wessanen q1 12 analyst&investors ppt
DESCRIPTION
First quarter 2012 presentation, providing overview of Wessanen performance (financially and business wise).TRANSCRIPT
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Royal Wessanen nv
Q1 2012 roadshow
Q1 published: 27April 2012
www.wessanen.com
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16%
14%
39%
31%
GroceryRevenue €66.4 mlnEBIT €4.8 mln
Revenue Q1 - €171 mln
Frozen FoodsRevenue €27.8 mlnEBIT €0.1 mln
HFS (Health Food Stores)Revenue €53.9 mlnEBIT €0.6 mln
Non-allocated & eliminationsRevenue € (2.2)mlnEBIT € (3.4)mln
ABCRevenue €24.7 mlnEBIT €0.9 mln
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Content
Page
4. History
7. Vision, mission, strategy
11-12 Clipper
17. Q1 2012
29. Segments
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A long and rich history2015 will mark 250th anniversary of Wessanen
1765 - Incorporated around river De Zaan
– Adriaan Wessanen started to trade in mustard, canary and other seeds
Around 1910 introducing first consumer products such as
oatmeal and cocoa
1913 - Distinguished title Royal
1959 - Listed on Euronext Amsterdam
Seventies, eighties, nineties - range of acquisitions, such as
1993 - Merger Bols and Wessanen (split 1998)
2000/01 - Acquisition Distriborg, Zonnatura, Natudis
2010 - Divestment Tree of Life, Inc
2009 - Strategic reorientation focus on organic food in Europe
2012 - To make our organic brands most desired in Europe
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0
400
800
1200
1600
2009 2010 2011 2011 ProForma
Clipper (March '12)
KK, LR, Righi
TOL NA
PANOS
ABC
Frozen Foods
Kalisterra
Tree of Life UK
HFS
Grocery
55
Transformation 2009-2011
712 706
1,586
From portfolio approach to focus on the core
694
In € mln
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Attractiveness organic food markets
European organic food market is an attractive and growing segment– €21 bn market, 2011 growth est. 6%– <3% of total European food market
Increasing consumer appreciation and still low per capita consumption
– European Union <€30> p.a.
– Germany <€75>, France <€55>, NL <€50>, UK <€30>
Consumers increasingly convinced of benefits of organic food regarding health, taste and environment
Grocery and HFS channels developing at different growth path– Decline percentage of households shopping in HFS channel in
the Netherlands halted
Wessanen has unique selling points;– Active in both channels (HFS and Grocery)– Strong brands in both channels– Increasingly orchestrating our European businesses– One of very few with true European presence
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Our Vision
“To make our organic brands most desired in Europe”
GROCERY HEALTH FOOD STORES
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Our Mission
“Our organic food, your natural choice”
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Wessanen’s Strategy
ECONOMIC LOGIC Preferred brands that can
command a premium European scale (COGS,
innovation, expertise)
VEHICLES Own/build organic
pioneering brands in all relevant food channels
Focus on sizeable, growing markets and categories where organic creates value
Acquire businesses with strong brands and European potential
DIFFERENTIATORS Preferred brands and impactful innovation Superior product quality Orchestration of a fast, flexible and efficient value chain We are Europe’s No 1 and committed to Organic: our people have
credibility and expertise (OEC) and we provide the most comprehensive thought leadership, service, consumer insight, product range
ARENAS Healthy & sustainable nutrition through organic food in Europe
STAGING Boost growth of current
business and resolve ‘big bets’ (OGSM!)
At least one major acquisition p.a.
