Aryzta Ag · SIX:ARYN
Aryzta — H1 2010 Earnings Presentation
41 slides from Aryzta's earnings presentation, Mar 15, 2010
Slide 1: H1 2010 Results
ARYZTA AG H1 2010 Results 15 March 2010
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward looking statements which reflect management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward look
Slide 3: Food Highlights
Food Highlights Balance Sheet strengthened – Net Debt reduced by €137.6m to €487.9m (H1 2009: €625.5m) – Net Debt : EBITDA 1.69x (H1 2009: 2.32x) – €27.9m dividend payment to equity shareholders in December 2009, represents payment of CHF 0.5324 per share – 10.7% return on investment, growth of 70 b
Slide 4: Our Business
ARYZTA AG Our Business 4 © ARYZTA, March 2010
Slide 5: Our Business
Our Business – Zurich based Swiss AG > Operations in Europe, North America, South East Asia and Australia – Created in 2008 – merger of Hiestand and IAWS August 2008 – Primary listing in Zurich (SIX; ARYN) and secondary listing in Dublin (ISE; YZA) – Holds 71.4% of Origin Enterprises plc (Origin), a
Slide 6: Corporate Structure ARYZTA AG
Corporate Structure ARYZTA AG ARYZTA AG Shareholder 71.4% Food Europe – Coup de Pates – Cuisine de France – Origin – Delice de France – Hiestand Food North America – La Brea Bakery – Otis Spunkmeyer Food Developing Markets – Hiestand 6 © ARYZTA, March 2010
Slide 7: Our Markets: Food Europe
Our Markets Food Europe Food Europe has leading market positions in the speciality bakery market in Switzerland, Germany, Poland, the UK, Ireland and France. In Europe, ARYZTA has a mixture of business to business and consumer brands, including Hiestand, Cuisine de France, Delice de France and Coup
Slide 8: Our Markets: Food North America
Our Markets Food North America Food North America has leading market positions in freshly baked cookies and freshly baked artisan breads. The business has two ico- nic brands which evoke emotional appeal with the US consumer, namely Otis Spunkmeyer and La Brea Bakery. 8 © ARYZTA, March 2010
Slide 9: Our Markets: Food Developing Markets
Our Markets Food Developing Markets ARYZTA has embryonic businesses in Japan, Malaysia and Australia. This gives ARYZTA an excellent opportunity to under- stand the customer diversity and opportunity in this vast market. 9 © ARYZTA, March 2010
Slide 10: Financial Review
ARYZTA AG Financial Review 10 © ARYZTA, March 2010
Slide 11: ARYZTA AG Income Statement
ARYZTA AG Income Statement period ended 31 January 2010 in Euro `000 January 2010 January 2009 % Group revenue 1,394,053 1,571,169 (11.3)% Group operating profit1 114,013 126,450 (9.8)% Share of associates and JVs2 13,635 7,837 Operating profit incl. associates and JVs1 127,648 134,287 (4.9)% Financ
Slide 12: ARYZTA AG - Underlying Revenue Growth
ARYZTA AG - Underlying Revenue Growth period ended 31 January 2010 Food Food N. Developing Total in Euro million Food Europe America Markets Food Group Origin3 Total Group revenue 533.6 254.7 12.6 800.9 593.1 1,394.0 Underlying growth (10.1)% (2.7)% 3.4% (7.6)% (11.9)% (9.5)% Acquisitions and 3.4%1
Slide 13: ARYZTA AG Segmental Profit
ARYZTA AG Segmental Profit period ended 31 January 2010 in Euro `000 January 2010 January 2009 % Food Group1 Food Europe 60,736 64,001 (5.1)% Food North America 35,271 34,294 2.8% Food Developing Markets 2,073 917 126.0% Total Food Group 98,080 99,212 (1.1)% Origin 15,933 27,238 (41.5)% Total Group
Slide 14: Food Group Income Statement
Food Group Income Statement period ended 31 January 2010 in Euro `000 January 2010 January 2009 % Group revenue 800,921 865,078 (7.4)% Group operating profit1 98,080 99,212 (1.1)% Operating margin 12.2% 11.5% Share of JV2 8,468 7,275 Operating profit incl. JV1 106,548 106,487 0.1% Financing costs, n
Slide 15: Food Group Cash Generation - H1 2010
