Paul Verhagen Chief Financial Officer

Transcription

1 Financial i Update Paul Verhagen Chief Financial Officer 1

2 Key takeaways Despite double digit sales decline we managed to improve EBITA margin through Ongoing Portfolio Pruning Accelerated and expanded programs to structurally reduce costs well above the synergies from the DAP/CE merge Decisive i actions to fix TV We have aggressively managed cash through improved working capital management We will continue to drive efficiencies, reinvest savings and make acquisitions iti to drive growth and improve profitability 2

3 While many categories experienced market decline, sales drop came mostly from pro-active portfolio pruning to improve margin Sales bridge from 28 to 29 (EUR million) 79 Sales YTD Q38 Market Development Key Category Overview Market Share Development Currency/ Others Portfolio Pruning & discontinued business 5564 Sales YTD Q39 Discontinued businesses and portfolio pruning include: TV North America Monitors Home Networks AVM P&A Value spaces Healthy life Personal care Home living Interactive living Key Categories Market Growth/ decline Mother & Oral Male Dry Female Garment Coffee Kitchen LCD TV DVD Blu-Ray Child Care Healthcare Shaving Depilation Care Appliances 3

4 Portfolio Management: We have achieved year on year profitability improvement in most businesses Adjusted EBITA, comparable sales growth and EBITA % Size of bubble represents EBITA* Outlook 29 Size of bubble represents EBITA* 28 Shaving & Beauty Health & Wellness Audio Video Multimedia Peripherals & Accessories Domestic Appliances TV Comparable Sales Growth % Note: Domestic Appliances excludes the Saeco acquisition as well as the incidental charges associated with the recall of certain Senseo products in 29 EBITA* % Note 2: *Adjusted EBITA/EBITA % excludes restructuring and acquisition related charges. 4

5 We have accelerated and expanded programs to structurally reduce costs well above the synergies from the DAP/CE merge Via Earn 2 Invest (E2I), our ongoing business improvement program E2I 27 Started within DAP Functional costs / External benchmarking Fully delivered on cost savings targets Three-way annual benchmarking validation E2I 28 Focus on DAP/CE synergies Functional costs / External benchmarking All projects in execution mode 1 E2I 29 E2I 21 Expand/accelerate to battle economic crisis Functional costs & external benchmarking Expansion to Bill of Material / Value Engineering Targeted start January 21 Functional costs & external benchmarking are driving program 3 Post Merger Benchmarks Internal Benchmarks Bottom-Up Validation 2 External Benchmarks 5

6 The benefit of early restructuring is clearly visible in the year on year quarterly cost savings Year-on-year Quarterly Fixed Cost Savings (EUR million) Restructuring charges (EUR million) Q3 Q4 Outlook Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Outlook 29 vs

7 ... And these cost savings together with margin management have lowered the break-even point Sales & Cost Index Curve Break Even Point Cost Reduction Index Sales Index Outlook Outlook Early start in 28 focused on implementation of DAP/CE synergies In 29 cost reduction in line with double digit sales decline Reduction of Sales breakeven point of 3% in 2 years In addition to aggressive cost reduction margin improvement through portfolio/price management 7

8 Television: We have taken decisive actions to manage TV business to profitability Portfolio pruning and mix management Industrial back end consolidation (LGD/Sharp) reaping purchase price benefits Forward Integration Simplification of Industrial footprint Aggressive cost cuts based on E2I Competitive range in the volume runners Increased ambilight factor in Western Europe Effective Price management Currency Benefits (USD) TV Sales as % of CL Sales 5% 4% 3% 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 Reported EBITA and Adjusted EBITA (EUR million) Q8 2Q8 3Q8 4Q8 1Q9 Net Operating Capital (EUR million) 2-2 Reported EBITA Adjusted EBITA 2Q9 3Q9-4 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 Note: Adjusted EBITA is EBITA corrected for restructuring charges 8

9 We have aggressively managed cash through improved working capital management Working Capital (EUR million) and Working Capital as % of sales 8 8% Working Capital 6 Working Capital (% of sales) 4 4% 2 % -2-4 Q1 Q2 Q3 Q4 Q1 Q2 Q3-4% Effective credit and risk management Slow Moving stock reduce by more than 5% DSO Receivables reduces from days 45 sales days reduced 37 days by 5 days Payment Days Terms of Inventory improve improved by 11 days by to days Overdues Overdues reduce by customers from 17% reduced - 8% by ~5% days vs. 34% year SKU end reduction 28 vs. 28 baseline Increased Increased usage usage of of Supplier Supplier Financing Financing Excess stock reduce by 2% Payment Terms improve by 7 days Amount in EUR million. LTM is last twelve months. References relate to Sept 9 vs. Sept 8 unless stated. 9

10 We are reinvesting savings to drive profitable growth Improved EBITA Margin Earn 2 Invest Re-invest savings to drive growth Increased and more effective Advertising and Promotion Improved Innovation Effectiveness through: Hard Gated Proposition Development NPS Filter Profitability Filter Step Up investment in Emerging Markets Special focus China/Brazil/India Re-Allocated Innovation and Development investment more towards growth spaces Growth through Acquisitions Saeco 1

11 Successful actions on cost and cash have delivered attractive double digit ROIC 5 Quarter Average Net Operating Capital (EUR million) and Return on Invested Capital (ROIC) Net Operating Capital (5 Quarter Average) ROIC % 1,5 6 1, Outlook 29 Note: ROIC includes the results of businesses and geographies until closure of transactions. ROIC = EBI/5 Quarter Average NOC 11

12 Key takeaways Despite double digit sales decline we managed to improve EBITA margin through Ongoing Portfolio Pruning Accelerated and expanded programs to structurally reduce costs well above the synergies from the DAP/CE merge Decisive i actions to fix TV We have aggressively managed cash through improved working capital management We will continue to drive efficiencies, reinvest savings and make acquisitions iti to drive growth and improve profitability 12

13 Q&A Paul Verhagen 13

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