Divest non-core businesses at sensible speed
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Strategic objectives 2012-14
Strategic focus Activities
Topline growth • Grow core brands• Grow core categories• Build strongholds in new markets• Country specific growth strategies• Launch fewer, bigger, better innovations• Execute acquisitions shortlist
Profitabilityimprovement
• Central sourcing savings• Pricing strategies towards customers• Improve operational excellence with SAP• Filling own factories
Enablers • Improve talent performance management / building connected leadership• Simplify how we are conducting business• Activate Organic Expertise Centre (OEC), integrate Quality
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Clipper
• UK based tea and coffee company
– Founded in 1984
• 100% branded business
– Tea, coffee, hot chocolate
– Grocery, HFS, food service, export
• Leading position in UK organic & fair trade tea
– Everyday, green, white, infusion, specialties
• Revenue £16mln, ca 90 employees
• Manufacturing plant (incl. blending) in Dorset (UK)
• Tea is one of our core categories
• Clear potential in UK as well as other European markets
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Financial Holding
Moving to a more integrated, centrally steered business
Strategic Architect
Strategic Orchestrator
Operator
Financial
Strategic guidelines
Strategic development
Operational
Stand-alone business
Shared skillsShared
business systems
Same business systems
Degree of Business Integration
Natu
re o
f C
orp
ora
te G
uid
an
ce
Wessanen in
transit
ion
Maximise value creation by
adapting governance model, decision rules and
effciency and effectiveness HQ support functions
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Link to Performance Management
Corporate OGSM
County and Functional OGSM
Align to individual objectives and development plans
Strategies & Goals
(Top-Down)
Performance Feedback
(Bottom-Up)
Linking corporate level goals to the country and functional goals and ultimately to the individual
Downwards providing clear and definitive direction to supporting functions and employees
Bottom-up providing feedback on the resources and timing required to accomplish the strategies
OGSM to align our plans and objectives
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Brands in
Grocery
Roadmap focused on 3 business models
DescriptionDescription
Sourcing/developing, marketing and selling of own brands to grocery
• Including distribution to distribution centers and/or stores
Countries, Brands & EntitiesCountries, Brands & Entities
France: BjorgBenelux: Zonnatura, Biorganic, MerzaUK: Kallo, Whole EarthGermany: Whole Earth, Culinessa, BjorgItaly: Bjorg
Sourcing/developing, marketing and selling of own brands to HFS
• Via wholesaler in Germany• Direct to stores (France, NL)
France: Bonneterre, EvernatNL: Ekoland, De Rit, Fertilia
MolenaartjeGermany: Allos, Tartex, De Rit
Brands in HFS
Sourcing, category management, sales and distribution to HFS stores
• Focus on full range (ambient and fresh) of products and high share of products per store
France: Bonneterre, BiodistrifraisNL: Natudis, KroonBelgium: Hagor
Whole-sale
in HFS
BusinessBusiness
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Driving our brands in 2 channels
Profile
Developmen
Opportunity
WessanenFocus
Health Food Specialty Stores Grocery Retail
Small, independent, large exclusively organic assortment
Concentration, modern formats
Attract & activate mainstream consumers, innovative concepts
Professional chains, organic core assortment
Dedicated shelf results in strong growth
Build credibility and profile through strong organic ranges
Building powerful brands, large ranges,moving from push to pull marketing
Wholesale (NL, BEL, FR)
Retail formulas (NL)
Aggressive growth, powerful in-store marketingFocus on fewer, bigger brands
All countries
Profile
Development
Opportunity
WessanenFocus
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Q1 2012
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Q1 2012 key figures
In € mln Q1 2012 Q1 2011
Revenue ¹ 170.6 178.8
Autonomous growth 1.3%
Gross contribution 65.8 65.8
As % of revenue 38.6% 36.8%
Normalised EBIT ¹ 3.0 7.0
As % of revenue 1.8% 3.9%
EBIT ¹ 3.0 8.1
Net result ² 1.5 4.5
Earnings per share (EPS) ² 0.02 0.06
Operating cash flow ¹ (5.8) (5.2)
¹ Continuing operations; ² Attributable to Wessanen equity holders
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Q1 highlights
• Continued to set further steps on our transformational journey to build our European organic business
• Witnessed comparable trends as seen last year– European consumer confidence remains low– The economy subdued– Organic food market developed relatively
