Emmi Ag · SIX:EMMN
Emmi — Non-Deal Roadshow (April 2010)
62 slides from Emmi's roadshow presentation, Apr 6, 2010
Slide 1: Financial year 2009 & Outlook
Financial year 2009 & Outlook Emmi Group Lucerne, 6 April 2010 Bild
Slide 2: Agenda
Agenda Highlights 2009 Strategy & current projects Results 2009 Annual results media conference and analysts’ presentation 31 March 2010 Page 1 Outlook Financial year 2009 – Emmi Group presentation 6 April 2010 Page 1
Slide 3: Highlights 2009 (1/2)
Highlights 2009 (1/2) Increased profitability – slight decline in sales Net sales CHF 2,619.3 million, down 1.9% (organic -4.4%) Disproportionately low cost development thanks to rigorous cost management Net profit of CHF 75.3 million (2.9% net profit margin) EBIT margin of 4.2% (+40 Bps) Markets St
Slide 4: Highlights 2009 (2/2)
Highlights 2009 (2/2) Investments in productivity and international expansion Concentration of processed cheese production in Langnau i. E. successfully completed Expansion to double the capacity at the Kaltbach cave continues – first cheese storage in April/May 2010 Acquisition of Nutrifrais SA in
Slide 5: Facts and figures financial year 2009
Facts and figures financial year 2009 Clear improvement in operating result Amounts in CHF million 2009 2008 2007 2006 2005 Net sales 2,619 2,671 2,501 2,335 2,027 Earnings before interest, taxes, depreciation 208.3 184.4 140.1 140.7 128.8 and amortization (EBITDA) as % of net sales 8.0 6.8 5.6 6.0
Slide 6: Emmi Sponsorship Film
Emmi Sponsorship Film Annual results media conference and analysts’ presentation 31 March 2010 Page 5 Financial year 2009 – Emmi Group presentation 6 April 2010 Page 5
Slide 7: Agenda
Agenda Highlights 2009 Strategy & current projects Results 2009 Annual results media conference and analysts’ presentation 31 March 2010 Page 6 Outlook Financial year 2009 – Emmi Group presentation 6 April 2010 Page 6
Slide 8: Emmi wants to become an international player with competitive structures
Emmi wants to become an international player with competitive structures Background Success factors Strategic pillars Swiss market saturated; Critical company international market growing size/key international Defence of position Market liberalization in player within Switzerland all segments Early
Slide 9: Emmi's vision
Emmi's vision To achieve long-term success as an independent company in open markets Net profit margin: Sales growth: Equity ratio: 2% – 3% 2% – 3% p.a. >40% Fresh products Cheese Domestic market A leading company THE company for Switzerland in Europe for Swiss cheese, both Switzerland's premium dai
Slide 10: Strategic focus - Switzerland
Strategic focus - Switzerland Maintain leading position in domestic market Defence of position within Switzerland Secure/defend position as leading full-range supplier in all channels > Maintain market share in the retail trade > Growth in the food service segment Reduction of interchangeability > S
Slide 11: Stake in Nutrifrais SA
Expanded presence in French-speaking Switzerland Stake in Nutrifrais SA Defence of position within Switzerland Acquisition of 60% of shares by Emmi > Reinforcement of brand strength and market position in French-speaking CH > Access to range expertise for products in the francophone area Specializes
Slide 12: Processed cheese production in Langnau
Processed cheese production in Langnau Successful completion of amalgamation Defence of position within Switzerland The Thun site was successfully integrated in the Langnau i. E. site > Centre of competence for processed cheese and fondue in Switzerland and Europe Increase in exports Reinforcement o
Slide 13: Strategic international focus
Strategic international focus One of Europe's leading premium dairies Growth outside Switzerland The leading company for Swiss cheese worldwide Expansion of business in Europe and North America with strategic brand concepts and specialities Targeted reinforcement via acquisitions and alliances Growt
Slide 14: International scope
International scope Expansion through subsidiaries and alliances Canada Belgium/Netherlands USA Production in Monroe United Kingdom Germany Austria Annual results media conference and analysts’ presentation 31 March 2010 Page 13 Italy Production in Roverè della Luna Stake in Ambrosi S.p.A. France Sp
