wessanen q4 11 roadshow presentation

Royal Wessanen nv

Q4 2011 roadshow

Q4 published: 23Feb 2012

www.wessanen.com

2

16%

16%34%

34%

WE GroceryRevenue €243.9 mlnNormalised EBIT €18.0 mln

Revenue FY11 - €706 mln

Frozen FoodsRevenue €113.1 mlnNormalised EBIT €2.3 mln

WE HFSRevenue €247.5 mlnNormalised EBIT €5.0 mln

Non-allocated & eliminations Revenue €(11.1) mlnNormalised EBIT €(11.5) mln

ABCRevenue €112.6 mlnNormalised EBIT €9.9 mln

3

Important dates

Fri 2 March Publication Annual Report 2011 (online)

Tue 20 March Record date AGM

Tue 17 April AGM (Sheraton Schiphol) (14h00 CET)

Thu 19 April Ex-dividend date

Tue 2 May Payment dividend

Fri 27 April Q1 2012 results (7h15 CET)

Wed 25 July Q2 2012 results (7h15 CET)

Thu 25 October Q3 2012 results (7h15 CET)

Fri 22 February Q4/FY 2012 results (7h15 CET)

4

Content

Page

5. History

7. Markets

8. Vision, mission, strategy

15. Clipper

17. FY 2011

31. Q4 2011

39. Divisions

5

A long and rich history2015 will mark 250th anniversary of Wessanen

1765 - Incorporated around river De Zaan

– Adriaan Wessanen started to trade in mustard, canary and other seeds

Around 1910 introducing first consumer products such as

oatmeal and cocoa

1913 - Distinguished title Royal

1959 - Listed on Euronext Amsterdam

Seventies, eighties, nineties - range of acquisitions, such as

1993 - Merger Bols and Wessanen (split 1998)

2000/01 - Acquisition Distriborg, Zonnatura, Natudis

2010 - Divestment Tree of Life, Inc

2009 - Strategic reorientation focus on organic food in Europe

2012 - To make our organic brands most desired in Europe

6

0

400

800

1200

1600

2009 2010 2011 2011 PF

KK, LR, RighiTOL NAPANOSABCFrozen FoodsKalisterraTree of Life UKHFSGrocery

66

Transformation 2009-2011

712 706

1,586

From portfolio approach to focus on the core

677

In € mln

7

Attractiveness organic food markets

European organic food market is an attractive and growing segment– €21 bn market, 2011 growth est. 6%– <3% of total European food market

Increasing consumer appreciation and still low per capita consumption

– European Union <€30> p.a.

– Germany <€75>, France <€55>, NL <€50>, UK <€30>

Consumers increasingly convinced of benefits of organic food regarding health, taste and environment

Grocery and HFS channels developing at different growth path– Decline percentage of households shopping in HFS channel in

the Netherlands halted

Wessanen has unique selling points;– Active in both channels (HFS and Grocery)– Strong brands in both channels– Increasingly orchestrating our European businesses– One of very few with true European presence

8

Our Vision

“To make our organic brands most desired in Europe”

GROCERY HEALTH FOOD STORES

9

Our Mission

“Our organic food, your natural choice”

C:\huisstijl\Data\WessNedbv\AFDELING\wholeearth20 sec ad.wmv

10

Strategic objectives 2012-2014

Strategic focus Activities

Topline growth • Grow core brands

• Grow core categories

• Build strongholds in new markets

• Country specific growth strategies

• Launch fewer, bigger, better innovations

• Execute acquisitions shortlist

Profitability

improvement

• Central sourcing savings

• Pricing strategies towards customers

• Improve operational excellence with SAP

• Filling own factories

Enablers • Improve talent performance management / building connected

leadership

• Simplify how we are conducting business

• Activate Organic Expertise Centre, integrate Quality

11

Financial Holding

Moving to a more integrated, centrally steered business

Strategic Architect

Strategic Orchestrator

Operator

Financial

Strategic guidelines

Strategic development

Operational

Stand-alone business

Shared skillsShared

business systems

Same business systems

Degree of Business Integration

Natu

re o

f C

orp

ora

te G

uid

an

ce

Wessanen in

transit

ion

Maximise value creation by

adapting governance model, decision rules and

effciency and effectiveness HQ support functions

12

Link to Performance Management

Corporate OGSM

County and Functional OGSM

Align to individual objectives and development plans

Strategies & Goals

(Top-Down)

Performance Feedback

(Bottom-Up)

Linking corporate level goals to the country and functional goals and ultimately to the individual

Downwards providing clear and definitive direction to supporting functions and employees

