Barry Callebaut Ag · SIX:BARN
Barry Callebaut — Non-Deal Roadshow (April 2012)
51 slides from Barry Callebaut's roadshow presentation, April 2012
Slide 1: Roadshow Presentation – Half-year results 2011/12
Barry Callebaut Roadshow Presentation– Half-year results 2011/12 April 2012 April 2012 Barry Callebaut – Roadshow presentation H1 2011/12
Slide 2: Agenda
Agenda X BC at a glance X Highlights HY 2011/12 X Financial and operational performance X Strategy & Outlook April 2012 Barry Callebaut – Roadshow presentation H1 2011/12 2
Slide 3: Barry Callebaut at a glance
Barry Callebaut at a glance FY 2010/11 X World leader in high-quality cocoa Sales volume =1,296,438 tonnes and chocolate products and outsourcing/ strategic partner of Asia- choice Pacific Global 4% X World’s largest supplier of Gourmet Sourcing & Cocoa & Specialties chocolate for artisanal 20% cust
Slide 4: Present in all stages of the industrial chocolate value chain
Barry Callebaut is present in all stages of the industrial chocolate value chain Cocoa Cocoa beans Plantations 80% Cocoa liquor ~54% ~46% Cocoa powder Cocoa butter Barry Callebaut + Sugar, Milk, + Sugar, Milk, + Sugar, Milk, core activity others fats, others others Powder mixes Compound/Fillings Cho
Slide 5: BC market leader in the open market
Expansion BC market leader in the open market Global Industrial Chocolate market in 2010/11 = 6,000,000 tonnes* Open market Integrated market Competitors Big 4 chocolate Others confectionary Others players 22% 40% 20% 40% 2% 3% 49% 51% 8% 80% 11% 14% *BC estimates April 2012 Barry Callebaut – Roadsh
Slide 6: Robust business model
Robust business model Barry Callebaut business model 100g chocolate tablet contains: Price List Cocoa Products Gourmet r at market price business 11% Cocoa butter 9% Milk powder Cocoa Products Sugar on cost plus 11% Other Food Manufacturers 69% 80% Cost Plus X Raw materials represent about 80% of op
Slide 7: Accelerated top-line growth, investing in the future
Half-year results 2011/12 Accelerated top-line growth, investing in the future X Sales volume up +6.7%; Sales revenue +10.4% in local currencies X Growth across all Regions and Product Groups: particularly strong in Americas, Eastern Europe and Asia as well as in Specialty products X Investing in fu
Slide 8: Global chocolate confectionery volume was flat, Gourmet grew 1-2%
Global chocolate confectionery volume was flat, Gourmet grew between 1-2% 5 Months Sep-Jan 2012(in 1,000 tonnes)1 USA2 Western Europe 3 Eastern Europe 4 -2.9% -2.0% 5.6% 692 672 458 449 349 368 2011 2012 2011 2012 2011 2012 Asia-Pacific 5 Total Top 18 countries 6.9% 0.0% 69 73 Brazil 5.5% 2011 2012
Slide 9: Growth across all Regions and Product Groups
Growth across all Regions and Product Groups Sales Volume per Region – H1 2011/12 Six months volume growth vs. prior year Asia- Pacific Europe +3.0% Global 4% Sourcing & Cocoa Americas +18.6% 19% Europe Asia-Pacific +7.9% 52% Global Sourcing & Cocoa +2.9% Americas 25% Food Manufacturers +8.2% Gourme
Slide 10: Further steps along our strategic direction
Highlights first six months – H1 2011/12 Further steps along our strategic direction Joint Venture with Closing of the P.T. Comextra Global long-term Long-term outsourcing divestiture of our Majora, building a new partnership agreement agreement with Group European consumer cocoa processing with Uni
Slide 11: Raw materials down or sideways
Raw material price development Raw materials down or sideways Cocoa bean price (GBP/tonne) White Sugar average price (EUR/tonne) london n°5 (2nd EU white sugar EU ref. Price White 2800 position) 2500 March 2012 950 1479 GBP/ton March 2012 850 800 €/ton 2200 750 1900 650 1600 550 1300 450 1000 350 70
Slide 12: Key Figures H1 2011/12
Key Figures H1 2011/12– from continuing operations Accelerated top-line growth, investing in the future Six months - Sep 2011-Feb 2012 Change in % Change in % H1 H1 In local 2011/12 2010/11 currencies (restated) Sales volume [in tonnes] 6.7% 699'058 655'065 Sales revenue [CHF m] 10.4% 3.0% 2'476.9 2
Slide 13: Volume rebound under challenging market conditions
Region Europe Volume rebound under challenging market conditions Europe • Western Europe returned to positive growth rates in Q2, outperforming a market which declined -2.9%. • Growth driven by strategic customers, as well as Specialties • Eastern Europe showed double digit growth, both in FM and Go
