Wessanen ppt at ing benelux conf sept2013
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Transcript of Wessanen ppt at ing benelux conf sept2013
Royal WessanenA leading European player in healthy & sustainable food
www.wessanen.com @RoyalWessanen
ING Benelux Conference LondonThursday 12 September 2013London, ING Offices, 60 London Wall
In a nutshell
Turnover €711mln (2012) | 2,064 employees (on average)
A leading European organic food player
Own operations in Benelux, France, Germany, Italy, UK + export operations
Pioneering brands | indulgence & nutritional
Well-managed supply chain | Strong focus on quality, innovations, brands
±20% own production, rest sourced from 3rd parties based on our recipes/packaging
Factories in UK (tea), Germany (vegetable spreads) (cereals/bars/spreads/honey) and Italy (soy/non-
dairy drinks)
Organic food market
Attractive growing part of food market | €22bn market
Increasing - although still low - per capita consumption
No colouring/flavouring | GMO-free | no artificial fertilisers | animal welfare
Unique certification system | grown and processed according to EU regulation
2
A long and rich history
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 (100 years ago !)
1959 - Listed on Euronext Amsterdam
2009 - Strategic reorientation focus on organic food in Europe
2015 - Marking our 250th anniversary
3
4
Portfolio approach focus on organic food
44
2009 2012
€711m
Focus and investment into core brands & categories in organic in Europe
Grocery
HFS
IZICO
ABC
Others
€1585m
1
Branded part of our Grocery and HFS business
5
Nutrition and food issues Transparency
Sustainability Weight and obesity
ORGANIC
To build the most desired brandsin Europe in our focus area
6
Healthy nutrition
Ethicalsustainable
Authentictaste
Functionalfood
Strategic objectives
7
Sales growthSales 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
Profitability
improvement
• Central sourcing savings
• Pricing strategies towards
customers
• Improve operational excellence
with SAP
• Filling own factories
EnablersEnablers
• Improve talent performance
management / building
connected leadership
• Simplify how we are conducting
business
• Activate Organic Expertise Centre
(OEC), integrate Quality
Wessanen 2015Wessanen 2015
A more integrated
consumer and customer driven organisation,
being focussed, less complex, more efficient and integrated
A more integrated
consumer and customer driven organisation,
being focussed, less complex, more efficient and integrated
‘Wessanen 2015’
1. Create more focus on our activities
• Reduction of approx. 300 FTE
• One-off costs €(21) mln cash
• Savings €15 mln p.a. from beginning of 2014 onwards
• Reduction of approx. 300 FTE
• One-off costs €(21) mln cash
• Savings €15 mln p.a. from beginning of 2014 onwards
3. Addressing low-yielding and non-performing activities Strongly reducing German grocery presence, changing go-to-market approach
Focus in Italian grocery on non-dairy (soy)
2. Reduce complexity and simplify processes• Cutting the tail / reducing number of SKUs at
− Dutch brands; √ French HFS brands; Export
Centralising quality department
• In the Netherlands, focus on one franchise formula (Natuurwinkel), to end GooodyFooods formula
Supply chain to manage our plants as of 2013 and to streamline processes
• Further increased focus on core brands and core categories
Expansion number of CBTs (category brand teams)
Split Benelux operations in branded and distribution organisation
Split French HFS operations in branded and distribution organisation
Q2 2013 performance We have to cope with uncertain economic times, low consumer confidence and
increasing unemployment
Consumer appreciation for healthy and sustainable food is continuously growing Consumers are gradually incorporating more of a sustainable agenda when making food
purchases Consumers show growing engagement with healthier food via alternative food solutions
such as organic, free from, ethical and local provinence
'Wessanen 2015' is progressing well Wessanen becoming a more profitable company, being more focused on its core
activities, more agile and more efficient Savings of €15 mln expected from 2014 onwards
ABC’s first half year performance was very disappointing
9
Looking forward
Macro economyEurope has to deal with deteriorated consumer confidence and increased unemployment Organic and natural food markets continue to trend positively
‘Wessanen 2015’Implementation running smoothlyAll progress, including FTE reductions and savings, closely monitored
H1 resultsWe have made significant progress in our core operations and IZICO
Improvement driven by own actions at our various businessesUnfortunately, ABC’s H1 performance was very disappointing. We therefore have initiated immediate short term corrective actions to return ABC to profitability in 2014.
