Barry Callebaut AG · SIX:BARN
Barry Callebaut — 9M 2014/15 Earnings Presentation
33 slides from Barry Callebaut's earnings presentation, July 2015
Slide 1: Roadshow Presentation – 9-month Key Sales Figures 2014/15
Roadshow Presentation – 9-month Key Sales Figures 2014/15 July 2015 July, 2015
Slide 2: Agenda
Agenda BC at a glance Highlights Q3 2014/15 Financial Review Strategy & Outlook Page 2 July, 2015 Q3 2014/15 Roadshow presentation
Slide 3: From the cocoa bean to the chocolate and cocoa products
From the cocoa bean to the chocolate and cocoa products Barry Callebaut is present in the key parts of the cocoa and chocolate value chain Cocoa Farming Barry Callebaut’s core activities Cocoa Origination Direct Sourcing Cocoa Processing Cocoa Beans 80% Cocoa Liquor ~54% ~46% Cocoa Powder Cocoa Butt
Slide 4: Barry Callebaut at a glance
Barry Callebaut at a glance Business description Key figures • World leading producer and business-to-business supplier FY 2013/14 of chocolate and cocoa products • Fully integrated with strong position in cocoa-orign Sales Volume 1.7 mio. tonnes countries Sales Revenue CHF 5.8 bn • Serving the enti
Slide 5: Favorable industry dynamics
Favorable industry dynamics Global growth prospects Outsourcing rationale for customers Average market growth in chocolate: 1.8 % in Free up capital to invest in marketing and volume per year distribution Influenced by population growth and increase Access to most recent innovation and new i
Slide 6: Our factories provide manufacturing diversification and unique competitive advantage
Our 54 factories provide us with manufacturing diversification and unique competitive advantage Cocoa processing factory Chocolate factory Integrated factory New factories since 2014 Page 6 July, 2015 Q3 2014/15 Roadshow presentation
Slide 7: Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets
Chocolate and Cocoa markets Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets Cocoa grinding capacity Industrial chocolate – open market BC BC Cargill Cargill + ADM Olam Blommer Blommer ADM Mondelez Cemoi Guan Chong Puratos Ecom Cocoa Fuji Oil Nestlé IRCA Ferrero Guittard
Slide 8: Agenda
Agenda BC at a glance Highlights Q3 2014/15 Financial Review Strategy & Outlook Page 8 July, 2015 Q3 2014/15 Roadshow presentation
Slide 9: Volume continues to grow well above the global chocolate confectionery market
9-month Key Sales Figures - 2014/15 Volume continues to grow well above the global chocolate confectionery market Sales volume growth +2.5% in a weak global chocolate confectionery market (-2.1%*) Continued good volume growth in the chocolate business Volume growth broadly based, supported by
Slide 10: Volume growth +2.5% above the global chocolate confectionery market
9-month Key Sales Figures - 2014/15 Volume growth +2.5% above the global chocolate confectionery market which declined -2.1%* Europe Americas Asia Pacific Global Cocoa 4% 4% 28% 28% 43% 25% 25% Volume growth +2.5% +3.7% +6.7% +0.8% Market Growth * -2.0% -2.5% -1.5% Source: * Nielsen data Sep- April
Slide 11: …along our three key growth drivers
9-month Key Sales Figures - 2014/15 …along our three key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic partnerships Volume growth 9 months +3.3% vs prior year +6.3 % vs prior year +4.9% vs prior year 2014/15 CAGR 5 year +17.3% +21.0% +6.0 % Volume 33% 31% %
Slide 12: Further expansion of our adjacent specialties business
Recent developments - Expansion Further expansion of our adjacent specialties business Acquisition of assets of American Almond, leader in the U.S. in artisanal nut-based ingredients 2,000 tonnes of nut specialties per year and revenue of approx. CHF 14.8 million (USD 15.9 million / EUR 14.2 mil
Slide 13: Signing of first long-term outsourcing agreement in South-East Asia with GarudaFood
Recent developments - Expansion Signing of first long-term outsourcing agreement in South-East Asia with GarudaFood GarudaFood and Barry Callebaut signed a long-term outsourcing agreement in South-East Asia on June 16th, 2015 Barry Callebaut will take over some of the manufacturing equipment fro
Slide 14: Antoine de Saint-Affrique to become CEO of Barry Callebaut
CEO Announcement Antoine de Saint-Affrique to become CEO of Barry Callebaut Effective October 1, 2015, Antoine de Saint-Affrique (1964, French national) will take over from Juergen Steinemann who was elected Vice Chairman of the Board in December 2014. Currently President Unilever Foods (combine
Slide 15: Agenda
Agenda BC at a glance Highlights Q3 2014/15 Financial Review Strategy & Outlook Page 15 July, 2015 Q3 2014/15 Roadshow presentation
Slide 16: Improvement of the EBIT per tonne continues
6-year EBIT per tonne development Improvement of the EBIT per tonne continues 312 282 290 285 EBIT per tonne in CHF 274 (at constant currencies) 282 286 251 245 EBIT per tonne in CHF 256 (as reported) 242 223 +9.1% 1’717 1’378 1’536 1’210 1’269 893 Volume in kMT 2009/10 2010/11 2011/12 2012/13 2013/
Slide 17: Challenging market environment in cocoa processing activity continues
Cocoa processing profitability Challenging market environment in cocoa processing activity continues European combined ratio- 6 months forward ratio 4.00 3.00 Combined ratio 2.67 ( June 26, 2015) 2.00 Cocoa butter 1.00 Cocoa powder 0.00 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 For coc
