Aryzta Ag · SIX:ARYN
Aryzta — Investor Day (October 2016)
106 slides from Aryzta's investor day presentation, Oct 6, 2016
Slide 1: Capital Markets Day
Capital Markets Day 6th October 2016 1
Slide 2: Forward Looking Statements
Forward Looking Statements 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: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 4: Purpose
Purpose To provide great food to people w ith busy lifestyles 4 © ARYZTA, October 2016
Slide 5: Mission
Mission Deliver high quality memorable food experiences » Consumers » Food Professionals » Large scale Foodservice & Retail customers 5 © ARYZTA, October 2016
Slide 6: Strategy – Finding the Niche
Strategy – Finding the Niche Why Bakery? Why Frozen? Why Consumer Obsession? Essential Components of Value Creation 6 © ARYZTA, October 2016
Slide 7: Defining the Space - Evolving Bakery
Defining the Space - Evolving Bakery Evolution in recent decades 1850 1980s Bread La Brea Bakery is early adapter Parisian bakers par-baking core diet of par-baking technology - create the technology that for over takes sourdough beyond San baguette. allows bread to be 6,000 Francisco Ultra-fresh: 6
Slide 8: Defining the Space - The Power of Frozen
Defining the Space - The Power of Frozen – Innovation in bakery through commercial freezing – Commercial freezing home-freezing Rapid arrest of spoilage process locks in Quality » Nutrients and vitamins Advantages » Flavours » Texture Economic advantages Economic » Solves the shelf-life proble
Slide 9: Defining the Space - Evolving Consumer
Defining the Space - Evolving Consumer Transformation in recent decades 1960-2010 Currently Golden Era for Big Retail & Big Food – FMCG Sector Consumer enjoying benefits of Resurgent interest in food preparation Interest in blurs the lines between the amateur and processed convenient food Food t
Slide 10: Defining the Space - Evolving Consumer
Defining the Space - Evolving Consumer The consumer is Global media exposure: focused on restaurant rankings, food increasing reviews have become a importance of staple in every media ingredient quality Chefs have become superstars Increasing Broader food tastes passion for food from extensive and i
Slide 11: Picard in the Context of ARYZTA
Picard in the Context of ARYZTA Complementary supply chain with increased frozen capabilities and further upside from expanding international presence French consumer uniquely retained engagement with high quality food and understands power of frozen Economics Contemporary Consumers acknowledgin
Slide 12: ARYZTA Key Pillars
ARYZTA Key Pillars Scale Allowing for Significant Leadership Capabilities Innovation Essential for Specialty Foods Optimisation of Infrastructure and Technology by Expanding – Customer Access – Channel Access Combination of – Geography Reach Acquisitions and – Food Capability Organic Growth Customer
Slide 13: ARYZTA Group at Glance
ARYZTA Group at Glance Global presence with 57 bakeries across 29 countries 57 Bakeries Rest of World Savoury & Other 6% Top 20 Customers (6%) QSR 15% Bread Rolls & Large 54% Retai (16%) Artisan Loaves Europe Channel 22% (54%) Capability Geography 45 % l Customer 35% Revenue 34% Revenue (25%) Revenu
Slide 14: Global Food & Speciality Bakery Market
Global Food & Speciality Bakery Market ARYZTA is well-positioned in the fast-growing speciality bakery market ARYZTA Positioning in the Global Speciality Bakery Market as of 2015 Global Food Market (MSP) The largest market is North America Bread rolls constitute €22bn of the which together with Euro
Slide 15: ARYZTA Food Group Speciality Bakery Market Share
ARYZTA Food Group Speciality Bakery Market Share Over 2008-2016 years ARYZTA increased its market share from 6% to 11% How have we evolved? Total Market ~€37bn 40 ARYZTA Revenue €3.9bn Changing customer base 11% market share Changing costs structure Total Market ~€26bn North America Market ~€17b
Slide 16: Specialty Bakery Market Remains Highly Fragmented
