Aryzta Ag · SIX:ARYN
Aryzta — H1 2024 Earnings Presentation
38 slides from Aryzta's earnings presentation, Aug 12, 2024
Slide 1: ARYZTA AG – H1 2024 results
ARYZTA AG — H1 2024 results August 12, 2024 | AR¥ZTA SERVING INSPIRATION
Slide 2: Forward Looking Statement
Forward Looking Statement This document contains forward looking statements which reflect the Board of Directors' 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 forwa
Slide 3: Strategic overview
Strategic overview
Slide 4: H1 2024 key results highlights
▪ Revenue €1,055.2m ▪ Innovation share almost doubled to 19.4% of revenues ▪ Organic growth -0.7%, on flat volume ▪ EBITDA €149.8m ▪ EBITDA margin 14.2% ▪ New RCF – Hybrid bond repurchase
Slide 5: H1 volume growth drivers and pricing and mix
▪ H1 volume growth impacted by: ➢ Active portfolio management ➢ QSR recovery ongoing ➢ Pressurised consumer spending ➢ Offset by strong innovation and new customers/listings ▪ Pricing and mix negative ➢ Some tactical price reductions: cost inflation trend unchanged ➢ Negative mix continues to improv
Slide 6: Innovation almost doubled to 19.4% of revenue
▪ Innovation almost doubled to 19.4% of revenue Artisanal products, buns, pastries ▪ Premium products accounting for c. 40% of revenue ▪ Solid organic growth performance in France, Switzerland, Denmark, Poland, Fornetti and Rest of World ▪ Other Foodservice performed strongly in most markets ▪ Conti
Slide 7: Innovation center and new capacity
▪ State-of-the-art innovation center in Germany: ➢ Available to all Group’s businesses from H1 2025 ➢ Covering ARYZTA’s entire portfolio capabilities ➢ Serving all customers and channels New capacity coming on stream to leverage consumer trends: ▪ Malaysian laminated dough line – operational 2024 ▪
Slide 8: Mid-term targets, new CEO and investment
▪ One remaining mid-term target to deliver ▪ New CEO appointed ▪ Dual role ends ▪ New mid-term targets expected in H1 2025 ▪ Continued investment in innovation and growth
Slide 9: H2 outlook and 2024 guidance reiterated
Organic growth expected to improve in H2 supported by: — Innovation and new listings — Further recovery in QSR — Seasonally stronger H2 — Significantly reduced impact from active portfolio management — More favourable comps 2024 guidance reiterated - further improvements in all key metrics — Organic
Slide 10: Mid-term targets 2023-25
Organic growth (CAGR) EBITDA Margin ROIC ≥ ≥ Revenue (€) CAPEX as % of revenue Total net debt leverage (incl. hybrids)
Slide 11: Financial review
Financial review
Slide 12: Financial review highlights
▪ Profitability, driven by innovation and active portfolio management ▪ Solid cash generation to improve our financial position ▪ Early achievement of mid-term leverage ratio target of <3x ▪ ROIC1.) improves strongly – 300bps to 13.1% ▪ Balance sheet renovation – RCF maturity and headroom extended ▪
Slide 13: Organic growth, EBITDA, free cash flow and ROIC
Organic Growth % EBITDA % Free Cash Flow (€m) ROIC2.) % 22.0% 14.2% 72.1 13.1% 13.2% 10.1% 53.0 WACC: 8% -0.7% H1 FY231.) H1 FY24 H1 FY231.) H1 FY24 H1 FY231.) H1 FY24 H1 FY231.) H1 FY24 Revenue EBITDA (€m) 1,060.2 1,055.2 (€m) 140.0 149.8 1.) Represents 6-month financial period ended June 2023 2.)
