analysts‘ conference · extended group management. 10.03.2015 4. kamillo kitzmantel. ch, export,...

INVESTOR PRESENTATION

HALF YEAR 2014HALF YEAR 2014

AGENDA

• Performance Highlights HY2014

• Environment HY2014

• P&L and B/S Details HY2014• P&L and B/S Details HY2014

• Acquisiton Russell Stover Candies, Inc., USAq , ,

• RawMaterials

• Outlook 2014

• Questions & Answers

2 1H2014 - Investor Presentation – August 19, 2014

HALF YEAR 2014

Performance Highlights HY2014


Performance Highlights HY2014

Net Net Trade Sales 1‘200 • Organic + 9.2%

CHF million

EBITDA 128.0

g• Swiss Francs + 6.0%

CHF +14.0 million vs. p.y. + 12.3%

EBIT 77.1 CHF +11.6 million vs. p.y. + 17.7%

NET INCOME 55.8 CHF +7.0 million vs. p.y. + 14.3%

NET LIQUIDITY 644.2 CHF -79.3 million vs. 31.12.2013


Key Figures

NET LIQUIDITY ABSORBTION VS. YEAR END - DUE TO CAPEX AND DIVIDEND PAYMENTS

2'800 74.0% 750

Equity(in CHF million)

Net Financial Position (in CHF million)

Equity B/S ratio(in %)

2'635 2'631

2'500

2'600

2'700

67.9%

70.6%

66 0%

68.0%

70.0%

72.0% 724

644600

650

700

2'300

2'400

2'500

60 0%

62.0%

64.0%

66.0%

450

500

550

2'100

2'200

54.0%

56.0%

58.0%

60.0%

300

350

400

2'000

31.12.2013 30.06.2014

52.0%

5 0%

31.12.2013 30.06.2014

250

31.12.2013 30.06.2014


HALF YEAR 2014

Environment HY 2014


Environment

ECONOMIES• Positive economic signals in North America & U.K.• Stabilisation in rest of EuropeStabilisation in rest of Europe

CONSUMERS• Continued trend to premium productsContinued trend to premium products• Consumers ready to spend for quality & innovation• Slightly improving consumer sentiment in Southern Europe

CHOCOLATE MARKETS• Low growth in volume & mix – no price increases despite raw material hikes• Continued trend to premium products

FX & RAW MATERIAL • Stable FX environment except US$, AU$ and CA$ weak vs. CHF• Significant increase of raw material prices


HALF YEAR 2014

P&L and B/S Details HY2014


S O G O O O O G GOO S S G O

Overview – P&L and B/S Details HY2014

Net Net Trade Sales EBIT Net Income

STRONG PROFIT IMPROVEMENT FOLLOWING GOOD SALES GROWTH

Net Net Trade SalesCHF 1‘200 million

EBIT CHF 77.1 million

Net IncomeCHF 55.8 million

+6.0% in CHF+9 2% in local curr

+ 17.7 % + 14.3 %

77.1

80

1'2001'200 55.8

50

60

+9.2% in local curr.

65.560

70

1'1321'10048.8

40

50

501'000 30

40

2013 2014

900

2013 2014

20

2013 2014


CONTINUED SOLID GROWTH IN SWISS FRANCS

Sales Analysis – 5 Years in Swiss Francs

CONTINUED SOLID GROWTH IN SWISS FRANCS

1'200

Absolute in CHF million Growth in CHF

1'0571'007 1'033

1'1321 200

900

1'100

700

500

6.0%7.9% -4.5% 2.6% 9.6%300

2010 2011 2012 2013 2014

6.0%7.9% 4.5% 2.6% 9.6%


ORGANIC GROWTH RECORD HALF YEAR GROWTH

Sales Analysis – 5 Years in Local Currencies

ORGANIC GROWTH: RECORD HALF YEAR GROWTH (EXCLUDING EXTRAORDINARY 2010)

2‘520In local currencies

1'200

Absolute in CHF million

90960

1'0111'099

1 200

900

1'100

905

700

500

8.7% 9.2%9.2% 6.1% 5.3%300

2010 2011 2012 2013 2014

8.7% 9.2%9.2% 6.1% 5.3%


Sales Analysis – Drivers

ORGANIC SALES GROWTH MAINLY DRIVEN BY VOLUME INCREASE -(LOW PRICE / MIX EFFECTS)

