Wessanen Q3 2012 analyst&investors presentation

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Wessanen Q3 2012 analyst&investors presentation

  1. 1. Royal Wessanen nv Q3 2012 Amsterdam, 25 October 2012www.wessanen.com @RoyalWessanen
  2. 2. Revenue and EBIT split Q3 >80% revenue in our organic activities HFS (Health Food Stores) Revenue €48.0 mlnGrocery EBIT €(0.3) mlnRevenue €65.8 mlnEBIT €5.7 mln 47% 19% 34%Frozen FoodsRevenue €26.6 mln 9mon 2012EBIT €0.4 mln 46% Non-allocated & eliminations Revenue €(1.9) mln 19% 35% EBIT €(2.5) mln 2
  3. 3. Q3 performance• Organic food market continues to trend favourably – Growth potential significant and sustainable – Increasing number of consumers appreciating rich taste; healthy nature; and sustainable production methods – Increased availability and still (too) low per capita consumption• We also see reduced consumer confidence and related reduction of spending – Result of subdued European economies• Assessment of structure and cost base well under way – Conclusions to be shared late November – Aim to reduce complexity, streamline processes and improve speed to market and decision making – As a result substantial costs savings are to be achieved 3
  4. 4. Q3 2012 performance (cont’d)• Grocery continues to show healthy performance, growing volumes, sales and operating profits – Addressing issues such as i) stop distributing Italian grocery brands and ii) reviewing go-to-market approach Germany – Healthy autonomous growth, increased operating result – Our brands (e.g. Bjorg, Clipper, Whole Earth) performing well• Developments disappointing at health food stores (HFS) – Also first positive signs such as • Development German brands • New customer wins in France • Positive like-for-like sales Dutch formula stores and independent stores 4
  5. 5. Q3 performance (cont’d)• At Frozen Foods, both operations combined under single management – Objective to realise further strategic alignment, corporation and process integration – Performance in line with previous quarters• Discontinued operations (ABC) – Divesting progressing as planned, signing targeted for the current fourth quarter – Ready-to-Drink cocktail market continued to grow driven by frozen pouches – Y-on-y comparison distorted due to last year’s allocation 5
  6. 6. Q3 2012 key figures In € mln Q3 2012 Q3 2011Revenue ¹ 138.5 136.6Autonomous growth (0.2)%Gross contribution ¹ 54.6 52.8As % of revenue 39.4% 38.7%Normalised EBIT ¹ 3.3 1.0As % of revenue 2.4% 0.7%EBIT ¹ 3.0 (0.8) Q3 revenue 48%Result discontinued operations (net of tax) 2.3 10.1 ²Net result 3.7 8.1 19% 33%Earnings per share (EPS) 0.05 0.11 Grocery HFS Frozen Foods¹ Continuing operations² Includes €4.7 mln of deferred tax assets and net reversal impairment losses of €0.8 million. 6
  7. 7. Cash flow Q3In € mln (8.9) 4.2 Decrease (7.9) of net debt (**) Cash flow Increase working from 4.2 capital (*) earnings (*) (4.4) Discontinued operations 12.6 Sources Net Investments (3.9) (*) (0.6) Derivatives and FX Uses 7
  8. 8. Closing remarksMacro economy• Organic food market continues to trend favourably• Reduced consumer confidence and related reduction of spendingQ3 results• Grocery continues to grow volumes, sales and operating profits• HFS developments disappointing, although first positive developments visibleOwn actions• Non-core activities – At Frozen Foods new single management – Divestment ABC progressing• Core activities – Addressing several issues such as • French distribution and Italian grocery activities – Assessment of structure and cost base well under way 8
  9. 9. Royal Wessanen nvTo make our organic brands most desired in Europe