And While We Won Market Share, Specialty Bakery Market Remains Highly Fragmented ARYZTA has a unique position in a yet fragmented market… ARYZTA ARYZTA 11 % 12 % Largest Largest Seven Competitor North America Competitors Europe Speciality Speciality Bakery Market 10 % Bakery Market 20 % €15bn Highly
Slide 17: ARYZTA Customer Centric USP
ARYZTA Customer Centric USP …with robust foundation focused on customer to sustain our leadership position 17 © ARYZTA, October 2016
Slide 18: Focus on Customer
Focus on Customer Customer at heart of what we do Welcoming Increased consumer footfall Aroma Of Increased frequency of store visit Baking Increased customer spend Frequent Bake Reduced waste Off "Little & Reduced labour costs Often" Means Reduced space Freshness Extensive range of dif
Slide 19: Business Evolution
Business Evolution Catalyst Action 1998 No growth in agri Acquire speciality foods business 2007 EU agri policy change Creation of Origin Enterprises 2009 Merger Hiestand Creation of ARYZTA AG 2010 Consumer response to recession Acquire major bakery infrastructure 2012 Customer relevance ATI program
Slide 20: ARYZTA / IAWS Share Price Performance
ARYZTA / IAWS Share Price Performance ARYZTA share price Index rebased to 1989 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Source: Datastream and Bloomberg as of 29-Sep-2016 20 © ARYZTA, October 2016
Slide 21: Future Capacity – Fully Unlocked
Future Capacity – Fully Unlocked Revenue €5bn EBITDA Innovation led €850m Fully Invested Capacity Free cash flow Leader in Specialty c.€350m Frozen Food Investment grade credit 2-3x EBITDA 21 © ARYZTA, October 2016
Slide 22: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 23: To be the Best Bakery
To be the Best Bakery 23
Slide 24: Our Focus
Our Focus • Develop and market Foods that redefine and enhance the Specialty Bakery Experience Our Business • Significant Investment in building our Brands, including La Brea Bakery and Otis Spunkmeyer Our Sustainable • Deliver outstanding Quality and Value to Customers and Growth Model Consumers al
Slide 25: Our Strategy
Our Strategy Our Business Our Sustainable Growth Model Our Market NORTH AMERICA To Challenge and Lead the Specialty Bakery Industry Our Customer Promise Summary © ARYZTA, October 2016 25
Slide 26: Our Business at a Glance
Our Business at a Glance 4 2,500+ Leading Brands Foods Our Business 2,000+ 200,000+ 22M+ Customers Points of Sale Daily Servings Our Sustainable Growth Model 24 GFSI1 90+ Certified Manufacturing Bakeries Lines Our Market 9,500 Single-Instance Employees AIMS2 ERP3 Bakery Route to Market Channel Custo
Slide 27: Our Operating Structure
Our Operating Structure Key Management Our Business Business Units Our Sustainable Growth Model US Consumer US Baking Brand Canada Foods Solutions Our Market North America Functions Our Customer Promise Procurement, Health, Quality Information Human Resources Innovation and Sustainability Technology
Slide 28: Our Team
Our Team Key Management Business Units North America Functions Our Business John Ronan Kristina Andrew Joel Tyson Tracie Mitch Culbert Scott Our Yamin Minahan Dermody Brimacombe Feldman Yu Sheehan Rosen Lu Fitzgerald Sustainable Growth Model Chief Chief President President US President US President
Slide 29: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 30: Our Transformation Goals
Our Transformation Goals • Create a Leadership Position in Specialty Bakery Our Business • Enhance our Customer Relationships Our • Leverage our full Portfolio Sustainable Growth Model • Establish one Way of Working Our Market • Eliminate Duplication • Delayer our Management Structure Our Customer •
Slide 31: Our Transformation
Our Transformation Legacy Current Our Business • Multiple Overlapping • One Company Operating Companies Our and Leadership Teams • Four Business Units with a Sustainable Customer-Centric Focus Growth Model • Numerous ARYZTA Customer Contacts • Single ARYZTA Customer Contact Our Market • Duplicative
Slide 32: Our Repositioning with Capital Investments
