Emmi Ag · SIX:EMMN
Emmi — Swiss Equities Conference Deutsche Bank 2008
35 slides from Emmi's conference presentation, May 20, 2008
Slide 1: Swiss Equities Conference Deutsche Bank
Swiss Equities Conference Deutsche Bank Reto Conrad, CFO Stephan Wehrle, Investor Relations Bild Zurich, 20 May 2008
Slide 2: Agenda
Agenda Overview of Emmi Group Business performance and annual result 2007 Strategic highlights and outlook Swiss Equities Conference Deutsche Bank – 20 May 2008 Page 1
Slide 3: Strategy - Vision
Strategy - Vision An independent and successful dairy company in Europe Vision § Emmi is an independent and internationally successful milk processor in Europe Market positioning § The leading Swiss company for dairy products and cheese § The leading company worldwide for Swiss cheese § One of the l
Slide 4: Business model: Broadly based product portfolio
Business model Broadly based product portfolio Dairy products Fresh products 30.1 % (CHF 754 mn) 21.5% (CHF 537 mn) Other products/ services 7.1 % (CHF 177 mn) Powder/concentrate 3.5 % (CHF 88 mn) Cheese 32.8 % (CHF 820 mn) Fresh cheese 5.0 % (CHF 125 mn) Swiss Equities Conference Deutsche Bank – 20
Slide 5: Strong growth with acquisitions
Strong growth with acquisitions Professional and rapid integration of acquisitions 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Distribution Cheese Dairy Coop Zingg AG Cheese Dairy Craamer (NL) Biedermann Roth Cheese Walter Schmitt AG Company Centre Coop Emmi Burra AG business SDF Ostermundigen
Slide 6: Dramatic growth spurt: Sales performance 2001–2007
Dramatic growth spurt Sales performance 2001 – 2007 2'500 in CHF million § 7.1 % growth in a still 2'250 587 competitive environment 2'000 509 1'750 444 § CAGR overall 11.1 % 414 447 1'500 § CAGR international 18.1 % 1'250 256 195 1'000 1826 1914 750 1'465 1'479 1'583 500 1'068 1'133 250 0 2001 2002
Slide 7: Main production locations
Main production locations Constantly improving productivity and efficiency 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 § Merging the operations of AZM and Emmi Butterzentrale to
Slide 8: Success through innovations and brand concepts
Success through innovations and brand concepts One of Europe’s leading premium dairy producers 1996 2007 Swiss Equities Conference Deutsche Bank – 20 May 2008 Page 7
Slide 9: Agenda
Agenda Overview of Emmi Group Business performance and annual result 2007 Strategic highlights and outlook Swiss Equities Conference Deutsche Bank – 20 May 2008 Page 8
Slide 10: Highlights 2007 (1/2)
Highlights 2007 (1/2) Sales targets exceeded – earnings below expectations § Growth of 7.1 % to CHF 2,501.2 million § Net profit of CHF 39.8 million (1.6 % net profit margin) § Total Shareholder Return 5.3 % Markets § Strong position maintained in domestic market > 4.8 % growth to CHF 1,914.1 millio
Slide 11: Highlights 2007 (2/2)
Highlights 2007 (2/2) Strengthening of competitive position and management change Competitive position § Integration of Mittelland Molkerei and concentration of production in Suhr § Integration of Trentinalatte § Strategic stake in Ambrosi S.p.A. § Expansion of cheese ageing facility Fromco S.A. Man
Slide 12: Facts and figures financial year 2007
Facts and figures financial year 2007 Good growth – net profit below expectations in CHF millions 2007 2006 Δ in % Net sales 2‘501.2 2‘335.2 +7.1 % Gross profit 759.4 723.9 +4.9 % in % of net sales 30.4 % 31.0 % EBIT 62.3 74.0 -15.8 % in % of net sales 2.5 % 3.2 % Net profit 39.8 54.0 -26.3 % in % o
Slide 13: Swiss market (1/2)
Swiss market (1/2) Strong position maintained in domestic market Net sales Switzerland § Growth of 4.8 % to 2007 Total Org. CHF 1,914.1 million, of which CHF mn Δ in % Δ in % 1.8 % organic Dairy products 746.0 +8.1 +1.5 Fresh products 329.7 +4.7 +3.8 § Growth in dairy and fresh products as Cheese 50
Slide 14: Swiss market (2/2)
Swiss market (2/2) Strategic projects successfully implemented § Concentration of production facilities of Mittelland Molkerei in Suhr completed § Expansion of cheese ageing facility for Le Gruyère AOC in Moudon § Commencement of work on expansion of processed cheese production facilities in Langnau
Slide 15: International markets (1/2)
International markets (1/2) Good growth – earnings below expectations Net sales international § Growth of 15.3 % to CHF 587 million 2007 Total Org. CHF mn Δ in % Δ in % § Emmi brand concepts are growth Dairy products 8.0 +4.9 +4.9 drivers Fresh products 207.3 +31.1 +11.8 § Good growth for the fresh
Slide 16: International markets (2/2)
International markets (2/2) Strengthening of market position § Integration of Italian Trentinalatte completed § 25 % stake in Italian cheese specialist Ambrosi § Merger of subsidiaries of Emmi and Ambrosi in France § Start of production of Caffè Latte in two test markets in the US § Acquisition of H
Slide 17: Trend in sales figures 2007
Trend in sales figures 2007 Solid organic growth in most product groups Sales incl. acquisitions Organic growth in CHF million 2007 2006 Δ in % 2007 in % Dairy products 754 698 +8.0 +1.6 Fresh products 537 473 +13.5 +6.5 Cheese 820 791 +3.7 +3.7 Fresh cheese 125 129 -2.8 -2.8 Powder/concentrate 88 8
