Media and Analysts‘ Conference SWX Swiss …...2007/04/11 · – Process of growth – Profitability FFF project «we@Hiestand» 290 EBIT CHF 100 m EBIT margin 10% Focus: Organization

1

1

HIESTAND GROUP

Annual results 2006

Media and Analysts‘ ConferenceSWX Swiss Exchange, 11 April 2007

2Agenda

Introduction Albert Abderhalden, Chairman

2006 financial year Wolfgang Werlé, CEO

Financial review Roland Straub, CFO

Projects, outlook and Q1 Urs Jordi, COO

2

32006 financial year

Achievement of targets

Overview

Highlights

Wolfgang Werlé, CEO

4HIESTAND GROUP

Statement from Wolfgang Werlé, 30 March 2006:

“As we strive towards a sales figure of one billion, we will seek to reach the CHF 500 million mark in 2006.”

3

5HIESTAND GROUP

Statement from Wolfgang Werlé, 30 March 2006:

“As we strive towards a sales figure of one billion, we will seek to reach the CHF 500 million mark in 2006.”

“In 2006, we surpassed the CHF 500 million mark and took a decisive strategic step towards achieving a sales figure of one billion.”

Wolfgang Werlé, 11 April 2007

6Targets for 2006 to 2008, communicated on 30 March 2006

> 6%Profit margin

10%EBIT margin

8–10%Organic sales growth

Targets by2008

Organic growth financed from cash flow.

4

7Overview of 2006

Sales growth of 14.8% to CHF 516.1 million

8Sales 2001–2006 (CHF millions)

2001 2002 2003 2004 2005

+4.0% +10.1% +19.8%

290.0301.5

331.9

449.6

+13.1%

397.5

2006

516.1

+14.8%

500.0

450.0

400.0

350.0

300.0

250.0

200.0

150.0

100.0

50.0

0

5

9Overview of 2006


Increase in EBIT of 14.0% to 10.1% of sales

10EBIT 2001–2006 (CHF millions)

+83.6% +23.6% +32.0%

13.4

24.6

30.4

45.0

40.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0

2001 2002 2003 2004 2005

40.1

+13.9%

45.7

2006

+14.0%

52.150.0

45.0

40.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0

6

11Overview of 2006



Rise in profit for the year of 14.7% to 7.1% of sales

12Profit for the year 2001–2006 (CHF millions)

+140.1% +57.8% +33.5%

2001 2002 2003 2004 2005

4.8

11.6

18.3

+31.2%

24.4

32.0

2006

+14.7%

36.736.0

32.0

28.0

24.0

20.0

16.0

12.0

8.0

4.0

0

7

13Overview of 2006



Rise in profit for the year of 14.7% to 7.1% of sales

Earnings per share of CHF 64.59 (+8.8%)

14Earnings per share 2001–2006 (CHF)

60.00

55.00

50.00

45.00

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00

2001 2002 2003 2004 2005

+134.7% +55.4% +33.4%9.69

22.75

35.35

+25.9%

47.16

59.39

2006

+8.8%

64.59

8

15Achievement of targets for 2006

7.1%

10.1%

14.8%

Result for

2006

> 6%Profit margin

10%EBIT margin

8–10%Sales growth

Targets by2008

We have surpassed all targets set, just as we did in

previous years.

162010 vision

Sales CHF 1 bn

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

– Costs/sales

– Productivity– Professionalism

– Transparency

– Group-wide optimization

– Group-wide synergies– Process of growth

– Profitability

FFF project «we@Hiestand»

290

EBIT CHF 100 m

EBIT margin 10%

Focus:

Organization and

Processes

Costs and profitability

Growth strategy

18

6.3%8.2%

9.2%10.1%

52

516

10.2%10.1%

ImplementationEvaluation

9

17we@Hiestand project: Group-wide processes

HIESTANDGROUP

Asia PacificSwitzerland Germany Poland Austria Japan

Innovation

Marketing & Sales

Risk Management

IT

Supply Chain Management

18Highlights 2006

10

19Portrait of FRICOPAN

• Established in 1992

• Long-standing family business

• 2006: approx. 750 employees

• Production facilities in Berlin and Immekath (Saxony-Anhalt)

• Sales 2006: around EUR 100 million

• Production volume: 100,000 tons per year

• 20 production lines for baguettes filled with garlic butter or herb butter, strudels, rolls, unfilled baguettes

• Exports to over 40 countries (e.g. Scandinavia, Italy, Spain, the UK, Austria and the USA)

20FRICOPAN’s business model

• Produces chilled and frozen bakery goods at two IFS/EFSIS-certified plants in Berlin and Immekath

