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Wessanen q4 2013 analyst&investor meeting 21 feb
- 1. Q4 & FY 2013 results Analyst & investor meeting Amsterdam, 21 February 2014
- 2. Agenda Wessanen: key challenges and priorities 2013 key achievements Financials
- 3. Wessanen business segmentation Revenue €184 mln (4.3)% growth RoCE 16.1% Revenue € 407 mln 2.1 % growth RoCE 14.7% Revenue €101 mln (21.9)% growth RoCE (5.6)% Branded ABC Discontinued
- 4. 2013 in a nutshell Revenue €508.5 mln EBITE €13.3 mln ‘Wessanen 2015’ completed on plan Branded = 80% revenue Our products: 90% respecting our nutritional policies Organic products 69% Vegetarian 94% Fair trade 54% of coffee, tea, chocolate sold
- 5. Wessanen vs the global food challenge 1bn people obese The rainforest disappears Too many chemicals in food Antibiotics are failing More food allergies Soil degradation 9bn people by 2050
- 6. We focus on food that is good for people and planet What we need to eat to be healthy The environmental impact of food Michel Granger Our focus
- 7. Structural growth of our markets Organic market (in € bn) 40 30 €23 bn 20 10 0 2007 2009 2011 20mln vegetarians (est.) 2013 2015E 2017E 2019E 2021E Healthy & sustainable food 5-7%
- 8. What we stand for Our mission: Healthier food, healthier people, healthier planet Our vision: We are building a European champion in healthy and sustainable food Organic Vegetarian Sustainable Food Nutritional Fair Trade
- 9. 4 pillars of healthy and sustainable food ORGANIC FAIRTRADE VEGETARIAN NUTRITION HEALTHY AND SUSTAINABLE FOOD
- 10. We have a house of strong local brands… and room for more
- 11. Situation assessment We have a solid foundation Organic and health food is a long-term growth market Trusted portfolio of brands European infrastructure in place Our core business is improving ...but value creation still limited
- 12. 5 sources of value creation Divest non-core IZICO and Distribution classified as discontinued ABC to be profitable again in 2014 Grow market share of core brands Growing markets with existing solid positions to grow Activate category expertise centres in 2-3 Wessanen markets (CBTs) Focus on core brands Increase A&P investments Acquire selectively Healthy and sustainable brands in Europe within our core categories Small to medium-sized companies Ensure synergies to increase operating margin
- 13. 5 sources of value creation (cont’d) Upgrade operations Supply chain projects (Logistics); reduction non-quality costs through S&OP Increase filling rate of factories; run on-going productivity projects Bundle volumes with portfolio alignment & SKU reduction program Green & entrepreneurial culture Run business as one Euro business (as long as it creates value), otherwise local On-going assessment of operating costs to re-invest in business Make Wessanen a ‘green place’ to work
- 14. 2014: improved quality of revenue Expected growth Branded to be held back by last year of pruning Core brands and core categories are growing Portfolio pruning to be completed (e.g. Benelux) Quality of revenue continues to improve Wessanen’s operating profit (EBITE) to increase ABC becoming profitable again Remainder of ‘Wessanen 2015’ benefits Additional sizeable step up of investments in marketing
- 16. Branded - key figures Revenue 500 450 6% +4.1% 400 3.8% 7.3% 3% 350 3.5% 300 0% 2012 110 Revenue growth 2013 9% 2013 Revenue 105 Price/mix Acquisitions Intersegment Currency Q4 13 2013 Marketing spending 2012 Operating costs 0 Q4 12 Underlying Gross margin (%) 10 90 Wessanen 2015' EBIT contributors +47% 20 95 Reported EBITE 30 +3.5% 100 Volume
- 17. Brand performance Core brands +3.1% UK Germany - - Tactical brands Agency brands Private label
- 18. Category focus is key Based on French Roll out Joint product development and x-country launch Roll-out of existing strong products VEGETARIANS (no meat, no fish but still consume eggs & dairy products) Ca 7mln 1-2mln Very similar Women, young, high level FLEXITARIANS/SEMI-VEGETARIANS (eat meat 2 times a week & less). Ca 16 mln Quite close to the Vegetarians Ca 28mln Significantly different Close to average French population: older, mid level Developing deeper consumer insight and category expertise