Slide 18: Product launches 2007
Product launches 2007 Innovations and additions to product range 2007 § CAFFÈ LATTE Caramello and Marocchino Caramel and chocolate hints added to range § Expansion of SWISS line Swiss Müesli and Swiss Yogurt launched in Switzerland and international markets § Introduction of LUCERNE Yogodu Switzerla
Slide 19: Net sales to gross profit (1/2)
Net sales to gross profit (1/2) Trend in net sales on track in CHF millions 2007 2006 Δ in % § Decline in gross profit margin from 31.0 % to 30.4 % Net sales 2,501 2,335 +7.1 % Gross profit 759 724 +4.9 % § Earnings clearly below as % of net sales 30.4 % 31.0 % expectations due to various negative d
Slide 20: Gross profit to EBIT (2/2)
Gross profit to EBIT (2/2) Trend in net sales on track in CHF millions 2007 2006 Δ in % § Personnel expenses higher Gross profit 759 724 +4.9 due to acquisitions and as % of net sales 30.4 % 31.0 % international expansion Other income 5.1 3.1 +164.5 § Investments in marketing Personnel expenses 310
Slide 21: EBIT to net profit
EBIT to net profit Significant decline in net profit margin in CHF millions 2007 2006 Δ § Euro and USD exchange rates have negative EBIT* 62.3 74.0 11.7 impact on financial result Financial result -14 -5 +9 § At CHF 3.2 million, taxes Result ass. companies 0.5 0.7 -3 well below prior year Extraordin
Slide 22: Solid balance sheet structure
Solid balance sheet structure Stable equity ratio of 42.9 % Assets Liabilities § Increase in shareholders’ equity by CHF 33.9 million to CHF 700.5 million § Equity ratio of 42.8 % Current Debt assets (52.1 %) (46.1 %) § Increase in net debt due to ongoing investment projects by 31 % to CHF 306.2 mil
Slide 23: Key figures 2003 - 2007
Key figures 2003 - 2007 Continued growth in CHF million 2007 2006 2005 2004 2003 Net sales 2,501 2,335 2,027 1,926 1,879 Earnings before interest, taxes, depreciation and amortization (EBITDA) as 140.1 140.7 128.8 119.9 119.2 % of net sales 5.6 6.0 6.4 6.2 6.3 Earnings before interest and taxes (EBI
Slide 24: Agenda
Agenda Overview of Emmi Group Business performance and annual result 2007 Strategic highlights and outlook Swiss Equities Conference Deutsche Bank – 20 May 2008 Page 23
Slide 25: Strategic focus
Strategic focus Strengthen the Emmi brand and expand international distribution § Swiss full-range provider with high degree of customer competence § International premium provider with added-value concepts § Improved productivity and efficiency in deploying resources § Sustained and profitable grow
Slide 26: Focus 2008 – Swiss market
Focus 2008 – Swiss market Maintain strong position in the domestic market § Consolidate/defend position as leading full-range provider in all channels § Emmi brand concepts are growth drivers for fresh products and cheese § Expand leading position in products with added health benefits § Investments
Slide 27: Focus 2008 – International (1/2)
Focus 2008 – International (1/2) Expansion of brand concepts § Consolidate leader position of Emmi Caffè Latte § Extend more concepts to international brands § Build on position as partner of choice for Swiss cheese § Strengthen international growth in cheese segment via partnership with Ambrosi S.p
Slide 28: Focus 2008 – International (2/2)
Focus 2008 – International (2/2) Profitable growth § Distribution growth and targeted use of marketing in the key markets of the US, Germany, Italy and Austria § Development of market presence via subsidiaries in Canada, the Netherlands, Scandinavia, UK and Belgium/Luxembourg § Development of distri
Slide 29: Objectives for financial year 2008
Objectives for financial year 2008 Consolidate basis for further growth § More promising sales growth at the beginning of 2008 § Emmi Group growth of 2 – 3 % § In the medium term, slight contraction in growth in the Swiss market for generic products with growth potential in brand concepts § Average
Slide 30: Strategic objectives of the Emmi Group
Strategic objectives of the Emmi Group Safeguard long-term profitability § Annual growth of 2 – 3 % in the next five years > Maintain good position in Switzerland: 0 – 0.5 % annual growth > Expansion of international business: 10 % average annual growth § Net profit margin of 2 – 3 % Swiss Equities
Slide 31: Back-up
Back-up Bild
Slide 32: Trend in subsidies in the agricultural sector
Trend in subsidies in the agricultural sector Subsidies set to be massively reduced by the end of 2008 180 160 Allow ances 140 66 120 Subsidies 39 CHFmn 100 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 Swiss Equities Conference Deutsche Bank – 20
Slide 33: 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 34: Group structure
Group structure Chief Executive Officer Urs Riedener Fresh Products Trade & Supply Finances & Dairy Products International Chain Management Controlling Robert Muri Erich Kienle Max Peter Reto Conrad Cheese Procurement & Finance & Cheese International Distribution Logistics Accounting Othmar Dubach M
Slide 35: Contact
Contact Reto Conrad CFO [email protected] +41 41 227 2792 Stephan Wehrle Media & Investor Relations [email protected] +41 41 227 27 86 +41 79 356 8123 Swiss Equities Conference Deutsche Bank – 20 May 2008 Page 34