Q3 Trading Update

Note: Headline results presented for the quarter exclude Charnwood and Knighton Foods

Alex Whitehouse, Chief Executive Officer

"We are pleased to report another very good quarter of volume led branded revenue growth, accompanied by further market share gains, as our branded growth model continues to deliver well for us. Our Sweet Treats business had a particularly strong Christmas with branded sales up 8.9%; Mr Kipling sold 20% more mince pies this year, delivering its biggest ever quarter. Earlier this year, we said that consumers are starting to trade up and treat themselves more. This has continued over Christmas with our premium ranges such as Ambrosia Deluxe desserts, Bisto Best gravy and Mr Kipling Signature Brownie Bites performing strongly and we more than doubled the sales of our Mr Kipling Signature mince pies."

"Our acquired brands, The Spice Tailor and FUEL10K, both delivered double digit sales growth, as we leverage our product innovation capabilities and commercial relationships to unlock their potential. Ambrosia porridge pots and Cape Herb & Spice were standout performers of the 38% growth in new categories in the quarter, while all our target overseas regions delivered further strong progress as International sales increased 29%3."

"Having delivered very good volume led, branded revenue growth in our key third quarter, we're now guiding Trading profit to the upper end of expectations for this financial year. As we look to the rest of FY24/25 and to the medium term, we expect to deliver further progress as we continue to execute against our five pillar growth strategy."

Trading update

Grocery

Grocery volumes increased again in Q3, with overall sales3 up 2.2%, Branded revenue up 3.5% and Non-branded (9.3%) lower. The premium Ambrosia Deluxe and Bisto Best ranges performed well as consumers traded up over the Christmas period and Loyd Grossman cooking sauces delivered sales growth from new product ranges such as Tomato & Mascarpone sauce and Pesto. Nissin again grew strongly in the quarter, due to both the existing core ranges and reflecting the recently added Demae Ramen range. The Group's acquired brands grew double-digit; The Spice Tailor increased sales helped by the launch of East Asian sauce kits while FUEL10K launched Multigrain flakes in the period, adding to the strongly performing Granola range. Sales from new categories grew 38% in the quarter; Ambrosia Porridge pots again increased retailer distribution and Cape Herb & Spice delivered particularly strong progress due to further retailer distribution wins and range expansion. Non-branded sales declined largely due to the exit of some lower margin contracts.

Sweet Treats

Sweet Treats reported strong volume led branded revenue growth of 8.9% in the quarter with both Mr Kipling and Cadbury contributing to this progress, growing faster than the market. Mr Kipling Signature mince pies and Brownie Bites more than doubled sales in the period, as consumers continue to trade up to premium options. Cadbury cake delivered good sales progress across both its core and seasonal ranges and the Group recently extended the licence it holds with Mondelēz Europe GmbH to manufacture and sell Cadbury cake and ambient desserts through to 2028. Non-branded Sweet Treats sales were in line with the same period a year ago.

International

The Group's overseas businesses enjoyed another quarter of progress with sales up 29%3 and double-digit growth in all target regions. Mr Kipling cake was again the major driver of growth in Australia, as the core portfolio of slices was supported by the launch of more products such as new Bakewell Tarts flavours, while the recently launched Paxo Gravy also performed well in the quarter as the Group expands its category presence. In North America, The Spice Tailor grew strongly in Canada as the range establishes its position in market, increasing retailer distribution points and supported by Diwali seasonal activity. Early sales of The Spice Tailor in the US in the quarter were encouraging. Sales in EMEA increased as Sharwood's continued to build distribution in Germany, Belgium, Spain and Portugal.

Outlook

With a third quarter of very good volume led branded revenue growth and further market share gains, the Group is now guiding Trading profit to be at the upper end of expectations5 for this financial year. Looking further ahead, the Company expects to deliver further progress against its growth strategy, with sales trends to be more balanced between volume and price.

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As one of the UK's largest food businesses, we're passionate about food and believe each and every day we have the opportunity to enrich life for everyone. Premier Foods employs over 4,000 people operating from 13 sites across the country, supplying a range of retail, wholesale, foodservice and other customers with our iconic brands which feature in millions of homes every day.

Grocery

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