PureCircle Limited : FY15 Half Year Interim Results · By attending the presentation to which this...
Transcript of PureCircle Limited : FY15 Half Year Interim Results · By attending the presentation to which this...
PureCircle - Investor Slides - All rights reserved March 2015
PureCircle Limited : FY15 – Half Year Interim ResultsInvestors March 2015
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PureCircle - Investor Slides - All rights reserved March 2015
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Content
1. CEO Overview Magomet Malsagov, CEO
2. Financial Review William Mitchell, CFO
3. Operational Review Jordi Ferre, COO
4. Outlook Magomet Malsagov, CEO
5. Questions
AppendixStevia Fact Sheet
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1. CEO Overview
by Magomet Malsagov, CEO
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PureCircle - Investor Slides - All rights reserved March 2015
CEO Overview (1)
• Sales 1H FY15 sales increased 24% to $43m
Growth in all global sales regions
• Financing Principal facilities:
$21m repaid & $71m extended 5 years:
3% lower rate.
$43m raised to support production capacity expansion
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CEO Overview (2)• The Stevia Market Unparalleled series of milestone F&B launches and rollouts
High profile Cola roll-outs: Coca-Cola Life, Pepsi Next / True
16 markets launched or announced including major markets such as USA, Mexico, UK, Japan, France
Reformulations of other leading CSD brands
Retailers & iconic brands in diverse categories (eg Ketchups)Mintel data 2014: 2,274 new products; > 50% CAGR
• Regulatory 4 billion consumers now have regulatory access to stevia
• Innovation PCL continues to lead industry innovation and unlock market
Launch Sigma D: strong Dairy application properties
• Production Capacity Board approved $42m production capacity expansion.
Expansion Come on stream FY17
• Leaf Tight China leaf supply result in higher costs in short term
Long term actively leading diversification from China
• Sustainability Industry leading report issued by PureCircle in January
• Management & systems COO structure. ERP implementation
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2. Financial Review
by William Mitchell, CFO
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Summary Financials
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1H FY15 1H FY 14 Change
$’m $’m
Period ended 31 December
Sales 43.2 34.9 24%
Gross margin 14.5 12.3 18%
Operating profit 3.5 2.9 21%
EBITDA 6.4 5.2 24%
Net result after tax (0.9) (1.9) 53%
Net debt (52) (85) 39%
Net assets 188 141 33%
Net assets per share (U$ cents) 1.1 0.9 29%
PureCircle - Investor Slides - All rights reserved March 2015
Profit and Loss Account
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1H FY15 1H FY14 Variance Variance
$’m $’m $’m %
Revenue 43.2 34.9 8.3 24%
Cost of sales (28.7) (22.6) (6.1)
Gross margin 14.5 12.3 2.2
Gross margin % 34% 35% (1%)
Other income 0.2 0.3 (0.1)
Administrative expenses (11.2) (9.7) (1.5)
Operating profit 3.5 2.9 0.6 21%
Other expenses (2.8) (2.2) (0.6)
Foreign exchange (loss) / gain (1.1) 2.0 (3.1)
Finance costs (3.7) (4.5) 0.8
Share of joint ventures (0.2) (0.5) 0.3
Taxation 3.4 0.4 3.0
Net result after tax (0.9) (1.9) 1.0 53%
EBITDA 6.4 5.2 1.2 24%
PureCircle - Investor Slides - All rights reserved March 2015
Profit and Loss Account
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Sales 1H FY15 sales of $43m are 24% higher than 1H FY14
Growth in all sales regions
Margins Gross margin increased $2.2m to $14.5m
Gross margin % consistent at 34%
Higher China leaf prices impacting gross margins in short term
Actively leading diversification of leaf from China
SG&A included $1.5m investment to support sales growth
Operating profit $3.5m, up $0.6m (21%)
EBITDA $6.4m increased 24%, in line with sales
