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Wessanen Q1 2011 (28 April 2011)


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Q1 2011 highlights
• Revenue +3.6% to €178.8 million,
• Autonomous² revenue growth Wessanen Europe Grocery 5.9% and HFS (6.1)%
• Ongoing focus to improve operations in areas such as brand activation and central sourcing
• Normalised operating result (EBIT) increased to €7.0 million, driven by Wessanen Europe Grocery
• Market share gains for leading Grocery brands such as Bjorg, Whole Earth and Zonnatura
• Net debt €36.7 million; 45% below last year’s comparable figure

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Wessanen Q1 2011 (28 April 2011)

  1. 1. Royal Wessanen nv Q1 2011 Amsterdam, 28 April 2011
  2. 2. Q1 2011 key figures ¹ Continuing operations; ² Attributable to Wessanen equity holders 2.0x 66.2 (14.3) (0.07) (4.8) 6.4 6.4 172.6 Q1 2010 - 0.06 Earnings per share (EPS) ² (5.2) Operating cash flow ¹ (44.6)% 36.7 Net debt 9.4% 7.0 ‘ Normalised’ EBIT ¹ 1.1x 4.5 8.1 0.2% 178.8 Q1 2011 Autonomous growth - Net result ² 26.6% EBIT ¹ - Leverage ratio Revenue ¹ In € million 3.6% In %
  3. 3. EBIT - from reported to ‘normalised’ <ul><li>Wessanen Europe Grocery </li></ul><ul><ul><li>Release provision €0.8mln </li></ul></ul><ul><ul><li>Restructuring provision Belgian activities €(0.3) mln </li></ul></ul><ul><li>Wessanen Europe HFS </li></ul><ul><ul><li>Release provision €0.6mln </li></ul></ul>6.4 7.0 ‘ Normalised’ EBIT 6.4 8.1 EBIT - 1.1 Exceptionals Q1 2010 Q1 2011 0.5 WE Grocery 0.6 WE HFS Exceptionals
  4. 4. Q1 2011 highlights <ul><li>Started 2011 as a stronger, more focused company </li></ul><ul><li>Central sourcing efforts starting to pay off, contributing to offset increased raw material costs </li></ul><ul><ul><li>In general, expect to be successful in raising prices, if and where needed </li></ul></ul><ul><li>Market share gains for leading Grocery brands </li></ul><ul><li>Numerous initiatives underway, such as </li></ul><ul><ul><li>Brand activation </li></ul></ul><ul><ul><ul><li>Such as Zonnatura biorhythm campaign </li></ul></ul></ul><ul><ul><li>Innovations </li></ul></ul><ul><ul><ul><li>Such as Bjorg lunchboxes, Allos Frucht Pur </li></ul></ul></ul><ul><ul><li>Embark on process to delist low-margin products </li></ul></ul><ul><ul><li>Nationwide distribution of fresh products in the Netherlands </li></ul></ul><ul><ul><li>Third GooodyFooods store opened in Almere </li></ul></ul><ul><ul><ul><li>Expect to realise 5-10 openings per annum </li></ul></ul></ul><ul><ul><li>Managed withdrawal Grocery Belgium </li></ul></ul>
  5. 5. Innovations - some examples
  6. 6. Brand activation - Zonnatura Biorhythm
  7. 7. European brand-platform-category map <ul><li>Organic Nutrition </li></ul><ul><li>Dairy alternatives </li></ul><ul><li>Biscuits (nutrition) </li></ul><ul><li>Bread replacers </li></ul><ul><li>Cereals </li></ul><ul><li>Tea </li></ul><ul><li>Spreads (nutrition) </li></ul><ul><li>Organic Taste-Indulgence </li></ul><ul><li>Spreads </li></ul><ul><li>Biscuits </li></ul><ul><li>Cereals </li></ul><ul><li>Juices </li></ul><ul><li>Organic Taste-Cooking </li></ul><ul><li>Condiments </li></ul><ul><li>Bouillon, Stock & Gravies </li></ul><ul><li>Meal components </li></ul><ul><li>Ready meals </li></ul>France Grocery HFS TBD TBD TBD Netherlands Grocery HFS Germany Grocery HFS UK Grocery HFS TBD TBD Other Europe Grocery HFS TBD Consumer Benefit Platform <ul><li>Organic Basics </li></ul><ul><li>Multi categories </li></ul>TBD TBD TBD TBD TBD TBD TBD TBD
  8. 8. Strategic objectives 2011-2013 <ul><li>Top-line growth </li></ul><ul><ul><li>Market share gains in core categories and brands </li></ul></ul><ul><ul><li>Add-on acquisitions </li></ul></ul><ul><li>Improve EBIT-margins </li></ul><ul><ul><li>Increase gross margins (central sourcing savings, richer product mix) </li></ul></ul><ul><ul><li>Manage non-core brands for cash </li></ul></ul><ul><ul><li>Increase capacity utilisation own factories </li></ul></ul><ul><ul><li>Reduce overhead costs </li></ul></ul><ul><li>Grow our export business and aim to establish footprint in other European countries </li></ul><ul><li>Improve operational performance / Establish cross-country organisation </li></ul><ul><li>Raise the overall talent bar / Increase people engagement </li></ul>