Food Group Cash Generation - H1 2010 in Euro `000 January 2010 EBIT 76,331 Amortisation 21,749 EBITA 98,080 Depreciation 28,044 EBITDA 126,124 Working capital movement (9,968) Dividends received 7,740 Maintenance capital expenditure (6,683) Interest & tax (25,363) Other (475) Cash flow generated fro
Slide 16: Food Group Net Debt and Investment Activity - H1 2010
Food Group Net Debt and Investment Activity - H1 2010 in Euro `000 Food Group Food Group opening net debt as at 31 July 2009 (505,504) Cash flow generated from activities 91,375 Investment capital expenditure (22,591) Dividends paid (30,603) Deferred consideration and acquisition costs (2,128) Forei
Slide 17: Food Group Banking Facilities
Food Group Banking Facilities – Origin debt facilities are standalone and non-recourse to ARYZTA AG – EUR 795m revolving credit facility – matures 20 June 2013 – USD 450m private placement – matures between 13 June 2014 – 13 June 2019 – CHF 200m Swiss bond – matures on 18 March 2015 – USD 200m priva
Slide 18: Food Group Debt Maturity Profile of Gross Debt
Food Group Debt Maturity Profile of Gross Debt* - weighted average maturity c. 7.4 years 2010 2011 2.3% 2012 2013 19.0% 2014 14.1% 2015 17.8% 2016/17 23.4% 2018/19 4.7% 2020/21 7.5% 2022/23 2024/25 3.7% 2026/27 2028/29 7.5% * Food Group gross debt at 31 January 2010 of EUR 757.5m. Food Group net deb
Slide 19: Food Group Funding
Food Group Funding – Marginal incremental cost of debt giving increased financial security from longer term funding – Intend to maintain investment grade credit position – Optimum leverage position in the range of 2x - 3x Net Debt to EBITDA – Extended maturity of debt during period – Complementary c
Slide 20: Return on Investment
Return on Investment Food Europe & Developing Food N. Total in Euro million Markets America Food Group Origin Total 2010 Group share net assets1 1,346 676 2,022 413 2,435 EBITA & JVs / associates cont.3 131 85 216 73 289 ROI 9.7% 12.6% 10.7% 17.6% 11.9% 2009 Group share net assets 1,295 733 2,028 38
Slide 21: Business Review
ARYZTA AG Business Review 21 © ARYZTA, March 2010
Slide 22: Bakery Business
Bakery Business – Bakery everyday food > Basic and sustainable > Indulgent and affordable – Challenge to deliver everyday consumer experience – Investment required for: > Freshly baked goods at point of sale > Varied assortment throughout the day > Consumer appealing concepts > Relevant value propos
Slide 23: Total Baked Goods Market
Total Baked Goods Market Market Value €260bn at RSP Asia Pacific 13% ROTW 22% North America 20% Europe 45% 23 © ARYZTA, March 2010 Based on market research reports produced by GIRA 2006 and Euromonitor 2007
Slide 24: Speciality Bakery Market
Speciality Bakery Market Speciality Bakery Market – €30bn at RSP ROTW 6% €1.8bn Asia Pacific 17% €5.1bn Europe 47% €14.1bn North America 30% €9bn 24 © ARYZTA, March 2010 Based on market research reports produced by GIRA 2006 and Euromonitor 2007
Slide 25: Value Added Business Model
Value Added Business Model Restaurants People & Technology Cumulative value added Convenience Catering Retailing Delivery & Execution Delivered through consumer Manufacture channels Quick Service Hotels & Restaurants Leisure Primary Sourcing Multiple Retail 25 © ARYZTA, March 2010
Slide 26: Food Europe - H1 2010
Food Europe - H1 2010 – Underlying revenue decline of 10.1% in the period – UK and Ireland > Extremely tough trading conditions > Economic downturn continues > Credit concerns still impacting revenues – Continental Europe > Revenue growth from new customers > Investment in additional field sales sta
Slide 27: Food North America - H1 2010
Food North America - H1 2010 – Underlying revenue declined by 2.7% in the period > High comparator of 16.6% in H1 2009 – Revenue weakness across most business channels – Consumer continues to conserve their dollar > As a result customers not making decisions required to stimulate revenue growth – Ot
Slide 28: Origin