• Sold under own name and private labels

• Distributed solely via clients’ central warehouses

• Mainly supplies packed consumer products to food retailers in Germany

• Main customers are Molkerei MEGGLE and German food retailers andrestaurant chains

11

21Potential synergies

• Procurement

• Optimizing product range (both companies)

• Rounding out product range (both companies)

• Access to new customer channels (both companies)

• Exchange of expertise

• we@Hiestand process


HIESTANDGROUP


Innovation

Marketing & Sales

Risk Management

IT


12


HIESTANDGROUP


Innovation

Marketing & Sales

Risk Management

IT


24Highlights 2006

TK-CENTER BIRRFELD AG

• Full acquisition as of May 2006

• Own logistics in Switzerland with 38 lorries

• Expanded a deep-freeze storage facility into the leading warehousing and logistics company for frozen bakery products

• Now full control of the value chain in Switzerland as well

• HIESTAND controls the entire value chain in all major markets except Japan

13

25Highlights 2006

Expansion of sales teams proves effective

• Huge expansion of sales teams focusing on the core markets of Germany and Poland

• Over 40 additional employees in sales

• Reflected in organic growth of over 10%

26Further highlights 2006

• Expansion in the Czech market

• Partnership agreement in Australia

• Cooperation agreement in Shanghai

• New distribution partner in Dubai

• An explosion of new products

14

27Product highlights 2006

French Range Vivafit Pain Paradiso Vivaldi Loaves

28Financial review

Consolidated statements for 2006

Key figures for 2006

Appropriation of available earnings

Roland Straub, CFO

15

29Consolidated Income Statement (CHF millions)

Diff.20052006

45.7

-96.4

-1.7

-24.9

-106.8

-179.8

455.3

4.6

1.1

449.6

14.0%52.1EBIT

6.8%-102.9Other operating expenses

49.6%-2.6Amortization of intangible assets

8.1%-26.9Depreciation of property, plant and equipment

20.6%-128.8Personnel expenses

16.0%-208.6Raw material and consumables used

14.6%521.9Total Income

-9.3%4.2Other operating income / changes in inventories of finished goods

48.6%1.6Services provided

14.8%516.1Net Sales

30Financial Result (CHF millions)

---0.20.0Share of results of associates

Diff.20052006

24.7%

32.0

-10.5

42.5

-3.5

45.7

25.3%Corporate tax rate

14.7%36.7Profit for the year

18.4%-12.4Tax

15.6%49.1Profit before tax

-13.8%-3.0Net financial expenses

14.0%52.1EBIT

16

31Other operating expenses (CHF millions)

Diff.20052006

-96.4

-14.2

-9.5

-4.5

-45.2

-6.1

-7.9

-9.0

6.8%-102.9HIESTAND GROUP

25.5%-17.8Other operating expenses

16.5%-11.1Selling expenses

36.4%-6.1Marketing expenses

-16.6%-37.7Distribution (transportation & storage)

41.3%-8.6Repair and maintenance

39.5%-11.0Energy and waste disposal

17.9%-10.6Rental expenses

Other operating expenses:- Communication- Office material

- Insurance

- Audit fees

- Consulting

- Investor relations

32Primary Segment Reporting – Europe (CHF millions)

17.2%57.467.3EBIT

Diff.20052006

13.5%

-1.7

59.1

-23.9

83.0

426.8

2.8

424.0

13.6%EBIT margin

51.1%-2.5Amortization of intangible assets

18.2%69.8EBITA

6.9%-25.6Depreciation and impairment losses

14.9%95.4EBITDA

15.9%494.5Total revenue

42.7%4.0Sales intercompany: to other area (Intrasegment)

15.7%490.5Sales to third and related parties

17

33Primary Segment Reporting – Asia (CHF millions)

-53.8%2.71.3EBIT

Diff.20052006

10.2%

-0.1

2.8

-0.8

3.6

26.6

0.0

26.6

4.6%EBIT margin

----0.0Amortization of intangible assets

-51.8%1.3EBITA

44.6%-1.2Depreciation and impairment losses

-30.5%2.5EBITDA

2.1%27.2Total revenue

---0.0Sales intercompany: to other area (Intrasegment)

2.1%27.2Sales to third and related parties

Organic growth (without Singaporean activities) 13.7%EBIT margin without currency impact 7.5%

34Consolidated Balance Sheet – Assets (CHF millions)

Diff.20052006

358.8

258.0

80.4

177.6

100.8

23.1

63.3

2.6

11.8

44.4%91.4Receivables

44.9%33.6Inventories

53.2%154.4Current assets

36.7%242.7Property, plant & equipment and financial assets

178.8%224.1Intangible assets

80.9%466.8Non-current assets

73.1%621.2Total assets

4.0%2.7Financial assets

127.3%26.7Cash and cash equivalents

18

35Consolidated Balance Sheet – Liabilities and Equity (CHF millions)

