Aryzta Ag · SIX:ARYN
Aryzta — FY2022 Earnings Presentation
54 slides from Aryzta's earnings presentation, Oct 3, 2022
Slide 1: ARYZTA AG FY 2022 results
ARYZTA AG FY 2022 results 3 October 2022 1
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: Performance FY 2022
Performance FY 2022 • Revenue €1,756.1m • Organic revenue growth 17.9% • Underlying EBITDA increased to €218.8m • Underlying EBITDA margin increased 110bps to 12.5% • Operating free cash flow reached €109.7m • Repayment of €50m Euro hybrid • Underlying net profit of €45.6m 3
Slide 4: Organic growth performance
Organic growth performance • 60% of Group revenue ahead of pre-COVID levels • Both segments performing strongly • Outpaced European retail market • Foodservice recovery in Europe continued • QSR in Europe and Asia delivered strong growth • Investing selectively in capacity for growth 4
Slide 5: Significant inflation challenges remain
Significant inflation challenges remain • War and supply chain disruptions • Little respite expected in the near term • Further costs and price increases expected • Bakery products have competitive calorific value advantages • Markets with resilient consumer spending and robust social supports 5
Slide 6: Energy availability and cost key challenge
Energy availability and cost key challenge • Energy c. 3.8% of revenue in FY 2022 (3.1% in FY 2021) • Contingency plans in progress to diversify energy sources • Reducing dependency on gas through modification of heating systems • Investing in renewable energy on some sites • Procurement risk manage
Slide 7: Mid-term targets FY 2023f – FY 2025f reiterated
Mid-term targets FY 2023f – FY 2025f reiterated Organic growth (CAGR) EBITDA Margin ROIC 4.5%–5.5% ≥14.5% ≥11.0% (constant pricing FY221) Revenue (€) CAPEX as % of revenue Total net debt leverage (incl. hybrids) >2bn 3.5%–4.0% c.3x (constant currency and pricing FY22) (driven by operational results)
Slide 8: Guidance FY 2023
Guidance FY 2023 • Current trading trends remain unchanged despite challenging macro environment • Further improvements expected in FY 2023 • Reiteration of mid-term targets FY 2025 8
Slide 9: FY 2022 results Financial review
FY 2022 results Financial review 9
Slide 10: Strong progress on turn-around plan generating important profit improvement
Strong progress on turn-around plan generating important profit improvement FY 2022 FY 2021 €m €m Variation Revenue 1’756.1 1’525.4 +15.1% Underlying EBITDA1 218.8 173.4 +26.2% Underlying EBITDA margin 12.5% 11.4% +110bps Underlying EBITA1 111.3 63.5 +75.3% Underlying EBITA margin 6.3% 4.2% +210bps
Slide 11: Organic growth driven by double digit volume growth and pricing
Organic growth driven by double digit volume growth and pricing Organic growth 17.9% In €m / % of revenue 0.7% (3.4%) 1’756 5.2% 0.6% 12.0% 1’525 Revenue growth 15.1% FY21 Volume Price Mix Disposal F/X FY22 11
Slide 12: Strong COVID recovery supporting organic growth in Europe and ROW
Strong COVID recovery supporting organic growth in Europe and ROW Organic growth % 19,3% 17,9% 10,5% 2,3% FY21 FY22 (6,4%) (7,9%) Total Group Europe ROW 12
Slide 13: Double digit growth in all channels, Retail & QSR above pre-COVID levels
Double digit growth in all channels, Retail & QSR above pre-COVID levels Organic growth % 31,5% 17,9% 16,5% 12,2% 2,3% FY21 FY22 (3,0%) (6,4%) (17,7%) Total Group Retail QSR Other Foodservice 13
Slide 14: Pricing and efficiency measures to mitigate input costs headwinds
Pricing and efficiency measures to mitigate input costs headwinds Pricing in % of FY22 revenue 11.0% 12,2% 10,7% Mitigating actions: 9,6% • Adequate pricing contributing to input costs recovery • Procurement costs optimizations and 6,1% risk management • Continuous efficiency program in bakeries 2,3
Slide 15: EBITDA margin progression driven by costs discipline and operational leverage
EBITDA margin progression driven by costs discipline and operational leverage In €m / % of revenue 110bps 140bps 12,5% 70bps 11,4% 10bps (110bps) 218.8 173.4 Underlying Gross Margin Distribution Indirect Costs Depreciation Underlying EBITDA FY21 EBITDA FY22 15