Slide 14: Strong performance, top and bottom-line
Region Americas Strong performance, top and bottom-line Americas • Chocolate confectionery market in the US declined -2%; Brazil slowed down to 5.5% • We maintained our growth momentum. In North America and Mexico, Corporate and National accounts, as well as Gourmet achieved a double-digit growth ra
Slide 15: Accelerated growth with further potential
Region Asia-Pacific Accelerated growth with further potential Asia- Pacific • Good volume growth amid a strong market development • Industrial sales accelerated in Q2 after capacity constraints limited opportunities earlier in the year • Gourmet & Specialties Products business grew at double digit r
Slide 16: Volume growth picking-up
Global Sourcing & Cocoa Volume growth picking-up Global Sourcing & Cocoa • Ongoing capacity expansions at existing factories and higher internal cocoa powder demand led to a decline in growth in our first quarter. Then, volume picked-up in Q2. • Sales revenue went up by +17% in local currencies driv
Slide 17: Combined cocoa ratio holding at a good level
Cocoa processing activity Combined cocoa ratio holding at a good level Cocoa powder-butter combined ratio* – European ratios 6 months forward against LIFFE 4.20 Combined ratio 3.28 – March 2012 3.40 2.60 Powder ratio 1.80 Butter ratio 1.00 0.20 Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02
Slide 18: Impact from investments in future growth
Impact from investments in future growth Future volume growth requires: Investing cycle for future growth • Additional production capacity: lower utilization and higher fixed costs at the beginning Volume (MT) • Additional overhead, such as QA, planning and supply chain management, customer service,
Slide 19: First six months impacted by some inefficiencies
Gross Profit – February 2012 – from continuing operations First six months impacted by some inefficiencies and shaping the organization for future growth in mCHF 2.8% +7.2 -19.8 +22.6 361.8 -23.6 351.8 338.2 Gross Profit H1 Volume Product mix, Scope effect, Gross profit Negative Gross Profit H1 2010
Slide 20: EBIT decline due to additional costs, investments and negative FX
EBIT – February 2012 – from continuing operations EBIT decline due to additional costs, investments in future growth and negative FX in mCHF -5.4% +10.0 -9.5 200.2 -11.4 189.3 -14.2 175.1 EBIT Additional Additional Scope effect, EBIT before Negative EBIT H1 Gross Profit SG&A ramp up costs, FX effect
Slide 21: Higher financial expenses due to higher credit spreads
Net Financial Expenses Higher financial expenses due to higher credit spreads from new bond in mCHF - From continuing operations only Average interest rate 3.9% 4.5% +20% 3.1 5.7 34.4 31.8 28.6 Net interest Net interest Bank charges, Foreign exchange Net financial expense HY expense HY fees and othe
Slide 22: Net profit from continuing operations
From EBIT to PAT Net profit from continuing operations Change in Change H1 % in % H1 2010/11 In local CHF 2011/12 (restated) currencies Operating profit (EBIT) -5.5% -12.5% 175.1 200.2 Financial items -15.1% -7.1% (31.8) (29.7) Result from investments in associates and 0.3 0.9 joint ventures [CHF m]
Slide 23: Higher investments in Working Capital and CAPEX
Cash Flow Higher investments in Working Capital and CAPEX as a result of growth First 6 months 2010/11 First 6 months 2011/12 -10% 216.0 -225.9 193.4 -247.9 29.1 -93.8 -0.8 104.5 -100.6 126.0 Operating Investment in Capital CF from Change in Operating Investment in Capital CF from Change in Cash Flo
Slide 24: Solid balance sheet with strong ratios
Balance Sheet Solid balance sheet with strong ratios Change Feb 12 Feb 11 in % Total Assets [CHF m] -2.6% 3'875.7 3'979.1 Net Working Capital [CHF m] -0.9% 1'045.1 1'054.1 Non-Current Assets [CHF m] -3.9% 1'353.1 1'408.4 Net Debt [CHF m] 1.0% 965.5 956.2 Shareholders' Equity [CHF m] -2.8% 1'301.0 1'
Slide 25: Our performance in relation to our mid-term guidance
Our performance in relation to our mid-term guidance Volume development (in tonnes)* CAGR 9.4% yoy growth 7.2% 12.3% 5.1% 13.4% 6.7% H2 H1 FY 06/07 FY07/08 FY08/09 FY09/10 FY10/11 FY11/12 * Excluding consumer business April 2012 Barry Callebaut – Roadshow presentation H1 2011/12 25
