Q4 2012 wessanen presentation
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Transcript of Q4 2012 wessanen presentation
1
Wessanen 2012 overviewRevenue
273
205
113
129
Grocery HFS IZICO ABC
EBIT before exceptionals
22,0
0,01,8
6,3
Grocery HFS IZICO ABC
FTEs (average)
434
630487
451
62
Grocery HFS IZICO ABC Corporate
Average Capital Employed
89
59
37
48
7
Grocery HFS IZICO ABC Corporate
€711mln €19mln*
2,064 €240mln
* Incl. non-allocated * Incl. intercompany sales
*
Royal Wessanen nv
Q4/FY 2012
Amsterdam, 22 February 2013
www.wessanen.com
0.7%
700
710
720
730
2011 Price/ mix Volume Currency Acq/ divest. 2012
FY 2012: a challenging year
The economy and marketA turbulent year for the global economyOrganic market trending positively
Our positivesGrocery continues to perform wellAcquisition of Clipper TeasCreation of one frozen food companyStrengthening Supervisory Board
Our negativesPerformance HFS disappointingPostponement sale of ABCSizeable goodwill impairments
Our remedyInitiated a broad restructuring to build a more European integrated marketing-led company
3
-45,8-19,0
18,823,7
2011 2012
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
Grocery
Showing a good performance all throughout the year
Realised 4.6% autonomous growth in 2012 6.9% in the fourth quarter
Core brands growing such as Bjorg, Zonnatura and Whole Earth
Six out of eight core categories growing
Clipper Teas acquired, UK market leader in organic and fair trade teas
11% growth in 2012 In France introduced early 2013 Netherlands to follow next few months
Innovation examples: Bjorg muesli superfruits; coconut milk cooking aid; fourré
chocolat with hazelnut Zonnatura loose green tea; squeeze fruit/vegetables Kallo gravy granules
4
In € mln Q4-12 Q4-11
Revenue 68.9 58.7
Autonomous growth 6.9%
Normalised EBIT6.3 1.9
Impairments (15.8) (3.0)
Other exceptionals (3.5) (0.5)
EBIT (13.0) (1.6)
In € mln FY12 FY11
Revenue 272.8 243.9
Autonomous growth 4.6%
Normalised EBIT22.0 18.0
Impairments (15.8) (3.0)
Other exceptionals (4.7) 0.6
EBIT 1.5 15.6
Health Food Stores (HFS)
HFS showing a disappointing performance in all three businesses
France impacted by changing health food stores landscape Rise of chains at expense independent stores Lower sales, especially in wholesale and at fresh
Benelux impacted by lost customers and weak performance at Fresh Existing Natuurwinkel and independent stores growing
Germany impacted by weak brand performance Allos and declining revenues at Reformhaus channel (Tartex)
Innovation examples: Tartex pasta sauces; jubilee yeast pastries Allos crunchy (e.g. almond and cinnamon); muesli (e.g. cranberry-
Goji)
5
In € mln Q4-12 Q4-11
Revenue 50.9 53.3
Autonomous growth (4.5)%
Normalised EBIT0.8 1.3
Impairments (23.9) (19.8)
Other exceptionals (6.5) (1.0)
EBIT (29.6) (19.5)
In € mln FY12 FY11
Revenue 204.8 247.5
Autonomous growth (5.0)%
Normalised EBIT- 5.0
Impairments (23.9) (23.1)
Other exceptionals (6.5) (3.7)
EBIT (30.4) (21.8)
IZICO - integrated frozen foods company
Acquiring non-controlling stake Favory paved the way for creation one integrated company
New management team in place
New name IZICO easy (IZI), go (CO), ice (IZ) and company (CO)
Milestone plan being executed for full alignment and process integration Beckers Benelux and Favory
Combining both headquarters in Breda Integration marketing & sales, operations, finance and HR
Closure Favory Deurne plant as of the end of March
6
In € mln Q4-12 Q4-11
Revenue 29.0 29.1
Autonomous growth (0.1)%
Normalised EBIT0.7 0.2
Impairments (7.0) (14.3)
Other exceptionals (6.2) (0.3)
EBIT (12.5) (14.4)
In € mln FY12 FY11
Revenue 112.5 113.1
Autonomous growth (0.5)%
Normalised EBIT1.8 2.3
Impairments (7.0) (14.3)
Other exceptionals (6.2) (0.3)
EBIT (11.4) (12.3)
ABC - market leader RTD frozen pouches
Capitalising on further optimisation in 2011 after significant improvement multiple processes in previous years
Strong step-up in marketing spending in $-terms Supporting key seasonal holidays First-ever national TV advertising campaign Broad range traditional and digital media
