Barry Callebaut Ag · SIX:BARN
Barry Callebaut — FY2009/10 Earnings Presentation
47 slides from Barry Callebaut's earnings presentation, Nov 4, 2010
Slide 1: Full Year Results 2009/10 Analysts presentation
Full Year Results 2009/10 Analysts presentation November 4, 2010
Slide 2: Cautionary note
Cautionary note Certain statements in this Letter to Investors regarding the business of Barry Callebaut are of a forwardlooking 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 a
Slide 3: Agenda
Agenda X Highlights FY 2009/10 X Financial and operational performance X Strategy & Outlook X Q&A November 4, 2010 Barry Callebaut FY 2009/10 results presentation 3
Slide 4: Global chocolate confectionery growth flat
Global chocolate confectionery growth flat 12 months Sep 2009 -Aug 2010 (‘000 tonnes) Western Europe Eastern Europe USA 0.9% -5.3% 2.7% 774 733 1’531 1’544 China 1’107 1’136 2009 2010 8.2% 2009 2010 2009 2010 43 46 Brazil 2009 2010 3.5% Total Top 15 countries 0.3% 141 146 2009 2010 3’595 3’606 Sourc
Slide 5: Strong year - dynamic growth
Financial summary FY 2009/10 Strong year - dynamic growth 1'305 1'214 X Ongoing strong sales volume growth in Sales Volume a flat global market: up 7.6% (´000 Tonnes) X Gourmet & Specialties: excellent sales 08/09 09/10 volume growth of 17.3% 5'214 X Sales revenue up 11.3% in local 4'880 Sales Reven
Slide 6: Substantial growth achieved in all Regions
Financial summary FY 2009/10 Substantial growth achieved in all Regions Europe Americas Asia-Pacific Global Sourcing & Cocoa Food Manufacturers, Food Manufacturers Food Manufacturers Cocoa semi-finished Gourmet and products & Gourmet & Gourmet Consumer 57.7% of sales 22.3% of sales 3.7% of sales 16.
Slide 7: Raw materials at high levels, volatility increased
Raw material price development Raw materials at high levels, volatility increased London Cocoa 2nd Position in GBP/tonne Average price for white sugar EUR/tonne 2500 london n°5 (2nd position) EU white sugar monthly av. (DDP) EU ref. Price White Oct 2010 750 1950 £/tonne Sep 2010 508 €/tonne 2000 650
Slide 8: Low combined cocoa ratio, recently improving
Raw material price development Low combined cocoa ratio, recently improving Cocoa powder-butter combined ratio* – European ratios 6 months forward against LIFFE 4.00 Oct 2010 3.4 3.50 Combined ratio 3.00 2.50 2.00 Powder ratio 1.50 Butter ratio 1.00 0.50 0.00 Jan-04 Jan-07 Jan-01 Oct-01 Oct-04 Oct-1
Slide 9: Focus on Expansion, Gourmet and Sustainability
Highlights FY 2009/10 Focus on Expansion, Gourmet and Sustainability From May until October, Barry Barry Callebaut Barry Callebaut joins Launch of multiple Callebaut acts as the extends the UTZ Certified cocoa certification project – unique supplier to successful Quality program aiming to UTZ, Rainf
Slide 10: Global partnership agreement with Kraft Foods
Highlights FY 2009/10 Global partnership agreement with Kraft Foods X Long-term global partnership between two leading companies in their field X Amongst the largest strategic deals BC has ever signed, and the first truly global agreement X Barry Callebaut expects to more than double current supplie
Slide 11: Growth Strategy
Highlights Fiscal Year 2009/10 Growth Strategy X “Heart X “Heart and and engine engine of of the the chocolate chocolate industry” industry” Vision X Chocolate X Chocolate expert expert and and business business partner partner of of choice choice X Number X Number one one chocolate chocolate compan
Slide 12: Increased importance of emerging markets and outsourcing
Geographic Expansion: Expansion Increased importance of emerging markets and outsourcing % of total consolidated sales volume Emerging 17% CAGR +16.2% markets 16% 14% 10% Outsourcing 14% 6% 9% (long-term CAGR +89%* 12% agreements) 2% Mature markets CAGR +5.8% 88% 84% 80% 75% 73% 2005/06 2006/07 2007
