Barry Callebaut Ag · SIX:BARN
Barry Callebaut — Q1 2017/18 Earnings Presentation
38 slides from Barry Callebaut's earnings presentation, January 2018
Slide 1: Roadshow presentation – Q1 Key Sales figures 2017/18
Roadshow presentation – Q1 Key Sales figures 2017/18 January 2018
Slide 2: Agenda
Agenda BC at a glance Highlights Q1 2017/18 Strategy & Outlook Page 2 January 2018 Q1 2017/18 Roadshow Presentation
Slide 3: BC at a glance
BC at a glance January 2018
Slide 4: The heart and engine of the chocolate industry
Who are we? The heart and engine of the chocolate industry A merger between Cacao Barry, the very first French chocolate connaisseur since 1842 and Callebaut a Belgian chocolate couverture manufacturer expert since 1911 Listed on the SIX Swiss Exchange since 1998 Today, the world's leading manufactu
Slide 5: We are present in the key parts of the cocoa and chocolate value chain
What do we do? We are present in the key parts of the cocoa and chocolate value chain Page 5 January 2018 Q1 2017/18 Roadshow Presentation
Slide 6: FY 2016/17
FY 2016/17 Page 6 January 2018 Q1 2017/18 Roadshow Presentation
Slide 7: A broad offering from standard to the most premium products
What do we offer? A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 7 January 2018 Q1 2017/18 Roadshow Presentation
Slide 8: Our Regional and Product split
How are we organized? Our Regional and Product split FY 2016/17 Sales Volume: 1.9 million tonnes Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 5% 12% Global Cocoa 23% Europe 45% Food Manu- facturers 65% Cocoa Products 23% Sales Revenue: CHF 6,805.2 mio. E
Slide 9: We apply a cost plus approach to the majority of the business
Our business model We apply a cost plus approach to the majority of the business Customers Pricing model Profit levers Food Manufacturers • Small, medium and • Cost Plus • Customer mix Global Food • Product mix Manufacturers • Economies of scale 65% Cocoa Products • Small, medium and • Market prices
Slide 10: A global footprint and a local service: 55 factories worldwide
Where are we present? A global footprint and a local service: 55 factories worldwide Cocoa factories in origin countries and chocolate factories close to our customers Cocoa processing factory Chocolate factory Integrated factory Page 10 January 2018 Q1 2017/18 Roadshow Presentation
Slide 11: Highlights Q1 2017/18
Highlights Q1 2017/18 January 2018
Slide 12: Strong start to the year
3-Month Key Sales Figures 2017/18 Strong start to the year Sales volume up +8.0% Broad-based growth supported by all Regions and Product Groups All key growth drivers contributed to outperform the market (+3.1%)1 Sales revenue reached CHF 1,872.2 million, a slight decline of -0.7%, mainly due to low
Slide 13: Strong start to the year across all Regions
Quarterly volume evolution Strong start to the year across all Regions Quarterly volume growth vs prior year (in Tonnes) +7.4% +8.0% +17.4% 8,345 +2.9% 3,924 +10.3% 3,868 23,097 -0.4% 532,165 492,931 Group Region EMEA Region Americas Region Asia Pacific Global Cocoa Group Q1 2016/17 Q1 2017/18 Marke
Slide 14: Strong start to the year in Cocoa and Chocolate Product Groups
Quarterly volume evolution Strong start to the year in Cocoa and Chocolate Product Groups Quarterly volume growth vs prior year FY growth 15/16 FY growth 16/17 +8.0% +2.2% +4.4% +7.4% +9.2% +12.6% +9.0% +5.5% +0.3% +8.25 +3.5% +7.2% +2.3% +4.9% +2.3% +3.8% +4.6% -8.6% -0.8% +9.1% +8.1% -0.4% +6.4% -
Slide 15: Volume increase supported by all our key growth drivers
