Barry Callebaut Ag · SIX:BARN
Barry Callebaut — 9M 2015/16 Earnings Presentation
34 slides from Barry Callebaut's earnings presentation, July 2016
Slide 1: Roadshow presentation – 9-Month Key Sales Figures 2015-16
Roadshow presentation – 9-Month Key Sales Figures 2015-16 July 2016 July 2016
Slide 2: Agenda
Agenda BC at a glance Highlights 9 months 2015/16 Strategy & Outlook Page 2 July 2016 9-Month Roadshow presentation
Slide 3: BC at a glance
BARRY ((}) CALLEBAUT BC at a glance @® BARRY Since 1842 —
Slide 4: The heart and engine of the chocolate industry
Who we are? The heart and engine 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-qua
Slide 5: Barry Callebaut at a glance
Barry Callebaut at a glance We add value in every step of the cocoa and chocolate value chain Page 5 July 2016 9-Month Roadshow presentation
Slide 6: Page 6 July 2016 9-Month Roadshow presentation
Page 6 July 2016 9-Month Roadshow presentation
Slide 7: Barry Callebaut at a glance
Barry Callebaut at a glance A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 7 July 2016 9-Month Roadshow presentation
Slide 8: Barry Callebaut at a glance
Barry Callebaut at a glance Our Regional and Product split FY 2014/15 Sales Volume: 1.8 mio tonnes Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 4% 10% Global Cocoa* 28% EMEA 42% Food Manu- facturers 62% Cocoa Products 28% Sales Revenue: CHF6,241.9m Ameri
Slide 9: Barry Callebaut at a glance
Barry Callebaut at a glance 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 62% Cocoa Products • Small, medium and • Mark
Slide 10: A global footprint and a local service
A global footprint and a local service Cocoa factories in origin countries and chocolate factories close to our customers Cocoa processing factory Chocolate factory We are present in 30 countries We have manufacturing factories in more than 50 locations Integrated factory Our global footprint ensure
Slide 11: Highlights - 9 months 2015/16
Highlights - 9 months 2015/16
Slide 12: Good volume growth continues
9-Month Key Sales Figures Good volume growth continues Sales volume growth at +4.2% All key growth drivers positively contributed to the volume increase Very strong chocolate volume growth accross segments and Regions Intentional phasing out of less profitable contracts in Global Cocoa Sales revenue
Slide 13: Strong growth in Chocolate, intentionally phasing out less profitable contracts in Global Cocoa
9 Months 2015/16 Strong growth in Chocolate, intentionally phasing out less profitable contracts in Global Cocoa Sales Volume (in tonnes) +13.0% -7.8%1 +9.9% 6'804 -28’247 33'668 +4.2% +7.7% 43'711 1’376’650 1’320’714 Group 9 EMEA Americas Asia Global Cocoa Group 9 months 2015 months 2016 Market Vol
Slide 14: All our key growth drivers contributed to the good volume momentum
9 months 2015/16 All our key growth drivers contributed to the good volume momentum Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth 9 months +9.3% vs prior year +6.7% vs prior year +11.4% vs prior year 2015/16 CAGR 5 year +17.7% +26.5% +6.5 % Volum
Slide 15: Barry Callebaut successfully prices bond
Barry Callebaut successfully prices bond On May 9th 2016, Barry Callebaut launched a EUR 450 m offering (upsized from EUR 350 mio) of 8-year senior notes Significant oversubscription, the book reached EUR 2.3bn Coupon: 2.375% Issue Price: 99.104% Type: Senior Notes / RegS only Maturity: 24th May 202
Slide 16: Good progress achieved on Cocoa Leadership Project
Good progress achieved on Cocoa Leadership Project Commercial Operations Global leverage leadership leadership SKU reduction on- Centralized Manufacturing going combined cocoa footprint reduced in Asia ratio management Customer in place segmentation Working Capital Setting up Global Stronger focus o
Slide 17: Slowly improving cocoa product pricing environment
Cocoa processing profitability Slowly improving cocoa product pricing environment; contracts from lowest market situation (2015) being executed in current business year European combined ratio - 6 months forward ratio 4.00 Combined ratio 3.00 3.12 Cocoa butter ratio 2.00 1.00 Cocoa powder ratio 0.00
Slide 18: Raw materials evolution
Raw materials evolution Cocoa bean price still at relatively high levels, world sugar prices increased strongly, milk powder at lowes historical levels Average 9 months vs. prior year 300% Cocoa beans 250% +10.8% Sugar world 200% +10.4% 150% 100% Sugar EU -9.7% 50% Milk powder -14.4% 0% Jun.2007 Jun
Slide 19: Strategy & Outlook
Strategy & Outlook CALLEBAUT