Finance costs $0.8m improvement: Initial benefits of lower rates on core facility
Net result 53% improvement on 1H FY14
Reflects EBITDA improvement and net movement in forex, tax, LTIP
Other expenses $2.8m principally non cash LTIP
$3m adverse forex movement offset by $3m tax credit
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Cash-flow
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1H FY15 1H FY14 Variance
USD‘ m USD‘ m USD‘ m
Operating cash flow before working capital changes 7.4 5.8 1.6
Increase in inventories (10.0) (4.0) (6.0)
(Increase)/decrease in trade and other receivables (0.4) 1.4 (1.8)
Decrease in trade and other payables (1.9) (5.2) 3.3
NET CASH FOR OPERATIONS before interest (4.9) (2.0) (2.9)
NET CASH FOR OPERATIONS after interest (8.5) (6.5) (2.0)
INVESTING ACTIVITIES (3.8) (6.5) 2.7
FINANCING ACTIVITIES 33.1 (5.2) 38.3
NET CASHFLOW 29.3 (18.2) 47.5
Operating Cashflow:
- $7.4m operating cashflow before working capital: $1.6m (28%) improvement on FY14
- $10m increase in inventories produced ahead of anticipated sales growth
- $0.9m lower interest cash cost: early benefits of new lower rate facility and $21m repayment
Financing Activities:
- $33m net finance raised in 1H FY15
- $43m placement offset by $21m early debt repayment
PureCircle - Investor Slides - All rights reserved March 2015
• Fixed assets represent current production capacity before approved expansion
• Intangible assets of $38m represent core process, patent, innovation and leaf technologies
• Inventory – invested $10m in anticipation of H2 FY15 and FY16 sales.
• BS assets include the weakening of MyR and RmB against $; asset impact approx. $5m
• Gross and net assets increased due to $43m placement partly offset by foreign exchange effectof weaker currencies against the US$
Balance Sheet
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1H FY15 1H FY14 June FY14
$’m $’m $’m
Property, plant and equipment 60 66 64
Intangible Assets 38 32 38
Working capital items:
Inventory 97 88 87
Receivables - excluding JVs 26 19 29
Payables (17) (15) (19)
Gross assets 315 272 293
Net debt (52) (85) (80)
Net assets 188 141 149
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3. Operational Review
by Jordi Ferre, COO
13.6
FY11
15.2
FY12
26.4
FY13
34.9
+24%
FY14
43.2
FY15
+12%
+74%
+32%
H1 FY15 Topline Sales Analysis
Sales of $43m increased 24% over 1H FY14- a 26% CAGR over the past 5 years. There was growth in allregions, revenues coming from wide range of products and customers.
Revenue breakdown by Region
NTAM APAC LATAM EMEA FY11 FY12 FY13 FY14 FY15
Number of Global Customers
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Number of Stevia Global launches continued to growth in 2014 (up 23%)
Source: MIntel International 2015
Global Food & Beverage Launches With Stevia
5 Yr CAGR
Total+52%
Food+45%
Beverages+67%
0
500
1000
1500
2000
2500
2009 2010 2011 2012 2013 2014
# o
f la
un
che
s
Food
Beverages
280
477
636
1,163
1,843
2,274 +23% vs. ‘13
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2014 was a pivotal year for stevia’s presence in mainstream brands
Coca-Cola LifeGlobal
presence expands
Pepsi TrueUS
Sierra MistUS
HeinzUK
Hershey’s Flavored Milk
Mexico
Pepsi NextGlobal
presence expands
Lipton RTD TeaGlobal
presence Expands
Mott’sUS
ChobaniSimply 100
YogurtUS
DanoneActivia LightVarious EU countries
Sara Lee Sweet
Hawaiian RollsUS
Nestle Chocapic
Chile
Quaker OatmealCanada
Beverage
Food
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Notable Global DAIRY Launches with Stevia 2014
FinlandArla Protein
MexicoNestle Griego
JapanMeiji Bulgaria Yogurt
JapanBio (Activia)
CanadaYoplait Source Mexico
Nestle Fermented Milk
NorwayActivia Light
MexicoLala Grekos
USALala Yogurt Smoothie
IsraelYoplait Yogurt
MexicoLala PetiZooColores
MalaysiaNestle Bliss
NetherlandsArla Zin!
