2. Royal Wessanen nv
Q4/FY 2012
Amsterdam, 22 February 2013
www.wessanen.com
3. FY 2012: a challenging year
730
Revenue (in € mln)
The economy and market
A turbulent year for the global economy
Organic market trending positively 720
Our positives
Grocery continues to perform well
710
Acquisition of Clipper Teas
Creation of one frozen food company
0.7%
Strengthening Supervisory Board
700
2011 Price/mix Volume Currency Acq/divest. 2012
Our negatives
Performance HFS disappointing ♦ Autonomous third party revenue growth
Postponement sale of ABC
EBIT (in € mln)
Sizeable goodwill impairments
Our remedy 23,7 18,8
Initiated a broad restructuring to build a more European
-19,0
integrated marketing-led company -45,8
2011 2012
♦ Reported, ♦ Normalised
3
4. Grocery
Showing a good performance all throughout the year
In € mln Q4-12 Q4-11
Realised 4.6% autonomous growth in 2012
Revenue 68.9 58.7
6.9% in the fourth quarter
Autonomous growth 6.9%
Core brands growing such as Bjorg, Zonnatura and Whole Earth
Normalised EBIT 6.3 1.9
Six out of eight core categories growing Impairments (15.8) (3.0)
Other exceptionals (3.5) (0.5)
Clipper Teas acquired, UK market leader in organic and fair trade
teas EBIT (13.0) (1.6)
11% growth in 2012
In France introduced early 2013
Netherlands to follow next few months In € mln FY12 FY11
Revenue 272.8 243.9
Innovation examples:
Bjorg muesli superfruits; coconut milk cooking aid; fourré Autonomous growth 4.6%
chocolat with hazelnut
Normalised EBIT 22.0 18.0
Zonnatura loose green tea; squeeze fruit/vegetables
Kallo gravy granules Impairments (15.8) (3.0)
Other exceptionals (4.7) 0.6
EBIT 1.5 15.6
4
5. Health Food Stores (HFS)
HFS showing a disappointing performance in all three businesses
In € mln Q4-12 Q4-11
France impacted by changing health food stores landscape
Revenue 50.9 53.3
Rise of chains at expense independent stores
Lower sales, especially in wholesale and at fresh Autonomous growth (4.5)%
Normalised EBIT 0.8 1.3
Benelux impacted by lost customers and weak performance at Fresh
Existing Natuurwinkel and independent stores growing Impairments (23.9) (19.8)
Other exceptionals (6.5) (1.0)
Germany impacted by weak brand performance Allos and declining
revenues at Reformhaus channel (Tartex) EBIT (29.6) (19.5)
Innovation examples:
Tartex pasta sauces; jubilee yeast pastries In € mln FY12 FY11
Allos crunchy (e.g. almond and cinnamon); muesli (e.g.
Revenue 204.8 247.5
cranberry-Goji)
Autonomous growth (5.0)%
Normalised EBIT - 5.0
Impairments (23.9) (23.1)
Other exceptionals (6.5) (3.7)
EBIT (30.4) (21.8)
5
6. IZICO - integrated frozen foods company
Acquiring non-controlling stake Favory paved the way for creation one
integrated company In € mln Q4-12 Q4-11
Revenue 29.0 29.1
New management team in place
Autonomous growth (0.1)%
New name IZICO
Normalised EBIT 0.7 0.2
easy (IZI), go (CO), ice (IZ) and company (CO)
Impairments (7.0) (14.3)
Milestone plan being executed for full alignment and process
Other exceptionals (6.2) (0.3)
integration Beckers Benelux and Favory
EBIT (12.5) (14.4)
Combining both headquarters in Breda
Integration marketing & sales, operations, finance and HR
In € mln FY12 FY11
Closure Favory Deurne plant as of the end of March
Revenue 112.5 113.1
Autonomous growth (0.5)%
Normalised EBIT 1.8 2.3
Impairments (7.0) (14.3)
Other exceptionals (6.2) (0.3)
EBIT (11.4) (12.3)
6
7. ABC - market leader RTD frozen pouches
Capitalising on further optimisation in 2011 after significant
In € mln Q4-12 Q4-11
improvement multiple processes in previous years
Revenue 16.9 18.0
Strong step-up in marketing spending in $-terms
Supporting key seasonal holidays Autonomous growth (4.7)%
First-ever national TV advertising campaign Normalised EBIT (3.0) (0.5)
Broad range traditional and digital media
Impairments - 0.1
Daily’s modest decline in growing RTD market Other exceptionals - 0.1
More competition emerged in frozen pouch segment
Remained clear market leader (market share; household EBIT (3.0) (0.3)
penetration; repeat purchases)
Innovations such as light and season-extending RTD pouches In € mln FY12 FY11
Revenue 128.6 112.6
Little Hug double digits revenue growth
Especially 20-pack and 40-pack performing well Autonomous growth 5.7%
Multi-year revitalisation process increasingly paying off Normalised EBIT 6.3 9.9
Impairments (0.1) 0.8
Other exceptionals 0.1 0.4
EBIT 6.3 11.1
7
8. ABC (cont’d)
Why postponement divestment ?!
