FY20 Interim Results Statement

19 May 2020

Decisive response to COVID-19; strong financial and operational model in place to build back the business

Greencore Group plc ('Greencore' or the 'Group'), a leading manufacturer of convenience food in the UK, today issues its interim results for the 26 weeks ending 27 March 2020 and updates on its response to the COVID-19 pandemic.

HIGHLIGHTS ^1,2,3

-       Comprehensive and rapid response to COVID-19 by keeping our people safe, feeding the UK, and protecting our business with focus now turning to building back Greencore volumes as social restriction measures are eased

-       Reported revenue growth of 1.6% and Pro Forma Revenue Growth of 0.1%, impacted by effect of COVID-19 on food to go categories at the end of the period

-       Adjusted Operating Profit of £38.3m and Adjusted EPS of 5.8 pence

-       Net Debt (excluding lease liabilities) of £311.1m at 27 March 2020 with Net Debt: EBITDA of 2.1x as measured under financing agreements

-       Total cash and undrawn committed facilities of £267.5m at 27 March 2020 with covenant waivers agreed for bank facilities; in addition, confirmation of eligibility, in principle, to access funding under the Covid Commercial Finance Facility (CCFF)

-       As announced on 30 March 2020, the Group will not be proceeding with an interim FY20 dividend payment and today announces that it will not be proceeding with either a final FY20 or an interim FY21 dividend payment

-       Appointment of Emma Hynes as Executive Director and Chief Financial Officer with effect from 19 May 2020

SUMMARY FINANCIAL PERFORMANCE ^1,2,3

Commenting on the results, Patrick Coveney, Chief Executive Officer, said: 

"I am hugely proud of the way in which our people have responded to the extraordinary challenges of  COVID-19, and  take this opportunity to publicly thank them for their role in keeping the UK fed over the last two months. We have implemented a broad range of actions to mitigate the impact of COVID-19 on our business and to position us for growth as the pandemic eases. More than ever before, our deep customer relationships, leadership positions in key food categories, well invested network, flexible model, and outstanding people are key strengths that ensure we trade our way resiliently through this uncertain period"

___________________________________________________________________________________________________

¹ The Group uses Alternative Performance Measures ('APMs') which are non-IFRS measures to monitor the performance of its operations and of the Group as a whole. These APMs along with their definitions are provided in the Appendix to the Interim Financial Report.

² The implementation of IFRS 16 Leases has been adopted by the Group in its Interim Financial Report, with no restatement of comparative information for prior periods. The impact on the Group's results for the period are highlighted in this report with further details on the transition impact outlined in Note 2 and Note 11 to the Interim Financial Report.

³ Net Debt: EBITDA as per financing agreements and is calculated excluding the impact of IFRS 16.

COVID-19 UPDATE

Three clear priorities

The Group is managing through this challenging trading environment with three priorities - keeping our people safe, feeding the UK, and protecting our flexible business. The organisation is functioning well in demanding working circumstances, with a resilient supply chain and production network enabling strong levels of customer service in a volatile demand environment.

Greencore is playing an important role in a food industry that has become a critical component of UK infrastructure through this pandemic. The Group's colleagues have been designated as 'key workers' and have performed with a powerful sense of commitment, skill, spirit, and purpose. Greencore is immensely grateful and proud of its own Food Heroes at this time. The Group is engaging continuously with regulatory bodies including the Health & Safety Executive and Public Health England, and in doing so has carried out an extensive range of measures to support and improve colleague safety across its manufacturing and distribution network. This strategy and these initiatives are consistent with the Group's broader sustainability agenda. These measures include a large number of social distancing measures in the workplace, the introduction of a range of new hygiene protocols, and the provision of support to colleagues who are working in manufacturing facilities and those who are working from home.  Labour absence, either through illness or through caring for ill or vulnerable family members, has been managed effectively and sensitively.

Greencore is working hard with its customers, the Government and the local communities in which it operates to provide high quality freshly prepared food to both consumers and frontline workers during this pandemic. The Group is contributing to the Government's food parcels for the most vulnerable housebound people in the UK and is donating thousands of food to go products to NHS workers across numerous UK hospitals and care homes. In addition, it is supporting the food industry charity, FareShare, and many other local organisations and charities that provide support for those in need at this time.

