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PureCircle Limited : FY15 – Half Year Interim Results
Investors March 2015
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PureCircle - Investor Slides - All rights reserved March 2015
Disclaimer
• This document, which is personal to the recipient and has been issued by PureCircle Limited (the “Company”), comprises written materials/slides for
presentations to be held in March 2015. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any
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PureCircle - Investor Slides - All rights reserved March 2015
Content
1. CEO Overview
Magomet Malsagov, CEO
2. Financial Review
William Mitchell, CFO
3. Operational Review
Jordi Ferre, COO
4. Outlook
Magomet Malsagov, CEO
5. Questions
Appendix
Stevia Fact Sheet
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PureCircle - Investor Slides - All rights reserved March 2015
1. CEO Overview
by Magomet Malsagov, CEO
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PureCircle - Investor Slides - All rights reserved March 2015
CEO Overview (1)
• Sales
1H FY15 sales increased 24% to $43m
Growth in all global sales regions
• Financing
Principal facilities:
$21m repaid & $71m extended 5 years:
3% lower rate.
$43m raised to support production capacity expansion
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PureCircle - Investor Slides - All rights reserved March 2015
CEO Overview (2)
• The Stevia Market
Unparalleled series of milestone F&B launches and rollouts
High profile Cola roll-outs: Coca-Cola Life, Pepsi Next / True
16 markets launched or announced including major markets such as USA,
Mexico, UK, Japan, France
Reformulations of other leading CSD brands
Retailers & iconic brands in diverse categories (eg Ketchups)
Mintel data 2014: 2,274 new products; > 50% CAGR
• Regulatory
4 billion consumers now have regulatory access to stevia
• Innovation
PCL continues to lead industry innovation and unlock market
Launch Sigma D: strong Dairy application properties
• Production Capacity
Expansion
Board approved $42m production capacity expansion.
Come on stream FY17
• Leaf
Tight China leaf supply result in higher costs in short term
Long term actively leading diversification from China
• Sustainability
Industry leading report issued by PureCircle in January
• Management & systems
COO structure. ERP implementation
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PureCircle - Investor Slides - All rights reserved March 2015
2. Financial Review
by William Mitchell, CFO
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PureCircle - Investor Slides - All rights reserved March 2015
Summary Financials
1H FY15
$’m
1H FY 14
$’m
Change
Period ended 31 December
Sales
Gross margin
Operating profit
EBITDA
Net result after tax
43.2
14.5
3.5
6.4
(0.9)
34.9
12.3
2.9
5.2
(1.9)
24%
18%
21%
24%
53%
Net debt
Net assets
Net assets per share (U$ cents)
(52)
188
1.1
(85)
141
0.9
39%
33%
29%
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PureCircle - Investor Slides - All rights reserved March 2015
Profit and Loss Account
1H FY15 1H FY14 Variance Variance
$’m
$’m
$’m
%
Revenue
43.2
34.9
8.3
(28.7)
(22.6)
(6.1)
Gross margin
14.5
12.3
2.2
Gross margin %
34%
35%
(1%)
0.2
0.3
(0.1)
(11.2)
(9.7)
(1.5)
3.5
2.9
0.6
Other expenses
(2.8)
(2.2)
(0.6)
Foreign exchange (loss) / gain
(1.1)
2.0
(3.1)
Finance costs
(3.7)
(4.5)
0.8
Share of joint ventures
(0.2)
(0.5)
0.3
3.4
0.4
3.0
(0.9)
6.4
(1.9)
5.2
1.0
1.2
Cost of sales
Other income
Administrative expenses
Operating profit
Taxation
Net result after tax
EBITDA
24%
21%
53%
24%
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PureCircle - Investor Slides - All rights reserved March 2015
Profit and Loss Account
Sales
1H FY15 sales of $43m are 24% higher than 1H FY14
Growth in all sales regions
Margins
Gross margin increased $2.2m to $14.5m
Gross margin % consistent at 34%
Higher China leaf prices impacting gross margins in short term
Actively leading diversification of leaf from China
SG&A included $1.5m investment to support sales growth