Slide 26: Our performance in relation to our mid-term guidance
Our performance in relation to our mid-term guidance EBIT development (in Local currencies)* CAGR 9.2% 15.3% yoy growth 9.8% 8.3% 5.8% H2 -5.5% H1 FY 06/07 FY07/08 FY08/09 FY09/10 FY10/11 HY11/12 * Excluding consumer business April 2012 Barry Callebaut – Roadshow presentation H1 2011/12 26
Slide 27: Our Strategy
Our Strategy Vision “Heart and engine of the chocolate industry” Expansion Innovation Strategic Sustainable, pillars profitable growth Cost leadership Sustainable Cocoa April 2012 Barry Callebaut – Roadshow presentation H1 2011/12 27
Slide 28: Expansion of our manufacturing footprint in the last 12 months
Expansion Expansion of our manufacturing footprint in the last 12 months Thimister, Belgium Chekhov, Russia Lebbeke-Wieze, Belgium Heule-Kortrijk, Belgium Nuth, The Netherlands Zundert, The Netherlands Banbury, UK St. Albans, VT, US St Helens, UK Kagerod, Sweden Chester, UK Pennsauken, NJ, US St. Hy
Slide 29: Growth driven by emerging markets and long-term agreements
Expansion Growth driven by emerging markets and long- term agreements % of total consolidated sales volume* - 5 year development Emerging markets CAGR +15.0% 23% 22% Long-term 21% 16% agreements CAGR +62.3% 14% with strategic 15% 20% partners 11% 7% 10% 17% 2% Developed CAGR +2.4% 61% markets 64% 78
Slide 30: Outsourcing and Strategic Partner of choice
Expansion Outsourcing and Strategic Partner of choice 2006-07 Nestlé Cadbury Hershey Morinaga (February 2007) Schweppes (April 2007) (September 2007) (June 2007) 2010-11 Kraft Foods Green Mountain Hershey Extension Chocolates Turín Baronie Group (September 2010) Coffee Roasters (May 2011) (June 2011
Slide 31: Ramp-up phases of recent long-term agreements
Expansion Ramp-up phases of recent long-term strategic agreements/outsourcing deals 1y 1y 3y 2y 1y 1y 1y 2007 2008 2009 2010 2011 2012 2013 2014 Today April 2012 Barry Callebaut – Roadshow presentation H1 2011/12 31
Slide 32: Sharpen focus on global brands
Accelerating Gourmet business Sharpen focus on global brands “Growing Great Chocolate“ Ads 360° Campaign Press release & internal launch New website LAUNCH MAY ‘12 Activation through personalization Ambassador testimonials & recipes Calletize your advertising Digital & social media activation April
Slide 33: Sharpen focus on global brands
Accelerating Gourmet business Sharpen focus on global brands X Upgrade core pack with new Callebaut design X Next Generation re- closeable pack X Build Cacao Barry premium distinctive brand image X Reinforce the Cacao Barry core range with new White Chocolate Zéphyr April 2012 Barry Callebaut – Road
Slide 34: Growth through acquisitions / adjacencies
Accelerating Gourmet business Growth through acquisitions / adjacencies X La Morella Nuts X Specialist in producing a variety of high quality nut-based ingredients X Planned launches as of May 2012: 8 new products under the Cacao Barry® brand 10 new products under the Callebaut® brand 50+ La M
Slide 35: Award winning products and initiatives
Innovation: Developed by Barry Callebaut Award winning products and initiatives X Innovation Award for Terra Cacao (FiE Nov 2011) X Most innovative Food Ingredient Award X Confectionery Innovation of the year X Barry Callebaut’s most successful specialties launch X Innovation Award for Stevia chocol
Slide 36: Project Spring
Cost Leadership Project Spring Objective: Streamline our internal processes to improve the overall service for our Customers and create competitive cost advantage Scope: Main focus areas in Western Europe • Customer Service • Pricing • Sales & Operations Planning • Quality Assurance • New Product In
Slide 37: Cocoa Horizons / Sourcing diversification
Sustainable Cocoa Cocoa Horizons / Sourcing diversification X Cocoa Horizons: CHF 40 Million to be invested in 10 years in origin countries; largest program in Barry Callebaut’s history X Goals: Increase cocoa farms productivity Increase amount of certified cocoa Improve livelihoods in cocoa c
Slide 38: International Conference: Chocovision
Other initiatives International Conference: Chocovision A platform for informed discussion, discourse and debate for 200 senior business leaders and stakeholders in the cocoa, chocolate and retail industry, organized by Barry Callebaut Strategy Sustainability Success April 2012 Barry Callebaut – Roa