Our Repositioning with Capital Investments Investment Initiatives (mEUR) Our Business 2012 40 • Integration into 4 Business Units aligned with our Customers 2013 38 Cash Non- recurring • Reduced Network by 8 Bakeries, 50 Distribution Centers, 5 Offices 2014 43 Expenditure Our 2015 • Function Consoli
Slide 33: Our Challenges and Solutions
Our Challenges and Solutions Our Business Year FY14 FY15 FY16 Our Declining DSD1 Rising Capital Long-Term Contract Challenge Sustainable Business Investment Renewals Growth Model Our Market Rationalized SKUs to Our Customer Renewed 2 Reduce Need for Promise Significant Long-Term Solution DSD Exit Ca
Slide 34: Our Financial Performance
Our Financial Performance Underlying Revenue Growth DSD Exit SKU Rationalization Contract Renewal Our Business 6% 4.7% 4% 2.6% 2.9% 2% - Our (1.2%) (2.4%) (2.1%) (2%) Sustainable (3.2%) (2.3%) (4%) Growth Model (6.7%) (5.6%) (6%) (8%) (6.5%) (8.4%) (10%) FY13 Q1 FY14 Q1 FY15 Q1 FY16 Q1 Our Market Un
Slide 35: Our Sustainable Growth Model
Our Sustainable Growth Model Established Brand, Customer and Category Leadership Our Business • Creating our Leadership Position in Specialty Bakery • Energizing our four Leading Specialty Bakery Brands • Enhancing our Customer Relationships using our Customer-Centric Strategy & Dedicated Customer T
Slide 36: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 37: ARYZTA Is the Leader in the Specialty Bakery Market
ARYZTA Is the Leader in the SpecialtyBakery Market ARYZTA North America Addressable Market Our Business Total Food Our Sustainable €750bn Growth Model Total Bakery1 €38bn Our Market Specialty2 Bakery €17bn Our Customer Promise Our Market Share € 2bn | 11% Summary Sources: Mintel; Technomic; Nielsen;
Slide 38: Specialty Bakery Is an Attractive Market Segment
Specialty Bakery Is an Attractive Market Segment Our Business • Attractive Market Dynamics supported by strong Fundamentals Our Sustainable Growth Model • Evolving Consumers craving Brands and Foods they trust Our Market • Evolving Customers demanding Innovative Solutions • Increasingly rigorous Ope
Slide 39: Rising Incomes Driving Increased Consumer Spending on Food
Rising Incomes Driving Increased Consumer Spending on Food Our Business Rising disposable income is translating into increased consumer spending on food Rising Disposable Income ($000 per capita) Increasing Food Expenditure ($ per capita) Our 2010-2015 CAGR 2016-2020 CAGR 2010-2015 CAGR 2016-2020 CA
Slide 40: ARYZTA Will Outperform Both Bakery and Specialty Bakery
ARYZTA Will Outperform Both Bakery and Specialty Bakery 5-Year Historical CAGR 2020 5-Year Projected CAGR Our Business 6% c3.0% - 5.0% Our 5% Sustainable Growth Model 4% 3% Our Market 2.0% c2.0% 2% 1.6% 1.0% 1% Our Customer Promise 0% Total Bakery Fresh Pan Bread Specialty Bakery Mid-Term ARYZTA Pro
Slide 41: Evolving Consumer Demands Creating Strategic Opportunities
Evolving Consumer Demands Creating Strategic Opportunities Discerning Consumer Spending Select ARYZTA Initiatives Our Business Health & Wellness Price Our Safety Sustainable Value Quality Growth Model Social Impact Convenience Experience Our Market Traditional Evolving Drivers Drivers Our Customer P
Slide 42: Retailers Repositioning to Adapt to Evolving Consumers
Retailers Repositioning to Adapt to Evolving Consumers Food Sales At-Home Our Business Retail / Grocery Our • Increasing perimeter and rising Sustainable relevance of “grocerants” Growth Model • Digitalization of retail strategy • Ongoing consolidation • Fresh and easy-to-eat portable sizes Our Mark
Slide 43: Foodservice Industry Is Innovating
Foodservice Industry Is Innovating Food Sales Away-from-Home Our Business Quick-Service & Casual Restaurants • Growth of simpler, healthier menus with Our transparent, less processed food Sustainable • Focus on innovation and breakfast Growth Model • Incorporating digital and customization • Varying
Slide 44: Partnering with Our Customers to Meet Evolving Consumer Demands
