Barry Callebaut AG · SIX:BARN
Barry Callebaut — Non-Deal Roadshow (May 2015)
40 slides from Barry Callebaut's roadshow presentation, May 2015
Slide 1: Roadshow presentation - HY 2014/15
Roadshow presentation -HY 2014/15 May 2015 April, 2015
Slide 2: Agenda
Agenda BC at a glance Highlights HY 2014/15 Financial Review Strategy & Outlook Page 2 May, 2015 Roadshow Presentation
Slide 3: Barry Callebaut at a glance
Barry Callebaut at a glance Business description Key figures • World leading producer and business-to-business supplier FY 2013/14 of chocolate and cocoa products • Fully integrated with strong position in cocoa-orign Sales Volume 1.7 mio. tonnes countries Sales Revenue CHF 5.8 bn • Serving the enti
Slide 4: From the cocoa bean to the chocolate and cocoa products
From the cocoa bean to the chocolate and cocoa products Barry Callebaut is present in the key parts of the cocoa and chocolate value chain Cocoa Farming Barry Callebaut’s core activities Cocoa Origination Direct Sourcing Cocoa Processing Cocoa Beans 80% Cocoa Liquor ~54% ~46% Cocoa Powder Cocoa Butt
Slide 5: Favourable Industry Dynamics
Favourable Industry Dynamics Global growth prospects Outsourcing rationale for customers Average market growth in chocolate: 2 % in Free up capital to invest in marketing and volume per year distribution Influenced by population growth and increase Access to most recent innovation and new in
Slide 6: Long-term chocolate remains a resilient category with 2% annual volume growth
Industry overview Long-term chocolate remains as a resilient category with an average annual volume growth of 2% Chocolate confectionery – Total market volume 2'250 2'125 2'017 1'781 1'730 1'380 1'435 Cocoa bean 911 price GBP 844 888 1’043 Worst economic downturn 4.1% 4.1% 3.1% 2.8% 2.0% 2.1% 2.0% 2
Slide 7: Our factories provide manufacturing diversification and competitive advantage
Our 52 factories provide us manufacturing diversification and unique competitive advantage Cocoa processing factory Chocolate factory Integrated factory New factories Page 7 May, 2015 Roadshow Presentation
Slide 8: Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets
Chocolate and Cocoa markets Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets Cocoa grinding capacity Industrial chocolate – open market BC BC Cargill Cargill + ADM Olam + ADM Blommer Blommer ADM Mondelez Cemoi Guan Chong Puratos Ecom Cocoa Fuji Oil Nestlé IRCA Ferrero Gu
Slide 9: Agenda
Agenda BC at a glance Highlights HY 2014/15 Financial Review Strategy & Outlook Page 9 May, 2015 Roadshow Presentation
Slide 10: Half-year Results 2014/15: Solid growth with strong profit improvement
Half-year Results 2014/15 Solid growth with strong profit improvement Sales Volume EBIT Net profit for the growth period +8.7% in CHF +10.7% in CHF +2.0% (Q1: 0.2%; Q2: +3.9%) +13.0% in L.c. +16.3% in L.c. Volume growth EBIT per Tonne Strong profit driven by improvement Western Europe, +6.6% in CHF
Slide 11: Volume growth fueled by main Regions, outperforming the market
HY Results 2014/15 Volume growth fueled by main Regions, outperforming the market Growth (tonnes) vs. prior +2.0% year +1.2% +5.8% +1.9% 3'002 2’002 +2.1% 4'051 8'085 893’437 876’297 Sales Volume Europe Americas Asia Global Cocoa Sales Volume HY 2013/14 HY 2014/15 Market Volume growth * -1.1% -2.0%
Slide 12: Along our three key growth drivers
HY 2014/15 …along our three key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic partnerships Volume growth +1.7% vs prior year +5.0 % vs prior year +6.0 % vs prior year CAGR 5 year +17.3% +21.0% +6.0 % Volume 33% 31% % of total Group 11% Volume Page 12 May, 20
Slide 13: Recent development of key growth drivers
HY 2014/15 Recent development of key growth drivers Emerging Markets Outsourcing & Strategic partnerships Strong volume growth in South America Additional volume from current Brazilian business double-digit growth partnerships agreements Opening of Chocolate factory in Chile Difficult envi
Slide 14: Gourmet & Specialties - Key achievements in first 6 months
