Barry Callebaut Ag · SIX:BARN
Barry Callebaut — FY2013/14 Earnings Presentation
45 slides from Barry Callebaut's earnings presentation, Nov 6, 2014
Slide 1: Full Year Results 2013/14 Roadshow presentation
Full Year Results 2013/14 Roadshow presentation November 6, 2014 November 2014
Slide 2: Agenda
Agenda BC at a glance Highlights FY 13/14 Financial review Strategy update & Outlook Page 2 November 2014 FY 13/14 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: Present in the key parts of the cocoa and chocolate value chain
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 Processing Cocoa Beans 80% Cocoa Liquor ~54% ~46% Cocoa Powder Cocoa Butter + Sugar, Milk, + Sugar, Milk, +
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 disposa
Slide 6: 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 6 November 2014 FY 13/14 Roadshow presentation
Slide 7: Agenda
Agenda BC at a glance Highlights FY 13/14 Financial review Strategy update & Outlook Page 7 November 2014 FY 13/14 Roadshow presentation
Slide 8: 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 9: 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 10: 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 11: 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 talent manage
Slide 12: 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 13: 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 +18.3% 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 14: Key growth driver: Gourmet & Specialties
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 drinks)
Slide 15: Acquired cocoa business: successful global integration
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 to the mark
Slide 16: 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 / Ghana / Came
Slide 17: Agenda
Agenda BC at at glance Highlights FY 13/14 Financial review Strategy update & Outlook Page 17 November 2014 FY 13/14 Roadshow presentation
Slide 18: 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 19: Focus on margins paid off
FY 13/14 Focus on margins paid off Europe Americas Asia Pacific Global Cocoa Volume 1 growth -1.2% +5.4% +9.3% +52.1% +8.6% 2 Underlying market +1.2% +2.8% +8.3% +1.8% EBIT growth 1 vs. prior year +95.7% (in CHF) +5.3% +17.5% +0.4% +2.6% 2 1) Including acquisition of Petra Foods Cocoa Business 2)exc
Slide 20: Gross Profit
Gross Profit Significant improvement due to better product mix and focus on product margins in CHF mio. +18.2% +12.8% +106.5 +47.4 861.1 831.8 +14.7 -26.6 -18.1 728.7 +8.5 737.2 Gross Profit Petra Foods Gross Profit Volume Product Additional Gross Profit Petra Foods Negative Gross Profit FY 2012/13
Slide 21: EBIT
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 22: Cocoa processing profitability
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 23: 5-year EBIT per tonne development
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 24: From EBITDA to Net Profit
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 25: Raw materials evolution
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 25 November 2014 FY 13/14 Roadshow
Slide 26: Net Working Capital
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 27: Cash Flow
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 28: Balance Sheet & 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 29: Available Financing
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-
Slide 30: Dividend increased to CHF 15.50 per share
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 (AGM) E
Slide 31: 5-year development
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 32: Agenda
Agenda BC at a glance Highlights FY 13/14 Financial review Strategy update & Outlook Page 32 November 2014 FY 13/14 Roadshow presentation
Slide 33: 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 33
Slide 34: 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 35: 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 36: 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 ideas f
Slide 37: 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 38: 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 consis
Slide 39: Outlook FY 2014/15: 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 for Growth
Slide 40: Outlook & 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* On average
Slide 41: Appendix
BARRY ((}) CALLEBAUT Appendix
Slide 42: 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 emerging mark
Slide 43: 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% Barry Cal
Slide 44: 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 44 November 2014 FY 13/14 Roadshow pr
Slide 45: 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 Blommer Blommer ADM Mondelez Cemoi Guan Chong Puratos Ecom Cocoa Fuji Oil Nestlé IRCA Ferrero Guittard BT Coc