Barry Callebaut Ag · SIX:BARN
Barry Callebaut — FY2008/09 Earnings Presentation
43 slides from Barry Callebaut's earnings presentation, Nov 12, 2009
Slide 1: Annual Results 2008/09 Media presentation
Annual Results 2008/09 Media presentation November 12, 2009 November 12, 2009 Barry Callebaut FY Results Presentation 2008/09
Slide 2: Impressions after 10 weeks
Impressions after 10 weeks X Strengths X Entrepreneurship X Leading-edge manufacturing technology X Customer centric X Global footprint X Chocolate is an attractive product X Growth potential - through X Further outsourcing deals X Regional expansion into emerging markets X Value-added products X Co
Slide 3: Agenda
Agenda X Highlights FY 2008/09 X Financial and operational performance X Strategy going forward & market opportunities X Outlook X Q&A November 12, 2009 Barry Callebaut FY Results Presentation 2008/09 3
Slide 4: Exceptionally challenging markets: negative volume growth in mature markets
Exceptionally challenging markets: Negative volume growth in mature markets – emerging markets still growing but slowed down Global chocolate market declined by more than 2% in volume - 2.6% 1'575'544 1'534'170 + 1.6% 2008 Volume in tons 2009 736'031 764'920 Volume in tons - 6.6% Volume in units 350
Slide 5: Cocoa prices volatile, sugar price high
Raw material price development Cocoa prices volatile, sugar price high London Cocoa 2nd Position – weekly close in £/ton in EUR/ton London Sugar No. 5 – 1st position 700.00 03/11/2009, 2750 2600 593.80 in €/ton 600.00 2450 in £/ton 2300 2150 500.00 2000 1850 400.00 $ / MT 1700 1550 1400 300.00 1250
Slide 6: Combined ratio hovering at low levels
Raw material price development Combined ratio hovering at low levels Cocoa powder-butter combined ratio – European ratios 6 months forward against LIFFE EU powder EU butter Combined ratio 4.40 4.20 4.00 3.80 3.60 3.40 3.20 3.00 Butter - Powder - Combined 2.80 2.60 2.40 2.20 2.00 1.80 1.60 1.40 1.20
Slide 7: Delivering strong top-line and bottom-line growth
Financial summary 2008/09: Delivering strong top-line and bottom-line growth X Sales volume up 4.1% in a declining global chocolate market X Accelerating volume growth in the second half of the fiscal year: +8.7% X Sales revenue up 8.5% in local currencies, driven by price increases (+1.3% in CHF) X
Slide 8: Focus on core business – Industrial & Gourmet
Strategic highlights 2008/09: Focus on core business – Industrial & Gourmet January 2009 June 2009 1st quarter 2010 February 2009 Acquisition of Inauguration of Chocolate Sale of Van Houten Danish Vending mix September 2008 new factory in factory in Brazil Singapore company Eurogran Acquisition of I
Slide 9: Intended acquisition of Chocovic in Spain
Expanding our core business: Intended acquisition of Chocovic in Spain X Agreement signed with Nederland Group to acquire Spanish chocolate maker Chocovic X Facts & Figures on Chocovic: X Approx. EUR 60 million sales revenue (2008) X 30,000 tonnes of chocolate and specialty products (2008) X Approx.
Slide 10: Significant steps in implementing our strategy
Strategic highlights 2008/09: Significant steps in implementing our strategy Strategy Geographic expansion Geographic expansion Innovation Cost leadership Innovation Cost leadership Targeted geographic Fundamental R&D: Purchasing power Achievements expansion: •11 clinical studies in Cost savings and
Slide 11: Outsourcing contracts on track
Strategic highlights 2008/09: Outsourcing contracts on track X Nestlé: Outsourcing contract is fully implemented X Hershey’s: Strong increase in deliveries out of our Mexican and US factories – volumes with Hershey’s will again increase in FY 09/10 X Cadbury: Running on track X Morinaga: Factory sta
Slide 12: Agenda
Agenda X Highlights FY 2007/08 X Financial and operational performance X Strategy going forward & market opportunities X Outlook X Q&A November 12, 2009 Barry Callebaut FY Results Presentation 2008/09 12
Slide 13: Strong profit growth in local currencies
Key Figures Strong profit growth in local currencies Change Change FY FY In local currencies 2008/09 2007/08 Sales volume [in tonnes] 4.1% 1'213'610 1'166'007 Sales revenue [CHF m] 8.5% 1.3% 4'880.2 5 226.5 4'815.4 CHF per tonne 4.3% -2.6% 4'021 4'130 Gross profit [CHF m] 7.0% 1.0% 707.8 749.9 700.8
Slide 14: Margin positive, combined ratio & FX negative
GROSS PROFIT Margin positive, combined ratio & FX negative in CHF m +8 750 -16 +28 -42 +29 CHF m 700 650 600 701 708 550 500 FY 07/08 Volume Product mix Efficiency Cocoa Negative Current FY Gross Profit growth / margin gains processing currency Gross Profit impact effects November 12, 2009 Barry Cal
Slide 15: Efficiency gains positive, non-recurring & FX negative
