wessanen q3 2014 trading update
TRANSCRIPT
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Q3 2014 results
Analyst. investor & media call 24 October 2014
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Our vision: We are building a European champion in healthy and sustainable food
ORGANIC FAIRTRADE VEGETARIAN NUTRITION
HEALTHY AND SUSTAINABLE FOOD
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5 Sources of value creation
Grow core brands
Acquire selectively
Green & Entrepren
eurialCulture
Upgrade operations
Divest non-Core
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Q3 / 9m key figures
In € mln Q3 2014 Q3 2013 9m 2014 9m 2013
Revenue 106.4 98.6 325.3 305.4
Autonomous growth 6.7% 3.3%
Normalised EBIT 4.9 3.8 22.3 17.2
as % of revenue 4.6% 3.9% 6.9% 5.6%
EBIT 4.9 3.6 21.6 15.4
Profit from continuing operations 2.9 (1.6) 12.4 3.3
Profit/(loss) from discontinued operations 2.8 5.3 39.3 4.3
Profit for the period 5.7 3.7 51.7 7.6
Earnings per share 0.07 0.05 0.68 0.10
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Grow own brands
Demand for healthy and sustainable food continues to rise
Core brands performed well
Six brands growing double-digit
On the back of new product launches and increased distribution
A&P investments increased in the quarter
TV commercials for Bjorg, Alter Eco, Zonnatura
In store and online activation
Grow core brands
Acquire selectively
Green & Entrepren
eurialCulture
Upgrade operations
Divest non-Core
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Dairy alternatives
Multi country
Sweets in between
Bread replacers
Breakfast cereals
Key innovations H2 2014
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Key innovations H2 2014
Hot drinks
Savoury spreads
Sweet spreads
Cold drinks & juices
Multi country
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Zonnatura - What happened to our food?Zonnatura wants consumers to wonder about what happened with their food
10 new TV commercials being aired, each having its own topic
Hosted symposium for 30 food bloggers and journalists
Launch of 30 new products in Q3
Most are based on products already successful in our other markets
Growth of distribution at grocery (e.g. Albert Heijn, Jumbo, Superunie) and drug stores (e.g. Etos)
Including 3 kinds of sugar and artificial added fibres
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Upgrade operations
Excellent data management (SAP)
New operations director started as of September
Integrating manufacturing, supply chain & central sourcing
Supply chain projects (logistics)
Reduction non-quality costs through sales and operational planning (S&OP)
Increase filling rate of factories; run on-going productivity projects
Bundle volumes with portfolio alignment & SKU reduction program
Grow Core brands
Acquire selectively
Green & Entrepren
eurialCulture
Upgrade operations
Divest Non-Core
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Green & entrepreneurial culture
Top Teams: excellence in execution and expert in sustainable food
Run business as one 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
Conducting a qualitative assessment through stakeholder dialogue to define material sustainability topics
Grow Core brands
Acquire selectively
Green & Entrepren
eurialCulture
Upgrade operations
Divest Non-Core
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ABC - business review
Classified as discontinued operations as of 30 September
We have commenced a divestment process
Grow Core brands
Acquire selectively
Green & Entrepren
eurialCulture
Upgrade operations
Divest Non-Core
In US$ mln Q3 14 Q3 13 9m 14 9m 13
Revenue 32.6 37.9 105.9 117.2
Normalised EBIT 3.1 (2.7) 10.2 (4.2)
as % of revenue 9.5% (7.1)% 9.6% (3.6)%
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Closing remarksExecute strategy to transform into focused European player in healthy & sustainable food
