Barry Callebaut Ag · SIX:BARN
Barry Callebaut — FY2013/14 Earnings Presentation
40 slides from Barry Callebaut's earnings presentation, Nov 6, 2014
Slide 1: Full Year Results 2013/14 Media Conference
Full Year Results 2013/14 Media Conference November 6, 2014 November 6, 2014
Slide 2: Cautionary note
Cautionary note Certain statements in this presentation regarding the business of Barry Callebaut are of a forward‐ looking nature and are therefore based on management’s current assumptions about future developments. Such forward‐looking statements are intended to be identified by words such as “be
Slide 3: Agenda
Agenda Highlights FY 13/14 Financial review Strategy update & Outlook Q&A Page 3 November 6, 2014 FY 13/14 Media Conference
Slide 4: A big leap in sales volume and profit
Highlights FY 2013/14 A big leap in sales volume and profit Sales Volume: 1.7 mio. tonnes EBIT: CHF 416.2 mio. +11.8% +21.4% +2.9% stand‐alone +5.6% stand‐alone Net Profit: CHF 255.0 mio. EBIT per tonne: CHF 242.4 +14.5% +8.5% +2.6% stand‐alone Successful integration of Dividend: CHF 15.50 per share
Slide 5: Chocolate confectionery market development
Chocolate confectionery market development Global market +2.3%* in volume vs. prior year Market slowdown in the second half‐year EE WE +3.7% +0.1% North America +2.1% Asia‐Pacific +8.3% SA +7% Global + 2.3%* Source: Nielsen data (Sep 2012‐ Aug 2013); ‐ Top 16 countries represent app. 75% of the glob
Slide 6: Growth boosted by acquired cocoa business, emerging markets and Gourmet
FY 2013/14 Growth boosted by acquired cocoa business, emerging markets and Gourmet, outperforming the global market Sales Volume – FY 2013/14 Sales Volume by Region – FY 2013/14 Group 11.8% Asia Pacific Food Manufacturers 0.7% 4% Global Global Cocoa 52.1% Americas Cocoa 26% 27% Gourmet & Specialties
Slide 7: A recap of our key focus areas for FY 2013/14
A recap of our key focus areas for FY 2013/14 Integrate Petra Foods cocoa business and strengthen our position in cocoa powder Enhance profitability Continue product margin improvement Keep supply chain and fixed costs under control Strengthen leadership in sustainable cocoa Accelerate t
Slide 8: Consistent implementation of our growth strategy as a key to success
Highlights FY 2013/14 Consistent implementation of our growth strategy as a key to success Inauguration of cocoa Inauguration of first chocolate Production start in new, New CHOCOLATE ACADEMY™ Acquisition of remaining 51% of factory in Makassar factory in Turkey relocated factory in Japan center in
Slide 9: Our expansion continues along the three key growth drivers
FY 2013/14 Our expansion continues along the three key growth drivers Emerging Markets Long‐term outsourcing & Gourmet & Specialties Strategic partnerships Volume growth +10.7% vs prior year* +8.7 % vs prior year +7.3 % vs prior year CAGR 5 year +14.8%* +28.2% +8.7 % Volume 33% % of total Group 21%
Slide 10: Significant volume growth through successful implementation of our Gourmet strategy
Key growth driver: Gourmet & Specialties Significant volume growth through successful implementation of our Gourmet strategy Global brands delivered double‐digit volume growth, through strongest ever activity plan Launch of new products for new market segments (e.g. Callebaut’s Hot Chocolate dri
Slide 11: Successful global integration, profit contribution and synergies on track
Acquired cocoa business Successful global integration, profit contribution and synergies on track Our journey to become one company no key customers lost no key people lost started with 181 global milestones ‐ only 19 milestones remain open One culture is being created Our sales approach
Slide 12: Update on Ebola outbreak in West Africa
Update on Ebola outbreak in West Africa Situation closely monitored, prepared for potential scenarios Ebola is not a food‐borne illness Countries affected: Guinea, Liberia, Sierra Leone and Mali We have no production facilities in affected countries No confirmed cases in Côte d’Ivoire / Ghan
Slide 13: Agenda
Agenda Highlights FY 13/14 Financial review Strategy update & Outlook Q&A Page 13 November 6, 2014 FY 13/14 Media Conference
Slide 14: A big leap in sales volume and profit
