Barry Callebaut AG · SIX:BARN
Barry Callebaut — H1 2013/14 Earnings Presentation
33 slides from Barry Callebaut's earnings presentation, Apr 3, 2014
Slide 1: Half-year Results 2013/14 Media Conference
Half-year Results 2013/14 Media Conference April 3, 2014 April 2014 HY 2013/14 Media presentation
Slide 2: Cautionary note
Cautionary note Certain statements in this presentation regarding the business of Barry Callebaut are of a forward-looking nature and are therefore based on management’s current assumptions about future developments. Such forward-looking statements are intended to be identified by words such as “bel
Slide 3: Agenda
Highlights HY 2013/14 - Juergen Steinemann, CEO Financial review - Victor Balli, CFO Strategy update & Outlook - Juergen Steinemann, CEO Q&A Session April 2014 HY 2013/14 Media presentation 3
Slide 4: Strong profit growth, strong contribution of acquired cocoa business
Highlights HY 2013/14 Strong profit growth, strong contribution of acquired cocoa business Sales Volume EBIT in CHF Net Profit for the period in CHF +17.6% +15.3% +3.1%1 +8.8%1 +8.3% Sales volume increase driven by recent cocoa acquisition, emerging markets, outsourcing and Gourmet Profit improv
Slide 5: Healthy chocolate market. Challenging market environment
Healthy chocolate market. Challenging market environment Raw Materials1 Currencies2 HY 13/14 ∆ prices vs py 300% 5% 250% 0% Cocoa beans +29% 200% -5% Sugar world -8% RUB/CHF 150% -10% INR/CHF Sugar EU -15% 100% -23% BRL/CHF Milk powder USD/CHF 50% -20% +26% 0% -25% Chocolate Market Development3 GDP
Slide 6: Growth across all regions; total volume +17.6%
HY 2013/14 Growth across all regions; total volume +17.6% Sales Volume by Region Volume growth vs prior year HY 2013/14 = 876,297 tonnes Group volume +17.6% Stand-alone +3.1% Europe +0.3% Americas +8.5% Asia-Pacific +11.0% Global Cocoa 1 +80.1% Underlying market2 +3.2% 1 Global Cocoa including recen
Slide 7: Continued positive performance of our key growth drivers
HY 2013/14 development Continued positive performance of our key growth drivers Emerging Markets Long-term outsourcing & Gourmet & Specialties Strategic partnerships Volume +17.9% vs prior year* +8.0% vs prior year +6.6% vs prior year growth % of total Group volume * Stand-alone, including recently
Slide 8: Ongoing focus on our strategic pillars
Highlights first six months- FY 2013/14 Ongoing focus on our strategic pillars Barry Callebaut Barry Callebaut Callebaut® launches takes over Inauguration of cocoa begins production in ‘Finest Belgian Hot remaining 51% of factory in Makassar with new, relocated Chocolate’ for the certified bean JV p
Slide 9: Agenda
Highlights HY 2013/14 - Juergen Steinemann, CEO Financial review - Victor Balli, CFO Strategy update & Outlook - Juergen Steinemann, CEO Q&A Session April 2014 HY 2013/14 Media presentation 9
Slide 10: Strong profit growth, strong contribution of the recently acquired cocoa ingredients business
HY 2013/14 Strong profit growth, strong contribution of the recently acquired cocoa ingredients business Group performance HY % vs prior % vs prior year (in local (CHF m) 2013/14 year currencies) (in CHF) Sales Volume Total (in tonnes) 876,297 +17.6% Sales Volume stand-alone 768,352 +3.1% EBIT Total
Slide 11: Region Europe: Significantly increased profitability
Region Europe Significantly increased profitability reflects focus on product margins Western Europe with strong focus on higher product margins, better customer segmentation and positive impact from Project Spring Addressing capacity shortage, with investments in factory expansions in Belgium,
Slide 12: Region Americas: Strong performance across all markets
Region Americas Strong performance across all markets Strong performance top- and bottom- line, across Food Manufacturers and Gourmet Good growth in North America, despite extreme weather hampering logistics and leading to lower demand Particularly strong growth in Mexico and Brazil +8.5% +20.