Performance since period end

In the first six weeks of H2 20, the COVID-19 pandemic has had a dramatic and volatile impact on the shape of UK food consumption, though there are signs that demand patterns have recently begun to stabilise. Weekly demand in the Group's food to go categories declined by up to 70% and is currently less than 60% below prior year levels. There has been sustained growth in the Group's other convenience categories, in particular cooking sauces, with growth currently about 5% above prior year levels. Group revenue is now approximately 60% of prior year levels on a proforma basis.

In response to these changed levels of consumer demand and in order to maintain efficient production, the Group moved rapidly to simplify its product ranges with its customers. Greencore has worked collaboratively with its customers to quickly adapt to the effects of the lockdown while maintaining customer service and working together on ways to maintain the integrity of the supply chain, while planning for activation as social restrictions begin to ease.

The Group has taken prudent measures to protect profitability and cashflow to ensure maximum flexibility through this uncertain environment. It has:

-       Tightened its food to go production network by temporarily ceasing production at its Bow, Atherstone and Heathrow facilities and rationalising production at its Northampton site.

-       Furloughed a substantial proportion of colleagues, using the Government's Coronavirus Job Retention Scheme.

-       Eliminated all non-essential operating costs including recruitment, travel, and other variable overheads.

-       Announced on 30 March that the Board and the Executive Directors have voluntarily agreed to take a 30% reduction in respective fees and base salary for a period of three months, with the wider senior teams also taking a voluntary reduction of between 10% and 20% of base salary for the same period.

The impact from the full suite of mitigating actions is now returning the Group to modestly positive EBITDA.

Liquidity

The Group is also focussed on conserving balance sheet strength and liquidity, and retains substantial and increased financial headroom. Together with positive underlying market fundamentals and the Group's market position, this leaves Greencore well placed to deliver over the medium term.

Greencore had cash and undrawn committed bank facilities of £267.5m at 27 March 2020. This includes a newly agreed £75m committed debt facility which matures in March 2021.

-       Since the end of H1 20, the Group secured formal agreement with its lending syndicate of banks to waive its Net debt: EBITDA covenant condition for the September 2020 and March 2021 test periods. The Group is also in advanced stages of discussions with the Private Placement holders in respect of a waiver of the September 2020 and March 2021 leverage covenants contained in the Private Placement documentation and the Group expects that an agreement in respect of such waivers will be finalised and concluded in the coming weeks.

-       In addition, the Group also confirms that it has received eligibility, in principle, to access funding under the Covid Corporate Financing Facility (CCFF).

-       The Group will defer a substantial portion of non-essential capital expenditure.

-       As previously announced, the Group is not proceeding with an interim FY20 dividend payment and the Group today announces that it will not be proceeding with either a final FY20 or an interim FY21 dividend payment.

-       Where relevant, the Group has agreed to defer cash contributions into its legacy defined benefit pension schemes.

The Group believes that this provides more than sufficient liquidity to manage through a range of different cashflow scenarios including fluctuations in working capital over the next 12 months.

OUTLOOK - BUILDING BACK FOR BETTER

Whilst COVID-19 is clearly impacting Greencore's performance in the short-term, the Group has taken a comprehensive set of actions to ensure that it is strongly positioned to build back the business as social restriction measures are eased. Greencore's medium-term strategic ambition remains focussed on optimising its growth potential in UK convenience food markets, supported by disciplined strategic investment. The Group's confidence in achieving this ambition is underpinned by its fundamental strengths; deep customer relationships, leadership positions across attractive food to go categories, a well invested and highly flexible network, an experienced and ambitious team, a comprehensive capability set and a positive resilient culture.

The Group is in close dialogue with customers on how to optimise its operating model to respond to evolving demand requirements, and the Group's commercial teams are exploring what future shopping trends and buying behaviours are expected to look like as the situation develops. The Group has demonstrated its agility and flexibility in responding positively to the immediate challenges of COVID-19 and expects to be able to deploy this agility again with customers as the pandemic eases.

Given the ongoing level of uncertainty around the possible duration and impact of COVID-19, the Group's financial guidance for FY20 was suspended on 30 March and the Group's outlook for FY20 included in the FY19 Full Year Results Statement and FY20 Q1 Trading Update should no longer be considered current.

