Aryzta Ag · SIX:ARYN

Aryzta — Shareholder Meeting (December 2009)

73 slides from Aryzta's shareholder meeting presentation, Dec 3, 2009

  1. Slide 1: 2009 AGM

    ARYZTA AG 2009 AGM 3 December 2009

  2. Slide 2: Merger – A Reminder

    ARYZTA AG Merger – A Reminder 2 © ARYZTA, December 2009

  3. Slide 3: Milestones since Announcement of Merger

    Milestones since Announcement of Merger June 2008 ➔ Announcement Date July 2008 ➔ IAWS shareholder approval August 2008 ➔ Hiestand shareholder approval August 2008 ➔ Admission of ARYZTA to SIX & ISE September 2008 ➔ ARYZTA proforma results FY 2008 March 2009 ➔ ARYZTA changes from dual-listing to pri

  4. Slide 4: Highly Complementary Businesses

    Highly Complementary Businesses – Operating in the speciality bakery segment > focus on innovative product development – Delivery through foodservice and retail channels > in partnership with an extensive network of customers – Intellectual property in manufacturing – Extensive direct store distribu

  5. Slide 5: 10 Year Track Record of IAWS Pre Merger

    10 Year Track Record of IAWS Pre Merger 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CAGR Group revenue (€m) 850 982 1,102 1,215 1,231 1,276 1,408 1,557 1,908 2,661 13.5% Total operating profit (€m)* ** 47.5 59.9 70.9 83.9 92.6 105.6 120.1 137.5 173.1 224.4 18.8% Free cash flow (pre disposal €m

  6. Slide 6: IAWS Speciality Bakery Business & Hiestand Track Record

    IAWS Speciality Bakery Business & Hiestand – 5 Year Track Record Pre Merger 140 IAWS EBITA*** **** 125 Hiestand EBITA*** ***** 120 108 100 80 77 € million 65 60 48 44 40 35 30 27 22 20 0 2003*/2004** 2004*/2005** 2005*/2006** 2006*/2007** 2007*/2008** * 12 Months to 31 December ** 12 Months to 31 Ju

  7. Slide 7: Medium Term Outlook Post Merger

    Medium Term Outlook Post Merger "Management targets to double earnings base within 5 years" Merger Announcement 9 June 2008 – Double digit EPS Growth > 50% organic > 50% acquisition/investment – Mid-teens ROI – Cash conversion from operating profit – Strong balance sheet 7 © ARYZTA, December 2009

  8. Slide 8: Corporate Governance

    ARYZTA AG Corporate Governance 8 © ARYZTA, December 2009

  9. Slide 9: Corporate Governance

    Corporate Governance – Framework set out in pre-merger prospectus July 2008 – Balancing best practice from Switzerland and Ireland – Board framework – Annual Report pp 21 – 36 > Board reduced from 15 directors to 11 during the year, 8 non-executive directors and 3 executive directors > Audit Committ

  10. Slide 10: Risk Statement

    Risk Statement – Group Risk Statement – Pg. 37 Annual Report – Risk map developed by business – Risk map used by Internal Audit – Risk map informs Swiss Internal Control Systems [ICS] 10 © ARYZTA, December 2009

  11. Slide 11: Responsibility

    Responsibility – Responsibilty Statement – Pg. 38 Annual Report – Decentralised business model – Understand and respect local cultures – Promoting: > Culture of Responsibility > Culture of Integrity > Culture of Respect > Culture of Sustainability 11 © ARYZTA, December 2009

  12. Slide 12: Remuneration

    Remuneration – Remuneration determined by independent non-executive committee – Executive remuneration policy > Align executive interests with shareholder interests > Secure, reward and retain executives > Incentivise long term value creation > Minimise long term liabilities (pension risks) > Avoid

  13. Slide 13: Remuneration

    Remuneration Compensation to Executive Management for fiscal year 2009 comprises: Total Executive Highest Earner in CHF '000 Management Owen Killian Basic salaries 3,188 1,277 Variable compensation 2,920 1,277 Benefits in kind 240 83 Pension contributions 478 191 Executive Incentive Plan 3,267 1,307

