Barry Callebaut AG · SIX:BARN
Barry Callebaut — Q1 2009/10 Earnings Presentation
33 slides from Barry Callebaut's earnings presentation, January 2010
Slide 1: Roadshow presentation Q1 2009/10
Barry Callebaut Roadshow presentation Q1 2009/10 January 2010 January 2010 Barry Callebaut
Slide 2: Agenda
Agenda X Barry Callebaut at a glance X Highlights and Financials Q1 2009/10 X Strategy going forward & market opportunities X Outlook January 2010 Barry Callebaut 2
Slide 3: Active along the entire cocoa and chocolate value chain
Barry Callebaut is active along the entire cocoa and chocolate value chain Cocoa Semi-finished Products Chocolate Products Sugar 100% Retail Milk customers Other Consumer Products Liquor for Chocolate via Industrial Shells/ chocolate Couverture customers waste ~50% Butter Artisanal 100% customers 20
Slide 4: Barry Callebaut at a glance
Barry Callebaut at a glance FY 2008/09 X World leader in high-quality cocoa and chocolate Net revenue: CHF 4.9 bn products and outsourcing partner of choice, with over 40% share in the industrial chocolate market Consumer Cocoa X World’s largest supplier of Gourmet & Products 17% 11 %15% Specialties
Slide 5: Global chocolate consumption is still sluggish
Global chocolate consumption is still sluggish Global chocolate market declined by more than 2% in volume FY 08/09 - 2.6% 1'575'544 1'534'170 + 1.6% 2008 Volume in tons 2009 736'031 764'920 Volume in tons - 6.6% Q1 09/10: -5.4 % Volume in units 350´269 326´861 Eastern Europe** Western Europe -10.9%
Slide 6: West Africa is the world's largest cocoa producer – BC sources locally
West Africa is the world’s largest cocoa producer – BC sources locally Total world harvest (08/09): 3 456 k MT Others Dominican Republic 1% 9% X BC sources ~540k MT/y (08/09) cocoa, thereof 65% directly from Papa New Guinea 2% farmers, cooperatives & local trade Ivory Coast* houses Indonesia /Malays
Slide 7: Third year of cocoa deficit despite significantly decreased grinding volumes
Third year of cocoa deficit despite significantly decreased grinding volumes Cocoa production versus consumption Crop year Gross crop Grinding Surplus/d End of eficit* season stock 2005/06 3776 3508 239 1891 2006/07 3426 3658 -266 1625 2007/08 3718 3743 -62 1563 2008/09 3456 3494 -73 1490 *Current n
Slide 8: Most relevant raw material prices have increased
Raw material price development Most relevant raw material prices have increased London Cocoa 2nd Position – weekly close in £/ton in EUR/ton London Sugar No. 5 – 1st position 2900 in €/ton in £/ton 2500 2100 1700 1300 900 500 May-00 May-03 May-08 Dec-99 Sep-00 Feb-01 Nov-01 Dec-04 Jun-01 Apr-02 Aug-
Slide 9: 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 4.50 4.00 3.50 3.00 Butter - Powder - Combined 2.50 2.00 1.50 1.00 0.50 0.00 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00
Slide 10: Cocoa, dairy, and sugar are the most important raw materials we source
Cocoa, dairy, and sugar are the most important raw materials we source Barry Callebaut business model 100g chocolate tablet contains: Gourmet & Milk Dark 20% Consumer price lists Products Cocoa liquor 11g 44g regular Cocoa butter 24g 12g updates Milk powder 22g - 80% Cost Plus Sugar 42g 43g Higher r
Slide 11: Agenda
Agenda X Barry Callebaut at a glance X Highlights and Financials Q1 2009/10 X Strategy going forward & market opportunities X Outlook January 2010 Barry Callebaut 11
Slide 12: Strong profit growth in local currencies
Key figures FY 08/09 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 74
Slide 13: Maintaining strong top-line growth in Q1 09/10
Maintaining strong top-line growth in Q1 09/10 Sales volume in ‘000 Metric Tons X Sales volumes up 7.2% in a Change Q1 09/20 Q1 08/09 still fragile economic in % environment Group +7.2% 363.0 338.5 X Europe volume increased in Global +14.0% 57.5 50.4 the wake of recessionary Sourcing & markets Cocoa
