Aryzta Ag · SIX:ARYN

Aryzta — FY2011 Earnings Presentation

62 slides from Aryzta's earnings presentation, Sep 26, 2011

  1. Slide 1: FY 2011 Results

    ARYZTA AG FY 2011 Results 26 September 2011

  2. Slide 2: Forward Looking Statement

    Forward Looking Statement This document contains forward looking statements which reflect management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking

  3. Slide 3: Agenda

    Agenda – Our Business – Financial and Business Review – Strategic Roadmap – Summary and Outlook 3 © ARYZTA, September 2011

  4. Slide 4: Our Business

    ARYZTA AG Our Business 4 © ARYZTA, September 2011

  5. Slide 5: Our Business

    Our Business – Global food business > Leader in speciality bakery – Zurich based Swiss AG > Operations in Europe, North and South America, South East Asia, Australia and New Zealand – Listed in Zurich (SIX; ARYN), and secondary listing in Dublin (ISE; YZA) Reporting Segments ARYZTA AG Food Europe Fo

  6. Slide 6: Food Group – Global Footprint

    Food Group – Global Footprint Revenue EUR 2.6bn Food North America 47% Food Europe 46% Food Rest of World 7% EBITA EUR 322m Food North America 46% Food Europe 46% 48 Manufacturing Centres 100 Distribution Centres Food Rest of World 19 Countries 8% 6 © ARYZTA, September 2011

  7. Slide 7: Food Group – Channel and Product Mix

    Food Group – Channel and Product Mix Customer Channel Mix1 Product Mix1 EUR 2.6 bn EUR 2.6 bn Limited Serve Other Foodservice Sweet Baked Goods & Restaurant Bread Rolls & Morning Goods 31% 25% Artisan Loaves 35% 44% Convenience & Independent Retail 21% Large Retail Savoury & Other 23% 21% Pro Forma

  8. Slide 8: Origin Enterprises plc – 71.4% Holding

    Origin Enterprises plc – 71.4 % Holding Origin Enterprises plc Origin is a leading agri-services group focused on integrated agronomy and agri-inputs, with operations in the UK, Ireland and Poland. ARYZTA AG is the majority shareholder (71.4%) in Origin Enterprises plc, which has a listing on the AI

  9. Slide 9: Origin Enterprises plc

    Origin Enterprises plc Journey and positioning Phase 1 Phase 2 Phase 3 2006 2007 2009 2010 2011 Origin’s IPO Marine Consumer Feed formation Proteins & Oils Foods Consolidation Specialist focus on original Realignment of business portfolio Repositioned for growth activities of IAWS Reducing complexit

  10. Slide 10: Development of Business 2008-2011

    ARYZTA AG Development of Business 2008-2011 (Since Creation of ARYZTA AG) 10 © ARYZTA, September 2011

  11. Slide 11: ARYZTA AG – Group Financial Performance

    ARYZTA AG – Group Financial Performance FY 2008 – FY 2011 Underlyingfully Underlying fully dilutedEPS diluted EPS(cent) (cent) 15% CAGR EBITA EBITA(EUR (EURm) m) 17% CAGR Revenue (EUR m) Revenue (EUR m) 7% CAGR 202.2 3,134 234.7 3,212 244.0 3,010 310.1 3,877 245 280 273 393 20081 2009 2010 2011 1 Pr

  12. Slide 12: Food Group – Financial Performance

    Food Group – Financial Performance FY 2008 – FY 2011 EBITA(EUR EBITA (EURm) m) 23% CAGR Revenue (EUR m) Revenue (EUR m) 16% CAGR 1,635 1,713 1,679 2,577 174 205 207 322 20081 2009 2010 2011 1 Pro forma numbers presented including Hiestand Holding AG in the 2008 comparative. 12 © ARYZTA, September 20

  13. Slide 13: Geographic diversification

    Food Group Geographic diversification Pro Forma Revenue 20081 Revenue 2011 EUR 1.6 bn EUR 2.6 bn Food North America Food Europe Food North America Food Europe 47% 46% 28% 71% Food Rest of World 1% Food Rest of World 7% 1 Pro forma numbers presented including Hiestand Holding AG in the 2008 comparati

  14. Slide 14: Diversification of the customer channel mix

    Food Group Diversification of the customer channel mix Customer Channel Mix 20081 Customer Channel Mix 2011 EUR 1.6 bn EUR 2.6 bn Limited Serve Limited Serve Restaurant Restaurant Other Foodservice 4% Other Foodservice 31% 25% 39% Convenience & Independent Retail Convenience & 33% Large Retail Indep

