Aryzta AG · SIX:ARYN
Aryzta — H1 2023 Earnings Presentation
40 slides from Aryzta's earnings presentation, Mar 6, 2023
Slide 1: ARYZTA AG - H1 2023 results
ARYZTA AG - H1 2023 results 6 March 2023 1
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: Performance H1 2023
Performance H1 2023 • Revenue €1,037.1m • Organic revenue growth 25.4% • EBITDA increased to €129.1m • EBITDA margin at 12.5% • Operating free cash flow increased strongly to €76m • IFRS Profit €51.7m • Redemption of €200m Euro hybrid by 28th of March 2023 3
Slide 4: Business Performance Accelerates
Business Performance Accelerates • Strategy delivering to expectations • Market momentum & innovation supports volume • All markets & channels performing strongly • Continue to outpace European retail market • Customers & service portfolio driving Foodservice growth • Innovation & momentum as key en
Slide 5: Challenges remain
Challenges remain • Inflationary environment continues across all costs • Input prices remain significantly above historic levels • Labour availability & costs elevated • Consumer consumption trends unchanged • Bakery products have competitive calorific proposition 5
Slide 6: Important reporting and management changes
Important reporting and management changes • Reporting simplification - Unadjusted profitability figures • Alignment of financial year with calendar year • Appointment of COO – strengthening executive management 6
Slide 7: Mid-term targets FY 2023f – FY 2025f reiterated
Mid-term targets FY 2023f – FY 2025f reiterated Organic growth (CAGR) EBITDA Margin ROIC 4.5%–5.5% ≥14.5% ≥11.0% (constant pricing FY221) Revenue (EUR) CAPEX as % of revenue Total net debt leverage (incl. hybrids) >2bn 3.5%–4.0% c.3x (constant currency and pricing FY22) (driven by operational result
Slide 8: Guidance FY 2023
Guidance FY 2023 • Current trading and consumer trends remain unchanged • Inflationary environment continues • Pricing volatility remains elevated • Further improvements in all key metrics expected in FY 2023 − Organic growth supported by volume and price − EBITDA supported by pricing, efficiencies
Slide 9: Financial review
Financial review 9
Slide 10: Simplification of external reporting – discontinuing of underlying EBITDA
Simplification of external reporting – discontinuing of underlying EBITDA In €m / % of revenue 12.5% 12.5% 490bps 7.1% 50bps 104.0 129.1 59.7 H1/22 EBITDA Impairment & Loss on disposal Previously H1/23 EBITDA Restructuring reported H1/22 related costs EBITDA1.) 10 1.) H1 FY2022 EBITDA corresponds to
Slide 11: Strong set of figures on all key metrics
Strong set of figures on all key metrics Cash Flow from Activities Organic Growth % EBITDA1.) % ROIC % (m€) 25.4% 12.5% 12.5% 44.8 9.1% WACC: 8.0% 13.3% 3.4% H1/22 H1/23 H1/22 H1/23 -16.0 H1/22 H1/23 H1/22 H1/23 €835.3m €1,037.1m €104.0m €129.1m 11 1.) H1 FY2022 EBITDA corresponds to the previously
Slide 12: Organic growth acceleration supported by pricing and resilient volume
Organic growth acceleration supported by pricing and resilient volume Organic Growth 25.4% In €m / % of revenue 0.3% 0.3% -1.5% 1,037.1 19.3% 5.8% 835.3 Revenue Growth 24.2% H1/22 Volume Price Mix FX Disposal H1/23 12
Slide 13: Broad based organic growth across the Group
Broad based organic growth across the Group Organic Growth % 26.2% 25.4% Key Highlights: 20.2% • Resilient volume growth in Europe combined with pricing 13.3% 14.3% • ROW with strong QSR volume growth, Foodservice driven by pricing 7.7% • Revenue now ahead of pre-COVID levels H1/22 H1/23 Total Group
Slide 14: All channels with strong revenue growth
