Barry Callebaut Ag · SIX:BARN
Barry Callebaut — Non-Deal Roadshow (April 2019)
41 slides from Barry Callebaut's roadshow presentation, April 2019
Slide 1: Roadshow presentation HY2018/19 Result
Roadshow presentation HY2018/19 Result April 2019
Slide 2: Agenda
AGENDA • BC at a glance • Highlights HY 2018/19 • Financial Review HY 2018/19 • Strategy & Outlook • Appendix 2 Roadshow presentation HY2018/19
Slide 3: BC at a glance
. ¢ / BARRY f\) CALLEBAUT W BC ata glance
Slide 4: The heart and engine of the chocolate industry
BC at a glance - 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 • Jacobs Holdin
Slide 5: We are present in the key parts of the cocoa and chocolate value chain
BC at a glance - What do we do? We are present in the key parts of the cocoa and chocolate value chain 5 Roadshow presentation HY2018/19
Slide 6: Shaping the world of chocolate and cocoa
BC at a glance - This is Barry Callebaut “Shaping the world of chocolate and cocoa” FY 2017/18 6 Roadshow presentation HY2018/19
Slide 7: A broad offering from standard to the most premium products
BC at a glance - What do we offer? A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties 7 Roadshow presentation HY2018/19
Slide 8: Our Regional and Product split
BC at a glance - how are we organized? Our Regional and Product split Sales Volume by Region Sales volume by Product Group Gourmet & Cocoa Americas Specialties Products EMEA 22% 27% 12% 46% Global Cocoa 22% Asia Pacific Food 5% Manufacturers 66% Full-Year 2017/18: Sales Volume: 2.0 million tonnes Sa
Slide 9: We apply a cost plus approach to the majority of our business
BC at a glance - business model We apply a cost plus approach to the majority of our business Customers Pricing model Profit levers Food manufacturers Small, medium Cost Plus Customer mix 66%* Global Food Product mix Manufacturers Economies of scale Global Cocoa Small, medium Market prices Global se
Slide 10: A global footprint and local service: 60 factories worldwide
BC at a glance - where are we present? A global footprint and local service: 60 factories worldwide Cocoa factories in countries of origin and chocolate factories close to our customers. With our 22 Chocolate Academies worldwide we are at the pulse of any trends in the industry Cocoa & Chocolate fac
Slide 11: Highlights
BARRY (() CALLEBAUT Highlights HY2018/19
Slide 12: Strong profitability and accelerating growth momentum
Highlights HY Results 2018/19 Strong profitability and accelerating growth momentum • Sales volume up +2.4% on top of a strong prior year base • Acceleration in Q2 to +3.1% • Sales revenue of CHF 3.7 bn, +6.0% in local currencies (+3.5% in CHF) • Operating profit (EBIT) up +12.4% in local currencies
Slide 13: +2.4% volume growth, accelerating growth momentum driven by chocolate
Highlights HY Results 2018/19 +2.4% volume growth, accelerating growth momentum driven by chocolate HY 2018/19 volume growth vs prior year (in tonnes) FY 2017/18 HY 2018/19 FY 2016/17 +6.3% +2.4% +4.4% +4.7% +1.7% +3.1% Chocolate (FM and Gourmet & Spec.) +1.1% +4.3% +2.9% Global Cocoa +4.8% +2.3% +5
Slide 14: Key growth drivers gaining momentum
Highlights HY Results 2018/19 Key growth drivers gaining momentum % of total Volume growth Group volume Vs prior year 34% +4.6% Emerging Ex cocoa Markets +7.4% Key growth drivers 33% Outsourcing +2.8% Long-term crucial to Partnerships continuously outperform the market 12% +4.1% Gourmet & Ex Beverag
Slide 15: Continued expansion around the globe
Highlights HY Results 2018/19 Continued expansion around the globe Acquisition of Inforum in Russia • A leading B2B chocolate manufacturer in Russia • Acquisition closed in January 2019 Long-term supply agreement with Burton’s • Supply started in December 2018 • Expand production capacity in UK New
Slide 16: Ruby goes global!
Highlights HY Results 2018/19 Ruby goes global! Ruby 1st year anniversary Introduced by more than 20 brands Available in over 40 markets Launch of rubychocolate.com crowdsourced platform 16 Roadshow presentation HY2018/19
Slide 17: Innovation - there is much more going on!