Partnering with Our Customers to Meet Evolving Consumer Demands 2016 Revenue Channel Leaders 100% 50% of Top 8 100% of 100% of 80% of Top 88% of Casual Top 8 FS1 Top 8 FS Our Business 25 Retailers Top 8 QSRs Diners Management Distributors Quick-Service and Casual Restaurants Retail / Grocery 32% 75%
Slide 45: Operating Environment Presenting Challenges and Opportunities
Operating Environment Presenting Challenges and Opportunities Stringent demands forcing food manufacturers to adapt their business models and infrastructure Our Business Food Safety Health & Safety Labor Issues Specialized Commodities • Food Safety • Occupational • Increasing wages • Increasing Our
Slide 46: ARYZTA Will Increase Its Specialty Bakery Market Share
ARYZTA Will Increase Its Specialty Bakery Market Share Our Business Brands Portfolio Innovation Our Sustainable Growth Model Evolving Customer Operating Our Market Consumer Partnerships Environment Our Customer Promise Attractive Specialty Bakery Market Summary © ARYZTA, October 2016 46
Slide 47: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 48: ARYZTA is dedicated to helping your business achieve sustainable success
ARYZTA is dedicated to helping your business achieve sustainable success through customized, scalable and efficient bakery and snacking portfolio solutions. Our commitment to building your trust as a valued partner is as strong as our Passion for Good Food. © ARYZTA, October 2016 48
Slide 49: Our Customer Promise
Our Customer Promise Rigorous Food & Industry-Leading Predictable People Safety Bakery Network Pricing and Programs and and Assured Strategic Supply Quality Supply Base Our Business Leadership Our Sustainable Growth Model Elevating Customer Pioneering Sustainability First Innovation Our Market Our C
Slide 50: Customer First
Customer First Dedicated Customer Our Business Team Account Champion with Dedicated Team across all functional areas Our Sustainable Protecting Brands Focused on Growth Model Growth Protecting both our and our Customers’ Brands with Focused on growing our our rigorous Food & People Customers’ busine
Slide 51: Industry-Leading Bakery Network & Assured Supply
Industry-Leading Bakery Network & Assured Supply Our Integrated Value Chain Our Business Food Transport and Customer Procurement Production Warehousing Satisfaction Our ARYZTA Single-Instance ERP Sustainable Growth Model Forecast to Stock Order to Cash Sales and Product Lifecycle Customer Sales Orde
Slide 52: Industry-Leading Bakery Network & Assured Supply
Industry-Leading Bakery Network & Assured Supply • 50+ Highly Efficient, Our Business Automated Lines, catering to Large Throughput Volumes • 24 GFSI-Certified state-of the-art Bakeries with • 40+ Flexible Lines, • Best-in-class multiple Capabilities catering to Innovative Customer Service and Our L
Slide 53: Predictable Pricing and Strategic Supply Base
Predictable Pricing and Strategic Supply Base Predictable Pricing Strategic Supply Base Our Business • Leading Commodity Hedging Policy • Partnered with industry-leading with long-term horizons Ingredient and Packaging Suppliers with mutual long-term commitments Our • 100% Procurement Spend Manageme
Slide 54: Rigorous Food & People Safety Programs and Quality Leadership
Rigorous Food & People Safety Programs and Quality Leadership Our Business Protect our Food • All Bakeries are GFSI certified Our • Leadership certified Sustainable in FSMA/SFCA Assure our Quality Growth Model Protect our People • Industry-leading • Quality specifications proprietary AIMS • >125,000
Slide 55: Elevating Sustainability
Elevating Sustainability Transparent Food Solutions • Non-GMO and Organic Certification Programs • Eliminating Partially Hydrogenated Oils, Reduced High Our Business Fructose Corn Syrup, Artificial Colors and Flavors Sourcing for a Sustainable Future • 1 Million Certified Cage Free Eggs Our • Purcha
Slide 56: Elevating Sustainability
Elevating Sustainability Our Business Our Sustainable Growth Model Our Market Our Customer Promise Summary © ARYZTA, October 2016 56
Slide 57: BREAK | BAKERY TOUR
BREAK | BAKERY TOUR © ARYZTA, October 2016 57
