Bakkavor: announces Q2 2016 financial results

Reykjavik / IS. (bkg) Islandic Bakkavor Group, the United Kingdom’s leading fresh prepared foods manufacturer, announced its Q2/2016 financial results for the 13 weeks ended 25 June 2016. Highlights:

• Strong revenue growth across the Group
• Growth in Adjusted Ebitda reflecting volume benefits, cost control and productivity improvements
• Sale of Belgian operation completes strategic exit from Continental Europe
• Leverage ratio now down to 2.8 times

Commenting on the results, Agust Gudmundsson, Chief Executive Officer said: «I am pleased to report another excellent set of results for the Group, with both strong revenue and Ebitda growth across our businesses. Although the UK is entering a period of some economic uncertainty following the recent EU referendum, we believe we are well placed to manage the challenges that may lie ahead. We are therefore planning to continue our accelerated capital investment programme to support our ongoing growth with key customers and drive further performance benefits».

GBP million	Q2 2016	Q2 20151	Change	H1 2016	H1 20151	Change
Revenue	438.7	425.1	3.2%	854.5	835.3	2.3%
Like-for-like Revenue2	437.9	422.8	3.6%	853.6	831.0	2.7%
Adjusted Ebitda3	41.4	35.1	18%	71.9	59.8	20%
Adjusted Ebitda margin3	9.4%	8.3%	110bps	8.4%	7.2%	120bps
Free cash flow4	31.9	36.0	(4.1)	27.0	30.5	(3.5)

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Key

1. The results for Q2 2015 and H1 2015 have been restated to exclude Italpizza as this is now classified as a discontinued operation following the completion of the sale of this business in July 2015.
2. Like-for-like revenue excludes the impact of acquisitions, disposals, closures, and foreign exchange translation but includes the Group’s share of revenue generated by associates.
3. Adjusted Ebitda: The Group manages the performance of its businesses through the use of ‘Adjusted Ebitda’. Ebitda is generally defined as operating profit / loss before share of results of associates, depreciation, amortisation and asset impairments. In calculating Adjusted Ebitda, we further exclude restructuring costs and royalty charges. Adjusted Ebitda margin is calculated as Adjusted Ebitda divided by total revenue from continuing operations.
4. Free cash flow is defined as the amount of cash generated by the business from continuing and discontinued operations, after meeting all its obligations for interest, tax and pensions, and after investments in tangible assets but excluding payments relating to historic UK tax liabilities.

Outlook

The Group has reported excellent results for the first half of 2016 with strong revenue and Ebitda growth across our operations. The uncertainty following the recent EU referendum, together with the ongoing cost implications of the National Living Wage and likely volatility in input pricing will undoubtedly pose challenges for the sector as a whole. However, we believe we are well placed for the future with a clear commitment to drive innovation and investment across our businesses.