All channels with strong revenue growth Organic Growth % 30.1% 30.7% 27.3% Key Highlights: 25.4% 22.6% • Ahead of European retail-market in volume & value • New customers and service offering driving Foodservice 13.3% 10.9% • Guest count and restaurant openings in a few markets driving QSR 6.5% H1/2
Slide 15: Costs discipline and operational leverage compensating input costs headwinds
Costs discipline and operational leverage compensating input costs headwinds In €m / % of revenue +0bps 12.5% -100bps 12.5% +180bps -110bps +30bps 104.0 129.1 EBITDA H1/22 Gross Margin Distribution SG&A Depreciation & EBITDA H1/23 ERP Amortization 15 1.) H1 FY2022 EBITDA corresponds to the previousl
Slide 16: Disciplined costs management supported by key efficiency programs
Disciplined costs management supported by key efficiency programs Levers Mid-Term Targets 2023-25 H1 Results Manufacturing continuous improvement 2-3% cost1 efficiency YoY • Manufacturing efficiency: c. 2% program SIMPLEX – recipe standardization & €26-36m costs optimization • Costs optimization >€5
Slide 17: EBITDA margin maintained with strong ROW performance
EBITDA margin maintained with strong ROW performance +590bps EBITDA as % of revenue 22.3% Key Highlights: • Procurement risk management ensuring cost 16.4% visibility -70bps 12.5% 12.5% 11.8% • Pricing & efficiencies in Europe recovering input 11.1% costs in absolute • Foodservice business in APAC d
Slide 18: Strong earnings and improved working capital accelerate cash flow
Strong earnings and improved working capital accelerate cash flow In €m 76.0 7.8 1.6 Key Highlights: • Working capital and securitization supporting 30.5 cash flow • Significantly reduced restructuring related cash 25.1 flow 11.0 • Cash flow from Activities improved to €44.8m Operating EBITDA1 Worki
Slide 19: ROIC above WACC driven by margin progress
ROIC above WACC driven by margin progress In % 9.1% Key Highlights: WACC: 8.0% • Improved EBITDA key driver of acceleration • Lower tax charge • Disciplined working capital and CAPEX mgmt. 3.4% H1/22 H1/23 19
Slide 20: Total leverage reduction supported by business results
Total leverage reduction supported by business results Total net debt (incl. hybrid & leases) in €m 3,000 8.5x1.) 9 Leverage Ratio Key Highlights: 8 2,500 7 • Leverage reduction by c. 50% over two years 2,000 5.6x1.) 6 • Interest costs well under control 1,820 5 1,500 4.3x1.) • Progress toward mid-t
Slide 21: Addressing capital structure through EUR-hybrid repayment
Addressing capital structure through EUR-hybrid repayment In €m 950.3 114.6 Key Highlights: 835.7 805.1 30.6 • Funded via cash from activities and existing 211.5 593.6 resources • Improves capital structure and reduces interest costs • Covenant ratios remain well within defined range H1/21 H1/22 H1/
Slide 22: Thank you
2 | AR¥YZTA SERVING INSPIRATION
Slide 23: Appendix
Appendix 23
Slide 24: Summary Income Statement
Summary Income Statement For period ended 28 January 2023 January January 2023 2022 €m €m % Change Continuing Operations Revenue 1,037.1 835.3 24.2% 1 EBITDA 129.1 59.7 116.2% EBITDA margin 12.5% 7.1% 540 bps Depreciation & amortisation (63.5) (61.4) (3.4)% Operating profit/(loss) 65.6 (1.7) Operati
Slide 25: Organic Revenue
Organic Revenue For period ended 28 January 2023 ARYZTA ARYZTA Total Continuing Europe Rest of World Operations €m €m €m Revenue 910.1 127.0 1,037.1 Organic movement 26.2% 20.2% 25.4% Disposals movement – (11.3)% (1.5)% Currency movement (0.2)% 2.7% 0.3% Total revenue movement 26.1% 11.6% 24.2% 25
Slide 26: Quarterly Organic Revenue
Quarterly Organic Revenue For period ended 28 January 2023 Q3 2022 Q4 2022 Q1 2023 Q2 2023 H1 2023 ARYZTA Europe Volume % 18.0% 10.1% 2.8% 8.4% 5.6% Price % 6.6% 11.8% 19.7% 21.4% 20.5% Mix % 1.0% 0.9% (0.4)% 0.6% 0.1% Organic movement % 25.6% 22.8% 22.1% 30.4% 26.2% ARYZTA Rest of World Volume % 3.