Q1 2017/18 Volume increase supported by all our key growth drivers Volume growth vs prior year 35.1% Emerging markets +11.1% 32.5% Key growth Long-term outsourcing drivers +9.0% & strategic to coutperform the partnerships market 12.2% Gourmet & +8.9% Specialties Page 15 January 2018 Q1 2017/18 Roads
Slide 16: Combined ratio remains favorable, driven by butter demand and lower cocoa bean prices
Cocoa processing profitability Combined ratio remains favorable, driven by butter demand and lower cocoa bean prices European combined ratio - 6 months forward ratio 4.00 Combined ratio 3.7 3.00 Butter ratio 2.00 1.00 Powder ratio 0.00 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 D
Slide 17: Lower raw material prices, with continued volatility
Raw materials price evolution Lower raw material prices, with continued volatility Q1 average increase 300% vs. prior year 250% 200% Sugar world -25.1%% Cocoa beans 150% -25.0% 100% Sugar EU -14.2% Milk powder 50% -24.1% 0% Dec/2007 Dec/2008 Dec/2009 Dec/2010 Dec/2011 Dec/2012 Dec/2013 Dec/2014 Dec/
Slide 18: Strategy & Outlook
Strategy & Outlook January 2018
Slide 19: Our long-term strategy remains unchanged
Our long-term strategy remains unchanged “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 Capital
Slide 20: Recent acquisitions underline focus on value-adding products (Specialties)
Expansion Recent acquisitions underline focus on value-adding products (Specialties) Acquisition of D’Orsogna Dolciaria Leading Italian supplier of decoration and inclusion solutions for ice- cream, dairy and bakery products in Europe Sales volume in 2016: 12,000 tonnes. Sales revenues of approx. EU
Slide 21: Unleashing the power of our People
Talent & Teams Unleashing the power of our People A renewed Senior Leadership Combining continuity and adding new skills Preparing Talent for the Future Systematic accelerated succession planning Learning and Development as a business focus A Diverse Talent pool Reflecting society’s trends and custo
Slide 22: Our focus areas in FY 2017/18
Our focus areas in FY 2017/18 Grow Competitively Expanding in emerging markets and drive long-term outsourcing agrements Greater focus on digital: e-commerce and customer portal Leading on innovation Grow Sustainably Scaling Forever Chocolate Invest in production capacity to cater for customer needs
Slide 23: Mid-term guidance confirmed and extended
Outlook Mid-term guidance confirmed and extended Outlook Current market environment remains positive, a more supportive cocoa products market and slightly improving demand for chocolate Mid-term guidance extended until 2018/19: Average volume growth 4-6% EBIT growth on average above volume growth1 1
Slide 24: Appendix
Appendix January 2018
Slide 25: What makes Barry Callebaut unique?
What makes Barry Callebaut unique? Global number one player in chocolate and cocoa Deep chocolate and cocoa expertise Global leader in Gourmet & Specialties Proven and long-term oriented strategy Unparalled global footprint, present in all key markets Preferred outsourcing and strategic partner Lead
Slide 26: Chocolate confectionery market development – Nielsen data
Chocolate confectionery market development – Nielsen data North America (22% of market) Western Europe (33% of market) EEMEA (24% of market) 2012-17 average: 0.1% 2012-17 average: 0.0% 2012-17 average: -0.6% 2018 Q1: 0.3% 2018 Q1: 2.8% 2018 Q1: 5.6% South America ( 7% of market) Asia Pacific (14% of
Slide 27: Chocolate consumption per capita
Our market and opportunities ahead Global Chocolate confectionery volume growth vs cocoa bean price Growing economies with still low chocolate consumption per capita 5% 2500 Chocolate consumption per capita 5.5 Euro area 4% 2000 Russia 4.5 3% 1500 Volume growth GBP/tonne 3.5 USA 2% 1000 in kg. 1% 50
