Barry Callebaut AG · SIX:BARN
Barry Callebaut — FY2002/03 Earnings Presentation
40 slides from Barry Callebaut's earnings presentation, Nov 11, 2003
Slide 1: Annual Results 2002/03
Annual Results 2002/03 Analyst Presentation November 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 1
Slide 2: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 2
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements Forward-looking statements Any information given on these slides as well as during the conference call has been prepared by Barry Callebaut solely for the use at this analyst presentation. Certain statements contained therein regarding the business of Ba
Slide 4: Financial Year 2002/03: Good result with strong operational improvements
Financial Year 2002/03: Good result with strong operational improvements X Strong operating improvements in Food Manufacturers and Gourmet & Specialties: X Organic growth and further margin extension X Stollwerck restructuring on track both operationally and financially X Sales volume increased to 8
Slide 5: Financial Highlights 2002/03
Financial Highlights 2002/03 (in CHF m) % change 2002/03 2001/02 Sales revenue 36.2 3,571.3 2,621.8 in local currencies 41.6 3,712.9 EBIT 20.5 208.7 173.2* in local currencies 25.2 216.8 EBIT per tonne 2.9 234.2 227.7* in local currencies 6.9 243.3 Net profit (PAT) 1.6 103.2 101.6* in local currenci
Slide 6: Major events for Barry Callebaut 2002/03
Major events for Barry Callebaut 2002/03 X First year Stollwerck part of Barry Callebaut – creating meaningful European Consumer business offering platform for future expansion X Important steps in Gourmet & Specialties strategy implementation through X acquisition of Luijckx, high-end decoration pr
Slide 7: Further move towards higher margin business in all segments
Further move towards higher margin business in all segments … X Molding XRaw material Cocoa XCocoa X X Industrial chocolate X Packaging X Marketing purchase Liquor Powder/Butter Cocoa Gourmet & Specialities • Focus on select customers • Convenience (RTS/RTU) • Cut capacity • Luijckx • Efficient size
Slide 8: … become the market/margin leader in each category by:
… become the market/margin leader in each category by: X Building on our unparalleled know-how from the bean to the shelf X Leveraging size and market position both in sourcing and distribution X Driving innovation through leading edge R&D X Actively managing costs X Expanding service level and reac
Slide 9: Two strategic business segments
Two strategic business segments Industrial Business Food Service / Retail Business X Sourcing & Risk Management X Gourmet & Specialties X Cocoa X Consumer Europe X Food Manufacturers X Consumer North America Key figures 2002/03 Key figures 2002/03 Sales volume Tonnes 631,146 Sales revenue CHF m 2,19
Slide 10: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment Cocoa Price X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 10
Slide 11: EBIT since IPO – steady growth
EBIT since IPO – steady growth CHF m CHF/mt EBIT: CAGR = 12.5 % 250 240 234.2 230 200 227.7* 220 150 213.4 210 202.4 197.8 200 100 208.7 168.0 173.2* 148.7 190 130.2 50 180 0 170 1998/99 1999/00 2000/01 2001/02 2002/03 EBIT EBIT/tonne * Before CHF 80 m restructuring provision for Stollwerck NOVEMBER
Slide 12: EBIT not correlated to cocoa prices
EBIT not correlated to cocoa prices CHF m GBP/mt 250 2500 208.7 200 2000 168.0 173.2 * 148.7 150 1500 130.2 1425 100 1157 1000 661 713 50 619 500 0 0 1998/99 1999/00 2000/01 2001/02 2002/03 EBIT Cocoa price (Closing 31 Aug, Terminal Market Second Position) * Before CHF 80 m restructuring provision f
Slide 13: PAT and RoE since IPO – stable performance
PAT and RoE since IPO – stable performance in declining interest rate environment CHF m 105 103.2 20% 101.61 100.2 100 16.2% 97.1 15% 13.9% 13.9% 13.6% 95 13.8% 2 10% 90.0 90 4.6% 4.5% 3.4% 3.5% 3.0% 5% 85 80 0% 1998/99 1999/00 2000/01 2001/02 2002/03 Net Income (PAT) ROE BUND 5yr avg. interest rate
Slide 14: ROCE since IPO - stable performance
