Barry Callebaut AG · SIX:BARN
Barry Callebaut — H1 2017/18 Earnings Presentation
30 slides from Barry Callebaut's earnings presentation, Apr 11, 2018
Slide 1: Half-Year Results 2017/18
Half‐Year Results 2017/18 Media & Analysts Conference April 11, 2018 April 11, 2018
Slide 2: Cautionary note
Cautionary note Certain statements in this presentation regarding the business of Barry Callebaut are of a forward‐ looking nature and are therefore based on management’s current assumptions about future developments. Such forward‐looking statements are intended to be identified by words such as “be
Slide 3: Agenda
Agenda Highlights HY 2017/18 – CEO Antoine de Saint‐Affrique Financial review HY 2017/18 – CFO Remco Steenbergen Strategy & Outlook – CEO Antoine de Saint‐Affrique Q&A – CEO&CFO Page 3 April 11, 2018
Slide 4: Highlights HY 2017/18
Highlights HY 2017/18 April 11, 2018
Slide 5: Strong performance in the first six months
HY Results 2017/18 Strong performance in the first six months Sales volume growth +8.0% Sales revenue of CHF 3.5 billion, ‐1.8% in local currencies (+0.3% in CHF) Operating profit (EBIT)1 up +20.6 % in local currencies (+24.6% in CHF) Net profit1 up +32.9% in local currencies (+37.5% in CHF)
Slide 6: Broad-based volume growth, significantly above the market
HY Results 2017/18 Broad‐based volume growth, significantly above the market HY volume growth vs prior year (in Tonnes) +6.2% +8.0% +15.5% 13,445 +5.5% 7,249 +9.6% 13,836 41,253 1,022,565 946,782 Group Region EMEA Region Americas Region Asia Pacific Global Cocoa Group HY 2016/17 HY 2017/18 Market Vo
Slide 7: Exceptional volume growth in the first six months of FY 2017/18
Quarterly volume evolution Exceptional volume growth in the first six months of FY 2017/18 Quarterly volume growth vs prior year FY growth 15/16 FY growth 16/17 +8.1% +2.2% +4.4% +4.8% +8.0% +7.4% +9.0% Chocolate (FM and Gourmet & Spec.) +9.2% Global Cocoa +12.6% +8.1% +5.5% +0.3% +8.2 +2.3% +3.5% +
Slide 8: Strong volume growth supported by all our key growth drivers
HY Results 2017/18– Key growth drivers Strong volume growth supported by all our key growth drivers % of total Group volume Volume growth vs prior year 35.6% Emerging markets +11.0% Key growth 33.1% Long‐term drivers outsourcing +8.1% & strategic crucial to partnerships continuously outperform the m
Slide 9: Expansion around the globe
Expansion around the globe Strong double‐digit growth in key emerging markets, across different product Groups Asia‐Pacific Accelerated momentum in Japan Expanding our Gourmet distribution via Alibaba Africa Started sales of cocoa powder in South Africa Developing West‐African sales of coc
Slide 10: Integration of bolt-on acquisitions in process
Integration of bolt‐on acquisitions in process Integration of D’Orsogna Dolciaria in process Part of Region EMEA as of Oct 2017 Capabilities: Multiple technologies (some patented), highly flexible and tailor‐made product offering Products: amaretti, meringues, cookies, glazings, toppings, in
Slide 11: Gourmet & Specialties continues its strong expansion path
Gourmet & Specialties continues its strong expansion path Focusing on the core Innovating and inspiring Empowering the artisan • Chocolate Hero campaign • Roll out of Callebaut Gold • Online and off‐line Chocolate Academy • Specialties • Chocogelato roll out • Strong social media activities • Sustai
Slide 12: Our breakthrough innovation Ruby chocolate hits the market
Our breakthrough innovation Ruby chocolate hits the market Page 12 April 11, 2018
Slide 13: Financial Review
Financial Review April 11, 2018
Slide 14: Strong volume growth translates into a significant improvement of bottom-line performance
HY Results 2017/18– Financial Key Figures Strong volume growth translates into a significant improvement of bottom‐line performance Group performance HY 2017/18 % vs prior year % vs prior year (in CHF mio.) (in CHF) (in CHF) (in local currencies) Sales volume Total (in tonnes) 1’022’565 +8.0% Sales
Slide 15: All regions contributed to the strong performance in the first six months
HY Results 2017/18– Regions Key Performance Indicators All regions contributed to the strong performance in the first six months Group Sales Volume: 471’120 265’904 tonnes 1’022’565 tonnes tonnes 231’420 54’121 tonnes tonnes EMEA Americas Asia‐Pacific Global Cocoa FY volume growth +9.6% +5.5% +15.5%
Slide 16: Gross Profit up +15.5% before FX impact
