Barry Callebaut Ag · SIX:BARN
Barry Callebaut — H1 2019/20 Earnings Presentation
45 slides from Barry Callebaut's earnings presentation, Apr 16, 2020
Slide 1: Roadshow presentation
Roadshow presentation Half-Year Results 2019/20 April / Mai 2020
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
AGENDA BC at a glance Highlights Half-Year Results 2019/20 Strategy & Outlook Appendix 3 Half-Year 2019/20 Roadshow presentation
Slide 4: BC at a glance
BC AT A GLANCE 4 Half-Year 2019/20 Roadshow presentation
Slide 5: Strong values & a strong team
BC at a glance - Who are we? Strong values & a strong team We are the heart and A merger between Cacao Barry, the very first French engine of the chocolate and cocoa industry chocolate connoisseur since 1842 and Callebaut a Belgian chocolate couverture manufacturer expert since 1911 Listed on the SI
Slide 6: This is Barry Callebaut
BC at a glance – This is Barry Callebaut ‘Shaping the world of chocolate and cocoa’ Full-Year 2018/19 0 0 0 6 Half-Year 2019/20 Roadshow presentation
Slide 7: We are present in the key parts of the cocoa and chocolate value chain
BC at a glance - What do we do? We are present in the key parts of the cocoa and chocolate value chain From the cocoa bean to the chocolate and cocoa products 7 Half-Year 2019/20 Roadshow presentation
Slide 8: A strong global market leader
BC at a glance – Market Leadership A strong global market leader Cocoa grinding capacity (kMT) Industrial Chocolate (open market – kMT) Market impact BC BC Cargill Cargill Olam Fuji Oil ECOM Puratos Fuji Oil Cémoi Guan Chong Clasen Mondelez Guan Chong Nestlé Irca Ferrero Kerry Group BT Cocoa Guittar
Slide 9: A broad offering with cost plus model on majority of business
BC at a glance – offering and business model A broad offering with cost plus model on majority of business Cocoa Products Food Manufacturers Gourmet & Specialties % share: 22%* of volume 66%* of volume 12%* of volume Customer: Small, medium and Global Small, medium and Global Professionals, Food Cha
Slide 10: A global footprint and local service: 62 factories worldwide
BC at a glance - where are we present? A global footprint and local service: 62 factories worldwide Cocoa & Chocolate factories Chocolate Academy Cocoa factories in countries of origin and chocolate factories close to our customers. With our 23 Chocolate Academies worldwide we are at the pulse of an
Slide 11: West Africa is the world's largest cocoa producer
BC at a glance – Cocoa bean sourcing West Africa is the world’s largest cocoa producer Total world harvest (18/19): 4,745 TMT About 70% of total cocoa beans are of others 12% West African Origin Brazil* 4% Barry Callebaut processed around 1 Ivory Coast* 45% Cameroon* million tonnes or approximately
Slide 12: Highlights
HIGHLIGHTS Half-Year Results 2019/20 12 Half-Year 2019/20 Roadshow presentation
Slide 13: COVID-19 update
COVID-19 update • As a leader and trusted partner in the global food supply chain, we play a critical role in contributing to the availability of food products. • Early on, we put in place precautionary measures to provide safe working environments and maintain business continuity. • To date, we hav
Slide 14: Strong volume growth and profitability
Highlights Half-Year Results 2019/20 Strong volume growth and profitability • Sales volume up +5.4% in a flat chocolate confectionery market1 • Sales revenue of CHF 3.8 billion, up +5.8% in local currencies (+2.4% in CHF). • Operating profit (EBIT) recurring2, up +6.7% in local currencies (+3.1% in
Slide 15: Chocolate continues to outperform underlying market
Highlights Half-Year Results 2019/20 Chocolate continues to outperform underlying market Cocoa FY 2017/18 FY 2018/19 HY 2019/20 Chocolate +6.3% +5.1% +5.4% +10.6% +10.7% +8.2% +8.0% +8.1% +10.2% +7.4% +4.8% +5.3% +6.5% +4.8% +4.7% +3.0% +1.1% +2.3% +10.6% +3.1% +8.1% +9.0% +1.7% +7.7% +2.5% +5.2% +5
Slide 16: All key growth drivers contribute positively
Highlights Half-Year Results 2019/20 All Key growth drivers contribute positively % of total % volume growth Group volume vs. prior year 36% +10.6% Emerging excl. Cocoa: Markets +11.2% Key growth drivers 32% Outsourcing crucial to +1.8% Long-term continuously Partnerships outperform the market 12% +
Slide 17: Strong innovation pipeline and continued expansion