ADOPTION OF IFRS 16 LEASES

On 28 September 2019 the Group adopted IFRS 16 Leases, the new accounting standard for leases. The Group transitioned to the standard using the modified retrospective approach, which does not require the restatement of comparative periods. On transition the Group recognised a right-of-use lease asset of £41.2m and a lease liability of £46.4m. The impact on the Group's H1 20 results are detailed in the Financial Review, and are summarised as follows;

The impact of IFRS 16 on the Group's APMs are detailed in the Appendix to this Report.

Forward‐looking statements

Certain statements made in this document are forward‐looking.  These represent expectations for the Group's business, and involve known and unknown risks and uncertainties, many of which are beyond the Group's control.  The Group has based these forward‐looking statements on current expectations and projections about future events.  These forward-looking statements may generally, but not always, be identified by the use of words such as 'will', 'aims', 'anticipates', 'continue', 'could', 'should', 'expects', 'is expected to', 'may', 'estimates', 'believes', 'intends', 'projects', 'targets', or the negative thereof, or similar expressions. 

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future and reflect the Group's current expectations and assumptions as to such future events and circumstances that may not prove accurate.  A number of material factors could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. You should not place undue reliance on any forward-looking statements.  These forward-looking statements are made as of the date of this announcement. The Group expressly disclaims any obligation to publicly update or review these forward-looking statements other than as required by law.

This announcement contains inside information for the purposes of the Market Abuse Regulation

PRESENTATION

A webcast presentation of the results for analysts and institutional investors will take place at 8.30am today. This presentation can also be accessed live from the Investor Relations section on www.greencore.com or alternatively via conference call.

Participants wishing to dial into the conference call can do so using the following details:

A replay of the presentation will be available on www.greencore.com and also through a 7 day conference call replay facility.

For further information, please contact:

About Greencore

Greencore is a leading manufacturer of convenience food in the UK. It supplies grocery and other retailers including all of the major UK supermarkets. The Group has strong market positions in a range of categories including sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings.

The Group's medium term financial ambitions are for mid single-digit organic revenue growth, high single-digit Adjusted EPS growth, the conversion of half of its Adjusted EBITDA to Free Cash Flow and for mid-teen ROIC.

For further information go to www.greencore.com or follow Greencore on social media.

OPERATING REVIEW ^1,2,3

Convenience Foods UK & Ireland

Strategic developments

In H1 20, the Group executed well against the commercial, operational and organisational objectives introduced during FY19. This good momentum provided a strong foundation from which to respond to the challenges presented by the COVID-19 outbreak. It will also form a critical element of the Group's capability to accelerate its growth again as the measures to combat the pandemic are eased.

Freshtime, acquired in September 2019, performed well in H1 20. It is integrating well into the Group and has successfully extended the Group's presence in meal salads and chilled snacking. Commercial activity has been encouraging, including increased engagement with existing Group customers, and as such the business provides a platform to drive growth and improve returns in these categories. The Group also continued to benefit from the reset of its ready meals product and facility footprint at Warrington, Kiveton and Consett in FY19. Furthermore, the Group continued to invest in a range of services to increase its relevance across the value chain, including a new distribution centre in Tamworth that will enhance capacity and maximise cost and operational efficiencies in the Group's Direct to Store distribution model.

In H1 20 the Group also made good operational and organisational progress. The Group advanced its pilot automation programme with multiple additional projects initiated in the period that will continue to be supported through the rest of the year. Greencore has also progressed its sustainability agenda in the period, notably in food packaging where the Group made significant progress alongside customers in developing innovative solutions for the recyclability of sandwich skillets.

Engagement and collaboration with customers deepened as the full impacts of the COVID-19 pandemic became apparent. Joint initiatives that were already in place on supply chain, waste and availability were modified to reflect the rapid change in consumer demand and shopper behaviours.

Performance

Reported revenue increased by 1.6% to £712.7m in H1 20. Pro Forma Revenue Growth was 0.1%, after adjusting for the acquisition of Freshtime, the exit of longer life ready meals manufacturing at the Kiveton facility in H1 19, and any movement in foreign exchange. Adjusted Operating Profit fell by 14.3% to £38.3m and Adjusted Operating Margin fell by 100bps to 5.4%.

While the UK trading environment remained subdued for much of the period, there were some signs of improvement before the UK Government's escalating measures in March to combat the outbreak of COVID-19. The business was significantly impacted in the second half of March by the effect that these measures had on consumer demand, most particularly in food to go categories.

