Aryzta Ag · SIX:ARYN
Aryzta — 17-month period to December 2023 Earnings Presentation
47 slides from Aryzta's earnings presentation, Mar 4, 2024
Slide 1: ARYZTA AG – 17-month results to December 2023
ARYZTA AG – 17-month results to December 2023 March 4, 2024
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: Strategic overview
Strategic overview
Slide 4: Strategy delivering
STRATEGIC OVERVIEW Strategy delivering ▪ Strategy delivering goals and performance ▪ Bake-off business attractive, creating sustainable value ▪ ARYZTA on track to deliver mid-term 2025 targets 4
Slide 5: Key highlights 17-month results to December 2023
STRATEGIC OVERVIEW Key highlights 17-month results to December 2023 ▪ Revenue €3,046.0m ▪ Organic growth 17.3%1.) ▪ EBITDA €400.8m ▪ EBITDA margin 13.2% ▪ Free cash flow €139.6m ▪ Profit for the period €160.5m 1.) Represents the organic growth comparing the 17-month financial period ended December 2
Slide 6: Key highlights 12-month results to December 2023
STRATEGIC OVERVIEW Key highlights 12-month results to December 2023 ▪ Revenue €2,192.7m ▪ Organic growth 14.7% ▪ EBITDA €304.5m ▪ EBITDA margin 13.9% ▪ Free cash flow €132.4m ▪ Profit for the period €125.7m 6
Slide 7: Organic growth strategy working
STRATEGIC OVERVIEW Organic growth strategy working ▪ Core categories ➢ Innovations impact on revenue almost doubles1.) ➢ Market share gain ▪ Core Channels ➢ QSR, Other Foodservice, Retail ➢ Significant improvement in customer feedback rating ▪ Core regions ➢ Both regions performed well ➢ Several gro
Slide 8: Operational improvements on all levels despite challenging environment
STRATEGIC OVERVIEW Operational improvements on all levels despite challenging environment ▪ Significant labour inflation ▪ Supply chain disruptions ▪ Commodities largely remain stable but elevated ▪ Increasing regulatory complexity and costs ▪ Pricing effect flattish but not deflating 8
Slide 9: Governance update
STRATEGIC OVERVIEW Governance update ▪ Board composition proposal to be listed in AGM invitation ▪ New permanent Group CEO – January 2025 onwards ▪ Smooth and orderly transition from dual role ▪ Strong oversight and support from Chairman and Board 9
Slide 10: Guidance 2024
STRATEGIC OVERVIEW Guidance 2024 Further improvements in all key metrics expected in 2024 — Organic growth to normalize in the low to mid-single digit range, driven mainly by volume/mix — EBITDA margin expansion to normalize, supported by growth, efficiencies and cost discipline — Further improvemen
Slide 11: On track to deliver mid-term targets FY2025
STRATEGIC OVERVIEW On track to deliver mid-term targets FY 2025 Organic growth (CAGR) EBITDA Margin ROIC 4.5%–5.5% ≥14.5% ≥11.0% Revenue (€) CAPEX as % of revenue Total net debt leverage (incl. hybrids) >2bn 3.5%–4.0% <3x 11
Slide 12: ESG strategy based on three pillars and supported by 13 goals
STRATEGIC OVERVIEW ESG strategy based on three pillars and supported by 13 goals Environmental Efficiency Inspiring Innovation Our People and Communities Using resources more efficiently, Focusing on innovation in our supply Attracting, retaining, developing & giving protecting the environment and c
Slide 13: Key ESG targets for 2028
STRATEGIC OVERVIEW Key ESG targets for 2028 Environmental Efficiency Inspiring Innovation Our People and Communities • GHG 34% reduction of Scope 1 • 25% share of regenerative • Work related incidents3.) 50% & 2 emissions from a 2022 wheat on a mass-balance basis reduction from 2023 baseline baselin
Slide 14: Improvement in energy mix, GHG emissions and food waste