Slide 27: Segmental EBITDA
Segmental EBITDA For period ended 28 January 2023 January January 2023 2022 EBITDA1 €m €m % Change ARYZTA Europe 100.8 81.4 23.8% ARYZTA Rest of World 28.3 (21.7) Total continuing operations 129.1 59.7 116.2% January January 2023 2022 EBITDA margin €m €m % Change ARYZTA Europe 11.1% 11.3% (20) bps A
Slide 28: Segmental EBITDA and reconciliation to Underlying EBITDA
Segmental EBITDA and reconciliation to Underlying EBITDA For prior period ended 29 January 2022 ‘EBITDA’ is presented as earnings before interest, taxation, depreciation and amortisation. In the 2022 Annual Report and Accounts this was referred to as ‘IFRS EBITDA’. As this measure more closely align
Slide 29: Impairment, disposal, and restructuring related costs
Impairment, disposal, and restructuring related costs For period ended 28 January 2023 Continuing Continuing Operations Operations January 2023 January 2022 €m €m Net loss on disposal of businesses – (40.2) Net loss on fixed asset disposals and impairments – (0.2) Total net loss on disposal of busin
Slide 30: Cash Generation
Cash Generation For period ended 28 January 2023 January 2023 January 2022 €m €m EBITDA 129.1 59.7 Impairment, disposal and restructuring-related costs - 44.3 Working capital movement (18.8) (34.6) Working capital movement from debtor securitisation1 12.9 (1.8) Capital expenditure (28.0) (29.6) Net
Slide 31: Reconciliation of IFRS cash flow from operating activities to Cash Flow generated from activities
Reconciliation of IFRS cash flow from operating activities to Cash Flow generated from activitie For period ended 28 January 2023 January 2023 January 2022 €m €m Net cash flows from operating activities1 104.2 37.9 Purchase of property, plant and equipment (26.1) (26.6) Purchase of intangible assets
Slide 32: Net Debt Evolution
Net Debt Evolution For period ended 28 January 2023 January 2023 January 2022 €m €m Opening net debt (290.0) (220.1) Cash flow generated from activities 44.8 (16.0) Net movements on lease liabilities 2.3 9.1 Disposal of businesses, net of cash and leases (0.6) 110.9 RCF termination costs - (7.7) Div
Slide 33: ARYZTA Group Gross Term Debt Financing Facilities and Maturities
ARYZTA Group Gross Term Debt Financing Facilities and Maturities For period ended 28 January 2023 January 2023 July 2022 €m €m Syndicated Bank RCF (294.7) (398.5) Schuldschein (17.2) (17.8) Gross term debt (311.9) (416.3) Upfront borrowing costs 6.0 6.6 Term debt, net of upfront borrowing costs (305
Slide 34: Covenants
Covenants For period ended 28 January 2023 In September 2021, ARYZTA replaced its existing Syndicated Revolving Credit Facility ('RCF') Agreement with a new five year €500m Syndicated RCF Agreement. In connection with the early repayment of the existing facility, the Group incurred €7.7m of costs du
Slide 35: Hybrid Funding
Hybrid Funding For period ended 28 January 2023 H1 2023 Instrument Coupon Coupon rate if not called €m CHF 400m 7.0% 6.045% +SARON 3 months compound rate (399.0) EUR 200m 6.8% 6.77% +5 Year Euro Swap Rate (200.0) CHF 190m 4.9% 4.213% +SARON 3 months compound rate (189.5) Hybrid principal outstanding
Slide 36: ARYZTA Group – Return on Invested Capital
ARYZTA Group – Return on Invested Capital For period ended 28 January 2023 ARYZTA ARYZTA Rest of ARYZTA Europe World Group €m €m €m 28 January 2023 1 Average segmental net assets 1,150.9 102.6 1,253.5 NOPAT1 82.1 31.4 113.5 ROIC1,2 7.1% 30.6% 9.1% 30 July 2022 1 Average segmental net assets 1,157.9
Slide 37: Net assets, goodwill and intangibles
Net assets, goodwill and intangibles For period ended 28 January 2023 January 2023 FY 2022 €m €m Property, plant and equipment 837.6 853.6 Goodwill and intangible assets 648.5 667.5 Working capital (124.5) (127.0) Other segmental assets 3.1 4.1 Other segmental liabilities (21.3) (23.4) Lease liabili
Slide 38: Average Closing and Average FX Rates
Average Closing and Average FX Rates For period ended 28 January 2023 Average Average Closing Closing Currency H1 2023 H1 2022 % Change H1 2023 FY 2022 % Change CHF 0.9794 1.0613 7.7% 1.0024 0.9730 (3.0)% AUD 1.5238 1.5847 3.8% 1.5292 1.4570 (5.0)% GBP 0.8681 0.8486 (2.3)% 0.8777 0.8380 (4.7)% PLN 4
Slide 39: Presentation Glossary
Presentation Glossary ‘Organic revenue’ – presents the revenue movement during the period, excluding impacts from acquisitions/(disposals) and foreign exchange translation. ‘EBITDA’ – presented as earnings before interest, taxation, depreciation and amortisation. In the 2022 Annual Report and Accoun
Slide 40: Change of financial year to calendar year – Implication on reporting
Change of financial year to calendar year – Implication on reporting Annual Results Quarterly Reporting • 12-month period ended 29 July 2023 • comparatives: 12-month period ended 30 • 3-month period ended 28 October 2023 July 2022 20231 • comparatives: 3-month period ended 29 October • 17-month peri