  14. Slide 14: Business Review

    ARYZTA AG Business Review 14 © ARYZTA, December 2009

  15. Slide 15: Our Business

    Our Business – Zurich based Swiss AG > Operations in Europe, North America, South East Asia and Australia – Created in August 2008 – merger of Hiestand and IAWS – Primary listing in Zurich (SIX; ARYN), and secondary listing in Dublin (ISE; YZA) – Focused on leading innovation, technology and brands

  16. Slide 16: ARYZTA Segmental Reporting Structure

    ARYZTA Segmental Reporting Structure ARYZTA AG Shareholder 71.4% Food Europe – Coup de Pates – Cuisine de France – Origin – Delice de France – Hiestand Food North America – La Brea Bakery – Otis Spunkmeyer Food Developing Markets – Hiestand 16 © ARYZTA, December 2009

  17. Slide 17: Origin

    Origin Origin ARYZTA AG is the majority share- holder (71.4%) in Origin Enterprises plc, which has a listing on the AIM in London and the IEX in Dublin (AIM:OGN,IEX:OIZ). Origin is a lead- ing player in the agri-nutrition sector in Ireland, the UK, Poland and Norway and has a leading ambient food an

  18. Slide 18: Origin IPO

    Origin IPO 1997 – 2007 – IAWS focus on speciality bakery – Original core provided cash for speciality bakery expansion – Limited development opportunities in core activities due to EU policy 2007 – EU policy change – direct farm payments – Creates impetus for Origin IPO 18 © ARYZTA, December 2009

  19. Slide 19: Origin IPO 2007

    Origin IPO 2007 – IPO of Origin enabled growth > New source of capital (€100m raised in IPO) > Separate governance > Incentivised management > Eliminated conflict of capital allocation between speciality bakery business and Origin > Separate non-recourse banking in both Origin and speciality bakery

  20. Slide 20: Excellent Long Term Outlook for Origin

    Excellent Long Term Outlook for Origin – World food demand set to increase > Population will expand by 50% > Demand for agricultural produce will increase by 70% – Global agricultural production > Farmers competing with industry and increased urbanisation for depleting water reserves > Asia and the

  21. Slide 21: Origin – Strategic Repositioning since 2007 IPO

    Origin – Strategic Repositioning since 2007 IPO – Operating profit base has doubled – €170m invested in first 12 months as listed company – Masstock acquisition > Driver of growth since acquisition > May be scalable > Develop integrated agronomy for sustainable future 21 © ARYZTA, December 2009

  22. Slide 22: Origin Property 2007

    Origin Property 2007 – Development land in Ireland at record high levels – Origin property capable of development over 3 – 5 year period – Transfer from IAWS to Origin at fair value > Revaluation arising – Development prospect of urban renewal for Cork – Vision for waterfront properties to replace g

  23. Slide 23: Origin Property 2009

    Origin Property 2009 – Post Lehman collapse – banking crisis – Deterioration of Irish economy – recession September 2008 – Collapse of Irish property market – 70% (non-cash) impairment of Origin property – Reversed 2007 revaluation – Sites still utilised for original activity 23 © ARYZTA, December 2

  24. Slide 24: Origin as an Investment

    Origin as an Investment – Under IFRS Origin is consolidated > With adjustment for minority interest – Investment of 95m shares or 71.4% – Value of holding c.€199.4m** – Trades at 5x EBITDA* ** – Origin is actively repositioning for future growth potential * Based on EBITDA of € 83m and net debt of €

  25. Slide 25: ARYZTA Segmental Reporting Structure

    ARYZTA Segmental Reporting Structure ARYZTA AG Shareholder 71.4% Food Europe – Coup de Pates – Cuisine de France – Origin – Delice de France – Hiestand Food North America – La Brea Bakery – Otis Spunkmeyer Food Developing Markets – Hiestand 25 © ARYZTA, December 2009

