DACT” · With good results Figures 2013 10.8% up Revenue 313 million euro Operating profit 513...
Transcript of DACT” · With good results Figures 2013 10.8% up Revenue 313 million euro Operating profit 513...
Wallet Distribution and Bank Relationship Management “Interactive PEP session – DACT” Klaas Springer – Director Corporate Treasury 10 April 2014
2
FrieslandCampina
Contents • General Introduction
• Bank Relationship Management: Quid Pro Quo
• Wallet Distribution Model: Why and How?
• Application in Combination with Refinancing
• Adam Smith Award
General introduction
4
employees 21.186
11.4 billion euro revenue
28 Facilities in
countries 100 Export to over
countries
Millions of consumers
member dairy farmers own the Company
19,244
Every day
2013
Figures 2013
5 1 before goodwill impairment
With good results
Figures 2013
10.8% up
Revenue
313 million euro
Operating profit
513 million euro
before goodwill impairment
2.7% Operating profit as a % of net revenue
4.5% before goodwill impairment
Revenue in millions of euros
11,418 10,309 9,626 8,972
2013 2012 2011 2010
Operating profit in millions of euros
513 487 403 434
20131 2012 2011 2010
2013 313
Operating profit as a % of net revenue in percentages
4.5 4.7 4.2 4.8
20131 2012 2011 2010
2013 2.7
Figures 2013 * in millions of euros
Worldwide
6
North and South America
United States of America
Africa and the Middle East
Nigeria Ghana United Arab Emirates Saudi Arabia
Asia and Oceania
Indonesia Malaysia Singapore Thailand Vietnam Philippines China Hong Kong India Japan New Zealand
Europe
Netherlands Germany Belgium Greece Hungary Romania Russia France Spain Italy Austria United Kingdom
1,165 revenue *
1,026 employees
19 locations
2,938 revenue *
6,846 employees
30 locations
6,965 revenue *
13,147 employees
68 locations
350 revenue *
167 employees
6 locations
Our position in the dairy sector
7 Figures 2012 in billion of euros
Company Dairy Revenue
3.3
3.5
4.1
4.4
4.44.5
4.5
4.5
5.1
5.8
6.0
6.5
6.9
8.49.4
10.512.5
14.0
15.123.4
20. Müller - Germany19. Schreiber Foods - USA
18. Bongrain - France17. DMK - Germany
16. Kraft Foods - USA15. Mengniu - China14. Sodiaal - France
13. Morinaga - Japan12. Yili - China
11. Unilever - Netherlands/UK10. Meiji - Japan
9. Saputo - Canada8. Dean Foods - USA
7. Arla Foods - Denmark/Sweden6. Dairy Farmers of America - USA
5. FrieslandCampina - Netherlands4. Fonterra - New Zealand
3. Lactalis - France2. Danone - France
1. Nestlé - Switzerland
5. FrieslandCampina - Netherlands
Source: Rabobank, August 2013
Concluding remarks: performance since the merger end 2008
2008
0,77
2,6
543 (5,7)
30,0
KPI
• Performance premium (cash + in kind) in € per
100 kg
• Operating profit in % of revenue*
• EBITDA in € million** (in
% of revenue)
• Equity as % of total assets
2013
3,04
4,5
961 (8,4)
37,0
* Performance premium included in the costs of goods sold, before goodwill impairment ** Annualized with performance premium added back to EBIT 8
Bank Relationship Management: Quid Pro Quo
10
Vision on the role of banks
• Financing: - Providing the flexible layer on the liability side - Commitment that financing banks will get the opportunity to pitch - In the strategic sense company does not want to rely on banks • Service provider: cash management, trade finance, FX, etc.
• Trusted advisor: - Financial advisor (e.g. M&A, DCM) - Strategic advisor (e.g. Outside-In views, Sustainability) - Research and sector knowledge
Bank Relationship Management: Quid Pro Quo
• Participating in RFC’s Revolving Credit Facility is the entrance ticket for other banking services
• Level Playing Field: the opportunity to pitch, but no guarantee for success
• To keep the balance: the company will strive, to a reasonable extent, to keep the distribution of the wallet aligned with the banks’ commitments
Wallet Distribution Model: Why and How?