Slide 58: Pioneering Innovation
Pioneering Innovation Our Business Our Sustainable Growth Model Our Market Our Customer Promise Summary © ARYZTA, October 2016 5838
Slide 59: Pioneering Innovation – Stage-gate
Pioneering Innovation – Stage-gate Exploration / Our Business €900M+ Ideation 1,400+ Foods Our Sustainable Growth Model €500M+ Design 800+ Foods Our Market €200M+ Development 275+ Foods Our Customer Promise €150M+ Launch 200+ Foods Summary © ARYZTA, October 2016 59
Slide 60: Pioneering Innovation – Platforms
Pioneering Innovation – Platforms Breads Cookies Muffins Baked Snacks Our Business • Converted all • Extended Clean • Expanded • Removed High Artisan Breads to Label Offerings Proprietary Fructose Corn non-GMO • Expanded Ingredients Syrup, Artificial Ingredients Proprietary Colors & Flavors Ingredie
Slide 61: Foremost Baking Knowledge & Expertise
Foremost Baking Knowledge & Expertise Baking & Chef Council & Unrivaled Snacking Solution Focused Accelerated Culinary Ingredient Insights and Exploration Commercialization Capability Sourcing Our Business Expertise Our Sustainable Growth Model • Global Network • Core Focus on • Over 50 sourcing • R
Slide 62: Depth of Range
Winning Specialty Bakery Portfolio Cross-Category Expertise Our Business Breads Sweet Goods Snacking Savory Artisan Breads Muffins Snack Cakes Pizza Our Sustainable Growth Model Depth of Range Premium Breads Donuts Cookies Flatbread Pizza Our Market Buns, Rolls, Bagels Cakes and Bars Muffins Prepare
Slide 63: Tailored Customer Solutions
Tailored Customer Solutions PIONEERING INNOVATION • Over 200+ New Foods launched every year with a 70% launch rate driving over €150M of Our Business incremental Revenue • Guiding trends through our Culinary Network • Experimenting with new Ingredients and revolutionary Baking Techniques • Deliverin
Slide 64: Leading Brands
Leading Brands Our Business Our Sustainable Growth Model Our Market Our Customer Promise Summary © ARYZTA, October 2016 64
Slide 65: © ARYZTA, October 2016
© ARYZTA, October 2016
Slide 66: Otis Spunkmeyer: to elevate the sweet snack experience
TO ELEVATE THE SWEET SNACK EXPERIENCE THROUGH CONSISTENTLY DELIVERING ON QUALITY AND GREAT TASTE © ARYZTA, October 2016
Slide 67: General snacking industry
(Ousoputimeveam GENERAL SNACKING BOOMERS MILLENIALS SNACKING INDUSTRY WILL HIT AT LEAST ¢200 Billion IN 2020, WITH 60% OF SALES COMING FROM TWO CONSUMER SEGMENTS:
Slide 68: Snacking consumer statistics
of adults snack at least once daily while half of adults snack two to three times per day of consumers indicate they are snacking on healthier foods this year compared to last year and are more likely to be serving healthier snacks to their children of people who snack were not interested in limitin
Slide 69: Otis Spunkmeyer history
The irresistible smell Otis Spunkmeyer sells Otis Spunkmeyer State of the art Otis of fresh-baked its stores and becomes a Otis Spunkmeyer Spunkmeyer cookies inspires Ken transitions to dominant player R&D Center is the Rawlings to open the wholesale, shipping in the fundraising of Excellence number
Slide 70: Redefining snack cakes with no funky stuff
Cusopunkincvesm REDEFINING SNACK CAKES WITH NO FUNKY STUFF Vv | NO HIGH FRUCTOSE CORN SYRUP V4 NO PARTIALLY HYDROGENATED OILS 7 NO ARTIFICIAL coLORS 7 NO ARTIFICIAL FLAVORS
Slide 71: © ARYZTA, October 2016
© ARYZTA, October 2016
Slide 72: Commodity volume chart
100% 90% 80% 70% 64% 60% 49% 50% 40% 30% 27% 20% 10% 5% 0% 2015 2016 2017 2018 Note: All commodity volume © ARYZTA, October 2016
Slide 73: US Distribution
Rsopuniincrcam US DISTRIBUTION Pa 0% ' 8 ooo rX ° ¢) 8 ee oo os AO Syoaiser®, 4 = or r) ee SE of ore e gr S08 g gee oe © ARYZTA, October 2016
Slide 74: Media coverage
WEEKLY FREUTCAKE - | 4 "4 it di J FOOD NEWS| WomansDay LET ME EAT CAKE
Slide 75: © ARYZTA, October 2016
© ARYZTA, October 2016
Slide 76: La Brea Bakery
“=D: LA BREA BAKERY: © ARYZTA, October 2016,
Slide 77: To always make delicious food with integrity
