Barry Callebaut AG · SIX:BARN

Barry Callebaut — Non-Deal Roadshow (November 2018)

46 slides from Barry Callebaut's roadshow presentation, November 2018

  1. Slide 1: Roadshow presentation – Full-Year Results 2017/18

    Roadshow presentation – Full‐Year Results 2017/18 November 2018

  2. Slide 2: Agenda

    Agenda  BC at a glance  Highlights FY 2017/18  Financial review  Strategy & Outlook  Appendix Page 2 November 2018 FY 2017/18 Roadshow presentation

  3. Slide 3: BC at a glance

    BARRY ((}) CALLEBAUT BC at a glance

  4. Slide 4: Who are we? The heart and engine of the chocolate industry

    Who are we? The heart and engine of the chocolate industry  A merger between Cacao Barry, the very first French chocolate connaisseur since 1842 and Callebaut a Belgian chocolate couverture manufacturer expert since 1911  Listed on the SIX Swiss Exchange since 1998  Today, the world's leading man

  5. Slide 5: What do we do? Present in key parts of the value chain

    What do we do? We are present in the key parts of the cocoa and chocolate value chain Page 5 November 2018 FY 2017/18 Roadshow presentation

  6. Slide 6: FY 2017/18

    FY 2017/18 Page 6 November 2018 FY 2017/18 Roadshow presentation

  7. Slide 7: What do we offer?

    What do we offer? A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 7 November 2018 FY 2017/18 Roadshow presentation

  8. Slide 8: How are we organized? Regional and Product split

    How are we organized? Our Regional and Product split FY 2017/18 Sales Volume: 2.0 million tonnes Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 5% 12% Global Cocoa 22% Europe 46% Food Manu‐ facturers 66% Cocoa Products 22% Sales Revenue: CHF 6,948.4 mio. A

  9. Slide 9: Our business model: cost plus approach

    Our business model We apply a cost plus approach to the majority of the business Customers Pricing model Profit levers Food Manufacturers • Small, medium and • Cost Plus • Customer mix 66% Global Food • Product mix Manufacturers • Economies of scale Cocoa Products • Small, medium and • Market prices

  10. Slide 10: Where are we present? 59 factories worldwide

    Where are we present? A global footprint and a local service: 59 factories worldwide Cocoa factories in origin countries and chocolate factories close to our customers. With our 21 Chocolate Academies worldwide we are at the pulse of any trends in the industry Cocoa processing factory Chocolate fact

  11. Slide 11: Highlights FY 2017/18

    Highlights FY 2017/18 November 2018

  12. Slide 12: Strategy delivering strong results across all regions

    FY Results 2017/18 Strategy delivering strong results across all regions Sales volume growth* Sales revenue growth (in local currencies) +6.3% +0.1% EBIT Net profit (CHF million) (CHF million) 554.0 357.4 Free cash flow Dividend (CHF million) (CHF per share) 311.9 24.00 * Compared to Global Chocolat

  13. Slide 13: Highlights 2017/18

    Highlights 2017/18 Fourth type of D'Orsogna Cocoa & Forests Gertrude Hawk Barry Callebaut Nestlé launches Ruby chocolate: completed Initiative signed Ingredients 10 years in China KitKat in Japan & Ruby completed South Korea Sept 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Jan 2018 Ruby: NCA Chocolate

  14. Slide 14: Strong sales volume growth, consistently above the market

    Quarterly volume evolution Strong sales volume growth, consistently above the market Quarterly volume growth vs prior year FY growth 16/17 FY growth 17/18 +4.4% +6.3% +9.2% +8.0% +8.1% Chocolate (FM and Gourmet & Specialties) +12.6% +7.4% Global Cocoa +4.8% +5.5% +4.8% +4.7% +0.3% +1.1% +2.3% +8.1%

  15. Slide 15: Positive contribution from all key growth drivers

    FY Results 2017/18 Positive contribution from all our key growth drivers Volume growth vs prior year 35.4% +9.1% Emerging markets +14.0% excl.Cocoa Key growth drivers 33.8% Long‐term outsourcing crucial to +5.6% & strategic partnerships continuously outperform the market 11.9% Gourmet & +7.7% Specia

  16. Slide 16: Expansion: good momentum continued

    Expansion Good momentum continued Double‐digit growth Driving long‐term Strong growth of our outsourcing & strategic Gourmet & Specialties in key emerging markets partnerships business Page 16 November 2018 FY 2017/18 Roadshow presentation

  17. Slide 17: Innovation: driving value across segments

    Innovation We drive value through innovation, leading on trends across segments Page 17 November 2018 FY 2017/18 Roadshow presentation

  18. Slide 18: Cost Leadership

    Cost Leadership Global transformational projects to drive growth and leverage Supporting the business Transforming Finance Driving operational excellence strategy through Information function through Finance across cocoa and chocolate Technology enablers Operational Excellence value chain  Supporti

