demb fy12 results media

7/31/2019 DEMB FY12 Results Media

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Date2012

ResultsFY12ResultsFY12


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DisclaimerDisclaimer

The statements contained in this document that are not historical facts are forward looking statements

within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of

1995. In addition, from time to time, in oral and written statements, representatives of D.E. MASTER

BLENDERS 1753 (the Company) discuss their expectations by making forward

looking statementsregarding the Company. Forwardlooking statements are generally but not always preceded by terms

such as "intends", expects, projects, anticipates, "likely" or believes. Forwardlooking

statements represent only the Company's beliefs regarding the future many of which are by their nature

inherently uncertain. The Company's actual results may differ, possibly materially, from those expressed

or implied in the forwardlooking statements. Consequently, the Company wishes to caution readers not

to place undue reliance on any forwardlooking statements. Among the factors that could cause the

Companys actual results to differ from such forwardlooking statements are those described in the

Registration Statement on Form F1 (Registration No. 333179839) filed by the Company with the

Securities and Exchange Commission, including the Company's ability to transition successfully to a

standalone operation, ongoing trends in the marketplace that affect the price and demand for the

Company's products, the cost and availability of raw materials as well as the outcome of the Company's

internal investigation relating to its operations in Brazil and the impact of the restatement of historical

financial results. The Company undertakes no obligation to publicly update any forwardlookingstatements, whether as a result of new information, future events or otherwise. This press release is

based on preliminary figures for the financial year 2012. The preliminary figures for the financial year

2012 have not been audited. This press release is issued while the earlier announced investigation in

Brazil has not yet been finalized. However, we do not except any further material adverse finding as a

result thereof.

FornonGAAPmeasuresseepressrelease 2


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Progressupdate Michiel Herkemij

FinancialPerformance2012 MichelCup

BusinessUpdate Michiel Herkemij

Outlook MichelCup

AgendaAgenda

3


4/52

Progress

Update

Progress

Update


5/52

KeyMilestonesKeyMilestones

Spinoffsuccessfullycompleted

OfficiallistingEuronextAmsterdamsinceJuly9

AEXindexinclusiontobeconfirmedinSeptember

MovetonewheadquartersinAmsterdamcompleted

5


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CompletionoftheBoardofDirectorsCompletionoftheBoardofDirectors

FinalnomineesfortheBoard

GeraldinePicaud

CFOofEssilor InternationalSA

FormerCFOVolcafe (ED&FManGroup)

RobZwartendijk

RetiredPresidentandCEOAholdUSA

HeldseveralboardmembershipsatlargeDutchmultinationals,

includingmorethan10yearsaschairmanatNumico

UponapprovalbytheAGMonNovember28,

theBoardwillbecomplete

6


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UpdateonBrazilUpdateonBrazil

AccountingirregularitiesinBrazilreportedonAugust1

Internalinvestigationlargelycompleted

Nomaterialnewfindingsorfinancialimpactidentified

Limitedcashoutflowexpected

Allnecessarymeasureshavebeenidentified;

implementationofremedialmeasuresstarted

7


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Strengthening theOrganization:

ActionsTaken

Strengthening theOrganization:

ActionsTaken Makingtheorganizationsimplerandmorecommercially

driven

BeginningchangesbelowExCo level

30%ofGMsinnewposition

MDcategoryteamsinstalled

Centralsalesteamforcategorymanagement

Out

of

Home:

Simplification

and

streamlining

Creatingopenandperformancedrivenculture

8


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Financial

Performance

2012

Financial

Performance

2012MichelCupMichelCup


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FinancialHighlightsFY2012FinancialHighlightsFY2012

Totalsegmentsalesup9.5%*;reportedsalesup7.6%

Strongunderlyingvolumereboundof+1.2%inQ4comparedto(4.4)%inQ3

Underlying

EBIT

margin

relatively

stable

at

12.3%

Costsavingsprogramswellontrack

NormalizedEPSat 0.45

Operatingworkingcapitalimproved220bps

10

*Onalikeforlikebasis(excludingforeignexchangeandscopeeffects)Adjusted,underlyingandnormalizedarenonIFRSfinancialmeasures.SeeourreconciliationtothemostdirectlycomparableIFRSmeasuresinourpressrelease,releasedatedAugust28,2012.