13
Why a Wallet Distribution Model?
• When you make a commitment, you have to manage it!
• In order to substantiate statements and make adjustments
when necessary to create balanced relationships
• Ability to lead discussion instead of being reactive
• But: - Keep it simple: can’t afford to spend too much time - No structural dependence on consultant - Rather a Golf than a Rolls
Request For Proposal 2010
14
How?: Overview of Corporate Treasury’s Business Wallet
In the overview, all relevant key areas are listed that were considered in the wallet estimation for 2010 FY:
Source: RFI Bank Services, dd 4/2/2011
15
How?: Countries in Scope of the Wallet Distribution Analysis
Given our bank relations considered in the wallet distribution exercise the following countries – and their respective currencies – were taken into consideration:
Europe (Greater Area) Asia and Australia Americas
The Netherlands Greece Malaysia USA
Belgium Hungary Indonesia Africa & Middle East
France Romania Thailand Nigeria
Spain Russia Vietnam Saudi Arabia
UK Switzerland Singapore United Arab Emirates
Germany Austria China
Italy
How?: Assumptions regarding pricing
What does a bank earn on?
• Liquidity management: information from RFP’s
• Deposits: interest rate spreads, e.g. Nigeria 0.6%, Malaysia 0.7%, Indonesia 1.0%, Europe 0.15%
• FX: Spots 1.1 bps and Forwards 1.4 bps
• IR: IRS 1 bps, Cross Currency IRS 1 bps
• Credit Cards: EUR 25 fee per card
• Etc.
16
17
Main Conclusions of Wallet Distribution Exercise
1. Banking wallet is fairly divided between our current banks in the RCF
• 1 Bank has less wallet due to limited product offering
• 1 Bank has 4% gap between commitment and wallet, due to fee business
• Current pricing of products used by FC, are overall below or at the market price, based on insights of Zanders
2. Next steps are
• To integrate this approach in our Long Term Funding Plan
• Discuss outcome with all banks
• Expand the Wallet Sizing tool with none RCF-banks, for Thailand, Nigeria and Vietnam.
• The process needs to be repeated on a yearly basis
Application in Combination with Refinancing
19
Discussing with our Banks: Classification and Positioning of our Banks
Category Result, Implementation Bank #
Free Lunchers
It is advisable to ask the bank to participate in a credit facility
1
Balanced Partners
It is important to keep these banks „happy“ and to nominate them as core bank candidates
3
Enigmas • „Greedies“ – have increased participation
• „Inescapables“ – gently pressure to participate or look for alternative solution
9
Goodies This discrepancy could trigger relation issues if it is not tackled adequately
1
The table below helps us to interpret Zanders’ classification of banks in their Wallet Distribution Tool with possible actions to be taken (see column “Result, Implementation”):
20
Refinancing 2011?
• Q2/Q3 2011: Discussing outcomes with the banks - Openness was highly appreciated - Generally high level of satisfaction with the relationship - Open for new business • Summer 2011: GREXIT as dominant theme, EB and Audit Committee wanted to build in more certainty of funds giving increased market volatility • Putting 2 and 2 together: - Following up recent discussion with request to discuss doable refinancing transaction - Implement Amend and Extend refinancing (plus two years at improved conditions)
21
Early Refinancing 2014?
• No extensive wallet distribution exercise this time: pretty balanced picture • Pitch with core banks to request for their refinancing proposal, discuss relationship and business wallet development • Invite to limited number of banks to facilitate at either € 150 million (Tier 1) or € 50 million (Tier 2) • Closing scheduled 3d week of April: - Market (better) pricing - Higher amount: from € 1 bln to € 1,5 bln - Documentation borrower friendlier - Rebalancing banking group
Adam Smith Award
Adam Smith Award
Questions?