Earnings call transcript: Premier Foods Q1 2025 sees modest sales growth

Premier Foods reported its Q1 2025 earnings, revealing a slight increase in group sales by 0.3% year-over-year, building on its steady revenue growth of 3.22% over the last twelve months. The company highlighted growth in branded sales, particularly in its Sweet Treats segment, which saw an 11.4% increase. The stock experienced a decline, closing at 181.6, down 1.1% from the previous session. According to InvestingPro data, the company trades at an attractive P/E ratio of 10.69, suggesting potential undervaluation. InvestingPro subscribers have access to detailed valuation metrics and 8 additional key insights about Premier Foods.

Key Takeaways

• Group sales increased by 0.3% year-over-year.
• Sweet Treats branded sales grew significantly by 11.4%.
• Stock price fell 1.1% post-earnings announcement.
• Trading profit expectations remain unchanged for the full year.
• Focus on innovation and international market expansion continues.

Company Performance

Premier Foods reported a slight increase in overall sales, driven by a strong performance in its Sweet Treats segment. Despite a 2% decline in grocery branded sales, the company maintained its market share in volume and value. The company continues to hold leadership positions in multiple categories and has been successful in gaining market share from private labels. InvestingPro analysis shows the company maintains healthy financials with a current ratio of 1.1 and operates with moderate debt levels, earning a "GOOD" overall financial health score.

Financial Highlights

• Group sales: Up 0.3% year-over-year.
• Branded sales: Increased by 1.2%.
• Sweet Treats branded sales: Grew by 11.4%.
• Grocery branded sales: Declined by 2%.

Outlook & Guidance

Premier Foods has maintained its trading profit expectations for the full year, anticipating double-digit growth in international markets, particularly in the latter half of the year. The company is exploring inorganic growth opportunities and focusing on strategic growth pillars to drive future performance. With a notable dividend yield of 6.3% and a low beta of 0.7, the stock offers both income potential and relative stability. For deeper insights into Premier Foods’ growth prospects and valuation, InvestingPro subscribers can access comprehensive research reports and detailed financial metrics.

Executive Commentary

CEO Alex Whitehouse stated, "We’re on track and our trading profit expectations for this financial year are unchanged." He emphasized the importance of innovation, saying, "Innovation is really important for our model." Whitehouse also highlighted the company’s efforts in health-focused product development, noting, "We’ve been reducing fat, salt, and sugar in our products and making healthier options."

Risks and Challenges

• Decline in grocery branded sales could impact overall growth.
• Market volatility and inflationary pressures may affect cost structures.
• Expansion into international markets poses logistical and competitive challenges.
• Dependence on innovation requires continuous investment and market responsiveness.

Premier Foods remains focused on expanding its product offerings and market presence, while maintaining a vigilant approach to market dynamics and consumer trends. The company’s solid financial foundation and consistent performance have contributed to its favorable market position, as reflected in InvestingPro’s comprehensive analysis available through their detailed research reports covering over 1,400 US equities.

Full transcript - Premier Foods PLC (PFD) Q1 2026:

Operator: Hello everyone and thank you for joining the Premier Foods Q1 trading update analyst conference call. My name is Harry and I will be your operator. All lines are currently in listen-only mode, and there will be an opportunity for Q&A after management’s prepared remarks. If you would like to enter the queue for questions, please dial STAR followed by 1 on your telephone keypad. I would now like to hand the call over to Premier Foods CEO Alex Whitehouse to begin. Please go ahead.

Alex Whitehouse, CEO, Premier Foods: Thank you very much and good morning everyone, and thanks for joining this, our quarter one trading update call.

Duncan Leggett, CFO, Premier Foods: Covers the 13 weeks up to 28 June this year.

Joined on the call this morning.

Usual by Duncan Leggett, our CFO.

I’ll start by giving a few headlines on our trading in the quarter.

We’ll dive into a few key areas to provide a bit more detail before, as usual, passing to you for your questions.

Alex Whitehouse, CEO, Premier Foods: As a reminder, by the way, we’re holding our AGM at 12:00 P.M. today.

We will be hosting our offices here in St Albans. If any shareholders would like to attend and you don’t have the details, please contact Richard Godden in our Investor Relations for details of how you can attend.

On to the Quarter One results then. Firstly, I’m pleased to say that we’ve grown our branded sales again in Quarter One, and we’ve also increased our market share. Branded sales were up 1.2%, and that was led by a particularly strong performance in branded sweet treats, which was partially offset by some of our grocery.

Brands, which were held back by the unusual hot weather that we’ve been having.

Overall, our Group sales were 0.3%.

Higher than last year.

You may recall we’re also lapping.

Some very strong comps.