Slide 14: Revenue bridge
In €m / % of revenue Organic Growth -0.7% 1,060.2 0.0% -0.4% Key Highlights: 1,055.2 — Subdued consumer sentiment -0.3% 0.2% — Geopolitical events in QSR — Active portfolio management in Retail, mainly Ireland/UK Revenue Growth -0.5% H1 FY231.) Volume Price Mix FX H1 FY24 1.) Represents 6-month fina
Slide 15: ARYZTA Europe results
H1 FY24 H1 FY231.) Var. vs. PY Organic Growth (1.1)% 22.9% (2400)bps EBITDA % 13.6% 12.2% +140bps - Revenue: - Innovation acceleration from 10.0% to 18.9% of revenue - Solid growth in France, Switzerland, Denmark, Poland and Fornetti - Foodservice performed strongly in most markets - Margin: - Stron
Slide 16: ARYZTA Rest of World results
H1 FY24 H1 FY231.) Var. vs. PY Organic Growth 2.8% 15.8% (1300)bps EBITDA % 18.7% 21.2% (250)bps - Revenue: - Resilient growth across channels – pricing and innovation - QSR sequentially improving – increased promotional activities - Foodservice – continued growth in customer base and performance -
Slide 17: EBITDA bridge
In €m / % of revenue -70bps Key Highlights: +290bps -130bps 13.2% 14.2% +10bps — Gross Margin improvement: — 190bps from innovation and portfolio management — 100bps from cost optimisations and input cost 140.0 149.8 tailwind — Off-setting increase in distribution costs and SG&A (of which 100bps is
Slide 18: Levers and mid-term targets progress
Levers Mid-Term Targets 2023-25 H1 FY24 Results Manufacturing continuous 2-3% cost1.) efficiency YoY ▪ Manufacturing efficiency: on track improvement program SIMPLEX – recipe standardisation & €26-36m costs optimisation ▪ Costs optimisation: > €28m Procurement leverage Fixed costs growth @ 30-40% of
Slide 19: Free cash flow evolution
Free cash flow evolution (in €m) 72.1 53.0 Key Highlights: — EBITDA expansion — Lower financing costs — Partially offset by: — Higher CAPEX supporting growth & IT projects — Lower positive contribution from working capital H1 FY231.) H1 FY24 1.) Represents 6-month financial period ended June 2023
Slide 20: Trade working capital as % of TTM revenue
Trade Working Capital as % of TTM revenue1.) 3.0% 3.0 2.5 2.5% 2.0 2.3% 1.8% 1.5 1.7% 1.3% 1.0 0.5 0.0 Q1 232.) Q2 23 2.) Q3 23 2.) Q4 23 2.) Q1 24 Q2 24 1.) 5Q average trade working capital as percentage of trailing twelve-month revenue. Trade working capital comprises inventory, trade receivables
Slide 21: Total net debt and leverage ratio
Total net debt (incl. hybrid & leases) in €m 8 Leverage Ratio Total net debt 6 Key Highlights: 3.8x 3.3x 4 2.9x <3.0x — Total net debt reduction supported by: 1,018 1,001 2 927 — Improved profitability — Solid Cash flow generation 0 — Lower Hybrid funding -2 -4 H1 FY231.) FY23 H1 FY24 2025 Target 1.
Slide 22: Financing costs
Financing costs incl. lease interest (in €m) 35.8 4.8 Key Highlights: 7.1 33.5 — Net reduction of €2.3m: — Hybrid buy-back delivered €7.1m of savings — €4.8m gross increase → mainly higher weighted average interest rates and borrowing — Bank debt interest exposure is c. 50% hedged — Financing costs
Slide 23: New 5-year refinancing and hybrid bonds outstanding
New 5-year re-financing Hybrid bonds outstanding • €930m RCF - same terms as existing facility • Hybrid 6.045%: CHF 325.4m Significant annual interest arbitrage • Term-Loan repaid • Hybrid 4.213%: CHF 144.3m • Extends maturity and headroom
Slide 24: ROIC
ROIC1.) % 13.1% 12.3% >11.0% 10.1% Key Highlights: WACC: 8% ROIC acceleration driven by: — Margin expansion — Improved capital efficiency → Further accelerating value creation H1 FY232.) FY23 H1 FY24 2025 Target 1.) ROIC is calculated as per the definition outlined in glossary on slide 38 2.) Repres
Slide 25: EPS
