Emmi: On track for further growth...HelveaBad Ragaz, January 2012; Emmi: On track for further growth...
Transcript of Emmi: On track for further growth...HelveaBad Ragaz, January 2012; Emmi: On track for further growth...
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Helvea conference, Bad Ragaz
Reto Conrad, CFO Emmi Schweiz AG
Bad Ragaz, 12 January 2012
Emmi:On track for further growth
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Emmi in brief
Appendix
Key success drivers
Key financials and outlook
Investments and innovation
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Page 3Helvea Bad Ragaz, January 2012; Emmi: On track for further growth Page 3
Vision ß Long-term success as an independent company in openmarkets
Market positioning ß No. 1 among Swiss milk processors
ß The top company for Swiss cheese, both withinSwitzerland and abroad
ß A leading company in Europe for premium dairy products
Growth ß 2 – 3 % (innovations, gains in market share and smallacquisitions)
Profitability ß 2.5 – 3.5 % net profit margin (new guidance)
Shareholders’ equity ß Equity ratio of at least 40 %
Independent and successful in open markets
Strategy and vision
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Page 4Helvea Bad Ragaz, January 2012; Emmi: On track for further growth Page 4
BackgroundStrategic pillars
Success factors
ß Critical company size/ key international playerß Early, proactive
adjustment to marketdevelopmentsß Close customer
relationship beyondprice; reduction of interchangeabilityß Competitive pricing/
"Fitness for European market"
ß Swiss market saturated; international growthß Market liberalization in
all segmentsß Discrepancy vis-à-vis
EU milk priceß Competition consolidationß Customer consolidationß Intensified price pressure
nationally / internationally
Emmi wants to become an international player withcompetitive structures
Defence of positionwithin Switzerland
International growth
Cost management
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Page 5Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Dairy products27.8 % (CHF 365 Mio.)
Other products and services
6.7 % (CHF 87 Mio.)
Powder/concentrates3.3 % (CHF 44 Mio)
Cheese31.5 % (CHF 413 Mio.)
Fresh cheese7.1 % (CHF 92 Mio.)
Fresh products23.6 % (CHF 309 Mio.)
Product groups (net sales 1HY2011)
Broadly based product portfolio
Total net sales 1HY2011: CHF 1310 Mio.; Total 2010: CHF 2 684 Mio..
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Page 6Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
One Word EquityEmmi
Product Brands
One Word EquityBrands
Emmi PositionStatement
Original WellbeingInspirationRefinement
IndulgenceSwiss & local
jewels
Strengthening of brand concepts
Emmi’s house of brands
GenuinePremium Indulgence
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Page 7Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Most important production sites in Switzerland
Constantly improved productivity and efficiency
Emmen LU
Kirchberg BE
Landquart GROstermundigen BE
Langnau BE
Dagmersellen LU
Kirchberg BE
Suhr AG
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Page 8Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Expansion through subsidiaries and cooperations
International base
Canada
France SwitzerlandSpain
United Kingdom
Germany
Austria
Benelux
43% Kaiku
USA, Monroe, WIEmmi Roth Inc.
Penn Yan, NYCASP
USA, Arcata, CACypress Grove Ch.
