Full Year 2024 Bakkavor Group Plc Earnings Call Transcript
Key Points
- Bakkavor Group PLC (LSE:BAKK) reported a strong financial performance in 2024, with a 70-basis point improvement in margin, reaching 5%.
- The company achieved a significant reduction in leverage, now at 1.1 times, indicating improved financial stability.
- Return on invested capital increased to over 10%, demonstrating effective use of capital and strategic investments.
- The U.S. operations showed marked improvement, with EBITDA margins now ahead of the UK, indicating successful operational efficiencies.
- Bakkavor Group PLC (LSE:BAKK) is confident in achieving its 6% margin target by 2027, supported by clear strategic plans and operational improvements.
- The company faces ongoing challenges with cost price inflation, particularly in labor, which is expected to impact 2025 with an additional GBP50 million in costs.
- Closure of the Wigan site will incur short-term costs, although it is expected to benefit margins in the second half of the year.
- The China business, while streamlined, is not expected to deliver significant profitability, with break-even at EBIT being the best-case scenario.
- Employee turnover, although improved, remains a concern, particularly in the U.S., where past high turnover rates impacted operational efficiency.
- The company experienced an increase in net carbon emissions due to an incident at a U.S. factory, although it is not expected to be a recurring issue.
Well. Good morning, everybody. Thank you all very much for coming here to join us this morning and also thank you to those who are joining us online. I'm Simon Burke. I'm the Chairman of Bakkavor and it's my pleasure to introduce this session this morning.
Just to give you an overview of what we're going to cover, Mike will start out by giving you the headlines, as it were, and Lee will then go into the financial detail and then Mike will give you a strategic overview of where we think we're at. And then there will be as much time as you need for questions at the end. So, without further ado, I will hand you over to Mike. Thank you.
Thanks Simon. So, look, I want to start off with a couple of slides before I hand over to Lee, who'll go through the detail, just framing the key messages from today. So, only two slides, one looking back, and one looking forward, and I guess at the end of
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