Barry Callebaut Ag · SIX:BARN
Barry Callebaut — Non-Deal Roadshow (April 2016)
41 slides from Barry Callebaut's roadshow presentation, April 2016
Slide 1: Roadshow presentation - Half-Year Results 2015/16
Roadshow presentation - Half-Year Results 2015/16 April 2016
Slide 2: Agenda
Agenda BC at a glance Highlights HY 2015/16 Financial Review Strategy & Outlook Page 2 April, 2016 HY 2015-16 Roadshow presentation
Slide 3: BC at a glance
BARRY () CALLEBAUT BC at a glance
Slide 4: We are present in the key parts of the cocoa and chocolate value chain
We are present in the key parts of the cocoa and chocolate value chain Page 4 April, 2016 HY 2015-16 Roadshow presentation
Slide 5: Page 5 April, 2016 HY 2015-16 Roadshow presentation
Page 5 April, 2016 HY 2015-16 Roadshow presentation
Slide 6: A broad offering from standard to the most premium products
Our products A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties Page 6 CAGE Conference - 2016
Slide 7: Our Regional and Product split
HY 2015/16 Our Regional and Product split Sales Volume per Region Sales Volume per Product Group Gourmet & Asia Pacific Specialities 4% 11% Global Cocoa 25% Europe 44% Food Manu- facturers 64% Cocoa Products 25% Americas 27% Page 7 April, 2016 HY 2015-16 Roadshow presentation
Slide 8: A global footprint and a local service
How do we operate? A global footprint and a local service: Cocoa factories in origin countries and chocolate factories close to our customers Cocoa processing factory Chocolate factory Integrated factory Page 8 April, 2016 HY 2015-16 Roadshow presentation
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 • Cost Plus • Customer mix and Global Food • Product mix Manufacturers • Economies of 62% scale Cocoa Products • Small, medium • Market prices • G
Slide 10: Highlights HY 2015/16
Highlights HY 2015/16 April, 2016
Slide 11: Solid volume growth, strong Free cash flow
HY Results 2015/16 Solid volume growth, strong Free cash flow Sales volume up +4.5%, significantly outpacing the market Strong growth in the chocolate business, intentionally phasing out unprofitable contracts in Global Cocoa Volume growth supported by all key growth drivers Gross Margins improved +
Slide 12: Outperforming the market, growth driven by main Chocolate Regions
HY Results 2015/16 Outperforming the market, growth driven by main Chocolate Regions Sales Volume (in tonnes) +12.6% -7.8%1 +13.4% 4'562 -19’406 +4.5% 29'583 +6.5% 25'151 933’327 893’437 Group HY 2015 EMEA Americas Asia Global Cocoa Group HY 2016 Market Volume growth 2 -2.2% -3.7% -1.7% -2.6% 1 Due
Slide 13: Positive contribution from all key growth drivers
HY Results 2015/16 Positive contribution from all key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic Partnerships Volume growth +12.5% vs prior year +10.3% vs prior year +7.4% vs prior year HY 2015/16 CAGR 5 year +17.7% +26.5% +6.5 % Volume 11.0% % 32.4% 35.3
Slide 14: Successful stories in our Food Manufacturers business
HY Results 2015/16 Successful stories in our Food Manufacturers business Two new long-term outsourcing agreement in emerging markets with local players Decorations business growing at double-digit Belgian customer launches the first chocolate brand in Europe that makes a cocoa flavanol health claim
Slide 15: Solid growth in Gourmet & Specialties, based on strong strategic execution
HY Results 2015/16 Solid growth in Gourmet & Specialties, based on strong strategic execution Solid growth of the two Global brands: Callebaut and Cacao Barry around the globe, while maintaining profitability Growing weight of emerging markets in overall growth Cacao Barry next generation packaging
Slide 16: Expanding our Specialties business through bolt-on acquisition
HY Results 2015/16 Expanding our Specialties business through bolt-on acquisition Acquisition of commercial beverages vending activities of FrieslandCampina Kievit Becoming a leading supplier of vending powder mixes in Europe, adding technical and innovation capabilities Additional volume of about 2