ItalyRoverè della Luna
ItalyRancio Valcuvia
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Emmi in brief
Appendix
Key success drivers
Key financials and outlook
Acquisitions and innovation
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Page 10Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Focus in 2011
CH: Optimized product portfolio; Intl: mix of local products and Swiss exports
Switzerland: Strong brand conceptsß Organic growth with high value brands
ß Successful launch of new products: Emmi Milk Shake, Emmi Mini Marinati
ß Elimination of low-margin generics
ß Reduction of 3rd party logistics services
ß Extensive tailor-made product and services packages for the trade
ß Additional cost saving initiatives due to the rough market environment
Stable market share
International: Successful acquisitionsß Extended distribution with recently
acquired local brands (Onken, Roth, Cypress Grove Chèvre, Bontà Divina)
ß Focussed marketing for exports out of Switzerland
ß Price increases to compensate for currency disadvantages
8 – 12 % growth in sales
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Page 11Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
0
10
20
30
40
50
60
70
80
90
100
2006 2007 2008 2009 2010 2011
CH ExportSource: quantity ordered from our plants
Key brand: Emmi Caffè Latte
Emmi Caffè Latte continues to grow
Million cups
Estimate
ß Growth 1HY 2011: + 6.2% (Switzerland +11%, Intl. + 4%)
ß 2011 as a whole: Single-digit increase in sales is realistic
2011:Solid growth in key markets likeSwitzerland, Austria, Spain and UK
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Page 12Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Achievements in 2011 Activities for 2012
Results 2011: Double-digit growth in volume and salesPotential going forward: at least high single digit growth
ß Intregration completedß New marketing team set upß Various promotion activities with tradeß New limited edition “Sicilian Lemon”
on sale since August
ß Removal of Dr. Oetker branding from all pots from August
ß TV sponsorship “Let’s do lunch” on ITV1 August / September
ß Sharpened brand positioning (Honest Tasty Pleasure)
ß New packaging by May
ß Extensive campaign starting in June(Print, TV, social media)
ß New products: two limited editions,additional product range
ß Clear channel strategy
Recently acquired:Key brand Onken
No. 1 within branded big-pot yogurts in the UK
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Page 13Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Achievements in 2011 Activities for 2012ß Sales specialization: food service,
retail and specialty retail
ß Increasing range expertise in Swiss export cheese and locally produced cheese
ß Relaunch of all "Swiss" products in red and white packaging (August)
Positioning as the expert for specialty cheese
ß Cheese education program in the food service sector –> partnerships with key chefs and Culinary Institute of America
ß Recipe contest to all Chefs
ß Various Gruyère promotions, also in retail
ß Launch of new types of fondue, also using social media
Recently acquired:Key brand Roth cheese
US market: Wide range of cheese and fresh products
Four-year average growth: Market 5.5%, Emmi Roth 15%Potential going forward: Growth clearly above market, assuming that market growth will be slightly more moderate
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Page 14Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Emmi-Roth USA: Cheese experts for the food service industry
Activities for restaurant chains
ß Culinary advisory services- infrastructure- product range- nutrition facts- menus
ß Cooking classes for Chefsß Development of recipesß State-of-the-art test and show kitchen
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Page 15Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Achievements in 2011 Activities in 2012
Results 2011: Solid double-digit growthPotential going forward:Solid double-digit growth
ß New range “The Flash Back Family”ß Strong social media presence ß New trends (e.g. cheese matching with
beer)ß Cheese “education”: recipes, adviceß Innovative marketing activities (eg.
