R&R 2014 Accounts

Bondholder information pack
Year end 2014
Contents
Introduction
Business highlights for the year ended 31 December 2014
Managements Discussion and Analysis of financial condition and results
of operations
Business
R&R Ice Cream plc consolidated financial information
INTRODUCTION
FORWARD-LOOKING STATEMENTS
This Bondholder Information Pack includes forward-looking statements within the meaning of the U.S. securities laws and
the laws of certain other jurisdictions, which are based on our current expectations and projections about future events. All
statements other than statements of historical facts included in this Bondholder Information Pack including, without limitation,
statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditure,
projected costs and our plans and objectives for future operations, may be deemed to be forward-looking statements. Words such
as believe, expect, anticipate, may, assume, plan, intend, will, should, estimate, risk, and similar
expressions or the negatives of these expressions are intended to identify forward-looking statements. These statements are based
on managements current views and assumptions and involve known and unknown risks and uncertainties that could cause
actual results, performance or events to differ materially from those anticipated by such statements. Factors that could cause such
differences in actual results include:
our inability to address significant changes in consumer preferences;
increased price, or decreased availability, of commodities we use to produce our products;
adverse changes in general economic conditions and/or reductions in consumer spending;
our ability to accurately predict demand for our summer selling season;
inclement weather in the regions in which our ice cream is sold;
our inability to effectively compete in our highly competitive industry;
the size and sophistication of our customers;
the loss of any of our major customers;
our dependence on the value and perception of our brands;
our reliance on licences from third parties;
increased shipping prices or disrupted shipping services;
significant damage to any of our factories;
significant charges incurred due to the closing or divesting of all or a portion of a manufacturing plant or facility;
the shipment of contaminated products or lawsuits relating to product liability;
health concerns which may cause a decreased demand for our products;
the damaged image or reputation of our customers, which could adversely affect the sales of our products;
our failure to comply with existing or future government regulations;
costs and liabilities imposed by environmental regulations;
our inability to retain or attract key personnel;
detrimental fluctuations in currency exchange rates;
our inability to adequately protect our confidential information due to the absence of patent protection;
our inability to successfully integrate our recently acquired businesses;
our inability to maintain adequate infrastructure and resources to support any future gro wth;
adverse economic, social or political conditions in any of the several different countries in which we operate; and
disruptions in our information technology systems.
We disclose important factors that could cause our actual results to differ materially from our expectations under the
Managements Discussion and Analysis of Financial Condition and Results of Operations section in this Bondholder
Information Pack. Other sections of this Bondholder Information Pack describe additional factors that could adversely affect
our business, financial condition or results of operations. Moreover, we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we
assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and
uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results.
BUSINESS HIGHLIGHTS FOR THE YEAR ENDED 31 DECEMBER 2014

Revenue of 837.8 million is up 157.0 million (+23.0%) for the year ended December 31, 2014
-
103.3 million attributable to Peters, which was acquired in mid-2014;

28.1 million attributable to Fredericks, which was acquired in mid-2013 and has since been fully
integrated into the UK business;
14.5 million due to a more favourable exchange rate used to translate results from our business in the
UK; and
11.2 million of organic growth across our major European markets, against a backdrop of flat
European markets.
Adjusted EBITDA* of 140.0 million is up 47.7 million (+51.7%) for the year ended December 31,
2014
-
22.5 million attributable to Peters in the six months trading post-acquisition; and
3.3 million attributable to Fredericks;
16.8 million attributable to improvements in profitability, mainly due to gains on pricing and
promotional activities, and also cost savings arising from the three factory closures in 2013;
3.1 million due to a more favourable exchange rate used to translate results from our UK business;
and
2.0 million is attributable to the positive EBITDA effects of organic sales growth.
Pro forma EBITDA, taking account of a full year effect of Peters trading for the year ended December
31, 2104, of 153.7 million is up 58.2 million (+60.9%) for the year ended December 31, 2014
-
36.3 million is attributable to Peters, including 13.8 million in the pre-acquisition period;
Growth year-on-year takes account of the full year of Fredericks trading in 2013 and 2014 and
therefore represents strong revenue and EBITDA growth on a like-for-like basis.
Refinanced the Groups 350 million senior secured notes with a 315 million bond
-
This reduced the Groups ongoing interest costs substantially, with a 4.7 million saving year-to-date,
or 8.0 million on an annualized basis; and
Ensured the Groups debt profile better matches its earnings and cash flows.
Acquired Peters Food Group for a total consideration of A$448.1 million (310.3 million)
-
R&R gained a market-leading position in the attractive Australian ice cream market;
Peters is #1 in the Australian take-home market, and #2 in the impulse market;
Almost entirely branded business with iconic Australian ice cream products, e.g. Peters Original, Peters
Light & Creamy and Connoisseur, and Nestl licensed brands; and
150 million and A$152 million senior secured notes raised to fund the acquisition.
Announced the acquisition of Nestl South Africas ice cream business on March 12, 2015
-
Acquisition was subject to the approval of the South African Competition Commission, which has
subsequently been received with the acquisition expected to close shortly; and
Major milestone towards our goal of becoming a leading global player in ice cream, and a platform
for growth in South Africa and across the African continent.
Liquid net cash balances at the year-end are approximately 13.2 million:
-
36.0 million cash balances;

22.6 million of drawn borrowings under the Existing Factoring Facilities and sundry facilities (such
as finance leases);
56.5 million of undrawn revolving credit facilities, providing liquidity headroom for further business
development.
* Adjusted EBITDA is presented here before parent company or investor management charges.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS
You should read the following discussion in conjunction with the audited financial statements and related notes
thereto and other financial information included with this document. The statements in this discussion regarding
industry outlook, our expectations regarding our future performance, liquidity and capital resources and other nonhistorical statements in this discussion are forward-looking statements. These forward-looking statements are
subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in
the Forward-Looking Statements section of this document. Our actual results may differ materially from those
contained in or implied by any forward-looking statements.
Overview
R&R Ice Cream plc (R&R) is the third largest global manufacturer of ice cream products and the largest
private label manufacturer in the world. R&R is the second largest take-home ice cream manufacturer in Europe,
with leading market shares in each of the UK, German, French and Italian ice cream markets. We now also have
a leading market share in Australia following the acquisition of Peters Food Group Limited (Peters).
R&R offers a broad product range of branded and private label ice cream products. We primarily produce
take-home ice cream products, including ice cream tubs and multi-packs of ice cream cones, ice lollies, ice cream
sticks and ice cream desserts, and impulse products, which individuals buy on impulse for immediate consumption.
Our scale, focus on large, stable take-home markets and highly efficient manufacturing operations provide us with
key advantages over our competitors and have allowed us to continue to generate stable earnings and significant
free cash flow through various economic cycles. We believe our broad product range allows us to maintain strong
sales volumes as consumer demand shifts between branded and private label products, including as a result of
economic cycles.
For the year ended December 31, 2014, we generated Adjusted EBITDA of 140.0 million, revenue of 837.8
million and free cash flow before acquisitions and exceptional operating items of 62.1 million. Including an
adjustment to incorporate a full year of Peters trading performance to December 31, 2014, pro forma revenue
was 921.6 million and pro forma EBITDA was 153.7 million.
Within Europe, we operate nine plants located in five countries, eight of which are in the four largest ice
cream markets in Europe, which allows us to supply our customers quickly and efficiently in their markets. We
also operate, what we believe is, the largest and most sophisticated ice cream manufacturing facility in Australia.
Our manufacturing platform benefits from many years of significant capital investment and footprint
rationalisation. Our plants have also benefited from sharing and implementation of best practices and procedures
across our group in order to leverage technological expertise. We consolidated certain of our operations following
the closure of three plants during 2013, which resulted in modest cost savings and improved efficiency across our
facilities in the year ended December 31, 2013, and achieved further cost savings in the year ended December 31,
2014. In addition, we have acquired numerous manufacturing facilities in recent years, and following each
acquisition we make capital improvements and implemented our best practices in order to bring such facilities in
line with our group-wide standards. We believe that our scale and manufacturing footprint provides us with a
competitive advantage over most of our competitors, which are generally smaller and only offer regional
distribution.
Factors Affecting our Business
Seasonality. Our business is seasonal, and a large percentage of our sales are generated between the months of
April and August of each year. As a result of our seasonality, our sales fluctuate from quarter to quarter, which
often affects the comparability of our results between quarterly periods. In 2014, we generated 65.7% of our sales
between April 1 and September 30 (2013: 70.3%). In future we expect to generate an even smaller proportion of
sales in these months due to the counter-seasonality of our Australian business and the impact of owning this for a
full financial year. Sales in certain of our markets are more seasonal than others, based on factors such as weather
patterns and consumer preference.
We generally produce most of our products prior to and during our summer selling season, as it is impossible for
us to produce upon receipt of orders for all customers during the primary selling season. Our inventory levels peak at
the end of May, as we generally build our inventory with what we expect to sell in the following three to five weeks,
based on forecast sales, working closely with our customers. We generally produce in advance a higher percentage of
our branded inventory than our private label products as these are not as dependent on the satisfactory conclusion of
the annual contracts prevalent in mainland Europe. If demand levels fluctuate, we can generally increase or decrease
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production to bring our stock to our desired levels within approximately three weeks. During our peak production
periods, we purchase large amounts of raw materials, hire additional workers at our facilities as temporary workers
and incur many other costs of our operations that we consider to be variable.
We finance our working capital needs through cash and cash equivalents, revolving credit borrowings and
factoring facilities. Our working capital requirements are typically higher in the first half of each year due to our
build-up of inventory for the summer selling period in Europe. As a result, our revolving credit and factoring
borrowings typically increase from January to June. In July, as we begin to generate cash from early summer season
sales of our ice cream products, we begin to repay our borrowings. In 2012, we put factoring facilities in place in
the UK and France, in 2013 in Germany and in 2014 in Australia, to supplement our Revolving Credit Facility and
cash on hand.
It is expected that the acquisition of Peters will help to counter the seasonality of the European summer and
therefore help smooth the Groups cash flows, although the seasons in Australia are more consistent than in the rest
of the Group. Following the acquisition, we put in place a factoring facility in Australia, which is an additional nonrecourse facility, with a limit of A$20.0 million during the peak October to February period, and a lower limit of
A$10.0 million from March to September.
Changes in Prices of Raw Materials. Raw materials used as ingredients and for packaging account for a
significant portion of our cost of sales. The principal raw materials we use to manufacture our products are cream,
milk, whey protein, sugar, glucose, cocoa, butter, coconut oil and palm oil. Many of the raw materials we use in
our manufacturing processes are commodities and are subject to significant price volatility. Changes in the price of
oil has also had a significant impact on our results each year as it has an impact on the cost of packaging, freight
and the cost of other components that we use in our manufacturing process, such as plastic.
We continue to take actions to reduce overall materials expense and exposure to price fluctuations. Since 2007,
we have increased the amount of raw materials that we purchase pursuant to fixed price contracts which set prices
for our raw material sales for that year. We enter into these arrangements when we believe that we can secure
favourable prices for our raw materials for specified future periods. We fix a substantial proportion of the annual
cost of our raw materials used for ingredients and packaging through fixed-price contracts, with the proportion fixed
as at December 31, 2014, representing approximately 55% of our expected raw materials expenditure for 2015.
Dairy products represented 12% of our cost of sales in 2014. Fixed-price contracts do not generally exist for
dairy products. We have previously reduced the amount of dairy fat and increased the amount of vegetable fat in
our ice cream products in order to reduce the effects of volatility in dairy prices on our business. However,
increasing demand for premium ice cream products across all markets is now leading to an increased requirement
for dairy fats.
Weather Trends. Sales of ice cream are generally positively impacted by warm, sunny, dry weather and are
negatively impacted by cool, overcast or rainy weather. Hours of sunshine, temperature and rainfall are the three
most important weather factors during the summer selling season. Our results of operations for the year ended
December 31, 2014 were adversely affected because of unseasonal weather, particularly in Italy during July and
much of Europe during August.
Sales of impulse ice cream are more dependent on warm weather than sales of take-home ice cream, as
consumers are more likely to buy those products as snacks on warm, sunny, dry days. However, impulse ice cream
is not a significant part of our business. Trends in take-home ice cream, such as the introduction of premium products
and indulgent flavours (which frequently contain enhancements such as pieces of confectionery or biscuits), and the
resulting increase in home consumption have made ice cream sales less dependent on warm, sunny, dry weather, as
consumers increasingly purchase ice cream as part of their weekly grocery shopping as opposed to an item purchased
on impulse. This is particularly important in countries where the summer months do not always guarantee warm,
sunny or dry weather, such as the UK. Our acquisitions of Eskigel in Italy and Peters in Australia means that we are
now less dependent on weather patterns in Northern Europe.
We are able to take steps to control our costs during the summer season if we expect weather trends to be
adverse. For example, a portion of our factory workforce across our enterprise is employed on a seasonal basis. We
are able to shorten the work period for our seasonal workers if our product requirements do not meet our projections,
although we generally are required to make any such determination early in the summer season.
Competition and Market Trends. The ice cream industry is highly competitive, and our products compete based
on a variety of factors, including design, quality, price, customer service and rate of innovation. Levels of
competition and the ability of our competitors to more accurately address consumer tastes, predict trends and
otherwise attract customers through competitive pricing or other factors impact our results of operations. Our
competitors ability to identify and encourage changes in consumer trends may impact our decision regarding what
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types of ice cream to develop and sell.

Certain actions by our competitors may impact our operating results, such as changes in their pricing or
marketing or levels of promotional sales, which may cause us to take certain actions that impact our profitability,
such as reductions in our prices or increases in our marketing expenditures. Some of our competitors from time to
time reduce their prices significantly in order to enhance their brand recognition. In addition, during more difficult
economic conditions the level and frequency of promotional activity required to stimulate sales is typically greater
than in less difficult economic conditions. The levels at which we are able to price our products are influenced by a
variety of factors, including the quality of the product, cost of production for those products, prices at which our
competitors are selling similar items, price points of products and willingness of our customers to pay for higher
priced items. These factors may limit our ability to respond to such price changes. We have also sought to enhance
our competitive position by increasing our scale, diversifying our products and enhancing and acquiring brands and
brand licences.
Foreign Currency Exchange Rates. As a result of our operations in various countries, we generate a significant
portion of our sales and incur a significant portion of our expenses in currencies other than the Euro, including the
British Pound, Australian Dollar the Polish Zloty. During 2014, 45.3% of our reported revenue was derived from
subsidiaries whose functional currency is not the Euro, largely the British Pound and Australian Dollar. Typically, our
costs and the corresponding sales are denominated in the same currency. Sometimes, however, we are unable to match
sales received in foreign currencies with costs paid in the same currency, and our results of operations are consequently
impacted by currency exchange rate fluctuations. Therefore, as and when we determine it is appropriate and advisable
to do so, we seek to mitigate the effect of exchange rate fluctuations through the use of derivative financial instruments.
The aforementioned Peters acquisition is part of the reason why our bonds are now in a mixture of the British
Pound, Euro and Australian Dollar as we better match our liabilities and debt service obligations to the earnings and
cash flows of the Group.
We present our consolidated financial statements in euro. As a result, we must translate the assets, liabilities,
revenue and expenses of all of our operations with a functional currency other than the Euro into Euro at thenapplicable exchange rates. Consequently, increases or decreases in the value of the Euro may affect the value of these
items with respect to our non-Euro businesses in our consolidated financial statements, even if their value has not
changed in their original currency. For example, a stronger Euro will negatively affect the reported results of operations
of the non- Euro businesses and conversely a weaker Euro will improve the reported results of operations of the nonEuro businesses. These translations could significantly affect the comparability of our results between financial
periods and/or result in significant changes to the carrying value of our assets, liabilities and shareholders equity.
We record the effects of these translations in our consolidated statement of comprehensive income and expense as
exchange differences on retranslation of foreign operations. During 2014 the Euro to British Pound exchange rate
averaged 1.2406 to 1 compared to an average of 1.1708 to 1 in 2013; and during the period following acquisition
(July 1, 2014) to December 31, 2014, the Australia Dollar averaged 0.6914 to 1 euro.
Acquisitions of Complementary Businesses. We continue to evaluate acquisition opportunities that may
improve our market share and product offerings, reduce costs, or allow us to enter new geographic markets. We
have completed 19 acquisitions since 1995. Following any acquisition, our results of operations will be impacted
by the results of the newly acquired business, debt incurred to acquire the business and expenditures made to
integrate the newly acquired business into our company. In general, when looking to integrate and improve a newly
acquired business, we look to several main areas: (i) reviewing current prices and product engineering or changing
recipes to achieve acceptable margins on products sold; (ii) researching ways to enhance our purchasing to benefit
from economies of scale; (iii) reducing duplicated overhead; (iv) moving production to the most efficient locations,
subject to geography and logistics; (v) sharing knowledge and experience; (vi) creating synergies with and benefits
to the existing businesses; and (vii) improving management of working capital. Many of these integration measures
will require expenditure. When acquiring a business, we believe that the best results are achieved by reviewing the
existing business over the first year and identifying the strengths and weaknesses of that business. During this period
we look to implement the R&R management reporting and key performance indicators to provide reliable,
standardised information. Additionally, we seek to achieve certain improvements, for example, from the purchase
of ingredients at better prices, which we believe are relatively easy to attain. After a period of observation and
understanding, we determine the extent of capital expenditure required to improve the business, potential further
synergies that we believe can be extracted, staffing resources we believe may enhance the business and any
identifiable savings we believe can be achieved.
In July 2013 we acquired Fredericks. At the time of the acquisition, Fredericks was a largely branded business
and it had functions that were very similar to the existing R&R UK business. Therefore, the existing sales force in
Fredericks significantly replicated the sales force in R&R and duplicative roles could be eliminated whilst
strengthening the combined team. Consequently, most of the Directors & senior management of Fredericks left and
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the finance function was largely absorbed into the existing R&R UK function. Certain products, notably tub
products, were transferred from Fredericks Skelmersdale facility to our Leeming Bar facility where these products
could be made at lower cost. These factors contributed to a significant improvement in the profitability of the
acquired business. The Fredericks business has since been hived up into the R&R UK business.
In June 2014, we announced the purchase of Peters. This acquisition is expected to deliver numerous benefits
including the benefit of counter seasonality which will help to smooth the Groups cash flows and EBITDA over
the course of a financial year, although the seasons in Australia are flatter than in the rest of the group. Synergies
are expected from the sharing of knowledge and best practice, diversification of our geographic foot print and cost
synergies from increasing economies of scale.
In March 2015, we announced the acquisition of Nestl South Africas ice cream business. The acquisition
was made subject to clearance from the competition authorities in South Africa. Approval from the competition
authorities was received recently, so that the acquisition is expected to close shortly. The acquisition has had no
material effect on the financial condition and results of operations for the year ended December 31, 2014.
In addition, certain acquisitions have resulted in, and future acquisitions may result in, efficiencies of scale and
therefore provide cost savings across the company. When integrating a newly acquired business, we review the key
production facilities and processes gained with that business to determine if they are duplicative of our current
facilities and production capabilities. Through this review and the resulting combination of duplicative processes,
we are often able to streamline our operations, reduce costs and recognise synergies across our operations.
Retailer Customer and Consumer Preferences. Our revenues are also impacted by our ability to continue to
produce ice cream that is desired by our retailer customers. Retailer customers purchase our private label ice cream
primarily based on price, quality, ability to deliver products which meet margin targets, ability to deliver our
products on a timely basis and ability to manufacture various types of ice cream in large volumes. Our ability to
meet these demands impacts our ability to sell to new and existing private label customers. In addition, our ability
to effectively sell our branded products to our customers is driven by consumer demand for our products, as a result
of, among other things, our marketing campaigns and the taste and quality of our products.
Impact of Acquisitions
Impact of the Peters Acquisition
On June 30, 2014, R&R Ice Cream plc completed the purchase of Peters, one of Australias oldest consumer
businesses, from Pacific Equity Partners (PEP) for a total consideration of A$448.1 million (310.3 million).
Peters has a significant portfolio of household name ice creams including Drumstick, Connoisseur, Peters Original
and Maxibon. The business achieved annual sales of circa A$259.5 million (180.8 million) and Adjusted EBITDA
of A$51.0 million (35.5 million) in the twelve months ended March 31, 2014. Peters has contributed 103.3
million of turnover and 22.5 million of adjusted EBITDA in the six months ended December 31, 2014. The
consolidated statement of financial position consolidates the balance sheet of Peters, including goodwill of 205.2
million (after fair value adjustments).
Impact of the Fredericks Acquisition
In July 2013, we acquired Fredericks for 57.3 million. Fredericks is a manufacturer of ice cream in the UK and
is based in Skelmersdale, Lancashire. Fredericks has a licence to manufacture ice cream products for Cadbury, Del
Monte, Nichols, Britvic and Tangerine and they were the sole supplier of ice cream to the 2012 London Olympics.
We believe these branded products have proved valuable additions to our portfolio and will enable us to extend our
successful partnership with Mondelz into the UK. Our consolidated income statement for the year ended December
31, 2013 includes Fredericks results since July 1, 2013. The Fredericks business has since been hived up into the
R&R UK business in 2014.
Impact of the Eskigel Acquisition
On July 31, 2012, we acquired Eskigel, an Italian ice cream manufacturer. The Eskigel business operates from a
factory in Terni, Umbria. Eskigel is a leading supplier of private label ice cream to Italys leading supermarkets
including Coop, Conad and Carrefour. Our consolidated income statement data for the year ended December 31,
2012 includes Eskigels results since July 1, 2012. Eskigels results were fully consolidated with our financial results
in the year ended December 31, 2013.
Acquisition Accounting
We have accounted for the acquisitions of Peters, Fredericks and Eskigel using the acquisition method of
accounting. As a result, the purchase price for each of Peters, Fredericks and Eskigel has been allocated to the tangible
and intangible assets acquired and liabilities assumed based upon their respective fair values as of the date of the
acquisition.
The excess of the purchase price over these allocations has been assigned to goodwill, which is not amortised for
accounting purposes but is subject to testing for impairment at least annually. The allocation of the purchase price of
the assets acquired has been determined, where appropriate, by external experts. This determination of fair values has
resulted in an increase to our amortisation expense. This relates to our acquired intangible assets because we adjust the
book value of the acquired intangible assets to fair value. Under applicable accounting guidance, we are permitted to
continue to make fair value adjustments until 12 months after the acquisition date. We have evaluated the remaining
depreciable lives of the manufacturing assets to reflect the estimated useful lives for purposes of calculating periodic
depreciation, and we will continue to amortise the intangible assets over their estimated useful lives, unless the
intangible assets are determined to have indefinite lives.
The group carried out a fair value assessment relating to finished goods owned by Peters at acquisition, which
resulted in an uplift to the inventory values as at June 30, 2014, of 3.5 million. The increase to inventory value was
in accordance with accounting standards, which require inventory to be revalued based on estimated selling price, less
costs to complete and to sell, and a reasonable profit margin. During the post-acquisition period to December 31, 2014,
this adjustment has resulted in a charge (non-cash) to the consolidated income statement as the inventories have been
sold. This has been treated as an exceptional item because of its size, one-off nature and to improve comparability of
trading performance between periods.
Potential Acquisitions and Financing
We have completed numerous acquisitions in recent years and continue to evaluate acquisition opportunities.
We will also consider obtaining additional licensing agreements that would allow us to sell well-established brand
name products to improve our market share and product offerings.
Components of Revenue and Expenses
Revenue
We generate revenue from the sale of ice cream and related products. We generate sales under contracts with
retailers, and by individual orders through sales personnel and independent brokers. In the UK, we generally enter
into purchase orders or other contracts for sale that have a rolling thirteen-week term. In Germany and France we
generally enter into longer-term contracts, typically for twelve months. In many cases, subject to certain exceptions,
these contracts have fixed prices for products but do not provide for specific volumes to be purchased. Rather, the
terms in the contracts govern individual purchase orders to be delivered to us as required by the retailer. In our
contracts for sale of goods in Germany, certain of our prices for our goods vary based on our costs of raw materials,
allowing us to pass some of our increased costs through to consumers. In Poland, we typically enter into contracts
with distributors and retailers early in the calendar year, fixing pricing and retrospective rebate levels for the coming
summer season. In Italy, relationships with customers are regulated by framework contracts setting quality standards
and payment terms, while other metrics (such as prices, discounts, promotional campaigns and new products) are
negotiated annually. In Australia, there are generally long standing arrangements with grocery customers. These
arrangements are reviewed annually, including the range of products and fixed pricing. Volumes are not specified,
however agreed promotional and marketing activity is undertaken to drive growth with additional incentives provided
to the retailer based on achieving stepped volume growth thresholds.
Revenues include sales of products less allowances, trade discounts and volume rebates. Revenue from sales
of products is recognised when the significant risks of ownership have been transferred to the buyer (which is
typically when the goods are dispatched). Our relationships with our retailer customers do not include a right of
return for unsold merchandise.
In the year ended December 31, 2014, our ten largest customers by revenue, represented 42% of our sales
(2013: 49%). Transactions with our largest customer accounted for 6.4% of our total revenue in the year ended
December 31, 2014 (compared to 7.5% during the year ended December 31, 2013).
Expenses
Our operating expenses primarily consist of:
cost of sales;
distribution expenses;
administrative expenses; and
finance expenses.
Of the foregoing, cost of sales, distribution expenses and administrative costs are our primary operating
expenses. Each component of our operating expenses is described in further detail below.
Cost of Sales. Cost of sales includes directly attributable costs such as material, labour, energy, product-specific
research and development, maintenance and consumables. Our costs of sales are primarily variable in nature based
on the amount of products we are selling at a given time.
Our raw material costs are the primary driver of our cost of sales, accounting for approximately 64% of our
cost of sales for the year ended December 31, 2014 compared to 62% for the year ended December 31, 2013.
Personnel expenses, which are salaries and wages, paid to our officers and employees, also significantly impact our
cost of sales, accounting for approximately 13% of our cost of sales for the year ended December 31, 2014 (2013:
13%). Our raw material costs and personnel expenses are expected to continue to be key components of our
operating expenses in the future.
Distribution Expenses. Distribution expenses represent the costs associated with the storage and shipping of
our products. These costs include freight, storage and other related distribution costs.
Administrative Expenses. Administrative expenses represent overhead costs including sales and marketing but
also those costs associated with support functions, such as finance, human resources, IT, professional fees (legal
and accounting) and senior management, and also include costs relating to impairment and amortisation of
intangibles.
Typically, costs of these support functions are salaries and benefits, systems costs, insurance costs and costs of
professional services. Administrative costs are relatively fixed in nature and were 11% of our sales for the year
ended December 31, 2014 compared to 10% for the year ended December 31, 2013.
Finance Expenses. Finance expense consists primarily of cash interest expense on financial debt, interest rate
derivative instruments, capital lease and other financing obligations in addition to non-cash interest on loans from
our shareholders.
Income Tax Expenses. Our income tax expense includes UK and non-UK income taxes and is based on pre-tax
income or loss. The effective rate is higher than the income tax rate in our countries of operation because of the nondeductibility of interest expense on some of our existing related party debt.
Adjusted EBITDA. Adjusted EBITDA is defined as profit/(loss) for the period before income tax (credit)
charge, net finance expenses, depreciation and amortisation, plus certain additional supplemental adjustments as
described in Note 3 to our financial statements. Adjusted EBITDA for 2012, 2013 and 2014 is stated after any
parent company or investor management charges. For further details of the calculation of Adjusted EBITDA, see
note 3 to our financial statements.
Results of Operations
The following table sets forth, for the periods presented, our consolidated statements of operations data. In the
table below and throughout this Managements Discussion and Analysis of Financial Condition and Results of
Operations, our consolidated statements of operations data for the years ended December 31, 2012, 2013 and 2014
have been extracted from our audited consolidated financial statements. The information contained in the table
below should be read in conjunction with our audited consolidated financial statements and the related notes.
Year Ended December 31,
(in thousands of euros)
Consolidated Statement of Income
Information:
Revenue ...............................................
2012
2013
2014
600,206
(464,415)
680,855
(531,708)
837,849
(607,831)
135,791
(1,587)
149,147
(24,440)
230,018
(7,228)
134,204
(38,833)
(55,739)
124,707
(43,459)
(66,827)
222,790
(51,896)
(92,385)
39,632
2,030
(59,495)
14,421
843
(63,758)
78,509
670
(106,793)
(206)
Income tax (charge) / credit .................

Loss for the year ..................................
Other Financial Information:
(18,039)
(870)
(48,494)
6,623
(27,614)
(6,635)
(18,909)
(41,871)
(34,249)
Adjusted EBITDA ...............................
84,357
91,975
139,179
Cost of sales (recurring) .......................

Gross profit (before exceptional items)
Cost of sales (exceptional) ...................
Gross profit (after exceptional items) ..
Distribution expenses ...........................
Administrative expenses ......................
Results from operating activities .........
Finance income ....................................
Finance expenses .................................
Share of loss of equity-accounted
investees ...............................................
Loss before tax .....................................
10
The table below also sets forth consolidated statement of income data expressed as a percentage of
revenues for the periods indicated:
(in percentages of revenue)
Consolidated Statement of Income
Information:
Revenue ...............................................
2012
2013
2014
100.0%
(77.4)
100.0%
(78.1)
100.0%
(72.5)
22.6
(0.3)
21.9
(3.6)
27.5
(0.9)
22.3
(6.4)
(9.3)
18.3
(6.4)
(9.8)
26.5
(6.2)
(11.0)
6.6
0.3
(9.9)
2.1
0.1
(9.3)
9.3
0.1
(12.7)
Income tax (charge) / credit .................

Loss for the year ..................................
(3.0)
(0.1)
(7.1)
1.0
(3.3)
(0.8)
(3.1%)
(6.1%)
(4.1%)
Adjusted EBITDA ...............................
14.1%
13.5%
16.7%
Cost of sales (recurring) .......................