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Healthy SalesGrowth DevelopmentHealthy SalesGrowth Development

11*onalikeforlikebasis(excludingforeignexchange&scopeeffects)

Q1 Q2 Q3 Q4 FY2012

Reportedsalesgrowth 11.0 12.2 5.5 (1.0) 7.1

Green

coffee

export 14.2 13.7 (36.0) (71.1) (25.0)

Segmentsalesgrowth 10.9 12.1 9.0 6.5 9.5

%vs LY*


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StrongReboundinUnderlying

VolumeGrowthinQ4

StrongReboundinUnderlying

VolumeGrowthinQ4

12

Q1 Q2 Q3 Q4 FY2012

Totalvolume (4.9) (7.3) (8.1) 0.3 (5.0)

French

private

label (1.4) (1.3) (1.4) (0.9) (1.2)

Thailandflooding (2.4) (2.3) (1.2)

Underlyingvolumegrowth (3.5) (3.6) (4.4) 1.2 (2.6)

*onalikeforlikebasis(excludingforeignexchange&scopeeffects)

%vs LY*


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VolumesarePickingUpwhilePriceand

MixareDecreasing

VolumesarePickingUpwhilePriceand

MixareDecreasing

13

Q1 Q2 Q3 Q4 FY2012

Volume (4.9) (7.3) (8.1) 0.3 (5.0)

Price 13.0 13.3 10.6 7.6 11.1

Mix/Other 2.8 6.2 6.6 (1.4) 3.4

Segmentsalesgrowth 10.9 12.1 9.0 6.5 9.5


%vs LY*


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SalestoAdjustedEBITSalestoAdjustedEBIT

14

mln

FY2011 FY2012 %vLY

Sales 2,595 2,793 7.6%

Grossprofit 977 1,008 3.2%

Grossprofitmargin 37.6% 36.1% (150)bps

A&P (138) (143) 3.6%

A&Pasa% ofsales 5.3% 5.1% (20)bps

OtherSG&A (486) (543) 11.7%

AdjustedEBIT 354* 321 (9.1)%

AdjustedEBITmargin 13.6% 11.5% (210)bps

* 363mln and14%adjustedEBITmarginexcludingBrazilrestatements


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AdjustedEBITtoUnderlyingEBITAdjustedEBITtoUnderlyingEBIT

15

FY2011 FY2012

AdjustedEBIT 354 321

Strandedcosts (30) NA

Additional nonallocated costs (10) NA

Green coffeeexport (17) (6)

OtheritemsBrazil 2 11

UnderlyingEBIT 299 326

UnderlyingEBITmargin 12.4% 12.3%

IFRS mln


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FinancialReview RetailWesternEuropeFinancialReview RetailWesternEurope

16

FY2011 FY2012 %vLY*

Sales 1,125 1,264 11.7%



IFRS mln



17/52


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FinancialReview OutofHomeFinancialReview OutofHome

18

FY2011 FY2012 %vLY*

Sales 634 637 (0.3)%



IFRS mln



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HigherotherSG&ALargelydueto

Stand

Alone

Impact

HigherotherSG&ALargelydueto

Stand

Alone

Impact

Other

SG&A

FY

2011 (486)

Strandedcosts (30)

Additionalnonallocatedcosts (10)

Acquisition impact (8)

Others (9)

OtherSG&AFY2012 (543)

mln

19


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CostSavingsProgramsareWellonTrackCostSavingsProgramsareWellonTrack

Announced 55 75mln ofsavingsbyFY15

Additionalsavingsidentified;savingsbyFY15willbeat

thehigherendoftherange

Expecttosave 25 30mln inFY13

20


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P&LExplainedP&LExplained


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22

NormalizedEPSat 0.45NormalizedEPSat 0.45

FY2011 FY2012


Shareofprofitfromassociates 2 0

Unusualitems (32) (221)

Netfinanceincome 47 150

Tax (103) (132)

Profit 267 118

Normalizedprofitfortheperiod NA 267

NormalizedEPS() NA 0.45

Averagesharesoutstanding(mln) NA 595

mln


23/52

UnusualItemsUnusualItems

Unusualitemsamountto (221)mln andinclude:

Spinrelateditems

Restructuring

TerminationcostsrelatedtopriorSenseocontractPhilips

Newbusinessmodel

Unusualitems expectedtoamountto(55) (65)mln

in FY13

23


24/52

UpdateFinancialImpactBrazilian

Operations

UpdateFinancialImpactBrazilian

Operations Internalinvestigationhasnowbeenlargelycompleted

Noadditionalnewfindings

Impactrestatements*onprofit:

PreH1FY12 (34)mln

H1FY12 (3)mln

ImpactonprofitH2FY12

Otheritems (14)mln

Taxprovision (30)mln

TotalimpactShareholdersEquitynotexpectedtoexceedtherangeof 85 95mln

24*RestatementsofhistoricalfinancialcarveoutcombinedfinancialstatementsasreportedintheF1/prospectus


25/52

Business

UpdateBusiness

Update

Michiel HerkemijMichiel Herkemij


26/52

TheTransformationBeginsTheTransformationBegins

26

YearIII:Harvesting

Innovation

programat

cruisingspeed

Accelerationof

topandbottom

linegrowth

Innovationsin

allcategories

Investinbrands

YearI:

SeedlingYearII:

Flowering

Firstinnovations

RelaunchSenseo

Launch

cost

saving

programs

Startworking

capitalreduction

Organization


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Netherlands:

Market

Share

Continues

Upward

Trend

Netherlands:

Market

Share

Continues

Upward

Trend

Nielsendataexcludinginstants

(valueshare%)

27


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France:

Consistent

Market

Share

Gains

France:

Consistent

Market

Share

Gains


(valueshare%)

28


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Spain:

Market

Share

Stabilizes

at

Record

Levels

Spain:

Market

Share

Stabilizes

at

Record

Levels


(valueshare%)

29


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ConsumerPricesStablein

Q4

versus

Q3

FY

12

ConsumerPricesStablein

Q4

versus

Q3

FY

12

FY12

Netherlands France Spain

Q4vs.Q3(Index) 106 99 100

30


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PriceDistanceversusKeyCompetitors

Virtually

Unchanged

PriceDistanceversusKeyCompetitors

Virtually

Unchanged

Q3 Q4 Q3 Q4 Q3 Q4

Keycompetitor(Index) 120 120 86 88

Privatelabel(Index) 89 85 75 77 51 52

31

Netherlands France Spain

h l d & d ih l d & d i


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NetherlandsRoast&GroundPremium

Launch

Continues

Good

Performance

NetherlandsRoast&GroundPremium

Launch

Continues

Good

Performance

Volume*(indexed) Marketshare Q412 Differencevs.LY

Premium 105 5.2% +0.2%

Base 102 57.1% +0.3%

Total

R&G102 62.3% +0.5%

*DatathroughJune30th 32

h l d hh l d h


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NetherlandsR&GPremiumInnovationhas

Helped

to

Reverse

Downward

Trend

NetherlandsR&GPremiumInnovationhas

Helped

to

Reverse

Downward

Trend

CY2009 CY2010 CY2011 2012*

R&Gvolumegrowth(%vLY) (2)% (3)% (4)% +2%

*Sincelaunch 33


34/52

Roast&GroundRollOutStartingRoast&GroundRollOutStarting

Belgium

Brazil

September2012

June2012

Mainstreamrange Premiumrange

34


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CapsulesContinuetoProgressVeryWellCapsulesContinuetoProgressVeryWell

FY12 vLY

NetSales 112mln +142%

France Spain NL Belgium

EstimatedMarketShareof

Nespresso Capsules*10% 25% 13% 7%

*Companyestimates 35


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Country LaunchDate

Netherlands July August

Germany July August

Belgium August August

France August September

Spain September September

Brazil TBD October

RelaunchOnTrackRelaunchOnTrack

36

SaristaSarista


37/52

Sarista

October

Launch

in

the

Netherlands

Sarista

October

Launch

in

the

Netherlands

37

O t f HO t f H


38/52

OutofHome:

AFirstStepTowardsProfitableGrowth

OutofHome:

AFirstStepTowardsProfitableGrowth

Drivetopline:

Broadenproductoffering

Improveproductquality

Consistent

branding

with

retail

Increaseinnovationrate

Improveefficiency

Salesforceeffectiveness

Streamlineorganization

Simplify

processes

FocusonNetherlands,representingmorethan50%ofOOHbusiness

RestructuringannouncedJuly1,

7%ofworkforceaffectedwithanannualsavingof 5mln

38


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Outlook

2013

Outlook

2013


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GreenCoffeeCoverageFY2013GreenCoffeeCoverageFY2013

