Aryzta Ag · SIX:ARYN
Aryzta — H1 2012 Earnings Presentation
57 slides from Aryzta's earnings presentation, Mar 12, 2012
Slide 1: H1 Results, FY 2012
ARYZTA AG H1 Results, FY 2012 12 March 2012
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 – Our Business – Financial and Business Review – Operating Environment – Food Group ARYZTA Transformation Initiative (ATI) – Summary and Outlook 3 © ARYZTA, March 2012
Slide 4: Our Business
ARYZTA AG Our Business 4 © ARYZTA, March 2012
Slide 5: 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 (71.4 % Holding) Listed on the AIM in London G
Slide 6: Food Group – Global Footprint
Food Group – Global Footprint Year ended 31 July 2011 Food Group Revenue EUR 2.6bn Food North America 47% Food Europe 46% Food Rest of World 7% Food Group EBITA1 EUR 322m Food North America 46% Food Europe 48 Manufacturing Centres 46% 100 Distribution Centres Food 19 Countries Rest of World 8% 1 See
Slide 7: Food Group – Channel and Food Mix
Food Group – Channel and Food Mix Year ended 31 July 2011 Customer Channel Mix1 Food Mix EUR 2.6 bn EUR 2.6 bn Limited Serve Restaurant Other Foodservice Sweet Baked Goods & Bread Rolls & Morning Goods1 31% 25% Artisan Loaves 35% 44% Convenience & Independent Retail 21% Large Retail Savoury & Other2
Slide 8: Origin Enterprises plc – 71.4% Holding
Origin Enterprises plc – 71.4 % Holding – Listed separately in 2007 – Independently managed and financed – Leading agri-services group – Highly consistent cash generation business in highly predictable sector – Significant repositioning undertaken since listing – Accounted for 18% of ARYZTA Group EB
Slide 9: Financial and Business Review
ARYZTA AG Financial and Business Review 9 © ARYZTA, March 2012
Slide 10: ARYZTA Group – Income Statement
ARYZTA Group – Income Statement 6 month period ended 31 January 2012 in Euro ’000 January 2012 January 2011 % Group revenue 1,911,456 1,894,272 0.9% EBITA 178,832 173,118 3.3% EBITA margin 9.4% 9.1% Associates and JVs, net 7,567 10,729 EBITA incl. associates and JVs 186,399 183,847 1.4% Finance cost
Slide 11: ARYZTA Group – Underlying Revenue Growth
ARYZTA Group – Underlying Revenue Growth 6 month period ended 31 January 2012 Food N. Food Total in Euro million Food Europe America Rest of World Food Group Origin Total Group revenue 629.0 669.3 105.7 1,404.0 507.4 1,911.4 Underlying growth (0.3)% 7.5% 14.5% 4.4% 6.1% 4.9% Acquisitions and disposa
Slide 12: ARYZTA Group – Segmental EBITA
ARYZTA Group – Segmental EBITA 6 month period ended 31 January 2012 in Euro ’000 January 2012 January 2011 % Food Group Food Europe 74,164 66,004 12.4% Food North America 84,955 76,953 10.4% Food Rest of World 13,851 12,520 10.6% Total Food Group 172,970 155,477 11.3% Origin 5,862 17,641 (66.8)% Tot
Slide 13: Food Group – Income Statement
Food Group – Income Statement 6 month period ended 31 January 2012 in Euro ’000 January 2012 January 2011 % Group revenue 1,404,035 1,283,194 9.4% EBITA 172,970 155,477 11.3% EBITA margin 12.3% 12.1% JVs, net 502 4,328 EBITA incl. JVs 173,472 159,805 8.6% Finance costs, net (28,555) (30,590) Hybrid
Slide 14: Food Group – Cash Generation
Food Group – Cash Generation 6 month period ended 31 January 2012 in Euro ’000 January 2012 January 2011 EBIT 125,960 113,000 Amortisation 47,010 42,477 EBITA 172,970 155,477 Depreciation 43,838 41,545 EBITDA 216,808 197,022 Working capital movement (21,883) (15,911) Working capital movement from de
Slide 15: Food Group Net Debt and Investment Activity
Food Group Net Debt and Investment Activity 6 month period ended 31 January 2012 Period ended Period ended in Euro ’000 31 January 2012 31 January 2011 Food Group opening net debt as at 1 August (955,468) (1,115,623) Cash flows generated from activities 131,242 125,670 Share placement 140,854 – Hybr