Full year 20132013 will be another challenging year“Store is open while we are renovating and innovating”
10
Segment overview
11
Grocery
France growing, driven by Dr. Schär, Krisprolls, Gayelord Hauser For the latter, we ran a sizeable promotional campaign
Bjorg slightly up, impacted by of a temporarily category delisting at a customer
New large TV campaign to be aired in Q3 Acquisition Alter Eco closed at end of May
UK branded business posted a strong performance Market share gains in its major categories
Tea, dairy alternatives and stocks & gravies Kallo is to be rebranded into Kallø from September
Supported by social media campaign, story-telling books and sampling events
In the Netherlands, Zonnatura and Dr Schär both showed a good performance
Zonnatura’s new TV commercial "what happened to our food?" was well received
In € mln H1-13 H1-12
Revenue 144.0 138.1
Autonomous growth 1.3%
Normalised EBIT15.6 10.0
As % of sales 10.8% 7.2%
Exceptional items (1.2) (0.9)
EBIT 14.4 9.1
12
Health Food Stores (HFS)
Wholesale reporting lower sales Natudis has been growing France lower volumes
• Moving part fruit & vegetables to Biodistrifrais• Bonneterre ceased chilled and larger part fruit & vegetables
Refocus Bonneterre company going well Cutting the tail programme implemented Bonneterre and Evernat brands making inroads at specialty chains
and buying groups
Our brands showed a good performance Allos, Tartex and Bonneterre growing In total, brands do represent 2/3 of total HFS sales
Autonomous growth and operating result strongly up Volumes and gross margins up in all 3 markets Lower operating costs (first benefits ‘Wessanen 2015’) Marketing spending up due to large campaign at Bonneterre
In € mln H1-13 H1-12
Revenue 106.9 105.9
Autonomous growth 0.7%
Normalised EBIT2.8 (0.5)
As % of sales 2.6% (0.5)%
Exceptional items (0.7) -
EBIT 2.1 (0.5)
13
Export - double-digit growth in H1
Reported as part of Grocery and HFS
Small dedicated group organised by brand and geography
Multiple export markets Most important ones are Nordics, Austria, Italy, Japan, Spain, Switzerland Also includes Russia, Middle East, Far East and Australia
Export plans based on clear brand and market choices
First half year growth 11%, driven by Clipper, Allos and Whole Earth
14
CBT’s starting to deliver tangible results
Fully aligned product and packaging launch in 3 countries,
produced in own factory
€1 mln revenue (full year basis)
Additional fixed cost coverage Allos factory
15
To come
To come
Innovative concept in both channels in France, produced at own
factory, further roll-out in progress
€2 mln revenue (full year basis)
Additional fixed cost coverage Bioslym factory
CBT Cereals
CBT Dairy alternatives
Significant renovation core product across countries to
remove palm oil (consumer issues re. sustainability/health)
+12% growth on renovated products in France
CBT Sweet in between
Clipper roll-out progressing well
France in Q1, Netherlands Q3, Germany in Q4
Initial sales in France above budget
Year 1 contribution >€1 mln in revenue
France Alter Eco – leading in French fairtrade Sale and purchase agreement signed
Closing expected early June, depending on satisfaction certain closing conditions
France Alter Eco Paris-based Revenue 2012 of €16.5 mln Organic and fair trade products such as chocolate, coffee, tea and juices Developed strong partnerships with farmers’ cooperatives Around 100 products
• Marketed in grocery, HFS and out-of-home channels Multiple paid 0.2-0.3x revenue
17
Strong growth driven by
• Brand support (TV/360°)
• In-store & consumer activation
• Innovation
18
• First TV commercials since 2007
• 1st in April/May, 2nd September
• A challenger to all conventional food brands
WHAT HAPPENED
TO OUR FOOD ?