Slide 16: EBITDA margin improvement in both regions
EBITDA margin improvement in both regions, Foodservice recovery accelerating ROW profitability 390bps Underlying EBITDA as % of revenue 17,5% 110bps 80bps 13,6% 12,5% 11,4% 11,7% 10,9% FY21 Total Group Europe ROW FY22 16
Slide 17: Operating Free Cash Flow doubled
Operating Free Cash Flow doubled1, supported by margin expansion and reduction of non-recurring cash spend 109,7 In €m 8,0 32,0 (25,9) 45,4 50,2 Operating Underlying Working CAPEX Other Operating Free Cash EBITDA Captial Free Cash Flow FY211 Movement Flow FY22 17 1 FY21 operating free cash flow from
Slide 18: ROIC acceleration supported by business performance and working capital efficiency
ROIC acceleration supported by business performance and working capital efficiency WACC 6,9% ROIC % 6,8% Key highlights: • ROIC approaching Group WACC • Return on Sales improved from (2.6%) to 4.8% • Asset-Turn accelerated from (2,9%) 1.1x to 1.4x (5,4%) FY20 FY21 FY22 18
Slide 19: Important improvement of hybrid funding in line with mid-term plan
Important improvement of hybrid funding in line with mid-term plan In m€ 973,3 (215,0) 814,1 45,2 (50,0) 60,6 Key highlights: • €50m hybrid principal repayment at 4% discount Hybrid Hybrid Hybrid Hybrid FX Movement Hybrid Funding Dividend Dividend Principal Funding Opening Payment Charge Payment Out
Slide 20: Stable interest costs supported by RCF refinancing
Stable interest costs supported by RCF refinancing and improved capital structure Weighted average interest rates 4,3% 4,2% 3,1% Key highlights: • RCF refinancing at competitive rates 1,7% 1,8% • EUR-Hybrid repayment strategy 1,6% • Interest risk management W.A. interest rates (incl. hybrids) W.A. i
Slide 21: Important improvements of capital structure and leverage ratio
Important improvements of capital structure and leverage ratio Total net debt incl. hybrid (incl. leases) in m€ 1'500 7 1'400 6,9x Key highlights: 1'300 6 5,0x • Debt maturity profile: from <1 to 4.1 1'200 5 1'100 years 1'000 4 Leverage ratio − RCF refinancing 900 3 800 − Schuldschein notes repaymen
Slide 22: FY 2022 results Closing remarks
FY 2022 results Closing remarks 22
Slide 23: Ambition & goals
Ambition & goals Our ambition Our value proposition To become the best partner for bake-off solutions across all our To deliver the channels and gold standard markets for bake-off 23
Slide 24: Four key value drivers for gold standard
Four key value drivers for gold standard Be strategic partner Be category captain Excellence in Excellence in Customer development Innovation / category know-how Strong customer focus and dedication to Following consumer customer needs Proposition trends and needs Gold standard for bake-off Excellen
Slide 25: ARYZTA a value creating business model
ARYZTA a value creating business model From To A value destructive A value creating organic acquisition driven model growth model An ordinary bakery product supplier A provider of the gold standard for bake off solutions A mainly commodity product supplier A category captain offering innovative, dif
Slide 26: Guidance FY 2023
Guidance FY 2023 • Current trading trends remain unchanged despite challenging macro environment • Further improvements expected in FY 2023 • Reiteration of mid-term targets FY 2025 26
Slide 27: Thank you
Thank you 27
Slide 28: FY 2022 results Appendix
FY 2022 results Appendix 28
Slide 29: Bake-off market: Core Focus for ARYZTA
Bake-off market: Core Focus for ARYZTA Total bakery market shares 2021 by segment Bake-off: Premium Segment (ARYZTA’s core focus) Semi-finished frozen to be baked off or thawed and adding 25% a finish at the point of sale, sold ultra fresh all day long; B2B Packaged Industrially manufactured bakery
Slide 30: Bake-off to become largest bakery segment
Bake-off to become largest bakery segment Total bakery market shares by segment • Bake-off is expected to 25% +3% 28% grow 2-3% annually Bake-off • Bake-off is expected to 31% 30% Packaged increase share to c. 28% Industrial fresh 17% 17% Small scale, • Total bakery market independent bakeries growt