Slide 16: Food Group Financing
Food Group Financing Excluding Origin – non-recourse financing facilities Debt Financing – Food Group net debt of EUR 952.4m – Food Group gross term debt weighted average maturity of circa 6.32 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 2012 in Euro ’000 Non-Cash Cash Total Transaction related costs – (805) (805) Asset write-downs (300) – (300) Restructuring related costs – (13,981) (13,981) Total income statem
Slide 18: Business Review
Business Review 6 month period ended 31 January 2012 – Food Europe – Food North America – Food Rest of World 18 © ARYZTA, March 2012
Slide 19: Food Europe
Food Europe 6 month period ended 31 January 2012 Revenue €629.0m, +7.5% Underlying revenue (0.3)% Acquisitions & disposals +6.5% Currency +1.3% EBITA €74.2m, +12.4% ARYZTA FOOD EUROPE Positive EBITA margin expansion of 50bps to 11.8% – Europe remains challenging - widespread austerity measures – Q2
Slide 20: Food North America
Food North America 6 month period ended 31 January 2012 Revenue €669.3m, +9.6% Underlying revenue +7.5% Acquisitions & disposals +4.0% Currency (1.9)% EBITA €85.0m, +10.4% Positive EBITA margin ARYZTA FOOD NORTH expansion of 10bps to 12.7% AMERICA Hawaii – Modest economic recovery – more confident c
Slide 21: Food Rest of World
Food Rest of World 6 month period ended 31 January 2012 Revenue €105.7m, +21.0% Underlying revenue +14.5% Acquisitions & disposals +5.0% ARYZTA FOOD Currency +1.5% GROUP EBITA €13.9m, +10.6% EBITA margin 13.1% (down from 14.3%) – Positive underlying revenue growth – Taiwan and Singapore acquisitions
Slide 22: Food Group Underlying Revenue Growth Trend Q2 2012
Food Group Underlying Revenue Growth Trend 25% Total Food Group 20% Food North America 15% Food Europe 10% 5% 0% (5)% (10)% (15)% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 22 © ARYZTA, March 2012
Slide 23: Financing Strategy
Financing Strategy – Committed to financial discipline – Intend to maintain investment grade credit position (2x – 3x net debt : EBITDA) – Extended and increased RCF in Q2 to CHF 970m with maturity of December 2016 – Raised EUR 140.9m in January 2012 through a 5% share placement – FY 2015 Food Group
Slide 24: Operating Environment
Food Group Operating Environment 24 © ARYZTA, March 2012
Slide 25: Macro Environment
Macro Environment Outlook Implications Response – Weak economic – Unemployment – Leverage key customer conditions in mature remains high relationships to grow revenue markets remain – Consumer spending – Food development around – Increased tax and subdued consumer insights austerity measures – Marke
Slide 26: Raw material volatility
Raw material volatility Inflation/Volatility for Primary Food Categories – Raw material inflation remains 150 % volatile 120 % – Prices likely to remain elevated 90 % – Reasonable recovery of higher raw material costs with three consecutive 60 % quarters of price increases 30% – Margin preservation
Slide 27: ARYZTA Transformation Initiative: Why?
Food Group ATI ARYZTA Transformation Initiative Why? 27 © ARYZTA, March 2012
Slide 28: Food Group – Financial Track Record
Food Group – Financial Track Record IAWS ARYZTA 10.5% 10.4% 10.6% 10.8% 12.0% 12.3% 12.5% EBITA Margin EBITA (EUR m) Revenue (EUR m) 1,018 1,162 1,713 1,679 2,577 619 740 108 125 205 207 322 65 77 20051 20061 20071 20081 2009 2010 2011 – FY 2011 revenue EUR 2.58bn with 27% CAGR since FY 2005 – FY 20
Slide 29: Scale & Reach – Global Access to over 1 Billion Consumers
Scale & Reach – Global Access to over 1 Billion Consumers Bakeries Distribution Centres Food Europe Food North America Food Rest of World No. of consumers 1 342m No. of consumers 1 341m No. of consumers1 389m Gross National Income 1 €10.0tn Gross National Income 1 €12.0tn Gross National Income 1 €5.