Duncan Leggett, CFO, Premier Foods: As a reminder, grocery branded sales.

We’re up 8.6% and total branded up 7.3% last year.

Alex Whitehouse, CEO, Premier Foods: Market share continued to grow, both volume and value market share. You might also recall that last year we delivered some particularly strong volume share.

Gains as we sharpened some of our promotional price points.

Taking further volume share this quarter.

Against that strong comparative, was very encouraging.

I’m also pleased to say that we’re on track at this early stage of the year with our trading profit expectations for the full year unchanged. Let’s take a look at some of the progress in this first quarter. Before I do, I’d just like.

Duncan Leggett, CFO, Premier Foods: To remind you of our branded growth model.

Model, which is at the core of.

What we do is the reason why we’ve been able to deliver such.

Consistent, strong performance over the last six years or so.

Alex Whitehouse, CEO, Premier Foods: Firstly, we’ve got a portfolio of strong brands, which are leaders in their categories.

They have got very high penetration.

We then listen very carefully to our consumers so that we can create and bring to market insightful new products which are based on current consumer needs and trends. We support many of our brands with emotionally engaging advertising and impactful marketing campaigns, which in fact we’re currently.

Evolving to incorporate more digital media and leveraging influencers on some of our brands.

Finally, but very importantly, we work closely with our key retail partners.

To make sure that we’re delivering excellent in-store execution for our brands.

It is this branded growth model that underpins our five pillar growth strategy, where we continue to make strong progress in all the pillars. I’ll come back to that shortly. Let’s start with our Sweet Treats business first, where we’ve had a really great quarter here, with branded sales increasing by 11.4%. A significant part of that growth has been driven by the quality innovation.

Program that we’ve got in place, which is obviously a key part of our strategy.

However, I should point out that the underlying core business also continues to perform.

Duncan Leggett, CFO, Premier Foods: Very strongly.

Alex Whitehouse, CEO, Premier Foods: In terms of some of the examples of new products, I’ve spoken about our Mr Kipling Signature Brownie Bites before, and they’ve been performing very well over the last year or so, tapping into the indulgent consumer trend. They continue to deliver further growth for.

This quarter as well.

We’ve also launched Mr Kipling lunchbox slices in quarter one, which has been.

Specifically designed to be less than 100.

Calories so that they can be included in school lunchboxes and are also of.

Of course, non-HFSS, so not high in fat, sugar.

One of the big highlights for Sweet Treats this quarter has been the success of birthday cake tarts and also shortcake cream tarts. These birthday cake tarts have been inspired by a trend that we’ve seen in the U.S. for birthday cake as well.

A flavor, not just as a cake.

We have replicated this with some small parts, which have done incredibly well since.

We launched them a few months ago.

We’ve also introduced a caramel version of our leading Cadbury Mini Rolls, and that’s also performed very well. That helped our Cadbury sales as well as Mr Kipling sales increased by double digits this last. Looking forward to the next quarter and beyond, we launched Mr Kipling breakfast cakes, which contain fiber and have got 30% less sugar than similar cakes, and that’s a perfect on-the-go solution as we further expand our breakfast offering.

And.

Moving on to the grocery business, this quarter our grocery brands’ sales.

Were 2% lower than the same period.

A year ago as they lacked some strong comparatives on, and also some of our grocery categories were impacted by that warmer, sunnier weather we’ve been having here.

In the UK compared to what was actually quite the cool, damp spring last year.

From our experience, there are a few specific categories which can be impacted by warmer or indeed colder weather, and that’s things like gravy, stocks, and soups, and also desserts. Costs to an extent too. We tend to see more of an impact in the shoulder seasons. A warmer spring or autumn can be more impactful, and likewise a cold.

Spring or autumn has the opposite effect.

However, this is very much a short-term factor. We don’t see any recourse on a medium to long-term basis.

So that everyone’s aware by the.

We’re on a journey to deseasonalize.

The business and reduce the impact of weather.

For example, we take this into consideration in our M&A strategy, and you can see that both the.

The Spice Tailor and Fuel10K, which have got little or no weather sensitivity, and also as we grow our business.

Overseas, this will reduce the impact of.

Short-term UK weather effects.

Now, as we look to the second half of the year for our grocery brands, we’ve got some particularly strong innovation.

To come such as The Spice Tailor Peri Peri.

Gravy, which aims to bring more younger consumers into the category, and also the continued rollout of Batchelors.

New microwavable ranges, which includes pastel and.

Sauce and also what we’re calling meals.

And minutes.

Over to the non-branded part of the business, non-branded grocery sales were 9.3% lower in the quarter. As we continue to rightsize this part of the business, we exited a couple of contracts in custard and salt. However, we also saw customers and consumers switching.

