Barry Callebaut AG · SIX:BARN
Barry Callebaut — Non-Deal Roadshow (December 2016)
47 slides from Barry Callebaut's roadshow presentation, December 2016
Slide 1: Roadshow presentation 2015/16
Roadshow presentation 2015/16 December, 2016 December 2016
Slide 2: Agenda
Agenda BC at a glance Highlights FY 2015/16 Strategy & Outlook Page 2 December 2016 FY 15/16 Roadshow presentation
Slide 3: BC at a glance
BARRY ((}) CALLEBAUT BC at a glance
Slide 4: The heart and engine of the chocolate industry
Who are we? The heart and engine of the chocolate industry A merger between Cacao Barry, the very first chocolate connoisseur since 1842 and Callebaut, a chocolate couverture manufacturer expert since 1911 Listed on the SIX Swiss Exchange since 1998 Today, the world's leading manufacturer of h
Slide 5: We add value in every step of the cocoa and chocolate value chain
Who do we do? We add value in every step of the cocoa and chocolate value chain Page 5 December 2016 FY 15/16 Roadshow presentation
Slide 6: Page 6 December 2016 FY 15/16 Roadshow presentation
Page 6 December 2016 FY 15/16 Roadshow presentation
Slide 7: A broad range from standard to the most premium products
What do we offer? A broad range from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 7 December 2016 FY 15/16 Roadshow presentation
Slide 8: Our Regional and Product split
How are we organized? Our Regional and Product split FY 2015/16 Sales Volume: 1.8 mio tonnes Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 4% 11% Global Cocoa 24% EMEA 44% Food Manu‐ facturers 65% Cocoa Products 24% Sales Revenue: CHF6,676.8m Americas EBI
Slide 9: We apply a cost plus approach to the majority of the business
Our business model We apply a cost plus approach to the majority of the business Customers Pricing model Profit levers Food Manufacturers • Small, medium and • Cost Plus • Customer mix Global Food • Product mix Manufacturers • Economies of scale 62% Cocoa Products • Small, medium and • Market prices
Slide 10: A global footprint and a local service
A global footprint and a local service Cocoa factories in origin countries and chocolate factories close to our customers Cocoa processing factory Chocolate factory Integrated factory Page 10 December 2016 FY 15/16 Roadshow presentation
Slide 11: Highlights FY 2015/16
Highlights FY 2015/16 December 2016
Slide 12: Proposal to the Annual General Meeting of Shareholders of December 7, 2016
FY results 2015/16 Proposal to the Annual General Meeting of Shareholders of December 7, 2016 Changes in the Board of Directors Dr. W. Andreas Jacobs to step down as Chairman Patrick De Maeseneire proposed for election as new Chairman All other Board members are standing for reelection for ano
Slide 13: Smart growth getting traction, strong free cash flow generation
FY results 2015/16 “Smart growth” getting traction, strong free cash flow generation Sales volume growth +2.2%, outperforming the market1 Strong growth of chocolate business +7.6% Intentional phase out of less profitable contracts in cocoa products -12.0% Positive contribution from all key g
Slide 14: Strong chocolate business across all regions, intentional decline in Global Cocoa
Strong chocolate business across all regions, outperforming the market, while intentional decline in Global Cocoa Sales volume growth 2015/16 vs. prior year Sales volume per Product Group Region Europe 6.6% Gourmet & Specialties 11% Region Americas 8.8% Food Manufacturers 65% Region Asia Pacific 10.
Slide 15: Highlights 2015/16
Highlights 2015/16 License agreement Launch of BC Studio Opening of the first Introduction of Katchilé, Opening new, relocated Launch of Cocoa with Naturex to «craft and co-create» Van Houten Beverage™ Innovative tool for geo- CALLEBAUT® Horizons Foundation market Acticoa chocolate of Academy center
Slide 16: Volume growth continues to be fuelled by our key drivers
FY results 2015/16 Volume growth continues to be fuelled by our key drivers Emerging Markets Long‐term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth +6.1% vs. prior year +4.5% vs. prior year +12.4% vs. prior year FY 2015/16 CAGR 5 year +16.5% +24.3% +9.6% Volume 34% 11% 34
Slide 17: Driving growth in Emerging Markets...
Driving growth in Emerging Markets... Opening our first chocolate factory in Indonesia to supply our long-term agreement with Garuda Foods Major expansion of our chocolate factory in Singapore: new production line, molding line and warehouse facility. Total investment of CHF 18 million Opening
Slide 18: Driving growth in Gourmet & Specialties...
Driving growth in Gourmet & Specialties... Fast growing with Expanding our successful Accelerating growth in global and local brands Beverages business Specialties and Decorations Page 18 December 2016 FY 15/16 Roadshow presentation
Slide 19: Driving growth by expanding and capturing strategic partnerships...
