PureCircle Limited : FY15 Half Year Interim Resultspurecircle.com/app/uploads/pdfs/event-pdfs/Presentation-slides-H1...PureCircle Limited : FY15 –Half Year Interim Results Investors

PureCircle - Investor Slides - All rights reserved March 2015

PureCircle Limited : FY15 – Half Year Interim ResultsInvestors March 2015

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Disclaimer

• This document, which is personal to the recipient and has been issued by PureCircle Limited (the “Company”), comprises written materials/slides for

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• This document has not been verified, does not purport to contain all information that a prospective investor may require and is subject to updating, revision

and amending. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without

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• Certain statements, beliefs and opinions in this document, are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’

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• By attending the telephone call presentation to which this document relates or by accepting this document in any other way you agree to be bound by the

foregoing provisions.

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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

AppendixStevia Fact Sheet

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1. CEO Overview

by Magomet Malsagov, CEO

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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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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 Board approved $42m production capacity expansion.

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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2. Financial Review

by William Mitchell, CFO


Summary Financials

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1H FY15 1H FY 14 Change

$’m $’m

Period ended 31 December

Sales 43.2 34.9 24%

Gross margin 14.5 12.3 18%

Operating profit 3.5 2.9 21%

EBITDA 6.4 5.2 24%

Net result after tax (0.9) (1.9) 53%

Net debt (52) (85) 39%

Net assets 188 141 33%

Net assets per share (U$ cents) 1.1 0.9 29%


Profit and Loss Account

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1H FY15 1H FY14 Variance Variance

$’m $’m $’m %

Revenue 43.2 34.9 8.3 24%

Cost of sales (28.7) (22.6) (6.1)

Gross margin 14.5 12.3 2.2

Gross margin % 34% 35% (1%)

Other income 0.2 0.3 (0.1)

Administrative expenses (11.2) (9.7) (1.5)

Operating profit 3.5 2.9 0.6 21%

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

Taxation 3.4 0.4 3.0

Net result after tax (0.9) (1.9) 1.0 53%

EBITDA 6.4 5.2 1.2 24%


Profit and Loss Account

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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


Cash-flow

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1H FY15 1H FY14 Variance

USD‘ m USD‘ m USD‘ m

Operating cash flow before working capital changes 7.4 5.8 1.6

Increase in inventories (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

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


• 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 $43m placement partly offset by foreign exchange effectof weaker currencies against the US$

Balance Sheet

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1H FY15 1H FY14 June FY14

$’m $’m $’m

Property, plant and equipment 60 66 64

Intangible Assets 38 32 38

Working capital items:

Inventory 97 88 87

Receivables - excluding JVs 26 19 29

Payables (17) (15) (19)

Gross assets 315 272 293

Net debt (52) (85) (80)

Net assets 188 141 149

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3. Operational Review

by Jordi Ferre, COO

13.6

FY11

15.2

FY12

26.4

FY13

34.9

+24%

FY14

43.2

FY15

+12%

+74%

+32%

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.

Revenue breakdown by Region

NTAM APAC LATAM EMEA FY11 FY12 FY13 FY14 FY15

Number of Global Customers

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Number of Stevia Global launches continued to growth in 2014 (up 23%)

Source: MIntel International 2015

Global Food & Beverage Launches With Stevia

5 Yr CAGR

Total+52%

Food+45%

Beverages+67%

0

500

1000

1500

2000

2500

2009 2010 2011 2012 2013 2014

# o

f la

un

che

s

Food

Beverages

280

477

636

1,163

1,843

2,274 +23% vs. ‘13


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2014 was a pivotal year for stevia’s presence in mainstream brands

Coca-Cola LifeGlobal

presence expands

Pepsi TrueUS

Sierra MistUS

HeinzUK

Hershey’s Flavored Milk

Mexico

Pepsi NextGlobal

presence expands

Lipton RTD TeaGlobal

presence Expands

Mott’sUS

ChobaniSimply 100

YogurtUS

DanoneActivia LightVarious EU countries

Sara Lee Sweet

Hawaiian RollsUS

Nestle Chocapic

Chile

Quaker OatmealCanada

Beverage

Food


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Notable Global DAIRY Launches with Stevia 2014

