Barry Callebaut Ag · SIX:BARN
Barry Callebaut — 9M 2018/19 Earnings Presentation
37 slides from Barry Callebaut's earnings presentation, July 2019
Slide 1: Roadshow presentation 9-Month Key Sales Figures 2018/19
Slide 2: Agenda
AGENDA * BCata glance * Highlights 9M 2018/19 * Strategy & Outlook * Appendix 2 Roadshow presentation 9M 2018/19 = | BARRY ((}) CALLEBAUT
Slide 3: BC at a glance
Slide 4: BC at a glance - Who are we?
BC at a glance - Who are we? The heart and engine of the chocolate and cocoa 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 * Jacob
Slide 5: BC at a glance - What do we do?
BC at a glance - What do we do? We are present in the key parts of the cocoa and chocolate value chain ote & sw. Ea Cocoa Origination ] Cocoa Processing Processing the beans Cocoa liquor L& = 54% = 46% SH Cocoa powder Cocoa butter Cocoa Product and Chocolate + sugar, milk, others + sugar, milk, + su
Slide 6: BC at a glance - This is Barry Callebaut
BC at a glance - This is Barry Callebaut “Shaping the world of chocolate and cocoa” FY 2017/18 a First time over 2million 554.0 re 59 factories 175 yea rs sales volume EBIT worldwide : intonnes in CHF million Selling to of chocolate heritage ] 4o cAGR AY | 6,948.4 countries More than| sales revenue
Slide 7: BC at a glance - What do we offer?
BC at a glance - What do we offer? A broad offering from standard to the most premium products Cocoa Products Food Manufacturers Gourmet & Specialties 7 Roadshow presentation 9M 2018/19 BARRY CALLEBAUT
Slide 8: BC at a glance - how are we organized?
BC at a glance - how are we organized? Our Regional and Product split Sales Volume by Region Americas EMEA 27% 46% Global Cocoa : i 22% Asia Pacific 5% Sales volume by Product Group Gourmet & Cocoa Specialties Products 12% 22% Food Manufacturers 66% Full-Year 2017/18: Sales Volume: 2.0 million tonne
Slide 9: BC at a glance - business model
BC at a glance - business model We apply a cost plus approach to the majority of our business Customers Pricing model Profit levers Food manufacturers Small, medium Cost Plus Customer mix ris 66%* Global Food Product mix BEee ns Manufacturers Economies of scale Global Cocoa Small, medium Market pric
Slide 10: BC at a glance - where are we present?
BC at a glance - where are we present? A global footprint and local service: 60 factories worldwide Cocoa factories in countries of origin and chocolate factories close to our , customers. With our 22 Chocolate 3 8 c) Academies worldwide we are at the , 7 pulse of any trends in the industry oo % eo
Slide 11: Highlights 9-Month Key Sales Figures 2018/19
Highlights 9-MONTH KEY SALES FIGURES 2018/19
Slide 12: Good growth momentum continues
Highlights 9-Month Key Sales Figures 2018/19 Good growth momentum continues 9 months sales volume up +5.0%, supported by all Regions Sales revenue of CHF 5.5 bn, +8.2% in local currencies (+5.7% in CHF) Early repayment of outstanding 5.375% Senior Note due 2021 in August 2019 Mid-term guidance confi
Slide 13: Growth momentum accelerating in Chocolate and Cocoa
Highlights 9-Month Key Sales Figures 2018/19 Growth momentum accelerating as anticipated both in Chocolate and Cocoa 9M 2018/19 +5.0% +10.6% +10.6% 9M 2018/19 volume growth vs prior year (in tonnes) FY 2016/17 44.4% Hi chocolate (FM and Gourmet & Spec.) || Global Cocoa FY 2017/18 +6.3% +4.8% 11% |e
Slide 14: All regions contributing to volume growth
Highlights 9-Month Key Sales Figures 2018/19 All regions contributing to volume growth EMEA Group Sales Volume: Americas ww 732,278 1,589,181 424.216 tonnes ’ Global Asia- Cocoa P oe Pacific 345,144 NLS 87,543 growth 15.3% | +6,0% | i +10.1% | | +2.2% | Market Volume +0.2% +0.2% +8.0% growth* *Sourc