EPS (in € cent) 0.2 -0.6 4.1 1.0 3.5 +17% H1 Operating Financing Costs Income Tax H1 FY231.) Performance (incl. Hybrid FY24 Dividend) 1.) Represents 6-month financial period ended June 2023
Slide 26: Our strategy is delivering
Our strategy is delivering: ▪ Innovation-led organic growth ▪ Good progress on cost optimisations ▪ Continued strengthening and restructuring of balance sheet → Well on track to deliver last remaining mid-term target
Slide 27: Thank you
Thank you
Slide 28: Appendix
Appendix 28 | ARY¥‘ZTA SERVING INSPIRATION
Slide 29: Summary Results
Summary Results For the 6-month period ended June 2024 H1 FY24 H1 FY231). €m €m Change % Revenue 1,055.2 1,060.2 (0.5)% Cost of sales (691.8) (726.3) 4.8% Distribution expenses (138.8) (132.7) (4.6)% Gross profit 224.6 201.2 11.6% Selling expenses (50.0) (45.7) (9.4)% Administration expenses (89.0)
Slide 30: Revenue
Revenue For the 6-month period ended June 2024 ARYZTA ARYZTA Europe Rest of World Total Group €m €m €m Revenue 937.9 117.3 1,055.2 Organic growth (1.1%) 2.8% (0.7%) Currency movement 0.8% (4.5%) 0.2% Total revenue movement (0.3%) (1.7%) (0.5%)
Slide 31: EBITDA
EBITDA For the 6-month period ended June 2024 H1 FY24 H1 FY231). €m €m % change ARYZTA Europe 127.9 114.7 11.5% ARYZTA Rest of World 21.9 25.3 (13.4%) Total Group 149.8 140.0 7.0% H1 FY24 H1 FY23 Change €m €m bps ARYZTA Europe 13.6% 12.2% 140 bps ARYZTA Rest of World 18.7% 21.2% (250) bps Total Grou
Slide 32: Free cash flow
Free cash flow For the 6-month period ended June 2024 H1 FY24 H1 FY231). €m €m EBITDA 149.8 140.0 Working capital movement 2.9 18.4 Working capital movement from debtor securitisation 2.9 13.3 Capital expenditure (41.6) (28.8) Net payments on lease contracts (18.2) (17.9) Proceeds from sale of prope
Slide 33: Return on Invested Capital
Return on Invested Capital For the periods ended June 2024, December 2023 & June 2023 H1 FY24 FY23 H1 FY231). €m €m €m Average invested capital 1,197.2 1,225.3 1,231.9 NOPAT2). 156.7 150.1 124.2 ROIC2). 13.1% 12.3% 10.1% 1.) Represents 6-month financial period ended June 2023 2.) See glossary on sli
Slide 34: Total net debt and hybrid funding
Total net debt and hybrid funding For the periods ended June 2024, December 2023 & June 2023 H1 FY24 FY23 H1 FY231). €m €m €m Net debt 432.2 490.8 409.9 Hybrid Instrument Funding 494.6 510.0 608.4 Total net debt and hybrid funding 926.8 1,000.8 1,018.2 1.) Represents 6-month financial period ended J
Slide 35: Quarterly Organic Growth (12 months to June 2024)
Quarterly Organic Growth For the 12-month period ended June 2024 Q3 20231). Q4 20231). Q1 2024 Q2 2024 H1 FY24 ARYZTA Europe Volume % 0.3% 5.6% 0.8% (0.7)% 0.1% Price % 10.4% 3.6% - (1.6)% (0.9)% Mix % (1.7)% (0.6)% (0.5)% (0.2)% (0.3)% Organic growth % 9.0% 8.6% 0.3% (2.5)% (1.1)% ARYZTA Rest of Wo
Slide 36: Quarterly Organic Growth (12 months to June 2023)
Quarterly Organic Growth For the 12-month period ended June 2023 Q3 20221). Q4 20221). Q1 20231). Q2 20231). H1 FY231). ARYZTA Europe Volume % 4.0% 5.7% 7.9% 0.2% 3.7% Price % 16.4% 21.5% 21.2% 17.7% 19.3% Mix % 0.1% 0.2% 0.2% (0.4)% (0.1)% Organic growth % 20.5% 27.4% 29.3% 17.5% 22.9% ARYZTA Rest
Slide 37: Average and Closing FX Rates
Average and Closing FX Rates For the 6-month period ended June 2024 Average Average Closing Closing Currency H1 FY24 H1 FY231). % Change H1 FY24 FY23 % Change CHF 0.9612 0.9859 2.5% 0.9617 0.9332 (3.1%) AUD 1.6420 1.5964 (2.9%) 1.6117 1.6185 0.4% GBP 0.8548 0.8772 2.6% 0.8463 0.8688 2.6% PLN 4.3172
Slide 38: Presentation Glossary
Presentation Glossary ‘Organic growth’ – represents the revenue growth during the period, after removing the impact of acquisitions and divestures and foreign exchange translation. This provides a “like-for-like” comparison with the previous period in constant scope and constant currency. ‘EBITDA’ –