Barry Callebaut AG · SIX:BARN
Barry Callebaut — FY2016/17 Earnings Presentation
41 slides from Barry Callebaut's earnings presentation, Nov 8, 2017
Slide 1: Full Year Results 2016/17 Analysts Conference
Full Year Results 2016/17 Analysts Conference November 8, 2017 November 8, 2017
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 FY 2016/17 – CEO Antoine de Saint-Affrique Financial review FY 2016/17 – CFO Victor Balli Strategy & Outlook – CEO Antoine de Saint-Affrique Q&A – CEO&CFO Page 3 November 8, 2017 Full year results 2016/17 ‐ Analysts Conference
Slide 4: Highlights FY 2016/17
Highlights FY 2016/17 November 8, 2017
Slide 5: Change in the Executive Committee
FY results 2016/17 Change in the Executive Committee Generational change Victor Balli (born 1957) to retire as Chief Financial Officer effective February 28, 2018 after 11 successful years of service Victor Balli Remco J. Steenbergen (born 1968) appointed as new Chief Financial Officer and membe
Slide 6: Changes in the Board
Proposals to the AGM: Elections Changes in the Board Two Board members not standing for re-election Andreas Schmid, associated with Barry Callebaut since 1997 Wai Ling Liu, Board member since 2014 Andreas Schmid Elio Leoni Sceti proposed as new Board member About 25 years of experience in
Slide 7: Successful year, delivering on strategy
FY Results 2016/17 Successful year, delivering on strategy Sales volume growth Sales revenue growth (in local currencies) +4.4% +1.2% EBIT growth Net profit growth (Recurring and in local currencies) (Recurring and in local currencies) +17.8% +31.3% Free cash flow growth Dividend increase (in local
Slide 8: Highlights 2016/17
Highlights 2016/17 Mona Lisa as Barry Callebaut couples Acquisition of Extension of strategic Opening of first New Sustainability chocolate factory in strategy by 2025: decorations brand sustainability with its Ingredients Division of partnership with shifts to sustainably renewed banking credit Ger
Slide 9: Top-line acceleration in Q3 and Q4 leading to annual volume growth
Quarterly volume evolution Top-line acceleration in Q3 and Q4 leading to an overall annual volume growth of +4.4% Quarterly volume growth vs prior year +9.2% FY growth 15/16 FY growth 16/17 +12.6% +2.2% +4.4% +5.5% +8.25 +0.3% +7.2% +3.5% +2.3% +4.9% +2.3% +3.8% +4.6% -8.6% -0.8% ‐0.4% +9.1% +8.1% +
Slide 10: Volume increase fueled by all our key growth drivers
FY Results 2016/17 Volume increase fueled by all our key growth drivers Volume growth vs prior year 34.5% Emerging markets +5.9% + 9.9% excl.Cocoa 34.1% Key growth Long‐term outsourcing drivers +9.3% & strategic to continuously partnerships outperform the market 11.7% Gourmet & +9.7% Specialties Pag
Slide 11: With good momentum in many key areas...
