Aryzta Ag · SIX:ARYN
Aryzta — Debt Investor Presentation (March 2013)
50 slides from Aryzta's debt investor presentation, Mar 11, 2013
Slide 1: H1 Results, FY 2013 Fixed Income Investor Presentation
ARYZTA AG H1 Results, FY 2013 Fixed Income Investor Presentation 11 March 2013
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
Slide 3: Agenda
Agenda – Group Profile.................................................Owen Killian (CEO) – Financial & Business Review.......................Patrick McEniff (CFO & COO) – ATI Review and Outlook..............................Owen Killian (CEO) 3 © ARYZTA, March 2013
Slide 4: Our Business
Our Business – Global leader in speciality bakery – Primary listing in Zurich (SIX; ARYN), and secondary listing in Dublin (ISE; YZA) Reporting Segments ARYZTA AG Food Europe Food North America Food Rest of World Origin Enterprises plc 95 million shares (68.8 % Holding) Listed on the AIM in London G
Slide 5: Origin Enterprises plc – 68.8% Holding
Origin Enterprises plc – 68.8% Holding January 2013 (EUR m) Change Revenue 567.7 Ï 11.9% Underlying fully diluted EPS 7.59c1 Ï 16.2% Market Cap2 664.8 Market Value of ARYZTA holding2 457.6 – Increased seasonality following adverse 2012 Autumn planting weather in the UK – Favourable pricing boosted A
Slide 6: ARYZTA AG – Group Financial Performance
ARYZTA AG – Group Financial Performance H1 2008 – H1 2013 Underlying fully diluted EPS (cent) 9.7% CAGR EBITA (EUR m) 11.9% CAGR Revenue (EUR m) 8.8% CAGR 2,068 146.4 1,911 1,357 107.7 1,571 104.5 1,394 140.3 145.6 1,894 92.2 186 106 126 114 173 179 2008 1 2009 2010 2011 2012 2013 1 Pro forma number
Slide 7: Food Group – Financial Performance
Food Group – Financial Performance H1 2008 – H1 2013 EBITA (EUR m) 16.7% CAGR Revenue (EUR m) 13.1% CAGR 1,283 1,404 1,500 865 801 173 155 184 810 99 98 85 2008 1 2009 2010 2011 2012 2013 1 Pro forma numbers presented including Hiestand Holding AG in the 2008 comparative. 7 © ARYZTA, March 2013
Slide 8: ARYZTA AG Financial and Business Review
ARYZTA AG Financial and Business Review 8 © ARYZTA, March 2013
Slide 9: H1 2013 Key Highlights
H1 2013 Key Highlights Food Group Origin Total Group Revenue Ï 6.9% Ï 11.9% Ï08.2% EBITA Ï 6.3% Ð (59.3%) Ï04.2% Underlying fully diluted net profit Ï 5.1% Ï 16.2% Ï05.6% – ARYZTA Group underlying fully diluted net profit increased 5.6% – Underlying fully diluted EPS increased 0.5% to 146.4c. – EPS
Slide 10: ARYZTA Group – Income Statement
ARYZTA Group – Income Statement 6 month period ended 31 January 2013 in Euro ’000 January 2013 January 2012 % Group revenue 2,067,994 1,911,456 8.2% EBITA 186,311 178,832 4.2% EBITA margin 9.0% 9.4% Associates and JVs, net 11,069 7,567 EBITA incl. associates and JVs 197,380 186,399 5.9% Finance cost
Slide 11: ARYZTA Group – Underlying Revenue Growth
ARYZTA Group – Underlying Revenue Growth 6 month period ended 31 January 2013 Food North Food Total in Euro million Food Europe America Rest of World Food Group Origin Total Group revenue 641.6 740.5 118.2 1,500.3 567.7 2,068.0 Underlying growth 0.5% 2.2% 5.6% 1.7% 5.4% 2.7% Acquisitions - 2.7% 4.8%
Slide 12: ARYZTA Group – Segmental EBITA
ARYZTA Group – Segmental EBITA 6 month period ended 31 January 2013 in Euro ’000 January 2013 January 2012 % Food Group Food Europe 77,611 74,164 4.6% Food North America 90,738 84,955 6.8% Food Rest of World 15,576 13,851 12.5% Total Food Group 183,925 172,970 6.3% Origin 2,386 5,862 (59.3)% Total G
Slide 13: Food Group – Income Statement
Food Group – Income Statement 6 month period ended 31 January 2013 in Euro ’000 January 2013 January 2012 % Group revenue 1,500,314 1,404,035 6.9% EBITA 183,925 172,970 6.3% EBITA margin 12.3% 12.3% JVs, net 203 502 EBITA incl. JVs 184,128 173,472 6.1% Finance costs, net (30,333) (28,555) Hybrid ins
Slide 14: Food Group – Cash Generation
