Aryzta Ag · SIX:ARYN
Aryzta — FY2009 Earnings Presentation
50 slides from Aryzta's earnings presentation, Sep 28, 2009
Slide 1: FY 2009 Results
ARYZTA AG FY 2009 Results 28 September 2009
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward looking statements which reflect management’s 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 forward look
Slide 3: Highlights
Highlights – First annual results for ARYZTA AG – Merger of Hiestand and IAWS Group August 2008 – Underlying EPS growth of 16.0% to 234.7 cent – Proposed dividend payout of 35.2 cent per share based on a payout ratio of 15.0% of underlying fully diluted EPS – Origin Enterprises underlying earnings g
Slide 4: Our Business
ARYZTA AG Our Business 4 © ARYZTA, September 2009
Slide 5: Our Business
Our Business – Zurich based Swiss AG > Operations in Europe, North America, South East Asia and Australia – Created in 2008 – merger of Hiestand and IAWS August 2008 – Primary listing in Zurich (SIX; ARYN), and secondary listing in Dublin (ISE; YZA) – Holds 71.4% of Origin Enterprises plc (Origin);
Slide 6: Corporate Structure ARYZTA AG
Corporate Structure ARYZTA AG ARYZTA AG Shareholder 71.4% Food Europe – Coup de Pates – Cuisine de France – Origin – Delice de France – Hiestand Food North America – La Brea Bakery – Otis Spunkmeyer Food Developing Markets – Hiestand 6 © ARYZTA, September 2009
Slide 7: Our Markets: Food Europe
Our Markets Food Europe Food Europe has leading mar- ket positions in the speciality bakery market in Switzerland, Germany, Poland, the UK, Ire- land and France. In Europe, ARYZTA has a mixture of busi- ness to business and consumer brands, including Hiestand, Cuisine de France, Delice de France and
Slide 8: Our Markets: Food North America
Our Markets Food North America Food North America has lead- ing market positions in freshly baked cookies and freshly baked artisan bread. The busi- ness has two iconic brands which evoke emotional appeal with the US consumer, namely Otis Spunkmeyer and La Brea Bakery. 8 © ARYZTA, September 2009
Slide 9: Our Markets: Food Developing Markets
Our Markets Food Developing Markets ARYZTA has embryonic businesses in Japan, Malaysia and Australia. 9 © ARYZTA, September 2009
Slide 10: Food Europe: Coup de Pates
Food Europe Coup de Pates Coup de Pates is the princi- pal brand of Groupe Hubert, a leading developer and distribu- tor of bakery products to the bakery, craft and foodservice sectors in France. Groupe Hu- bert offers its customers bread, viennoiserie, patisserie, trai- teur and reception products.
Slide 11: Food Europe: Cuisine de France
Food Europe Cuisine de France Cuisine de France offers the consumer traditional French breads, pastries and also a wide range of continental- style breads, confectionery and hot savoury items. Cuisine de France provides a complete bake-off solution primarily to the retail industry, as well as staff
Slide 12: Food Europe: Delice de France
Food Europe Delice de France Delice de France supplies high quality continental breads, viennoiserie, savoury and con- fectionery products, including hospitality goods, primarily to the foodservice and catering industry. The business offers premium solutions tailored to meet future customer and cons
Slide 13: Food Europe and Developing Markets: Hiestand
Food Europe and Developing Markets Hiestand Hiestand offers a broad range of innovative bakery products (croissants, bread, rolls, pas- tries, snacks, pretzels) and the comprehensive services to ac- tively promote sales. Hiestand provides added value for busi- ness-to-business customers. Through the
Slide 14: Food North America: La Brea Bakery
Food North America La Brea Bakery La Brea Bakery is widely cred- ited as the pioneer and leader of the artisan bread movement in America. La Brea Bakery of- fers a wide assortment of rustic breads ranging from baguettes and loaves to sandwich and dinner rolls. 14 © ARYZTA, September 2009
Slide 15: Food North America: Otis Spunkmeyer
Food North America Otis Spunkmeyer Otis Spunkmeyer is a leading, premium fresh baked goods brand in its US market catego- ries. An iconic brand, it has strong recognition and aware- ness across a national custom- er base in the foodservice and retail channels. 15 © ARYZTA, September 2009
Slide 16: Origin
Origin Origin ARYZTA AG is the majority shareholder (71.4%) in Origin Enterprises plc, which has a listing on the AIM in London and the IEX in Dublin (AIM:OGN,IEX:OIZ). Origin is a leading player in the agri- nutrition sector in Ireland, the UK, Poland and Norway and has a leading ambient food and c
Slide 17: Financial Review
ARYZTA AG Financial Review 17 © ARYZTA, September 2009
Slide 18: ARYZTA AG Income Statement
