Press Conference Financial Year Maître Chocolatier Suisse Depuis 1845

Transcription

1 Press Conference Financial Year 2018

2 Group Management Martin Hug Group CFO Rolf Fallegger Country Responsibility Alain Germiquet Country Responsibility Dr Dieter Weisskopf Group CEO Dr Adalbert Lechner Country Responsibility Guido Steiner International Operations Press conference FY March

3 Agenda Financial Year in brief 2018 Market Insights and Highlights Financial Figures 2018 Sustainability Update Outlook Q&A Press conference FY March

4 Financial Year in brief 2018

5 Confectionery Landscape General: Trade / Consumer / Operations Hard discounters & private label Price pressure Growth of e-commerce Continued trend to premium Value of sustainability & health Importance of supply chain Europe: Flat chocolate markets in volume Moderate GDP growth only Political uncertainties / shifts Slightly positive consumer sentiment North America: Changing retail landscape Declining store traffic, mainly drug & dept. stores Low value growth in chocolate market Unchanged positive trend to premium Rest of the World: Uncertainties & volatility Usual volatile markets in GDP / FX / Politics Good L&S starting position in BR CN ZA + JP Underlying higher GDP growth creating consumer interest in premium Press conference FY March

6 Key Figures Group sales CHF bn EBIT CHF m +6.9% EBIT-Margin 14.8% (+20bp) Operating cash flow CHF m +10.3% Sales growth in CHF +5.5% Organic growth +5.1% Net income CHF million +7.6% Europe +5.6% Organic growth: Rest of the world +10.3% Dividend CHF 1, % NAFTA +2.8% Buyback Program on track with CHF ~500 m by July 2019 > 72,500 Farmers in the Lindt & Sprüngli Farming Program ~ 14,000 Employees Global Retail sales CHF~550 m 460 Boutiques & Cafés Press conference FY March

7 Global Retail: 460 stores worldwide Lindt Outlet Store O2 Mall (UK) Lindt Shop Empire State Bldg. (USA) Lindt Shop Vnukovo (RUS) Lindt Shop Jundiai (BRA) Lindt Shop Okayama (JPN) Lindt Shop - Europa Park Rust (GER) Press conference FY March

8 Market Insights and Highlights

9 Sales Analysis Markets Rest of the World CHF 0.58 bn (+10.3%) 13.4% Total Group sales CHF bn 38.4% North America CHF 1.66 bn (+2.8%) Europe CHF 2.08 bn (+5.6%) 48.2% Press conference FY March

10 Europe: Market Split Confectionery Market Largest region for L&S: 48.2% of Group sales Slightly positive consumer sentiment Generally flat chocolate markets in volume High price pressure by trade partners Expansion of hard discounters and private labels 7.3% 3.8% 5.7% 6.4% Total sales Europe CHF 2.08 bn (+5.6%) 9.7% 15.3% Germany France Italy UK CH (excl. Export business & Duty Free) Rest of Europe Press conference FY March

11 Europe Switzerland: Highlights Decreasing per capita confectionery consumption in Switzerland (long & hot summer / border traffic) Total sales growth L&S Switzerland (including Export business and Duty Free): +1.6% Opening of Lindt s 10 th shop in Basel and a pop-up store in Lucerne Attractive Easter and Christmas markets at Kilchberg Bachmann Shop-in-Shop concept developed - opening in January at Zurich s Bahnhofstrasse Successful launch of innovations, e.g. Lindt bread spread in wholesale and Lindt Excellence Figue and Poire Intense Charity event in circus Knie for Winterhilfe with Roger Federer Press conference FY March

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13 Europe: Highlights Market share gains in all markets - strong sales growth in well established and Eastern European markets UK +11.3%; Germany +5.4%; France +2.9%; Italy incl. Caffarel +3.0%, Austria +10.3%, Nordics +6.3%; Spain +7.6%; Central & Eastern Europe (CEE) +37.5%; Russia +29.9% Focus on strong key brands Lindor & Excellence Launch of new product formats for sharing and snacking, e.g. Lindt Hello Bites or Caffarel s new sub-brand L Artigianale Attractive range additions, e.g. Lindor Mint and Excellence 78% Launch of Lindt No Sugar-Added bars Press conference FY March