Operating profit $3.5m, up $0.6m (21%)
EBITDA $6.4m increased 24%, in line with sales
Finance costs
$0.8m improvement: Initial benefits of lower rates on core facility
Net result
53% improvement on 1H FY14
Reflects EBITDA improvement and net movement in forex, tax, LTIP
Other expenses $2.8m principally non cash LTIP
$3m adverse forex movement offset by $3m tax credit
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PureCircle - Investor Slides - All rights reserved March 2015
Cash-flow
1H FY15
1H FY14
Variance
USD‘ m
USD‘ m
USD‘ m
Operating cash flow before working capital changes
7.4
5.8
1.6
(10.0)
(4.0)
(6.0)
(Increase)/decrease in trade and other receivables
(0.4)
1.4
(1.8)
Decrease in trade and other payables
(1.9)
(5.2)
3.3
NET CASH FOR OPERATIONS before interest
(4.9)
(2.0)
(2.9)
NET CASH FOR OPERATIONS after interest
(8.5)
(6.5)
(2.0)
INVESTING ACTIVITIES
(3.8)
(6.5)
2.7
FINANCING ACTIVITIES
33.1
(5.2)
38.3
NET CASHFLOW
29.3
(18.2)
47.5
Increase in inventories
Operating Cashflow:
- $7.4m operating cashflow before working capital: $1.6m (28%) improvement on FY14
- $10m increase in inventories produced ahead of anticipated sales growth
- $0.9m lower interest cash cost: early benefits of new lower rate facility and $21m repayment
Financing Activities:
- $33m net finance raised in 1H FY15
- $43m placement offset by $21m early debt repayment
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PureCircle - Investor Slides - All rights reserved March 2015
Balance Sheet
1H FY15
$’m
Property, plant and equipment
Intangible Assets
1H FY14
$’m
June FY14
$’m
60
38
66
32
64
38
Working capital items:
Inventory
Receivables - excluding JVs
Payables
97
26
(17)
88
19
(15)
87
29
(19)
Gross assets
Net debt
Net assets
315
(52)
188
272
(85)
141
293
(80)
149
•
•
•
•
•
Fixed assets represent current production capacity before approved expansion
Intangible assets of $38m represent core process, patent, innovation and leaf technologies
Inventory – invested $10m in anticipation of H2 FY15 and FY16 sales.
BS assets include the weakening of MyR and RmB against $; asset impact approx. $5m
Gross and net assets increased due to $43m placement partly offset by foreign exchange effect
of weaker currencies against the US$
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PureCircle - Investor Slides - All rights reserved March 2015
3. Operational Review
by Jordi Ferre, COO
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H1 FY15 Topline Sales Analysis
Sales of $43m increased 24% over 1H FY14- a 26% CAGR over the past 5 years.
There was growth in allregions, revenues coming from wide range of products and customers.
+24%
43.2
+32%
34.9
+74%
26.4
+12%
13.6
15.2
FY11
FY12
FY13
Revenue breakdown by Region
NTAM
APAC
LATAM
EMEA
FY14
FY15
Number of Global Customers
FY11
FY12
FY13
FY14
FY15
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PureCircle - Investor Slides - All rights reserved March 2015
Number of Stevia Global launches continued to
growth in 2014 (up 23%)
Global Food & Beverage Launches With Stevia
2500
2,274
# of launches
2000
+23% vs. ‘13
5 Yr CAGR
1,843
Total
+52%
1500
Food
1,163
Food
+45%
1000
Beverages
636
500
477
Beverages
+67%
280
0
2009
2010
2011
2012
2013
2014
Source: MIntel International 2015
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PureCircle - Investor Slides - All rights reserved March 2015
2014 was a pivotal year for stevia’s presence in mainstream brands
Beverage
Coca-Cola Life
Global
presence
expands
Pepsi True
US
Pepsi Next
Global
presence
expands
Sierra Mist
US
Mott’s
US
Lipton RTD Tea
Global
presence
Expands
Hershey’s
Flavored Milk
Mexico
Food
Chobani
Simply 100
Yogurt
US
Danone
Activia Light
Various EU
countries
Heinz
UK
Sara Lee
Sweet
Hawaiian Rolls
US
Nestle
Chocapic
Chile
Quaker
Oatmeal
Canada
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PureCircle - Investor Slides - All rights reserved March 2015
Notable Global DAIRY Launches with Stevia 2014
BEVERAGES
YOGURT
USA
Oikos*
Japan
Bio (Activia)
Canada
Yoplait
Source
Norway
Activia Light
Israel
Yoplait
Yogurt
Finland
Arla Protein
Netherlands
Arla Zin!