Slide 30: Food Group: Diversification of geography
Food Group Diversification of geography 20041 20082 2011 Revenue EUR 464m Revenue EUR 1.6bn Revenue EUR 2.6bn 17% 28% 71% 46% 83% 1% 47% Geography 7% 46% Food Europe Food North America Food Rest of World 4% 31% 25% 169% FY 2004 data based on IAWS Food Business revenue. 21% 2 FY 2008 data based on AR
Slide 31: Food Group: Diversification of channel mix
1% Food Group Diversification of channel mix 47% 7% 200446% 1 Food Europe 20082 2011 46% Revenue EUR 464m Food Europe Food North America Revenue EUR 1.6bn Revenue EUR 2.6bn Food North America 46% Food Europe Food Rest of World Food Rest of World 4% 31% 25% 69% 7% Food North America 7% Food Rest of W
Slide 32: Unique Channel Requirements and Innovation / Trends
Food Group Unique Channel Requirements Innovation / Trends LSR High-end Gastronomy Menu Board Development Chef Solutions - Consumer insights - Consumer insights - Long term partnerships - Differentiation - Supply chain optimisation Customer Channel Mix - New food pipeline - Consistency FY 2011 Reven
Slide 33: Food Group – Investment / ROI
Food Group – Investment / ROI IAWS ARYZTA €3,256m €2,947m 15.3% Food Group Net Assets (EUR m) 15% ROI ROI €1,934m €1,114m €1,163m ATI target 15% 10.2% ROI €563m €614m 20051 20061 20071 20081 2009 2010 2011 – Since creation of ARYZTA EUR 2.36bn invested in Food assets (incl. EUR 138m H1 FY 2012) – Ma
Slide 34: Key Elements of ARYZTA ATI
Key Elements of ARYZTA ATI Inputs Process Outcome - Market intelligence ARYZTA ATI - To become more relevant to - Bakery expertise is key enabler customers - Culture of innovation - To leverage our infrastructure and capabilities - Customer partnerships - To maintain our competitive - Channel access
Slide 35: ATI
ATI – Appointed executive management teams in Europe and North America – Refocused sales teams – Enhanced customer capability – Supply chain optimisation will ARYZTA FOOD GROUP drive investment – Full ERP implementation in North America by July 2012 – ERP being commissioned in Europe – Enormous orga
Slide 36: H1 FY 2012 Summary & Outlook
H1 FY 2012 Summary & Outlook – 2012 trends reflecting customer channel preference and economic activity – Raw material inflation remains volatile – Strengthened balance sheet positioned for growth – FY 2012 and FY 2013 Transformation of business model – Margin growth expected from ATI Guidance and T
Slide 37: Appendix – Origin Financials
ARYZTA AG Appendix 1 – Origin Financials 37 © ARYZTA, March 2012
Slide 38: Origin Income Statement
Origin Income Statement 6 month period ended 31 January 2012 in Euro ’000 January 2012 January 2011 % Group revenue 507,421 611,078 (17.0)% EBITA 5,862 17,641 (66.8)% EBITA margin 1.2% 2.9 % Associates and JV, net 7,065 6,401 EBITA incl. associates and JV 12,927 24,042 (46.2)% Finance costs, net (3,
Slide 39: Origin Underlying Net Profit Rec.
Origin Underlying Net Profit Rec. 6 month period ended 31 January 2012 in Euro ’000 January 2012 Reported net loss (3,248) Intangible amortisation 3,419 Tax on amortisation (765) Net acquisition, disposal and restructuring related costs and fair value adjustments 9,665 Underlying net profit 9,071 Un
Slide 40: Appendix – Other Financial Information and Presentation Glossary
ARYZTA AG Appendix 2 – Other Financial Information and Presentation Glossary 40 © ARYZTA, March 2012
Slide 41: ARYZTA Group Underlying Net Profit Rec.
ARYZTA Group Underlying Net Profit Rec. 6 month period ended 31 January 2012 in Euro ’000 January 2012 Reported net profit 71,855 Intangible Amortisation 50,429 Tax on amortisation (13,173) Hybrid instrument accrued dividend (8,240) Net acquisition, disposal and restructuring related costs and fair
Slide 42: Food Group Underlying Net Profit Rec.
