Barry Callebaut AG · SIX:BARN
Barry Callebaut — FY2017/18 Earnings Presentation
32 slides from Barry Callebaut's earnings presentation, Nov 7, 2018
Slide 1: Full Year Results 2017/18
Full Year Results 2017/18 Media and Analysts/Institutional Investors’ Conference November 7, 2018 November 7, 2018
Slide 2: Cautionary note
Cautionary note Certain statements in this presentation regarding the business of Barry Callebaut are of a forward- looking nature and are therefore based on management’s current assumptions about future developments. Such forward-looking statements are intended to be identified by words such as “be
Slide 3: Agenda
Agenda Highlights FY 2017/18 – CEO Antoine de Saint-Affrique Financial review FY 2017/18 – CFO Remco Steenbergen Strategy & Outlook – CEO Antoine de Saint-Affrique Q&A – CEO & CFO Page 3 November 7, 2018
Slide 4: Highlights FY 2017/18
Highlights FY 2017/18 November 7, 2018
Slide 5: Strategy delivering strong results across all regions
FY Results 2017/18 Strategy delivering strong results across all regions Sales volume growth* Sales revenue growth (in local currencies) +6.3% +0.1% EBIT Net profit (CHF million) (CHF million) 554.0 357.4 Free cash flow Dividend (CHF million) (CHF per share) 311.9 24.00 * Compared to Global Chocolat
Slide 6: Highlights 2017/18
Highlights 2017/18 Fourth type of D'Orsogna Cocoa & Forests Gertrude Hawk Barry Callebaut Nestlé launches Ruby chocolate: completed Initiative signed Ingredients 10 years in China KitKat in Japan & Ruby completed South Korea Sept 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Jan 2018 Ruby: NCA Chocolate
Slide 7: Strong sales volume growth, consistently above the market
Quarterly volume evolution Strong sales volume growth, consistently above the market Quarterly volume growth vs prior year FY growth 16/17 FY growth 17/18 +4.4% +6.3% +9.2% +8.0% +8.1% Chocolate (FM and Gourmet & Specialties) +12.6% +7.4% Global Cocoa +4.8% +5.5% +4.8% +4.7% +0.3% +1.1% +2.3% +8.1%
Slide 8: Positive contribution from all our key growth drivers
FY Results 2017/18 Positive contribution from all our key growth drivers Volume growth vs prior year 35.4% +9.1% Emerging markets +14.0% excl.Cocoa Key growth drivers 33.8% Long-term outsourcing crucial to +5.6% & strategic partnerships continuously outperform the market 11.9% Gourmet & +7.7% Specia
Slide 9: Good momentum continued
Expansion Good momentum continued Double-digit growth Driving long-term Strong growth of our outsourcing & strategic Gourmet & Specialties in key emerging markets partnerships business Page 9 November 7, 2018
Slide 10: We drive value through innovation, leading on trends across segments
Innovation We drive value through innovation, leading on trends across segments Page 10 November 7, 2018
Slide 11: Cost Leadership
Cost Leadership Global transformational projects to drive growth and leverage Supporting the business Transforming Finance Driving operational excellence strategy through Information function through Finance across cocoa and chocolate Technology enablers Operational Excellence value chain Supporti
Slide 12: Forever Chocolate increasing impact
Susatinability Forever Chocolate increasing impact Achievements FY 2017/18 >130,000 cocoa 2.1 million cocoa 44% of cocoa and other raw 24% of factories on farms mapped seedlings distributed materials sourced sustainably renewable energy Page 12 November 7, 2018
Slide 13: Financial Review
Financial Review November 7, 2018
Slide 14: Strategy delivering strong results
FY Results 2017/18 Strategy delivering strong results Group performance FY 2017/18 % vs prior year 1) % vs prior year 1) (In CHF mio.) (in CHF) (in CHF) in local currencies Sales Volume Total (in tonnes) 2,035,857 +6.3% Sales Revenue 6,948.4 +2.1% +0.1% Gross Profit 1,157.1 +20.7% +17.2% EBIT Total
Slide 15: All Regions contributed to top- and bottom-line growth
FY Results 2017/18 All Regions contributed to top- and bottom-line growth Group Sales Volume: 925,144 2,035,857 549,287 tonnes tonnes tonnes 455,649 105,777 tonnes tonnes EMEA Americas Asia-Pacific Global Cocoa FY volume growth +6.8% +6.0% +16.2% +3.9% EBIT growth in +11.2%* +9.2% +20.2% +28.3% loca
Slide 16: Gross profit up +17.2% in local currencies
Gross Profit FY 2017/18 Gross profit up +17.2% in local currencies, driven by strong product and customer mix, Cocoa business maintained strong momentum In CHF mio +20.7% in CHF +17.2% in LC +33.5 1’157.1 +48.0 1’123.6 +77.9 -21.5 +60.4 958.8 Gross Profit Volume Product/ Cocoa Additional Gross Profi
Slide 17: Combined ratio remains at favorable level
Cocoa processing profitability Combined ratio remains at favorable level European combined ratio - 6 months forward ratio* FY 2017/18 5.00 4.00 Combined ratio 3.7 3.00 Butter ratio 2.00 Powder ratio 1.00 0.00 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 *For co