  26. Slide 26: Our Markets – Food Europe

    Our Markets – Food Europe Food Europe Food Europe has leading market positions in the speciality bakery market in Switzerland, Ger- many, Poland, the UK, Ireland and France. In Europe, ARYZTA has a mixture of business to business and consumer brands, including Hiestand, Cuisine de France, Delice de

  27. Slide 27: Food Europe: Hiestand

    Food Europe Hiestand Hiestand offers a broad range of innovative bakery products (croissants, bread, rolls, pastries, snacks, pretzels) and the com- prehensive services to actively pro- mote sales. Hiestand provides added value for business-to-busi- ness customers. Through the close-knit logistical

  28. Slide 28: Food Europe: Coup de Pates

    Food Europe Coup de Pates Coup de Pates is the principal brand of Groupe Hubert, a leading developer and distributor of bak- ery products to the bakery, craft and foodservice sectors in France. Groupe H ­ ubert offers its custom- ers bread, viennoiserie, patisserie, traiteur and reception products.

  29. Slide 29: Food Europe: Cuisine de France

    Food Europe Cuisine de France Cuisine de France offers the con- sumer traditional French breads, pastries and also a wide range of continental-style breads, confec- tionery and hot savoury items. Cuisine de France provides a com- plete bake-off solution primarily to the retail industry, as well as s

  30. Slide 30: Food Europe: Delice de France

    Food Europe Delice de France Delice de France supplies high quality continental breads, viennoiserie, savoury and confec- tionery products, including hospitality goods, primarily to the foodservice and catering industry. The business offers premium solutions tailored to meet future customer and cons

  31. Slide 31: Our Markets – Food North America

    Our Markets ­– Food North America Food North America Food North America has leading market positions in freshly baked cookies and freshly baked artisan bread. The business has two iconic brands which evoke emo- tional appeal with the US con- sumer, namely Otis Spunkmeyer and La Brea Bakery. 31 © ARY

  32. Slide 32: Food North America: La Brea Bakery

    Food North America La Brea Bakery La Brea Bakery is widely credited as the pioneer and leader of the ar- tisan bread movement in America. La Brea Bakery offers a wide as- sortment of rustic breads ranging from baguettes and loaves to sandwich and dinner rolls. 32 © ARYZTA, December 2009

  33. Slide 33: Food North America: Otis Spunkmeyer

    Food North America Otis Spunkmeyer Otis Spunkmeyer is a leading, pre- mium fresh baked goods brand in its US market categories. An iconic brand, it has strong recognition and awareness across a national customer base in the foodservice and retail channels. 33 © ARYZTA, December 2009

  34. Slide 34: Our Markets – Developing Markets

    Our Markets – Developing Markets Food Developing Markets ARYZTA has embryonic businesses in Japan, Malaysia and Australia. This gives ARYZTA an excellent op- portunity to understand the cus- tomer diversity and opportunity in this vast market. 34 © ARYZTA, December 2009

  35. Slide 35: Total Baked Goods Market

    Total Baked Goods Market Market Value €260bn at RSP Latin America 15% Asia Pacific 13% Australasia 1% Middle East & Africa 6% Eastern Europe 7% North America 20% Western Europe 38% 35 © ARYZTA, December 2009 Based on market research reports produced by GIRA 2006 and Euromonitor 2007

  36. Slide 36: Speciality Bakery Market

    Speciality Bakery Market Speciality Bakery Market – €30bn at RSP ROTW 6% €1.8bn Asia Pacific 17% €5.1bn Europe 47% €14.1bn North America 30% €9bn 36 © ARYZTA, December 2009 Based on market research reports produced by GIRA 2006 and Euromonitor 2007

  37. Slide 37: Market Growth – Speciality Bakery

    Market Growth – Speciality Bakery 35 12% Per capita consumption 10 Year CAGR 30 10% 10 year CAGR Value Added Bakery 25 € per head per annum 8% 20 6% 15 4% 10 2% 5 0 0 Europe USA Asia Pacific Middle East 37 © ARYZTA, December 2009 Based on market research reports produced by GIRA 2006 and Euromonitor

