Barry Callebaut AG · SIX:BARN
Barry Callebaut — FY2012/13 Earnings Presentation
48 slides from Barry Callebaut's earnings presentation, Nov 7, 2013
Slide 1: Full Year Results 2012/13 Analysts Conference
Full Year Results 2012/13 Analysts Conference Nov 7, 2013 Because we love chocolate…
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 “bel
Slide 3: Agenda
Agenda X Highlights 2012/13 Juergen Steinemann, CEO X Financial review Victor Balli, CFO X Strategy update & Outlook Juergen Steinemann, CEO X Q&A Session Nov 7, 2013 FY 2012/13 Analysts presentation 3
Slide 4: Successful year in further implementing our growth strategy
Highlights FY 2012/13 Successful year in further implementing our growth strategy +8.7% +4.4%1 -4.9%1 Stand-alone* Stand-alone* Net Profit + 11.4% -3.9%1 from continuing Volume growth EBIT growth operations Acquisition of Significant Dividend Cocoa Business investments in CHF 14.50 from Petra Foods
Slide 5: Important steps taken towards strengthening our leadership in the industry
Highlights 2012/13 Important steps taken towards the strengthening of our leadership in the industry Cocoa Horizons Acquisition of Cocoa Business from Petra Foods Implementation – Opening of 1st. First Cocoa Center of chocolate factory in Signing agreement Financing in place and Closing Excellence T
Slide 6: Strong broad-based volume performance
FY 2012/13 Strong broad-based volume performance Sales Volume by Region Volume growth vs prior year Europe +8.1% Asia- Pacific 4% Global Sourcing & Cocoa Americas +16.7% 20% Europe 48% Global Sourcing & Cocoa +14.5% Americas 28% Asia-Pacific +1.8% Underlying market 1 +1.6% 1 Source: Nielsen – Chocol
Slide 7: Continued focus on our key expansion drivers
Five-year development Continued focus on our key expansion drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic partnerships Volume +23% vs prior year +28% vs prior year +10% vs prior year growth CAGR +15% CAGR +34% CAGR+9% 26% 22% 10% of total 20% Group 10% 10% volume 20
Slide 8: Significant expansion of manufacturing footprint provides diversification and competitive advantage
Significant expansion of manufacturing footprint provides diversification and unique competitive advantage Cocoa processing factory Chocolate factory Integrated cocoa & chocolate factory New Factory, under construction or expansion Nov 7, 2013 FY 2012/13 Analysts presentation 8
Slide 9: Gourmet & Specialties: strong top and bottom-line performance
Gourmet & Specialties: strong top and bottom-line performance Group Gourmet & Specialties Business – Growth evolution CAGR+9.0% +9.9% Sales Volume 1.3% 1.5% Underlying (tonnes) 1.2% 0.6% market growth* -0.7% 2008/09 2009/10 2010/11 2011/12 2012/13 CAGR +11.5% +17.7% EBIT (in constant currencies) * S
Slide 10: Strongest ever activation plan for our global brands
Strongest ever activation plan for our global brands with key focus behind growing the core… The Callebaut® brand 100% Belgian, from bean to chocolate X N°1 chocolate brand for professionals worldwide, at the heart of great chocolate stories X First gourmet brand to switch completely to sustainable
Slide 11: Activation plan for global brands supported by world leading chefs
Strongest ever activation plan for our global brands supported by the world leading chefs… The Cacao Barry® brand unlocking the sensorial richness of cacao & chocolate to inspire creativity X N°1 French brand for professionals worldwide X Launch of Cacao Barry “Purity from Nature” – the next generat
Slide 12: Striving for cost leadership while growing at a high pace
Striving for cost leadership while growing at a high pace... Capacity Manufacturing Higher Utilization costs per supply chain tonne costs • Chocolate: 95% due to (target 82-85%) -2.6%1 capacity • Cocoa 92 % constraints (target 90-95%) Energy Optimization Production consumption of materials capacity
Slide 13: Our sustainability initiative in numbers
