ANALYSTS‘ CONFERENCE€¦ · Confectionery remains one of the largest and most important...

ANALYSTS‘ CONFERENCE10 MARCH, 2015

Financial Year 2014

GROUP MANAGEMENT

10.03.2015 3

Dr. Dieter WeisskopfFinance, Administration, IT, Procurement,

Operations

Rolf FalleggerFR, IT, UK, PL, CZ, RU, China

Andreas PfugerCEO Russell Stover, N/America, MEX, AUS

Uwe SommerMarketing, Sales, Global Retail,

Markets

Ernst TannerChairman & Group CEO

Financial Analysts‘ Meeting

EXTENDED GROUP MANAGEMENT

10.03.2015 4

Kamillo KitzmantelCH, Export, Duty Free

Thomas LinemayrUSA, CA

Dr. Albert lechnerDE, AT


1. Financial year 2014

2. Outlook

3. Added Information (Russell Stover)

AGENDA

10.03.2015Financial Analysts‘ Meeting 5

KEY FIGURESFinancial Year 2014

P&L STATEMENT L&S GROUP

+17.4% sales growth of the Lindt & Sprüngli Group INCLUDING Russell Stover


CHF million 2013 2014 Growth in CHF

Sales 2 882.5 3 385.4 +17.4%

EBITDAMargin

503.317.5%

588.017.4%

+16.8%

EBITMargin

404.114.0%

474.314.0%

+17.4%

Net Income Margin

303.010.5%

342.610.1%

+13.1%

LINDT STANDALONE P&L STATEMENT

Full achievement of strategic growth and profit targets on a prior year comparable basis


CHF million 2013 2014Growth Margin

Developmentin CHF Organic

Sales 2 882.5 3 133.3 +8.7% +9.8%

EBITDA Margin

503.317.5%

553.417.7%

+10.0% +20 BP

EBIT Margin

404.114.0%

444.314.2%

+9.9% +20 BP

BALANCE SHEET

2635

3002

1600

2100

2600

3100

2013 2014


67.9%

53.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

2013 2014

724

-844-850

-650

-450

-250

-50

150

350

550

750

2013 2014

The acquisition reduced the equity ratio and the Net Financial Position in 2014

Equity in CHF Mio. Equity B/S Ratio in % Net Financial Position in CHF Mio.

47000

51000

55000

59000

63000

12.2013

02.2014

04.2014

06.2014

08.2014

10.2014

12.2014

02.2015

LINDT registered

LINDT registered

SHARE PRICE


Creating shareholder value: +18.8% in 2014, +10.7% in 2015 so far

Lindt registered share

30.12.2014: LISN CHF 57’160 +18.8% y-o-y

31.12.2013: LISN CHF 48’100

Since January 2015

LISN CHF 63‘300.- (09.03.15)30.12.14 - 09.03.15: +10.7%

SHAREHOLDER RETURN

Dividend Payment + 11.5 % vs. 2013 / Payout Ratio 49.1%

1992 2011 2012 2013 2014

Dividend Reg. (CHF) 39 500 575 650 725*

• From Agio 500 535 555 325

• From Retained Earnings 40 95 400

Increase (CHF) 50 75 75 75

Dividend Yield Reg. 1.4% 1.6% 1.7% 1.4% 1.3%

Payout Ratio Reg. 16.9% 47.2% 53.1% 49.0% 49.1%

Registered Shares (at year-end) 2 800 31 390 34 515 48 100 57 160

Market Cap. (Mio. CHF) 492 6 982 7 384 10 268 12 495


* subject to approval by the AGM

SALES GROWTH 2014 – MAIN MARKETS

Switzerland (incl. Exports) 6.8%

Germany 5.1%

France 6.4%

UK 14.7%

Italy 3.1%

North America (excl. RS) 14.3%


Strong Growth of Key Brands

High organic growth in main markets leading to market share gains in 2014

Lindor Excellence Season Pralinés

GLBOBAL RETAILIMPORTANT SUCCESS FACTOR


Global network of own shops with 275 points of sale

36.8%

15.3%11.2%

9.9%

7.7%

7.0%

6.7%

5.4%7.0%

SALES ANALYSIS – MARKETS


Total NNTS CHF

3.385bn● North America incl. RS

● Germany

● France

● CH incl. Exports

● Italy

● Rest of the World

● Rest of Europe

● UK

Of whichRussell Stover

SALES GROWTH – GROUP


2 579 2 4892 670

2 883

3 385

1 500

2 000

2 500

3 000

3 500

2010 2011 2012 2013 2014

Absolute in CHF Mio.