Wedding cheese cake)
ß 20th birthday of Humboldt fogß Cheesemonger’s education programß Website re-do, blog launch, content
creation for social mediaß Increased number of tasting eventsß Finalize expansion projects
Expansion of cheese range in the US
Recently acquired:Key brand Cypress Grove Chèvre
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Page 16Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Recently acquired:Key brand Bontà Divina
A-27 SpA offers new business opportunities
Achievements in 2011 Activities for 2012ß Assessment synergies in Benelux & UKß Re-definition of marketing mixß Redesign of packagingß Development of new products in the top-
range Bontà Divina Deliziaß Evaluation of synergies in further
markets
ß Integration into Emmi’s booksß Definition of synergy potential in
Emmi's key marketsß Merging of sales organizations
1st priority: Germany starting Jan 1, 2012ß Definition of investment case for
2012 and 2013
Results 2011: Double-digit growthPotential going forward: Solid double-digit growth
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Page 17Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
0 50 100 150 200
2010
2009
2008
2007
2006
2005
Emmi's expansion in the premium dessert market
A-27 SpA is well established in Emmi's key markets
Million portions
Production volumes Most important markets (2010)
ß Maximum capacity was reached in 2009
Belgium; 6%
Australia; 2%
Netherlands; 2%
France; 44%
Germany; 14%
UK; 12%
Italy; 20%
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Emmi in brief
Appendix
Key success drivers
Key financials and outlook
Investments and innovation
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Page 19Helvea Bad Ragaz, January 2012; Emmi: On track for further growth Page 19
International Switzerland
CHF million
1133 1479
256
414 447
587
18261465 1583
444
509
0
500
1,000
1,500
2,000
2,500
2002 2003 2004 2005 2006 2007
1389
1879 19262027
23352501
2008
3,000
1914
2671 2619
626
2045
2009
675
1944
50%
50%
In 4-6 years
732
1952
2684
2010
Sales 2002 - 2010 and the long-term goal
Continuous growth with medium-term 50/50 ratiointernational and Switzerland
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Page 20Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
0
50
100
1HY2007 1HY2008 1HY2009 1HY2010 1HY2011 mid-term
Production abroad Export CH
75%
25%
65%
35%
54%
46%
62%
38%
74%
26%
Percent
Important acquisitions2006: Trentinalatte (Italy)2009: Roth Cheese (US)2010: Cypress Grove Chèvre (US)
Fromalp (CH)2011: Onken, yogurt (Germany)
A-27, desserts (Italy)
Trend (depending on currency situation)
International markets: Percentage shares of export business and locally produced business 2007 - 2011
International markets: Higher increase in share of locally produced business
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Page 21Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Investments as a prerequisite for further growth:Italy
New factory for dessert production
Type of investmentProduction facilities in addition to existing A-27plant in Northern Italy
PurposeMeet increasing demand for premium desserts
Magnitude and timingß CHF 15 million investment in 2012/2013ß Double capacityß Production to be up and running by end 2013
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Page 22Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Investments as a prerequisite for further growth:USA
Additional capacity for goat cheese production
Type of investmentNew creameryNew goat farm with 200 animals 2012 (600 in 2013)
PurposeMeet increasing demand for goat cheese, significant expansion of production capacity
Magnitude and timingß CHF 6 million investment in 2012 ß Double capacityß Production to be up and running by end 2012
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Page 23Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Investments as a prerequisite for further growth:Switzerland, Kaltbach
New capacity for fresh goat cheese production
Type of investmentExpanded production facilities
PurposeIncrease efficiency by producing Bettex cheeses(acquired end 2010) in Kaltbach
Magnitude and timingß CHF 4.5 million investment in 2012ß Production to be up and running by end 2012
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Page 24Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Investments as a prerequisite for further growth:Switzerland, Saignelégier
Additional capacity for Tête de Moine Cheese
Type of investmentAdditional building with state-of-the art solar system
PurposeIncrease capacity for Tête de Moine affinage
Magnitude and timingß CHF 8 million investment in 2012ß To be up and running by end 2012
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Page 25Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Possible routes for acquisitions
Brand Jewel
Stra
tegi
c/In
tern
atio
nal
Tact
ical
/Sw
iss
Possible
CH
F1’
000
mio
. C
HF
50 M
io.
