Barry Callebaut AG · SIX:BARN
Barry Callebaut — CAGE 2016
30 slides from Barry Callebaut's conference presentation, Mar 21, 2016
Slide 1: CAGE 2016
CAGE 2016 CEO - Antoine de Saint-Affrique London, March 21, 2016
Slide 2: Who we are? The beating heart of the chocolate industry
Who we are? The beating heart of the chocolate industry A merger between Cacao Barry, the very first chocolate connoisseur since 1842 and Callebaut a chocolate couverture manufacturer expert since 1925 Listed on the SIX Swiss Exchange since 1998 Today, the world's leading manufacturer of high-
Slide 3: What we do?
What we do? Adding value every step of the way, from the cocoa beans to the chef’s table Page 3 CAGE Conference - 2016
Slide 4: Our products
Our products A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 4 CAGE Conference - 2016
Slide 5: Barry Callebaut in figures
Barry Callebaut in figures Page 5 CAGE Conference - 2016
Slide 6: How do we operate?
How do we operate? 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 6 CAGE Conference - 2016
Slide 7: Our business model
Our business Model We apply a cost plus approach to the majority of the business Customers Pricing model Profit levers Food Manufacturers • Small, medium • Cost Plus • Customer mix and Global Food • Product mix 62% Manufacturers Cocoa Products • Small, medium • Market prices • Global set-up and Glob
Slide 8: Cost plus creates competitive advantage in volatile markets
Raw materials Cost plus creates competive advantage in volatile markets Q1 vs. prior year 300% 250% Cocoa beans +12% 200% Sugar 150% world +4% 100% Sugar EU -20% 50% Milk powder -11% 0% Sep.07 Jun.08 Mrz.09 Dez.09 Sep.10 Jun.11 Mrz.12 Dez.12 Sep.13 Jun.14 Mrz.15 Dez.15 Note: All figures are indexed
Slide 9: A leading position in the industry
A leading position in the industry Since 2013 (Petra Foods - Cocoa acquisition), we lead in both cocoa and chocolate 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
Slide 10: We have a clear and successful long-term strategy
We have a clear and successful long-term strategy “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable, 4 strategic Innovation profitable pillars growth Cost Leadership Sustainable Cocoa Page 10 CAGE Conference - 2016
Slide 11: Expansion fueled by our three key growth drivers
Expansion fueled by our three key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth +14.3% +12.3% +5.2% Q1 2015/16 vs py +17.3% +16.5% +6.5% CAGR 5 years (FY) 34% 31% 10% % of total Group Sales Volume Page 11 CAGE Conference - 2016
Slide 12: 12-year development: volume and EBIT growth
12-year development Achieving sustainable and strong volume and EBIT growth over the long-term Sales Volume* (in tonnes) CAGR +7.5% 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 EBIT in CHF mio (excluding FX impact) CAGR+8.1% 02/03 03/04 04/05 05/06 06/07 07/08 08/09
Slide 13: 12-year development: cash flow and total shareholder return
12-year development Delivering sustainable cash flow generation and total shareholder return Cash Flow * (in CHF mio) CAGR +6.3% 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 Total Shareholder return (in CHF) 775% 738% 591% 581% 512% 475% 415% 419% 281% 316% 153% 0% 1
Slide 14: Significant opportunities ahead, per market and applications
Industry Significant opportunities ahead, per market and applications Top 10 countries (in tonnes) in chocolate Forecast volume growth per application 2015-2020 12 1.5% 10 Germany 3.1% 8 UK Kg per capita 2015 3.0% 6 USA Russia 2.6% France % CAGR 2015-2020 4 (in tonnes) 1.7% 2 Italy Turkey 3.9% 0 Jap
Slide 15: The way forward: Strategy unchanged, execution adjusted
The way forward Strategy unchanged, execution adjusted We are entering the next phase of our journey Focus on consistent, above market-growth and enhanced profitability: “SMART GROWTH” Sustainable growth Margin accretive growth Accelerated growth in Gourmet, Specialties and emerging markets Return o
Slide 16: Sustainable Cocoa: innovation, implementation, impact
Sustainable Cocoa: innovation, implementation, impact Sustainable practices, prosperous communities, long term supply Leading sustainability Collaborating for impact Setting new benchmarks • A holistic approach • Pre-competitive platforms • Cocoa Horizons Foundation • Capability based • Customer par
