(Alliance News) - Newlat Food Spa on Tuesday announced details of the group's business plan to 2030, following the announcement on May 27 regarding its intention to acquire 100 percent of the share capital of Princes Limited, a historic UK-based food group.

New Princes Group, the new group that will result from the planned acquisition of Princes Limited by Newlat Food, will have a turnover of EUR2.8 billion, a global operating network of 31 plants and about 8,800 employees, and 30 brands.

The group, the company explains in a note, will double its product category offering to its customers, becoming one of the leading multi-brand and multi-product food companies in Europe.

The deal is expected to close by the end of July 2024.

The new group's business plan to 2030 thus envisions organic sales growth with a CAGR of 3 percent between 2024 and 2030, reaching EUR3.34 billion in 2030. Further contributions to growth may come from commercial synergies between Princes and Newlat Food, while the EUR5 billion target will be linked to the contribution made by external growth.

Under this conservative scenario, profitability is projected to increase by 270 bps, reaching an Ebitda of EUR317 million and a margin of 9.5 percent in 2030 driven by commercial synergies, improved product mix offered, increased contribution from proprietary brands, and operating leverage. Cost and integration synergies are estimated at EUR36 million, while further commercial synergies may drive margin growth above 10 percent by 2030.

Net income is expected to exceed EUR100 million by 2030, while already for the current fiscal year, pro forma 2024 profit - Princes consolidated for 12 months - is expected to exceed EUR300 million due to badwill of EUR288 million. Against this extraordinary item and in view of the EUR200 million shareholder loan, group equity is expected to exceed EUR700 million.

"The group expects a level of Free Cash Flow of EUR172 million in 2030, the result of more efficient management of Working Capital, optimization of the operating structure and consequent reduction of CAPEX, as well as from the progressive reduction of interest costs related to the virtuous triangle of: Improving Ebitda; reduction of average spread; progressive reduction of average amount of debt," reads the company's statement.

Management plans to rapidly complete the deleveraging process, aiming for a net debt-to-Ebitda ratio of less than 1x by the end of 2026.

This financial flexibility will allow New Princes Group to look at further strategic M&A activities to reach EUR5 billion in revenues in 2030.

Newlat Food's stock closed Monday in the green by 3.4 percent at EUR8.44 per share.

By Chiara Bruschi, Alliance News reporter

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