Slide 13: Further potential for outsourcing
Expansion Further potential for outsourcing Global Industrial Chocolate market in 2009 = 5,400,000 tonnes* Barry Callebaut • BC only player with the biggest Kraft / Cadbury market share in the open market Mars • Only company with long-term Nestlé agreements with the major Hershey's chocolate compani
Slide 14: Key market trends drive our R&D efforts
Innovation Innovation at Barry Callebaut Key market trends drive our R&D efforts Sustainability & Cost Focus Indulgence Permissibility Regulation Sustainability Transparency Market •Same quality, •Increasing •Demand for •Chocolate •QPP Trends lower costs interest for healthy alter- alternatives incl
Slide 15: Operational efficiency further improved
Cost Leadership Cost leadership Operational efficiency further improved X Costs per tonne down by 5% in fiscal year 2009/10 through: X Maintenance costs down by 4%* per tonne X Optimized product flows and inventory management X Transport optimization X Reduced energy consumption X Higher capacity ut
Slide 16: Quality Partner Program (QPP)
Corporate Social Responsibility Quality Partner Program (QPP) X Increase quality as well as quantity of cocoa produced by farmers X Increase direct sourcing (65% of total sourced beans) X Goal is to improve farmers income by: X Cutting out middlemen X Training programs to increase quality and yield
Slide 17: Agenda
Agenda X Highlights FY 2009/10 X Financial and operational performance X Strategy & Outlook X Q&A November 4, 2010 Barry Callebaut FY 2009/10 results presentation 17
Slide 18: Strong year with significant growth
Key Figures 2009/10 Strong year with significant growth Change in % Change in % FY 2009/10 FY 2008/09 In local currencies Sales volume [in tonnes] 7.6% 1'305'280 1'213'610 Sales revenue [CHF m] 11.3% 6.8% 5'213.8 4'880.2 CHF per tonne 3.5% -0.7% 3'994 4'021 Gross profit [CHF m] 6.3% 4.0% 736.2 707.8
Slide 19: Volume growth and operational improvements partly offset low combined ratio and negative FX
Gross Profit – August 2010 Volume growth and operational improvements partly offset low combined ratio and negative FX in mCHF +4.0% +9.9 -20.7 +30.3 -16.4 +37.3 -12.0 736.2 707.8 Gross Profit Volume Product Operational Scope effects Cocoa processing Negative Gross Profit FY 2008/09 effects mix / Pr
Slide 20: Double digit EBIT growth before scope and negative currency effects
EBIT – August 2010 Double digit EBIT growth before scope and negative currency effects in mCHF 11.4% +44.8 -20.2 +15.4 390.8 -12.5 -7.9 370.4 350.8 EBIT Additional Additional SG&A Overhead EBIT before Scope effects Negative EBIT FY 2008/09 Gross Profit from business efficiency Scope, non- and non- c
Slide 21: Region Europe
Region Europe Strong performance amidst challenging market conditions Sales volume (tonnes) Europe 4.1% Food Manufacturers (FM), Gourmet and Consumer 57.7% of total sales volume 723,099 753,011 • Market demand in Western Europe recovered, although UK and France are still slightly negative, Eastern E
Slide 22: Region Americas
Region Americas A strong top-line translates into profit improvement Sales volume (tonnes) Americas Food Manufacturers 15.6% & Gourmet 22.3% of total sales volume • Chocolate consumption in the US saw low levels 252,159 291,399 in early 2010 and rebounded strongly in last quarter; overall the US cho
Slide 23: Region Asia-Pacific
Region Asia - Pacific A strong growth story continues Sales volume (tonnes) Asia-Pacific 15.5% Food Manufacturers & Gourmet 3.7% of total sales volume • Chocolate consumption in China, India, 41,544 47,984 Indonesia and Malaysia showed overall significant growth, while Japan did not grow FY 08/09 FY
