Barry Callebaut Ag · SIX:BARN
Barry Callebaut — H1 2010/11 Earnings Presentation
32 slides from Barry Callebaut's earnings presentation, Apr 1, 2011
Slide 1: Half-Year Results 2010/11
Half-Year Results 2010/11 Analysts presentation April 1, 2011 April 1, 2011 Barry Callebaut H1 2010/11 results presentation
Slide 2: Cautionary note
Cautionary note Certain statements in this presentation regarding the business of Barry Callebaut are of a forwardlooking 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 “beli
Slide 3: Financial and business Highlights H1 2010/11
Financial and business Highlights H1 2010/11 Sales volume grew twice as fast as the market: +7.1% Strong profit growth: Net profit up 17.1% in local currencies (+9.0% in CHF) Growth drivers: Emerging markets and Cocoa Products for strategic customers Gourmet: Investing in structures and orga
Slide 4: Global chocolate confectionery market up 3.6%
Global chocolate confectionery market up 3.6% Sep-Jan 2010/11 (in 1,000 tonnes) WE -1.8% 7.1% EE 7.4% USA 670 658 410 439 274 295 2010 2011 2010 2011 2010 2011 24.3% China Total Top 15 countries 14 18 3.6% Brazil 12.1% 2010 2011 70 78 2010 2011 1’485 1’538 Source: Nielsen data (Sep 2010-Jan 2011) 20
Slide 5: Growth across all regions
Business Performance HY 2010/11 Growth across all regions Europe Americas Asia-Pacific Global Sourcing & Cocoa Food Manufacturers, Food Manufacturers Food Manufacturers Cocoa Products Gourmet & & Gourmet & Gourmet Consumer 56.8% of sales 21.3% of sales 3.8% of sales 18.1% sales volume volume volume
Slide 6: Raw materials at high levels, volatility increase
Raw materials at high levels, volatility increase “Cost plus” model proves to be robust Cocoa bean- Ldn 2nd Position in GBP/tonne White Sugar average price EUR/tonne london n°5 (2nd position) EU white sugar Kingsman‘s estimate WE 3000 (spot prices) March 2011 950 2008 GBP/tonne March 2011 2500 850 8
Slide 7: Situation in Côte d'Ivoire – as per 31st March 2011
Situation in Côte d‟Ivoire – as per 31st March 2011 Since elections end of November 2010, two parties are fighting for presidential power Côte d‟Ivoire accounts for about 35% of the total world cocoa crop Current 14 January 2011: EU adopted sanctions against Côte d‟Ivoire situation 24 Januar
Slide 8: Victor Balli CFO
Victor Balli CFO April 1, 2011 Barry Callebaut H1 2010/11 results presentation 8
Slide 9: Key Figures – H1 2010/11
Key Figures – H1 2010/11 Growth twice as fast as the market and improved profitability Change in % Change in % H1 H1 In local 2010/11 2009/10 currencies Sales volume [in tonnes] 7.1% 706'570 659'536 Sales revenue [CHF m] 13.2% 3.1% 2'737.9 2'656.5 CHF per tonne 5.7% -3.8% 3'875 4'028 Gross profit [C
Slide 10: Region Europe: Positive growth driven by Eastern Europe
Region Europe Positive growth driven by Eastern Europe Europe • Mixed overall market growth, Eastern Europe with strong growth and slight decline in Western Europe, mainly Germany • BC achieved double digit volume growth in FM and Gourmet in Eastern Europe • Good demand of Gourmet products and marke
Slide 11: Region Americas: Significant growth driven by FM Corporate Accounts
Region Americas Significant growth driven by FM Corporate Accounts Americas • Chocolate consumption in the U.S. kept strong growth momentum (+7.1%); Brazil increased by +12.1% • Significant overall volume growth of +9.8% driven by U.S., Mexico and Brazil • Food Manufacturers recorded double-digit gr
Slide 12: Region Asia-Pacific: Double digit growth with Gourmet business
Region Asia-Pacific Double digit growth with Gourmet business Asia-Pacific • Significant increase in volume growth, driven by India, Japan, Malaysia and China • Double-digit volume growth with Gourmet & Specialties Products, mainly with our global brands Cacao Barry and Callebaut • Food Manufacturer
Slide 13: Region Global Sourcing & Cocoa: Significant top- and bottom line growth
Region Global Sourcing & Cocoa Significant top- and bottom line growth Global Sourcing & • All relevant raw material prices moved up to new historical highs Cocoa • Significant volume growth positively impacted by higher demand of cocoa powder and cocoa products for strategic customers • Profitabili
Slide 14: Improved combined cocoa ratio
Cocoa processing profitability Improved combined cocoa ratio Cocoa powder-butter combined ratio* – European ratios 6 months forward against LIFFE 4.50 4.00 18 March 2011 3.55 Combined ratio 3.50 3.00 2.50 2.00 Powder ratio 1.50 Butter ratio 1.00 0.50 0.00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Ma
Slide 15: Sustained double digit EBIT growth before scope and negative currency effects
EBIT – HY 2010/11 Sustained double digit EBIT growth before scope and negative currency effects in mCHF 14.2% 18.6 -10.8 238.5 -5.9 11.0 -15.5 10.9 217.1 208.8 EBIT Volume Margin Operational Additional EBIT before Scope Negative EBIT HY 2009/10 effects effects improvements SG&A Scope, non- effects c
Slide 16: Lower financial expenses, despite slightly higher interest rate
Net Financial Expenses Lower financial expenses, despite slightly higher interest rate in mCHF Av. interest rate 3.5% 3.9% 4.5 1.2 0.6 34.1 30.9 31.4 Net interest Net interest Bank charges, Gains on Exchange Net financial expense H1 expense H1 fees and other derivative rate impact expenses H1 2009/1