Gross profit (before exceptional items)
Cost of sales (exceptional) ...................
Gross profit (after exceptional items) ..
Distribution expenses ...........................
Administrative expenses ......................
Finance income ....................................
Loss before tax .....................................
Discussion and Analysis of our Results of Operations

The tables and discussions set forth below provide a separate analysis of each of the line items that comprise our
statement of income for each of the periods described below. In each case, the tables present (i) the amounts reported
by us for the comparative periods, (ii) the Euro change and the percentage change from period to period and (iii) the
percentage change from period to period after removing the effects of changes in foreign exchange rates (FX).
Changes in foreign currency rates have had a significant translation impact on our reported operating results in the
periods presented below, since a significant portion of our operations have functional currencies other than the euro.
As a result, we have included the percentage change net of exchange rates in order to present operational and other
changes and factors in addition to FX that affected our business during the applicable periods. We have removed the
effects of FX changes in each discussion by identifying the exchange rate used to translate the earlier periods nonEuro denominated results and re-translating the later periods non-Euro denominated results using that same rate. For
the 2014 versus 2013 comparison, the British Pound balances in 2014 have been retranslated at 1.2406, and for the
2013 versus 2012 comparison, the British Pound balances in 2013 have been retranslated at 1.2332. We have not
adjusted the numbers for the impact of the Polish Zloty as this is not considered to be significant. For the 2014 year,
the Australian Dollar balances have been retranslated at 0.6914.
11
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
The table below presents consolidated statement of income data, including the amount and percentage changes
for the periods indicated:
Year Ended December
31,
Consolidated Statement of
Income Information:
Revenue ..............................................
Cost of sales ........................................
Gross profit ..........................................
Distribution expenses ..........................
Administrative expenses .....................
Finance income ....................................
Loss before tax .....................................
Income tax credit / (charge) .................
Loss for the year ..................................
Adjusted EBITDA ...............................
2013
2014
Amount of
Change
680,855
(556,148)
837,849
(615,059)
156,994
(58,911)
124,707
(43,459)
(66,827)
222,790
(51,896)
(92,385)
98,083
(8,437)
(25,558)
14,421
843
(63,758)
(48,494)
6,623
78,509
670
(106,793)
(27,614)
(6,635)
(41,871)
91,975
Percent
Change
Percent
Change
Excluding
FX
23.1%
20.9%
(10.6)
78.7
(19.4)
(8.7)
75.3
(17.6)
64,088
(173)
(43,035)
20,880
(13,258)
(38.2)
444.4
(20.5)
(67.5)
43.1
(36.5)
429.2
(22.7)
(66.9)
39.3
(200.2)
(192.9)
(34,249)
7,622
18.2%
15.0%
139,179
47,715
51.7%
48.0%
Revenue
Revenue increased 157.0 million or 23.1% to 837.8 million for the year ended December 31, 2014 as
compared to 680.9 million for the year ended December 31, 2013. Excluding FX, our revenue increased 142.5
million, or 20.9%. 103.3 million of this increase was attributable to the part-year impact of Peters. Fredericks
sales following the acquisition on July 9, 2013, contributed an incremental 28.1 million to our revenues in the
year ended December 31, 2013, although this business was hived up into the UK business in 2014, and separate
trading performance data is therefore no longer available. The remaining increase is due to organic growth within
the existing business.
Cost of Sales
Cost of sales increased 58.9 million or 10.6% to 615.1 million for the year ended December 31, 2014 as
compared to 556.1 million for the year ended December 31, 2013. Excluding FX, our cost of sales increased
48.5 million, or 8.7%. The increase in cost of sales is partly attributable to 56.8 million of incremental costs
resulting from including the part-year impact of Peters in 2014. Further, our cost of sales for 2014 includes a full
year of the costs of Fredericks, whereas in 2013 the figures only included six months of Fredericks cost of sales
following its acquisition on July 9, 2013. During 2014 we also benefited from some price efficiencies on various
inputs. However, the main reason for the reduced level of cost of sales as a percentage of revenue (i.e. higher
gross margin) is the effect of consolidating six months trading performance of the high-margin Peters business.
In 2013, we closed three factories, one in the UK, one in Germany and one in France. Together, these
closures incurred costs (including impairments) of 24.4 million, accounted for within exceptional items within
cost of sales in the year ended December 31, 2013.
12
Distribution Expenses
Distribution expenses increased by 8.4 million or 19.4% to 51.9 million for the year ended December
31, 2014 as compared to 43.5 million for the year ended December 31, 2013. Excluding FX, our distribution
expenses increased 7.7 million, or 17.6%. The increase is principally attributable to a full year of distribution
expenses in connection with Fredericks in 2014 compared to six months in 2013, and to the part-year impact of
the Peters business in 2014, which contributed an incremental 7.8 million to our distribution expenses.
Administrative Expenses
Administrative expenses increased 25.6 million or 38.2% to 92.4 million for the year ended December
31, 2014 as compared to 66.8 million for the year ended December 31, 2013. Excluding FX, our administrative
expenses increased 24.4 million, or 36.5%. As with other cost categories, the increase is principally attributable
to a full year of administrative expenses in connection with Fredericks in 2014 compared to six months in 2013,
and to the part-year impact of the Peters business in 2014, which contributed an incremental 25.9 million to our
administrative expenses although after excluding the effects of Peters and FX, administrative expenses are
lower year-on-year.
Finance Expenses
Net finance expenses increased 43.2 million or 68.7% to 106.1 million for the year ended December 31,
2014 as compared to 62.9 million for the year ended December 31, 2013. Excluding FX, our net finance
expenses increased 42.8 million, or 68.1%. This increase reflects compounding interest in the amount of 2.4
million with respect to our subordinated shareholder loans, an increase in net foreign exchange losses of 6.2m
(non-cash items, i.e. unrealised), one off exceptional costs of 30.4m in relation to the refinancing of the 350
million senior secured loan notes together with additional interest costs of 8.1m from the additional debt used
to support the Peters acquisition. This is all partly offset by 4.7m savings made as a result of the above
mentioned refinancing exercise.
Of the 106.8 million finance charges (2013: 63.8 million), 32.7 million (2013: 29.3 million) relates
to non-cash interest on the subordinated shareholder loan.
Income Tax Charge/Credit
Income tax charge increased 13.3 million to a 6.6 million charge for the year ended December 31, 2014
as compared to a 6.6 million credit for the year ended December 31, 2013. Excluding FX, our income tax charge
increased 12.8 million. This increase was principally due to the improvement in underlying profitability of our
businesses across Europe and now in Australia, the effects of some one-off tax deductible costs that the group
incurred in 2013 (which were not repeated in 2014) and effects of non-cash movements in deferred tax balances
across the group. Prior year adjustments of 2.6 million relate to the finalisation of UK payments for group relief
to intermediate parent undertakings outside of the R&R Ice Cream plc group.
Adjusted EBITDA
Adjusted EBITDA increased 47.7 million or 51.7% to 139.9 million for the year ended December 31,
2014 as compared to 92.3 million for the year ended December 31, 2013 Excluding FX, our Adjusted EBITDA
increased 44.1 million, or 48.0%. 22.5 million of this increase was attributable to the full year impact of Peters
in 2014 and a further 3.3 million was attributable to the full year impact of Fredericks. A further 2.2 million
results from the organic sales growth with the remaining increase being as a result of cost savings with the
significant savings being made from the closure of three factories in 2013 and input price efficiencies, especially
on dairy related products and some promotional gains.
Overall, a significant factor in the higher gross margin, higher overhead levels and much increased
Adjusted EBITDA margin year-on-year is the positive effect of Peters. The reason for this is that Peters is a
predominantly branded business, which entails a higher level of marketing, advertising and promotional expense,
together but with substantially higher gross margins than our European business. There is an additional expense
of servicing a large land mass like Australia, which entails higher distribution costs. However, the overall effect
of Peters is significantly margin-accretive at gross margin and Adjusted EBITDA margin levels.
13
The table below presents consolidated statement of income data, including the amount and percentage changes
for the periods indicated:
Year Ended December
31,
Consolidated Statement of
Income Information:
Revenue ..............................................
Cost of sales ........................................
Gross profit ..........................................
Distribution expenses ..........................
Administrative expenses .....................
Finance income ....................................
Share of loss of equity-accounted investees
.............................................................
Loss before tax .....................................
Income tax credit / (charge) .................
Loss for the year ..................................
Adjusted EBITDA ...............................
2012
Amount of
Change
2013
600,206
(466,002)
680,855
(556,148)
80,649
(90,146)
134,204
(38,833)
(55,739)
124,707
(43,459)
(66,827)
(9,497)
(4,626)
(11,088)
39,632
2,030
(59,495)
14,421
843
(63,758)
(25,211)
(1,187)
(4,263)
(206)
206
(18,039)
(870)
(48,494)
6,623
(30,455)
7,493
(18,909)
(41,871)
84,357
91,975
Percent
Change
Percent
Change
Excluding
FX
13.4%
15.3%
(19.3)
(7.1)
(11.9)
(21.2)
(5.1)
(13.6)
(19.9)
(63.6)
(58.5)
(7.2)
(22.0)
(61.6)
(58.8)
(7.8)
100.0
(168.8)
100.0
(166.5)
861.3
851.0
(22,962)
(121.4%)
(119.7%)
7,618
9.0%
11.2%
Revenue
Revenue increased 80.6 million or 13.4% to 680.9 million for the year ended December 31, 2013 as
compared to 600.2 million for the year ended December 31, 2012. Excluding FX, our revenue increased 92.1
million, or 15.3%. 46.8 million of this increase was attributable to the full year impact of Eskigels sales,
compared to only six months of sales attributable to Eskigel in the year ended December 31, 2012, as the Eskigel
acquisition occurred on July 31, 2012. Fredericks sales following the Fredericks acquisition on July 9, 2013,
contributed an incremental 25.7 million to our revenues in the year ended December 31, 2013. In addition, the
launch of Mondelz-branded products in Germany and France resulted in 10.7 million of incremental sales.
The remaining increase is due to strong summer sales in the UK and an increase in revenues in Poland as a result
of the growth of private label sales. Due to the success of our Polish operations, we may use our Polish operations
as a platform to expand in Central and Eastern Europe.
Cost of Sales
Cost of sales increased 90.1 million or 19.3% to 556.1 million for the year ended December 31, 2013 as
compared to 466.0 million for the year ended December 31, 2012. Excluding FX, our cost of sales increased
98.9 million, or 21.2%. The increase in cost of sales is partly attributable to 36.0 million of incremental costs
resulting from a full year results of Eskigel in 2013 compared to six months in 2012. Further, our cost of sales
for 2013 includes six months of Fredericks cost of sales following its acquisition on July 9, 2013. Fredericks
contributed incremental costs of 20.3 million in 2013. In 2013, we closed three factories, one in the UK, one in
Germany and one in France. Together, these closures incurred costs (including impairments) of 24.4 million,
accounting for all of the 22.9 million incremental exceptional spend within cost of sales in the year ended
December 31, 2013 as compared to the year ended December 31, 2012. Rising dairy prices also contributed to
the increase in cost of sales in 2013 due to the increasing trend towards premium ice cream, which has resulted
in a higher percentage of our costs being attributable to dairy, as dairy fat is the predominant fat used in premium
ice cream products. We have managed to partly mitigate increasing prices for dairy products by increasing the
prices for some of our products. While several of our contracts with our customers and retailers are based upon
fixed price schedules, we secured price increases with certain customers in the UK in October 2013. Because we
secured these price increases late in the year ended December 31, 2013, we did not recognise the full mitigating
effect of the price increases in the year ended December 31, 2013, however we expect to recognise the beneficial
impact of these price increases during the summer of 2014.
14
Distribution Expenses
Distribution expenses increased 4.6 million or 11.9% to 43.5 million for the year ended December 31,
2013 as compared to 38.8 million for the year ended December 31, 2012. Excluding FX, our distribution
expenses increased 5.3 million, or 13.6%. The increase is principally attributable to a full year of distribution
expenses in connection with Eskigel in 2013 compared to six months in 2012, which contributed an incremental
4.6 million to our distribution expenses in 2013. In addition, the mid-year acquisition of Fredericks contributed
an incremental 1.6 million to our distribution expenses in 2013. Excluding the impact of Eskigel and Fredericks
in the year ended December 31, 2013, our distribution costs decreased by 1.6 million as compared to the year
ended December 31, 2012.
Administrative Expenses
Administrative expenses increased 11.1 million or 19.9% to 66.8 million for the year ended December
31, 2013 as compared to 55.7 million for the year ended December 31, 2012. Excluding FX, our administrative
expenses increased 12.3 million, or 22.0%. The increase in administrative expenses is principally due to a 9.3
million increase in exceptional costs due primarily to costs related to PAIs acquisition of R&R, resulting in an
incremental administrative expense of 4.2 million, administrative costs associated with the closure of our
Carcassonne, Crossgates and Durigon facilities in the amount of 3.6 million and a 0.5 million increase in
acquisition costs. In addition, 2.1 million and 1.7 million of incremental administrative expenses related to the
Fredericks acquisition and Eskigel acquisition, respectively.
Finance Expenses
Net finance expenses increased 5.5 million or 9.5% to 62.9 million for the year ended December 31,
2013 as compared to 57.5 million for the year ended December 31, 2012. Excluding FX, our net finance
expenses increased 5.8 million, or 10.2%. This increase reflects compounding interest in the amount of 2.3
million with respect to our subordinated shareholder loans and an increase of a 2.1 million in net foreign
exchange losses.
Income Tax Charge/Credit
Income tax charge decreased 7.5 million to a 6.6 million credit for the year ended December 31, 2013
as compared to a 0.9 million charge for the year ended December 31, 2012. Excluding FX, our income tax
charge decreased 7.4 million. This decrease was principally due to a reduction in profitability across the Group,
principally driven by increased loss before tax of 30.4 million, which generated a decrease in income tax charge
of 6.9 million at prevailing tax rates.
Adjusted EBITDA
Adjusted EBITDA increased 7.6 million or 9.0% to 92.0 million for the year ended December 31, 2013
as compared to 84.4 million for the year ended December 31, 2012. Excluding FX, our Adjusted EBITDA
increased 9.4 million, or 11.2%. 6.4 million of this increase was attributable to the full year impact of Eskigel
in 2013 compared to only six months in 2012. In addition, 3.0 million of incremental Adjusted EBITDA was
generated in the six months following the acquisition of Fredericks in July 2013.
15
Cash Flows
The following summarises our primary sources of cash in the periods presented:

2013(a)

Cash generated by / (used in):
Operating activities ...............................................
Investing activities ................................................
Financing activities ...............................................
Total ........................................................................
Free cash flow before acquisitions........................
Memorandum:
Add back: Exceptional operating items ................
Free cash flow before acquisitions and
exceptional operating items ..................................
2014
Increase
(Decrease) to Net
Cash Flow
Amount
45,065
(80,947)
1,672
68,081
(329,596)
281,910
23,016
(248,649)
280,238
(34,210)
20,395
54,605
24,030
44,252
20,222
19,200
17,824
3,076
43,230
62,076
18,846
Note (a):
Prior year comparatives have been restated to categorise Parent company funding (43.6 million) and group funding
of PIK Toggle interest payments (12.0 million) within financing cash flows.
Operating Activities
Cash generated by operating activities increased 23.0 million or 51.0% to an inflow of 68.1 million for
the year ended December 31, 2014 as compared to an inflow of 45.1 million for the year ended December 31,
2013. This increase was principally driven by the 47.7 million increase in Adjusted EBITDA together with the
12.2 million reduction in exceptional operating costs. This increase is partly offset by the reduction in the factory
closure provision which has created a cash outflow in the year of 7.8 million. In addition, operating cash flows
in Europe were offset by some unfavourable working capital movements largely as a result of the groups year
end being in the middle of the Australian summer, at the peak of Peters working capital cycle.
Investing Activities
Cash used in investing activities increased 248.6 million to an outflow of 329.6 million for the year ended
December 31, 2014 as compared to an outflow of 80.9 million for the year ended December 31, 2013. This
increase is principally attributable to the acquisition cost of Peters in 2014 (305.8 million, net of cash acquired),
versus the acquisition costs of Fredericks and YooMoo in 2013 (59.9 million, net of cash acquired).
Financing Activities
Cash generated in financing activities increased by 280.2 million to 281.9 million for the year ended
December 31, 2014 as compared to 1.7 million for the year ended December 31, 2013. This increase was
primarily attributable to the receipt of the 315.0 million, 150 million and A$152 million senior secured loan
notes (the latter two of which were used to finance the Peters acquisition), net of the 12.6 million of transaction
costs, offset by the redemption of the 350.0 million 2017 senior secured loan notes, together with the associated
exceptional redemption cash costs of 23.3 million.
Free cash flow before acquisitions
Free cash flow before acquisitions inflow increased by 20.2 million or 84.2% to 44.3 million for the year
ended December 31, 2014 as compared to 24.0 million for the year ended December 31, 2013. Before
exceptional operating items, free cash flow increased by 18.8 million or 43.6% to 62.1 million for the year
ended December 31, 2014 as compared to 43.2 million for the year ended December 31, 2013.
16
The following summarises our primary sources of cash in the periods presented:

2012

Cash generated by / (used in):
Operating activities ...............................................
Investing activities ................................................
Financing activities ...............................................
Total ........................................................................
Free cash flow before acquisitions........................
2013
Increase
(Decrease) to Net
Cash Flow
Amount
69,633
(97,921)
(2,823)
76,700
(80,947)
(29,963)
7,067
16,974
(27,140)
(31,111)
(34,210)
(3,099)
48,949
55,665
6,716
Operating Activities
Cash generated by operating activities increased 7.1 million or 10.1% to an inflow of 76.7 million for the
year ended December 31, 2013 as compared to an inflow of 69.6 million for the year ended December 31, 2012.
This increase was principally driven by the 7.6 million increase in Adjusted EBITDA during the year ended
December 31, 2013 and the unwinding of Fredericks working capital balances following the Fredericks
acquisition in July 2013, and an increase in loans from parent undertakings, which were offset by an increase in
cash exceptional items expensed and the unwinding of Eskigels working capital balances following its acquisition
in July 2012.
Investing Activities
Cash used in investing activities decreased 17.0 million or 17.3% to an outflow of 80.9 million for the
year ended December 31, 2013 as compared to an outflow of 97.9 million for the year ended December 31, 2012.
This decrease is principally attributable to the incremental acquisition cost of Fredericks and Yoomoo in 2013,
which was 17.3 million less than the acquisition cost of Eskigel in 2012.
Financing Activities
Cash used in financing activities increased by 27.1 million to 30.0 million for the year ended December
31, 2013 as compared to 2.8 million for the year ended December 31, 2012. This increase was primarily
attributable to an 8.0 million acquisition cost with respect to the acquisition of non-controlling interests in Eskigel
and a 6.0 million repayment of related party debt in Eskigel. In addition, in the year ended December 31, 2012,
we received a 6.0 million receipt from related parties, cash used to repay the Existing Factoring Facilities
increased by 2.3 million and 4.1 million was incurred in connection with certain transactions.
Free cash flow before acquisitions inflow increased by 6.7 million or 14% to 55.7 million for the year
ended December 31, 2013 as compared to 48.9 million for the year ended December 31, 2012. This is despite
cash out flows in relation to exceptional items which increased by 17.0 million during the year ended December
31, 2013. Fredericks, which we acquired in July 2013, near our peak working capital period, generated 9.1
million of post-acquisition free cash flow in 2013 and Eskigel, which we acquired in July of 2012, also near our
peak working capital period, contributed 18.3 million of post-acquisition free cash flow in 2012. Shareholder
funding from new intermediate parent companies account for the majority of the remaining increase from 2012
to 2013.
Capital Expenditure
We continually undertake capital expenditure projects in order to increase our production capacity, facilitate
innovation and consolidate production. Many of our recent capital expenditure programs have been made to either
bring newly acquired plants and operations up to the standards of our existing operations, or to develop existing
factories as a result of consolidating our production processes following plant closures.
Capital expenditure in the UK in the past three years has focused on developing the Leeming Bar site to improve
operational efficiencies and to enable the consolidation of production following the closure of the Crossgates factory
17
in Leeds, in October 2013, and to consolidate manufacturing capacity between the Leeming Bar and Skelmersdale
sites. Developments at the Leeming Bar site have included the construction of an effluent treatment plant,
installation of a combined heat and power plant and the erection of a new warehouse along with the purchases of
plant and fixtures.
In France, our recent capital expenditure programs have focused on developing our factories in Ploudern,
Brittany and Vayres, Bordeaux, to help consolidate the production processes following the closure of the Carcassone
plant in July 2013. As well as consolidating production, we have also undertaken capital expenditure programmes
in France to improve operational efficiencies by reallocating production lines between factories to focus the
production capabilities of Ploudern and Vayres. In addition to this we have implemented an automated palletisation
system in the Ploudern factory to improve our operational efficiency.
In Germany, we have focused our capital expenditure on a new sugar silo and automatic truck loading facility
to improve our operational efficiency.
In Poland, we have continued the expansion of the factory in Mielec, which has included a new chocolate stick
tunnel and an ice cream confectionery line to support our expanding product portfolio. We continue to make capital
investment in respect of freezers and cabinets to support the growth of our Zielona Budka brand and help develop
the Mondelz brand in the Polish market.
In Italy, our main investment has been in the Oreo sandwich filler to allow the factory in Terni to be at the
centre of our Oreo sandwich production throughout Europe, together with various factory improvements.
In Australia, initially the majority of capital investment for the period has been into the impulse business with
the on-going replacement of freezer assets and distribution vehicles. Minor upgrades have also occurred across the
manufacturing facility together with IT improvements and replacements, and we continue to work with our
Australian business to understand better where operational investments should be made in future.
During the year ended December 31, 2014, our net capital expenditure was 26.7 million (2013: 21.0 million),
primarily related to the expansion of our Leeming Bar and Mielec operations together with our consolidation of the
production facilities in France.
Liquidity Arrangements
Our principal uses of cash have been to finance working capital, capital expenditure, debt service and
acquisitions. Our principal sources of liquidity have historically been net cash provided by operating activities and
borrowings under revolving credit facilities and factoring facilities and unsecured subordinated loans from our
parent entities. We anticipate that we will continue to use cash provided by operating activities and borrowings
under the Revolving Credit Facility and factoring facilities to finance our operations, and that this will allow us to
meet our needs with respect to investment activities, manage our working capital and repay debt on its scheduled
maturity dates.
Credit Facilities in Place
Note: definitions used herein are drawn from the senior secured notes indenture and/or offering memoranda.
Revolving Facility Agreement
The Issuer, the Existing Notes Guarantors, the other companies named therein, Barclays Bank PLC, Credit Suisse
International and HSBC Bank plc, as mandated lead arrangers, the financial institutions named therein, as original
lenders, Barclays Bank PLC, as agent and security trustee, and Barclays Bank PLC and HSBC Bank plc, as issuing
banks, have entered into the Revolving Facility Agreement. Our Revolving Credit Facility provides for borrowings up
to an aggregate of 60.0 million on a committed basis but will allow for borrowings of a further 15.0 million on an
uncommitted basis. Of the 60.0 million currently committed, 17.4 million is committed as ancillary facilities, 13.9
million in the form of overdrafts and 3.5 million in the form of various guarantee facilities (including 2.1 million
in relation to a guarantee of the rental contract for our Australian property). Loans may be borrowed, repaid and
reborrowed at any time. Borrowings under the Revolving Credit Facility accrue interest at EURIBOR, LIBOR or
WIBOR plus a margin of 3.00% per annum. Under its current terms, the Revolving Credit Facility will mature on
March 15, 2020.
Subordinated Shareholder Funding Instrument
Prior to completion of the offering of the Existing Senior Secured Notes, in connection with the novation of
shareholder funding instruments to a parent entity, the Issuer entered into a subordinated shareholder funding
instrument with its direct parent. The subordinated shareholder funding instrument bears interest at a fixed rate
18
payable to the extent, among other things, of the Issuers interest income, dividends and capital gains received by the
Issuer from its investments, less interest payable on the Existing Senior Secured Notes. The interest is payable in
cash at our option (but if interest is not paid, it is accrued and carried forward). The subordinated shareholder funding
instrument will mature in November 2110, and no mandatory put or call rights or mandatory redemption features are
applicable prior to maturity. Obligations under the subordinated shareholder funding instrument are subordinated to
all other debt obligations of the Issuer. If the Issuer cannot make the required payment upon maturity, or if the
instrument cannot be redeemed at par, the maturity date will extend until payment or redemption at par can be
achieved without breaching the applicable payment or redemption restrictions and conditions. As at December 31,
2014, we have 366.1 million in aggregate principal amount and accrued interest outstanding under the subordinated
shareholder funding instrument. No cash interest on this loan was paid in 2014.
Existing Factoring Facilities
Rolland entered into a 30.0 million (for the period April to September) and 15.0 million (for the period
October to March) non-recourse invoice discounting agreement with HSBC Factoring (France) SA on May 4,
2012 (the French Factoring Agreement). HSBC Factoring (France) SA may terminate the agreement in the event
of a change of control of Rolland, including an indirect change of control of our Group. The French Factoring
Agreement has recently been renewed for a further two years and will be renewed automatically on the same terms
for another two years unless either party gives three months prior written notice to terminate prior to renewal.
The minimum service fee over the two year contract is 284,200 (i.e. 142,100 per annum).
On March 30, 2012, R&R Ice Cream UK Limited entered into a non-recourse receivables financing agreement
with Barclays Bank plc with a facility limit of up to 27.5 million. The facility has been renewed such that it expires
on May 31, 2016, and may be terminated early by R&R Ice Cream UK Limited on six months written notice.
On February 4, 2013, R&R Ice Cream Deutschland GmbH entered into a non-recourse factoring agreement with
HSBC Trinkaus & Burkhardt AG (the German Factoring Agreement) with a facility limit of up to 25.0 million
(for the period from April to September) and 15.0 million (for the period from October to March). The facility has
subsequently been renewed, with a maturity date of July 31, 2015. After this date, the contract will be extended by
one year, provided that neither party has terminated the agreement (with a prior notice period of three months).
On October 16, 2014, Australian Food Group Pty Ltd (AFG) entered into a non-recourse debtor finance
facility with HSBC Bank Australia Limited with a facility limit of A$20.0 million (with a reduced seasonal limit of
A$10.0 million for the off-peak season from March to September). The facility matures on 30 September 2016
unless a termination or default event occurs earlier. AFG also entered into a guarantee facility on 16 October 2014
with a limit of A$6.05 million, which has subsequently been increased to A$7.0 million. The facility is repayable
on demand and cancellable at any time. Instruments issued under the facility have a maximum tenor of 5 years.
Peters Finance Lease
Peters has A$ 21.0 million of debt outstanding as of December 31, 2014, in connection with a finance lease
relating to Peters Mulgrave plant. This is a development lease dated 24 January 2014 with The Trust Company
(Australia) Limited as trustee for the CLP Mulgrave Trust (the Landlord). Pursuant to the terms of the lease, the
Landlord is required to design and construct a new office building at 254-294 Wellington Road, Mulgrave in Victoria
(Mulgrave Site) for Peters. Upon completion of construction of the new office building (Mulgrave Office
Premises), Peters is required to take a lease of the whole of the premises for a term which will expire on 23 January
2034. The rent payable in the first year of the lease will be the greater of 10% of all costs and expenses incurred by
the Landlord in the design and construction of the base building of the Mulgrave Office Premises and approximately
AUD 800,000. The annual rent will increase by 3.5% on 24 January of each year of the lease term. This lease is
treated as a finance lease for accounting purposes.
Contractual Obligations and Commercial Commitments
The following table represents the principal payments associated with our debt and other contractual obligations
as of December 31, 2014. The actual amount that we may be required to repay on our Revolving Credit Facility may
be different, including as a result of additional borrowings under that facility. Amounts shown in the table below that
represent obligations and commitments not denominated in Euro have been presented based on their Euro equivalent,
based on the exchange rates prevailing on December 31, 2014.
19
Payments Due By Period

Long term cash pay debt obligations(1) ..............
Finance lease obligations(2) ................................
Other financial liabilities(3) ................................
Total
Less than
1 Year
1-5 Years
More
than
5 Years
Purchase commitments(4) ...................................
865,535
16,519
538
2,814
37,844
885
2,814
151,376
1,439
-
676,315
14,195
538
-
Total ..................................................................
885,406
41,543
152,815
691,048
(1) Represents the Euro equivalent of 315.0 million, AUD 152.0 million and Euro 150.0 million of principal
payments on the Notes and assumes that our Revolving Credit Facility remains undrawn. For further detail, see
note 20 to our audited financial statements for the year ended December 31, 2014 included elsewhere in this
document.
(2) Consists of payments under finance leases for various property, plant and equipment, including the finance
lease on the Australian property. For further detail, see note 21 to our audited financial statements for the year
ended December 31, 2014 included elsewhere in this document.
(3) Represents payments under an operating lease for land in Australia. For further detail, see note 24 to our audited
financial statements for the year ended December 31, 2014 included elsewhere in this document.
(4) Consists of obligations to purchase goods or services, primarily fixed assets, which are enforceable and legally
binding on us. Excludes purchase orders made in the ordinary course of business that are short-term or
cancellable. For further detail, see note 25 to our audited financial statements for the year ended December 31,
2014 included elsewhere in this document.
Off Balance Sheet Arrangements
As of December 31, 2014 we did not have any material off balance sheet obligations other than those operating
lease and purchase obligations identified above.
Inflation
We believe inflation has not had a material effect on our financial condition or results of operations in recent
years. However, there can be no assurance that we will not be affected by inflation in the future.
Critical Accounting Policies and Estimates
Our discussion and analysis of results of operations and financial condition are based upon our audited financial
statements. These audited financial statements have been prepared in accordance with IFRS as applied in the
European Union. The preparation of these financial statements requires us to make estimates and judgments that
affect the amounts reported in those financial statements. On an ongoing basis, we evaluate estimates. We base our
estimates on historical experiences and assumptions believed to be reasonable under the circumstances. Those
estimates form the basis for our judgments that affect the amounts reported in the financial statements. Actual results
could differ from our estimates under different assumptions or conditions.
Estimates are in particular required in the following cases:
the determination of the necessity and measurement of impairment losses on intangible assets, items of
property, plant and equipment and inventories;
the outstanding liability owed, at the balance sheet date, in respect of volume pricing rebates owed to
customers;
the assessment of potential deferred tax assets; and
the recognition and measurement of pension obligations and anniversary bonuses.
Our significant accounting policies, which may be affected by our estimates and assumptions, are described in
the Accounting Policies section of our consolidated financial statements for the year ended December 31, 2014.
20
Determination of Fair Values