Driving growth by expanding and capturing strategic partnerships... Extension of strategic partnership with Mondelēz International Intention to acquire and integrate the chocolate production facility of Mondelēz International in Halle, Belgium Long-term agreement for the supply of additional 3
Slide 20: Cocoa Leadership Project: Bringing Global Cocoa to the next level
Cocoa Leadership Project Bringing Global Cocoa to the next level Driving commercial Leveraging our scale in Optimizing our excellence execution operations • Sharpening focus on • Combined ratio • Creating an optimal customers organization & manufacturing governance in place footprint • New pricing m
Slide 21: Smart growth getting traction in FY 2015/16
“Smart growth” getting traction in FY 2015/16 Growing with customers Bringing cocoa Greater discipline on while adding value to the next level free cash flow Page 21 December 2016 FY 15/16 Roadshow presentation
Slide 22: Financial Highlights FY 2015/16
Financial Highlights FY 2015/16 December 2016
Slide 23: Solid volume growth, profitability as anticipated and flat in local currencies
FY results 2015/16 Solid volume growth, profitability as anticipated and flat in local currencies Group performance FY 2015/16 % vs prior year % vs prior year (in CHF) (in CHF) in local (In CHF mio.) currencies Sales Volume Total 1,834,224 +2.2% (in tonnes) Sales Revenue 6,676.8 +7.0% +8.8% Gross Pr
Slide 24: Strong volume growth across all chocolate Regions
FY results 2015/16 Strong volume growth across all the chocolate Regions, while intentional phase out of less profitable contracts in Global Cocoa in tonnes +2.2% ‐3.5% +3.8% +2.3% +4.6% +8.1% +9.1% 1,834,224 +6.4% -23.2% -7.9% -13.7% +9.7% 1,794,782 -2.0% +7.6% Chocolate (FM and Gourmet & Specialti
Slide 25: Strong chocolate performance, Global Cocoa profitability temporarily affected
FY results 2015/16 Strong chocolate performance, in Global Cocoa profitability temporarily affected by challenging cocoa products market EMEA Americas Asia Pacific Global Cocoa 4% 4% 28% 24% 44% 28% 25% Volume growth +6.6% +8.8% +10.8% ‐12.0% EBIT growth in +4.4% +12.0% +17.9% ‐60.3% local currencie
Slide 26: Gross profit up +4.4% before FX impact
Gross Profit FY 2015/16 Gross profit up +4.4% before FX impact, driven by positive volume effects, margin mix and despite a historically low combined cocoa ratio in CHF mio. +4.4% +34.5 +46.6 883.7 -44.2 863.2 846.8 -20.5 Gross Profit Volume Product/Customer Cocoa Gross Profit FX Impact Gross Profit
Slide 27: Historically low combined cocoa ratio strongly impacted FY 2015/16
Cocoa processing profitability Historically low combined cocoa ratio strongly impacted FY 2015/16; recent signs of recovery, albeit with regional differences European combined ratio - 6 months forward ratio FY 2015/16 4.00 Combined ratio 3.39 3.00 Butter ratio 2.00 1.00 Powder ratio 0.00 Oct-07 Oct-
Slide 28: Operating profit flat in local currencies
EBIT FY 2015/16 Operating profit flat in local currencies, supported by good product and customer mix, while setting up the path for continued “smart growth” in CHF mio. +0.1% +36.9 414.8 -26.2 415.3 One-off related to the 13.6 -10.2 401.7 settlement -13.6 agreement with Petra Foods EBIT Additional
Slide 29: Net Profit down 8.7% in CHF
From EBITDA to Net Profit Net Profit down 8.7% in CHF, due to higher financial expenses, as well as higher taxes in CHF mio. 539.4 -137.7 One-off costs related to bond and FX Brazil Tax rate EPS EPS 401.7 -135.3 17.8% vs CHF 39.5 CHF 43.2 15.6% in prior year -47.5 ‐8.7% 239.9 219.0 EBITDA Depreciati
Slide 30: Raw materials price evolution
Raw materials price evolution Cocoa bean at high levels; world sugar prices increased, milk powder at low levels FY average increase vs. prior year 300% Cocoa beans 250% +10.1% Sugar world 200% +18.6% 150% 100% Sugar EU ‐6.1% 50% Milk powder ‐11% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2
Slide 31: Net Working Capital below prior year
Net Working Capital Working Capital below prior year as a result of successful inventory reduction program and positively impacted by one-offs in CHF mio. Receivables Stocks Payables ‐10.2% +36 +27 1,530 -14 +68 -19 -147 1,374 -87 -19 Net Growth Price and Growth Operational Price Impact Growth Price
Slide 32: Strong cash flow generation
Free Cash Flow Strong cash flow generation as a result of efforts to reduce working capital and strict discipline on CAPEX in CHF mio. +20.4% 569 +193 -201 473 (py -101) (py-249) 404 -141 -17 (py-145) (py +44) Operating Operating Change in Capital Interest paid and M&A Free Cash Flow Cash Flow Cash
