Aryzta Ag · SIX:ARYN
Aryzta — H1 2022 Earnings Presentation
45 slides from Aryzta's earnings presentation, Mar 7, 2022
Slide 1: ARYZTA AG – H1 2022 Results
ARYZTA AG – H1 2022 Results 7 March 2022
Slide 2: Forward Looking Statement
Forward Looking Statement This document contains forward looking statements which reflect the Board of Directors' current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forwa
Slide 3: Strong top- and bottom-line acceleration confirming confidence in turnaround plan
Strong top- and bottom-line acceleration confirming confidence in turnaround plan – Strong double digit organic revenue growth of 13.3% ahead of expectations – Underlying EBITDA acceleration of 240bps to 12.5% supported by disciplined costs management – Capital structure improved further, deferred h
Slide 4: Key achievements of turnaround plan
Key achievements of turnaround plan – Reinvigorating profitable Growth » Multi-local approach fully gaining traction businesses representing more than 30% of revenue ahead of 2019 » Portfolio transformation roadmap established significant increase in value added share of revenues » First busines
Slide 5: Strengthening our footprint in fast growing South East Asia Market
Strengthening our footprint in fast growing South East Asia Market – South East Asia bakery market forecasted to grow 7%-8% year on year – Exercised option to purchase bakery from co-manufacturer DeLuxe – More than doubled manufacturing capacity – Strengthening our relevant position in Foodservice a
Slide 6: Managing Business Risks
Managing Business Risks – Inflation across all cost inputs including raw material, labour, logistics and services – Price volatility very evident in commodities especially wheat and energy – Supply chain disruptions also significantly elevated – Actively managing the entire business risks on a daily
Slide 7: Guidance FY2022
Guidance FY2022 – Expectation full year 2022 for organic revenue growth in a range of 12% to 14% – Reiterate underlying EBITDA margin guidance 7 March 2022
Slide 8: Financial Review
Financial Review 8 March 2022
Slide 9: Double-digit Organic Revenue Growth driven by volume recovery
Double-digit Organic Revenue Growth driven by volume recovery in €m / % of revenue 13.3% Organic Growth 2.0% (2.7%) 0.4% 11.3% 835.3 752.5 11.0% Revenue Growth H1/21 Volume Price/Mix Disposal Currency H1/22 9 March 2022
Slide 10: Strong momentum in Europe and resilient growth in ROW
Strong momentum in Europe and resilient growth in ROW Organic revenue growth in % 14.3% 13.3% 7.7% (6.9%) (17.6%) H1/21 (19.5%) H1/22 Total Group Europe ROW 10 March 2022
Slide 11: All channels supporting growth, Foodservice with strong recovery
All channels supporting growth, Foodservice with strong recovery Organic revenue growth in % 30.7% 13.3% 10.9% 6.5% (8.4%) (8.6%) (17.6%) H1/21 H1/22 (36.1%) Total Group Retail QSR Foodservice 11 March 2022
Slide 12: Pricing contribution ramping up in line with plan
Pricing contribution ramping up in line with plan H1/22 Q1/22 Q2/22 Price % of revenue 2.3% 3.6% 1.6% 1.6% 1.7% 0.9% 0.4% Nov Dec Jan Mix Pricing 12 March 2022
Slide 13: Strong leverage contribution and gross margin protection driving profitability
Strong leverage contribution and gross margin protection driving profitability in €m / % of revenue 0.8% 12.5% 2.0% 10.1% 0.3% 0.9% 104.0 76.1 +240 bps Margin Improvement Underlying EBITDA H1/21 Gross Margin Distribution Indirect Costs Depreciation Underlying EBITDA H1/22 13 March 2022
Slide 14: Broad based margin improvement in Europe and ROW
Broad based margin improvement in Europe and ROW Underlying EBITDA % of revenue Group Europe ROW +240bps +240bps +230bps 12.5% 16.4% 11.8% 14.1% 10.1% 9.4% H1/21 H1/22 14 March 2022
Slide 15: Operating free cash flow improving net of exceptional impacts
Operating free cash flow improving net of exceptional impacts in €m Total Working Capital Movement: -45.4 18.8 27.9 37.62 26.6 27.5 5.7 6.7 11.0 1 H1/21 Underlying EBITDA Growth driven Exceptional impact CAPEX Other H1/22 1 Operating Free Cash Flow for continuing operations, see page 36 2 Operating
Slide 16: Hybrid dividend payment of €182.9m in H1
Hybrid dividend payment of €182.9m in H1 in €m Hybrid dividend payment: 182.9 172.0 22.6 10.9 22.7 973.3 835.7 Opening Balance Deferred & compounded Current dividend Dividend charge F/X movement Closing Balance 01/08/21 dividend 29/01/22 16 March 2022