Remarkable contribution of Russell Stover to the sales growth of the group

SALES GROWTH – LINDT STAND ALONE


2 579 2 4892 670

2 883

3 133

1 500

2 000

2 500

3 000

3 500

2010 2011 2012 2013 2014

8.6%6.0%7.3% 6.8% 9.8%

Accelerated organic growth on a Lindt & Sprüngli standalone basis

Absolute in CHF Mio.Increase p.a. in local currencies (organic growth in %)

SALES – GROWTH FACTORS

9.1%

9.8%

8.7% 17.4%

0.7%-1.1%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Volume Price / Mix Organic Forex RS Sales in CHF


Sales growth mainly driven by volume and acquisition of Russell Stover

ORGANIC GROWTH BY REGION

2.8%

5.1%

6.4%

3.1%

0%

1%

2%

3%

4%

5%

6%

7%

CH Dom GER FRA ITA


14.3%

0%

2%

4%

6%

8%

10%

12%

14%

NAFTA (excl. RS)

L&S in Europe +6.5% L&S in NAFTA +14.3%

MATERIAL COSTS


Material costs including changes in inventories increased by 360 BP – raw material prices

Absolute in CHF Mio.In % Sales

940.0 892.4 940.0 943.2

1227.9

0

200

400

600

800

1 000

1 200

1 400

2010 2011 2012 2013 2014

36.4% 35.9% 35.2% 32.7% 36.3%

NUMBER OF EMPLOYEES (FTE‘S)


Increase by 1 763 employees driven by RS and further expansion in production & retail (*)

Average number of employees

7 572 7 7798 157

8 949

10 712

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

2010 2011 2012 2013 2014

(*) Increase of 610 FTE‘s on a L&S stand alone basis

PERSONNEL EXPENSES


Decrease in the expense ratio to lowest level due to Russell Stover and efficiency gains

in CHF Mio.in % Sales

564.7 540.5599.6

654.7719.5

0

200

400

600

800

2010 2011 2012 2013 2014

21.9% 21.7% 22.5% 22.7% 21.2%

OPERATING EXPENSES


Continued good support of marketing investments in 2014

Absolute in CHF Mio.in % Sales

663.9 644.1707.9

794.9 815.1

0

200

400

600

800

2010 2011 2012 2013 2014

25.7% 25.9% 26.5% 27.6% 26.0%

EBITDA


Absolute increase by +16.9%

423.3 422.0 435.9

503.3

588.0

0

100

200

300

400

500

600

2010 2011 2012 2013 2014

16.4% 17.0% 16.3% 17.5% 17.4%


CAPITAL INVESTMENTS


Increase to keep pace with high volume growth

Absolute in CHF Mio.

88.6104.2

144.6

191.4

234.6

0

40

80

120

160

200

240

2010 2011 2012 2013 2014

DEPRECIATION AND IMPAIRMENTS


Depretiation to sales ratio remained stable despite higher investments/ impairment

98.093.2

105.899.2

113.7

0

20

40

60

80

100

120

2010 2011 2012 2013 2014

3.8% 3.7% 4.0% 3.4% 3.4%


OPERATING PROFIT (EBIT)


EBIT Margin 14.0% includes all one-offs from the RS acquisition

325.3 328.7 330.1

404.1

474.3

0

100

200

300

400

2010 2011 2012 2013 2014

12.6% 13.2% 12.4% 14.0% 14.0% (*)


(*) L&S standalone: EBIT Margin 14.2%

TAX RATE


Significant increase in 2014 due to fully utilized tax loss carry forwards in the US

in % of income before taxes

25.3% 25.0% 25.6% 24.5%27.5%

0%

10%

20%

30%

2010 2011 2012 2013 2014

NET INCOME


Net Income Margin 10.1% includes all one-offs from the RS acquisition

241.9 246.5 244.9

303.0

342.6

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014

9.4% 9.9% 9.2% 10.5% 10.1%


NET FINANCIAL POSITION – DEVELOPMENT


The acquisition of RS financed via own funds and the issuance of bonds

Net Cash in CHF Mio.

