Barry Callebaut Ag · SIX:BARN
Barry Callebaut — Q1 2016/17 Earnings Presentation
35 slides from Barry Callebaut's earnings presentation, Jan 17, 2017
Slide 1: Roadshow presentation – 3-Month Key Sales Figures 2016/17
Roadshow presentation – 3-Month Key Sales Figures 2016/17 January 2017 January 2017
Slide 2: Agenda
Agenda BC at a glance Highlights 3 months 2016/17 Strategy & Outlook Page 2 January 2017 3-Month Roadshow presentation
Slide 3: BC at a glance
BARRY ((}}) CALLEBAUT BC at a glance he Kio farken
Slide 4: The heart and engine of the chocolate industry
Who we are? The heart and engine of the chocolate industry A merger between Cacao Barry, the very first chocolate connoisseur since 1842 and Callebaut a chocolate couverture manufacturer expert since 1911 Listed on the SIX Swiss Exchange since 1998 Today, the world's leading manufacturer of hi
Slide 5: Barry Callebaut at a glance
Barry Callebaut at a glance We add value in every step of the cocoa and chocolate value chain Page 5 January 2017 3-Month Roadshow presentation
Slide 6: FY 2015/16
FY 2015/16 Page 6 January 2017 3-Month Roadshow presentation
Slide 7: A broad range from standard to the most premium products
What do we offer? A broad range from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 7 January 2017 3-Month Roadshow presentation
Slide 8: Our Regional and Product split
How are we organized? Our Regional and Product split FY 2015/16 Sales Volume: 1.8 mio tonnes Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 4% 11% Global Cocoa 24% EMEA 44% Food Manu- facturers 65% Cocoa Products 24% Sales Revenue: CHF6,676.8m Americas EBI
Slide 9: We apply a cost plus approach to the majority of the business
Our business model We apply a cost plus approach to the majority of the business Customers Pricing model Profit levers Food Manufacturers • Small, medium and • Cost Plus • Customer mix Global Food • Product mix Manufacturers • Economies of scale 65% Cocoa Products • Small, medium and • Market prices
Slide 10: A global footprint and a local service
A global footprint and a local service Cocoa factories in origin countries and chocolate factories close to our customers Cocoa processing factory Chocolate factory Integrated factory Page 10 January 2017 3-Month Roadshow presentation
Slide 11: Highlights - 3 months 2016/17
Highlights - 3 months 2016/17 January 2017
Slide 12: Steady start, consistent above market growth
3-Month Key Sales Figures Steady start, consistent above market growth Sales volume growth flat Above-market growth in chocolate +2.3%1 Gourmet & Specialties continues to perform strongly, up +14.3% Nearly completed phase-out of less profitable contracts in cocoa -8.6% Sales revenue up +3.
Slide 13: Above-market growth in Chocolate, phase-out of less profitable contracts in Global Cocoa
3 months 2016/17 Above-market growth in Chocolate, and nearly completed phase-out of less profitable contracts in Global Cocoa Sales Volume (in tonnes) -0.4% +8.8% +1.4% 1'828 +2.2% 1'882 -10’543 4'891 494’873 -8.6%1 492’931 Group 3 months EMEA Americas Asia Global Cocoa Group 3 months 2015/16 2016/
Slide 14: All key growth drivers contributed to steady volume growth
3 months 2016/17 All key growth drivers contributed to steady volume growth Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth 3 months +2.5% vs prior year +1.0% vs prior year +14.3% vs prior year 2016/17 CAGR 5 year +17.7% +26.5% +6.5 % Volume 11.2%
Slide 15: Focus on execution - Cocoa Leadership Project
Focus on execution - Cocoa Leadership Project Commercial Operations Global leverage leadership leadership SKU reduction on- Centralized Manufacturing going combined cocoa footprint reduced in Asia ratio management Customer in place segmentation Working Capital Setting up Global Stronge
Slide 16: Cocoa processing profitability
Cocoa processing profitability Temporary improvement; at higher levels compared to prior year European combined ratio - 6 months forward ratio 4.00 Combined ratio 3.32 3.00 Butter ratio 2.00 1.00 Powder ratio 0.00 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 For cocoa proces
Slide 17: Raw materials evolution
Raw materials evolution Cocoa bean prices lower than prior year, world sugar prices increased strongly, milk powder prices remain firm 300% Average 3 months vs. prior year 250% Sugar world +51.4% 200% Cocoa beans -1.6% 150% 100% Sugar EU +4.7% 50% Milk powder +15.4% 0% Sep.2007 Sep.2008 Sep.2009 Sep
Slide 18: Strategy & Outlook
Strategy & Outlook January 2017
Slide 19: Consistent long-term strategy, focus on execution
Consistent long-term strategy, focus on execution “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable growth Margin accretive growth 4 strategic Innovation “SMART Accelerated growth in Gourmet, pillars growth” Specialties and emerging markets Cost Leadership Return on
Slide 20: Execution translated into our Product groups
Execution translated into our Product groups Accelerated growth • Expand reach Leveraging global scale and expertise • Expand scope • Growth & profit accretion Gourmet & Specialties Sustained growth • Strengthen existing Food Manufacturers partnerships • Foster new partnerships • Innovation & co- cr
Slide 21: Page 21 January 2017 3-Month Roadshow presentation
Page 21 January 2017 3-Month Roadshow presentation
Slide 22: Strategic priorities 2016/17
Strategic priorities 2016/17 Grow Competitively Further leverage our innovation capabilities Inspire and co-create Nourish & expand partnerships Grow Sustainably Cocoa Beyond cocoa Talents & teams Grow Profitably Cocoa Leadership deployment Increase leverage Footprint & Capab
Slide 23: Outlook
Outlook Continue to strive for a smart balance between consistent, above-market volume growth and enhanced profitability Outlook Continue to implement “smart growth”, we have good visibility on volume growth and expect positive contribution to profitability from our Cocoa Leadership project. Mid-t
Slide 24: Appendix
Appendix January 2017
Slide 25: What makes Barry Callebaut unique?
