Barry Callebaut AG · SIX:BARN
Barry Callebaut — Q1 2011/12 Earnings Presentation
35 slides from Barry Callebaut's earnings presentation, January 2012
Slide 1: Roadshow presentation - Q1 2011/12
Barry Callebaut Roadshow presentation - Q1 2011/12 January y 2012
Slide 2: Agenda
Agenda X BC at a glance X Q1 Key Sales Figures X Strategy & Outlook X Q&A January 2012 Barry Callebaut Roadshow Q1 2011/12 2
Slide 3: Present in all stages of the chocolate industry value chain
Barry Callebaut is present in all of the stages of the chocolate industry value chain Cocoa Cocoa beans Plantations 80% Cocoa liquor ~54% ~46% Cocoa powder Cocoa butter BC core activity + Sugar, Milk, others + Sugar, Milk, + Sugar, Milk, fats, others others Powder mixes Compound/Fillings Chocolate c
Slide 4: Main raw materials and business model
Main raw materials and business model Main raw materials Barry Callebaut business model BC sourced d in i 10/11: 10/11 % off total t t l raw Price List material value Gourmet Cocoa Products at market price business 11% 9% Cocoa 650 KT 52% Cocoa Products D i Dairy 110 KT 9% on cost plus 11% Sugar 464
Slide 5: Our Geographic and Product Group diversification
Our Geographic and Product Group diversification Sales Volume per Region - FY 2010/11 Sales Volume per Product Group - FY 2010/11 Gourmet & Specialties Asia-Pacific Products Global 4% 11% Cocoa Products Sourcing & Cocoa 20% 20% Europe 51% Americas 25% Food Manufacturers Products 69% January 2012 Bar
Slide 6: Our global footprint - 40 factories in 4 continents
Our global footprint- 40 factories in 4 continents Chekhov, Russia Thimister, Belgium Lebbeke-Wieze, Belgium Heule-Kortrijk, Belgium Nuth, The Netherlands Zundert, The Netherlands Banbury, UK St. Albans, VT, US St Helens, UK + Kagerod, g Sweden Chester, UK Pennsauken, NJ, US St. Hyacinthe, Canada Lo
Slide 7: Agenda
Agenda X BC at a glance X Q1 Key Sales Figures X Strategy & Outlook X Q&A January 2012 Barry Callebaut Roadshow Q1 2011/12 7
Slide 8: Outperforming the market in a challenging environment
Outperforming the market in a challenging environment Change Three months up to Three months up (%) Nov 30, 2011 to Nov 30, 2010 Sales volume mt 2.6 362,637 353,277 Sales revenue CHF m (4.1) 1,273.1 1,326.9 in local Sales revenue 5.0 currencies X Sales volume up 2.6% vs. a global market which declin
Slide 9: Volume growth driven by Americas, FM and Gourmet
Volume growth driven by Americas, FM and Gourmet Europe Difficult market environment in Western Europe, good growth in Eastern Europe • Volume decrease 0.8% • Sales revenue +1.2 in loc. currencies; -8.2% 8.2% in CHF • Debt crisis affected consumer sentiment mainly in Southern Europe • Eastern Europe
Slide 10: Further delivering on our strategic direction
Highlights Q1 2011/2012 Further delivering on our strategic direction September 2011 Novembre 2011 January 2012 Barry Callebaut Joint Venture with P.T. Long-term outsourcing successfully closes Comextra Majora, Majora building a agreement with Mexican the divestiture of its new cocoa processing faci
Slide 11: New outsourcing agreement – Bimbo
New outsourcing agreement – Bimbo • On January 16th, Barry Callebaut signed a long long-term term outsourcing agreement with Bimbo for close to 32,000 tons. • Bimbo Bi b is i one off leaders l d i the in th Food F d Industry I d t ini Latin L ti America • Barryy Callebaut to supply pp y the p plants
Slide 12: Raw materials at high levels, volatility increased
Raw material price development Raw materials at high g levels,, volatility y increased Cocoa bean price (GBP/tonne) White Sugar average price (EUR/tonne) london n°5 (2nd EU white sugar monthly av. EU ref. Price White position) iti ) (DDP) 2800 Jan 2012 1354 GBP/tonne 950 Jan 2012 2500 760 €/tonne 85