Slide 31: Manufacturing and commercial footprint
Manufacturing and commercial footprint 31
Slide 32: €18bn addressable market
€18bn1 addressable market Market by product category Market by channel 6% 19% Bread, rolls and Retail artisan loaves 39% 50% Sweet baked and Food Service 55% morning goods Quick serve 31% restaurants Savoury and other 1Source: Gira/ARYZTA Intelligence, market size shown only for markets with ARYZTA
Slide 33: Excellent growth opportunities across all categories
Excellent growth opportunities across all categories Product category growth driven by Market growth by category 2023f–2025f (CAGR) consumer trends: • New taste & look: mainly savoury and 3.9 Savoury pastry and other 2.5 Sweet baked and • Artisan: mainly morning goods bread/rolls 2.1 Bread, rolls an
Slide 34: Excellent growth opportunities across all channels
Excellent growth opportunities across all channels Market growth by channel 2023f– Market growth by channel 2023f–2025f (CAGR %) 2025f (CAGR) • QSR: driven by excellent product and service 5.2 QSR offering & staff availability Food Service 2.6 Retail • Retail: Mainly driven by Total market 2.1 growt
Slide 35: Bake-off growing strongly across ARYZTA's markets
Bake-off growing strongly across ARYZTA‘s markets Europe Channel Share APAC Channel Share Total €15.5bn: 2.5% CAGR Total €2.5bn; 3.5% CAGR 3% 25% 39% Retail 40% Retail 58% Food Service Food Service Quick serve Quick serve restaurants restaurants 35% Source: Gira/ARYZTA Intelligence, market size show
Slide 36: Underlying Income Statement Reconciliation to IFRS
Underlying Income Statement Reconciliation to IFRS FY 2022 FY 2021 For period ended 30 July 2022 €m €m Continuing Operations Group revenue 1,756.1 1,525.4 Underlying EBITDA 1 218.8 173.4 Underlying EBITDA margin 12.5% 11.4% Depreciation & ERP Amortisation (107.5) (109.9) 1 Underlying EBITA 111.3 63.
Slide 37: Reconciliation of Underlying EBITDA to IFRS result
Reconciliation of Underlying EBITDA to IFRS result FY 2022 FY 2021 For period ended 30 July 2022 €m €m Continuing Operations Underlying EBITDA 218.8 173.4 Depreciation (96.5) (99.1) ERP amortisation (11.0) (10.8) Underlying EBITA 111.3 63.5 Amortisation of non-ERP intangible assets (16.3) (17.7) Net
Slide 38: Reconciliation of Underlying EBITDA to IFRS EBITDA
Reconciliation of Underlying EBITDA to IFRS EBITDA For period ended 30 July 2022 Continuing Operations 2022 2021 €m €m Underlying EBITDA 218.8 173.4 (Loss)/gain on disposal of businesses (42.0) - Loss on disposal of discontinued operations - - Net loss on fixed asset disposals and impairments (2.4)
Slide 39: Reconciliation of IFRS Income Statement to Financial Business Review
Reconciliation of IFRS Income Statement to Financial Business Review For period ended 30 July 2022 Impairment, Impairment, IFRS disposal & Non-ERP Underlying IFRS disposal & Covid-19 Non-ERP Underlying Income restructuring Intangible Income Income restructuring related Intangible Income Statement re
Slide 40: Organic Revenue
Organic Revenue For period ended 30 July 2022 ARYZTA ARYZTA Total Continuing Europe Rest of World Operations Revenue in €m 1,531.1 225.0 1,756.1 Organic movement % 19.3% 10.5% 17.9% Disposals movement % (0.4%) (19.6%) (3.4%) Currency movement % 0.3% 2.4% 0.6% Total revenue movement % 19.2% (6.7%) 15
Slide 41: Segmental Underlying EBITDA
Segmental Underlying EBITDA For period ended 30 July 2022 FY 2022 FY 2021 1 Underlying EBITDA €m €m % Change ARYZTA Europe 179.5 140.5 27.8% ARYZTA Rest of World 39.3 32.9 19.5% Total continuing operations 218.8 173.4 26.2% FY 2022 FY 2021 Underlying EBITDA margin1 % % % Change ARYZTA Europe 11.7% 1
Slide 42: Impairment, disposal, restructuring and COVID-19 related costs
Impairment, disposal, restructuring and COVID-19 related costs For period ended 30 July 2022 ARYZTA Total Total ARYZTA Rest of Continuing Continuing Europe World Operations Operations 2022 2022 2022 FY 2021 €m €m €m €m Gain on disposal before FX recycle 0.2 43.2 43.4 – FX recycle from other comprehe
