Q3 2012 results presenta

1. Royal Wessanen nv
Q3 2012
Amsterdam, 25 October 2012
www.wessanen.com @RoyalWessanen

2. Revenue and EBIT split Q3
>80% revenue in our organic activities
HFS (Health Food Stores)
Revenue €48.0 mln
Grocery EBIT €(0.3) mln
Revenue €65.8 mln
EBIT €5.7 mln 47%
19%
34%
Frozen Foods
Revenue €26.6 mln 9mon 2012
EBIT €0.4 mln
46%
Non-allocated & eliminations
Revenue €(1.9) mln 19%
35%
EBIT €(2.5) mln
2

3. Q3 performance
• Organic food market continues to trend favourably
– Growth potential significant and sustainable
– Increasing number of consumers appreciating rich taste; healthy nature; and
sustainable production methods
– Increased availability and still (too) low per capita consumption
• We also see reduced consumer confidence and related reduction of spending
– Result of subdued European economies
• Assessment of structure and cost base well under way
– Conclusions to be shared late November
– Aim to reduce complexity, streamline processes and improve speed to market
and decision making
– As a result substantial costs savings are to be achieved
3

4. Q3 2012 performance (cont’d)
• Grocery continues to show healthy performance, growing volumes, sales and
operating profits
– Addressing issues such as i) stop distributing Italian grocery brands and ii)
reviewing go-to-market approach Germany
– Healthy autonomous growth, increased operating result
– Our brands (e.g. Bjorg, Clipper, Whole Earth) performing well
• Developments disappointing at health food stores (HFS)
– Also first positive signs such as
• Development German brands
• New customer wins in France
• Positive like-for-like sales Dutch formula stores and independent stores
4

5. Q3 performance (cont’d)
• At Frozen Foods, both operations combined under single management
– Objective to realise further strategic alignment, corporation and process
integration
– Performance in line with previous quarters
• Discontinued operations (ABC)
– Divesting progressing as planned, signing targeted for the current fourth
quarter
– Ready-to-Drink cocktail market continued to grow driven by frozen pouches
– Y-on-y comparison distorted due to last year’s allocation
5

6. Q3 2012 key figures
In € mln Q3 2012 Q3 2011
Revenue ¹ 138.5 136.6
Autonomous growth (0.2)%
Gross contribution ¹ 54.6 52.8
As % of revenue 39.4% 38.7%
Normalised EBIT ¹ 3.3 1.0
As % of revenue 2.4% 0.7%
EBIT ¹ 3.0 (0.8)
Q3 revenue
48%
Result discontinued operations (net of tax) 2.3 10.1 ²
Net result 3.7 8.1 19%
33%
Earnings per share (EPS) 0.05 0.11
Grocery HFS Frozen Foods
¹ Continuing operations
² Includes €4.7 mln of deferred tax assets and net reversal impairment losses of €0.8 million. 6

7. Cash flow Q3
In € mln
(8.9)
4.2
Decrease
(7.9) of net
debt (**)
Cash flow
Increase working
from 4.2 capital (*)
earnings (*) (4.4)
Discontinued
operations
12.6
Sources
Net Investments
(3.9) (*)
(0.6) Derivatives and FX
Uses
7

8. Closing remarks
Macro economy
• Organic food market continues to trend favourably
• Reduced consumer confidence and related reduction of spending
Q3 results
• Grocery continues to grow volumes, sales and operating profits
• HFS developments disappointing, although first positive developments visible
Own actions
• Non-core activities
– At Frozen Foods new single management
– Divestment ABC progressing
• Core activities
– Addressing several issues such as
• French distribution and Italian grocery activities
– Assessment of structure and cost base well under way
8

