Chocoladefabriken Lindt & Spruengli Ag · SIX:LISN

Chocoladefabriken Lindt & Spruengli — Chocoladefabriken Lindt & Sprüngli — FY2008 Earnings Presentation

48 slides from Chocoladefabriken Lindt & Spruengli's earnings presentation, Mar 17, 2009

  1. Slide 1: Annual Results 2008 - Financial Analysts Presentation

    ANNUAL RESULTS 2008 LINDT & SPRÜNGLI Financial Analysts Presentation March 17th, 2009 1 Annual Media Conference FULL YEAR 2008

  2. Slide 2: Group Management

    GROUP MANAGEMENT LINDT & SPRÜNGLI Group Management Ernst Tanner Duty Free Marketing/Sales Finance & & Administration Country Country Purchasing Responsibility Responsibility Manufacturing Hansjürg Uwe Dr. Dieter Klingler Sommer Weisskopf 2 Annual Media Conference FULL YEAR 2008

  3. Slide 3: Contents

    CONTENTS LINDT & SPRÜNGLI 1 Highlights 2008 2 Market Review - Sales Growth Analysis 3 Business Model 4 Financials - Operating Performance - Interest / Taxes - Raw Materials & Packaging 5 Outlook 2009 - Accounting Change 2009 3 3 Annual Media Conference FULL YEAR 2008

  4. Slide 4: Highlights 2008

    LINDT & SPRÜNGLI Highlights 2008 4 Annual Media Conference FULL YEAR 2008

  5. Slide 5: Highlights - P&L Results

    HIGHLIGHTS - P&L RESULTS LINDT LINDT&&SPRÜNGLI SPRÜNGLI CHF Mio. Increase in % vs. 2007 NET TRADE SALES 2.937 -0,3% NTS* ORGANIC 5.8% EBITDA 461 3.6% EBIT 361 3.0% NET INCOME 262 4.4% EPS REG. (CHF) 1.158 3.1% OPER. CASH FLOW 295 35.6% * NTS = Net Trade Sales -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 5.5% 6.5%

  6. Slide 6: Highlights – Balance Sheet

    HIGHLIGHTS – BALANCE SHEET LINDT LINDT&&SPRÜNGLI SPRÜNGLI Equity Equity B/S ratio Net Cash Y/E CHF Mio in % CHF Mio 1'500 62.0% 120 1'479 61.4% 60.0% 100 109 1'400 1'389 58.0% 80 1'300 56.0% 60 70 56.3% 1'200 54.0% 40 1'100 52.0% 20 1'000 50.0% 0 2007 2008 2007 2008 2007 2008 6 Annual Media Conferen

  7. Slide 7: Highlights – Key Messages

    HIGHLIGHTS – KEY MESSAGES LINDT & SPRÜNGLI  Challenging environment  Volatility in FX, raw mat. & equity markets  Consumer confidence at historic low  Trade exposed to low or no liquidity  Bankruptcies, chapter 11 and shop closures at peak  Price sensitivity among consumers enhances discount /

  8. Slide 8: Highlights – Key Messages

    HIGHLIGHTS – KEY MESSAGES LINDT & SPRÜNGLI  Performance vs. long term objectives  Organic-/const. currency growth 2008: L/T objective - NTS: + 5.8% 6% to 8% - EBIT: + 8.9% 8% to 10% (20-40 BP) - Net Income: +11.0% 10% to 12%  Other Highlights  Negative FX impact on NTS in CHF by -6.1% (= CHF 161

  9. Slide 9: L&S Share Price vs. SMI 2008

    L&S SHARE PRICE VS. SMI 2008 LINDT & SPRÜNGLI Share Price Moving in line with SMI CHF Lindt Reg. SMI 40.000 38.000 36.000 34.000 32.000 30.000 28.000 26.000 LINDT REGISTERED SHARE VS. SMI - 2008 24.000 22.000 Jan. 08 M rz. 08 M ai. 08 Jul. 08 Sep. 08 Nov. 08 9 Annual Media Conference FULL YEAR 2008