ARYZTA AG Income Statement Proforma in Euro `000 July 2009 July 20086 % Group revenue 3,212,270 3,134,201 2.5 Group operating profit1 280,409 245,017 14.4 Share of associates and JVs2 17,525 17,455 Operating profit incl. associates and JVs1 297,934 262,472 13.5 Finance cost, net (50,652) (44,446) Pr
Slide 19: Underlying Revenue Growth 2009 – ARYZTA AG
Underlying Revenue Growth 2009 – ARYZTA AG Food Food N. Developing Total in Euro million Food Europe1 America Markets1 Food Group Origin2 Total Group revenue 1,137.2 555.1 20.4 1,712.7 1,499.6 3,212.3 Underlying growth (2.2)% 12.5% 1.5% 1.9% (8.4)% (3.0)% Acquisitions 2.2% – – 1.6% 16.1% 8.5% Curren
Slide 20: ARYZTA AG Segmental Profit
ARYZTA AG Segmental Profit Proforma in Euro `000 July 2009 July 20083 % Food Group1 Food Europe 135,103 121,298 11.4 Food North America 67,481 51,865 30.1 Food Developing Markets 2,123 928 129.0 Total Food Group 204,707 174,091 17.6 Origin 75,702 70,926 6.7 Total Group 280,409 245,017 14.4 Associate
Slide 21: Non-Recurring Items
Non-Recurring Items – EUR 96.5m net of minorities and taxes – Non-cash impact – Relates to: > 70% write down of Origin investment property > Merger costs 21 © ARYZTA, September 2009
Slide 22: Dividend
Dividend – Dividend payout based on underlying profit excluding non-recurring items and amortisation – Proposed dividend > 15.0% of underlying fully diluted EPS > 234.7 cent x 15% = 35.2 cent – Timetable for dividend > Shareholder approval 3 December 2009 (General assembly) > Anticipated ex-date 7 D
Slide 23: Food Group Income Statement
Food Group Income Statement Proforma in Euro `000 July 2009 July 2008³ % Group revenue 1,712,754 1,635,362 4.7 Group operating profit1 204,707 174,091 17.6 Operating margin 12.0% 10.6% Share of JV2 13,808 15,203 Operating profit incl. JV1 218,515 189,294 15.4 Financing costs, net (33,299) (29,874) P
Slide 24: Food Group Cash Generation
Food Group Cash Generation in Euro `000 July 2009 EBIT 161,724 Amortisation 42,983 EBITA 204,707 Depreciation 54,628 EBITDA 259,335 Working capital movement 24,675 Dividends received 18,830 Ongoing capital expenditure (15,047) Interest & tax (53,562) Other 2,126 Cash flow generated from activities 2
Slide 25: Food Group Net Debt and Investment Activity
Food Group Net Debt and Investment Activity in Euro `000 Food Group Food Group proforma opening net debt as at 31 July 2008 (552,562) Cash flow generated from activities 236,357 Investment capital expenditure (63,006) Deferred consideration and acquisition costs (76,497) Foreign exchange movement (4
Slide 26: Food Group Banking Facilities
Food Group Banking Facilities – Origin debt facilities are standalone and non-recourse to ARYZTA AG – ARYZTA AG – excellent committed banking facilities totalling EUR 1.16bn – EUR 795m revolving credit facility – matures 20 June 2013 – USD 450m private placement – matures between 13 June 2014 – 13 J
Slide 27: Maturity Profile of Food Group Net Debt
Maturity Profile of Food Group Net Debt in Euro `000 July 09 Cash (204,586) Within 1 year 15,663 Between 1 and 2 years 848 Between 2 and 5 years 483,083 Greater than 5 years 210,497 Total net debt 505,504 Weighted average debt maturity in years 5.35 yrs 27 © ARYZTA, September 2009
Slide 28: Return on Investment
Return on Investment Food N. Total in Euro million Food Europe¹ America Food Group5 Origin Total 2009 Group share net assets2 1,344 638 1,986 382 2,368 EBITA & JVs/associates cont.4 135 81 219 79 298 ROI 10.0% 12.7% 11.0% 20.7% 12.6% 2008 Group share net assets 1,222 592 1,815 366 2,181 EBITA & JVs/
Slide 29: Business Review
ARYZTA AG Business Review 29 © ARYZTA, September 2009
Slide 30: Year in Review
Year in Review – Q1 – Global financial crisis – Recession spread and deepened throughout the year – Substantial financial stimulus – Credit severely restricted – Reduced consumer spending – Banking crisis became consumer crisis 30 © ARYZTA, September 2009
Slide 31: Implications of Financial Crisis
Implications of Financial Crisis – Reduced spending + restricted credit – Increased credit risk ➔ – Impact on customers: > Reducing costs > Reducing investment > Delaying decisions 31 © ARYZTA, September 2009
Slide 32: Bakery Business
Bakery Business – Bakery everyday food – Basic and sustainable – Indulgent and affordable – Challenge to deliver everyday consumer experience – Consistent high quality baked goods – Consistent availability through dayparts 32 © ARYZTA, September 2009
Slide 33: Food Europe
Food Europe – Revenue growth declined each quarter – Ireland and UK most impacted > Reduced cost base > Grangecastle enhanced efficiency – Continental Europe proved resilient > Expanding channel penetration > Utilising logistics capability – Unlocked merger benefits 33 © ARYZTA, September 2009