Expansion With good momentum in many key areas... Double-digit growth in key Driving long-term Strong growth of our emerging markets outsourcing & strategic Gourmet & Specialties partnerships business Page 11 November 8, 2017 Full year results 2016/17 ‐ Analysts Conference
Slide 12: We continue to be at the forefront of innovation
Innovation We continue to be at the forefront of innovation, through breakthrough discoveries such as Ruby, the fourth type of chocolate... Page 12 November 8, 2017 Full year results 2016/17 ‐ Analysts Conference
Slide 13: ... and we keep inspiring the world of cocoa and chocolate
Innovation ... and we keep inspiring the world of cocoa and chocolate Page 13 November 8, 2017 Full year results 2016/17 ‐ Analysts Conference
Slide 14: Cocoa Leadership delivering on expectations
Cost Leadership Cocoa Leadership delivering on expectations Global steering Global harmonization Global design Combined ratio Customer segmentation Factory footprint optimized centralized management Cocoa product pricing methodology Factory organization setup Interregional product flow
Slide 15: Our focus on optimizing our cost base remains strong
Cost Leadership Our focus on optimizing our cost base remains strong, across several functional areas Defining, optimizing and aligning our processes end-to-end globally Cleaning and standardizing data Improving and aligning IT tools – Automation Centralization of day-to-day transactional ac
Slide 16: Forever Chocolate gaining momentum
Sustainability Forever Chocolate gaining momentum Achievements FY 2016/17 157,000 farmers 36% of our total cocoa beans 30% of non-cocoa raw -7,320 tonnes trained sourced sustainably materials sourced sustainably reduced of CO2 emissions Page 16 November 8, 2017 Full year results 2016/17 ‐ Analysts C
Slide 17: Financial Review
Financial Review November 8, 2017
Slide 18: Successful year, delivering on our strategy
FY results 2016/17 Successful year, delivering on our strategy Group performance FY 2016/17 % vs prior year % vs prior year in (In CHF mio.) (in CHF) (in CHF) local currencies Sales Volume Total (in tonnes) 1,914,311 +4.4% Sales Revenue 6,805.2 +1.9% +1.2% Gross Profit 986.7 +14.3% +14.6% EBIT Total
Slide 19: All regions contributed to the strong results
FY Results 2016/17 All regions contributed to the strong results Group Sales Volume: 866,498 518,359 tonnes 1,914,311 tonnes tonnes 438,434 91,020 tonnes tonnes EMEA Americas Asia‐Pacific Global Cocoa FY volume growth +6.4% +2.2% +19.1% +0.4% EBIT growth in local currencies +9.8%* +9.2% +20.2% +272.
Slide 20: Gross profit up +14.3%
Gross Profit FY 2016/17 Gross profit up +14.3% driven by chocolate volume growth, better product and customer mix and strong improvement of our cocoa business In CHF mio +14.3% +57.7 986.7 -21.8 +49.1 +38.5 863.2 Gross Profit Volume effects Product/Customer Mix Cocoa Processing Additional costs due
Slide 21: Combined ratio remains favorable
Cocoa processing profitability Combined ratio remains favorable, driven by butter demand and lower cocoa bean prices European combined ratio - 6 months forward ratio FY 2016/17 4.00 Combined ratio 3.6 3.00 Butter ratio 2.00 1.00 Powder ratio 0.00 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-
Slide 22: Strong operating profit up +21.5%
EBIT FY 2016/17 Strong operating profit up +21.5% including non-recurring, +17.0% recurring In CHF mio +21.5% +17.0% +123.5 +18.1 488.2 -38.3 470.1 -27.0 401.7 +10.2 411.9 EBIT Restructuring & EBIT Additional Additional Other costs, EBIT Non-recurring EBIT FY 2015/16 other one-off FY 2015/16 Gross P
Slide 23: Net Profit up +30.1% in CHF
EBITDA to Net Profit Net Profit up +30.1% in CHF, as a result of strong profitability, lower financial expenses and a stable tax rate In CHF mio 638.1 Tax rate: 488.2 17.4% vs -149.9 PY: 17.8% +30.1% -121.6 302.9 -18.1 284.8 -63.6 219.0 EBITDA Depreciation EBIT Net Financial Income Net Profit One-of
Slide 24: Lower cocoa bean prices, milk powder and sugar above prior year
Raw materials price evolution Lower cocoa bean prices, milk powder and sugar above prior year FY average increase 300% vs. prior year 250% 200% Sugar world +16.5% Cocoa beans 150% ‐21.0% 100% Sugar EU +17.6% 50% Milk powder +12.6% 0% Sep/2007 Sep/2008 Sep/2009 Sep/2010 Sep/2011 Sep/2012 Sep/2013 Sep
Slide 25: Net Working Capital
Net Working Capital A decrease compared to prior year as a result of continued focus and tailwind from lower cocoa prices Receivables Stocks Payables in CHF mio. ‐17.8% +56 1,374 +71 +12 +28 1,130 -265 -96 -43 -7 Net Growth Price and Growth Operational Price Impact Growth Price impact Others and Net
