Emmi Ag · SIX:EMMN
Emmi — Helvea Swiss Equities Conference 2008
28 slides from Emmi's conference presentation, Jan 11, 2008
Slide 1: Helvea Swiss Equities Conference
Helvea Swiss Equities Conference Bad Ragaz, 11 January 2008 Reto Conrad, CFO Stephan Wehrle, Media & Investor Relations Bild
Slide 2: Agenda
Agenda Emmi Group at a Glance Dairy Industry – Market Environment Overview first half of 2007 and Outlook Helvea Swiss Equities Conference – 11 January 2008 Page 1
Slide 3: Emmi Group - Overview
Emmi Group - Overview The leading dairy company in Switzerland § Emmi is the leading dairy company in Switzerland § Emmi is the leading company for Swiss cheese worldwide § In the first half of 2007, Emmi posted net sales of CHF 1.2 billion § Emmi employs a total of 3’300 people in Switzerland, Euro
Slide 4: Strong growth through acquisitions
Strong growth through acquisitions Professional and rapid integration of acquired companies 1998 1999 2000 2001 2002 2003 2004 2005 2006 Distribution Cheese Dairy Coop Zingg AG Cheese Dairy Craamer (NL) Biedermann Roth Cheese USA Company Centre Coop Emmi Interfrais Burra AG business SDF Ostermundige
Slide 5: Strong burst of growth
Strong burst of growth Sales trends 2001 – 2006 2'500 in CHF million § 15.2 % growth in a highly 2'250 competitive market 2'000 509 environment 1'750 444 1'500 414 447 § CAGR overall 13.1 % 1'250 195 256 § CAGR international 21.2 % 1'000 1826 750 1'583 1'465 1'479 500 1'068 1'133 250 0 2001 2002 200
Slide 6: Business model
Business model Growth via brand concepts and specialities Contraction in standard products in Switzerland Dairy products Fresh products 29.9 % (CHF 363 mio.) 20.3 % (CHF 275 mio.) Other products and services 6.8 % (CHF 87 mio.) Powder/concentrates 3.6 % (CHF 40 mio.) Cheese 33.9 % (CHF 370 mio.) Fre
Slide 7: Strategy - Vision
Strategy - Vision Vision § Emmi is an independent and international successful dairy company in Europe Market positioning § Number 1 in the Swiss Dairy Industry § The leading company worldwide for Swiss cheese § A leading company in Europe for premium dairy products Growth § 2 3% (Innovation, gain
Slide 8: Strategic focus
Strategic focus Leading position in Switzerland and focus on international expansion § Maintain high level of innovation § Growth via brand concepts and specialities with focus on Emmi brand § Further expansion of international business focused on key markets § Increase productivity (operational exc
Slide 9: Success via innovation and brands
Success via innovation and brands One of the leading European companies in the premium segment 1996 2007 Helvea Swiss Equities Conference – 11 January 2008 Page 8
Slide 10: Major production sites
Major production sites Increase productivity and operational excellence Switzerland International Emmen LU Suhr AG Kirchberg BE Langnau BE Rovere della Luna / I (Trentinalatte S.p.A.) Ostermundigen BE Dagmersellen LU Landquart GR Thun BE § Amalgamation of AZM and Emmi‘s Butterzentrale into Mittellan
Slide 11: International strategy 1/2
International strategy 1/2 Focus on Europe and North America Helvea Swiss Equities Conference – 11 January 2008 Page 10
Slide 12: International strategy 2/2
International strategy 2/2 Transformation from a national to a international company § Italy: key market with local production site (Trentinalatte) § USA: key market with local production (partnership Upstate Farms/CASP) and minority stake in Roth Käse Ltd § Subsidiaries in Germany, Austria, UK, Ita
Slide 13: Agenda
Agenda Emmi Group at a Glance Dairy Industry Market Environment Overview of First Half of 2007 and Outlook Helvea Swiss Equities Conference – 11 January 2008 Page 12
Slide 14: Global milk market trends
Global milk market trends EU products getting more expensive – Switzerland becoming more competitive § Global demand outstrips supply – Sharp rise in milk powder prices § Increased demand for raw milk in Europe leads to rise in milk price § According to international analysis, milk price will remain
Slide 15: Increased competitiveness of milk industry