Japan
Meiji Yoplait
Japan
Meiji Bulgaria
Yogurt
USA
Chobani 100
Mexico
Nestle
Griego
Mexico
Nestle
Fermented
Milk
Malaysia
Nestle Bliss
Brazil
Sollys
Soy Drink
Mexico
Hershey’s
Flavored Milk
Mexico
Yomi
Chocolate
Milk
FROZEN
Mexico
Lala Grekos
USA
Lala Yogurt
Smoothie
Mexico
Lala PetiZoo
Colores
USA
Pro Yo Frozen
Yogurt
UK
Tesco Dessert
Sundaes
USA
Silk Soy Milk
USA
SO Delicious
Dairy Free
Coconut Milk
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PureCircle - Investor Slides - All rights reserved March 2015
Other Notable FOOD Launches with Stevia 2014
Sauces & Seasonings
Heinz
Master
Hellman’s
Breakfast Cereals
Chocapic
Quaker
Processed Meats, Seafood
Tesco
Ball Park Park’s Finest
Bakery
Vitatops
King Oscar
Confections
Touyfayan Smart
Pockets
Ricola
Cavalier
Extra
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PureCircle - Investor Slides - All rights reserved March 2015
Development of Stevia with retailers: Tesco incorporates
stevia in healthy living platform
Caramel Iced Dessert 900ML
Vanilla
Big Pot Yogurt
450G
Cherry Big
pot Yogurt
450G
Red Fruits
Yoghurt
4 X 125G
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PureCircle - Investor Slides - All rights reserved March 2015
The Retail Sector is now capitalising on the opportunity
• Coca Cola Life and Carrefour France Example
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PureCircle - Investor Slides - All rights reserved March 2015
CSD Cola rollout continue: Establishment of a new
Global Green Cola Category
Coca-Cola Life Launches
2013
 Argentina
 Chile
2014





UK
Mexico
USA
Sweden
Czech Republic
2015








Norway
France
Germany
Belgium
Luxembourg
Netherlands
Australia
Japan
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PureCircle - Investor Slides - All rights reserved March 2015
PureCircle Innovation: Introducing Sigma-D
Dairy Category Solution: Sigma-D category specific product for Dairy that taste
breakthroughs and deeper calorie reductions.
What are the technical benefits of Sigma-D?
•
Clean sweetness profile that performs well in dairy systems
•
Demonstrates parity to sugar on key attributes
•
Great for mid calorie sugar reductions
•
Shows excellent synergy with fructose, sugar and several polyols
•
Stable through HTST and UHT processing
Example – Plain Yogurt, 60% sugar reduced
Sigma-D is parity to the full sugar formula
7
Plain Yogurt: Full Sugar vs. 60% Reduced Sugar with Sigma-D
6
5
Full Sugar (Control)
Sigma-D
4
3
2
1
0
Sweet
Intensity
Bitterness
Bitter
Aftertaste
Sweet
Overall Liking
Aftertaste
22
*= 80% CI, lowercase= 90% CI, uppercase = 95% CI
PureCircle - Investor Slides - All rights reserved March 2015
PureCircle leads the market in proactive stevia education
STEVIA BENEFITS
SAFE
for the whole
family
NATURAL
source
SUSTAINABLE
for farmers
and the planet
TASTES
GREAT
0 CALORIE
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PureCircle - Investor Slides - All rights reserved March 2015
PureCircle is reinforcing communication on
the Leaf origin, with strong substantiation.
Investing in new assets
- video footage, still images
- Plant & farmer led
- Value Chain focus
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PureCircle - Investor Slides - All rights reserved March 2015
Helping Customers communicate with Consumers
about The Story Behind the Sweetness of Stevia
What if you could tell your consumers why you chose to sweeten your
product with stevia? What if your answer motivated them not just to buy
your product but recommend it to their friend? Let us help you tell your own
stevia story.
The base idea:
Whenever you see the PureCircle logo or Sweetened
with Stevia image, you can scan it using a mobile
technology.
You will then receive a mobile download featuring a 515 second video, or other content of choice.
Customize Content:
You can select a short video that you would like to share
with your fans. It could be a short story about a farmer or
some powerful facts about stevia.
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PureCircle - Investor Slides - All rights reserved March 2015
Stevia Leaf Prices Have Increased: Chinese Leaf Supply
With growth in consumer demand, China leaf supply has tightened and prices in have increased.
•
Short Term: tight leaf supply in China as a consequence leaf prices have increased this year.