  15. Slide 15: Expansion of product capability

    Food Group Expansion of product capability Product Mix 20081 Product Mix 2011 EUR 1.6 bn EUR 2.6 bn Bread Rolls & Sweet Baked Goods & Bread Rolls & Morning Goods Sweet Baked Goods& Artisan Loaves Artisan Loaves Morning Goods 44% 35% 37% 43% Savoury&Other 20% Savoury & Other 21% 1 Pro forma numbers p

  16. Slide 16: Financial and Business Review

    ARYZTA AG Financial and Business Review 16 © ARYZTA, September 2011

  17. Slide 17: ARYZTA AG – Income Statement

    ARYZTA AG – Income Statement Year ended 31 July 2011 in Euro ’000 July 2011 July 2010 % Group revenue 3,876,923 3,009,726 28.8% EBITA 393,326 272,973 44.1% EBITA margin 10.1% 9.1% Associates and JVs, net 19,479 31,613 EBITA incl. associates and JVs 412,805 304,586 35.5% Finance cost, net (67,916) (5

  18. Slide 18: ARYZTA AG – Underlying Revenue Growth

    ARYZTA AG – Underlying Revenue Growth Year ended 31 July 2011 Food N. Food Total in Euro million Food Europe America Rest of World Food Group Origin1 Total Group revenue 1,184.9 1,212.5 180.0 2,577.4 1,299.5 3,876.9 Underlying growth 0.9% 5.3% 17.0% 2.7% 11.8% 6.7% Acquisitions & disposals 7.1% 106.

  19. Slide 19: ARYZTA AG – Segmental EBITA

    ARYZTA AG – Segmental EBITA Year ended 31 July 2011 in Euro ’000 July 2011 July 2010 % Food Group Food Europe 149,038 131,245 13.6% Food North America 148,673 69,911 112.7% Food Rest of World 24,601 5,963 312.6% Total Food Group 322,312 207,119 55.6% Origin 71,014 65,854 7.8% Total Group EBITA 393,3

  20. Slide 20: Food Group – Income Statement

    Food Group – Income Statement Year ended 31 July 2011 in Euro ’000 July 2011 July 2010 % Group revenue 2,577,420 1,679,417 53.5% EBITA 322,312 207,119 55.6% EBITA margin 12.5% 12.3 % JVs, net 4,622 20,041 EBITA incl. JVs 326,934 227,160 43.9% Finance costs, net (57,406) (36,272) Hybrid instrument ac

  21. Slide 21: Food Group – Cash Generation

    Food Group – Cash Generation Year ended 31 July 2011 in Euro ’000 July 2011 July 2010 EBIT 235,780 160,252 Amortisation 86,532 47,450 EBITA 322,312 207,702 Depreciation 86,479 60,363 EBITDA 408,791 268,065 Working capital movement1 (12,970) 24,818 Dividends received2 13,138 24,158 Maintenance capita

  22. Slide 22: Food Group Net Debt and Investment Activity

    Food Group Net Debt and Investment Activity Year ended 31 July 2011 in Euro ’000 FY 2011 FY 2010 Food Group opening net debt as at 31 July 2010 (1,115,623) (505,504) Cash flows generated from activities 271,947 251,018 Hybrid instrument proceeds 285,004 – Cost of acquisitions (317,674) (860,313) Sha

  23. Slide 23: Food Group Financing

    Food Group Financing Excluding Origin – non-recourse financing facilities Debt Financing – Food Group net debt of EUR 955.5m – Food Group gross term debt weighted average maturity of circa 6.2 years – Weighted average interest cost of Food Group financing facilities of circa 4.28%1 – Net debt: EBITD

  24. Slide 24: ARYZTA AG – Return on Investment

    ARYZTA AG – Return on Investment as at 31 July 2011 Food Food N. Food Rest Total in Euro million Europe America of World Food Group Origin Total 2011 Group share net assets1 1,368 1,635 253 3,256 4343 3,690 EBITA incl. associates and JVs2 149 157 26 332 86 418 ROI 10.9% 9.6% 10.1% 10.2 % 19.8 % 11.3