  38. Slide 38: Food to Go and Convenience Food – Non-Discretionary Consumer Spending

    Food to Go and Convenience Food – Non-Discretionary Consumer Spending Entertainment 4.9% Healthcare 5.7% Clothes & services 3.9% Alcohol & Tobacco 1.7% Fruit & veg 1.2% Insurance & pension 10.9% Education 1.8% Meats 1.6% Non alcoholic Misc 7.1% drinks 0.7% Misc 1.8% Bakery 0.6% Transport 17.6% Food

  39. Slide 39: Value Added Business Model

    Value Added Business Model Restaurants People & Technology Cumulative value added Convenience Catering Retailing Delivery & Execution Delivered through consumer Manufacture channels Quick Service Hotels & Restaurants Leisure Primary Sourcing Multiple Retail 39 © ARYZTA, December 2009

  40. Slide 40: ARYZTA Business Strategy

    ARYZTA Business Strategy – Customer focus through value added partnership model – Leverage on investment in products, technology and brands – Decentralised management teams which are motivated, incentivised and focused – Organic growth complimented by opportunity for strategic expansion – Continuous

  41. Slide 41: FY 2009 Review

    ARYZTA AG FY 2009 Review 41 © ARYZTA, December 2009

  42. Slide 42: Highlights FY 2009

    Highlights FY 2009 – First annual results for ARYZTA AG – Merger of Hiestand and IAWS Group August 2008 – Underlying EPS growth of 16.0% to 234.7 cent – Proposed dividend payout of 35.2 cent per share based on a payout ratio of 15.0% of underlying fully diluted EPS – Origin Enterprises underlying ea

  43. Slide 43: Year in Review

    Year in Review – Q1 – Global financial crisis – Recession spread and deepened throughout the year – Substantial financial stimulus – Credit severely restricted – Reduced consumer spending – Banking crisis became consumer crisis 43 © ARYZTA, December 2009

  44. Slide 44: Implications of Financial Crisis

    Implications of Financial Crisis – Reduced spending + restricted credit – Increased credit risk ➔ – Impact on customers: > Reducing costs > Reducing investment > Delaying decisions 44 © ARYZTA, December 2009

  45. Slide 45: Bakery Business

    Bakery Business – Bakery everyday food – Basic and sustainable – Indulgent and affordable – Challenge to deliver everyday consumer experience – Consistent high quality baked goods – Consistent availability through dayparts 45 © ARYZTA, December 2009

  46. Slide 46: Food Europe

    Food Europe – Revenue growth declined each quarter – Ireland and UK most impacted > Reduced cost base > Grangecastle enhanced efficiency – Continental Europe proved resilient > Expanding channel penetration > Utilising logistics capability – Unlocked merger benefits 46 © ARYZTA, December 2009

  47. Slide 47: Food North America

    Food North America – Revenue growth declined each quarter – Consumer seeking value – conserving $ – Most channels show declining revenues – Consumer slowdown continuing – La Brea Bakery proved resilient – Otis Spunkmeyer growth driver 47 © ARYZTA, December 2009

  48. Slide 48: Outlook

    Outlook – Efficient and well invested business model – Cash remains a priority over revenue – Customers and consumers in survival mode – September 2008; did not predict severity of recession – September 2009; cannot predict recovery – Double digit revenue growth to declining revenue growth (12 month

  49. Slide 49: Finance Review July 2009 (in Euro)

    ARYZTA AG Finance Review 31 July 2009 (in Euro) 49 © ARYZTA, December 2009

  50. Slide 50: ARYZTA AG Income Statement

    ARYZTA AG Income Statement Annual Report Pg 11 Proforma in Euro `000 July 2009 July 20086 % Group revenue 3,212,270 3,134,201 2.5 Group operating profit1 280,409 245,017 14.4 Share of associates and JVs2 17,525 17,455 Operating profit incl. associates and JVs1 297,934 262,472 13.5 Finance cost, net