•
Mid and Long Term: Our leaf diversification program continues to progress outside China.
Beyond our own agricultural operations in Kenya and Paraguay we are actively developing stevia plantations with
local partners in the following Countries:
On-going tests and actual
plantations
Countries
Potential Land Size
(Hectares)
Africa
Burundi
CAR
Kenya
Malawi
Mozambique
Rwanda
Swaziland
Tanzania
Uganda
Zambia
10,000
Latin America
Ecuador
Guatemala
Mexico
Nicaragua
Other Regions
India
Macedonia
Romania
Turkey
USA
10,000
1,000
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PureCircle - Investor Slides - All rights reserved March 2015
Production Capacity Expansion
PureCircle has started to expand its production capacity to meet anticipated future increased volume. The
PureCircle Board has approved $42m of capital expenditure projects that will increase production capacity of
refined stevia sweeteners and natural flavor systems and provide additional investment in next generation stevia
innovation.
Phase I
Phase II
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PureCircle - Investor Slides - All rights reserved March 2015
Management and systems:
New Operations Management
Key new Top Management hires in Manufacturing, and Leaf Development
Jordi Ferre
Chief Operating Officer
Bob Compier
Vice President Group Operations
•
•
•
•
•
Joined PureCircle in 2008
Significant experience across the
global F&B space
Formerly Vice Presiden of sales
and marketing for Tate & Lyle’s
Splenda Sucralose division
•
Joined PureCircle in 2015
Over 15 years of experience in
Manufacturing and Plant
Management with DSM Food
Specialties and Philip Morris
Worked for 5 years in Shanghai
as Operations Manager for DSM
Nutritional Products China
Didier Lebret
Vice President Leaf Sourcing &
Development
• More than 30 years in executive
management & development in
the agro & rural sector in Europe,
Latin America and Africa .
• Board member & operational
supply chain executive in various
agro business industries including
Bananas, Cocoa and Cotton .
We also implemented the first stages of Group ERP information systems.
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PureCircle - Investor Slides - All rights reserved March 2015
H1 FY15 Summary: PureCircle Progress Has Continued
•
Sales Revenue increased 24% over 1H FY14 ($35m). There was growth in sales in
all of our global sales regions.
•
2014 was a breakthrough year for Stevia: New product launches in mainstream
brands, global roll out of a new green cola category and strong development in
food applications
•
PureCircle continues to lead stevia innovation with new products and applications
designed to meet identified category needs. During H1 FY15 saw the successful
launch of Sigma D, the first category specific stevia solution
•
PureCircle has started to expand its production capacity to meet anticipated future
increased volume.
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PureCircle - Investor Slides - All rights reserved March 2015
4. Outlook
by Magomet Malsagov, CEO
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PureCircle - Investor Slides - All rights reserved March 2015
Outlook (1)
• The size and breadth of F&B product launches and roll-outs in 1H FY15 indicate that stevia
is now well on the way to becoming an important ingredient for F&B companies wishing to
moderate calories.
• Further the existing footprint of products launched using stevia provides a sound basis for
a multi-billion $ stevia industry in the years to come.
• In 1H FY15 we again strengthened our position as market leader with further proprietary
product innovation and growth in both delivered sales and project pipelines.
• With sustained long term growth prospects, PureCircle has started to expand our
production capacity. We expect this to come on stream in FY17
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PureCircle - Investor Slides - All rights reserved March 2015
Outlook (2)
• We are generating revenues from a wide range of natural sweetener and flavor products
and from a wide range of customers directly and through our business partners.
• With accelerating roll-outs of food and beverage products using PureCircle's stevia
solutions, particularly in the important Carbonated Soft Drink category, the Company is
confident of continued sales growth and with it improvements in profitability.
• However until market consumption smooths out, that growth will come with a lumpy sales
profile and therefore some volatility: this adds some complexity to our ability to provide
guidance in the short term
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PureCircle - Investor Slides - All rights reserved March 2015
5. Questions
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PureCircle - Investor Slides - All rights reserved March 2015
Appendix: Stevia Fact Sheet
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PureCircle - Investor Slides - All rights reserved March 2015
Appendix:
An Introduction to the Zero Calorie, Plant-Based
Sweetener of Natural Origin
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PureCircle - Investor Slides - All rights reserved March 2015
PureCircle Limited : FY15 – Half Year Interim Results
Investors March 2015
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PureCircle - Investor Slides - All rights reserved March 2015