- 19. Clipper roll-out NETHERLANDS FRANCE Launch plan for the year overachieved by 30% Still building distribution and awareness GERMANY
- 20. Alter Eco - integration on track The Alter Eco meter Measuring positive impact of products #1 Fair trade brand in France 3.5% market share on total organic shelf Long-term partnerships with 40 cooperatives of independent farmers 6% household penetration / 35% awareness Rodolfo Cometeros Paime, cocoa producer, ACCOPAGRO Cooperative, Peru
- 21. Activation of core brands TV advertising on substituting palm oil from biscuits - sales uplift of 30% TV reportage on the 2nd biggest channel (M6) at prime time on Bjorg palm oil substitution
- 22. Activation of core brands (cont‘d) In-store theatre Trade shows Cooperation
- 23. Focus on core brands in Export Finland Lebanon Chile
- 25. New segmentation New segmentation reflects more accurately the different business models we operate Branded: German and French HFS operations (Bonneterre) All operations previously reported as Grocery Distribution: Natudis (Benelux) and Biodistrifrais (France) Non-allocated All corporate costs other than shareholder and stewardship costs are charged to the operating segments Better reflects that our corporate center mainly performs functions on behalf of and for the benefit of these operating segments
- 26. ABC- key figures Q4 traditionally a seasonally weak quarter In € mln Q4 2013 Q4 2012 H2 2013 H2 2012 FY 2013 FY 2012 Revenue 12.4 16.9 40.8 53.7 101.2 128.6 (5.3) 0.0 (7.2) 3.9 (13.0)% - (7.1)% 3.0% (0.1) 0.0 (2.4) 3.9 43.1 48.2 (5.6)% 7.9% Autonomous growth Normalised EBIT as % of revenue EBIT Average capital employed RoCE (21.9)% -
- 27. 12% ABC - performance 47% 31% 10% Little Hug continued to grow double digit Brand activation and newly introduced flavours ( Little Hug Oth fruit drinks RTD pouches Non-alc mixers RTD frozen pouch segment continued to decline >20% Daily’s performing in line with market Daily’s clear market leader (46% in 2013) Back to profitability in 2014 Numerous actions been initiated Extend listings at new customers; introduce two new RTD pouch flavours
- 28. Discontinued operations IZICO, Natudis and Biodistrifrais all classified as discontinued operations Divestment processes has commenced These are expected to be completed during 2014 Sales process Natudis progressing well Advanced discussions with Vroegop Ruhe & Co In € mln FY 2013 FY 2012 Revenue 183.9 190.7 Normalised EBIT 6.3 0.8 Profit of discontinued operations (net of tax) 4.4 (16.1)
- 29. ‘Wessanen 2015‘ Sizeable restructuring has been executed during 2013 Strategic initiatives to increase profitability Addressing low-yielding activities Cutting the tail projects Total Wessanen In total 250 FTE left Branded, Distribution, IZICO and head offices One-off costs €(19.2) million €(2.6) has been expensed in 2013 Annual cost savings of €15 million from 2014 onwards Half was realised in 2013
- 30. Financials Tax expenses: FY13 €(14.5) mln vs. FY12 €(3.8) mln €(4.5) mln - write-down deferred tax assets ABC €(2.0)mln - unrecognised income tax losses €(3.3) mln - addition to provision for uncertain tax positions Depreciation and amortisation €(9.9) mln (2012: €(9.6) mln) Capex €(5.1) mln (1.0% of revenue) €(5.6) mln in FY 12 (1.1% of revenue) Non-allocated EBIT €(3.7) mln vs. €(3.4) mln in FY12
- 31. Net debt development 2013 75 60 45 3,8 3,6 5,0 54,9 37,0 30 4,5 1,7 5,1 50,7 9,1 15 Year end 2012 Cash Provision Taxes paid Interest inflow expenses, paid after WC employee benefits Capex Acq. Alter Dividends Eco paid Other Year end 2013
- 32. Christophe Barnouin (CEO) Closing remarks
- 33. Conclusion Solid foundation in health and sustainable food …but value creation still limited 5 sources of value creation • Divest non-core • Grow market share of core brands • Acquire selectively • Upgrade operations • Green and entrepreneurial culture 2013: Core brands show strong performance 2014: Focus on driving core, finalise portfolio pruning, realise divestments