40Totalbuying 6mln bagsexcludinggreencoffeeexport

67% 64%

24%17%

ArabicaEurope RobustaEurope ArabicaBrazil RobustaBrazil

%covered

%oftotal buying 35% 28% 12% 27%


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VirtuousCircleofGrowthVirtuousCircleofGrowth

LowergreencoffeepricesandFit4Growthsavingswill

fuelmargins

Partofmargintailwindwillbereinvestedbackintothe

business

Productqualityimprovements Marketinginvestments

Speeduprolloutinnovation

41


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42

Outlook2013Outlook2013

+3%to+5%

+150to+200bps

Salesgrowth*Salesgrowth*

Underlying EBIT

margin improvement*

Underlying EBIT

margin improvement*

*Onalikeforlikebasis,excludinggreencoffeeexport


43/52

DividendDividend

Intentiontopayout25%ofnormalizednetprofitoffiscal

year2013*

IntentiontopayaninterimdividendinAugust/September

2013

Thecompanyhasnointentiontopayanadditionaldividend

overFY2012asaresultofthespinoffandthespecial

dividendpaidendofJune2012.

*Fiscal2013:July1 2012 December31 2013 43


44/52

Q&AQ&A


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AppendixAppendix


46/52

UpcomingEventsUpcomingEvents

Annualreport/20F Oct.10,2012

Q113Tradingupdate Oct.23,2012

AGM Nov.28,2012

H1FY13Results EndofFeb.2013

46

i i l i All di i l i All d


47/52

FinancialReview NonAllocatedFinancialReview NonAllocated

47

FY2011 FY2012

Salesgreen coffeeexport 187 135

EBITgreen coffeeexport 17 6

Nonallocated costs (33) (43)

AdjustedEBIT (16) (37)

IFRS mln

N Fi IN Fi I


48/52

NetFinanceIncomeNetFinanceIncome

FY2011 FY2012

Interestexpense (21) (18)

Interestincome 20 22

Netforeignexchangegain/(loss) (41) 45

Changeinfairvaluederivative

instruments 17 (9)

Pensionfinanceincome 27 38

InterestincomeonloanstoSaraLee 45 72

Totalnetfinanceincome 47 150

48

B l Sh tB l Sh t


49/52

BalanceSheetBalanceSheet

mln

49

Assets EquityandLiabilities

Equity 312

Property,plantandequipment 377 Borrowings 529

Goodwillandotherintangibleassets 387 Retirementbenefitobligations 108

Othernoncurrentassets 282 Provisions 62

Othernoncurrentliabilities 113

Noncurrentassets 1,046 Noncurrentliabilities 812

Inventories 404 Borrowings 28

Tradeandotherreceivables 448 Tradeandotherpayables 632

Cashandcashequivalents 222 Incometaxespayables 270

Provisions 66

Currentassets 1,074 Currentliabilities 996

Totalassets 2,120 Totalequityandliabilities 2,120

OperatingWorkingCapitalImprovedOperatingWorkingCapitalImproved


50/52

FY2011 FY2012

Inventories 437 404

TradeReceivables 253 275

TradePayables (265) (282)

Operatingworkingcapital 425 397

%oftotalsales 16.4%* 14.2%

p g g p p

220

bps

versus

2011

p g g p p

220

bps

versus

2011

50

IFRS mln

*BeforerestatementofBrazil18.3%,2012reflectsBraziladjustment

Adjustments Brazil H1 FY 12Adjustments Brazil H1 FY 12


51/52

AdjustmentsBrazilH1FY12AdjustmentsBrazilH1FY12

H12012*H12012

Brazil

Total

restated

Sales 1,387 1,387

Grossprofit 509 (3) 506

A&Pandother SG&A (340) (1) (341)

AdjustedEBIT 169 (4) 165

Incometax (101) 1 (100)

Profitfortheyear 71 (3) 68

51*AsreportedintheF1/prospectus

Adjustments Brazil FY 11Adjustments Brazil FY 11


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AdjustmentsBrazilFY11AdjustmentsBrazilFY11

FY2011*FY2011

Brazil

Total

restated

Sales 2,602 (6) 2,595

Grossprofit 985 (8) 977

A&Pandother SG&A (621) (2) (623)

AdjustedEBIT 363 (9) 354

Incometax (104) 1 (103)

Profitfortheyear 276 (9) 267

52*AsreportedintheF1/prospectus

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