Final Results

Greencore Group PLC 25 November 2003 GREENCORE GROUP PLC ============================================================================== PRELIMINARY STATEMENT OF RESULTS Year Ended 26 September 2003 -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - Profit before tax* up 7% to €67.8 million - 1% overall like-for-like sales growth, with 4% in convenience food divisions - Operating margin growth in all three divisions - Like-for-like operating profit* up 7%, with growth in all three divisions - Headline EPS* up 4% to 30.6 cent - Underlying headline EPS** up 19% - Net interest down 21% to €41.2 million - Net debt down €133 million to €430 million - $302 million (equivalent) raised in successful US private placement OPERATIONAL HIGHLIGHTS - Another year of strong growth in UK convenience food businesses - Strong cash generation and solid profit growth in the ingredients and agribusiness division, with excellent operational performance - 1,200 new products launched - Position as world's largest sandwich manufacturer consolidated - Capacity in UK chilled ready meal market upgraded and extended to support ongoing growth - Successful entry into UK chilled soup market * before exceptional items and amortisation ** headline EPS adjusted for constant currency and disposals Commenting on the results, Greencore Group Chief Executive, David Dilger, said: 'These are strong results, with underlying EPS growth of 19%. They demonstrate the potential of this business following the successful integration of Hazlewood Foods and, most notably, its complementary growth and cash generative characteristics. This is our second full year of results since the acquisition of Hazlewood. In both years, we have produced strong single digit like-for-like operating profit growth and excellent cash generation, with a consequential significant reduction in our interest charge. 'In the year under review, our chilled and frozen division once again performed particularly well, with 13% like-for-like operating profit growth. In addition, we have again substantially reduced the Group's indebtedness. 'Greencore has been transformed over the last number of years and, as a result, is well placed to achieve continued growth. We look forward to the future with confidence.' Tuesday, 25 November 2003 For further information, please contact: David Dilger, Chief Executive Tel: +353 1 605 1002 Patrick Kennedy, Chief Financial Officer Tel: +353 1 605 1003 Billy Murphy/Trish Morrissey, Drury Communications Tel: +353 1 260 5000 ============================================================================== RESULTS Like-for-like sales grew by 1% and operating margin improvement in all three divisions led to a 7% uplift in like-for-like operating profit*. There was a further significant decline in the Group's interest charge, which helped to offset both the negative translation impact of weaker sterling and a reduction of €9.5 million in operating profit from discontinued activities. Profit before tax* grew by 7%. Headline earnings per share* grew by 4% to 30.6c (2002: 29.4c), notwithstanding an increase in the effective tax charge from 11% to 13%. Underlying headline earnings per share*, which calculates continuing earnings at constant exchange rates, increased by 19% over the comparative period. For the last two years, the Group has been heavily engaged in ensuring that maximum value is obtained from the Hazlewood acquisition. The results reflect the achievements of the Group in this regard and highlight the future potential of its well balanced portfolio of businesses. DIVIDEND As outlined in the interim statement, since the acquisition of Hazlewood Foods in 2001, the Board maintained, rather than increased, the level of the interim and final dividend. The aim was to reduce, as swiftly as possible, the indebtedness assumed to finance the acquisition. These results, and the recent successful US private placement, demonstrate the benefits of this prioritisation and the Board intends to continue this policy for the time being. The Board also decided earlier this year to rebalance the weighting between the interim and final dividend payments, increasing the interim dividend to reflect more closely the relative profitability of the first half and second half of the financial year. A final dividend of 7.58c per share is therefore proposed, making a total for the year of 12.63c, which is in line with last year's level. Shareholders will again be offered the option of receiving dividends in the form of cash or shares. DIVISIONAL HIGHLIGHTS - The ingredients and agribusiness division performed strongly. Operating margins improved significantly, resulting in operating profit* of €45.0 million, up 4% on a like-for-like basis. Irish Sugar's profitability increased modestly, whilst the profits of the Group's malt business increased following record production levels, improved margins and ongoing cost control. The strong performance was achieved despite a 5% decline in turnover, principally as a result of a lower EU sugar quota and a stronger comparable period for the malt division following last year's successful de-stocking programme. - The chilled and frozen division had another very strong year, with operating