EBIT Efficiency gains positive, ∆ non-recurring & FX negative EBIT development [CHF m] 400 - 15 16 - 18 + 49 - 23 350 CHF m 300 351 341 250 FY 07/08 EBIT Additional Additional Efficiency Delta non- Net FY 08/09 EBIT Gross Profit SG&A from gains recurring FX effect (excl. FX business items impact) gr
Slide 16: Region Europe: Market impacted by recession
Region Europe: Market impacted by recession – volumes regaining momentum in H2 Regional revenue split 08/09 X Declining chocolate consumption in particular in mature markets. Asia/RoW X BC achieved slight growth supported by Eastern Europe and a 8% rebound in activities in the second half-year. X HO
Slide 17: Region Americas: Market share gains in a declining market
Region Americas: Market share gains in a declining market Regional revenue split 08/09 X Continued expansion in difficult market environment. Asia/RoW 8% X Barry Callebaut with a strong sales volume growth due to deliveries from Mexico plant to Hershey’s, increased share of wallet with other key acc
Slide 18: Region Asia/RoW: Well positioned for further growth
Region Asia/RoW: Well positioned for further growth Regional revenue split 08/09 X Results partly distorted due to changes in scope (e.g. profitable sale of consumer activities in Asia and Africa). Asia/RoW 8% X Sales volume up 14.6%, partly due to the acquisition in Malaysia, the new outsourcing ag
Slide 19: From EBIT to PAT
From EBIT to PAT: Stable financial cost & tax, less one-offs Change 2008/09 2007/08 in % Operating Profit (EBIT) CHF m 2.8 350.8 341.1 in local currencies CHF m 9.5 373.5 Financial expense, net CHF m -1.3 (91.6) (92.8) Disposal of financial assets, other CHF m 0.5 (6.4) Income taxes CHF m -0.3 (32.7
Slide 20: Cash-Flow: Full self-financing of investments and expansion
Cash-Flow: Full self-financing of investments and expansion 350.0 -6.3% 300.0 -57 250.0 CHF m 200.0 317 -144 150.0 297 +6 100.0 -59 50.0 +43 0.0 24 Operating Cash Operating Cash Investment CAPEX CF from Dividend** Increase in net flow* 2007/08 flow * 2008/09 into working acquisitions, cash (excl. FX
Slide 21: Balance sheet: Lower net debt and NWC
Balance sheet: Lower net debt and NWC despite growth and higher cocoa prices, supported by currency effect CHF m Change Aug 09 Aug 08 [%] absolute Total assets -5.8% -214.7 3'514.8 3'729.5 Net working capital -2.6% -27.0 1'010.1 1'037.1 Non-current assets 0.6% 8.5 1'432.2 1'423.7 Net debt -9.5% -98.
Slide 22: Stable financing situation due to long-term secured credit-lines
Stable financing situation due to long-term secured credit-lines Financing and liquidity situation as at August 31, 2009 [CHF] 2500 >CHF 650 various Short-term uncommitted 2000 facilities Financial leeway per end August 2009 1500 EUR 850 CHF m Maturity 2012 (17%) Syndicated 262 2013 (83%) bank loan
Slide 23: EVA keeps growing despite raw material price impact
EVA keeps growing despite impact of raw material prices on working capital and high investments EVA defined as measure to determine the value created above the return required by shareholders 1 0.5% 350 CAGR + 300 250 130 NOPAT (CHFm) 126 123 200 105 87 150 100 177 148 156 169 142 50 0 2004/05 2005/
Slide 24: P&L Overview: Significant impact from currencies
P&L Overview: Significant impact from currencies % change 2008/09 2007/08 Revenue from sales and services CHF m 1.3% 4'880.2 4'815.4 in local currencies 8.5% 5'226.5 Gross Profit CHF m 1.0% 707.8 700.8 in local currencies 7.0% 749.9 EBITDA CHF m 2.8% 456.1 443.7 in local currencies 9.1% 484.3 EBIT C
Slide 25: Stable payout of ~30% of net profit proposed
Proposed pay-out: Stable payout of ~30% of net profit proposed CHF per share change 2008/09 2007/08 in % Profit from continuing operations 8.9% 44.0 40.4 Proposed payout 8.7% 12.5 11.5 Payout ratio (continuing operations) 28.4% 28.5% Total proposed payment (CHF m) 8.6% 64.6 59.5 X Reduction of nomin
Slide 26: Agenda
Agenda X Highlights FY 2007/08 X Financial and operational performance X Strategy going forward & market opportunities X Outlook X Q&A November 12, 2009 Barry Callebaut FY Results Presentation 2008/09 26
Slide 27: Barry Callebaut continuously outpaced chocolate market growth
Barry Callebaut continuously outpaced chocolate market growth – delivered on targets in past 5 years Sales Volume (mt) Operating Profit EBIT (CHF m) +15.3 % + 35.8 % 400 350.8 1'400'000 1'213'610 350 1'200'000 1'052'467 300 258.3 1'000'000 250 800'000 200 600'000 150 400'000 100 200'000 50 0 0 2004/
Slide 28: Strategy confirmed, new growth opportunities
Strategy going forward: Strategy confirmed, new growth opportunities 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 choc
Slide 29: Future growth through Geographic Expansion
Strategy confirmed, new growth opportunities: Future growth through Geographic Expansion Geographic Expansion X Expand with regional customers (e.g. Russia, China, Japan, Americas) X Grow Gourmet organically and through acquisitions (e.g. Chocovic) X Expand into emerging markets through existing cus
