Barry Callebaut Ag · SIX:BARN
Barry Callebaut — FY2019/20 Earnings Presentation
42 slides from Barry Callebaut's earnings presentation, November 2020
Slide 1: Roadshow presentation Full-Year results 2019/20
Roadshow presentation Full-Year results 2019/20 November, 2020
Slide 2: 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
Slide 3: BC at a glance
BC AT A GLANCE 3 FY 2019/20 Roadshow presentation
Slide 4: Strong values & a strong team
BC at a glance - Who are we? Strong values & a strong team We are the heart and engine of the chocolate A merger between Cacao Barry, the very first French and cocoa industry chocolate connoisseur since 1842 and Callebaut a Belgian chocolate couverture manufacturer expert since 1911 Listed on the SI
Slide 5: Shaping the world of chocolate and cocoa
BC at a glance – This is Barry Callebaut Shaping the world of chocolate and cocoa 5 FY 2019/20 Roadshow presentation
Slide 6: From the cocoa bean to the chocolate and cocoa products
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 2019/20 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 Barry Callebaut Barry Callebaut Cargill Cargill Olam Fuji Oil Guan Chong Puratos Fuji Oil Cémoi ECOM Clasen Mondelez Guan Chong Ferrero Irca JB Foods
Slide 8: A broad offering with cost plus model on majority of business
BC at a glance – offering and business model A broad offering with cost plus model on majority of business Cocoa Products Food Manufacturers Gourmet & Specialties % share: 22%* of volume 68%* of volume 10%* of volume Customer: Small, medium and Global Small, medium and Global Professionals, Food Cha
Slide 9: A global footprint and local service: 61 factories worldwide
BC at a glance - where are we present? A global footprint and local service: 61 factories worldwide Cocoa & Chocolate factories Chocolate Academy Cocoa factories in countries of origin and chocolate factories close to our customers. With our 23 CHOCOLATE ACADEMY™ Centers worldwide we are at the puls
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 (19/20E): 4,857 TMT About 70% of total cocoa beans are of West African Origin Rest of World Brazil* 12% Barry Callebaut processed around 1 4% Indonesia* million tonnes or approximately 20% 5% 4
Slide 11: Highlights Full-Year Results 2019/20
HIGHLIGHTS Full-Year Results 2019/20 11 FY 2019/20 Roadshow presentation
Slide 12: Change in the Executive Committee
Governance Change in the Executive Committee Remco Steenbergen leaving Barry Callebaut Remco Steenbergen will leave Barry Callebaut as of December 31, 2020 to become Chief Financial Officer of the Lufthansa Group. He has successfully accomplished his mission to improve processes and systems, the str
Slide 13: Change in the Board of Directors
Governance Change in the Board of Directors The following board member will not stand for reelection: Suja Chandrasekaran Board member since 2018 Member of the Nomination & Compensation Committee All other Board members will stand for reelection for a term of office of one year. Proposed as new memb
Slide 14: Solid results in unprecedented times, confident on mid-term guidance
Highlights Full-Year Results 2019/20 Solid results in unprecedented times, confident on mid-term guidance Sales volume down -2.0%, progressive recovery in fourth quarter Sales revenues of CHF 6.9 billion, down -0.4% in local currencies (-5.7% in CHF) Operating profit (EBIT) recurring1 of CHF 491.0 m
Slide 15: COVID-19 management: early adoption of precautionary measures focusing on 3 pillars
Highlights Full-Year Results 2019/20 COVID-19 management: early adoption of precautionary measures focusing on 3 pillars Enormous gratitude to all Barry Callebaut employees for pivoting and rethinking Care: Protect the health of employees business as usual Further strengthened hygiene protocols Soci
Slide 16: Progressive volume recovery in fourth quarter
Highlights Full-Year Results 2019/20 Progressive volume recovery in fourth quarter FY 2018/19 FY 2019/20 Cocoa +5.1% -2.0% Chocolate +10.6% +8.2% +10.6% +5.3% +10.2% +3.0% +3.1% +2.5% +1.7% +10.7% +7.7% +2.5% +4.3% +5.9% -14.3% -4.3% +2.9% +2.5% -0.9% -5.5% -2.4% -14.6% -3.9% -14.1% Q1 18/19 Q2 18/1
