Emmi Ag · SIX:EMMN
Emmi — Helvea Swiss Equities Conference 2009
38 slides from Emmi's conference presentation, Jan 16, 2009
Slide 1: Helvea Swiss Equities Conference
Helvea Swiss Equities Conference Bad Ragaz, 16 January 2009 Urs Riedener CEO Emmi Group
Slide 2: Agenda
Agenda Overview of Emmi Group and strategic focus Current market situation and trends Global and national milk market trends Opportunities and challenges for the Emmi Group Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 2
Slide 3: Strategy and vision
Strategy and vision Independent and successful in open markets Vision § Independent and internationally successful dairy in open markets Market positioning § The leading Swiss company for cheese and milk products § The leading company for Swiss cheese worldwide § One of the leading premium dairies i
Slide 4: Business model: Broadly based product portfolio
Business model Broadly based product portfolio Dairy products Fresh products 30.1% (CHF 754 million*) 21.5% (CHF 537 million*) Other products/ services 7.1% (CHF 177 million*) Powder/concentrates 3.5% (CHF 88 million*) Cheese 32.8% (CHF 820 million*) Fresh cheese 5.0% (CHF 125 million*) * 2007 figur
Slide 5: Sharp rise in growth
Sharp rise in growth Sales trends 2001 – 2007 In CHF millions 2,500 § 7.1% growth in a still highly 2,250 competitive environment 587 2,000 509 § CAGR overall 11.1% 1,750 444 1,500 414 447 § CAGR international 18.1% 1,250 256 195 1,000 1,826 1,914 750 1,465 1,479 1,583 500 1,068 1,133 250 0 2001 200
Slide 6: Strong growth through acquisitions
Strong growth through 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 Mittelland Walter Schmitt AG Company Centre Coop Emmi Burra AG business SDF Ostermundig
Slide 7: Success through innovations and brand concepts
Success through innovations and brand concepts One of the leading premium dairies in Europe 1996 2008 Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 7
Slide 8: Emmi in comparison to the international market
Emmi in comparison to the international market The 20 leading dairies worldwide and Emmi 16.9 16 14 Europa Umsatz in Mrd. Euro Welt 12 10.2 9.6 10 8.8 8.1 7.6 7.6 8 6.4 6 4.7 4.4 3.5 3.4 3.3 3.1 4 3.0 2.8 2.4 2.3 2.3 2.2 1.6 2 0 hr or es rm r Fo A a dm st d La e la rra tlé i am s tF s O uto ng t Fo
Slide 9: Well-positioned with regard to growth momentum
Well-positioned with regard to growth momentum International competitor comparison: EBIT and sales growth 1) EBIT margin 07 % COMMENT Profitability 18 • In terms of sales growth Emmi Sales volumes is the most dynamic 16 company, but with relatively 14 lower profitability 12 • Milk processor market g
Slide 10: Level of internationalization and size is increasing
Level of internationalization and size is increasing International competitor comparison: Foreign sales / total sales 1) COMMENT Foreign sales [%] Level of internationalization 100 • Emmi is catching up with regard to level of 90 internationalization and 80 company size • A high proportion of foreig
Slide 11: Strategic focus: Maintain leading position in domestic market
Strategic focus Maintain leading position in domestic market § Maintain/defend position as a full-range supplier in all channels § Emmi brand concepts as growth drivers for fresh products and cheese § Expand leading position in products with added health benefits § Investments in brand concepts (Kal
Slide 12: Strategic focus: Expand brand concepts
Strategic focus Expand brand concepts § Maintain leading position of Emmi Caffè Latte § Expand other concepts to international brands § Expand position as a partner of choice for Swiss cheese § Strengthen international growth in the cheese segment through partnerships and acquisitions Helvea Swiss E
Slide 13: Strategic focus: Profitable international growth
Strategic focus Profitable international growth § Key markets USA, Germany, Italy and Austria > Distribution growth and targeted use of marketing resources § Developing markets Canada, the Netherlands, UK and Belgium/Luxembourg > Market development through subsidiaries § Asia, Middle East and Russia
Slide 14: Emmi acquires US producer Roth Käse USA Ltd
Position bolstered on the US cheese market Emmi acquires US producer Roth Käse USA Ltd § Reinforce position on the US cheese market § Increasing sales opportunities in retail sector and food service channels § Potential with speciality cheeses in a double-digit growth market § US becomes largest for
Slide 15: Agenda
Agenda Overview of Emmi Group and strategic focus Current market situation and trends Global and national milk market trends Opportunities and challenges for the Emmi Group Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 15
Slide 16: Consumer sentiment remains positive
Consumer sentiment remains positive Good growth in the Swiss retail trade in 2008 § Coop (+15.1%) and Migros achieved double-digit growth in 2008 § 8 out of 10 retail companies expect a significant growth for 2009* § Generally good forecast for 2009, despite recession § No sense of crisis in the Swi
Slide 17: Private consumers supporting the economy
Private consumers supporting the economy Consumers benefit from lower inflation § Growth forecasts (GDP) revised from 1.9% in 2008 to -0.8% in 2009 § Slight increase of 0.7% expected in consumer prices § SECO anticipates consumer growth (private households) of 1.2% in 2009 § Consumers will be suppor
Slide 18: International focus markets hit by recession
International focus markets hit by recession No significant impact on retail and food industry § Rural US-Mainstreet Economy slows to record low – unemployment rate rises to 7,1% § Total government expenditures to nominal GDP will rise 23.6% to record high § Ongoing recession for 2009 expected. Gove
Slide 19: Increasing price pressure in the retail business
Increasing price pressure in the retail business Trading up and down continues to be a powerful global trend § Segmentation of brand concepts at Coop (Fine Food, Slow Food) and Migros (Sélection) n g up § Clear positioning through Swiss Premium T rad i indulgence Powerful global trend § Discounter A