What makes Barry Callebaut unique? Global number one player in chocolate and cocoa Deep chocolate and cocoa expertise Global leader in Gourmet & Specialties Proven and long-term oriented strategy Unparalled global footprint, present in all key markets Preferred outsourcing and strategic
Slide 26: Capital Expenditures
Capital Expenditures in CHF mio. +4.5% +4.6% +4.2% +4.0% +3.0% CAPEX as % of sales revenue 249 249 218 224 201 200 Additional growth IT Upgrade / efficiency gains existing sites Maintenance 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 E Page 26 January 2017 3-Month Roadshow presentation
Slide 27: 7-year EBIT per tonne development
7-year EBIT per tonne development EBIT per tonne temporarily affected by a challenging cocoa products market and a strong Swiss franc 312 282 290 274 279 271 286 251 EBIT per tonne in constant currencies 256 231 219 242 EBIT per tonne in CHF 223 (as reported) +7.2% 1’717 1’795 1’834 1’379 1’536 1’21
Slide 28: 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 Olam Blommer Blommer Fuji Oil Mondelez Puratos Guan Chong Cémoi Ecom Cocoa Irca BT Cocoa Clasen Nestlé Kerry Grou
Slide 29: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer Total world harvest (15/16): 4,031 TMT others 13% About 70% of total cocoa beans Nigeria come from West Africa 5% Brazil* 3% BC processed ~900,000 tonnes or Ivory Coast* 22% of the world crop Cameroon* 39% 6% Barry Callebaut has various cocoa E
Slide 30: FY results 2015/16
FY results 2015/16 Solid volume growth, profitability as anticipated and flat in local currencies Group performance FY 2015/16 % vs prior year % vs prior year (in CHF) (in CHF) in local (In CHF mio.) currencies Sales Volume Total 1,834,224 +2.2% (in tonnes) Sales Revenue 6,676.8 +7.0% +8.8% Gross Pr
Slide 31: EBIT FY 2015/16
EBIT FY 2015/16 Operating profit flat in local currencies, supported by good product and customer mix, while setting up the path for continued “smart growth” in CHF mio. +0.1% +36.9 414.8 -26.2 415.3 One-off related to the 13.6 -10.2 401.7 settlement -13.6 agreement with Petra Foods EBIT Additional
Slide 32: Free Cash Flow
Free Cash Flow Strong cash flow generation as a result of efforts to reduce working capital and strict discipline on CAPEX in CHF mio. +20.4% 569 +193 -201 473 (py -101) (py-249) 404 -141 -17 (py-145) (py +44) Operating Operating Change in Capital Interest paid and M&A Free Cash Flow Cash Flow Cash
Slide 33: Balance Sheet & key ratios
Balance Sheet & key ratios Improvement of our some financial ratios, based on our “smart growth” strategy and some positive one-off effects Aug 16 Aug 15 Total Assets [CHF m] 5,640.8 5,429.4 Net Working Capital [CHF m] 1,374.6 1,529.7 Non-Current Assets [CHF m] 2,301.0 2,185.5 Net Debt [CHF m] 1,452
Slide 34: Available Financing
Available Financing Enough headroom for further growth and raw material price fluctuations As of 31 August 2016 CHF 4,407 mio ABS CHF 948 mio Various uncommitted facilities -58.9% EUR 600 mio. Domestic Commercial Paper Programme 3-5 years Various bilateral LT loans CHF 1,811 mio CHF 150 mio. Related
Slide 35: Liquidity – Debt maturity profile
Liquidity – Debt maturity profile As of 31 August 2016 In CHF mio Uncommitted lines Committed lines 150 ‐‐ Cash and revolving credit facility (undrawn) 657 Short-term facilities Term loans 457 484 Bonds 91 382 383 271 134 Cash 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Page 35 January 2017 3-