PureCircle Limited : 1HFY13 Interim Results · •Revenue of High Purity Stevia products increased...
Transcript of PureCircle Limited : 1HFY13 Interim Results · •Revenue of High Purity Stevia products increased...
PureCircle Limited : 1HFY13 – Interim Results Investors March 2013
1 PureCircle - Investor Slides - All rights reserved March 2013
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Content
1. CEO Overview Magomet Malsagov, CEO
2. Financial Review William Mitchell, CFO
3. Sales and Marketing Review Jordi Ferre, President Commercial Division
4. Outlook Magomet Malsagov, CEO
5. Questions
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1. CEO Overview Magomet Malsagov
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CEO Overview
• Sales: H1 FY 13 sales were $27.4m an increase of 80% against 1H FY12 ($15.2m). $26m of
the sales were high purity stevia sweeteners and natural flavors, a 120% improvement against
H1 FY12.There was growth in sales across all high purity ingredients primarily driven by new
innovations in our Stevia PureCircle proprietary portfolio of all-natural, no-calorie sweeteners
and natural flavor systems, under the PureCircle Flavors range. By region, EMEA, Latin
America, Asia Pacific and USA all recorded sales growth.
• Sales volumes: In 1H FY13 total volumes of high purity stevia sweeteners and natural flavors
increased by 135% against 1H FY12. Volume increases were led by sales of new proprietary
ingredients introduced over the past twenty-four months.
• Market usage: Global F&B usage of PureCircle’s high purity stevia solutions continues to grow
strongly in all regions and in more categories. By region the EU has seen the highest number of
new launches in its first full year since regulatory clearance in December 2011. By category
beverages continues to have highest usage with Carbonated Soft Drinks including global Cola
and lemon flavored brands, Iced Teas, Juices and Flavored Waters all growing.
• Regulatory: Important regulatory clearances since 30 June 2012 have included Indonesia
(August 2012), and Canada (November 2012). Further clearances are expected in CY13.
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CEO Overview continued
• Customer base: The Group continues to secure new customers and now has almost 200 more
customers than at end 1H FY12, with our EU joint ventures and the Americas each contributing
strongly to this growth.
• Innovation: The breadth and scale of our innovation pipeline is beginning to become apparent
in the market within our successful Stevia 3.0 strategy. Sales volumes of proprietary new
products launched within the last 24 months increased well in excess of 100%. In March 2013
we announced plans to commercialize high purity Reb D, the natural sweetener having one of
the best sweetness profiles which is expected to come to the market in FY14. We have a rich
pipeline of future innovations to come
• Marketing and Application: Our core marketing and service platforms including Global Stevia
Institute, the Stevia by PureCircle Trustmark, PureCircle University and PureCircle Insights
Group are being used actively by clients to support their stevia based product launches. Our
service and application support for customers has been boosted by the opening of our UK office
and application laboratory.
• Supply Chain: After the slow-down of production in FY12 our supply chain has picked up pace
and production volumes increased in 1H FY13 with further increases expected in 2H FY13.
During 1H FY13 we have also expanded leaf supply and strengthened supply chain
management with the appointment of Randy Cook as VP Supply Chain.
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2. Financial Review William Mitchell, CFO
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$’m 6 months ended
1HFY13
1HFY12
% variance
Sales 27.4 15.2 80%
Gross Profit 5.2 1.7 206%
Other income and expenses 1.2 (6.5) 118%
SG&A expenses (9.8) (7.2) (36%)
Interest (3.9) (3.7) (5%)
Taxation 0.4 2.6 (85%)
Net loss after tax (6.9) (13.1) 47%
EBITDA (adjusted ) (0.5) (8.6) 94%
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Profit and Loss Account
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$’m 31 December 2012 30 June 2012
Intangible assets 30.0 26.8
Fixed assets 67.5 66.6
Other non current assets 14.9 15.4
Inventories 88.9 73.7
Receivables 27.3 26.6
Cash and deposits 45.8 24.3
Gross assets 274.6 233.3
Payables (15.8) (10.4)
Short term borrowings (22.1) (18.3)
Long term liabilities (90.5) (85.2)
Net assets 145.7 119.5
Net debt (66.3) (78.1)
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Balance Sheet
PureCircle - Investor Slides - All rights reserved March 2013
$’m 6 months ended
1HFY13
1HFY12
Loss before tax (7.3) (15.6)
Add: interest, dep’n and non cash items 9.3 4.1
Working capital changes (9.8) 13.1
Cashflow before interest and financing (7.8) 1.6
Interest/Tax (4.0) (3.7)
Capex (4.8) (1.3)
Share issues and Borrowings 37.2 (11.7)
Forex 1.0 (0.9)
Net cashflow for period 21.7 (16.0)
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Cashflow
