Barry Callebaut AG · SIX:BARN
Barry Callebaut — 9M 2003/04 Earnings Presentation
34 slides from Barry Callebaut's earnings presentation, Jul 5, 2004
Slide 1: 9-months results 2003/04
9-months results 2003/04 Analysts’ and Conference Call July 5th, 2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 1
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements Forward-looking statements Any information given on these slides as well as during the conference has been prepared by Barry Callebaut solely for the use at this conference call. Certain statements contained therein regarding the business of Barry Calleb
Slide 3: Agenda
Agenda X Highlights 9-months results 2003/04 X Business review X AM Foods X Financial results JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 3
Slide 4: Highlights 9-months results 2003/04
Highlights 9-months results 2003/04: X Solid growth* continued in both business segments in Q3 X Sales revenue for 9-months 2003/04 up 12% to CHF 3.1 bn** X Sales volumes for 9-months 2003/04 up 10.7% to 758,401 tonnes** X Strong profitability in our business units Cocoa, Food Manufacturers and Gour
Slide 5: Solid growth continued in both business segments
Solid growth continued in both business segments Q1* Q2* Q3* 9-mths* Industrial Business Segment (Volumes) Cocoa - 5.9 % 3.2 % 14.7 % 3.5 % Food Manufacturers - 1.3 % 1.3 % 4.1 % 1.1 % (like-for-like**) 1.9 % 4.7 % 6.1 % 4.4 % Food Service/Retail Business Segment (Sales Revenue) Gourmet & Specialtie
Slide 6: Cocoa price development
Cocoa price development London cocoa terminal market 6-month forward price JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 6
Slide 7: Agenda
Agenda X Highlights 9-months results 2003/04 X Business review X AM Foods X Financial results JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 7
Slide 8: Industrial Business Segment: Solid sales growth...
Industrial Business Segment Solid sales growth... Cocoa X Sales volumes of semi-finished products up 3.5% to 93,838 tonnes according to plan (optimisation of fixed cost structure) X Sales revenue down 12.5% to CHF 403.4 m due to lower cocoa bean prices and weak USD Food Manufacturers X Sales volumes
Slide 9: Industrial Business Segment: ... and strong profitability
Industrial Business Segment ... and strong profitability Cocoa X Favorable combined ratios (in particular Butter-ratio) X Fixed cost optimisation due to capacity utilisation fine- tuning X Partly offset by two restructuring projects completed in Cameroon and France Food Manufacturers X Organic growt
Slide 10: Food Service/Retail Business Segment: Strategy implementation on its way
Food Service/Retail Business Segment: Strategy implementation on its way Gourmet & Specialties X Nominal sales revenue up 12.7%. Organic revenue growth of 5.7% due to improved mix of higher-margin business and organic volume growth X Strategic acquisition of AM Foods K/S (see next slides) JULY 5TH,2
Slide 11: Barry Callebaut acquiring AM Foods
Barry Callebaut acquiring AM Foods X Combining the highly complementary operations of Barry Callebaut’s vending business and AM Foods will turn a marginal business into a meaningful EBIT contributor (up to 5% of Group EBIT in 2005/06) The acquisition of AM Foods allows Barry Callebaut to: X have its
Slide 12: The vending mix market
The vending mix market X Vending are powder chocolate drinks ready to be used in hot beverage machines, including cappucino X Vending is a growing business segment with a good catch-up potential in Europe X Europe 1.900.000 machines : 1 machine for 198 people X Japan 2.600.000 machines : 1 machine f
Slide 13: Who is AM Foods?
Who is AM Foods? X AM Foods is one of Europe's leading producers of Instant ready-to-use hot beverages such as Cappuccino, Chocolates and Topping. X It is currently a company within Arla Foods, the largest European dairy group. X AM Foods offers a complete product range of more than 100 high-quality
Slide 14: State-of-the art production plant
State-of-the art production plant AM Foods is situated in Kågeröd, Sweden, approx. 100 kilometers from Copenhagen, Denmark. X Production: capacity 20,000 t/year X Dedicated R&D Department X Quality control: ISO 9001 and working in accordance with HACCP X Administration X Sales X Marketing Kågeröd fa
Slide 15: The Transaction
The Transaction X Barry Callebaut acquires all assets, businesses and related brands of AM Foods from Arla Foods X Signing took place on July 2, 2004 X Closing of the transaction, subject to the required regulatory consents, expected on September 1, 2004 X The parties agreed not to disclose the purc
Slide 16: Food Service/Retail Business Segment: Strategy implementation on its way
Food Service/Retail Business Segment: Strategy implementation on its way Consumer Products X Price pressure and still weak economy characterize the German market conditions X Sales in North America characterised by contradicting trends (i.e. candy business compressed by obesity and low-carb frenzy)
Slide 17: Consumer Europe
Consumer Europe: X Sudden Hazelnuts price increases (+ 250%) and valuation impact on consumer price list business had a one-off adverse effect and required corrective action X Future challenge will be to reduce costs further and to bring them in line with market potential as well as to move towards
