Bakkavör Group: Announces Full Year Results 2020

Reykjavik / IS. (bkg) Island’s Bakkavör Group, the leading international provider of fresh prepared food (FPF), announces its full year audited results for the 52-week period ended 26 December 2020.

Financial Highlights

  • Group revenue 4.9 percent lower at GBP 1,793.5 million, with demand returning to our fresh, convenient foods outside of Covid-19 lockdown restrictions:
    • UK revenues decreased by 5.2 percent to GBP 1,566.6 million, due to lower consumer demand, particularly across our food-to-go range
    • US delivered strong growth of 12.2 percent to GBP 146.5 million, benefitting from the growing demand for fresh meals
    • China revenues were 21.8 percent lower at GBP 80.4 million, reflecting a steady recovery following a 60 percent downturn in February 2020
  • Operating profit decreased 10.7 percent to GBP 62.0 million, with margins decreasing by 20 basis points to 3.5 percent, albeit operating margins improved to 5.3 percent in H2, through more stabilised trading, a strong US performance and strategic restructurings across all regions
  • US business underwent commercial and operational reset, delivering profitable growth in H2 and positive trajectory
  • Decisive actions taken to preserve cash, lower cost base and protect profitability in response to pandemic, including a reduction in non-essential capex, temporary and permanent closures of food-to-go and Salads sites, and simplification of ranges in response to lower consumer demand
  • Operational net debt decreased by GBP 21.4 million to GBP 333.4 million with leverage maintained at 2.3 times
  • Strong financial position supported by over GBP 200 million of liquidity headroom with funding maturities now extended to 2025
  • No dividend payable for 2020 given Covid-19 impact throughout year

Financial Summary

GBP in millions (unless otherwise stated) FY 2020 FY 2019 Change
Revenue 1,793.5 1,885.9 (4.9%)
Like-for-like revenue(1) 1,721.9 1,810.6 (4.9%)
Adjusted Ebitda pre IFRS 16(1) 139.2 138.0 0.9%
Adjusted operating profit(1) 83.6 89.7 (6.8%)
Adjusted operating profit margin(1) 4.7% 4.8% (10bps)
Operating profit 62.0 69.4 (10.7%)
Operating profit margin 3.5% 3.7% (20bps)
Basic EPS 5.9p 6.4p (0.5p)
Adjusted EPS(1) 8.7p 10.3p (1.6p)
Free cash flow(1) 40.1 46.9 (6.8)
Operational net debt(1) (333.4) (354.8) 21.4

(1) Alternative Performance Measures (APMs), including «like-for-like», «adjusted» and «underlying» are applied consistently throughout.

Agust Gudmundsson, Chief Executive Officer, said: «In what was a year like no other, the external environment was the most challenging it has ever been. I am extremely proud of the resilience our business has shown and I would like to thank all our colleagues for their hard work and dedication.

«Despite the UK Government’s roadmap, with lockdown restrictions in the UK continuing into the spring, the short-term trading environment remains uncertain, but we are encouraged by the way consumers have returned to our fresher, healthier and more convenient foods each time these restrictions have lifted. Our unique position of scale, expertise and strong customer relationships have served us well during this extraordinary period, and they remain key as we continue to grow our market share and further strengthen our leadership position.

«The actions taken in 2020 to preserve cash and protect profitability across the business, combined with the successful turnaround of our US business, and the strength of our financial position, leave the Group well placed to deliver further growth. The way that Bakkavor has been able to rapidly adapt, find new ways of working, and drive the business forward through the Covid-19 crisis provides us with additional confidence for the future.

«We will continue to play an essential role in supporting our customers and communities and we are in great shape to deliver for all stakeholders in 2021 and beyond.»