Gross Profit HY 2017/18 Gross Profit up +15.5% before FX impact, driven by strong volume, good product and customer mix and a more supportive market environment in CHFmio +15.5% +30.3 +17.2 553.0 535.8 +28.8 ‐15.2 +27.9 464.0 Gross Profit Volume Product/Customer Cocoa Additional Gross Profit FX Impa
Slide 17: Combined ratio favourable for HY 2017/18
Cocoa processing profitability Combined ratio favourable for HY 2017/18 European combined ratio ‐ 6 months forward ratio 4.00 Combined ratio 3.7 3.00 Butter ratio 2.00 1.00 Powder ratio 0.00 Feb‐07 Feb‐08 Feb‐09 Feb‐10 Feb‐11 Feb‐12 Feb‐13 Feb‐14 Feb‐15 Feb‐16 Feb‐17 Feb‐18 For cocoa processors, pro
Slide 18: Steep increase in operating profit up +20.6% on a recurring basis
EBIT HY 2017/18 Steep increase in operating profit up +20.6% on a recurring basis and before FX impact in CHFmio +16.1% +20.6% +71.8 +9.0 276.8 267.8 238.4 ‐26.1 222.1 ‐16.3 EBIT Non‐recurring EBIT Additional Additional EBIT FX Impact EBIT HY 2016/17 HY 2016/17 Gross Profit SG&A, scope, HY 2017/18 H
Slide 19: Net Profit up +37.5% in CHF
EBITDA to Net Profit Net Profit up +37.5% in CHF, as a result of strong profitability and lower financial expenses In CHF mio 359.4 Tax rate: 24.0% vs PY 19.5%. 276.8 Excl. Tax reform one‐time impact 82.6 ETR would be 19.5% 49.2 10.1 +37.5% 173.0 ‐54.6 16.3 142.1 125.8 EBITDA Depreciation EBIT Finan
Slide 20: Lower prices of main raw materials until end of February 2018
Lower prices of main raw materials until end of February 2018, cocoa bean prices recently increased 250% HY average increase vs. prior year 200% Sugar world ‐27.6%% 150% Cocoa beans ‐22.5% 100% Sugar EU ‐20.9% Milk powder 50% ‐27.8% Feb.2008 Feb.2009 Feb.2010 Feb.2011 Feb.2012 Feb.2013 Feb.2014 Feb.
Slide 21: Robust Free Cash Flow generated from higher profitability
Free Cash Flow – 12‐month Rolling Robust Free Cash Flow generated from higher profitability, lower working capital requirements and discipline on Capital Expenditures in CHF mio. +225 (PY ‐43) +18.9% 688 ‐168 (PY ‐148) +31 547 578 (PY +11) (PY +315) ‐229 (PY ‐207) EBITDA reported EBITDA reported Cha
Slide 22: Solid Balance Sheet, focus on improvement of key financial ratios
HY Results 2017/18– Financial Key Figures Solid Balance Sheet, focus on improvement of key financial ratios (in CHF mio) Feb‐18 Aug‐17 Feb‐17 Total Assets 6,187 5,534 5,912 Net Working Capital 1,175 1,130 1,398 Non‐Current Assets 2,547 2,458 2,378 Net Debt 1,208 1,111 1,455 Shareholders’ Equity 2,21
Slide 23: Strategy & Outlook
Strategy & Outlook April 11, 2018
Slide 24: Consistent long-term strategy, continued focus on execution
Consistent long‐term strategy, continued 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
Slide 25: Focus on further commercializing our innovations and expanding our value-adding portfolio
Focus on further commercializing our innovations and expanding our value‐adding portfolio across all our Product Groups Gourmet & Specialties Food Manufacturers Global Cocoa • Callebaut Gold, leveraging • Global approach to Specialties • Continued focus on on our global R&D and and Decorations, leve
Slide 26: Continuous progress made in Sustainability
Continuous progress made in Sustainability First progress report published December 2017 36% of sustainable cocoa 98% of sustainable palm oil Signatory to the Cocoa & Forest Initiative Framework for Action in November 2017 Forever Chocolate Pilots Purpose is to accelerate the impact in s
Slide 27: Going digital with customer focus
Going digital with customer focus Online Chocolate Academy Offer expert chocolate education for chefs, by chefs. Interactive video courses – techniques – recipes – community Go‐live in Summer 2018 Customer portal With the “My BC” customer portal, we will offer an improved experience throug
Slide 28: Operational excellence across different functions to drive efficiencies
Operational excellence accross different functions to drive efficiencies and value added activities FOX Focus on harmonization and automation of Finance key processes Definition of an operating model for Finance that allows resources to focus on business partnering Clear roles and career paths
Slide 29: Outlook: Mid-term guidance confirmed
Outlook Good portfolio visibility and diligent execution of ‘smart growth’ strategy. Mid‐term guidance confirmed Outlook We continue to see healthy market dynamics, despite increasing cocoa bean prices. We have good visibility on our portfolio. Mid‐term guidance (2015/16 – 2018/19) confirmed Ave
Slide 30: Chocovision
Chocovision Page 30 April 11, 2018