  10. Slide 10: Other Share Key Figures

    OTHER SHARE KEY FIGURES LINDT & SPRÜNGLI Share Key Figures 1992 2004 2005 2006 2007 2008 Dividend Reg. S. (CHF) 39 180 225 275 330 360* - Increase (CHF) 2 40 45 50 55 30 Dividend Yield Reg. S. 1,4% 1.1% 1.0% 0.9% 0.8% 1.6% Pay-Out Ratio 16.9% 26.5% 28.7% 29.2% 29.5% 31.2% Reg. Share (CHF) 2'800 16'6

  11. Slide 11: Market Review - Sales Growth Analysis

    LINDT & SPRÜNGLI MARKET REVIEW SALES GROWTH ANALYSIS 11 11 Annual Media Conference FULL YEAR 2008

  12. Slide 12: Sales Analysis – Organic

    SALES ANALYSIS – ORGANIC LINDT LINDT&&SPRÜNGLI SPRÜNGLI absolute in CHF millions increase vs. previous year in local currencies & net of acquisition effects 3'000 2'946 2'937 2'500 2'586 2'000 2'247 1'995 1'500 1'000 500 + 12.5% + 11.4% + 13.7% + 11.8% + 5.8% 0 2004 2005 2006 2007 2008 12 Annual Med

  13. Slide 13: Sales Analysis - Drivers

    SALES ANALYSIS - DRIVERS LINDT & SPRÜNGLI GROWTH 2008 LIMITED BY CONSTELLATION OF UNUSUAL FACTORS 6.00% 5.00% 5.8% 4.00% 4,3% 3.00% -6.1% 2.00% -0,8% 1.00% 2.3% -0.3% 0.00% Volume Mix Price Organic Forex Reported -1.00% 13 Annual Media Conference FULL YEAR 2008

  14. Slide 14: Sales Analysis – Swiss Francs

    SALES ANALYSIS – SWISS FRANCS LINDT LINDT&&SPRÜNGLI SPRÜNGLI CHF + 161 MIO IN CONSTANT CURRENCIES absolute in CHF millions increase vs. prev. year in % of CHF 3'000 2'946 2'937 2'500 2'586 2'000 2'247 1'995 1'500 1'000 500 + 12.0% + 12.6% + 15.1% + 13.9% - 0.3% 0 2004 2005 2006 2007 2008 14 Annual M

  15. Slide 15: Sales Analysis – Market Split

    SALES ANALYSIS – MARKET SPLIT LINDT & SPRÜNGLI BALANCED SPLIT OF MARKETS Total NTS: CHF 2’937 Mio 8.7% 5.6% Switzerland 17.7% 22.9% Germany France Italy UK Rest of Europe North America Rest of World 18.8% 9.5% 4.6% 12.2% 15 Annual Media Conference FULL YEAR 2008

  16. Slide 16: Sales Analysis – Markets

    SALES ANALYSIS – MARKETS LINDT & SPRÜNGLI POSITIVE SALES DEVELOPMENT ACCROSS MARKETS 20.0% 28.5% 21.8% 17.5% 15.0% 14.8% 12.5% 12.6% 10.0% 9.9% 8.9% 8.6% 7.5% 7.0% 5.0% 4.6% 2.5% 3.1% 2.1% 0.0% -2.4% -2.5% D F CH AUT IT E U.K. POL SWE AUS USA CAN Average 5.8 % 16 Annual Media Conference FULL YEAR 20

  17. Slide 17: Business Model

    LINDT & SPRÜNGLI LINDT & SPRÜNGLI BUSINESS MODEL 17 17 Annual Media Conference FULL YEAR 2008

  18. Slide 18: Key Drivers of Model

    KEY DRIVERS OF MODEL LINDT & SPRÜNGLI  Strong and uniquely positioned brands  Global No. 1 in premium chocolate  Focus: one category (chocolate) / one market (premium)  Ongoing underlying consumer trend towards premium quality  Consumer driven  Uncompromising focus upon product quality  Excep

  19. Slide 19: Growth Above Market

    GROWTH ABOVE MARKET LINDT & SPRÜNGLI 10 YEARS: DOUBLING OF SALES – CONT. MARGIN GROWTH absolute in CHF millions EBIT margin 3'000 15.0% NTS in CHF: CAGR 8.1 % 13.0% 2'500 11.0% 2'000 9.0% 1'500 7.0% 1'000 5.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 19 Annual Media Conference FULL YEAR 200