TechnologyLeader / Added
Value PL
no
Possible
Market Synergies/Efficiency
Rutz Käse
Roth Cheese/Fromalp
Organic
Biedermann
Possible
Regional /competion of product range
Molkerei Basel
Onken
BontàDivina
CypressGrove
Focus on existing Emmi international key markets
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Page 26Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Image shaped through innovative brand concepts
The culture to support innovations
2003
Benecol
2005 2007
Minicol
Choco Latte
Swiss Müesli
Luzerner Yogodu
Kaltbach Le Gruyère
MC Neil Benecol Drink
Emmi Caffè Latte Lassi
2004 2006
Création Yoghurt
Kaltbach Raclette
SwissAlp Käse
Winzer
2008
Gala Mousse
Emminent
2009
Emmi Caffè Latte Zero
Energy Milk
Mozzarella
Luzerner Scheiben
Tigre
Yogi Drink
2010
KaltbachExtra
Emmi CaffèLatte Intenso
2011
Milk Shake
Mini Marinati
Yogurt Milk
Kaltbach Fondue
Fondue withoutalcohol
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Page 27Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Trend scouting to back up innovations
ß Indulgence
ß Wellbeing / Health
ß Convenience
ß Sustainability
Lactose Free „All Natural“ Toni
Major trends in the food industry
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Emmi in brief
Appendix
Key success drivers
Key financials and outlook
Investments and innovation
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Page 29Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Amounts in CHF millions 1HY11 1HY10 1HY09 1HY08 1HY07Net sales 1,310 1,275 1,281 1,289 1,199Earnings before interest, taxes, depreciationand amortization (EBITDA) as % of net sales
101.0
7.7
104.2
8.2
84.6
6.6
85.7
6.6
68.2
5.7
Earnings before interest and taxes (EBIT)as % of net sales
57.04.4
60.74.8
44.73.5
47.93.7
32.02.7
Net profitas % of net sales
35.22.7
39.93.1
32.82.6
26.62.1
22.71.9
Headcount (FTEs) 3,614 3,542 3,504 3,351 3,337
Overview of key figures
1H2011 earnings exceed 2009 levels
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0
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40
60
80
100
120
31.12.08 / 31.12.09 31.12.09 / 31.12.10 31.12.10 / 30.6.11
Exchange rate-driven sales decline since 2007
Sales decline of CHF 120 million in 2.5 years
CHF millions
ß With a stable exchange rate since the beginning of 2009, export sales would have been 1/6 higher!ß 2011 half-year decline already
higher than in 2010 as a whole
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Page 31Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
1683 17291831
16551635
47.9 49.6
56.553.855.3
0
300
600
900
1200
1500
1800
2007 2008 2009 2010 20110
10
20
30
40
50
60
70
Total assets in CHF millions Equity ratio (%)
In CHF millions as %
Target equity ratio in %
ß Equity ratio remains high, considerably in excess of target
ß Basis for further financing remains very solid
Equity ratio in first half of 2011
Financing basis continues to be very stable
2007 – 2010: 31.12.; 2011: 30.6.
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Page 32Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Growth incl. acquisitions, profit
Outlook Outlookcurrent situation as at 31.3.2011
ß Group sales 2 - 3 % 3 - 5 %
ß Sales Switzerland 0 - 2 % 0 - 3 %
ß Sales Intl. 8 - 12 % 10 - 15 %
ß EBIT, CHF million 120 - 130 120 - 140
ß Net profit margin 2.5 - 3 % approx. 3%
(Figures assume exchange rates as at the second half of August 2011 and constant raw milk prices; including known acquisitions)
Outlook for 2011 as a whole
2 - 3 % Group growth
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Page 33Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
(Figures assume constant exchange rates and raw milk prices; organic)
Growth without acquisitions, profit
ß Group sales 2 – 3 %
ß Sales in Switzerland stable
ß International sales 6 – 8 %
ß Net profit margin 2.5 – 3.5 %
No change from outlook as per 25 March 2011
Medium-term objectives
2 – 3 % organic growth per year at Group level
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Page 34Helvea Bad Ragaz, January 2012; Emmi: On track for further growth Page 34
Emmi in full speed. Now and in the future.