9. Royal Wessanen nv
To make our organic brands most desired in Europe

10. Strategic priorities 2012-14
Strategic focus Activities
Topline growth • Grow core brands
• Grow core categories
• Build strongholds in new markets
• Country specific growth strategies
• Launch fewer, bigger, better innovations
• Execute acquisitions shortlist
Profitability • Central sourcing savings
• Pricing strategies towards customers
improvement
• Improve operational excellence with SAP
• Filling own factories
Enablers • Improve talent performance management / building connected
leadership
• Simplify how we are conducting business
• Activate Organic Expertise Centre (OEC), integrate Quality
10

11. Q3 figures per segment
In € mln Revenue Normalised EBIT
Q3 12 Q3 11 Q3 12 Q3 11
Grocery 65.8 57.5 5.7 3.8
HFS (Health Food Stores) 48.0 54.7 (0.3) (0.5)
Frozen Foods 26.6 27.3 0.4 0.2
Non-allocated * (1.9) (2.9) (2.5) (2.5)
Wessanen 138.5 136.6 3.3 1.0
* Eliminations for inter-segment revenue (between Grocery and HFS)
11

12. Revenue breakdown per segment
Grocery HFS
4.4%
(4.2)%
65,8
54,7 48,0
57,5
Autonomous third party revenue growth Autonomous third party revenue growth
Frozen Foods Royal Wessanen
(0.2)%
136,6
138,5
(2.5)%
27,3 26,6
Autonomous third party revenue growth Autonomous third party revenue growth
12

13. Bridge - revenue growth
In € mln
150
(1.9)% 1.7% 0.8% 1.0% 1.5%
140
130
120
Q3 11 Volume Price/mix Currency Acq&div. Q3 12
€136.6 €(2.6) €2.3 €1.0 €1.2 €138.5
13

14. Bridge - segment revenue growth
In € mln
150
€8.3 €(6.7)
€136.6 €(0.7) €1.0 €138.5
140
130
120
Q3 11 Grocery HFS Frozen Foods Intersegment Q3 12
14

15. Bridge - EBITE development y-on-y
In € mln
6
€1.0 €1.9 €0.2 €0.2 - €3.3
4
2
0
Q3 11 Grocery HFS Frozen Foods Corporate Q3 12
15

16. Financials Q3 / guidance 2012
Financials Q3
• Net financing costs €(0.9) mln Q3 2011: €(1.0) mln
• Income tax expenses €(0.7) mln Q3 2011: €(0.2) mln
• Capex €(1.4) mln Q3 2011: €(2.5) mln
Guidance FY2012
• Net financing costs €(3-4) mln
• Effective tax rate around 35%
• Capex €6-8 mln
• Depreciation and amortisation €10-11 mln
• Non-allocated expenses (incl. corporate) €11-12 mln
16

17. Working capital
80
4 quarter average working capital  Cont. operations
 ABC
60
40
20
0
Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 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 17

18. Net debt and leverage ratio
In € mln
150
Net debt
€57 mln
75
0
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
4
Leverage ratio
2.0x
2
0
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
18

19. A very sound financial position
In € mln Sept 12 Dec 11 In € mln Sept 12 Dec11
Assets Liabilities
Property, plant and equipment 55.1 86.4 Total equity 164.9 166.1
Intangible assets 106.8 90.6 Interest-bearing loans 64.7 37.4
Investment associates/other 0.5 1.0 Employee benefits 23.7 24.0
Deferred tax assets 6.8 8.8 Provisions / Deferred tax liabilities 6.4 3.9
Non-current assets 169.2 186.8 Non-current liabilities 94.8 65.3
Inventories 60.7 67.5 Bank overdrafts / current debt 5.7 3.0
Income tax receivables 0.7 2.2 Provisions 2.1 3.3
Trade receivables 77.4 78.9 Income tax payables 2.2 0.5
Other receivables / prepayments 14.8 24.4 Trade payables 64.6 70.5
Cash (equivalents) 13.9 8.2 Non-trade payables&accrued expenses 50.3 59.3
Assets classified as held for sale 58.8 - Liabilities classified as held for sale 10.9 -
Current assets 226.3 181.2 Current liabilities 135.8 136.6
TOTAL ASSETS 395.5 368.0 TOTAL EQUITY & LIABILITIES 395.5 368.0 19