Origin – Released H1 results on Thursday 11th March > Available on www.originenterprises.com – Origin has performed well in H1 against difficult trading background > Masstock delivered a strong performance in particular – Year-on-year comparisons are impacted by increased seasonality in agricultural
Slide 29: Summary
Summary – Tough economic conditions throughout the period – Positive signals about economic recovery - yet to reach consumer – Consumer switching channels - food service more impacted than retail – Reduced consumer spend impacts customer – Lack of credit impacts customer – It is all about the consum
Slide 30: Outlook
Outlook – FY2010 guidance for underlying EPS of 224 cent remains unchanged – Focus on operating efficiency (ARYZTA Technology Initiative) with well invested bakery assets – Excellent cash generation and balance sheet strength – Fragmented bakery market offers opportunities for disciplined strategic
Slide 31: Appendix – Origin Financials
ARYZTA AG Appendix 1 – Origin Financials 31 © ARYZTA, March 2010
Slide 32: Origin Income Statement
Origin Income Statement period ended 31 January 2010 in Euro `000 January 2010 January 2009 % Group revenue1 593,132 706,091 (16.0)% Group operating profit2 15,933 27,238 (41.5)% Operating margin3 2.7% 3.8% Share of associates and JV4 5,167 562 Operating profit incl. associates and JV2 21,100 27,800
Slide 33: Origin Underlying Net Profit Reconciliation
Origin Underlying Net Profit Reconciliation in Euro `000 January 2010 Reported net profit 10,228 Amortisation of intangible assets 2,002 Tax on amortisation (281) Underlying net profit 11,949 Underlying fully diluted EPS1 (cent) 8.7 1 The share denominator for the period ended 31 January 2010 is 137
Slide 34: Appendix – Other Financial Information
ARYZTA AG Appendix 2 – Other Financial Information 34 © ARYZTA, March 2010
Slide 35: ARYZTA AG Underlying Net Profit Reconciliation
ARYZTA AG Underlying Net Profit Reconciliation in Euro `000 January 2010 Reported net profit 64,371 Amortisation of intangible assets 23,751 Tax on amortisation (5,341) Underlying net profit 82,781 Dilutive impact of Origin management incentives (251) Underlying fully diluted 82,530 Underlying fully
Slide 36: Food Group Underlying Net Profit Reconciliation
Food Group Underlying Net Profit Reconciliation in Euro `000 January 2010 Reported net profit 57,065 Amortisation of intangible assets 21,749 Tax on amortisation (5,060) Underlying net profit 73,754 36 © ARYZTA, March 2010
Slide 37: ARYZTA AG Balance Sheet
ARYZTA AG Balance Sheet in Euro `000 As at January 2010 Property, plant and equipment 655,288 Investment properties 63,083 Goodwill and intangible assets 1,508,187 Associates and joint ventures 147,270 Net working capital 40,135 Other segmental liabilities (89,563) Segmental net assets 2,324,400 Net
Slide 38: Food Group Balance Sheet
Food Group Balance Sheet in Euro `000 As at January 2010 Property, plant and equipment 570,745 Investment properties 3,869 Goodwill and intangible assets 1,395,017 Joint venture 60,118 Net working capital (18,884) Other segmental liabilities (40,217) Segmental net assets 1,970,648 Net debt (487,857)
Slide 39: FX Rates
FX Rates January 10 January 09 % Closing Rates Sterling 0.8648 0.9397 8.0% US Dollar 1.3985 1.2952 (8.0)% Swiss Franc 1.4700 1.4981 1.9% Canadian Dollar 1.4870 1.6248 8.5% Average Rates Sterling 0.8923 0.8356 (6.8)% US Dollar 1.4574 1.3796 (5.6)% Swiss Franc 1.5080 1.5523 2.9% Canadian Dollar 1.5504
Slide 40: Thank you!
ARYZTA AG Thank you! 40 © ARYZTA, March 2010
Slide 41: Investor Information
Investor Information Investor Meeting Requests* [email protected] *All enquiries regarding investor meeting requests should be sent by email. Company Contact Hilliard Lombard Head of Group Finance and Communications ARYZTA AG Talacker 41 8001 Zurich Switzerland Tel: +41 (0) 44 583 42 00 F