4. Q3 2011 highlights
Another quarter with progression
Autonomous revenue growth 8.0%
Grocery up 7.5% and ABC 53.5%
Grocery continues to perform well showing growing sales and
strengthening position of its brands
HFS working hard to implement multiple improvements
Autonomous growth (7.1)%
Focus at Frozen Foods on both sales growth and managing
operating costs. Innovations gaining traction
ABC showing a very strong performance this quarter
Benefiting from strongly increased distribution of RTDs
4
5. Going forward
Strategy is clear, we are more focused, and in better shape
Different businesses response with different speed to strategic
initiatives
Going forward, we are cautiously optimistic
A strong team in place
Execution of strategy is progressing
To deal with element of uncertainty
Persistently subdued European economic environment
Consumer confidence remains fragile
Firmly determined
To improve performance step-by-step
To further solidify our positions and brands
5
8. Q3 2011 financials
Normalised EBIT €6.2 mln, clear increase year-on-year
Driven by strong performances at Grocery and ABC
Increased margins and operational leverage
Reported EBIT of €5.4 mln
Includes exceptionals of €(0.8) mln
Income taxes €3.8 mln positive
Recognition of tax carry forward losses in US;
deferred tax asset of €4.7 mln at quarter-end
Operating cash flow €4.2 mln
Negative impact of €9.2 mln due to discontinuation
factoring of debtors
Net debt fell to €35.9 mln
Leverage ratio 0.9x (Q2 2011: 1.1x)
• Additional data available in appendix (e.g. on net debt / cash flow / exceptionals)
8
9. Cash flow Q3 2011
In € mln
13.9 (10.7)
Derivatives
0.5
and FX (1.5) Net Investments
Decrease
working 4.9
capital
Discontinuation
(9.2) Factoring
France Grocery
Cash flow
from 8.5
earnings
Reduction
3.2
of net debt
Sources Uses
9
10. Net debt and leverage ratio
In € mln
250
Net debt
200
150
100
€35.9 mln
50
0
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
5
Leverage ratio
4
3
2
0.9x
1
0
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
10
11. Organic food market is still attractive
Organic food engaged mainstream consumers
Penetration 70% → consumption per capita low
Mainstream consumer willing to pay price premium (~20%)
Consumers seek clear consumer benefits from organic
Organic food industry dynamics become similar to
conventional ‘FMCG’ markets
Consumer price based on perceived value
and consumer benefits
Private label has become more a price reference point
‘Organic’ image builder for grocery
One single European certification
11
12. Organic food market review
European market growth modest in 2010, despite
Loyal group of traditional organic food customers, and
Ever growing group of mainstream consumers becoming engaged
Clear impact by economic downturn and low consumer confidence
Particularly HFS impacted, while grocery markets fared better
Total European organic market ± €19 bn in 2010
Historically, growth ± 10% up to 2008
Countries where we are active grew estimated 2% to € 14 billion
Part of growth attributable to catering and categories (fresh, meat) we are hardly involved in
Per capita consumption still low in the countries where we operate
Organic, on average, 2.6% of total spending on food/beverages
• 1.7% for UK; 3.3% for Germany and Italy
12
15. Roadmap focused on 3 different business models
Business Description Countries, Brands & Entities
Sourcing/developing, marketing France: Bjorg
Brands and selling of own brands to Benelux: Zonnatura, Biorganic, Merza
in grocery UK: Kallo, Whole Earth
• Including distribution to distribution Germany: Whole Earth, Culinessa, Bjorg
Grocery centers and/or stores Italy: Bjorg
Sourcing/developing, marketing France: Bonneterre, Evernat
and selling of own brands to HFS NL: Ekoland, De Rit, Fertilia
Brands • Via wholesaler in Germany Molenaartje
in HFS • Direct to stores (France, NL) Germany: Allos, Tartex, De Rit
Sourcing, category management, France: Bonneterre, Biodistrifrais
Whole- sales and distribution to HFS stores NL: Natudis, Kroon
