Barry Callebaut AG · SIX:BARN
Barry Callebaut — Merger or Acquisition (December 2012)
34 slides from Barry Callebaut's merger presentation, Dec 12, 2012
Slide 1: Acquisition of Petra Foods' Cocoa Ingredients Division
Acquisition of Petra Foods’ Cocoa Ingredients Division DECEMBER 12, 2012 Barry Callebaut – Acquisition of Petra Foods Cocoa Ingredients Division
Slide 2: Agenda
Agenda Overview & Strategic Rationale Juergen Steinemann, CEO Transaction Details Victor Balli, CFO & Financial Consideration Summary & Conclusion Juergen Steinemann, CEO Q&A Session December 12th 2012 Barry Callebaut – Acquisition of Petra Foods Cocoa Ingredients Division 2
Slide 3: Agenda
Agenda Overview & Strategic Rationale Juergen Steinemann, CEO Transaction Details Victor Balli, CFO & Financial Consideration Summary & Conclusion Juergen Steinemann, CEO Q&A Session December 12th 2012 Barry Callebaut – Acquisition of Petra Foods Cocoa Ingredients Division 3
Slide 4: Excellent strategic fit at the core of Barry Callebaut's cocoa and chocolate business
Excellent strategic fit at the core of Barry Callebaut’s cocoa and chocolate business X Supporting further chocolate growth by stepping up the integrated cocoa sourcing and processing activities X Strengthening current and future outsourcing and partnership agreements X Boosting sales volume in fast
Slide 5: Consistent implementation of our long-term strategy
Consistent implementation of our long-term strategy Our Vision: “Heart and engine of the chocolate industry” Geographical expansion in emerging markets and strengthen position in developed markets Expansion Long term outsourcing agreements/strategic partnerships Faster growth in Gourmet & Spec
Slide 6: Vertically integrated in cocoa sourcing and processing since 1996
Vertically integrated in cocoa sourcing and processing since 1996 Cocoa Cocoa beans Plantations 80% Cocoa liquor ~54% ~46% Cocoa powder Cocoa butter Barry Callebaut + Sugar, Milk, + Sugar, Milk, + Sugar, Milk, core others fats, others others activity Powder mixes Compound/Fillings Chocolate couvertu
Slide 7: Long-term outsourcing and strategic partnership agreements include both chocolate and cocoa products
Expansion Long-term outsourcing and strategic partnership agreements include both chocolate and cocoa products 2006-07 C + Ch deal Nestlé Cadbury Schweppes Hershey Morinaga (February 2007) (June 2007) (April 2007) (September 2007) C + Ch 2010-11 C + Ch deal C + Ch deal deal ex-Kraft Foods Green Moun
Slide 8: Based on our strategy we grew almost 8% on average per year
Based on our strategy we grew almost 8% on average per year, driven by emerging markets and strategic partnerships % of total consolidated sales volume * CAGR 06-12 Emerging markets +17.2% +7.8% 24% 23% Long-term 22% Outsourcing 16% 20% 19% agreements & +67.2% Strategic 15% 11% 16% partnerships 7% 1
Slide 9: Cocoa Powder-based applications growing fast
Cocoa Powder-based applications growing fast Demand for powder As a result, derived demand applications growing faster for powder is the fastest growing CAGR 11-16 of main cocoa SFP applications (in %) CAGR (11-16F) 2 -5 % 1 Powder Powder applications Main powder/ 1-2% butter applications Liquor 1-2
Slide 10: Demand for Cocoa Powder driven by emerging markets
Expansion Demand for Cocoa Powder driven by emerging markets Annual growth in volumes Size (2011/12) Annual growth rate APAC SA EU NA Total ~960k MT Global growth rate range estimated to be 2-5% Source: Customer interviews; Sunflower data for market size, Euromonitor for regional split; team analysi
Slide 11: The Cocoa Market
The Cocoa Market X Globally, ADM and Cargill are the largest players X Differences in regional profiles X Asia: Petra Foods largest player, followed by Guan Chong X South America: Cargill and ADM leaders X Europe: Cargill leading, followed by ADM X North America: Blommer leading, followed by Barry C
