Aryzta Ag · SIX:ARYN
Aryzta — H1 2017 Earnings Presentation
36 slides from Aryzta's earnings presentation, Mar 13, 2017
Slide 1: ARYZTA AG H1 Results, FY 2017
ARYZTA AG H1 Results, FY 2017 13 March 2017
Slide 2: Forward Looking Statement
Forward Looking Statement This document contains forward looking statements which reflect the Board of Directors' 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 forwa
Slide 3: Key Developments
Key Developments –– Continued strong cash generation of €99m –– Financing costs reduced by €26m –– Weighted average interest cost reduced to 1.62% –– Increased Syndicated Bank RCF covenant to 4.0x Net Debt: EBITDA –– Extended €614m term loan maturity to February 2019 –– Strategic review of Joint Ven
Slide 4: Group – Underlying Income Statement
ARYZTA Group – Underlying Income Statement Six month period ended 31 January 2017 in EUR ’000 January 2017 January 2016 % Group revenue 1,906,036 1,960,014 (2.8)% EBITA1 158,533 230,832 (31.3)% EBITA margin 8.3% 11.8% (350) bps Joint ventures, net of interest and tax 16,710 13,699 22.0% EBITA includ
Slide 5: H1 2017 Underlying EPS Bridge
H1 2017 Underlying EPS Bridge (30.6)c 158.4c (19.3)% H1 2016 EPS ARYZTA Europe (53.5)c (33.8)% +13.1c 123.2c +8.3% (22.2)% H1 2017 Tax, EPS ARYZTA NCI & Other North America +29.4c +18.6% Finance cost, incl. Hybrid +3.4c +2.1% +3.0c +1.9% Joint Ventures ARYZTA Rest of World 5 © ARYZTA, March 2017
Slide 6: Group Underlying Revenue
ARYZTA Group Underlying Revenue Six month period ended 31 January 2017 in EUR million Europe North America Rest of World Total Group Group revenue 861.8 915.2 129.0 1,906.0 Underlying growth 1.0% (5.2)% 9.5% (1.6)% Acquisitions/(disposals), net (1.8)% (1.7)% – (1.6)% Currency (1.5)% 1.1% 10.8% 0.4%
Slide 7: Group – Quarterly Underlying Revenue
ARYZTA Group – Quarterly Underlying Revenue Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 H1 2017 ARYZTA Europe Volume % 2.1% 2.7% 3.3% 3.1% 1.8% (0.1)% 0.8% Price/Mix % 3.4% 1.1% 0.6% (0.1)% (0.4)% 0.7% 0.2% Underlying growth % 5.5% 3.8% 3.9% 3.0% 1.4% 0.6% 1.0% ARYZTA North America Volume % (9.4
Slide 8: Group – Segmental EBITA
ARYZTA Group – Segmental EBITA Six month period ended 31 January 2017 in EUR ’000 January 2017 January 2016 % ARYZTA Europe 78,085 105,370 (25.9)% ARYZTA North America 65,471 113,129 (42.1)% ARYZTA Rest of World 14,977 12,333 21.4% ARYZTA Group EBITA 158,533 230,832 (31.3)% EBITA Margin January 2017
Slide 9: Joint Venture Underlying Income Statement
Joint Venture Underlying Income Statement Six month period ended 31 January 2017 Picard Signature Total Total January January January January in EUR ’000 2017 2017 2017 2016 Revenue 787,738 55,614 843,352 734,984 EBITDA 126,967 6,475 133,442 118,008 Depreciation (14,792) (2,667) (17,459) (16,231) EB
Slide 10: Integration and Rationalisation Activities
Integration and Rationalisation Activities Six month period ended 31 January 2017 Non-cash Cash Total Total in EUR ’000 January 2017 January 2017 January 2017 January 2016 Net gain / (loss) on disposal of businesses – – – 2,395 Asset write-downs (2,347) – (2,347) (7,379) Acquisition-related costs –
Slide 11: Underlying Net Profit Reconciliation
Underlying Net Profit Reconciliation Six month period ended 31 January 2017 in EUR ’000 January 2017 January 2016 Underlying net profit – continuing operations 109,430 141,074 Intangible amortisation (87,460) (86,370) Tax on amortisation 16,072 17,817 Share of joint venture intangible amortisation a
Slide 12: Cash Generation