JapanMeiji Yoplait
MexicoHershey’sFlavored Milk
MexicoYomiChocolate Milk
USASilk Soy Milk
BrazilSollysSoy Drink
USASO DeliciousDairy FreeCoconut Milk
USAPro Yo FrozenYogurt
UKTesco Dessert Sundaes
YOGURTBEVERAGES
FROZEN
USAOikos*
USAChobani 100
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Other Notable FOOD Launches with Stevia 2014
Sauces & Seasonings
Breakfast Cereals Bakery
Heinz Master Hellman’s Tesco
QuakerChocapicVitatops Touyfayan Smart
PocketsRicola
Confections
Cavalier Extra
Processed Meats, Seafood
King OscarBall Park Park’s Finest
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Vanilla Big Pot Yogurt
450G
Cherry Big pot Yogurt
450G
Red Fruits Yoghurt4 X 125G
Caramel Iced Dessert 900ML
Development of Stevia with retailers: Tesco incorporates stevia in healthy living platform
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• Coca Cola Life and Carrefour France Example
The Retail Sector is now capitalising on the opportunity
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Coca-Cola Life Launches
2013 2014 2015
Argentina Chile
UK Mexico USA Sweden Czech Republic
Norway France Germany Belgium Luxembourg Netherlands Australia Japan
CSD Cola rollout continue: Establishment of a new Global Green Cola Category
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PureCircle Innovation: Introducing Sigma-DDairy Category Solution: Sigma-D category specific product for Dairy that taste
breakthroughs and deeper calorie reductions.
What are the technical benefits of Sigma-D?• Clean sweetness profile that performs well in dairy systems• Demonstrates parity to sugar on key attributes• Great for mid calorie sugar reductions • Shows excellent synergy with fructose, sugar and several polyols• Stable through HTST and UHT processing
Example – Plain Yogurt, 60% sugar reducedSigma-D is parity to the full sugar formula
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1
2
3
4
5
6
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SweetIntensity
Bitterness BitterAftertaste
SweetAftertaste
Overall Liking
Full Sugar (Control) Sigma-D
Plain Yogurt: Full Sugar vs. 60% Reduced Sugar with Sigma-D
*= 80% CI, lowercase= 90% CI, uppercase = 95% CI
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PureCircle leads the market in proactive stevia education
SAFEfor the whole
family
NATURALsource
SUSTAINABLEfor farmers
and the planet
TASTES GREAT
0 CALORIE
STEVIA BENEFITS
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PureCircle is reinforcing communication on the Leaf origin, with strong substantiation.
Investing in new assets - video footage, still images- Plant & farmer led- Value Chain focus
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Helping Customers communicate with Consumers about The Story Behind the Sweetness of Stevia
What if you could tell your consumers why you chose to sweeten your product with stevia? What if your answer motivated them not just to buy your product but recommend it to their friend? Let us help you tell your own stevia story.
The base idea:Whenever you see the PureCircle logo or Sweetened with Stevia image, you can scan it using a mobile technology. You will then receive a mobile download featuring a 5-15 second video, or other content of choice.
Customize Content:You can select a short video that you would like to share with your fans. It could be a short story about a farmer or some powerful facts about stevia.
PureCircle - Investor Slides - All rights reserved March 2015
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Stevia Leaf Prices Have Increased: Chinese Leaf SupplyWith growth in consumer demand, China leaf supply has tightened and prices in have increased.
• Short Term: tight leaf supply in China as a consequence leaf prices have increased this year.
• Mid and Long Term: Our leaf diversification program continues to progress outside China.