Slide 18: Cocoa bean price still at relatively high levels, other raw materials below prior year
Raw materials evolution Cocoa bean price still at relatively high levels, other raw materials below prior year Sep-June 2015 vs. prior year 300% 250% Cocoa beans 200% +9% Sugar world 150% -7% 100% Sugar EU +4% Milk powder 50% -15% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep
Slide 19: Higher working capital needs due to acquisition of cocoa business and higher cocoa bean price
10-year development Higher working capital needs due to acquisition of cocoa business and higher cocoa bean price Cocoa bean price (GBP) 904 943 889 876 975 789 834 832 798 NWC per tonne 700 754 (CHF) CAGR +6.2% 1,675 NWC CHF mio. 1,346 1,037 1,010 965 1,039 914 921 884 888 831 FY 2004 FY 2005 FY 20
Slide 20: Significant investments for growth. Focusing on improving returns
10-year development Significant investments for growth. Focusing on improving returns (CHF mio.) 21% 19% 20% 20% ROE target 20% 19% 19% 18% 18% 16% 15% 14% 14% 15% 15% ROIC target 15% 14% 14% 14% 13% 14% ROE 11% 11% 11% ROIC 250 249 218 224 200 CAPEX 153 144 145 145 102 115 90 FY 2004 FY 2005 FY 200
Slide 21: Agenda
Agenda BC at a glance Highlights HY 2014/15 Financial Review Strategy & Outlook Page 21 July, 2015 Q3 2014/15 Roadshow presentation
Slide 22: Our proven four-pillar strategy is the basis for our long-term business success
The Barry Callebaut Group’s growth strategy Our proven four-pillar strategy is the basis for our long-term business success “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable, 4 strategic Innovation profitable pillars growth Cost Leadership Sustainable Cocoa Page 22
Slide 23: Significant further opportunities with three key growth drivers
Expansion Significant further opportunities with three key growth drivers Potential volume of 3 mio tonnes BC with 25% market share 80% in emerging markets is captive Acquisitions pipeline market Adjacent products Increase distribution points Global market (1.8% volume growth long-term)
Slide 24: Outlook
Outlook Market/ Industry Outlook Temporary decline in the chocolate confectionery industry, due to prices increases and soft economies across the globe. Growth prospects in chocolate and cocoa remain unchanged Significant opportunities along the key growth drivers Challenging cocoa products ma
Slide 25: Appendix
Appendix July, 2015
Slide 26: What makes Barry Callebaut unique?
What makes Barry Callebaut unique? Global number one player focused in chocolate and cocoa Global leader in Gourmet Proven and long-term oriented strategy Unparalled global footprint, present in all key markets Preferred outsourcing and strategic partner Leading and growing presence in e
Slide 27: High cocoa bean price levels still weighing on our Balance Sheet and key ratios
Balance Sheet & key ratios High cocoa bean price levels still weighing on our Balance Sheet and key ratios Feb 15 Aug 14 Feb 14 Total Assets [CHF m] 5,433.4 5,167.5 5,106.9 Net Working Capital [CHF m] 1,566.6 1,674.6 1,501.4 Non-Current Assets [CHF m] 2,139.5 2,175.6 2,068.6 Net Debt [CHF m] 1,790.6
Slide 28: Enough headroom for further growth and raw material price fluctuations
Available Financing Enough headroom for further growth and raw material price fluctuations As of 28 Feb 2015 CHF 3,830 mio ABS CHF 791 mio. Various Short term uncommitted 44.9% facilities EUR 600 mio. Domestic Commercial Paper Programme CHF 2,111 mio 3-5 years Various bilateral LT loans EUR 175 mio.
Slide 29: Capital Expenditures
Capital Expenditures in CHF mio. +4.5% +4.6% +4.2% CAPEX as % of sales revenue Average = 3.9% +3.2% +3.2% 249 218 224 200 174 Additional growth 145 IT Upgrade / efficiency gains existing sites Maintenance 2009/10 2010/11 2011/12 2012/13 2013/14 PLAN 2014/15 Page 29 July, 2015 Q3 2014/15 Roadshow pre
Slide 30: Cash flow generation despite fast volume growth and expansion
Cash flow generation despite fast volume growth and expansion, which also translated into high return to shareholders in CHFm Total return to 696% shareholders 522% 502% 436% 411% 337% 324% 279% 161% 47% 69% 0% -2% CAGR 12.7% 480 474 458 455 451 434 418 407 348 313 Cash Flow 252 228 116 2002 2003 20
Slide 31: Net debt development – Increased driven by higher working capital needs and further expansion
10-year development Net debt development – Increased driven by higher working capital needs and further expansion 3.5 3.4 Net debt /EBITDA 2.6 2.6 1,804 2.3 2.2 2.3 2.1 2.1 2.2 1.8 1,525 Net Debt (in CHF mio.) 1,042 943 954 907 930 943 943 871 790 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2
Slide 32: Long-term chocolate remains a resilient category with average annual volume growth of 1.8%
Industry Overview Long-term chocolate remains a resilient category with an average annual volume growth of 1.8% Chocolate confectionery – Total market volume 2,250 2,125 2,017 Cocoa bean price (GBP) 1,781 1,730 1,380 1,435 1,043 844 911 888 Worst economic downturn 4.1% 4.1% 3.1% 2.8% 2.0% 2.1% 2.0%
Slide 33: West Africa is the world’s largest cocoa producer – BC sources locally
West Africa is the world’s largest cocoa producer – BC sources locally Total world harvest (13/14): 4’345 TMT others 8% About 70% of total cocoa beans Ecuador come from West Africa 5% Brazil* 5% Ivory Coast* BC processed ~940,000 tonnes or Cameroon* 40% 22% of the world crop 5% Nigeria 6% Barr