  9. 9. Closing remarks <ul><li>Started 2011 as a stronger, more focused company </li></ul><ul><li>Numerous good initiatives underway </li></ul><ul><ul><li>Central sourcing, SAP implementations, brand activation </li></ul></ul><ul><li>Also still have to improve in various areas and businesses </li></ul><ul><ul><li>Notably Wessanen Europe HFS </li></ul></ul><ul><li>Step-by-step improvement of sales and, subsequently, earnings performance </li></ul><ul><li>We are on the right track and we will see the first evidence in 2011 with more to come in the coming years </li></ul>
  10. 10. Appendices
  11. 11. Royal Wessanen - who we are <ul><li>A long and rich history as a food company </li></ul><ul><li>Incorporated in 1765; Royal since 1913; listed on Euronext since 1959 </li></ul><ul><li>2010 revenue €712 mln; over 2,200 employees </li></ul><ul><li>Headquartered in Amsterdam </li></ul><ul><ul><li>Operations in the Benelux, France, Germany, UK, Italy, USA </li></ul></ul><ul><li>A leading player in the major organic food markets in Europe </li></ul><ul><li>Frozen Foods: leading frozen snacks producer/marketer in Benelux </li></ul><ul><li>ABC: leading producer fruit drinks/cocktail mixers in USA </li></ul>
  12. 12. Revenue 2010 €712 mln WE Grocery Revenue €231 mln EBITDA €12 mln Avg. Capital Employed €66 mln FTE’s (year-end) 435 Frozen Foods Revenue €116 mln EBITDA €9 mln Avg. Capital Employed €56 mln FTE’s (year-end) 505 WE HFS Revenue €273 mln EBITDA €11 mln Avg. Capital Employed €95 mln FTE’s (year-end) 837 ABC Revenue €93 mln EBITDA €7 mln Avg. Capital Employed €46 mln FTE’s (year-end) 382 Corporate centre & non-allocated EBITDA €(11) mln FTE’s (year-end) 63
  13. 13. Net debt and leverage ratio Net debt Leverage ratio € 36.7 mln 1.1x In € mln
  14. 14. Cash flow Q1 2011 In € mln
  15. 15. Financial guidance 2011 <ul><li>Net financing costs €(4-5) mln </li></ul><ul><ul><li>2010: €(8.3) mln (2009: €(19.9) mln) </li></ul></ul><ul><li>Effective tax rate around 35% </li></ul><ul><ul><li>2010 impacted by country mix and non-deductible impairments, partly compensated by recognition tax losses </li></ul></ul><ul><li>Capex around level of depreciation of €(15) mln </li></ul><ul><ul><li>2010: €(11.5) mln (2009: €(9.5) mln) </li></ul></ul><ul><li>Non-allocated expenses (incl. corporate) around 2010 normalised level </li></ul><ul><ul><li>2010: €(12.3) mln (normalised €(10.2) mln) </li></ul></ul><ul><li>Some reconfigurations low value-added distribution activities Wessanen Europe HFS </li></ul><ul><ul><li>Possibly leading to limited restructuring costs </li></ul></ul>
  16. 16. Priorities 2011 <ul><li>Wessanen Europe Grocery and Wessanen Europe HFS: </li></ul><ul><ul><li>Achieve revenue growth and gain market share </li></ul></ul><ul><ul><li>Increase success rate of innovations </li></ul></ul><ul><ul><li>Improve operating margins through focus on core brands and strengthening of brand equity </li></ul></ul><ul><ul><li>Improve operational excellence </li></ul></ul><ul><li>Frozen Foods: </li></ul><ul><ul><li>Increase relevance of Beckers and Bicky brands for our customers and consumers </li></ul></ul><ul><ul><li>Improve operational efficiency by continuously improving quality of processes, systems and production </li></ul></ul><ul><li>ABC: </li></ul><ul><ul><li>Build brand equity and improve distribution for sales growth and margin improvement </li></ul></ul><ul><ul><li>Intention to divest, in principle, in 2011 </li></ul></ul><ul><li>Financing policy </li></ul><ul><ul><li>Aim to maintain net debt structurally below 2.5x EBITDA </li></ul></ul>