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15 North America: Market Split Confectionery Market 2nd largest region for L&S: 38.4% of Group sales Solid GDP growth in 2018 Structural changes in retail environment Premium segment outperforming growth of total chocolate market Limited impact of US trade disputes on chocolate market Total sales North America CHF 1.66 bn (+2.8%) 32.2% 5.9% USA Canada Mexico 0.3% (re-activated in March 2018) Press conference FY March

16 North America: Highlights Organic sales growth + 2.8%; double-digit growth in Canada Investments to consolidate the logistics network in the USA lay foundation for future profitable sales growth Lindt & Sprüngli USA and Ghirardelli grow faster than chocolate market Lindt: First time partnership with the International EMMY Awards with exclusive Lindor Lounge Ghirardelli: Popular collaboration with restaurant chain for Very Cherry Ghirardelli Chocolate Cheesecake and new TV commercial Makes Life a Bite Better Lindt Canada: Distribution and marketing initiatives e.g.: Expansion of own store network & on-and offline campaign with chocolate magazine The Season Press conference FY March

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18 North America: Russell Stover Sales performance 2018 in line with expectations, i.e. only small decline Successful relaunch of sugar-free chocolate products based on Stevia extract with continued positive growth in 2018 Stable market share in Easter and Valentine s Day 2018 Developed Relaunch of Assorted Pralines in 2019 to regain momentum: Improved quality and packaging Continued headwinds due to declining foot traffic in store formats with high L&S exposure: Drug & Department Stores (Kmart/Sears) Overall, expectation of business stabilization in 2019 (flat performance compared to 2018) Press conference FY March

19 Rest of the World: Market Split Confectionery Market 3rd largest region for L&S: 13.4% of Group sales Dynamic premium chocolate markets: Growth in all markets Consumer demand for chocolate increasing Good base for future growth in BR CN ZA & JP 13.4% Total sales All other Markets CHF 0.58 bn (+10.3%) Press conference FY March

20 Rest of the World: Highlights Double-digit growth, particularly in Brazil, China, South Africa and Japan New distribution center in Tokyo (stocks-, co-packing- and e-commerce-hub) Successful launch of innovations, e.g. Lindor Matcha & Special Lindor edition for the Soccer World Championship Marketing campaign in China with Chinese actor Xin Zhilei boosting brand awareness Chocolate Tastings with Lindt Master Chocolatier in Hong Kong Exclusive collaborations with travel retail partners support Duty Free Business Press conference FY March

21 All other Markets: Overview Press conference FY March

22 New markets increasingly important Superior performance of growth markets: +20% +40% sales increase Russia China Japan Brazil South Africa Press conference FY March

23 Detailed Financial Figures

24 P&L Statement L&S Group Organic growth of +5.1% and EBIT margin increase of +20 BP CHF million Growth in CHF Sales Growth in local currency % +5.1% EBIT Margin % % +6.9% EBITDA Margin % % +6.8% Net Income Margin % 8.0% 17.4% 7.9% 11.1% 6.8% 11.3% 4.8% Press conference FY March

25 Shareholder Return Dividend payment of CHF (reg.) or +7.5% vs / continuous increase over the past 25 years * Subject to approval by the AGM * Dividend Reg. (CHF) From Agio From Retained Earnings Increase (CHF) Dividend Yield Reg. 1.4% 1.3% 1.1% 1.4% 1.3% 1.4% Payout Ratio 16.9% 49.0% 49.4% 49.8% 49.5% 50.0% Registered Shares (at year-end in CHF) Market Capitalisation (CHF million) % 17.4% 7.9% 6.8% 4.8% Press conference FY March

26 Sales Growth In CHF Continuation of growth path Absolute in CHF million (as published) Growth Rate in % (as published) % 7.9% 6.8% 4.8% 5.5% Press conference FY March

27 Organic Sales Growth Confirmation of Guidance given for Absolute in CHF million (as published) Growth Rate in % (organic) % 7.1% 6.0% 3.7% 5.1% Press conference FY March

28 Sales Growth Factors Volume as main growth contributor 6% 5% 4% 4.9% 0.2% 5.1% 0.4% 5.5% 3% 2% 1% 0% Volume Price / Mix Organic Forex Sales in CHF Press conference FY March

29 Material Costs Material costs - including inventory changes - decreasing by -170 BP vs Absolute in CHF million In % Sales % 35.7% 35.3% 34.8% 33.1% Press conference FY March