9 2%0.7% 3 2%9.0%

10.0%

8.5%9.2%0.7% 3.2%

6 0%

7.0%

8.0%

6.0%

3 0%

4.0%

5.0%

6.0%

1.0%

2.0%

3.0%

0.0%Volume Price/Mix Organic Forex Reported in CHF


O S C

Sales Analysis – Split of Markets

TOTAL NNTS: CHF 1’200 million

7.6% North America

26.8%

6.4%

7.3% Germany

CH incl. Exports

9.2%

France

Italy

2014CHF 1‘200 million

19.1%

12 1%

11.5%UK

Rest of Europe

R t f th W ld12.1% Rest of the World


ACCELERATED GROWTH IN EUROPE AND NAFTA DOUBLE DIGIT IN THE

Sales Analysis – Markets

ACCELERATED GROWTH IN EUROPE AND NAFTA, DOUBLE DIGIT IN THE REST OF THE WORLD

Europe Rest of WorldNAFTA

16.0% 16.0%8.0%

12.0% 12.0%6.0%

8.0% 8.0%4.0%

4.0% 4.0%

11 3%4.0% 12.7% 13.7% 14 1%

2.0%

5.8% 6.9%

0.0%

1H 2013 1H 2014

0.0%

1H 2013 1H 2014

11.3%12.7% 13.7% 14.1%

0.0%

1H 2013 1H 2014

5.8% 6.9%


INCREASE OF COST MARGIN MAINLY DRIVEN BY HIGHER PRICES FOR

Material Costs including +/‐ Change in Inventory

INCREASE OF COST MARGIN MAINLY DRIVEN BY HIGHER PRICES FOR COCOA PRODUCTS

423425

In % of NNTSAbsolute in CHF million

383

354 358379

423

350

375

400

354 358

300

325

350

225

250

275

35.2%36.2% 35.2% 34.7% 33.4%

200

225

2010 2011 2012 2013 2014

35.2%36.2% 35.2% 34.7% 33.4%


LOW PERSONNEL EXPENSE RATIO THANKS TO EFFICIENCY GAINS

Personnel Expenditure

LOW PERSONNEL EXPENSE RATIO THANKS TO EFFICIENCY GAINS

350

Personnel exp. in CHF million Personnel exp. in % NNTS

279 277

306 309300

279267

277

200

250

15025.8%26.4% 26.5% 26.8% 27.0%

1002010 2011 2012 2013 2014

25.8%26.4% 26.5% 26.8% 27.0%


AVG NO OF EMPLOYEES INCREASING BY 558 FTE ( 6 8%) MAINLY IN

Headcount & NNTS / Employee

AVG. NO OF EMPLOYEES INCREASING BY 558 FTE (+6.8%) – MAINLY INMANUFACTURING DUE TO VOLUME GROWTH

9'000

Average number of employees

7'450

8'187

8'745

7'500

8'000

8'500

6'984 7'1607'450

6'000

6'500

7'000

4'500

5'000

5'500

4'000

4 500

2010 2011 2012 2013 2014


CONTINUED INCREASE IN BRAND SUPPORT UNDERPROPORTIONAL

Operating / Marketing Expenses

CONTINUED INCREASE IN BRAND SUPPORT - UNDERPROPORTIONAL GROWTH IN SALES AND ADMINISTRATION

Absolute in CHF million In % of NNTS

348350

318309

338348

300

325

301

275

300

225

250

29.0%30.1% 29.9% 30.0% 29.8%200

2010 2011 2012 2013 2014

29.0%30.1% 29.9% 30.0% 29.8%


EBIT DEVELOPMENT DRIVEN BY OPERATING EFFICIENCY GAINS AND

Operating Profit (EBIT)

