Royal Wessanen Q1 2013 result presentation for analysts, investors and media; Dutch quoted company, mainly active in organic food with wellknown brands such as Bjorg, Bonneterre, Evernat, Allos, Tartex, Kallo, Clipper and Zonnatura
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Wessanen Q1 2013 roadshow ppt
1. Royal Wessanen
A leading player in organic food in Europe
Q1 2013 roadshow presentation
Updated 26april 2013
www.wessanen.com @RoyalWessanen
2. In a nutshell
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
• Factories in UK (tea), Germany (vegetable spreads) (cereals/bars/spreads/honey) and Italy
(soy/non-dairy drinks)
• Turnover €711mln (2012) | 2,064 employees (on average)
Organic food market
• Attractive part of food market | growing | low per capita consumption | €22bn market
• No colouring/flavouring | GMO-free | no artificial fertilisers | animal health
• Unique certification system | grown and processed according to EU regulation
2
3. 3
Portfolio approach focus on organic food
33
2009 2012
€711m
Focus and investment into core brands &
categories in organic in Europe
Grocery
HFS
IZICO
ABC
Others
€1585m
4. What is organic?!
Strict criteria to be allowed to be labelled organic
Demonstrably free from GMO, pesticides and growth hormones
Strict rules on animal welfare
Severe restrictions on fertilisers, herbicides and pesticides
Severe 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
4
5. 5
Nutrition and food issues Transparency
Sustainability Weight and obesity
ORGANIC
6. Our vision is to build the most desired brands
in Europe in our focus area
6
Healthy
nutrition
Ethical
sustainable
Authentic
taste
Functional
food
7. Strategic objectives
7
Sales growth
• Grow core brands
• Grow core categories
• Build strongholds in new markets
• Country specific growth strategies
• Launch fewer, bigger, better
innovations
• Execute acquisitions shortlist
Profitabilty
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 (OEC), integrate Quality
Wessanen 2015
A more integrated
consumer and customer driven organisation,
being focussed, less complex, more efficient and integrated
8. Transformation programme ‘Wessanen 2015’
1. Create more focus on our activities
• Reduction of approx. 300 FTE
• Expected one-off costs €(21) mln cash and €(7.0) mln non-cash impairment Deurne plant
• Expected savings €15 mln p.a. from 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 in branded and distribution organisation
− Benelux operations
− French HFS operations
9. Net debt / Leverage ratio
0
25
50
75
100
Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13
0
1
2
3
Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13
9
Net debt
Leverage ratio
€63 mln
1.7x
In € mln
10. A very sound financial position
In € mln Mar 13 Dec 12 *
Restated
Non-current assets 152.7 154.5
Current assets 214.4 183.4
TOTAL ASSETS 367.1 337.9
10
In € mln Mar 13 Dec 12 *
Restated
Dec 12
Reported
Total equity 115.8 110.8 101.6
Non-current liabilities 20.3 81.0 90.2
Current liabilities 231.0 146.1 146.1
Total liabilities 251.3 227.1 236.3
TOTAL EQUITY & LIABILITIES 367.1 337.9 337.9
*Restated for IAS19R
11. Q1 2013 key figures
In € mln Q1 2013 Q1 2012
Revenue 172.5 170.6
Autonomous growth (1.0)%
Normalised EBIT 9.3 2.9
As % of revenue 5.4% 1.7%
Exceptional costs (1.1) -
EBIT 8.2 2.9
Net result, attributable to equity holders 5.1 1.7
Earnings per share (EPS) 0.07 0.02
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EBIT improvement
Gross profit
Operating costs
Marketing spending
12. Q1 2013 performance
• We have to cope with uncertain economic times, deteriorating consumer
confidence and increased unemployment
• Consumer appreciation for healthy and nutritional food is continuously growing
– Consumers are gradually incorporating more of a sustainable agenda when
making food purchases
– Consumers show growing engagement with organic food
• Execution of ‘Wessanen 2015’ running smoothly
– A transformational programme to become a more profitable company
– €(0.9) mln of costs incurred; cumulative costs €(17.2) mln
– Total costs (with a cash effect) of €(21) mln expected
– Savings of €15 mln expected from 2014 onwards
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13. Q1 2013 performance (cont’d)
