Chocoladefabriken Lindt & Spruengli Ag · SIX:LISN
Chocoladefabriken Lindt & Spruengli — Chocoladefabriken Lindt & Sprüngli — FY2010 Earnings Presentation
43 slides from Chocoladefabriken Lindt & Spruengli's earnings presentation, Mar 15, 2011
Slide 1: Financial Analysts Conference – Annual Results 2010
FINANCIAL ANALYSTS CONFERENCE ANNUAL RESULTS 2010
Slide 2: Contents
CONTENTS 1 RESULTS – HIGHLIGHTS 2010 2 BUSINESS REVIEW ► Business environment ► Key figures ► Sales analysis ► Sustainability 3 FINANCIALS ► Operating p gpperformance 4 OUTLOOK ► Business environment ► Share buy-back ► Financial guidance 2011 and beyond 2 FY2010 Financial Analysts Conference
Slide 3: Highlights 2010
HIGHLIGHTS 2010 3 FY2010 Financial Analysts Conference
Slide 4: 2010 Results – Highlights I
2010 RESULTS – HIGHLIGHTS I L&S BACK ON ITS FAMILIAR ROAD TO SUCCESS ABOVE-AVERAGE ORGANIC SALES GROWTH ► 7.3 7 3 % organic growth for full year and market share gains in all important markets ► Sales growth in all markets except Australia ► LINDT & GHIRARDELLI continue to rank among fastest growing
Slide 5: 2010 Results – Highlights II
2010 RESULTS – HIGHLIGHTS II L&S BACK ON ITS FAMILIAR ROAD TO SUCCESS CAPEX ► Lower investments in 2010: CHF C 89 mio. - following f substantial capacity increase in prior years ► Successful start-up of cocoa liquor and chocolate tablet lines in USA CASH & DIVIDENDS ► High operating cash generation
Slide 6: Business Review: Business Environment
BUSINESS REVIEW BUSINESS ENVIRONMENT 6 FY2010 Financial Analysts Conference
Slide 7: Ongoing Challenging Environment
BUSINESS ENVIRONMENT 2010 ONGOING CHALLENGING ENVIRONMENT ► Slow but steady economic recovery worldwide ► High volatility in FX and raw material – cocoa prices at 30 years high ► Volumes stagnating g g in most chocolate markets ► Rising employment rates and progressive improvement of consumer confid
Slide 8: Good Performance Based on Streamlining in 2009
BUSINESS ENVIRONMENT 2010 GOOD PERFROMANCE BASED ON STREAMLINING IN 2009 ► Successful impact from measures taken in 2009 to safeguard long- term sales and p profit g growth ● Structural reorganization of LINDT retail network in USA ● Major investments in our USA facilities to satisfy growing demand
Slide 9: Business Review: Key Figures
BUSINESS REVIEW KEY FIGURES 9 FY2010 Financial Analysts Conference
Slide 10: Solid Set of Results Well in Line with Company Guidance
KEY FIGURES P&L SOLID SET OF RESULTS WELL IN LINE WITH COMPANY GUIDANCE – HIGH CASH GENERATION CHF mio. Net Net TRADE SALES 2‘579 Organic growth 7.3 % (in CHF: +2.2%) EBITDA 423 +10.8% 10.8% vs. p.y. – Margin: 16.4% (09: 15.1%) EBIT 325 +22.8% vs. p.y. – Margin: 12.6% (09: 10.5%) NET INCOME 242 +25.