182.9%124.0350.8Total liabilities

358.8

234.8

46.3

17.5

28.8

77.7

23.8

33.3

20.6

2005 Diff.2006

15.2%270.4Total equity

40.4%33.4Accruals

69.5%131.6Current liabilities

494.5%171.4Interest bearing loans and borrowings

172.7%47.8Provisions

372.9%219.2Non-current liabilities

73.1%621.2Total liabilities & equity

62.8%54.1Payables

114.1%44.1Interest-bearing loans and borrowings

36Impact acquisition FRICOPAN on intangible assets

Amortization12 months

Increase

-3.7

-3.7

140.2TOTAL

74.3Goodwill *

4.3Intangible assets (indefinite useful life)

61.6Intangible assets (finite useful life)

* Goodwill includes CHF 24.2 million of deferred taxes on intangible assets

19

37Financing of acquisitions

• Financed in cash via syndicated loan, lead banks CS and UBS

• Duration until 31 December 2012

• Interest periods between 1 and 36 months

• Interest rate based on LIBOR or SWAP plus a margin (margin depends on the actual covenants)

• Debt Covenants as to- Equity (min. CHF 200 million, min. 30% of total assets)

- Level of indebtness (max. 2.5)

- Interest coverage (min. 6)

• Financial window of opportunity is still in place

38Cash flow Statement (CHF millions)

-26.9-26.5Investments

-3.1-3.0Interest paid

0.30.4Treasury shares

-14.9

127.2

0.8

-8.0

-153.1

2006

0.0

110.5

-110.5

76.9

0.0

-17.1

17.1

49.2

13.0De- (in)crease cash & cash equivalents

-5.2Dividends paid

Financing activities

0.9Proceeds from sales of property, plant and equipment and financial assets

-28.2In- (de)crease interest bearing liabilities

Acquisitions

Net cash provided by operating activities

2005

20

39Investments (CHF millions)

26.5Total investments in property, plant & equipment including IT

2.0Downpayments warehouse FRICOPAN IMMEKATH

15.7Other investments including IT

4.3Expansion logistics fleet Germany

4.5TKC – Logistics fleet Switzerland

2006

40Product Groups (CHF millions)

79.8

Croissants ProductsPastriesBread/Rolls Snacks Pretzels Various

72.4

225.7

200.7

117.5103.9

46.538.7

26.425.2 20.211.8

+10.2%

+12.5%

+13.1%

+20.1%

+4.8%+71.2%

2005 2006

220

200

180

160

140

120

100

80

60

40

20

0

21

41Strategic Business Units (SBUs) (CHF millions)

180

160

140

120

100

80

60

40

20

0

73.0

Gastronomy/

Food ServiceCustomersCateringBakeriesConvenience

stores/Service

stations

Bakery shops

in food storesVarious

60.4

82.579.2

22.523.7

131.2138.2

126.5

53.4

29.8

+20.9%

+79.2%

2005 2006

+11.7%

146.5 +9.2%

+4.2%

-5.1%

42Employees (Full Time Equivalents – FTE)

57.8

16.5

23.4

231.7

2 777

294

165

310

2 008

2006

Weighted FTE number for 2006: 2 227 TCHF

285183Retail

214204Finance & Administration

1 7941 788TOTAL at year-end

221.6251.4Sales per FTE

22.425.6EBIT per FTE

13.617.9Profit for the year per FTE

51.959.7Personnel expenses per FTE

245238Sales & Marketing

10501 163Production & logistics

20042005FTE

22

43Headcount

1997

709

1998

821

1999

946

2000

1282

2001

1705

2002

1905

2003

1817

2005

1918

2004

1978

2006

2997

2500

2000

1500

1000

500

0

44Company key figures

20052006

7.1

15.8

10.1

186.0

43.5

Balance Sheet

35.0CHF mNet debt

Income Statement

10.2%EBIT margin

16.1%EBITDA margin

7.1%Profit margin

65.4%Equity ratio

23

45Share information

20052006

509.35

144.95

64.59

744.7

1 400

530 850

531 930

Stock exchange information

527.1CHF mMarket capitalization

991CHFPrice at year-end (31 December)

Key figures per share (weighted average)

59.39CHFEarnings per share

93.10CHFCash flow per share

444.43CHFShareholders’ equity per share

528 292NumberRegistered shares (weighted average)