Daily’s modest decline in growing RTD market More competition emerged in frozen pouch segment Remained clear market leader (market share; household
penetration; repeat purchases)
Innovations such as light and season-extending RTD pouches
Little Hug double digits revenue growth Especially 20-pack and 40-pack performing well Multi-year revitalisation process increasingly paying off
7
In € mln Q4-12 Q4-11
Revenue 16.9 18.0
Autonomous growth (4.7)%
Normalised EBIT(3.0) (0.5)
Impairments - 0.1
Other exceptionals - 0.1
EBIT (3.0) (0.3)
In € mln FY12 FY11
Revenue 128.6 112.6
Autonomous growth 5.7%
Normalised EBIT6.3 9.9
Impairments (0.1) 0.8
Other exceptionals 0.1 0.4
EBIT 6.3 11.1
ABC (cont’d)
Why postponement divestment ?! Bids not adequately reflecting fundamental value
• Uncertainties attached to relatively short track record in emerging RTD frozen pouch category; perceived to be crowded competitive field
Realise better value for our shareholders at a later stage
The process Process kicked off in June Conducted a comprehensive process Good level of interest from strategic and financial parties
Next steps Reported as ‘continuing operations’ Clear plans / budgets in place Labelled non-core
8
‘Wessanen 2015’
Announced late November 2012
Consultation with European and local works councils have been / are taking place
Wessanen will become a more consumer- and customer-led company
To deliver more efficiently our strategic agenda and to adapt to the changed magnitude and circumstances of the business
We have been initiating wide range of actions To increase focus To substantially reduce complexity To become more profitable by reducing costs
Detailed plan and timeline with numerous actions at our various businesses Progress (including savings and staff reduction) closely monitored Executing plans in various ‘waves’, to reduce executional risks
9
‘Wessanen 2015’ - the numbers
Reduction of approx. 300 FTE of which 250 forced redundancies Grocery/HFS/Corporate ± 190FTE IZICO ± 110 FTE
Expected one-off costs €(21) mln cash, largely accounted for in Q4, remainder in 2013 €(7.0) mln non-cash due to impairment Deurne plant
Expected savings €15mln p.a. from 2014 onwards €10 mln at Grocery/HFS/Corporate € 5mln at IZICO
Includes lower employee / other operating expenses Excludes any expected benefits to top-line
10
‘Wessanen 2015’ - a wide range of actions
Create more focus on our activities Further increased focus on core brands and eight core categories Expansion number of CBTs (category brand teams) Benelux operations split in branded and distribution French HFS operations split in branded and distribution Integration De Rit in Germany operations
Reduce complexity / simplify processes Cutting the tail / reducing number of SKUs at
• Dutch brands• French HFS brands; exiting frozen range at Bonneterre• Export
Centralising quality department Focus on one franchise formula (Natuurwinkel), to end GooodyFooods formula Supply chain to manage our plants as of 2013 Streamlining supply chain processes
Addressing low-yielding and non-performing activities Strongly reducing German grocery presence, changing go-to-market approach Focus Italian grocery on non-dairy (soy)
11
Ronald Merckx (CFO)
12
• Q4/FY financials
Q4/FY key figures
In € million Q4-12 Q4-11 FY-12 FY-11
Revenue 163.8 157.2 710.8 706.0
Autonomous growth 0.7% 0.7%
Gross contribution 60.9 60.5 270.5 263.6
As % of revenue 37.2% 38.5% 38.1% 37.3%
Normalised EBIT 1.9 (1.3) 18.8 23.7
As % of revenue 1.1% (0.8)% 2.6% 3.4%
EBIT (61.6) (39.9) (45.8) (19.0)
Net result ¹ (61.5) (35.1) (53.2) (17.1)
Earnings per share (EPS) (0.81) (0.46) (0.70) (0.23)
13¹ Attributable to Wessanen equity holders
EBIT - from normalised to reported
Q4-12 Q4-11 FY-12 FY-11
Normalised EBIT 1.9 (1.3) 18.8 23.7
Impairments (46.7) (37.0) (46.8) (39.6)
Wessanen 2015 (16.3)- (16.6) -
Other exceptional costs (0.5) (1.6) (1.2) (3.1)
EBIT (61.6) (39.9) (45.8) (19.0)
14
Impairments of goodwill and PPE
Grocery UK - Kallo €(15.8) mln Lower growth projections dairy alternatives, loss private label contract, adverse
movement pre-tax discount rate (12.1%12.7%)