20
• 11% growth in the UK
• Integration in UK on plan
• Roll-out Europe
- France: Q1
- Netherlands: Q2
- Germany: Q3
21
• New positioning and
Communication
• New range from
March 2013
IZICO - integrated frozen foods company
Good progress in becoming one company to strengthen its position on Benelux market and in export to further improve profitability to better and more effectively cope with the challenging environment
All ‘Wessanen 2015’ actions have been completed Closure Deurne plant New structure and roles at various departments implemented Offices combined in Breda
Market: retail growing, out-of-home impacted by sluggish demand
Bicky continued to grow, while Beckers lost some market share in retail Plans to revitalise Beckers underway
In H2 2013, half of €5 mln ‘Wessanen 2015’ savings to materialse
In € mln H1-13 H1-12
Revenue 53.2 56.9
Autonomous growth (6.4%)
Normalised EBIT1.5 0.7
As % of sales 2.8% 1.2%
Exceptional items (0.2) -
EBIT 1.3 0.7
22
ABC - Little Hug’s growth offset by Daily’s
Little Hug continues to perform well Growing revenue and market share Continue to invest in brand activation Introduced new flavours Berry Blend and Apple Orchard
Daily’s maintained its clear leadership share in pouch segment Year-to-date, frozen pouches lost >20% (volume and value) No meaningful improvement foreseen for remainder of 2013 Daily’s underperformed broader RTD market
• Numerous initiatives: 6 new flavours, new campaign and grown distribution coverage.
Expected FY13 revenue breakdown Little Hug 45-50%, single serve fruit drinks >10% Daily’s 40-45% (2/3 frozen pouches, 1/3 non-alcoholic mixers)
FY2013 operational loss (EBITE) expected of US$5-10 million
FY2014, we expect ABC to be profitable again
In US$ mln H1-13 H1-12
Revenue 79.2 97.6
Autonomous growth (18.8%)
Normalised EBIT(1.4) 6.5
As % of sales (1.8)% 6.7%
Exceptional items (0.5) -
EBIT (1.9) 6.5
23
Retailer Support64th of July promotion
Financials
25
Q2/H1 P&L in more detail
In € mln Q2 2013 Q2 2012 H1 2013 H1 2012
Revenue 187.3 201.0 359.8 371.6
Autonomous growth (6.8)% (4.1)%
Gross contribution - - 137.9 142.4
As % of revenue - - 38.3% 38.3%
Normalised EBIT 4.8 6.2 14.1 9.1
As % of revenue 2.6% 3.1% 3.9% 2.4%
Exceptional costs (1.3) (0.3) (2.4) (0.3)
EBIT 3.5 5.9 11.7 8.8
Net financing costs (0.6) (0.7) (1.0) (1.3)
Income tax expenses (4.1) (2.1) (6.8) (2.9)
Net result attributable to equity
holders
(1.2) 3.2 3.9 4.9
26
Organic growth in perspective
27
In € mln Q2 13 H2 13 H1 14
Grocery (2) (5) (2-3)
• Germany - different go-to-market model (0.5) (1) -
• Italy - withdrawal Bjorg and Efficance brands (0.3) (0.6) (0.3)
• UK - ending private label contracts (1) (2) (1)
• NL - terminating Biorganic (0.3) (1.5) (1)
HFS (1) (6) (3-4)
• France - cutting the tail / ending frozen, F&V (0.5) (4) (3)
• NL - cutting the tail (0.5) (1) (1)
• Germany - SAP implementation 1 July 0.7 (0.7) n.m.