Slide 15: Reinforcement of position outside Switzerland
Reinforcement of position outside Switzerland Encouraging performance by Roth Käse USA Growth outside Switzerland Revenue, sales and earnings targets reached and exceeded in a difficult economic environment Market position considerably stronger Leader in the production and distribution of cheese spe
Slide 16: Encouraging collaboration with Ambrosi
Reinforcement of position outside Switzerland Encouraging collaboration with Ambrosi Growth outside Switzerland The products manufactured by the Italian cheese specialist Ambrosi S.p.A. are distributed increasingly via the foreign subsidiaries of the Emmi Group Collaborations or equity interests At
Slide 17: Innovative products (1/2)
Innovative products (1/2) üesli: successful development in the German market Swiss Mü National campaign with focus on Sale of Swiss Müesli in Germany (tubs) enjoyment and Swiss origin 600'000 Targeted development of "Emmi +99% Swiss" product group with premium 500'000 yoghurts 400'000 +36% 300'000 +
Slide 18: Innovative products (2/2)
Innovative products (2/2) Emmi CAFFÈ LATTE: continuous growth Emmi CAFFÈ LATTE 2005 – 2009 in millions of cups 80 + 52% 70 Total 60 +9% 50 Intern. +6% 40 30 20 CH Annual results 10media conference and analysts’ presentation 31 March 2010 Page 17 +13% - 2005 2006 2007 2008 2009 Total sales Switzerlan
Slide 19: Innovations by Emmi
Innovations by Emmi Image shaped significantly by innovative brand concepts – large number of innovations SWISS Gala Aloe Müesli/ Mousse Minicol Vera Yoghurt Benecol Création Yoghurt Lucerne Emminent Yogodu Choco Latte 2002 2000 2003 2004 2005 2006 2007 2008 2009 Aktifit Winzer Caffè Latte Zero Gruy
Slide 20: Rigorous cost management
Rigorous cost management Secure competitive cost structures Cost management following market liberalization Investments in productivity enhancement and capacity expansion, including > expansion of the Kaltbach cave > extension to Emmen site – fruit base processing > Optimization of operating procedu
Slide 21: Strengthening of umbrella brand
Strengthening of umbrella brand Emmi Position Genuine Swiss statement premium taste One Word Equity Enjoyment Emmi Enjoyment One Word Equity Original Refinement Inspiration Wellbeing Product Brands „Emmi „Emmi ofof Benecol Benecol Product brands Kaltbach Kaltbach Caffè Caffè Latte Latte Switzerland“
Slide 22: Emmi brand world
Emmi brand world "Genuine Swiss premium taste" Annual results media conference and analysts’ presentation 31 March 2010 Page 21 Financial year 2009 – Emmi Group presentation 6 April 2010 Page 21
Slide 23: Emmi Sponsoring
Emmi Sponsoring Bild
Slide 24: Financial year 2009
Annual results media conference and analysts’ presentation 31 March 2010 Page 23 Financial year 2009 – Emmi Group presentation 6 April 2010 Page 23
Slide 25: Agenda
Agenda Highlights 2009 Strategy & current projects Results 2009 Annual results media conference and analysts’ presentation 31 March 2010 Page 24 Outlook Financial year 2009 – Emmi Group presentation 6 April 2010 Page 24
Slide 26: Sales performance 2009
Sales performance 2009 Growth primarily outside Switzerland Schweiz International Total Sales in CHF million 1,944.1 675.2 2,619.3 Share in % 74.2 25.8 100.0 Change in % -4.9 7.9 -1.9 Foreign currency effect in % - -4.4 -0.9 Acquisition effect in % 0.5 13.9 3.4 Organic in local currency in % -5.4 -1
Slide 27: Change in milk price 2009
Change in milk price 2009 The average industrial milk price fell by 13.8 centimes per kg compared with 2008 Change in industrial milk price, conventional (in centimes/kg) 85 2008 80 Ø 76.6 75 70 2007 Ø 68.8 65 60 2009 Annual results media conference and analysts’ presentation 31 March 2010 Page 26 Ø
Slide 28: Domestic market – overview 2009
Domestic market – overview 2009 Excellent market position maintained in Switzerland Dairy Fresh Natural Processe Fresh Powder/ Other Total products products cheese d cheese cheese Concen- trates Sales in 735.4 357.7 480.5 51.1 134.7 65.0 119.7 1,944.1 CHF million Share in % 37.8 18.4 24.7 2.7 6.9 3.