  19. Slide 19: Sustainability: Forever Chocolate increasing impact

    Sustainability Forever Chocolate increasing impact Achievements FY 2017/18 >130,000 cocoa 2.1 million cocoa 44% of cocoa and other raw 24% of factories on farms mapped seedlings distributed materials sourced sustainably renewable energy Page 19 November 2018 FY 2017/18 Roadshow presentation

  20. Slide 20: Financial Review

    Financial Review November 2018

  21. Slide 21: Strategy delivering strong results

    FY Results 2017/18 Strategy delivering strong results Group performance FY 2017/18 % vs prior year 1) % vs prior year 1) (In CHF mio.) (in CHF) (in CHF) in local currencies Sales Volume Total (in tonnes) 2,035,857 +6.3% Sales Revenue 6,948.4 +2.1% +0.1% Gross Profit 1,157.1 +20.7% +17.2% EBIT Total

  22. Slide 22: All regions contributed to top- and bottom-line growth

    FY Results 2017/18 All Regions contributed to top‐ and bottom‐line growth Group Sales Volume: 925,144 2,035,857 549,287 tonnes tonnes tonnes 455,649 105,777 tonnes tonnes EMEA Americas Asia‐Pacific Global Cocoa FY volume growth +6.8% +6.0% +16.2% +3.9% EBIT growth in +11.2%* +9.2% +20.2% +28.3% loca

  23. Slide 23: Gross Profit FY 2017/18

    Gross Profit FY 2017/18 Gross profit up +17.2% in local currencies, driven by strong product and customer mix, Cocoa business maintained strong momentum In CHF mio +20.7% in CHF +17.2% in LC +33.5 1’157.1 +48.0 1’123.6 +77.9 ‐21.5 +60.4 958.8 Gross Profit Volume Product/ Cocoa Additional Gross Profi

  24. Slide 24: Cocoa processing profitability: combined ratio

    Cocoa processing profitability Combined ratio remains at favorable level European combined ratio ‐ 6 months forward ratio* FY 2017/18 5.00 4.00 Combined ratio 3.7 3.00 Butter ratio 2.00 Powder ratio 1.00 0.00 Aug‐07 Aug‐08 Aug‐09 Aug‐10 Aug‐11 Aug‐12 Aug‐13 Aug‐14 Aug‐15 Aug‐16 Aug‐17 Aug‐18 *For co

  25. Slide 25: EBIT FY 2017/18

    EBIT FY 2017/18 Operating profit up +21.2% in local currencies, well above volume growth In CHF mio +20.4% +21.2% +164.8 +18.2 554.0 535.8 ‐49.0 ‐22.1 460.2 442.1 ‐18.1 EBIT Non‐recurring EBIT Additional Additional Scope, Other EBIT FX impact EBIT FY 2016/17 FY 2016/17 Gross Profit SG&A FY 2017/18 F

  26. Slide 26: Long-term EBIT per tonne development

    Long‐term EBIT per tonne development Increase in EBIT thanks to enhanced product and customer mix and continued improvement in Cocoa business 312 312 290 283 EBIT per tonne 282 274 279 in constant currencies 271 251 EBIT per tonne in CHF 286 231 272 219 256 242 231 223 +6.7% 2’036 Volume in kMT 1’71

  27. Slide 27: EBITDA to Net Profit

    EBITDA to Net Profit Net Profit recurring is up +35.9% as a result of great profitability and lower net finance cost items In CHF mio 728.3 (+23.0%) *Tax rate = 21.1%, or 18.2% excl. tax reform one‐time impact 554.0 Prior year = 17.0% (+20.4%) ‐174.2 +35.9% ‐101.1 357.4 ‐95.5 +18.1 281.1 263.0 EBITD

  28. Slide 28: Raw material price evolution

    Raw material price evolution Volatile cocoa bean prices, sugar and dairy below prior year FY 2017/18 2.5 Change Sept 17 – Aug 18 2 1.5 Sugar world ‐14% Cocoa beans 1 +11% Milk powder +0% 0.5 Sugar EU ‐34% 0 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep.2014 Sep.2015 Sep.2016 Sep.2017 Sep

  29. Slide 29: Free Cash Flow

    Free Cash Flow Solid Free cash flow generated from higher profitability, relatively stable working capital and CAPEX discipline In CHF mio +23.0% 728 ‐32 592 (PY +193) ‐156 (PY ‐141) 312 (PY +476) ‐218 ‐11 (PY ‐220) (PY +23) EBITDA recurring EBITDA recurring Change in Interest Capex Others FCF FY 20

  30. Slide 30: Balance Sheet & key ratios

    Balance Sheet & key ratios Positive development of all key financial ratios (in CHF mio) Aug 2017/18 Aug 2016/17 Total Assets CHF m 5,832 5,467 Net Working Capital CHF m 1,074 1,043 Non‐Current Assets CHF m 2,506 2,478 Net Debt CHF m 1,074 1,111 Shareholders’ Equity CHF m 2,270 2,111 Deb/Equity rati