  10. 10. Strategic priorities 2012-14Strategic focus ActivitiesTopline growth • Grow core brands • Grow core categories • Build strongholds in new markets • Country specific growth strategies • Launch fewer, bigger, better innovations • Execute acquisitions shortlistProfitability • Central sourcing savings • Pricing strategies towards customersimprovement • Improve operational excellence with SAP • Filling own factoriesEnablers • Improve talent performance management / building connected leadership • Simplify how we are conducting business • Activate Organic Expertise Centre (OEC), integrate Quality 10
  11. 11. Q3 figures per segment In € mln Revenue Normalised EBIT Q3 12 Q3 11 Q3 12 Q3 11Grocery 65.8 57.5 5.7 3.8HFS (Health Food Stores) 48.0 54.7 (0.3) (0.5)Frozen Foods 26.6 27.3 0.4 0.2Non-allocated * (1.9) (2.9) (2.5) (2.5)Wessanen 138.5 136.6 3.3 1.0* Eliminations for inter-segment revenue (between Grocery and HFS) 11
  12. 12. Revenue breakdown per segment Grocery HFS 4.4% (4.2)% 65,8 54,7 48,0 57,5 Autonomous third party revenue growth Autonomous third party revenue growth Frozen Foods Royal Wessanen (0.2)% 136,6 138,5 (2.5)% 27,3 26,6 Autonomous third party revenue growth Autonomous third party revenue growth 12
  13. 13. Bridge - revenue growthIn € mln150 (1.9)% 1.7% 0.8% 1.0% 1.5%140130120 Q3 11 Volume Price/mix Currency Acq&div. Q3 12 €136.6 €(2.6) €2.3 €1.0 €1.2 €138.5 13
  14. 14. Bridge - segment revenue growth In € mln150 €8.3 €(6.7) €136.6 €(0.7) €1.0 €138.5140130120 Q3 11 Grocery HFS Frozen Foods Intersegment Q3 12 14
  15. 15. Bridge - EBITE development y-on-yIn € mln6 €1.0 €1.9 €0.2 €0.2 - €3.3420 Q3 11 Grocery HFS Frozen Foods Corporate Q3 12 15
  16. 16. Financials Q3 / guidance 2012Financials Q3• Net financing costs €(0.9) mln Q3 2011: €(1.0) mln• Income tax expenses €(0.7) mln Q3 2011: €(0.2) mln• Capex €(1.4) mln Q3 2011: €(2.5) mlnGuidance FY2012• Net financing costs €(3-4) mln• Effective tax rate around 35%• Capex €6-8 mln• Depreciation and amortisation €10-11 mln• Non-allocated expenses (incl. corporate) €11-12 mln 16
  17. 17. Working capital 80 4 quarter average working capital  Cont. operations  ABC 60 40 20 0 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 40 q-on-q movement working capital 20 0-20-40 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 17
  18. 18. Net debt and leverage ratioIn € mln150 Net debt €57 mln 75 0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 4 Leverage ratio 2.0x 2 0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 18
  19. 19. A very sound financial position In € mln Sept 12 Dec 11 In € mln Sept 12 Dec11Assets LiabilitiesProperty, plant and equipment 55.1 86.4 Total equity 164.9 166.1Intangible assets 106.8 90.6 Interest-bearing loans 64.7 37.4Investment associates/other 0.5 1.0 Employee benefits 23.7 24.0Deferred tax assets 6.8 8.8 Provisions / Deferred tax liabilities 6.4 3.9Non-current assets 169.2 186.8 Non-current liabilities 94.8 65.3Inventories 60.7 67.5 Bank overdrafts / current debt 5.7 3.0Income tax receivables 0.7 2.2 Provisions 2.1 3.3Trade receivables 77.4 78.9 Income tax payables 2.2 0.5Other receivables / prepayments 14.8 24.4 Trade payables 64.6 70.5Cash (equivalents) 13.9 8.2 Non-trade payables&accrued expenses 50.3 59.3Assets classified as held for sale 58.8 - Liabilities classified as held for sale 10.9 -Current assets 226.3 181.2 Current liabilities 135.8 136.6TOTAL ASSETS 395.5 368.0 TOTAL EQUITY & LIABILITIES 395.5 368.0 19
  20. 20. Appendix - Sustainability 20
  21. 21. Attractiveness organic food markets European organic food an attractive, growing segment – Size €21 bn; 2011 growth around 6% – <3% of total European food market Increasing consumer appreciation Still low per capita consumption – European Union <€30> p.a. Consumers increasingly convinced of benefits of organic food regarding health, taste and environment Grocery and HFS channels developing at different growth path – Decline percentage of households shopping in HFS channel in the Netherlands halted 21