  51. Slide 51: ARYZTA AG Underlying Revenue Growth

    ARYZTA AG Underlying Revenue Growth 2009 Annual Report Pg 12 Food Food N. Developing Total in Euro million Food Europe1 America Markets1 Food Group Origin2 Total Group revenue 1,137.2 555.1 20.4 1,712.7 1,499.6 3,212.3 Underlying growth (2.2)% 12.5% 1.5% 1.9% (8.4)% (3.0)% Acquisitions 2.2% – – 1.6%

  52. Slide 52: ARYZTA AG Segmental Operating Profit Performance

    ARYZTA AG Segmental Operating Profit Performance1 Annual Report Pg 12 Food Food N. Developing Total in Euro '000 Food Europe America Markets Food Group Origin Total Group Operating Profit 135,103 67,481 2,123 204,707 75,702 280,409 Growth 11.4% 30.1% 129% 17.6% 6.7% 14.4% Operating Margin1 11.9% 12.

  53. Slide 53: Underlying Net Profit Reconciliation

    Underlying Net Profit Reconciliation Annual Report Pg 11 Food Group Origin Total Group in Euro `000 2009 2009 2009 Reported net profit 94,633 (56,825) 54,010 Amortisation of intangible assets 42,983 3,294 46,277 Tax on amortisation (10,800) (380) (11,180) Property write down –­ 134,543 134,543 Tax o

  54. Slide 54: Food Group Income Statement

    Food Group Income Statement Annual Report Pg 11 Proforma in Euro `000 July 2009 July 2008³ % Group revenue 1,712,754 1,635,362 4.7 Group operating profit1 204,707 174,091 17.6 Operating margin 12.0% 10.6% Share of JV2 13,808 15,203 Operating profit incl. JV1 218,515 189,294 15.4 Financing costs, net

  55. Slide 55: Food Group Cash Generation

    Food Group Cash Generation Annual Report Pg 15 in Euro `000 July 2009 EBIT 161,724 Amortisation 42,983 EBITA 204,707 Depreciation 54,628 EBITDA 259,335 Working capital movement 24,675 Dividends received 18,830 Ongoing capital expenditure (15,047) Interest & tax (53,562) Other 2,126 Cash flow generat

  56. Slide 56: Food Group Net Debt and Investment Activity

    Food Group Net Debt and Investment Activity Annual Report Pg 16 in Euro `000 Food Group Food Group proforma opening net debt as at 31 July 2008 (552,562) Cash flow generated from activities 236,357 Investment capital expenditure (63,006) Deferred consideration and acquisition costs (76,497) Foreign

  57. Slide 57: Food Group Financing Facilities

    Food Group Financing Facilities Annual Report Pg 16 ARYZTA's banking facilities and financial covenants (excluding Origin, which is separately financed) are as follows: Description Revolving credit Private placement Principal €795m $450m Maturity 20 June 2013 13 June 2014 – 13 June 2019 Net Debt : E

  58. Slide 58: Group Balance Sheet

    Group Balance Sheet Annual Report Pg 17 Total Group in Euro `000 2009 Property, plant and equipment 664,532 Investment properties 62,975 Goodwill and intangible assets 1,498,430 Associates and joint ventures 139,351 Working capital (14,871) Other segmental liabilities (93,592) Segmental net assets 2

  59. Slide 59: Dividend

    Dividend Annual Report Pg 18 – Dividend payout based on underlying profit excluding non-recurring items and amortisation – Proposed dividend > 15.0% of underlying fully diluted EPS > CHF 0.5324 before 35% Swiss witholding tax – Timetable for dividend > Shareholder approval 3 December 2009 (General a

  60. Slide 60: Vielen Dank!

    ARYZTA AG Vielen Dank! 60 © ARYZTA, December 2009

  61. Slide 61: 2009 AGM December 2009

    ARYZTA AG 2009 AGM 3 December 2009 61 © ARYZTA, December 2009

  62. Slide 62: 2009 General Assembly Agenda

    ARYZTA AG 2009 General Assembly Agenda 2009 Generalversammlung Traktanden 3 December 2009