  25. Slide 25: Food Group Non-Recurring Items

    Food Group Non-Recurring Items Strategic repositioning Strategic repositioning costs for financial year ending 31 July 2011 in Euro ’000 Non-Cash Cash Total Maidstone fair value gain on existing 50% at acquisition 121,391 – 121,391 Asset write-down arising on integration (43,039) – (43,039) Costs ar

  26. Slide 26: Dividend

    Dividend – Proposed dividend > 15 % of underlying fully diluted EPS > 310.1 cent x 15 % = 46.52 cent (CHF 0.56791) > Euro increase of 27.1% year-on-year > No longer subject to withholding tax – Timetable for dividend > Shareholder approval 1 December 2011 (General Assembly) > Expected ex-date 27 Jan

  27. Slide 27: Business Review

    Business Review Year ended 31 July 2011 – Food Europe – Food North America – Food Rest of World – Summary 27 © ARYZTA, September 2011

  28. Slide 28: Operating Environment – Inflationary

    Operating Environment – Inflationary Inflation/ Volatility for Primary Food Products – Significant volatility continuing – Working closely with customers to 150 % 120 % minimise the impact of input inflationary pressures 90 % – Efficiencies, change in product mix 60 % and dynamic pricing being deplo

  29. Slide 29: Food Europe

    Food Europe Year ended 31 July 2011 15 Manufacturing Centres 45 Distribution Centres 11 Countries Revenue €1.2bn, +10.5% Underlying revenue +0.9% Acquisitions & disposals +7.1% Currency +2.5% EBITA €149.0m, +13.6% Positive EBITA margin expansion of 40bps to 12.6% 1–60 people per km2 > 60 people per

  30. Slide 30: Food North America

    Food North America Year ended 31 July 2011 25 Manufacturing Centres 42 Distribution Centres 2 Countries Revenue €1.2bn, +112% Underlying revenue +5.3% Acquisitions & disposals +107% Currency +0.3% EBITA €148.7m, +113% Positive EBITA margin expansion of 10bps to 12.3% 1–60 people per km2 Hawaii > 60

  31. Slide 31: Food Rest of World

    Food Rest of World Year ended 31 July 2011 8 Manufacturing Centres 13 Distribution Centres 6 Countries Revenue €180m, +403% Underlying revenue +17.0% Acquisitions & disposals +374% Currency +11.8% EBITA €24.6m, +313% EBITA margin 13.7% (down from 16.6%) 1–60 people per km2 > 60 people per km2 – Japa

  32. Slide 32: Summary FY 2011

    Summary FY 2011 – Robust performance from underlying business in FY 2011 despite very challenging trading conditions > Focused on added value speciality bakery > Well developed customer relationships > Well diversified geographic, channel and customer base > Efficient balance sheet and balanced FX p

  33. Slide 33: Acquisition Update

    Acquisition Update – EUR 100m committed to: > Completion of Taiwan and Singapore acquisitions (expected in Q11) > Acquisition of a UK manufacturing business of flatbreads with focus on retail channel – Aligned with strategy to diversify geographies, channels and products – Expected to add EUR 78m in

  34. Slide 34: Food Group Key Financial Metrics

    Food Group Key Financial Metrics Depreciation p.a. €85 – 90m Amortisation p.a. €90 – 95m Effective tax rate 16% – 20% Finance costs p.a. €70 – 75m Dividend payout of underlying EPS p.a. 15% Maintenance capex p.a. €50m Investment grade status maintain Internal investment expenditure p.a. €100m Non-re

  35. Slide 35: Strategic Roadmap

    Food Group Strategic Roadmap 35 © ARYZTA, September 2011

  36. Slide 36: Macro Environment: Context

    Macro Environment: Context – Weak economic conditions in mature markets – Input price inflation Outlook – Financial market volatility – Weak consumer spending – Consumer switching channels leading to increased competition between customers Implications – Promotional activity remains elevated – Lever

  37. Slide 37: ARYZTA Transformation Initiative: Progress

    ARYZTA Transformation Initiative: Progress Critical enabler in transforming the ARYZTA business – FY 2012 will be a year of significant change for the Group operationally – Investing EUR 100m per annum in transformation initiative in next 3 years > Supply chain optimisation > Investment in ERP 2010

  38. Slide 38: ATI – Revenue opportunities

    ARYZTA Transformation Initiative (ATI) Revenue opportunities – Progressive revenue enhancement for entire product portfolio from > Leveraging excellent customer relationships for cross-selling opportunities > Developing single sales contact across customer base > Providing full availability of entir