To always make delicious food with integrity — simple ingredients and a patient process. © ARYZTA, October 2016
Slide 78: La Brea Bakery history
The artisan bread La Brea Bakery develops Artisan bread started La Brea Bakery La Brea Bakery is the movement was born a process that replicates becoming available celebrates 25 years number one Artisan when La Brea Bakery the traditional way nationally when La Brea with a brand refresh Bread compan
Slide 79: Highest Quality, Simple Ingredients
Highest Quality, Simple Ingredients No Preservatives, Additives or Dough Conditioners Kosher Pareve and Certified Organic Bakeries Transparency of Sourcing and Process Non-GMO © ARYZTA, October 2016
Slide 80: La Brea Bakery awards
Bakery of the Year Top 10 Bread Baker Best New Snack & Bakery Product Platinum Award Grand Prize Snack Food & Wholesale Bakery, Snack Food & Wholesale Bakery, Dessert Professional Magazine, Hermes Creative Awards, La Brea 2016 PR Daily Video Awards, named La Brea Bakery its 2016 named La Brea Bakery
Slide 81: Commodity volume chart
100% 90% 80% 70% 60% 50% 50% 42% 40% 31% 30% 27% 20% 10% 0% 2015 2016 2017 2018 Note: All commodity volume © ARYZTA, October 2016
Slide 82: US Distribution
. b ~ US DISTRIBUTION LA BREA BAKERY. nited States @ 8 rh © ARYZTA, October 2016,
Slide 83: Michael Pollan quote on bread
“The bread that you buy in the supermarket, in that package, the Wonder Bread, is very different than what bread was for most of history.” – Michael Pollan, Cooked © ARYZTA, October 2016
Slide 84: Quote on industrial agriculture and flours
“Before the advent of industrial agriculture, Americans enjoyed a wide range of regional flours milled from equally diverse wheats, which in turn could be used to make breads that were astonishingly flavorful and nutritious. For nearly a century, however, America has grown wheat tailored to an indus
Slide 85: First national farm to table bread in North America
™ We are proud to be the first national farm to table bread in North America. Artisan Breads made from single origin heritage grains. La Brea Bakery Reserve embraces the beauty and dignity of farming and the true taste of real food. © ARYZTA, October 2016
Slide 86: Our Beliefs in Practice
OUR BELIEFS IN ™ PRACTICE From the farm to your table, La Brea Bakery Reserve strives to bring well-crafted, nutritious and flavorful breads: • Single Origin • Heritage Grains • Our Starter • Patient Process • Responsible Farming © ARYZTA, October 2016
Slide 87: La Brea Bakery Reserve: Vintage 2016
LA BREA BAKERY RESERVE: Vintage 2016 Fortuna Pain de Struan Wheat Campagne © ARYZTA, October 2016
Slide 88: © ARYZTA, October 2016
© ARYZTA, October 2016
Slide 89: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 90: Summary
Summary
Slide 91: Contents
Contents 1 ARYZTA AG – Strategy & Overview Owen Killian 2 Focus on ARYZTA North America Our Business John Yamin Our Sustainable Growth Model Ronan Minahan Our Market Tyson Yu Andrew Brimacombe | Tracie Sheehan Our Customer Promise Scott Fitzgerald | Kristina Dermody Summary John Yamin 3 ARYZTA AG –
Slide 92: ARYZTA Europe
ARYZTA Europe Year ended 31 July 2016 ARYZTA Europe 2016 Financial Highlights 22 Bakeries 18 Countries Revenue 6.1% Underlying revenue 4.0% Acquisitions, net 1.9% Currency 0.2% EBITA 1.8% EBITA margin (50) bps Savoury QSR 8% & Other Food Solutions (8 %) Top 20 19% Convenience 37% (22 %)
Slide 93: ARYZTA Europe Revenue Analysis
ARYZTA Europe Revenue Analysis +€122.6m (€90.6m) +7.4% (5.5)% Disposals Acquisitions €1,747.1m +€2.5m +6.1% +0.2% FX FY16 Revenue +€19.9m +1.2% +€ 46.1m Price/Mix +2.8% Volume €1,646.6m FY15 Revenue 93 © ARYZTA, October 2016
Slide 94: ARYZTA Europe - Germany
ARYZTA Europe - Germany – Completed new €150m bakery investment with 5 lines at existing campus New Bakery – Closed older, less efficient facility employing 500 people Investment Will – Transferred almost €80m revenue into existing facilities Drive Future incl. new bakery Efficiency – Significant di
Slide 95: ARYZTA Europe - CEE
