Cloetta Interim Report Q2 2015 and acquisition of Lonka - Presentation

18
Q2 2015 results and acquisition of Lonka 17 July 2015 Bengt Baron, CEO David Nuutinen, incoming CEO Danko Maras, CFO Jacob Broberg, SVP IR

Transcript of Cloetta Interim Report Q2 2015 and acquisition of Lonka - Presentation

Title

Arial, Bold, 40 pt, red

Subtitle

Arial, Bold, 40 pt, grey

Q2 2015 results and acquisition of Lonka – 17 July 2015

Bengt Baron, CEO

David Nuutinen, incoming CEO

Danko Maras, CFO

Jacob Broberg, SVP IR

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Q2 highlights

2

Continued growth and improved operating profit

• Net sales for the quarter increased by 3.4 per cent to SEK 1,280m (1,238),

including a positive impact from foreign exchange rates of 1.4 per cent.

• Operating profit was SEK 130m (85).

• Cash flow from operating activities was very strong and amounted to

SEK 163m (44).

• Net debt/EBITDA continued to decrease and was 3.30x (4.55).

• On 16 July, 2015 Cloetta signed an agreement to acquire Locawo B.V.

(Lonka) – a Dutch company producing and selling fudge, nougat and

chocolate. The acquisition will significantly strengthen Cloetta’s position in

the Netherlands.

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Overall market and sales development

Sales growth of 3.4 per cent

• Positive total market developments, except in

the Netherlands

• Organic growth 0.8 per cent for the quarter

• Sales grew in Sweden, Finland, Denmark and

outside the main markets. Also Nutisal and the

Jelly Bean Factory brand grew.

• Sales in Sweden and Norway negatively

impacted due to ongoing contract negotiations

with customers.

• Risk that sales to some customers in Sweden

and Norway may continue to be negatively

affected.

3

Cloetta´s main markets

SEKm Apr-Jun

2015

Margin

%

Change

%

Apr-Jun

2014

Margin

%

Net sales 1,280 3.42 1,238

Underlying EBIT 1) 129 10.3 17.3 110 9.4

Operating profit (EBIT) 130 10.2 52.9 85 6.9

Profit for the period 66 633.3 9

Net sales and EBIT

4

1) Based on constant exchange rates, the current group structure and excluding items affecting comparability related

to restructurings.

2) Organic growth at constant exchange rates and comparable units 0.8 per cent for the quarter.

Changes in net sales

5

-4,1

1,4 1,6 0,6

2,2

-0,6

1,7

4,0

0,8

-5,0-4,0-3,0-2,0-1,00,01,02,03,04,05,0

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

% Organic growth

Changes in net sales, % Apr-Jun

2015

Apr-Jun

2014

Organic growth 0.8 2.2

Structural changes 1.2 3.6

Changes in exchange rates 1.4 3.7

Total 3.4 9.5

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Net sales, operating profit and underlying EBIT

6

Net sales Operating profit Underlying EBIT

1193 1 238 1 303

1 579

1 313 1280

0

200

400

600

800

1 000

1 200

1 400

1 600

Q1 Q2 Q3 Q4

SE

Km

2014 2015

52

85

178

262

90

130

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4

SE

Km

2014 2015

81

110

200

244

107 129

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4

SE

Km

2014 2015

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

-16 -23

54

116

91

44

75

290

223

163

-50

0

50

100

150

200

250

300

350

Q1 Q2 Q3 Q4

SE

Km

2013 2014 2015

Cash flow from operating activities

7

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Cash Flow

8

SEKm Apr-Jun

2015

Apr-Jun

2014

Cash flow from operating activities before changes in

working capital

100 74

Cash flow from changes in working capital 63 -30

Cash flow from operating activities 163 44

Cash flows from investments in property, plant and

equipment and intangible assets

-28 -44

Cash flow from other investing activities - -71

Cash flow from investing activities -28 -115

Cash flow from operating and investing activities 135 -71

2,0

2,5

3,0

3,5

4,0

4,5

5,0

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

9

Financial leverage

Net debt/EBITDA, x

Target

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

10

• Supports profitable growth in core categories

• Significantly strengthens Cloetta’s market position in the Netherlands – Lonka is a well known, strong brand

– Diversifies Cloetta’s product range into new categories

– Entry into Dutch chocolate market

• Strengthens Cloetta’s product offering, including Pick & Mix, and position in

the Nordics and the UK

• Offers new production technologies: – Fudge, chocolate coated moulded products and nougat

Lonka acquisition creates value

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

11

• Founded in 1920

• Branded confectionery products, Pick & Mix products and contract

manufacturing. Specialised in fudge, nougat and chocolate products

• Sales and marketing organisation as well as two factories in the

Netherlands. In total 130 employees

• Sales of approximately SEK 300m

– Approximately 50 per cent of sales in the Netherlands

– The Nordic countries and the UK are other important markets

– Approximately 50 per cent of sales is branded and 50 per cent is Pick &

Mix sales and contract manufacturing

Lonka facts

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Lonka product categories 12

Wrapped Caramels

P&M Nougat Soft Nougat

Chocolate Nougat

Chocolate Products

Fudge Soft Toffee Bites

Gums/Jellies

(pectine/gelatine)

Chocolate

Gums/Jellies Jamaica Rum

Chocolates

Caramel Bars

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Core product offerings

13

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

14

• Synergies within administration, sales, procurement and supply chain

• The acquisition will over time support Cloetta’s 14% EBIT-margin target

• Long-term potential for revenue synergies with new technologies such as

fudge

Transaction supports EBIT-target

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

In focus

15

Integration of

Lonka

Profitable growth

Pricing based on

raw material and

currency changes

Acceleration of

Nutisal and The

Jelly Bean Factory

Q2 selection of product launches

16

Läkerol

Ginger Lime and Chili Licorice

Sweden Läkerol

Strawberry Lime

Norway

Malaco

Salt Sill and Colaflaskor

Sweden

Malaco

Kick Raspberry

Sweden and Norway

KING

Peppermint Orange

The Netherlands

Dietorelle

Blood Orange and Cherries

Italy

Sperlari

Strawberry and Lemon

Italy

Läkerol

Deep Dark Saltius and

Ripe Ruby Tastius

Finland

All sorts

Coco, Pink and Choco

Finland

Cloetta Sprinkle

Black Raspberry Sparks

Finland

Cloetta Crispy Bite

Cranberry and Blueberry

Finland

Jenkki

Strawberry/Blueberry

Finland

Title

Arial, Bold, 80 pt, white Q&A

Title

Arial, Bold, 40 pt, red

Text/Bullets, Level 1-5

Arial, Regular, 20 pt, grey

Subtitle

Arial, Bold, 40 pt, grey

Disclaimer

• This presentation has been prepared by Cloetta AB (publ) (the “Company”) solely for use at this presentation and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations.

• This presentation is not for presentation or transmission into the United States or to any U.S. person, as that term is defined under Regulation S promulgated under the Securities Act of 1933, as amended.

• This presentation contains various forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Company’s control and may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. These risks include but are not limited to the Company’s ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brands in its portfolio, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks.

• The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.

• No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

18