profit* from continuing operations of €40.2 million, up 13% on a like-for-like basis. Like-for-like sales grew by 5% following strong performances in most categories, most notably in sandwiches, ready meals and quiche. - The ambient grocery division increased like-for-like sales by 2% and, with operating margin improvement, generated operating profit* of €16.4 million, up 5% on a like-for-like basis. Within this division, the mineral water and ambient sauce businesses performed well, the Group's UK bread business showed modest improvement, whilst cakes and desserts had a mixed year. *before exceptional items and amortisation BOARD CHANGES Pat McCann, chief executive of Jurys Doyle Hotel Group plc, has been co-opted to the Board of Directors as a non-executive director. He has been chief executive of Jurys Doyle since 2000 and is currently a member of the National Executive Council of IBEC, a member of the executive council of the Dublin Chamber of Commerce and chairman of its City Business Committee. He is a past president of the Irish Hotels Federation and a former member of the National Tourism Council. OUTLOOK Further progress is anticipated in the current year. The Group is confident that its convenience food businesses will continue to outperform. With number one or number two market positions in almost all of the categories in which it operates, the Group anticipates further good growth, as the demographic factors that have driven the increased demand for convenience food in the last decade intensify. In the chilled and frozen division, the market continues to grow and the Group is well positioned to benefit from this growth through the market leadership positions and product innovation skills of its businesses. Further progress in this division should be underpinned by additional trade that has been gained in sandwiches, chilled ready meals and chilled soup. The Group remains focused on achieving further improvements in operating margins and, in addition, is taking the necessary steps to address the underperformance of the chilled pizza business in the last two years. In the ambient grocery division, additional trade has been gained in both the mineral water and ambient sauces businesses. Bread price increases are being implemented, whilst the operational improvements necessary at the Hull cakes and desserts facility should be delivered. Raw material price inflation in the UK convenience food businesses is higher than has been experienced for a number of years, although the Group is determined to offset it through price increases, product reformulation, efficiencies and supply chain improvements. Another solid year is anticipated from the ingredients and agribusiness division. At Irish Sugar, the processing campaign has progressed well, the quota of the business will be 5,290 tonnes higher than last year and the full year's impact of the sugar price increase implemented last year will assist in recovering inflation in the cost base of the business. The malt division has experienced higher barley prices in recent months, although malt prices are yet to reflect these increases fully. Nonetheless, strong operational efficiencies and cost management, combined with the division's sales and purchasing expertise, should enable a satisfactory performance to be delivered. In addition, the Group is confident that the continued reduction in indebtedness and improvement in the capital structure will lead to a further substantial fall in interest payments. Overall, the Group has successfully addressed the challenges presented by the Hazlewood acquisition and integration and now has a well-balanced robust portfolio of businesses that are well placed to achieve continued growth in the future. ============================================================================== OPERATIONAL REVIEW Ingredients and Agribusiness Division + -------------------------------------------------------------------------------- 2003 2002 Like-for-Like €m €m Change Turnover (Continuing Operations) 504.2 539.9 -5% Operating Profit (Continuing Operations)* 45.0 44.2 +4% Operating Margin 8.9% 8.2% * before goodwill amortisation and exceptional items Sugar Irish Sugar had a satisfactory year. Although sugar beet and other costs increased and its sugar beet quota was reduced by 7,052 tonnes, the business benefited from both the price increase obtained in the second half of the previous year and a further price increase obtained in the year under review. In addition, an excellent operational performance during the processing campaign helped to offset the lack of sugar beet availability due to poor weather. By-product prices fell due to a reduction in the price of other feed products, while fertiliser and chemical results improved compared to the prior year. In the current financial year, the business will benefit from a full year impact of the recent price increase and an increase in sugar quota of 5,290 tonnes, as recently announced by the EU. The processing campaign has, to date, progressed well, whilst the flexibility and change programme, which is targeting a substantial reduction in manning levels and unit costs over a three year period, is expected to be finalised within the next number of