wessanen q3 2011 analyst&investors presentation
DESCRIPTION
Q3 2011 presentation used for analyst and investors on roadshowsTRANSCRIPT
Royal Wessanen nv
Q3 2011
Amsterdam, 27 October 2011
2
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
3
Q3/9M 2011 key figures
In € million Q3 2011 Q3 2010 9M 2011 9M 2010
Revenue ¹ 174.3 173.4 548.8 539.7
Autonomous growth 8.0% 3.5%
Normalised EBIT ¹ 6.2 1.6 25.0 18.9
As % of revenue 3.6% 0.9% 4.6% 3.5%
EBIT ¹ 5.4 1.6 20.9 17.4
Net result ² 8.1 1.0 18.0 2.8
Earnings per share (EPS) ² 0.11 0.01 0.24 0.04
Operating cash flow ¹ 4.2 9.2 0.9 12.9
¹ Continuing operations; ² Attributable to Wessanen equity holders
4
160
170
180
190
200
Q3 2010 Volume Price/ mix Tradingdays
Currency Divestments Q3 2011
Bridge - revenue growth
0.5%
In € mln
5.2%
2.8%
(0.8)%
(1.9)%
(4.8)%
8.0%
Autonomous revenue growth
Reportedrevenue growth
5
Grocery examples of activation
Yearly award magazine „Lebensmittel Praxis“Whole Earth Inka Taler (4 varieties)Criteria based on:Quality/Design/Distribution/Communication/Sustainability
Kallo soy launch activityDairy alternatives key categoryKallo core brand, phased out So Good
Bjorg commercialBased on success of Q2 airing, repeated in SeptemberResults: increased awareness, higher sales
6
Zonnatura 360°campagne
Radio campaign Week 43-45
Margriet Winterfair Week 46-47
TastingsIn-store tastings tea / barsIn week 44
In-store Retail promotions Week 43-47
Television Sponsoring GTST Week 43-44
Outdoor - busshelter Nationwide coverage Week 43-44
Site Consumer activation
Social mediaFree sampling From week 43
7
HFS examples of activation
New GooodyFooods storeOpened early October in Zaandam4th store, new ones in the pipeline
Allos cookiesNew range of cookies launchedAvailable in German HFS stores
8
Frozen Food examples of activation
Bicky Double Chicken burgerIntroduced in October in Belgian out-of-homeFurther extension Bicky rangeNewly designed carton boxSupported by TV commercials and online campaign
Online campaign in Flanders (Dutch) and Wallonia (French)
9
ABC examples of activation
10
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)
11
Closing remarks
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
Appendices
13
20.9
17.4
25.0
18.9
9M 10 9M 11
Q3 performance
548.8539.7
3.5%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
1.6
5.4
1.6
6.2
Q3 10 Q3 11
174.3173.4
8.0%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
9M performance
14
15%
21% 33%
31%
WE GroceryRevenue €57.5 mlnNormalised EBIT €3.8 mln
Revenue Q3 2011 €174.3 mln
Frozen FoodsRevenue €27.3 mlnNormalised EBIT €0.2 mln
WE HFSRevenue €54.7 mlnNormalised EBIT €(0.5) mln
ABCRevenue €37.7 mlnNormalised EBIT €5.2 mln
Non-allocated & eliminations Revenue €(2.9) mlnNormalised EBIT €(2.5) mln
15
15%
17%33%
35%
WE GroceryRevenue €185.2 mlnNormalised EBIT €16.2 mln
Revenue 9M 2011 €548.8 mln
Frozen FoodsRevenue €84.0 mlnNormalised EBIT €2.1 mln
WE HFSRevenue €194.2 mlnNormalised EBIT €3.8 mln
ABCRevenue €94.6 mlnNormalised EBIT €10.4 mln
Non-allocated & eliminations Revenue €(9.2) mlnNormalised EBIT €(7.5) mln
16
160
165
170
175
180
Q3 2010 Grocery HFS FrozenFoods
ABC I nter-segment
eliminations
Q3 2011
Bridge - revenue
€174.3
€173.4
In € mln
€2.9 €(13.6)
€0.2
€11.2 €0.2
17
0
2
4
6
8
10
Q3 2010 Grocery HFS FrozenFoods
ABC Corporateentities
Q3 2011
Bridge - normalised EBIT
In € mln
€1.6
€6.2
€1.6 €(1.9)
€(0.9)
€5.9
€(0.1)
18
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
19
Cash flow Q3 2011
In € mln13.9 (10.7)
Derivatives and FX
0.5
Sources Uses
Discontinuation Factoring
France Grocery
Net I nvestments
4.9Decrease working capital
3.2Reduction of net debt
Cash flow from
earnings8.5
(1.5)
(9.2)
20
0
50
100
150
200
250
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
0
1
2
3
4
5
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
Net debt
Leverage ratio
€35.9 mln
0.9x
Net debt and leverage ratioIn € mln
21
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)
22
4.02.2 2.2
3.8
Q3 10 Q3 11
Wessanen Europe Grocery Revenue growth remained robust, growing by 5.3% to
€57.5 million
Continued focus on core brands, making further progress in areas such as brand activation, innovations and operational excellence
Bjorg continues to gain market share Zonnatura launched sizeable 360º activation
campaign * Focus on organic teas and its natural taste
Range of soy milks relaunched under Kallo brand* Diary alternatives European core category* 1 strong brand, therefore phased out So Good
Bjorg launched on German market* Its nutritional positioning complementary to indulgence of Whole Earth
Normalised EBIT up to €3.8 million Increased revenue and higher gross margin %
57.5
54.6
7.5%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
23
-2.5
1.4 1.4
-0.5
Q3 10 Q3 11
Wessanen Europe HFS Revenue down 19.9%
Divestment TOL UK (12.2% impact)
Autonomous revenue (7.1)% >2% decline due to weak performance Kalisterra
• Divested as of 1 October
Brands performing satisfactorily Focus on brand activation and innovations Brands such as Allos, Bonneterre, De Rit
At wholesale activities working hard on implementing multiple improvements, several yet to translate in tangible results
Focus on operational excellence and expanding Dutch own format stores
54.768.3
(7.1)%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
24
1.1
0.2
Q3 10 Q3 11
Frozen Foods Autonomous revenue growth 0.8%
Branded up due to Belgian out-of-home, export Somewhat lower volumes at Dutch retail and
out-of-home Private label about stable
EBIT decreased to €0.2 million Increased raw material prices Marketing spending in line with last year
In October, Bicky Double Chicken burger introduced in Belgian out-of-home
Further extension of Bicky range Supported by TV commercials and online
27.327.1
0.8%
EBIT (in € mln)
Revenue (in € mln)
Autonomous revenue growth
Reported
25
-0.7
6.2
-0.7
5.2
Q3 10 Q3 11
American Beverage Corporation Very strong Q3, driven by success Daily’s RTD pouches
Development right packaging concepts Change distribution strategy to serve grocery
chains Consistent execution Attractive price-value positioning
Daily’s bag-in-a-box and premixes doing well either
Little Hug stable sales Continued competitive activity Active pruning/de-emphasising lower margin
products 20-count doing well / new packaging Revitalisation continues
2011: EBIT in range of US$17-19 mln; autonomous revenue expected to show strong growth year-on-year
2012: further revenue and earnings growth
37.7
26.5
53.5%
EBIT (in € mln)
Revenue (in € mln)
Autonomous revenue growth
Reported, Normalised