H1 20 revenue in the Group's food to go categories (comprising sandwiches, salads, sushi and chilled snacking) totalled £455.8m and accounted for approximately 64% of reported revenue. Reported revenues increased by 1.9% in these categories, driven by the acquisition of Freshtime. Excluding this acquisition, Pro Forma Revenue declined by 2.1%.

Underlying product revenue growth in food to go categories was broadly in line with plan for most of H1 20. The final two weeks of the trading period were negatively impacted by significantly reduced demand in grocery retail, as well as the restrictions on trading activity applied to other convenience and food service channels.

Revenue for the distribution of third party products accounted for approximately 6% of Group revenue. Following the acquisition of Freshtime in September 2019, revenue from its products that were previously distributed by Greencore is now classified as underlying product revenue.

The Group's other convenience categories comprise activities in the chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Pudding categories, as well as Irish ingredients trading businesses. Reported revenue across these businesses increased by 1.0% to £256.9m. Pro Forma Revenue increased by 4.0%, when adjusting for movements in foreign exchange and excluding sites that have ceased trading. This was driven by strong growth in ambient cooking sauces, ready meals, soups and quiche based products in the final month of the period. The Group's cooking sauce business benefitted in particular from higher demand during the final two weeks of the trading period. Revenue in the Group's Irish ingredients trading businesses declined modestly in the period.

Inflation trends in the Group's main UK cost components were broadly as anticipated. Raw material and packaging costs rose by under 1% in H1 20. Direct labour inflation in the UK rose by approximately 5%.

Overall, Adjusted Operating Profit declined by £6.4m to £38.3m. In its food to go categories, while the performance benefitted from the addition of the Freshtime business, the Group experienced a decline in profitability driven in large part by a deteriorating performance in the second half of March which happened before any mitigating measures could be fully implemented. This decline was only partly offset by an improvement in the Group's other convenience categories, in particular in the ready meals business following the reset of its product and facility footprint over the last year.

Group Cash Flow and Returns

Strategic developments

In H1 20 the Group focussed on balance sheet strength and liquidity, extending the maturity of its £340m revolving credit bank facility to January 2025 and entering into a new revolving credit bank facility of £75m maturing in March 2021.

The Group retains substantial and increased financial headroom, with cash and undrawn committed bank facilities of £267.5m at 27 March 2020.

Subsequent to the end of H1, the Group secured formal agreement with its lending syndicate of banks to waive its net debt: EBITDA covenant condition for the September 2020 and March 2021 test periods. The Group is also in advanced stages of discussions with the Private Placement holders in respect of a waiver of the September 2020 and March 2021 leverage covenants contained in the Private Placement documentation and the Group expects that an agreement in respect of such waivers will be finalised and concluded in the coming weeks. 

In addition, the Group confirms that it has received eligibility, in principle, to access funding under the Covid Corporate Financing Facility (CCFF).

The Group today announces that it will not be proceeding with either a final FY20 or an interim FY21 dividend payment. The Group will seek to reinstate dividend payments as soon as is practicable thereafter in accordance with its capital allocation strategy.

The Group also plans to defer a substantial portion of non-essential capital expenditure which was planned for FY20.

The Group's capital allocation model has ensured a prudent financial profile for the business and a strong foundation from which to respond to the challenges presented by the COVID-19 outbreak.

Performance

Free Cash Flow was a modest £2.6m inflow in H1 20 compared with an outflow of £19.4m in H1 19 which included the disposal of the US business. The improvement was driven by lower working capital outflows, a decrease in exceptional cash flows, and the non-recurrence of cash outflows associated with discontinued operations.               

Net Debt increased to £374.4m at the end of H1 20. This included the impact of IFRS 16 lease obligations of £63.3m. Net Debt (excluding lease liabilities) increased to £311.1m from £284.1m at the end of H1 19 and £288.5m at the end of FY19. The Group's Net Debt: EBITDA leverage as measured under financing agreements was 2.1x at period end, compared to 1.9x at the end of March 2019 and 1.8x at the end of September 2019. Net Debt: EBITDA as measured under financing agreements is calculated excluding the impact of IFRS 16.

ROIC was 12.3% for the 12 months ended 27 March 2020, compared to 14.6% for the 12 months ended 29 March 2019. The reduction was driven by increased investment over the last 12 months, in particular the acquisition of Freshtime, and also the impact of the recognition of leases on the Groups balance sheet under IFRS 16.