ROCE since IPO - stable performance in declining interest rate environment % 20 20% 18% 15.9 15.3 15.0 16% 15 13.5 14.0 14% 12% 10 10% 8% 4.6% 4.5% 6% 5 3.4% 3.5% 3.0% 4% 2% 0 0% 1998/99 1999/00 2000/01 2001/02* 2002/03 ROCE BUND 5 year avg. Interest rate * 2001/02 Ratios are calculated on a pro-for
Slide 15: Sales revenue by business unit development 1999/00 – 2002/03
Sales revenue by business unit development 1999/00 – 2002/03 CHF m 4 000 3,571 3 500 Consumer Products 901 3 000 2,549 2,622 2 500 2,410 185 Gourmet & 209 476 Specialities 578 * 427 424 2 000 614 441 496 620.3 Cocoa, Sourcing 1 500 & Risk Management 1 000 1,392 1,417 1,393 1'580 Food 500 Manucturers
Slide 16: Towards a balanced business portfolio – net sales revenue
Towards a balanced business portfolio – net sales revenue 2001/02 2002/03 2002/03 as reported Pro forma including Brachs Americas Americas excl. Brachs RoW 21% RoW Brachs 12% Americas 7% 7% 18% 27% RoW 6% Europe Europe Europe 66% 72% 64% NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analys
Slide 17: Sales revenue reconciliation
Sales revenue reconciliation 2001/02 - 2002/03 740 3571 (CHF m) 386 - 142 2622 - 35 Sales Volume & Cocoa price Currency Acquisitions Sales Revenues Margin impact Revenues 01/02 effect 02/03 + + + + + - + 715 3571 187 53 2622 -6 Sales Cocoa, Food Gourmet & Consumer Sales Revenues Sourcing & Manufactu
Slide 18: Key metrics and ratios
Key metrics and ratios 2002/03 2001/02 Profitability EBIT as % of Sales 5.8% 6.6%* EBIT as % of Gross Profit 18.3% 19.6%* EBIT per tonne 234.2 227.7* Balance sheet Debt to equity ratio 135.7% 138.4% Solvency ratio 28.0% 26.2% Net debt / EBITDA 3.1x 3.6x* Interest cover ratio 4.2x 3.5x Per share Earn
Slide 19: Key figures - Income statement
Key figures - Income statement (CHF m) % of 2002/03 % of 2001/02 revenue revenue Sales revenues 100 3,571.3 100 2,621.8 Material consumed 68.1 (2,431.0) 66.3 (1,739.0) Gross Profit 31.9 1,140.3 33.7 882.8 Ohter operating expenses 26.1 (931.6) 27.1 (709.7) Operating profit (EBIT) 5.8 208.7 6.6 173.22
Slide 20: A far better balance sheet composition
A far better balance sheet composition Improved balance sheet structure reflects refinancing transaction: massive shift from short- to long-term debt to better reflect asset structure reduced liquidity and interest rate risk Risks Costs but higher financing costs => financial ratios moving i
Slide 21: Net working capital relatively flat while sales revenue grew substantially
Net working captial relatively flat while sales revenue grew substantially CHF m / per 31 August 3'571 3500 8 7 3000 2'622 2'410 2'549 6 2500 2'262 5 2000 3.7 4 3.9 3.3 3.2 1500 2.7 3 955 1000 894 829 766 2 586 500 1 0 0 1999 2000 2001 2002 2003 Net working capital Sales revenue Sales - NWC ratio NO
Slide 22: Cash-flow statement
Cash-flow statement (in CHF m) 2002/03 2001/02 Operating cash flow before working 328.0 194.7 capital changes Working capital changes (93.2) (34.3) Cash generated from operations 234.8 160.4 Net cash flow from operating activities 119.2 84.2 Net cash flow from investing activities (98.1) (143.1) Net
Slide 23: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 23
Slide 24: Industrial Business Segment - Strong operational improvements
Industrial Business Segment - Strong operational improvements ... .... leading to substantial EBIT growth as well as overall EBIT/tonne increase X Sales volume up 1.5% resulting from: increase of 5% in Food Manufacturers, intentional reduction in Cocoa of 11.1% X EBIT up 13.9% to CHF 142.3 m. Ve
Slide 25: Industrial Business Segment
Industrial Business Segment (in CHF m) Change in % 2002/03 2001/02 Sales revenue 9.0 % 2,193.9 2,012.8 Cocoa -1.0 % 614.2 620.3 Food Manufacturers 13.4 % 1,579.7 1392.5 Sales volume (tonnes) 1.5 % 631,146 621,953 Cocoa -11.1 % 120,827 135,914 Food Manufacturers 5.0 % 510,319 486,039 EBITDA 6.5 % 214
Slide 26: Cocoa, Sourcing & Risk Management 2002/03 Reducing volatility
Cocoa, Sourcing & Risk Management 2002/03 Reducing volatility X Sales revenue CHF 614.2 million - 1.0% X Sales volume 120,827 tonnes - 11.1% X Barry Callebaut processes approx. 15% of global cocoa harvest Approx. 2/3 of the products are for in-house use Remainder sold to select third-party custo