Slide 20: Strong brand as a USP
Strong brand as a USP Strategic approach with single brand and umbrella brand Real Swiss Premium Indulgence Single brand with Single brand with distinct Single brand with implicit umbrella brand dominant umbrella brand umbrella brand In Switzerland and abroad Original Refinement Inspiration Well- Lo
Slide 21: Swiss as USP
Swiss as USP Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 21
Slide 22: Agenda
Agenda Overview of Emmi Group and strategic focus Current market situation and trends Global and international milk market trends Opportunities and challenges for the Emmi Group Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 22
Slide 23: Overview of global milk products market
Overview of global milk products market Highly fragmented international milk market Market volume for milk products worldwide [USD billions ] • Global market growth (4.9%) is well above that of 5 years Switzerland (1.06%) +4.9 CAGR % +3.7 • In 2011, the overall market for milk products will 487.2 am
Slide 24: Degree of consolidation in individual segments
Degree of consolidation in individual segments Products with added benefits are attractive Level of consolidation by segment Estimated market share of top 5 players 50 % Maximum Commodity milk 45 % Private Label Commodity butter 40 % Premium Branded milk 35 % Premium Branded yogurts Premium Branded
Slide 25: Global market developments as an opportunity
Global market developments as an opportunity There has been a consumption surplus since 2003 Weltmilchproduktion & -konsum (in Mio. Tonnen) 650 647 645 640 Consumption 630 620 610 Production 600 Ø jährliches Konsumwachstum: ca. 12.4 Mio. to (ca. 2.1%) 590 585.7 585.2 580 2001 2002 2003 2004 2005 200
Slide 26: Developments in milk prices
Developments in milk prices Milk price handicap could be reduced Rp./kg Milch Quellen: BLW, ZMP, SMP, LTO Milchpreisentwicklung EU und Schweiz Monatl. Eurokurs: SNB 86 82 1.1.2009 81.29 CH gewerbliche Käsereien, ohne SVZ (BLW) 78 78.25 -9 74 centimes/ 70 kg approx. 24 centimes/kg 33 Rp./kg 66 CH Ind
Slide 27: Unstable raw material development in Switzerland
Unstable raw material development in Switzerland Develop competitive structures and milk prices § Rapid reduction in surplus production in Switzerland § Milk price lowered by around 9 centimes per kilogram of milk for January 2009 § Reassessment of market conditions in spring 2009 § Development of m
Slide 28: Agenda
Agenda Overview of Emmi Group and strategic focus Current market situation and trends Global and international milk market trends Opportunities and challenges for the Emmi Group Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 28
Slide 29: Opportunities and challenges for Emmi
Opportunities and challenges for Emmi Imminent significant changes to the environment Value chain MARKET ENVIRONMENT/ LIBERALIZATION • Greater export opportunities INVESTORS • Volume and price/margin • Positive evolution of pressure within Switzerland shareholder value • Elimination of state subsidi
Slide 30: Liberalisation as an opportunity (1/3)
Liberalisation as an opportunity (1/3) Every second kilogram of milk in international competition § Cheese (1,430 million kg milk) § Long-life milk products (300 million kg milk) § Yoghurt, fresh milk products, ice cream (200 million kg) § Retail tourism (butter, cream, milk) Export (every third kil
Slide 31: Liberalisation as an opportunity (2/3)
Liberalisation as an opportunity (2/3) New export possibilities for milk products § Free market access to around 500 million consumers for quality products and specialities § The condition is that milk prices fall closer to the EU price level § Regaining from retail tourism § Reliable and long-term
Slide 32: Liberalisation as an opportunity (3/3)
Liberalisation as an opportunity (3/3) Hard and semi-hard cheeses as an opportunity for Swiss export Greece France Italy Finland Germany Belgium Austria Netherlands Sweden Czech Rep. Estonia Poland Average cheese consumption/per capita Slovenia Latvia § Total: 20.9 kg U.K. § Hard and semi-hard chees
Slide 33: Focus on Swissness – Example: Swiss muesli
Focus on Swissness – Example: Swiss muesli Decisive USP and differentiation from the competition § Successful performance in German key market since start of 2007 § Positioning in retail trade as a premium product from Switzerland § Potential for expansion in international key markets § Targeted exp
Slide 34: Focus on innovations – Example: Kaltbach
Focus on innovations – Example: Kaltbach Pure Cheese Indulgence § The best cheeses ageing in the cave and develop into veritable delicacies § Kaltbach Le Gruyère AOC and Kaltbach Emmental AOC – differentiation through unmistakeable taste § Creating added value through natural cheese refining process
Slide 35: Focus on increasing efficiency
Focus on increasing efficiency Reduction of large production locations from 12 to 7 Suhr Kirchberg BE Dagmersellen Emmen Ostermundigen Landquart Thun BE Langnau § Amalgamation of AZM and Emmi Butterzentrale locations into Mittelland Molkerei increases efficiency and international competitiveness § C
Slide 36: Focus on collaborations – Example: USA
Focus on collaborations – Example: USA Roth Käse USA Synergies Emmi USA Final Sourcing/ maturing of Swiss Switzerland/ production/ Wisconsin cheese cheese specialities fresh products NY maturation in Monroe Warehou- Wisconsin/ Analysis of situation sing/logist to June 2009 East Coast East Coast ics
Slide 37: Outlook for financial year 2008
Outlook for financial year 2008 Financial objectives § Growth of 6 – 8% > Above target of 2 – 3% > Slowdown in international business due to declining consumer sentiment § Profit margin above 2% Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 37
Slide 38: 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 Helvea Swiss Equities Conference – Bad Ragaz, 16 January 2009 Page 38