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3. Commercial Review Jordi Ferre, President Commercial Division
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• Revenue of High Purity Stevia products increased 120% during H1 vs. year ago
• Diversification of the business has continued, Reb A is now less than a third of the overall high purity volume sales
• 5 year supply and development agreement signed with The Coca Cola Company as announced end of September 2013
• Global Commercial Infrastructure is now consolidated to exceed customers expectations:
– We have open offices with application labs in Europe (UK), China (Shanghai), Mexico and expanded our Chicago
Area facility with new sensory capabilities
– We have established our own regulatory affairs resources working directly with regulatory bodies around the World including approval of new innovation by the FDA
– We have appointed a global business director for Animal Feed with focus on co-products sales
– Our European JVs are now fully integrated into PCL and starting to have a significant business impact
– We have appointed new distributors in Thailand, South Africa, Indonesia, Philippines and Taiwan
– PC Marketing focusing on Stevia Advocacy and Sustainability of great relevance to global customers
• All the above while CSD launches using Stevia sweeteners have continued to roll out into a number of key markets during the past 6 months,
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Commercial Overview H1 FY13
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Main launches Since September 2012: Expanded Market and Category Reach
Alcoholic Drinks
Beverages (Non CSDs)
Scandinavia Germany
Finland
Italy
Meal bar, USA
Finland
UK
Spain Ireland
Chocolate Powder, Mexico
Argentina Ecuador
Table Top
Other USA
Confectionery
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Switzerland
Scandinavia
France
Revenue Evolution: Accelerated Growth of High Purity Ingredient business
* Regular Repeat Sales: Based on customers actual consumption and repeat orders for high purity stevia products * Co-Product Sales: Sold for animal feed or traditional Asian applications such as soy sauce * Take or Pay Sales: Based on committed volumes by contract
H1 Revenue Breakdown by Revenue Source*
Cargill PepsiCo
PepsiCo Merisant PepsiCo
Merisant Firmenich
Firmenich 30,000
25,000
20,000
15,000
10,000
5,000
0
13,507
FY13 FY12 FY11
27,360
+120%
15,120
+81%
Regular Sales
Co-Product Sales
Take or Pay
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PureCircle Volume By Quarter in MT -
+152%
+66%
Q4 Q3 Q2 Q1
PureCircle High Purity Stevia Volume By Quarter
FY10
FY11
FY12
FY13
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*PC sold to 136 different Customers (GKAs counted as one) in H1 * PC sold to 49 different Country of Destinations in H1
Breakdown of PureCircle business H1 FY13
% of total Stevia High Purity Volume
Reb A
Others
% of sales per Country of Destination*
USA
Others
% of Total Revenue by Customer *
Top 10
Others
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• Reb A represented 30% of high purity stevia sales volume down from 91% in FY11
• Diversification and innovation strategy is succeeding
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PureCircle Customers Serviced Globally: EU JVs have started to have an impact
Cumulative Customers Serviced By Month – Including JVs
0
50
100
150
200
250
300
58
De
c ’1
0
54
No
v ’1
0
44
Oct ’1
0
40
Se
p ’1
0
38
Fe
b ’11
136
Ja
n ’11
130 D
ec ’11
128
No
v ’11
121 O
ct ’1
1
117
Se
p ’11
112
Au
g ’11
108
Ju
l ’1
1
101
Ju
n ’1
0
98
Ma
y ’1
0
88
Ap
r ’1
0
82
Ma
r ’1
0
73
No
v ’1
3
300
Oct ’1
3
296
Se
p ’1
3
289
Au
g ’1
3
275
Ju
l ’1
3
261
Ju
n ’1
2
251
Ma
y ’1
2
235
Ap
r ’1
2
230
Ma
r ’1
2
211
Au
g ’1
2
172
Ju
l ’1
2
170
Ju
n ’11
164
Ma
y ’11
152
Fe
b ’1
0
152
Ma
r ’1
1
141
Fe
b ’1
2
204
Ja
n ’1
2
195
De
c ’1
2
189
No
v ’1
2
Apr
’11
Oct ’1
2
184
Sep ’12
178
Aug ’10
31
Ju
l ’1
0
23
61
Jan ’10
184 US Customers Serviced
Global Customers Serviced
EU JVs
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PureCircle Commercial Division: World Class Global Infrastructure ready to service Global Customers
UK: Office/Lab (Winnersh) Warehouse (Northfleet)
) China: Office/Lab (Shanghai) Warehouse (Shanghai
Malaysia: Sales office (Kuala Lumpur) Warehouse (Kuala Lumpur)
Australia: Sales office Warehouse (Sidney)
Argentina: Sales office
France: Sales office Warehouse (Le Havre) JV location (Lille)
Mexico: Office/Lab (Mexico City) Warehouse (Mexico City)
United States: Office/Lab (Oak Brook) Warehouse (Chicago)
Sweden: Warehouse (Malmoe)
Germany: JV location (Darmstadt)
Italy: Sales office
Denmark: Sales office
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Regulatory Approvals Update Since September 2012: Confirmed approvals for Canada and South Africa while progress Continues
Country Regulatory Approval Update
USA Rebaudioside D (Reb D) received GRAS status from Expert Panel and has been submitted to FDA for review. Expected approval: July 2013
Canada Stevia Leaf Extract approved by Health Canada on November 30th 2012, opening the market for PC sweeteners and flavors portfolio.
