Libstar Holdings (LBR) Trading update summary

Strategic initiatives and operating model

• Five key value-driving initiatives are being executed: simplification, accountability, category growth, cost reduction, and targeted acquisitions from 2025, aimed at enhancing cost-competitiveness, earnings quality, and return on invested capital.

• Operating model simplified into Perishables and Ambient super categories, with Perishables moving to a category-based structure from July and full simplification on track for end-2024.

• Category growth initiatives have benefited dairy, value-added meats, convenience meals, and wet condiment sub-categories, with export channels outperforming due to renewed business development.

• The One Libstar culture programme was launched in H1 2024 to align teams with 2027 ambitions and drive strategic alignment.

Trading and financial performance

• Revenue up 4.6% year-to-date, driven by 6.3% price/mix growth, offset by a 1.7% volume decline; price increases generally 4–6%.

• Perishable Products revenue rose 4.4%, with price/mix up 7.7% and volumes down 3.3%, mainly due to lower beef volumes.

• Lancewood dairy saw strong value growth (~10%) despite a 1.18% volume decline, with improvements in conversion costs and margin management.

• Convenience meals subcategory grew 18% in volume; Millennium Foods saw 10% value and 5.5% volume growth, but lost 50% of McDonald's beef volumes due to supply diversification.

• Gross profit margins remain above H1 2023 levels due to effective pricing, cost management, and production efficiencies.

Capital allocation and cost management

• Capital allocation remains at the lower end of 2–3% of revenue; working capital at the higher end of revised targets.

• Net interest-bearing debt to Normalised EBITDA ratio is on track to fall below 1.5 by end-2024, with H1 gearing higher due to cash generation weighted to H2.

• General and administrative costs maintained below CPI for multiple years; corporate costs remain well contained.