• Grocery continues to show healthy performance
– Most core categories showing growth
– Our brands (e.g. Bjorg, Clipper, Whole Earth) performing well
– Volume impacted by
• Lower private label sales in UK and Italy
• Withdrawal from low-yielding German and Italian grocery activities
• Positive signs visible at Health Food Stores, such as
– First indications of restructuring and refocus Bonneterre encouraging
– Allos growing sales, benefiting from its new positioning and innovations
– Benelux showing growth at existing formula and independent stores
– The Benelux operations to be split in branded and wholesale/distribution
businesses to increase focus
13
Q1 revenue
30%
41%
13%
16%
Grocery HFS IZICO ABC
14. Strong growth driven by
• Brand support (TV/360°)
• In-store & consumer activation
• Innovation
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15. • First TV commercials since 2007
• A challenger to all conventional food brands
16. 16
• 11% growth in the UK
• Integration in UK on plan
• Roll-out Europe
- France: Q1
- Netherlands: Q2
- Germany: Q3
18. 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
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19. Q1 2013 performance (cont’d)
• IZICO making good progress in becoming one company
– Deurne plant has been closed per end of March
– New structure and roles at various departments are being implemented
– Autonomous revenue up: retail growing, out-of-home impacted by sluggish demand
– Beckers and Bicky performing in line with expectations
• At ABC , Daily’s maintained its market share, despite lower volumes
– Pouches line expanded with 6 new flavours
• 3x Tropical and 3x light, now totalling 13
– Little Hug continues to grow, gaining market share
– New campaign launched
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22. Attractiveness organic food markets
European organic food an attractive, growing segment
– Size €21 bn; 2011 growth around 6%
– <3% of total European food market
Increasing consumer appreciation
Still low per capita consumption
– European Union €30 per annum
Consumers increasingly convinced of benefits of organic food
regarding health, taste and environment
Grocery and Health Food Stores channels developing at
different growth path
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23. 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
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We expect suppliers and business partners to comply with the above principles
25. 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
• Since March 2011 Member of Roundtable on Sustainable Palm Oil (RSPO)
– 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
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26. Organic Expertise Centre (OEC)
• Establishment internal expertise center - named OEC - 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
• 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
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27. 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 (99 years !)
1959 - Listed on Euronext Amsterdam
2009 - Strategic reorientation focus on organic food in Europe
2012 - To make our organic brands most desired in Europe
• 2015 - Marking 250th anniversary of Wessanen
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30. Revenue breakdown per segment
52,8
53,9
30
22,5
24,7
(1.5)%
Health Food Stores
Autonomous third party revenue growth
70,9
66,4
1.7%
Grocery
Autonomous third party revenue growth
28,2
27,8
1.4%
IZICO
Autonomous third party revenue growth
(9.9)%
ABC
Autonomous third party revenue growth
31. Financials Q1 / guidance 2013
Financials Q1
• Net financing costs €(0.4) mln Q1 2012: €(0.6) mln (restated)
• Income tax expenses €(2.7) mln Q1 2012: €(0.8) mln
Guidance FY2013
• Net financing costs €(2-3) mln
• Effective tax rate around 35%
• Capex €8-10 mln
• Depreciation and amortisation €14 mln
• Non-allocated expenses (incl. corporate) €11 mln
Revised IAS 19 – impact on FY 2012 / yearend 2012
• €0.5 mln higher personnel expenses
• €1.1 mln lower net financing costs
• Equally distributed over all four quarters
• Equity (‘OCI’) €9.0 mln higher as at yearend 2012
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