Slide 34: Food North America
Food North America – Revenue growth declined each quarter – Consumer seeking value – conserving $ – Most channels show declining revenues – Consumer slowdown continuing – La Brea Bakery proved resilient – Otis Spunkmeyer growth driver 34 © ARYZTA, September 2009
Slide 35: Origin
Origin – Satisfactory performance in volatile market – 6.0% underlying earnings growth – Masstock well positioned – real growth driver – Marine proteins in strategic joint venture – Investment properties written down – Facing challenges in 2010 > Irish farming impacted by volatility and reduced cred
Slide 36: ARYZTA Positioning
ARYZTA Positioning – Well invested bakeries – Passionate motivated people – Customer partnership model – Food business is defensive – Bakery is a value proposition for customers without compromise – Investing in process – ARYZTA Technology Initiative (ATI) > Response time > Shorter pipeline / lead t
Slide 37: Outlook
Outlook – Efficient and well invested business model – Cash remains a priority over revenue – Customers and consumers in survival mode – September 2008; did not predict severity of recession – September 2009; cannot predict recovery – Double digit revenue growth to declining revenue growth (12 month
Slide 38: Appendix 1 – Origin Financials
ARYZTA AG Appendix 1 – Origin Financials 38 © ARYZTA, September 2009
Slide 39: Origin Income Statement
Origin Income Statement in Euro `000 July 2009 July 2008 % Group revenue1 1,499,516 1,498,839 0.1 Group operating profit2 75,702 70,926 6.7 Operating margin3 5.0% 4.7% Share of associates and JV4 3,717 2,252 Operating profit incl. associates and JV2 79,419 73,178 8.5 Financing costs, net (17,353) (1
Slide 40: Origin Underlying Net Profit Reconciliation
Origin Underlying Net Profit Reconciliation in Euro `000 July 2009 Reported net (loss) (56,825) Amortisation of intangible assets 3,294 Tax on amortisation (380) Property write down 134,543 Tax on write down (30,940) Underlying net profit 49,692 Underlying fully diluted EPS1 36.16 1 The share denomi
Slide 41: Appendix 2 – Other Financial Information
ARYZTA AG Appendix 2 – Other Financial Information 41 © ARYZTA, September 2009
Slide 42: ARYZTA AG Underlying Net Profit Reconciliation
ARYZTA AG Underlying Net Profit Reconciliation in Euro `000 July 2009 Reported net profit 54,010 Amortisation of intangible assets 46,277 Tax on amortisation (11,180) Property write down 134,543 Tax on property write down (30,940) Minority interest impact of property write down (29,609) Merger costs
Slide 43: Food Group Underlying Net Profit Reconciliation
Food Group underlying Net Profit Reconciliation in Euro `000 July 2009 Reported net profit 94,633 Amortisation of intangible assets 42,983 Tax on amortisation (10,800) Merger costs 22,738 Tax on merger costs (218) Underlying net profit 149,336 43 © ARYZTA, September 2009
Slide 44: ARYZTA AG Balance Sheet
ARYZTA AG Balance Sheet in Euro `000 As at July 2009 Property, plant and equipment 664,532 Investment properties 62,975 Goodwill and intangible assets 1,498,430 Associates and joint ventures 139,351 Working capital (14,871) Other segmental liabilities (93,592) Segmental net assets 2,256,825 Net debt
Slide 45: Food Group Balance Sheet
Food Group Balance Sheet in Euro `000 As at July 2009 Property, plant and equipment 577,772 Investment properties 3,761 Goodwill and intangible assets 1,382,431 Joint venture 55,720 Working capital (28,744) Other segmental liabilities (55,544) Segmental net assets 1,935,396 Net debt (505,504) Deferr
Slide 46: FX Rates
FX Rates July 09 July 08 % Closing Rates Sterling 0.8545 0.7911 (8.0) US Dollar 1.4252 1.5729 9.4 Swiss Franc 1.5247 1.6247 6.2 Canadian Dollar 1.5372 1.5946 3.6 Average Rates Sterling 0.8615 0.7435 (15.9) US Dollar 1.3643 1.4855 8.2 Swiss Franc 1.5310 1.6276 5.9 Canadian Dollar 1.5932 1.4962 (6.5)
Slide 47: Appendix 3 – Analysts' Consensus
ARYZTA AG Appendix 3 – Analysts' Consensus 47 © ARYZTA, September 2009
Slide 48: ARYZTA FY 2010 Consensus Estimates
ARYZTA FY 2010 Consensus Estimates* September 2009 in Euro `000 mean Based on 14 analysts EBITA including associates & JVs 285,202 Underlying fully diluted net profit 180,134 Underlying EPS (cent) 224.6 Based on 6 analysts Food Group Net Debt (400,825) Origin Net Debt (109,977) 1 Net profit & EPS pr
Slide 49: Thank you!
ARYZTA AG Thank you! 49 © ARYZTA, September 2009
Slide 50: Investor Information
Investor Information Investor Meeting Requests [email protected] *All enquiries regarding investor meeting requests should be sent by email. Company Contact Hilliard Lombard Head of Group Finance and Communications ARYZTA AG Talacker 41 8001 Zurich Switzerland Tel: +41 (0) 44 583 42 00 Fa