“Cocoa Horizons”: Execution platform for sustainability projects Our sustainability initiative in numbers Increase sustainable cocoa supply and improve farmer livelihoods Farmer Practices Farmer Education Farmer Health Double yield & improve Train next farmer Clean water & basic quality generation h
Slide 14: Strong innovation funnel with focus on fewer, bolder and bigger projects
Strong innovation funnel with focus on fewer, bolder and bigger projects Project B Project A C B Asia Project J O I N L QPP + Pure D T A Terra Cacao Project C E R U Project D A A N Acticoa C C G T H Sweet Project E Project K A Project M Stevia F Relauch Sweet by fruit T G G Project G E A A Project H
Slide 15: Project «Spring»: Enhancing our leadership in service
Project «Spring»: Enhancing our leadership in service Workstreams Customer segmentation Harmonized processes Customer Service for Quality Assurance New Product Pricing Introduction Today Oct 17 2011 May 8 2012 Dec 15 April June 2013 Sept 2013 Jun 2014 Pre-Spring: Process design Implementation Go-liv
Slide 16: Integration of the recently acquired cocoa business from Petra Foods well on track
Integration of the recently acquired cocoa business from Petra Foods well on track... Organization in place X Regional and global commercial and functional organization Commercial model X Combined cocoa and chocolate sales forces, one face to the customer approach Global Supply Chain X Global manufa
Slide 17: Agenda
Agenda X Highlights 2012/13 Juergen Steinemann, CEO X Financial review Victor Balli, CFO X Strategy update & Outlook Juergen Steinemann, CEO X Q&A Session Nov 7, 2013 FY 2012/13 Analysts presentation 17
Slide 18: Strong top-line growth, gaining profitability momentum
Strong top-line growth, gaining profitability momentum Group performance FY 2012/13 % vs prior year (in CHF) Sales Volume Total 1’535’662 +11.4% Sales Volume stand-alone 1’498’632 +8.7% EBIT Total 339.6 -3.9% EBIT stand-alone 368.8 +4.4% EBIT per tonne 246.1 -3.9% Net profit from continuing operatio
Slide 19: Strong top-line growth, gaining profitability momentum
Strong top-line growth, gaining profitability momentum Europe Americas Asia-Pacific Global Sourcing & Cocoa Volume growth +8.1% +16.7% +1.8% +14.5%1 +0.9%2 Market volume +2.1% -0.6% 12.9% growth3 EBIT growth -36.0%1 vs. prior +9.0% +19.3% -9.4% year -17.6%2 (in CHF) 1) Including acquisition of Petra
Slide 20: Improved product margins fueled gross profit
Gross Profit –FY 12/13 Improved product margins fueled gross profit in mCHF * Without Cocoa Processing impact +9.6% +13.4% +74.1 +8.1 736.9 728.5 -25.1 +34.7 -27.5 -8.5 672.6 Gross Profit Volume Product mix Cocoa Additional Scope effects, Gross Profit Petra Foods Gross Profit FY 2011/12 effects and
Slide 21: Combined ratio had a negative impact, however current outlook is positive
Cocoa processing profitability Combined ratio had a negative impact, however current outlook is positive... European combined ratio- 6 months forward ratio FY 12/13 4.00 3.42 3.00 2.00 1.00 0.00 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 For coc
Slide 22: Stand-alone operating result gained momentum +4.4%
EBIT bridge Stand-alone operating result gained momentum +4.4% in CHF m * Without Cocoa Processing impact +11.5% +4.4% +64.3 -24.0 368.8 353.2 -24.7 -12.0 339.6 -17.2 EBIT Additional Additional SG&A Add. costs, EBIT stand- Petra Foods Acquisition EBIT FY 2011/12 Gross Profit from business Scope and
Slide 23: Foreseen profitability improvement of the recently acquired cocoa business
Foreseen profitability improvement of the recently acquired cocoa business of Petra Foods X Good visibility of current portfolio X Recent improvement of combined ratio will positively impact 2014 X Synergies confirmed X Integration of sourcing operations started X European business improvement initi
Slide 24: Net finance costs remained at prior year level