FinlandArla Protein

MexicoNestle Griego

JapanMeiji Bulgaria Yogurt

JapanBio (Activia)

CanadaYoplait Source Mexico

Nestle Fermented Milk

NorwayActivia Light

MexicoLala Grekos

USALala Yogurt Smoothie

IsraelYoplait Yogurt

MexicoLala PetiZooColores

MalaysiaNestle Bliss

NetherlandsArla Zin!

JapanMeiji Yoplait

MexicoHershey’sFlavored Milk

MexicoYomiChocolate Milk

USASilk Soy Milk

BrazilSollysSoy Drink

USASO DeliciousDairy FreeCoconut Milk

USAPro Yo FrozenYogurt

UKTesco Dessert Sundaes

YOGURTBEVERAGES

FROZEN

USAOikos*

USAChobani 100


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Other Notable FOOD Launches with Stevia 2014

Sauces & Seasonings

Breakfast Cereals Bakery

Heinz Master Hellman’s Tesco

QuakerChocapicVitatops Touyfayan Smart

PocketsRicola

Confections

Cavalier Extra

Processed Meats, Seafood

King OscarBall Park Park’s Finest


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Vanilla Big Pot Yogurt

450G

Cherry Big pot Yogurt

450G

Red Fruits Yoghurt4 X 125G

Caramel Iced Dessert 900ML

Development of Stevia with retailers: Tesco incorporates stevia in healthy living platform


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• Coca Cola Life and Carrefour France Example

The Retail Sector is now capitalising on the opportunity


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Coca-Cola Life Launches

2013 2014 2015

Argentina Chile

UK Mexico USA Sweden Czech Republic

Norway France Germany Belgium Luxembourg Netherlands Australia Japan

CSD Cola rollout continue: Establishment of a new Global Green Cola Category


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PureCircle Innovation: Introducing Sigma-DDairy 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 reducedSigma-D is parity to the full sugar formula

0

1

2

3

4

5

6

7

SweetIntensity

Bitterness BitterAftertaste

SweetAftertaste

Overall Liking

Full Sugar (Control) Sigma-D

Plain Yogurt: Full Sugar vs. 60% Reduced Sugar with Sigma-D

*= 80% CI, lowercase= 90% CI, uppercase = 95% CI


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PureCircle leads the market in proactive stevia education

SAFEfor the whole

family

NATURALsource

SUSTAINABLEfor farmers

and the planet

TASTES GREAT

0 CALORIE

STEVIA BENEFITS


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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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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 5-15 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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Stevia Leaf Prices Have Increased: Chinese Leaf SupplyWith 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 actualplantations

Africa Latin America Other Regions

Countries BurundiCAR

KenyaMalawi

MozambiqueRwanda

SwazilandTanzania

UgandaZambia

EcuadorGuatemala

MexicoNicaragua

IndiaMacedonia

RomaniaTurkey

USA

Potential Land Size (Hectares)

10,000 10,000 1,000


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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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Management and systems: New Operations Management

Jordi FerreChief Operating Officer

• 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

Bob CompierVice President Group Operations

• 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 LebretVice 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 .

Key new Top Management hires in Manufacturing, and Leaf Development

We also implemented the first stages of Group ERP information systems.


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 futureincreased volume.

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4. Outlook

by Magomet Malsagov, CEO


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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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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5. Questions


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Appendix: Stevia Fact Sheet


Appendix:

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An Introduction to the Zero Calorie, Plant-Based Sweetener of Natural Origin


PureCircle Limited : FY15 – Half Year Interim ResultsInvestors March 2015

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Documents

PureCircle Limited : FY15 Half Year Interim Resultspurecircle.com/app/uploads/pdfs/event-pdfs/Presentation-slides-H1...PureCircle Limited : FY15 –Half Year Interim Results Investors