Slide 15: Key growth drivers gaining momentum
Highlights 9-Month Key Sales Figures 2018/19 Key growth drivers gaining momentum % of total Volume growth Group volume vs prior year 35% +8.8% Emerging Ex cocoa ~ Markets +11.6% Key growth drivers crucial to continuously outperform the market 12% +3.3% Gourmet & Ex Beverages Specialties : +7.1% 15 R
Slide 16: Cocoa processing profitability
Cocoa processing profitability Cocoa Combined Ratio -— a macro indicator European combined ratio Directionally right... 6 to 9 months forward ratio Shows general high level industry direction, assuming many variables are fixed 4.00 3.50 Combined Ratio 3.4 3.00 However... 250 Butter Many variables ar
Slide 17: Raw material prices
Raw material prices Raw material price developments | i} 200% Increase 9M 2018/19 i} | 150% + } i} | Milk powder +25.2% | Cocoa beans +4.0% 100% ugar world +3.9% Sugar EU +46.0% 50% i} | | i} | 0% \ \ | \ Mai09 MailO Mail) Mail2 Mail3) Mail4 MailS Mail6é Mail7 Mail8 Mail9 —Cocoa beans — Milk —— Suga
Slide 18: Strategy & Outlook
Strategy &
Slide 19: Consistent long-term strategy - evolving execution
Strategy Consistent long-term strategy - evolving execution “Heart and engine of the chocolate and cocoa industry” Sustainable growth Margin accretive growth Accelerated growth in Gourmet, Specialties and emerging markets pillars = = Return on Capital and greater focus on Free cash flow Sustainabili
Slide 20: Good momentum continues: Innovation and Expansion
Strategy Good momentum continues | Innovation * Drive premium range in cocoa powders * Leverage Innovation across segments: - Callebaut Ruby RBI - Sugar-reduced solutions * Leverage portfolio of Gertrude Hawk and d’Orsogna pay NO ADDED SUGAR tow Co) 20 Roadshow presentation 9M 2018/19 Expansion Inte
Slide 21: Good momentum continues: Cost leadership and Sustainability
Strategy Good momentum continues | Cost leadership * Successful placement of EUR 600 million equivalent Schuldscheindarlehen with average tenor of 7.8 years and attractive interest rate of 1.65% * Early repayment of outstanding 5.375% Senior Bond over EUR 250 million (due 2021) at beginning of Augus
Slide 22: Outlook
Outlook Guidance Confident of delivering midterm guidance * Good visibility in portfolio and acceleration in sales momentum as expected make us confident of delivering on our current mid-term guidance. New mid-term guidance 2019/20-2021/22 » Average volume growth +4-6% * EBIT growth on average above
Slide 23: Appendix
Slide 24: What makes Barry Callebaut unique?
Appendix What makes Barry Callebaut unique? Global number one player in chocolate and cocoa Deep chocolate and cocoa expertise Consistent growth above the underlying market Global leader in Gourmet & Specialties Proven and long-term oriented strategy Unparalleled global footprint, present in all key
Slide 25: Chocolate confectionery market development — Nielsen data
Appendix Chocolate confectionery market development — Nielsen data Western Europe (33% of market) 2013-18 average: -0.5% 9M 2018/19: 6 North America (22% of market) 2013-18 average: -0.4% «4 $ 9M 2018/19: +18% Fee EEMEA (24% of market) 2013-18 average: +0.3% 9M 2018/19: +3.2% Asia Pacific (14% of ma
Slide 26: Our market and opportunities ahead
Appendix Our market and opportunities ahead Volume growth Global Chocolate confectionery volume growth vs cocoa bean price 5 2'500 44 A F 2'000 _ [\ / \G 24 L 1'500 Vy | "000 o4 r SOO 1 2 DORMDOEAMNYNORADORAM Q SECS SLER CA CSELARRAN SSSSORNRARARRAROGRRR Cocoa price Hl Chocolate confectionery Growin