Slide 29: International markets – overview 2009
International markets – overview 2009 Targeted growth in key markets Fresh Natural Processed Powder/ Other Total products cheese cheese concentrates Sales in CHF million 206.3 329.7 58.0 20.5 60.7 675.2 Share in % 30.6 48.8 8.6 3.0 9.0 100.0 Change -7.4 26.0 -15.4 72.8 0.5 7.9 in % Foreign currency
Slide 30: Gross profit to EBIT
Gross profit to EBIT Significant increase in EBIT margin Gross profit margin increased thanks to: ∆ in in CHF million 2009 2008 % - extension of the value chain Net sales 2 619.3 2 670.8 -1.9 (own-production of fruit bases) Gross operating 852.0 818.3 +4.1 - Shift towards products with profit more a
Slide 31: Rigorous cost management
Rigorous cost management Targeted use of resources optimizes costs ∆ in Decline of 0.6% in personnel in CHF million 2009 2008 % expenses, adjusted for Personnel expenses 324.0 314.4 +3.0 acquisitions as % of net sales 12.4 11.8 Advertising and 105.1 108.3 -2.9 12.5% increase in consumer- marketing e
Slide 32: Cost management
Cost management Reducing costs and increasing productivity Additional cost-reduction programme with savings of CHF 5.0 million in addition to the CHF 20 million realized since 2008 Streamlining of the product portfolio Extension of the value chain Closure of the Swedish subsidiary Emmi Nordic AB Hig
Slide 33: Kaizen in Kirchberg
Kaizen in Kirchberg Bilder kommen am Montag Annual results media conference and analysts’ presentation 31 March 2010 Page 32 Financial year 2009 – Emmi Group presentation 6 April 2010 Page 32
Slide 34: Net working capital
Net working capital Positive cash flow thanks to rigorous management in CHF million Warehouse management: 400 reduction in inventories by 15.7% 350 adjusted for acquisitions 300 337 14.2% (particularly powder and butter 295 11 stocks) 250 275 -18.3% 200 6.5% reduction in receivables 150 thanks to co
Slide 35: EBIT drivers
EBIT drivers Disproportionately low increase in costs in CHF million 160 Other operating Write-back expenses of negative Personnel 140 Gross profit -0.2 goodwill expenses +33.7 -2.4 -9.6 Depreciation 120 -14.6 2009 2008 109.0 100 102.1 80 60 Annual results media conference and analysts’ presentation
Slide 36: EBIT to net profit
EBIT to net profit Net profit margin on target Disproportionately high increase in CHF million 2009 2008 ∆ of 55.8% in taxes, although level EBIT 109.0 102.1 +6.9 remains extremely low at 13.8% Gains from 1.3 2.2 -0.9 thanks to tax cuts in Switzerland associated companies Financial result -8.7 -26.0
Slide 37: Financial result
Financial result Positive foreign currency effect Foreign currency gain thanks to in CHF million 2009 2008 ∆ hedging arrangements Currency income 0.9 -7.8 +8.7 Interest income -4.9 -12.7 +7.8 Interest income well above Other financial result -4.7 -5.5 +0.8 previous year due to reduced Total financia
Slide 38: Cash flow (1/2)
Cash flow (1/2) Significant improvement in operating cash flow in CHF million 2009 2008 ∆ Operating cash flow 208.3 186.9 +21.4 Change in net working capital 63.6 -47.4 +111.0 Other -12.7 -25.6 +12.9 Cash flow from operating activities 259.2 113.9 +145.3 Investments in tangible assets -72.8 -83.2 +1
Slide 39: Cash flow (2/2)
Cash flow (2/2) Largest investment projects Concentration of processed cheese production in Langnau i. E. complete (total CHF 35 million, 2009 CHF 6 million, 2008 CHF 29 million) Expansion of Kaltbach cave (total CHF 15 million, 2009 CHF 9 million, 2008 CHF 2 million) Preparation of fruit bases in E
Slide 40: Key figures (1/4)
