Barry Callebaut AG · SIX:BARN
Barry Callebaut — H1 2015/16 Earnings Presentation
29 slides from Barry Callebaut's earnings presentation, Apr 6, 2016
Slide 1: Half-Year Results 2015/16
Half-Year Results 2015/16 Analysts Conference April 6, 2016
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 2015/16 Financial Review Strategy & Outlook Q&A Page 3 April 6, 2016 HY 2015-16 Results - Analyst Conference
Slide 4: Highlights HY 2015/16 - CEO Antoine de Saint-Affrique
Highlights HY 2015/16 - CEO Antoine de Saint-Affrique April 6, 2016
Slide 5: Solid volume growth, strong Free cash flow
HY Results 2015/16 Solid volume growth, strong Free cash flow Sales volume up +4.5%, significantly outpacing the market Strong growth in the chocolate business, intentionally phasing out unprofitable contracts in Global Cocoa Volume growth supported by all key growth drivers Gross Margins improved +
Slide 6: Outperforming the market, growth driven by main Chocolate Regions
HY Results 2015/16 Outperforming the market, growth driven by main Chocolate Regions Sales Volume (in tonnes) +12.6% -7.8%1 +13.4% 4'562 -19’406 +4.5% 29'583 +6.5% 25'151 933’327 893’437 Group HY 2015 EMEA Americas Asia Global Cocoa Group HY 2016 Market Volume growth 2 -2.2% -3.7% -1.7% -2.6% 1 Due
Slide 7: Positive contribution from all key growth drivers
HY Results 2015/16 Positive contribution from all key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth +12.5% vs prior year +10.3% vs prior year +7.4% vs prior year HY 2015/16 CAGR 5 year +17.7% +26.5% +6.5 % Volume 11.0% % 32.4% 35.3
Slide 8: Successful stories in our Food Manufacturers business
HY Results 2015/16 Successful stories in our Food Manufacturers business Two new long-term outsourcing agreement in emerging markets with local players Decorations business growing at double-digit Belgian customer launches the first chocolate brand in Europe that makes a cocoa flavanol health claim
Slide 9: Solid growth in Gourmet & Specialties, based on strong strategic execution
HY Results 2015/16 Solid growth in Gourmet & Specialties, based on strong strategic execution Solid growth of the two Global brands: Callebaut and Cacao Barry around the globe, while maintaining profitability Growing weight of emerging markets in overall growth Cacao Barry next generation packaging
Slide 10: Expanding our Specialties business through bolt-on acquisition
HY Results 2015/16 Expanding our Specialties business through bolt-on acquisition Acquisition of commercial beverages vending activities of FrieslandCampina Kievit Becoming a leading supplier of vending powder mixes in Europe, adding technical and innovation capabilities Additional volume of about 2
Slide 11: Good progress achieved on Cocoa Leadership Project
HY Results 2015/16 Good progress achieved on Cocoa Leadership Project Commercial Operations Global leverage leadership leadership SKU reduction on- Centralized Manufacturing going combined cocoa footprint reduced in Asia ratio management Customer in place segmentation Working Capital Setting up Glob
Slide 12: Financial Review – CFO Victor Balli
Financial Review – CFO Victor Balli April 6, 2016
Slide 13: Solid volume growth, profitability as anticipated, improved cash flow
HY results 2015/16 Solid volume growth, profitability as anticipated, improved cash flow Group performance HY 2015/16 % vs prior year % vs prior year (In CHF mio.) (in CHF) (in CHF) in local currencies Sales Volume Total 933,327 +4.5% (in tonnes) Sales Revenue 3,424.3 +5.6% +11.7% Gross Profit 437.9
Slide 14: Good performance in the chocolate business, Global Cocoa as anticipated
HY results 2015/16 Good performance in the chocolate business, Global Cocoa as anticipated EMEA Americas Asia Pacific Global Cocoa 4% 4% 28% 25% 44% 27% 25% Volume growth +6.5% +13.4% +12.6% -7.8% EBIT growth in +1.3% +4.3% +20.7% -29.9% local currencies EBIT growth in CHF -8.1% +4.6% +17.2% -45.1%
Slide 15: Gross profit up +4.7%, driven by solid volume growth and better product mix
Gross Profit HY 2015/16 Gross profit up +4.7%, driven by solid volume growth, better product mix and despite difficult cocoa powder margins in CHF mio. -1.9% +4.7% +12.5 +29.3 467.1 -21.0 446.2 437.9 -29.2 Gross Profit Volume Product Mix Cocoa Processing Gross Profit HY FX impact Gross Profit HY 201
Slide 16: Slowly improving cocoa product pricing environment