FINANCIAL REVIEW ^1,2

Revenue and Operating Profit

Reported revenue in the period was £712.7m, an increase of 1.6% compared to H1 19, primarily reflecting the acquisition of Freshtime in H2 20 and the exit of longer life ready meals manufacturing in H1 19. Pro Forma Revenue Growth was 0.1%.

Group Operating Profit declined by £5.7m to £35.6m primarily driven by deterioration in profitability, as revenue from food to go categories declined in the second half of March due to the impact of COVID-19. Adjusted Operating Profit of £38.3m declined £6.4m on the prior period, also driven by the impact of trading performance in late March and includes the impact of IFRS 16. Adjusted Operating Margin was 5.4%, 100 basis points lower than the prior period.

Net finance costs

The Group's net bank interest payable was £7.2m in H1 20, a decrease of £0.5m versus H1 19. The decrease was driven by closing out swaps in the prior period.

The Group's non-cash finance charge in H1 20 was £1.5m (H1 19: £3.1m). The Group recognised a £0.5m interest charge relating to the unwinding of the IFRS 16 lease liability in the period. The change in the fair value of derivatives and related debt adjustments in the period netted to nil (H1 19 charge: £1.8m). The non-cash pension financing charge of £1.0m was £0.3m lower than the H1 19 charge of £1.3m.

Profit before taxation

The Group's Profit before taxation increased to £27.3m in H1 20 from £5.7m in H1 19, as higher finance costs in the prior period, which includes an exceptional finance charge, offsets the decline in Group Operating Profit in the current period. Adjusted Profit Before Tax in the period was £31.1m, a decrease of £6.6m from £37.7m in H1 19, primarily driven by a reduction in the Group's Adjusted Operating Profit and a reduction in net interest expense.

Taxation

The Group's effective tax rate in H1 20 (including the tax impact associated with pension finance items) was 13% (H1 19: 15%). This reflects the rate benefit resulting from the restatement of the deferred tax assets, arising from the decision by the UK Government to maintain the UK corporation tax rate at 19%. This decision not to decrease the UK corporation tax rate to 17% results in a one-off tax credit to the income statement, with a corresponding increase to the Groups net deferred tax asset.

Exceptional items

The Group had an after tax exceptional credit of £0.4m, comprised as follows:

These charges are described in Note 5 to the Condensed Group Financial Statements.

Earnings per share

Basic earnings per share for total operations was 5.3 pence (H1 19: 10.5 pence). This was driven by a £41.8m decrease in earnings due to the reduction in profits as a result of the disposal of the Groups US business and the decline in profitability in the food to go categories in late March. Basic earnings per share also benefitted from a reduction of 261m in the number of shares in issue as a result of the tender offer which was executed in January 2019. The weighted average number of shares in issue in H1 20 was 443.3m (H1 19: 620.9m). Adjusted earnings per share was 5.8 pence (H1 19: 6.4 pence)

Cash Flow and Net Debt

Adjusted EBITDA was £1.3m higher in H1 20 at £63.8m, after the impact of IFRS 16. The Group incurred a net working capital outflow of £21.8m. Maintenance capital expenditure of £11.2m was incurred in the period (H1 19: £12.8m). The cash outflow in respect of exceptional charges was £2.6m (H1 19: £7.7m), of which £2.1m related to prior year exceptional charges.

Interest paid in the period was £7.5m, including interest on lease liabilities (H1 19: £9.2m) primarily reflecting the impact of closing out swaps in the prior year. Cash tax increased by £2.6m to £4.2m due to a one-off change in rules for the timing of UK corporation tax payments impacting H1 20, resulting in a cash tax rate in the period of 15.6% (H1 19: 4.7%). The cash tax rate for the Group is expected to rise towards the Group's effective rate in the medium term as a result of increased profitability and a reduction in the degree to which UK losses may be utilised in any one year. The Group's cash funding for defined benefit pension schemes was £7.8m (H1 19: £8.0m).

These movements resulted in a Free Cash inflow of £2.6m compared to an outflow of £19.4m in H1 19 driven by lower working capital outflows, a decrease in exceptional cash flows, and the non-recurrence of cash outflows associated with discontinued operations.