From our own label desserts into Ambrosia, which is obviously exactly what we want to see.

Non branded sales in sweet treats declined by 5.5%, which was also largely due to some contract exit. While the nature of these non branded contract handling the business can be quite lumpy on a quarter to quarter basis, as we look forward to the second half of the year, we expect non branded sales for both grocery and sweet treats to start to flatten out. Now, to look more broadly at the progress we’ve made on our other strategic pillars, it remains very encouraging. You’ll remember that one of those.

Pillars is expanding our brands into new.

Categories in the UK. I’m pleased to say that we’ve.

Continued the strong momentum in those new categories.

Duncan Leggett, CFO, Premier Foods: With sales up 38% this quarter.

Alex Whitehouse, CEO, Premier Foods: This further momentum was again led by Ambrosia Porridge Pots as it leveraged further.

Distribution gains in both the major multiples.

Retailer large stores, but also now into.

Convenience stores as well.

It now also has five flavors.

Variants in the market too.

Perhaps more surprisingly, Ambrosia Porridge Pots have.

Again, continued to deliver significant market share gains.

As a reminder and reflecting the success of Ambrosia Porridge Pots, we’re also in the process of laying down some additional capacity for porridge pots at our manufacturing site in Devon. Another key driver of the new categories growth in the quarter was Cape Herb & Spice, which is really becoming an established presence in the market as it benefits from increased distribution from the range of what is now 14 retail SKUs.

We’ve also got a few food service as well.

Cape Herb & Spice range is extremely versatile. It’s great at bringing great flavor to.

Liven up a wide variety of dishes, including poultry, fish, salad, and ribs.

Also across many midweek evening meals.

Of course, the barbecue season will have benefited us over the last few weeks.

Growth from new categories also included the expansion of Fuel10K in some mainstream big box cereals with products such.

As multigrain flakes and multigrain hoops.

These are all protein enriched in line with the rest of the Fuel10K range. It’s early days for this range, but we can already see that they’re bringing younger consumers back into the traditional cereals category. As we look forward to quarter two and beyond, we’ve got a strong set of plans for new products in new categories. This includes the launch into the chilled aisle with Fuel10K yogurt and granola pots, adding to the breadth of our breakfast offering. We’re also expanding our Angel Delight handheld ice cream range with what we call handheld twists, and they’re in strawberry vanilla.

Cotton chocolate flavors. If we now move on to international.

As I’ve said before, our focus markets are Australia, North America, and EMEA. Within these target markets, we’re currently.

Focused on Mr Kipling, Sharwood’s, and The Spice Tailor brands.

In the quarter, overseas sales at constant currency grew by 5%.

Again, going ahead of our UK.

Core, in Australia we grew sales double digits with further good progress in cake and cooking sauces, and both our cake and cooking sauce brands continue to perform.

Really well in market, driven by the continued execution of our branded growth model as we further build on our market leadership positions.

You may recall that we’ve advertised both Mr Kipling and The Spice Tailor on TV in Australia recently, and we continue.

To do interviews, new products to market, as well as maintaining strong relationships with the retailers there.

Sales also grew very strongly in Canada as the sales of Mr Kipling continue to build, partly due to the increased.

Distribution that we gained last year.

In the US we’re updating the Mr Kipling range, accentuating the Britishness of the product range with pack designs that.

Include iconic British images such as Big Ben.

I mentioned before that our research suggests that U.S. consumers believe that British cakes.

Will be of higher quality.

Just as a reminder, our final strategic growth pillar is to look for inorganic opportunities where we can deliver further growth by leveraging the strength of.

Our branded growth model.

That was a key principle we applied when we assessed the fit of both.

The Spice Tailor and Fuel10K.

Both of them increased UK sales.

Double digits this quarter compared to a year ago.

The Spice Tailor has benefited from increased sales from the East Asian cooking sauce kits that we’ve launched and Chinese cooking.

Sauce kits, which we launched during last year.

These are authentic product flavors such.

As Japanese teriyaki, Vietnamese curry, and classic.

Sweet and sour sauce. To build on the cuisine extensions, we just launched into Mexican with our new Mexican kits with flavors such.

As smoky barbecue fajita and chipotle and lime fajitas.

Fuel10K had an exceptionally strong quarter, and that was helped by a series of new products we’ve launched recently, extending.

The brand into a number of different categories.

All of these are, of course, high in protein, which is central.

Part of the brand’s proposition.

These new products include instant noodles, a range of instant soups and protein bowl pouches, and this very latest product is Fuel10K yogurt and granola pots which have gone into market just a couple of weeks.

Duncan Leggett, CFO, Premier Foods: Ago into the chill vial.