ARYZTA Europe - CEE – Acquisition of Fornetti performing well Update on – Hungary based with franchisee model across CEE Acquisitions – Synergy with ARYZTA operations in CEE – Developing business with modern retail and discounters ISB New Channels – Leveraging local consumer insights – Established b
Slide 96: ARYZTA Europe - France
ARYZTA Europe - France – Well established Coup de pates business in France Well Established Innovation Led – Innovation led revenue generation model Business – 30% of revenue Paris weighted – Adversely impacted by series of terrorist attacks Impacted by Recent Events – Tourists numbers visiting Pari
Slide 97: ARYZTA Europe - Switzerland
ARYZTA Europe - Sw itzerland – Well flagged contract renewal volume loss of frozen bread commences in FY17 – Renewal losses triggered by significant insourcing Well Flagged investment by customer in fresh bread manufacturing and Contract logistics Renewals – Originally a Joint Venture investment wit
Slide 98: ARYZTA Europe - UK & Ireland
ARYZTA Europe - UK & Ireland – Economic recovery assisting strong performance in both regions Economic Recovery – Consumers spending again Update on – Acquisition of La Rousse, focused on premium restaurant Acquisitions sector, performing well – Brexit and FX volatility a key issue – Require price i
Slide 99: ARYZTA Group - Continuing Operations FY 2009 – FY 2016
ARYZTA Group - Continuing Operations FY 2009 – FY 2016 Revenue EBITA (€m) (€m) 2016 3,879 2015 3,820 2014 3,394 2013 2012 2,868 2011 2,577 CAGR CAGR 2010 1,679 12.4% 13.1% 2009 1,713 Cash flow generated from activities Underlying fully diluted EPS – continuing operations (€m) (€c) 2016 266.7 2015 21
Slide 100: EBITA Margin Movements
EBITA Margin Movements Year ended 31 July 2016 in EUR ’000 July 2016 Margin July 2015 Margin bps Revenue 3,878,871 3,820,231 Cost of sales (2,621,744) (67.6)% (2,579,789) (67.5)% (10)bps Distribution expenses (410,427) (10.6)% (399,952) (10.5)% (10)bps Total Group Gross profit 846,700 21.8% 840,490
Slide 101: Return on Invested Capital
Return on Invested Capital Year ended 31 July 2016 North Rest of Total in EUR million Europe America World Group 2016 Group share net assets 1,903 2,488 198 4,589 EBITA 215 243 26 484 ROIC1 11.3% 9.8% 13.0% 10.5% 2015 Group share net assets 1,963 2,602 204 4,769 EBITA 220 275 27 522 ROIC1 11.2% 10.6
Slide 102: Customer Contract Renewals Impact
Customer Contract Renewals Impact In EUR million 2016 2017 2018 Europe – (50) (30) North America (90) (40) – Total contract renewals revenue impact (90) (90) (30) – Long-term contract renewals refers to three customers whose contract renewals coincided. Two of these contracts originated as joint ven
Slide 103: ARYZTA Group – Quarterly Underlying Revenue
ARYZTA Group – Quarterly Underlying Revenue Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Europe Volume (%) 2.1% 2.7% 3.3% 3.1% 2.8% Price/Mix 3.4% 1.1% 0.6% (0.1)% 1.2% Underlying growth % 5.5% 3.8% 3.9% 3.0% 4.0% North America Volume (%) (9.4)% (6.5)% (4.2)% (1.2)% (5.3)% Price/Mix 3.8% 4.1% 1.9% (0.9)%
Slide 104: FY 2017 Financial Metrics
FY 2017 Financial Metrics Current Estimates1 Underlying income statement Underlying revenue growth 1 – 2% EBITA margin 11.5% – 12.5% Joint Ventures (70% H1 weighted) €18 – 25m Finance costs, including hybrid financing €80 – 105m Effective tax rate 16% – 19% Reconciliation of underlying net profit to
Slide 105: FY17 Actions for Success
FY17 Actions for Success Optimise new German bakery capacity Expand Swiss customer base to absorb spare capacity following contract Europe renewal losses Positive Successful pricing recovery strategies to deal with FX volatility Operating Positive innovation-led revenue development Leverage
Slide 106: Unlocking Capacity – Opportunity
Unlocking Capacity – Opportunity – Revenue: + 25% – EBITDA: + 40% – EBITDA Margin: 17% – ROIC: 15% – To unlock this capacity ARYZTA sustaining predictable free cash generation in the range of c€225-275m To grow underlying revenue from 3.4% in 2016 to 5.4% post contract renewals To fully unlock