Q2 2013 wessanen analyst&investor meeting

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Q2 2013 wessanen analyst&investor meeting

  1. 1. Royal Wessanen nv Q2 2013 Amsterdam, 25 July 2013 www.wessanen.com
  2. 2. Q2 2013 performance  We have to cope with uncertain economic times, low consumer confidence and increasing unemployment  Consumer appreciation for healthy and sustainable food is continuously growing  Consumers are gradually incorporating more of a sustainable agenda when making food purchases  Consumers show growing engagement with healthier food via alternative food solutions such as organic, free from, ethical and local provinence  'Wessanen 2015' is progressing well  Wessanen becoming a more profitable company, being more focused on its core activities, more agile and more efficient  Savings of €15 mln expected from 2014 onwards  ABC’s first half year performance was very disappointing 2
  3. 3. ‘Wessanen 2015’ 1. Create more focus on our activities • Reduction of approx. 300 FTE • One-off costs €(21) mln cash • Savings €15 mln p.a. from beginning of 2014 onwards 3. Addressing low-yielding and non-performing activities  Strongly reducing German grocery presence, changing go-to-market approach  Focus in Italian grocery on non-dairy (soy) 2. Reduce complexity and simplify processes • Cutting the tail / reducing number of SKUs at − Dutch brands; √ French HFS brands; Export  Centralising quality department • In the Netherlands, focus on one franchise formula (Natuurwinkel), to end GooodyFooods formula  Supply chain to manage our plants as of 2013 and to streamline processes • Further increased focus on core brands and core categories  Expansion number of CBTs (category brand teams)  Split Benelux operations in branded and distribution organisation  Split French HFS operations in branded and distribution organisation
  4. 4. Grocery  France growing, driven by Dr. Schär, Krisprolls, Gayelord Hauser  For the latter, we ran a sizeable promotional campaign  Bjorg slightly up, impacted by of a temporarily category delisting at a customer  New large TV campaign to be aired in Q3  Acquisition Alter Eco closed at end of May  UK branded business posted a strong performance  Market share gains in its major categories  Tea, dairy alternatives and stocks & gravies  Kallo is to be rebranded into Kallø from September  Supported by social media campaign, story-telling books and sampling events  In the Netherlands, Zonnatura and Dr Schär both showed a good performance  Zonnatura’s new TV commercial "what happened to our food?" was well received In € mln H1-13 H1-12 Revenue 144.0 138.1 Autonomous growth 1.3% Normalised EBIT 15.6 10.0 As % of sales 10.8% 7.2% Exceptional items (1.2) (0.9) EBIT 14.4 9.1 4
  5. 5. Health Food Stores (HFS)  Wholesale reporting lower sales  Natudis has been growing  France lower volumes • Moving part fruit & vegetables to Biodistrifrais • Bonneterre ceased chilled and larger part fruit & vegetables  Refocus Bonneterre company going well  Cutting the tail programme implemented  Bonneterre and Evernat brands making inroads at specialty chains and buying groups  Our brands showed a good performance  Allos, Tartex and Bonneterre growing  In total, brands do represent 2/3 of total HFS sales  Autonomous growth and operating result strongly up  Volumes and gross margins up in all 3 markets  Lower operating costs (first benefits ‘Wessanen 2015’)  Marketing spending up due to large campaign at Bonneterre In € mln H1-13 H1-12 Revenue 106.9 105.9 Autonomous growth 0.7% Normalised EBIT 2.8 (0.5) As % of sales 2.6% (0.5)% Exceptional items (0.7) - EBIT 2.1 (0.5) 5
  6. 6. CBT’s starting to deliver tangible results  Fully aligned product and packaging launch in 3 countries, produced in own factory  €1 mln revenue (full year basis)  Additional fixed cost coverage Allos factory 6 To come To come  Innovative concept in both channels in France, produced at own factory, further roll-out in progress  €2 mln revenue (full year basis)  Additional fixed cost coverage Bioslym factory CBT Cereals CBT Dairy alternatives  Significant renovation core product across countries to remove palm oil (consumer issues re. sustainability/health)  +12% growth on renovated products in France CBT Sweet in between