Highlights HY Results 2018/19 Innovation - there is much more going on! • Dairy-free: launch of Magnum Vegan, with dairy-free chocolate • Sweet solutions: we are the largest producer of sugar-reduced chocolate products • Shaping experiences: leverage the knowhow of D’Orsogna and Gertrude Hawk in dec
Slide 18: Financial Review HY 2018/19
BARRY (() CALLEBAUT Financial Review HY 2018/19
Slide 19: Profit growing above volume growth
Financial Key Figures Profit growing above volume growth Group performance HY 2018/19 % vs prior year in % vs prior year in (in CHF mio) CHF local currencies Sales volume Total 1,046,695 +2.4% n/a (in tonnes) Sales revenue 3,672.7 +3.5% +6.0% Gross profit 584.8 +5.7% +8.5% EBIT Total 301.4 +8.9% +12
Slide 20: All Regions contributed to volume growth and profitability
Regions Key Performance Indicators All Regions contributed to volume growth and profitability EMEA Group Sales Volume: Americas 480,721 1,046,695 1’046’695 281,204 tonnes APAC Global Cocoa 57,192 227,578 EMEA Americas Asia Pacific Global Cocoa HY volume +2.0% +5.8% +5.7% -1.7% growth EBIT growth in
Slide 21: Gross profit up +8.5% in local currencies
Gross Profit Gross profit up +8.5% in local currencies, driven by good product mix and a supportive market environment In CHF millions +8,5% 21 600 -15 26 -9 585 9 553 Gross Profit Volume Mix Cocoa Additional Gross Profit FX impact Gross Profit HY 2017/18 effects effects processing costs due HY 2018
Slide 22: Cocoa Combined Ratio remains at a healthy level
Cocoa processing profitability Cocoa Combined Ratio remains at a healthy level European combined ratio - 6 month forward ratio 4.00 3.50 Combined Ratio 3.5 3.00 Butter ratio 2.50 2.00 1.50 1.00 Powder ratio 0.50 0.00 Aug 08 Aug 09 Aug 10 Aug 11 Aug 12 Aug 13 Aug 14 Aug 15 Aug 16 Aug 17 Aug 18 For co
Slide 23: Strong increase in operating profit by +12.4% in local currencies
EBIT Strong increase in operating profit by +12.4% in local currencies In CHF millions +12.4% +47 311 301 -13 277 -10 EBIT Additional Additional EBIT FX impact EBIT HY 2017/18 Gross Profit SG&A, Scope and HY 2018/19 HY 2018/19 non-rec/other before FX 23 Roadshow presentation HY2018/19
Slide 24: Net Profit up +15.1% in CHF, as a result of good profitability
EBITDA to Net Profit Net Profit up +15.1% in CHF, as a result of good profitability In CHF millions 387 Tax rate: 19.3% vs PY (+7.6%) 19.5% (excl. non- recurring tax impact) 301 (+8.9%) +15.1% -85 +8.7% (-3.4%) (+12.3% in LC) -55 (-11.2%) 199 183 10 -48 173 (+12.9%) EBITDA Depr. and EBIT Financial I
Slide 25: Raw material prices
Raw material prices Price increases mainly in Sugar and Dairy during the first half. On average Cocoa bean price also increased 250% 200% Increase HY 2018/19 150% Sugar World +13.7% Milk powder +17.7% 100% Cocoa beans -0.3% Sugar EU +37.3% 50% 0% Feb.09 Feb.10 Feb.11 Feb.12 Feb.13 Feb.14 Feb.15 Feb.