sale • Focus on full range product portfolio Belgium: Hagor
and high share of products per store
In HFS
15
16. Requiring strong central steering and different
organisation and governance model
Nature of Corporate Guidance
Operational Operator
in
en n
an o
e ss siti
Strategic W ra n Strategic
development t Orchestrator Maximize value creation
by
Strategic Strategic adapting governance model,
guidelines Architect decision rules and
effciency and effectiveness HQ
Financial support functions
Financial
Holding
Stand-alone Shared business Same business
Shared skills
business systems systems
Degree of Business Integration
16
18. Strategic objectives 2011-2013
Top-line growth
Market share gains in core categories and brands
Add-on acquisitions
Improve EBIT-margins
Increase gross margins (central sourcing savings, richer product mix)
Manage non-core brands for cash
Increase capacity utilisation own factories
Reduce overhead costs
Grow our export business and aim to establish footprint in other
European countries
Improve operational performance / Establish cross-country organisation
Raise the overall talent bar / Increase people engagement
18
19. Wessanen Europe Grocery
Revenue growth remained robust, growing by 5.3% to Revenue (in € mln)
€57.5 million
7.5%
Continued focus on core brands, making further progress
in areas such as brand activation, innovations and
operational excellence
Bjorg continues to gain market share 57.5
Zonnatura launched sizeable 360º activation 54.6
campaign
* Focus on organic teas and its natural taste
Range of soy milks relaunched under Kallo brand
♦ Autonomous third party revenue growth
* Diary alternatives European core category
* 1 strong brand, therefore phased out So Good EBIT (in € mln)
Bjorg launched on German market
* Its nutritional positioning complementary to
indulgence of Whole Earth
Normalised EBIT up to €3.8 million
4.0
Increased revenue and higher gross margin % 2.2 2.2
3.8
Q3 10 Q3 11
♦ Reported, ♦ Normalised 19
20. Grocery examples of activation
Kallo soy launch activity
Dairy alternatives key category
Kallo core brand, phased out So Good
Yearly award magazine „Lebensmittel Praxis“
Whole Earth Inka Taler (4 varieties)
Criteria based on:
Quality/Design/Distribution/Communication/Sustainability
Bjorg commercial
Based on success of Q2 airing, repeated in
September
Results: increased awareness, higher sales
20
21. Zonnatura 360°campagne
Television Outdoor - busshelter
Sponsoring GTST Nationwide coverage
Radio campaign Week 43-44
Week 43-45 Week 43-44
In-store
Retail promotions
Week 43-47
Tastings
Site
In-store tastings tea / bars
Consumer activation
In week 44
Social media
Free sampling
From week 43
Margriet Winterfair
Week 46-47
21
23. Wessanen Europe HFS
Revenue down 19.9% Revenue (in € mln)
Divestment TOL UK (12.2% impact)
Autonomous revenue (7.1)% (7.1)%
>2% decline due to weak performance Kalisterra
• Divested as of 1 October
Brands performing satisfactorily 68.3
Focus on brand activation and innovations 54.7
Brands such as Allos, Bonneterre, De Rit
At wholesale activities working hard on implementing ♦ Autonomous third party revenue growth
multiple improvements, several yet to translate in EBIT (in € mln)
tangible results
Focus on operational excellence and expanding
Dutch own format stores
1.4 1.4
-2.5 -0.5
Q3 10 Q3 11
♦ Reported, ♦ Normalised 23
24. HFS examples of activation
Allos cookies
New range of cookies launched
Available in German HFS stores
New GooodyFooods store
Opened early October in Zaandam
4th store, new ones in the pipeline 24
25. Frozen Foods
Autonomous revenue growth 0.8% Revenue (in € mln)
Branded up due to Belgian out-of-home,
export 0.8%
Somewhat lower volumes at Dutch retail and
out-of-home
Private label about stable
27.3
EBIT decreased to €0.2 million 27.1
Increased raw material prices
Marketing spending in line with last year
♦ Autonomous revenue growth
In October, Bicky Double Chicken burger introduced
in Belgian out-of-home EBIT (in € mln)
Further extension of Bicky range
