Barry Callebaut AG · SIX:BARN
Barry Callebaut — H1 2014/15 Earnings Presentation
31 slides from Barry Callebaut's earnings presentation, Apr 1, 2015
Slide 1: Half-Year Results 2014/15 Analysts Conference
Half-Year Results 2014/15 Analysts Conference April 1, 2015 April 1, 2015
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 HY 2014/15 Financial Review Strategy & Outlook Q&A Page 3 April 1, 2015 Half-year Results - Analysts Conference
Slide 4: Solid growth with strong profit improvement
Half-year Results 2014/15 Solid growth with strong profit improvement Sales Volume EBIT Net profit for the growth period +8.7% in CHF +10.7% in CHF +2.0% (Q1: 0.2%; Q2: +3.9%) +13.0% in L.c. +16.3% in L.c. Volume growth EBIT per Tonne Strong profit driven by improvement Western Europe, +6.6% in CHF
Slide 5: Volume growth fueled by main Regions, outperforming the market
HY Results 2014/15 Volume growth fueled by main Regions, outperforming the market Growth (tonnes) vs. prior +2.0% year +1.2% +5.8% +1.9% 3'002 2’002 +2.1% 4'051 8'085 893’437 876’297 Sales Volume Europe Americas Asia Global Cocoa Sales Volume HY 2013/14 HY 2014/15 Market Volume growth * -1.1% -2.0%
Slide 6: …along our three key growth drivers
HY 2014/15 …along our three key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic partnerships Volume growth +1.7% vs prior year +5.0 % vs prior year +6.0 % vs prior year CAGR 5 year +17.3% +21.0% +6.0 % Volume 33% 31% % of total Group 11% Volume Page 6 April 1,
Slide 7: Recent development of key growth drivers
HY 2014/15 Recent development of key growth drivers Emerging Markets Outsourcing & Strategic partnerships Strong volume growth in South America Additional volume from current Brazilian business double-digit growth partnerships agreements Opening of Chocolate factory in Chile Difficult environment in
Slide 8: Gourmet & Specialties - Key achievements in first 6 months
HY 2014/15 Gourmet & Specialties- Key achievements in first 6 months HY 14/15 LEAD & EXPAND Gourmet volumes accelerating in Q2, outperforming the foodservice market through education and inspiration Leading the way through successful innovations with Cacao Barry Purity from Nature and Callebaut Hot
Slide 9: Highlights HY 2014/15
Highlights HY 2014/15 Expansion of Brazilian Inaguration of the first Inaguration new CHOCOLATE Signing of outsourcing Inaguration new CHOCOLATE Chocolate factory chocolate factory in Chile ACADEMY TM in Dubai agreement with WFC (USA) ACADEMY TM in Moscow Oct 2014 Dec 2014 Jan 2015 Feb 2015 March 20
Slide 10: Agenda
Agenda Highlights HY 2014/15 Financial Review Strategy & Outlook Q&A Page 10 April 1, 2015 Half-year Results - Analysts Conference
Slide 11: Accelerating volume growth, strong profitability
HY 2014/15 Accelerating volume growth, strong profitability Group performance HY 2014/15 % vs prior year % vs prior year (in CHF mio.) (in CHF) (in local currencies) Sales Volume (in tonnes) 893,437 2.0% Sales Revenue 3,244.2 11.6% 14.5% Gross Profit 446.2 5.8% 9.5% EBIT 219.2 8.7% 13.0% EBIT per to
Slide 12: Strong top and bottom-line performance of main Regions Europe and Americas
HY 2014/15 Strong top and bottom-line performance of main Regions Europe and Americas Europe Americas Asia Pacific Global Cocoa 4% 4% 28% 28% 43% 25% 25% Volume growth +2.1% +1.9% +5.8% +1.2% EBIT growth in +15.8% +12.4% +4.0% -39.6% CHF EBIT growth in +21.9% +9.5% +7.1% -36.4% local currencies Page
Slide 13: Challenging cocoa market environment, negative impact from the cocoa combined ratio
Cocoa processing profitability Challenging cocoa market environment, negative impact from the cocoa combined ratio European combined ratio- 6 months forward ratio 4.00 3.00 Combined ratio 2.75 2.00 Butter ratio 1.00 Powder ratio 0.00 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 For cocoa
Slide 14: Gross profit up +9.5% mainly due to better product & customer mix
Gross Profit HY 2014/15 Gross profit up +9.5% maily due to better product & customer mix and focus on margins * Without Cocoa in mCHF Processing impact +12.1% +5.8% +9.5% +53.6 461.7 -12.5 446.2 -10.0 +9.0 -15.5 421.6 Gross Profit Volume Product Mix Cocoa Add. Gross Profit FX impact Gross Profit H1
Slide 15: Significant improvement at Operating Profit level
EBIT HY 2014/15 Significant improvement at Operating Profit level, through higher focus on margins, better product mix and tigher cost control in mCHF FX translation impact for FY, at current rates estimated up to -30 mio CHF +8.7% +13.0% +40.1 227.9 -8.5 219.2 -5.4 -8.7 201.7 EBIT Additional Additi
Slide 16: Improvement of the EBIT per tonne continues
6-year EBIT per tonne development Improvement of the EBIT per tonne comtinues. On track to achieve our mid-term guidance 312 282 290 285 EBIT per tonne in CHF 274 (at constant currencies) 282 286 251 245 EBIT per tonne in CHF 256 (as reported) 242 223 +9.1% 1’717 1’378 1’536 1’210 1’269 893 Volume i
