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Wessanen's 3rd quarter 2013 trading update
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Royal Wessanen nv
Q3 2013 trading update
Amsterdam, 25 October 2013
www.wessanen.com @RoyalWessanen
Q3 performanceA continuation of trends witnessed in the first half of 2013
• Rather low consumer confidence; European economies remain depressed
• Strong underlying trend of consumers looking for healthier, more sustainable food
– Lasting growth for organic, natural, free-from and fair trade products
• Transformational programme ‘Wessanen 2015’ largely completed
– Full run-rate savings of €15 mln expected from 2014 onwards
• Results in the quarter showing mixed picture
– Revenue impacted by various initiatives (e.g. cutting the tail, closing Deurne plant)
– Underlying revenue growth healthy at Grocery, HFS and IZICO
– EBITE increased at Grocery, HFS and IZICO
– ABC bringing in weak performance
2
Q3 revenue
28%
42%
16%
14%
Grocery HFS IZICO ABC
Q3 2013 key figures
In € mln Q3 2013 Q3 2012
Revenue 171.2 175.4
Autonomous growth (2.9)%
Normalised EBIT 2.6 7.5
As % of revenue 1.5% 4.3%
Exceptional costs / income 6.7 (0.8)
EBIT 9.3 6.7
Net result, attributable to equity holders 3.7 3.9
Earnings per share (EPS) 0.05 0.05
3
EBIT contributors
Gross margin (%)
Operating costs
Marketing spending
Q3 performance - Grocery
• Autonomous revenue 6.4%, driven by 5.3% volume and 1.1% price/mix
– Strategic actions impacting growth negatively by about 3%
• Integration Alter Eco progressing as planned
• Most core brands and categories continue to grow
– Bjorg showing strong growth, driven by TV campaign and promotions
– Zonnatura aired successfully its 2nd TV campaign “What happened to our food?”
– Rebranding into Kallø been favourable responded to by consumers
• Clipper has been launched in NL and Germany
– Very positive feedback by trade and consumers
– Further distribution expansion in France
4
Q3 performance - HFS
• Autonomous revenue growth (1.4)%
– German SAP go-live moved 1.5% volume to Q2 (pre-ordering)
– Additional (3)% effect of discontinuing most of fruits & vegetables distribution
• Branded business to perform in line with expectations
– Bonneterre and Evernat growing (inroads at specialty chains and HFS buying groups)
• Dutch wholesale (Natudis) growing sales,
– Natuurwinkel stores and independent stores growing
– Dutch fresh distribution (Kroon) and Belgium operations also up
• Underlying French wholesale activities growing
– Impacted by ceasing distribution of chilled and large part fruit & vegetables
– Refocus Bonneterre company going well
5
Q3 revenue split
33%
67%
Brands Wholesale
Bjorg - 17 new productsAll launched in September
6
• Available at Albert Heijn (4
variants)
• Available at numerous health
food stores (8 variants)
• Working on further
distribution expansion
7
Clipper - Dutch introduction
KalløExtensive rebrand across entire portfolio from autumn 2013
8
• New ‘folk tale’ designs• Packaging features hand drawn illustrations and poetry• Focus on loving food and embracing life
• Available in stores from mid-September
Q3 performance - IZICO / ABC
• Revenue IZICO impacted by closure Deurne plant / cutting the tail projects
– Branded sales up in NL and Belgium, private label growing as well
• EBITE clearly improved as result of ‘Wessanen 2015’
• Beckers and Bicky performing well
– Activation in out-of-home channel (scratch card, ‘Win a Vesta’)
– Beckers expanded distribution at Albert Heijn
• At ABC, market weakness for ready-to-drink pouches remained
– Market down over 20% in volume and value year-to-date
– Daily’s remains clear market leader
• Little Hug continued to perform well, delivering double digit revenue growth
• Negative EBITE in Q3 (and expected to be as well in Q4). To become profitable again in 2014
9
Net debt development year-to-date
55
7314 14
4,13,2
53,8
30
45
60
75
90
10
In € mln
Closing remarks
• Q3 showing continuation of trends witnessed in first half 2013
• Ongoing positive developments for healthy and sustainable food such as organic,
natural, free-from and fair trade products.