20. Appendix - Sustainability
20

21. Attractiveness organic food markets
European organic food an attractive, growing segment
– Size €21 bn; 2011 growth around 6%
– <3% of total European food market
Increasing consumer appreciation
Still low per capita consumption
– European Union <€30> p.a.
Consumers increasingly convinced of benefits of organic food
regarding health, taste and environment
Grocery and HFS channels developing at different growth path
– Decline percentage of households shopping in HFS channel in
the Netherlands halted
21

22. What is organic?!
Strict criteria to be allowed to be labelled organic
Demonstrably free from GMO, pesticides and growth hormones
Strict rules on animal welfare
Severe restrictions on fertilisers, herbicides and pesticides
Severe restrictions on additives and processing aids
All about being produced and processed in line with organic principles
Organic products promote health and well-being
Holding benefits for the planet and for future generations
All about nutrition and taste !
Organic food is controlled by a unique European certification system
22

23. Wessanen Business principles
• Compliance with laws: being a responsible partner in society,
acting with integrity towards all stakeholders and others who
can be affected by our activities
• Environment: in line with commitment to sustainable
development, we will do all that is reasonable and practicable to
minimise adverse effects on the environment
• Product safety: we aim at all times to supply safe products
and services
• Free market competition: we support free market
competition as basis of conducting business; we observe
applicable competition laws and regulations
• Child, bonded and forced labour: under no circumstances we
are making use of forced or bonded labour; we do not employ
children in violation of relevant conventions of ILO
• Human rights: we support and respect human rights and
strive to ensure that our activities do not make it an accessory
to infringements of human rights
We expect suppliers and business partners to comply with the above principles
23

24. Commitment to minimise environmental impact
• Committed to minimising impact on environment by
measuring and monitoring the effects of our operations
• All our organic products are free of GMO
• We are working on reducing our CO2 footprint and usage of
water
• Additionally, organic products do not use pesticides,
therefore contributing to a decrease
• ISO 14001 is an internationally recognised standard for
embedding processes to analyse and reduce our impact on
the environment
24

25. Wessanen’s supply chain
25

26. Palm oil - member RSPO
• Palm oil is important, versatile raw material for food
– Only be cultivated in tropical areas of Asia, Africa and South America
– Concerns that demand causing expansion of plantations into eco-sensitive areas
• Since March 2011 Member of Roundtable on Sustainable Palm Oil (RSPO)
– Global multi-stakeholder initiative
– Encouraging sustainable production/use palm oil
– Wessanen commits to organisation’s objectives
• In 2011, we developed policy to govern palm oil sourcing and guidelines for implementation in
partnership with our suppliers
• Committed to switching palm oil to RSPO certified sustainable palm oil during 2012-13
– RSPO certified segregated palm oil for organic
– GREEN PALM certificates for conventional
26

27. Organic Expertise Centre (OEC)
• We established our internal expertise - named OEC - in 2010
 To stimulate exchange of knowledge / experience that is widely available
within Wessanen
 To educate and inspire our internal / external stakeholders in organic values
• Specialists join forces and work on pan-European issues
• To legitimise our position in organic world by championing the organic case
• Focal areas will be:
 Training (incl. training package for newcomers) and founding Organic
Academy
 Knowledge building by teaming up with external researchers and experts
 Lobbying to promote organic food
 Communication for more general awareness / knowledge of organic food
27

28. Employee engagement
• 2012 Leadership development programme
 Top-65
 Focus on strategy execution, connected leadership
• Employee turnover is key focus area
• Competency model deployed
 Defines behaviour expectations for all employees
 Translates ambitions/values into behaviour conventions
and skills
100% 120 8
75% 6
80
50% 4
40
25% 2
0% 0 0
Executives Managers Associates 2009 2010 2011 2009 2010 2011
28
Men Women Injury severity rate Injury frequency rate