Bottom-up providing feedback on the resources and timing required to accomplish the strategies

OGSM to align our plans and objectives

13

Brands in

Grocery

Roadmap focused on 3 business models

DescriptionDescription

Sourcing/developing, marketing and selling of own brands to grocery

• Including distribution to distribution centers and/or stores

Countries, Brands & EntitiesCountries, Brands & Entities

France: BjorgBenelux: Zonnatura, Biorganic, MerzaUK: Kallo, Whole EarthGermany: Whole Earth, Culinessa, BjorgItaly: Bjorg

Sourcing/developing, marketing and selling of own brands to HFS

• Via wholesaler in Germany• Direct to stores (France, NL)

France: Bonneterre, EvernatNL: Ekoland, De Rit, Fertilia

MolenaartjeGermany: Allos, Tartex, De Rit

Brands in HFS

Sourcing, category management, sales and distribution to HFS stores

• Focus on full range (ambient and fresh) of products and high share of products per store

France: Bonneterre, BiodistrifraisNL: Natudis, KroonBelgium: Hagor

Whole-sale

in HFS

BusinessBusiness

14

Driving our brands in 2 channels

Health Food Specialty Stores Grocery Retail

Profile

Developmen

Opportunity

Small, independent, large exclusively organic assortment

Concentration, modern formats

Attract & activate mainstream consumers, innovative concepts

WessanenFocus

Professional chains, small organic assortment

Strong organic growth, store in store

Build credibility and profile through strong organic ranges, increase frequency, margin mix improvement

Building powerful brands, large ranges,moving from push to pull marketing

Wholesale (NL, BEL, FR)

Retail formulas (NL)

Allos, Tartex, De Rit, Ekoland, Bonneterre

Aggressive growth, powerful in-store marketingFocus on fewer, bigger brands

All countries

Bjorg, Zonnatura, Whole Earth, Kallo

Profile

Development

Opportunity

WessanenFocus

http://www.nieuwsnederland.com/wp-content/uploads/2010/12/albert-heijn1.jpg

16

Clipper

• UK based tea and coffee company

– Founded in 1984

• 100% branded business

– Tea, coffee, hot chocolate

– Grocery, HFS, food service, export

• Leading position in UK organic & fair trade tea

– Everyday, green, white, infusion, specialties

• Revenue £16mln, ca 90 employees

• Manufacturing plant (incl. blending) in Dorset (UK)

• Tea is one of our core categories

• Clear potential in UK as well as other European markets

17

FY 2011

1818

Wessanen FY11 snapshot

Total assets

Grocery HFS Frozen Foods ABC Non-allocated

FTEs (at year end)

Grocery

HFS

Frozen Foods

ABC

Corporate

Normalised EBIT

-15

-10

-5

0

5

10

15

20

25

30

2010 2011

Revenue

Grocery HFS TOLUK, KT Frozen Foods ABC

1,998€368 mln

€706 mln

19

Q4/FY 2011 key figures

In € million Q4 2011 Q4 2010 FY 2011 FY 2010

Revenue ¹ 157.2 172.5 706.0 712.2

Autonomous growth 0.8% (1.7)% 2.9% (1.3)%

Normalised EBIT ¹ (1.3) 0.9 23.7 19.8

As % of revenue (0.8)% 0.5% 3.4% 2.8%

EBIT ¹ (39.9) (12.1) (19.0) 5.3

Net result ² (35.1) (8.9) (17.1) (6.1)

Earnings per share (EPS) ² (0.46) (0.12) (0.23) (0.08)

Operating cash flow ¹ 7.9 21.4 8.8 34.3

¹ Continuing operations; ² Attributable to Wessanen equity holders

20

FY 2011 highlights

• 2011 was an exciting year for all of us at Wessanen

• Grocery and ABC bringing in strong performances on topline and profits

• Sale Tree of Life UK and Kalisterra to focus on higher added value wholesale at HFS

• Dividend per share of €0.08 (fully in cash) – Pay-out ratio 40%

• We are … on a multi-year journey… determined to improve our performance step-by-step… building a strong leadership group … raising the talent bar.. ensuring that the execution of our strategy is progressing

• We ended 2011 stronger than we started

• This will continue during 2012 and the years to come

-19.0

5.3

23.719.8

FY 10 FY 11

706.0712.2

2.9%

EBIT (in € mln)

Revenue (in € mln)