Food Group Underlying Net Profit Rec. 6 month period ended 31 January 2012 in Euro ’000 January 2012 Reported net profit 74,175 Intangible amortisation 47,010 Tax on amortisation (12,408) Hybrid instrument accrued dividend (8,240) Net acquisition, disposal and restructuring related costs and fair va
Slide 43: ARYZTA Group Balance Sheet
ARYZTA Group Balance Sheet as at 31 January 2012 in Euro ’000 As at January 2012 As at July 2011 Property, plant and equipment 988,236 939,949 Investment properties 22,290 32,180 Goodwill and intangible assets 2,798,090 2,650,956 Associates and joint ventures 130,179 124,057 Other financial assets 3
Slide 44: Food Group Balance Sheet
Food Group Balance Sheet as at 31 January 2012 in Euro ’000 As at January 2012 As at July 2011 Property, plant and equipment 892,143 845,693 Investment properties 15,953 16,178 Goodwill and intangible assets 2,663,054 2,520,450 Joint ventures 5,164 4,976 Investment in Origin 51,045 51,045 Working ca
Slide 45: 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 46: Food Group Gross Term Debt Maturity Profile
Food Group Gross Term Debt Maturity Profile weighted average maturity c. 6.32 years Gross GrossTerm TermDebt DebtMaturity MaturityProfile1 Profile 1 Financial Year 2012 2013 4% 2014 9% 2015 13% 2016 2% 2017 15% Revolver 20% 35%2 2018 4% 2019 3% 2020 2% 2021 9% 2022 11% 2025 3% 2030 5% 1 The term deb
Slide 47: Food Group Underlying Revenue Growth
Food Group Underlying Revenue Growth Quarterly Underlying Revenue Growth Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Food Europe (2.4)% 0.7% 2.9% 2.3% 1.2% (1.8)% Food North America (1.4)% 5.9% 8.9% 7.1% 6.0% 8.9% Food Rest of World 18.5% 18.3% 6.2% 21.3% 14.7% 14.2% Total Food Group (1.7)% 2.5%
Slide 48: ARYZTA Group – Return on Investment
ARYZTA Group – Return on Investment Food Food N. Food Rest Total in Euro million Europe America of World Food Group Origin Total 31 January 2012 Group share net assets1 1,453 1,738 282 3,473 4434 3,916 EBITA incl. associates and JVs2 163 158 27 348 75 423 ROI 11.2% 9.1%3 9.7% 10.0 % 16.9% 10.8% 31 J
Slide 49: 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
Slide 50: 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
Slide 51: Appendix – FX Analysis
ARYZTA AG Appendix 3 – FX Analysis 51 © ARYZTA, March 2012
Slide 52: EUR Average and Closing FX Rates
EUR Average and Closing FX Rates Closing Rates January 2012 July 2011 % Swiss Franc 1.2072 1.1464 5.3 % US Dollar 1.3149 1.4323 (8.2)% Canadian Dollar 1.3135 1.3620 (3.6) % Sterling 0.8390 0.8761 (4.2) % Average Rates January 2012 January 2011 % Swiss Franc 1.2019 1.3169 (8.7) % US Dollar 1.3586 1.3
Slide 53: EURUSD Trend
EURUSD Trend 1.50 Average Monthly Rate H1 FY 2012 1.45 Average Monthly Rate H1 FY 2011 1.40 Closing Monthly Rate H1 FY 2012 1.3586 1.35 1.3343 1.30 1.3149 1.25 1.20 Jul Aug Sep Oct Nov Dec Jan 53 © ARYZTA, March 2012
Slide 54: EURCHF Trend
EURCHF Trend 1.40 Average Monthly Rate H1 FY 2012 1.35 Average Monthly Rate H1 FY 2011 1.30 1.3169 Closing Monthly Rate H1 FY 2012 1.25 1.2072 1.20 1.2019 1.15 1.10 Jul Aug Sep Oct Nov Dec Jan 54 © ARYZTA, March 2012
Slide 55: Food Group Revenue by Currency
Food Group Revenue by Currency Year ended 31 July 2011 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,
Slide 56: Thank you!
ARYZTA AG Thank you! 56 © ARYZTA, March 2012
Slide 57: 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 57 © ARYZTA, March 2012