  17. 17. Wessanen Europe Grocery <ul><li>Revenue +7.7% </li></ul><ul><ul><li>Autonomous growth 5.9% </li></ul></ul><ul><ul><ul><li>Volume 5.7%; Price/mix 0.2% </li></ul></ul></ul><ul><ul><li>Currency effect 0.4%; trading days 1.4% </li></ul></ul><ul><li>Normalised operating result €5.9 mln </li></ul><ul><ul><li>Increased ICT spending </li></ul></ul><ul><ul><li>Lower A&P spending, partly due to phasing </li></ul></ul><ul><li>Exceptional gain €0.5 mln </li></ul><ul><ul><li>€ 0.8 mln due to release provision </li></ul></ul><ul><ul><li>€ (0.3) mln due to managed withdrawal Belgium </li></ul></ul><ul><li>Brands such as Bjorg, Kallo and Whole Earth gaining market share </li></ul><ul><li>In Benelux, Zonnatura and Biorganic volumes up </li></ul><ul><li>Further expansion of distribution in German grocery </li></ul><ul><li>Gaining distribution in Italy </li></ul>5.9% EBIT (in € mln) Revenue (in € mln)  Reported,  ‘Normalised’  Autonomous third party revenue growth
  18. 18. Wessanen Europe HFS <ul><li>Revenue decreased (0.6)% </li></ul><ul><ul><li>Autonomous growth (6.1)% </li></ul></ul><ul><ul><ul><li>Volume (3.5)%, price/mix (2.6)% </li></ul></ul></ul><ul><li>Normalised EBIT Є2.3 mln </li></ul><ul><ul><li>Lower volumes in France and Benelux </li></ul></ul><ul><ul><li>Higher operating expenses, mainly ICT related </li></ul></ul><ul><li>€ 0.6 mln exceptional gain as result of release provision </li></ul><ul><li>Benelux sales impacted by increased competition </li></ul><ul><ul><li>±30 Natuurwinkels at year-end following departures </li></ul></ul><ul><ul><li>3 rd GooodyFooods opened in Almere </li></ul></ul><ul><ul><li>Natudis in nationwide distribution fresh products </li></ul></ul><ul><li>French market slightly recovering. Bonneterre up, while fresh and food supplements down </li></ul><ul><li>Growth in German market varying per category </li></ul><ul><ul><li>‘ Our’ categories stable, while we posted growth </li></ul></ul><ul><li>Tree of Life UK turned in solid performance </li></ul>(6.1)% EBIT (in € mln) Revenue (in € mln)  Reported,  ‘Normalised’  Autonomous third party revenue growth
  19. 19. Frozen Foods <ul><li>Revenue down 5.9% </li></ul><ul><ul><li>Autonomous growth (7.9)% </li></ul></ul><ul><ul><ul><li>Volume (8.7)%, price/mix 0.7% </li></ul></ul></ul><ul><ul><li>Branded volumes up, private label down </li></ul></ul><ul><ul><li>In general, competition remained fierce </li></ul></ul><ul><li>EBIT in line with last year </li></ul><ul><ul><li>Lower gross margin due to lower revenue and increased raw material prices </li></ul></ul><ul><ul><li>Lower marketing expenses </li></ul></ul><ul><ul><ul><li>Phasing </li></ul></ul></ul><ul><ul><ul><li>In 2010 introduction of Mammoet frikandel </li></ul></ul></ul><ul><li>Focus remains on revitalising Beckers </li></ul><ul><ul><li>New campaign “The Family Man 2011” </li></ul></ul>(7.9)% EBIT (in € mln) Revenue (in € mln)  Autonomous revenue growth
  20. 20. American Beverage Corporation <ul><li>Revenue up 23.1% in US dollar terms </li></ul><ul><ul><li>Autonomous growth 21.6% </li></ul></ul><ul><ul><ul><li>Volume 13.9%, price/mix 7.7% </li></ul></ul></ul><ul><li>EBIT of US$1.0 mln in line with expectations </li></ul><ul><li>Daily’s doing well, driven by success RTD pouches </li></ul><ul><ul><li>Additional RTD line has been installed </li></ul></ul><ul><ul><li>National roll-out large customer nearing completion </li></ul></ul><ul><li>Little Hug showing lower volumes </li></ul><ul><ul><li>Lapping bonus pack promotion last year </li></ul></ul><ul><ul><li>Continued intense competitive activity </li></ul></ul><ul><li>A&P in line with last year </li></ul><ul><ul><li>Upgrading of Little Hug packaging </li></ul></ul><ul><ul><li>New print advertising with key benefits such as </li></ul></ul><ul><ul><li>“ 75% less sugar” </li></ul></ul><ul><ul><li>Print advertising Daily’s updated </li></ul></ul>21.6% EBIT (in € mln) Revenue (in € mln)  Autonomous revenue growth