Cloetta Year-end Report 2016 - Presentation

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Q4 2016 results – 1 February 2017

Danko Maras, Interim President and CEO/CFO

Jacob Broberg, SVP IR

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Improved sales and operating profit , adjusted

• Net sales for the quarter increased by 3.8 per cent to SEK 1,684m (1,622). In 2016 net

sales increased by 3.1 per cent to SEK 5,852m (5,674).

• Operating profit, adjusted, increased to SEK 258m (255). In 2016 operating profit,

adjusted, increased to SEK 758m (690).

• Operating profit/loss amounted to SEK –548m (239). In 2016 operating profit/loss

amounted to SEK –82m (671).

• Cash flow from operating activities increased to SEK 406m (367). In 2016 cash flow

from operating activities amounted to SEK 889m (927).

• Net debt/EBITDA ratio amounted to 2.44x (3.03).

• The Board proposes a dividend of SEK 0.75 (0.50) per share.

Q4 highlights

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Overall market and sales development Total sales growth of 3.8 per cent

Cloetta´s main markets

• The confectionery market was unchanged or negative in all markets

except in the Netherlands.

• Organic sales growth of 1.0 per cent.

• Sales grew in Sweden, Denmark, the Netherlands and in export

markets and declined in Finland, Italy, Norway, Germany and the UK.

• In Sweden sales was driven by pick-and-mix and seasonal products.

Sales of chewing gum and sugar confectionery increased in the

Netherlands.

• In Finland sales decreased due to de-stocking in trade prior to the

abolishment of the confectionery tax.

• In Italy lower prices on seasonal products were not fully

compensated by higher volumes.

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Key ratios,

SEKm

Oct-Dec

2016

Margin

%

Change

%

Oct-Dec

2015

Margin

%

Full year

2016

Full year

2015

Net sales 1,684 3.8 1,622 5,852 5,674

Gross profit 667 39.6 0,7-pts 631 38.9 2,319 2,211

Operating profit, adjusted 258 15.3 - 0.4-pts 255 15.7 758 690

Operating profit/loss (EBIT) - 548 -32.5 N/A 239 14.7 - 82 671

Net financial items -25 -48 -174 -178

Profit/loss before tax - 573 191 -256 493

Profit/loss for the period - 420 157 -191 386

Profit for the period excluding

impact of impairment loss

174 10.8 157 403 386

Earnings per share, excluding

impact of impairment loss, SEK

0.61 10.9 0.55 1.41 1.35

Increased operating profit, adjusted

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Changes in net sales Oct-Dec

2016

Full year

2016

Full year

2015

Organic growth 1.0% 0.5% 1.5%

Structural changes - 2.2% 3.9%

Changes in exchange rates 2.8% 0.4% 1.4%

Total 3.8% 3.1% 6.8%

Changes in net sales

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Net sales and Operating profit, adjusted

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Operating profit, adjusted

74

108

193

257

108

133

194

255

126

150

224

258

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4S

EK

m

2016 2015 2014

Net sales

1,400

1,700

1,600

1,500

1,300

1,200

0

SE

Km

1,684

Q4

1,622

1,579

Q3

1,448 1,459

1,303

Q2

1,362

1,280

1,238

Q1

1,358

1,313

1,193

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-35

125 93

147

-16 -23

54

116

91 44

75

290

223 163 174

367

253

114 116

406

330

131

500

927

889

-200

0

200

400

600

800

1000

1200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

SE

Km

Cash flow from operating activities Cash flow from operating activities (rolling 12 months)

Strong cash flow from operating activities

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2012 2013 2014 2015 2016

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SEKm Oct-Dec

2016

Oct-Dec

2015

Full year

2016

Full year

2015

Cash flow from operating activities before changes in working

capital

324 295 813 697

Cash flow from changes in working capital 82 72 76 230

Cash flow from operating activities 406 367 889 927

Cash flow from investments in property, plant and equipment

and intangible assets

-58 -48 -170 -161

Cash flow from other investing activities -47 - -152 -206

Cash flow from investing activities -105 -48 -322 -367

Cash flow from operating and investing activities 301 319 567 560

Cash flow from financing activities -425 -211 -534 -518

Cash flow for the period -124 108 33 42

Cash flow

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Net debt/EBITDA below target

2013

Financial leverage

0,0

5,0

3,0

3,5

4,5

4,0

2,5

2,0

0,5

Q2 Q3 Q4 Q1 Q2 Q3 Q4

2.50 Target

Q1 Q4 Q3 Q2 Q1 Q3 Q4 Q1 Q2

2014 2015 2016

Q4: 2.44

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Strategic review Cloetta Italy

• Negative Italian economy and Cloetta’s performance over the last years makes it

necessary to do a strategic review of Cloetta Italy.

• The strategic review is aimed at improving growth and margins of Cloetta and might

include a potential divestment of the Italian business.

• A divestment of Cloetta Italy would improve Cloetta’s EBIT margin.

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Net debt/EBITDA below target – increased dividend proposed

• Improved EBITDA and strong cash flow for the year.

– Cash flow from operating activities continued to be strong and amounted to

SEK 889m (927).

• Net debt/EBITDA ratio decreased to 2.44x (3.03x).

– Target of 2.5x has been reached.

• The Board is proposing a dividend of SEK 0.75 (0.50) per share which is in line

with the financial target.

• Ambition is to use future cash flows for payment of share dividend, while at the

same time providing financial flexibility for complementary acquisitions.

Cloetta stands strong

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Strategic review

of Cloetta Italy

Operational

excellence in

supply chain

through

Lean2020

initiative

Implement and

drive initiatives

within pick-and-

mix

In focus

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Profitable growth

including

potential

acquisitions

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Sweden Denmark

Q4 selection of product launches

Finland

The Netherlands

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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.

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Cloetta Year-end Report 2016 - Presentation

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