Slide 26: Strong free cash flow
Free Cash Flow Strong free cash flow, based on higher profitability, lower working capital, stable interest and taxes paid, plus discipline on investments in CHF mio. +192.6 (PY +210.3) +14.9% 620.0 ‐139.8 (PY -140.8) 539.4 +23.2 +475.6 (PY +19.7) (PY +430.9) ‐220.4 (PY -201.0) EBITDA recurring EBIT
Slide 27: Positive development of all key financial ratios
Balance Sheet & key ratios Positive development of all key financial ratios Aug-17 Aug-16 Total Assets [CHF m] 5,534.1 5,640.8 Net Working Capital [CHF m] 1,129.5 1,374.2 Non-Current Assets [CHF m] 2,458.2 2,301.0 Net Debt [CHF m] 1,110.9 1,452.8 Shareholders' Equity [CHF m] 2,178.8 1,956.3 Debt/Equ
Slide 28: Proposed payout of CHF 20 per share, an increase of 29%
Dividend Proposed payout of CHF 20 per share, an increase of 29% 35% 39% 36%* Proposed dividend Payout ratio 33% 33% CHF 20.0 per share1 303 255 240 223 219 Payout of 36% of Net Profit Net Profit in CHF mio. Payout of 39% of recurring Net profit 2012/13 2013/14 2014/15 2015/16 2016/17 +38% Tim
Slide 29: Strategy & Outlook
Strategy & Outlook November 8, 2017
Slide 30: Our long-term strategy remains unchanged
Our long-term strategy remains unchanged “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 Return on Capital
Slide 31: Recent acquisitions underline focus on value-adding products
Expansion Recent acquisitions underline focus on value-adding products (Specialties) Acquisition of D’Orsogna Dolciaria Leading Italian supplier of decoration and inclusion solutions for ice- cream, dairy and bakery products in Europe Sales volume in 2016: 12,000 tonnes. Sales revenues of approx
Slide 32: Unleashing the power of our People
Talent & Teams Unleashing the power of our People A renewed Senior Leadership Combining continuity and adding new skills Preparing Talent for the Future Systematic accelerated succession planning Learning and Development as a business focus A Diverse Talent pool Reflecting society’s tr
Slide 33: Our focus areas in FY 2017/18
Our focus areas in FY 2017/18 Grow Competitively Expanding in emerging markets and drive long-term outsourcing agrements Greater focus on digital: e-commerce and customer portal Leading on innovation Grow Sustainably Scaling Forever Chocolate Invest in production capacity to cater for
Slide 34: Mid-term guidance confirmed and extended
Outlook Mid-term guidance confirmed and extended Outlook Current market environment remains positive, a more supportive cocoa products market and slightly improving demand for chocolate Mid‐term guidance extended until 2018/19: Average volume growth 4-6% EBIT growth on average above volume gro
Slide 35: Questions & Answers
Questions & Answers November 8, 2017
Slide 36: Thank you
Thank you Page 36 November 8, 2017 Full year results 2016/17 ‐ Analysts Conference
Slide 37: Appendix
BARRY (() Appendix ( mejue i. e are committed to sustainability. Barry Callebaut is the partner to #(faftCreate(ollaborate.
Slide 38: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer Total world harvest (15/16): 3,989 TMT others 12% About 70% of total cocoa beans Nigeria come from West Africa 5% Brazil* 3% BC processed ~900,000 tons or 23% Ivory Coast* of the world crop Cameroon* 39% 6% Barry Callebaut has various cocoa Ecu
Slide 39: 8-year EBIT per tonne development
8-year EBIT per tonne development Increase in EBIT per MT thanks to more favorable cocoa processing margin and improvement of product and customer mix 312 290 297 282 274 279 271 286 251 246 EBIT per tonne in CHF (at constant currencies) 256 219 242 EBIT per tonne in CHF 231 (as reported) 223 1’795
Slide 40: Significant headroom for further growth and raw material price fluctuations
Significant headroom for further growth and raw material price fluctuations As of 31 August 2017 CHF 4,131 mio ABS CHF 960 mio Various uncommitted facilities ‐64% EUR 600 mio Domestic Commercial Paper Programme Various Bilateral LT Loans CHF 1,507 mio EUR 750 mio ABS Syndicated Bank Loan Maturity 20
Slide 41: Capital Expenditures
12 months – CAPEX Capital Expenditures in CHF mio. +4.6% +4.2% +4.0% +3.0% +3.2% CAPEX as % of sales revenue 249 249 240 224 220 201 Additional growth IT Upgrade / efficiency gains existing sites Maintenance 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 E Page 41 November 8, 2017 Full year results