Bids not adequately reflecting fundamental value
• Uncertainties attached to relatively short track record in emerging RTD frozen
pouch category; perceived to be crowded competitive field
Realise better value for our shareholders at a later stage
The process
Process kicked off in June
Conducted a comprehensive process
Good level of interest from strategic and financial parties
Next steps
Reported as ‘continuing operations’
Clear plans / budgets in place
Labelled non-core
8
9. ‘Wessanen 2015’
Announced late November 2012
Consultation with European and local works councils have been / are taking place
Wessanen will become a more consumer- and customer-led company
To deliver more efficiently our strategic agenda and to adapt to the changed magnitude and
circumstances of the business
We have been initiating wide range of actions
To increase focus
To substantially reduce complexity
To become more profitable by reducing costs
Detailed plan and timeline with numerous actions at our various businesses
Progress (including savings and staff reduction) closely monitored
Executing plans in various ‘waves’, to reduce executional risks
9
10. ‘Wessanen 2015’ - the numbers
Reduction of approx. 300 FTE of which 250 forced redundancies
Grocery/HFS/Corporate ± 190FTE
IZICO ± 110 FTE
Expected one-off costs
€(21) mln cash, largely accounted for in Q4, remainder in 2013
€(7.0) mln non-cash due to impairment Deurne plant
Expected savings €15mln p.a. from 2014 onwards
€10 mln at Grocery/HFS/Corporate
€ 5mln at IZICO
Includes lower employee / other operating expenses
Excludes any expected benefits to top-line
10
11. ‘Wessanen 2015’ - a wide range of actions
Create more focus on our activities
Further increased focus on core brands and eight core categories
Expansion number of CBTs (category brand teams)
Benelux operations split in branded and distribution
French HFS operations split in branded and distribution
Integration De Rit in Germany operations
Reduce complexity / simplify processes
Cutting the tail / reducing number of SKUs at
• Dutch brands
• French HFS brands; exiting frozen range at Bonneterre
• Export
Centralising quality department
Focus on one franchise formula (Natuurwinkel), to end GooodyFooods formula
Supply chain to manage our plants as of 2013
Streamlining supply chain processes
Addressing low-yielding and non-performing activities
Strongly reducing German grocery presence, changing go-to-market approach
Focus Italian grocery on non-dairy (soy)
11
15. Impairments of goodwill and PPE
Grocery UK - Kallo €(15.8) mln
Lower growth projections dairy alternatives, loss private label contract, adverse
movement pre-tax discount rate (12.1%→12.7%)
HFS - Tartex €(19.9) mln
Lower growth projections Reformhaus channel
Private label business negatively impacted by insolvency one of our customers
HFS - Allos €(3.5) mln
Lower growth projections 2 core categories
Difficulties in passing on increased raw material costs
HFS - France €(0.5) mln *
Weaker market outlook
IZICO €(7.0) mln
Closure of Favory Deurne plant in March 2013
* €(0.3) mln relates to goodwill and €(0.2) mln relates to other intangibles
15
16. Year end carrying value goodwill/brands
In € mln Goodwill Brands Total
Grocery - France 10.4 9.1 19.5
Grocery - UK (Kallo / Clipper) 11.1 10.5 21.6
Grocery - Benelux 4.6 - 4.6
HFS - Allos 9.3 2.1 11.4
HFS - Tartex - 1.2 1.2
Carrying value year end 2012 35.4 22.9 58.3
At year end 2012: no carrying value of goodwill and/or brands at Grocery Italy, Grocery Germany,
HFS France, HFS Benelux, IZICO and ABC
16
17. Cash flow 2012
22.2 (42.3)
Increase working
(7.6)
capital
Cash flow
from 22.2
earnings
(26.1)
Sources
Net Investments
(*)
Increase
20.1 of net
debt (**)
(6.1) Dividends paid
(2.5) Derivatives and FX
Uses
17
18. Net debt / Leverage ratio
In € mln
100
Net debt
75
€55 mln
50
25
0
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
3
Leverage ratio
1.7x
2
1
0
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
18
20. Looking forward
2012 was a turbulent year for the global economy
Organic food markets continue to trend positively
We have made clear progress in numerous areas, however not all initiatives have resulted in
desired outcome
We have run a connected leadership development programme for our top-60
We have initiated a comprehensive transformation programme
As of 2014 €15 mln of savings p.a.