  7. 7. Clipper roll-out progressing well  France in Q1, Netherlands and Germany in Q3  Initial sales in France above budget  Year 1 contribution over €1 mln in revenue
  8. 8. Export - double-digit growth in H1  Reported as part of Grocery and HFS  Small dedicated group organised by brand and geography  Multiple export markets  Most important ones are Nordics, Austria, Italy, Japan, Spain, Switzerland  Also includes Russia, Middle East, Far East and Australia  Export plans based on clear brand and market choices  First half year growth 11%, driven by Clipper, Allos and Whole Earth 8
  9. 9. IZICO - integrated frozen foods company  Good progress in becoming one company  to strengthen its position on Benelux market and in export  to further improve profitability  to better and more effectively cope with the challenging environment  All ‘Wessanen 2015’ actions have been completed  Closure Deurne plant  New structure and roles at various departments implemented  Offices combined in Breda  Market: retail growing, out-of-home impacted by sluggish demand  Bicky continued to grow, while Beckers lost some market share in retail  Plans to revitalise Beckers underway  In H2 2013, half of €5 mln ‘Wessanen 2015’ savings to materialse In € mln H1-13 H1-12 Revenue 53.2 56.9 Autonomous growth (6.4%) Normalised EBIT 1.5 0.7 As % of sales 2.8% 1.2% Exceptional items (0.2) - EBIT 1.3 0.7 9
  10. 10. ABC - Little Hug’s growth offset by Daily’s  Little Hug continues to perform well  Growing revenue and market share  Continue to invest in brand activation  Introduced new flavours Berry Blend and Apple Orchard  Daily’s maintained its clear leadership share in pouch segment  Year-to-date, frozen pouches lost >20% (volume and value)  No meaningful improvement foreseen for remainder of 2013  Daily’s underperformed broader RTD market • Numerous initiatives: 6 new flavours, new campaign and grown distribution coverage.  Expected FY13 revenue breakdown  Little Hug 45-50%, single serve fruit drinks >10%  Daily’s 40-45% (2/3 frozen pouches, 1/3 non-alcoholic mixers)  FY2013 operational loss (EBITE) expected of US$5-10 million  FY2014, we expect ABC to be profitable again In US$ mln H1-13 H1-12 Revenue 79.2 97.6 Autonomous growth (18.8%) Normalised EBIT (1.4) 6.5 As % of sales (1.8)% 6.7% Exceptional items (0.5) - EBIT (1.9) 6.5 10
  11. 11. Ronald Merckx (CFO) • Financials 11
  12. 12. Q2/H1 P&L in more detail In € mln Q2 2013 Q2 2012 H1 2013 H1 2012 Revenue 187.3 201.0 359.8 371.6 ↓ Autonomous growth (6.8)% (4.1)% Gross contribution - - 137.9 142.4 ↓ As % of revenue - - 38.3% 38.3% → Normalised EBIT 4.8 6.2 14.1 9.1 ↑ As % of revenue 2.6% 3.1% 3.9% 2.4% ↑ Exceptional costs (1.3) (0.3) (2.4) (0.3) ↓ EBIT 3.5 5.9 11.7 8.8 ↑ Net financing costs (0.6) (0.7) (1.0) (1.3) ↑ Income tax expenses (4.1) (2.1) (6.8) (2.9) ↓ Net result attributable to equity holders (1.2) 3.2 3.9 4.9 ↓     
  13. 13. Organic growth in perspective 13 In € mln Q2 13 H2 13 H1 14 Grocery (2) (5) (2-3) • Germany - different go-to-market model (0.5) (1) - • Italy - withdrawal Bjorg and Efficance brands (0.3) (0.6) (0.3) • UK - ending private label contracts (1) (2) (1) • NL - terminating Biorganic (0.3) (1.5) (1) HFS (1) (6) (3-4) • France - cutting the tail / ending frozen, F&V (0.5) (4) (3) • NL - cutting the tail (0.5) (1) (1) • Germany - SAP implementation 1 July 0.7 (0.7) n.m. IZICO (3) (7) (4) • Closing Deurne plant / cutting the tail