favourably
• Gross margin up– Due to Grocery, ABC and HFS– Central sourcing initiatives and pricing discipline
• EBIT declining, due to step up in costs
• Increased marketing investments
• Acquisition Clipper, UK market leader in organic and fair trade tea
8,1
3,0
7,0
3,0
Q1 11 Q1 12
170,6
178,8
1.3%
EBIT (in € mln)
Revenue (in € mln)
Reported, Normalised
Autonomous third party revenue growth
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Q1 figures per segment
Revenue Normalised EBIT
Q1 12 Q1 11 Q1 12 Q1 11
Grocery 66.4 61.8 4.8 5.9
HFS (Health Food Stores) 53.9 70.6 0.6 2.3
Frozen Foods 27.8 27.0 0.1 0.8
ABC 24.7 22.3 0.9 0.7
Non-allocated (2.2)* (2.9)* (3.4) (2.7)
Wessanen 170.6 178.8 3.0 7.0
* Eliminations for inter-segment revenue (between Grocery and HFS)
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160
165
170
175
180
185
190
Q1 11 Volume Price/ mix Currency Clipper Divestments Q1 12
Bridge - revenue growth
(4.6)%
In € mln
(1.0)% 2.3% 0.7% (7.6)%
1.3%
Autonomous revenue growth
1.0%
€178.8 €4.1€(1.8) €1.3 €(13.8)€1.8 €170.6
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Bridge - EBIT development y-on-y
0
5
10
Q1 11 Grocery HFS Frozen Foods ABC Corporate Q1 12
In € mln
€7.0 €3.0€(1.1) €(1.7) €(0.7)€0.2€(0.7)
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2323
Working capital
0
20
40
60
80
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Q112
-40
-20
0
20
40
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Q112
4 quarter average working capital
Q-on-q movement working capital
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Cash flow Q1
In € mln2.4 (27.5)
Sources
Uses
2.4
(19.3)
I ncrease of net debt
Net I nvestments
25.1
(8.2)
Cash flow from
earnings
I ncrease working capital
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0
50
100
150
200
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
0
1
2
3
4
5
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
Net debt
Leverage ratio
€57.3 mln
1.6x
Net debt and leverage ratio
In € mln
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Financials Q1 / guidance 2012
Financials Q1
Net financing costs €(0.9) mln (Q1 2011: €(0.6) mln)
Income tax expenses €(0.8) mln (Q1 2011: €(3.0) mln)
Capex €(2.0) mln (Q1 2011: €(2.5) mln)
Guidance FY2012
Net financing costs €(3-4) mln
Effective tax rate around 30-40%
Capex about €12-14 mln
Depreciation and amortisation about €15 mln
Non-allocated expenses (incl. corporate) around €12-13 mln
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24,722,3
Revenue breakdown per segment
53,9
70,6(5.1)%
HFS
Autonomous third party revenue growth
66,4
61,8
5.8%
Grocery
Autonomous third party revenue growth
27,827,0
3.0%
Frozen Foods
Autonomous third party revenue growth
6.5%
ABC
Autonomous third party revenue growth
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160
165
170
175
180
185
190
Bridge - segment revenue growth
€170.6
In € mln
€(16.7)€4.6 €0.7€0.8€178.8 €2.4
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Segments
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• Improve talent performance management / building connected
leadership
• Simplify how we are conducting business
• Activate Organic Expertise Centre, integrate Quality
Enablers
• Central sourcing savings
• Pricing strategies towards customers
• Improve operational excellence with SAP
• Filling own factories
Profitability
improvement
• Grow core brands
• Grow core categories
• Build strongholds in new markets
• Country specific growth strategies
• Launch fewer, bigger, better innovations
• Execute acquisitions shortlist
Topline growth
ActivitiesStrategic focus
• Improve talent performance management / building connected
leadership
• Simplify how we are conducting business
• Activate Organic Expertise Centre, integrate Quality
Enablers
• Central sourcing savings
• Pricing strategies towards customers
• Improve operational excellence with SAP
• Filling own factories
Profitability
improvement
• Grow core brands
• Grow core categories
• Build strongholds in new markets
• Country specific growth strategies
• Launch fewer, bigger, better innovations
• Execute acquisitions shortlist
Topline growth
ActivitiesStrategic focus
Grocery
• Autonomous revenue growth 5.8%– Volume 3.6%, price/mix 2.2%
• Grow core brands and categories– Bjorg gaining market share– Whole Earth spreads (UK) performing well– Kallo soy milk (UK) reversing downward trend– Whole Earth, Bjorg and Culinessa growing in Germany– Gayelord Hauser strong performance (promotion driven)– Dutch Biobest shelf progressing well
• Increased marketing spending – Bjorg TV commercial– Zonnatura follow-up campaign (radio, billboards)