Slide 14: Americas and Global Sourcing & Cocoa are biggest growth contributors in Q1
Americas and Global Sourcing & Cocoa are biggest absolute growth contributors in Q1 Sales volume distribution Q1 2009/10 Sales volume growth Q1 2009/10 [000 MT] [000 MT] Group: 363 Group: 24.5 Global Global 12.4; 3% 57.5; 1.9; 8% 76.8; Sourcing & Sourcing & 16% 7.1; 29% Cocoa Cocoa 21% Europe Europe
Slide 15: Global Sourcing and Cocoa – good growth but depressed combined cocoa ratio
Global Souring and Cocoa – good growth but depressed combined cocoa ratio +14.0% X Cocoa terminal markets further 70 advanced and reached 33-year high in 57.5 London in the wake of concerns about 60 the 09/10 crop in Ivory Coast and 50.4 Ghana Volume in 000 MT 50 40 X BC increased volumes by 14%, dr
Slide 16: Europe – sales volume increase in the wake of recessionary environment
Europe – sales volume increase in the wake of recessionary environment +2.4% X Market demand in Western Europe 250 stabilizing, in Eastern Europe no 216.2 clear signs of recovery yet 211 X Sales of Gourmet products increased 200 in all markets and segments, Volume in 000 MT especially in Bakery/past
Slide 17: Americas – again strong growth in FM and Gourmet
Americas – again strong growth in FM and Gourmet +15.6% X Chocolate confectionary market has 90 bottomed out, but not recovered yet 80 76.8 X Consumer are down-trading (lower 66.5 prices products as well as private 70 label) Volume in 000 MT 60 X BC’s major growth drivers were 50 national accounts a
Slide 18: Asia-Pacific – recovering customer demand and growth with new customers
Asia-Pacific – recovering customer demand and growth with new customers +17.7% 14 X Asian chocolate consumption is 12.4 showing some early signs of 12 recovery 10.5 X Yet, also driven by high raw material Volume in 000 MT 10 prices, there is a very short notice 8 ordering pattern of customers X Gain
Slide 19: 2007-09 substantial expansion of plant capacity
2007 -09 substantial expansion of plant capacity Plant utilization per end 2008/09 Cocoa Grinding Capacity MT 600'000 92.2% 500'000 93.7% 88.6% 400'000 X BC has usually utilization 300'000 rates in chocolate of > 90%, in cocoa grinding even 200'000 100'000 higher 0 2006/07 2007/08 2008/09 Origin Cou
Slide 20: CAPEX development: back to long-term sustainable levels
CAPEX development: Back to long-term sustainable levels CHF m 300 250 250 200 additional growth 153 144 150 115 ~125 IT On- going Upgrade/ efficiency 100 level gains existing sites Maintenance 50 0 2005/06 2006/07 2007/08 2008/09 2009/10 plan January 2010 Barry Callebaut 20
Slide 21: 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 22: Agenda
Agenda X Barry Callebaut at a glance X Highlights and Financials Q1 2009/10 X Strategy going forward & market opportunities X Outlook January 2010 Barry Callebaut 22
Slide 23: 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 24: 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 25: Additional market outsourcing potential between 250,000 and 500,000 tonnes
Geographic Expansion Additional market outsourcing potential between 250,000 and 500,000 tonnes Top 11 Manufacturers of Industrial Chocolate X Total global industrial yearly (in '000 tonnes) chocolate production is Barry Callebaut estimated at 5.5 million tonnes Nestlé X The top five players (w/o BC
Slide 26: 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 27: 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 28: 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 29: Agenda
Agenda X Barry Callebaut at a glance X Highlights and Financials Q1 2009/10 X Strategy going forward & market opportunities X Outlook January 2010 Barry Callebaut 29
Slide 30: 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 31: 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 32: 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 Janua
Slide 33: 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