531 930NumberRegistered shares

46Earnings per share

520‘09347.8247.162004

530‘850+10.0%65.30+8.8%64.592006

528‘292+24.2%59.39+25.9%59.392005

Total number of

shares

IncreaseAdjusted for intangible

assets *

IncreaseAccording to annual

report

* Adjusted for intangible assets: basis for the calculation of earnings per share is profit

after minorities and taxes, before amortization of intangible assets resulting from acquisitions

24

47Proposed appropriation of available earnings (CHF 000s)

HIESTAND HOLDING AG

20052006

61 970.7

9 574.7

71 545.4 56 327.4Available earnings

7 979.0Payment of a dividend of CHF 18 per registered share

(prior year: CHF 15)

48 348.4To be carried forward

following appropriation of available earnings:

The Board of Directors proposes to the General Meeting the

48Projects, outlook and Q1

Project “SPEED”

HIESTAND ISTANBUL GMBH

Branch in Slovakia

HIESTAND SERVICES AG

New Group organization as of 9 May 2007

1st quarter of 2007

Targets 2007–2010

Urs Jordi, COO

25

49Project “SPEED”

SPEED

Project “SPEED” – the “fit for the future” and integration project for FRICOPAN


Sanierung PEEDSynergies


26


Sanierung PEEDSynergies Potentials EED



Sanierung PEEDSynergies PEEDPotentials Effective-ness

ED


27


Sanierung PEEDSynergies PEEDPotentials PEEDEffective-ness

Efficiency D



Sanierung PEEDSynergies PEEDPotentials PEEDEffective-ness

PEEDEfficiency Do it


28

55Project SPEED

• Focal points:- Production/Engineering

- Logistics

- Product Management

- Purchasing

- Finance/Administration

- Overall Organization

• Initial impact on FRICOPAN results expected mid 2007

56HIESTAND ISTANBUL GMBH

• Founded on 1 March 2007

• Location Istanbul

• 1 office and warehouse, 1 Managing Director, 3 employees, 2 lorries

• First orders from key customers

• Highest per capita consumption of bakery products worldwide at 146 kg (Banca IMI)

• Turkish market offers strong growth potential

• HIESTAND is a pioneer in the Turkish market for frozen bakery products: hence own logistics

29

57Branch in Slovakia

• A sales organization was established in Slovakia in January 2007

• Reproducing the successful business model in the Czech Republic

• Location Bratislava

58HIESTAND SERVICES AG

• Foundation of HIESTAND SERVICES AG on 7 March 2007

• The HIESTAND company for worldwide Purchasing, Trading and Financing

• Office in Lupfig

• Nine employees planned by end of 2007 (mainly taken over from the Group companies in Switzerland and Germany)

30

59

Urs Jordi Roland Straub Andrea Stegen Armin Bieri Roger Bless

New Group organization as of 9 May 2007

Des. CEO and Delegate of the Board of Directors

CFO Key AccountInternational

Sales Productionand Logistics

Preparing to separate production and trading in the individual countries (project to run until 2010)

601st quarter of 2007

13.0%14.5%of which before acquisitions

-18.4%0.0%of which acquisitions & divestments

0.2%-6.1%of which currency effects

19.6%11.6%of which organic

1.4%5.5%Growth in Swiss francs

6.16.4Net sales Asia

0.6%2.5%of which currency effects

12.2%12.6%of which organic

0.0%33.5%of which acquisitions & divestments

12.8%48.7%Growth in Swiss francs

106.7158.6Net sales Europe

112.7165.0Net sales Q1 (CHF m)46.4%

12.5%12.6%of which organic0.5%1.9%of which currency effects

-0.9%31.8%of which acquisitions & divestments

12.1%Growth in Swiss francs

20062007

31

61Targets 2007 to 2010

10%8–9%EBIT margin

> 6%> 5%

> CHF 69

Profit margin

Earnings per share (adjusted)*

8–10%

1 bn

8–10%

~ 700 m

Organic growth in sales

Target total sales (CHF)

Targets

2010

Targets

2007

Organic growth financed from cash flow.

* Adjusted means excluding the amortization of intangible assetsfrom acquisitions.

Disproportionate

to sales growth

62HIESTAND GROUP

“We will continue the vision:as we strive towards a sales figure of one billion, we will seek to reach the CHF 700 million mark

in 2007.”

Urs Jordi, 11 April 2007

32

63

HIESTAND GROUP

Thank you for your attention!

Media and Analysts‘ ConferenceSWX Swiss Exchange, 11 April 2007

Documents

Media and Analysts‘ Conference SWX Swiss …...2007/04/11 · – Process of growth – Profitability FFF project «we@Hiestand» 290 EBIT CHF 100 m EBIT margin 10% Focus: Organization