Slide 17: Gradual recovery of Key growth drivers
Highlights Full-Year Results 2019/20 Gradual recovery of Key growth drivers % of total % volume growth Group volume vs. prior year 36% +0.0% Emerging excl. Cocoa: Markets +0.5% Key growth drivers 35% Outsourcing crucial to -0.7% Long-term continuously Partnerships outperform the market 10% Gourmet &
Slide 18: Continued expansion and drive for new opportunities
Highlights Full-Year Results 2019/20 Continued expansion and drive for new opportunities September 2019 February 2020 ‘Cacaofruit Experience’ and November 2019 WholeFruit Chocolate introduced 100% dairy-free ‘M_lk January 2020 Chocolate’ of ‘Plant Craft’ Barry Callebaut leading range introduced amon
Slide 19: Strong Innovation
Highlights Full-Year Results 2019/20 Strong Innovation Riding the trends Ruby continues to establish its presence as 4th type of chocolate Plant-based - at the forefront of dairy-free and vegan trends with 100% dairy-free M_lk Chocolate and nut-based products Further exploit the richness of the Caca
Slide 20: Financial Review
FINANCIAL REVIEW Full-Year Results 2019/20 20 FY 2019/20 Roadshow presentation
Slide 21: Resilient volume and strong Free cash flow generation
Financial review – Key figures Resilient volume and strong Free cash flow generation Change % Pro-forma1 Group performance (in CHF million) FY 2019/20 in local currencies in CHF Sales volume (in tonnes) 2,095,982 n/a -2.0% Sales revenue 6,893.1 -0.4% -5.7% Gross profit 1,063.7 -6.8% -11.3% EBIT repo
Slide 22: Resilient performance across Regions
Financial review – Key performance indicators by Region Resilient performance across Regions EMEA Americas 945,640 Group Sales volume: 565,650 2,095,982 45% tonnes 27% Global Cocoa APAC 457,386 127,306 22% 6% EMEA Americas Asia Pacific Global Cocoa FY volume -3.6% -1.4% +7.4% -2.0% growth EBIT growt
Slide 23: COVID-19 impact on volume and mix
Gross profit COVID-19 impact on volume and mix In CHF millions -6.8% 1,199 -25 0 1,117 -57 1,064 -53 Gross Profit FY Volume Mix (Incl. COVID) Cocoa Gross Profit FX Gross Profit 2018/19 FY 2019/20, in LC FY 2019/20 pro-forma IFRS16 23 FY 2019/20 Roadshow presentation
Slide 24: Cocoa Combined ratio development
Cocoa processing profitability Cocoa Combined ratio development European combined ratio – 6-month forward ratio 4.00 Directionally right… Combined Shows general high level 3.50 ratio 3.6x industry direction, assuming many variables are fixed. 3.00 However… Butter ratio 2.50 Many variables are not fi
Slide 25: Operating profit (EBIT) recurring impacted by adverse mix
EBIT bridge Operating profit (EBIT) recurring impacted by adverse mix In CHF million -13.8% 603 520 -82 -1 -8 483 -29 EBIT FY 2018/19 Gross Profit SG&A, Scope EBIT Factory FX EBIT pro-forma IFRS16 FY 2019/20, closure costs FY 2019/20 recurring, in LC 25 FY 2019/20 Roadshow presentation
Slide 26: Strict management of financing cost support solid Net profit
EBITDA to Net profit bridge Strict management of financing cost support solid Net profit In CHF million 704 Effective Tax rate: 18.2% (PY 18.6%3) 483 -13.3% -221 392 (PY -2111) 20 339 -102 311 8 (PY-117 1,2) -69 (PY -913) EBITDA Depreciation EBIT Financial Income Net Profit Factory FX Net Profit Net
Slide 27: Raw material price developments
Raw material Raw material price developments 200% 180% 160% 140% 120% Increase FY 2019/20 (average) 100% Cocoa beans +6.3% Milk powder +21.0% 80% Sugar EU +7.6% 60% Sugar World +4.1% 40% 20% 0% Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 27 FY 2019/20 Roadshow presen
Slide 28: Strict Working capital management supporting strong Free cash flow generation
Free cash flow Strict Working capital management supporting strong Free cash flow generation In CHF million -13.4% 108 814 (PY -33) 704 -149 (PY -2012) 404 -87 (PY 2911,2) (PY +66) 317 (PY 3571,2) -281 22 (PY -280) EBITDA EBITDA Change in Interest paid CAPEX Others FCF FY RMI Beans FCF recurring rec