  14. 14.  H1 gross profit / normalised EBIT  Gross profit in line with last year  Grocery ↑ • Underlying improvement  HFS ↑ • Growth brands and deliberate downsizing part of wholesale operations  IZICO ↑ • Ending low-margin Halal and breadcrumb activities; under-absorption Q2 production  ABC ↓ • Lower pouches sales and provisions for customer returns / obsolete inventory  Marketing spending  Grocery ↓ • France ↓ - phasing towards Q1 and Q3 (new TV campaign to be launched) • UK ↓ - due to large media spending on both Clipper and Kallo last year • Germany ↓ - revised go-to-market approach  HFS ↑ • Due to a large billboard/poster campaign in France  At ABC and IZICO in line with last year  Warehousing / logistics / general & administrative  Lower general and administrative costs  Lower warehousing and logistical costs 14 
  15. 15.  ‘Wessanen 2015’ - cash costs 15 In € mln Q4 2012 Q1 2013 Q2 2013 H2 2013 Grocery (3.0) (0.2) (0.8) (0.5-1) HFS (6.5) (0.5) (0.2) (0.5-1) IZICO (6.2) (0.2) - (0.5-1) Non-allocated (0.6) - - - Costs ‘Wessanen 2015’ (16.3) (0.9) (1.0) (2-3)
  16. 16. First half 2013 cash flow 16 20.8 (3.6) (3.7) (8.4) (15.7) (3.9) (3.6) (18.3)
  17. 17. Successful renewal credit facility 0 25 50 75 100 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 0 1 2 3 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 17  Three-year secured €100 million revolving credit facility  Current facility scheduled to mature in Feb. 2014  Uncommitted options to  Extend facility for in total two years  Increase facility up to maximum aggregate amount of €25 mln (‘accordion facility’)  Pricing grid narrowed to 110-205 bps over Euribor  Based on leverage ratio (Net debt/EBITDAE) (max. remains at 3.0x)  Increase in debt (€74.6 mln vs. €62.7mln at end of Q1) due to:  Cash out provision expenses €8.4 mln, Alter Eco €5.0 mln and dividend payments €3.8 mln Leverage ratio: 2.0XNet debt: €74.6
  18. 18. Piet Hein Merckens (CEO) • Closing remarks 18
  19. 19. Looking forward Macro economy Europe has to deal with deteriorated consumer confidence and increased unemployment Organic and natural food markets continue to trend positively ‘Wessanen 2015’ Implementation running smoothly All progress, including FTE reductions and savings, closely monitored H1 results We have made significant progress in our core operations and IZICO  Improvement driven by own actions at our various businesses Unfortunately, ABC’s H1 performance was very disappointing. We therefore have initiated immediate short term corrective actions to return ABC to profitability in 2014. Full year 2013 2013 will be another challenging year “Store is open while we are renovating and innovating” 19
  20. 20. Appendices 20
  21. 21. A very sound financial position In € mln Jun 13 Dec 12 Assets Property, plant and equipment 74.8 77.4 Intangible assets 66.9 66.8 Investment associates/other 1.2 1.1 Deferred tax assets 9.0 9.2 Non-current assets 151.9 154.5 Inventories 74.5 72.3 Income tax receivables 0.2 - Trade receivables 111.0 85.7 Other receivables / prepayments 17.7 15.7 Cash (equivalents) 14.7 9.7 Current assets 218.1 183.4 TOTAL ASSETS 370.0 337.9 21 In € mln Jun 13 Dec 12 ¹ Equity and liabilities Total equity 112.5 110.8 Interest-bearing loans 0.3 60.7 Employee benefits 13.0 15.1 Provisions / Deferred tax liabilities 6.3 5.2 Non-current liabilities 19.6 81.0 Bank overdrafts / current debt 13.9 1.4 Interest-bearing loans/borrowings 75.1 2.5 Provisions 10.7 16.8 Income tax payables 2.9 0.7 Trade payables 72.9 68.3 Non-trade payables/accrued expenses 62.4 56.4 Current liabilities 237.9 146.1 TOTAL EQUITY & LIABILITIES 370.0 337.9 ¹ Restated for effect of IAS 19 (revised 2011)
  22. 22. Financials Q2 - guidance 2013 Financials Q2  Net financing costs €(0.6) mln Q2 12: €(0.7) mln ¹  Income tax expenses €(4.1) mln Q2 12: €(2.1) mln  Capex €(2.3) mln Q2 12: €(1.7) mln Financials H1  Net financing costs €(1.0) mln FY 12: €(1.3) mln ¹  Income tax expenses €(6.8) mln FY 12: €(2.9) mln  Capex €(3.6) mln FY 12: €(3.6) mln Guidance 2013  Net financing costs €(2) mln  Effective tax rate 53% ²  Capex €(8-10) mln  Depreciation and amortisation €(13-14) mln  Non-allocated expenses (incl. corporate) €(11) mln 22¹ Restated for effects of IAS 19 (revised 2011) ² Excludes recognition of provision for uncertain tax positions in Q2 2013 of €1.1 million
  23. 23. Royal Wessanen nv

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