Slide 17: Cocoa bean price still at relatively high levels
Raw materials evolution Cocoa bean price still at relatively high levels, other raw materials below prior year HY 14/15 HY vs. prior year 300% 250% Cocoa beans +12% 200% Sugar world -2% 150% 100% Sugar EU -23% Milk powder 50% -40% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep
Slide 18: Good working capital management
Net Working Capital Good working capital management with negative impact only from higher cocoa bean prices in CHF mio. Receivables Stocks Payables +4.3% +202 -17 +41 -91 +15 1’567 +28 1’501 -113 Net Growth Operational Growth Price impact Growth Price impact Others and Net Working impact improvement
Slide 19: High cocoa bean price levels still weighing on our Balance Sheet and key ratios
Balance Sheet & key ratios High cocoa bean price levels still weighing on our Balance Sheet and key ratios Feb 15 Aug 14 Feb 14 Total Assets [CHF m] 5,433.4 5,167.5 5,106.9 Net Working Capital [CHF m] 1,566.6 1,674.6 1,501.4 Non-Current Assets [CHF m] 2,139.5 2,175.6 2,068.6 Net Debt [CHF m] 1,790.6
Slide 20: Enough headroom for further growth and raw material price fluctuations
Available Financing Enough headroom for further growth and raw material price fluctuations As of 28 Feb 2015 CHF 3,830 mio ABS CHF 791 mio. Various Short term uncommitted 44.9% facilities EUR 600 mio. Domestic Commercial Paper Programme CHF 2,111 mio 3-5 years Various bilateral LT loans EUR 175 mio.
Slide 21: Agenda
Agenda Highlights HY 2014/15 Financial Review Strategy & Outlook Q&A Page 21 April 1, 2015 Half-year Results - Analysts Conference
Slide 22: Our proven four-pillar strategy is the basis for long-term success
The Barry Callebaut Group’s growth strategy Our proven four-pillar strategy is the basis for our long-term business success “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable, 4 strategic Innovation profitable pillars growth Cost Leadership Sustainable Cocoa Page 22
Slide 23: Significant further opportunities with three key growth drivers
Expansion Significant further opportunities with three key growth drivers Potential volume of 3 mio tonnes BC with 25% market share 80% in emerging markets is captive Acquisitions pipeline market Adjacent products Increase distribution points Global market (2% volume growth long-term) Outsourcing &
Slide 24: Strong, structured innovation funnel to support additional volume growth
Innovation Strong, structured innovation funnel to support additional volume growth Project B Project A I D Project J C L E Project C O A Pure Project D A N U Project E Project K T Project M N Sweet Project G G R C Project H A A H Project L T C Project I T E G Controlled Fermentation: Special yeast
Slide 25: Strengthening efficiency, optimizing and enabling for future growth
Cost Leadership Strengthening efficiency, optimizing and enabling for future growth Intention to create a Shared Service Center (SSC) for Europe in Poland Łódź Scope: Transactional activities performed in Europe Benefits: Increase operational efficiency and create economies of scale and skills Local
Slide 26: Sustainable cocoa – Leading the industry through innovation
Sustainable Cocoa Sustainable cocoa – Leading the industry through innovation, implementation and impact «Cocoa CocoaAction Life» (Industry Collaboration) «Learn to «Vision for grow» Customers Change» initiatives targetting to switch to sustainably sourced cocoa by Other 2020 customer «Cocoa plans P
Slide 27: Outlook
Outlook Market/ Industry Outlook Long-term growth in chocolate and cocoa products markets remains intact Significant opportunities along the key growth drivers Mid-term Guidance* On average 6-8% volume growth per year, and EBIT per tonne to reach CHF 256 by 2015/16 * Barring any unforseable events ;
Slide 28: Agenda
Agenda Highlights HY 2014/15 Financial Review Strategy & Outlook Q&A Page 28 April 1, 2015 Half-year Results - Analysts Conference
Slide 29: Summary
HY 2014/15 Summary Accelerating volume growth, in particular in Western Europe and Americas Volume growth well supported by key growth drivers: Outsourcing and Gourmet Significant profit improvement, due to good product mix and focus on margins and despite negative combined cocoa ratio and negative
Slide 30: Appendix
Appendix April 1, 2015
Slide 31: Cash flow above prior year, mainly impacted from high cocoa bean prices
Cash Flow Cash flow above prior year, mainly impacted from high cocoa bean prices in CHF mio. +1.9% 258 263 -211 18 +131 -128 -42 -31 Operating Operating Investment Capital Interest paid CF from other Cash flow Net decrease Cash Flow Cash Flow in Working Expenditures and income activities from finan