Slide 20: A successful long-term strategy setting up the path for Smart Growth
A successful long-term strategy setting up the path for “Smart Growth“ “Focus on consistent, above “Heart and engine of the Vision market-growth and enhanced chocolate and cocoa industry” profitability” Expansion Sustainable growth Margin accretive growth Innovation 4 strategic “SMART Accelerated gr
Slide 21: We see significant growth opportunities ahead
We see significant growth opportunities ahead Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Low market share 70% in emerging markets still 20% market share globally in-house production Currently low consumption Low presence in emerging Top 5 chocolate players
Slide 22: While we continue to fine-tune the execution of our strategy in different areas
While we continue to fine-tune the execution of our strategy in different areas Talent Management & Leveraging our capabilities Digital Capabilities Carreer development in Innovation As of April 1 2016, new Cross-fertilisation of FM Stronger digital CHRO is part of the and Gourmet presence in both F
Slide 23: Continued challenging market environment; mid-term targets confirmed
Outlook Continued challenging market environment; mid-term targets confirmed Outlook 2015/16 As anticipated in Nov 2015: challenging fiscal year 2015/16 due to the current cocoa products market, which will temporarily affect profitability Optimistic for the chocolate business Mid-term guidance (unti
Slide 24: Appendix
| (() Appendix CALLEBAUT FINEST BELGIAN CHOCOLATE POWER 41
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 Proven and long-term oriented strategy Unparalled global footprint, present in all key markets Preferred outsourcing and strategic partner Leader in Innovati
Slide 26: 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 Blommer Fuji Oil Mondelez Puratos Guan Chong Cémoi Ecom Cocoa Irca BT Cocoa Clasen Nestlé Kerry Grou
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 Nigeria come from West Africa 5% Brazil* 6% BC processed ~925,000 tonnes or Ivory Coast* 22% of the world crop Cameroon* 42% 6% Barry Callebaut has various cocoa Ecuador
Slide 28: EBIT flat excluding negative FX impact, despite lower cocoa result and restructuring costs
EBIT HY 2015/16 EBIT flat excluding negative FX impact, despite lower cocoa result and restructuring costs in CHF mio. -8.4% -0.3% +20.9 219.2 218.6 -16.2 -5.3 200.7 -17.9 EBIT Additional Additional SG&A One-off EBIT FX impact EBIT H1 2014/15 Gross Profit from business restructuring H1 2015/16 H1 20
Slide 29: Efforts on reducing working capital and CAPEX start to pay off, improved cash flow
Free Cash Flow Efforts on reducing working capital and CAPEX start to pay off, improved cash flow generation in CHF mio. 10.3% 290 -36 263 +58 (PY -42) (PY -211) 220 0 -1 -91 (PY -128) Operating Operating Change in Interest paid and CAPEX M&A Others Free Cash Flow Cash Flow Cash Flow Working Capital
Slide 30: Improvement of the EBIT per tonne in constant currencies continues
6-year EBIT per tonne development Improvement of the EBIT per tonne in constant currencies continues 312 282 290 274 279 EBIT per tonne 286 251 in constant currencies EBIT per tonne in CHF 256 242 (as reported) 231 223 +8.2% 1’717 1’795 1’379 1’536 1’210 1’269 Volume in kMT 2009/10 2010/11 2011/12 2
Slide 31: Deleveraging of the company and improvement of key financial ratios remain a high priority
Balance Sheet & key ratios Deleveraging of the company and improvement of key financial ratios remain a high priority Feb 16 Aug 15 Feb 15 Total Assets [CHF m] 5'509.9 5'429.4 5'433.4 Net Working Capital [CHF m] 1'382.3 1'529.7 1'566.6 Non-Current Assets [CHF m] 2'253.4 2'185.5 2'139.5 Net Debt [CHF
Slide 32: Capital Expenditures
Capital Expenditures* +4.5% +4.6% +4.2% +3.8% +4.0% 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 33: Enough headroom for further growth and raw material price fluctuations
Available Financing Enough headroom for further growth and raw material price fluctuations As of 29 Feb 2016 CHF 4,165 mio ABS CHF 957 mio Various uncommitted facilities -47.1% EUR 600 mio. Domestic Commercial 3-5 years Paper Programme CHF 1,919 mio Various bilateral LT loans Term Loan Maturity 2016
Slide 34: Liquidity – Debt maturity profile
Liquidity – Debt maturity profile As of 29 Feb 2016 In CHF mio Uncommitted lines Committed lines 150 --Cash and revolving 675 credit facility (undrawn) ■ Short-term facilities 109 ■ Term loans ■ Bonds 191 380 388 284 269 222 100 14 Cash 2015 2016 2017 2018 2019 2020 2021 2022 2023 Page 34 July 2016