Barry Callebaut AG · SIX:BARN
Barry Callebaut — FY2015/16 Earnings Presentation
32 slides from Barry Callebaut's earnings presentation, Nov 2, 2016
Slide 1: Full Year Results 2015/16 Analysts Conference
Full Year Results 2015/16 Analysts Conference November 2, 2016 November 2, 2016
Slide 2: Cautionary note
Cautionary note Certain statements in this presentation regarding the business of Barry Callebaut are of a forward- looking nature and are therefore based on management’s current assumptions about future developments. Such forward-looking statements are intended to be identified by words such as “be
Slide 3: Agenda
FY Results 2015/16 Agenda Highlights FY 2015/16 - CEO Antoine de Saint-Affrique Financial Performance FY 2015/16 - CFO Victor Balli Strategy update & Outlook - CEO Antoine de Saint-Affrique Questions & Answers session - CEO & CFO Page 3 November 2, 2016 Analyst Conference
Slide 4: Highlights FY 2015/16
Highlights FY 2015/16 November 2, 2016
Slide 5: Proposal to the Annual General Meeting of Shareholders of December 7, 2016
FY results 2015/16 Proposal to the Annual General Meeting of Shareholders of December 7, 2016 Changes in the Board of Directors Dr. W. Andreas Jacobs to step down as Chairman Patrick De Maeseneire proposed for election as new Chairman All other Board members are standing for reelection for another t
Slide 6: “Smart growth” getting traction, strong free cash flow generation
FY results 2015/16 “Smart growth” getting traction, strong free cash flow generation Sales volume growth +2.2%, outperforming the market1 Strong growth of chocolate business +7.6% Intentional phase out of less profitable contracts in cocoa products -12.0% Positive contribution from all key growth dr
Slide 7: Strong chocolate business across all regions, outperforming the market
Strong chocolate business across all regions, outperforming the market, while intentional decline in Global Cocoa Sales volume growth 2015/16 vs. prior year Sales volume per Product Group Region Europe 6.6% Gourmet & Specialties 11% Region Americas 8.8% Food Manufacturers 65% Region Asia Pacific 10.
Slide 8: Highlights 2015/16
Highlights 2015/16 License agreement Launch of BC Studio Opening of the first Introduction of Katchilé, Opening new, relocated Launch of Cocoa with Naturex to «craft and co-create» Van Houten Beverage™ Innovative tool for geo- CALLEBAUT® Horizons Foundation market Acticoa chocolate of Academy center
Slide 9: Volume growth continues to be fuelled by our key drivers
FY results 2015/16 Volume growth continues to be fuelled by our key drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth +6.1% vs. prior year +4.5% vs. prior year +12.4% vs. prior year FY 2015/16 CAGR 5 year +16.5% +24.3% +9.6% Volume 34% 11% 34
Slide 10: Driving growth in Emerging Markets...
Driving growth in Emerging Markets... Opening our first chocolate factory in Indonesia to supply our long-term agreement with Garuda Foods Major expansion of our chocolate factory in Singapore: new production line, molding line and warehouse facility. Total investment of CHF 18 million Opening new,
Slide 11: Driving growth in Gourmet & Specialties...
Driving growth in Gourmet & Specialties... Fast growing with Expanding our successful Accelerating growth in global and local brands Beverages business Specialties and Decorations Page 11 November 2, 2016 Analyst Conference
Slide 12: Driving growth by expanding and capturing strategic partnerships...
