Wessanen Q1 2011 (28 April 2011)
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Transcript of Wessanen Q1 2011 (28 April 2011)
Royal Wessanen nv
Q1 2011
Amsterdam, 28 April 2011
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Q1 2011 key figures
In € million Q1 2011 Q1 2010 In %
Revenue ¹ 178.8 172.6 3.6%
Autonomous growth 0.2%
EBIT ¹ 8.1 6.4 26.6%
‘Normalised’ EBIT ¹ 7.0 6.4 9.4%
Net result ² 4.5 (4.8) -
Earnings per share (EPS) ² 0.06 (0.07) -
Operating cash flow ¹ (5.2) (14.3)
Net debt 36.7 66.2 (44.6)%
Leverage ratio 1.1x 2.0x -
¹ Continuing operations; ² Attributable to Wessanen equity holders
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EBIT - from reported to ‘normalised’
Q1 2011 Q1 2010
EBIT 8.1 6.4
Exceptionals 1.1 -
‘Normalised’ EBIT 7.0 6.4
Exceptionals
WE Grocery 0.5
WE HFS 0.6
Wessanen Europe Grocery Release provision €0.8mln Restructuring provision Belgian activities €(0.3) mln
Wessanen Europe HFS Release provision €0.6mln
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Q1 2011 highlights Started 2011 as a stronger, more focused company
Central sourcing efforts starting to pay off, contributing to offset increased raw material costs
In general, expect to be successful in raising prices, if and where needed
Market share gains for leading Grocery brands
Numerous initiatives underway, such as Brand activation
• Such as Zonnatura biorhythm campaign Innovations
• Such as Bjorg lunchboxes, Allos Frucht Pur Embark on process to delist low-margin products Nationwide distribution of fresh products in the Netherlands Third GooodyFooods store opened in Almere
• Expect to realise 5-10 openings per annum Managed withdrawal Grocery Belgium
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Innovations - some examples
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Brand activation - Zonnatura Biorhythm
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European brand-platform-category map
Organic Nutrition– Dairy alternatives– Biscuits (nutrition)– Bread replacers– Cereals– Tea– Spreads (nutrition)
Organic Taste-Indulgence– Spreads– Biscuits– Cereals – Juices
Organic Taste-Cooking– Condiments– Bouillon, Stock & Gravies– Meal components – Ready meals
France
Grocery HFS
TBD TBD
TBD
Netherlands
Grocery HFS
Germany
Grocery HFS
UK
Grocery HFS
TBD TBD
Other Europe
Grocery HFS
TBD
Consumer Benefit Platform
Organic Basics– Multi categories TBD TBD TBD TBD TBD TBD TBD TBD
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Strategic objectives 2011-2013
Top-line growth
Market share gains in core categories and brands
Add-on acquisitions
Improve EBIT-margins
Increase gross margins (central sourcing savings, richer product mix)
Manage non-core brands for cash
Increase capacity utilisation own factories
Reduce overhead costs
Grow our export business and aim to establish footprint in other European countries
Improve operational performance / Establish cross-country organisation
Raise the overall talent bar / Increase people engagement
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Closing remarks Started 2011 as a stronger, more focused company
Numerous good initiatives underway Central sourcing, SAP implementations, brand activation
Also still have to improve in various areas and businesses Notably Wessanen Europe HFS
Step-by-step improvement of sales and, subsequently, earnings performance
We are on the right track and we will see the first evidence in 2011 with more to come in the coming years
Appendices
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Royal Wessanen - who we are
A long and rich history as a food company
Incorporated in 1765; Royal since 1913; listed on Euronext since 1959
2010 revenue €712 mln; over 2,200 employees
Headquartered in Amsterdam Operations in the Benelux, France, Germany, UK, Italy, USA
A leading player in the major organic food markets in Europe
Frozen Foods: leading frozen snacks producer/marketer in Benelux
ABC: leading producer fruit drinks/cocktail mixers in USA
Revenue split 2010
16%
13%
32%
39%
WE Grocery WE HFS Frozen Foods ABC
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16%
13%
32%
39%
WE GroceryRevenue €231 mlnEBITDA €12 mlnAvg. Capital Employed €66 mlnFTE’s (year-end) 435
Revenue 2010 €712 mln
Frozen FoodsRevenue €116 mlnEBITDA €9 mlnAvg. Capital Employed €56 mlnFTE’s (year-end) 505
WE HFSRevenue €273 mlnEBITDA €11 mlnAvg. Capital Employed €95 mlnFTE’s (year-end) 837
ABCRevenue €93 mlnEBITDA €7 mlnAvg. Capital Employed €46 mlnFTE’s (year-end) 382