months. In the longer term, changes to the EU sugar regime are expected. However, the Group believes that the fundamental structures of the EU sugar regime will be retained, and that the regime will continue to enable efficient sugar processors to make an adequate return on the significant capital investment made by the industry. Irish Sugar has, for many years, taken the necessary steps to maintain its position as one of Europe's most efficient sugar processors. The impending flexibility and change programme is a further example of this. This focus has resulted, and will continue to result, in strong levels of cash flow being generated by the business. The Group's strategy has been to deploy this cash flow into businesses which are generating significant profit growth, with a view to ensuring that the sugar business represents a modest proportion of total Group profitability by the time that any regime changes might materially impact the profitability of European sugar processors. Malt The malt division increased its profitability, delivering record production levels despite the disposal during the year of the smallest of its three Belgian maltings. The improvement was driven by good margin management and the business also benefited from an increased contribution from Rusmalt, the joint venture for the supply of management services to Sun Interbrew in the Russian market. In the current selling season, barley prices have increased in line with international grain prices. However, whilst a significant amount of trade is not impacted by these movements, elsewhere the increases have not yet been fully reflected in higher malt prices, most particularly in export markets. Nonetheless, strong operational efficiencies and cost management, combined with the division's sales and purchasing expertise, should deliver a satisfactory performance. Agribusiness Interchem delivered a solid improvement in sales and profitability, driven by new product introductions and higher spring cereal acreage. Drummonds had a strong year, the features of which were improved efficiencies, lower costs and a significant reduction in working capital, which offset a sales decline resulting from poor grain yields from the 2002 harvest and a reduction in winter wheat sowings. Profitability in Molasses advanced due to poor forage availability in the first half of the year, combined with good margin and overhead management. This increase in profitability was achieved despite a reduction in turnover caused by the hot weather in the summer. The Group decided to close its Armer Salmon subsidiary during the year, following the successful sale of its site and surrounding lands. Edible Oils Trilby Trading, Ireland's leading importer and merchandiser of edible oils, had another satisfactory year. + As communicated in this year's interim statement, following the disposal of the fertiliser business, Grassland Holdings, in the second half of the previous financial year, the Board decided to combine the results of its remaining agribusinesses within the ingredients division for reporting purposes going forward. ============================================================================== OPERATIONAL REVIEW Chilled and Frozen Division -------------------------------------------------------------------------------- 2003 2002 Like-for-Like €m €m Change Turnover (Continuing Operations) 613.3 635.8 +5% Operating Profit (Continuing Operations)* 40.2 38.7 +13% Operating Margin 6.6% 6.1% * before goodwill amortisation and exceptional items Sandwiches The sandwich business enhanced its position as the world's largest sandwich manufacturer. Good top line growth was experienced, driven by new product and packaging introductions and the commencement of trade with some new customers. Improved efficiencies and cost reduction initiatives ensured that this growth was translated to the bottom line. The strong growth over the last decade in the UK sandwich market is forecast to continue and the Group's business remains very well positioned to capitalise on this. It will invest in automation during the year to maintain and enhance its market leadership position. Furthermore, additional trade to commence in the new year has been gained and whilst raw material prices are increasing, this gain, coupled with a strong new product development pipeline, underpins the Group's confidence in another excellent year in the sandwich category. Chilled Ready Meals Chilled ready meals had another successful year. The market remains buoyant, with double-digit topline growth again experienced in spite of the hot summer weather. Additional trade from several new customers was also gained during the year. Capacity was well managed, with several successful initiatives undertaken to improve efficiencies, whilst €16 million was spent upgrading and extending capacity at three of the Group's facilities. The chilled ready meals market in the UK is forecast to continue to grow strongly, as the frequency of purchase increases and the move to premium products continues. The principal customer of the business continues to expand its store base, and with the successful introduction of additional capacity, prospects remain very attractive. Quiche The UK chilled quiche