Slide 17: Innovation: Margin accretive growth, value added products & services
Innovation: Margin accretive growth, value added products & services Products Channels Be on trend Be ahead Added-value products Added-value services of the curve Clean label, free from Acticoa Decorations, Co-creation Inclusions, fillings, Thermo-tolerant Innovative concepts 2 & 3 D printing Fermen
Slide 18: Expansion: Accelerate Gourmet, Specialties and Emerging Markets
Expansion: Accelerate Gourmet, Specialties and Emerging Markets Further drive Further expand in Further leverage Gourmet & Specialties Emerging markets Outsourcing & strategic partnerships Page 18 CAGE Conference - 2016
Slide 19: Cost Leadership: Returns from scale, leverage & operational excellence
Cost Leadership: Returns from scale, leverage & operational excellence Leverage our global scale Operational excellence Leverage our footprint Leverage our scale Continuous improvement Cocoa Leadership European shared service centre One + Finance Excellence Quality Culture Western Europe & EEMEA Cen
Slide 20: Cost Leadership: Cocoa leadership
Cost Leadership: Cocoa leadership Cocoa leadership project Improved presence in Commercial leadership Operations Global Leverage origin /emerging leadership countries Supports growth of Footprint Centralized SKU reduction adjusted chocolate business combined cocoa ratio management Step-up in c
Slide 21: Outlook
Outlook Strive for smart balance between consistent, above-market volume growth and enhanced profitability Mid-term guidance (until 2017/18) We will strike a balance between volume growth and enhanced profitability, as well as free cash flow generation: “smart growth” Average volume growth 4-6%
Slide 22: Appendix
BARRY 0) CALLEBAUT Appendix
Slide 23: Our Regional and Product split
Our Regional and Product split Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 4% 10% Global Cocoa 28% Europe Food Manu- 42% facturers 62% Cocoa Products 28% Americas 26% Page 23 CAGE Conference - 2016
Slide 24: Cocoa processing profitability
Cocoa processing profitability Challenging cocoa market environment continues European combined ratio - 6 months forward ratio Q1 2015/16 4.00 3.00 Combined ratio 2.85 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 Oct-15 For cocoa processors, profit
Slide 25: 6-year EBIT per tonne development
6-year EBIT per tonne development Based on our long-term strategy and business model, we continuously deliver sustainable volume growth and profitability 312 282 290 279 EBIT per tonne 274 251 in constant currencies 286 EBIT per tonne in CHF 256 (as reported) 242 231 223 CAGR +8.2% 1’536 1’717 1’795
Slide 26: Balance Sheet & key ratios
Balance Sheet & key ratios Deleveraging of the company and improvement of key financial ratios remain a high priority Aug 15 Aug 14 Total Assets [CHF m] 5'429.4 5'167.5 Net Working Capital [CHF m] 1'529.7 1'674.6 Non-Current Assets [CHF m] 2'185.5 2'175.6 Net Debt [CHF m] 1'728.0 1'803.5 Shareholder
Slide 27: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer Total world harvest (14/15): 4,157 TMT others 8% About 70% of total cocoa beans come from Nigeria West Africa 5% Brazil* 6% BC processed ~925,000 tonnes or 22% of the Ivory Coast* Cameroon* world crop 42% 6% Ecuador Barry Callebaut has various
Slide 28: Capital Expenditures
Capital Expenditures* +4.5% +4.6% +4.2% +4.0% +3.8% CAPEX as % of sales revenue Average = 4.1% 249 249 218 224 200 174 Approved amount Additional growth IT Upgrade / efficiency gains existing sites Maintenance CAPEX 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 E *CAPEX as reflected in Cash Flow S
Slide 29: Available Financing
Available Financing Enough headroom for further growth and raw material price fluctuations As of 31 August 2015 CHF 4,021 mio. ABS CHF 791 mio Various uncommitted facilities -48.1% EUR 600 mio. Domestic Commercial 3-5 years Paper Programme CHF 2,086 mio. Various bilateral LT loans EUR 175 mio. Term
Slide 30: Liquidity – Debt maturity profile
Liquidity – Debt maturity profile As of 31 August 2015 In CHF mio Uncommitted lines Committed lines 150 645 ‐‐ Cash and revolving 196 credit facility (undrawn) Short-term facilities 188 374 374 Term loans Bonds 265 196 127 100 12 Cash 2015 2016 2017 2018 2019 2020 2021 2022 2023 Page 30 CAGE Confere