  20. Slide 20: Delivering to Shareholders

    DELIVERING TO SHAREHOLDERS LINDT & SPRÜNGLI 1(compound average growth rate) 2(basis points) 20 Annual Media Conference FULL YEAR 2008

  21. Slide 21: Model: Organic Growth, Market Share, EBIT Margin

    LINDT & SPRÜNGLI MODEL LINDT & SPRÜNGLI Organic Growth significantly above premium chocolate markets Persistency Market Share Growth gains in most major chocolate markets Continuity EBIT Margin Growth Increasing consistently year after year Reliability 21 Annual Media Conference FULL YEAR 2008

  22. Slide 22: Financials - Operating Performance

    LINDT & SPRÜNGLI FINANCIALS OPERATING PERFORMANCE 22 22 Annual Media Conference FULL YEAR 2008

  23. Slide 23: Material Costs

    MATERIAL COSTS LINDT & SPRÜNGLI IMPACT OF MATERIAL COST INCREASE: 200 BASIS POINTS absolute in CHF millions in % of NTS 1'000 900 957.6 800 901.4 700 772.1 600 686.5 500 602.5 400 300 200 100 30.2% 30.6% 29.9% 30.6% 32.6% 0 2004 2005 2006 2007 2008 23 Annual Media Conference FULL YEAR 2008

  24. Slide 24: Headcount & NTS per Employee

    HEADCOUNT & NTS PER EMPLOYEE LINDT & SPRÜNGLI NTS GROWTH WITH STABLE NO OF STAFF Average number of employees NTS per employee in CHF ('000) 8'000 7'793 7'712 7'000 7'044 6'652 6'000 6'293 5'000 4'000 317 338 367 378 381 3'000 2004 2005 2006 2007 2008 24 Annual Media Conference FULL YEAR 2008

  25. Slide 25: Personnel Expenses

    PERSONNEL EXPENSES LINDT & SPRÜNGLI EFFICIENCY INCREASES IN ALL PROCESSES absolute in CHF millions in % of NTS - 8.6% 600 596 500 546 545 493 400 453 300 200 100 22.7% 21.9% 21.1% 20.2% 18.5% 0 2004 2005 2006 2007 2008 25 Annual Media Conference FULL YEAR 2008

  26. Slide 26: Operating/Marketing Expenses

    OPERATING/MARKETING EXPENSES LINDT & SPRÜNGLI DECREASING OPERATING EXPENSES DESPITE ONGOING HEAVY INVESTMENTS IN MARKETING absolute in CHF millions in % of NTS - 3.0% 1'000 1'055 1'023 800 905 769 600 678 400 200 34.0% 34.2% 35.0% 35.8% 34.8% 0 2004 2005 2006 2007 2008 26 Annual Media Conference FUL

  27. Slide 27: EBITDA

    EBITDA LINDT & SPRÜNGLI RESULT OF HIGHER EBIT & DEPRECIATION absolute in CHF millions in % of NTS 500 + 3.6 % 450 444 461 400 350 381 300 325 250 295 200 150 100 50 14.8% 14.5% 14.7% 15.1% 15.7% 0 2004 2005 2006 2007 2008 27 Annual Media Conference FULL YEAR 2008

  28. Slide 28: Depreciation

    DEPRECIATION LINDT & SPRÜNGLI IMPACT OF HIGHER CAPEX absolute in CHF millions in % of NTS 100 90 99.3 93.5 80 84.0 70 79.3 76.5 60 50 40 30 20 10 4.0% 3.4% 3.2% 3.2% 3.4% 0 2004 2005 2006 2007 2008 28 Annual Media Conference FULL YEAR 2008

  29. Slide 29: Operating Profit (EBIT)

    OPERATING PROFIT (EBIT) LINDT & SPRÜNGLI MARGIN IMPROVEMENT: 40 BASIS POINTS absolute in CHF millions in % of NTS + 3.0% 350 350.8 361.2 300 250 297.2 248.6 200 215.8 150 100 50 10.8% 11.1% 11.5% 11.9% 12.3% 0 2004 2005 2006 2007 2008 29 Annual Media Conference FULL YEAR 2008