This is a pot of protein-enriched yogurt with a lid containing some of our market-leading Fuel10K granola to sprinkle on top or indeed to mix in.

Alex Whitehouse, CEO, Premier Foods: As we said before, we’ll continue to explore further inorganic opportunities where we can.

Believe that we can add value by applying our branded growth model.

Of course, we’ve now got greater flexibility in terms of the size of opportunities we can consider, given the strength of our balance sheet.

However, as we’ve said before.

We are quite picky, and we’ll update.

When we’ve got anything more that we can share.

In summary, we’re on track and our trading profit expectations for this financial year are unchanged. It’s particularly pleasing to see the.

Really strong growth in sweet treats, which.

Is a strong testament to the value.

That we’re delivering from our branded growth model.

Model, albeit partly offset in Q1 by.

The hot weather impact on some of our grocery categories.

As we look forward to the rest of the year, we expect to see the strong comparative ease.

Revenue build as we leverage the strength.

Of our branded growth model. We’ll be continuing to support our brands and bringing a number.

Of new products to market, as well as building further the distribution of our brands A to Z.

Over the medium term, we expect to continue to make strong progress against all five of our strategic growth pillars. Thank you very much for your time. I’ll now pass back to the operator.

We will be very happy to take your questions.

Operator: Thank you. If you would like to ask a question, please dial Star followed by one on your telephone keypad. If you change your mind and would like to exit the queue, please dial Star followed by two. Finally, when preparing to ask your question, please ensure that your device is unmuted locally. As a reminder, that is Star one to enter the queue for questions. Our first question today will be from the line of Matthew Abraham with Berenberg. Please go ahead. Your line is now open.

Morning all. Thanks for taking my questions. First question just is in reference to innovation. You spoke to the success of innovation in Q1. Is it possible to provide some quantification of innovation to come for the remainder of the financial year, whether that’s the number of new SKUs and how that compares to the degree of new products that’s been launched in the quarters have gone. Thank you.

Hi, thanks, Matthew.

Alex Whitehouse, CEO, Premier Foods: Obviously, innovation is really important for our model.

Duncan Leggett, CFO, Premier Foods: We know that there is a very.

Alex Whitehouse, CEO, Premier Foods: Strong correlation between long-term brand growth.

Brands which have got the ability to consistently innovate, that’s why we put so much focus on it, to be honest.

In terms of balance to go, I can’t quantify it, unfortunately.

No.

The reason for that is the.

We’re increasing our overall innovation output.

Duncan Leggett, CFO, Premier Foods: It’s not by throwing more and more SKUs into the market, because frankly there’s a bit of room for them on the shelf.

It’s actually by increasing the overall revenue.

potential of the things that we do launch is all about how the marketing team down in the engine room develop ideas, working with consumers, which have got, frankly, there’s a bigger potential.

When I look at our balance.

To go this year, I just think we’ve got a particularly strong and exciting lineup of new products, many of which I don’t really want to talk about yet because I don’t want to give away commercially what we’re about to do.

By the time we get to the half year, I’ll be able to share more of the things that we’re doing.

Alex Whitehouse, CEO, Premier Foods: The one I pull out.

Now that we’re quite excited about is the Fuel10K yogurt and granola pots with the granola on top.

There are lots of things coming across.

The other categories as well a little bit later in the year. It’s just waiting for when the retailers do their shelf relay.

Okay, understood. Thank you. Just one more next question, just in reference to margin with mix changes to impact from weather, is there a broader group margin impact from a change in that mix?

We’ve got slightly different margins on some of the categories, so things can.

Move around a little bit.

Duncan Leggett, CFO, Premier Foods: You’ll note today that we’re saying that we’re on track to our overall trading profit for the year, so there’s no major issue.

Okay, understood. I’ll pass it on. Thank you.

Operator: The next question today will be from the line of Matthew Webb with Investec. Please go ahead. Your line is open. Thanks very much. Good morning.

The first question, can we just start?

Off with that sweet treat growth number, 11.4% for the branded sweet treats? Clearly a terrific number. Would it be possible to give us a rough breakdown of that between volume, price, and mix? Also, if possible, clearly innovation was quite a big contributor as well. Is it possible to break out the contribution of innovation as well, please, just to sweet treats specifically? That’s my first question. Thanks.

I don’t have those specific numbers.

Duncan Leggett, CFO, Premier Foods: What I can tell you is that the innovation played a very big role in that growth. The reason why it was so powerful is because the core grew as well. We got good growth out of the core business and then some really powerful MPD that came on top, which is why you get such a powerful number.

I think that was coupled with also some really great execution in store.

We had a big in-store event centered around our partnership with Roald Dahl, and that led to some really big displays in store at the same time. Everything came together and worked really well in terms of volume, price, and mix.