Slide 11: Solid Balance Sheet & Record Net Cash
KEY FIGURES – B/S SOLID BALANCE SHEET (no goodwill activated) & RECORD NET CASH Equity CHF mio. Equity B/S ratio in % Net Cash Y/E CHF mio. 11 FY2010 Financial Analysts Conference
Slide 12: Key Figures – L&S Shares Outperforming SMI
KEY FIGURES – L&S SHARES OUTPERFORMING SMI +18.5% or CHF 30‘100 at 31.12.2010 -2.1% at 31.12.2010 Source VWD,, bi-weekly share prices SMI LINDT REGISTERED SHARE IN CHF 12 FY2010 Financial Analysts Conference
Slide 13: Key Figures – Registered Share
KEY FIGURES – REGISTERED SHARE 1992 2006 2007 2008 2009 2010 Dividend (CHF) 39 275 330 360 400 450* – Increase (CHF) 2 50 55 30 40 50 Dividend Yield 1.4% 0.9% 0.8% 1.6% 1.6% 1.5% Pay-Out Ratio 16.9% 29.2% 29.5% 31.2% 47.3% 42.8% Share price at year end (CHF) 2‘800 30‘700 39‘770 22‘600 25‘405 30‘100
Slide 14: Business Review: Sales Analysis
BUSINESS REVIEW SALES ANALYSIS 14 FY2010 Financial Analysts Conference
Slide 15: Sales Analysis I – Organic Growth 5 Years
SALES ANALYSIS I ORGANIC GROWTH 5 YEARS Absolute in CHF mio. Increase vs. p.y. in local currencies 13.4% 10.7% 4.9% 2.3% 7.3% 15 FY2010 Financial Analysts Conference
Slide 16: Dynamic Volume Growth 2010
SALES ANALYSIS – DRIVERS DYNAMIC VOLUME GROWTH 2010 - 5.1% 2.2 % 16 FY2010 Financial Analysts Conference
Slide 17: Sales Analysis – Markets
SALES ANALYSIS – MARKETS Total NNTS 2010: CHF 2’579 2 579 mio mio. 17 FY2010 Financial Analysts Conference
Slide 18: Corporate Social Responsibility & Sustainability
BUSINESS REVIEW CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY 18 FY2010 Financial Analysts Conference
Slide 19: Inherent Part of the Lindt Premium Brand
CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY INHERENT PART OF THE LINDT PREMIUM BRAND ►High commitment in every aspect of corporate action ►Clearly formulated corporate policies ►Complete control of the supply chain from bean to premium chocolate ►Transparent communication on CSR activities thro
Slide 20: Sustainability – Update on Activities 2011 – I
SUSTAINABILITY – UPDATE ON ACTIVITIES 2011 – I C Cocoa b bean sourcing i Ghana Gh – Traceable T bl back b k to t farmer f ►Lindt supporting infrastructure projects in villages supplying us with cocoa beans ►Premium paid for traceability & social projects in 2010 on top of market price USD 1.2 mio. ►
Slide 21: Sustainability – Update on Activities 2011 – II
SUSTAINABILITY – UPDATE ON ACTIVITIES 2011 – I I Energy Usage ►Lindt Goal to reduce CO2 output per ton produced by 2 % p.a. ►Implementation of 4‘250 m2 solar panels in Lindt Italy with ● Production 320 MWh/year ● Reduction of CO2 emissions by y 214 tons/year y ►Additional roof insulation in L&S Germ
Slide 22: Financials: Operating Performance
FINANCIALS OPERATING PERFORMANCE 22 FY2010 Financial Analysts Conference
Slide 23: Material Costs
MATERIAL COSTS MATERIAL COSTS +/- / INVENTORY CHANGE: FURTHER INCREASE OF COST MARGIN Absolute in CHF mio mio. In % of NNTS 33.0% 33.2% 35.8% 36.2% 36.5% 23 FY2010 Financial Analysts Conference
Slide 24: Headcount & NNTS per Employee
HEADCOUNT & NNTS PER EMPLOYEE INCREASE OF STAFF – MAINLY IN MANUFACTURING Average number of employees NNTS per employee in CHF (`000) 328 334 334 341 341 24 FY2010 Financial Analysts Conference
Slide 25: Personnel Expenditure
PERSONNEL EXPENDITURE DECREASE OF COST MARGIN DUE VOLUME- VOLUME AND EFFICIENCY GAINS Personnel exp. exp in CHF mio mio. Personnel exp. in % NNTS 23.6% 22.9% 21.2% 22.6% 21.9% 25 FY2010 Financial Analysts Conference
Slide 26: Operating Expenses
OPERATING EXPENSES 2009 IMPACTED BY EXTRAORDINARY CHARGES – „LIKE FOR LIKE“ LIKE INCREASE IN 2010 BASED ON HIGHER ADVERTISING EXPENSES Absolute in CHF mio. In % of NNTS 27.3% 27.4% 25.6% 26.6% 25.7% 26 FY2010 Financial Analysts Conference