IZICO (3) (7) (4)
• Closing Deurne plant / cutting the tail
H1 gross profit / normalised EBIT
Gross profit in line with last year Grocery
• Underlying improvement HFS
• Growth brands and deliberate downsizing part of wholesale operations IZICO
• Ending low-margin Halal and breadcrumb activities ABC
• Lower pouches sales and provisions for customer returns / obsolete inventory
Marketing spending Grocery
• France - phasing towards Q1 and Q3 (new TV campaign to be launched)• UK - due to large media spending on both Clipper and Kallo last year• Germany - revised go-to-market approach
HFS • Due to a large billboard/poster campaign in France
At ABC and IZICO in line with last year
Warehousing / logistics / general & administrative Lower general and administrative costs Lower warehousing and logistical costs
28
‘Wessanen 2015’ - cash costs
29
In € mln Q4 2012 Q1 2013 Q2 2013 H2 2013
Grocery (3.0) (0.2) (0.8) (0.5-1)
HFS (6.5) (0.5) (0.2) (0.5-1)
IZICO (6.2) (0.2) - (0.5-1)
Non-allocated (0.6) - - -
Costs ‘Wessanen 2015’ (16.3) (0.9) (1.0) (2-3)
First half 2013 cash flow
30
20.8
(3.6)(3.7)
(8.4)
(15.7)
(3.9)
(3.6)
(18.3)
Successful renewal credit facility
0
25
50
75
100
Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 130
1
2
3
Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 1331
Three-year secured €100 million revolving credit facility Current facility scheduled to mature in Feb. 2014
Uncommitted options to Extend facility for in total two years Increase facility up to maximum aggregate amount of €25 mln (‘accordion facility’)
Pricing grid narrowed to 110-205 bps over Euribor Based on leverage ratio (Net debt/EBITDAE) (max. remains at 3.0x)
Increase in debt (€74.6 mln vs. €62.7mln at end of Q1) due to: Cash out provision expenses €8.4 mln, Alter Eco €5.0 mln and dividend payments
€3.8 mln
Leverage ratio: 2.0XNet debt: €74.6
A very sound financial position
In € mln Jun 13 Dec 12
Assets
Property, plant and equipment 74.8 77.4
Intangible assets 66.9 66.8
Investment associates/other 1.2 1.1
Deferred tax assets 9.0 9.2
Non-current assets 151.9 154.5
Inventories 74.5 72.3
Income tax receivables 0.2 -
Trade receivables 111.0 85.7
Other receivables / prepayments 17.7 15.7
Cash (equivalents) 14.7 9.7
Current assets 218.1 183.4
TOTAL ASSETS 370.0 337.932
In € mln Jun 13 Dec 12 ¹
Equity and liabilities
Total equity 112.5 110.8
Interest-bearing loans 0.3 60.7
Employee benefits 13.0 15.1
Provisions / Deferred tax liabilities 6.3 5.2
Non-current liabilities 19.6 81.0
Bank overdrafts / current debt 13.9 1.4
Interest-bearing loans/borrowings 75.1 2.5
Provisions 10.7 16.8
Income tax payables 2.9 0.7
Trade payables 72.9 68.3
Non-trade payables/accrued expenses 62.4 56.4
Current liabilities 237.9 146.1
TOTAL EQUITY & LIABILITIES 370.0 337.9
¹ Restated for effect of IAS 19 (revised 2011)
Financials Q2 - guidance 2013
Financials Q2
Net financing costs €(0.6) mln Q2 12: €(0.7) mln ¹
Income tax expenses €(4.1) mln Q2 12: €(2.1) mln
Capex €(2.3) mln Q2 12: €(1.7) mln
Financials H1
Net financing costs €(1.0) mln FY 12: €(1.3) mln ¹
Income tax expenses €(6.8) mln FY 12: €(2.9) mln
Capex €(3.6) mln FY 12: €(3.6) mln
Guidance 2013
Net financing costs €(2) mln
Effective tax rate 53% ²
Capex €(8-10) mln
Depreciation and amortisation €(13-14) mln
Non-allocated expenses (incl. corporate) €(11) mln
33¹ Restated for effects of IAS 19 (revised 2011)² Excludes recognition of provision for uncertain tax positions in Q2 2013 of €1.1 million
Sustainability
34
Wessanen business principles
Compliance with laws: being a responsible partner in society, acting with integrity towards all stakeholders and others who can be affected by our activities
Environment: in line with commitment to sustainable development, we will do all that is reasonable and practicable to minimise adverse effects on the environment