Slide 17: Net debt and interest well within covenant ratios
Net debt and interest well within covenant ratios Net Debt Covenant Leverage2 Interest Costs Interest Cover Ratio3 (post IFRS16) (post IFRS16) 299.6 2.44x 1.15x 16.6 220.1 72.0 ¹ 0.58x 9.1 2.16x 227.6 FY21 H1/22 FY21 H1/22 H1/21 H1/22 H1/21 H1/22 1 Increase of net debt driven by net-effect of hybrid
Slide 18: Markets, Business Model, Innovation, Outlook
– Markets – Business Model – Innovation – Outlook 18 March 2022
Slide 19: International Bakery Company with Local Focus
International Bakery Company with Local Focus ARYZTA Adressable Market (bake-off) Total €18bn Annual Growth Rates Total 1-2% Europe €15.5bn Europe 1-2% AsiaPac 3-4% AsiaPac €2.5bn Market growing between 3-5%, depending on category ARYZTA Market Share 9-11% Source: Gira, GFK, Company and Other 19 Mar
Slide 20: ARYZTA Business Model - Four Revenue Drivers
ARYZTA Business Model - Four Revenue Drivers OUR BUSINESS MODEL – FOUR REVENUE DRIVERS Excellence in Excellence in Channel Innovation / Solutions Category Know-how Channels: Food Service, Within 6 Product Groups Convenience, Bakery, Retail, QSR Proposition Gold Standard for ovenbaked freshness Excel
Slide 21: Leading Bakery Brands
Leading Bakery Brands 21 March 2022
Slide 22: Excellence in innovation within six food categories
Excellence in innovation within six food categories 22 March 2022
Slide 23: Consumer trends driving bakery Innovation/Renovation
Consumer trends driving bakery Innovation/Renovation to meet consumer trends/needs – Consumers looking for: » Wholegrain, Seeded, Sourdough, Artisan » High-fibre, Low Protein and Low Carb – Recent sucessful NPD innovations: » High protein/high fibre bread » Vegan plant-based savory “Chicken" pastry
Slide 24: Guidance FY 2022
Guidance FY 2022 – Expectation full year 2022 for organic revenue growth in a range of 12% to 14% – Reiterate underlying EBITDA margin guidance – Strategic growth plan and mid-term guidance expected to be finalised during Q3 – ESG roadmap also to be finalised during Q3 24 March 2022
Slide 25: Thank You
Thank You March 2022 25 | ARWZTA SERVING INSPIRATION
Slide 26: Appendix
o | ARWZTA SERVING INSPIRATION March 2022
Slide 27: ARYZTA Group Underlying Income Statement
ARYZTA Group Underlying Income Statement 26 week period ended 29 January 2022 January January H1 22 H1 21 €m €m % Change Continuing Operations Group revenue 835.3 752.5 11.0% Underlying EBITDA 1 104.0 76.1 36.7% Underlying EBITDA margin 12.5% 10.1% 240 bps Underlying net profit /(loss)- continuing o
Slide 28: Underlying Income Statement Reconciliation to IFRS
Underlying Income Statement Reconciliation to IFRS 26 week period ended 29 January 2022 January 2022 January 2021 €m €m % Change Continuing Operations Group revenue 835.3 752.5 11.0% Underlying EBITDA1 104.0 76.1 36.7% Underlying EBITDA margin 12.5% 10.1% 240 bps Depreciation and ERP amortisation (5
Slide 29: Reconciliation of Underlying EBITDA to IFRS result
Reconciliation of Underlying EBITDA to IFRS result 26 week period ended 29 January 2022 January January 2022 2021 €m €m Continuing Operations Underlying EBITDA 104.0 76.1 Depreciation (47.9) (49.1) ERP amortisation (5.3) (5.3) Underlying EBITA 50.8 21.7 Amortisation of other intangible assets (8.2)
Slide 30: Reconciliation of Underlying EBITDA to IFRS EBITDA
Reconciliation of Underlying EBITDA to IFRS EBITDA 26 week period ended 29 January 2022 Continuing Operations Discontinued Operations ARYZTA Group January January January January January January 2022 2021 2022 2021 2022 2021 €m €m €m €m €m €m Underlying EBITDA 104.0 76.1 - 48.7 104.0 124.8 Net loss
Slide 31: Organic revenue
Organic revenue 26 week period ended 29 January 2022 ARYZTA ARYZTA Total Continuing Europe Rest of World Operations €m €m €m Group revenue 721.5 113.8 835.3 Organic movement 14.3% 7.7% 13.3% Disposals movement (0.4)% (15.2)% (2.7)% Currency movement 0.3% 1.7% 0.4% Total revenue movement 14.2% (5.8)%
Slide 32: Quarterly organic revenue
Quarterly organic revenue Q3 2021 Q4 2021 Q1 2022 Q2 2022 H1 2022 ARYZTA Europe Volume % (0.3%) 20.5% 8.6% 16.4% 12.3% Price/Mix % 0.9% 2.0% 1.5% 2.7% 2.0% Organic movement % 0.6% 22.5% 10.1% 19.1% 14.3% ARYZTA Rest of World Volume % 14.8% 20.8% 4.3% 7.0% 5.7% Price/Mix % (0.7%) 4.1% 3.6% 0.6% 2.0%
Slide 33: Segmental Underlying EBITDA