market has been reinvigorated over the last number of years and the Group's quiche business had another strong year. The market continues to be less impacted by seasonality, helped by product innovation and more frequent eating occasions, whilst the business successfully relaunched several of its key ranges through the year. The prospects for the Group's quiche business remain attractive. In common with other UK convenience food producers, the category is experiencing raw material price inflation higher than levels of recent years, although this should be offset by price increases, product reformulation, efficiencies and supply chain improvements. Additional capacity is planned to be added to the quiche bakery this year and further progress is anticipated. Chilled Pizza Although progress was made on several fronts, the Group's UK chilled pizza business had a disappointing year. Volumes from the Bedford facility, which was closed at the end of the previous year, and the Nelson facility, which was closed during the year under review, were consolidated into the Deeside facility. However, a high level of complexity arising from the wide range of products assumed, combined with a lack of sales growth and excessive levels of temporary labour, led to underperformance during the year. Progress has been made in recent months and the Group is taking the necessary steps to address the underperformance of this business. Chilled Sauce and Soup The chilled sauce market in the UK saw a slowdown during the year, with the hot summer weather having a significant impact. The chilled soup market, whilst having a quiet summer for the same reason, still grew by in excess of 20% during the year as customer penetration, frequency of purchase and average spend all increased. The business commenced supply of chilled soup to two leading retailers at the start of the year and gained further trade during the year. Capital expenditure was undertaken at the Bristol facility to support this growth. Frozen Savoury and Desserts Roberts, the Group's frozen savoury and dessert business, experienced a fire at its leading savoury facility during the year. Satisfactory insurance was in place and production was transferred to other Group facilities whilst the damaged facility was rebuilt. All production of Yorkshire puddings has been transferred back into the new enhanced facility and Roberts is well positioned to continue its growth in this market, although recent inflation in the costs of its principal raw materials, most particularly egg, will need to be recovered or reversed. Meanwhile, further strong growth was experienced in both the retail and food service frozen dessert market. Continental Chilled The Group's continental chilled operations, based in the Netherlands, progressed well during the year. Sales of sandwiches, chilled pizza and chilled sauce increased, as new customers were won, the new 'Borgondi' brand was launched and the business expanded its presence in both Belgium and Germany. The sandwich facility at Alphen was successfully expanded during the year. Disposals During the year, the Group disposed of its UK chilled sausage business, J & J Tranfield. ============================================================================== OPERATIONAL REVIEW Ambient Grocery Division -------------------------------------------------------------------------------- 2003 2002 Like-for-Like €m €m Change Turnover (Continuing Operations) 331.4 368.5 +2% Operating Profit (Continuing Operations)* 16.4 17.0 +5% Operating Margin 5.0% 4.6% * before goodwill amortisation and exceptional items Mineral Water The Group's Scottish mineral water business had an excellent year, with double-digit sales growth for the fifth year in succession. Sales benefited from the continuing market growth and were also assisted by the hot summer weather, with record weekly levels achieved in August. The business dealt very well with this exceptional demand and enhanced its reputation with its customer base accordingly. The outlook for the business remains very strong. Market fundamentals remain attractive, the business has recently increased its share of trade with its largest customer, and a new production line, which will increase capacity and improve efficiencies, is being installed in the new year. Ambient Sauces The ambient sauce and pickle business had another successful year. Sales grew strongly as growth in retailer brand cooking sauces exceeded other brands for the first time in several years. Price increases on certain product lines were achieved and two co-packing contracts with global branded manufacturers commenced during the year. The outlook for this category remains positive. Additional trade has been gained, there are good opportunities for further co-packing growth, and the business plans to expand its food service offering significantly during the year. Cakes and Desserts The Group's cakes and desserts business had a mixed year. The Christmas cake trade was much improved on the previous year, whilst a significant number of new products were introduced into the Hull facility. Additional cake trade was won, the trade from the Bedford chilled dessert facility was transferred to the Hull facility in April, whilst