Driving growth by expanding and capturing strategic partnerships... Extension of strategic partnership with Mondelēz International Intention to acquire and integrate the chocolate production facility of Mondelēz International in Halle, Belgium, in its network Long-term agreement for the supply of ad
Slide 13: Bringing Global Cocoa to the next level
Cocoa Leadership Project Bringing Global Cocoa to the next level Driving commercial Leveraging our scale in Optimizing our excellence execution operations • Sharpening focus on • Combined ratio • Creating an optimal customers organization & manufacturing governance in place footprint • New pricing m
Slide 14: “Smart growth” getting traction in FY 2015/16
“Smart growth” getting traction in FY 2015/16 Growing with customers Bringing cocoa Greater discipline on while adding value to the next level free cash flow Page 14 November 2, 2016 Analyst Conference
Slide 15: Financial Highlights FY 2015/16
Financial Highlights FY 2015/16 November 2, 2016
Slide 16: Solid volume growth, profitability as anticipated and flat in local currencies
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 17: Strong volume growth across all the chocolate Regions
FY results 2015/16 Strong volume growth across all the chocolate Regions, while intentional phase out of less profitable contracts in Global Cocoa in tonnes +2.2% -3.5% +3.8% +2.3% +4.6% +8.1% +9.1% 1,834,224 +6.4% -23.2% -7.9% -13.7% +9.7% 1,794,782 -2.0% +7.6% Chocolate (FM and Gourmet & Specialti
Slide 18: Strong chocolate performance, Global Cocoa profitability temporarily affected
FY results 2015/16 Strong chocolate performance, in Global Cocoa profitability temporarily affected by challenging cocoa products market EMEA Americas Asia Pacific Global Cocoa 4% 4% 28% 24% 44% 28% 25% Volume growth +6.6% +8.8% +10.8% -12.0% EBIT growth in +4.4% +12.0% +17.9% -60.3% local currencie
Slide 19: Gross profit up +4.4% before FX impact
Gross Profit FY 2015/16 Gross profit up +4.4% before FX impact, driven by positive volume effects, margin mix and despite a historically low combined cocoa ratio in CHF mio. +4.4% +34.5 +46.6 883.7 -44.2 863.2 846.8 -20.5 Gross Profit Volume Product/Customer Cocoa Gross Profit FX Impact Gross Profit
Slide 20: Historically low combined cocoa ratio strongly impacted FY 2015/16
Cocoa processing profitability Historically low combined cocoa ratio strongly impacted FY 2015/16; recent signs of recovery, albeit with regional differences European combined ratio - 6 months forward ratio FY 2015/16 4.00 Combined ratio 3.39 3.00 Butter ratio 2.00 1.00 Powder ratio 0.00 Oct-07 Oct-
Slide 21: Operating profit flat in local currencies
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 22: Net Profit down 8.7% in CHF
From EBITDA to Net Profit Net Profit down 8.7% in CHF, due to higher financial expenses, as well as higher taxes in CHF mio. 539.4 -137.7 One-off costs related to bond and FX Brazil Tax rate EPS EPS 401.7 -135.3 17.8% vs CHF 39.5 CHF 43.2 15.6% in prior year -47.5 -8.7% 239.9 219.0 EBITDA Depreciati
Slide 23: Cocoa bean at high levels; world sugar prices increased, milk powder at low levels
Raw materials price evolution Cocoa bean at high levels; world sugar prices increased, milk powder at low levels FY average increase vs. prior year 300% Cocoa beans 250% +10.1% Sugar world 200% +18.6% 150% 100% Sugar EU -6.1% 50% Milk powder -11% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2
Slide 24: Working Capital below prior year
Net Working Capital Working Capital below prior year as a result of successful inventory reduction program and positively impacted by one-offs in CHF mio. Receivables Stocks Payables -10.2% +36 +35 1,530 -14 +68 -19 -147 1,374 -87 -19 Net Growth Price and Growth Operational Price Impact Growth Price
Slide 25: Strong cash flow generation as a result of efforts to reduce working capital
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 26: 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 27: Proposed payout of CHF 15.50 per share, up CHF 1.00 per share
Dividend Proposed payout of CHF 15.50 per share, up CHF 1.00 per share Payout ratio Proposed dividend CHF 15.50 per share1 39% Payout of 39% of Net Profit 33% 35% 33% 33% Not subject to withholding tax2 255 240 223 219 143 Timetable for dividend Shareholder approval: Dec 7, 2016 (AGM) Expected ex-da
Slide 28: Strategy update & Outlook
Strategy update & Outlook November 2, 2016
Slide 29: 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 30: Leveraging global scale and expertise
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 31: 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 & Capabilities Disciplined exec
Slide 32: 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-ter