Key figures (1/4) Net Debt/EBITDA in CHF million parameter 350 306 300 287 3 250 234 200 2.19 181 2 150 1.65 1.56 100 100 1 0.87 50 0.77 Annual results media conference and analysts’ presentation 31 March 2010 Page 39 - - 2005 2006 2007 2008 2009 2009 Net Debt Net Debt/EBITDA Ratio Financial year 20
Slide 41: Key figures (2/4)
Key figures (2/4) Improved equity ratio in CHF million in % 1'800 1683 70.0 1635 1655 1'600 58.4 1531 55.3 60.0 1'400 49.3 49.6 47.9 50.0 1167 1'200 1'000 40.0 800 30.0 600 20.0 400 Annual results media conference and analysts’ presentation 31 March 2010 Page 40 10.0 200 - - 2005 2006 2007 2008 2009
Slide 42: Key figures (3/4)
Key figures (3/4) Increase in profitability (ROI) in CHF million in % 1'200 9.0 1106 1089 1071 991 8.0 7.1 1'000 8.0 7.0 800 760 5.5 6.0 6.3 5.0 600 4.5 4.0 400 3.0 2.0 200 media conference and analysts’ presentation 31 March 2010 Annual results Page 41 1.0 - - 2005 2006 2007 2008 2009 2009 Net oper
Slide 43: Key figures (4/4)
Key figures (4/4) Increase in dividends in CHF in % 16.00 40 14.08 34.6 35 12.00 30 10.98 9.78 10.33 25.3 24.6 25 23.6 21.9 8.00 7.52 20 15 4.00 10 Annual results media conference and analysts’ presentation 31 March 2010 Page 42 3.00 5 2.60 2.60 2.60 2.60 - - 2005 2006 2007 2008 2009 2009 EPS Distri
Slide 44: Agenda
Agenda Highlights 2009 Strategy & current projects Results 2009 Annual results media conference and analysts’ presentation 31 March 2010 Page 43 Outlook Financial year 2009 – Emmi Group presentation 6 April 2010 Page 43
Slide 45: Competitive environment of the Swiss dairy industry
Competitive environment of the Swiss dairy industry Analysis of competitive strengths Political framework conditions Competitors Import products Swiss dairy industry Suppliers Customers Milk volume Domestic demand Milk price Increasing competition Export between companies Annual results media confer
Slide 46: Swiss environment 2010
Swiss environment 2010 Consumer sentiment precarious – increased focus on prices Lower milk prices (on average) than in 2009 little recovery in sight Various retailers under sales pressure price pressure Overproduction of milk continues volume and price control difficult Import pressure with regard
Slide 47: Measures Switzerland 2010
Measures Switzerland 2010 Increase investments in brand concepts (Benecol, Caffè Latte, “Emmi of Switzerland”, Kaltbach, Luzerner Rahmkäse) Implement further savings of CHF 5 million to CHF 10 million Strengthen conditions for export Active contribution to Swiss Milk Association (BO Milch) Annual re
Slide 48: International environment 2010
International environment 2010 Growth abroad US consumer sentiment is recovering faster than expected Germany, Austria, the Netherlands, Belgium and the UK in a stable situation Italy: private consumption has stagnated – the retail trade is suffering The lack of further economic packages will be the
Slide 49: International measures 2010
International measures 2010 USA: organic growth resulting from amalgamation of Emmi and Roth Käse Germany: investments in Caffè Latte and EOS Italy: reinforce local brands such as Tigre and Trentinalatte, maintain cheese at a stable level Belgium/Netherlands: growth with Chalet, Fondue and Caffè Lat
Slide 50: External factors and trends
External factors and trends Consumer sentiment Price development Currency raw milk 2009 2010 2009 2010 2009 2010 Switzerland - - USA Italy Germany Austria Other countries/regions > 20% 5% – 20% ≥ 2 % -5% – -20% > -20% 2010 will be driven by Annual results media conference and analysts’ presentation
Slide 51: Guidance 2010