Slide 13: Combined cocoa ratio, holding well
Raw material price development Combined cocoa ratio,, holding g well Cocoa powder-butter combined ratio* – European ratios 6 months forward against LIFFE 4.20 3.40 Combined ratio 3.6 – Dec 2011 2.60 Powder ratio 1.80 Butter ratio 1.00 0.20 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-
Slide 14: Agenda
Agenda X BC at a glance X Q1 Key Sales Figures X Strategy & Outlook X Q&A January 2012 Barry Callebaut Roadshow Q1 2011/12 14
Slide 15: Our Strategy
Our Strategy X “Heart Heart and engine of the chocolate industry industry” Vision X Chocolate expert and business partner of choice X Number one chocolate company Expansion Innovation Strategic Sustainable, pillars ill profitable growth Cost leadership New Sustainable Cocoa January 2012 Barry Calleb
Slide 16: Expansion in its three dimensions
Expansion “Expansion” in its three dimensions • Drive consolidation and grow p ofitabl in mat profitably maturee FM markets ma kets Geography • Achieve full potential in recently entered emerging markets • Further expand in new emerging markets Outsourcing • Strengthen our current partnerships … • I
Slide 17: Focus on growing emerging markets and long-term agreements
Expansion Focus on the growing emerging markets as well as on long long-term term agreements/partnerships % of total consolidated sales volume Emerging 23% CAGR +19.3% markets 22% 16% 20% Long-term CAGR +78.8% 15% 11% 16% agreements / 7% Partnerships 10% 2% Mature CAGR +0.8% markets 83% 77% 70% 67%
Slide 18: Outsourcing and Strategic Partner of choice
Expansion Outsourcing and Strategic Partner of choice 2006-07 Nestlé Cadbury Hershey Morinaga (February 2007) Schweppes (April 2007) (September 2007) (June 2007) 2010-11 Kraft Foods Green Mountain Hershey Extension Chocolates Turín Baronie Group (September 2010) Coffee Roasters (May 2011) (June 2011
Slide 19: BC market leader in the open market
Expansion BC C market a et leader eade in the t e open ope market a et Global Industrial Chocolate market in 2010/11 = 6,021,000 tonnes* Open market Integrated market Big 4 Competitors chocolate Others players 40% 49% 51% 80% Outsourced (long-term volumes)) *BC estimates January 2012 Barry Callebaut
Slide 20: 6 actions to accelerate Gourmet growth
Expnsion Expansion Gourmet 6 actions to accelerate Gourmet g growth 1 year 2 year 3 year 4-5 year • Centralized brand • Large potential for growth management for our global identified with (non-)chocolate brands products • Decorations, compound coatings, fillings • Dedicated organization • Segment-s
Slide 21: Supporting growth while staying cost leader
Cost Leadership Cost Leadership Supporting growth while staying cost leader X Flow and footprint optimization X Capacity utilization liquid chocolate: from 82 82.6% 6% to 84.7% 84 7% (Target: 82–85%) 82 85%) X Capacity utilization cocoa processing: from 91% to 86% (Target: 90-95%) X Continuous impro
Slide 22: 72% of sales volume with new products made in past 5 years
Innovation Innovation 72% of sales volume with new products made in past 5 years X R&D X Pro-active innovation: new product development, fundamental research on cocoa/chocolate, clinical studies, farmer productivity & quality X Applied R&D: renovate products/recipes, apply new technologies to finish
Slide 23: We need more, more sustainable cocoa in the future
Sustainable Cocoa Sustainable Cocoa Sustainable Cocoa We need more, more sustainable cocoa in the future X Consumption outpaces bean production X Competitive crops more profitable Excess return of Rubber vs. Cocoa farming in Ivory Coast per Ha 4'000 3'800 World crop (net) 2'200 3'600 World grindings
Slide 24: Yield & quality initiative for more responsibly grown cocoa