HY 2014/15 Gourmet & Specialties- Key achievements in first 6 months HY 14/15 LEAD & EXPAND Gourmet volumes accelerating in Q2, outperforming the foodservice market through education and inspiration Leading the way through successful innovations with Cacao Barry Purity from Nature and Callebaut
Slide 15: Highlights HY 2014/15
Highlights HY 2014/15 Expansion of Brazilian Inaguration of the first Inaguration new CHOCOLATE Signing of outsourcing Inaguration new CHOCOLATE Chocolate factory chocolate factory in Chile ACADEMY TM in Dubai agreement with WFC (USA) ACADEMY TM in Moscow Oct 2014 Dec 2014 Jan 2015 Feb 2015 March 20
Slide 16: Agenda
Agenda BC at a glance Highlights HY 2014/15 Financial Review Strategy & Outlook Page 16 May, 2015 Roadshow Presentation
Slide 17: Accelerating volume growth, strong profitability
HY 2014/15 Accelerating volume growth, strong profitability Group performance HY 2014/15 % vs prior year % vs prior year (in CHF mio.) (in CHF) (in local currencies) Sales Volume (in tonnes) 893,437 2.0% Sales Revenue 3,244.2 11.6% 14.5% Gross Profit 446.2 5.8% 9.5% EBIT 219.2 8.7% 13.0% EBIT per to
Slide 18: Strong performance of main Regions Europe and Americas
HY 2014/15 Strong top and bottom-line performance of main Regions Europe and Americas Europe Americas Asia Pacific Global Cocoa 4% 4% 28% 28% 43% 25% 25% Volume growth +2.1% +1.9% +5.8% +1.2% EBIT growth in +15.8% +12.4% +4.0% -39.6% CHF EBIT growth in +21.9% +9.5% +7.1% -36.4% local currencies Page
Slide 19: Challenging cocoa market environment, negative combined cocoa ratio
Cocoa processing profitability Challenging cocoa market environment, negative impact from the combined cocoa ratio European combined ratio- 6 months forward ratio 4.00 3.00 Combined ratio 2.75 2.00 Butter ratio 1.00 Powder ratio 0.00 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 For cocoa
Slide 20: Gross profit up 9.5% due to better product and customer mix
Gross Profit HY 2014/15 Gross profit up +9.5% maily due to better product & customer mix and focus on margins * Without Cocoa in mCHF Processing impact +12.1% +5.8% +9.5% +53.6 461.7 -12.5 446.2 -10.0 +9.0 -15.5 421.6 Gross Profit Volume Product Mix Cocoa Add. Gross Profit FX impact Gross Profit H1
Slide 21: Significant improvement at Operating Profit level
EBIT HY 2014/15 Significant improvement at Operating Profit level, through higher focus on margins, better product mix and tigher cost control in mCHF FX translation impact for FY, at current rates estimated up to -30 mio CHF +8.7% +13.0% +40.1 227.9 -8.5 219.2 -5.4 -8.7 201.7 EBIT Additional Additi
Slide 22: 6-year EBIT per tonne development
6-year EBIT per tonne development Improvement of the EBIT per tonne comtinues. On track to achieve our mid-term guidance 312 282 290 285 EBIT per tonne in CHF 274 (at constant currencies) 282 286 251 245 EBIT per tonne in CHF 256 (as reported) 242 223 +9.1% 1’717 1’378 1’536 1’210 1’269 893 Volume i
Slide 23: Cocoa bean price still high, other raw materials below prior year
Raw materials evolution Cocoa bean price still at relatively high levels, other raw materials below prior year HY 14/15 HY vs. prior year 300% 250% Cocoa beans +12% 200% Sugar world -2% 150% 100% Sugar EU -23% Milk powder 50% -40% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep
Slide 24: Good working capital management
Net Working Capital Good working capital management with negative impact only from higher cocoa bean prices in CHF mio. Receivables Stocks Payables +4.3% +202 -17 +41 -91 +15 1’567 +28 1’501 -113 Net Growth Operational Growth Price impact Growth Price impact Others and Net Working impact improvement
Slide 25: Balance Sheet & key ratios
Balance Sheet & key ratios High cocoa bean price levels still weighing on our Balance Sheet and key ratios Feb 15 Aug 14 Feb 14 Total Assets [CHF m] 5,433.4 5,167.5 5,106.9 Net Working Capital [CHF m] 1,566.6 1,674.6 1,501.4 Non-Current Assets [CHF m] 2,139.5 2,175.6 2,068.6 Net Debt [CHF m] 1,790.6
Slide 26: Available Financing
Available Financing Enough headroom for further growth and raw material price fluctuations As of 28 Feb 2015 CHF 3,830 mio ABS CHF 791 mio. Various Short term uncommitted 44.9% facilities EUR 600 mio. Domestic Commercial Paper Programme CHF 2,111 mio 3-5 years Various bilateral LT loans EUR 175 mio.