  39. Slide 39: ATI – Benefits of standardising processes

    ARYZTA Transformation Initiative (ATI) Benefits of standardising processes – Standardisation > Master file data, reporting and KPIs > Operating processes throughout manufacturing and logistics > Data management > Performance measurement > Operational and financial controls – Benefits > Improved cust

  40. Slide 40: ATI – Leadership

    ARYZTA Transformation Initiative (ATI) Leadership – Transformation requires leadership and ownership – Passionate and committed management resources throughout the Group – Excellent knowledge of business, market channels and customer requirements – Leadership reorganised post year end to align with

  41. Slide 41: FY 2011 Summary & Outlook

    FY 2011 Summary & Outlook – Global repositioning with more balanced earnings flow – Customer and channel repositioning with better balanced access to consumers – Diversified sources of finance - investment grade with long maturity – ATI development to create global food business – FY 2012 consensus

  42. Slide 42: Appendix – Origin Financials

    ARYZTA AG Appendix 1 – Origin Financials 42 © ARYZTA, September 2011

  43. Slide 43: Origin Income Statement

    Origin Income Statement Year ended 31 July 2011 in Euro ’000 July 2011 July 2010 % Group revenue 1,299,503 1,330,309 (2.3)% EBITA 71,014 65,854 7.8% EBITA margin 5.5 % 5.0 % Associates and JV, net 14,857 11,572 EBITA incl. associates and JV 85,871 77,426 10.9% Financing costs, net (10,510) (15,213)

  44. Slide 44: Origin Underlying Net Profit Rec.

    Origin Underlying Net Profit Rec. Year ended 31 July 2011 in Euro ’000 July 2011 Reported net profit 45,798 Intangible amortisation 4,295 Tax on amortisation (1,663) Net loss on transfer of Origin Food and Feed businesses to associates 11,010 Tax on transfer of Origin Food and Feed businesses to ass

  45. Slide 45: Appendix – Other Financial Information and Presentation Glossary

    ARYZTA AG Appendix 2 – Other Financial Information and Presentation Glossary 45 © ARYZTA, September 2011

  46. Slide 46: ARYZTA AG Underlying Net Profit Rec.

    ARYZTA AG Underlying Net Profit Rec. Year ended 31 July 2011 in Euro ’000 July 2011 Reported net profit 212,657 Intangible amortisation 90,827 Tax on amortisation (18,691) Gain on acquisitions, disposals and asset impairments (56,656) Integration and rationalisation related costs 66,692 Hybrid instr

  47. Slide 47: Food Group Underlying Net Profit Rec.

    Food Group Underlying Net Profit Rec. Year ended 31 July 2011 in Euro ’000 July 2011 Reported net profit 179,948 Intangible amortisation 86,532 Tax on amortisation (17,028) Gain on acquisitions, disposals and asset impairments (67,666) Integration and rationalisation related costs 66,692 Hybrid inst

  48. Slide 48: ARYZTA AG Balance Sheet

    ARYZTA AG Balance Sheet as at 31 July 2011 in Euro ’000 As at July 2011 As at July 2010 Property, plant and equipment 939,949 945,100 Investment properties 32,180 20,648 Goodwill and intangible assets 2,650,956 2,280,763 Associates and joint ventures 124,057 162,881 Other financial assets 35,013 – W

  49. Slide 49: Food Group Balance Sheet

    Food Group Balance Sheet as at 31 July 2011 in Euro ’000 As at July 2011 As at July 2010 Property, plant and equipment 845,693 815,918 Investment properties 16,178 4,646 Goodwill and intangible assets 2,520,450 2,166,168 Joint ventures 4,976 73,140 Investment in Origin 51,045 51,045 Working capital

  50. Slide 50: Food Group Financing Facilities

    Food Group Financing Facilities Excluding Origin – non-recourse financing facilities Debt Funding Principal 1 Maturity May 2010 – Syndicated Bank Loan CHF 600m Dec 2014 May 2010 – U.S. Private Placement USD 420m /EUR 25m May 2013 – May 2022 Dec 2009 – U.S. Private Placement USD 200m Dec 2021 – Dec 2