  31. Slide 31: Dividend: proposed payout of CHF 24.00 per share

    Dividend Proposed payout of CHF 24.00 per share, an increase of 20.0% 39% 39% 37%* Payout ratio 35% 33% 33% 357 Proposed dividend 281 255 240 223 219  CHF 24.00 per share  Payout of 37% of Net Profit Net Profit in CHF mio. 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Timetable for dividend +66%

  32. Slide 32: Proposals to the AGM: Elections

    Proposals to the AGM: Elections Changes in the Board  James (Jim) Donald will not stand for reelection  Board member since 2008 and Chariman of the Nomination & Compensation Committee  All other Board members will stand for reelection for a term of office of one year Andreas Schmid  Proposed for

  33. Slide 33: Strategy & Outlook

    Strategy & Outlook November 2018

  34. Slide 34: Our long-term strategy remains unchanged

    Strategy 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 pillars Growth’ Gourmet, Specialties and emerging markets Cost Leadership Return on

  35. Slide 35: Expansion: recent transactions outline growth potential

    Expansion Recent transactions outline growth potential  Long‐term supply agreement with Burton’s Biscuit  Burton’s Biscuit Company, UK’s second biggest biscuit manufacturer  Supply of over 12,000 tons of chocolate and compound per year  Expand production capacity in the UK  Closing expected by

  36. Slide 36: Talent & Teams: grow talents, grow business

    Talent & Teams Grow talents, grow business  Foster a performance and values driven culture  Performance management program to strengthens strategic alignment throughout the organization  Annual Chairman's Award and Value Awards  Grow and strengthen talent pool  More systematic approach to talen

  37. Slide 37: Outlook: focus areas in FY 2018/19

    Outlook Our focus areas in FY 2018/19  Grow consistently  Maintain strong momentum in developed countries.  Further strengthen our presence in the high‐potential Emerging Markets and value added segments.  Deploy and leverage the might of our recent acquisitions and innovations.  Grow profitabl

  38. Slide 38: Mid-term guidance confirmed, new guidance in 1H

    Outlook Mid‐term guidance confirmed, new guidance in 1H Outlook  Continued execution of our ‘smart growth’ strategy, good visibility on volume growth and healthy global demand, give us confidence to achieve mid‐term guidance. Mid‐term guidance until 2018/19:  Average volume growth 4‐6%  EBIT grow

  39. Slide 39: Appendix

    Appendix November 2018

  40. Slide 40: What makes Barry Callebaut unique?

    Appendix What makes Barry Callebaut unique?  Global number one player in chocolate and cocoa  Deep chocolate and cocoa expertise  Global leader in Gourmet & Specialties  Proven and long‐term oriented strategy  Unparalled global footprint, present in all key markets  Preferred outsourcing and s

  41. Slide 41: Chocolate confectionery market development – Nielsen data

    Appendix Chocolate confectionery market development – Nielsen data North America (22% of market) Western Europe (33% of market) EEMEA (24% of market) 2013‐18 average: ‐0.4% 2013‐18 average: ‐0.5% 2013‐18 average: +0.3% 2018 12M: ‐0.2% 2018 12M: ‐0.1% 2018 12M: +6.6% South America ( 7% of market) Asi

  42. Slide 42: Our market and opportunities ahead

    Appendix Our market and opportunities ahead Global Chocolate confectionery volume growth vs cocoa bean price 5 2'500 Forecast volume growth per application 2017‐2022 4 2'000 3 1.4% Volume growth GBP / tonne 2 1'500 1 3.2% 1'000 0 500 3.4% ‐1 ‐2 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201

  43. Slide 43: Uniquely positioned in industrial chocolate and cocoa markets

    Appendix Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets Cocoa grinding capacity Industrial chocolate – open market Notes: Olam incl. ADM; Cargill incl. ADM chocolate business; Fuji Oil incl. Harald Sources: Proprietary estimates Page 43 November 2018 FY 2017/18 Roadsho

  44. Slide 44: West Africa is the world's largest cocoa producer

    Appendix West Africa is the world’s largest cocoa producer Total world harvest (16/17): 4,748 TMT others 11%  About 70% of total cocoa beans come Nigeria from West Africa 5% Brazil* 4% Ivory  BC processed ~925,000 tonnes or Coast* approximately 20% of the world crop Cameroon* 43% 5%  Barry Calleb

  45. Slide 45: Significant headroom for further growth and raw material price fluctuations

    Appendix Significant headroom for further growth and raw material price fluctuations As of 31 August 2018 CHF 4,152 mio ABS CHF 835 mio Various uncommitted facilities ‐66% EUR 750 mio Domestic Commercial Paper Programme Various Bilateral LT Loans CHF 1,428 mio EUR 750 mio ABS Syndicated Bank Loan Ma

  46. Slide 46: Liquidity – Debt maturity profile

    Appendix Liquidity – Debt maturity profile As of 31 August 2018 In CHF mio 848 Cash and Revolving Credit Facility (undrawn) Short‐term facilities Bonds 1 139 502 406 381 281 172 2 2 Cash 2018 2019 2020 2021 2022 2023 2024 Page 46 November 2018 FY 2017/18 Roadshow presentation

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