FY 13/14 A big leap in sales volume and profit Group performance FY 2013/14 % vs prior year (in CHF) (in CHF) Sales Volume Total 1,716,766 +11.8% (in tonnes) Sales Volume stand‐alone 1,541,654 +2.9% (in tonnes) EBIT Total 416.2 +21.4% EBIT per tonne 242.4 +8.5% EBIT stand‐alone 392.8 +5.6% EBIT per
Slide 15: Focus on margins paid off
FY 13/14 Focus on margins paid off Europe Americas Asia Pacific Global Cocoa Volume growth ‐1.2% +5.4% +9.3% +52.1% 1 +8.6% 2 Underlying market +1.2% +2.8% +8.3% +1.8% EBIT growth vs. prior year +95.7% 1 (in CHF) +5.3% +17.5% +0.4% +2.6% 2 1) Including acquisition of Petra Foods Cocoa Business 2)exc
Slide 16: Strong focus on enhancing profitability and positive contribution from acquired business
EBIT Strong focus on enhancing profitability and positive contribution from acquired business in CHF mio. +21.4% +7.6% +94.6 +27.8 416.2 ‐30.0 400.5 +29.2 372.1 ‐3.3 ‐8.8 342.9 ‐36.2 EBIT Petra Foods EBIT Additional Additional Add. Costs, EBIT Petra Foods Additional Negative EBIT FY 2012/13 Cocoa st
Slide 17: Improved EBIT per tonne driven by stronger focus on profitability
5‐year EBIT per tonne development Improved EBIT per tonne driven by stronger focus on profitability, despite low combined cocoa ratio 312 +9.3% 282 290 EBIT per tonne in CHF 274 (at constant currencies) 282 286 251 EBIT per tonne in CHF 256 (as reported) 242 223 +9.1% 1’717 Volume in kMT 1’378 1’536
Slide 18: Significant increase in cocoa bean price over the last year
Raw materials evolution Significant increase in cocoa bean price over the last year FY 13/14 300% 250% Cocoa beans 200% +23% Sugar world 150% ‐4% 100% Sugar EU ‐22% 50% Milk powder ‐39% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep.2014 Page 18 November 6, 2014 FY 13/14 Media
Slide 19: Cash Flow negatively affected by higher raw material prices
Cash Flow Cash Flow negatively affected by higher raw material prices in CHF mio. +5.0% 474 451 ‐279 +272 17 ‐249 ‐142 +21 ‐80 Operating Operating Investment Capital Interest paid Dividend CF from Cash flow Net increase in Cash Flow* Cash Flow* in Working Expenditures and income & Capital acquisitio
Slide 20: Dividend increased to CHF 15.50 per share – up 6.9%
Dividend Dividend increased to CHF 15.50 per share – up 6.9% Total payout to shareholders Proposed dividend CHF 15.50 per share1, up 6.9% in CHF mio. Payout of 34% of Net Profit CAGR 4.2% 85 Not subject to withholding tax2 80 80 80 72 Timetable for dividend Shareholder approval: Dec 10, 2014
Slide 21: Long-term and continued strong volume and EBIT growth in a capital intensive business
5‐year development Long‐term and continued strong volume and EBIT growth in a capital intensive business Sales Volume EBIT CAGR +8.4% CAGR +9.1% Currency effects Acquired (cumulated) Cocoa business Acq. Cocoa business BC stand‐alone BC stand‐alone (before FX impact) 09/10 10/11 11/12 12/13 13/14 09/
Slide 22: Agenda
Agenda Highlights FY 13/14 Financial review Strategy update & Outlook Q&A Page 22 November 6, 2014 FY 13/14 Media Conference
Slide 23: Our proven four-pillar strategy is the basis for our long-term business success
The Barry Callebaut Group’s growth strategy Our proven four‐pillar strategy is the basis for our long‐term business success “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable, 4 strategic Innovation profitable pillars growth Cost Leadership Sustainable Cocoa Page 23
Slide 24: We will further refine our focus with 6 shaping initiatives
The Barry Callebaut Group’s growth strategy We will further refine our focus with 6 shaping initiatives 1 3 5 Outsourcing & Product & Operational Partnerships service Excellence 2.0 differentiation Expansion Innovation Cost Leadership Sustainable Cocoa 2 4 6 Leadership in Compound & One Company coco
Slide 25: Untapped growth potential in different dimensions
Key growth drivers Untapped growth potential in different dimensions Emerging Markets Long‐term outsourcing & Gourmet & Specialties Strategic partnerships • New factories in Chile, • 51% of industrial chocolate • Expand into new markets/ Turkey, India still captive market increase distribution point
Slide 26: Chocovision 2014
Chocovision 2014 Taking industry leadership and driving sustainability; supporting CocoaAction International conference for senior business leaders and key stakeholders in the cocoa and chocolate industry Neutral platform for debate Networking and knowledge sharing platform, gathering of new i