Financial items Net finance costs remained at prior year level, despite recent financing for acquisition in CHF m Average 4.36% 4.30% interest rate 1.3 1.0% 74.8 69.1 69.8 7.2 -1.6 -1.9 Net interest Net interest Bank charges, Gain on derivative Pension cost Petra Foods cocoa Net Finance expense FY e
Slide 25: Continued good tax rate, last time effect from consumer business divestiture
Below EBIT Continued good tax rate, last time effect from consumer business divestiture [CHF m] Change in FY 2012/13 FY 2011/12 % CHF Operating profit (EBIT) -3.9% 339.6 353.2 Financial items -0.1% (74.8) (74.9) Profit before Taxes [CHF m] -4.8% 264.8 278.3 Income taxes 4.6% (35.5) (37.2) Tax rate [
Slide 26: Investments and strategic acquisition to support future growth
Cash Flow Investments and strategic acquisition to support future growth in CHF m +2.5% 440 451 -52 -224 +890 32 -106 -80 -847 Operating Operating Investment in Capital Interest paid Dividend CF from Cash flow Net increase in Cash Flow* Cash Flow* Working Capital Expenditures and income & Capital ac
Slide 27: Continued good working capital management
Net Working Capital evolution Continued good working capital management in mCHF Receivables Stocks Payables +263 1’346 +4.3% +103 +77 -41 1’083 1’039 -7 -44 -32 -12 Net Growth Price impact Growth Price impact Growth Price impact Others, scope Net Petra Foods Net Working impact and impact and impact
Slide 28: Stand-alone most ratios improved, total impacted by recent acquisition
Balance Sheet & key ratios Stand-alone most ratios improved, total impacted by recent acquisition BC stand-alone Aug 13 Aug 12 Aug 2013 Total Assets [CHF m] 4'527.1 3'576.6 Net Working Capital [CHF m] 1'083.4 1'345.7 1'039.2 Non-Current Assets [CHF m] 2'072.1 1'424.8 Net Debt [CHF m] 993.1 1'525.2 9
Slide 29: Payout ratio increased to 35%, total payout maintained
Dividend Payout ratio increased to 35%, total payout maintained Total payout to shareholders Proposed dividend in CHF m X CHF 14.50 per share1 X Payout of 35 % of Net Profit CAGR +5% 80 80 80 X Not subject to withholding tax2 72 65 Timetable for dividend X Shareholder approval: Dec 11, 2013 (AGM) X
Slide 30: Agenda
Agenda X Highlights 2012/13 Juergen Steinemann, CEO X Financial review Victor Balli, CFO X Strategy update & Outlook Juergen Steinemann, CEO X Q&A Session Nov 7, 2013 FY 2012/13 Analysts presentation 30
Slide 31: Our strategy remains unchanged
Our strategy remains unchanged Vision “Heart and engine of the chocolate and cocoa industry” Expansion Innovation Sustainable, Strategic profitable pillars growth Cost leadership Sustainable Cocoa Nov 7, 2013 FY 2012/13 Analysts presentation 31
Slide 32: Demand outlook in chocolate and cocoa remains strong
Further expansion of our chocolate and cocoa business Demand outlook in chocolate and cocoa remains strong Chocolate Confectionery – Volume in tonnes 1 Cocoa powder– Volume in tonnes 2 280 24 240 Western Europe Asia-Pacific 20 South America 200 Asia Pacific 16 EU 160 Absolute Absolute growth growth
Slide 33: Taking global leadership in chocolate and cocoa
Expansion Taking global leadership in chocolate and cocoa Cocoa Grinding Capacity Industrial chocolate – Open market Barry Callebaut Barry Callebaut Cargill Cargill ADM Blommer Blommer ADM Mondelez Cemoi Guan Chong Puratos Nestlé Fuji Oil Ferrero IRCA BT Cocoa Guittard Ecom Cocoa Other players other
Slide 34: Our ambition: preferred, proactive cocoa powder supplier
Our ambition: preferred, proactive cocoa powder supplier Move from Move to X Tactical player X Proactive seller of cocoa products X Strong sourcing base in West X More globally balanced sourcing Africa from origin countries, including Asia and South America X Limited presence in emerging X Greatly e
Slide 35: Our key focus areas for 2013/14