EBIT DEVELOPMENT DRIVEN BY OPERATING EFFICIENCY GAINS AND VOLUME GROWTH

Absolute in CHF million In % of NNTS

7780

66

77

60

70

3442

46

30

40

50

34

10

20

30

6 4%3 2% 4 2% 4 5% 5 8%0

2010 2011 2012 2013 2014

6.4%3.2% 4.2% 4.5% 5.8%


SOUND PROFITABILITY IN FIRST HALF 2014

Net Income

SOUND PROFITABILITY IN FIRST HALF 2014

60

Net income in CHF million In % of NNTS

49

56

40

50

25

323530

40

25

10

20

02010 2011 2012 2013 2014

4.7%2.3% 3.2% 3.4% 4.3%


HIGH INVESTMENT IN CAPEX TO SUPPORT FURTHER GROWTH

Operating Cash Flow & CAPEX

HIGH INVESTMENT IN CAPEX TO SUPPORT FURTHER GROWTH

Operating Cash Flow in CHF million CAPEX in CHF million

250

226 228211

1 1

200

159171

100

150

50

10540 42 65 840

2010 2011 2012 2013 2014

10540 42 65 84


NET FINANCIAL POSITION DECREASED VS YEAR END BY 80 MILLION DUE TO

Net Financial Position ‐ Development

NET FINANCIAL POSITION DECREASED VS. YEAR END BY 80 MILLION DUE TO DIVIDEND PAYMENT & HIGH CAPEX

1'000 0

1'100.0

Net cash and net cash movement in CHF million

895839

797171

49 10542

148700 0

800.0

900.0

1'000.0

486543

724 724649 644 644

1485

400 0

500.0

600.0

700.0

100 0

200.0

300.0

400.0

0.0

100.0

FY2011 FY2012 FY2013 OperatingCash Flow

CapitalIncrease

CAPEX Sharebuyback

DividendPayment

CTA/Other 1HY 2014


HALF YEAR 2014

Acquisiton Russell Stover Candies,

Inc., USA


Acquisition Russell Stover Candies, Inc., USA

COMPANY FACTS

• Head-Office in Kansas City

R ll St G ith 2‘700 l• Russell Stover Group with 2‘700 employees

• 4 Plants 2 in Kansas1 in Texas1 in Colorado

• NNTS 2013 USD 502m

• 3 Brands: Russell StoverWhitman‘s Pangburn‘s

NEXT STEPS

• Expected closing after approval of antitrust authorities (September / October 2014)

• IFRS 3 accounting rules impact on first months of business


HALF YEAR 2014

RawMaterial


Cocoa Crop / Grinding Balance

5.5%

16.2%

42.4%5.5%

15.5%-180


Cocoa Product Prices 2011 ‐ 2014


Nut & Almond Prices 2011 ‐ 2014


Milk Prices Europe, Switzerland & World 2010 ‐ 2014


Sugar Prices 2010 ‐ 2014


HALF YEAR 2014

Outlook 2014


INVESTING FOR FUTURE GROWTH

Outlook 2014 – Financial Guidance

MARKET FOCUS 2014• Focus on market share gains

INVESTING FOR FUTURE GROWTH

• Focus on market share gains• Build on good growth trend in all markets• Continue strong support of newly opened markets Brazil, China, Japan• Dynamic growth and strong expansion of „Global Retail“

CONTINUATION OF MARKET INVESTMENTS IN 2014M k ti di St th b d d iti i l b ll i f th• Marketing spending: Strengthen brand and positioning globally via further increase of advertising spending

• New geographies: explore expansion potential

INTERNAL• Continued cost saving measures via process- and efficiency improvements• Optimize management of transactional FX-exposure / raw material prices


Mid to Long Term Financial Guidance

UNCHANGED MID TO LONG TERM FULL YEAR SALES AND PROFIT TARGETSUNCHANGED MID-TO LONG TERM FULL YEAR SALES AND PROFIT TARGETS

Organic Growth 6 – 8 % p.a. (*)Organic Growth 6 8 % p.a. ( )

EBIT margin + 20 to 40 basis points (*)

CAPEX 2014 CHF 250 illiCAPEX 2014 CHF > 250 million

C ti d hi h h tiContinued high cash generation

(*) Present Lindt business i.e. excluding sales and profit impact of the Russell Stover acquisition


Disclaimer

This presentation contains forward looking statements which reflectManagement‘s current views and estimates. The forward lookingstatements involve certain risks and uncertainties that could cause actualstatements involve certain risks and uncertainties that could cause actualresults to differ materially from those contained in the forward lookingstatements. Potential risks and uncertainties include such factors as generalgeconomic conditions, foreign exchange- and commodity price fluctuations,competitive product and pricing pressures and regulatory developments.


HALF YEAR 2014

Questions & Answers


analysts‘ conference · extended group management. 10.03.2015 4. kamillo kitzmantel. ch, export,...

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