All the right actions, full of confidence these will bear fruit
2013 will be another challenging year: “Store is open while we are renovating and innovating”
20
22. Bridge - revenue growth 2012
In € mln
730
(2.1).% 2.8% 1.8% (4.2)% (0.2)% 2.6% 0.7%
720
710
700
690
Autonomous
revenue growth
680
0.7%
670
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23. Bridge: EBITE → EBIT
In € mln
30
20
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€(46.8) €(45.8)
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€23.7 €4.0 €(5.0) €(0.5) €(3.6) €0.2 €18.8 €(17.8)
-30
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23
24. Working capital
80
4 quarter average working capital
60
40
20
0
Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12
40
q-on-q movement working capital
20
0
-20
-40
Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 24
25. Cash flow Q4 2012
3.7 (2.1)
Decrease
working 1.6 (1.6) Net Investments
capital
Derivatives and
(0.5)
FX
2.1 Decrease
(1.6) of net
Cash flow debt
from
earnings
Sources Uses
25
26. A very sound financial position
In € mln Dec 12 Dec 11 In € mln Dec12 Dec11
Assets Liabilities
Property, plant and equipment 77.4 86.4 Total equity 101.6 166.1
Intangible assets 66.8 90.6 Interest-bearing loans 60.7 37.4
Investment associates/other 1.1 1.0 Employee benefits 24.1 24.0
Deferred tax assets 9.2 8.8 Provisions / Deferred tax liabilities 5.4 3.9
Non-current assets 154.5 186.8 Non-current liabilities 90.2 65.3
Bank overdrafts / current debt 1.4 2.9
Inventories 72.3 67.5 Interest-bearing loans/borrowings 2.5 0.1
Income tax receivables - 2.2 Provisions 16.8 3.3
Trade receivables 85.7 78.9 Income tax payables 0.7 0.5
Other receivables / prepayments 15.7 24.4 Trade payables 68.3 70.5
Cash (equivalents) 9.7 8.2 Non-trade payables/accrued expenses 56.4 59.3
Current assets 183.4 181.2 Current liabilities 146.1 136.6
TOTAL ASSETS 337.9 368.0 TOTAL EQUITY & LIABILITIES 337.9 368.0
26
27. Financials Q4/FY - guidance 2013
Financials Q4
Net financing costs €(1.1) mln Q4-11: €(0.9) mln
Income tax expenses €1.2 mln Q4-11: €1.7 mln
Capex €(1.2) mln Q4-11: €(3.3) mln
Financials Full Year
Net financing costs €(3.8) mln FY-11: €(3.5) mln
Income tax expenses €(3.9) mln FY-11: €1.5 mln
Capex €(5.7) mln FY-11: €(10.2) mln
Guidance 2013
Net financing costs €(3)-(4) mln
Effective tax rate around 35%
Capex €(8)-(10) mln
Depreciation and amortisation €(14) mln
Non-allocated expenses (incl. corporate) €(11) mln
27