Slide 18: Agenda
Agenda X Highlights 9-months results 2003/04 X Business review X AM Foods X Financial results JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 18
Slide 19: Financial Highlights 9-months 2003/04 (1)
Financial Highlights 9-months 2003/04 (1) X Sales revenue increased (12.3%) overproportional to sales volumes (10.7%) due to the first-time consolidation of Brach’s and Luijckx, net currency effect and price increases (despite decreases in underlying cocoa prices) X EBIT margin only down 0.4%-pts to
Slide 20: Financial Highlights 9-months 2003/04 (2)
Financial Highlights 9-months 2003/04 (2) Operating profit (EBIT) in Q3 was impacted by the following one-time negative effects: Restructuring projects Cocoa (France & Cameroon) CHF 3.5 m Hazelnuts price increase CHF 3.8 m Valuation effect on consumer price list business CHF 6.5 m Total CHF 13.8 m (
Slide 21: Summary income statement
Summary income statement (CHF mio.) in % of 2003/04 in % of 2002/03 revenues 9-mths revenues 9-mths Sales revenues 100.0 3,100.9 100.0 2,760.9 Material consumed 63.9 (1,980.6) 68.7 (1,896.7) Gross Profit 36.1 1,120.3 31.3 864.2 Other operating expenses 30.6 (950.7) 25.4 (701.8) Operating profit (EBI
Slide 22: Sales growth reconciliation 9-mths 2002/03 to 9-mths 2003/04
Sales growth reconciliation 9-mths 2002/03 to 9-mths 2003/04 266 3,101 (CHF m) 78 2,761 -101 97 9M Sales Cocoa Volumes & Currency Acquisitions 9M Sales Revenues price Margins (net)1) Revenues 02/03 03/04 - + - + 323 3,101 2,761 28 46 - 57 9M Sales Cocoa Food Gourmet & Consumer 9M Sales Revenues Manu
Slide 23: Seasonality impact
Seasonality impact Operational profit (EBIT) per Quarter (in Mio. CHF) +15% 2003/04 100 92 2002/03 79 +15% 2001/02 80 67 51 58 - 38% 38 46 60 40 38 31 32 20 20 0 Q1 Q2 Q3 Q4 Sales Revenue per Quarter Q1 Q2 (in Mio. CHF) Q3 Q4 2003/04 1,224.7 974.6 901.6 2002/03 1056.9 849.5 854.5 810.1 2001/02 713.5
Slide 24: Profitability ratios
Profitability ratios 2003/04 2002/03 9-mths 9-mths EBIT as % of Revenue 5.5% 5.9% EBIT as % of Gross Profit 15.1% 18.8% EBIT per tonne 223.6 237.0 JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 24
Slide 25: Net sales revenue by business unit
Net sales revenue by business unit 2001/02 2002/03 2003/04 (full year) (full year) (9-mths) 16% 13% 13% 7% 45% 40% 53% 25% 34% 24% 17% 13% Gourmet & Specialties Consumer Products Cocoa Food Manufacturers JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 25
Slide 26: Net sales revenue by geography
Net sales revenue by geography 2001/02 2002/03 2003/04 (full year) (full year) (9-mths) Americas Americas RoW 21% RoW RoW 26% Americas 7% 7% 6% 27% Europe Europe Europe 66% 72% 68% JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 26
Slide 27: Balance sheet key figures & ratios
Balance sheet key figures & ratios (in Mio. CHF) 31/05/2004 31/08/2003 Net working capital 1,044.3 955.1 Net debt 1,059.1 1,030.1 Shareholder‘s equity 763.5 759.2 Debt to equity ratio 138.7% 135.7% Solvency ratio 27.7% 28.0% Net debt / EBITDA 3.1x 3.1x Interest cover ratio 4.2x 4.2x JULY 5TH,2004 9-
Slide 28: Cash flow statement
Cash flow statement 2003/04 2002/03 (in CHF mio.) 9-mths 9-mths Operating cash flow before working capital changes 182.5 176.7 Change in net working capital (29.8) (225.7) Net cash flow from operations 152.7 (49.0) Investing activities (56.6) (84.0) Cash flow before financing activities 96.1 (133.0)
Slide 29: Outlook
Outlook “We are not satisfied with the performance of our consumer business in Germany in the third quarter. However, the business portfolios and the year-end outlook for our businesses with industrial and artisanal users are very good. We are therefore confident that we will reach our operational o
Slide 30: Trading history – share price performance
Trading history – share price performance 120% 100% BARN SW Equity SPI Index SPISMC Index 80% 60% 40% 20% 0% -20% -40% sep/02 nov/02 jan/03 mrt/03 mei/03 jul/03 sep/03 nov/03 jan/04 mrt/04 mei/04 JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 30
Slide 31: Trading history – share price performance and daily volume
Trading history – share price performance and daily volume Barry-Callebaut share price and volume Share price in % Evolution from September 02, 2002 to June 30, 2004 Volume 120% 30.000 100% 25.000 80% 20.000 60% 40% 15.000 20% 10.000 0% 5.000 -20% 0 -40% Sep 02 Jun 04 JULY 5TH,2004 9-MONTH RESULTS 2
Slide 32: Summary
Summary Barry Callebaut is the only fully integrated chocolate company from the bean to the shelf and the world market leader The move towards higher value added products and services for all customer segments has increased our earnings power We have a strong focus on innovation – about 30% of sales
Slide 33: Cocoa price development
Cocoa price development Dutch-German alkalised 10/12 Powder price vs. Butter price (in EUR/kg) 6-month forward deliveries, ex-factory, monthly average JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 33
Slide 34: Hazelnut price development
Hazelnut price development Turkish Hazelnut Kernels FAQ 620 570 520 470 USD/100 kg 420 370 320 270 220 170 jul-96 jun-97 jul-98 sep-99 nov-00 dec-01 feb-03 apr-04 curr. crop new crop JULY 5TH,2004 9-MONTH RESULTS 2003/04, ANALYSTS‘ AND MEDIA CONFERENCE 34