Slide 43: Cash Generation
Cash Generation For period ended 30 July 2022 FY 2022 FY 2021 €m €m Underlying EBITDA - continuing operations 218.8 173.4 Underlying EBITDA - discontinued operations - 76.6 ARYZTA Underlying EBITDA 218.8 250.0 Working capital movement (2.7) (18.7) Working capital movement from debtor securitisation
Slide 44: Cash Generation – continuing operations
Cash Generation – continuing operations For period ended 30 July 2022 FY 2022 FY 2021 €m €m ARYZTA Underlying EBITDA 218.8 173.4 Working capital movement (2.7) 10.1 Working capital movement from debtor securitisation 23.0 2.2 Capital expenditure (89.4) (63.5) Net payments on lease contracts (33.8) (
Slide 45: Net Debt Evolution
Net Debt Evolution For period ended 30 July 2022 FY 2022 FY 2021 €m €m Opening net debt (220.1) (1,010.7) Cash flow generated from activities 44.0 (34.1) Net movements on lease liabilities 14.4 1.2 Disposal of businesses, net of tax and leases 1 109.8 791.6 Disposal of equity investment - 24.3 Hybri
Slide 46: ARYZTA Group Net Debt Facilities and Maturities
ARYZTA Group Net Debt Facilities and Maturities For period ended 30 July 2022 2022 2021 €m €m Syndicated Bank RCF (398.5) (45.0) State sponsored COVID-19 related loans - (21.9) Schuldschein (17.8) (178.6) Gross term debt (416.3) (245.5) Upfront borrowing costs 6.6 9.1 Term debt, net of upfront borro
Slide 47: Covenants
Covenants For period ended 30 July 2022 In September 2021, ARYZTA replaced its existing €800m Syndicated Revolving Credit Facility ('RCF') Agreement with a new five year €500m Syndicated RCF Agreement. In connection with the early repayment of the existing facility, the Group incurred €8.3m of costs
Slide 48: Hybrid Funding
Hybrid Funding For period ended 30 July 2022 FY 2022 Instrument Coupon Coupon rate if not called €m CHF 400m 5.5% 6.045% +SARON 3 months compound rate (411.1) EUR 200m 6.8% 6.77% +5 Year Euro Swap Rate (200.0) CHF 190m 3.7% 4.213% +SARON 3 months compound rate (195.3) Hybrid funding principal outsta
Slide 49: ARYZTA Group – Return on Invested Capital
ARYZTA Group – Return on Invested Capital For period ended 30 July 2022 ARYZTA ARYZTA Rest of ARYZTA Europe World Group €m €m €m 30 July 2022 Average segmental net assets 1,3 1,157.9 99.9 1,257.8 1 NOPAT 64.4 20.7 85.1 1,2 ROIC 5.6% 20.7% 6.8% 31 July 2021 Average segmental net assets 1,3 1,221.8 15
Slide 50: Net assets, goodwill and intangibles
Net assets, goodwill and intangibles For period ended 30 July 2022 FY 2022 FY 2021 €m €m Property, plant and equipment 853.6 849.8 Investment properties – 3.7 Goodwill and intangible assets 667.5 660.3 Working capital (127.0) (94.1) Other segmental assets 4.1 6.0 Other segmental liabilities (23.4) (
Slide 51: Group Consolidated Income Statement
Group Consolidated Income Statement For period ended 30 July 2022 2022 2021 €m €m Continuing Operations Revenue 1,756.1 1,525.4 Cost of sales (1,205.8) (1,058.5) Distribution expenses (231.8) (214.4) Gross profit 318.5 252.5 Selling expenses (85.1) (86.8) Administration expenses (143.3) (178.3) Net
Slide 52: Group Consolidated Balance Sheet
Group Consolidated Balance Sheet For period ended 30 July 2022 2022 2021 2022 2021 €m €m €m €m Assets Equity Non-current assets Called up share capital 17.0 17.0 Property, plant and equipment 853.6 849.8 Share premium 1,531.2 1,531.2 Investment properties - 3.7 Retained deficit and other reserves (6
Slide 53: Average Closing and Average FX Rates
Average Closing and Average FX Rates For period ended 30 July 2022 Average Average Closing Closing Currency FY 2022 FY 2021 % Change FY 2022 FY 2021 % Change CHF 1.0423 1.0868 4.1% 0.9730 1.0773 9.7% USD 1.1139 1.1947 6.8% 1.0193 1.1882 14.2% AUD 1.5445 1.5949 3.2% 1.4570 1.6072 9.3% GBP 0.8466 0.88
Slide 54: Presentation Glossary
Presentation Glossary ‘Organic revenue’ – presents the revenue movement during the period, excluding impacts from acquisitions/(disposals) and foreign exchange translation. ‘Underlying EBITDA’ – presented as earnings before interest, taxation, depreciation and amortisation; before impairment, dispos