Food Group – Cash Generation 6 month period ended 31 January 2013 Period ended Period ended in Euro ’000 31 January 2013 31 January 2012 EBIT 135,188 125,960 Amortisation 48,737 47,010 EBITA 183,925 172,970 Depreciation 46,252 43,838 EBITDA 230,177 216,808 Working capital movement (14,987) (31,428)
Slide 15: Food Group Net Debt and Investment Activity
Food Group Net Debt and Investment Activity 6 month period ended 31 January 2013 Period ended Period ended in Euro ’000 31 January 2013 31 January 2012 Food Group opening net debt as at 1 August (976,283) (955,468) Cash flows generated from activities 170,956 131,242 Net debt cost of acquisitions (2
Slide 16: Food Group Financing
Food Group Financing Excluding Origin – non-recourse financing facilities Debt Financing – Food Group net debt of EUR 884.1m – Food Group gross term debt weighted average maturity of circa 5.38 years1 – Weighted average interest cost of Food Group debt financing facilities (including overdrafts) of
Slide 17: Food Group Non-Recurring Costs
Food Group Non-Recurring Costs Strategic repositioning Food Group non-recurring costs for 6 month period ending 31 January 2013 in Euro ’000 Non-Cash Cash Total Net loss on acquisition, disposals and dilution (705) – (705) Transaction related costs – (3,797) (3,797) Asset write-downs and fair value
Slide 18: Business Review
Business Review 6 month period ended 31 January 2013 – Food Europe – Food North America – Food Rest of World – Food Financial Metrics 18 © ARYZTA, March 2013
Slide 19: Inflationary Input Trends
Inflationary Input Trends +12.6% +40.4% +13.0% +17.6% Growth in global Growth in cumulative Growth in wheat Growth in sugar population over the real GDP over the last consumption over consumption over last 10 years 10 years the last 10 years the last 10 years +38.7% +45.2% +24.6% +2.1% Growth in glo
Slide 20: Food Europe
Food Europe 6 month period ended 31 January 2013 17 Bakeries and Kitchens Revenue €641.6m, +2.0% Underlying revenue +0.5% Currency +1.5% EBITA €77.6m, +4.6% EBITA margin 12.1% (up from 11.8%) – Hour-glass economy impact in most markets – Robust performance in challenging market – Return to positive
Slide 21: Food North America
Food North America 6 month period ended 31 January 2013 25 Bakeries and Kitchens Revenue €740.5m, +10.6% Underlying revenue 2.2% Acquisitions +2.7% Currency +5.7% EBITA €90.7m, +6.8% EBITA margin 12.3% (down from 12.7%) Hawaii – Hour-glass economy becoming more pronounced – Solid like for like growt
Slide 22: Food Rest of World
Food Rest of World 6 month period ended 31 January 2013 11 Bakeries and Kitchens Revenue €118.2m, +11.8% Underlying revenue +5.6% Acquisitions +4.8% Currency +1.4% EBITA €15.6m, +12.5% EBITA margin 13.2% (up from 13.1%) – Growth trends remain robust for revenue and EBITA – Margins benefited from non
Slide 23: Food Group Underlying Revenue Growth
Food Group Underlying Revenue Growth Quarterly Underlying Revenue Growth Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Food Europe 2.9% 2.3% 1.2% (1.8)% (2.6)% (0.7)% (0.2)% 1.2% Food North America 8.9% 7.1% 6.0% 8.9% 6.0% 7.2% 1.3% 3.0% Food Rest of World 6.2% 21.3% 14.7% 14.2% 11
Slide 24: Food Group Underlying Revenue Growth
Food Group Underlying Revenue Growth Channel and geographic rebalancing 25.0% 20.0% High dependency on Independents and 15.0% Europe (especially Channel and geographic ROI & UK) rebalancing 10.0% 5.0% 0.0% (5.0%) (10.0%) (15.0%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2009 2009 20
Slide 25: ARYZTA Food Group – Repositioning
ARYZTA Food Group – Repositioning FY 2008 – FY 2012 2008 (pro forma) 1 2012 (EUR 1.6bn) (EUR 2.9bn) Food Rest of World Food Rest of World 1% Food North America 8% Food North America 28% 48% Geographic Geographic Mix Mix Food Europe Food Europe 71% 44% Quick Serve Restaurant 4% Large Retail Large Ret
