After the announcement regarding the intention to acquire 100% of the share capital of Princes, a historic food group based in the United Kingdom and the stock market rally recorded in the following days (also on Monday the stock closed up by 3,4% ), Newlat Food presents the industrial plan which aims for 5 billion euros in revenues by 2030.
From the new group 2,8 billion in turnover
The new group that will be born from the marriage with Princes, New Princes Group, will have a turnover 2,8 billion euros, a global operating network of 31+ factories 8.800 employees and 30 brands.
The group will double the offering of product categories to its customers, “becoming one of the leading multi-brand and multi-product companies in the food sector in Europe”, underlines the company.
Il closing of the transaction, subject to the green light from the relevant authorities and consultation of the European and Dutch Works Council within the Princes Group, is expected by end of July 2024.
Newlat Food's industrial plan
The industrial plan to 2030 provides for a organic growth in turnover with a CAGR of 3% between 2024 and 2030, reaching 3,34 billion euros in 2030. "Further contributions to growth may come from the commercial synergies between Princes and Newlat Food", underlines the group in a note, while the target of 5 billion will be linked to the contribution made by external growth.
In this conservative scenario, profitability is expected to increase by 270 bps, reaching an Ebitda of 2030 million and a margin of 317% in 9,5 "driven by commercial synergies, the improvement of the mix of products offered, a greater contribution from proprietary brands and operating leverage ”, highlights Newlat. Cost and integration synergies are estimated at 36 million, while further commercial synergies could lead to margin growth of over 10% by 2030.
THENet income should exceed 100 million by 2030, while already for the current financial year, the company expects a pro-forma profit 2024 (Princes consolidated for 12 months) above 300 million due to the badwill of 288 million. Given this extraordinary stake and in consideration of the shareholder loan of 200 million, the net assets group is expected to exceed 700 million.
The group expects a level of Free cash flow equal to 172 million in 2030, "the result of a more efficient management of Working Capital, an optimization of the operational structure and consequent reduction of Capex, as well as the progressive reduction of interest costs linked to the virtuous triangle of improving Ebitda, reduction of average spread and progressive reduction of the average amount of debt”, says Newlat.
Management expects to complete the process quickly reduction of leverage financial position, targeting a net debt/Ebitda ratio of less than 1x by the end of 2026. This financial flexibility will allow New Princes Group to look to further strategic M&A activities to reach 5 billion in revenues in 2030.
2,8 billion, no million!