Slide 27: Sustainable Cocoa
Sustainable Cocoa Aligning our sustainability strategy and activities with CocoaAction Sustainable Cocoa Innovation, Implementation, Impact Productivity Community ‐ Farmer Training ‐ Education ‐ Inputs ‐ Child Protection ‐ Planting ‐ Women’s Material ‐ Financing Empowerment Solutions ‐ Health KPIs P
Slide 28: HR for Growth – Developing our people
Accelerate Talent Management and succession planning HR for Growth – Developing our people On‐going initiative to further improve our Talent Management & Leadership Development Aligning our HR organisation to better support the business Introducing a new IT system to become more efficient and
Slide 29: Outlook FY 2014/15: Our key focus areas going forward
Outlook FY 2014/15 Our key focus areas going forward Drive further expansion along our three key growth drivers Outsourcing & Partnerships Gourmet Emerging markets Continued focus on margins, tighter cost control, stronger discipline in CAPEX and cash flow generation Further implement HR
Slide 30: Challenging environment, confident to achieve mid-term guidance
Outlook & Guidance Challenging environment, confident to achieve mid‐term guidance Market / industry outlook Long‐term growth in chocolate and cocoa powder remains intact Significant growth opportunities Challenging environment in emerging markets, as well as in Europe Mid‐term Guidance*
Slide 31: Questions & Answers
Questions & Answers November 6, 2014
Slide 32: Summary
FY 2013/14 Summary Strong, double‐digit volume growth and profit improvement Successful global integration and positive profit contribution from acquired cocoa business, synergies on track Intact growth drivers: Gourmet, emerging markets, outsourcing Leading the way in sustainable cocoa St
Slide 33: Page 33 November 6, 2014 FY 13/14 Media Conference
Page 33 November 6, 2014 FY 13/14 Media Conference
Slide 34: What makes Barry Callebaut unique?
What makes Barry Callebaut unique? Global number one player focused in chocolate and cocoa Global leader in Gourmet Proven and long‐term oriented strategy Unparalled global footprint, present in all key markets Preferred outsourcing and strategic partner Leading and growing presence in e
Slide 35: Appendix
BARRY ((}) CALLEBAUT Appendix
Slide 36: Neutral profitability impact from the combined cocoa ratio in FY 13/14
Cocoa processing profitability Neutral profitability impact from the combined cocoa ratio in FY 13/14 European combined ratio‐ 6 months forward ratio FY 13/14 4.00 3.00 Combined ratio 2.88 Butter ratio 2.00 1.00 Powder ratio 0.00 Oct‐07 Oct‐08 Oct‐09 Oct‐10 Oct‐11 Oct‐12 Oct‐13 Oct‐14 For cocoa proc
Slide 37: Net Profit for the year increased by +14.5%
From EBITDA to Net Profit Net Profit for the year increased by +14.5% driven by higher operational result, partly offset by higher financing expenses and taxes in CHF mio. 531.5 (+21% vs PY) Petra Foods 416.2 Cocoa acquisition (+21%) ‐118.8 impact ‐115.3 ‐27.5 (+21%) 14.5% +91.1 255.0 (+17%) ‐42.4 2
Slide 38: Good working capital management with negative impact from increased cocoa bean prices
Net Working Capital Good working capital management with negative impact from increased cocoa bean prices in CHF mio. Receivables Stocks Payables +24.4% +308 +56 1,675 ‐20 +41 ‐90 1,346 +30 +4 Net Growth Operational Growth Price impact Growth Price impact Others and Net Working impact improvements i
Slide 39: Higher working capital led to higher debt and lower key ratios
Balance Sheet & key ratios Higher working capital led to higher debt and lower key ratios Aug 14 Aug 13 Total Assets [CHF m] 5,167.5 4,526.9 Net Working Capital [CHF m] 1,674.6 1,345.7 Non-Current Assets [CHF m] 2,175.6 2,071.9 Net Debt [CHF m] 1,803.5 1,525.2 Shareholders' Equity [CHF m] 1,790.7 1,
Slide 40: Enough headroom for further growth and raw material price fluctuations
Available Financing Enough headroom for further growth and raw material price fluctuations As of 31 Aug 2014 CHF 3,287 mio. CHF 730 mio. Various Short term uncommitted facilities 36.2% Program size increased to EUR 400 mio. EUR 600 mio Domestic Commercial (Oct 2014) Paper Programme CHF 2,100 mio. 3‐