Sustainable Cocoa Sustainable Cocoa Sustainable Cocoa Yield & quality initiative for more quality grade responsibly grown cocoa quality-grade, 300,000 tonnes of additional cocoa beans by 2020 Farmer Practices Farmer Education Farmer Health • Plantation yield & quality • Cocoa curriculum • Water well
Slide 25: BC share price development over last 12 months above indices
BC share price development over last 12 months above relevant indices BC share development Jan 11th, 2011 to Jan 11th, 2012 930 Growth 12 months BARN.S = 922 +21.2% 880 830 Euro Stoxx = 5.3% 780 730 SPI= -6.8% 680 630 580 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 20
Slide 26: Financial targets confirmed
Outlook Financial targets confirmed X Four-year y growth g targets g for 2009/10 –2012/13 X Annual growth targets on average* for 2009/10 through 2012/13: Volumes: 6-8% EBIT: at least in line with volume growth * Our view for the 2009-2013 period reflects current economic forecasts for the marke
Slide 27: Reasons to invest in Barry Callebaut
10 Reasons to invest in Barry Callebaut World leader in high-quality cocoa and chocolate products Proven, focused and long-term oriented strategy Leader and growing presence in emerging markets Superior growth opportunities through strong positioning in outsourcing and long-term strategic partnershi
Slide 28: Appendix
Appendix January 2012 Barry Callebaut Roadshow Q1 2011/12 28
Slide 29: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer – BC sources locally Total world harvest (10/11): 4,195k MT X 70% of total cocoa beans others 11% come from West Africa Ecuador 3% Ivory Coast* Brazil* 35% X BC processed ~540,000 cocoa 5% beans or 13% of total world Cameroon* harvest, thereof 61% so
Slide 30: Investments support the growth of our business
CAPEX development Investments support uppo the growth g o of o our ou business bu in mCHF Additional growth IT Upgrade / efficiency gains existing sites Maintenance 250 CAPEX as % of sales 174 153 156 144 145 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 PLAN January 2012 Barry Callebaut Roadshow
Slide 31: Exchange rates
Exchange rates vs. CHF2 Aug 2010 Aug 2011 % 2011/2010 Closing rates EUR 1.2924 1.1576 -10% USD 1 0210 1.0210 0 8037 0.8037 -21% CAD 0.9629 0.8218 -15% GBP 1.5739 1.3073 -17% Average rates EUR 1.4481 1.2681 -12% USD 1.0577 0.9128 -14% CAD 1 0121 1.0121 0 9226 0.9226 -9% 9% GBP 1.6560 1.4642 -12% Janu
Slide 32: Revenue by currency
Revenue by currency FY 2010/11 Sales Revenue Others* 33% EUR 40% CHF 1% GBP 9% USD 17% * Others Oh i l d Canadian include: C di D Dollar, ll M i Mexican P Peso, B Brazilian ili R l Japanese Real, J Y Yen, R Russian i R bl Australian Ruble, A li D l Dolar, Chi Chinese Y Yuan, Malaysian Ringgit, Poish
Slide 33: Solid and profitable growth
Key Figures 2010/11 – from continuing operations Solid and p profitable growth g Change g in % Change g in % FY FY In local 2010/11 2009/10 currencies (restated) Sales volume [in tonnes] 7.2% 1'296'438 1 296 438 1'209'654 1 209 654 Sales revenue [CHF m] 13.3% 0.7% 4'554.4 4'524.5 CHF per tonne 5.7%
Slide 34: Solid Balance Sheet with improvement of all key ratios
Balance Sheet Solid Balance Sheet with improvement of all key ratios Change Aug 11 Aug 10 in % Total Assets [CHF m] -8.6% 3'263.1 3'570.8 g Capital Net Working p [[CHF m]] -8.0% 888.1 964.9 Non-Current Assets [CHF m] -14.0% 1'208.4 1'405.8 Net Debt [CHF m] -9.3% 789.8 870.8 Shareholders' Equity [CHF
Slide 35: Increased pay-out in a tax efficient way
Proposed dividend Increased pay-out p y in a tax efficient way y Dividends per share (CHF) 15.5 Key Facts: +8% 14.0 Average annual 12 5 12.5 dividend increase of 8% 11.5 11.5 10.5 (2005-2011) 11% dividend increase vs. prior year proposed Payout ratio of 31% in 2010/11 Paid out from paid-in c