I don’t have the numbers down.

What I can tell you is that.

There is some price in it, definitely.

We increased our prices at the back end of last year, so there’s definitely a price component.

From a market share point of view.

We took volume share and value share, which probably gives you some indication that it was driven by some of each.

Operator: Got it.

Maybe a bigger picture question.

About the cake category. I guess the perception out there is that it’s on the wrong end of some structural changes in consumption. It was a very strong point for you in the period, and I think you mentioned that the category in the period as well. What do you think the medium term prospects are for the cake category as a whole and for you within it?

We’ve always found that the cake category.

Alex Whitehouse, CEO, Premier Foods: is one of our most elastic categories. By that I mean it’s very sensitive to when we get it right, so if we get the innovation right.

We get the execution in store right, we see disproportionate gains compared to some of our other categories.

Duncan Leggett, CFO, Premier Foods: I think the reason for that.

Some of our products are tied.

To specific meal occasions. I’m only going to use a pasta sauce if I’m having pasta for dinner. If I’m having something else, I don’t eat it. Cake is something that you can eat no matter what you’re having for dinner. People tend to put them on the countertop at home, and they get kind of hoovered up by the family as they go past. I think when we get it right on cake, we see disproportionately strong performance, which I think is exactly what you’ve seen here in Q1. In terms of long term outlook, we’re pretty positive on it, to be honest.

Operator: Got it.

Thank you.

The final question, the international figure, the growth of 5% I guess looks maybe a little bit disappointing compared to some of the rates you’ve posted in the past.

Is that a fair reflection of the?

Underlying growth in the period or were there any signings in there? I know you said that Australia grew double digits, so presumably something else was going the wrong way. What was going on there?

Alex Whitehouse, CEO, Premier Foods: Yeah, sure.

I mean, we’re still really positive.

Duncan Leggett, CFO, Premier Foods: On the international growth prospects, we would expect to be in double-digit growth over the full year, although that does feel a little more back-end weighted for us. In quarter one, we had some great performance in Australia. We had really strong growth on both of our key categories, cake and also Indian cooking sauces. We took really strong market share gains as well, actually on both those categories. Canada continues its kind of strong building in performance.

Where we saw some stuff going in.

The opposite direction is where we just got, frankly, lumpiness in the supply chain.

Because the business is still actually not that big.

Consequently, when you’re shipping stuff over long distances, the difference between when a container ships and how much stocks.

In the market can create a bit.

There is a concertina effect. We ship a load of stock and give them a stocking market, then there’s a bit of a pause while it gets consumed, and then we ship some more. I think that’s some of what we saw in the quarter in some markets.

I think it’s also fair.

We’ve had to change our distributor in the Middle East. We did have a bit of a period of time where we’ve not really sold anything in the Middle East while we’re exiting one distributor and moving to another. These are temporary effects, which is why we still expect to be double digit for the full year.

Operator: Got it. That’s really fair. Thanks very much indeed. The next question today will be from the line of Karim Elias with Barclays. Please go ahead. Your line is now open.

Thank you for the presentation and thanks for taking my question. Obviously your bond is due in October 2026. Just wondering whether you’ve got any particular plans to address those and whether the bond market will still be your favorite cloud for those. Thank you.

Duncan Leggett, CFO, Premier Foods: Yeah, morning, Green. Thanks for the question. I think, absolutely right from the format of October 26th. I think as we said at the year end we’ll be looking to need them to rebalance it probably over the next nine or 12 months or so. That very much remains the plan. We continue to monitor the market. I think the bond market has typically worked pretty well for us, B2C, and it’s a bit of a different position than it was when we put the current bond in place at 3.5%. We’ll keep an eye on things and probably be able to do something over the next nine or 12 months.

Thank you.

Operator: The next question today will be from the line of Andrew Ford with Peel Hunt. Please go ahead. Your line is now open.

Morning all.

Thank you for taking my questions. A couple from me, if I can, just on the grocery number and the negative number there, can you give a bit more detail on the performance, I guess how some of the less seasonally relevant products perform versus the ones that you called out in terms of gravy and soups, et cetera, that you’d expect to be a bit weaker given the warm weather, maybe as well. You’ve obviously become less seasonally dependent as you’ve grown through your brand building. I wondered how much further you can go given the current portfolio you have or if it would require more of a, I guess a widening of the categories, reliant on acquisitions or is there product changes you can make in order to improve that? I’ll start with that one and I’ve got one more if I can.

Good morning, Andrew.

Alex Whitehouse, CEO, Premier Foods: Within grocery, as I say.

There are some categories which are particularly sensitive to weather. This quarter it was for the worst, but some quarters it’s for the better.