Slide 24: Global Sourcing & Cocoa
Global Sourcing & Cocoa Creating value through our core ingredients Sales volume (tonnes) Global Sourcing & Cocoa 8.2% Cocoa semi-finished products 16.3% of total sales volume 196,808 212,886 • Volatile cocoa markets and new historical highs driven by fears of a poor crop and heavy speculative buyin
Slide 25: Net Financial Expenses
Net Financial Expenses Substantially improved due to lower interest rates in mCHF Av. interest rate 4.7% 3.5% 84.7 6.7 1.9 81.1 6.0 66.5 Net interest Net interest Bank charges, Losses on Exchange Net financial expense FY expense FY fees and other derivative rate impact expenses FY 2008/09 2009/10 fi
Slide 26: From EBIT to PAT
From EBIT to PAT Lower financial expenses contributed to record Net Profit Change in % Change in In local % FY 2009/10 FY 2008/09 currencies Operating profit (EBIT) [CHF m] 7.9% 5.6% 370.4 350.8 Financial items [CHF m] -9.4% -11.5% (81.1) (91.6) Result from investments in associates (0.3) 0.4 and jo
Slide 27: Cash Flow FY 2009/10
Cash Flow FY 2009/10 Improved Cash Flow key to support the speed of our growth in mCHF +19.3% 355 297 -177 -145 -11 -43 -65 Operating Operating Investment in Capital CF from Dividend** Decrease in Cash Flow* Cash Flow* Working Capital Expenditures acquisitions, net cash FY 2008/09 FY 2009/10 disposa
Slide 28: Working Capital
Working Capital Positive impact from our Capital Excellence program CHF 114 million in mCHF Average of the year vs. prior year • Inventories (days sales in inventory) Net Working Capital at 31 Aug 2009 1′010 Reduction considering volume growth thanks to a better planning. Overall reduction of 11.7 d
Slide 29: CAPEX development
CAPEX development Investments support the growth of our business in mCHF Additional growth IT 5% Upgrade / efficiency gains existing sites Maintenance 4% 250 3% 3% 3% CAPEX as % of sales 165 153 144 145 115 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 PLAN November 4, 2010 Barry Callebaut FY 2009
Slide 30: Balance Sheet
Balance Sheet Solid Financials with improvement of all key ratios Change August 2010 August 2009 in % Total Assets [CHF m] 1.6% 3'570.8 3'514.8 Net Working Capital [CHF m] -4.5% 964.9 1'010.1 Non-Current Assets [CHF m] -1.8% 1'405.8 1'432.2 Net Debt [CHF m] -7.6% 870.8 942.7 Shareholders' Equity [CH
Slide 31: Net debt
Net debt Stable financing structure through long-term secured credit lines Financing and liquidity situation as of Aug 31, 2010 (CHF million) 2,326 775 Various Short term uncommitted facilities EUR 850 mio 1,131 Syndicated bank Maturity 255 ABS receivables loan (12 banks) 2012 (17%) financing 2013 (
Slide 32: Growth over the last 5 years
BC’s sustainable and solid top-line and bottom-line growth over the last 5 years Sales Volume EBIT in CHF CAGR CAGR + 7.5% + 8,9% 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 Net profit in CHF * Economic Value Added in CHF CAGR CAGR +11.0% 10.1% EVA Notional Capital Charge* 2005 2006
Slide 33: BC share price development over last 5 years vs. relevant indexes
BC share price development over last 5 years vs. relevant indexes 1000 900 BARN.S = 765 800 CAGR 2005/10= +16% 700 600 500 400 300 200 100 Jan 2006 Apr 2006 Aug 2006 Dec 2006 Apr 2007 Aug 2007 Nov 2007 Mar 2008 Jul 2008 Nov 2008 Mar 2009 Jul 2009 Oct 2009 Feb 2010 Jun 2010 Oct 2010 BARN.S .SSHI .SX3
Slide 34: Proposed pay-out: Increase of 12% to CHF 14.0 per share
Proposed pay-out: Increase of 12% to CHF 14.0 per share Change FY CHF per share FY 2008/09 in % 2009/10 Profit from continuing operations 10.5% 48.6 44.0 Proposed payout 12.0% 14.0 12.5 Payout ratio (continuing operations) 28.8% 28.4% Total proposed payment [CHF m] 12.0% 72.4 64.6 • Reduction of nom