30 Cocoa Price and Butter Ratio Price of cocoa beans slightly higher / cocoa butter slighly lower Cocoa bean prices in GBP t Butter ratio % Jan. 18 Mar. Mrz May Mai Jul. 18 Sep % Nov. 18 Jan % 22.7% 21.2% 21.7% Butter ratio ICE London 2.6 Press conference FY March

31 Personnel Expenses Stable expense ratio higher costs in Retail compensated by efficiency gains In CHF million In % Sales % 22.1% 21.7% 21.7% 21.8% Press conference FY March

32 Number of Employees (FTE) Increase by about 600 employees driven by expansion of Global Retail Average number of employees (FTE) Press conference FY March

33 Operating Expenses Higher logistics costs in the US and increased marketing investments in Absolute in CHF million In % Sales % 25.0% 25.1% 25.2% 26.5% Press conference FY March

34 Operating Profit (EBIT) Increase in EBIT Margin by +20 BP to 14.8% (EBITA margin: 15.0%) Absolute in CHF million In % Sales % % 14.2% 14.4% 14.6% 14.8% Press conference FY March

35 EBITDA EBITDA Margin increase by 20 BP Absolute in CHF million In % Sales % % 17.7% 18.3% 18.7% 18.9% Press conference FY March

36 Capital Investments CAPEX in line with expectations, Outlook for CHF million p.a. Absolute in CHF million Press conference FY March

37 Depreciation and Impairments Increased depreciation ratio due to CAPEX (> CHF 200 million) in the past years Absolute in CHF million In % Sales % 3.5% 3.9% 4.1% 4.2% Press conference FY March

38 Tax Rate Lower tax rates in some countries (incl. changes in US tax legislation) 30% In % of income before taxes 25% 20% 27.5% 25.5% 24.2% 22.4% 21.5% 15% 10% Press conference FY March

39 Net Income Increase in net income margin by +20 BP Absolute in CHF million In % Sales % % 10.4% 10.8% 11.1% 11.3% Press conference FY March

40 Net Financial Position Development Decrease of net debt mainly driven by high free cash flow generation 800 Net cash in CHF million Operating Cash Flow -257 CAPEX Dividend Share Buy Back Capital Increase Other 2018 Press conference FY March

41 Balance Sheet Strong equity further strengthened Total Assets in CHF million Equity B/S Ratio in % Net Financial Position in CHF million % 50% 40% 60.1% 61.9% % % 10% % Press conference FY March

42 Sustainability Update

43 Lindt & Sprüngli Farming Program Lindt & Sprüngli Farming Program for Cocoa covering 5 countries Ghana Ecuador Madagascar Papua New Guinea Dom. Rep. 97% traceable cocoa beans 86% traceable and verified cocoa beans Overall ~50% traceable and verified cocoa products Investments >CHF 10m p.a. 90% hazelnuts from ITA or sustainable programs in TU 5 March

44 86% of cocoa bean supply chain traceable & verified Press conference FY March

45 More than 72,500 farmers are part of the Program

46 Training and knowledge transfer to increase productivity

47 > 10,000 farmers benefitting from additional income opportunities

48 60 new boreholes in Ghana

49 Outlook

50 Outlook - Environment Environment Overall flat chocolate consumption in developed markets Trend to «healthy» & low-sugar highprotein snacking products Emerging brands with specific sustainability- / ingredients positioning Importance of omni channel brand presence Increasing supply chain complexity Opportunities Lindt & Sprüngli Focus on growing premium segment in developed- and well performing emerging (BRCS+J) markets Focus on Lindt premium product portfolio and indulgence (high cocoa / low-sugar; high protein nuts / almonds) Continue and communicate substantial sustainability efforts and results through the Lindt & Sprüngli Farming Program Extend development of stores, e-commerce & cooperation with e-platforms of trade partners Strive for global efficiency in the supply chain through ongoing projects in planning / purchasing / logistics / production Press conference FY March

51 Outlook - Summary The Group confirms its mid- to long-term goal of an organic sales growth target of 5 7% combined with an average increase in EBIT of basis points. For the 2019 financial year, the Group expects organic sales and profit growth to be in those targeted mid- to long-term brackets Press conference FY March

52 Update Chocolate Competence Center

53 Milestone Topping Out Ceremony Press conference FY March

54 Q&A Press conference FY March 2019

55 DISCLAIMER This presentation contains forward-looking statements which reflect Management s current views and estimates. The forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forwardlooking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange and commodity price fluctuations, competitive product and pricing pressures and regulatory developments. Press conference FY March