EBITE to increase in 2014; increase in EBITE Branded in H2 (after increase in H1 as well)
Core brands growing profitable
On the back of new products launches and increased distribution
Increased spending on marketing in the quarter
Divestment process ABC initiated, last non-core operation
A unique contribution to sustainability
A sound financial position
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Restated figures - 2013 and Q1/Q3 2014Wessanen (in € mln) Q1 13 Q2 13 Q3 13 Q4 13 FY 13 Q1 14 Q2 14 Q3 14
Revenue 101.8 105.0 98.6 101.9 407.3 109.9 109.0 106.4
EBITE 8.1 5.3 3.8 2.3 19.5 9.2 8.2 4.9 Exceptional items
(0.4) (1.2) (0.2) (4.5) (6.3) (0.1) (0.6) -
EBIT 7.7 4.1 3.6 (2.2) 13.2 9.1 7.6 4.9
Branded (in € mln) Q1 13 Q2 13 Q3 13 Q4 13 FY 13 Q1 14 Q2 14 Q3 14
EBITE 8.9 5.6 4.2 3.9 22.6 10.0 8.1 5.5 Exceptional items (0.4) (1.2) - (4.7) (6.3) (0.1) - -
EBIT 8.5 4.4 4.2 (0.8) 16.3 9.9 8.1 5.5
Non-allocated (in € mln) Q1 13 Q2 13 Q3 13 Q4 13 FY 13 Q1 14 Q2 14 Q3 14
EBITE (0.8) (0.3) (0.4) (1.6) (3.1) (0.8) 0.1 (0.6) Exceptional items - - (0.2) 0.2 - - (0.6) -
EBIT (0.8) (0.3) (0.6) (1.4) (3.1) (0.8) (0.5) (0.6)
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Q3 13 Q3 1495
100
105
110Q3 revenue
Branded - key figures
EBIT contributors
Gross margin (%)
Operating costs
Marketing spending
Q3 13 Q3 140
2
4
6Q3 EBITE
Volume Price/mix Acquisitions Currency Reported0%
2%
4%
6%
8%
10%Q3 revenue growth
3.5%
+8.2%
Volume Price/mix Underlying0%
2%
4%
6%
8%
10%
Q3 underlying autonomous revenue growth
2.5% 1.5%n.a.
3.9% 4.6%
8.2%
4.2%
€ mln
€ mln
2.5%
5.8%
8.3%
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A very sound financial position
In € mln Sept 14 Jun 14 Dec 13
Non-current assets 91.5 116.6 118.0
Current assets 207.8 174.6 219.7
Total assets 299.3 291.2 337.7
In € mln Sept 14 Jun 14 Dec 13
Total equity 159.8 149.6 105.4
Non-current liabilities 11.5 11.8 72.5
Current liabilities 128.0 129.8 159.8
Total equity & liabilities 299.3 291.2 337.7
-25
0
25
50
75
100
Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Net debt
-1
0
1
2
3
Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Leverage ratio
(21.3)(0.6)x
In € mln
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Q3 / 9m financials
Tax expensesQ3: €(1.6) mln Q3 13: €(4.6) mln9m: €(7.6) mln 9m 13: €(10.6) mln
In Q2 €(0.5) mln net addition to provision for uncertain tax positions
Net financing costsQ3: €(0.4) mln Q3 13: €(0.6) mln9m: €(1.6) mln 9m 13: €(1.5) mln
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Financial guidance 2014 (continuing operations only)
FY 2014 EBITE
EBITE at Branded is expected to increase in H2 2014 versus H2 2013
EBITE Non-allocated (corporate) expenses of around €(2-3) million
Financial items
Net financing costs around €(2) mln
Tax rate around 38%
Includes net addition for uncertain tax positions of €(0.5) mln in Q2
Capital expenditures €4-5 mln
Depreciation and amortisation €6-7 mln
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Wessanen overview
TSR peer group
Bonduelle Lotus Bakeries
Bongrain Nutreco
Corbion Premier Foods
Ebro Foods Sligro
Fleury Michon Wessanen
7.3%3.8%
Executive Board
CEO Christophe Barnouin (1968)
CFO Ronald Merckx (1967)
Shares 2013
Avg. # of shares 75.7 mln
EPS €0.00
Dividend €0.05
Pay-out ratio 42%
Ratios 2013
EBITE (in%) 2.6%
RoCE (in %) 7.0%
Leverage ratio 1.6 x
Debt to equity 48%
Capex to revenue 1.0%
Royal Wessanen
1765 Incorporated
1913 Royal warrant granted
1959 Listed at Euronext
Corporate Communications & Investor Relations
Carl Hoyer
+31 20 3122 140 +31 6 123 556 58
www.wessanen.com Twitter: @royalwessanen
Valuation
Market cap €360 mln (23 Oct)
Net cash €21.3 mln (30 Sep)
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Calendar 2015
Fri 20 February Q4 / FY results
Fri 27 February Publication Annual Report (online)
Thu 16 April Annual General meeting of Shareholders (AGM)
Fri 24 April Q1 trading update
Fri 24 July Q2/H1 report
Fri 23 October Q3 trading update