Barry Callebaut Ag · SIX:BARN
Barry Callebaut — FY2018/19 Earnings Presentation
41 slides from Barry Callebaut's earnings presentation, November 2019
Slide 1: Roadshow presentation Full-Year Results 2018/19
Roadshow presentation Full-Year Results 2018/19 November 2019
Slide 2: Agenda
AGENDA BC at a glance Highlights Full-Year 2018/19 Strategy & Outlook Appendix
Slide 3: BC at a glance
BC AT A GLANCE 3 FY 2018/19 Roadshow presentation
Slide 4: Strong values & strong team
BC at a glance - Who are we? Strong values & strong team We are the heart and engine of the chocolate A merger between Cacao Barry, the very first French and cocoa industry chocolate connaisseur since 1842 and Callebaut a Belgian chocolate couverture manufacturer expert since 1911 Listed on the SIX
Slide 5: Shaping the world of chocolate and cocoa
BC at a glance – This is Barry Callebaut ‘Shaping the world of chocolate and cocoa’ Full-Year 2018/19 5 FY 2018/19 Roadshow presentation
Slide 6: 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 6 FY 2018/19 Roadshow presentation
Slide 7: 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 Schokinag Nestlé Irca Ferrero Kerry Group BT Cocoa Guittard
Slide 8: A broad offering with cost plus approach on majority of business
BC at a glance – offering and business model A broad offering with cost plus approach on majority of business Cocoa Products Food Manufacturers Gourmet & Specialties % share: 22%* of volumes 66%* of volumes 12%* of volumes Customer: Small, medium and Global Small, medium and Global Professionals, Fo
Slide 9: 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 10: 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 (17/18): 4,645 tsd MT About 70% of total cocoa beans are of others 12% West African Origin Brazil* 4% Barry Callebaut processed around Ivory Cameroon* Coast* 43% 925,000 tonnes or approximately
Slide 11: Highlights Full-Year 2018/19
HIGHLIGHTS Full-Year 2018/19 11 FY 2018/19 Roadshow presentation
Slide 12: Good momentum continues
Highlights Full-Year Results 2018/19 Good momentum continues Sales volume up +5.1%, well above market growth of +1.8%1 Sales revenue of CHF 7.3 bn, up +7.8% in local currencies (+5.2% in CHF) Operating profit (EBIT) up +11.9% in local currencies (+8.5% in CHF) Net profit2 up +14.2% in local currenci
Slide 13: Consistent execution of 'smart growth', mid-term guidance achieved
Mid-term guidance 2015/16 – 2018/19 Consistent execution of ‘smart growth’, mid-term guidance achieved1 Volume growth +4.5% on average Key growth drivers on average: - Emerging Markets +7.7%, doubling its volume share Sustainable growth - Outsourcing +6.1%, adding >150,000 tonnes - Gourmet & Special
Slide 14: Delivering on all strategic pillars
Highlights Full-Year Result 2018/19 Delivering on all strategic pillars S&P upgrade to Investment grade Launch Outsourcing Strategic Completion Successful Expansion CHOCOLATE Announcement Action PlanWholefruit Chocolate Agreement with Partnership of Inforum placement of cocoa processing ACADEMYTM in
Slide 15: Healthy growth, continued good momentum
Highlights Full-Year Results 2018/19 Healthy growth, continued good momentum Cocoa Chocolate FY 2017/18 FY 2018/19 +10.6% +6.3% +5.1% +10.6% +8.0% +8.1% +7.4% +4.8% +4.7% +5.3% +4.8% +2.3% +1.1% +3.0% +10.7% +3.1% +8.1% +9.0% +1.7% +5.7% +5.9% +5.5% +4.3% +2.9% -2.4% -0.9% Q1 17/18 Q2 17/18 Q3 17/18
Slide 16: Growth continues to be broad based
Highlights Full-Year Results 2018/19 Growth continues to be broad based % of total % volume growth Group volume vs prior year 35% +9.7% Emerging excl. cocoa Markets +12.7% Key growth drivers 34% Outsourcing crucial to Long-term continuously +5.2% Partnerships outperform the market 12% +2.8% Gourmet
Slide 17: Financial Review Full-Year 2018/19
FINANCIAL REVIEW Full-Year 2018/19 17 FY 2018/19 Roadshow presentation
Slide 18: Consistently delivering profitable growth
Financial review - Key figures Consistently delivering profitable growth % vs prior year % vs prior year Group performance ( in CHF millions) FY 2018/19 in CHF in local currencies Sales volume (in tonnes) 2,139,758 5.1% n/a Sales revenue 7,309.0 5.2% 7.8% Gross profit 1,188.4 2.7% 5.1% EBIT Total 60
Slide 19: All Regions contributed to volume growth and profitability
Financial review – Key Performance Indicators by Region All Regions contributed to volume growth and profitability Group Sales Volume: 1’046’695 2,139,758 tonnes volume growth / EBIT growth in Market volume growth1 local currencies EMEA +6.1% / +1.1% +5.9% Americas EMEA 573,413 981,231 27% Americas
Slide 20: Gross profit up +5.1% in local currencies, driven by good volume growth and mix
Gross profit Gross profit up +5.1% in local currencies, driven by good volume growth and mix effects In CHF millions +5.1% +10 +33 +59 1,216 -43 1,188 -28 1,157 Gross Profit Volume effects Mix effects Cocoa business Additional costs Gross Profit FX impact Gross Profit FY 2017/18 improvements support
Slide 21: Combined cocoa ratio remains at a healthy level
Cocoa processing profitability Combined cocoa ratio remains at a healthy level European combined ratio – 6-month forward ratio Directionally right… 4.00 Shows general high level industry Combined direction, assuming many 3.50 Ratio 3.5 variables are fixed 3.00 However… Butter 2.50 ratio Many variabl