Slide 27: Agenda
Agenda BC at a glance Highlights HY 2014/15 Financial Review Strategy & Outlook Page 27 May, 2015 Roadshow Presentation
Slide 28: Our proven four-pillar strategy
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 28
Slide 29: Expansion: three key growth drivers
Expansion Significant further opportunities with three key growth drivers Potential volume of 3 mio tonnes BC with 25% market share 80% in emerging markets is captive Acquisitions pipeline market Adjacent products Increase distribution points Global market (2% volume growth long-term) Ou
Slide 30: Innovation funnel to support additional volume growth
Innovation Strong, structured innovation funnel to support additional volume growth Project B Project A I D Project J C L E Project C O A Pure Project D A N U Project E Project K T Project M N Sweet Project G G R C Project H A A H Project L T C Project I T E G Controlled Fermentation : Special yeast
Slide 31: Cost Leadership: Shared Service Center in Poland
Cost Leadership Strengthening efficiency, optimizing and enabling for future growth Intention to create a Shared Service Center (SSC) for Europe in Poland Łódź Scope: Transactional activities performed in Europe Benefits: Increase operational efficiency and create economies of scale and skills
Slide 32: Sustainable cocoa - Leading the industry
Sustainable Cocoa Sustainable cocoa – Leading the industry through innovation, implementation and impact «Cocoa CocoaAction Life» (Industry Collaboration) «Learn to «Vision for grow» Customers Change» initiatives targetting to switch to sustainably sourced cocoa by Other 2020 customer «Cocoa plans P
Slide 33: Outlook
Outlook Market/ Industry Outlook Long-term growth in chocolate and cocoa products markets remains intact Significant opportunities along the key growth drivers Mid-term Guidance* On average 6-8% volume growth per year, and EBIT per tonne to reach CHF 256 by 2015/16 * Barring any unforseable
Slide 34: Appendix
Appendix May, 2015
Slide 35: 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 36: 10-year development: investments for growth, high returns
10-year development Significant investments for growth, while still focusing on high returns (CHF mio.) 21% 19% 20% 20% ROE target 20% 19% 19% 18% 18% 16% 15% 14% 14% 15% 15% ROIC target 15% 14% 14% 14% 13% 14% ROE 11% 11% 11% ROIC 250 249 218 224 200 CAPEX 153 144 145 145 102 115 90 2003/04 2004/05
Slide 37: Cash flow generation and high return to shareholders
Cash flow generation despite fast volume growth and expansion, which also translated into high return to shareholders in CHFm Total return to 696% shareholders 522% 502% 436% 411% 337% 324% 279% 161% 47% 69% 0% -2% CAGR 12.7% 480 474 458 455 451 434 418 407 348 313 Cash Flow 252 228 116 2002 2003 20
Slide 38: Cash flow above prior year
Cash Flow Cash flow above prior year, mainly impacted from high cocoa bean prices in CHF mio. +1.9% 258 263 -211 18 +131 -128 -42 -31 Operating Operating Investment Capital Interest paid CF from other Cash flow Net decrease Cash Flow Cash Flow in Working Expenditures and income activities from finan
Slide 39: Capital Expenditures
Capital Expenditures in CHF mio. +4.5% +4.6% +4.2% CAPEX as % of sales revenue Average = 3.9% +3.2% +3.2% 249 218 224 200 174 Additional growth 145 IT Upgrade / efficiency gains existing sites Maintenance 2009/10 2010/11 2011/12 2012/13 2013/14 PLAN 2014/15 Page 39 May, 2015 Roadshow Presentation
Slide 40: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer – BC sources locally Total world harvest (13/14): 4’345 TMT others 8% About 70% of total cocoa beans Ecuador come from West Africa 5% Brazil* 5% Ivory Cameroon BC processed ~940,000 tonnes or Coast* 22% of the world crop * 40% 5% Nigeria 6% Bar