Duncan Leggett, CFO, Premier Foods: Right? There would be obvious things like gravy, stocks, and stuffing because those categories, in what we call flavors and seasonings, if you’ve got the barbecue out and you’re having salads, you’re not having a roast dinner. There’s an obvious impact there.

You’ve got, you know, things.

Alex Whitehouse, CEO, Premier Foods: That growth has continued to march on.

You know, irrespective of that.

Duncan Leggett, CFO, Premier Foods: We have really strong growth from The Spice Tailor. We have really strong growth from Fuel10K. Breakfast was really strong because obviously that’s not weather sensitive. Things like granola are not weather sensitive at all.

Knitting performed really well, with further double-digit growth. There were a number.

Of things which were going in the right direction, which are the things, as you would expect, are not weather sensitive.

Yes, we are significantly less.

seasonal and weather sensitive than we used to be. That’s for a number of reasons, I think. Firstly, we’ve got a more robust business model than we would have had six or seven years ago. You can see that in the strong growth from the Cape Herb & Spice business. Secondly, the new category entries we’ve made have tended to be either seasonally neutral or actually seasonally inverse. I think about things like Cape Herb & Spice, which delivered more than 50% growth in the quarter as people sprinkled it on stuff they were putting on the barbecue, and then the brands, as you pointed out, the brands we bought.

We sort of take this deseason.

Concept into account on all those things, and over time we will further deseasonalizing the business at a structural level. I think we’ve made an awful lot of progress over the last five or six years, which is why we’re still looking at positive branded growth despite the really hot weather that we’ve just had. I cast forward over the next three, five years; if we keep doing the same, it’ll just make us even more robust. That’s very much the plan. I should also ask, by the way, of course, I remember when the weather’s.

It works for us that way.

Operator: Yeah, absolutely.

Thank you.

Just one more, just on the trading up into brands. I know you made a comment there.

Is there?

I think it was more in the sweet treats side, but are there any other notable kind of moves into that, from non-branded into branded that you’re seeing, anything worth calling out with that trend?

Alex Whitehouse, CEO, Premier Foods: Yeah, I’d pull out desserts as well, where we’re seeing sales moving from non-branded desserts into Ambrosia. That’s been a trend that’s been going.

On for probably 18 months or so now and have not got.

Operator: Great.

Thank you very much.

That’s all from me.

That possibly helps, actually, by the way, by the Ambrosia Deluxe launch. Remember, we’ve got Ambrosia Deluxe, we.

Duncan Leggett, CFO, Premier Foods: Talked about at the full year, which has done incredibly well and continues to do so, I think that just drags people up in general.

Operator: Thank you. As a quick reminder, if you would like to ask any further questions, please dial STAR followed by 1 on your telephone keypad now. The next question will be from the line of Clive Black with Shore Capital Markets. Please go ahead. Your line is open.

Thank you, and thank you for taking the question. Gentlemen, one narrow one to start off with.

Would it be fair to say that?

Your trading experiences in Ireland mirror those of the UK, given you’ve got a much broader assortment in that market and across the Atlantic. Maybe just give us some color how things are progressing in Canada, which has.

I think a little bit more, race.

Profile as you result, and then in a much more, much broader base that’s building on Matthew’s question. First of all, the UK government has issued updated news on its own food strategy, particularly around HFSS foods. We’ve seen a lot or heard a lot of noise about GLP-1s and appetite suppressant drugs in the market, more so stateside than here. Interestingly, recent updates from Domino’s and Gregg’s have contained some of that story. There’s a certain irony in your sweet treats blowing the mindset in Q1, but are you seeing and is your business strategy evolving around appetite suppressant drugs as well to the extent that they’re now starting to more noticeably feature in the market, in the UK market. Thank you.

Alex Whitehouse, CEO, Premier Foods: Yeah, quite a bit unpacked there. Ireland, yes, there’s a similar, almost certainly a.

Similar impact happening in Ireland.

Duncan Leggett, CFO, Premier Foods: UK from a weather point of view.

It’s not that big for us, to be fair, relative populations. Yeah, let’s talk about North America for a bit though.

Alex Whitehouse, CEO, Premier Foods: Yes, in Canada. We are doing really well in Canada, and I think some of this is.

We’ve been there for longer than we’ve been in after Australia.

Duncan Leggett, CFO, Premier Foods: There’s a little bit of a.

The way we kind of like to.

Think about it is that these markets.

Are following the pattern.

We are delighted with where we are in Australia, where we’ve got leadership in the first two categories, and we start to move our elbows out now and expand into additional categories. Fully established business team on the ground, you know, running the full brand building model.

That’s the blueprint.

We do need to bear in mind, of course, that it’s quite a simple market because it’s got two key.

Retailers, and then, you know, next cab off the rank was really Canada.