Slide 28: 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 Olam Blommer Ecom Cocoa Fuji Oil Blommer Cémoi Guan Chong Puratos Mondelez Clasen BT Cocoa Irca Nestlé Schokinag
Slide 29: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer Total world harvest (15/16): 3,989 TMT others 12% About 70% of total cocoa beans Nigeria come from West Africa 5% Brazil* 3% BC processed ~900,000 tons or 23% Ivory Coast* of the world crop Cameroon* 39% 6% Barry Callebaut has various cocoa Ecuador 6
Slide 30: Successful year, delivering on our strategy
FY results 2016/17 Successful year, delivering on our strategy Group performance FY 2016/17 % vs prior year % vs prior year in (In CHF mio.) (in CHF) (in CHF) local currencies Sales Volume Total (in tonnes) 1,914,311 +4.4% Sales Revenue 6,805.2 +1.9% +1.2% Gross Profit 986.7 +14.3% +14.6% EBIT Total
Slide 31: Strong operating profit up +21.5% including non-recurring, +17.0% recurring
EBIT FY 2016/17 Strong operating profit up +21.5% including non-recurring, +17.0% recurring In CHF mio +21.5% +17.0% +123.5 +18.1 488.2 -38.3 470.1 -27.0 401.7 +10.2 411.9 EBIT Restructuring & EBIT Additional Additional Other costs, EBIT Non-recurring EBIT FY 2015/16 other one-off FY 2015/16 Gross P
Slide 32: Net Profit up +30.1% in CHF
EBITDA to Net Profit Net Profit up +30.1% in CHF, as a result of strong profitability, lower financial expenses and a stable tax rate In CHF mio 638.1 Tax rate: 488.2 17.4% vs -149.9 PY: 17.8% +30.1% -121.6 302.9 -18.1 284.8 -63.6 219.0 EBITDA Depreciation EBIT Net Financial Income Net Profit One-of
Slide 33: Positive development of all key financial ratios
Balance Sheet & key ratios Positive development of all key financial ratios Aug-17 Aug-16 Total Assets [CHF m] 5,534.1 5,640.8 Net Working Capital [CHF m] 1,129.5 1,374.2 Non-Current Assets [CHF m] 2,458.2 2,301.0 Net Debt [CHF m] 1,110.9 1,452.8 Shareholders' Equity [CHF m] 2,178.8 1,956.3 Debt/Equ
Slide 34: Strong free cash flow
Free Cash Flow Strong free cash flow, based on higher profitability, lower working capital, stable interest and taxes paid, plus discipline on investments in CHF mio. +192.6 (PY +210.3) +14.9% 620.0 -139.8 (PY -140.8) 539.4 +23.2 +475.6 (PY +19.7) (PY +430.9) -220.4 (PY -201.0) EBITDA recurring EBIT
Slide 35: Increase in EBIT per MT thanks to more favorable cocoa processing margin
8-year EBIT per tonne development Increase in EBIT per MT thanks to more favorable cocoa processing margin and improvement of product and customer mix 312 290 297 282 274 279 271 286 251 246 EBIT per tonne in CHF (at constant currencies) 256 219 242 EBIT per tonne in CHF 231 (as reported) 223 1’795
Slide 36: Capital Expenditures
12 months – CAPEX Capital Expenditures in CHF mio. +4.6% +4.2% +4.0% +3.0% +3.2% CAPEX as % of sales revenue 249 249 240 224 220 201 Additional growth IT Upgrade / efficiency gains existing sites Maintenance 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 E Page 36 January 2018 Q1 2017/18 Roadshow P
Slide 37: Significant headroom for further growth and raw material price fluctuations
Significant headroom for further growth and raw material price fluctuations As of 31 August 2017 CHF 4,131 mio ABS CHF 960 mio Various uncommitted facilities -64% EUR 600 mio Domestic Commercial Paper Programme Various Bilateral LT Loans CHF 1,507 mio EUR 750 mio ABS Syndicated Bank Loan Maturity 20
Slide 38: Liquidity – Debt maturity profile
Liquidity – Debt maturity profile As of August 31, 2017 in CHF mio Uncommitted lines Committed lines Cash and revolving credit 857 facility (undrawn) Short-term facilities Bonds 157 507 399 375 283 183 3 3 Cash 2017 2018 2019 2020 2021 2022 2023 2024 Page 38 January 2018 Q1 2017/18 Roadshow Presenta