STRATEGIC OVERVIEW Improvement in energy mix, GHG* emissions and food waste Energy consumption GHG* emission Operational Food Waste (in 000’ MWh) (000’ MT) (% reduction vs. 2022 baseline) -4% -3% -16% 594 236 229 Index 100 570 Index 84 -6% 98 92 +31% 82 63 2022 2023 Renewable Non-Renewable Scope1 Sc
Slide 15: Financial review
Financial review » | ARYZTA
Slide 16: Key financial highlights
FINANCIAL REVIEW Key financial highlights ▪ Strong improvement in profitability ▪ Acceleration of cash generation ▪ Capital efficiency ahead of mid-term targets 16
Slide 17: 17-month results, strong growth with accelerating EBITDA margin and ROIC
FINANCIAL REVIEW – 17-month results 17-month results, strong growth with accelerating EBITDA margin and ROIC Organic Growth % EBITDA % Free Cash Flow (€m) ROIC % 21.6% 13.2% 139.6 12.3% 12.8% 17.3%1.) 10.2% 109.1 WACC: 8% 12-month 17-month 12-month 17-month 12-month 17-month 12-month 17-month FY 202
Slide 18: Consolidation of turnaround plan in calendar year 2023
FINANCIAL REVIEW – 12-month results Consolidation of turnaround plan in calendar year 2023 Organic Growth % EBITDA % Free Cash Flow (€m) ROIC % 22.6% 13.9% 132.4 12.3% 12.0% 14.7% 7.5% WACC: 8% 57.3 CY 2022 CY 2023 CY 2022 CY 2023 CY 2022 CY 2023 CY 2022 CY 20231.) Revenue EBITDA (€m) 1,915.9 2,192.
Slide 19: Double-digit organic growth, normalizing contribution from pricing
FINANCIAL REVIEW – 12-month results Double-digit organic growth, normalizing contribution from pricing Organic Growth %1.) CY 2022 CY 2023 27.9% 26.5% Key Highlights: 25.1% 20.5% — Pricing normalizing quarter by quarter 17.4% 17.0% — Portfolio management impacting volume and supporting margins 9.1%
Slide 20: Europe with broad-based margin improvement
FINANCIAL REVIEW – 12-month results Europe with broad-based margin improvement CY 2023 CY 2022 Var. vs. PY Organic Growth 15.2% 23.8% (860)bps EBITDA % 13.0% 11.0% +200bps - Revenue growth: - Poland, France, QSR and Germany as stand-outs - Retail channels outperforming market - Strong innovation acc
Slide 21: Foodservice supporting margin expansion in ROW
FINANCIAL REVIEW – 12-month results Foodservice supporting margin expansion in ROW CY 2023 CY 2022 Var. vs. PY Organic Growth 11.2% 15.9% (470)bps EBITDA % 20.6% 19.1% +150bps - Revenue growth: - Innovation and correct pricing supporting OG - QSR – restaurant openings, promotional activities and inn
Slide 22: Innovation, portfolio optimization & costs initiatives as key margin drivers
FINANCIAL REVIEW – 12-month results Innovation, portfolio optimization & costs initiatives as key margin drivers In €m / % of revenue +70bps -30bps 13.9% -60bps +210bps 12.0% 304.5 230.1 EBITDA CY 2022 Gross Margin Distribution SG&A Depreciation & EBITDA CY 2023 Amortization 22
Slide 23: Progress of gross margin recovery
FINANCIAL REVIEW – 12-month results Progress of gross margin recovery Gross Margin % of revenue 33.0 32.9% 32.8% 32.5 32.0 31.6% 31.5 31.3% 31.0 30.8% 30.5 30.0 H1/FY 20201.) H1/FY 20211.) H1/FY 20221.) CY 20222.) CY 20232.) 1.) Gross Margin before Distribution corresponds to the previously reported
Slide 24: Cost discipline and efficiency initiatives largely on track
FINANCIAL REVIEW – 12-month results Cost discipline and efficiency initiatives largely on track Levers Mid-Term Targets 2023-25 CY 2023 Results Manufacturing continuous 2-3% cost1.) efficiency YoY ▪ Manufacturing efficiency: on track improvement program SIMPLEX – recipe standardization & €26-36m cos
Slide 25: Free cash flow more than doubled