A number of the Groups accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure
purposes based on the following methods. The fair value of property, plant and equipment recognised as a result of
a business combination is based on market values. The market value of property is the estimated amount for which a
property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arms length
transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without
compulsion. The market value of items of plant and equipment is based on the quoted market prices for similar items
or depreciated replacement cost where quoted market prices are not available.
The fair value of intangible assets is calculated using methods which reflect the value that the Group would
have paid for the assets in an arms length transaction. Such methods include where appropriate, discounting
estimated future net cash flows from the asset and applying multiples to royalty streams that could be obtained by
licensing the intangible asset.
The fair value of inventories acquired in a business combination is determined based on its estimated selling
price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit
margin based on the effort required to complete and sell the inventory.
The fair value of trade and other receivables is estimated as the present value of the amounts to be received,
determined at appropriate interest rates less allowance for bad debts. Discounting has not been applied to current
receivables.
The fair value of interest rate and foreign exchange derivatives is the estimated amount that the Group would
receive or pay to terminate the derivative at the balance sheet date, taking into account current interest rates and the
current creditworthiness of the derivative counterparties.
The fair value of trade and other payables is estimated as the present value of the amounts to be paid, determined
at appropriate interest rates. Discounting has not been applied to current payables.
Qualitative and Quantitative Disclosures About Market Risk
Our operations are exposed to market risks primarily as a result of changes in prices of our raw materials and
changes in interest and foreign currency exchange rates. Derivatives that we use are primarily foreign currency
forward contracts. Our derivative activities are subject to the management, direction, and control of our senior
financial officers. Risk management practices, including the use of financial derivative instruments, are presented
to the board of directors of the Issuer at least annually.
We perform a sensitivity analysis to determine the effects that market risk exposures may have on our debt and
other financial instruments. Information provided by the sensitivity analysis does not necessarily represent the
actual changes in fair value that would be incurred under normal market conditions because, due to practical
limitations, all variables other than the specific market risk factor are held constant.
Commodity Risk
We require substantial amounts of raw materials in our operations, including cream, milk, whey protein, sugar,
glucose, cocoa, butter, coconut oil and palm oil. We are exposed to commodity price and supply risks with respect
to these raw materials. In addition, we are exposed to fluctuations in the price of energy (primarily electricity and
natural gas), the cost of freight, which is impacted by fluctuations in the price of oil, and the cost of other
components that we use in our manufacturing process, such as plastic which is impacted by a number of commodity
prices and fluctuations of the U.S. dollar. To the extent we are not able to leverage our purchasing power in the
future as successfully as we have in the past, we may not be able to increase the selling price of our products to
reflect increases in the costs of raw materials, or if we experience any interruptions or shortages in the supply of
raw materials, our operating margins could be adversely affected. We seek to mitigate the effects of increased costs
by entering into fixed price contracts and by implementing increases in our prices when possible.
We manage supply risks by consolidating our purchases among a select group of suppliers and through provisions
in sales agreements that allow for certain increases in raw material costs to be passed through to our customers.
However, an interruption in the ability of these suppliers to provide raw materials could have a material adverse effect
on our financial position, results of operations and cash flows. The availability and price of raw materials may also be
subject to shortages in supply, suppliers allocations to other purchasers, interruptions in production by suppliers,
changes in exchange rates, global demand and worldwide price levels.
Credit Risk
21
Our management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
Credit evaluations are performed on all customers requiring credit over a certain amount. The Group does not
require collateral in respect of financial assets.
At December 31, 2014, there were no significant concentrations of credit risk. The maximum exposure to credit
risk is represented by the carrying amount of each financial asset, including derivatives on the balance sheet.
Interest Rate Risk
Following our May 2014 and June 2014 refinancings, the majority of our debt obligations bear interest at a
fixed rate. Consequently, we have no significant direct exposure to interest rate fluctuations. We use short-term
borrowings to fund our business through peak periods of working capital needs. We borrow such loans at floating
interest rate fluctuations. Our exposure to interest rates resulting from such borrowings is not significant. Our shortterm receivables and payables are not exposed to interest rate risk. Our cash at bank earns interest at floating rates
based on market rates.
Foreign Currency Risk
We are exposed to foreign currency risk on our sales, purchases and borrowings that are denominated in a
currency other than the respective functional currencies of our entities. The currencies giving rise to these risks are
primarily the British Pound, Australian Dollar and the Polish Zloty.
The UK and Australian businesses also typically uses contracts to mitigate foreign currency exposure on
trading. At the 2014 year end, there were 11 such contracts outstanding (2013: six). The Directors believe that the
foreign exchange exposure in this regard does not present a material risk. The net fair value of these contracts at 31
December 2014 was a liability of 408,000 (2013: liability of 32,000).
A movement of +/- 10% in the GBP: EUR exchange rate, with all other variables held constant would result in
a 19.5 million (2013: 1.5 million) movement in the groups results and a 21.9 million (2013: 14.6 million)
movement in the groups equity. A movement of +/- 10% in the A$: EUR exchange rate, with all other variables
held constant would result in a 1.1 million (2013: nil) movement in the groups results and a 1.9 million (2013:
nil) movement in the groups equity.
95% of the UK businesss forecast 2015 Euro trading requirement is hedged (2013: 95% of the UK businesss
2014 Euro trading requirement). 65% of the Australian businesss forecast Euro trading requirement up to 30 June
2015 is hedged, with nil hedged beyond that date as at 31 December 2014, with an overall hedged position of 31%
of the Euro requirement to 31 December 2015.
Capital Management
One of the groups objectives is to safeguard its ability to continue as a going concern providing returns to
shareholders, through the optimisation of the debt and equity balance, and to maintain a strong credit rating and
headroom. The group manages its capital structure and makes appropriate decisions in light of the current economic
conditions and strategic objectives of the group.
The groups capital comprises equity and long-term debt. The equity comprises fully paid up ordinary shares
and the long-term debt comprises subordinated shareholder loans, the senior secured notes and finance leases. Intrayear funding requirements are managed through cash, revolving credit facilities and factoring facilities.
The refinancing in 2014 allowed the group to better match EBITDA and cash flows to its borrowings and debt
service obligations, in particular to provide a natural hedge in respect of potential foreign exchange movements.
The groups policy is to budget sufficient headroom in order to maintain compliance with the covenant set out
in the revolving credit facility agreement such that any unforeseen circumstances are unlikely to result in a breach
of that covenant. Throughout the year, the group has comfortably complied with this policy.
There has been no change in the objectives, policies or processes in respect of capital management during the
years ended 31 December 2014 and 31 December 2013.
22
BUSINESS
Overview
We are the second largest take-home ice cream manufacturer in Europe, with leading market shares in each
of the UK, German, French and Italian ice cream markets. We now also have a leading market position in Australia
following the acquisition of Peters. We offer a broad product range of private label and branded ice cream
products. We primarily produce take-home ice cream products, including ice cream tubs and multi-packs of ice
cream cones, ice lollies, ice cream sticks and ice cream desserts, and impulse products, which individuals buy on
impulse for immediate consumption. Our scale, focus on large, stable take-home markets and highly efficient
manufacturing operations provide us with key advantages over our competitors and have allowed us to continue
to generate stable earnings and significant free cash flow through various economic cycles. We believe our broad
product range allows us to maintain strong sales volumes as consumer demand shifts between branded and private
label products, including as a result of economic cycles. For the year ended December 31, 2014, we generated
Adjusted EBITDA of 140.0 million, revenue of 837.8 million and free cash flow before acquisitions of 44.3
million. Including an adjustment to incorporate a full year of Peters trading performance to December 31, 2014,
pro forma revenue was 921.6 million and pro forma EBITDA was 153.7 million.
We believe that we are the largest private label ice cream manufacturer in the world and that our large scale and
ability to develop new products make us a key supplier of private label ice cream to the major national retailers. We have
partnered with most of the major retailers in our markets to develop and produce their private label ice cream, including
Tesco and Asda in the UK, Aldi and Edeka in Germany, Leader Price and Carrefour in France, Conad and Coop in Italy,
and Biedronka in Poland. We believe that our success with our customers has been driven by our new product
development capabilities, well-invested manufacturing plants that can consistently deliver reliable quantities and quality,
and ability to deliver attractive prices due to effective cost management.
Through the acquisition of Peters, we are also now the number one ice cream business in the Australian takehome market and number two in the impulse market. Our Australian business is a predominantly branded business
with iconic Australian ice cream products, such as Peters Original, Peters Light & Creamy and Connoisseur, and
numerous Nestl licensed brands. We also have a leading and longstanding position with the major retailers in the
Australian market, such as Woolworths and Coles.
We benefit from a variety of premium licensed and owned brands, and we have exclusive ice cream product
licences with the worlds largest food company (Nestl), the worlds largest confectionary company (Mondelz)
and international confectionary manufacturer, Cadbury UK Limited. Our other primary licence is a non-exclusive
licence with the worlds largest entertainment company (Disney). Our private label relationships with our customers
provide us with strong opportunities to cross sell these premium branded products.
The following table sets forth an overview of our primary licence agreements, the products they cover, and the
jurisdictions in which they allow us to market our products. The table below does not include every licence, product
within a particular licence, or applicable jurisdiction. For example, in addition to the table below, we have an
agreement with Schweppes for the Oasis mark, among other agreements.
Licence
Brands/Products
Jurisdiction
Nestl
Smarties, Aero, Rolo, Toffee

Crisp, Lion, KitKat, FAB,
Rowntrees Fruit Pastille, Maxibon
and Toffee Crumble
UK and Ireland
Nestl (via Peters)
Drumstick, Heaven, Drumstick Kit

Kat, Lifesavers, Maxibon, Milo,
Rolo and Skinny Cow
Australia
Milka,
Oreo,
Philadelphia, Daim
Germany, Austria, Switzerland,

France, Belgium, Netherlands,
Luxembourg, Spain, Portugal,
Italy, Poland, Czech Republic and
Slovakia
Mondelz
23
Toblerone,
and
New
Zealand
(except with respect to Drumstick (including

Drumstick Kit Kat) and Milo, which are
excluded from the New Zealand territory)
Cadbury
Dairy Milk, Crunchie, Cadbury