Slide 18: Operating profit up +21.2% in local currencies
EBIT FY 2017/18 Operating profit up +21.2% in local currencies, well above volume growth In CHF mio +20.4% +21.2% +164.8 +18.2 554.0 535.8 -49.0 -22.1 460.2 442.1 -18.1 EBIT Non-recurring EBIT Additional Additional Scope, Other EBIT FX impact EBIT FY 2016/17 FY 2016/17 Gross Profit SG&A FY 2017/18 F
Slide 19: Long-term EBIT per tonne development
Long-term EBIT per tonne development Increase in EBIT thanks to enhanced product and customer mix and continued improvement in Cocoa business 312 312 290 283 EBIT per tonne 282 274 279 in constant currencies 271 251 EBIT per tonne in CHF 286 231 272 219 256 242 231 223 +6.7% 2’036 Volume in kMT 1’71
Slide 20: Net Profit recurring is up +35.9%
EBITDA to Net Profit Net Profit recurring is up +35.9% as a result of great profitability and lower net finance cost items In CHF mio 728.3 (+23.0%) *Tax rate = 21.1%, or 18.2% excl. tax reform one-time impact 554.0 Prior year = 17.0% (+20.4%) -174.2 +35.9% -101.1 357.4 -95.5 +18.1 281.1 263.0 EBITD
Slide 21: Volatile cocoa bean prices, sugar and dairy below prior year
Raw material price evolution Volatile cocoa bean prices, sugar and dairy below prior year FY 2017/18 2.5 Change Sept 17 – Aug 18 2 1.5 Sugar world -14% Cocoa beans 1 +11% Milk powder +0% 0.5 Sugar EU -34% 0 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep.2014 Sep.2015 Sep.2016 Sep.2017 Sep
Slide 22: Solid Free cash flow generated from higher profitability
Free Cash Flow Solid Free cash flow generated from higher profitability, relatively stable working capital and CAPEX discipline In CHF mio +23.0% 728 -35 592 (PY +211) -156 (PY -141) 312 (PY +476) -218 -11 (PY -220) (PY +23) EBITDA recurring EBITDA recurring Change in Interest Capex Others FCF FY 20
Slide 23: Positive development of all key financial ratios
Balance Sheet & key ratios Positive development of all key financial ratios (in CHF mio) Aug 2017/18 Aug 2016/17 Total Assets CHF m 5,832 5,467 Net Working Capital CHF m 1,074 1,043 Non-Current Assets CHF m 2,506 2,478 Net Debt CHF m 1,074 1,111 Shareholders’ Equity CHF m 2,270 2,111 Deb/Equity rati
Slide 24: Proposed payout of CHF 24.00 per share, an increase of 20.0%
Dividend Proposed payout of CHF 24.00 per share, an increase of 20.0% 39% 39% 37%* Payout ratio 35% 33% 33% 357 Proposed dividend 281 255 240 223 219 CHF 24.00 per share Payout of 37% of Net Profit Net Profit in CHF mio. 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Timetable for dividend +66%
Slide 25: Changes in the Board
Proposals to the AGM: Elections Changes in the Board James (Jim) Donald will not stand for reelection Board member since 2008 and Chairman of the Nomination & Compensation Committee All other Board members will stand for reelection for a term of office of one year Andreas Schmid Proposed for
Slide 26: Strategy & Outlook
| (() | Strategy & Outlook
Slide 27: Our long-term strategy remains unchanged
Our long-term strategy remains unchanged “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable growth Margin accretive growth 4 strategic Innovation ‘Smart Accelerated growth in pillars Growth’ Gourmet, Specialties and emerging markets Cost Leadership Return on Capital
Slide 28: Recent transactions underline growth potential
Expansion Recent transactions underline growth potential Long-term supply agreement with Burton’s Biscuit Burton’s Biscuit Company, UK’s second biggest biscuit manufacturer Supply of over 12,000 tons of chocolate and compound per year Expand production capacity in the UK Closing expected b
Slide 29: Grow talents, grow business
Talent & Teams Grow talents, grow business Foster a performance and values driven culture Performance management program to strengthen strategic alignment Annual Chairman's Award and Value Awards Grow and strengthen talent pool More systematic approach to talent development Renewed learn
Slide 30: Our focus areas in FY 2018/19
Our focus areas in FY 2018/19 Grow consistently Maintain strong momentum in developed countries Further strengthen our presence in the high-potential Emerging Markets and value adding segments Deploy and leverage the power of our recent acquisitions and innovations Grow profitably Create
Slide 31: Mid-term guidance confirmed, new guidance in first half 2018/19
Outlook Mid-term guidance confirmed, new guidance in first half 2018/19 Outlook Continued execution of our ‘smart growth’ strategy, good visibility on volume growth and healthy global demand, give us confidence to achieve mid-term guidance. Mid-term guidance until 2018/19: Average volume growth
Slide 32: Thank you
Thank you Page 32 November 7, 2018