Beyond our own agricultural operations in Kenya and Paraguay we are actively developing stevia plantations with local partners in the following Countries:
On-going tests and actualplantations
Africa Latin America Other Regions
Countries BurundiCAR
KenyaMalawi
MozambiqueRwanda
SwazilandTanzania
UgandaZambia
EcuadorGuatemala
MexicoNicaragua
IndiaMacedonia
RomaniaTurkey
USA
Potential Land Size (Hectares)
10,000 10,000 1,000
PureCircle - Investor Slides - All rights reserved March 2015
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Production Capacity Expansion
PureCircle has started to expand its production capacity to meet anticipated future increased volume. The PureCircle Board has approved $42m of capital expenditure projects that will increase production capacity of
refined stevia sweeteners and natural flavor systems and provide additional investment in next generation stevia innovation.
Phase I Phase II
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Management and systems: New Operations Management
Jordi FerreChief Operating Officer
• Joined PureCircle in 2008
• Significant experience across the
global F&B space
• Formerly Vice Presiden of sales
and marketing for Tate & Lyle’s
Splenda Sucralose division
Bob CompierVice President Group Operations
• Joined PureCircle in 2015
• Over 15 years of experience in
Manufacturing and Plant
Management with DSM Food
Specialties and Philip Morris
• Worked for 5 years in Shanghai
as Operations Manager for DSM
Nutritional Products China
Didier LebretVice President Leaf Sourcing & Development
• More than 30 years in executive
management & development in
the agro & rural sector in Europe,
Latin America and Africa .
• Board member & operational
supply chain executive in various
agro business industries including
Bananas, Cocoa and Cotton .
Key new Top Management hires in Manufacturing, and Leaf Development
We also implemented the first stages of Group ERP information systems.
PureCircle - Investor Slides - All rights reserved March 2015
H1 FY15 Summary: PureCircle Progress Has Continued
• Sales Revenue increased 24% over 1H FY14 ($35m). There was growth in sales in all of our global sales regions.
• 2014 was a breakthrough year for Stevia: New product launches in mainstream brands, global roll out of a new green cola category and strong development in food applications
• PureCircle continues to lead stevia innovation with new products and applications designed to meet identified category needs. During H1 FY15 saw the successful launch of Sigma D, the first category specific stevia solution
• PureCircle has started to expand its production capacity to meet anticipated futureincreased volume.
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PureCircle - Investor Slides - All rights reserved March 2015
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4. Outlook
by Magomet Malsagov, CEO
PureCircle - Investor Slides - All rights reserved March 2015
Outlook (1)
• The size and breadth of F&B product launches and roll-outs in 1H FY15 indicate that stevia is now well on the way to becoming an important ingredient for F&B companies wishing to moderate calories.
• Further the existing footprint of products launched using stevia provides a sound basis for a multi-billion $ stevia industry in the years to come.
• In 1H FY15 we again strengthened our position as market leader with further proprietary product innovation and growth in both delivered sales and project pipelines.
• With sustained long term growth prospects, PureCircle has started to expand our production capacity. We expect this to come on stream in FY17
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PureCircle - Investor Slides - All rights reserved March 2015
Outlook (2)
• We are generating revenues from a wide range of natural sweetener and flavor products and from a wide range of customers directly and through our business partners.
• With accelerating roll-outs of food and beverage products using PureCircle's stevia solutions, particularly in the important Carbonated Soft Drink category, the Company is confident of continued sales growth and with it improvements in profitability.
• However until market consumption smooths out, that growth will come with a lumpy sales profile and therefore some volatility: this adds some complexity to our ability to provide guidance in the short term
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5. Questions
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Appendix: Stevia Fact Sheet
PureCircle - Investor Slides - All rights reserved March 2015
Appendix:
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An Introduction to the Zero Calorie, Plant-Based Sweetener of Natural Origin
PureCircle - Investor Slides - All rights reserved March 2015
PureCircle Limited : FY15 – Half Year Interim ResultsInvestors March 2015
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