FINANCIAL REVIEW – 12-month results Free cash flow more than doubled Free cash flow evolution (in €m) 132.4 Key Highlights: — Operating performance as key driver — EBITDA expansion 57.3 — Working capital net of securitization — Prudent CAPEX management — Higher financing costs and tax charge more th
Slide 26: Total net debt leverage approaching mid-term target
FINANCIAL REVIEW – 12-month results Total net debt leverage approaching mid-term target Total net debt (incl. hybrid & leases) in €m 8 Leverage Ratio 5.6x Total net debt @ 6 4.8x constant currency 20212.) Key Highlights: 1,135 F/X impact 3.3x 4 1,097 <3.0x — Cash flow supports further balance sheet
Slide 27: Hybrid buy-back mitigating financing costs increase
FINANCIAL REVIEW – 12-month results Hybrid buy-back mitigating financing costs increase Financing costs incl. lease interest (in €m) 13.2 73.4 22.9 Key Highlights: 63.7 — Net increase of €9.7m due to higher interest rates — Hybrid buy-back offset €13.2m of gross-increase → full effect will materiali
Slide 28: ROIC exceeding mid-term target
FINANCIAL REVIEW – 12-month results ROIC exceeding mid-term target ROIC % 12.3% >11.0% Key Highlights: 7.5% WACC: 8% ROIC improvement driven by: — Strong revenue growth — Margin expansion — Disciplined working capital management CY 2022 CY 20231.) 2025 Target 1.) CY 2023 ROIC is calculated as per th
Slide 29: Operating performance driving EPS expansion
FINANCIAL REVIEW – 12-month results Operating performance driving EPS expansion EPS (in €cents) -1.0 -1.4 8.2 7.2 3.4 + 141% CY 2022 Operating Financing Costs Income Tax CY 2023 Performance (incl. Hybrid Dividend) 29
Slide 30: Successful strategy driving investment case
FINANCIAL REVIEW Successful strategy driving investment case ▪ Business is attractive and creating real value for shareholders ▪ Strategy delivering ▪ On track to deliver mid-term 2025 targets 30
Slide 31: Thank you
Thank you 31
Slide 32: Appendix
Appendix 32
Slide 33: Summary Results
Summary Results For the 17-month period ended 31 December 2023 December 2023 July 2023 17-month 12-month €m €m Revenue 3,046.0 2,123.2 Cost of sales (2,069.4) (1,462.9) Distribution expenses (383.1) (268.0) Gross profit 593.5 392.3 Selling expenses (128.9) (90.1) Administration expenses (244.8) (158
Slide 34: Revenue
Revenue For the 17-month period ended 31 December 2023 ARYZTA ARYZTA Europe Rest of World Total Group €m €m €m Revenue 2,697.8 348.2 3,046.0 Organic growth 17.7% 14.2% 17.3% Disposals movement – (3.9%) (0.5%) Currency movement 0.6% (4.3%) (0.1%) Total revenue movement 18.3% 6.0% 16.7% All movements
Slide 35: Segmental EBITDA
Segmental EBITDA For the 17-month period ended 31 December 2023 17-month 12-month December 2023 July 2023 1 EBITDA €m €m ARYZTA Europe 330.4 220.5 ARYZTA Rest of World 70.4 50.8 Total Group 400.8 271.3 17-month 12-month Change 1 EBITDA margin December 2023 July 2023 bps ARYZTA Europe 12.2% 11.7% 50
Slide 36: Free cash flow
Free cash flow For the 17-month period ended 31 December 2023 17-month 12-month December 2023 July 2023 €m €m EBITDA 400.8 271.3 Working capital movement (16.2) 5.5 Working capital movement from debtor securitisation 24.6 19.1 Capital expenditure (91.8) (63.1) Net payments on lease contracts (50.9)
Slide 37: Total net debt and hybrid funding
Total net debt and hybrid funding For the periods ended December 2023, December 2022 & H1 FY 2022 17-month 12-month December 2023 December 20221 H1 FY 2022 €m €m €m Net debt (490.8) (282.8) (299.6) Hybrid Instrument Funding (510.0) (813.7) (835.7) Total net debt and hybrid funding (1,000.8) (1,096.5
Slide 38: Return on Invested Capital