Slide 26: Investment Update
Investment Update – Acquired two small businesses in North America > Complementary baking assets > Accelerates network reconfiguration – Disposed of small joint venture in North America – Subsequent event > Announced acquisition of Klemme AG in Germany, subject to regulatory approval > Consideration
Slide 27: Channel Mix Repositioning in Europe
Channel Mix Repositioning in Europe 2008 2012 Post Klemme Convenience & Convenience & Convenience & Independent Retail Independent Retail Independent Retail 80% 65% 55% – 80% dependency on Convenience and Independent Retail channel in 2008 – While still an important channel for ARYZTA, suffering fro
Slide 28: Food Group ATI Review and Outlook
Food Group ATI Review and Outlook 28 © ARYZTA, March 2013
Slide 29: ARYZTA Transformation Initiative (ATI) September 2011 Targets
ARYZTA Transformation Initiative (ATI) September 2011 Targets – September 2011 announced three-year ARYZTA Transformation Initiative – Objective to create customer centric integrated, fully functioning organisation – Target to improve ROIC to 15% on FY 2011 underlying Food assets by 2015 – Requires
Slide 30: Repositioning in North America
Repositioning in North America – Customer Centric strategy progressing well with cross functional teams in place – Formerly separate businesses now operating as one with single instance ERP – Excellent management engagement in customer centric teams – New acquisitions providing greater bakery select
Slide 31: Repositioning in Europe
Repositioning in Europe – 18 months behind North America on ERP rollout – Greater complexity with separate businesses across eight countries – Weaker consumer sentiment adversely impacting volumes – Higher than anticipated cost reductions required to maintain margins and competitiveness – 2015 targe
Slide 32: Midpoint ATI Investment Review Guidance
Midpoint ATI Investment Review Guidance – Excellent progress on ATI – ERP operational in North America – Rolling out in Europe in line with business integration – One-off costs higher than September 2011 guidance – Reflects acquisitions (+15%) and additional cost reduction measures including exiting
Slide 33: Outlook
Outlook – Focused on completing ATI programme in FY 2014 – Customer centric strategy essential for future organic growth – Acquisitions to add bakery capability/capacity and customer/geographic access – Maintain investment grade credit rating – Consensus FY 2013 underlying fully diluted EPS, includi
Slide 34: Appendix – Origin Financials
ARYZTA AG Appendix 1 – Origin Financials 34 © ARYZTA, March 2013
Slide 35: Origin Income Statement
Origin Income Statement 6 month period ended 31 January 2013 in Euro ’000 January 2013 January 2012 % Group revenue 567,680 507,421 11.9% EBITA 2,386 5,862 (59.3)% EBITA margin 0.4% 1.2% Associates and JVs, net 10,866 7,065 EBITA incl. associates and JVs 13,252 12,927 2.5% Finance costs, net (3,034)
Slide 36: Origin Underlying Net Profit Rec.
Origin Underlying Net Profit Rec. 6 month period ended 31 January 2013 in Euro ’000 January 2013 Reported net profit 6,701 Intangible amortisation 2,901 Tax on amortisation (586) Net acquisition, disposal and restructuring related costs 1,791 Tax on net acquisition, disposal and restructuring relate
Slide 37: Appendix – Other Financial Information and Presentation Glossary
ARYZTA AG Appendix 2 – Other Financial Information and Presentation Glossary 37 © ARYZTA, March 2013
Slide 38: Food Group FY 2013 Financial Metrics Updated
Food Group FY 2013 Financial Metrics Updated Current Estimates Depreciation p.a. €95 – 105m Amortisation p.a. €100 – 110m Effective tax rate 17% – 20% Finance costs p.a. €75 – 85m Dividend payout of underlying EPS p.a. 15% Maintenance capex p.a. €50 – 60m Investment grade status maintain 38 © ARYZTA
Slide 39: ARYZTA Group Underlying Net Profit Rec.