Increased competitiveness of milk industry Gap between Switzerland and Germany reduced by over 50 % Ct/kg Comparison CH-D (Ct/kg) 46 45 44 ca. 10 Rp. 43 45.00 (= 74.2 Rp.) 42 41 2007 40 39 38 CH 2005 37 2005 38.40 (= 63.4 Rp.) CH 2006 36 CH 2007 35 Germany 2005 34 35.60 (= 58.7 Rp.) 33 2006 Germany
Slide 16: Liberalisation of agricultural market
Liberalisation of agricultural market Swiss agricultural policy agenda § Shift of market support toward direct payments (AP 2011) § Milk quota system to be scrapped from 1 May 2009 § Cheese market liberalisation with the EU in place since 1 June 2007 (Bilateral Agreement I) § Free trade in process
Slide 17: Agenda
Agenda Emmi Group at at Glance Dairy Industry – Market Environment Overview of first half of 2007 and Outlook Helvea Swiss Equities Conference – 11 January 2008 Page 16
Slide 18: Emmi in first half of 2007
Emmi in first half of 2007 Growth in sales in line with objectives January – June in CHF million 2007 2006 Δ in % Net sales 1‘199 1‘087 +10.3% Gross profit 374 334 +12.0% as a % of sales 31.2% 30.7% EBIT 32 28 +14.0% as a % of sales 2.7% 2.6% Net profit 22.7 20.5 +14.0% as a % of sales 1.9% 1.9% Obj
Slide 19: International earnings below expectations
International earnings below expectations Good sales growth in 2007 § Earnings from abroad below expectations due to high level of investments and cold, wet summer in Europe § Significant increase of milk price in Italy can only be passed on in January 2008 § Sales price for Emmentaler were falling
Slide 20: How does Emmi respond to these challenges?
How does Emmi respond to these challenges? Emmi is on the right track with its defined strategy § Board of Director and Group Management confirm defined international strategy § Emmi will continue to adhere to this strategy § Measures to ensure long-term profitability are taken § Strengthening earni
Slide 21: Outlook for second half of the year and 2007 as a whole
Outlook for second half of the year and 2007 as a whole Revised financial objectives § Growth of 5 % § Above-average growth abroad of 12 – 15 % § Profit margin of 1.5 – 1.7 % (revised) Helvea Swiss Equities Conference – 11 January 2008 Page 20
Slide 22: Strategic goals of the Emmi Group
Strategic goals of the Emmi Group Back on track due to increase of profitability and efficiency § Annual growth of 2 – 3 % in the next five years > Swiss market slightly decreasing > International 10 % § Profit margin 2 – 3 % Helvea Swiss Equities Conference – 11 January 2008 Page 21
Slide 23: Back up
Back up Bad Ragaz, 11 January 2007 Reto Conrad, CFO Stephan Wehrle, Media & Investor Relations Bild
Slide 24: Group structure
Group structure Chief Executive Officer Urs Riedener* Dep. Robert Muri Dairy Products Retail & Supply Finance & Dairy Products International Chain Management Controlling Robert Muri Erich Kienle Max Peter Reto Conrad Cheese Procurement & Cheese Finance & Accounting International Distribution Logisti
Slide 25: News CEO of Emmi
News CEO of Emmi Urs Riedener takes over the position on 1 April 2008 § Familiar with all aspects of the national and international retail trade § Successful build-up of the international brand position of Lindt&Sprüngli § Strong personality with proven leadership experience § Take over of the posit
Slide 26: Impact on Swiss milk industry
Impact on Swiss milk industry Producers exerting more pressure for price rises § Rise in EU prices enhances competitiveness of Swiss milk industry (price gap closing) in exports and the domestic market for products with low border protection (cheese, yoghurt etc.) § In the case of products with bord
Slide 27: Liberalisation of agricultural market
Liberalisation of agricultural market WTO – current status international trade agreements § WTO negotiations ongoing, timing of agreement uncertain § Potential reduction in duty of between 60% (EU position) and 85% (US position) § Consensus over reduction in export subsidies, i.e. "Schoggigesetz„ su
Slide 28: Development of agricultural subsidies
Development of agricultural subsidies Subsidies will be significantly reduced by end of 2008 180 160 Allowances 140 66 120 Subsidies Mio. CHF 100 39 80 37 36 60 33 96 40 84 34 59 34 20 47 42 34 19 14 0 2002 2003 2004 2005 2006 2007 2008 2009-2011 Helvea Swiss Equities Conference – 11 January 2008 Pa