  63. Slide 63: 1. Approval of the annual report

    1. Approval of the annual report Genehmigung des Jahresberichts 1. Approval of the annual report (including the 1. Genehmigung des Jahresberichts (ein­schliess- corporate governance report), the annual financial lich des Corporate Governance Berichts), der statements and the consolidated financial s

  64. Slide 64: 2. Conversion of general (legal) reserves into unrestricted reserves

    2. Conversion of general (legal) reserves into unrestricted reserves Verwendung des Bilanzgewinns Motion Antrag The Board of Directors proposes that general (legal) reserves in Der Verwaltungsrat beantragt, allgemeine Reserven in der Höhe the amount of CHF 1,065,329,000 be converted into unrestricte

  65. Slide 65: 3. Appropriation of available earnings

    3. Appropriation of available earnings Motion Verwendung des Bilanzgewinns Motion Antrag The Board of Directors proposes that the available earnings Der Verwaltungsrat beantragt, den Bilanzgewinn wie folgt be approriated as follows: zu verwenden: in CHF in CHF Transfer from share premium to Umwandlu

  66. Slide 66: 4. Discharge of the members of the Board of Directors

    4. Discharge of the members of the Board of Directors Entlastung der Mitglieder des Verwaltungsrates Motion Antrag The Board of Directors proposes that discharge be granted to Der Verwaltungsrat beantragt, den Mitgliedern des Verwaltungsrates the members of the Board of Directors for their activitie

  67. Slide 67: 5. Re-election of the members of the Board of Directors

    5. Re-election of the members of the Board of Directors Wiederwahl der Verwaltungsratsmitglieder Motion Antrag The Board of Directors proposes that Albert Abderhalden, Noreen Der Verwaltungsrat beantragt, Albert Abderhalden, Noreen Hynes, Hynes, Hugo Kane, and Owen Killian be re-elected as members o

  68. Slide 68: 6. Election of auditors

    6. Election of auditors Wahl der Revisionsstelle Motion Antrag The Board of Directors proposes that PricewaterhouseCoopers AG, Der Verwaltungsrat beantragt, die PricewaterhouseCoopers AG, Zürich, Zurich, be elected as auditors for the 2010 business year. als Revisionsstelle für das Geschäftsjahr 201

  69. Slide 69: 7. Amendments of Articles of Association

    7. Amendments of Articles of Association Statutenänderungen 7.1 Amendment of Article 5 of the Articles of Association 7.1 Änderung von Artikel 5 der Statuten Motion Antrag The Board of Directors proposes to replace Article 5 of the Articles of Der Verwaltungsrat beantragt, Artikel 5 der Statuten dur

  70. Slide 70: 7. Amendments of Articles of Association

    7. Amendments of Articles of Association Statutenänderungen c) The Board of Directors is authorized to withdraw the pre-emptive c) Der Verwaltungsrat ist ermächtigt, Bezugsrechte der Aktionäre aus- rights of the shareholders and to allocate them to third parties in zuschliessen und diese Dritten zuz

  71. Slide 71: 7. Amendments of Articles of Association

    7. Amendments of Articles of Association Statutenänderungen 7.2 Amendment of Article 6 of the Articles of Association 7.2 Änderung von Artikel 6 der Statuten Motion Antrag The Board of Directors proposes to replace Article 6 of the Articles of Der Verwaltungsrat beantragt, Artikel 6 der Statuten dur

  72. Slide 72: 7. Amendments of Articles of Association

    7. Amendments of Articles of Association Statutenänderungen Explanation Erklärung As of 1 January 2010, the new Swiss Federal Act on Intermediated Am 1. Januar 2010 tritt das neue Bundesgesetz über die Bucheffekten Securities (ISA) will enter into force. The ISA substitutes the current (BEG) in Kraf

  73. Slide 73: 2009 AGM

    ARYZTA AG 2009 AGM 3 December 2009

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