  30. Slide 30: EBIT Growth Analysis – Drivers

    EBIT GROWTH ANALYSIS – DRIVERS LINDT & SPRÜNGLI SUBSTANTIAL IMPACT OF MATERIAL COSTS IN 2008 160.0 140.0 120.0 100.0 119.8 -117,8 80.0 60.0 40.0 41.1 -26,7 20.0 13.2 29,6 0.0 Vol. & Mix Pricing Materials Operating / Other EBIT Marketing const.curr. Expenses 30 Annual Media Conference FULL YEAR 2008

  31. Slide 31: Quality & Efficiency Highlights

    QUALITY & EFFICIENCY HIGHLIGHTS LINDT & SPRÜNGLI  Production  New Praline lines starting up in Germany and Switzerland  Bar & Cocoa liquor investments ongoing in USA  Start-up of new cocoa liquor line in Olten/Switzerland  Supply chain & logistics  New central warehouse set up for overseas shi

  32. Slide 32: Quality & Efficiency Highlights

    QUALITY & EFFICIENCY HIGHLIGHTS LINDT & SPRÜNGLI  Procurement  Agreement for supply of traceable cocoa beans in Ghana including contributions to Social Projects  Systems & IT  SAP implemented in Australia & Italy (SAP hub)  New JDE/Oracle implemented in Canada (US JDE hub) 32 Annual Media Confe

  33. Slide 33: Financials - Interest / FX, Taxes & Net Cash

    LINDT & SPRÜNGLI FINANCIALS INTEREST / FX TAXES & NET CASH 33 33 Annual Media Conference FULL YEAR 2008

  34. Slide 34: Financial Expenses

    FINANCIAL EXPENSES LINDT & SPRÜNGLI IMPAIRMENT PORTFOLIO & FX IMPACT IN VOLATILE MARKETS absolute in CHF millions in % of NTS 20,0 2,0% 15,0 10,0 1,0% 5,0 0,0 0,0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 34 Annual Media Conference FULL YEAR 2008

  35. Slide 35: Corporate Tax Rate

    CORPORATE TAX RATE LINDT & SPRÜNGLI TAX RATE DECLINING YEAR-ON-YEAR TO RECORD LOW Tax Rate in % 40,00% 38,4% 35,00% 35,8% 33,8% 32,6% 30,00% 31,4% 29,8% 29,7% 29,0% 28,0% 25,00% 25,4% 20,00% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 35 Annual Media Conference FULL YEAR 2008

  36. Slide 36: Net Income

    NET INCOME LINDT & SPRÜNGLI CONTINUOUS GROWTH ABSOLUTE & MARGIN absolute in CHF millions in % of NTS 300 +4.4% 250 250.5 261.5 200 209.2 150 172.7 149.0 100 50 7.5% 7.7% 8.1% 8.5% 8.9% 0 2004 2005 2006 2007 2008 36 Annual Media Conference FULL YEAR 2008

  37. Slide 37: Delivering Strong Earnings

    DELIVERING STRONG EARNINGS LINDT & SPRÜNGLI EARNINGS PER SHARE – CAGR 14.7 % EPS CHF EPS GROWTH Y-O-Y 1.200 1.000 20,0% 800 15,0% 600 10,0% 400 5,0% 200 0 0,0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 37 Annual Media Conference FULL YEAR 2008

  38. Slide 38: Operating Cash Flow & Capex

    OPERATING CASH FLOW & CAPEX LINDT & SPRÜNGLI RECORD HIGH PERFORMANCE Operating Cash flow CAPEX in CHF millions + 36% 300 295 250 277 200 217 190 190 150 100 50 99 129 146 235 199 0 2004 2005 2006 2007 2008 38 Annual Media Conference FULL YEAR 2008

