öresund investment day
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Jacob Broberg, SVP Corporate Communication & Investor Relations
Öresund Investment Day, 22 September 2014
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Cloetta – the leading
Nordic confectionery player
• Founded by the three Cloetta brothers in 1862
• Annual sales of around SEK 5 billion
• Leading local brands in 6 countries
• Leading market positions in Sweden, Finland, Norway, Denmark, the Netherlands and Italy
• 2,500 employees in 13 countries
• Production at 11 factories in 6 countries
• Listed on NASDAQ OMX Stockholm. The largest shareholders are Malfors Promotor, AMF Försäkring och fonder and Lannebo Fonder
2
3
Iconic brands
1836
1878
1909
1913
1927
1928
1934
1937
1938
1941
1949
1951
1953
1960
1965
1970
1976
1979
1981
2007
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Cloetta has its 6 main markets in
Western Europe
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Exports to more than 50 countries
worldwide
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Net sales
By country and by category
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Nordic market leader and
leading market positions
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Sugar confectionery, countlines, pastilles, chocolate bags and nuts
Pastilles, chewing gum and sugar confectionery
Sugar confectionery and pastilles
Pastilles and sugar confectionery
Sugar confectionery, chewing gum and pastilles
Seasonal products, sweetener and sugar confectionery
Country Leading market positions in the following categories
SWEDEN
NETHER-
LANDS
FINLAND
NORWAY
DENMARK
ITALY
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Attractive non-cyclical market
Market development in Cloetta’s main markets1) Key trends
• Market driven by increase in population, higher prices and to
some extent also increased per capita consumption
• Demand for differentiated and innovative products
• Strong brands gain market share
Market size by region Consumer behaviour
• Purchases highly impulse driven
• High brand loyalty
• Availability is an important factor for impulse driven purchases
• Appreciation of innovation – taste, quality and novelties is
important
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Best in class route-to-market
Supermarkets Convenience stores /
gas stations Other
• Customer relations
– Large and efficient sales
organisation in place on all main
markets
– 80% of total sales generated
from markets with own sales
force
• Execution
– Ensure that negotiated listing
and distribution agreements are
followed
– Ensure good visibility on shelves
and checkout lines
– Implement campaigns efficiently
C o n s u m e r s C o n s u m e r s
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Clear strategy to deliver profitable growth
• Acquisitions
• New geographies
New territory
• Broaden distribution
• Promotion planning and
execution
• Advertising campaigns
• Seasonal products
• Packaging updates and
upgrades
Every day great execution
• Sizing and pricing
• Brand extensions
• Fill white spots
• Geographical roll-out
• Brand re-launch
• Innovations
Strategic initiatives
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Stable revenues and visible earnings recovery
LTM net sales Q4 2011 – Q2 2014 LTM EBIT Q4 2011 – Q2 2014
522 499
444 416 423
467
525 561
591 577 578
364
293
166
127 125
177
284
325
418 412 443
11% 11%
9% 9% 9%
10%
11% 12%
12% 12% 12%
8%
6%
3%
3% 3%
4%
6%
7%
9% 8% 9%
0%
2%
4%
6%
8%
10%
12%
14%
0
100
200
300
400
500
600
700
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
SE
Km
Underlying EBIT LTM Reported EBIT LTM
Underlying EBIT % LTM Reported EBIT % LTM
4 658 4 699 4 791 4 826 4 859 4 902 4 821 4 856 4 893 4 959 5 066
0
1 000
2 000
3 000
4 000
5 000
6 000
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net
sale
s (
SE
Km
)
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Financial development and targets
Quarterly net sales Quarterly underlying EBIT1) Financial leverage
• Target organic sales growth: At least
in line with market growth long term
– Historical aggregate value growth of
approx. 2% in Cloetta’s markets
• Target EBIT margin: At least 14%
• Cost synergies, growth and focus on
profitability
• Target long-term net debt/EBITDA of
around 2.5x
• Objective to reach target in three
years
• Payout ratio 40-60% of net income
over time when financial target is
reached
1) Underlying EBIT based on constant exchange rates and the current company structure (excluding distribution business in Belgium and third-party distribution agreement in Italy) and excluding items affecting comparability
3 0
56
3 0
19
3 2
44
3 2
48
3 2
30
3 3
04
3 4
93
0
1 000
2 000
3 000
4 000
5 000
2012 Q42013 Q12013 Q22013 Q32013 Q42014 Q12014 Q2
Net
deb
t (S
EK
m)
1 0
84
1 2
12
1 1
59
1 4
04
1 1
27
1 1
31
1 1
94
1 4
41
1 1
93
1 2
38
0
200
400
600
800
1 000
1 200
1 400
1 600
Q1 Q2 Q3 Q4
Net
sale
s (
SE
Km
)
2012 2013 2014
47
51
124
201
91
109
160
231
77 1
10
0
50
100
150
200
250
Q1 Q2 Q3 Q4
Un
derl
yin
g E
BIT
(S
EK
m)
2012 2013 2014
x Net debt/ Underlying EBITDA LTM
4.7x 5.1x 4.4x 4.7x 4.2x 4.4x 4.6x
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Cloetta towards the future
PURPOSE / MISSION
To bring a smile to your
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Munchy Moments is our territory!
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• The acquisition of Nutisal is a significant step in to a new category with an
established brand in Cloetta home markets
– Dry roasted nuts which gives a unique ‘crisp’ to the products
– The nuts category is growing in Western Europe by 5-8%
– Nutisal is expected to be EPS accretive in 2015 and to contribute with
approximately 1 percentage point of growth per year in the next 3-5 years
• The Jelly Bean Factory brand is a premium “gourmet” product that fits
Cloetta’s core offering within sugar confectionery
– Solid growth over the last years with an attractive EBIT-margin
– Significantly strengthens Cloetta’s position in the UK
Acquisition of Nutisal and The Jelly Bean Factory
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Questions
To bring a smile to your
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