We have been there a little while.

Now we really have started to pick up momentum, picked up some big.

Chunks of distribution, particularly in Walmart last year, have had really good effects for Mr Kipling in Canada following that initial test. If you remember that fallback, that’s where we first tested.

The retail structure is not overly complex. It’s not dissimilar in terms of for.

The UK really, where you’ve got a handful of decent-sized retailers.

Not like Australia, but also very.

Much not like either. In the US we’re obviously further behind that. I think in the US and in Europe we’re still in that very early stage where we’re just putting our foot in the water. It’s a complicated, if not very complicated, retail environment which I’m sure you’re.

Very well aware of, there are.

Some interesting things happening in the U.S. Charwoods has been there a little while. It’s in limited distribution, but where it is, it’s really motoring forward. We’re going to be looking at how we can expand that further.

Early days with The Spice Tailor.

As you know, we’ve got one retailer where we’re testing that seems to do.

Pretty well, and we’re about to.

Alex Whitehouse, CEO, Premier Foods: I won’t go as far as to.

Duncan Leggett, CFO, Premier Foods: Say relaunch, but we’re just about to update the Mr Kipling with that Britishness positioning.

To launch apple pies, which have tested really well because, interestingly, you might think pricey. The U.S. has got, you know, is.

Known for its apple pies, but actually they’re all quite big and individual.

Six apple pies in a box is something they don’t really seem to have. That seems to have been something.

That retailers are quite liking the look of. We will see, but that’s sort of the game plan.

Meanwhile, sorry, I was just going.

That could be a good segue into the broader GLP-1 appetite suppressant angle. Big apple pies versus yours.

Alex Whitehouse, CEO, Premier Foods: Quite. We are not seeing any impact at this point.

We’re monitoring it really carefully.

The work we’ve done, that for the majority of our business, the UK grocery business, we’re selling things which you use to put together an entire meal.

If you’ve got a family, you.

Duncan Leggett, CFO, Premier Foods: know, you’ve got a family of four who’s making a.

Making pasta or they’re making something that needs an Oxo cube, you’re not going.

To use 2/3 of the jar or 3/4 of the jar because you know somebody one, and you’re not going to use 3/4 of an Oxo cube.

We don’t think, because of the.

Nature of a lot of our brands.

That it’s going to make that much difference.

The irony is you say you’re three.

3, where in principle, you could imagine there are some people who are going to stop eating cakes.

Alex Whitehouse, CEO, Premier Foods: They’re not seeing it. I suspect some of it might be that.

Duncan Leggett, CFO, Premier Foods: There’s not enough people in the UK that want it to make as much of a difference.

I think as well, you.

Alex Whitehouse, CEO, Premier Foods: You look at the usage habit of.

Kipling cake, it’s not. You don’t buy one and eat it.

Duncan Leggett, CFO, Premier Foods: On the go, like you might with a, you know, a confection bar.

Yeah, it’s part of the weekly shop. It goes home, it sits on the.

Kitchen countertop, and different family members eat them, you know, as they come and go through the kitchen, make a cup of tea.

We think, therefore, that will see the consumption from the rest of the family. As I say, we can’t see.

Any impact, I’m not sure we’re going to, to be honest.

Very interesting. Just very quickly, concept of time, the UK government’s evolving rhetoric on diet and health. Is that a continuum for you or something new that we’ve seen in the last week?

It feels like a continuum, to be honest.

Alex Whitehouse, CEO, Premier Foods: I think we’ve been quite supportive of the health agenda. We see it as both a moral responsibility to help nudge people in the right direction with their eating habits, but also as a commercial opportunity because we know a lot of people are trying to be a little healthier. Over the last more than six years now, probably more like eight years or so, we’ve been reducing fat, salt, and sugar in our products and making healthier options so they are available if people want them, and we’ll continue to do that.

Yeah, I really appreciate the way you embrace the question.

Duncan Leggett, CFO, Premier Foods: Thank you very much.

Alex Whitehouse, CEO, Premier Foods: I think, sorry, I’d ask.

We still need to be aware that we make healthy options of things.

Sometimes people buy the original version, but it’s there if people want it.

Yeah, absolutely the right way.

Thank you.

Operator: The next question today will be from the line of Damien McNeiller with Deutsche Bank. Please go ahead. Your line is open.

Hi.

Alex Whitehouse, CEO, Premier Foods: Morning everybody.

Thanks for taking the questions. A few quick ones for me, I think hopefully. Just in terms of the market share gains that you’ve made in the period, are you able to sort of quantify the size of those gains that you’ve made and where you’ve taken that share from? I’m assuming quite a bit of it’s from private label, but whether you could just confirm that, please. Secondly, on breakfast you’ve indicated that you’re doing an increasing amount to focus on that eating occasion. I’m just wondering whether you could sort of give us an indication of how much of your sales are generated from breakfast at the minute.