India Approved by Food Safety and Standard Authority of India (FSSAI) for use in major food and beverage categories, the administrative step of notification is expected by September 2013
Thailand At the final stage of Approval. Ministry of Health deliberating Max Use Levels for beverage, and a few other categories Expected: H1 2013
Indonesia BPOM (“National Agency of Food and Drug Control”) published approval of Stevia as Natural Sweetener. Maximum Usage Levels are being deliberated, final notification expected by August 2013,
South Africa Approved for use in a wide range of products as outlined by Codex
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276
470 598
1087
0
200
400
600
800
1000
1200
2009 2010 2011 2012Source: Mintel
Global F&B Stevia Product Launches By Calendar Year
$434
$934
$1,242
$1,605
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Q2 2009 Q2 2010 Q2 2011 Q2 2012
Market Indicators Continue to be Positive
US: Annualized All Channel Retail Dollar Sales ($)-
Source: Nielsen
Stevia Aided Awareness
Source: PureCircle Insights Study
TOTAL PRODUITS STEVIA TOTAL EDULCORANT + NUTRITIONNEL
France: Breakdown (k€) artificial sweeteners vs. stevia
S t e v i a - b a s e d t a b l e t o p s w e e t e n e r s represent 36% of total market in France (in value)
5% reduction
20% reduction
30% reduction
Carbonated Soft Drink Sweetened with Stevia: New Launches since September 2012
30% reduction
Reformulations Brand Extensions
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H1 FY13 Update
Progress
• Appointment of spokesperson for Mexico & Toxicologist Berna Magnusson joins Global Board
• Expansion of outreach materials and website into Mandarin & German
• Newsletter >25,000 reach monthly
• Development of the first comprehensive Stevia Safety Review
Future Developments
• European Outreach/educational plan across major European markets
• Expanding LATAM influence with KOL Educational Programme – ‘Fighting Obesity’ across key Mexico markets
• Developing plans to expand consumer
resource materials following positive KOL and industry feedback
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• Completing updated Carbon Footprint
• Announcement of comprehensive 5 year sustainability objectives
• Issuing updated Sustainability report to the marketplace
• Begun deeper engagement with customers on CSR advantage
• Leveraged CSR to open up new project opportunities with major customers
• Announcement of calorie footprint exceeding 1.3 trillion through FY 2012
Future Developments Progress
FY13 Update
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• Aggressive PC University Expansion and marketing supported roll out of Stevia 3.0
• Launch EU applications lab and develop
• Launch of Stevia 3.0
• Launch of PureCircle University 20+ customer sessions
Future Developments Progress
FY13 Update
PureCircle - Investor Slides - All rights reserved March 2013
Stevia PureCircle Status assessment
• Market Indicators:
– CSD launches by major global beverage companies have continued in the past 6 months confirming roll out that started in Q1 2012
– All market indicators so far are positive: $1.6bn retail market in the US and the number of new product launches is accelerating as regulatory approvals continue to roll.
– Awareness in all major markets is rapidly increasing to 60%+
• PureCircle Commercial Strategy:
– We have signed long term agreements with all major Global Key Accounts including The Coca Cola Company
– Global Commercial Infrastructure is second to none
– Success of innovation strategy reflected in sales volumes will continue in the future with recent filing of Reb D and others
– While CSD launches accelerate and customer inventories are being depleted, PureCircle High Purity Business grew +120% during H1 FY13
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….The company for major long term industry
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4. Outlook Magomet Malsagov, CEO
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Outlook
• We are confident of the long term future of high purity stevia market:
- New markets, growth in usage all regions and F&B categories, including major CSD brands,
- Global drive by the F&B industry to reduce the caloric content of their products; and
- PureCircle with its natural and healthy ingredient solutions is helping clients achieve their goals.
• The success of our expanded product portfolio and customer acquisition drive supports our
confidence in our strategy and in PureCircle’s likely leading role in the emerging market of
healthy and good for you ingredient solutions.
• Our business model is sensitive to sales volumes. Whilst sales remain modest relative to
our capacity, our margins too will remain below those of our long term business model.
• It will be mid to long term before PureCircle sees rapid sales growth. Expect this to result
from the combination of major CSD usage, the unwinding of Beverage Global Key Account
(BGKA) inventories and further regulatory clearances. 1H FY 13 sales volumes are perhaps
the first indication of that growth emerging.
• Looking at H2 FY13 we expect stronger revenues than 1H FY13, but expect these revenues
to continue to be impacted by some BGKA inventory overhang. Accordingly our sales guidance for H2 FY13 is in the range of $35m to $45m.
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5. Questions
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PureCircle Limited : 1HFY13 – Interim Results Investors March 2013
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