Slide 27: Operating Profit (EBIT)
OPERATING PROFIT (EBIT) EBIT MARGIN INCREASE + 50 BASIS POINTS vs. 2009 RESTATED FOR EXTRAORDINARY ITEMS Absolute in CHF mio mio. I % off NNTS In 12.9% 13.5% 14.0% 10.5% 12.6% 27 FY2010 Financial Analysts Conference
Slide 28: Net Financial Expenses
NET FINANCIAL EXPENSES ONLY SMALL POSITIVE EFFECTS OF HIGHER CASH POSITION - LOW INTEREST RATES ON CHF LOW RISK INVESTMENTS Absolute in CHF mio. 28 FY2010 Financial Analysts Conference
Slide 29: Corporate Tax Rate
CORPORATE TAX RATE TAX RATE BENEFITTING FROM HIGHER BEFORE TAX INCOME IN US COMPANIES – RATE TO STABILIZE AROUND 25.5% Tax Rate in % 29 FY2010 Financial Analysts Conference
Slide 30: Net Income
NET INCOME NET INCOME STRONGLY IMPACTED BY CURRENCY TRANSLATION EFFECT IN 2010 Absolute in CHF mio. In % of NNTS 9.0% 9.6% 10.2% 7.6% 9.4% 30 FY2010 Financial Analysts Conference
Slide 31: Financials: Raw Materials & Packaging
FINANCIALS RAW MATERIALS & PACKAGING 31 FY2010 Financial Analysts Conference
Slide 32: Cocoa Crop / Grinding Balance
COCOA CROP / GRINDING BALANCE COCOA BEANS ´000 000 T 16.2% 5.5% 5.5% 42.4% 15 5% 15.5% Source: CRA 02.11 32 FY2010 Financial Analysts Conference
Slide 33: Cocoa Product Prices 2008 – 2010
COCOA PRODUCT PRICES 2008 – 2010 COCOA LONDON TERMINAL BUTTER RATIO GBP/TON RATIO MULT. 33 FY2010 Financial Analysts Conference
Slide 34: Nut & Almond Prices 2008 – 2010
NUT & ALMOND PRICES 2008 – 2010 HAZELNUTS ALMONDS USD/TON CHF/TON 34 FY2010 Financial Analysts Conference
Slide 35: Milk Prices Europe & Switzerland 2008 – 2010
MILK PRICES EUROPE & SWITZERLAND 2008 – 2010 SMP SWITZERLAND SMP EUROPE EUR/TON 35 FY2010 Financial Analysts Conference
Slide 36: Sugar Prices 2008 – 2010
SUGAR PRICES 2008 – 2010 USD/Ton 36 FY2010 Financial Analysts Conference
Slide 37: Material Costs Trends 2011
MATERIAL COSTS TRENDS 2011 COCOA PRODUCTS - Terminal Market short term - Bean Differentials - Butter Ratio OTHER RAW MATERIALS - Milk - Sugar - Hazelnuts - Almonds PACKAGING - Paper & Cardboard - Metals & Flexibles 37 FY2010 Financial Analysts Conference
Slide 38: Outlook 2011
OUTLOOK 2011 38 FY2010 Financial Analysts Conference
Slide 39: Outlook – External Environment: Key Themes 2011
OUTLOOK - EXTERNAL ENVIRONMENT KEY THEMES 2011 LINDT & SPRÜNGLI RESPONSE CONSUMER INTEREST IN CHOCOLATE ► Slowdown in volume growth of chocolate ► Continuous launch of innovating concepts consumption in Western hemisphere ► Priority on market share gains INPUT COSTS / COMMODITY INFLATION ► Substanti
Slide 40: Share Buy-Back 2011 / 2012
SHARE BUY-BACK 2011 / 2012 BUY-BACK BUY BACK OF MAX. 5 % OF TOTAL CAPITAL BUY-BACK PROGRAM 2011 / 12 ►Board of Directors has decided to initiate buy buy-back back program for Lindt registered shares and Lindt participation certificates (PCs) SIZE OF PROGRAM ►Re-purchase of maximum 5 % of total share
Slide 41: Financial Guidance & Growth Expectations Next Years
FINANCIAL GUIDANCE & GROWTH EXPECTATIONS NEXT YEARS MID- / LONG TERM SALES AND PROFIT TARGETS MID Unchanged Guidance Organic Growth 6 – 8 % p.y. EBIT Margin + 20 to 40 basis points ((*)) CAPEX CHF 120 – 140 mio. CONTINUED HIGH CASH GENERATION ((*)) Depending p g on background g conditions i.e. raw m
Slide 42: Disclaimer
DISCLAIMER This presentation contains forward looking statements which reflect management‘s management s current views and estimates. The forward looking statements involve risks and uncertainties that could cause actual results to differ from those expressed in the forward looking statements. Poten
Slide 43: Financial Analysts Conference – Annual Results 2010
FINANCIAL ANALYSTS CONFERENCE ANNUAL RESULTS 2010
Chocoladefabriken Lindt & Sprüngli — FY2010 Earnings Presentation on 6ix