Finally, on marketing spend, I know you don’t sort of provide the exact numbers, but I was wondering if you could provide us with some color on marketing spend this year and just interested in some of the influences that you are using as well, please. Thank you.

Hi, Moy. Market share gains, we’ve not shared.

I don’t have the exact number on that, but you could probably say it’s double digit on both volume and value share gains, double digit basis points.

Duncan Leggett, CFO, Premier Foods: Just to be clear.

Alex Whitehouse, CEO, Premier Foods: I often get.

Asked where does the share come from? It’s an interesting one because we don’t really look at it like that. We gain market share almost by the consequence of growing faster than the market. What we intend to do is.

Duncan Leggett, CFO, Premier Foods: Drive growth for the.

Categories, particularly given we tend to have.

leadership positions in most of our categories. We will go out of our way to drive growth for us and for the retailer and grow the category. The fact that we do that, I guess better than the rest of the category, means that there’s a mathematical share gain, which is quite different from us going out and actually targeting where that share is going to come from. It’s sort of a slightly different approach.

As I said earlier, we have.

Got categories where we are taking consumers from private label into brand, and that includes fruit trees and it includes dessert.

Alex Whitehouse, CEO, Premier Foods: Does that answer that question?

Yeah, that’s perfect. Thank you very much, Alex.

Drext is still relatively small for us.

Obviously, we offered to step into it with the Ambrosia Porridge Pots, which continued to.

Duncan Leggett, CFO, Premier Foods: Do incredibly well and has grown by a huge double-digit number again this quarter. Since then you bought Fuel10K, which has got a very big proportion of its sales in breakfast. We’ve just expanded that with the yogurt and granola pots, which we expect largely to be eaten at breakfast or morning time. Also, the Fuel10K big box, big box cereals, which are quite interesting in that we’re seeing that bringing younger consumers back into that big box central part of the cereal category.

is still early days for us.

Very double-digit growth, and I’m really pleased with the trajectory that we’ve got on that.

Alex Whitehouse, CEO, Premier Foods: Finally, on your marketing spend question, look, the direction of travel here we’ve been really clear on is that we are increasing our overall marketing spend over.

Time, ahead of inflation, with the intent to scale up how much we’re spending behind our brands.

Duncan Leggett, CFO, Premier Foods: We’ve been doing this for a number.

For years, at least the last six years, we plan to spend more this year than we spent last year. That’s part of that journey.

Alex Whitehouse, CEO, Premier Foods: We feel as though we’re probably.

Duncan Leggett, CFO, Premier Foods: Two thirds of the way along the road from where we were versus where.

We want to be, if that’s any help.

Yes, that’s great. Thanks, Alex. Can you name drop any influencers that you’ve been using, please?

Alex Whitehouse, CEO, Premier Foods: I couldn’t, no.

Duncan Leggett, CFO, Premier Foods: That’s mainly because I am not that close to it.

There are plenty of people in.

Alex Whitehouse, CEO, Premier Foods: The team who are.

Okay. Perhaps just once I’ve got the mic, just quickly on breakfast. Do you think the portfolio of brands that you’ve got is sufficient to get you to where you want to be in breakfast, or do you think there are still gaps in that part of the portfolio?

I think with the brands we’ve got, we cover a lot of bases.

We can do creaminess with Ambrosia, which is really helpful on things like.

Porridge, and I think protein enriched from Fuel10K.

Fuel10K also works with a lot of younger consumers, which is where the growth is and therefore quite exciting.

Duncan Leggett, CFO, Premier Foods: We’re pretty pleased with what we’ve.

Got to be honest. Okay, brilliant.

Thank you very much.

Thanks.

Operator: Thank you. We have no further questions in the queue at this time. I would now like to hand the call back to Alex Whitehouse for some closing remarks.

Alex Whitehouse, CEO, Premier Foods: Thanks for dialing in everybody this morning. As you can tell, I think we’re.

We’re pretty confident about the full year outlook. We’re pleased with the overall, I guess, progress across the five pillars of the growth strategy.

Duncan Leggett, CFO, Premier Foods: Sweet Treats is in a particularly strong position, but obviously in the short term grocery being weather affected. Obviously, we know that that’s a temporary thing, so it doesn’t really knock us off track for the rest of the year or where we’re heading strategically. As you know, we’ve got great ambition to scale up Premier Foods using that branded growth model and using the five pillar growth strategy. Thank you very much.

Operator: This concludes the Premier Foods Q1 trading update analyst conference call. Thank you all for joining. You may now disconnect your lines.

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