Caramel
UK and Ireland
Disney
Mickey Mouse, Minnie Mouse,

Cars
France
Del Monte
Del Monte Smoothies and Fruitini

ice lollies
UK and Italy
Within Europe, we operate nine plants located in five countries, eight of which are in the four largest ice cream
markets in Europe, which allows us to supply our customers quickly and efficiently in their markets. We also now
operate, what we believe is, the largest and most sophisticated ice cream manufacturing facility in Australia. Our
manufacturing platform benefits from many years of significant capital investment and footprint rationalisation. Our
plants have also benefited from sharing and implementation of best practices and procedures across our Group in order
to leverage technological expertise. We have consolidated certain of our operations following the closure of three plants
during 2013, which resulted in modest cost savings and improved efficiency across our facilities in the year ended
December 31, 2013, and significant cost savings in the year ending December 31, 2014. In addition, we have
acquired numerous manufacturing facilities in recent years, and following each acquisition we have made capital
improvements and implemented our best practices in order to bring such facilities in line with our group-wide
standards. We believe that our scale and manufacturing footprint provides us with a competitive advantage over
most of our competitors, which are generally smaller and only offer regional distribution.
Our History
Overview
Our company was formed in 2006 when Richmond Foods (Richmond), a leading producer of ice cream in
the UK and listed on the London Stock Exchange, merged with Roncadin Eis (Roncadin), a German ice cream
producer. This merger created R&R Ice Cream, the largest private label ice cream manufacturer in Europe. Since
the Richmond-Roncadin combination, we sought to continue our expansion through strategic acquisitions across
Europe, focusing primarily on the take-home segment in order to improve our position as a market leader in the
fragmented European ice cream market. In 2014 we acquired the Peters business, the leading take-home ice cream
manufacturer in Australia; and in March 2015 we announced the acquisition of Nestl South Africas ice cream
business.
Acquisitions since 2007
In 2007, we acquired the Creamice private label ice cream business from Fredericks Ice Cream Ltd.
In 2008, we acquired a 75% stake in Kellys of Cornwall Ltd. (Kellys), a small but fast-growing
Cornish ice cream manufacturer, to our brand portfolio. We acquired the remaining 25% stake in Kellys
in 2010.
In 2010, we acquired the Rolland group through the acquisition of its holding company, Soparo SAS.
Rolland is an established French ice cream manufacturer and the leading company in Frances private label
ice cream market. This acquisition significantly increased our private label market share in France.
In 2011, we added Pilpa (the ice cream division of Maison Boncolac) to our portfolio. Our acquisition
of Pilpa, which further consolidated the French ice cream market, gave us access to prominent brands
such as Disney and Oasis.
In 2011, we acquired the Germany-based ice cream producer Durigon Gelato GmbH. This strategic
acquisition increased our production capabilities in Germany, however we closed the Durigon facility in
December 2013 and consolidated production in Osnabrck.
In 2012, we acquired Eskigel, the leading Italian private label ice cream manufacturer.
In early 2013, we purchased a further 67.8% stake in Yoomoo, a frozen yogurt company based in the
UK, in which we had previously made a 25% investment in 2011. Yoomoo is the leading frozen yogurt
brand in the UK.
In 2013, we completed the acquisition of Fredericks, adding the licence of Cadbury brands to our
portfolio of licensed brands. Cadbury is the UKs largest confectionary brand and as a result of the
Fredericks acquisition, we now produce Cadbury branded ice cream, in addition to Nestle branded ice
24
cream, in the UK.
On June 30, 2014, R&R Ice Cream plc completed the purchase of Peters, one of Australias oldest
consumer businesses, from Pacific Equity Partners (PEP) for a total consideration of A$448.1 million
(310.3 million). Peters has a significant portfolio of household name ice creams including Drumstick,
Connoisseur, Peters Original and Maxibon.
On March 12, 2015, we announced the acquisition of Nestl South Africas ice cream business. The
terms of the deal were not disclosed. Nestl South Africas ice cream business has a brand portfolio
including Dairymaid, Country Fresh, Eskimo Pie and King Cone as well as Rolo and KitKat, produced
from a modern manufacturing facility with nine production lines at Clayville, Johannesburg.
Having successfully consolidated the UK private label market and subsequently having overseen ten acquisitions
since 2007, our management team has a large amount of experience in consolidating ice cream manufacturing
operations in various markets in Europe, and now in acquiring ice cream business outside of Europe. Following each
acquisition, we have made significant improvements to the acquired businesses into our Group and to improve the
operating efficiency of the newly acquired entity by implementing our group-wide best practices at that entity. Our
strategic acquisitions allow us to benefit from increasing economies of scale relating to our purchasing of raw materials
and provide us with additional marketing strength when selling our products to retailers.
Major Licensing Arrangements
In addition to our acquisition-driven growth, we have entered into a number of licensing agreements, through
which we have sought to expand our market share in the branded market. We have entered into the following
primary licences:
In 2011 we entered into an exclusive licence agreement with Mondelz to produce and sell ice cream
products in Germany, Austria, Switzerland, France, Belgium, Netherlands, Luxembourg, Spain,
Portugal, Italy, Poland, Czech Republic and Slovakia under its brand names including Milka, Oreo,
Toblerone, Philadelphia and Daim.
Through the acquisition of Pilpa in 2011, we gained non-exclusive access to various Disney licences
such as Mickey Mouse, Minnie Mouse and Cars, for use in the UK, France, Germany, Poland and
certain Nordic countries. Through the same acquisition, we also acquired an exclusive licence to
produce and market products under the Oasis brand.
In 2011, we renewed our licence agreement with FrieslandCampina regarding the use of the Landliebe
brand in Germany, Austria and Switzerland.
Through the acquisition of Fredericks in 2013, we have an exclusive licence agreement with Cadbury
to produce and sell in the UK ice cream products under the Cadbury brands, which include Dairy
Milk, Crunchie and Cadbury Caramel. Through the same acquisition, we entered into a licence
agreement with Del Monte for the sale of Del Monte Smoothies and Fruitini ice lollies in the UK and
Italy.
Through the acquisition of Peters in 2014, we have an exclusive licence agreement with Nestl in
Australia and New Zealand for brands such as Drumstick, Heaven, Drumstick Kit Kat, Lifesavers,
Maxibon, Milo, Rolo and Skinny Cow.
Through the acquisition of Nestl South Africas ice cream business, announced in March 2015, we
have a licence agreement with Nestl to produce and sell in South Africa (and a number of other
countries in Africa) ice cream products under, amongst others, the Bar One Kit-Kat and Rolo brands.
In many cases, we are able to sell products through these licences in jurisdictions where products bearing these
brands are not currently sold, providing us with an opportunity to increase our branded product revenues. For
example, in Italy where we have historically sold almost exclusively private label products, we have launched
successfully products under the Mondelz and Del Monte brands. These licences also provide us with the
opportunity to cross-sell to our customers innovative private label offerings and reinforce our position as a leading
European ice cream manufacturer.
Our Strengths
Focus on Attractive Markets. We believe that ice cream is one of the most attractive retail food categories for
manufacturers in Europe and Australia. Ice cream has strong appeal, and demand for ice cream has generally
experienced stable growth and demonstrated resilience to negative macro-economic conditions. The countries in
which we have leading positions are some of the largest, most stable and attractive ice cream markets in Europe.
France, Germany, Italy and the UK had total take home ice cream sales, including discounters, of 0.8 billion, 1.2
billion, 0.8 billion and 1.0 billion, respectively, in 2014, and sales of ice cream in those markets have steadily
grown over recent years, including during recessionary periods. In Australia, market growth has been substantial
25
over a number of years, with growth of 2.7% per annum between 2009 and 2013. There are the additional factors
of the premiumisation trend, resulting from customers purchasing higher-priced indulgent products, and to
volume growth, which is driven by Australias increasing population and stable consumption patterns.
Leading Market Positions. We have leading market positions in the UK, Germany, France and Italy, which
are the four largest take-home ice cream markets in Europe and the four largest markets for private label ice cream
in Europe. We are the one of the largest take-home ice cream manufacturers in Europe. We also are the largest
manufacturer of private label ice cream in each of the UK, France and Italy by volume and value and we estimate
that we accounted for approximately 61%, 63% and 58%, respectively, of total private label sales in those markets
in 2014. In Germany, we are the second largest manufacturer of private label ice cream and estimate that we
accounted for approximately 28% of the private label market in 2014. According to Nielsen, we have the second
largest market share in take-home ice cream in the UK and we estimate our 2014 revenues represented 33% of this
market. We believe we are also the second largest manufacturer of take-home ice cream in France and Italy and the
third largest manufacturer of take-home ice cream in Germany. We believe that our large size and leading market
positions make us a key supplier of private label ice cream for the major national retailers we serve and allow us to
maximise economies of scale in production and raw material purchasing. We also have a market-leading position
in the Australian ice cream market through Peters, which has the number one position in the take-home market and
number two position in the impulse market, in both cases with an approximate market share of 30%.
Cost Leadership and Efficient Operating Base. We believe that our ability to produce quality products at a low
cost provides us with a strong competitive advantage. During the past few years, we have invested substantially in our
operations, including acquisitions and improvements to our properties, plant and equipment, with a focus on projects
that we believed would return our investments within three years. These expenditures were made to increase our
production capacity and efficiency, facilitate innovation, reduce ongoing manufacturing costs and improve product
quality. We have also improved our production controls and upgraded the operating processes at each of our facilities,
in particular those acquired by us in recent years. As a result of these measures, we believe that our manufacturing base
is characterised by efficient changeovers, which is a key focus for us, minimal waste and high capacity utilisation. We
have actively managed our asset base by divesting or closing inefficient plants or plants providing excess capacity. Since
2000, we have closed eight facilities in the UK, three in Germany and one in France and have shifted production to
larger more efficient facilities, improving and rationalising our manufacturing footprint. In July 2013, we ceased
production at our Carcassonne facility and increased capacity at our three other French facilities. We subsequently
closed Crossgates in Leeds, UK, in early October 2013 moved that facilitys production to our Leeming Bar site.
Further, we closed our Durigon plant in Schwanewede, Germany at the end of December 2013 and all of that facilitys
production was transferred to our Osnabrck plant. These three closures resulted in modest cost savings and improved
efficiency at our remaining plants in these countries during 2013 and significant cost savings in the year ending
December 31, 2014. In addition, we consolidated production between our Leeming Bar and Skelmersdale sites after
the acquisition of Fredericks in 2013. In order to optimise profitability, we continually assess the sales performance
of all of our product lines and seek to introduce higher margin products at the expense of lower margin products. As a
result of these measures and our manufacturing excellence, we believe we are able to manufacture ice cream more
efficiently than our competitors, which we believe allows us to maintain higher margins than most of our competitors.
Attractive Profit Margins with Strong Cash Flow. Our focus on reducing costs and making disciplined capital
expenditure, combined with our focus on high margin product lines and markets with attractive characteristics, has
allowed us to achieve attractive profit margins and generate strong levels of cash flow in recent periods. In 2013 and
2014, we converted 26% and 32%, respectively, of our Adjusted EBITDA into free cash flow before acquisitions. In
2013 and 2014, we had cash conversion ratios (defined as Adjusted EBITDA minus capital expenditure, divided by
Adjusted EBITDA) of 77% and 81%, respectively. Our strong cash flow generation has allowed us to invest in our
business to achieve additional cost reductions, acquire new businesses and develop new products to further strengthen
our market positions. As a result of our recent investments, we now have a well invested capital base, which we believe
will reduce our ongoing capital expenditure requirements at those facilities. We also practice margin discipline by not
accepting low margin business from our customers. We believe that low margins are not sustainable over the long
term, and that by only producing products which meet our desired margins, we will continue to be profitable with the
ability to reinvest in our business. In addition, the Peters business in Australia has substantially higher gross and
EBITDA margins than those that prevail in European markets, and within our European business. Therefore, we
expect the contribution of the Peters business to have a substantial and positive effect on the groups profit margins
and cash flows.
Diverse Product Range. We have developed and acquired a broad range of product offerings and brands in
order to address changing consumer preferences and meet our retailer customers needs to sell a wide variety of
products. In order to maintain a diversified product portfolio, we rely on what we believe to be first-rate product
development capabilities located in each of the markets in which we operate to continuously develop new products
in response to changing market trends. We believe that our balanced product range is unique because we sell both
26
branded and private label products. This diversity allows us to maintain strong sales volumes as consumer demand
shifts between branded and private label products, often as a result of economic cycles. As a result of our
acquisitions in recent years, we own a broad range of brands, which include Kellys and yoomoo in the UK,
Botterbloom in Germany, Flipi and Pilpa in France, Zielona Budka in Poland, Peters and Connoisseur in Australia,
and other recognisable brands. In addition, we have an exclusive licence for branded products such as Smarties,
Aero, Rolo, Toffee Crisp, Lion, KitKat, FAB, Rowntrees Fruit Pastille, Maxibon and Toffee Crumble (through
Nestl), Milka, Oreo, Toblerone, Philadelphia and Daim (through Mondelz), Dairy Milk, Crunchie and Cadbury
Caramel (through Cadbury), and Del Monte Smoothies and Fruitini ice lollies (through Del Monte). The use of
these brands allows us to market a wide variety of products with brands that have instant customer recognition and
leverage the marketing campaigns of the brand owners.
Strong Relationships with a Diverse Customer Base of Leading Retailers. We believe that our scale and
diverse portfolio of attractive products have enabled us to build strong relationships with our customers. We have
product innovation teams located throughout our markets that enable us to serve our customers locally, and we
solidify our relationships with our customers by working with them to develop, commercialise and efficiently
produce innovative new private label products. We seek to expand by cross-selling to our large existing customer
base and by offering new customers a wide variety of products that address their retail needs. Many of our customers
are leaders in their respective national markets, including Asda, Tesco, Carrefour, Conad, Aldi, Woolworths and
Coles, and we have long-standing relationships with each of our leading customers. Since we operate in several
different markets in Europe, we serve a number of different retailers, and as a result our top five customers, by
revenue, accounted for only 27% of our sales in 2014 (2013: 31%), which we believe is relatively low in the food
retail industry, a market that is dominated by a limited number of retailers. No single customer represented more
than 6.4% of our revenue in 2012, 2013 or 2014. We believe that the leading retailers in our current markets will
ultimately lead the consolidation of retail food markets across Europe, and we will seek to expand our business, in
particular sales of our private label products, to new markets as our customers expand.
Proven Management Team. We have a strong and experienced management team. Our Chief Executive Officer,
Ibrahim Najafi, has been with our company since 1998, and has been Chief Executive Officer since 2013. Our Chief
Financial Officer, Andrew Finneran, has been with our company since 1991. In 2014, there were certain changes to
the composition of our senior management team. In July 2014, we announced the retirement of James Lambert OBE
from his role as non-executive Chairman of the company. James Lamberts retirement followed a period of transition
which saw him step down from his role as CEO in the summer of 2013 whilst retaining the role of chairman. He
remains a significant shareholder in the company. In addition, in December 2014, Bob Bigley stepped down from
his role as Head of Group Development, with his responsibilities being assumed by Ibrahim Najafi, Andrew Finneran
and other members of the executive management team.
Our senior management team has strengthened our relationships with some of the largest and fastest growing
food retailers in Europe, and has improved the efficiency of our operations by implementing production controls
and by targeting high-return capital investments. Our management team has also strengthened our company and
increased our scale through a series of acquisitions of complementary businesses, and has realised significant cost
synergies when integrating these acquisitions and applying our companys best practices to acquired businesses.
Our Strategy
Our goal is to strengthen our position as a leading global manufacturer of ice cream products and increase our
profitability. Our strategy includes the following elements:
Drive Growth through Product Innovation. We intend to maintain and further strengthen our leading positions
in our markets by continuing to produce high quality products that effectively address our customers needs. We plan
to continue to use our product development capabilities, which exist in each of the countries in which we operate and
allow us to cater to local markets in order to deliver products that meet the diverse and changing needs and tastes of
ice cream consumers in those markets. Our development of new products includes evaluations of our portfolio of
existing products to determine whether any can be replaced with higher margin products. We will continue to work
with our retailer customers to develop new private label products, such as private label super-premium products. We
also are increasing our focus on consumer testing, which we believe will enable us to launch better focused and
therefore more successful, products. We also intend to use our existing portfolio of strong brands and our Nestl,
Mondelz and Cadbury licences to market new and innovative branded products. We intend to continue to increase
our product range under these licences and expand the geographical distribution of these products across Europe.
Our recent successful product innovations include Cadbury mini-cones, Oreo sandwiches and Milka, Daim and Oreo
ice cream sticks. We intend to capitalise on these brands by launching brand rejuvenation initiatives, leveraging our
product development capabilities and increasing marketing-related investment. We believe that our low-cost
manufacturing platform provides us with a strong base from which to expand our product offerings.
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Continue to Reduce Costs and Increase Efficiency. In 2014, we achieved significant cost savings through
reducing overhead and production costs, consolidating our sites in the UK, Germany and France and improving
management information and financial controls. We plan to continue to improve our productivity and lower costs
across our entire business by investing selectively in new production equipment, implementing process improvements,
evaluating our product lines, and in respect of our newly acquired manufacturing facilities, implementing our Groups
best practices. Additionally, we plan to continue to invest in capital expenditures that result in improved cost
efficiencies in our manufacturing and production operations, which we will evaluate using our conservative investment
criteria whereby, with the exception of health and safety investments, we generally seek to achieve full return on our
capital expenditure in three years or less. We also plan to continue to seek ways to consolidate our production in order
to maximise our use of manufacturing lines and to fully realise other economies of scale in production, purchasing and
distribution.
Pursue Selective Acquisition Opportunities. We plan to continue to evaluate acquisition opportunities to
selectively acquire businesses that may improve our market share and product offerings, reduce costs, or allow us to
enter new geographic markets. We have completed ten acquisitions since 2007 and continue to evaluate acquisition
opportunities. We will also consider obtaining additional licensing agreements that would allow us to sell wellestablished brand name products to improve our market share and product offerings. Following any acquisition, we
will seek to implement our best practices such as those we have developed and applied to the UK, German, French,
Polish and Italian facilities we have acquired since 2006, with the intent of increasing efficiencies and lowering our
cost of operations.
Our Products
We manufacture and market a wide variety of ice cream products that we sell to a broad customer base. We offer
different ice cream products in the various local and regional markets in which we operate in order to appropriately
cater to the tastes of the consumers in each of these markets. We sell our products primarily through two separate
distribution channels: take-home ice cream products and impulse ice cream products. Our take-home ice cream
products include ice cream tubs and multi-packs of ice cream cones, ice lollies and ice cream sticks, some of which
are branded with our own brands and those we license from third parties, and others which are sold under private
labels. Our impulse ice cream products include single portions of ice cream products such as ice cream cones, ice
lollies and ice cream sticks.
We market our ice cream products under our family of brands and under the private labels of our retailer and
food service specialist customers. In 2014, our private label sales represented approximately 63% of our total
consolidated revenue and our branded sales represented approximately 37% of our total consolidated revenue. We
anticipate that the proportion of branded sales within our mix will substantially increase as a result of the
acquisitions of Peters and Nestls South African ice cream business. We believe that our presence in both the
private label and branded ice cream markets helps us maximise the volume of our ice cream product sales to
retailers, as compared to operators who are only able to supply either branded or private label products.
Private Label Sales. Our private label ice cream is manufactured by us and sold by our retailer customers under their
own labels. Our private label customers often specify their own ice cream flavours and formulas, which we then produce
and distribute to the customer who in turn sells the product to the end-consumer often at a lower price than comparable
branded ice cream products. We manufacture our private label ice cream products on a large scale and at low cost, and
our profit margins for these products are consistent with or only slightly below those of branded ice cream products. Our
primary private label product customers include Asda, Tesco, J Sainsburys and Morrisons in the UK, Aldi, Edeka and
Bofrost in Germany, Leader Price, Picard, Auchan, Leclerc and Carrefour in France, Coop and Conad in Italy, and
Biedronka in Poland. Retailers select private label ice cream suppliers based on criteria typically focused on price and
quality, but also including service, logistics and ability to supply to stores or consolidation centres nationwide. Retailers
will typically work with us to develop a unique product package that reflects the various types of ice cream products
we offer and utilises our marketing capabilities. We believe this collaborative approach to product development helps us
to solidify our customer relationships.
Branded Product Sales. Our diverse portfolio of branded products and licence arrangements with Mondelz,
Cadbury, Nestl and Disney, allow us to produce an array of branded ice cream products. Our brand licences are
summarized elsewhere within this document.
Since 2001, we have held an exclusive, ten-year rolling licence to produce and distribute Nestl branded ice
cream and confectionary products in both the impulse and take-home markets in the UK and the Republic of Ireland.
The licence gives us access to the FAB and Rowntrees Fruit Pastille ice lolly brands, which hold first and second
position, respectively, in the everyday water ice category, and Skinny Cow, a leading healthy ice cream product in
the UK. We also have access to the Aero, Smarties, Milky Bar, Rolo, KitKat, Toffee Crisp, Lion Bar, Maxibon and
Toffee Crumble brands, each of which creates instant customer recognition and benefits from significant advertising
28
support from Nestl. The licence is only cancellable (subject to certain exceptions, such as events of default) by
Nestl upon ten years advance notice, which has not been given by Nestl as of the date of this document.
In October 2011, we entered into an exclusive licence agreement with Mondelz to produce and sell ice cream
products under its brand names including Milka, Oreo, Toblerone, Philadelphia and Daim. Our extensive
manufacturing and distribution platform allows us to produce and market cross-category offerings of these Mondelzbranded products, including sticks, cones, mini cones, single serve pots and sandwiches. We are also regularly
developing new products for this range. We offer Mondelz branded products in Germany, Austria, Switzerland,
France, Spain, Portugal, Italy, The Netherlands, Belgium, Luxembourg, the UK, Poland, the Czech Republic and
Slovakia. The success of Mondelz-branded products has encouraged us to extend the range of products, combining
our existing capabilities and innovations into new geographic regions. We periodically assess new markets for our
licensed products and should we determine to expand the range of our products, we seek consent from our contractual
counterparties.
We have an exclusive licence agreement with Cadbury to produce and sell in the UK ice cream products under
the Cadbury brands that include Dairy Milk, Crunchie and Cadbury Caramel. We also gained a licence with Del
Monte for the sale of Del Monte Smoothies and Fruitini ice lollies in the UK.
We have certain licences associated with Disney, including Mickey and Minnie Mouse, and Cars. The Disney
brands lend themselves well to products that are attractive to children. Through the same acquisition, we obtained
an exclusive licence to produce and market products under the Oasis brand.
We have licences associated with Nestl that were acquired as part of the Peters business in mid-2014. These
cover an exclusive right to manufacture and distribute the Drumstick, Heaven, Drumstick Kit Kat, Lifesavers,
Maxibon, Milo, Rolo and Skinny Cow brands in Australia and New Zealand, except with respect to Drumstick
(including Drumstick Kit Kat) and Milo, which are excluded from the New Zealand territory under the licence.
In each local market in which we operate, we offer a branded family tub ice cream which allows us to adapt
recipes according to local consumer tastes. We market several of these brands based on the unique characteristics of
the ice cream sold under that brand. For example, in the UK our platform brand is Kellys ice cream. A key marketing
point for Kellys is that it is manufactured at our Cornish site in Bodmin, using local milk and clotted cream, all
sourced from within 15 miles of the factory, making it unique in ingredients, taste and geography. The brand has
been supported by an integrated marketing plan including television, magazine and online advertising. We also have
a Kellys scooping range for use in ice cream parlours and have a strong presence nationally at many family day-out
locations including zoos, theme parks and beaches.
In 2011, we renewed our licence agreement with FrieslandCampina regarding the use of the Landliebe brand
in Germany, Austria and Switzerland. Similar to the Kellys brand in the UK, the Landliebe range is made using a
unique dairy recipe that builds on the brands dairy heritage in yogurts and is marketed as a premium quality brand.
In France, we use ice cream brands such as, Flipi and Pilpa. In Poland we own the ice cream brand Zielona Budka.
In 2012, we launched the yoomoo frozen yogurt brand into the UK supermarket channel and established a
leading position in this sector. We are continuing to invest in the brand with an integrated marketing plan including
television, magazine and online advertising and we will roll out the brand internationally. We also license the brand
to Yoomoo Holdings Limited, a company which is not part of R&R, which is building a franchise business for
yoghurt bars and now have a presence in Switzerland, Greece, Thailand, United Arab Emirates, Ibiza, Cyprus and
the UK.
For both take-home and impulse ice cream products, many of the brands that we use are licensed and we pay a
licence fee that is typically in the order of 5-6% of the net amount of the sales generated by the product associated
with a particular licence. Licensing brands gives us the flexibility to identify opportunities with respect to new
and/or growing brands or to move into sectors in which we do not have a presence as well as allowing us to benefit
from the investment in parent brand support associated with power brands in other categories.
Product Research and Development
We conduct continuous research and development activities to develop new products and to improve existing
ones. We conduct extensive consumer research to understand attitudes to and usage of ice cream by consumers using
qualitative techniques such as pre-tasks in the home. We combine this to understand shopper behaviour by conducting
at fixture interviews in grocery stores to provide an in situation understanding of how customers react to the ice cream
category in a number of retail stores. We also invest in market data to understand trends and performance across all of
the markets in which we operate. The insights we identify, together with feedback from retailers, are applied to both
our branded portfolio and our private label portfolio, and are shared with our customers, and these insights also form
the basis for our product development programme.
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We have ongoing research and development functions in each of the countries in which we operate so that we can
tailor our projects specifically to the markets they serve. These research and development functions are primarily
concentrated on creating new ice cream products and improving existing recipes. In addition, we have a corporate
team that focuses on sharing best practices, research results and other information among our regional teams.
We believe that our high-quality innovation capabilities allow us to proactively meet both our customers and
end-consumers needs, and provide us with a competitive advantage and help maintain our strong relationships with
our customers. Taste and budget vary widely among our customers and are constantly changing. This means that there
is demand for a significant number of new or revised products to be introduced annually. New product development
can come from our brands, from our extensive market knowledge and research and development, from consumer tested
research or from a specific customer requirement. We also engage in product testing to effectively gauge consumer
preferences. This allows us to tailor our supply purchases to better meet anticipated demand and avoid waste.
Customers
We serve a broad range of retailer customers, including hypermarkets, supermarkets, grocery stores, convenience
stores, club stores and other retailers. In the UK, our primary customers include Tesco and Asda, and in the rest of
Europe, our primary customers include Aldi and Edeka in Germany, Leader Price and Carrefour in France, Conad and
Coop in Italy, and Biedronka in Poland. In Australia, our primary customers include Woolworths and Coles. Our ten
largest retailer customers, by revenue, represented 42% of our revenues in 2014 (2013: 49%). In the UK, we generally
enter into purchase agreements that have rolling thirteen-week terms. In Germany, France and Italy, we generally enter
into contracts that have twelve-month terms, normally beginning in April of each year. We generally enter into rolling
written agreements with our retail customers in Poland which are terminable on one to three months notice depending
on the customer. In Australia there are generally have long standing arrangements within grocery customers, reviewed
annually. We seek to provide our customers with superior service levels, particularly during peak periods, which we
believe gives us a competitive advantage. We generally assign a specific member of our sales team to each of our
customers, and that sales person is responsible for negotiating orders and terms with that customer and ensuring that
products are delivered according to those orders. We sell our impulse ice cream products through food service and
wholesale channels, who sell to customers such as small retail and corner shops, tourist attractions (such as theme
parks) and cinemas.
Distribution
Our products are generally distributed using third party distributors. Outsourcing our distribution function
enhances our ability to increase production without requiring large capital expenditure, and has driven increased
profitability. Our products are shipped on refrigerated trucks from our facilities to distribution warehouses. From
there, they are sent to our customers along with other frozen and refrigerated good products that are shipped by our
distributors to the regional distribution centres of our retailer customers. We believe this allows us to minimise the
time required for us to deliver our products to our customers, who desire timely service in order to keep their shelves
sufficiently stocked with products. In addition, it frees us from making investments in transportation assets, which
generally would not satisfy our capital investment requirements.
Marketing
The goal of our sales and marketing strategy is to continually evolve our offer to meet our consumers needs
in ice cream through the development of a broad portfolio of brand and private label products.
We believe that our product research gives us a thorough understanding of our markets which, coupled with our
key differentiators, include strong development resources, customer service and support capabilities, broad geographic
reach and large-scale production resources, help make us an important supplier to our customers. It is critical in our
industry to provide superior service, and therefore we approach sales and marketing with sales teams who have
specialised product and regional market knowledge as well as product development personnel who can coordinate
development activities. Our scale enables us to dedicate certain sales and marketing efforts to particular products,
customers or geographic regions, enabling us to develop expertise that is valued by our customers. Many of our
customer relationships stem from existing relationships of owners or management of companies we have acquired,
and in many cases those owners who stay with us continue to play a key role in those relationships.
Our sales representatives are trained to maintain a general familiarity with all of our products that allow us to
take advantage of cross-selling opportunities and high-margin products. As a result, we believe that our sales
personnel have developed a deep understanding of our product lines and profitability, in addition to the specific
operations and needs of the individual customers that each representative services. We believe that this expertise
enables us to cultivate profitable new business, develop highly-effective partnering initiatives with key customers,
meet or exceed customer needs and expectations as to product quality and innovation, and differentiate our products
from those of our competition.
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We support the growth of our brands by running fully integrated marketing campaigns. We start a typical
marketing campaign by conducting research to develop a full understanding of how a particular brand is perceived
by our customers before we look to engage with our customers through a variety of multi-media platforms. All of
our marketing campaigns are highly targeted and have specific objectives in mind, whether it is to drive our
customers to try our products or to engage with our consumers to give them a greater understanding about, and a
connection with, our brands. Initially, we engage with customers at home either through television, magazine or
online advertising or through online communications via social media, our websites, home shopping websites,
banners or pop ups on high traffic websites. This is then followed by targeted marketing with in-store
demonstrations and tastings, point of sale marketing, car park and security gate banner and poster advertising and
in-store promotions.
A large portion of our revenue is derived from licenced brands and private label products. As a result, we
believe that we generally spend less on marketing than is normally required to maintain a portfolio of brands as we
benefit from significant parent brand investment support. We also believe that both our private label capabilities
and close involvement in the development of our customers new products help to integrate us with our customers
operations and position us as a critical supplier. We believe that this significantly helps to drive our whole business
growth strategy.
In addition, our sales and marketing strategy includes an effort to take advantage of the cross-selling
opportunities afforded by our acquisitions of independent businesses. We seek to cross-sell our private label as well
as branded offering to our acquired businesses existing customer base while also introducing newly acquired
product lines to our existing customers.
Manufacturing
We currently operate 10 manufacturing facilities located in the UK, France, Germany, Italy, Australia and
Poland. Our total production capacity is approximately 1.3 billion litres per year. The chart below provides an
overview of the facilities we operated during the year ended December 31, 2014.
Location
Leeming Bar, U.K.
Bodmin, U.K.
Skelmersdale, U.K.
Vayres, France
Dang-Saint-Romain,
France
Ploudern, France
Osnabrck, Germany
Mulgrave, Victoria,
Australia
Mielec, Poland
Terni, Italy
Total.
Products Produced
Tubs, ice cream cones, bars and
sticks and desserts
Kellys brand products and tubs
Cadbury & Del Monte branded
products
Ice cream and sorbet tubs, cones,
lollies
Bars, speciality cones and
speciality desserts
Sticks, tubs, cones, and desserts
Tubs, cones, sandwiches, sticks,
desserts, lollies
Peters branded products
Zielona Budka brand products
Tubs, cones, sticks and sandwiches
Capacity
2014
(millions Production
of litres per
(millions
year)
of litres) Employees
Total
Sq.
Meters
(000)
500
22
147
13
631
104
34
1.5
100
15
49
10
44
24
112
5.6
20
70
9
55
87
343
2.5
5.3
210
130
503
18
157
50
85
43
24
55
452
280
226
8.4
9.5
22.6
1,258
515
2,787
117.4
We measure capacity in each facility on a line by line basis, taking account of product throughput, shift patterns,
maintenance and cleaning downtime and plant shutdowns. Our corporate headquarters is located at our Leeming
Bar facility in Northallerton, North Yorkshire, UK.
Materials and Suppliers
The primary raw materials used in the production of our ice cream are cream, milk, water, whey protein, sugar,
glucose, cocoa, butter, coconut oil and palm oil. We source all of our raw material needs from third party suppliers
and we have identified duplicate sources of supply for most of our raw material needs. We also buy cones, chocolate,
wafers and fruit from third party suppliers. We purchase a small number of Nestl branded products from Nestls
plants in Europe for sale under our Nestl licence agreement in the UK and the Republic of Ireland and some
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Mondelz-branded products in connection with our Mondelz licence. We purchase supplies on a company-wide
scale so as to maximise economies of scale. We have supply chain personnel at each of our facilities who work
together to ensure each location receives the necessary supplies.
We continue to take actions to reduce overall materials expense and exposure to price fluctuations. Since 2007,
we have increased the amount of raw materials that we purchase pursuant to fixed-price contracts which set prices
for our raw material sales for that entire year. We opportunistically enter into these arrangements when we believe
that we can secure favourable prices for our raw materials for specified future periods or when we have contracted
customer prices ahead of time to reduce our exposure to near-term price fluctuations. We currently fix the majority
of our raw materials used for ingredients and packaging through fixed-price contracts. Fixed-price contracts do not
generally exist for dairy products, although dairy products represented a small proportion of our overall cost base.
Quality Control
Our quality control and assurance programs are designed to enable us to maintain strict compliance with all
applicable government mandates regarding the safe manufacture of foods. Quality control policies and procedures
are strictly monitored and enforced at all of our manufacturing locations. All plants ensure product consistency to
a designed standard of product quality. We believe that as a private label manufacturer our customers demand
particularly high standards of control as the customers names are directly on the product and accordingly, any poor
quality product reflects on the retailer.
Competition
The ice cream industry is highly competitive and ice cream manufacturers include full line dairies, major foodproducing corporations and independent ice cream processors, many of whom are capable of manufacturing and
marketing a variety of ice creams. Our branded products compete on the basis of brand image, quality, breadth of
flavour selection, delivery timeliness and price. Our key branded product competitors throughout Europe include
Unilever and Nestl, each of which has substantial financial, marketing and other resources and established brand
names. Unilever sells branded ice cream in almost every country in Europe, and in Australia. In addition, we
compete against regional producers in each of the markets in which we operate, including Bulla in Australia. Our
private label products compete primarily on the basis of price, but also on the basis of quality, breadth of flavour
selection and delivery timeliness, and our ability to produce large volumes of product. We compete with various
regional private label manufacturers throughout Europe.
There are relatively high barriers to entry for major producers in the ice cream business, including high initial
capital requirements. Smaller ice cream manufacturers are at a disadvantage to larger rivals because of the cost
benefit gained by having large scale operations. Much of the competition for our branded products comes from the
private label brands produced for the major supermarket chains. These products generally sell at prices below those
charged for branded ice cream products.
Our regional competitors in the UK include Masterfoods and Mackies and previously included Fredericks.
Our regional competitors in Germany include DMK, Rosen Eiskrem, Ysco and Eisbr Eis, and in France include
Ysco. In addition, the French market is more brand driven that other markets, therefore we face competition from
brands such as Mars, Magnum and Nestl. Our regional competitors in Italy include Sammontana. Our regional
competitors in Poland include Koral, Kilargo, Grycan and Ice Mastry. The main regional competitor in Australia
is Bulla.
Seasonality
The ice cream market is seasonal, with a larger portion of annual sales generally being generated in the summer
months. We have a higher level of sales preceding and during the summer months and lower level of sales in the
first and fourth quarters. Please see Managements Discussion and Analysis of Financial Condition and Results of
OperationsFactors Affecting our BusinessSeasonality.
Licensing Agreements
The brands that we license and use in our sales and marketing efforts include, among others, trademarks
associated with Nestl, Dairy Milk, Milka, Oreo, Toblerone, Philadelphia, Daim, Disney, Oasis, and Landliebe.
The Nestl Licence
We hold a licence for various trademarks owned by and popularly associated with the Nestl brand which
allows us to manufacture, distribute and sell ice cream products bearing certain Nestl trademarks through the
UK and the Republic of Ireland. Our licence agreement with Nestl became effective on September 11, 2001 and
will continue until terminated by either party. Nestl may terminate the agreement if we fail to achieve net sales
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in the UK and the Republic of Ireland of 20.0 million during any annual period or for certain breaches. The
agreement may be terminated by either party upon ten years notice. The agreement may also be terminated by
either party if the other party materially breaches the agreement or the related manufacturing agreement that
provides specifications for products we manufacture (and, if such breach is capable of remedy, such breach is
not cured within 25 or 40 days, as applicable) or enters insolvency-like proceedings. The agreement may also be
terminated if a force majeure renders performance of material obligations under the agreement by either party
not reasonably possible for more than 120 days and the other party gives notice of such termination or upon
insolvency of either party.
The Mondelz Licence
We hold an exclusive licence for various trademarks owned by and popularly associated with the Mondelz
brand which allows us to manufacture, distribute and sell ice cream products bearing the Daim, Milka, Oreo,
Philadelphia and Toblerone Mondelz trademarks through Germany, Austria, Switzerland, France, Belgium, The
Netherlands, Luxembourg, Spain, Portugal and Italy. Our licence agreement with Mondelz became effective on
October 1, 2011 and was initially due to expire on December 31, 2016. However, the term of this licence has since
been extended to December 31, 2018 and the parties intend to review further extensions of the license on an annual
basis. Mondelz may terminate the agreement on six months written notice if we fail to achieve at least 50% of the
aggregate target net sales for all products relating to a particular brand in any two of France, Germany and/or Austria
for two consecutive years. Mondelz may also terminate the agreement in respect of any brand on six months written
notice if we fail to achieve at least 50% of the aggregate target net sales for all products relating to that brand for two
consecutive years. We are required to notify Mondelz of any proposed change of control and, in the event of a
change of control to a competitor of Mondelz, the parties shall work together in good faith for a period of three
months from the date of the change of control and for one month following the expiration of the initial three month
period either party shall be entitled to terminate the agreement by providing eight months written notice. Mondelz
is also entitled to terminate the agreement immediately if we challenge the ownership or validity of or seek to revoke
any of the trade marks which are the subject of the agreement or if we are responsible for an act or omission which
has caused material prejudice to the name and reputation of Mondelz or any of the trademarks or brands which are
the subject of the agreement. The agreement may also be terminated by either party if the other party materially
breaches the agreement or enters insolvency-like proceedings.
A further three licences with Mondelz were entered into in respect of Poland, the Czech Republic and Slovakia
from January 1, 2014. Each of these licences terminate on December 31, 2018. The terms of these licences are
substantially the same as the head licence save that Mondelz may terminate any one licence on six months written
notice if we fail to achieve at least 50% of the aggregate target net sales for all products relating to a particular brand
in the named territory for two consecutive years.
The Cadbury Licence
Through the acquisition of Fredericks, we now have an exclusive license agreement with Cadbury to produce and
sell Cadbury brand products in the UK, Cyprus, Malta, the UAE, Turkey, Lebanon, Ghana, Qatar, Spain and Portugal.
This licence includes right to the use the Dairy Milk, Crunchie, and Cadbury Caramel brands. The licence agreement
became effective on January 1, 2010. The licence was automatically extended for an additional term of five years in
2014, under which either party may terminate the licence at any time after expiry of the additional term by giving at
least 12 months prior notice. Therefore, the earliest the Cadbury licence can be terminated following an extension is
December 31, 2019, provided notice is served on December 31, 2018. Further, Cadbury is entitled to terminate at any
time in the event of a change of control whether of R&R Ice Cream UK Limited or of any party which directly or
indirectly has control of R&R Ice Cream Limited or a change in the structure of the management of R&R Ice Cream
UK Limited which could reasonably be expected to affect adversely the ability of R&R Ice Cream UK Limited to
perform its obligations.
The Del Monte Licence
We are also party to a contract packing agreement and supply agreement with Del Monte, which enables us to
manufacture, package and sell a line of smoothies and Fruitini ice lollies bearing the Del Monte trademark in
Europe, Africa and the Middle East. At present, we sell Del Monte products in the UK and Italy. The agreement
became effective on April 1, 2012 and continues under an annual rolling basis until terminated. Either party may
terminated on expiry of the initial period or any anniversary thereof by giving three months prior written notice.
Del Monte may also terminate on written notice on notification of any change or proposed change of control of
R&R Ice Cream UK Limited.
The Nestl Licence in Australia
33
Following the acquisition of Peters, we hold a licence, dated August 1, 2012, with Nestl to produce certain
branded products in Australia and New Zealand, for an initial term of ten years unless renewed or terminated. The
licence provides an exclusive right to manufacture and distribute the Drumstick, Heaven, Drumstick Kit Kat,
Lifesavers, Maxibon, Milo, Rolo and Skinny Cow brands in Australia and New Zealand, except with respect to
Drumstick (including Drumstick Kit Kat) and Milo, which are excluded from the New Zealand territory under the
licence. Provided that we are not in material breach of the agreement, we have the right to renew the agreement for
an additional ten year term and an additional five year term up to a maximum of twenty-five years from the date of
the Nestle license agreement, provided that we give six months advance notice of its election to renew. Either party
may terminate the agreement if the other party becomes insolvent or commits a material breach of the agreement.
In addition, Nestl can terminate the agreement in certain instances where a change of control event occurs.
Other Licences
We are a party to various other licensing agreements, pursuant to which we license trade marks from other third
parties. Examples of our trade mark licences include, but are not limited to: the Landliebe mark licensed from
FrieslandCampina GmbH & Co. KG; the Mickey Mouse, Minnie Mouse and Cars marks licensed from
Disney; the Oasis mark licensed from Schweppes; the Vimto mark licensed from Nichols; and the Refreshers,
Butterkist and Dip Dab marks licensed from Tangerine.
Regulation
All of our facilities and products ware subject to local, national and international laws and regulations relating
to food, products quality, sanitation, safety and environmental control, including laws relating to air emissions,
remediation of contaminated soil and ground water, waste water, discharge, noise, odour and handling, storage and
disposal of waste. Failure to comply with these requirements may result in fines and penalties and liability for
compliance costs and damages.
From time to time, we receive notices and inquiries from regulatory authorities and others asserting that we are
not in compliance with such laws and regulations. In some instances, litigation ensues. In addition, individuals may
initiate litigation against us. Please see Legal and Administrative Proceedings. Many of our facilities are subject
to environmental permits and other regulatory requirements, violations of which may result in civil or criminal
sanction. In some cases, third parties may also have the right to sue to enforce compliance. We believe that we are
currently in compliance with all material governmental laws and regulations affecting our business, including
environmental and health and safety laws and regulations, and maintain all material permits and licences relating
to our operations.
Food Safety Regulations
We are subject to extensive food safety regulations and are subject to governmental food processing controls in
each of the countries in which we operate. Regulation EC/178/2002 provides the framework for a unified approach
to food safety in the European Union and all member states have implemented the requirements into national law.
Among the other major requirements of Regulation EC/178/2002 are Article 17, which imposes on food business
operators a general obligation to ensure that the operations under their control satisfy the relevant food law
requirements and an obligation to verify that such requirements are met, and Article 18, which imposes a mandatory
traceability requirement along the food chain. The traceability requirement applies to all food, animal feed, foodproducing animals and all types of food chain operators including in the farming, processing, transport, storage,
distribution and retail sectors. Information including the name, address of the producer, nature of the products and
date of transaction must be systematically registered by each operators traceability system. This information must
be kept for a period of five years and upon request, must be made immediately available to the competent authorities.
We have implemented careful internal recording systems to ensure that we comply with this requirement. In addition
to the general requirements of Regulation EC/178/2002, we are subject to the specific food hygiene legislation,
HACCP (Hazard Analysis and Critical Control Points), which has been implemented in all of our operating divisions
and plants. Further, we are regularly inspected by various national and local regulatory authorities, as well as by our
customers.
In 2014, in particular, there were substantial effects of changing regulations within the EU. Included within
exceptional items for the year ended December 31, 2014, are exceptional origination costs of 2.5 million, relating
to the write-off of packaging and similar costs due to new EU regulations, which prescribed particular and stringent
standards to numerous elements of consumer product packaging. This included items such as packaging font size,
languages, other matters relating to the presentation of nutritional information such as allergens, amongst many other
elements.
Environmental Regulations
34
We are subject to a number of local, national and international laws and other requirements relating to the
protection of the environment and the safety and health of personnel and the public. These requirements relate to a
broad range of our activities, including:
the discharge of pollutants into the air and water;
the identification, generation, storage, handling, transportation, disposal, record-keeping, labelling,
reporting of, and emergency response in connection with, hazardous materials (including asbestos)
associated with our operations;
noise emissions from our facilities; and
safety and health standards, practices and procedures that apply to the workplace and the operation of
our facilities.
In order to comply with these requirements, we may need to spend money and commit other resources from time to
time to (i) construct or acquire new equipment, (ii) acquire or amend permits to authorise facility operations, (iii) modify,
upgrade or replace existing and proposed equipment and (iv) clean up or decommission waste management facilities. Our
capital and operating budgets include costs and expenses associated with complying with these laws. If we do not comply
with environmental requirements that apply to our operations, regulatory agencies could seek to impose civil,
administrative and/or criminal liabilities, as well as seek to curtail our operations. Under some circumstances, private
parties could also seek to impose civil fines or penalties for violations of environmental laws or recover monetary
damages, including those relating to property damage or personal injury.
The presence of hazardous materials at our facilities may expose us to potential liabilities associated with the
cleanup of contaminated soil and groundwater, and we could be liable for (i) the costs of responding to and
remediating that release and (ii) the restoration of natural resources damaged by any such release, among other
things. We have not incurred, nor do we anticipate incurring, material expenditures made in order to comply with
environmental laws or regulations. We are not aware of any environmental liabilities that we would expect to have
a material adverse effect on our business.
Health and Safety Regulations
Our internal safety department and our insurers conduct regular inspections of all of our manufacturing
activities so as to ensure that site and personal safety is managed to the highest level. We have systems in place
designed to monitor, reduce and avoid food safety risks throughout all stages of our production process.
Additionally we provide ongoing employee training regarding food, work and site safety. Safety statistics are
monitored on a daily and weekly basis at site level and reviewed monthly by our management board.
Business Continuity
We have policies and procedures and a robust business continuity process in place so that an immediate and
effective response can be given to incidents that might present an immediate and significant danger or disruption to
the business or our customers, in order to allow us to continue to minimise the impact of any major incidents. Should
there be a crisis, we have a crisis management team that can immediately be put in place to manage the situation.
Additionally, we have a strategic continuity team to manage the recovery as efficiently and as quickly as possible.
Employees
At December 31, 2014, we had 2,787 employees, including seasonal workers in manufacturing, segmented by
the following functions:
Function
UK
Germany
France
Italy
Australia
Poland
Total
Manufacturing
Selling Groups
Customer Service
Corporate
Marketing, R&D and
Merchandising
695
32
4
27
428
11
4
21
449
20
4
22
192
9
14
214
142
76
194
51
5
21
2,172
265
17
181
26
39
47
11
20
152
Total
784
503
542
226
452
280
2,787
We add seasonal workers each year to prepare for the seasonal increase in production. During 2014, for
35
illustration, we had an average of 3,370 employees across our group for the year, versus a year-end position of
2,787 employees. We are able to shorten the work period for our seasonal workers if our product requirements do
not meet our projections and, although we generally are required to make any such determination early in the
summer season, adjustments can be made at short notice.
In the UK, there are no recognised unions on any of our sites. Our sites in the UK are represented through
consultative committees. Sites in Germany, France, Italy and Poland have union representation through works
councils. We have never experienced a work stoppage and consider our relations with our employees to be strong.
At all of our sites, the works councils and consultative committees are in compliance with the European
Communication and Consultation requirements. We offer our staff a variety of benefits, which can vary depending
on the country, including contributory pension scheme, private health, company car or car allowance scheme, staff
canteens, salary sacrifice schemes and free of charge products, as well as training and development based on both
personal and business needs.
Our remuneration and benefits policy is designed to reward employees operating in line with good market practice.
Accordingly, our salary system consists of a fixed base salary and a variable bonus component in the form of a cash
payment for all employees based on our overall business performance. We provide pension benefits for our employees
in line with local market practice and requirements. In Germany, our major retirement schemes are set out in shop
agreements which establish defined benefit plans covering the employees of the German subsidiaries.
Legal and Administrative Proceedings
At any given time, we may be a party to litigation or be subject to non-litigated claims arising out of the normal
operations of our businesses. Other than as discussed below, we do not expect any liability arising from any of these
legal proceedings to have a material impact on our results of operations, liquidity, capital resources or financial
position.
In 1996, Rolland appointed Brand Innovations Limited (formerly Frigifrance) (BI) as its distributor in the
UK and Ireland. In 2010, R&R Ice Cream Limited acquired Rolland and in November 2010, Rolland served notice
on BI to terminate their contract. A dispute arose as to how much notice Rolland was required to give in order to
terminate the contract. In February 2011, BI commenced a breach of contract claim against Rolland in the French
courts for an aggregate sum of 3.9 million (1.3 million for terminating the contract without the requisite notice
and 2.6 million for loss of goodwill). Rolland filed a counterclaim in respect of unpaid invoices amounting to 1.6
million. In October 2012, the court ruled that Rolland had given insufficient notice to terminate the contract;
however BIs claim for loss of goodwill was dismissed. BI conceded that it owed Rolland the amount claimed for
in respect of the unpaid invoices, which amount would be set off against BIs own claim. The two parties paid an
equal share of 0.5 million into escrow pending resolution of the dispute, which was subsequently settled in late
2014, with the escrow share refunded to R&R Ice Cream plc in full and final settlement of the case.
In May 2013, Stefano De Santis filed a request for arbitration with the Chamber of National and International
Arbitration of Milan in respect of various matters arising from the acquisition by Eskigel Holding S.p.A. of 50 per
cent of the entire issued share capital of Eskigel S.r.l. held by Mr De Santis. The Arbitration panel has been
appointed and briefs have been filed by both parties. The arbitration panel first met to discuss the case on March
24, 2014 and the deadline for determining an arbitral award was previously set for September 29, 2014. This has
subsequently been extended, with no arbitral award yet made. The claimant has not specified the amount being
claimed, however, we estimate that the claim is in the range of 2.5 million to 5.0 million in accordance with the
fee brackets established by the Chamber.
In October 2013 all Tesco branded cones and screwballs were withdrawn from Tesco stores in the UK and the
Republic of Ireland following a contamination issue. After lengthy tests over a six week period, all products with
the exception of the Tesco Choc N Nut Cone were released from quarantine and made available for sale. The
Choc N Nut Cone remained withdrawn from sale with the gross cost to R&R Ice Cream UK Limited, prior to
settlements, estimated to be approximately 0.7 million, which includes amongst other costs, cost of stock value,
landfill disposal, trials, investigation reports and storage. R&R Ice Cream UK Limited made a claim under its
product recall insurance policy and the claim was accepted. A loss adjuster verified the terms of the claim, with
R&R receiving settlement from our insurers in late 2014.
Intellectual Property
The brands that we own and use in our sales and marketing efforts include, among others, logos associated
with Kellys, yoomoo, Flipi and Zielona Budka. Each of our trademarks, service marks and trade names that we do
not license from third parties is registered and/or pending registration in our name, as appropriate for the needs of
our relevant business.
36
RIC-B0018a R&R Annual Report 2014 V2.qxp_Layout 1 29/04/2015 15:20 Page 2
ANNUAL REPORT
31 DECEMBER 2014
CORPORATE INFORMATION
DIRECTORS:
Ibrahim Najafi,
Andy Finneran
SECRETARY:
Andy Finneran
AUDITOR:
KPMG LLP, 1 The Embankment, Neville Street,
Leeds LS1 4DW
BANKERS:
Barclays Bank Plc, PO Box 190, 2nd Floor,
1 Park Row, Leeds LS1 5WU
SOLICITORS:
Linklaters LLP, 1 Silk Street,
London EC2Y 8HQ
REGISTERED OFFICE:
Richmond House, Plews Way,
Leeming Bar Industrial Estate, Northallerton,
North Yorkshire DL7 9UL
Registered No. 05777981
R&R ICE CREAM PLC | ANNUAL REPORT | 01
CONTENTS
Strategic report
02
Corporate governance
06
Directors report
08
Statement of Directors' responsibilities
09
Independent auditors report to the

members of R&R Ice Cream plc
10
Consolidated financial statements

Consolidated income statement
11
Consolidated statement of
comprehensive income and expense
12
Consolidated statement of changes in equity
12
Consolidated statement of financial position
13
Consolidated statement of cash flows
13
Accounting policies
14
Notes to the consolidated financial statements
18
Company only accounts

Company only balance sheet
36
Accounting policies
36
Notes to the Company only accounts
37
02 | R&R ICE CREAM PLC | ANNUAL REPORT
STRATEGIC
REPORT
OVERVIEW
R&R Ice Cream plc (R&R) is the third largest global manufacturer of ice
cream products and the largest private label manufacturer in the world.
R&R is the second largest take-home ice cream manufacturer in Europe,
with leading market shares in each of the United Kingdom, German, French
and Italian ice cream markets. We now also have a leading market share in
Australia following the acquisition of Peters Food Group Limited (Peters).
R&R offers a broad product range of branded and private label ice cream
products. We primarily produce take-home ice cream products, including ice
cream tubs and multipacks of ice cream cones, ice lollies, ice cream sticks and
ice cream desserts, and impulse products, which individuals buy on impulse
for immediate consumption. Our scale, focus on large, stable take-home
markets and highly efficient manufacturing operations provide us with key
advantages over our competitors and have allowed us to continue to
generate stable earnings and significant free cash flow through various
economic cycles. We believe our broad product range allows us to maintain
strong sales volumes as consumer demand shifts between branded and
private label products.
For the year ended December 31, 2014, we generated Adjusted EBITDA(a)
of 140.0 million, revenue of 837.8 million and free cash flow before
acquisitions and exceptional operating items(a) of 62.1 million. Including an
adjustment to incorporate a full year of Peters trading performance to
December 31, 2014, pro forma revenue was 921.6 million and pro forma
EBITDA(a) was 153.7 million.
Within Europe, we operate nine plants located in five countries, eight of
which are in the four largest ice cream markets in Europe, which allows us
to supply our customers quickly and efficiently in their markets. We also
operate, what we believe is, the largest and most sophisticated ice cream
manufacturing facility in Australia. Our manufacturing platform benefits from
many years of significant capital investment and footprint rationalisation.
Our plants have also benefited from sharing and implementation of best
practices and procedures across our group in order to leverage technological
expertise. We consolidated certain of our operations during 2013, which
resulted in modest cost savings and improved efficiency across our facilities
in the year ended December 31, 2013 and achieved further cost savings in
the year ended December 31, 2014. Following each acquisition we make
capital improvements and implement our best practices in order to bring
such facilities in line with our group-wide standards. We believe that our
scale and manufacturing footprint provides us with a competitive advantage
over most of our competitors, which are generally smaller and only offer
regional distribution.
We benefit from a variety of premium licensed and owned brands, and we
have exclusive ice cream product licences with the worlds largest food
company (Nestl), the worlds largest confectionery company (Mondelez,
formerly Kraft Foods), and the worlds largest entertainment company
(Disney). Strong private label relationships with our customers provide us
with strong opportunities to cross-sell our branded products. Some of
Nestls prominent confectionery brand names that we produce in the
United Kingdom under our licence include Smarties, KitKat, Rolo, Milky Bar
- enables us to
and Lion Bar. Our exclusive licence agreement with Mondelez
produce and sell in Western Europe (excluding the United Kingdom) ice
cream products under established brand names that include Milka, Oreo,
Toblerone, Philadelphia and Daim. Through the acquisition of Fredericks in
- to produce
2013 we also have an exclusive licence agreement with Mondelez
and sell in the UK ice cream products under the Cadbury brands that include
Dairy Milk, Crunchie, Cadburys Caramel and Marvellous Creations (which is a
super-premium offering). We also have non-exclusive access to various