Product safety: we aim at all times to supply safe products and services
Free market competition: we support free market competition as basis of conducting business; we observe applicable competition laws and regulations
Child, bonded and forced labour: under no circumstances we are making use of forced or bonded labour; we do not employ children in violation of relevant conventions of ILO
Human rights: we support and respect human rights and strive to ensure that our activities do not make it an accessory to infringements of human rights
35We expect suppliers and business partners to comply with the above principles
Commitment to minimise environmental impact
Committed to minimising impact on environment by measuring and monitoring the effects of our operations
All our organic products are free of GMO
We are working on reducing our CO2 footprint and usage of water
Additionally, organic products do not use pesticides, therefore contributing to a decrease
ISO 14001 is an internationally recognised standard for embedding processes to analyse and reduce our impact on the environment
36
Additional information at www.wessanen.com on
sustainability, such as
GRI G3 table | Performance fact sheet
Wessanen’s supply chain
37
What is organic?!
Strict criteria to be allowed to be labelled organicDemonstrably free from GMO, pesticides and growth hormonesStrict rules on animal welfareSevere restrictions on fertilisers, herbicides and pesticidesSevere restrictions on additives and processing aids
All about being produced and processed in line with organic principles
Organic products promote health and well-being
Holding benefits for the planet and for future generations
All about nutrition and taste !
Organic food is controlled by a unique European certification system
At Wessanen, our vision is to make our organic brands most desired in Europe
38
“Sustainability is an essential and
natural part of our daily work.”
Palm oil - member RSPO
Palm oil is important, versatile raw material for food
Only be cultivated in tropical areas of Asia, Africa and South America
Concerns that demand causing expansion of plantations into eco-sensitive areas
RSPO member (Roundtable on Sustainable Palm Oil)
Global multi-stakeholder initiative
Encouraging sustainable production/use palm oil
Wessanen commits to organisation’s objectives
In 2011, we developed policy to govern palm oil sourcing and guidelines for implementation in partnership
with our suppliers
Committed to switching palm oil to RSPO certified sustainable palm oil during 2012-13
RSPO certified segregated palm oil for organic
GREEN PALM certificates for conventional
39
Organic Expertise Centre (OEC)
Establishment internal expertise center in 2010 To stimulate exchange of knowledge / experience that is widely available
within Wessanen To educate and inspire our internal / external stakeholders in organic values To implement and roll-out sustainability strategy
Specialists join forces and work on pan-European issues
To legitimise our position in organic world by championing the organic case
Focal areas will be: Training (incl. training package for newcomers)
Knowledge building by teaming up with external researchers and experts
Lobbying to promote organic food
Communication for more general awareness / knowledge of organic food
Hosting annual Organic day for all employees (5 Sept 2013)
40
Employee engagement WEacademy
2012 Leadership development programme Focus on strategy execution, connected leadership
Employee turnover is a key focus area
Competency model deployed Defines behaviour expectations for all employees Translates ambitions/values into behaviour conventions and
skills
0
40
80
120
2009 2010 2011 2012
Injury severity rate
0%
25%
50%
75%
100%
Executives Managers Associates
Men Women 41
0
2
4
6
8
2009 2010 2011 2012
Injury frequency rate
Royal Wessanen nv