Wessanen's 3rd quarter 2013 trading update

1. Royal Wessanen nv
Q3 2013 trading update
Amsterdam, 25 October 2013
www.wessanen.co
@RoyalWessanen

2. Q3 performance
A 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
–
•
Transformational programme ‘Wessanen 2015’ largely completed
–
•
Lasting growth for organic, natural, free-from and fair trade products
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
Q3 revenue
16%
42%
14%
28%
2
Grocery
HFS
IZICO
ABC

3. 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
0.05
0.05
Earnings per share (EPS)
EBIT contributors
Gross margin (%)
→
Operating costs
↓
Marketing spending
3
↑

4. 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
–
–
Zonnatura aired successfully its 2nd TV campaign “What happened to our food?”
–
•
Bjorg showing strong growth, driven by TV campaign and promotions
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

5. 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
Q3 revenue split
33%
67%
Brands
Wholesale
5

6. Bjorg - 17 new products
All launched in September
6

7. Clipper - Dutch introduction
• Available at Albert Heijn (4
variants)
• Available at numerous health
food stores (8 variants)
• Working on further
distribution expansion
7

8. Kallø
Extensive rebrand across entire portfolio from autumn 2013
•
•
•
New ‘folk tale’ designs
Packaging features hand drawn illustrations and poetry
Focus on loving food and embracing life
•
Available in stores from mid-September
8

9. 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

10. Net debt development year-to-date
In € mln
90
75
60
45
4,1
14
14
3,2
5
3,8
73
55
30
10

11. 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

12. Healthy food, healthy people, healthy planet

13. 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
↓
* Eliminations for inter-segment revenue (between Grocery and HFS)
13

14. Revenue breakdown per segment
Grocery
Health Food Stores
80
40
6.4%
(1.4)%
72,7
65,8
48,9
48,0
0
♦ Autonomous third party revenue growth
 €2mln partly exiting German/Italian grocery, delisting Biorganic
and exiting UK private label contract
♦ Autonomous third party revenue growth
 €1.3mln of discontinued fruit & vegetables business France
IZICO
ABC
(18.2)%
(7.2)%
26,6
36,9
24,7
♦ Autonomous third party revenue growth
 €3mln of discontinued volume (closure Deurne plant, cutting the tail)
28,4
♦ Autonomous third party revenue growth
14

15. 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)
–
•
H1 2014: €(2-3) mln
HFS: cutting the tail projects in France and NL
–
•
Q4 2013: €(2.5) mln;
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

16. 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
¹ Including €2.3 mln addition to provision for uncertain tax positions
² Effective tax rate excludes recognition of provisions for uncertain tax positions
16

17. Net debt / Leverage ratio
In € mln
100
Net debt
€73 mln
75
50
25
0
Q3 11
Q4 11
Q1 12
3
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13
Leverage ratio
Q3 13
2.2x
2
1
0
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13
Q3 13
17

18. A very sound financial position
In € mln
Sept 13
Dec 12 *
In € mln
Sept 13
Dec 12 *
Dec 12
Restated Reported
Restated
Total equity
115.5
110.8
101.6
- Non-current liabilities
100.4
81.0
90.2
153.0
146.1
146.1
Non-current assets
145.4
154.5
- Current liabilities
Current assets
223.5
183.4
Total liabilities
368.9
337.9
TOTAL ASSETS
TOTAL EQUITY & LIABILITIES
253.4
227.1
236.3
368.9
337.9
337.9
*Restated for revised IAS19 (employee benefits)
18