Slide 27: Food Manufacturers 2002/03 Strong organic growth
Food Manufacturers 2002/03 Strong organic growth X Sales revenue CHF 1,579.7 million + 13.4% X Sales volume 510,319 tonnes + 5.0% X Very successful year for Food Manufacturers against generally flat or even declining markets: Mainly organic increase of more than 24,000 mt Buoyant business in Ben
Slide 28: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 28
Slide 29: Food Service/Retail Business Acquisition of Stollwerck
Food Service/Retail Business Acquisition of Stollwerck… … created meaningful European consumer business with CHF 901 million sales revenues and offering platform for further expansion X Stated results influenced by first time consolidation of Stollwerck and Luijckx in P&L X EBIT growth of 31% to CHF
Slide 30: Food Service / Retail Business
Food Service / Retail Business (in CHF m) Change in % 2002/03 2001/02 Sales revenue 126 % 1,377.4 609.0 Gourmet & Specialities 12 % 476.4 423.6 Consumer Products 386 % 901.0 185.4 EBITDA1 62 % 152.9 94.2 Operating profit (EBIT)1 31 % 104.3 79.8 Segment assets 6% 776.5 735.8 EBIT/Segment assets2 nmf
Slide 31: Gourmet & Specialties 2002/03: Again very high margins achieved
Gourmet & Specialties 2002/03: Again very high margins achieved X Sales revenue CHF 476.4 million +12.4% X Sales volume 102,928 tonnes + 4.7% X Sales revenue increase of 12.4% of which 6.3% organic Strong volume growth across all brands (Callebaut, Cacao Barry, Carma) and regions, excl. Asia-Pacif
Slide 32: Consumer Products 2002/03: Building platform for future growth
Consumer Products 2002/03: Building platform for future growth X Sales revenue CHF 901.0 million +386.1%* X Increases the Group‘s business mix in the higher margin products towards the end of the chocolate value chain No 1 in customer label business (CLB) in Germany No 2 in Belgium with Jacques
Slide 33: Stollwerck integration on track
Stollwerck integration on track Situation 2002 Status 2003 Work in progress Objectives: Achieved to-date: Objectives for 2nd phase: Restructure, get the Gubor production Restructuring of synergies and transfer 3 administration define/build business Sourcing integrated Further consolidation o
Slide 34: Consumer Products – How we will drive future growth
Consumer Products – How we will drive future growth X Capitalizing on dual strategy of offering branded and customer label products X Further streamlining of product portfolio X Stepping up speed of innovation X Structure brand portfolio into 3 levels: 1. Premium/super-premium brand with internation
Slide 35: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 35
Slide 36: Performance targets through 2005/06
Performance targets through 2005/06* X Top line growth (organic) of 5% on average - more than twice expected market growth X EBIT growth on average in the mid-teens, mainly achieved by: Year-on-year efficiency gains announced improvements on the consumer side (full impact of Stollwerk restructur
Slide 37: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 37
Slide 38: Proposals to Annual General Meeting
Proposals to Annual General Meeting (December 10, 2003) X Dividend Dividend increase from CHF 6.90 to CHF 7.00 per registered share proposed X Board composition Pierre Vermaut to retire Dr. Walther Andreas Jacobs, Chairman of Brach‘s, proposed for election Andreas Schmid (Chairman), Dr. Joha
Slide 39: Agenda
Agenda X Highlights 2002/2003 X Financial results X Business review X Industrial Business Segment X Food Service/Retail Business Segment X Performance Targets X Proposals to the AGM X Summary for investors NOVEMBER 11, 2003 Annual Results Presentation 2002/03 – Analysts Presentation 39
Slide 40: Summary
Summary Barry Callebaut is the only fully integrated chocolate company from the bean to the shelf and the world market leader The move towards higher value added products and services for all customer segments has increased our earnings power We have a strong focus on innovation – about 30% of sales