Highlights Half-Year Results 2019/20 Strong innovation pipeline and continued expansion Change in Barry Introduction ‘Cacaofruit Callebaut’s Ruby receives Opening revamped New leadership Experience’ shareholder TMP as ‘4th Type 3rd Forever Chocolate CHOCOLATE in Region EMEA including ‘Wholefruit str
Slide 18: Strong Innovation
Highlights Half-Year Results 2019/20 Strong Innovation Riding the trends • Ruby enters the product category of ice cream with launches of ‘Magnum Ruby’ and ‘Häagen-Dazs Ruby’. • Introduction 100% dairy-free ‘M_lk Chocolate’ as part of the growing indulgent ‘Plant Craft’ range. Innovation on the core
Slide 19: Valentine's Day was dressed in Ruby
Highlights Half-Year Results 2019/20 Valentine’s Day was dressed in Ruby 19
Slide 20: Financial review
FINANCIAL REVIEW Half-Year Results 2019/20 20 Half-Year 2019/20 Roadshow presentation
Slide 21: Strong volume growth and profitability
Financial review – Key figures Strong volume growth and profitability Change % Pro-forma 1 Group performance (in CHF million) HY 2019/20 in local in CHF currencies Sales volume (in tonnes) 1,103,728 +5.4% n/a Sales revenue 3,761.8 +2.4% +5.8% Gross profit 607.4 +3.2% +6.1% EBIT reported 303.5 +0.5%
Slide 22: Growth supported by all Regions
Financial review – Key performance indicators by Region Growth supported by all Regions EMEA Group Sales volume: Americas 507,177 1,103,728 287,482 46% tonnes 26% Global Cocoa APAC 242,315 66,754 22% 6% EMEA Americas Asia Pacific Global Cocoa FY volume +5.5% +2.2% +16.7% +6.5% growth EBIT growth in
Slide 23: Gross profit up +6.1% in local currencies
Gross profit bridge Gross profit up +6.1% in local currencies, mainly supported by good volume growth and positive mix In CHF millions +6.1% 12 -8 625 -17 607 32 589 Gross profit Volume Mix Cocoa Gross profit FX impact Gross profit HY 2018/19 HY 2019/20 HY 2019/20 Pro-forma in LC IFRS 16 23 Half-Yea
Slide 24: Cocoa Combined Ratio development
Cocoa processing profitability Cocoa Combined Ratio development European combined ratio - 6 -month forward ratio Directionally right… 4.0 Shows general high level Combined industry direction, assuming 3.5 Ratio 3.4 many variables are fixed. 3.0 However… Butter 2.5 Ratio Many variables are not fixed
Slide 25: Operating profit (EBIT) recurring up by +6.7% in local currencies
EBIT bridge Operating profit (EBIT) recurring up by +6.7% in local currencies In CHF million +6.7% -16 322 36 -8 302 -11 304 EBIT Additional Additional EBIT Factory FX EBIT HY 2018/19 Gross profit SG&A, scope HY 2019/20 closure costs HY 2019/20 Pro-forma recurring, in LC IFRS 16 25 Half-Year 2019/20
Slide 26: Net profit recurring up +11.6% in local currencies
EBITDA to Net profit bridge Net profit recurring up +11.6% in local currencies, as a result of improved profitability and lower financial result In CHF million 413 Tax rate: 19.6% vs (PY 4061) PY 19.3% +11.6% 304 +3.1% (PY 3021) (in CHF) -110 (PY -85) 9 220 -50 204 8 198 (PY -55) -50 (PY -48) EBITDA
Slide 27: Raw material price development
Raw material Raw material price development 250% 200% Increase HY 2019/20 (average) 150% Milk powder +43.0% Cocoa beans +13.6% 100% Sugar World +3.0% Sugar EU +18.4% 50% 0% Aug-09 Feb-13 Feb-10 Aug-18 Feb-20 Aug-10 Feb-14 Aug-14 Feb-15 Aug-16 Feb-17 Feb-11 Feb-12 Aug-12 Aug-13 Aug-15 Feb-16 Aug-17 F
Slide 28: Adjusted Free cash flow similar as prior-year
Free cash flow Adjusted Free cash flow similar as prior-year on the back of improved working capital management In CHF million +1.7% 406 413 -174 (PY -218) -73 -18 -341 -359 (PY -68) (PY -10) (PY -109) (PY -119) -148 -36 (PY -127) (PY -3) EBITDA Change in Interest Capex Others FCF Adjustment FCF 6m
Slide 29: Net debt flat versus prior-year excluding IFRS 16 adoption
Financial Review – Net debt Net debt flat versus prior-year excluding IFRS 16 adoption. Adjusted for RMI, Net debt decreased In CHF million +211 +6 71 -65 1,975 1,981 1,770 205 -1,099 -161 1,043 882 161 Net Debt IFRS 16 Adj. Net Free Cash FX Impact Net Debt Adjustment Adjusted Adjusted Feb’19 Leases
Slide 30: Balance sheet
Financial Key Figures Balance sheet (in CHF million) Feb 20 Aug 19 Feb 19 Pro-forma1 Pro-forma1 Total assets 7,550 6,712 7,024 Net working capital 1,838 1,363 1,762 Non-current assets 2,854 2,857 2,846 Net debt 1,981 1,510 1,975 Adj. Net debt2 882 817 1,043 Shareholders’ equity 2,403 2,399 2,384 Deb
