Barry Callebaut Ag · SIX:BARN
Barry Callebaut — Q1 2018/19 Earnings Presentation
38 slides from Barry Callebaut's earnings presentation, January 2019
Slide 1: Roadshow presentation – 3-Month Key Sales Figures 2018/19
Roadshow presentation – 3‐Month Key Sales Figures 2018/19 January 2019
Slide 2: Agenda
Agenda BC at a glance Highlights Q1 2018/19 Strategy & Outlook Appendix Page 2 January 2019 Q1 2018/19 Roadshow presentation
Slide 3: BC at a glance
BC at a glance January 2019
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 man
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 2019 Q1 2018/19 Roadshow presentation
Slide 6: FY 2017/18
FY 2017/18 Page 6 January 2019 Q1 2018/19 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 2019 Q1 2018/19 Roadshow presentation
Slide 8: Our Regional and Product split
How are we organized? Our Regional and Product split FY 2017/18 Sales Volume: 2.0 million tonnes Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 5% 12% Global Cocoa 22% EMEA 46% Food Manu‐ facturers 66% Cocoa Products 22% Sales Revenue: CHF 6,948.4 mio. Ame
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 66% Global Food • Product mix Manufacturers • Economies of scale Cocoa Products • Small, medium and • Market prices
Slide 10: A global footprint and a local service: 59 factories worldwide
Where are we present? A global footprint and a local service: 59 factories worldwide Cocoa factories in origin countries and chocolate factories close to our customers. With our 21 Chocolate Academies worldwide we are at the pulse of any trends in the industry Cocoa processing factory Chocolate fact
Slide 11: Highlights Q1 2018/19
Highlights Q1 2018/19 January 2019
Slide 12: Steady start to the year and new mid-term guidance
3‐Month Key Sales Figures 2018/19 Steady start to the year and new mid‐term guidance Sales volume up +1.7% on top of a very strong prior‐year base of +8.0% Sales revenue of CHF 1,881.4 million, up +3.7% in local currency On track to deliver on current mid‐term guidance ending with fiscal year
Slide 13: Steady start against strong comparator, acceleration expected in H2
Quarterly volume evolution Steady start against strong comparator, acceleration expected in H2 Quarterly volume growth vs prior year +8.1% Market Volume ‐2.3% ‐1.4% +2.3% +2.2% +3.1% +1.7% +2.2% +1.3% +1.4% growth* *Source: Nielsen chocolate confectionery in volume, September 2018 – October/November
Slide 14: Volume growth supported by Americas and APAC, EMEA stable on very high comparison base
Quarterly volume evolution Volume growth supported by Americas and APAC, EMEA stable on very high comparison base Group Sales Volume: 248,053 541,109 147,909 tonnes tonnes tonnes 117,665 27,482 tonnes tonnes EMEA Americas Asia‐Pacific Global Cocoa ‐0.1% +8.0% +3.8% ‐2.4% Q1 volume growth: (+10.3%) (
Slide 15: Steady start against strong comparator
Q1 volume 2018/19 Steady start against strong comparator Volume growth vs prior year 34.9% +1.4% Emerging markets ex cocoa +5.4% Key growth drivers 32.9% Long‐term outsourcing crucial to +3.8% & strategic partnerships continuously outperform the market 12.2% +2.3% Gourmet & ex Beverages Specialties
Slide 16: We drive value through innovation, leading on trends across segments
Innovation We drive value through innovation, leading on trends across segments Page 16 January 2019 Q1 2018/19 Roadshow presentation
Slide 17: Combined ratio remains broadly unchanged
Cocoa processing profitability Combined ratio remains broadly unchanged European combined ratio ‐ 6 months forward ratio* FY 2017/18 4.50 4.00 3.50 Combined ratio 3.5 3.00 Butter ratio 2.50 2.00 1.50 1.00 Powder ratio 0.50 0.00 August-08 August-09 August-10 August-11 August-12 August-13 August-14 Au
Slide 18: Cocoa bean prices trading range bound, sugar and dairy prices below prior year
Raw material price evolution Cocoa bean prices trading in range bound, sugar and dairy prices below prior year 1Q 2018/19 250% 200% Change Sep 2018 ‐ Nov 2018 150% Sugar world +8.9% Cocoa beans 100% ‐4.1% Milk powder ‐1.7% Sugar EU 50% +19.3% 0% Aug.2008 Aug.2009 Aug.2010 Aug.2011 Aug.2012 Aug.2013
Slide 19: Strategy & Outlook
Strategy & Outlook January 2019
Slide 20: Consistent long-term strategy, competitive execution
Strategy Consistent long‐term strategy, competitive execution “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable growth Margin accretive growth 4 strategic Innovation ‘Smart Accelerated growth in pillars Growth’ Gourmet, Specialties and emerging markets Cost Leadersh
Slide 21: 2018/19 confident to deliver on current mid-term guidance
Outlook 2018/19 confident to deliver on current mid‐term guidance Outlook Confident that sales momentum will pick up in the back half of the fiscal year as additional volumes come on stream from new outsourcing contracts across all Regions Good product mix and strong portfolio give us confiden
Slide 22: Recent transactions outline growth potential
Expansion Recent transactions outline growth potential Long‐term supply agreement with Burton’s Biscuit Supply of over 12,000 tons of chocolate and compound per year Expand production capacity in the UK Closed December 2018 Extension of long‐term supply agreement with Garudafoods Supply
Slide 23: New mid-term guidance for 2019/20 to 2021/22
Outlook New mid‐term guidance for 2019/20 to 2021/22 New Mid‐term guidance Confident outlook for the future and issuance of new, unchanged, mid‐term guidance for the 3‐year period 2019/20 – 2021/22 with continued focus on consistent, above‐market volume growth and enhanced profitability: Average
Slide 24: Forever Chocolate increasing impact
Sustainability Forever Chocolate increasing impact Achievements FY 2017/18 2.1 million cocoa >130,000 cocoa 44% of cocoa and other raw 24% of factories on seedlings distributed farms mapped materials sourced sustainably renewable energy Page 24 January 2019 Q1 2018/19 Roadshow presentation
Slide 25: Appendix
BARRY ((}) CALLEBAUT Appendix » >
Slide 26: What makes Barry Callebaut unique?