Strategy Our key focus areas for 2013/14 X Integrate Petra Foods cocoa business and strengthen our position in cocoa powder X Enhance profitability X Continue product margin improvement X Keep supply chain and fixed costs under control X Full implementation of Project Spring X Accelerate talent mana
Slide 36: Our outlook for the next year and mid-term guidance
Outlook & Guidance Our outlook for the next year and mid-term guidance Market / X Long-term growth remains intact: around 2% volume Industry growth X Sensitive economic environment in Southern European markets X Slower growth in some emerging markets, including FX risks X Improvement of combined coc
Slide 37: Agenda
Agenda X Highlights 2012/13 Juergen Steinemann, CEO X Financial review Victor Balli, CFO X Strategy update & Outlook Juergen Steinemann, CEO X Q&A Session Nov 7, 2013 FY 2012/13 Analysts presentation 37
Slide 38: Summary
Summary X Significant top-line growth, profitability gained momentum Volume growth +8.7% stand-alone (+11.4% total) EBIT growth +4.4% stand-alone, (-3.9% total) Net profit CHF 229.3 mio (-4.9) X Growth driven by strategic partnerships, Gourmet and emerging markets X Integration of the acquired
Slide 39: Thank you
Thank you Nov 7, 2013 FY 2012/13 Analysts presentation 39
Slide 40: Appendix
Appendix Nov 7, 2013 FY 2012/13 Analysts presentation 40
Slide 41: Overall chocolate confectionery market grew 1.6% in volume vs. prior year
Market Development Overall chocolate confectionery market grew 1.6% in volume vs. prior year Global + 1.6% EE WE +2.8% +1.7% USA -0.9% China & India +12.9% Brazil +1.2% 1) Source: Nielsen data (Sep 2012- Aug 2013); - Top 16 countries represent app. 75% of the global chocolate market in volume; - USA
Slide 42: Raw materials development
Raw materials development Historical evolution % of total BC raw material costs FY 12/13 300% 250% Cocoa beans 55% 200% Cocoa beans Milk powder 150% Sugar 14% Sugar EU 12% Milk Powder Sugar world 100% Fats 7% 12% Others 50% Okt 06 Okt 07 Okt 08 Okt 09 Okt 10 Okt 11 Okt 12 Okt 13 Note: All figures ar
Slide 43: 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 (12/13): 3’986 TMT X About 70% of total cocoa beans come from West Africa others X BC stand-alone processed 10% Ecuador ~620,000 tonnes or 16 % of the 5% world crop Brazil* Ivory 5% Coast* 37% X BC (including
Slide 44: 3 mio tonnes of outsourcing potential for future growth
Expansion 3 mio tonnes of outsourcing potential for future growth Global Industrial Chocolate market in 2012/13= 6,250,000 tonnes* Open market Integrated market Big 4 chocolate confectionary Competitors players Others Others 20% 40% 49% 51% * Company estimates Nov 7, 2013 FY 2012/13 Analysts present
Slide 45: Some of our key customers & long-term strategic partners
Some of our key customers & long-term strategic partners Nov 7, 2013 FY 2012/13 Analysts presentation 45
Slide 46: Capex investments support the growth of our business
Capex investments support the growth of our business in CHFm +5.2% +4.4% +4.5% CAPEX as % of sales revenue +3.0% +3.3% +2.8% Average = 4.0% 250 218 224 200 174 144 145 Additional growth IT Upgrade / efficiency gains existing sites Maintenance 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 P
Slide 47: Strong operating cashflow despite fast volume growth and expansion
Cash flow evolution Strong operating cashflow despite fast volume growth and expansion CAGR 13.2% Negative FX impact 480 458 455 451 434 407 418 348 313 252 228 116 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 * Operating Cash Flow before working capital changes Nov 7, 2013 FY 2012/13
Slide 48: Stable financing offering enough headroom for future growth
Stable financing offering enough headroom for future growth and average maturity of 6 years Financing and liquidity situation as of August 31, 2013 in CHFm 2,945 CHF 570 mio Various Short term uncommitted facilities 40.4% EUR 400 mio Commercial Paper Programme 3-5 years Various bilateral LT loans 1,