Cocoa processing profitability Slowly improving cocoa product pricing environment; contracts from lowest market situation (2015) being executed in current business year European combined ratio - 6 months forward ratio 4.00 Combined ratio 3.00 2.96 (March 2016) Butter ratio 2.00 1.00 Powder ratio 0.0
Slide 17: EBIT flat excluding negative FX impact
EBIT HY 2015/16 EBIT flat excluding negative FX impact, despite lower cocoa result and restructuring costs in CHF mio. -8.4% -0.3% +20.9 219.2 218.6 -16.2 -5.3 200.7 -17.9 EBIT Additional Additional SG&A One-off EBIT FX impact EBIT H1 2014/15 Gross Profit from business restructuring H1 2015/16 H1 20
Slide 18: Net Profit down 18.5%, due to higher financial expenses and FX loss
From EBITDA to Net Profit Net Profit down 18.5%, due to higher financial expenses, a foreign exchange loss, as well as higher income taxes in CHF mio. 270.9 -70.2 FX loss mainly related to Tax rate 200.7 -68.1 Brazil 18.6% vs 17.5% in prior year -18.5% -24.7 132.4 107.9 EBITDA Depreciation EBIT Net
Slide 19: 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 Average HY vs. 300% prior year 250% Cocoa beans 200% +10.9% Sugar world 150% +5.6% 100% Sugar EU -13.8% 50% Milk powder -12.3% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2
Slide 20: Significant reduction in working capital
Net Working Capital Significant reduction in working capital, mainly due to an improvement in Inventories in CHF mio. Receivables Stocks Payables -11.8% +82 +36 1’567 +37 -165 -57 +56 +1’382 -42 -131 Net Growth Price and Growth Reduction Price and Growth Price impact Others and Net Working impact op
Slide 21: Efforts on reducing working capital and CAPEX start to pay off
Free Cash Flow Efforts on reducing working capital and CAPEX start to pay off, improved cash flow generation in CHF mio. 10.3% 290 -36 263 +58 (PY -42) (PY -211) 220 0 -1 -91 (PY -128) Operating Operating Change in Interest paid and CAPEX M&A Others Free Cash Flow Cash Flow Cash Flow Working Capital
Slide 22: Deleveraging of the company and improvement of key financial ratios
Balance Sheet & key ratios Deleveraging of the company and improvement of key financial ratios remain a high priority Feb 16 Aug 15 Feb 15 Total Assets [CHF m] 5'509.9 5'429.4 5'433.4 Net Working Capital [CHF m] 1'382.3 1'529.7 1'566.6 Non-Current Assets [CHF m] 2'253.4 2'185.5 2'139.5 Net Debt [CHF
Slide 23: Strategy & Outlook – CEO Antoine de Saint-Affrique
Strategy & Outlook – CEO Antoine de Saint-Affrique April 6, 2016
Slide 24: Our successful and long-term strategy remains unchanged
Our successful and long-term strategy remains unchanged “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable, 4 strategic Innovation profitable pillars growth Cost Leadership Sustainable Cocoa Page 24 April 6, 2016 HY 2015-16 Results - Analyst Conference
Slide 25: Setting up the path towards smart growth
Setting up the path towards “smart growth” Focus on consistent, above market-growth and enhanced profitability: “SMART GROWTH” Sustainable growth Margin accretive growth Accelerated growth in Gourmet, Specialties and emerging markets Return on Capital and greater focus on Free cash flow Talent & Tea
Slide 26: We see significant growth opportunities ahead
We see significant growth opportunities ahead Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Low market share 70% in emerging markets still 20% market share globally in-house production Currently low consumption Low presence in emerging Top 5 chocolate players
Slide 27: While we continue to fine-tune the execution of our strategy
While we continue to fine-tune the execution of our strategy in different areas Talent Management & Leveraging our capabilities Digital Capabilities Carreer development in Innovation As of April 1 2016, new Cross-fertilisation of FM Stronger digital CHRO is part of the and Gourmet presence in both F
Slide 28: Continued challenging market environment; mid-term targets confirmed
Outlook Continued challenging market environment; mid-term targets confirmed Outlook 2015/16 As anticipated in Nov 2015: challenging fiscal year 2015/16 due to the current cocoa products market, which will temporarily affect profitability Optimistic for the chocolate business Mid-term guidance (unti
Slide 29: Thank you
Thank you Page 30 April 6, 2016 HY 2015-16 Results - Analyst Conference