Supported by TV commercials and online
1.1
0.2
Q3 10 Q3 11
♦ Reported 25
26. Frozen Food examples of activation
Bicky Double Chicken burger
Introduced in October in Belgian out-of-home
Further extension Bicky range
Newly designed carton box
Supported by TV commercials and online campaign
Online campaign in Flanders (Dutch) and Wallonia (French)
26
27. American Beverage Corporation
Very strong Q3, driven by success Daily’s RTD pouches Revenue (in € mln)
Development right packaging concepts
Change distribution strategy to serve grocery
chains 53.5%
Consistent execution
Attractive price-value positioning
37.7
Daily’s bag-in-a-box and premixes doing well either
26.5
Little Hug stable sales
Continued competitive activity
♦ Autonomous revenue growth
Active pruning/de-emphasising lower margin
products EBIT (in € mln)
20-count doing well / new packaging
Revitalisation continues
2011: EBIT of US$10-12 mln, excluding impairment
reversal and any non-recurring items
6.2 5.2
2012: further revenue and earnings growth
-0.7 -0.7
Q3 10 Q3 11
♦ Reported, ♦ Normalised 27
29. Q3 performance 9M performance
Revenue (in € mln) Revenue (in € mln)
3.5%
8.0%
539.7 548.8
174.3
173.4
♦ Autonomous third party revenue growth ♦ Autonomous third party revenue growth
EBIT (in € mln) EBIT (in € mln)
25.0
20.9
5.4
17.4 18.9
6.2
1.6 1.6
Q3 10 Q3 11 9M 10 9M 11
♦ Reported, ♦ Normalised ♦ Reported, ♦ Normalised 29
30. Revenue Q3 2011 €174.3 mln
ABC WE Grocery
Revenue €37.7 mln Revenue €57.5 mln
Normalised EBIT €5.2 mln Normalised EBIT €3.8 mln
21% 33%
Frozen Foods
Revenue €27.3 mln 15%
Normalised EBIT €0.2 mln
31%
WE HFS
Revenue €54.7 mln
Normalised EBIT €(0.5) mln
Non-allocated & eliminations
Revenue €(2.9) mln
Normalised EBIT €(2.5) mln
30
31. Revenue 9M 2011 €548.8 mln
ABC WE Grocery
Revenue €94.6 mln Revenue €185.2 mln
Normalised EBIT €10.4 mln Normalised EBIT €16.2 mln
17%
33%
Frozen Foods 15%
Revenue €84.0 mln
Normalised EBIT €2.1 mln 35%
WE HFS
Revenue €194.2 mln
Normalised EBIT €3.8 mln
Non-allocated & eliminations
Revenue €(9.2) mln
Normalised EBIT €(7.5) mln
31
34. EBIT - from normalised to reported
Q3 2011 Q3 2010
Normalised EBIT 6.2 1.6
Grocery Release restructuring provisions 0.2 -
HFS Mainly exchange loss deferred in equity (2.0) -
ABC Minor asset adjustments 0.2 -
ABC Net reversal impairment losses 0.8 -
EBIT 5.4 1.6
34
35. Financial guidance 2011
Net financing costs €3-4 mln
2010: €(8.3) mln; 2009: €(19.9) mln
Effective tax rate around 25-30%
Excluding recognition of deferred tax assets regarding
tax carry forward losses
2010 impacted by country mix and non-deductible impairments,
partly compensated by recognition tax losses
Depreciation and amortisation (excl. impairments) about €14 mln
2010: €(14) mln
Capex about €10-11 mln
2010: €11.5 mln
Non-allocated expenses (incl. corporate) around €10 mln
2010: €(12.3) mln (normalised €(10.2) mln)
35
Objective: to gain a understanding of So Good consumers/Soya category. Methodology: 2x focus groups (online); outputs used to create main U&A questionnaire; Online U&A (600 sample); Segmentation & U&A report Sample Focus Group 10-15 Current So Good users Lapsed So Good users (but still in the soya category) Non So Good users (users of other soya products) Category non users (but non rejecters) Online U&A n=200 current So Good users (past 2 months) n=200 So Good non or lapsed users but users of other soya alternatives n=200 dairy alternative non users but non rejecters
Objective: to gain a understanding of So Good consumers/Soya category. Methodology: 2x focus groups (online); outputs used to create main U&A questionnaire; Online U&A (600 sample); Segmentation & U&A report Sample Focus Group 10-15 Current So Good users Lapsed So Good users (but still in the soya category) Non So Good users (users of other soya products) Category non users (but non rejecters) Online U&A n=200 current So Good users (past 2 months) n=200 So Good non or lapsed users but users of other soya alternatives n=200 dairy alternative non users but non rejecters