Yorkshire pudding production was temporarily transferred to Hull in January after the fire at the Roberts facility in Leeds. The combination of these factors led to short-term disruption and inefficiencies which the business is addressing. Meanwhile, the chilled hot-eating dessert category was impacted by the hot summer weather. In the current year, Christmas cake production has progressed well and whilst initial order levels are slower than in previous years, these should be recovered by mid-December. Significant raw material cost inflation is being experienced, which the business is actively attempting to recover. Bread and Baked Goods Rathbones delivered a modest improvement in its results for the year as a result of the rationalisation and cost reduction measures implemented during the year and in the prior year. Although UK private label bread market volumes declined and surplus capacity still exists in the market place, the overall UK bread market remained static in volume terms and increased by 5% in value terms. The business has increased its focus on the premium segment of the market with a series of premium product launches with a number of leading UK retailers. The speciality business continued to improve, aided by new product introductions. Whilst one of the two hot plate bakeries of the business was destroyed by fire during the year, satisfactory insurance was in place, and its principal trade has since been consolidated into two of the Group's other bakeries. Flour prices have increased in the last number of months. The business is currently in the process of implementing price increases, which should offset recent inflation in flour and other cost categories. ASSOCIATES Share of profit of associates, net of share of interest, increased significantly, from €4.2 million to €5.5 million. This reflected the inclusion of the flour and oatmeal business, Odlums, as an associate for the full year, following its partial disposal in 2002, and its continued strong trading. Other associate companies also performed well. FINANCIAL REVIEW Net debt at 26 September 2003 was €430.0 million, a reduction of €133.2 million from the September 2002 figure, and €443.7 million below the March 2001 figure, which was the first reporting date after the Hazlewood acquisition. The net debt reduction in the last twelve months reflects the successful focus on cash generation across the Group, as well as a translation benefit of €33.3 million on the sterling element of the Group's indebtedness. Net interest payable reduced accordingly from €51.9 million to €41.2 million. Following the significant improvement in the Group's credit profile since the acquisition of Hazlewood, a private placement of US$302 million (equivalent) in senior notes was completed last month with nine institutional investors. The notes were issued in US dollars and sterling, with the US dollar component subsequently swapped into sterling. They comprise 7, 10 and 12 year maturities, with an average maturity of 9.4 years. A net exceptional profit of €0.6 million was recorded during the year, net of tax. The exceptional cost within operating profit of €4.7 million relates to start-up inefficiencies incurred until May 2003 at the Deeside pizza facility. An exceptional profit of €3.3 million was recorded in respect of the sale or termination of certain Group operations during the year and the excess of insurance proceeds received over book value in respect of fixed assets destroyed by fire. A net tax credit of €2.0 million arose on the exceptional items. Significant capital investment was made in the period, most particularly in the chilled ready meals category; capital expenditure of €51.6 million was incurred in the year, whilst the depreciation charge was €46.2 million. The tax charge of €8.8 million on ordinary activities equates to an effective rate of 13%, up from 11% in the prior year. Note Like-for-like calculations exclude discontinued operations, use constant exchange rates for comparisons and exclude sales from facilities damaged by fire. ============================================================================== CONSOLIDATED PROFIT AND LOSS ACCOUNT Year Ended 26 September 2003 -------------------------------------------------------------------------------- 2003 2002 Notes Before Amortisation Total Restated exceptional and items and exceptional amortisation items €'000 €'000 €'000 €'000 Turnover Continuing operations 1 1,448,996 - 1,448,996 1,544,190 Discontinued operations 1 24,313 - 24,313 233,901 ---------- ---------- ---------- ---------- 1,473,309 - 1,473,309 1,778,091 ---------- ---------- ---------- ---------- Operating profit before goodwill amortisation Continuing operations 1 101,678 - 101,678 99,881 Discontinued operations 1 1,837 - 1,837 11,324 ---------- ---------- ---------- ---------- 103,515 - 103,515 111,205 Goodwill amortisation - (21,425) (21,425) (21,020) Exceptional items 2 - (4,667) (4,667) (13,272) ---------- ---------- ---------- ---------- Operating profit Continuing operations 101,678 (26,092) 75,586 66,793 Discontinued operations 1,837 - 1,837 10,120 ---------- ---------- ---------- ---------- 103,515 (26,092) 77,423 76,913 Share of operating profit of associated undertakings 