Cloetta - Roadshow presentation May 2014

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Roadshow presentation 12-16 May 2014 in Chicago, New York, London and Stockholm.

Transcript of Cloetta - Roadshow presentation May 2014

PowerPoint Presentation

Roadshow

Chicago, New York, London and Stockholm 12-16 May 2014

2

Cloetta attendees

Joined LEAF as CEO in 2009

Previously held various senior management positions within

FMCG sector, including CEO of

V&S

B.Sc. and MBA, University of California at Berkeley

Bengt Baron President and CEO

Joined LEAF as CFO in 2010

Previously held various senior management positions within

Unilever, including CFO/COO

Unilever Nordic and VP Finance

Supply Chain North America

B.Sc. in Business Administration and Economics, University of

Uppsala

Danko Maras CFO

Joined LEAF as SVP Corporate Communications in 2010

Previously held various senior management positions, including

VP Corporate Communications

in TeliaSonera, V&S and

Electrolux

B.A. in Political Science and Economics, University of Lund

Jacob Broberg SVP Corporate

Communications &

Investor relations

3

Cloetta the leading Nordic confectionery player

Leading market positions in key markets and complete product offering

A portfolio of iconic local brands top 10 brands account for about 60% of net sales

Sales in 50 countries 80% of total sales generated from markets with own sales force

Approx. 2,500 employees in 13 countries

Production at 10 factories in 5 countries 96,500 tonnes produced in 2013 (excl. Nutisal)

Complete offering

CANDY & LIQUORICE

CHEWING GUM PASTILLES

CHOCOLATE

Net Sales split 2013 Sales and underlying EBIT margin1)

1) Underlying EBIT based on constant exchange rates and the current company structure (excluding distribution business in Belgium and third-party distribution agreement in Italy) and excluding items affecting comparability

By region By product area

NUTS

4 859 4893

9%

12%

0%

2%

4%

6%

8%

10%

12%

14%

0

1 000

2 000

3 000

4 000

5 000

6 000

2012 2013

Un

de

rlyi

ng

EB

IT m

arg

in

Ne

t s

ale

s (

SE

Km

)

4

Iconic brands

1836

1878

1909

1913

1927

1928

1934

1937

1938

1941

1949

1951

1953

1960

1965

1970

1976

1979

1981

2007

Population (million): 9.5

Market size (EUR million): 1,500

Market position: #2

Top-selling brands:

Malaco, Kexchoklad, Lkerol,

Ahlgrens bilar, Polly, Center,

Juleskum, Plopp, Sportlunch

Sw

ed

en

1)

Population (million): 4.9

Market size (EUR million): 900

Market position: #1

Top-selling brands:

Malaco, Lkerol, Pops,

Ahlgrens bilar

No

rwa

y2

)

Population (million): 5.6

Market size (EUR million): 1,100

Market position : #3

Top-selling brands:

Malaco, Lakrisal, Lkerol,

Center, Juleskum

De

nm

ark

2)

Population (million): 5.4

Market size (EUR million): 900

Market position: #2

Top-selling brands:

Malaco, Jenkki, Mynthon,

Lkerol, Sisu, Tupla

Fin

lan

d1

)

Population (million): 16.6

Market size (EUR million) : 1,500

Market position: #2

Top-selling brands:

Sportlife, XyliFresh, King,

Red Band, Venco Ne

the

rla

nd

s3

)

Population (million): 60.7

Market size (EUR million): 3,700

Market position : #2

Top-selling brands:

Sperlari, Dietor, Saila,

Dietorelle

Ita

ly2

)

5

Solid positions in key markets

Datamonitor, Nielsen Note: 1) Confectionary market, 2) Sugar confectionary and pastilles market, 3) Sugar confectionery market. All numbers for market sizes represent entire confectionary market (to consumer)

6

Best in class route-to-market

Supermarkets Convenience stores /

gas stations Other

Customer relations

Large and efficient sales organisation in place on all main

markets

80% of total sales generated from markets with own sales

force

Execution

Ensure that negotiated listing and distribution agreements are

followed

Ensure good visibility on shelves and checkout lines

Implement campaigns efficiently

C o n s u m e r s C o n s u m e r s

7

Attractive non-cyclical market

Market development in Cloettas main markets1) Key trends

Market driven by increase in population, higher prices and to some extent also increased per capita consumption

Demand for differentiated and innovative products

Strong brands gain market share

Market size by region Consumer behaviour

Purchases highly impulse driven

High brand loyalty

Availability is an important factor for impulse driven purchases

Appreciation of innovation taste, quality and novelties is important

8

Clear strategy to deliver profitable growth

Asset-light growth with low risk combined with potential upside from acquisitions

Acquisitions

New geographies

New territory

Broaden distribution

Promotion planning and execution

Advertising campaigns

Seasonal products

Packaging updates and upgrades

Every day great execution

Sizing and pricing

Brand extensions

Fill white spots

Enter new categories with existing brands

Geographical roll-out

Brand re-launch

Innovations

Strategic initiatives

Examples of initiatives

9

Clear strategy to deliver profitable growth contd

Launch of Viva Licorice Dutch products in Malaco bags

Launch of Polly bilar

Sisu chewing gum pastille stretches into gum in a unique packaging format

Sportlife Mint Chewing gum brand stretches into pastilles

Re-launch of Dietorelle new products, new packaging and heavy

marketing investment

Launch of Chewits in Italy Cloettas UK candy

Hopea Toffee Old brand is re-launched

Tupla minibites Tupla chocolate bar stretches into minibites and biscuits

Acquisition of Goody Good Stuff

10

Stable revenues and visible earnings recovery

LTM net sales Q4 2011 Q1 2014 LTM EBIT Q4 2011 Q1 2014

4 658 4 699 4 791 4 826 4 859 4 902 4 821 4 856 4 893

4 959

0

1 000

2 000

3 000

4 000

5 000

6 000

2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1

Ne

t s

ale

s (

SE

Km

)

522 499

444 416 423

467

525 561

591 577

364

293

166

127 125

177

284

325

418 412

11%

11%

9%

9% 9%

10%

11% 12% 12%

12%

8%

6%

3%

3% 3%

4%

6%

7%

9% 8%

0%

2%

4%

6%

8%

10%

12%

14%

0

100

200

300

400

500

600

700

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

SE

Km

Underlying EBIT LTM Reported EBIT LTM

Underlying EBIT % LTM Reported EBIT % LTM

3 0

56

3 0

19

3 2

44

3 2

48

3 2

30

3 3

04

0

1 000

2 000

3 000

4 000

5 000

2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1

Ne

t d

eb

t (S

EK

m)

11

Financial development and targets

Quarterly net sales Quarterly underlying EBIT1) Financial leverage

Target organic sales growth: At least in line with market growth long term

Historical aggregate value growth of approx. 2% in Cloettas markets

Target EBIT margin: At least 14%

Cost synergies, growth and focus on profitability

Target long-term net debt/EBITDA of around 2.5x

Objective to reach target in three years

Payout ratio 40-60% of net income over time when financial target is

reached

x Net debt / Underlying EBITDA LTM

4.7x 5.1x

1) Underlying EBIT based on constant exchange rates and the current company structure (excluding distribution business in Belgium and third-party distribution agreement in Italy) and excluding items affecting comparability

4.4x 4.7x 4.2x

1 0

84

1 2

12

1 1

59

1 4

04

1 1

27

1 1

31

1 1

94

1 4

41

1 1