Slide 33: Balance Sheet & key ratios
Balance Sheet & key ratios Improvement of our some financial ratios, based on our “smart growth” strategy and some positive one-off effects Aug 16 Aug 15 Total Assets [CHF m] 5,640.8 5,429.4 Net Working Capital [CHF m] 1,374.6 1,529.7 Non-Current Assets [CHF m] 2,301.0 2,185.5 Net Debt [CHF m] 1,452
Slide 34: Proposed payout of CHF 15.50 per share
Dividend Proposed payout of CHF 15.50 per share, up CHF 1.00 per share Payout ratio Proposed dividend CHF 15.50 per share1 39% Payout of 39% of Net Profit 33% 35% 33% 33% Not subject to withholding tax2 255 240 223 219 143 Timetable for dividend Shareholder approval: Dec 7, 2016 (AGM) Expe
Slide 35: Strategy update & Outlook
Strategy update & Outlook December 2016
Slide 36: Consistent long-term strategy, focus on execution
Consistent long-term strategy, focus on execution “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable growth Margin accretive growth 4 strategic Innovation “SMART Accelerated growth in Gourmet, pillars growth” Specialties and emerging markets Cost Leadership Return on
Slide 37: Execution translated into our Product groups
Execution translated into our Product groups Accelerated growth • Expand reach Leveraging global scale and expertise • Expand scope • Growth & profit accretion Gourmet & Specialties Sustained growth • Strengthen existing Food Manufacturers partnerships • Foster new partnerships • Innovation & co- cr
Slide 38: Strategic priorities 2016/17
Strategic priorities 2016/17 Grow Competitively Further leverage our innovation capabilities Inspire and co-create Nourish & expand partnerships Grow Sustainably Cocoa Beyond cocoa Talents & teams Grow Profitably Cocoa Leadership deployment Increase leverage Footprint & Capab
Slide 39: Outlook
Outlook Continue to strive for a smart balance between consistent, above-market volume growth and enhanced profitability Outlook Continue to implement “smart growth”, we have good visibility on volume growth and expect positive contribution to profitability from our Cocoa Leadership project. Mid‐t
Slide 40: Appendix
Appendix December 2016
Slide 41: What makes Barry Callebaut unique?
What makes Barry Callebaut unique? Global number one player in chocolate and cocoa Deep chocolate and cocoa expertise Global leader in Gourmet & Specialties Proven and long-term oriented strategy Unparalled global footprint, present in all key markets Preferred outsourcing and strategic
Slide 42: Capital Expenditures
Capital Expenditures in CHF mio. +4.5% +4.6% +4.2% +4.0% +3.0% CAPEX as % of sales revenue 249 249 218 224 201 200 Additional growth IT Upgrade / efficiency gains existing sites Maintenance 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 E Page 42 December 2016 FY 15/16 Roadshow presentation
Slide 43: 7-year EBIT per tonne development
7-year EBIT per tonne development EBIT per tonne temporarily affected by a challenging cocoa products market and a strong Swiss franc 312 282 290 274 279 271 286 251 EBIT per tonne in constant currencies 256 231 219 242 EBIT per tonne in CHF 223 (as reported) +7.2% 1’717 1’795 1’834 1’379 1’536 1’21
Slide 44: Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets
Chocolate and Cocoa markets Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets Cocoa grinding capacity Industrial chocolate – open market BC BC Cargill Cargill Olam Blommer Blommer Fuji Oil Mondelez Puratos Guan Chong Cémoi Ecom Cocoa Irca BT Cocoa Clasen Nestlé Kerry Grou
Slide 45: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer Total world harvest (14/15): 4,157 TMT others 8% About 70% of total cocoa beans Nigeria come from West Africa 5% Brazil* 6% BC processed ~925,000 tonnes or Ivory Coast* 22% of the world crop Cameroon* 42% 6% Barry Callebaut has various cocoa Ec
Slide 46: Available Financing
Available Financing Enough headroom for further growth and raw material price fluctuations As of 31 August 2016 CHF 4,407 mio ABS CHF 948 mio Various uncommitted facilities ‐58.9% EUR 600 mio. Domestic Commercial Paper Programme 3-5 years Various bilateral LT loans CHF 1,811 mio CHF 150 mio. Related
Slide 47: Liquidity – Debt maturity profile
Liquidity – Debt maturity profile As of 31 August 2016 In CHF mio Uncommitted lines Committed lines 150 -- Cash and revolving credit facility (undrawn) 657 Short-term facilities Term loans 457 484 Bonds 91 382 383 271 134 Cash 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Page 47 December 2016 F