Disney licences such as Mickey Mouse, Minnie Mouse and Cars. Through the
Peters acquisition in 2014, we have, amongst others, the Connoisseur,
Drumstick and Peters Original brands in Australia.
Note (a): See performance highlights table for definitions of these terms.
PERFORMANCE SUMMARY
The group has continued to deliver much improved trading results in 2014.
Turnover increased to 837.8 million from 680.9 million and Adjusted
EBITDA increased to 140.0 million from 92.3 million. This is partly as a
result of the full year impact of Fredericks (acquired in mid-2013) and the
post-acquisition results of Peters (acquired in June 2014) which contributed
103.3 million to turnover and 22.5 million of Adjusted EBITDA in 2014.
It also benefits from efficiencies generated from the factory closures in 2013
and realisation of synergies from the acquisition of Fredericks. The groups
trading performance has also benefited from the increase in the strength of
GBP to the Euro in the year, benefiting turnover by 14.5 million and
Adjusted EBITDA by 3.1 million (see below).
The group has incurred substantial one-off and exceptional costs in 2013 and
2014, as part of a substantial reshaping of the groups activities and financing
structure. The financial effects of this are shown in the Statement of Cash
Flows and, in particular, in note 1 to the accounts. The medium to long-term
benefits to the group include the following:
Acquisition of Peters in Australia, which has added 22.5 million of
EBITDA post-acquisition, or 36.3 million on a pro forma (annual) basis.
Benefits to overheads and other ongoing costs of the restructuring
programmes, including three factory closures, implemented in 2013 and
2014.
A substantial annualised saving of 8.2m of interest costs as a result of
lower interest rates achieved when the previous 350 million senior
secured notes were refinanced in May 2014.
PERFORMANCE HIGHLIGHTS
A summary of the results and position of the group is presented below:
Turnover
Pro forma EBITDA(a)
(b)
Adjusted EBITDA
Adjusted EBITDA%
Exceptional operating items (note 1)

Capital expenditure
Free cash flow before acquisitions and
exceptional operating items(c) (page 13)
2014
000
837,849
2013
000
680,855
153,745
95,528
139,979
92,264
16.7%
13.6%
(19,577)
(32,184)
(26,666)
(20,986)
62,076
43,230
Note (a): Pro forma EBITDA is an unaudited measure that represents Adjusted EBITDA, plus the groups
estimate of the full-year effects of the acquisition of Peters (in 2014) and Fredericks (in 2013).
Note (b): EBITDA is defined as earnings before interest charges, taxation, depreciation and amortisation.
Adjusted EBITDA also excludes any other exceptional items and parent company/investor management
charges. See note 3.
Note (c) Free cash flow before acquisitions and exceptional operating items is defined as net cash flow
from operating and investing activities excluding the acquisitions of subsidiaries (net of cash acquired)
and net cash outflows in respect of exceptional operating items. 2013 free cash flow has been restated
to categorise PAI funding and group funding of PIK Toggle interest payments within financing cash
flows. This has resulted in a reduction to 2013 free cash flow of 31.6 million from 74.9 million to
43.2 million.
TURNOVER
The turnover of the group has increased by 157.0 million from 680.9
million to 837.8 million, after taking account of favourable exchange rate
movements on GBP (of 14.5 million), with the 2014 average exchange rate
of 1.2406EUR:1GBP used to translate the UK business performance, versus
1.1708EUR:1GBP in 2013. The underlying growth was as a result of the postacquisition revenue of Peters, a full year effect of the Fredericks acquisition
(made in mid-2013) and organic growth across our UK, French and Italian
businesses. In overall terms, despite the mixed weather throughout our major
European markets impacting the peak period of 2014, the group has
continued to deliver organic growth across its segments.
By operating segment:
R&R UK revenues have increased by 16.7 million (7.3%) year-on-year (at
constant exchange rates), partly caused by the Fredericks acquisition, partly
by pricing gains and more effective promotions; and also by a further
14.5 million due to the favourable exchange rate movement.
R&R Germany revenues decreased by 1.7 million or 0.8% year-on-year:
a healthy performance despite competitive pressures in the German
- business,
market, with growth across our private label and Mondelez
as we withdrew some of our tertiary brands.
R&R France revenues have increased 6.2 million or 3.8% year-on-year.
- business, and
This growth is also largely due to growth in the Mondelez
also partly due to growth in the Pilpa brand.
R&R Italy revenues increased 5.5 million despite some particularly
adverse weather conditions in July across Italy, which contributed to an ice
cream market that, unusually, declined in 2014. 1.0 million of the growth
- and
was due to the launch of our branded offering (particularly Mondelez)
the remainder due to the excellent performance of the private label
business in the discounters.
R&R Poland revenues increased by 3.4 million or 10.7% year-on-year as a
result of growth in branded sales, the majority of which was due to Mondelez.
R&R Australia revenues for the six months post-acquisition were 103.0
million, translated at the average exchange rate for the period postacquisition of 1.446A$:1EUR. At constant exchange rates, Australia
revenues increased by 3.2 million versus the comparative period figure
(which was prior to our acquisition of Peters).
ADJUSTED EBITDA AND PRO FORMA EBITDA
The Adjusted EBITDA of the group increased by 47.7 million (or 51.7%) to
140.0 million from 92.3 million. The acquisitions of Peters contributed an
additional Adjusted EBITDA of 22.5 million to the group. Excluding the
post-acquisition performance of Peters, Adjusted EBITDA increased by
25.2 million (or 27.3%).
Excluding exceptional items, impairments and amortisation, the groups
gross margin increased to 27.5% from 21.9%. This is due to a number of
trading factors, including:
The consolidation of six months trading of the high-margin Peters
business (Peters gross margin was 45.5% for the six months postacquisition).
A greater share of branded sales across the group, which contribute
higher gross margins.
Some pricing gains achieved across the group, which somewhat mitigated
ingredient price inflation in the latter part of 2013/early 2014.
Buying gains in Europe and some operational gains, such as in distribution
costs in Germany.
In total administrative and distribution expenses before exceptional items and

amortisation increased by 36.9 million from 81.7 million to 118.6 million.
The consolidation of Peters has contributed an incremental 28.8 million to
administrative and distribution expenses. There was an additional effect of
the first full year of consolidation of the Fredericks business. Savings in
administrative and distribution expenses have principally been a full year
effect of site rationalisation at Carcassonne, Crossgates and Durigon in 2013.
Excluding the impact of Peters, administrative and distribution expenses as a
percentage of revenue has remained broadly constant at 12.2% of revenue
(2013: 12.0%).
The Peters business was acquired mid-year, and so has only a six month
period of results consolidated in these accounts. However, including an
adjustment to incorporate a full year of Peters trading performance to
December 31, 2014, the groups pro forma revenue was 921.6 million and
pro forma EBITDA was 153.7 million.
EXCEPTIONAL OPERATING ITEMS
The group has recognised 19.6 million (2013: 32.2 million) of exceptional
operating items. These are set out in note 1 to the accounts. These largely
comprise acquisition costs relating to the Peters transaction (7.2 million),
restructuring and redundancy costs (3.8 million) and exceptional origination
costs (2.5 million), relating to the write off of packaging due to new EU
regulations. A further 3.5 million of exceptional costs have been disclosed
in respect of the fair value adjustment of stock acquired as part of the Peters
acquisition, which had the one-off effect of reducing post-acquisition profits
as this stock was sold in the period after acquisition.
CASH FLOWS
We generated 62.1 million of free cash flow before acquisitions and
exceptional operating items in 2014, an increase of 18.8 million on 2013.
This was driven by the underlying EBITDA growth of 47.7 million, offset by
unfavourable working capital movements of 6.1 million (largely as a result
of the groups year end being in the middle of the Australian summer, at the
peak of Peters working capital cycle) together with the cash payments
relating to provisions covering the factory closures and restructuring projects
announced in 2013, 3.0 million additional interest payments (largely driven
by additional debt incurred in the acquisition of Peters), 3.1 million of
incremental tax payments and 5.7 million additional capital expenditure.
Financing cash flows were affected by the one-off costs relating to the
groups refinancing in May 2014 and the financing related to the Peters
acquisition in June 2014. In particular, the group benefited from 64.7 million
of parent company funding (2013: 43.7 million), as PAI and management
made an equity injection, although the group incurred one-off transaction
costs relating to the groups transitional refinancing of 12.6 million.
CAPITAL STRUCTURE
During the year, we refinanced our previous 350 million senior secured
notes with new 315 million senior secured notes and also raised 150
million and A$152 million senior secured notes to finance the acquisition of
Peters. The refinancing resulted in a saving of 8.2 million on an annualised
basis (versus the previous annual cost of the notes), with an upfront
exceptional interest cost of 23.3 million. The result of these transactions is
a mix of borrowings that better match the groups cash flows and earnings
profile, as well as ongoing interest costs that are fixed at a substantially
lower average rate than the groups previous borrowings.
LOOKING FORWARD
Our goal is to strengthen our position as a leading global manufacturer of
ice cream products and increase our profitability. Our strategy includes the
following elements:
Drive Growth through Product Innovation
New product development continues to be a key growth driver of revenue
across both branded and retailer branded products. We will continue to
STRATEGIC
REPORT
(cont.)
- in France, Germany, Italy and Poland, as

leverage the success of Mondelez
well as the UK, particularly after the strong growth in these key markets in
2014. Across our key markets, we are currently launching a number of
exciting product innovations which we hope will contribute to significant
revenue growth in 2015.
Continue to Reduce Costs and Increase Efficiency
After the gains from factory consolidation in 2013, and particularly in 2014,
we will continue to make targeted investments in order to drive efficiency
and reduce our overhead base, all of which will help to deliver EBITDA
growth.
Pursue Selective Acquisition Opportunities

We plan to continue to evaluate acquisition opportunities to selectively
acquire businesses that may improve our market share and product
offerings, or allow us to enter new geographic markets. We continue to
evaluate acquisition opportunities. In March 2015, we announced the
acquisition of Nestl South Africas ice cream business. The acquisition was
made subject to clearance from the competition authorities in South Africa.
Approval from the competition authorities was received recently and the
acquisition is expected to close shortly.The acquisition has had no material
effect on the financial condition and results of operations for the year
ended December 31, 2014 .
HEALTH & SAFETY AND ENVIRONMENTAL MATTERS
We maintain healthy and safe working conditions on all our sites, measuring
our ability to keep staff and visitors safe. We review and aim to
continuously improve all aspects of our working environments to ensure our
staff have the safest occupational health and safety standards we can
provide. We aim to operate in an environmentally responsible manner
across all sites in the group, as we regard compliance with relevant
environmental legislation and regulations as imperative, and the adoption of
responsible standards where no legislation exists, as an integral part of our
business strategy. Reports are presented at our monthly board meetings
covering health, safety and environmental matters, which include statistics
on any accidents and progress in fullling targets linked to continuous
improvement, as well as promoting wider awareness of environmental and
safety to all employees. We carry out regular risk management audits to
identify areas for improvement, minimising safety risks. The impact we make
on the environment is important to us and we are committed to continual
improvement in environmental and pollution prevention; this focus has
enabled us to reduce our carbon footprint across the group by over 2.5% in
the past year and to reduce the waste going to landfill to less than 2.5%
annually.
We recognise that our activities inevitably have an impact on the
environment. To reduce this we set environmental objectives and targets
relating to energy reduction (electricity, gas) and look to reduce our
environmental footprint by reducing use of energy and water, and reducing
waste by prevention, reuse and recycling. These targets are monitored and
reviewed through KPIs.
We installed a combined heat and power plant in the UK as part of our
target to reduce energy costs and to increase the efficiency of our energy
usage. We intend to install a similar system in Italy in 2015/2016.
In addition we work closely with our customers and brand partners in the
development of our products and assessment of their health impacts,
including fat, sugar and salt content. We purchase our raw materials from
sustainable sources and use recycled card and paper where possible. Health
and the environment is an area we continue to focus on within the context
of the market sector we operate in and the development of healthier
alternatives such as frozen yoghurt.
SOCIAL AND COMMUNITY MATTERS

We strive to be a good corporate citizen with a responsibility to work in
partnership with the communities in which we operate. Each year we
donate a part of our profits to local charities as well as providing indirect
giving in terms of free-of-charge products that charities and communities
can use to raise funds and we also encourage employee support for their
community or chosen charities. As a business we have selected two main
charities that we support, with a strong focus on children: Hope and Homes
for Children which is an international charity that aims to close orphanages
and place children into family homes and the Archbishop of Yorks Youth
Trust, which supports and develops young peoples leadership and community
skills. The business has provided our charities with donations totalling over
75,000 during the past year alone. In addition, our employees raised a
further 18,000 through payroll giving and charity events.
BUSINESS ETHICS
We are committed to conducting our business with an ethically and socially
responsible attitude and treating employees, customers, suppliers and
shareholders in a fair, open and honest manner. As a business we are
regularly audited, by both independent auditors and by our customers; in
addition we audit our supply chain to ensure that we are buying from
businesses who operate in an ethically and socially responsible manner.
We encourage staff feedback on any issues they are concerned about,
operating an anonymous whistleblowing hotline that gives employees in all
businesses around the group the chance to report anything they believe is
not meeting our exacting standards.
EMPLOYEES
The group provides channels through which our employees can express views
and communicate regularly with senior management of the business.
We also have a number of employee committees and works councils to
provide a forum for our employees to air the views of their colleagues and
discuss relevant issues. We conduct staff surveys, in order to ensure that the
group responds to employee feedback and a variety of initiatives have been
implemented which have aided the trust and engagement of employees with
the business.
The group is committed to a training and development plan that improves
workforce capabilities, skills and competencies. We recruit a large number of
young people across our business each year, and in many cases support these
young people with work-based training or external qualifications. We also
develop our long-term succession planning by a talent management
programme.
KEY PERFORMANCE INDICATORS (KPIs)
In addition to the measures discussed in the performance summary and
highlights, there are a number of key performance indicators used across the
group on both a daily and monthly basis. These monitor performance of the
operations compared to budget and forecast. The most significant of these
are set out below:
KPIs monitored on a daily basis are:
Production volume
Sales volume and value
Order intake
KPIs monitored weekly/monthly are the above plus:
Sales margins
Profit and cash generation
Net debt
Variances to standard cost
Food safety and quality
Health and safety

Service levels
Inventory levels
Market share
PRINCIPAL RISKS AND UNCERTAINTIES

The Directors of the group consider the potential impact of business risks at
monthly Board meetings. Actions to mitigate the risks are also discussed.
The more significant risks and uncertainties faced by the group are set out
below:
Price and supply fluctuations. Whilst we look to hedge most of our
requirements for a term of up to one year, any unhedged raw materials,
including dairy which we can potentially only partially hedge, may present
additional cost.
Acquisition strategies. Whilst we undertake detailed due diligence ahead
of any acquisition, there is the potential that acquisitions may expose us to
additional unforeseen risk.
Fire or significant damage to a factory. Whilst production can be switched
to other sites across the group, any significant damage to a factory unit
will cause short-term disruption.
Seasonality. The ice cream market is characterised by fluctuations in sales,
although these largely equalise out over the course of a year. Ice cream
sales are inextricably linked with the seasons and therefore any climate
changes have the potential to impact on business.
Competition in the ice cream industry. The group operates in highly
competitive markets, often competing with substantial multi-national
businesses, and with large, profitable retail customers and its failure to
compete effectively could result in a material adverse effect on its results.
Economic conditions. The group derives the majority of its profits from
sales activity in Germany, France, Italy, the UK and Australia. It is therefore
sensitive to fluctuations in the economic conditions of these countries.
Exchange rates. Given that the group reports in Euros, any strengthening
of the Euro relative to Pounds Sterling and/or the Australian dollar would
adversely affect the contribution from the UK and/or Australia to group
profitability. (There is also a similar risk, though substantially smaller, in
respect of the Polish Zloty.)
The Board has strategies to manage these risks and remains confident in the
groups ability to mitigate any significant effect.
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
The group finances its activities with a combination of loan notes,
shareholder loan notes, debt factoring, cash and revolving credit facilities.
Other financial assets and liabilities arise directly from the groups operating
activities. The main risks associated with the groups financial assets and
liabilities are set out below:
The groups functional currency is the Euro. Its UK operation buys certain
goods and sells almost all goods denominated in Sterling. Similarly, the
Australian operation buys certain goods and sells almost all goods
denominated in Australian dollars. As a result the value of the groups
Sterling and Australian dollar revenues, purchases, financial assets and
liabilities and cash flows can be affected significantly by movements in the
Sterling and Australian dollar exchange rates. To a lesser extent, due to
the smaller size of the Polish business, this is also true of the Zloty.
The groups loan notes are denominated and serviced in Euros, Sterling
and Australian dollars; whilst the group believes that it has put in place an
effective hedging strategy with regard to those liabilities, there remains
the risk of mis-match between the underlying cash flows, assets and
liabilities of the groups trading subsidiaries and the groups loan note
liabilities and debt servicing obligations.
The shareholder loan notes are denominated in Euros and bear interest at
fixed rates. Consequently, there is no foreign exchange risk or interest rate
risk on these instruments.
The group aims to mitigate liquidity risk by managing cash generation by its
operations and applying cash collection targets throughout the group.
Investment is carefully controlled, with authorisation limits operating up to
group Board level.
By order of the Board
A Finneran
Secretary
28 April 2015
CORPORATE
GOVERNANCE
OWNERSHIP AND BOARD OF DIRECTORS
The group is majority-owned by funds held by, or advised by, PAI Partners
SAS (PAI), a private equity firm headquartered in Paris, France.
PAI is one of the oldest and most experienced private equity firms in Europe
with its origins dating back to Paribas Affaires Industrielles, the historical
principal investment activity of Paribas, the pan-European merchant bank
which merged with BNP in 1999.
PAI has invested in the group via a corporate structure in Luxembourg. Our
ultimate parent undertaking is Riviera Topco Sarl which controls 100% of the
shares of R&R Ice Cream plc via a number of intermediate parent companies.
Riviera Topco Sarl acquired R&R Ice Cream plc via a UK holding company
structure of which Riviera Topco Limited is the ultimate UK parent.
BOARD OF DIRECTORS
The Board is responsible for the overall operations of the group, including
the final approval of the strategic plan, annual budget, changes to the
groups financing arrangements, acquisitions and disposals, material contracts
and significant capital expenditure.
During the year, the Board comprised the following directors:
Ibrahim Najafi
Chief Executive Officer
Andy Finneran
Chief Financial Officer and Company Secretary
James Lambert OBE
Chairman (resigned 14 July 2014)
Oversight is provided by the Board of a parent company (Riviera Topco

Limited), which is represented by:
Ian Fraser
Non-Executive Director of
Riviera Topco Limited (Chairman)
Colm OSullivan
PAI representative
Frdric Stvenin
PAI representative
Galle dEngremont
PAI representative
Safeway and Orange UK. He was appointed Non-Executive Chairman of the

Board on 9 October 2014.
Colm OSullivan joined PAI in 2006 and heads PAIs UK Office. Since
November 2008, he has managed PAIs UK Office. Mr OSullivan was
previously at Deutsche Bank where he spent eight years in the Financial
Sponsors group. Prior to this, he spent six years with Hambros Bank.
Frdric Stvenin joined PAI in 1993 and is responsible for the Food &
Consumer Goods and Healthcare sector teams. In 1998, he joined Deutsche
Bank/Bankers Trust as a Director and subsequently as Managing Director. In
June 2001, he returned to PAI. Prior to this, Mr Stvenin spent four years
with Banque Paribas. He is also a non-executive director of Chr. Hansen,
Cerba and Marcolin.
Galle dEngremont joined PAI in 2004 and is a member of the Food &
Consumer Goods sector team. Prior to this, Mme. dEngremont worked for
four years with Casino and two years with Unibail.
Christopher Afors joined PAI in 2008. He has been involved in a number of
transactions including United Biscuits, R&R Ice Cream and VPS. Prior to
2008, Mr Afors spent five years with JPMorgan in London working in the
M&A and Equity Capital Markets teams.
Eugenio Minvielle was appointed a Non-Executive Director of Riviera Topco
Limited in January 2014. Mr Minvielle most recently held the position of
COO for DE Master Blenders 1753, a spin off IPO from Sara Lee. Prior to
this, Mr Minvielle was President and CEO of Unilever North America, Nestl
France, Nestl Mexico and Nestl Venezuela. He also previously worked for
Procter & Gamble in Spain and Canon in Japan.
James Lambert OBE, co-founder of the group, retired as Chairman on the 14
July 2014. The Board would like to reiterate our thanks to Mr Lambert for all
of his work at the helm of the R&R group over a period of 26 years, taking
the company from foundation to a leading European ice cream business.
Christopher Afors
PAI representative
Eugenio Minvielle
Non-Executive Director of Riviera Topco Limited
EXECUTIVE TEAM AND MANAGEMENT BOARD

The Executive team and management board is responsible for the day-to-day
operations of the group and the development of the groups business
strategy and plans for consideration by the Board.
Bob Bigley
Head of Group Development

(resigned 22 January 2015)
The Executive team and management board comprises the Chief Executive
Officer and Chief Financial Officer, as well the following individuals:
Ibrahim Najafi has served as our Chief Executive Officer since July 2013 and
was previously European Chief Executive Officer and Group Chief Operating
Officer from June 2009 and 2006, respectively. Prior to that, Mr Najafi
served as Richmonds operations director from 1999 to 2007 and as the
factory manager at Richmonds Leeming Bar site from 1998 to 1999. Prior to
that, Mr Najafi served in various factory management roles in the chilled
foods sector.
Andy Finneran has served as our Chief Financial Officer and Secretary since
our inception. Mr Finneran held a similar position at Richmond from 1995 to
2005. Prior to that, Mr Finneran served as Treats head of accounting and
finance. Mr Finneran qualified as a chartered accountant (ACA) in 1984.
Ian Fraser was appointed a Non-Executive Director of Riviera Topco Limited
in January 2014. Mr Fraser was CEO of Enterprise Group, a leading supplier
to the UK utility and government services markets, from 2011 to 2013 before
overseeing its sale to Spanish infrastructure business Ferrovial. Prior to this,
Mr Fraser was CEO of automotive specialist Kwik Fit. Mr Fraser is currently
Chairman of the Priory Group and a board member at German auto parts
retailer and service provider ATU. He was also previously a non-executive
director and Chairman of the Audit Committee at Punch Taverns from 2004
to 2012 where he worked closely with the executive management team
during a period of significant regulatory reform, and also worked for
Philip Griffin
Group Marketing Director
Pietro Monaco
Chief Operations Officer
Peter Pickthall
Group Human Resources Director
Sam Wrist
UK Operations Director
Michael Fraine
Country Head - UK
Fabrice Ducasse
Country Head - France
Gotthard Kirchner
Country Head - Germany
Giuseppe Listanti
Country Head - Italy
Zbigniew Dysko
Country Head - Poland
BOARD COMMITTEES
The Audit Committee and Remuneration Committee at a Riviera Topco
Limited level have oversight of the governance of the group.
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee consists of Colm OSullivan, Galle
dEngremont, Christopher Afors and the two non-executive directors, all of
whom are on the Board of Directors of Riviera Topco Limited. It is chaired by
Ian Fraser.
The committee meets at least three times a year, at appropriate times in the
reporting and audit cycle. In addition, the committee meets at such other
times as the Board or the committee Chairman requires, or if requested by
the groups external auditor. Only committee members have the right to
attend meetings but, in practice, other individuals, including members of the
group board and other members of the senior finance team are invited to
attend all or part of meetings as and when appropriate to their area of
expertise. The external auditor also attends certain meetings.
The committees responsibilities include overseeing the relationship with the
external auditor. It meets with them regularly, reviews the audit plan and
discusses audit findings with them. The committees responsibilities also
include the evaluation of managements risk framework and communicating
the importance of internal control and the management of risk.
REMUNERATION COMMITTEE
The Remuneration Committee consists of Colm OSullivan, Frdric Stvenin
and the two non-executive directors, all of whom are on the Board of
Directors of Riviera Topco Limited. It is chaired by Colm OSullivan.
The committee meets at least twice a year and also at such other times as
required. Only committee members have the right to attend meetings, but
other individuals are invited to attend from time to time, when appropriate.
The committees responsibilities include determining and agreeing the
annual remuneration of the executive directors and approving the design of
the groups annual incentive plans.
DIRECTORS
REPORT
The Directors present their report and the group financial statements
for the year ended 31 December 2014.
RESEARCH AND DEVELOPMENT
There are ongoing research and development projects at each of the groups
locations. The research and development functions are primarily concentrated on
new ice cream design and recipes.
DISABLED EMPLOYEES
The group gives full consideration to applications for employment from disabled
persons where the candidate displays particular aptitudes and abilities that are
consistent with adequately meeting the requirements of the job. Opportunities
are available to disabled employees for training, career development and
promotion.
EMPLOYEE INVOLVEMENT
The group operates a framework for employee information and consultation
which complies with the requirements of the Information and Consultation of
Employees Regulations 2004. Throughout the year the group issues information
on its website. In Germany the group works closely with the Works Council and
complies with Betriebsverfassungsgesetz (BetrVG) (works constitution act).
DIRECTORS
The Directors who served during the year are as follows:
James Lambert
Ibrahim Najafi
Andy Finneran
- resigned 14 July 2014
SUPPLIER PAYMENT POLICY AND PRACTICE

It is the groups policy that payments to suppliers are made in accordance with
those terms and conditions agreed between the group and its suppliers,
provided that all trading terms and conditions have been complied with.
AUDITOR
In accordance with Section 487 of the Companies Act 2006, a resolution to
reappoint KPMG LLP as auditor will be put to the members at the Annual
General Meeting.
DIRECTORS STATEMENT AS TO DISCLOSURE

OF INFORMATION TO THE AUDITOR
The Directors who were members of the Board at the time of approving the
Directors report are listed on page 6. Having made enquiries of fellow
Directors and of the companys auditors, each of these confirms that:
to the best of each Directors knowledge and belief, there is no information
relevant to the preparation of their report of which the companys auditors
are unaware; and
each Director has taken all the steps a Director might reasonably be expected
to have taken to be aware of relevant audit information and to establish that
the companys auditors are aware of that information.
By order of the Board
A Finneran
Secretary
28 April 2015
STATEMENT
OF DIRECTORS'
RESPONSIBILITIES
STATEMENT OF DIRECTORS RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT
The Directors are responsible for preparing the Annual Report and the
group and parent company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare group and parent company
financial statements for each financial year. Under that law they have elected
to prepare the group financial statements in accordance with IFRSs as
adopted by the EU and applicable law and have elected to prepare the
parent company financial statements in accordance with UK Accounting
Standards and applicable law (UK Generally Accepted Accounting Practice).
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the group and parent company and of the groups profit or loss for
that period.
In preparing each of the group and parent company financial statements, the
Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
for the group financial statements, state whether they have been prepared
in accordance with IFRSs as adopted by the EU;
for the parent company financial statements, state whether applicable UK
Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the parent company will
continue in business.
The Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the parent company's transactions and
disclose with reasonable accuracy at any time the financial position of the
parent company and enable them to ensure that its financial statements
comply with the Companies Act 2006. They have general responsibility for
taking such steps as are reasonably open to them to safeguard the assets of
the group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the companys website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
INDEPENDENT
AUDITORS REPORT
INDEPENDENT AUDITORS REPORT TO THE MEMBERS
OF R&R ICE CREAM plc
We have audited the financial statements of R&R Ice Cream plc for the year
ended 31 December 2014 set out on pages 11 to 38. The financial reporting
framework that has been applied in the preparation of the group financial
statements is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the EU. The financial reporting framework that has
been applied in the preparation of the parent company financial statements
is applicable law and UK Accounting Standards (UK Generally Accepted
Accounting Practice).
This report is made solely to the company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the company's members
those matters we are required to state to them in an auditors report and for
no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company and the
company's members, as a body, for our audit work, for this report, or for the
opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR
As explained more fully in the Directors' Responsibilities Statement set out
on page 9, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit, and express an opinion on, the financial statements
in accordance with applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with the Auditing
Practices Board's (APB's) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
A description of the scope of an audit of financial statements is provided on
the Financial Reporting Council's website at
www.frc.org.uk/auditscopeukprivate.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 31 December 2014 and of
the group's loss for the year then ended;
the group financial statements have been properly prepared in accordance
with IFRSs as adopted by the EU;
the parent company financial statements have been properly prepared in
accordance with UK Generally Accepted Accounting Practice;
the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT

2006
In our opinion the information given in the Strategic Report and the
Directors' Report for the financial year for which the financial statements
are prepared is consistent with the financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches
not visited by us; or
the parent company financial statements are not in agreement with the
accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not
made; or
we have not received all the information and explanations we require for
our audit.
Nicola Quayle (Senior Statutory Auditor)

For and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 The Embankment,
Neville Street,
Leeds
LS1 4DW
28 April 2015
CONSOLIDATED
FINANCIAL
STATEMENTS
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2014
In thousands of euros
Before
Note
Revenue
Cost of sales
Profit/(loss) before income tax

Income tax (charge)/credit
Loss from continuing operations
amortisation and
amortisation and
non-cash interest
non-cash interest(a)
exceptional items,
2014
Total
Exceptional items,
amortisation and
amortisation and
non-cash interest
non-cash interest(a)(b)
2013
Total
(7,228)
837,849
(615,059)
680,855
(531,708)
(24,440)
680,855
(556,148)
230,018
(7,228)
222,790
149,147
(24,440)
124,707
(51,481)
(67,104)
(415)
(25,281)
(51,896)
(92,385)
(43,459)
(38,209)
(28,618)
(43,459)
(66,827)
111,433
(32,924)
78,509
67,479
(53,058)
14,421
333
(36,258)
(35,925)
337
(70,535)
(70,198)
670
(106,793)
(106,123)
520
(32,165)
(31,645)
323
(31,593)
(31,270)
843
(63,758)
(62,915)
75,508
(103,122)
(27,614)
(6,635)
(34,249)
35,834
(84,328)
(48,494)
6,623
(41,871)
Distribution expenses
Administrative expenses
Finance income
Finance expenses
Net finance costs
Exceptional items,
837,849
(607,831)
Gross profit
Results from operating activities
Before
exceptional items,
10
Attributable to:
Equity holders of the company
Non-controlling interests
Loss for the year
(34,249)
(34,249)
(41,963)
92
(41,871)
Note (a): in order to aid understanding of the financial results, the Directors have presented additional analysis to illustrate the effect of exceptional items, amortisation of intangible assets and non-cash interest
charges. These items are analysed in detail in note 1.
The notes on pages 14 to 34 are an integral part of these consolidated financial statements.
All operations are continuing.
CONSOLIDATED
FINANCIAL
STATEMENTS
(cont.)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE

Loss for the year

Other comprehensive income/(expense)
Items that are or may be reclassified to profit or loss
Exchange differences on retranslation of foreign operations
Net investment hedging
Items that will never be reclassified to profit or loss
Change in actuarial assumptions in respect of post-employment benefits
Total comprehensive expense for the year
2014
2013
(34,249)
(41,871)
7,402
(6,899)
503
(5,799)
(5,799)
(647)
(299)
(34,393)
(47,969)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Balance at 1 January 2013
Comprehensive expense for the year
(Loss)/profit for the year
Exchange differences on
retranslation of foreign operations
Change in actuarial assumptions in
respect of post-employment benefits
Total comprehensive (expense)/
income for the year
Transactions with owners of the company
Changes in ownership interests
Acquisitions of non-controlling interests
Contributions and distributions
Share-based payments
Balance at 31 December 2013
Comprehensive expense for the year
Loss for the year
Exchange differences on
retranslation of foreign operations
Net investment hedging
Change in actuarial assumptions in respect of
post-employment benefits
Total comprehensive income/(expense)
for the year
Share
capital
Currency
translation
Accumulated
losses
Sub-total
Non-controlling
interests
Total
equity
50,886
(11,845)
(145,510)
(106,469)
1,803
(104,666)
(41,963)
(41,963)
92
(41,871)
(5,799)
(5,799)
(5,799)
(299)
(299)
(299)
(5,799)
(42,262)
(48,061)
92
(47,969)
(6,105)
(6,105)
(1,895)
(8,000)
50,886
(17,644)
2,301
(191,576)
2,301
(158,334)
2,301
(158,334)
(34,249)
(34,249)
(34,249)
7,402
(6,899)
7,402
(6,899)
7,402
(6,899)
(647)
(647)
(647)
50,886
503
(17,141)
(34,896)
(226,472)
(34,393)
(192,727)
(34,393)
(192,727)
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 31 December 2014
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Current tax assets
Trade and other receivables
Cash and cash equivalents
Note
CONSOLIDATED STATEMENT OF
CASH FLOWS
Restated(a)
2014
2013
15
16
17
Total assets
202,004
607,382
19,006
828,392
147,896
359,518
14,293
521,707
Restated(a)
2013
139,979
92,264
(20,377)
(32,572)
119,602
59,692
1,396
5,596
(21,885)
11,489
22,179
(7,797)
113,495
(4,340)
9,592
2,301
84,330
(35,174)
(10,240)
68,081
(32,172)
(7,093)
45,065
18
18
18
333
520
2,857
190
11
(305,767)
(59,912)
20
14
23
12
13
(26,666)
(353)
(329,596)
(20,986)
(759)
(80,947)
(261,515)
(35,882)
(373,274)
639,883
(10,400)
(12,621)
64,739
(4,094)
43,660
(23,403)
(1,747)
(1,267)
281,910
(12,025)
(8,000)
(9,023)
(6,000)
(1,513)
(1,333)
1,672
20,395
12,568
(34,210)
47,331
3,049
(553)
36,012
12,568
Adjusted EBITDA
3
Adjustments for exceptional items and
management charges
3
Operating cash flow before changes
in working capital and provisions
3
88,205
3,127
131,899
36,012
259,243
436
259,679
69,189
2,114
87,093
12,568
170,964
3,475
174,439
Decrease in inventories
(Increase)/decrease in trade and
other receivables
Increase/(decrease) in trade
and other payables
(Decrease)/increase in provisions
Cash generated from operations
1,088,071
696,146
Interest paid
Income tax paid
Net cash from operating activities
50,886
(17,141)
(226,472)
50,886
(17,644)
(191,576)
(192,727)
(158,334)
1,027,727
20,547
4,137
1,052,411
682,301
22,915
2,831
708,047
Equity and liabilities
Non-current liabilities
Financial liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
2014
Note
Cash flows from operating activities
12
13
14
Assets classified as held for sale

Total current assets
Equity
Equity share capital
Currency translation reserve
Accumulated losses
Total equity attributable
to owners of the company

Cash flows from investing activities

Interest received
Proceeds from sale of property, plant
and equipment
Acquisition of subsidiaries,
net of cash acquired
Acquisition of property, plant and
equipment
Acquisition of intangible assets
Net cash used in investing activities
Net cash flow from operating and
investing activities
These financial statements were approved by the Board of Directors on

28 April 2015 and were signed on its behalf by:
Cash flows from financing activities

Redemption of 350 million
senior secured notes
20
Proceeds from issue of
senior secured notes
20
Net unrealised foreign exchange
losses related to /A$ senior
secured notes (non-cash)
Transaction costs related to refinancing 20
Parent company funding
Funding of parent undertakings
external PIK Toggle loan note interest
Acquisition of non-controlling interests
Repayment of factoring facilities
Loan repaid to related party
Repayment of borrowings
Repayment of finance lease liabilities 21
Net cash from financing activities
I Najafi
Director
Net decrease in cash and cash

equivalents
Cash and cash equivalents at 1 January
Effect of exchange rate fluctuations
on cash held
Cash and cash equivalents at
31 December
17
Current liabilities
Financial liabilities
Trade and other payables
Current tax liabilities
Provisions
Total current liabilities
20
22
6,102
214,232
135
7,918
228,387
5,782
128,052
2,655
9,944
146,433
Total liabilities
1,280,798
854,480
Total equity and liabilities
1,088,071
696,146
23
Note (a): Prior year comparatives have been restated to show provisions analysed between current
and non-current liabilities. This has resulted in 2.8 million of provisions in 2013 moving from current
to non-current liabilities (note 23).
Company number: 05777981
Note (a): Prior year comparatives have been restated to categorise Parent company funding (43.6 million)
and group funding of PIK Toggle interest payments (12.0 million) within financing cash flows.
Memorandum:
Net cash flow from operating and
investing activities
net of cash acquired
Exceptional operating items cash flows
and exceptional operating items
(261,515)
(35,882)
305,767
17,824
59,912
19,200
62,076
43,230
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
ACCOUNTING POLICIES
REPORTING ENTITY
R&R Ice Cream plc is a company domiciled in the UK. The address of the
companys registered office is Richmond House, Plews Way, Leeming Bar
Industrial Estate, Northallerton, North Yorkshire, DL7 9UL.
The consolidated financial statements of the company as at and for the year
ended 31 December 2014 comprise the company and its subsidiaries.
The group is primarily involved in the manufacture and sale of ice cream and
ice cream related products.
STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared and approved by
the Directors in accordance with International Financial Reporting Standards
as adopted by the European Union (IFRSs). The parent company has elected
to prepare its Financial Statements in accordance with UK GAAP. These are
presented on pages 36 to 38.
The IFRS accounting policies set out below have been applied consistently
unless otherwise stated to all periods presented in these consolidated
financial statements. The accounting policies have been prepared on the
basis of the requirements of IFRSs in issue and adopted by the EU and
effective at 31 December 2014.
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from those estimates.
Judgements in applying accounting policies that have the most significant
effect on the amount recognised in the financial statements are described in
the following notes:
Note 11 Acquisitions of subsidiaries
Note 13 Intangible assets
Note 23 Provisions
ADOPTION OF NEW AND REVISED STANDARDS
The following revised IFRSs have been adopted in these consolidated
financial statements. The application of these revised IFRSs has not had any
material impact on the amounts reported for current or prior years but may
affect the accounting for future transactions and arrangements:
IFRS 10: Consolidated financial statements
IFRS 11: Joint arrangements
IFRS 12: Disclosures of interests in other entities
IAS 27: Separate financial statements (2011)
IAS 28: Investments in associates and joint ventures (2011)
GOING CONCERN
At 31 December 2014, the group has consolidated net liabilities of 192.7
million (2013: 158.3 million). Net liabilities are typical in private equity
backed businesses such as the group, largely due to the financing structure
adopted and the rolling up of non-cash interest on parent company loans,
which is not payable until 2110 at the earliest. In addition included in current
liabilities is 63.7 million (2013: 31.5 million) of interest free loans from
parent companies which, although repayable on demand, in reality are not
repayable until the exit of PAI Partners SAS. Excluding these current
liabilities, the group has net current assets of 95.0 million (2013: 59.5
million (restated)). During the period, the business refinanced, securing loan
notes providing certainty over future interest charges until 2020. The
Directors believe that the reduced rates are competitive and reduce the
exposure of the business to increases in interest rates for the medium term
to almost zero. This gives the Board further comfort as to the groups going
concern status, understanding the related cash requirements and the lack of
additional unknown risk.
The Directors have considered this position, together with the groups
budgets and positive net current assets position, and after making
appropriate enquiries, the Directors consider that the group has adequate
resources to continue in operational existence for the foreseeable future and
therefore continue to adopt the group going concern basis for the
preparation of the financial statements.
BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on the historical
cost basis except for the revaluation of certain financial instruments.
The methods used to measure fair values are discussed further below.
USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on
historical experience and other judgements reasonable under the
circumstances, the results of which form the basis of making the judgements
Amendments to IAS 32: Offsetting financial assets and liabilities

Amendments to IAS 36: Recoverable amount disclosures for non-financial assets
BASIS OF CONSOLIDATION
Business combinations
The group accounts for business combinations using the acquisition method
when control is transferred to the group. Subsidiaries are entities controlled
by the group. The group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. In assessing
control, the group takes into consideration potential voting rights that are
currently exercisable. The acquisition date is the date on which control is
transferred to the acquirer. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to
align them with the policies adopted by the group. Losses applicable to the
non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a
deficit balance.
The consideration transferred in an acquisition is generally measured at fair
value, as are the identifiable net assets acquired. Any goodwill that arises is
tested annually for impairment. Any gain on a bargain purchase is recognised
in profit or loss immediately. Transaction costs are expensed as incurred,
except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the
settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of
acquisition. If an obligation to pay contingent consideration that meets the
definition of a financial instrument is classified as equity, then it is not
remeasured and settlement is accounted for within equity. Otherwise,
subsequent changes in the fair value of contingent consideration are
recognised in profit or loss.
If share-based payment awards (replacement awards) are required to be

exchanged for awards held by the acquirees employees (acquirees awards),
then all or a portion of the amount of the acquirers replacement awards is
included in measuring the consideration transferred in the business
combination. This determination is based on the market-based measure of
the replacement awards compared with the market-based measure of the
acquirees awards and the extent to which the replacement awards relate to
pre-combination service.
Non-controlling interests
NCI are recognised at their proportionate share of the acquirees identifiable
net assets at the date of acquisition. Changes in the groups interest in a
subsidiary that does not result in a loss of control are accounted for as equity
transactions.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and
expenses arising from intra-group transactions, are eliminated. Unrealised
gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the groups interest in
the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are
under the control of the shareholder that controls the group are accounted
for as if the acquisition had occurred at the date that common control was
established. The group has a policy of applying book value accounting using
the book value of the transferor.
Change in subsidiary ownership and loss of control
Changes in the groups interest in a subsidiary that do not result in a loss of
control are accounted for as equity transactions. Where the group loses
control of a subsidiary, the assets and liabilities are derecognised along with
any related NCI and other components of equity. Any resulting gain or loss is
recognised in profit or loss. Any interest retained in the former subsidiary is
measured at fair value when control is lost.
Interests in equity-accounted investees (associates)
Associates are those entities in which the group has significant influence,
but not control, over the financial and operating policies. Associates are
accounted for using the equity method (equity accounted investees) and
are initially recognised at cost, which includes transaction costs.
The consolidated financial statements include the groups share of the total
comprehensive income and equity movements of equity accounted investees,
from the date that significant influence commences until the date that
significant influence ceases.
Foreign currency
The functional currency of each group company is the currency of the
primary economic environment in which the group company operates.
The financial statements are presented in Euros which is the presentational
currency of the group.
Transactions denominated in foreign currencies are translated into the
functional currency of each group company at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are translated into Euros at the rate of exchange ruling
at the balance sheet date. Foreign exchange gains and losses arising on the
settlement of such transactions and translation of monetary assets and
liabilities are recognised in the income statement.
On consolidation, the financial statements of subsidiaries with a functional
currency other than Euro are translated into Euros as follows:
The assets and liabilities in their balance sheets plus any goodwill are
translated at the rate of exchange ruling at the balance sheet date.
The income statements and cash flow statements are translated at the
average rate of exchange for the year.
Currency translation movements arising on the translation of the net
investments in foreign subsidiaries are recognised in the currency
translation reserve, which is a separate component of equity.
Hedge of a net Investment in foreign operation
The group applies hedge accounting to foreign currency differences arising
between the functional currency of the net assets of the UK and Australian
operations and the groups functional currency (Euro).
To the extent that the hedge is effective, foreign currency differences arising
on the translation of a financial liability designated as a hedge of a net
investment in a foreign operation are recognised in and accumulated in the
currency translation reserve; any remaining differences are recognised in
profit or loss. When the hedged net investment is disposed of, the relevant
amount in the translation reserve is transferred to profit or loss as part of
the gain or loss on disposal.
OTHER ACCOUNTING POLICIES
Revenue
Revenue from the sale of goods is measured at the fair value of the
consideration received or receivable, net of returns and allowances, trade
discounts and volume rebates. Revenue is recognised when the significant
risks and rewards of ownership have been transferred to the buyer (which is
when the goods are despatched), recovery of the consideration is probable,
the associated costs and possible return of goods can be estimated reliably,
and there is no continuing management involvement with the goods.
Taxation
Income tax on the profit or loss for the year comprises current and deferred
tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Deferred tax is recognised using the balance sheet method, providing for
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the
initial recognition of goodwill, the initial recognition of assets or liabilities in
a transaction that is not a business combination and that affects neither
accounting nor taxable profit, and differences relating to investments in
subsidiaries and jointly controlled entities to the extent that they probably
will not reverse in the foreseeable future. The amount of deferred tax
provided is based on the carrying amount of assets and liabilities, using the
prevailing tax rates. The deferred tax balance has not been discounted.
Current tax is the expected tax payable on the taxable income for the year,
using prevailing tax rates enacted or substantively enacted at the reporting
date, and any adjustment to tax payable in respect of previous years.
Employee benefits
Obligations for contributions to defined contribution pension plans are
recognised as an expense in the income statement when they are due.
The group recognises within provisions its obligations in respect of French
retirement benefits and Italian termination benefits, which are set out in
more detail in note 23. In general the obligation in respect of these benefits
is calculated based on future benefits earned in return for their service in
current and prior periods, discounted to present value. The discount rate is
the yield at the reporting date on AA credit-rated bonds that have maturity
dates approximating the terms of the groups obligations. Any actuarial gains
or losses are recognised directly in equity.
NOTES TO THE
CONSOLIDATED
(cont.)
ACCOUNTING POLICIES (cont.)

On acquisition of Peters, the group acquired a provision in respect of
employee long service leave. Employees are entitled to 13 weeks of holiday
after 15 years of service and are entitled to a pro rata payment if they leave
employment after 7 years (see note 23).
For cash settled share-based payment transactions, the fair value of the
amount payable to the employee is recognised as an expense with a
corresponding increase in liabilities. The fair value is initially measured at
grant date and spread over the period during which the employees become
unconditionally entitled to payment. The fair value is measured based on an
option pricing model taking into account the terms and conditions upon
which the instruments were granted. The liability is revalued at each balance
sheet date and settlement date with any changes to fair value being
recognised in the Consolidated income statement.
For equity settled share-based payment transactions, the fair value of the
amount payable to the employee is measured at the date of grant and is
recognised as an expense with a corresponding increase in equity. The fair
value is based on an option pricing model taking into account the terms and
conditions upon which the instruments were granted.
Property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses.
Depreciation on property, plant and equipment is provided using the straight
line method to write off the cost less any estimated residual value, as
follows:
Land
nil depreciation
nil depreciation
Buildings
40-50 years
2%-2.5%
Plant and equipment
3-15 years
6.67%-33.33%
Depreciation methods, useful lives and residual values are reassessed at the
reporting date.
Leased assets
Assets financed by means of a finance lease are treated as if they had been
purchased outright and the corresponding liability to the leasing company is
included as an obligation under finance leases. Depreciation on such assets is
charged to the income statement, in accordance with the stated accounting
policy, over the shorter of the lease term or the asset life. The finance
elements of payments to leasing companies are calculated so as to achieve a
constant rate of interest on the remaining balance over the lease term, and
charged to the income statement accordingly.
Amounts payable under operating leases are charged to operating expenses
on a straight line accruals basis over the lease term.
Intangible assets
An intangible asset acquired as part of a business combination is recognised
outside of goodwill if the assets are separable or arises from contractual or
other legal rights and its fair value can be measured reliably. Following initial
recognition, the historic cost model is applied, with intangibles being carried
at cost less accumulated amortisation and impairment losses.
Intangible assets with a finite life have no residual value and are amortised
on a straight line basis over their useful lives with charges included in cost of
sales, distribution expenses and administrative expenses as appropriate as
follows:
Customer relationships
10-20 years
5%-10%
Brands and trademarks
20 years
5%
Licences
10-20 years
5%-10%
Recipes
2-3 years
33%-50%
Computer software
and development costs
3-10 years
10%-33%
The valuation methodologies in arriving at values for intangible assets on
acquisition of subsidiaries are as follows:
Customer relationships - Multi-period excess earnings
Brands and trademarks - Royalty relief
Recipes - Cost to recreate
Acquired brands are initially valued using discounted cash flow models.
No amortisation on UK or Australian brands is charged as the group believes
that the value of those brands is maintained indefinitely. These brands are
tested annually for impairment. Acquired software licences and software
developed in house are capitalised on the basis of the costs incurred to
acquire and bring into use the specific software.
The carrying value of intangible assets is reviewed for impairment wherever
events or changes in circumstances indicate the carrying value may not be
recoverable.
Impairment
The carrying amounts of the groups assets, other than inventories and
deferred tax assets, are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists,
the assets recoverable amount is estimated.
For goodwill, assets that have an indefinite useful life and intangible assets
that are not yet available for use, the recoverable amount is estimated at
each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset
or its cash generating unit exceeds its recoverable amount. Impairment
losses are recognised in the Consolidated income statement.
Impairment losses recognised in respect of cash-generating units (not
relating to other intangible assets specifically) are allocated first to reduce
the carrying amount of any goodwill allocated to cash-generating units and
then, to reduce the carrying amount of the other assets in the unit on a pro
rata basis. A cash-generating unit is the group of assets identified on
acquisition that generate cash inflows that are largely independent of the
cash inflows from other assets or groups of assets.
The recoverable amount of assets or cash-generating units is the greater of
their fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An impairment loss in respect of goodwill is not reversed. In respect of other
assets, an impairment loss is reversed if there has been a change in the
estimates used or a change in market factors used to determine the
recoverable amount.
An impairment loss is reversed only to the extent that the assets carrying
amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Work in
progress comprises direct materials, labour costs, site overheads and other
attributable overheads.

Trade and other receivables are held at cost less any impairment in realisable
value.
The group sells certain of its trade receivables through factoring and invoice
discounting arrangements. The majority of these arrangements are without
recourse to the seller. Consequently, these transactions meet IAS 39
requirements for asset de-recognition, since the risks and rewards have been
substantially transferred.
Cash and cash equivalents are defined as cash balances in hand and at the
bank (including short-term cash deposits). The group routinely utilises shortterm revolving credit and overdraft facilities as an integral part of its cash
management policy. Offset arrangements across the group have been
applied to arrive at the cash figure.
Non-current assets held for sale and discontinued operations
A non-current asset or a group of assets containing a non-current asset (a
disposal group) is classified as held for sale if its carrying amount will be
recovered principally through sale rather than through continuing use, it is
available for immediate sale and sale is highly probable within one year.
On initial classification as held for sale, non-current assets and disposal
groups are measured at the lower of previous carrying amount and fair value
less costs to sell with any adjustments taken to profit or loss. The same
applies to gains and losses on subsequent re-measurement although gains
are not recognised in excess of any cumulative impairment loss. Any
impairment loss on a disposal group is first allocated to goodwill, and then
to remaining assets and liabilities on a pro rata basis, except that no loss is
allocated to inventories, financial assets, deferred tax assets, employee
benefit assets and investment property, which continue to be measured in
accordance with the groups accounting policies.
Bank and other borrowings
Interest bearing borrowings, bank and other borrowings are carried at
amortised cost. Finance charges, including issue costs, are charged to the
income statement using an effective interest rate method.
Trade payables on normal terms are not interest bearing and are stated at
their nominal value.
Provisions
A provision is recognised in the balance sheet if, as a result of a past event,
the group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits
will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific
to the liability.
Operating segments
An operating segment is a component of the group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the groups
other components. The operating segments are determined on a
geographical basis, which reflects the groups management and internal
reporting structure. Turnover, including intercompany sales and Adjusted
EBITDA, are the measures which are reviewed regularly by the Management
Board of the group (considered the Chief Operating Decision Maker under
IFRS 8) to make decisions about resources to be allocated to each segment
and to segment performance, and for which discrete financial information is
available.
NON-IFRS MEASURES
Exceptional items
The group presents as exceptional items on the face of the income
statement those material items of income or expense which, because of the
nature and expected infrequency of the events giving rise to them, merit
separate presentation. This allows users of the accounts to better understand
the elements of financial performance in the year, so as to better assess
trends in financial performance.
EBITDA, Adjusted EBITDA and Pro forma EBITDA
Management uses EBITDA and Adjusted EBITDA to monitor the ongoing
performance of the group. EBITDA is defined as earnings before interest
charges, taxation, depreciation and amortisation. Adjusted EBITDA also
excludes any other exceptional items and parent company or investor
management charges. Pro forma EBITDA also includes an adjustment for
managements assessment of pre-acquisition trading performance for
businesses acquired mid-year.
FAIR VALUES
Determination of fair values
A number of the groups accounting policies and disclosures require the
determination of fair value, for both financial and non-financial assets and
liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods.
The fair value of property, plant and equipment recognised as a result of a
business combination is based on market values. The market value of
property is the estimated amount for which a property could be exchanged
on the date of valuation between a willing buyer and a willing seller in an
arms length transaction after proper marketing wherein the parties had
each acted knowledgeably, prudently and without compulsion. The market
value of items of plant and equipment is based on the quoted market prices
for similar items or depreciated replacement cost where quoted market
prices are not available.
Intangible assets
The fair value of intangible assets is calculated using methods which reflect
the value that the group would have paid for the assets in an arms length
transaction. Such methods include where appropriate, discounting estimated
future net cash flows from the asset and applying multiples to royalty
streams that could be obtained by licensing the intangible asset.
Inventories
The fair value of inventories acquired in a business combination is determined
based on its estimated selling price in the ordinary course of business less the
estimated costs of completion and sale, and a reasonable profit margin based
on the effort required to complete and sell the inventory.
The fair value of trade and other receivables is estimated as the present value of
the amounts to be received, determined at appropriate interest rates less
allowance for bad debts. Discounting has not been applied to current receivables.
Financial instruments
The fair value of interest rate and foreign exchange derivatives is the
estimated amount that the group would receive or pay to terminate the
derivative at the balance sheet date, taking into account current interest
rates and foreign exchange rates and the current creditworthiness of the
derivative counterparties.
The fair value of trade and other payables is estimated as the present value
of the amounts to be paid, determined at appropriate interest rates.
Discounting has not been applied to current payables.
NOTES TO THE
CONSOLIDATED
(cont.)
01. EXCEPTIONAL ITEMS, AMORTISATION AND NON-CASH INTEREST

The table below shows an analysis of the items separately disclosed on the face of the Consolidated income statement.
Cost of Sales
Distribution
costs
Administrative
expenses
31 December 2014
Total
31 December 2013
Total
(660)
(3,504)
(2,547)
(462)
(55)
(415)
-
(7,245)
(2,741)
(2,628)
691
(165)
(36)
190
(7,245)
(3,816)
(3,504)
(2,628)
(2,547)
691
(165)
(498)
135
(3,308)
(1,396)
(1,441)
(13,973)
(2,372)
(2,109)
(167)
(7,175)
(243)
(7,228)
(415)
(11,934)
(19,577)
(32,184)
Amortisation and impairments

Closure of Carcassonne factory
Closure of Crossgates factory
Closure of Durigon factory
Other impairment
Amortisation of intangible assets
(653)
(370)
(12,324)
(653)
(370)
(12,324)
(6,793)
(1,877)
(894)
(200)
(11,110)
Total impairments and amortisation
(13,347)
(13,347)
(20,874)
(7,228)
(415)
(25,281)
(32,924)
(53,058)
Exceptional operating items

Acquisition costs
Restructuring and redundancy costs
Unwind of Peters fair value inventory adjustment
One-off legal fees
Origination costs arising from a change in EU legislation
Closure of Carcassonne factory
Closure of Durigon factory
Closure of Crossgates factory
Product recall
Professional fees and other charges
related to the sale of the group
Other
Total exceptional operating items
Total exceptional operating items, impairments

and amortisation
31 December 2014
Total
31 December 2013
Total
Exceptional and non-cash interest

Exceptional cash interest on refinancing of 350 million senior secured loan notes
Write off of deferred transaction costs on refinancing (non-cash)
Accrued but unpaid interest to parent undertakings (non-cash)
Non-cash foreign exchange loss
Non-cash movement in fair value of derivatives
Non-cash amortisation of transaction costs
(23,274)
(7,175)
(29,983)
(7,066)
52
(2,752)
(27,534)
(862)
(422)
(2,452)
Total exceptional and non-cash interest
(70,198)
(31,270)
(103,122)
(84,328)
(39,347)
(63,775)
(32,184)
(52,144)
(103,122)
(84,328)
Total exceptional items and non-cash interest

Analysed as:
Cash items
Non-cash items
Total exceptional items and non-cash interest
01. EXCEPTIONAL ITEMS, AMORTISATION AND NON-CASH INTEREST

(cont.)
EXCEPTIONAL OPERATING ITEMS
Acquisition costs
This represents due diligence expenses and other professional fees in respect
of acquisitions, whether successful or unsuccessful, and related group
restructurings. During the year ended 31 December 2014, the group incurred
6.0 million of acquisition costs in respect of its acquisition of Peters Food
Group (Peters) (see note 11).
Restructuring and redundancy costs
We have continued to incur costs in respect of the consolidation and
integration of manufacturing facilities. In addition, during the year ended 31
December 2014, the group was recharged by an immediate parent
undertaking Riviera Acquisitions Limited, 2.0 million in respect of exit costs
related to two senior managers of the group.
Peters unwind of fair value inventory adjustment
The group carried out a fair value assessment relating to finished goods owned
by Peters at acquisition, which resulted in an uplift to the inventory values of
3.5 million. The increase to inventory value was in accordance with accounting
standards, which require inventory to be revalued based on estimated selling
price, less costs to complete and to sell, and a reasonable profit margin. During
the post-acquisition period to 31 December 2014, this adjustment has resulted
in a charge (non-cash) to the Consolidated income statement as the inventories
have been sold. This has been treated as an exceptional item because of its size,
one-off nature and to improve comparability of trading performance between
periods.
One-off legal fees
This represents one-off legal fees which have been classified as exceptional
on the grounds of their magnitude or incidence. During the year ended 31
December 2014, the group settled a court action with a former agent of its
Rolland business, resulting in a total cost to the group of 1.4 million,
including the write down of an historic trade receivable of 1.6 million.
Origination costs
During the year ended 31 December 2014 the group incurred costs of 2.5
million due to the change in EU regulations in respect of the labelling of
food products.
Factory closure costs
During the year ended 31 December 2013, the group initiated the closure
and disposal of three of our factories: Carcassonne (France), Durigon
(Germany) and Crossgates (UK), resulting in exceptional operating expenses
including the costs of redundancies, ceasing production and remediation of
the sites and the ongoing costs post-cessation of production. In 2014 the
majority of these costs have resulted in cash outflows (see note 23). There
have been some residual additional costs and releases of provision as actual
costs have been realised/agreed.
Closure costs also include the non-cash impairment of plant, property and
equipment.
Professional fees and other charges related to the sale of the group
On 11 July 2013 the group was acquired by PAI Partners SAS. Fees of 4.9
million were incurred by the group as part of the sale process. In addition
other charges of 2.3 million were incurred in respect of the value of
share-based payment arrangements to employees of the group from its
ultimate parent, which, following a modification of terms, crystallised on the
sale of the group.
02. OPERATING SEGMENTS

The results of the group under the key management reporting segments as
reported to the Management Board of the group are as follows:
Revenue
UK
Germany
Poland
France
Italy
Australia
Intra-group
Sub-total as reported to management
Reconciling item - actual exchange rates(1)
Reconciling items - other(2)
2014
2013
244,926 228,226
211,250 212,974
34,981 31,588
172,432 166,160
95,278 89,797
103,015
(36,339) (33,724)
825,543 695,021
12,622 (14,459)
(316)
293
837,849 680,855
Adjusted EBITDA after parent company management charges
UK
49,787 35,948
Germany
29,544 27,869
Poland
4,561
3,177
France
17,747 15,179
Italy
13,074 12,192
Australia
22,486
Sub-total as reported to management
137,199 94,365
2,614 (2,278)
Reconciling item - actual exchange rates(1)
Reconciling items - other (2)
166
177
139,979 92,264
Note (1): This item illustrates the impact of translating the results of subsidiaries which report in
currencies other than EUR (GBP, A$ and PLN) to the average rate for the year under IFRS, rather
than the budgeted exchange rate used in the management accounts. Note (2): This item includes
presentation differences between the management accounts and the group accounts.
Refer to note 3 for a reconciliation of loss for the year to Adjusted EBITDA.
In the year ended 31 December 2014, 2.2 million of the exceptional items
relates to Germany, 2.9 million relates to the UK, 0.5 million relates to
Poland, 2.8 million relates to France, 0.6 million relates to Italy, 5.0
million relates to Australia and 6.8 million relates to central costs. In the
year ended 31 December 2013, 2.8 million of the exceptional items relates
to Germany, 5.3 million relates to the UK, 15.8 million relates to France
and 8.3 million relates to central costs.
All reportable segments deal in the production and sale of ice cream and
frozen confectionery.
Transactions between reportable segments include trading transactions,
management recharges and interest recharges. These are accounted for on an
arms length basis.
NOTES TO THE
CONSOLIDATED
(cont.)
03. LOSS FOR THE YEAR RECONCILIATION TO ADJUSTED EBITDA
04. GEOGRAPHICAL ANALYSIS
Loss for the year
Revenue
Sales represent the sale of ice cream and frozen confectionery across the
group. There are no other significant categories of revenue. The table below
shows the revenue relating to the geographical location of the customer.
Note
Adjustments for:
Taxation
Net finance costs
Result from operating activities
Adjustments for:
Depreciation of property, plant
and equipment
Impairment of property, plant
and equipment
Impairment of assets held for sale
Loss on disposal of plant,
property and equipment
Operating cash flow before changes
in working capital and provisions
(post exceptional EBITDA)
Adjustments for exceptional
operating items
Oaktree management charges
Adjusted EBITDA post parent
company management charges
Parent company management charges
Adjusted EBITDA before parent
2014
2013
(34,249) (41,871)
6,635
106,123
78,509
12
1
1
1
(6,623)
62,915
14,421
27,410 24,087
12,324
11,110
Adjustments for:
Impairment of property, plant and equipment
Impairment of assets held for sale
Exceptional operating items
before exceptional items and
amortisation (EBITA)
Adjustments for:
Depreciation of property, plant and equipment
Loss on disposal of plant, property and equipment
Oaktree management charges
Parent company management charges
Adjusted EBITDA before parent
2014
246,416
155,670
139,137
103,278
94,010
22,625
18,554
13,075
34,816
2,621
7,647
837,849
2013
209,466
149,331
137,032
94,062
21,425
13,355
10,674
36,633
2,471
6,406
680,855
370
653
9,764
-
336
310
119,602
59,692
Transactions with our largest customer represent 6% (2013: 7%) of total

revenue. This customer is serviced out of Germany (2013: Germany).
19,577
-
32,184
99
Non-current assets
The table below shows the geographic location of non-current assets
excluding deferred tax assets:
139,179
800
91,975
289
139,979 92,264
Memo: Reconciliation of Results from operating activities to results from operating

activities before exceptional items and amortisation and Adjusted EBITDA before
parent company management charges:
UK
Germany
France
Australia
Italy
Poland
Spain
Ireland
Other EU
Other Europe
Rest of the World
2014
78,509
2013
14,421
12,324
370
653
19,577
11,110
9,764
32,184
111,433
67,479
27,410 24,087
336
310
99
800
289
139,979 92,264
UK
Australia
Germany
France
Italy
Poland
2014
306,434
296,403
72,856
63,587
50,451
19,655
809,386
2013
289,731
75,300
64,354
52,594
25,435
507,414
05. INCOME STATEMENTS OF ENTITIES ACQUIRED IN THE YEAR
06. RESULTS FROM OPERATING ACTIVITIES
The results of the individual entities acquired in the year which have been
recognised in the Consolidated income statement are as follows:
This is stated after charging/(crediting):