Slide 17: Good progress achieved on Cocoa Leadership Project
HY Results 2015/16 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 Glob
Slide 18: Financial Review
Financial Review April, 2016
Slide 19: Solid volume growth, profitability as anticipated, improved cash flow
HY results 2015/16 Solid volume growth, profitability as anticipated, improved cash flow Group performance HY 2015/16 % vs prior year % vs prior year (In CHF mio.) (in CHF) (in CHF) in local currencies Sales Volume Total 933,327 +4.5% (in tonnes) Sales Revenue 3,424.3 +5.6% +11.7% Gross Profit 437.9
Slide 20: Good performance in the chocolate business, Global Cocoa as anticipated
HY results 2015/16 Good performance in the chocolate business, Global Cocoa as anticipated EMEA Americas Asia Pacific Global Cocoa 4% 4% 28% 25% 44% 27% 25% Volume growth +6.5% +13.4% +12.6% -7.8% EBIT growth in +1.3% +4.3% +20.7% -29.9% local currencies EBIT growth in CHF -8.1% +4.6% +17.2% -45.1%
Slide 21: Gross profit up +4.7%, driven by solid volume growth and better product mix
Gross Profit HY 2015/16 Gross profit up +4.7%, driven by solid volume growth, better product mix and despite difficult cocoa powder margins in CHF mio. -1.9% +4.7% +12.5 +29.3 467.1 -21.0 446.2 437.9 -29.2 Gross Profit Volume Product Mix Cocoa Processing Gross Profit HY FX impact Gross Profit HY 201
Slide 22: 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 2.96 (March 2016) Butter ratio 2.00 1.00 Powder ratio 0.0
Slide 23: EBIT flat excluding negative FX impact
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 24: Net Profit down 18.5%
From EBITDA to Net Profit Net Profit down 18.5%, due to higher financial expenses, a foreign exchange loss, as well as higher income taxes in CHF mio. 270.9 -70.2 FX loss mainly related to Tax rate 200.7 -68.1 Brazil 18.6% vs 17.5% in prior year -18.5% -24.7 132.4 107.9 EBITDA Depreciation EBIT Net
Slide 25: Cocoa bean price still at relatively high levels
Raw materials evolution Cocoa bean price still at relatively high levels, other raw materials below prior year Average HY vs. 300% prior year 250% Cocoa beans 200% +10.9% Sugar world 150% +5.6% 100% Sugar EU -13.8% 50% Milk powder -12.3% 0% Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2
Slide 26: Significant reduction in working capital
Net Working Capital Significant reduction in working capital, mainly due to an improvement in Inventories in CHF mio. Receivables Stocks Payables -11.8% +82 +36 1’567 +37 -165 -57 +56 +1’382 -42 -131 Net Working Growth Price and Growth Reduction Price and Growth Price impact Others and Net Working C
Slide 27: Efforts on reducing working capital and CAPEX start to pay off
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 28: Deleveraging of the company and improvement of key financial ratios
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 29: Strategy & Outlook
Strategy & Outlook April, 2016
Slide 30: Our successful and long-term strategy remains unchanged
Our successful and long-term strategy remains unchanged “Heart and engine of the Vision chocolate and cocoa industry” Expansion Sustainable, 4 strategic Innovation profitable pillars growth Cost Leadership Sustainable Cocoa Page 30 April, 2016 HY 2015-16 Roadshow presentation
Slide 31: Setting up the path towards smart growth
Setting up the path towards “smart growth” Focus on consistent, above market-growth and enhanced profitability: “SMART GROWTH” Sustainable growth Margin accretive growth Accelerated growth in Gourmet, Specialties and emerging markets Return on Capital and greater focus on Free cash flow Talent & Tea
Slide 32: 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 33: While we continue to fine-tune the execution of our strategy
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 34: 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 35: Appendix
BARRY (() CALLEBAUT Appendix 69 CALLE BAUT Pur tac o i 823
Slide 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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 41 April, 201