543724

-844

30873

-235 -148-89

-1475-2

-1 000

-500

0

500

1 000

1 500

2012 2013 OperatingCash Flow

CapitalIncrease

CAPEX Dividend Share buyback &

TreasuryStock

RS CTA /Other

2014

OUTLOOK

OUTLOOK ENVIRONMENT 2015

● Positive economic outlook in North America

● Subdued consumer sentiment in Europe

● Transaction / Translation impact from SNB decision

● Continued challenge from unchanged high raw material prices

● Trade partners competing on price limiting price adjustments


● Innovation and intensified marketing communication

● Continuous strengthening of LINDT brand in all markets

● Anchoring and exploiting strong no. 3 market position in the USA

● Strong focus on the worldwide implementation of own sales channel (Global Retail)

● Ongoing optimization via efficiency increases and cost management

● Middle to long-term organic sales growth target of 6-8% confirmed for 2015

● Back to middle to long-term target for increase of 20-40 BP in EBIT margin after integration of RS

Ongoing challenging general conditions

Lindt & Sprüngli – Strengthening of the brand, ongoing increase of market shares, expansion into new markets

RUSSELL STOVER

ACQUISITION RUSSELL STOVER


July 2014

Headqartrer Kansas City, Missouri

Employees 2800

4 Factories 2 in Kansas, 1 Texas, 1 Colorado

Brands Russell Stover, Whitman‘s, Pangburn‘s

Founded Russell Stover 1923, Whitman‘s 1842 (integrated in 1993)

Sales ~ USD 500 million per year

RUSSELL STOVER: FACTS AND FIGURES

10.03.2015 34Financial Analysts‘ Meeting

LINDT / Ghirardelli

Russell Stover

PREMIUM SEGMENT IN THE USA

1989 Commissioning of the LINDT factory in Stratham, NH

1992 Sales in N/America: CHF 30 million

1995 Establishment of an own LINDT shop concept to build on brand awareness

1998 Strategic acquisition of Ghirardelli

2006 N/America: Most important market of the Group

2010 Commissioning of a new facility for production of cocoa liquor (from ban to bar)

2014 Take-over of Russell Stover(most important strategic acquisition of company history)

Today Lindt & Sprüngli is no.3 chocolate manufacturer in the USA and clear leaderof the premium chocolate segment

10.03.2015 35

Lindt & Sprüngli dominates the premium choclate segment in N/America

PREM

IUM

SEG

MEN

T


RUSSELL STOVER:NO.1 FOR GIFTING CHOCOLATE IN AMERICA


1923 Clara und Russell Stover

The couple begins to produce „Mrs. Stover‘s Bungalow Candies“ in the basement of their house in Denver. Just a few month later they open their first store.

1960Ward Family

The business is taken over by the Ward family who further expanded the national distribution.

1993Whitman‘s

Whitman‘s, established in 1842 and one of the oldest American chocolate brands, is integrated in the company‘s portfolio in 1993.

Russell Stover Headquarter in Kansas City, Missouri

ACQUISITION RUSSELL STOVER

10.03.2015 37

• Biggest and most important strategic acquisition in the company‘s history

• Russell Stover optimally complements the brand and product portfolio of Lindt & Sprüngli USA

• Lindt & Sprüngli is third biggest chocolate manufacturer in the N/American overall chocolate market

• New leading position in „Boxed Chocolates“, seasonal business, and sugar-free chocolate

• Lindt & Sprüngli becomes one of the main partners of the trade

• Strong basis for further growth

• Four additional factories with potential for expansion will allow manufacturing synergies

• Own shop network (36 POS)


FOUR NEW PRODUCTION SITES


Russell Stover Factory in Abilene, Kansas

Russell Stover Factory in Corsicana, TexasRussell Stover Factory in Iola, Kansas

Russell Stover Factory in Montrose, Colorado

POPULAR HOUSEHOLD BRANDS


Russell Stover, Whitman’s and Pangburn’s brands hold a market share of more than 50% in the segment of chocolate hearts.

The Whitman’s cultic «sampler» gift box with a selection of chocolate candies is the bestseller pralinés assortment in the USA since its launch more than 100 years ago.

The «Millionaire$» pralines of Pangburn’s are famous for their delicate recipes with milk chocolate, pecan, caramel and a touch of honey. They were created in 1914 in Fort Worth (Texas) and are very popular in the Southeast of the US.

BRAND PORTFOLIO

10.03.2015 40

GLOBAL BRANDS> 75% of sales

REGIONAL BRANDS~ 22% of sales

LOCAL BRANDS~ 3% of sales

Key Products/ Brands


LINDOR EXCELLENCE SAISON PRALINES

Financial Analysts‘Meeting / March 10, 2015

DISCLAIMER

This presentation contains forward looking statements which reflect

Management‘s current views and estimates. The forward looking statements

involve certain risks and uncertainties that could cause actual results to

differ materially from those contained in the forward looking statements.

Potential risks and uncertainties include such factors as general economic

conditions, foreign exchange- and commodity price fluctuations,

competitive product and pricing pressures and regulatory developments.


ANALYSTS‘ CONFERENCE€¦ · Confectionery remains one of the largest and most important...

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