Year ended 31 December 2014

Peters
Total
acquired
Revenue
Cost of sales:
Recurring
Exceptional
103,278
(56,356)
(3,503)
(59,859)
43,419
(7,841)
Gross profit
Administrative expenses:
Recurring
Exceptional
(20,439)
(1,490)
(21,929)
13,649
Recurring
Non-cash Exceptional
interest
(Note 1)
Depreciation of property,
plant and equipment:
- owned assets (note 12)
26,078
- assets held under
finance leases (note 12)
1,332
Amortisation of
intangible assets (note 13)
12,324
Operating lease charges
3,119
Other exceptional costs (note 1)
Research and development costs 4,335
Net foreign exchange
loss (note 9)
Impairment of assets
held for sale
-
2014
2013
370 26,448 33,286
1,332
565
19,577
-
12,324
3,119
19,577
4,335
11,110
1,496
32,184
3,599
7,066
7,066
862
653
653
07. AUDITORS REMUNERATION

The post-acquisition results of Peters, acquired on 30 June 2014, have been
recognised in the Consolidated income statement. Peters has contributed
post-acquisition Adjusted EBITDA of 22.5 million. On a pro forma basis
Peters would have contributed Adjusted EBITDA of 36.3 million for the full
year and turnover of 187.0 million.
Revenue
Cost of sales
Gross profit
Administrative expenses:
Recurring
Exceptional
Fredericks
Dairies
Limited
Yoomoo
International
Limited
Total
acquired
25,711
(20,346)
5,365
(1,629)
456
(269)
187
(9)
26,167
(20,615)
5,552
(1,638)
(1,438)
(656)
(2,094)
1,642
(76)
(76)
102
(1,514)
(656)
(2,170)
1,744
(1)
Note (1): These results are for the three months ended 31 March 2013. From this date the business was hived
up into the UK business and it is not possible to separately identify the results of the Yoomoo business.
The post-acquisition results of Fredericks Dairies Limited, acquired on 9 July

2013, and Yoomoo International Limited, acquired on 9 January 2013, have
been recognised in the Consolidated income statement. Fredericks has
contributed post-acquisition Adjusted EBITDA of 3.0 million, and Yoomoo
International Limited has contributed post-acquisition Adjusted EBITDA of
0.2 million, for the year ended 31 December 2013.
The acquisitions are described in note 11.
The group paid the following amounts to its auditor during the year:
Fees payable to the company's auditor for
the audit of the company's annual accounts
Fees payable to the company's auditor and
its associates for other services:
The audit of the company's subsidiaries,
pursuant to legislation
Tax compliance services
Tax advisory services
Services relating to corporate finance
transactions
All other services
2014
2013
39
39
391
139
79
335
31
115
912
80
960
26
2014
2013
94,621
24,154
2,356
121,131
80,081
19,889
1,068
101,038
08. STAFF COSTS AND DIRECTORS EMOLUMENTS

Staff costs
Wages and salaries
Social security contributions
Other pension costs
The average number of employees during the year was made up as follows:
Production
Sales, Marketing and Distribution
Administrative and Other
2014
No.
2013
No.
2,647
374
349
3,370
2,469
250
338
3,057
NOTES TO THE
CONSOLIDATED
(cont.)
08. STAFF COSTS AND DIRECTORS EMOLUMENTS (cont.)
10. INCOME TAX EXPENSE IN THE INCOME STATEMENT
The geographical location of employees at each year end is as follows:
UK
France
Germany
Australia
Italy
Poland
Directors remuneration
Directors remuneration
Aggregate contributions to defined
contribution pension schemes
2014
No.
2013
No.
784
542
503
452
226
280
2,787
775
571
515
216
277
2,354
2014
2013
1,927
1,692
167
156
From 11 July 2013, the Directors have been remunerated by Riviera

Acquisitions Limited, an intermediate parent of R&R Ice Cream plc. During
the year ended 31 December 2014, a recharge of 3.7 million (six months to
31 December 2013: 1.2 million) in total was made to the group in respect
of Directors costs. This included 1.4 million in respect of exit costs. The
aggregate remuneration of the highest paid director was 0.9 million (2013:
0.8 million). Throughout the year, the group made payments into 2
directors (2013: 2 directors) defined contribution pension schemes.
09. FINANCE INCOME AND EXPENSE
Finance income
Interest income on bank deposits
Gain on derivative financial instrument (non-cash)
Net foreign exchange gain (non-cash)
Finance expense
Interest expense on senior secured loan notes
Accrued but unpaid interest to parent
undertakings (non-cash)
Refinancing of 2017 loan notes (cash interest)
Net foreign exchange loss (non-cash)
Write off deferred transaction costs related
to refinancing (non-cash)
Interest expense on bank overdrafts and loans
Amortisation of transaction costs (non-cash)
Interest on obligations under finance leases
Loss on derivative financial instrument (non-cash)
Net finance expense
2014
2013
333
52
285
670
520
323
843
(32,727)
(29,316)
(29,983)
(23,274)
(7,351)
(27,534)
(1,185)
(7,175)
(2,799)
(2,752)
(732)
(106,793)
(2,822)
(2,452)
(27)
(422)
(63,758)
(106,123)
(62,915)
2014
2013
Current tax charge

Current period
Adjustments for prior years (UK group relief)
Total current tax charge
5,736
2,568
8,304
5,747
(77)
5,670
Deferred tax credit

Origination and reversal of temporary differences
Adjustments for prior years
Total deferred tax credit (note 14)
(468)
(1,201)
(1,669)
(11,954)
(339)
(12,293)
Total income tax charge/(credit)
6,635
(6,623)
Reconciliation of effective tax rate

2014
2013
Loss for the year before income tax
(27,614)
(48,494)
(5,937)
3,324
(11,275)
5,905
(1,136)
6,653
2,187
1,228
(1,888)
2,568
(77)
(1,201)
6,635
(339)
(6,623)
Total income tax using domestic

corporation tax rate of 21.5%
(2013: 23.25%)
Non-deductible expenses
Impact of change of tax rate on
deferred tax
Losses not recognised in deferred
tax provision
Difference between local tax rates
and UK standard rate
(Over)/Under recovery in prior years
- current tax
Under recovery in prior years
- deferred tax
Current tax charge

The total current tax charge of 8.3 million (2013: 5.7 million) mainly
relates to corporation tax payable by overseas entities of 5.4 million (2013:
5.8 million) and 2.6 million of UK group relief in respect of prior years.
This adjustment relates to the finalisation of group relief in the UK
corporation tax computations for 2013, in respect of relief taken from UK
intermediate parent undertakings outside of the R&R Ice Cream plc group.
The blended corporation tax rate of 21.5% represents the UK corporation tax
rate of 23% for three months of the year which reduced to 21% on 1 April
2014 for the remainder of the year. The rate of corporation tax reduced to
20% on 1 April 2015.
Deferred tax credit
The deferred tax credit in 2014 has reduced mainly due to the recognition in
2013 of deferred tax assets related to the closure of Carcassonne in France and
the unwind of deferred tax liabilities related to intangible assets and timing
differences in respect of accounting and tax depreciation.
As the deferred tax assets and liabilities should be recognised based on the
corporation tax rates substantively enacted at the balance sheet date, a 20%
deferred tax rate has been used at 31 December 2014 (31 December 2013: 20%).
Tax reconciliation
The year-on-year comparison of the items included in the tax reconciliation
is difficult due to the following:
Changes in the group financing structure impacting
non-deductible expenses
Changes in certain jurisdictions overseas to reduce the number
of tax groups
Group operational restructuring and related costs
Impact of acquisitions
The total losses in respect of the UK are 6.0 million due to exceptional
costs in the year in R&R Ice Cream plc and their future use is uncertain.
11. ACQUISITIONS OF SUBSIDIARIES
Summary of acquisition cash flows
Peters acquisition
Cash on Peters acquisition
Fredericks acquisition
Cash on Fredericks acquisition
Yoomoo International acquisition
Cash on Yoomoo International acquisition
net of cash on acquisition
2014
2013
(310,268)
4,501
-
(57,295)
1,705
(4,933)
611
(305,767)
(59,912)

Business acquisition - Peters
On 30 June 2014, the group acquired the ordinary share capital of Peters
Food Group Limited for a total consideration of A$448.1 million. Peters,
based in Mulgrave in Melbourne, manufactures iconic brands such as
Drumstick cones and Connoisseur tubs and sticks.
The acquisition balance sheet of Peters is shown below. Fair value
adjustments have been made to certain of the assets and liabilities and the
excess of cash paid over net identifiable assets and liabilities has been
allocated to goodwill.
The acquisition had the following effect on the groups assets and liabilities
at acquisition date:
Intangible assets
Deferred tax assets
Inventories
Current tax asset
Non-current liabilities Financial liabilities
Non-current liabilities Deferred tax liabilities
Current liabilities Trade and other payables
Provisions
Net identifiable assets and liabilities
Pre-acquisition
carrying
amounts
Fair value
adjustments
Provisional
fair values on
acquisition
54,811
26,812
5,340
15,311
25,461
80
4,501
17,752
1,019
3,489
-
54,811
44,564
6,359
18,800
25,461
80
4,501
(14,721)
(14,721)
(55)
(55)
(28,326)
(6,404)
82,810
22,260
(28,326)
(6,404)
105,070
Goodwill on acquisition
Total consideration
205,198
310,268
Cash on acquisition
Net cash outflow on acquisition
4,501
(305,767)
The goodwill recognised on the acquisition is attributable mainly to the ability of

the group to win new business, including in new markets in the future, and the
skill and technical talent of the acquired businesss workforce.
Business acquisition - Yoomoo International Limited
At 1 January 2013, the group held a 25% share ownership in Yoomoo
International Limited and equity accounted for its investment. On 9 January
2013, the group acquired an incremental 67.8% of the ordinary share capital.
The consideration comprised 4.9 million cash (payable on the date of the
transaction) plus deferred consideration. The deferred consideration amount
is subject to a calculation based on the performance of the Yoomoo brand
and will be payable at some time between June 2014 and June 2019, the
timing of which will be at the discretion of the former shareholders, and
some of which was paid out during the year ended 31 December 2014 see
below.
The remaining 7.2% of the ordinary shares were acquired by the group
pursuant to a put and call option, during the year ended 31 December 2014.
The anticipated acquisition method was applied in accounting for the noncontrolling interest and therefore 100% of results and assets and liabilities
were recognised at 9 January 2013. The consideration for and the timing of
the remaining share purchase was the same as the deferred consideration.
At the date of acquisition the group recognised a financial liability of 1.0
million in respect of the deferred consideration payable (including the fair
value of the put and call option). 1.0 million of deferred consideration was
paid in the year ended 31 December 2014.
The acquisition balance sheet of Yoomoo International Limited is shown
below. The excess of the consideration payable over the net identifiable
assets and liabilities was allocated to goodwill. The acquisition had the
following effect on the group assets and liabilities at acquisition date:
NOTES TO THE
CONSOLIDATED
(cont.)
11. ACQUISITIONS OF SUBSIDIARIES (cont.)

Pre-acquisition
carrying
amounts
Fair value
adjustments
Provisional
fair values on
acquisition
1,198
418
611
1,198
418
611
(240)
(240)
(237)
(3,030)
(1,280)
(237)
(3,030)
(1,280)
6,939
5,659
Intangible assets
Non-current liabilities deferred tax liabilities
Current liabilities trade and other payables
Current liabilities - related party
Additional goodwill on acquisition
Total consideration
Discharged by:
Deferred consideration
Cash
Fair value of non-controlling interest
Total consideration
986
4,933
(260)
5,659
The goodwill recognised on the acquisition was attributable mainly to the

ability of the group to win new business in the future. No further intangible
assets were identified as part of the purchase price allocation exercise.
Business acquisition - Fredericks Holdings (Guernsey) Limited
On 9 July 2013, the group acquired 100% of the ordinary share capital of
Fredericks Holdings (Guernsey) Limited for a cash consideration of 57.3
million.
Fredericks Holdings (Guernsey) Limited owned the share capital of
Fredericks Dairies Limited which owns the Fredericks trading operation.
Hereafter, this acquisition group is referred to as Fredericks. Fredericks is
principally a branded ice cream manufacturer. It has licences for brands
including Cadbury, Del Monte and Britvic.
The acquisition balance sheet of Fredericks is shown below. Fair value
adjustments were made to certain of the assets and liabilities and the excess
of cash paid over net identifiable assets and liabilities was allocated to
goodwill.
Pre-acquisition
carrying
amounts

Intangible assets
Deferred tax assets
Inventories
Non-current liabilities financial liabilities
Non-current liabilities - deferred tax
Current liabilities - financial liabilities
Current liabilities trade and other payables
Current liabilities - current tax
Additional goodwill on acquisition
Total consideration
Discharged by:
Cash
Total consideration
Fair value
adjustments
Provisional
fair values on
acquisition
4,164
545
8,252
18,098
1,705
9,437
-
4,164
9,437
545
8,252
18,098
1,705
(1,193)
(54)
(9,572)
(1,887)
-
(1,193)
(1,941)
(9,572)
(15,153)
(489)
6,303
7,550
-
(15,153)
(489)
13,853
43,442
57,295
57,295
57,295
The goodwill recognised on the acquisition was attributable mainly to the

synergies expected to be achieved from integrating the company into the
groups existing UK operations and the skill and technical talent of the
acquired businesss workforce.
12. PROPERTY, PLANT AND EQUIPMENT

Land and buildings
Plant and equipment
Assets under
construction
Total
Cost or deemed cost

Acquisitions through business combinations (note 11)
Other additions
Reclassification of assets under construction
Transfers held for sale
Disposals
Foreign currency adjustment
94,307
1,273
845
1,170
(1,700)
(2,218)
(1,098)
92,579
149,318
2,783
7,336
3,440
(2,828)
(37,715)
(2,494)
119,840
8,789
108
12,805
(4,610)
(10)
(471)
(28)
16,583
252,414
4,164
20,986
(4,538)
(40,404)
(3,620)
229,002

Other additions
Reclassification of assets under construction
Reclassification - gross up of cost(1)
Transfers to assets held for sale
Disposals
92,579
14,060
2,217
5,354
(8,293)
1,962
107,879
119,840
40,010
11,235
16,006
6,971
(6,467)
130
187,725
16,583
741
13,214
(21,360)
572
(359)
772
10,163
229,002
54,811
26,666
7,543
(15,119)
2,864
305,767
Depreciation and impairment

Depreciation for the year
Impairment
Disposals
14,368
6,932
5,417
(2,204)
(128)
24,385
75,914
17,155
4,251
(38,072)
(1,090)
(1,785)
56,373
257
96
(5)
348
90,539
24,087
9,764
(40,276)
(1,090)
(1,918)
81,106

Depreciation for the year
Impairment
Disposals
Reclassification - gross up of depreciation(1)
24,385
6,322
(8,027)
414
23,094
56,373
21,088
(5,162)
7,543
232
80,074
348
370
(108)
(15)
595
81,106
27,410
370
(13,297)
7,543
631
103,763
Note (1) As a result of the review of asset registers in Germany during the year a gross up adjustment has been made to correct the gross cost and depreciation value of assets held.
Carrying amounts
At 1 January 2013
At 31 December 2013 and 1 January 2014
At 31 December 2014
Land and buildings
Plant and equipment
Assets under
construction
Total
79,939
68,194
84,785
73,404
63,467
107,651
8,532
16,235
9,568
161,875
147,896
202,004
The net book value of plant and equipment held under finance leases and hire purchase contracts at 31 December 2014 was 21.8 million (2013: 3.9 million).
The total depreciation charged in the year relating to these assets is 1.3 million (2013: 0.6 million).
NOTES TO THE
CONSOLIDATED
(cont.)
13. INTANGIBLE ASSETS

Goodwill
Customer
Relationships
Brands and
Trademarks
Licences and
Recipes
Software
Total
Cost
Other additions
Disposals
217,343
50,381
(2,249)
265,475
94,539
(1,451)
93,088
29,114
1,198
70
(57)
30,325
45,378
9,437
113
(785)
54,143
7,548
576
(13)
(376)
7,735
393,922
61,016
759
(4,555)
(376)
450,766

Other additions
Disposals
265,475
205,198
6,232
476,905
93,088
3,702
96,790
30,325
39,887
(605)
69,607
54,143
3
3,291
57,437
7,735
4,677
350
32
(85)
12,709
450,766
249,762
353
12,652
(85)
713,448
Amortisation and impairment losses

Amortisation for the year
Disposals
42,358
6,654
(404)
48,608
17,029
1,379
2
18,410
16,254
2,552
(286)
18,520
5,195
525
(3)
(7)
5,710
80,836
11,110
(3)
(695)
91,248

Amortisation for the year
Disposals
48,608
6,600
(66)
1,483
56,625
18,410
1,382
7
19,799
18,520
3,260
1,143
22,923
5,710
1,082
(85)
12
6,719
91,248
12,324
(151)
2,645
106,066
Goodwill
Customer
Relationships
Brands and
Trademarks
Licences and
Recipes
Software
Total
217,343
265,475
476,905
52,181
44,480
40,165
12,085
11,915
49,808
29,124
35,623
34,514
2,353
2,025
5,990
313,086
359,518
607,382
Carrying amounts
At 1 January 2013
At 31 December 2013 and 1 January 2014
At 31 December 2014
Recipes, customer relationships, brands, trademarks and licences consist of

intangible assets acquired through business combinations. Recipes, customer
relationships, trademarks and licences are amortised over their useful lives of
between 2 and 20 years. UK brands and Australian brands have indefinite
useful lives and are not amortised. This is because there is no foreseeable
limit to the period over which the asset is expected to generate net cash
inflows for the business. These intangible assets are tested annually to
determine whether there is any indication of impairment. Software and
development costs are amortised over their useful economic lives of
between 3 and 10 years.
Amortisation and impairment of intangible assets charge

The amortisation and impairment of intangible assets charge is recognised
within administrative expenses.
Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill acquired through business
combinations is allocated to the groups operating segments which represent
the lowest level within the group at which the goodwill is monitored for
internal management purposes. Goodwill arising on the Yoomoo International
and Fredericks acquisitions is included within the UK unit.
13. INTANGIBLE ASSETS (cont.)

The aggregate carrying amounts of goodwill allocated to each unit are as
follows:
UK
France
Germany
Australia
Italy
Total
Discount
2014
11.5%
13.0%
12.6%
12.0%
12.1%
factor
2013
12.0%
12.7%
12.1%
14.0%
Carrying amount
2014
2013
181,284 169,468
31,125
31,125
30,877 30,877
199,614
34,005 34,005
476,905 265,475
The key assumptions underpinning these forecasts are based on anticipated

revenue and gross margin performance into perpetuity since management
believes this gives a true reflection of the anticipated cash flows of the
business. Management does not currently believe that any reasonably
possible change in the key assumptions on which assessments of recoverable
amounts have been based would cause the carrying amount of goodwill to
exceed its recoverable amount.
The goodwill allocated to each business unit has been assessed as part of the
purchase price allocation exercise on acquisition and tested for impairment
by management in the current year. The assessment was performed on a
value in use basis using the risk-adjusted pre-tax discount factor for that
country (as shown in the table above) and the 2015 budget as approved by
the Board and extrapolated forwards using management estimates of future
growth rates of earnings and cash flows, into perpetuity, which management
considers do not exceed long-term average growth rates for the groups
markets.
14. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities are attributable to the following:
Assets
Intangible assets
Inventories
Leased assets
Employee benefits
Provisions/accruals
Tax losses
Other items
Net tax assets/(liabilities)
Liabilities
Net
2014
2013
2014
2013
2014
2013
2,903
457
403
3,191
3,214
5,421
3,417
19,006
5,058
111
18
940
1,139
2,394
4,633
14,293
(3,421)
(16,805)
(162)
(16)
(143)
(20,547)
(4,199)
(18,350)
(59)
(16)
(291)
(22,915)
(518)
(16,805)
295
403
3,191
3,198
5,421
3,274
(1,541)
859
(18,350)
52
18
940
1,123
2,394
4,342
(8,622)
At 31
December
2013
Acquired
Recognised
in income
Foreign
exchange
movement
At 31
December
2014
859
(18,350)
52
18
940
1,123
2,394
4,342
(8,622)
199
217
198
1,921
1,679
1,332
758
6,304
(1,766)
2,447
38
195
368
437
1,712
(1,762)
1,669
190
(902)
(12)
(8)
(38)
(41)
(17)
(64)
(892)
(518)
(16,805)
295
403
3,191
3,198
5,421
3,274
(1,541)

Intangible assets
Inventories
Leased assets
Employee benefits
Provisions/accruals
Tax losses
Other items(1)
Net tax liabilities
Note (1): Other items of 3.3 million (2013: 4.3 million) includes 2.0 million (2013: 1.9 million) of tax reliefs available from operating in the Mielec Special Economic Zone in Poland.
NOTES TO THE
CONSOLIDATED
(cont.)
15. INVENTORIES
17. CASH AND CASH EQUIVALENTS
Raw materials and consumables

Work in progress
Finished goods
2013
15,433
941
52,815
69,189
2014
2013
130,479
83,321
1,420
131,899
3,772
87,093

Exchange difference on
retranslation of foreign
operations
Net Investment hedging
Change in actuarial
assumptions in respect of
post-employment benefits
Loss for the year
The above amounts are stated net of inventory provisions.

16. TRADE AND OTHER RECEIVABLES
Trade receivables, prepayments, accrued income
and other
Trade and other receivables due from related
parties
2014
2013
Provisions against trade receivables

Opening provision against trade receivables
Provisions acquired in year
Provision utilised in year
Expensed in year
Closing provision for trade receivables
3,441
1,362
(1,103)
1,883
(67)
5,516
4,064
11
(667)
67
(34)
3,441
Included in the above analysis of receivables are the following amounts

which are past due and for which we have not made any specific provision:
Past due receivables

<1 month overdue
1-2 months overdue
2-3 months overdue
>3 months overdue
Total overdue receivables
2014
2013
36,012
12,568
36,012
12,568
The bank balance includes cash in same day call deposit accounts of nil
(2013: nil). Cash balances denominated in currencies other than the
functional currency comprise 0.3 million (2013: 0.3 million) denominated
in Zlotys, 8.5 million (2013: 1.7 million) denominated in Pounds Sterling
and 7.9 million (2013: nil) denominated in Australian Dollars.
18. RECONCILIATION OF MOVEMENT IN CAPITAL AND RESERVES
The above receivables are shown net of the following provisions

for doubtful debts.
Bank balances
Cash and cash equivalents in the statement
of cash flows
2014
23,199
1,185
63,821
88,205
2014
2013
6,169
1,731
809
535
9,244
6,440
734
586
1,008
8,768
Receivables denominated in currencies other than the functional currency

comprise 63.0 million (2013: 24.6 million) of receivables denominated in
Pounds Sterling, 1.0 million (2013: 1.0 million) of receivables denominated
in Zlotys, and 47.0 million (2013: nil) of receivables denominated in
Australian Dollars.
Trade and other receivables due from related parties consist of balances due
from New R&R Ice Cream Limited.
Equity Currency
share translation Accumulated
capital
reserve
losses
50,886
(17,644)
7,402
(6,899)
50,886
Total
(191,576) (158,334)
7,402
(6,899)
(647)
(647)
(34,249) (34,249)
(17,141) (226,472) (192,727)
Currency translation reserve

The translation reserve comprises all foreign currency differences arising
from the translation of the financial statements of foreign operations and
the companys net investment in those operations.
The group has applied net investment hedging in respect of its investments
in the UK, Jersey and Australia by designating its GBP Sterling and A$
senior secured loan notes as hedging instruments. Net foreign exchange
losses recognised in the Consolidated profit and loss account have been
transferred to accumulated losses to the extent the value of the Senior
Secured loan notes is 100% matched against the value of the sub
consolidated net assets of the underlying investments.
19. CALLED UP SHARE CAPITAL
Allotted, called up and fully paid
50.9 million (2013: 50.9 million)
ordinary shares of 1 each
2014
2013
50,886 50,886
20. FINANCIAL LIABILITIES
Terms and debt repayment schedule

Terms and conditions of outstanding loans (excluding any derivatives
balances) were as follows:
This note provides information about the contractual terms of the groups
interest-bearing loans and borrowings. For more information about the
groups exposure to interest rate and foreign currency risk see note 24.
2014
Non-current liabilities
2017 350 million senior secured Notes
2020 A$152 million senior secured Notes
Less deferred transaction costs
Finance leases
Other financial liabilities
Secured loan
Derivative financial instruments
Loan from parent undertakings
Total non-current liabilities
Current liabilities
Senior secured Notes accrued interest
Current portion of finance leases
Derivative instruments
Secured loans
Unsecured bank loans
Total current liabilities
Total financial liabilities
Less: deferred transaction costs
Total financial liabilities
2014
2013
- 350,000
150,000
404,492
102,691
657,183 350,000
(11,755)
(7,930)
645,428 342,070
15,634
2,138
538
985
14
977
366,113
336,131
1,027,727 682,301
4,809
885
408
6,102
3,725
915
432
576
134
5,782
1,045,584 696,013
(11,755)
(7,930)
1,033,829 688,083
Transaction costs
At 31 December 2013 there were 7.9 million of transaction costs related to
the 350 million senior secured loan notes deferred on the balance sheet.
On refinancing of the 350 million senior secured loan notes, 7.2 million of
transaction costs were written off to the Consolidated income statement
(see note 1).
13.0 million of transaction costs were incurred on the issue of the 315
million senior secured loan notes in May 2014 and on the issue of 150
million and A$152 million senior secured loan notes in June 2014 (see
below). These costs are being amortised over the life of the senior secured
loan notes to 2020.
Issuance of senior secured loan notes
2017 senior secured loan notes
On 14 May 2014 the group refinanced its 350 million 2017 senior secured
loan notes through the issuance of 315 million of new senior secured loan
notes due to mature in 2020. These new notes accrue interest at 5.5% which
is payable semi-annually on 15 May and 15 November.
The refinancing resulted in the repayment of the 350 million nominal value
of the notes plus additional costs of 23.3 million (see note 1).
On 26 June 2014 the group issued a further 150 million and A$152 million of
senior secured loan notes in order to raise funds to acquire Peters (see note 11).
The notes are due to mature in 2020 and accrue interest at 4.75% and 8.25%
respectively. The interest is payable semi-annually on 15 May and 15 November.
2020 loan notes (note 1)

Less: transaction costs
Finance lease
liabilities (note 21)
Total secured
Currency
Interest
Rate
Year of
Maturity
31 Dec
Carrying
Amount
GBP
EUR
AUS$
EUR
5.5%
4.75%
8.25%
n/a
2020
2020
2020
n/a
407,319
150,905
103,768
(11,755)
417,558
155,926
103,703
-
Various Various
n/a
2022
16,519
538
667,294
16,519
538
694,244
Various
AUS$
Unsecured loan from:

New R&R Ice Cream Limited
(Subordinated
shareholder loan)
EUR
Total unsecured
Total
8.92%
Fair
Value
2110 366,113
366,113
366,113
366,113
1,033,407 1,060,357
2013

Less: transaction costs
Finance lease
liabilities (note 21)
Secured loan
Total secured
Currency
Interest
Rate
EUR
EUR
8.375%
n/a
Various
Various
Year of
Maturity
2017 353,725
n/a (7,930)
5.0% Various
3.15%
2016
Unsecured loan from:

New R&R Ice Cream Limited
(Subordinated
shareholder loan)
EUR
8.92%
Other loans
EUR 0.7%-1.2%
Total unsecured
Total
31 Dec
Carrying
Amount
Fair
Value
375,514
-
3,053
1,561
350,409
3,053
1,657
380,224
2110 336,131
2016
134
336,265
686,674
336,131
134
336,265
716,489
Note 1: Including interest accrual.
Undrawn facilities
At 31 December 2014 the group had 56.5 million (2013: 58.9 million) of
undrawn revolving credit facilities and 43.3 million (2013: 27.8 million) of
non-recourse factoring facilities available should they be required. There are
no significant restrictions on the utilisation of the revolving credit facility.
Any non-recourse factoring facility drawings are restricted by the level of
debtors outstanding at that time.
NOTES TO THE
CONSOLIDATED
(cont.)
21. FINANCE LEASE LIABILITIES
Analysed as:
The group has finance leases for some of its plant and machinery. Future
minimum lease payments under finance leases are as follows:
2014
Future minimum payments due:
Not later than one year
After one year but not more than five years
More than five years
Less finance charges allocated to future periods
Present value of minimum lease payments
2014
2013
2,162
15,460
17,566
(18,669)
16,519
952
2,171
(70)
3,053
The present value of minimum lease payments is analysed as follows:

Not later than one year
After one year but not more than five years
More than five years
885
1,439
14,195
16,519
915
2,138
3,053
The effective interest rate on finance leases is 7.5% (2013: 5.0%).