  51. Slide 51: Food Group Gross Term Debt Maturity Profile

    Food Group Gross Term Debt Maturity Profile weighted average maturity c. 6.2 years Gross Term Debt Maturity Profile1 Gross Term Debt Maturity Profile 1 2012 2013 4% 2014 9% 2015 37% 2016 2% 2017 14% 2018 3% 2019 3% 2020 2% 2021 9% 2022 10% 2025 2% 2030 5% 1 Profile of term debt maturity is set out a

  52. Slide 52: Fair Value Gain on Maidstone Acquisition

    Fair Value Gain on Maidstone Acquisition – A non cash gain on 50% Maidstone Bakeries previously owned being recorded (under revised IFRS 3 implemented as required for the year ended 31 July 2010) > EUR 121.4m1 (CAD 172.2m) based on multiple of 10.2 x EBITDA in Canadian Dollar million Pro forma TTM E

  53. Slide 53: Food Group Underlying Revenue Growth

    Food Group Underlying Revenue Growth Quarterly Underlying Revenue Growth Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Food Europe (2.4)% 0.7% 2.9% 2.3% 0.9% Food North America (1.4)% 5.9% 8.9% 7.1% 5.3% Food Rest of World 18.5% 18.3% 6.2% 21.3% 17.0% Total Food Group (1.7)% 2.5% 4.9% 4.7% 2.7% 53 © ARYZT

  54. Slide 54: Presentation Glossary

    Presentation Glossary – 'EBITA' – presented before non-­recurring items and related deferred tax credits. SAP intangible asset amortisation is treated as depreciation. – 'Associates and JVs, net' – presented as profit from associates and JVs, net of taxes and interest. – 'EBITDA' – presented as earn

  55. Slide 55: Appendix – FX Analysis & Consensus Estimates

    ARYZTA AG Appendix 3 – FX Analysis & Consensus Estimates 55 © ARYZTA, September 2011

  56. Slide 56: FX Rates July 2010 and July 2011

    FX Rates July 2010 and July 2011 July 2011 July 2010 % Closing Rates Swiss Franc 1.1464 1.3616 (15.8) % US Dollar 1.4323 1.3079 9.5% Canadian Dollar 1.3620 1.3546 0.5 % Sterling 0.8761 0.8373 4.6 % Average Rates Swiss Franc 1.2862 1.4621 (12.0) % US Dollar 1.3762 1.3811 (0.4)% Canadian Dollar 1.3676

  57. Slide 57: EURUSD Trend

    EURUSD Trend Year ended 31 July 2011 1.4825 1.50 1.4323 Average Monthly Rate 1.45 Closing Monthly Rate 1.40 1.3762 1.35 1.3079 1.3079 1.30 1.2931 1.25 1.2708 1.20 July ’10 Sept ’10 Nov ’10 Jan ’11 Mar ’11 May ’11 July ’11 57 © ARYZTA, September 2011

  58. Slide 58: EURCHF Trend

    EURCHF Trend Year ended 31 July 2011 1.40 1.3616 1.3678 1.3616 Average Monthly Rate 1.35 Closing Monthly Rate 1.30 1.2862 1.25 1.20 1.15 1.1464 1.10 July ’10 Sept ’10 Nov ’10 Jan ’11 Mar ’11 May ’11 July ’11 58 © ARYZTA, September 2011

  59. Slide 59: Food Group Revenue by Currency

    Food Group Revenue by Currency Currency Mix1 Euro 29% U.S. Dollar 43% Other Currencies2 28% 1 Based on FY 2011 Food Group revenue of €2.6bn. 2 Other currencies comprises of the following: UK Sterling, Swiss Franc, Japanese Yen, Malaysian Ringgit, Polish Zloty, Swedish Krona, Australian Dollar, Canad

  60. Slide 60: ARYZTA FY 2012 Consensus Estimates

    ARYZTA FY 2012 Consensus Estimates* September 2011 in Euro million mean Based on 8 analysts EBITA including associates & JVs1 438.6 Underlying fully diluted net profit2 278.2 Underlying EPS (cent)2 338.0 1 EBITA presented before impact of non-recurring items. Associates and JVs presented after inter

  61. Slide 61: Thank you!

    ARYZTA AG Thank you! 61 © ARYZTA, September 2011

  62. Slide 62: Investor Information

    Investor Information Company Contact Paul Meade Communications Officer ARYZTA AG Talacker 41 8001 Zurich Switzerland Tel: +41 (0) 44 583 42 00 Fax: +41 (0) 44 583 42 49 info@aryzta.com www.aryzta.com 62 © ARYZTA, September 2011

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