wessanen q2 2011 analyst&investors presentation
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Royal Wessanen nv
Q2 2011
Amsterdam, 27 July 2011
2
Royal Wessanen - who we are
A long and rich history as a food company
Incorporated in 1765; Royal since 1913; listed on Euronext since 1959
Headquartered in Amsterdam Operations in the Benelux, France, Germany, UK, Italy, USA Over 2,200 employees
A leading player in the major organic food markets in Europe Vision: ‘To make our brands most desired in Europe’
Frozen Foods: leading frozen snacks producer/marketer in Benelux
ABC: leading producer fruit drinks/cocktail mixers in USA
Revenue split 2010€712mln
16%
13%
32%
39%
WE Grocery WE HFS Frozen Foods ABC
3
Piet Hein Merckens (CEO)
Review Q2 performance
4
Q2 2011 highlights Wessanen fitter and more focused
Q2 results reconfirmation of continuous progress we are making
Revenue +1.1%, autonomous growth +2.3% Volume 1.0%, Price/mix 1.3%
Normalised EBIT €11.8 mln, up 8.3%
Successful renegotiation and extension of €100 million credit facility at more favourable terms
Divestment Tree of Life UK and Kalisterra (per 1 October)
5
Q2 2011 highlights Strategy is clear, we are more focused, and in better shape,
although we have to improve in multiple areas
Despite subdues economic growth, awareness and appreciation for organic food continue to grow
Grocery continues to grow Focus on core brands, innovations, brand activation, more
consistent execution
HFS wholesale challenging quarter, while branded performed satisfactorily
Numerous initiatives undertaken to address issues We expect result to improve gradually
Increasingly implementing one consistent way of working Areas such as brand activation, innovation, central sourcing,
operational excellence and ICT
ABC performed strongly in Q2, expected to continue based on current momentum and plans in place
6
6.85.1
5.5 6.5
Q2 10 Q2 11
Wessanen Europe Grocery Continued focus on core brands, making further progress
Revenue up 7.2% Autonomous growth 5.1% Volume 4.4%; Price/mix 0.7%
France: Bjorg continues to grow and gain market shareFirst nationwide TV commercial aired in May-June
Benelux sales up, driven by Biorganic, Merza and Dr Schär. Zonnatura to relauch its tea range in August
In Germany, Whole Earth and Culinessa further gaining distribution
In UK, revenue about stable, impacted by focus on ‘cutting the tail’
Italian sales continue to growThe soy plant is performing well, expanded with a water treatment facility which just was started up
65.9
61.1
5.1%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
7
Brand activation - Bjorg
8
-2.7
1.9
2.6 2.0
Q2 10 Q2 11
Wessanen Europe HFS Revenue down (5.9)%
Autonomous growth (6.8)% Volume (6.6)%; Price/mix (0.2)%
Increased focus on branded and high value added wholesale due to divesting Tree of life UK and Kalisterra
Benelux sales are lower due to fewer stores; Kroon (our fresh supplier) gaining new customers; At existing own-format stores, revenue trending up; New Natuurwinkels Huizen, Zoetermeer and Maastricht
France: sales at Bonneterre stable with Bonneterre brand up. Dietetic market (Kalisterra) facing strong competition
Germany stable. HFS stores (‘Naturkost’) up, more specialised stores down (‘Reformhauses’)Plants in Freiburg and Dreber performed well
68.973.2
(6.8)%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
9
Innovations - Allos and Tartex
10
Activation - Little Green Bag
Goal Little Green Bag
Connect retailers to Natudis and its brands
Generate additional traffic to shops
Pull new consumers by low prices organic offer
Generate additional promotional revenue (high traffic to stores)
What is it?
A red paper bag which can be filled in HFS store
5 organic products for only €5 (normal price about €10)
‘Green’ because of 5 ‘green’ products
Tied to a theme - now ‘Picnic’
Additional promotional material was included (f.e. instore material,
advertising campaign, PR)
A large advertising campaign in local newspapers
11
2.0
1.1
Q2 10 Q2 11
Frozen Foods Revenue (2.8)%
Autonomous growth (6.0)% Volume (7.5)%; Price/mix 1.5%
Branded volumes (Beckers, Bicky) up Higher sales in Belgian and Dutch retail
Private label volumes remaining weak
Marketing spending somewhat lower Spending weighted to 2nd half 2010 TV campaign featuring Beckers brothers
EBIT down to €1.1 mln Lower revenue, increased raw material prices
29.730.7
(6.0)%
EBIT (in € mln)
Revenue (in € mln)
Autonomous revenue growth
12
Beckers ‘Family man of the year’
Consumer action - period May-September Media
Media partners Free publicity Online
Retail activation Out-of-home activation
13
4.53.5
4.53.6
Q2 10 Q2 11
American Beverage Corporation Q2 showing strong performance; expected continuation
strong performance in H2 2011