5,804 - 5,804 4,546 ---------- ---------- ---------- ---------- 109,319 (26,092) 83,227 81,459 ---------- ---------- ---------- ---------- Exceptional items 2 Disposal of interest in subsidiaries - Proceeds in excess of book value - - - 6,976 - Goodwill previously written off to reserves - - - (11,633) ---------- ---------- ---------- ---------- - - - (4,657) Loss on sale/termination of operations - (288) (288) (10,042) Profit on disposal of fixed assets - 3,583 3,583 - ---------- ---------- ---------- ---------- - 3,295 3,295 (14,699) ---------- ---------- ---------- ---------- Profit/(loss) on ordinary activities before interest and taxation 109,319 (22,797) 86,522 66,760 ---------- ---------- ---------- ---------- Net interest payable (41,250) - (41,250) (51,941) Amortisation of issue costs of finance facility - (5,324) (5,324) (2,918) Share of interest payable - associates (307) - (307) (375) ---------- ---------- ---------- ---------- Profit/(loss) on ordinary activities before 67,762 (28,121) 39,641 11,526 taxation Taxation (8,809) 1,977 (6,832) (38) ---------- ---------- ---------- ---------- Profit/(loss) on ordinary activities after 58,953 (26,144) 32,809 11,488 taxation Minority interests (1,298) - (1,298) (1,357) ---------- ---------- ---------- ---------- Profit/(loss) attributable to Group shareholders 57,655 (26,144) 31,511 10,131 Dividends 3 (23,864) - (23,864) (23,721) ---------- ---------- ---------- ---------- Retained profit/(loss) 33,791 (26,144) 7,647 (13,590) ========== ========== ========== ========== Adjusted earnings per ordinary share 4 30.6c 29.4c Basic earnings per ordinary share 4 16.7c 5.4c Diluted earnings per ordinary share 16.6c 5.4c ============================================================================== CONSOLIDATED BALANCE SHEET At 26 September 2003 -------------------------------------------------------------------------------- ---- 2003 2002 €'000 €'000 Fixed assets Intangible assets 370,348 391,773 Tangible assets 557,633 586,180 Financial assets 16,141 16,784 ---------- ---------- 944,122 994,737 ---------- ---------- Current assets Stocks 137,424 137,662 Debtors 123,062 178,974 Cash and bank balances 103,494 103,256 ---------- ---------- 363,980 419,892 Creditors Amounts falling due within one year - Bank debt 358,796 1,522 - Other 408,974 394,531 ---------- ---------- 767,770 396,053 Net current (liabilities)/assets (403,790) 23,839 ---------- ---------- Total assets less current liabilities 540,332 1,018,576 ---------- ---------- Creditors Amounts falling due after more than one year - Bank debt 174,747 664,907 - Other 24,055 28,488 Provisions for liabilities and charges 40,874 46,323 Development grants 1,510 2,332 ---------- ---------- 241,186 742,050 ---------- ---------- Net assets 299,146 276,526 ========== ========== Capital and reserves Called up share capital 122,103 121,584 Capital conversion reserve fund 934 934 Share premium account 87,370 85,847 Profit and loss account/other reserves 83,084 63,535 ---------- ---------- Shareholders' funds - equity interests 293,491 271,900 Minority interests - equity interests 5,655 4,626 ---------- ---------- 299,146 276,526 ========== ========== ============================================================================== CONSOLIDATED CASH FLOW STATEMENT Year Ended 26 September 2003 -------------------------------------------------------------------------------- 2003 2002 €'000 €'000 Operating activities Operating profit 77,423 76,913 Non cash items - Depreciation 46,227 57,351 - Amortisation 20,021 19,454 - Other (including translation differences) (5,976) (12,372) Changes in working capital 40,421 48,247 ---------- ---------- Cash flow from operating activities 178,116 189,593 Dividends from associates 5,323 3,159 Returns on investments and servicing of finance (34,951) (70,941) Taxation 4,119 (3,718) Purchase of tangible fixed assets (51,570) (46,619) Disposal of tangible fixed assets and termination of operations 12,762 14,912 Disposal of subsidiary and associated undertakings - 55,203 Net debt disposed of on disposals - 37,740 Equity dividends paid (13,739) (23,668) ---------- ---------- Cash flow before financing 100,060 155,661 Financing (126,580) (298,766) ---------- ---------- Decrease in cash and liquid resources in period (26,520) (143,105) Cash flow from decrease in debt and lease financing 126,839 300,522 ---------- ---------- Change in net debt resulting from cash flow 100,319 157,417 Loans and finance leases disposed with subsidiaries - 24 Finance leases (457) (2,678) Translation differences 33,262 4,702 ---------- ---------- Movement in net debt in year 133,124 159,465 Net debt at start of year (563,173) (722,638) ---------- ---------- Net debt at end of year (430,049) (563,173) ========== ========== ============================================================================== STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Year Ended 26 September 2003 -------------------------------------------------------------------------------- 2003 2002 €'000 €'000 Profit for year attributable to Group shareholders 31,511 10,131 Exchange adjustments 11,902 2,531 ---------- ---------- Total recognised gains for the year 43,413 12,662 Prior year adjustments - 