  39. Slide 39: Net Cash Position - Development

    NET CASH POSITION - DEVELOPMENT LINDT & SPRÜNGLI NET CASH POSITION ENSURES FREEDOM AND FLEXIBILITY CHF MIO 200.0 -1 180.0 24 160.0 -75 140.0 120.0 92 100.0 80.0 Net cash & net cash 60.0 movement in CHF Mio 110 110 40.0 70 20.0 22 0.0 0 -1 nd -20.0 l 04 05 06 07 08 F s ita re FC e 20 20 20 20 20 ap h

  40. Slide 40: Financials - Raw Materials & Packaging

    LINDT & SPRÜNGLI FINANCIALS RAW MATERIALS & PACKAGING 40 40 Annual Media Conference FULL YEAR 2008

  41. Slide 41: Cocoa Crop / Grinding Balance

    COCOA CROP / GRINDING BALANCE LINDT & SPRÜNGLI Cocoa Beans '000' t 3'900 3'768 3'724 3'520 3'649 3'684 3'567 3'379 3'390 3'300 16.2% 2'700 5.5% 2'100 5.5% 42.4% 1'500 900 300 15.5% 248 -270 -177 -300 -40 05/06 06/07 07/08 08/09 Crop Grindings Surpl./Deficit 41 Annual Media Conference FULL YEAR 2008

  42. Slide 42: Cocoa Product Prices 07 - 09

    COCOA PRODUCT PRICES 07 - 09 LINDT & SPRÜNGLI COCOA LONDON TERMINAL BUTTER RATIO GBP/TON RATIO MULT. 2.100 3,6 1.900 3,3 1.700 3 1.500 2,7 1.300 2,4 1.100 900 2,1 Mrz . 07 J ul . 0 7 N ov . 0 7 Mrz . 08 J ul . 0 8 N ov . 0 8 Mrz. 09 M r z . 07 J ul . 0 7 N ov . 0 7 M r z . 08 J ul . 0 8 N ov . 0 8 M

  43. Slide 43: Milk Prices EU 07 - 09

    MILK PRICES EU 07 - 09 LINDT & SPRÜNGLI MILK PRICES – SMP EUROPE / SWITZERLAND EUR/100KG SMP SWITZERLAND SMP EUROPE 4.200 4.000 3.800 3.600 3.400 3.200 3.000 2.800 2.600 2.400 Mrz. 07 Jun. 07 Sep. 07 Dez. 07 Mrz. 08 Jun. 08 Sep. 08 Dez. 08 Mrz. 09 43 Annual Media Conference FULL YEAR 2008

  44. Slide 44: Material Cost Trends

    MATERIAL COST TRENDS LINDT & SPRÜNGLI Cocoa Products: - Terminal Market speculative impact - Differentials strengthening - Butter Ratio weakening Other Raw Materials: - Milk weakening - Sugar volatile / EU / Brazil - Hazelnuts weakening - Almonds weakening Packaging: - Paper & Cardboard stable - Met

  45. Slide 45: Outlook 2009 - Accounting Change

    LINDT & SPRÜNGLI OUTLOOK 2009 ACCOUNTING CHANGE 45 Annual Media Conference FULL YEAR 2008

  46. Slide 46: Accounting Change HY 09: Trade Promotion Expenses Status

    ACCOUNTING CHANGE HY 09 LINDT & SPRÜNGLI TREATMENT OF TRADE PROMOTION EXPENSES (TPE) STATUS  Payments to trade partners for counterparts / services  Accounting treatment of TPE not specifically defined by IFRS  Different treatment by European FMCG companies: - Deduction from sales - or - Componen

  47. Slide 47: Accounting Change HY 09: Action L&S

    ACCOUNTING CHANGE HY 09 LINDT & SPRÜNGLI TREATMENT OF TRADE PROMOTION EXPENSES (TPE) ACTION L&S  Deduction of TPE’s from Sales as from 1.1.2009 onwards  Reasons: - World-wide comparability within majority of FMCG companies - Expected new more detailed IFRS specifications - Statutory accounting cha

  48. Slide 48: Lindt & Sprüngli

    LINDT & SPRÜNGLI 48 Annual Media Conference FULL YEAR 2008

Chocoladefabriken Lindt & Sprüngli — FY2008 Earnings Presentation on 6ix