Slide 17: From EBIT to Net Profit
From EBIT to Net Profit Lower financial expenses contributed to a double digit profit growth in mCHF Change in % Change in In local % H1 H1 currencies CHF 2010/11 2009/10 Operating profit (EBIT) 11.4% 4.0% 217.1 208.8 Financial items -19.8% (34.1) (42.5) Income taxes 17.8% (25.1) (21.3) Tax rate [in
Slide 18: Sustainable Cash Flow despite investments in Working Capital and Capex
Cash Flow Sustainable Cash Flow despite investments in Working Capital and Capex First 6-months 2009/10 First 6-months 2010/11 -21% 272.2 -330.0 (-56.2) 216.0 -226.0 -44.5 -94.0 -1.0 105.0 -27.3 129.6 Operating Investment Capital CF from Cash Operating Investment Capital CF from Cash Cash Flow* in W
Slide 19: Balance Sheet – H1 2010/11
Balance Sheet – H1 2010/11 Solid Financials with improvement of all key ratios Change Feb 11 Feb 10 in % Total Assets [CHF m] -2.2% 3'979.1 4'068.0 Net Working Capital [CHF m] -13.5% 1'054.1 1'218.4 Non-Current Assets [CHF m] -3.3% 1'408.4 1'457.2 Net Debt [CHF m] -12.5% 956.2 1'093.4 Shareholders'
Slide 20: Financing and Credit Rating agencies
Financing and Credit Rating agencies Financing • Stable financing in place 1. Syndicated loan runs until July 2013 2. Term of outstanding bond is July 2017 No short term need for refinancing, however we look closer to market opportunities Credit Rating Agencies • Standard and Poors raised in Feb 201
Slide 21: Juergen Steinemann CEO
Juergen Steinemann CEO April 1, 2011 Barry Callebaut H1 2010/11 results presentation 21
Slide 22: Our Growth Strategy
Our Growth Strategy “Heart and engine of the chocolate industry” Vision Chocolate expert and business partner of choice Number one chocolate company Expansion Sustainable, Strategic Innovation profitable pillars growth Cost leadership April 1, 2011 Barry Callebaut H1 2010/11 results presentati
Slide 23: Expansion: Emerging markets drive growth
Expansion 1. Geography Emerging markets drive growth Emerging markets in % of total sales volume (6 months figures) 2010/11 growth Investments in emerging 21% +12.9% markets paying off 20% 13% 17% 12% 14% 6% 13% +38.1% Poland: Line extension 2% 9% 10% completed Mexico: Volume increased, gained
Slide 24: Expansion: Implementation and strengthening partnerships
Expansion 2. Outsourcing/Partnerships Implementation and strengthening partnerships Long-term outsourcing agreements evolution as % of total sales volume (6 months figures) 2010/11 Implementation of Kraft growth long-term strategic partnership has started +12.9% 21% and it is well on track 20% 13%
Slide 25: Developments of our 6 strategic actions
Expansion 3. Gourmet & Specialties Products Developments of our 6 strategic actions 1. Sharpen focus on two global brands Cacao Barry and Callebaut Centralization of brand management completed Regional brand Managers put in place in U.S. and Western Europe 2. Move from a product to a segment foc
Slide 26: Innovation: Many new, innovative specialties
Innovation Many new, innovative specialties Decorations & Fillings 40 new decorations developed under „Callebaut“ brand 120 new decorations developed under „Cacao Barry“ brand answering the trend towards smaller and customized products Broad range of new fillings Inclusions Innovative soft m
Slide 27: Innovation: Many new, innovative specialties
Innovation Innovation Many new, innovative specialties Healthier confectionary alternatives Broadened range of specialty products reduced in saturated fats Significant reduction in the use of hydrogenated fats Elimination of almost all trans-fatty- acids from all products Terra Cacao Chocolate
Slide 28: Cost Leadership: Challenging environment offset by efficiency improvements
Cost Leadership Challenging environment offset by efficiency improvements Higher manufacturing costs in last six months due to: Strong growth in Gourmet and Specialties products Reduced energy consumption per ton offset by higher energy prices Contingency plan Côte d„Ivoire “One+“ the new
Slide 29: Outlook: Financial targets confirmed
Outlook Financial targets confirmed Annual growth targets on average* for 2009/10 through 2012/13: Volumes: 6-8% EBIT: at least in line with volume growth * Our view for the 2009-2013 period reflects current economic forecasts for the markets we operate in as well as internal developments and
Slide 30: Q&A
Q&A April 1, 2011 Barry Callebaut H1 2010/11 results presentation 30
Slide 31: Summary
Summary Sales volume growing twice as fast as the market: +7.1% Growth drivers: Emerging markets and strategic partnerships Strong profit growth: Net profit up 17.1% Confirmation of four-year growth targets up to 2012/13 Volumes: 6-8% EBIT: at least in line with volume growth in local cu
Slide 32: Barry Callebaut Financial Calendar 2010/11
Barry Callebaut Financial Calendar 2010/11 9-month key sales figures 2010/11 (news release) – June 30, 2011 Full-year results 2010/11 (news release / conference) – November 10, 2011 Annual General Meeting 2010/11 – December 8, 2011 April 1, 2011 Barry Callebaut H1 2010/11 results presentation