Slide 26: Adjusted Free Cash Flow CHF -31 million
HY 2018/19 Free Cash Flow Adjusted Free Cash Flow CHF -31 million on back of higher inventory catering for future volume growth In CHF millions (6 month rolling) +7,6% -239 387 (PY -84) 359 -70 18 -31 (PY -71) (PY 5) (PY 103) -110 (PY -64) -127 -141 (PY -106) (PY 39) EBITDA EBITDA Change in Interest
Slide 27: Net Debt mostly increased due to IFRS 15 related higher working capital
Financial Review Net Debt mostly increased due to IFRS 15 related higher working capital and earlier dividend payment In CHF millions +696 +206 34 31 1.770 141 154 1.565 336 -932 1.074 838 (PY 743) Net Debt IFRS 15 Dividend pro forma Free Cash Acquisitions FX Impact Net Debt adjustment Adjusted Aug
Slide 28: Balance sheet
Financial Key Figures Balance sheet (in CHF millions) Feb 2019 Aug 18 Feb 18 Aug 18 Feb 182 Pro forma1 Pro forma1 Total Assets 6,820.4 6,169.0 6,444.3 5,832.0 6,105.9 Net Working Capital 1,762.1 1,403.4 1,426.1 1,074.4 1,087.7 Non-Current Assets 2,639.9 2,506.5 2,566.5 2,505.5 2,566.5 Net Debt 1,769
Slide 29: Strategy & Outlook
BARRY (() CALLEBAUT Strategy & Outlook
Slide 30: Consistent long-term strategy – evolving execution
Strategy Consistent long-term strategy – evolving execution “Heart and engine of the Vision chocolate and cocoa industry” Sustainable growth Margin accretive growth Expansion Accelerated growth in Gourmet, Specialties and 4 strategic Innovation ‘smart emerging markets pillars growth’ Return on Capit
Slide 31: Pursuing the momentum
Strategy Pursuing the momentum Innovation Expansion • Drive premium range in Cocoa powders • Integration of Inforum in Russia, • Leverage Innovation across segments complementary product and customer - Callebaut Ruby RB1, Caramel doré base in 2nd largest chocolate - Sugar-reduced solutions confectio
Slide 32: Forever Chocolate: Our plan to make sustainable chocolate the norm by 2025
Strategy - Sustainability Forever Chocolate: Our plan to make sustainable chocolate the norm by 2025 Leading on carbon disclosure • Barry Callebaut’s efforts to reduce its carbon footprint awarded A- score by the Carbon Disclosure Project (CDP) Our Goal Key Metric • Ranking in top 6% of over 7,000 c
Slide 33: Schuldschein issue strengthens our debt structure
Strategy - Cost Leadership Schuldschein issue strengthens our debt structure • Average tenor is 7.8 years and has extended the overall Group maturity to 5.5 years • Attractive interest rate of 1.65% lowering average cost of long-term debt • The successful issuance reflects the trust of the investors
Slide 34: Confident outlook
Outlook Confident outlook Confident of reaching mid-term guidance • Good visibility in portfolio and expected acceleration in sales momentum make us confident of delivering on our current mid-term guidance. New mid-term guidance 2019/20-2021/22 • Average volume growth +4-6% • EBIT growth on average
Slide 35: Appendix
Appendix
Slide 36: 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
Slide 37: Chocolate confectionery market development – Nielsen data
Appendix Chocolate confectionery market development – Nielsen data Western Europe (33% of market) 2013-18 average: -0.5% 2019 half-year: -1.0% North America (22% of market) 2013-18 average: -0.4% 2019 half-year: +1.0% EEMEA (24% of market) 2013-18 average: +0.3% 2019 half-year: +4.7% Asia Pacific (1
Slide 38: Our market and opportunities ahead
Appendix Our market and opportunities ahead Global Chocolate confectionery volume growth vs cocoa bean price 5 2’500 4 Forecast volume growth per application 2017-2022 2’000 Volume growth 3 GBP / tonne 2 1’500 1.4% 1 1’000 0 3.2% 500 -1 -2 0 3.4% 2006 2009 2022 2023 2008 2005 2007 2016 2019 2011 202
Slide 39: Strong global market leader in industrial chocolate and cocoa
Appendix Strong global market leader in industrial chocolate and cocoa Cocoa grinding capacity (kMT) Industrial Chocolate (open market – kMT) BC BC Cargill Cargill Olam Fuji Oil ECOM Puratos Fuji Oil Cémoi Guan Chong Clasen Mondelez Schokinag Nestlé Irca Ferrero Kerry Group BT Cocoa Guittard Others
Slide 40: West Africa is the world's largest cocoa producer
Appendix West Africa is the world’s largest cocoa producer Total workd harvest (17/18): 4,645 tsd MT others 12% Brazil* 4% • About 70% of total cocoa beans are Ivory West African Origin Cameroon* Coast* 43% 5% • Barry Callebaut processed around 925,000 tonnes or approximately 20% of Indonesia* 5% th
Slide 41: Increase in EBIT per MT thanks to improved product mix
Appendix Increase in EBIT per MT thanks to improved product mix and supportive cocoa processing market 312 312 EBIT per tonne in constant currencies 290 282 279 283 274 271 EBIT per tonne 251 in CHF 282 286 272 256 242 231 231 223 219 2,036 Volume in kMT 1,914 1,834 1,795 1,717 1,536 1,379 1,269 1,2