Corporate centre & non-allocated EBITDA €(11) mlnFTE’s (year-end) 63
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100
150
200
250
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
0
1
2
3
4
5
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
Net debt
Leverage ratio
€36.7 mln
1.1x
Net debt and leverage ratioIn € mln
14
Cash flow Q1 2011
7.4 (15.3)
(0.5)Derivatives
and FX
Sources
Uses
7.4
(2.2) Capex
7.9
I ncrease working capital
I ncrease of net debt
Cash flow from
earnings
(12.6)
In € mln
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Financial guidance 2011
Net financing costs €(4-5) mln
2010: €(8.3) mln (2009: €(19.9) mln)
Effective tax rate around 35%
2010 impacted by country mix and non-deductible impairments, partly compensated by
recognition tax losses
Capex around level of depreciation of €(15) mln
2010: €(11.5) mln (2009: €(9.5) mln)
Non-allocated expenses (incl. corporate) around 2010 normalised level
2010: €(12.3) mln (normalised €(10.2) mln)
Some reconfigurations low value-added distribution activities Wessanen Europe HFS
Possibly leading to limited restructuring costs
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Priorities 2011
Wessanen Europe Grocery and Wessanen Europe HFS:
Achieve revenue growth and gain market share
Increase success rate of innovations
Improve operating margins through focus on core brands and strengthening of brand equity
Improve operational excellence
Frozen Foods:
Increase relevance of Beckers and Bicky brands for our customers and consumers
Improve operational efficiency by continuously improving quality of processes, systems and
production
ABC:
Build brand equity and improve distribution for sales growth and margin improvement
Intention to divest, in principle, in 2011
Financing policy
Aim to maintain net debt structurally below 2.5x EBITDA
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6.4
3.7 3.7
5.9
Q1 10 Q1 11
Wessanen Europe Grocery Revenue +7.7%
Autonomous growth 5.9%• Volume 5.7%; Price/mix 0.2%
Currency effect 0.4%; trading days 1.4%
Normalised operating result €5.9 mln Increased ICT spending Lower A&P spending, partly due to phasing
Exceptional gain €0.5 mln €0.8 mln due to release provision €(0.3) mln due to managed withdrawal Belgium
Brands such as Bjorg, Kallo and Whole Earth gaining market share
In Benelux, Zonnatura and Biorganic volumes up
Further expansion of distribution in German grocery
Gaining distribution in Italy
61.8
57.4
5.9%
EBIT (in € mln)
Revenue (in € mln)
Reported, ‘Normalised’
Autonomous third party revenue growth
18
2.93.3 3.3
2.3
Q1 10 Q1 11
Wessanen Europe HFS Revenue decreased (0.6)%
Autonomous growth (6.1)%• Volume (3.5)%, price/mix (2.6)%
Normalised EBIT Є2.3 mln Lower volumes in France and Benelux Higher operating expenses, mainly ICT related
€0.6 mln exceptional gain as result of release provision
Benelux sales impacted by increased competition ±30 Natuurwinkels at year-end following
departures 3rd GooodyFooods opened in Almere Natudis in nationwide distribution fresh products
French market slightly recovering. Bonneterre up, while fresh and food supplements down
Growth in German market varying per category ‘Our’ categories stable, while we posted growth
Tree of Life UK turned in solid performance
70.671.0
(6.1)%
EBIT (in € mln)
Revenue (in € mln)
Reported, ‘Normalised’
Autonomous third party revenue growth
19
0.8 0.8
Q1 10 Q1 11
Frozen Foods Revenue down 5.9%
Autonomous growth (7.9)%• Volume (8.7)%, price/mix 0.7%
Branded volumes up, private label down In general, competition remained fierce
EBIT in line with last year Lower gross margin due to lower revenue and
increased raw material prices Lower marketing expenses
• Phasing• In 2010 introduction of Mammoet frikandel
Focus remains on revitalising Beckers New campaign “The Family Man 2011”
27.028.7
(7.9)%
EBIT (in € mln)
Revenue (in € mln)
Autonomous revenue growth
20
0.7
1.3
Q1 10 Q1 11
American Beverage Corporation Revenue up 23.1% in US dollar terms
Autonomous growth 21.6%• Volume 13.9%, price/mix 7.7%
EBIT of US$1.0 mln in line with expectations
Daily’s doing well, driven by success RTD pouches Additional RTD line has been installed National roll-out large customer nearing
completion
Little Hug showing lower volumes Lapping bonus pack promotion last year Continued intense competitive activity
A&P in line with last year Upgrading of Little Hug packaging New print advertising with key benefits such as
“75% less sugar” Print advertising Daily’s updated
22.3
18.4
21.6%
EBIT (in € mln)
Revenue (in € mln)
Autonomous revenue growth