Slide 12: Petra Foods – company overview
Petra Foods – company overview Branded consumer Cocoa Ingredients Division X One of the leading players in Southeast Asia X One of the world’s major manufacturers and that markets and distributes its own brands suppliers of premium cocoa products, of chocolate and sugar confectionery namely Cocoa Li
Slide 13: Petra Foods' Cocoa Ingredients Division a strong player in the cocoa market
Petra Foods’ Cocoa Ingredients Division a strong player in the cocoa market... Strong current capabilities Further potential for future growth X The largest cocoa products supplier in Asia- X Strengthen relationships with major Food Pacific and the third largest worldwide Manufacturers (405,000 tonn
Slide 14: ...with a strong exposure to emerging markets
...with a strong exposure to emerging markets Cocoa Ingredients Division Cocoa Ingredients Division Sales volume per region – 2011 Sales volume per product type– 2011 Cocoa liquor 13% Developed markets 34% Cocoa butter Cocoa 42% powder Emerging 45% markets 66% December 12th 2012 Barry Callebaut – Ac
Slide 15: Acquisition will position Barry Callebaut as a large, pro-active market player in Cocoa Powder
Expansion Acquisition will position Barry Callebaut as a large, pro- active market player in Cocoa Powder business globally X Barry Callebaut is the largest global industrial chocolate supplier Cocoa grinders Industrial chocolate – Open market BC + Petra Foods Barry Callebaut Cargill Cargill Barry C
Slide 16: Through Petra Foods' Cocoa Ingredients Division our emerging markets exposure will increase to 31%
Expansion Through Petra Foods’ Cocoa Ingredients Division our emerging markets exposure will increase to 31% Geographic expansion Sales Volume breakdown Emerging markets 31% 24% Long-term 23% outsourcing 22% 18% agreements & 16% 20% 19% strategic 15% 11% 16% 7% 10% partnerships 2% 77% 67% 61% 51% 83
Slide 17: Cocoa Powder will strengthen our overall offering
Innovation Cocoa Powder will strengthen our overall offering X Petra Foods’ business is cocoa centric X Experts in Cocoa Powder processes X Thorough technical understanding of how raw materials behave under certain conditions X Knowledge in cake alkalizing (black powder) X Deep understanding of Asia
Slide 18: Increasing of cocoa sourcing and processing footprint (buy vs. build)
Cost Leadership Increasing of cocoa sourcing and processing Sustainable Cocoa footprint (buy vs. build) Footprint of cocoa processing factories Germany Switzerland France U.S. Mexico Thailand Ivory Coast Malaysia Brazil Singapore Ghana Global Headquarters Cameroon Indonesia Barry Callebaut cocoa fac
Slide 19: Petra Foods' Cocoa Ingredients Division is right at the core of our strategy
Petra Foods’ Cocoa Ingredients Division is right at the core of our strategy Our vision: “Heart and engine of the chocolate industry” 9 Supporting further chocolate growth in both Industrial and Gourmet 9 Strengthening current and future outsourcing and partnership Expansion agreements 9 Boosting sa
Slide 20: Agenda
Agenda Overview & Strategic Rationale Juergen Steinemann, CEO Transaction Details Victor Balli, CFO & Financial Consideration Summary & Conclusion Juergen Steinemann, CEO Q&A Session December 12th 2012 Barry Callebaut – Acquisition of Petra Foods Cocoa Ingredients Division 20
Slide 21: Historical financials – capacity and volumes
Petra Foods’ Cocoa Ingredients Division Historical financials – capacity and volumes Grinding capacity (kMT) and sales value (USDm) – 2002-2012 Sales value 2002: 160 Sales value 2011: 1,276 395 405 370 370 310 320 240 220 200 200 100 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q3 2012 Sales vo
Slide 22: Historical financials – profitability and assets
Petra Foods’ Cocoa Ingredients Division Historical financials – profitability and assets EBITDA / MT of sales volume (USD / MT) – 2002-2012(1) 250 208 221 204 215 198 190 159 136 119 100 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 9M 2012 EBITDA (USDm) – 2002-2012