Slide 35: Agenda
Agenda X Highlights FY 2009/10 X Financial and operational performance X Strategy & Outlook X Q&A November 4, 2010 Barry Callebaut FY 2009/10 results presentation 35
Slide 36: Growth Strategy
Fine-tuning our strategy Growth Strategy X “Heart X “Heart and and engine engine of of the the chocolate chocolate industry” industry” Vision X Chocolate X Chocolate expert expert and and business business partner partner of of choice choice X Number X Number one one chocolate chocolate company comp
Slide 37: "Expansion" in different dimensions
Expansion Fine-tuning our strategy “Expansion” in different dimensions • Drive consolidation and grow profitably in mature FM markets Geography • Achieve full potential in recently entered emerging markets • Further expand in new emerging markets Outsourcing • Strengthen our current partnerships … •
Slide 38: Goal: Strengthen our Global Gourmet Leadership
Fine-tuning our strategy on Gourmet Goal: Strengthen our Global Gourmet Leadership November 4, 2010 Barry Callebaut FY 2009/10 results presentation 38
Slide 39: Global Gourmet market
Fine-tuning our strategy on Gourmet Global Gourmet market Gourmet global market and BC presence Market X Highly fragmented market with more than Total= >CHF 3bn 100’000 end-customers Chocolate products Adjacent products CHF ~2bn sales CHF >1bn sales X Three main segments: 100% X Confectioners: artis
Slide 40: Our business today
Fine-tuning our strategy on Gourmet Our business today X Global Market leader X Sales Revenue more than CHF 700 mio (24% market share) X Present in all major markets, through own sales office or agent X We sell via different channels: distributors, wholesalers, cash & carry and directly X Brands: X
Slide 41: Six actions for accelerated Gourmet growth in the future
Fine-tuning our strategy on Gourmet Six actions for accelerated Gourmet growth in the future 1. Sharpen focus on two global brands Cacao Barry and Callebaut 2. Move from a product to a segment focus Decorations (Confectioners) 3. Increase adjacent product offering 4. Accelerate geographical expansio
Slide 42: Gourmet growth target
Fine-tuning our strategy on Gourmet Gourmet growth target X Double our sales volume until 2014/2015 (Combination of organic growth and acquisitions) CAGR +14.9% CAGR +6.4% 2004/05 2009/2010 2014/15 November 4, 2010 Barry Callebaut FY 2009/10 results presentation 42
Slide 43: Financial targets confirmed and extended
Outlook Financial targets confirmed and extended X Three-year growth targets for 2009/10 – 2011/12 extended by one year through 2012/13 X Annual growth targets on average* for 2009/10 through 2012/13: Volumes: 6-8% EBIT: at least in line with volume growth * Our view for the 2009-2013 period ref
Slide 44: Agenda
Agenda X Highlights FY 2009/10 X Financial and operational performance X Strategy & Outlook X Q&A November 4, 2010 Barry Callebaut FY 2009/10 results presentation 44
Slide 45: Summary
Summary Strong year – dynamic growth Outperforming global chocolate market Excellent growth in all Regions, especially in emerging markets and in Gourmet & Specialties Proven growth strategy Financial targets confirmed and extended through 2012/13 November 4, 2010 Barry Callebaut FY 2009/10 results
Slide 46: Barry Callebaut Financial Calendar 2010/11
Barry Callebaut Financial Calendar 2010/11 X Annual General Meeting 2009/10 - December 7, 2010 X 3-month key sales figures 2010/11 - January 12, 2011 X Half-year results 2010/11 - April 1, 2011 X 9-month key sales figures 2010/11 - June 30, 2011 X Full-year results 2010/11 - November 10, 2011 X Annu
Slide 47: Thank you for your attention!
Thank you for your attention! November 4, 2010 Barry Callebaut FY 2009/10 results presentation 47