5 April 2023
Hilton Food Group plc
International Food and Supply Chain Services Partner of Choice
Volume and revenue growth against volatile backdrop during 2022; well positioned for year ahead
Hilton Foods today announces its preliminary results for the 52 weeks ended 1 January 2023. The business has also published a separate announcement this morning regarding a change of leadership.
Strategic overview:
1. Outstanding Protein Products
o Strength and resilience in core meat category, underpinned by strong commercial partnerships
o Challenging seafood performance, with robust recovery plans in place to restore profitability
o Further vegan and vegetarian growth through branded partnerships and private label expansion
o Double digit growth in easier meals, with launch of award-winning new products
2. Growing across international markets
o Strong performance in APAC including first full year of trading in New Zealand
o New partnership formed in Singapore with Country Foods, a wholly owned subsidiary of SATS, Asia’s leading provider of food solutions and gateway services
o Growth through geographical diversification with Foppen acquisition
3. Industry-leading technology
o Increased ownership of Foods Connected supply chain management platform to 65%
o Agito joint venture reinforcing automation and engineering capabilities
4. Delivered through The Sustainable Protein Plan
o Introduction of stretching ESG performance metrics into our LTIP Scheme including targets for Scope 1 & 2 energy efficiency, packaging recycled content and food waste
o Progress across people, planet and product pillars, including exceeding 2025 target for women in leadership positions and A- rating from CDP on Climate Change
Financial overview:
· Group revenue up 16.5% to £3.8bn (2021: £3.3bn), underpinned by contribution from newly acquired businesses, first full year of trading in New Zealand and inflationary impact
· Volume growth of 4.3% to 513,816 tonnes (2021: 492,588 tonnes)
· Adjusted operating profit down 3.3% to £71.1m (2021: £73.6m)
· IFRS operating profit down 14.8% to £54.0m (2021: £63.4m) after exceptional items of £11.9m, relating predominantly to 2021 fire at Belgium site
· Adjusted basic earnings per share down 26.4% at 45.1p (2021: 61.3p)
· IFRS basic earnings per share down 56.0% at 19.8p (2021: 45.0p)
· Strong cash flows from operating activities of £98.3m (2021: £121.3m)
· Net bank debt £211.6m (2021: £84.6m) following £83.6m investments in acquisitions/JVs and £56.8m capex investment with a strong balance sheet following refinancing
· Proposed final dividend of 22.6p, taking total dividend for 2022 to 29.7p (2021: 29.7p)
Outlook and current trading
Against the backdrop of a challenging environment, with global uncertainties impacting supply chains and inflation, Hilton’s trading performance since the beginning of 2023 has been in line with the Board’s expectations and the business is well positioned for the year ahead. We continue to explore opportunities with existing and new customers for further expansion in our domestic and overseas markets.
Our short and medium term growth prospects are underpinned by the acquisitions of Foppen, Dalco and Fairfax Meadow, the new partnership in Singapore and recovery in our UK Seafood business as well as further opportunities arising across our markets by the development of our cross-category business and the application of our supply chain management expertise.
Commenting on the results Chief Executive Philip Heffer said:
“After the challenges we faced last year in our seafood business, we took a series of steps to rebuild profitability and we are now well placed for the year ahead. Meanwhile we have continued to deliver on our strategic priorities and to set the business up for long-term, sustainable growth.
“Our meat category has performed well and we have continued to innovate with new and award winning products. We have continued to grow in new and emerging markets following the acquisitions of Foppen and Fairfax Meadow with both these businesses performing well, while also expanding in Asia with Country Foods. Despite the significant macro-economic challenges, we have continued our record of growing our volumes every year since Hilton Foods became a publicly listed company in 2007.
“Hilton Foods today is a completely different business from the company we started in 1994. Over 75% of our sales volumes are now outside the UK; we offer a wide range of protein products and categories; and we have built a technology services offer which is best-in-class in the industry. The global economy today is more uncertain than at any time in the past thirty years, but Hilton Foods is well set for long-term success.”
Financial performance – overview:
| 2022 | 2021 | Change | ||
| 52 weeks to 1 January 2023 | 52 weeks to 2 January 2022 | Reported | Constant currency | |
| Volume (tonnes) | 513,816 | 492,588 | 4.3% | 4.3% |
| Revenue | £3,847.6m | £3,302.0m | 16.5% | 16.0% |
| Adjusted results 1 | ||||
| Adjusted operating profit | £71.1m | £73.6m | -3.3% | -3.2% |
| Adjusted profit before tax | £55.5m | £67.2m | -17.4% | -17.2% |
| Adjusted basic earnings per share | 45.1p | 61.3p | -26.4% | |
| Adjusted EBITDA | £119.9m | £119.5m | 0.3% | 0.1% |
| IFRS results | ||||
| Operating profit | £54.0m | £63.4m | -14.8% | |
| Profit before tax | £29.6m | £47.4m | -37.5% | |
| Basic earnings per share | 19.8.p | 45.0p | -56.0% | |
| Cash flows from operating activities | £98.3m | £121.3m | -18.9% | |
| Other measures | ||||
| EBITDA | £131.8m | £139.0m | -5.3% | |
| Net bank debt 2 | £211.6m | £84.6m | ||
| Dividends paid and proposed in respect of the year | 29.7p | 29.7p | 0.0% | |
Notes
1 Adjusted results represent the IFRS results before deduction of acquisition intangibles amortisation, depreciation of fair value adjustments to property, plant & equipment, exceptional items and also IFRS 16 lease adjustments as detailed in the Alternative performance measures note 17. Unless otherwise stated financial metrics in the Chairman’s statement, Chief Executive’s summary and Performance and financial review refer to the Adjusted results
2 Net bank debt represents borrowings less cash and cash equivalents excluding lease liabilities
Enquiries
Hilton Foods Tel: +44 (0) 1480 387214
Philip Heffer, Chief Executive Officer
Matt Osborne, Chief Financial Officer
Headland Consultancy Limited Tel: +44 (0) 20 3805 4822
Edward Young Email: hiltonfood@headlandconsultancy.com
Will Smith
Joanna Clark