Slide 23: Key transaction parameters
Key transaction parameters X Acquisition price: USD 950 mio(1) X Transaction structure: Share deal X EV/EBITDA multiple: 14.3x (2011) 9.2x – 9.7x post run-rate synergies(2) X Run-rate synergies: CHF 30 - 35 mio p.a. by year 4 (contribution to EBIT) X Financing: Fully underwritten bridge loan for tot
Slide 24: Key metrics
Key metrics In CHF mio Cocoa Cocoa Ingredients Ingredients Division Division FY 31-Aug 2012 (FY Aug 2012) (FY Dec 2011)(1) (9M Sep 2012)(2) Group volume (in kMT) 1,379 265(3) 188(3) Group revenue 4,830 1,132 732 EBITDA 434 59 33 % margin 9.0% 5.2% 4.5% EBIT 353 44 20 % margin 7.3% 3.9% 2.8% EBIT per
Slide 25: Numerous sources of synergies identified
Numerous sources of synergies identified Optimized Sourcing and product flows 1 5 Optimization of available capacity X Reduce transportation / logistics X Utilization of complementary costs through a more efficient “pockets of excess capacity” in utilisation of the combined network the Petra Foods a
Slide 26: Key figures of the acquired business Guidance FY 13/14
Key figures of the acquired business Guidance FY 13/14 X Additional sales volume: 230,000 tonnes X Additional Net Sales Value: CHF 1.0-1.1 bio X Additional EBITDA: CHF 45-50 mio X Additional EBIT: CHF 30-35 mio (before synergy related costs) X Additional financing costs: CHF 30 to 32 mio (depending
Slide 27: Volatility Mitigation Potentials
Volatility Mitigation Potentials X Butter processing mainly used to support internal chocolate production X Increase share of cost plus / combined based deals in total sales volumes (ensures stable / predictable profitability level) X Enhanced purchasing platform Centralize bean sourcing Central
Slide 28: Financing structure
Financing structure X Financial package fully bank underwritten X Take out will consist of equity and debt X Transaction has full support of Jacobs Holding AG (main shareholder of Barry Callebaut) X Expect to maintain strong balance sheet and full financial flexibility X Target solid BB+/Ba1 rating
Slide 29: Group – mid term guidance as of consolidation
Group – mid term guidance as of consolidation As of consolidation: X Volume growth: 6-8% on average per year until 2015/16 X EBIT/tonne restored to Barry Callebaut’s pre-acquisition level by 2015/16 X Our view for the 2012-2016 period reflects current economic forecasts for the markets we operate in
Slide 30: Expected transaction and integration timeline
Expected transaction and integration timeline 12 Dec 16 Jan Feb 8 Apr Apr May Summer Q4 2014 / 2012 2013 2013 2013 2013 2013 2013 Q1 2015 Barry Petra Barry Callebaut Petra Foods Callebaut Foods half-year results 1st Quarter 3-month full-year Results key sales results figures 2012 Transaction Petra F
Slide 31: Agenda
Agenda Overview & Strategic Rationale Juergen Steinemann, CEO Transaction Details Victor Balli, CFO & Financial Consideration Summary & Conclusion Juergen Steinemann, CEO Q&A Session December 12th 2012 Barry Callebaut – Acquisition of Petra Foods Cocoa Ingredients Division 31
Slide 32: Summary – Acquisition Petra Foods' Cocoa Ingredients Division
Summary – Acquisition Petra Foods’ Cocoa Ingredients Division Excellent strategic fit at the core of Barry Callebaut’s cocoa and chocolate business, supporting the company’s overall growth X Supporting further chocolate growth by stepping up the integrated cocoa sourcing and processing activities X
Slide 33: Agenda
Agenda Overview & Strategic Rationale Juergen Steinemann, CEO Transaction Details Victor Balli, CFO & Financial Consideration Summary & Conclusion Juergen Steinemann, CEO Q&A Session December 12th 2012 Barry Callebaut – Acquisition of Petra Foods Cocoa Ingredients Division 33
Slide 34: 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
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