HFS - Tartex €(19.9) mln Lower growth projections Reformhaus channel Private label business negatively impacted by insolvency one of our customers
HFS - Allos €(3.5) mln Lower growth projections 2 core categories Difficulties in passing on increased raw material costs
HFS - France €(0.5) mln * Weaker market outlook
IZICO €(7.0) mln Closure of Favory Deurne plant in March 2013
15* €(0.3) mln relates to goodwill and €(0.2) mln relates to other intangibles
Year end carrying value goodwill/brands
In € mln Goodwill Brands Total
Grocery - France 10.4 9.1 19.5
Grocery - UK (Kallo / Clipper) 11.1 10.5 21.6
Grocery - Benelux 4.6 - 4.6
HFS - Allos 9.3 2.1 11.4
HFS - Tartex - 1.2 1.2
Carrying value year end 2012 35.4 22.9 58.3
16
At year end 2012: no carrying value of goodwill and/or brands at Grocery Italy, Grocery Germany, HFS France, HFS Benelux, IZICO and ABC
Cash flow 2012
17
22.2 (42.3)
Sources
(6.1) Dividends paid
Uses
I ncrease working capital
20.1
I ncrease of net
debt (* * )
Net Investments (* )
(2.5)
22.2
(26.1)
Cash flow from
earnings
(7.6)
Derivatives and FX
Net debt / Leverage ratio
0
25
50
75
100
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
0
1
2
3
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
18
Net debt
Leverage ratio
€55 mln
1.7x
In € mln
Piet Hein Merckens (CEO)
• Closing remarks
19
Looking forward
2012 was a turbulent year for the global economy
Organic food markets continue to trend positively
We have made clear progress in numerous areas, however not all initiatives have resulted in desired outcome
We have run a connected leadership development programme for our top-60
We have initiated a comprehensive transformation programme As of 2014 €15 mln of savings p.a.
All the right actions, full of confidence these will bear fruit
2013 will be another challenging year: “Store is open while we are renovating and innovating”
20
Appendices
21
Bridge - revenue growth 2012
670
680
690
700
710
720
730
22
In € mln
(2.1).% 2.8% (4.2)%1.8% (0.2)%
0.7%
Autonomous revenue growth
2.6% 0.7%
Bridge: EBITE EBIT
-50
-40
-30
-20
-10
0
10
20
30
2011
Gro
cery
HFS
I ZIC
OABC
Corpo
rate
EBI T
E
Exce
ptional
s
Impai
rmen
ts
2012
23
In € mln
€23.7
€(45.8)
€(5.0) €(0.5) €(3.6)€4.0 €0.2 €18.8 €(17.8)
€(46.8)
-40
-20
0
20
40
Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 24
Working capital
0
20
40
60
80
Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12
24
4 quarter average working capital
q-on-q movement working capital
Cash flow Q4 2012
25
3.7 (2.1)
Decrease working capital
1.6 (1.6) Net I nvestments
(0.5) Derivatives and FX
Cash flow from earnings
Sources Uses
Decrease of net debt
2.1
(1.6)
A very sound financial position
In € mln Dec 12 Dec 11
Assets
Property, plant and equipment 77.4 86.4
Intangible assets 66.8 90.6
Investment associates/other 1.1 1.0
Deferred tax assets 9.2 8.8
Non-current assets 154.5 186.8
Inventories 72.3 67.5
Income tax receivables - 2.2
Trade receivables 85.7 78.9
Other receivables / prepayments 15.7 24.4
Cash (equivalents) 9.7 8.2
Current assets 183.4 181.2
TOTAL ASSETS 337.9 368.0 26
In € mln Dec12 Dec11
Liabilities
Total equity 101.6 166.1
Interest-bearing loans 60.7 37.4
Employee benefits 24.1 24.0
Provisions / Deferred tax liabilities 5.4 3.9
Non-current liabilities 90.2 65.3
Bank overdrafts / current debt 1.4 2.9
Interest-bearing loans/borrowings 2.5 0.1
Provisions 16.8 3.3
Income tax payables 0.7 0.5
Trade payables 68.3 70.5
Non-trade payables/accrued expenses 56.4 59.3
Current liabilities 146.1 136.6
TOTAL EQUITY & LIABILITIES 337.9 368.0
Financials Q4/FY - guidance 2013
Financials Q4
Net financing costs €(1.1) mln Q4-11: €(0.9) mln
Income tax expenses €1.2 mln Q4-11: €1.7 mln
Capex €(1.2) mln Q4-11: €(3.3) mln
Financials Full Year
Net financing costs €(3.8) mln FY-11: €(3.5) mln
Income tax expenses €(3.9) mln FY-11: €1.5 mln
Capex €(5.7) mln FY-11: €(10.2) mln
Guidance 2013
Net financing costs €(3)-(4) mln
Effective tax rate around 35%
Capex €(8)-(10) mln
Depreciation and amortisation €(14) mln
Non-allocated expenses (incl. corporate) €(11) mln
27
Royal Wessanen nv
Q4 2011
Amsterdam, 23 February 2012