22. TRADE AND OTHER PAYABLES
2014
Trade payables, accrued expenses and other balances

Trade and other payables due to related parties
2013
137,514 92,000
76,718 36,052
214,232 128,052
Payables denominated in currencies other than the functional currency comprise

31.4 million (2013: 29.1 million) of trade payables, accrued expenses and other
payables denominated in Pounds Sterling, 3.0 million (2013: 2.5 million) of
trade payables, accrued expenses and other payables denominated in Zlotys, and
41.1 million (2013: nil) of trade payables, accrued expenses and other payables
denominated in Australian Dollars.
Trade and other payables due to related parties consist of balances of 12.3
million (2013: 8.6 million) to Riviera Acquisitions Limited, 6.9 million (2013:
27.4 million) to R&R PIK plc, and 54.8 million (2013: nil) to New R&R Ice
Cream Limited, all of which are intermediate parent companies of the company.
23. PROVISIONS
Provisions transferred during the year
Provisions made during the year
Provisions used during the year
Employment
provisions
Factory
Legal
closures provisions
Total
2,484
602
547
(802)
2,831
9,544
9,544
400 2,884
602
- 10,091
- (802)
400 12,775

2,831
Provisions acquired during the year
6,404
Provisions made/(released) during the year
913
Provisions used during the year
(12)
(126)
10,010
9,544
(611)
(7,788)
1,145
400
500
900
12,775
6,404
802
(7,800)
(126)
12,055
Payable within one year

Payable in more than one year
5,873
4,137
10,010
1,145
1,145
900 7,918
- 4,137
900 12,055
2,831
2,831
9,544
9,544
400 9,944
- 2,831
400 12,775
2013
Payable within one year
Payable in more than one year
Provisions at 31 December 2013 have been restated on the face of the

Consolidated balance sheet to analyse them between current and noncurrent liabilities. This has resulted in 2.8 million of provisions at 31
December 2013 being reclassified to non-current liabilities.
Employment provisions
Rolland SAS and Pilpa SAS hold provisions in respect of lump sum payments
on retirement granted to all employees under French law, based on their
seniority in the company, and their current level of remuneration.
The remuneration is paid to all employees when they reach retirement age,
60 to 65, depending on when they commenced working. Cash outflows from
this provision are not expected to be significant over the next three years.
The balance as at 31 December 2014 was 3.1 million (2013: 2.4 million).
Until December 2006, Eskigel Srl was required to withhold a percentage of
all employees salaries in a provision called Trattamento di Fine Rapporto, or
TFR. It is paid to employees when their period of employment ceases. Since
January 2007, following a change of law, a portion of salary is still retained
but is now paid to the Italian tax authority on a monthly basis. The TFR
provision represents the residual obligation for the benefit accruing to
employees until 31 December 2006. This provision is a long-term employee
benefit scheme. Cash outflows from this provision are not anticipated to be
significant over the next three years. The balance as at 31 December 2014
was 0.4 million (2013: 0.4 million).
On acquisition of Peters (see note 11), the group acquired a provision in
respect of employee long service leave. Employees are entitled to 13 weeks
of holiday after 15 years of service. Employees are entitled to a pro rata
payment if they leave employment after 7 years. The balance as at 31
December 2014 was 6.5 million (2013: nil).
Factory closures
In the year ended 31 December 2013, the group initiated the closure of
three of its factories. Provision was made for the estimated expected further
costs of closure. The majority of cash outflows associated with these
provisions have been realised during 2014. It is anticipated that the
remaining cash outflows will be during 2015.
Legal provisions
The provisions for legal expenses are connected with previous acquisitions.
This provision is now anticipated to result in cash outflows in 2015.
24. FINANCIAL INSTRUMENTS

The groups financial assets comprise cash at bank, trade receivables and other
receivables. The groups financial liabilities comprise bank and other
borrowings, financial lease obligations and other payables.
Exposure to credit, interest rate and currency risks arises in the normal course
of the groups business. Derivatives are used to manage exposure to
fluctuations in exchange rates.
Credit risk
Management has a credit policy in place and the exposure to credit risk is
monitored on an ongoing basis. Credit evaluations are performed on all
customers requiring credit over a certain amount. The group does not
require collateral in respect of financial assets.
At the reporting date there were no significant concentrations of credit risk.
The maximum exposure to credit risk is represented by the carrying amount
of each financial asset, including derivatives in the balance sheet.
Interest rate risk
The majority of the groups debt is fixed coupon which means that there is
no significant exposure to interest rates. Short-term borrowings are used to
fund the business through its peak working capital requirement. Such loans
are borrowed at floating interest rates. The exposure on such borrowings is
not considered significant. Short-term receivables and payables are not
exposed to interest rate risk.
Cash at bank earns interest at floating rates based on market rates.
Foreign currency risk
The group is exposed to foreign currency risk on sales, purchases and
borrowings that are denominated in a currency other than the respective
functional currencies of group entities. The currencies giving rise to these
risks are primarily Pounds Sterling (GBP), Australian Dollars (Aus $) and
Polish Zloty.
In prior years the key risk was the exposure of entities in the UK which had
EURdenominated debt. To the extent that the GBP: EUR exchange rate
fluctuated, the relevant companies required more or less GBP to meet their
EUR interest and capital obligations. At 31 December 2013 the group had
68.7 million of EUR denominated debt being serviced by entities with a
GBP functional currency. During the year ended 31 December 2014, the UK
subsidiaries repaid its EUR denominated debt and new GBP denominated debt
(66.1 million) was issued by R&R Ice Cream plc, therefore mitigating this risk.
At 31 December 2014 the key risk is the groups borrowings in foreign
currency, being the GBP 315.0 million and AUS $ 152.0 million senior
secured loan notes. These notes are held in the balance sheet of R&R Ice
Cream plc which has a EUR reporting and functional currency. The groups
strategy is that these foreign currency borrowings better match the
generation of cash flow in the group. In respect of the GBP denominated
loan notes it is expected that they will be largely serviced by the cash
generation of the groups UK trading business. Likewise the AUS $
denominated loan notes are expected to be serviced by the cash generation
of the groups Australian business.
The UK and Australian businesses also typically uses contracts to mitigate
foreign currency exposure on trading. At the 2014 year end, there were 11
such contracts outstanding (2013: six). The Directors believe that the foreign
exchange exposure in this regard does not present a material risk. The net
fair value of these contracts at 31 December 2014 was a liability of
408,000 (2013: liability of 32,000).
A movement of +/- 10% in the GBP: EUR exchange rate, with all other
variables held constant would result in a 19.5 million (2013: 1.5 million)
movement in the groups results and a 21.9 million (2013: 14.6 million)
movement in the groups equity. A movement of +/- 10% in the A$: EUR
exchange rate, with all other variables held constant would result in a 1.1
million (2013: nil) movement in the groups results and a 1.9 million (2013:
nil) movement in the groups equity.
95% of the UK businesss forecast 2015 Euro trading requirement is hedged
(2013: 95% of the UK businesss 2014 Euro trading requirement). 65% of the
Australian businesss forecast Euro trading requirement up to 30 June 2015 is
hedged, with nil hedged beyond that date as at 31 December 2014, with an
overall hedged position of 31% of the Euro requirement to 31 December
2015.
Capital management
One of the groups objectives is to safeguard its ability to continue as a going
concern providing returns to shareholders, through the optimisation of the
debt and equity balance, and to maintain a strong credit rating and headroom.
The group manages its capital structure and makes appropriate decisions in
light of the current economic conditions and strategic objectives of the group.
The groups capital comprises equity and long-term debt. The equity comprises
fully paid up ordinary shares and the long-term debt comprises subordinated
shareholder loans, the senior secured notes and finance leases. Intra-year
funding requirements are managed through cash, revolving credit facilities and
factoring facilities.
The refinancing in 2014 allowed the group to better match EBITDA and cash
flows to its borrowings and debt service obligations, in particular to provide a
natural hedge in respect of potential foreign exchange movements.
The groups policy is to budget sufficient headroom in order to maintain
compliance with the covenant set out in the revolving credit facility agreement
such that any unforeseen circumstances are unlikely to result in a breach of
that covenant. Throughout the year, the group has comfortably complied with
this policy.
There has been no change in the objectives, policies or processes in respect of
capital management during the years ended 31 December 2014 and 31
December 2013.
NOTES TO THE
CONSOLIDATED
(cont.)
24. FINANCIAL INSTRUMENTS (cont.)

Liquidity risk
The following are the contractual maturities of financial liabilities, including interest payments:
Total
contractual
cash flows
Within
1 year
1-2
years
2-3
years
3-5
years
8.92%
5.5%
4.75%
8.25%
n/a
7.5%
n/a
n/a
(366,113) (1,316,048,053)
(407,318)
(526,974)
(150,905)
(189,227)
(103,769)
(149,334)
(538)
(538)
(16,519)
(35,370)
(408)
(14)
(1,045,584) (1,316,949,496)
(22,247)
(7,125)
(8,472)
(2,089)
(39,933)
(22,247)
(7,125)
(8,472)
(1,773)
(39,617)
(22,247)
(7,125)
(8,472)
(1,801)
(39,645)
(44,494)
(14,250)
(16,944)
(3,446)
(79,134)
- (1,316,048,053)
(415,739)
(153,602)
(106,974)
(538)
(8,188)
(18,073)
(685,041) (1,316,066,126)
Nil
36,012
36,012
36,012
36,012
11,755
(997,817) (1,316,913,484)
36,012
36,012
(3,921)
(39,617)
(39,645)
(79,134)
(685,041) (1,316,066,126)
Total
contractual
cash flows
Within
1 year
1-2
years
2-3
years
3-5
years
8.92%
8.375%
5.0%
n/a
n/a
3.15%
(336,131) (1,316,048,137)
(353,725)
(467,252)
(3,053)
(3,392)
(432)
(977)
(1,561)
(1,629)
(695,879) (1,316,520,410)
(29,313)
(974)
(618)
(30,905)
(29,313)
(1,039)
(631)
(30,983)
(29,313)
(319)
(380)
(30,012)
(379,313)
(630)
(379,943)
- (1,316,048,137)
(430)
(430) (1,316,048,137)
0.5%
0.7%-1.2%
12,568
12,568
(134)
(134)
12,434
12,434
7,930
(675,515) (1,316,507,976)
12,568
(134)
12,434
(18,471)
(30,983)
(30,012)
(379,943)
(430) (1,316,048,137)
Interest
Rate
Fixed rate
Subordinated shareholder loan
2020 loan notes - GBP
2020 loan notes EUR
2020 loan notes AUS$
Operating lease liability
Finance lease liabilities
Derivative financial instruments(1)
Deferred consideration(1)
Total fixed rate
Floating rate
Cash
Total floating rate
Transaction costs
Total
Carrying
amount

Interest
Rate
Fixed rate
Subordinated shareholder loan
2017 loan notes
Derivative financial instruments(1)
Deferred consideration(1)
Other loans
Total fixed rate
Floating rate
Cash
Other loans
Total floating rate
Transaction costs
Total
Carrying
amount
5-10
years
5-10
years
More than
10 years
More than
10 years
Note (1): Contractual cash flows have not been presented; these liabilities represent their fair value at 31 December 2014 and the amount and/or timing of the contractual cash flows are uncertain.
Fair values of financial assets and financial liabilities

Set out below is a comparison by category of carrying amounts and fair
values of all the groups financial instruments.
2014
Book value
2013
27. CONTINGENT LIABILITIES
Fair value
2014
2013
Fixed rate
Subordinated shareholder
loan
(366,113)
Senior secured notes
(661,992)
(538)
(16,519)
Derivative financial instruments (408)
Deferred consideration
(14)
Other loans
Total fixed rate
(1,045,584)
(336,131)
(366,113)
(353,725)
(677,188)
(538)
(3,053)
(16,519)
(432)
(408)
(977)
(14)
(1,561)
(695,879) (1,060,780)
(336,131)
(375,514)
(3,053)
(432)
(977)
(1,657)
(717,764)
Floating rate
Cash
Other loans
Total floating rate
Transaction costs
Total
12,568
36,012
(134)
12,434
36,012
7,930
(675,515) (1,024,768)
12,568
(134)
12,434
(705,330)
36,012
36,012
11,755
(997,817)
In calculating the fair values of the subordinated shareholder loan above the
Directors have utilised discounted cash flow techniques using the rate of
interest on the most recently arranged tranche of borrowings as an indicator
of current market rates for this type of debt. In the case of the senior
secured loan notes and other loans the fair value has been taken from the
observed market value of the listed debt. In the case of the variable rate
borrowings the Directors believe that carrying value does not differ
materially from fair value and accordingly no separate valuations were
performed.
The derivative financial instruments fall into level two of the fair value
hierarchy since their valuation is derived from observable market prices. The
deferred consideration falls into level three of the fair value hierarchy.
The fair values of trade and other receivables, trade and other payables and
derivatives are the same as the respective book values. At 31 December 2014,
6.7 million (2013: 9.6 million) of factoring balances are shown net within
trade and other receivables.
25. CAPITAL COMMITMENTS
Capital commitments at the end of the financial year, for which no provision
has been made, are as follows:
2014
2013
Contracted
2,814
4,510
26. OPERATING LEASE COMMITMENTS

Total commitments under non-cancellable operating leases are as follows:
Lease payments:
Within one year
Within two to five years
In five years or more
Land and Buildings

2014 2013
2,211
162
8,017
137
28,315 153
38,543 452
Other
2014
2013
705
1,565
2,270
807
600
1
1,408
From time to time, in the normal course of trading, the group may become
subject to claims. The nature of claims means they can take a long time to
resolve. It is the groups policy to investigate claims, and in the event a
financial settlement is considered probable and the amount reliably
estimable, provision is made.
28. SHARE-BASED PAYMENTS
Riviera Midco SA - Share incentive scheme
As part of the acquisition of the group on 11 July 2013 by PAI Partners,
certain senior executives and management of R&R Ice Cream plc were
invited to take part in a new share incentive scheme. This entitled the
individuals to purchase shares in Riviera Midco SA, an intermediate parent
undertaking of R&R Ice Cream plc, and to partake in the future success of
the group. These shares were paid for upfront. There have been further
share issues during the year ended 31 December 2014.
In order to derive any benefit from the shares, the employee must remain an
employee of R&R Ice Cream plc for the duration of Riviera Midco SAs
ownership of R&R Ice Cream plc.
This scheme is treated as equity settled. The fair value of the incentive shares
at the date of grant was nil (2013: nil). No charges have therefore been
recognised in the Consolidated Income Statement in the current or prior
period.
29. DEFINED CONTRIBUTION PENSION PLAN
The group operates a defined contribution pension plan. 2.5 million (2013:
2.3 million) was recognised as an expense in the year relating to the plan.
NOTES TO THE
CONSOLIDATED
(cont.)
30. GROUP ENTITIES

Significant subsidiaries
Durigon Gelato GmbH(1)
Eskigel Holding SpA
Eskigel SrL(1)
Fredericks Dairies Limited(1)
Nord-Eis die Eisprofis GmbH(1)
R&R Holdings Deutschland GmbH
R&R Holdings France SAS
R&R Ice Cream Deutschland GmbH(1)
R&R Ice Cream France SAS(1)
R&R Ice Cream UK Limited(1)
R&R Rolland France SAS
Richmond Foods Limited(1)
Riviera (AUS) Pty Ltd
Riviera Holdings (AUS) Pty Ltd
Paladine SAS(1)
Peters Food Group Limited
Pilpa SAS(1)
Mulgrave Leasco Pty Ltd
Rolland SAS(1)
Ruby Acquisitions Limited
Soparo SAS(1)
Yoomoo International Limited(1)
Zielona Budka (Mielec) SpZoo(1)
Principal
activity
Country of
incorporation
See below(2)
Holding company
See below(2)
See below(2)
See below(2)
Holding company
Holding company
See below(2)
See below(2)
See below(2)
Holding company
Holding company
Holding company
Holding company
See below(2)
See below(2)
See below(2)
Lease company
See below(2)
Holding company
Holding company
See below(2)
See below(2)
Germany
Italy
Italy
England and Wales
Germany
Germany
France
Germany
France
England and Wales
France
England and Wales
Australia
Australia
France
Australia
France
Australia
France
England and Wales
France
England and Wales
Poland
Ownership interest
2014
2013
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
92.8%
100%
Note (1): These entities are held indirectly.

Note (2): The principal activity of all subsidiaries in the group is the production and sale of ice cream and frozen confectionery, unless otherwise stated.
The above ownership interests are all ordinary shares.

All controlled entities in the table above have been included in the group consolidation.
31. RELATED PARTIES
Immediate parent undertaking
At 31 December 2014 and 31 December 2013, the immediate parent
company of R&R Ice Cream plc was New R&R Ice Cream Limited.
Ultimate parent undertaking
At 31 December 2014 and 2013 the group was owned by PAI Partners SAS
and funds managed by PAI Partners SAS, a private equity firm based in Paris,
France.
At 31 December 2014 and 2013 the ultimate parent undertaking of R&R Ice
Cream plc was Riviera Topco Sarl.
Related party transactions
At the 2013 year end, the group owed 336.1 million in long-term loans and
unpaid interest to New R&R Ice Cream Limited. Throughout 2014, the group
incurred 30.0 million of interest on long-term loans. Consequently, at the
2014 year end, the group owed 366.1 million in long-term loans and unpaid
interest to New R&R Ice Cream Limited.
At 1 January 2014 New R&R Ice Cream Limited owed 3.7 million to the
group in respect of the benefit received of UK group tax relief. At 31
December 2014, New R&R Ice Cream Limited owed an additional 2.2
million to the group in respect of the benefit received of UK group tax relief.
At 31 December 2014 the total related party receivable in respect of group
relief owed to the group was 5.9 million.
On 26 June 2014 New R&R Ice Cream Limited advanced an interest free
loan to the group of 62.0 million as part of the funding for the acquisition
of Peters Food Group Limited (see note 11).
At 1 January 2014 the group owed R&R PIK plc, an intermediate parent
company of R&R Ice Cream plc, 27.4 million. In the period to 31 December
2014 the group repaid 27.1 million and consequently at 31 December 2014
the group owed 0.3 million (2013: 27.4 million). In addition, as at 31
December 2014 the group owed 6.6 million in respect of the benefit
received of UK group tax relief (2013: nil).
At 1 January 2014 the group owed Riviera Acquisitions Limited, an
intermediate parent company of R&R Ice Cream plc, 8.6 million. At 31
December 2014 the group owed Riviera Acquisitions Limited 15.0 million.
4.2 million of this balance represents the benefit given to the UK group in
respect of tax relief, 2.7 million of surplus cash lent to the group and 1.7
million in respect of amounts owing by the group related to management
recharges.
Key management personnel compensation comprised short-term employee
benefits of 2.0 million (2013: 1.7 million). An additional 1.4 million was
incurred in respect of loss of office. Key management personnel are defined
as the group directors as at 31 December 2014 and 2013.
32. POST BALANCE SHEET EVENTS
In March 2015, we announced the acquisition of Nestl South Africas ice
cream business. The acquisition was made subject to clearance from the
competition authorities in South Africa. Approval from the competition
authorities was received recently, so that the acquisition is expected to close
shortly. The acquisition has had no material effect on the financial condition
and results of operations for the year ended 31 December 2014.
COMPANY ONLY
ACCOUNTS
31 DECEMBER 2014
COMPANY ONLY
ACCOUNTS
COMPANY ONLY BALANCE SHEET
ACCOUNTING POLICIES
As at 31 December 2014
BASIS OF PREPARATION
The financial statements are prepared in accordance with applicable UK
accounting standards and under the historical cost convention. The company
has taken the exemption under s408 of the Companies Act 2006 not to
publish the parent company profit and loss account and the company has
taken exemption under FRS 1 not to present a cash flow statement on the
grounds that the consolidated financial statements include the company.
Note
Fixed assets
Investments
Current assets
Debtors
(includes 166.7 million
(2013: 286.4 million)
due after more than one year)
Cash at bank and in hand
Creditors:
Amounts falling due within
one year
2014
2013
630,334
323,634
The company has taken advantage of the exemption to disclose transactions

with fellow group companies allowed by FRS 8 since consolidated financial
statements of this company are prepared and are publicly available from
Companies House.
2
342,477
342,477
377,313
377,313
(76,936)
(58,238)
The following accounting policies have been applied consistently in dealing

with items which are considered material to the financial statements.
Net current assets
265,541
319,075
Total assets less current

liabilities
895,875
642,709
(1,013,728)
(117,853)
(680,250)
(37,541)
Capital and reserves

Called up share capital
Profit and loss account
5
6
50,886
(168,739)
50,886
(88,427)
Total Shareholders deficit
(117,853)
(37,541)
Creditors:
Amounts falling due after
more than one year
Net liabilities
These financial statements were approved by the Board of Directors on

28 April 2015 and were signed on its behalf by:
I Najafi
Director
Company number: 05777981
GOING CONCERN
At 31 December 2014, the company has net liabilities of 117.9 million (2013:
37.5 million net liabilities). Net liabilities are typical in private equity backed
businesses such as the company, largely due to the financing structure
adopted and the rolling up of non-cash interest on parent company loans,
which is not payable until 2110 at the earliest. In addition the group has
63.7 million (2013: 31.5 million) of interest free loans from parent
companies included in current liabilities which although are repayable on
demand, in reality will not be repaid until exit of PAI Partners SAS.
Excluding these current liabilities and group debtors owing in more than one
year, the company has net current assets of 47.1 million (also excluding
115.4 million of intercompany loans due to be repaid on 31 December 2015
but which will be refinanced during 2015 over a longer period (2013: net
current assets of 64.2 million). During the period, the company refinanced
its previous loan notes, providing certainty over future interest charges until
2020. The Directors believe that the rates are competitive and reduce the
exposure of the business to increases in interest rates for the medium term
to almost zero. This gives the Board further comfort as to the going concern
status, understanding the related cash requirements and the lack of
additional unknown risk.
The Directors have considered this position, together with the company and
the groups budgets and positive net current assets position, and after
making appropriate enquiries, the Directors consider that the company has
adequate resources to continue in operational existence for the foreseeable
future and therefore continue to adopt the going concern basis for the
preparation of the financial statements.
INVESTMENTS
Investments are stated at cost less provision for permanent diminution in
value.
FOREIGN CURRENCIES
The companys functional currency and presentation currency is the Euro.
Transactions in foreign currencies are initially recorded at the spot rate ruling
at the time of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the functional currency rate of
exchange ruling at the balance sheet date. All differences are taken to the
profit and loss account.
LOANS AND BORROWINGS
All loans and borrowings are initially recognised at fair value of the
consideration received net of directly attributable transaction costs. After
initial recognition, loans and borrowings are subsequently measured at
amortised cost using the effective interest method.
NOTES TO THE
COMPANY ONLY
ACCOUNTS
TAXATION
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes. Deferred
tax is recognised without discounting, in respect of all timing differences
between the treatment of certain items for taxation and accounting
purposes which have arisen but not reversed by the balance sheet date,
except as otherwise required by FRS 19. The deferred tax balance has not
been discounted.
115.4 million (2013: 105.9 million) of structural intra-group debt. These

loans bear interest at 9% which accrues on a compound basis. The capital
and unpaid interest are due for repayment upon the earlier of 31
December 2015 or the occurrence of a disposal or public offering of the
relevant subsidiarys share capital. It is expected that these loans will be
refinanced during 2015.
2.0 million (2013: 36.0 million) of intercompany revolving loan which
bears interest at 1.6%, payable monthly with the capital repayable on
demand.
01. FIXED ASSET INVESTMENTS

Shares in
group
undertakings
There are no amounts of unprovided deferred tax.

03. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Cost and Net book value

Additions
Reduction in investment
323,624
348,256
(41,556)
630,334
The principal subsidiaries are disclosed in note 30 of the Consolidated

financial statements.
On 26 June 2014 the company subscribed for 100% of the issued share
capital of R&R Ice Cream Jersey Limited and Riviera Holdings (Aus) Pty
Limited, for 226.5 million (A$327.0 million) and 81.2 million (A$117.3
million) respectively. On 29 December 2014 R&R Ice Cream Jersey Limited
declared a dividend of 41.6 million (A$60.0 million) which resulted in a
reduction in the companys investment in its Jersey subsidiary. On the same
day the company subscribed for 40.5 million (A$ 60.0 million) of additional
shares in Riviera Holdings (Aus) Pty Limited.
Bank overdrafts
Interest accrued on loan notes
Transaction costs
Accruals and deferred income
Amounts owed to parent undertakings
Amounts owed to subsidiary undertakings
2014
2013
338,566
1,577
810
1,524
373,135
2,324
1,808
46
342,477
377,313
Included in the above balances are 166.7 million (2013: 284.8 million) of
amounts owed by subsidiary undertakings and 0.9 million (2013: 1.6
million) of transaction costs falling due in more than one year.
The amounts owed by subsidiary undertakings include:
166.7 million (2013: 178.9 million) of intercompany loans (and 1.4
million (2013: 7.6 million) of accrued interest) which bear interest at rates
of 5% to 8.625% (2013: 8.625%), payable twice annually. The capital on
certain of these loans is due for repayment in 2017 or in respect of new
loans issued in the year 2020. In the year ended 31 December 2014, 113.2
million of such loans due from various subsidiaries were repaid. 66.1
million of new loans issued to certain of its UK subsidiaries and 16.0
million loan issued to R&R Holdings France SAS.
2014
2013
7,535
4,809
(2,187)
1,664
63,670
1,445
23,105
3,725
(2,050)
1,139
31,504
815
76,936
58,238
Amounts owed to parent undertakings include 63.7 million (2013: 31.5

million) of interest free loans repayable on demand. During the period the
companys immediate parent undertaking issued a loan of 62.0 million as
part of the funding of the Peters acquisition.
04. CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR
02. DEBTORS
Amounts owed by subsidiary undertakings

Transaction costs
Prepayments and accrued income
Other debtors
Other non-interest bearing operational loans of 47.0 million (2013: 44.7

million) due from subsidiaries.

2020 A$152 million senior secured Notes
2017 loan notes
Amounts owed to parent undertakings
Transaction costs
2014
2013
150,000
404,492
102,691
366,113
(9,568)
350,000
336,131
(5,881)
1,013,728
680,250
Transaction Costs
At 31 December 2013 there was 7.9 million of transaction costs related to
(see note 11).
13.0 million of transaction costs were incurred on the issue of the 315
million senior secured loan notes in May 2014 and on the issue of 150
million and A$152 million senior secured loan notes in June 2014 (see
below). These costs are being amortised over the life of the senior secured
loan notes to 2020.
NOTES TO THE
COMPANY ONLY
ACCOUNTS
(cont.)
04. CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR (cont.)
06. RESERVES
Issuance of senior secured loan notes

At 31 December 2013 there was 7.9 million of transaction costs related to
(see note 11).
On 26 June 2014 the group issued a further 150 million and A$152 million
of senior secured loan notes in order to raise funds to acquire Peters (see
note 11). The notes are due to mature in 2020 and accrue interest at 4.75%
and 8.25% respectively. The interest is payable semi-annually on 15 May and
15 November.
Amounts owed to parent undertakings comprise the capital and accrued
interest on the subordinated shareholder loan payable to New R&R Ice
Cream Limited. This loan accrues compound interest at a fixed rate of 8.92%
until the term of the contract expires in 2110, at which point the capital and
cumulative interest accrued become payable. Interest on the loan is only
payable in cash at the companys option. Prior to maturity, there are no
mandatory put or call rights and there are no mandatory redemption
features. Any payments on the loan are subordinated to all other debt claims
of R&R Ice Cream plc.
Profit and
loss account
At 31 December 2013
Retained loss for the year
(88,427)
(80,312)
At 31 December 2014
(168,739)
During the year ended 31 December 2014 the group made no distributions
to its parent undertakings.
07. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS DEFICIT
2014
2013
(80,312)
(80,312)
(36,177)
(36,177)
Opening shareholders deficit
(37,541)
(1,364)
Closing shareholders deficit
(117,853)
(37,541)
Loss for the year

Net movement in shareholders deficit
08. ULTIMATE PARENT COMPANY

05. CALLED UP SHARE CAPITAL
Allotted, called up and fully paid
50.9 million (2013: 50.9 million)
ordinary shares of 1 each
2014
2013
50,886
50,886
The company is a subsidiary undertaking of New R&R Ice Cream Limited, a

company incorporated in England and Wales.
The ultimate parent undertaking is Riviera Topco Sarl, a company
incorporated in Luxembourg.
.
NOTES
UK
Leeming Bar
R&R Ice Cream UK Ltd,
Richmond House,
Plews Way,
Leeming Bar Industrial Estate,
Northallerton,
North Yorkshire
DL7 9UL
Tel: +44 1677 423 397
Fax: +44 1677 428 102
Cornwall
Kellys of Cornwall Ltd,
Lucknow Road,
Walker Lines Estate,
Bodmin,
Cornwall
PL31 1EZ
Tel: +44 1208 77277
Fax: +44 1208 78269
Skelmersdale
Fredericks Dairies Limited,
Unit 2,
Prospect Place,
Skelmersdale,
Lancashire
WN8 9QD
Tel: +44 1695 713 900
Fax: +44 1695 713 901
GERMANY
Osnabrck
R&R Ice Cream Deutschland
GmbH,
Eduard-Pestel Str.15,
D-49080 Osnabrck,
Germany
Tel: +49 541 9999 - 0
Fax: +49 541 9999 - 200
FRANCE
Vayres
R&R Ice Cream France SAS,
Le Labour - B.P. 13,
33870 Vayres,
France
Tel: +33 557 55 39 00
Fax: +33 557 55 39 29
Ploudern
Rolland SAS,
Kergamet,
29800 Ploudern,
France
Tel: +33 298 20 92 92
Fax: +33 298 20 92 80
Dang-Saint-Romain
Paladine SAS,
La Taille du Moulin vent,
86220 Dang-Saint-Romain,
France
Tel: +33 549 86 38 27
Fax: +33 549 86 45 49
ITALY
Terni
Eskigel SrL,
Via Augusto Vanzetti,
Terni,
Italy
Tel: +39 0744 612111
Fax: +39 0744 304771
POLAND
Mielec
Zielona Budka (Mielec) Spzoo,
ul. Wojska Polskiego 3,
39-300 Mielec,
Poland
Tel: +48 17 788 5501
Fax: +48 17 788 5507
AUSTRALIA
Peters Food Group Limited
254-294 Wellington Road,
Mulgrave
VIC 3170
Tel: +613 9565 7777
Fax: +613 9561 6538

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Bondholder information pack

Year end 2014

our inability to address significant changes in consumer preferences;

increased price, or decreased availability, of commodities we use to produce our products;

adverse changes in general economic conditions and/or reductions in consumer spending;

inclement weather in the regions in which our ice cream is sold;

our inability to effectively compete in our highly competitive industry;

the size and sophistication of our customers;

the loss of any of our major customers;

our dependence on the value and perception of our brands;

our reliance on licences from third parties;

increased shipping prices or disrupted shipping services;

significant damage to any of our factories;

the shipment of contaminated products or lawsuits relating to product liability;

our failure to comply with existing or future government regulations;

costs and liabilities imposed by environmental regulations;

our inability to retain or attract key personnel;

detrimental fluctuations in currency exchange rates;

our inability to successfully integrate our recently acquired businesses;

disruptions in our information technology systems.

BUSINESS HIGHLIGHTS FOR THE YEAR ENDED 31 DECEMBER 2014

103.3 million attributable to Peters, which was acquired in mid-2014;

36.0 million cash balances;

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

types of ice cream to develop and sell.

administrative expenses; and

Income tax (charge) / credit .................

Adjusted EBITDA ...............................

Cost of sales (recurring) .......................

Income tax (charge) / credit .................

Adjusted EBITDA ...............................

Cost of sales (recurring) .......................

Discussion and Analysis of our Results of Operations

Year Ended December 31,

(in thousands of euros)

Year Ended December 31,

(in thousands of euros)

Payments Due By Period

(in thousands of euros)

Purchase commitments(4) ...................................

the assessment of potential deferred tax assets; and

the recognition and measurement of pension obligations and anniversary bonuses.

Determination of Fair Values

Smarties, Aero, Rolo, Toffee

Nestl (via Peters)

Drumstick, Heaven, Drumstick Kit

Germany, Austria, Switzerland,

(except with respect to Drumstick (including

Dairy Milk, Crunchie, Cadbury

Mickey Mouse, Minnie Mouse,

Del Monte Smoothies and Fruitini

cream, in the UK.

the discharge of pollutants into the air and water;

the identification, generation, storage, handling, transportation, disposal, record-keeping, labelling,

noise emissions from our facilities; and

RIC-B0018a R&R Annual Report 2014 V2.qxp_Layout 1 29/04/2015 15:20 Page 2

RIC-B0018a R&R Annual Report 2014 V2.qxp_Layout 1 29/04/2015 15:20 Page 3

Registered No. 05777981

RIC-B0018a R&R Annual Report 2014 V2.qxp_Layout 1 29/04/2015 15:20 Page 4

R&R ICE CREAM PLC | ANNUAL REPORT | 01

Statement of Directors' responsibilities

Independent auditors report to the

Consolidated financial statements

Consolidated statement of changes in equity

R&R 2014 Accounts

R&R 2014 Accounts