Segmental Underlying EBITDA 26 week period ended 29 January 2022 January January 2022 2021 Underlying EBITDA €m €m % Change ARYZTA Europe 85.3 59.1 44.3% ARYZTA Rest of World 18.7 17.0 10.0% Continuing Operations 104.0 76.1 36.7% January January 2022 2021 Underlying EBITDA margin €m €m % Change ARYZ
Slide 34: Impairment, disposal, restructuring and COVID-19 related costs
Impairment, disposal, restructuring and COVID-19 related costs 26 week period ended 29 January 2022 ARYZTA ARYZTA Total Continuing Total Continuing Europe Rest of World Operations Operations 2022 2022 2022 2021 €m €m €m €m Net gain/(loss) on disposal of businesses 0.1 (40.3) (40.2) – Loss on fixed a
Slide 35: Cash Generation
Cash Generation Period ended 29 January 2022 January 2022 January 2021 €m €m Underlying EBITDA - continuing operations 104.0 76.1 Underlying EBITDA - discontinued operations – 48.7 ARYZTA Underlying EBITDA 104.0 124.8 Working capital movement (34.6) 32.2 Working capital movement from debtor securiti
Slide 36: Cash Generation - Continuing operations
Cash Generation - Continuing operations Period ended 29 January 2022 in €m January 2022 January 2021 Underlying EBITDA 104.0 76.1 Working capital movement (34.6) 10.8 Working capital movement from debtor securitisation1 (1.8) (1.8) Capital expenditure (29.6) (23.9) Net payments on lease contracts (1
Slide 37: Reconciliation of IFRS cash flow from operating activities to Cash flow generated from activities
Reconciliation of IFRS cash flow from operating activities to Cash flow generated from activities Period ended 29 January 2022 January 2022 January 2021 €m €m Cash flow from operating activities 37.9 90.8 Purchase of property, plant and equipment (26.6) (35.6) Purchase of intangible assets (3.0) (1.
Slide 38: Net debt evolution
Net debt evolution January 2022 January 2021 €m €m Opening net debt (220.1) (1,010.7) Cash flow generated from activities (16.0) 33.8 Net movements on lease liabilities 9.1 13.6 Disposal of businesses, net of tax and leases 110.9 58.8 Disposal of equity investment – 24.3 Receipt of vendor loan note
Slide 39: ARYZTA Group Gross Term Debt Financing Facilities and Maturities
ARYZTA Group Gross Term Debt Financing Facilities and Maturities 29 January 2022 31 July 2021 €m €m Syndicated Bank RCF (340.4) (45.0) State sponsored COVID-19 related loans - (21.9) Schuldschein (17.0) (178.6) Gross term debt (357.4) (245.5) Upfront borrowing costs 7.0 9.1 Term debt, net of upfront
Slide 40: Covenants
Covenants – Under the new RCF Agreement the Group’s financial covenants are as follows: – Leverage covenant (Net Debt: EBITDA): » maximum 3.5x – Interest cover covenant (EBITDA: Net interest, including Hybrid dividend), minimum: » >1.50x – until 31 January 2022 » >2.00x – until 31 July 2022 » >3.00x
Slide 41: Hybrid Funding
Hybrid Funding Perpetual Callable FY 2021 Subordinated Instruments Coupon Coupon rate if not called €m Not called CHF 400m 5.3% 6.045% +3 Month SARON (385.5) Not called EUR 250m 6.8% 6.77% +5 Year Euro Swap Rate (250.0) Not called CHF 190m 3.5% 4.213% +3 Month SARON (183.1) Hybrid principal outstand
Slide 42: ARYZTA Group – Return on Invested Capital
ARYZTA Group – Return on Invested Capital ARYZTA ARYZTA Rest of ARYZTA Europe World Group Continuing operations €m €m €m 29 January 2022 Segmental net assets1 1,174.1 97.1 1,271.2 TTM EBITA1 71.0 18.7 89.7 ROIC1 6.0% 19.3% 7.1% 31 July 2021 Segmental net assets1 1,164.0 148.6 1,312.6 TTM EBITA1 45.1
Slide 43: Net assets, goodwill and intangibles
Net assets, goodwill and intangibles Period ended 29 January 2022 January 2022 FY 2021 €m €m Property, plant and equipment 831.0 849.8 Investment properties 2.5 3.7 Goodwill and intangible assets 660.4 660.3 Deferred tax on goodwill and intangibles (14.9) (16.4) Working capital (64.8) (94.1) Other s
Slide 44: EUR Closing and Average FX Rates
EUR Closing and Average FX Rates Average Average Closing Closing Currency H1 2022 H1 2021 % Change H1 2022 FY 2021 % Change CHF 1.0613 1.0781 1.6% 1.0376 1.0773 3.7% USD 1.1534 1.1928 3.3% 1.1154 1.1882 6.1% GBP 0.8486 0.9020 5.9% 0.8323 0.8515 2.3% BRL 6.2644 6.4388 2.7% 6.0291 6.0401 0.2% 44 March
Slide 45: Presentation Glossary
Presentation Glossary ‘Organic revenue’ – presents the revenue movement during the period, excluding impacts from acquisitions/(disposals) and foreign exchange translation. ‘Underlying EBITDA’ – presented as earnings before interest, taxation, depreciation and amortisation; before impairment, dispos