Cash Generation Six month period ended 31 January 2017 in EUR ’000 January 2017 January 2016 EBIT 71,073 144,462 Amortisation 87,460 86,370 EBITA 158,533 230,832 Depreciation 70,484 69,025 EBITDA 229,017 299,857 Working capital movement (17,551) 26,707 Working capital movement from debtor securitisa
Slide 13: Net Debt and Investment Activity
Net Debt and Investment Activity Six month period ended 31 January 2017 in EUR ’000 January 2017 January 2016 Opening net debt as at 1 August (1,719,617) (1,725,103) Cash flow generated from activities 99,412 173,041 Disposal of businesses, net of cash and finance leases – 35,992 Proceeds from dispo
Slide 14: Group Financing
ARYZTA Group Financing –– Debt Financing »» Net debt of €1,851m »» Weighted average interest cost of 1.62% »» Interest cover of 4.95x (hybrid as debt) »» Syndicated Bank RCF covenant increased to 4.0x Net Debt: EBITDA for the three tests at 31 July 2017, 31 January 2018 and 31 July 2018 »» Extended
Slide 15: Gross Term Debt Maturity Profile
Gross Term Debt Maturity Profile Gross Term Debt Maturity Profile¹ 13%² 29% 10% 39%² 8% 1% Term Loan Syndicated Bank RCF Schuldschein 1 The term debt maturity profile is set out as at 31 January 2017, adjusted for the term loan maturity extension. Gross term debt at 31 January 2017 is €2,076.7m. Net
Slide 16: ARYZTA Europe
ARYZTA Europe Six month period ended 31 January 2017 22 Bakeries ARYZTA Europe H1 2017 Financial Metrics 18 Countries Revenue (2.3)% Underlying revenue 1.0% Acquisitions/(disposals), net (1.8)% Currency (1.5)% EBITA (25.9)% EBITA margin (290) bps Savoury QSR 8% & Other Food Solutions Top
Slide 17: Europe Revenue Analysis
ARYZTA Europe Revenue Analysis €4.6 m €(20.1) m +0.5% (2.3)% €1.8 m Acquisitions €7.2 m +0.2% Disposals +0.8% Price/Mix Volume €881.7m H1 2016 €(13.4) m Revenue (1.5)% Currency €861.8m (2.3)% H1 2017 Revenue 17 © ARYZTA, March 2017
Slide 18: Europe
ARYZTA Europe –– Slower than expected ramp-up of new bakery capacity in Germany –– Brexit impacting H1 2017 margins; however, pricing recovery expected in H2 2017 –– Swiss customer insourcing of c.€80m of revenue has started, but at a lower than expected pace –– Robust revenue performance across Eur
Slide 19: North America
ARYZTA North America Six month period ended 31 January 2017 ARYZTA North America H1 2017 Financial Metrics Revenue (5.8)% Underlying revenue (5.2)% Acquisitions/(disposals), net (1.7)% Currency 1.1% EBITA (42.1)% EBITA margin (450) bps Hawaii 24 Bakeries 2 Countries Savoury Customer & Ot
Slide 20: North America Revenue Analysis
ARYZTA North America Revenue Analysis €(54.4) m €971.0m (5.6)% H1 2016 Revenue Volume €3.6 m €(16.8) m +0.4% (1.7)% €11.8 m €915.2m Price/Mix (5.8)% +1.1% Disposals H1 2017 Currency Revenue 20 © ARYZTA, March 2017
Slide 21: North America
ARYZTA North America –– Labour cost increases impacting performance –– Previously announced contract renewals resulting in volume reductions and negative operating leverage –– Co-pack revenue losses impacting earlier than anticipated –– Enacting efficiency improvement programmes and price increases
Slide 22: Rest of World
ARYZTA Rest of World Six month period ended 31 January 2017 ARYZTA Rest of World H1 2017 Financial Metrics Revenue 20.3% Underlying revenue 9.5% Currency 10.8 % EBITA 21.4% EBITA margin 10 bps 11 Bakeries 9 Countries Large Retail 3% Savoury & Other 1% Food Solutions Other Top 20 21% Other
Slide 23: Rest of World Revenue Analysis
ARYZTA Rest of World Revenue Analysis €11.5m €129.0m +10.8% +20.3% H1 2017 Revenue Currency €3.4 m +3.1% Price/Mix €6.8 m +6.4% Volume €107.3m H1 2016 Revenue 23 © ARYZTA, March 2017
Slide 24: Rest of World