In H1 20, the Group incurred strategic capital expenditure of £9.9m (H1 19: £6.1m including £1.2m on discontinued operations)

Equity dividend cash payments decreased significantly to £16.7m (H1 19: £39.4m). The H1 20 payment was made on a reduced number of shares, reflecting the impact of the Group's tender offer which was executed in January 2019. The prior year period also included the change in the phasing of dividend cash payments resulting from the removal of the scrip dividend option (both the interim and final dividend for FY18 were paid during H1 19).

The Group's Net Debt at 27 March 2020 was £374.4m, an increase of £90.3m compared to the prior year period, primarily driven by IFRS 16 lease obligations of £63.3m and the acquisition of Freshtime in September 2019.

Financing

In the period the Group extended the maturity of its £340m committed bank facility by one year to 2025. It also secured an additional £75m committed debt facility which matures in March 2021. The Group had cash and undrawn committed facilities of £267.5m at 27 March 2020, compared to £216.6m as at 27 September 2019.

As at 27 March 2020 the Group's committed facilities had a weighted average maturity of 3.8 years and comprised:

-       A £340m revolving credit bank facility with a maturity date of January 2025.

-       A £50m bilateral bank facility with a maturity date of January 2022.

-       £114.9m of outstanding Private Placement notes with maturities ranging between October 2021 and June 2026.

-       A revolving credit bank facility of £75m, with a maturity date of March 2021.

In addition, the Group has received eligibility, in principle, to access funding under the Covid Corporate Financing Facility (CCFF).

Pensions

All legacy defined benefit pension schemes are closed to future accrual. The net pension deficit relating to legacy defined pension schemes, before related deferred tax, at 27 March 2020 was £52.3m, £39.7m lower than the position at 27 September 2019. The net pension deficit after related deferred tax was £39.2m, a decrease of £35.6m from 27 September 2019. The decrease in net pension deficit was driven principally by a decrease in UK scheme liabilities, resulting in a £32.0m actuarial gain, as relevant bond yield assumptions increased offset by a reduction in the return on scheme assets following the impact of COVID-19 on capital markets in March 2020.

The valuations and funding obligations of the Group's legacy defined benefit pension schemes are assessed on a triennial basis with the relevant trustees. Following the most recent reviews, the Group's annual cash funding requirement for defined benefit pension schemes is approximately £15m. The Group is assessing opportunities to further de-risk liabilities, that if implemented, could modestly increase annual cash funding requirements. During the period, the Trustees of one of the smaller UK legacy defined benefit schemes, completed a buy-out of the scheme, transferring insurance policies to individual scheme members removing the scheme liabilities from the Group's Statement of Financial Position.

Dividends

The Group announced on 30 March 2020 that it is not proceeding with an interim FY20 dividend payment and today announces that it will not be proceeding with either a final FY20 or an interim FY21 dividend payment. The Group will seek to reinstate dividend payments as soon as is practicable thereafter in accordance with its capital allocation strategy.

Principal risks and uncertainties

There are a number of potential risks and uncertainties which could have a material impact on future Group performance and could cause actual results to differ materially from expected and historical results. The Board considers the risks and uncertainties as described in detail in the section Risks and Risk Management in the Annual Report and Financial Statements for the year ended 27 September 2019 issued on 26 November 2019, to remain applicable in the second half of the year.

The Board has also considered an additional risk factor, relating to the financial and operational impacts associated with COVID-19, to be applicable in the second half of the year. Greencore management are continuing to perform detailed assessments of the continuing risks faced specifically in relation to COVID-19, and defined strategies for mitigating these risks and the specific actions for achieving these are already underway.

A description of the risks and uncertainties, including the risks associated with COVID-19, are set out in the Appendix to the Interim Financial Report.

Responsibility Statement

The Directors are responsible for preparing the Interim Financial Report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency Rules of the Central Bank of Ireland and with IAS 34 Interim Financial Reporting as adopted by the European Union.

The Directors confirm that, to the best of their knowledge:

•      the Condensed Group Financial Statements for the half year ended 27 March 2020 have been prepared in accordance with the international accounting standard applicable to interim financial reporting adopted pursuant to the procedure provided for under Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002;

•      the Interim Management Report includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the Condensed Group Financial Statements for the half year ended 27 March 2020 and a description of the principal risks and uncertainties for the remaining six months; and

•      the Interim Management Report includes a fair review of related party transactions that have occurred during the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and any changes in the related parties' transactions described in the last Annual Report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.