Slide 22: Strong increase in Operating profit by +11.9% in local currencies
EBIT bridge Strong increase in Operating profit by +11.9% in local currencies In CHF millions +11.9% +7 620 + 59 601 -19 554 EBIT Additional Additional EBIT FX impact EBIT FY 2017/18 Gross Profit SG&A, Other FY 2018/19 before FX FY 2018/19 22 FY 2018/19 Roadshow presentation
Slide 23: Increase in EBIT thanks to enhanced product and customer mix
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 EBIT per tonne in CHF 282 290 (at constant currencies) 274 279 283 271 EBIT per tonne in CHF 286 251 281 (as reported) 272 256 242
Slide 24: Net Profit up +14.2% in local currencies, based on good profitability
EBITDA to Net Profit Full-Year 2018/19 Net Profit up +14.2% in local currencies, based on good profitability In CHF millions 775 601 -174 +14.2% -148 +26 +13 408 369 357 -84 EBITDA Depreciation EBIT Financial Income taxes Net profit Net effect of FX Impact Net profit Net profit FY 2018/19 and FY 201
Slide 25: Ongoing volatility
Raw material prices Ongoing volatility 200% Increase FY 2018/19 (average) 150% Milk powder +28.9% 100% Cocoa beans +4.5% Sugar World -3.7% Sugar EU +16.8% 50% 0% Aug 09 Aug 10 Aug 11 Aug 12 Aug 13 Aug 14 Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 25 FY 2018/19 Roadshow presentation
Slide 26: Good Free cash flow generation, while investing in structural improvements
Full-Year 2018/19 Free cash flow Good Free cash flow generation, while investing in structural improvements for future growth In CHF millions +6.4% +33 775 728 -234 +33 323 290 257 -280 -5 -66 EBITDA EBITDA Change in Interest CAPEX Others FCF Aug 19 Effect of FCF Aug 19 RMI Beans FCF Aug 18 Aug 19 w
Slide 27: Strong Balance sheet with further improvement in key ratios
Financial key figures Strong Balance sheet with further improvement in key ratios Aug 18 Aug 18 (in CHF millions) Aug 19 Pro forma1 Reported Total assets 6,508.1 6,169.0 5,832.0 Net working capital 1,363.2 1,403.4 1,074.4 Non-current assets 2,650.0 2,506.5 2,505.5 Net debt 1,304.7 1,409.3 1’074.3 Ad
Slide 28: Proposed payout of CHF 26.00 per share, an increase of +8.3%
Dividend Proposed payout of CHF 26.00 per share, an increase of +8.3% 33% 33% 39% 39% 37% 39% Payout ratio 357 369 Proposed dividend 255 281 240 219 CHF 26.00 per share, +8.3% Net profit in CHF millions Payout 39% of Net profit 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 26.00* 24.00 20.00 Timet
Slide 29: Changes in the Board
Board of Directors Changes in the Board The following board members will not stand for reelection: Jakob Baer Board member since 2010, Vice Chairman of the Board Chairman of the Audit, Finance, Risk, Quality & Compliance Committee (AFRQCC) Jürgen Steinemann Board member since 2014 Member of the Nomi
Slide 30: Strategy & Outlook
STRATEGY & OUTLOOK 30 FY 2018/19 Roadshow presentation
Slide 31: Consistent long-term strategy – evolving execution
Strategy Consistent long-term strategy – evolving execution “Heart and engine of the Vision chocolate and cocoa industry” Sustainable growth Expansion Margin accretive growth 4 strategic Innovation ‘smart Accelerated growth in Gourmet, pillars Specialties and Emerging Markets growth’ Cost Leadership
Slide 32: Drive momentum, drive value creation
Strategy Drive momentum, drive value creation Expansion Innovation Expanding in Emerging Markets Riding the trends • Integration of Inforum on track • Extended dairy-free chocolate range • New chocolate factories in Serbia and India • New sugar-reduced solutions Strengthening the core for further ex
Slide 33: Drive momentum, drive value creation
Strategy Drive momentum, drive value creation Cost Leadership Sustainability Strengthening our financing Leading a movement • Through the issuance of a Schuldschein- darlehen • No. 1 ranking in Sustainalytics assess-ment of 178 food companies Streamlining and further improving processes • Among lead
Slide 34: Adding value at every step
A transformation journey Adding value at every step Value added Offering 34 FY 2018/19 Roadshow presentation
Slide 35: The strength of our 12,000 people
Talents & Team The strength of our 12,000 people Value driven Passion Entrepreneurship Customer focus Integrity Team spirit Roots and re-invention Strong roots and culture Content driven & meritocratic Curiosity and freedom to experiment Further building our strength Diversity Learning & development
Slide 36: Mid-term guidance
Outlook Mid-term guidance Confident to deliver on renewed guidance Committed to pursuing successful ‘smart growth’ strategy Good growth momentum Strong innovation portfolio Discipline in execution Strong team Mid-term guidance 2019/20-2021/22, on average per annum: volume growth of +4-6% EBIT growth
Slide 37: Appendix
APPENDIX 37 FY 2018/19 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: Significant headroom for further growth and raw material price fluctuations
Appendix Significant headroom for further growth and raw material price fluctuations 39 FY 2018/19 Roadshow presentation
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) 2013-18 average: -0.5% 2013-18 average: -0.4% FY 2018/19: +0.9% FY 2018/19: +1.4% EEMEA (24% of market) 2013-18 average: +0.3% FY 2018/19: +1.3% Asia Pacific (14% of market
Slide 41: Consumption per capita in kg
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% 2018