Slide 31: Strategy & Outlook
STRATEGY & OUTLOOK Half-Year Results 2019/20 31 Half-Year 2019/20 Roadshow presentation
Slide 32: Consistent long-term strategy – strong execution
Strategy & Outlook Consistent long-term strategy – strong execution “Heart and engine of the Vision chocolate and cocoa industry” Sustainable growth Expansion management Margin accretive growth COVID-19 4 strategic Innovation ‘smart Accelerated growth in pillars growth’ Gourmet, Specialties and Emer
Slide 33: COVID-19 – Care and serve
Strategy & Outlook COVID-19 – Care and serve Put in place precautionary measures to provide safe working environment and maintain business continuity: • Set up of dedicated teams at global and regional levels. • Initial team segregation in offices and factories. • Early strong sanitary measures on:
Slide 34: COVID-19 – how we are impacted
Strategy & Outlook COVID-19 – how we are impacted Impact on our network Impact on our businesses To date, we have not experienced any major disruption As the COVID-19 pandemic progresses, it’s too early to to our operations. establish the full business impact. • APAC: No major disruptions, despite s
Slide 35: Post COVID-19 learnings from China
Strategy & Outlook Post COVID-19 learnings from China China: Production / Delivery recovery 99% 88% • China was the first country to be impacted by the 60% Tonnes COVID-19 pandemic. % • Sharp slowdown in the Gourmet business in February 45% 2020, particularly in the high-end segment. 0% • Factory in
Slide 36: Outlook – adapt to and overcome the pandemic
Strategy & Outlook Outlook – adapt to and overcome the pandemic COVID-19 is a major unforeseen event. While we have put in place precautionary measures to support the continuation of our operations, its impact on business growth and profitability cannot be quantified at this stage as it depends on t
Slide 37: Appendix
APPENDIX 37 Half-Year 2019/20 Roadshow presentation
Slide 38: What makes Barry Callebaut unique
Appendix What makes Barry Callebaut unique Global number one player in chocolate and cocoa Deep chocolate and cocoa expertise Consistent growth above the underlying market Global leader in Gourmet & Specialties Proven and long-term oriented strategy Unparalleled global footprint, present in all key
Slide 39: Solid liquidity profile with no outstanding amounts under the Revolving Credit Facility
Appendix Solid liquidity profile with no outstanding amounts under the Revolving Credit Facility as per HY end CHF 4,640 M As of 29 Feb 2020 ABS CHF 936 M Various uncommitted facilities -49% EUR 750 M Domestic Commercial Paper Programme CHF 2,352 M ABS EUR 750 M Revolving Maturity 2024 Credit Facili
Slide 40: Chocolate confectionery market development – Nielsen data
Appendix Chocolate confectionery market development – Nielsen data Western Europe (33% of market) North America (22% of market) 2014-19 CAGR: -0.3% 2014-19 CAGR: -0.5% HY 2019/20: -0.7% HY 2019/20: -3.2% EEMEA (24% of market) 2014-19 CAGR: -0.3% HY 2019/20: +2.9% Asia Pacific (14% of market) 2014-19
Slide 41: Our market and opportunities ahead
Appendix Our market and opportunities ahead Global Chocolate confectionery volume growth vs cocoa bean price Forecast volume growth per application 2018-2023 5 2’500 4 2’000 Volume growth 3 GBP / tonne Chocolate confectionery 1.3% 2 1’500 1 1’000 0 Ice cream 2.2% 500 -1 -2 0 Sweet biscuits 1.9% 2007
Slide 42: Long-term EBIT per tonne development
Long-term EBIT per tonne development Increase in EBIT thanks to enhanced product and customer mix and continued improvement in Cocoa business In CHF millions 327 312 312 290 282 274 279 283 271 286 251 281 272 256 242 223 231 231 219 2,036 2,140 1,795 1,834 1,914 1,717 1,379 1,536 1,210 1,269 2009/1
Slide 43: Forever Chocolate Progress Report – increasing our impact
Sustainability Forever Chocolate Progress Report – increasing our impact 43 Half-Year 2019/20 Roadshow presentation
Slide 44: Forever Chocolate Progress Report – increasing our impact
Sustainability Forever Chocolate Progress Report – increasing our impact 44 Half-Year 2019/20 Roadshow presentation
Slide 45: Thank you
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