Slide 27: Strong global market leader in industrial chocolate and cocoa
Appendix Strong global market leader in industrial chocolate and cocoa Cocoa grinding capacity (kMT) Industrial Chocolate (open market - KMT) BC BC Cargill Cargill Olam Fuji Oil ECOM Puratos Fuji Oil Cémoi Guan Chong Clasen Mondelez Schokinag Nestlé Irca Ferrero Kerry Group BT Cocoa Guittard Others
Slide 28: West Africa is the world's largest cocoa producer
Appendix West Africa is the world’s largest cocoa producer Total world harvest (17/18): 4,645 tsd MT others 12% Brazil* 4% Ivory Cameroon* Coast* 43% 5% Indonesia* 5% Nigeria 6% Ecuador 6% Ghana*19% Source: ICCO Forecast 28 Roadshow presentation 9M 2018/19 About 70% of total cocoa beans are of West
Slide 29: Increase in EBIT per MT thanks to improved product mix
Appendix Increase in EBIT per MT thanks to improved product mix and supportive cocoa processing market 312 312 EBIT per tonne in constant currencies EBIT per tonne in CHF Volume in KMT 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 29 Roadshow presentation 9M 2018/19 BARRY C
Slide 30: HY 2018/19 Financial Key Figures
Appendix — HY 2018/19 Financial Key Figures Profit growing above volume growth % vs prior year in % vs prior year in CHF local currencies eer is HY 2018/19 Group performance (in CHF mio) Sales volume Total 1,046,695 42.4% me (in tonnes) Sales revenue 3,672.7 +3,5% +6.0% Gross profit 584.8 +5.7% +8.5
Slide 31: HY 2018/19 Regions Key Performance Indicators
Appendix — HY 2018/19 Regions Key Performance Indicators All Regions contributed to volume growth and profitability EMEA Group Sales Volume: Americas ww 480,721 281,204 | tonnes APAG Global Cocoa .— 307 598 rs 57,192 HY volume +2.0% +5.8% +5.7% 1.7% growth EBIT growth in local currencies +6.1% +8.5%
Slide 32: HY 2018/19 Gross Profit
Appendix — HY 2018/19 Gross Profit Gross profit up +8.5% in local currencies, driven by good product mix and a supportive market environment In CHF millions Gross Profit Volume Mix Cocoa Additional Gross Profit FX impact Gross Profit HY 2017/18 effects effects processing costsdue HY 2018/19 HY 2018/
Slide 33: HY 2018/19 EBIT
Appendix — HY 2018/19 EBIT Strong increase in operating profit by +12.4% in local currencies In CHF millions 311 orreeee el -10 EBIT Additional Additional EBIT FX impact EBIT HY 2017/18 Gross Profit SG&A,Scopeand HY 2018/19 HY 2018/19 non-rec/other before FX 33 Roadshow presentation 9M 2018/19 BARRY
Slide 34: HY 2018/19 EBITDA to Net Profit
Appendix — HY 2018/19 EBITDA to Net Profit Net Profit up +15.1% in CHF, as a result of good profitability In CHF millions 387 Tax rate: 19.3% vs PY (+7.6%) _ 19.5% (excl. non- recurring tax impact) 2 | —— +8.7% (-3.4%) (+12.3% in LC)- 5s (-11.2%) a 183 10 48 Q~R = paee — 173 (412.9%) FR EBITDA _ Dep
Slide 35: HY 2018/19 Free Cash Flow
Appendix — HY 2018/19 Free Cash Flow Adjusted Free Cash Flow CHF -31 million on back of higher inventory catering for future volume growth In CHF millions (6 month rolling) 3590 a (PY -71) (PY 5) (PY 103) — __-H0 ae mui ——s(PY -64) Sy -141 (PY -106) | (PY 39) EBITDA EBITDA Changein Interest Capex Ot
Slide 36: HY 2018/19 Financial Key Figures
Appendix — HY 2018/19 Financial Key Figures Balance sheet (in CHF millions) Feb 2019 Aug 18 Feb 18 Pro forma! Pro forma! Total Assets 6,820.4 6,169.0 6,444.3 5,832.0 6,105.9 Net Working Capital 1,762.1 1,403.4 1,426.1 1,074.4 1,087.7 Non-Current Assets 2,639.9 2,506.5 2,566.5 2,505.5 2,566.5 Net Deb
Slide 37: Thank you.
Thank you.