Alpine skiing is the perfect fit for Emmi
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Appendix 1: Sustainability
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Page 36Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Sustainability is a high priority
Emmi’s first sustainability report
ß Emmi started its sustainability initiatives back in the early nineties
ß The sustainability report complies with theGlobal Reporting Initiative (GRI) standards(reporting level C+)
ß The report is available in German and English and can be downloaded fromhttp://group.emmi.com/en/about-emmi/sustainability.html
http://group.emmi.com/en/about-emmi/
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Page 37Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
2005 2007
Dagmersellen : Switchover of various systems from heating oil to natural gas/biogas
Dagmersellen: Use of lukewarm water to cool air compressors => Reduced consumption of groundwater
Landquart : Milk cream now cooled using cold milk
2006 2010
Logistics: ongoing adaptation of delivery schedules, moderni-sation of vehicle fleet
Start of cooperation with the"Abfallbörse“(waste exchange project)
Berne: Heat generation from waste water
Molkerei Biedermann: Solar power thanks to photovoltaic installation
Emmen: New woodchip-fired steam plant
2009
Landquart: heat recovery using compressed air
Berne: heat recovery from waste gas, Energieverbund Mösli
2008Fromco Moudon:Heat generation using newcool air compressors
Emmen production facility: Heat generation using ventilation energy
Sustainability is a high priority
Key environmental measures 2005 to 2010
Bever: Introduction of a solar system
Continuous energy optimization measures in the six largest sites
2011
86% of large trucks at lowestemission level (EURO 5)
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Page 38Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
* Emmi estimate
82 81 80 7979 7770
0
20
40
60
80
100
2007 2008 2009 2010
Objective Actual Emmi
Index
2000
65-70*
CO2 emissions: Emmi exceedsthe targets set by the Energy Agency for Industry
CO2 emissions reduced by 30% within 10 years
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Page 39Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
WaterWaste to incinerationplant
Electricity
Dotted line = product sales as a benchmark
2008 2009 2010
100
90
80
88.0
89.9
92.396.9
97.194.8
98.6
Index
Environmental index Emmi Group 2008 - 2010
Disproportionate decline in emissions
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Appendix 2: Market background
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Page 41Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Per-capita consumption of yogurt and cheese
Stable in central Europe, upwards trend in UK, US and Asia
stable22.7 kg8.5 kgItaly
up2.5 kg**n.a.Japan
specialty cheese up; yogurt up
18.0 kg5.2 kg*US
Yogurt: overall stable, big potup; specialty cheese: up
6.0 kg10.6 kgUK
stable22.8 kg17.8 kgGermany
stable21.5 kg18.2 kgSwitzerland
TrendCheeseYogurtMarket
*2007, all others 2010** estimate
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Page 42Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Direct suppliers Mittelland, Berne, Northern andEastern Switzerland
Central SwitzerlandMilk ProducersZMP
Others
Milchverbandbeider Basel MIBA
Nordostmilch
30%
Milk suppliers Switzerland
808 833 880 834 873
41 53
83
38 40
0
200
400
600
800
1000
2006 2007 2008 2009 2010
Milk Cream
Switzerlandin kg million
Milk and cream processing by Emmi
Volume of milk and cream processed by Emmi in Switzerland
Emmi processes over 900 million kg
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Page 43Helvea Bad Ragaz, January 2012; Emmi: On track for further growth
Price gap has widened again
Price handicap on raw materials Switzerland - EU
Milk price comparison Switzerland - Germany [at farm level in CHF]
35
40
45
50
55
60
65
70
75
Dez 0
9
Jan 1
0
Feb 1
0
Mrz 1
0
Apr 1
0
Mai 1
0
Jun 1
0Ju
l 10
Aug 1
0
Sep 1
0
Okt 1
0
Nov 1
0
Dez 1
0
Jan 1
1
Feb 1
1
Mrz 1
1
Apr 1
1
Mai 1
1
Jun 1
1Ju
l 11
Aug 1
1
Sep 1
1
Okt 1
1
Nov 1
1
Switzerland Ø industrial milk Switzerland Ø cheese milk Germany
appr
ox. 2
0
appr
ox. 1
5
appr
ox. 2
2
appr
ox. 1
9