• EBIT decreased due to:- Increased marketing, warehouse, transportation and ICT costs
- Partly phasing, partly temporarily, partly structural - Despite higher volumes and gross margin up
Topline growth
Profitabilityimprovement
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Grocery examples of activation
Yearly award magazine „Lebensmittel Praxis“Whole Earth Inka Taler (4 varieties)Criteria based on:Quality/Design/Distribution/Communication/Sustainability
Kallo soy launch activityDairy alternatives key categoryKallo core brand, phased out So Good
Bjorg commercialBased on success of Q2 airing, repeated in SeptemberResults: increased awareness, higher sales
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• Rebuilding
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HFS
• Autonomous revenue growth (5.1)%– Volume (5.9)%, price/mix 0.8%
• Bonneterre (Fr) declined at wholesale and branded, while Bio-Distrifrais reported stable sales
– SAP implementation at Bonneterre early 2012 went well
• German sales stable – Allos slightly declining, Tartex and Export both growing– Tartex continues to gain traction within HFS channel
• Benelux operations showed mixed performance– Continued impact of previously lost customers – Benefitted from previously opened GooodyFooods stores, newly
gained customers– Fresh wholesaler Kroon increasing volumes, moved to premises
Vroegop-Windig– New managing director and finance director
• Operating result lower than last year– Lower volumes and increased operating expenses both contributed
• Improve talent performance management / building connected
leadership
• Simplify how we are conducting business
• Activate Organic Expertise Centre, integrate Quality
Enablers
• Central sourcing savings
• Pricing strategies towards customers
• Improve operational excellence with SAP
• Filling own factories
Profitability
improvement
• Grow core brands
• Grow core categories
• Build strongholds in new markets
• Country specific growth strategies
• Launch fewer, bigger, better innovations
• Execute acquisitions shortlist
Topline growth
ActivitiesStrategic focus
• Improve talent performance management / building connected
leadership
• Simplify how we are conducting business
• Activate Organic Expertise Centre, integrate Quality
Enablers
• Central sourcing savings
• Pricing strategies towards customers
• Improve operational excellence with SAP
• Filling own factories
Profitability
improvement
• Grow core brands
• Grow core categories
• Build strongholds in new markets
• Country specific growth strategies
• Launch fewer, bigger, better innovations
• Execute acquisitions shortlist
Topline growth
ActivitiesStrategic focus
Topline growth
Profitabilityimprovement
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HFS examples of activation
New GooodyFooods storeOpened early October in Zaandam4th store, new ones in the pipeline
Allos cookiesNew range of cookies launchedAvailable in German HFS stores
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Frozen Foods
• Autonomous revenue 3.0%
– Volume 1.0%, price/mix 2.0%
– Private label, out-of-home and foodservice sales increased,
whereas retail sales were about stable
• Customers continue to focus on price in Dutch retail and out-of-home
food markets, resulting in a competitive environment and difficulties in
passing on commodity cost prices, especially for private label
• EBIT decreased to €0.1 million mainly due to increased
raw material prices
• Marketing spending in line with last year
• We successfully launched a new concept ‘Broketje’,
thereby also creating entries at new customers
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Frozen Food examples of activation
Bicky Double Chicken burgerIntroduced in October in Belgian out-of-homeFurther extension Bicky rangeNewly designed carton boxSupported by TV commercials and online campaign
Online campaign in Flanders (Dutch) and Wallonia (French)
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ABC
• Revenue +6.5% (price/mix 7.7% and volume (1.2)%)
• Cocktail business about stable
– Further expanding distribution, increase Daily’s marketing
spending, grow in-store displays and introducing new products
– Competition increasing: new players entering RTD pouches
market, which we consider a normal pattern given its growth
• Juices up driven by Little Hug and single serves
– Despite impact pruning low-margin products
• EBIT up as mixture increased marketing spending, increased
gross contribution (more favourable product mix) and
beneficial impact of low-margin product pruning
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ABC examples of activation