Guidance 2010 Sales slightly lower than last year; moderate growth abroad 2010: > Sales in Switzerland -2% > International sales 2% – 4% > Group sales ~0% > EBIT 103 – 113 million > Net profit margin 2.5% – 3.0% Annual results media conference and analysts’ presentation 31 March 2010 Page 50 (under
Slide 52: Medium term objectives
Medium term objectives Growth abroad Medium term (over 5 years): > Sales in Switzerland ~0%* > International sales 6% – 8%* > Group sales 2% – 3%* > Including acquisitions 50% international sales in 5-7 years > Net profit margin 2.5% – 3% Annual results media conference and analysts’ presentation 31
Slide 53: Questions and answers
Questions and answers Annual results media conference and analysts’ presentation 31 March 2010 Page 52 Financial year 2009 – Emmi Group presentation 6 April 2010 Page 52
Slide 54: Appendix
Appendix Annual results media conference and analysts’ presentation 31 March 2010 Page 53 Financial year 2009 – Emmi Group presentation 6 April 2010 Page 53
Slide 55: Sustainability more than just a buzzword
Sustainability more than just a buzzword – the most important environmental measures of the last five years Logistics: Ongoing adjustments Landquart site: Heat to delivery schedule and recovery from compressed modernization of vehicle fleet air Dagmersellen site: Conversion of Start of collaboration
Slide 56: Woodchip facility at Emmen site
Sustainability Woodchip facility at Emmen site Woodchip plant creates steam for use in the manufacture of dairy products Burns logs, branches, driftwood, wood waste, rootstocks etc. The plant produces approx. 22,000 tonnes of steam per year Emmi saves around 1.6 million litres of heating oil Carbon
Slide 57: Customers – the Swiss retail trade is only one sales channel
Customers – the Swiss retail trade is only one sales channel for Swiss dairy products Only around 55% of milk produced in Switzerland flows directly into the Swiss retail trade processed milk approx. 3,400 million kg Swiss retail trade Swiss food industry Direct Export (chocolate and baked goods ind
Slide 58: Milk flow diagrams - 2009
Milk flow diagrams - 2009 Die Schweizer Milch Emmi Schweiz AG 700‘000 Kühe von 27‘000 Milch-Produzenten verarbeitet jährlich 750 Mio. kg Industriemilch produzieren jährlich 4‘000 Mio. kg Milch. von 6‘500 Produzenten. 700 Mio. kg. Milch wird für Haushalt und Fütterung verwendet. Emmi verarbeitet in e
Slide 59: Milk price developments 2009
Milk price developments 2009 The Swiss milk price fell by CHF 0.13/kg – raw material price handicap reduced by end of 2009 Change in at farm-gate producer prices, EU and Switzerland (in centimes/kg) 1 85 CH cheese-making milk 80 inkl. VAT/4% MF, 3.3% MP 75 73.6 70 CH industrial milk Incl.VAT /4% MF,
Slide 60: The challenge of liberalized markets
The challenge of liberalized markets Emmi is responsible for around ¾ of all Swiss yoghurt and milk dessert exports Change in exports of yoghurts and milk desserts 2005-09 (in tonnes) 20'000 Imports 18'000 Other exports Emmi exports (incl. Biedermann from 2009) 16'000 14'000 12'000 10'000 18'173 8'0
Slide 61: Foreign trade with cheese
Foreign trade with cheese Performance in 2009 compared with the previous year Export Tonnes + 960 td 65000 Other - 1 Other 60000 countries ,318 countries 11'831 td 10'513 Import 55000 + 3,030 td 50000 45000 40000 EU d EU t 35000 49'359 ,274 51'633 EU + 2 EU 44'101 30000 41'070 Annual results 25000 m
Slide 62: The leading dairies worldwide and Emmi
Emmi in comparison to the international market The 20 leading dairies worldwide and Emmi 20.0 18.5 Europa Welt Umsatz in Mrd. Euro (2008) 15.0 10.7 10.0 9.3 9.3 8.2 8.1 6.9 6.9 5.1 4.5 5.0 3.7 3.6 3.6 3.2 3.0 2.8 2.5 2.5 2.4 2.3 1.8 0.0 O stry rm * Em r Fo ina a g eiji rai n La I n s iu la ca tF s D