Slide 39: Confident to reach our mid-term financial targets
Outlook Confident to reach our mid-term financial targets X Four-year average growth targets for 2009/10 –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 deve
Slide 40: Summary
Summary X Outpacing the market, significantly investing in future growth X Volume up +6.7% X EBIT decrease by 5.7% X Net profit for the period CHF 121.1 mn X Significant investments in future growth along our strategic pillars X Investments in structures X Ramp-up of outsourcing deals X Investments
Slide 41: Appendix
Appendix April 2012 Barry Callebaut – Roadshow presentation H1 2011/12 41
Slide 42: Our product offering focuses on cocoa and chocolate
Our product offering focuses on cocoa and chocolate Food Manufacturers Gourmet & Specialties Cocoa Products • Standard chocolate • Chocolate • Standard Cocoa Products • Cocoa Products (cocoa powder, butter, • Specialties • Coating liquor) • Certified • Fillings • Probiotic • Low fat and high fat • R
Slide 43: West Africa is the world's largest cocoa producer
West Africa is the world’s largest cocoa producer – BC sources locally Total world harvest (10/11): 4,195k MT X 70% of total cocoa beans come others 11% from West Africa Ecuador 3% Ivory Coast* Brazil* 35% X BC processed ~540,000 tonnes 5% of cocoa beans or 13% of total Cameroon* world harvest 5% X
Slide 44: Investments support the growth of our business
CAPEX development Investments support the growth of our business in mCHF Additional growth IT Upgrade / efficiency gains existing sites Maintenance 250 CAPEX as % of sales 174 170 153 144 145 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 PLAN April 2012 Barry Callebaut – Roadshow presentation H1 2
Slide 45: Revenue by currency
Revenue by currency FY 2010/11 Sales Revenue Others* 33% EUR 40% CHF 1% GBP 9% USD 17% * Others include: Canadian Dollar, Mexican Peso, Brazilian Real, Japanese Yen, Russian Ruble, Australian Dollar, Chinese Yuan, Malaysian Ringgit, Polish Zloty, Czech koruna, Swedish Krona, Indonesian, Rupiah ,etc
Slide 46: Stable financing with enough headroom to cope with future growth
Net debt Stable financing with enough headroom to cope with future growth Financing and liquidity situation as of Feb 29, 2012 (CHF million) 2,144 770 Various uncommitted Short term facilities 1,188 EUR 600 mio 233 ABS receivables Syndicated bank loan financing Maturity 2016 (12 banks) 249 Short-ter
Slide 47: Solid and profitable growth
Key Figures 2010/11 – from continuing operations Solid and profitable growth Change in % Change in % FY FY In local 2010/11 2009/10 currencies (restated) Sales volume [in tonnes] 7.2% 1'296'438 1'209'654 Sales revenue [CHF m] 13.3% 0.7% 4'554.4 4'524.5 CHF per tonne 5.7% -6.1% 3'513 3'740 Gross prof
Slide 48: Solid Balance Sheet with improvement of all key ratios
Balance Sheet Solid Balance Sheet with improvement of all key ratios Change Aug 11 Aug 10 in % Total Assets [CHF m] -8.6% 3'263.1 3'570.8 Net Working Capital [CHF m] -8.0% 888.1 964.9 Non-Current Assets [CHF m] -14.0% 1'208.4 1'405.8 Net Debt [CHF m] -9.3% 789.8 870.8 Shareholders' Equity [CHF m] -6
Slide 49: 7% average annual volume growth over the last 10 years
Based on our strategy we achieved a 7% average annual volume growth over the last 10 years… Stollwerck divestment 1,403 1,317 CAGR+7% Brach’s divestment 1,214 1,166 1,130 1,052 1,050 1,011 891 761 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Consumer Divestment Vol
Slide 50: Higher cash flow generation and return to shareholders
… which translated into higher cash flow generation and return to shareholders 15.5 CAGR +17% 14.0 12.5 11.5 11.5 10.5 493 470 434 446 8.0 407 7.8 6.9 7.0 348 313 252 228 116 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Cash Flow as 4% 6% 6% 8% 9% 10% 9% 9% 10% 10%
Slide 51: Share performance vs. peers and indices
Share performance vs. peers and indices 10 Years - CAGR (Feb 2002 – Feb 2012) 1 Year performance (Feb 2011 – Feb 2012) Barry Callebaut 17.2% Barry Callebaut 19.8% Eurostoxx F&B 13% Lindt 12.3% Lindt 4.9% ADM 8.5% -3% SPI Givaudan 5.5% -7.1% Givaudan SMIM 4.7% -12.2% ADM Eurostoxx F&B 4.2% -14.0% SMI