Revenue growth in US$ 21.2%, in Є up 7.8% Autonomous growth 24.6% Volume 21.1%; Price/mix 3.5%
Ongoing success RTDs Daily’s Capacity expanded
Launch ‘Summerology’ promotion Daily’s
Little Hug softness, showing growth in second half quarter
Competitive activity Lapping bonus pack promotion 2010 Active pruning lower margin products
Revitalisation Little Hug continues Application new design to all SKU’s completed Print advertising continues
34.6
32.0
24.6%
EBIT (in € mln)
Revenue (in € mln)
Autonomous revenue growth
Reported, Normalised
14
Little Hug Daily’s Fruit Mixers Daily’s Ready-to-Drink
New packaging
New Kiwi Strawberry flavor
New Tropical variety w/bi-lingual packaging
New Sangria Mixer New Lemonade Bag-in-a-box
2011 innovations year-to-date
15
Ronald Merckx (CFO)
Financials
Started at Wessanen as of 1 June
16
Q2/H1 2011 key figures
In € million Q2 2011 Q2 2010 H1 2011 H1 2010
Revenue ¹ 195.7 193.7 374.5 366.3
Autonomous growth 2.3% 1.3%
Normalised EBIT ¹ 11.8 10.9 18.8 17.3
EBIT ¹ 7.4 9.4 15.5 15.8
Net result ² 5.4 6.6 9.9 1.8
Earnings per share (EPS) ² 0.07 0.08 0.13 0.03
Operating cash flow ¹ 1.9 18.0 (3.3) 3.7
¹ Continuing operations; ² Attributable to Wessanen equity holders
17
190
192
194
196
198
200
Q2 2010 Grocery HFS FrozenFoods
ABC I nter-segment
allocations
Q2 2011
Bridge - sales
€195.7
€193.7
In € mln
€4.8 €(4.3) €(1.0) €2.6 €(0.1)
18
EBIT - from normalised to reported
Q2 2011 Q2 2010
Normalised EBIT 11.8 10.9
Exceptionals/impairments (4.4) (1.5)
EBIT 7.4 9.4
Tree of Life UK (divested as of 18 July) €(3.3) mln impairment Q3: non-cash net cumulative exchange loss deferred in equity of €(2.1) mln
Kalisterra (Asset held for sale) (sale as of 1 Oct)€(1.4) mln exceptional costs
19
9
10
11
12
13
Q2 2010 Grocery HFS FrozenFoods
ABC Corporateentities
Q2 2011
Bridge - normalised EBIT
In € mln
€10.9
€11.8
€1.0 €(0.6) €(0.9) €0.9 €0.5
20
0
50
100
150
200
250
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q1 11
0
1
2
3
4
5
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
Net debt
Leverage ratio
€39.1 mln
1.1x
Net debt and leverage ratioIn € mln
21
Cash flow Q2 2011
In € mln
8.5 (10.9)
(0.5)Derivatives
and FX
Sources
Uses
8.5
(2.5) I nvestments
2.4I ncrease working capital
(1.3)Dividends
paid
I ncrease of net debt
Cash flow from
earnings
(6.6)
22
Piet Hein Merckens (CEO)
Closing remarks
23
Closing remarks Strategy is clear, we are more focused, and in better shape,
although we have to improve in multiple areas
Very pleased with the quality of the people at Wessanen
Increasingly implementing one consistent way of working
Q2 results reconfirmation of continuous progress we are making
Confident that we are well on track to further improve our performance
24
Q&A
Appendices
26
15%
15%
34%
36%
WE GroceryRevenue €127.7 mlnNormalised EBIT €12.4 mln
Revenue H1 2011 €374.5 mln
Frozen FoodsRevenue €56.7 mlnNormalised EBIT €1.9 mln
WE HFSRevenue €139.5 mlnNormalised EBIT €4.3 mln
ABCRevenue €56.9 mlnNormalised EBIT €5.2 mln
Inter-segment eliminations Revenue Є(6.3) mlnNormalised EBIT €(5.0) mln
27
15.515.8
18.817.3
H1 10 H1 11
Q2 performance
374.5
366.3
1.3%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
7.49.4
11.810.9
Q2 10 Q2 11
195.7
193.7
2.3%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
H1 performance
28
Financial guidance 2011 Net financing costs around €(4) mln
2010: €(8.3) mln; 2009: €(19.9) mln
Effective tax rate around 25-30% 2010 impacted by country mix and non-deductible impairments, partly compensated by
recognition tax losses
Depreciation and amortisation (excluding impairments) around €(14) mln 2010: €(14) mln
Capex (pp&e and intangibles) around €(15) mln 2010: €(14) mln
Non-allocated expenses (incl. corporate) around €(10) mln 2010: €(12.3) mln (normalised €(10.2) mln)
29
European brand-platform-category map
Organic Nutrition– Dairy alternatives– Biscuits (nutrition)– Bread replacers– Cereals– Tea– Spreads (nutrition)
Organic Taste-Indulgence– Spreads– Biscuits– Cereals – Juices
Organic Taste-Cooking– Condiments– Bouillon, Stock & Gravies– Meal components – Ready meals
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
Organic Basics– Multi categories TBD TBD TBD TBD TBD TBD TBD TBD
30
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
31
Wessanen’s building blocks
Six important assets on which Wessanen’s success is built, reasons
why our brands will be your natural choice and why Wessanen can make its
organic brands the most desired in Europe:
I. Passionate people
II. Pioneering brands
III. Customer partnerships & multi-channel approach
IV. Network of strategic supplier partnerships
V. European scale
VI. Unique expertise & industry authority
Royal Wessanen nv
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