Reported, Normalised

Autonomous third party revenue growth

21

650

675

700

725

750

2010 Volume Price/ mix Tradingdays

Currency Divestments 2011

Bridge - revenue growth FY

(0.9)%

In € mln

1.3%

1.6% - (1.1)%

(2.7)%

2.9%

Autonomous revenue growth

Reportedrevenue growth

22

-20

-10

0

10

20

30

2010

Gro

cery

HFS

Froz

en F

oods

ABC

Corpo

rate

EBI T

E

Exce

ptional

s

Impai

rmen

ts

EBI T

201

1

Bridge - normalised EBIT FY11

In € mln

€19.8

€(19.0)

€(5.1)

€(2.3)

€(1.3)€4.6 €8.0€23.7 €(3.1)

€(39.6)

23

• Improve talent performance management / building connected

leadership



Enablers





Profitability

improvement

• Grow core brands






Topline growth

ActivitiesStrategic focus


leadership



Enablers





Profitability

improvement







Topline growth


Grocery - Topline growth

• Brand activation– Bjorg TV commercial, Zonnatura 360º campaign– Kallo relaunch soy drinks, Whole Earth city campaign

• In-store presence– Launch Bjorg on German market– Biobest shelf launched in the Netherlands– Further distribution expansion Biorganic, Dr Schär

• Innovations– Bjorg lunch boxes– Kallo soy drinks– Zonnatura full range of organic tea


Topline growth

24


leadership



Enablers





Profitability

improvement







Topline growth



leadership



Enablers





Profitability

improvement







Topline growth


Grocery - Profitability improvement

• Central sourcing initiatives– Mitigated most of the upward effects on

raw material prices

• A cutting the tail programme in the UK– (1.5)% effect on autonomous growth Grocery– (8)% impact on full year UK sales

• Managed withdrawal from Belgian grocery

• Improved pricing strategies towards customers

Profitabilityimprovement

25

HFS - Topline growth

Wholesale / formulas• Cooperation fresh wholesaler Kroon and Vroegop-Windig

• Further roll-out GooodyFooods stores– Openings: Almere, Zaandam, Apeldoorn

• Store activation– Little Green Bag activation campaign

Brands • Innovations

– Allos range of cookies; Bonneterre range extension




leadership



Enablers





Profitability

improvement







Topline growth



leadership



Enablers





Profitability

improvement







Topline growth


Topline growth

26


leadership



Enablers





Profitability

improvement







Topline growth



leadership



Enablers





Profitability

improvement







Topline growth


HFS - Profitability improvement

• Central sourcing initiatives– Mitigated most of the upward effects on

raw material prices

• Divestment Kalisterra / Tree of Life UK

• Operational excellence improvement– SAP introduction at Bonneterre– Upgrade in the Netherlands

Profitabilityimprovement

27


leadership



Enablers





Profitability

improvement







Topline growth



leadership



Enablers





Profitability

improvement







Topline growth


Enablers

• Connected leadership

• Raising the talent bar

• Strategic orchestration– OGSM framework– Central sourcing, Innovation, ICT, Organic Expertise

Centre (OEC)– Supply chain

• Operational excellence improvement via SAP implementations

Enablers

28

Cash flow FY11

In € mln 27.6 (31.0)

(0.1)Derivatives and

FX

Sources

Uses

I ncrease of net debt

Cash flow from

earnings

3.4

Dividends paid

Discontinuation Factoring France

Grocery

I ncrease working capital

I nvestments

27.6

(10.8)

(1.3)

(10.2)

(8.6)

2929

Working capital

0

20

40

60

80

Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

-40

-20

0

20

40

Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

4 quarter average working capital

Q-on-q movement working capital

* €9mln impact due to ending debtor factoring

*

30

0

50

100

150

200

Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

0

1

2

3

4

5

Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

Net debt

Leverage ratio

€32.2 mln

0.8x

Net debt and leverage ratioIn € mln

31

Q4 2011

32

18%

11%

37%

34%

WE GroceryRevenue €58.7 mlnNormalised EBIT €1.9 mln

Revenue Q4 - €157.2 mln

Frozen FoodsRevenue €29.1 mlnNormalised EBIT €0.2 mln

WE HFSRevenue €53.3 mlnNormalised EBIT €1.3 mln

ABCRevenue €18.0 mlnNormalised EBIT €(0.5) mln

Non-allocated & eliminations Revenue €(1.9) mlnNormalised EBIT €(4.2) mln

33

140

150

160

170

180

Q4 10 Volume Price/ mix Tradingdays

Currency Divestments Q4 11

Bridge - revenue growth Q4

(8.9)%

In € mln

(1.8)%

2.6%

(2.2)%

0.5%

(8.0)%

0.8%

Autonomous revenue growth

Reportedrevenue growth

34

Q4 2011 highlights

• Revenue €157.2 mln– Autonomous revenue growth 0.8%

• Autonomous revenue growth Grocery 1.2%– All countries reported growth, except the UK – UK portfolio pruning to enhance profitability

causing 2.3% negative impact

• Normalised EBIT €(1.3) mln– Impacted by lower HFS results and higher

non-allocated expenses

• Impairment charges and one-offs resulting in a net loss of €35.1 mln

-12.1

-39.9

0.9-1.3

Q4 10 Q4 11

157.2

172.5

0.8%

EBIT (in € mln)