Slide 13: Region Asia-Pacific: Continued strong growth
Region Asia-Pacific Continued strong growth Food Manufacturers business achieved double-digit growth, in particular in China, Japan, Indonesia and Malaysia Slower economic environment and weakeaning of some local currencies influenced the demand for the international Gourmet brands EBIT impact
Slide 14: Global Cocoa: Significant volume and profit contribution
Global Cocoa Significant volume and profit contribution of acquired cocoa business The acquisition of the cocoa business from Petra Foods brought this business to a new level Stand-alone volume flat due to increased internal demand for cocoa products and transfer of volumes to recently acquired
Slide 15: Focus on profitable growth paid off: EBIT bridge
EBIT bridge Focus on profitable growth paid off: stand-alone EBIT increased +8.8% in CHF m +8.8% +41.7 -4.0 +12.9 201.7 -14.1 190.4 +8.7 -1.6 174.9 -16.8 EBIT Volume Product mix Cocoa Add. Add. costs, EBIT Petra Foods Acquisition and EBIT H1 2012/13 effects and margin processing operational Scope an
Slide 16: Net profit impacted by financing related to acquisition and higher tax rate
Below EBIT Net profit impacted by financing related to acquisition and higher tax rate [CHF m] Change in % Change in H1 2013/14 H1 2012/13 In local % (restated) currencies CHF Operating profit (EBIT) 16.8% 15.3% 201.7 174.9 Financial items 59.3% 55.5% (56.6) (36.4) Share of result of equity-accounte
Slide 17: Cash Flow
Cash Flow Strong operating cash flow, offset by higher working capital and continuous investments in further growth in CHF m +9.4% 258 236 +204 2 -317 -47 -110 +10 Operating Operating Investment in Interest paid and Capital CF from Cash flow from Net decrease in Cash Flow H1 Cash Flow H1 Working Cap
Slide 18: Balance Sheet & key ratios
Balance Sheet & key ratios Ratios impacted by recent acquisition and higher working capital needs BC stand-alone Feb 14 Feb 13 1 Feb 14 Total Assets [CHF m] 5,106.9 3,555.9 Net Working Capital [CHF m] 1,246.5 1,501.4 1,026.2 Non-Current Assets [CHF m] 2,068.6 1,488.4 Net Debt [CHF m] 1,182.3 1,698.2
Slide 19: Agenda
Highlights HY 2013/14 - Juergen Steinemann, CEO Financial review - Victor Balli, CFO Strategy update & Outlook - Juergen Steinemann, CEO Q&A Session April 2014 HY 2013/14 Media presentation 19
Slide 20: Our strategy remains unchanged
Our strategy remains unchanged “Heart and engine of the Vision chocolate and cocoa industry” Expansion People & Processes Innovation Sustainable, profitable Strategic growth pillars Cost Leadership Sustainable Cocoa April 2014 HY 2013/14 Media presentation 20
Slide 21: Focus on Gourmet strategy implementation
Expansion Focus on Gourmet strategy implementation, delivers positive growth in particular global brands Sales volume evolution – Global brands Product Superiority global Global brands & differentiation on Brands track Best in class launch Cacao Innovation Barry «Purity from Nature» / Callebaut «H
Slide 22: Innovating based on insights and focus on discovery areas
Innovation Innovating based on insights and focus on 5 discovery areas Portfolio Discovery areas Global Insights Cocoa Science Daily luxury Post harvest treatment, fermentation, Cocoa Cocoa bean identity, origin treats, color, taste, metabolomics, application Structure, Texture & Sensory Smart & Mic
Slide 23: Production capacities expanded, while keeping manufacturing costs under control
Cost Leadership Production capacities expanded, while Expansion keeping manufacturing costs under control • Liquid chocolate capacity utilization has improved, from end of last year now at 90% (target 82-85%). Focus on eliminating capacity constraints in Western Europe Belgium Poland Germany Italy Q
Slide 24: Full acquisition of Biolands: direct sourcing business model
Strengthening our position in Sustainable Cocoa Sustainable Cocoa Full acquisition of Biolands: direct sourcing business model Barry Callebaut acquired a 49% stake in 2008 and acquired the remaining 51% Feb 18 2014 Strategic step to increase our direct sourcing activities and with the aim to rep
Slide 25: Our key focus areas for 2013/14
Strategy Our key focus areas for 2013/14 Integrate Petra Foods cocoa business and strengthen our position in cocoa powder Enhance profitability Continue product margin improvement Keep supply chain and fixed costs under control Full implementation of Project Spring Strengthen leadership
Slide 26: Integration of acquired business well on track...
Integration of acquired business well on track... Organization is • Ensuring the best balance between BC and ex-Petra resources on in place key positions (Regional commercial organizations and global functions) Commercial • Combined cocoa/chocolate sales teams and account allocation, model has been
Slide 27: ...and identified synergies confirmed
...and identified synergies confirmed Systems are • Streamline the business, starting up a being project to structurally identify what is needed implemented from a process and systems perspective for the new/combined organization Synergies are • Identified and confirmed synergies, and put a identifi
Slide 28: Project Spring: Achievements
Project Spring: Achievements Current status: Fully implemented Customer Segmentation Roll out ongoing What has been done • Customer segmentation became key decision driver • Enhanced differentiation in Pricing has lead More responsive & to significant margin improvements Harmonised QA profitable Pri
Slide 29: Talent Management and Development
Talent Management and Development Talent Management Components April 2014 HY 2013/14 Media presentation 29
Slide 30: Chocovision 2014
Chocovision 2014 Fast forward – From Cocoa to Chocolate – Inspiration, Innovation, Impact Follow us on: www.chocovision.ch/blog @chocovision_org vimeo.com/chocovisionorg flickr.com/chocovision_org April 2014 HY 2013/14 Media presentation 30
Slide 31: Our mid-term financial guidance
Guidance Our mid-term financial guidance Guidance: Volume growth: 6-8% on average per year until 2015/16 EBIT/tonne restored to Barry Callebaut’s pre-acquisition level by 2015/16* * As of consolidation of the cocoa business acquired from Petra Foods: EBIT per tonne CHF 256 – barring any major un
Slide 32: Agenda
Highlights HY 2013/14 - Juergen Steinemann, CEO Financial review - Victor Balli, CFO Strategy update & Outlook - Juergen Steinemann, CEO Q&A Session April 2014 HY 2013/14 Media presentation 32
Slide 33: Summary – HY 2013/14
Summary – HY 2013/14 Strong profit growth +15.3% Total business; EBIT +8.8% Stand-alone Volume growth driven by Emerging Markets, outsourcing and strategic partnerships and Gourmet Integration well on track. Strong contribution of recently acquired cocoa business. First synergies realized Mi