ARYZTA Group Underlying Net Profit Rec. 6 month period ended 31 January 2013 in Euro ’000 January 2013 Reported net profit 62,051 Intangible amortisation 51,638 Tax on amortisation (13,158) Hybrid instrument accrued dividend (8,234) Net acquisition, disposal and restructuring related costs 44,501 Ta
Slide 40: Food Group Underlying Net Profit Rec.
Food Group Underlying Net Profit Rec. 6 month period ended 31 January 2013 in Euro ’000 January 2013 Reported net profit1 57,439 Intangible amortisation 48,737 Tax on amortisation (12,572) Hybrid instrument accrued dividend (8,234) Net acquisition, disposal and restructuring related costs 42,710 Tax
Slide 41: ARYZTA Group Balance Sheet
ARYZTA Group Balance Sheet as at 31 January 2013 in Euro ’000 As at January 2013 As at July 2012 Property, plant and equipment 1,014,711 1,022,587 Investment properties 29,061 29,268 Goodwill and intangible assets 2,708,698 2,871,982 Associates and joint ventures 127,607 127,384 Other financial asse
Slide 42: Food Group Balance Sheet
Food Group Balance Sheet as at 31 January 2013 in Euro ’000 As at January 2013 As at July 2012 Property, plant and equipment 925,812 931,439 Investment properties 15,753 15,960 Goodwill and intangible assets 2,576,745 2,729,340 Joint ventures – 2,545 Working capital (66,940) (57,782) Other segmental
Slide 43: Food Group Financing Facilities
Food Group Financing Facilities Excluding Origin – non-recourse financing facilities Debt Funding Principal 1 Maturity Nov 2011 – Syndicated Bank Loan CHF 970m Dec 2016 May 2010 – US Private Placement USD 420m /EUR 25m May 2013 – May 2022 Dec 2009 – US Private Placement USD 200m Dec 2021 – Dec 2029
Slide 44: Food Group Gross Term Debt Maturity Profile
Food Group Gross Term Debt Maturity Profile weighted average maturity c. 5.38 years 4% 9% 14% 3% 16% 17% 33%2 4% 3% 2% 9% 11% 3% 5% 1 The term debt maturity profile is set out as at 31 January, 2013. Food Group gross term debt at 31 January 2013 is €1.18bn. Food Group net debt at 31 January 2013 is
Slide 45: ARYZTA Group – Return on Invested Capital
ARYZTA Group – Return on Invested Capital Food Food North Food Rest Total in Euro million Europe America of World Food Group Origin Total 31 January 2013 Group share net assets1 1,392 1,719 272 3,383 4693 3,8523 EBITA incl. associates and JVs2 173 184 31 388 83 471 ROIC 12.4% 10.7% 11.3% 11.5% 17.6%
Slide 46: EUR Average and Closing FX Rates
EUR Average and Closing FX Rates Closing Rates January 2013 July 2012 % Swiss Franc 1.2450 1.2010 3.7% US Dollar 1.3450 1.2370 8.7% Canadian Dollar 1.3393 1.2393 8.1% Sterling 0.8522 0.7854 8.5% Average Rates January 2013 January 2012 % Swiss Franc 1.2095 1.2019 0.6 % US Dollar 1.2886 1.3586 (5.2)%
Slide 47: ARYZTA Consensus Estimates March 2013
ARYZTA Consensus Estimates1 March 2013 FY 2013 Mean High Low Based on 13 analysts Underlying EPS 363.5c 377.0c 353.0c FY 2014 Mean High Low Based on 12 analysts Underlying EPS 401.9c 423.0c 383.0c FY 2015 Mean High Low Based on 10 analysts Underlying EPS 443.0c 471.0c 419.0c 1 Forecasts as of 8 Marc
Slide 48: Presentation Glossary
Presentation Glossary – 'EBITA' – presented before non-recurring items and related tax credits. ERP 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 earnings before
Slide 49: Thank you!
ARYZTA AG Thank you! 49 © ARYZTA, March 2013
Slide 50: 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 50 © ARYZTA, March 2013