• Vast majority of our core brands and categories has been growing
– We continue to invest in A&P behind our core brands
• Transformational program Wessanen 2015 largely completed
– On track to deliver annualised cost savings of €15 million p.a. as of 2014
• Encouraged by progress made in Europe year-to-date. Focused to bring the year to
a good end and being well-positioned for a good start in 2014
11
Healthy food, healthy people, healthy planet
Segment overview
In € mln Revenue Normalised EBIT
Q3 13 Q3 12 Q1 13
Grocery 72.7 65.8
HFS (Health Food Stores) 48.9 48.0
IZICO 24.7 26.6
ABC 28.4 36.9
Non-allocated (3.5)* (1.9)*
Wessanen 171.2 175.4
13* Eliminations for inter-segment revenue (between Grocery and HFS)
Revenue breakdown per segment
48,948,0
14
28,4
36,9
(1.4)%
Health Food Stores
Autonomous third party revenue growth €1.3mln of discontinued fruit & vegetables business France
72,765,8
0
40
80
6.4%
Grocery
Autonomous third party revenue growth €2mln partly exiting German/Italian grocery, delisting Biorganic and exiting UK private label contract
26,6 24,7
(7.2)%
IZICO
Autonomous third party revenue growth €3mln of discontinued volume (closure Deurne plant, cutting the tail)
(18.2)%
ABC
Autonomous third party revenue growth
Revenue / EBIT guidance 2013-14
In general, we do not provide guidance on revenue or EBIT(E) for Royal Wessanen.
We however do provide specific guidance, on certain topics.
Revenue
• Grocery: downsizing German and Italian grocery operations, exiting UK private label
contract and delisting Biorganic (in NL)
– Q4 2013: €(2.5) mln; H1 2014: €(2-3) mln
• HFS: cutting the tail projects in France and NL
– Q4 2013: €(2.5) mln; H1 2014: €(3-4) mln
• IZICO: closing of Deurne plant (as of March 2013) and cutting the tail projects
– Q4 2013: €(3.5) mln; Q1 2014: €(4) mln
EBIT
• Non-allocated expenses are expected to be €10 mln in 2013
• ABC is expected to show a loss of $8-10 mln in 2013
• ABC is expected to be profitable in 2014
• In Q4, in relation to Wessanen 2015, exceptional costs <€(1) mln are expected
15
Q3 financials / FY13 guidance
Financials Q3
• Net financing costs €(0.7) mln Q3 2012: €(0.6) mln (restated)
• Income tax expenses €(4.9) mln ¹ Q3 2012: €(2.2) mln
Guidance FY2013
• Net financing costs €(2-2.5) mln
• Effective tax rate around 45% ²
• Capex €(6-7) mln
• Depreciation and amortisation €(13-14) mln
Revised IAS 19 - impacted FY 2012 / yearend 2012
• Personnel expenses - €0.5 mln higher
• Net financing costs - €1.1 mln lower
• Equally distributed over all four quarters
• Equity €9.2 mln higher as at yearend 2012
16¹ Including €2.3 mln addition to provision for uncertain tax positions² Effective tax rate excludes recognition of provisions for uncertain tax positions
Net debt / Leverage ratio
0
25
50
75
100
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13
0
1
2
3
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13
17
Net debt
Leverage ratio
€73 mln
2.2x
In € mln
A very sound financial position
In € mln Sept 13 Dec 12 *
Restated
Non-current assets 145.4 154.5
Current assets 223.5 183.4
TOTAL ASSETS 368.9 337.9
18
In € mln Sept 13 Dec 12 *
Restated
Dec 12
Reported
Total equity 115.5 110.8 101.6
- Non-current liabilities 100.4 81.0 90.2
- Current liabilities 153.0 146.1 146.1
Total liabilities 253.4 227.1 236.3
TOTAL EQUITY & LIABILITIES 368.9 337.9 337.9
*Restated for revised IAS19 (employee benefits)