1,600 ---------- ---------- Total gains and losses recognised since last annual report 43,413 14,262 ---------- ---------- ============================================================================== NOTES TO THE FINANCIAL STATEMENTS Year ended 26 September 2003 -------------------------------------------------------------------------------- 1. Analysis of Results 2003 2002 Restated Turnover Operating profit Turnover Operating profit Pre goodwill Post goodwill Pre goodwill Post goodwill & exceptional & exceptional & exceptional & exceptional €'000 €'000 €'000 €'000 €'000 €'000 BY ACTIVITY Continuing operations Ingredients and 504,222 45,041 45,020 539,880 44,210 43,272 Agribusiness Chilled and Frozen 613,327 40,228 19,319 635,770 38,670 16,253 Ambient Grocery 331,447 16,409 11,247 368,540 17,001 7,268 --------- --------- --------- --------- --------- --------- 1,448,996 101,678 75,586 1,544,190 99,881 66,793 --------- --------- --------- --------- --------- --------- Discontinued operations Ingredients and 3,410 - - 76,173 4,602 4,602 Agribusiness Chilled and Frozen 20,903 1,837 1,837 80,069 3,827 2,623 Ambient Grocery - - - 77,659 2,895 2,895 --------- --------- --------- --------- --------- --------- 24,313 1,837 1,837 233,901 11,324 10,120 --------- --------- --------- --------- --------- --------- Total 1,473,309 103,515 77,423 1,778,091 111,205 76,913 --------- --------- --------- --------- --------- --------- BY GEOGRAPHICAL MARKET Results by origin Continuing operations UK and Rest of World 1,124,420 70,774 44,703 1,199,562 69,611 37,461 Republic of Ireland 324,576 30,904 30,883 344,628 30,270 29,332 --------- --------- --------- --------- -------- --------- 1,448,996 101,678 75,586 1,544,190 99,881 66,793 --------- --------- --------- --------- -------- --------- Discontinued operations UK and Rest of World 20,903 1,837 1,837 107,317 3,933 2,749 Republic of Ireland 3,410 - - 126,584 7,391 7,371 --------- --------- --------- --------- -------- --------- 24,313 1,837 1,837 233,901 11,324 10,120 --------- --------- --------- --------- -------- --------- Total 1,473,309 103,515 77,423 1,778,091 111,205 76,913 --------- --------- --------- --------- -------- --------- Turnover by destination Continuing operations UK and Rest of World 1,150,819 1,218,448 Republic of Ireland 298,177 325,742 --------- --------- 1,448,996 1,544,190 --------- --------- Discontinued operations UK and Rest of World 20,903 119,217 Republic of Ireland 3,410 114,684 --------- --------- 24,313 233,901 --------- --------- Total 1,473,309 1,778,091 --------- --------- The comparative amounts have been restated to reflect discontinued activities. 2. Exceptional Items A net exceptional profit of €0.61 million was recorded net of tax. The exceptional cost within operating profit of €4.67 million is in respect of commissioning projects undertaken until May 2003 at the Deeside pizza facility. A net exceptional loss of €0.29 million was recorded in respect of the sale or termination of certain Group operations during the year. In addition, a profit of €3.58 million was recorded on the excess of insurance proceeds received over book value in respect of fixed assets destroyed by fire. A net tax credit of €1.98 million was recorded on exceptional items. 3. Dividends The proposed final dividend per share of 7.58c (2002: 8.25c) is payable on 30 March 2004 to shareholders on the Register of Members at 5 December 2003. An interim dividend of 5.05c (2002: 4.38c) was paid on 30 September 2003. 4. Earnings per Share The calculation of adjusted earnings per share is after elimination of the exceptional credit of €0.61 million (after tax relief: €1.98 million), goodwill amortisation of €21.43 million (tax relief: nil) and amortisation of acquisition finance facility costs of €5.32 million (tax relief: nil). The calculation of adjusted earnings per share in 2002 is after elimination of exceptional charges of €21.04 million (tax relief: €6.93 million), goodwill amortisation of €21.02 million (tax relief: nil) and amortisation of acquisition finance facility costs of €2.92 million (tax relief: nil). The calculation of basic earnings per share is based on a profit of €31.51 million (2002: profit of €10.13 million). Both the calculation of adjusted EPS and basic EPS are based on 188.6 million ordinary shares (2002: 187.4 million), being the weighted average number of ordinary shares in issue during the period. The calculations of earnings per share exclude 4.9 million treasury shares arising from the share repurchase programme. 5. Accounting Policies The foregoing accounts are prepared on the basis of the accounting policies set out in the 2002 annual report. The annual report and accounts will be circulated to shareholders in January 2004, prior to the Annual General Meeting to be held on 5 February 2004 in Jury's Hotel, Ballsbridge, Dublin 4. By order of the Board, C.M. Bergin, Company Secretary, 25 November 2003. Greencore Group plc, St Stephen's Green House, Earlsfort Terrace, Dublin 2. ============================================================================== This information is provided by RNS The company news service from the London Stock Exchange

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