Bakkavor : Full Year Results 2020

A resilient trading and operational performance during an unprecedented year

Bakkavor Group plc ('Bakkavor', 'the Group' or 'the Company'), the leading international provider of fresh prepared food ('FPF'), today announces its full year audited results for the 52-week period ended 26 December 2020.

HIGHLIGHTS

• Group revenue 4.9% lower at £1,793.5m, with demand returning to our fresh, convenient foods outside of COVID-19 lockdown restrictions:
• UK revenues decreased by 5.2% to £1,566.6m, due to lower consumer demand, particularly across our food-to-go range
• US delivered strong growth of 12.2% to £146.5m, benefitting from the growing demand for fresh meals
• China revenues were 21.8% lower at £80.4m, reflecting a steady recovery following a 60% downturn in February 2020
• Operating profit decreased 10.7% to £62.0m, with margins decreasing by 20 basis points to 3.5%, albeit operating margins improved to 5.3% 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 £21.4m to £333.4m with leverage maintained at 2.3 times
• Strong financial position supported by over £200m of liquidity headroom with funding maturities now extended to 2025
• No dividend payable for 2020 given COVID-19 impact throughout year

FINANCIAL SUMMARY

£ million (unless otherwise stated)	FY 2020	FY 2019	Change
Revenue	1,793.5	1,885.9	(4.9%)
Like-for-like revenue1	1,721.9	1,810.6	(4.9%)
Adjusted EBITDA pre IFRS 161	139.2	138.0	0.9%
Adjusted operating profit1	83.6	89.7	(6.8%)
Adjusted operating profit margin1	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 EPS1	8.7p	10.3p	(1.6p)
Free cash flow1	40.1	46.9	(6.8)
Operational net debt1	(333.4)	(354.8)	21.4

¹Alternative Performance Measures ('APMs'), including 'like-for-like', 'adjusted' and 'underlying' are applied consistently throughout. The APMs are defined in full and reconciled to the reported statutory measure in the Consolidated Financial Statements in Note 11 of this results statement and in Note 37 of the Annual Report and Accounts 2020.

AGUST GUDMUNDSSON, CEO, COMMENTED:

'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.'

PRESENTATION

A copy of these results is available on www.bakkavor.com

We will be presenting to analysts via a webcast at 10.00 am, 16 March 2021, through the Investor section of the Group's website at:

https://event.on24.com/wcc/r/3022922/DA860DB30CFB1D6A51030A3B0180757F

The presentation can also be accessed via a replay service shortly after the presentation has concluded.

ENQUIRIES

Institutional investors and analysts:
Ben Waldron, Chief Financial Officer
Sally Barrett-Jolley, Head of Corporate Affairs	[phone]
Media
Will Palfreyman, Tulchan Communications	[phone]

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 some of the UK's leading grocery retailers, including Tesco, Marks & Spencer, Sainsbury's and Waitrose. The Group's International segment operates in the US and China. Bakkavor was founded in 1986 and has its headquarters in London. The Group has over 19,000 employees and operates 23 factories in the UK, 5 in the US and 9 in China.

DISCLAIMER - FORWARD-LOOKING STATEMENTS

This statement, prepared by Bakkavor Group plc (the 'Company'), may contain forward-looking statements about Bakkavor Group plc and its subsidiaries (the 'Group'). Forward-looking statements involve uncertainties because they relate to events, and depend on circumstances, that will, or may, occur in the future. If the assumptions on which the Group bases its forward-looking statements change, actual results may differ from those expressed in such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update these forward-looking statements. Nothing in this statement should be construed as a profit forecast. Some numbers and period on period percentages in this statement have been rounded or adjusted in order to ensure consistency with the financial information.