Slide 29: Net debt reduced and further strengthened balance sheet
Financial Review – Net debt Net debt reduced and further strengthened balance sheet In CHF million -144 121 205 1,510 1,305 13 40 1,366 -317 -223 223 817 594 -772 Net debt IFRS 16 Net debt Dividends Free Acqui- FX Impact Net debt RMI Adjusted Adjusted Aug-19 Leases Aug-19 & Treasury cash flow sition
Slide 30: Balance sheet further strengthened
Financial key figures Balance sheet further strengthened Aug 19 Aug 19 (in CHF million) Aug 20 Pro-forma IFRS 16 Reported Net working capital 1,192 1,363 1,363 Non-current assets 2,800 2,857 2,650 Total Assets 7,141 6,712 6,508 Net debt 1,366 1,510 1,305 Adj. Net debt1 594 817 612 Shareholders’ equi
Slide 31: Proposed payout of CHF 22.00, a stable payout ratio of 39%
Dividend Proposed payout of CHF 22.00, a stable payout ratio of 39% Proposed dividend 33% 33% 39% 39% 37% 39% 39% Stable payout ratio of 39% of Net profit Payout ratio 357 369 CHF 22.00 per share 255 281 311 240 219 Timetable for dividend Net profit reported in CHF millions Shareholder approval: Dec
Slide 32: Strategy & Outlook
STRATEGY & OUTLOOK Full-Year Results 2019/20 32 FY 2019/20 Roadshow presentation
Slide 33: Consistent long-term strategy in unprecedented times
Strategy & Outlook Consistent long-term strategy in unprecedented times management COVID-19 33 FY 2019/20 Roadshow presentation
Slide 34: COVID-19 management
Strategy & Outlook COVID-19 management COVID-19 progression remains volatile, we remain vigilant… Continued focus on Care, Continuity & Cash Global and regional issue teams daily monitoring developments Strict health and safety protocols in place Phased approach to reintroducing or lifting precautio
Slide 35: Solid basis for growth: Expansion and Innovation
Strategy Solid basis for growth: Expansion and Innovation Expansion Innovation Ongoing investment and outsourcing Riding the wave Integration and expansion of GKC Foods in Australia Expansion plant-based offerings New outsourcing contracts in EEMEA and Australia Making the wave started ramp-up Cacao
Slide 36: Strong financial basis and sustainable supply chain
Strategy Strong financial basis and sustainable supply chain Cost Leadership Sustainability Benefit from optimized debt structure and Forever Chocolate ranked No. 2 sustainable strategy in strengthened balance sheet the Food & Beverage industry by Sustainalytics Shared Service Center 5th anniversary
Slide 37: Pursue expansion and drive for new opportunities
Outlook Pursue expansion and drive for new opportunities Although markets are still volatile, we will further pursue expansion and drive for new opportunities, thanks to our continued focus on customers and our strong innovation pipeline. This together with our solid financial basis, supports the co
Slide 38: Appendix
APPENDIX 38 FY 2019/20 Roadshow presentation
Slide 39: Solid liquidity profile with no outstanding amounts under the Revolving Credit Facility
Appendix Solid liquidity profile with no outstanding amounts under the Revolving Credit Facility as per year end 5,419 ABS As of 31 Aug 2020 CHF 929 M Various uncommitted facilities 57% EUR 750 M Domestic Commercial Paper Programme 1,690 ABS EUR 1 B Revolving Maturity 2024 Credit Facility (15 banks)
Slide 40: 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 41: Chocolate confectionery market development – Nielsen data
Appendix Chocolate confectionery market development – Nielsen data Western Europe (33% of market) North America (22% of market) 2015-20 average: +0.5% 2015-20 average: -0.4% FY 2019/20: +2.4% FY 2019/20: -2.4% EEMEA (25% of market) 2015-20 average: +0.7% FY 2019/20: -0.5% Asia Pacific (13% of market
Slide 42: Our market and opportunities ahead
Appendix Our market and opportunities ahead Global Chocolate confectionery volume growth vs cocoa bean price Forecast volume growth per application 2019-2024 (Pure chocolate/compound volumes) 5 2’500 Volume growth, % 4 2’000 Absolute volume growth in tonnes / CAGR % GBP / tonne 3 2 1’500 Chocolate c