Appendix 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 s
Slide 27: Chocolate confectionery market development – Nielsen data
Appendix Chocolate confectionery market development – Nielsen data North America (22% of market) Western Europe (33% of market) EEMEA (24% of market) 2013‐18 average: ‐0.4% 2013‐18 average: ‐0.5% 2013‐18 average: +0.3% 2019 3M: +0.7% 2019 3M: ‐2.2% 2019 3M: +6.5% South America ( 7% of market) Asia P
Slide 28: Our market and opportunities ahead
Appendix Our market and opportunities ahead Global Chocolate confectionery volume growth vs cocoa bean price 5 2'500 Forecast volume growth per application 2017‐2022 4 2'000 3 Volume growth 1.4% GBP / tonne 2 1'500 1 1'000 3.2% 0 500 ‐1 3.4% ‐2 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 29: Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets
Appendix Barry Callebaut uniquely positioned in industrial chocolate and cocoa markets Cocoa grinding capacity Industrial chocolate – open market Notes: Olam incl. ADM; Cargill incl. ADM chocolate business; Fuji Oil incl. Harald, Fuji announced acquisition of Blommer in November 2018 Sources: Propri
Slide 30: West Africa is the world's largest cocoa producer
Appendix West Africa is the world’s largest cocoa producer Total world harvest (17/18): 4,645TMT others 12% Over 70% of total cocoa beans come from West Africa Brazil* 4% Cameroon* BC processed ~956,000 tonnes or 5% Ivory approximately 20% of the world crop Indonesia* Coast* 43% 5% Barry Calle
Slide 31: Strategy delivering strong results
FY Results 2017/18 Strategy delivering strong results Group performance FY 2017/18 % vs prior year 1) % vs prior year 1) (In CHF mio.) (in CHF) (in CHF) in local currencies Sales Volume Total (in tonnes) 2,035,857 +6.3% Sales Revenue 6,948.4 +2.1% +0.1% Gross Profit 1,157.1 +20.7% +17.2% EBIT Total
Slide 32: Operating profit up +21.2% in local currencies, well above volume growth
EBIT FY 2017/18 Operating profit up +21.2% in local currencies, well above volume growth In CHF mio +20.4% +21.2% +164.8 +18.2 554.0 535.8 ‐49.0 ‐22.1 460.2 442.1 ‐18.1 EBIT Non‐recurring EBIT Additional Additional Scope, Other EBIT FX impact EBIT FY 2016/17 FY 2016/17 Gross Profit SG&A FY 2017/18 F
Slide 33: Increase in EBIT thanks to enhanced product and customer mix
Long‐term EBIT per tonne development Increase in EBIT thanks to enhanced product and customer mix and continued improvement in Cocoa business 312 312 290 283 EBIT per tonne 282 274 279 in constant currencies 271 251 EBIT per tonne in CHF 286 231 272 219 256 242 231 223 +6.7% 2’036 Volume in kMT 1’71
Slide 34: Net Profit recurring is up +35.9%
EBITDA to Net Profit FY 2017/18 Net Profit recurring is up +35.9% as a result of great profitability and lower net finance cost items In CHF mio 728.3 (+23.0%) *Tax rate = 21.1%, or 18.2% excl. tax reform one‐time impact 554.0 Prior year = 17.0% (+20.4%) ‐174.2 +35.9% ‐101.1 357.4 ‐95.5 +18.1 281.1
Slide 35: Solid Free cash flow generated from higher profitability
Free Cash Flow FY 2017/18 Solid Free cash flow generated from higher profitability, relatively stable working capital and CAPEX discipline In CHF mio +23.0% 728 ‐35 592 (PY +211) ‐156 (PY ‐141) 312 (PY +476) ‐218 ‐11 (PY ‐220) (PY +23) EBITDA recurring EBITDA recurring Change in Interest Capex Other
Slide 36: Positive development of all key financial ratios
Balance Sheet & key ratios Positive development of all key financial ratios (in CHF mio) Aug 2017/18 Aug 2016/17 Total Assets CHF m 5,832 5,467 Net Working Capital CHF m 1,074 1,043 Non‐Current Assets CHF m 2,506 2,478 Net Debt CHF m 1,074 1,111 Shareholders’ Equity CHF m 2,270 2,111 Deb/Equity rati
Slide 37: Significant headroom for further growth and raw material price fluctuations
Appendix Significant headroom for further growth and raw material price fluctuations As of 31 August 2018 CHF 4,152 mio ABS CHF 835 mio Various uncommitted facilities ‐66% EUR 750 mio Domestic Commercial Paper Programme Various Bilateral LT Loans CHF 1,428 mio EUR 750 mio ABS Syndicated Bank Loan Ma
Slide 38: Liquidity – Debt maturity profile
Appendix Liquidity – Debt maturity profile As of 31 August 2018 In CHF mio 848 Cash and Revolving Credit Facility (undrawn) Short‐term facilities Bonds 1 139 502 406 381 281 172 2 2 Cash 2018 2019 2020 2021 2022 2023 2024 Page 38 January 2019 Q1 2018/19 Roadshow presentation