Revenue (in € mln)

Reported, Normalised


35

EBIT - from normalised to reported

Q4 2011 Q4 2010

Normalised EBIT (1.3) 0.9

Exceptionals * (1.5) (4.0)

Grocery Impairment Italy (3.0)

HFS Impairment Benelux (19.8)

FF Impairment Favory Group (64.1% owned) (14.3)

Impairment TOL UK / Grocery brand (9.0)

EBIT (39.9) (12.1)

* Exceptionals relate to closing of Distriborg distribution centre (Grocery + HFS) and severance payments (FF) / impairment reversal ABC

36

Cash flow Q4

In € mln

8.3 (4.6) Derivatives

and FX0.4

Sources Uses

Cash flow from

earnings3.2

3.7

4.7Decrease working capital

(4.6) Net I nvestments

Reduction of net debt

37

2011 financials Net financing costs €3.5 mln (2010: €8.3 mln)

Interest expenses €1.4 mln (2010: €3.2 mln) Other financial income&expenses €2.1 mln (2010: €5.1 mln)

Capex €13.3 mln

– Property, plant & equipment: €10.1 mln (2010: € 11.2 mln)

– Intangibles: €3.2 mln (2010: € 2.4mln)

Depreciation and amortisation €13.7 mln

– Depreciation: €11.4 mln (2010: €12.3 mln)

– Amortisation: €2.3 mln (2010: €1.6 mln)

• Impairments pp&e €2.5 mln; intangibles €37.1 mln

Non-allocated expenses (incl. corporate) (part of EBIT) €11.6 mln

– Normalised 2011: €11.5 mln

– Normalised 2010: €10.2 mln, (reported €12.3 mln)

Non-controlling interests €4.0 mln– Partial allocation losses incurred at FavoryFY

• Income tax gain of €1.5 mln– Mainly result of non-tax deductible expenses (including goodwill impairment losses) incurred

38

Financial guidance 2012

Net financing costs €3-4 mln

Effective tax rate around 30-40%

Capex about €15 mln

Depreciation and amortisation about €15 mln

Non-allocated expenses (incl. corporate) around €12-13 mln

39

Divisions

40

58.760.0

3.5%

Grocery - revenue breakdown per quarter

65.9

61.1

5.1%

Q2 2011


61.8

57.4

5.9%

Q1 2011


57.5

54.6

7.5%

Q3 2011


1.2%

Q4 2011

Autonomous third party revenue growth Correcting for UK cutting the tail

41

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

42

• Rebuilding

43

HFS - revenue breakdown per quarter

68.973.2

(6.8)%

Q2 2011


70.671.0

Q1 2011


54.768.3

Q3 2011


53.3

70.1

Q4 2011


(6.1)%

(7.1)%(3.1)%

44

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

45

FF - revenue breakdown per quarter

29.730.7

(6.0)%

Q2 2011


27.028.7

(7.9)%

Q1 2011


27.327.1

0.8%

Q3 2011


29.129.3

2.4%

Q4 2011


46

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)

47

ABC - US$ revenue breakdown per quarter

49.9

41.1

24.6%

Q2 2011


30.925.1

21.6%

Q1 2011


53.2

34.6

53.5%

Q3 2011


23.421.6

7.9%

Q4 2011


48

ABC examples of activation

Royal Wessanen nv

www.wessanen.com

To make our organic brands most desired in Europe

50

Important dates

Fri 2 March Publication Annual Report 2011 (online)

Tue 20 March Record date AGM

Tue 17 April AGM (Sheraton Schiphol) (14h00 CET)

Thu 19 April Ex-dividend date

Tue 2 May Payment dividend

Fri 27 April Q1 2012 results (7h15 CET)

Wed 25 July Q2 2012 results (7h15 CET)

Thu 25 October Q3 2012 results (7h15 CET)

Fri 22 February Q4/FY 2012 results (7h15 CET)

wessanen q4 11 roadshow presentation

Investor Relations

results 7h15 cetthu

mln normalised ebit

results 7h15 cetwed

results 7h15 cetfri

results 7h15 cet3

grocery revenue

hfs revenue

organic brands