  22. 22. What is organic?! Strict criteria to be allowed to be labelled organic Demonstrably free from GMO, pesticides and growth hormones Strict rules on animal welfare Severe restrictions on fertilisers, herbicides and pesticides Severe restrictions on additives and processing aids All about being produced and processed in line with organic principles Organic products promote health and well-being Holding benefits for the planet and for future generations All about nutrition and taste ! Organic food is controlled by a unique European certification system 22
  23. 23. Wessanen Business principles• Compliance with laws: being a responsible partner in society, acting with integrity towards all stakeholders and others who can be affected by our activities• Environment: in line with commitment to sustainable development, we will do all that is reasonable and practicable to minimise adverse effects on the environment• Product safety: we aim at all times to supply safe products and services• Free market competition: we support free market competition as basis of conducting business; we observe applicable competition laws and regulations• Child, bonded and forced labour: under no circumstances we are making use of forced or bonded labour; we do not employ children in violation of relevant conventions of ILO• Human rights: we support and respect human rights and strive to ensure that our activities do not make it an accessory to infringements of human rightsWe expect suppliers and business partners to comply with the above principles 23
  24. 24. Commitment to minimise environmental impact• Committed to minimising impact on environment by measuring and monitoring the effects of our operations• All our organic products are free of GMO• We are working on reducing our CO2 footprint and usage of water• Additionally, organic products do not use pesticides, therefore contributing to a decrease• ISO 14001 is an internationally recognised standard for embedding processes to analyse and reduce our impact on the environment 24
  25. 25. Wessanen’s supply chain 25
  26. 26. Palm oil - member RSPO• Palm oil is important, versatile raw material for food – Only be cultivated in tropical areas of Asia, Africa and South America – Concerns that demand causing expansion of plantations into eco-sensitive areas• Since March 2011 Member of Roundtable on Sustainable Palm Oil (RSPO) – Global multi-stakeholder initiative – Encouraging sustainable production/use palm oil – Wessanen commits to organisation’s objectives• In 2011, we developed policy to govern palm oil sourcing and guidelines for implementation in partnership with our suppliers• Committed to switching palm oil to RSPO certified sustainable palm oil during 2012-13 – RSPO certified segregated palm oil for organic – GREEN PALM certificates for conventional 26
  27. 27. Organic Expertise Centre (OEC)• We established our internal expertise - named OEC - in 2010  To stimulate exchange of knowledge / experience that is widely available within Wessanen  To educate and inspire our internal / external stakeholders in organic values• Specialists join forces and work on pan-European issues• To legitimise our position in organic world by championing the organic case• Focal areas will be:  Training (incl. training package for newcomers) and founding Organic Academy  Knowledge building by teaming up with external researchers and experts  Lobbying to promote organic food  Communication for more general awareness / knowledge of organic food 27
  28. 28. Employee engagement • 2012 Leadership development programme  Top-65  Focus on strategy execution, connected leadership • Employee turnover is key focus area • Competency model deployed  Defines behaviour expectations for all employees  Translates ambitions/values into behaviour conventions and skills100% 120 875% 6 8050% 4 4025% 2 0% 0 0 Executives Managers Associates 2009 2010 2011 2009 2010 2011 28 Men Women Injury severity rate Injury frequency rate

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