News

Outperformance and strategic progress while navigating unprecedented industry challenges

Bakkavor Group plc (the “Company”) and its subsidiaries ("Bakkavor" or "the Group"), the leading international provider of fresh prepared food ("FPF"), today announces its full year audited results for the 52-week period ended 25 December 2021.

Financial outperformance¹ and strengthened balance sheet

• Like-for-like revenue² ahead of pre-pandemic levels, up 1.2% on 2019, and up 6.2% on 2020 to £1,885.6m
• Group reported revenue up 4.4% to £1,871.6m
• Adjusted operating profit² of £102.0m, ahead of market expectations¹ and up 22.0%
• Basic earnings per share of 9.8 pence, up 3.9 pence
• Free cash flow² of £91.2m, up £51.1m
• Leverage² of 1.9x within medium-term target range, delivered 6 months ahead of previous guidance
• Total dividend per share for 2021 up 10% on 2019, with final dividend of 3.96 pence per Ordinary share proposed

Good strategic progress underpins future growth and improving returns

• Our scale, experience, category leadership and breadth of portfolio in the UK has underpinned our significant progress, and puts us in a strong position to continue to succeed
• US like-for-like revenue up 31.8% and recent investments unlock capacity for further growth
• Steady top-line recovery in China, and our strategic focus on entering new channels is being realised with new customers
• Group adjusted operating margin² up 70 bps despite inflationary headwinds and labour challenges, as a result of our strict focus on cost control and operational efficiency
• Group net carbon emissions reduced by 4.1%, with ‘roadmap’ to deliver our 2040 net zero commitment in progress

Remain well-positioned to successfully mitigate inflationary headwinds

• Sales volumes in early 2022 have been encouraging, giving confidence in the continuation of the Group’s revenue momentum through the year
• The Group is committed to mitigating the impact of significant inflationary headwinds through continued price recovery with customers, strict cost control and productivity improvements
• The Group is confident in delivering 2022 in line with market expectations¹ as our established teams, commercial philosophy and dynamic ways of working equip us well for successfully navigating the tough environment
• Strong cash generation and strengthened balance sheet provides flexibility for targeted investment to deliver further efficiencies and take advantage of medium-term growth opportunities

FINANCIAL SUMMARY

1. Based on company compiled consensus (“Consensus”) which includes the following institutions: Peel Hunt, Citi, Investec, Numis, Goodbody, Berenberg and HSBC. Operating profit Consensus for 2021 of £97.4m. Operating profit Consensus for 2022 of £98.1m. Last updated on 7 March 2022.
2. Alternative Performance Measures are referred to as ‘like-for-like’, ‘adjusted’, ‘underlying’ and are applied consistently throughout this document. These are defined in full and reconciled to the reported statutory measures in Note 13.
3. During the period, the final dividend relating to the period ended 28 December 2019 was paid, please refer to Note 10 for further details.

AGUST GUDMUNDSSON, CEO, COMMENTED:

“In 2021 we achieved meaningful financial and strategic progress against unprecedented industry challenges. We have continued to leverage our scale, category leadership, and strict focus on efficiency and cost control to emerge in a position of strength. Our outperformance, and the support we have given to our customers, suppliers and communities, would not have been possible without the exceptional efforts of all of our colleagues, for which I am incredibly proud.

“While we expect the significant inflationary pressures to persist, we have demonstrated our ability over the past 36 years to navigate such headwinds. I believe we are well-positioned to mitigate these challenges, giving us confidence in delivering on our expectations for the full year.”

PRESENTATION

A copy of the 2021 full year results are available on www.bakkavor.com

We will be presenting to analysts in-person and via a webcast at 09.00 am, 8 March 2022, through the Investor section of the Group's website at: https://q4-emea.wavecast.io/bakkavor/2021-full-year-results. The presentation can also be accessed via a replay service shortly after the presentation has concluded.

ENQUIRIES

About Bakkavor

Bakkavor is the leading provider of fresh prepared food ("FPF") in the UK, with a growing international presence in the US and China. The Group is the number one by market share in the UK in the four FPF product categories of meals, salads, desserts and pizza & bread, providing high-quality, fresh, healthy and convenient food. Its customers include every major UK grocery retailer, including Tesco, Marks & Spencer, Sainsbury's and Waitrose, and some of the world's best-known food brands. Bakkavor was founded in 1986 and has its headquarters in London. The Group has c.19,000 employees and operates 23 factories in the UK, 5 in the US and 9 in China.

LEI number: 213800COL7AD54YU9949

Disclaimer - forward-looking statements

This statement, prepared by Bakkavor, may contain forward-looking statements about Bakkavor. These represent expectations for the Group's business, and involve known and unknown risks and uncertainties, many of which are beyond the Group's control. The Group has based these forward‐ looking statements on current expectations and projections about future events. These forward-looking statements may generally, but not always, be identified by the use of words such as 'will', 'aims', 'anticipates', 'continue', 'could', 'should', 'expects', 'is expected to', 'may', 'estimates', 'believes', 'intends', 'projects', 'targets', or the negative thereof, or similar expressions.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future and reflect the Group's current expectations and assumptions as to such future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. There may be risks and uncertainties that the Group is unable to predict at this time or that the Group currently does not expect to have a material adverse effect on its business. You should not place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this announcement. The Group expressly disclaims any obligation to publicly update or review these forward-looking statements other than as required by law. Some numbers and period on period percentages in this statement have been rounded or adjusted in order to ensure consistency with the financial information.