Slide 30: Additional market outsourcing potential between 250,000 and 500,000 tonnes
Strategy confirmed, growth opportunities: Geographic Expansion Additional market outsourcing potential between 250,000 and 500,000 tonnes Geographic Expansion Top 11 Manufacturers of Industrial Chocolate X Total global industrial yearly (in '000 tonnes) chocolate production is Barry Callebaut estima
Slide 31: Better implementing our innovations
Strategy confirmed, new growth opportunities: Better implementing our innovations Innovation X Innovate products and services to sustain price premium and increase Share of Wallet X Enlarge certification and traceability on farmer level and improve quality of cocoa X Establish incubator structure fo
Slide 32: Clinical research program: 11 studies completed
Innovation Innovation 2008/09: Clinical research program: 11 studies completed Aim: to substantiate scientific evidence of health-enhancing benefits of cocoa and chocolate, focus on cocoa flavanols 1. Antioxidant effect Completed: 2, of which 1 in FY08-09 On-going: meta-analysis, opinion from EFSA o
Slide 33: New innovative products launched
Innovation Innovation 2008/09: New innovative products launched Health & Wellness Premium X Toothfriendly chocolate X The largest range of single origin chocolates and moves toward X White Chocolate with Real new, more exclusive and certified origins Fruit X Plantations – Millesime premium concept w
Slide 34: Innovations on multiple fronts in Gourmet
Innovation Innovation 2008/09: Innovations on multiple fronts in Gourmet Gourmet drivers Functional Convenience Ready-to-serve of innovation X Added value X Functional X Convenience X Ready-to serve Anti-oxidant Mousse pre-mixes Frozen dessert line X Decorations enriched X Adaptation to Decorations
Slide 35: Reducing costs on an ongoing basis
Strategy confirmed, new growth opportunities: Reducing costs on an ongoing basis Cost Leadership X Optimize flow and footprint to achieve lower logistic costs, higher scale effects and lower fixed costs X Increase capacity utilization X Improve processes to optimize stock management and reduce worki
Slide 36: BC's sustainability and CSR commitment in Africa
Focus on farmers, children, cocoa farming communities: BC’s sustainability and CSR commitment in Africa X Working to empower cocoa farmers X Quality Partner program in Ivory Coast: X 38 cooperatives, 42,000 farmers X Farmer training to achieve higher yields, better quality and, thus, higher income X
Slide 37: Executive Committee
Organization: Executive Committee Status as of November 10, 2009 – replaces former Senior Management Team (SMT) Juergen B. Steinemann, CEO Victor Balli, CFO Massimo Garavaglia, Western Europe David S. Johnson, Americas Steven Retzlaff, Global Sourcing & Cocoa Dirk Poelman, Chief Operations Officer H
Slide 38: Agenda
Agenda X Highlights FY 2007/08 X Financial and operational performance X Strategy going forward & market opportunities X Outlook X Q&A November 12, 2009 Barry Callebaut FY Results Presentation 2008/09 38
Slide 39: Barry Callebaut is uniquely positioned
Strong platform for continued growth: Barry Callebaut is uniquely positioned X Clear growth strategy and robust business model X Recognized as the global market leader X Unmatched global presence X Leader in cocoa and chocolate innovations X Cost leader X Broadly diversified product portfolio From
Slide 40: Financial targets for 3-year period 2009/10-2011/12
Outlook: Financial targets for 3-year period 2009/10-2011/12 X Annual growth targets on average* for 2009/10 through 2011/12: X Volumes: 6-8% X EBIT: at least in line with volume growth *Our view for the 2009-2012 period reflects current economic forecasts for the markets we operate in as well as in
Slide 41: Agenda
Agenda X Highlights FY 2007/08 X Financial and operational performance X Strategy going forward & market opportunities X Outlook X Q&A November 12, 2009 Barry Callebaut FY Results Presentation 2008/09 41
Slide 42: Chocolate market down – Barry Callebaut up
Summary: Chocolate market down – Barry Callebaut up We delivered strong top-line and bottom-line growth in a declining market Our growth strategy stood the test of the global economic crisis. We will continue on this path We will continue to significantly outperform the global chocolate market Novem
Slide 43: Cautionary note
Cautionary note Forward-looking statements Any information given on these slides as well as during the conference call has been prepared by Barry Callebaut solely for the use at this analyst presentation. Certain statements contained therein regarding the business of Barry Callebaut are of a forward