Return on Invested Capital For the periods ended December 2023, July 2023 & December 2022 17-month 12-month 12-month December July December 2023 2023 20222 Average invested capital 1,225.3 1,223.1 1,255.7 1 NOPAT 150.1 125.2 94.5 1 ROIC 12.3% 10.2% 7.5% 1 See glossary on slide 47 for definitions of
Slide 39: Pro Forma Calendar Year – Income Statement
Pro Forma Calendar Year – Income Statement For the 12-month period ended December 2023 December 2023 December 2022 €m1 €m1 Change % Revenue 2,192.7 1,915.9 14.4% Cost of sales (1,471.8) (1,325.9) (11.0)% Distribution expenses (271.3) (251.4) (7.9)% Gross profit 449.6 338.6 32.8% Selling expenses (91
Slide 40: Pro Forma Calendar Year – Revenue
Pro Forma Calendar Year – Revenue For the 12-month period ended December 2023 ARYZTA ARYZTA Europe Rest of World Total Group €m €m €m Revenue1 1,948.0 244.7 2,192.7 Organic growth 15.2% 11.2% 14.7% Currency movement 0.7% (7.2)% (0.3)% Total revenue movement 15.9% 4.0% 14.4% 1 Pro forma 12-month resu
Slide 41: Pro Forma Calendar Year - Quarterly Organic Growth
Pro Forma Calendar Year - Quarterly Organic Growth For the 12-month period ended December 2023 December 2023 1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 12 Months ARYZTA Europe Volume % 7.9% 0.2% 0.3% 5.6% 3.4% Price % 21.2% 17.7% 10.4% 3.6% 12.5% Mix % 0.2% (0.4)% (1.7)% (0.6)% (0.7)% Organic growth % 29.3%
Slide 42: Pro Forma Calendar Year - Quarterly Organic Growth
Pro Forma Calendar Year - Quarterly Organic Growth For the 12-month period ended December 2022 December 2022 1 Q1 2022 Q2 2022 Q3 2022 Q4 2022 12 Months ARYZTA Europe Volume % 12.8% 15.3% 4.0% 5.7% 9.1% Price % 5.2% 10.0% 16.4% 21.5% 13.9% Mix % 1.5% 1.6% 0.1% 0.2% 0.8% Organic growth % 19.5% 26.9%
Slide 43: Pro Forma Calendar Year - Gross Margin Development
Pro Forma Calendar Year - Gross Margin Development For the 12-month period ended December 2023 1 1 1 CY 2022 CY 2023 H1 FY20 H1 FY21 H1 FY22 2 €m €m €m €m €m2 Revenue 952.2 752.5 835.3 1,915.9 2,192.7 Cost of goods sold (639.9) (517.2) (571.1) (1,325.9) (1,471.8) Gross Margin 312.3 235.3 264.2 590.0
Slide 44: Pro Forma Calendar Year – Segmental EBITDA
Pro Forma Calendar Year – Segmental EBITDA For the 12-month period ended December 2023 December 2023 December 2022 1 2 2 EBITDA €m €m % Change ARYZTA Europe 254.1 185.1 37.3% ARYZTA Rest of World 50.4 45.0 12.0% Total Group 304.5 230.1 32.3% Change 1 EBITDA margin December 2023 December 2022 bps ARY
Slide 45: Pro Forma Calendar Year – Free cash flow
Pro Forma Calendar Year – Free cash flow For the 12-month period ended December 2023 December 2023 December 2022 1 1 €m €m EBITDA 304.5 230.1 Working capital movement 27.4 (28.7) Working capital movement from debtor securitisation 8.8 40.4 Capital expenditure (69.0) (87.6) Net payments on lease cont
Slide 46: Average and Closing FX Rates
Average and Closing FX Rates For the period 17-month period ended 31 December 2023 Average Average Average Currency December 2023 July 2023 % Change July 2022 % Change CHF 0.9732 0.9804 0.7% 1.0423 6.6% AUD 1.5958 1.5684 (1.8%) 1.5445 (3.3%) GBP 0.8685 0.8705 0.2% 0.8466 (2.6%) PLN 4.5977 4.6558 1.2
Slide 47: Presentation Glossary
Presentation Glossary ‘Organic growth’ – represents the revenue growth during the period, after removing the impact of acquisitions and divestures and foreign exchange translation. This provides a “like-for-like” comparison with the previous period in constant scope and constant currency. ‘EBITDA’ –
Aryzta — 17-month period to December 2023 Earnings Presentation on 6ix