ARYZTA Rest of World –– Underlying growth momentum from: »» Increasing global approach and support of international customer partnerships »» Expansion of offer to convenience and retail channels »» Organic growth in foodservice through innovative premium food exports from Europe »» Changing dietary
Slide 25: Focus
Focus –– Continuing to focus on customer service, support and food safety –– Increased focus on cost alignment and efficiency initiatives –– Improving revenue growth and operating leverage of well-invested asset base –– Peak capital expenditure cycle completed –– Increased focus on cash generation –
Slide 26: Thank you
Thank you 26 © ARYZTA, March 2017
Slide 27: Appendix
Appendix 27 © ARYZTA, March 2017
Slide 28: Group Balance Sheet
ARYZTA Group Balance Sheet as at 31 January 2017 in EUR ’000 As at January 2017 As at July 2016 Property, plant and equipment 1,610,739 1,594,885 Investment properties 20,771 24,787 Goodwill and intangible assets 3,624,696 3,617,194 Deferred tax on acquired intangibles (201,166) (210,635) Working ca
Slide 29: Net Debt
Net Debt as at 31 January 2017 Outstanding Debt Funding as at 31 January 2017 Principal in EUR `000 Syndicated Bank RCF USD 870m (815,065) Syndicated Bank RCF CAD 45m (32,155) Syndicated Bank RCF CHF 245m (229,300) Term loan facility EUR 614m (614,000) Schuldschein EUR 366m (366,000) Schuldschein US
Slide 30: Hybrid Funding
Hybrid Funding as at 31 January 2017 Outstanding Hybrid Funding as at 31 January 2017 Principal in EUR `000 Hybrid funding – first call date April 2018 CHF 400m (374,367) Hybrid funding – first call date March 2019 EUR 250m (250,000) Hybrid funding – first call date April 2020 CHF 190m (177,824) Hyb
Slide 31: Group – Return on Invested Capital
ARYZTA Group – Return on Invested Capital North Rest Total in EUR million Europe America of World Group 31 January 2017 Group share net assets 1,837 2,524 218 4,579 TTM EBITA 189 196 28 413 ROIC1 10.3% 7.8% 13.1% 9.0% 31 July 2016 Group share net assets 1,903 2,488 198 4,589 TTM EBITA 215 243 26 484
Slide 32: Continuing Operations – Five Year KPIs
Continuing Operations – Five Year KPIs In EUR million July 2012 July 2013 July 2014 July 2015 July 2016 Total / CAGR1 Revenue 2,867.6 3,085.5 3,393.8 3,820.2 3,878.9 8.5% EBITDA 465.2 500.4 589.2 638.3 609.6 8.3% Underlying net profit – continuing operations 246.6 268.4 324.6 330.0 311.5 7.4% ARYZTA
Slide 33: Continuing Operations – Five Year Cash Generation
Continuing Operations – Five Year Cash Generation In EUR million July 2012 July 2013 July 2014 July 2015 July 2016 Five Year Total EBIT 275.0 300.1 362.5 346.0 308.6 1,592.2 Amortisation 99.8 106.6 123.8 168.0 176.2 674.4 EBITA 374.8 406.7 486.3 514.0 484.8 2,266.6 Depreciation 90.4 93.7 102.9 124.3
Slide 34: Continuing Operations – Five Year Net Debt
Continuing Operations – Five Year Net Debt In EUR million July 2012 July 2013 July 2014 July 2015 July 2016 Opening net debt as at 1 August (955.5) (976.3) (849.2) (1,642.1) (1,725.1) Cash flow generated from activities 120.6 93.8 74.1 21.4 266.7 Disposal of businesses, net of cash and finance lease
Slide 35: EUR Closing and Average FX Rates
EUR Closing and Average FX Rates Closing Rates January 2017 July 2016 % Change Swiss Franc 1.0685 1.0855 1.6% US Dollar 1.0674 1.1162 4.4% Canadian Dollar 1.3995 1.4562 3.9% Sterling 0.8489 0.8399 (1.1)% Average Rates January 2017 January 2016 % Change Swiss Franc 1.0820 1.0862 0.4% US Dollar 1.0910
Slide 36: Presentation Glossary
Presentation Glossary –– ‘Joint ventures, net of interest and tax’ – presented as profit from joint ventures, net of interest and tax, before non-ERP amortisation and the impact of associated non-recurring items. –– ‘EBITA’ – presented as earnings before interest, taxation, non-ERP related intangibl