From Sara Lee
to Jacobs Douwe Egberts
Noordwijk, 14 November 2014
Jan Schets
D.E. Master Blenders 1753
Sander Honingh
Rabobank
Amsterdam, June3rd. 2014
Agenda
Company
Refinancing
Bank
Wallet
Snapshot
Transactions
Relationships
Distribution
Key Learnings
Q&A
Company Snapshot
We are a leading, focused pure-play coffee and tea company with operations
across Europe, Brazil, Australia and Thailand.
72% of our sales are generated from markets where we have a
Number 1 or Number 2 position.
Note: 72% is total company sales in countries where D.E MASTER BLENDERS has a number 1 or 2 position in retail coffee.
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2
We have strong local brands
Denmark
France
Spain
Brazil
Australia
Hungary
Norway
NL & BE
Global
Global
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3
Our sales split by geography
Spain
6%
Other
16%
Netherlands
29%
Australia
6%
Germany
6%
Belgium
7%
Brazil
17%
France
13%
2013: € 2,5 bln
Other includes New Zealand, Norway, Denmark, Poland, Thailand, Greece, Hungary, Czech Rep, UK
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4
Roast & Ground
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Senseo
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Capsules
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Tea
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Intended JV with Mondelez announced
Announced on May 7th
To become the world’s leading
pure-play coffee company
Mondelez
DEMB
JV
#2 sales €2.9 bln
#3 sales €2.5 bln
#2 sales €5.4 bln
JV:
49%
51%
100%
Merger is complimentary in regions and in
coffee expertise.
Many 1st and 2nd positions in key markets
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Our History
The business expands
into Western Europe
Douwe Egberts
established
1936
1753
1940s
1978
Pickwick established
Douwe Egberts
acquired by Sara Lee
March – June 2012:
The new company name
“D.E MASTER BLENDERS
1753” revealed and
Company is listed on the
NYSE Euronext Exchange
Senseo coffee
system launched
2001
2010
2012
Launched the L’OR EspressO
capsules compatible with the
Nespresso® single-serve system
May 2014
DEMB announced the
intended partnership
with Mondelez on
combining
Coffee activities
2013
2014
Sept 2013
Oak Leaf B.V acquired
95% of the shares
In DEMB 1753
OOH: Out of Home
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Refinancing transactions
Before July 2012
Chicago Treasury
- DCM
- CM America’s
- Insurance
Utrecht Treasury
- FX Global
- CM ROW
- Group financing
NYSE listed
BBB rated
Public Debt
Bank funded RCF
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Surplus cash
CM / FX banks
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
12
July 2012, spin-off from Sara Lee
Chicago Treasury
- DCM
- CM America’s
- Insurance
Amsterdam Treasury
- Capital markets
- FX Global
- CM Global
- Insurance
NYSE listed
BBB rated
Public Debt
Bank funded RCF
AEX-listed
BBB rated
USPP $650 mln
RCF €750 mln
Sara Lee
Spin-off
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Bank group
Existing bank relations
Selection of banks based
on our global footprint
- 10 banks (out of 18)
- NL banks eager
- FR banks dropped out
Q4
2014
Q1
2015
Q2
2015
Q3
2015
13
September 2013, JAB-led acquisition
Privatized
B+ / BB- rated
RCF
€300 mln
Loans
- banks
€2,000 mln
- investors €1,000 mln
Sara Lee
Spin-off
Q2
2012
Q3
2012
Bank group
JAB / existing bank relations
- 25 banks
- 7 dropped-out
- 4 reconsidered
- 18 new
JAB led
acquisition
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
14
July 2014, refinancing in view of intended
partnership with Mondelez per July 2015
Bank group
Mondelez / JAB / Existing
bank relations
- 40 banks
- 2 dropped-out
- 9 reconsidered
- 8 new
Privatized
BB / BB- rated
RCF
€500 mln
Loans
- banks
€3,900 mln
- investors €3,200 mln
Sara Lee
Spin-off
Q2
2012
Q3
2012
Mondelez
refinancing
JAB led
acquisition
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Mondelez
partnership
Q4
2014
Q1
2015
Q2
2015
Q3
2015
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Bank relationships
Development of bank commitments
< 2012
Sara Lee
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
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17
18
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27
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35
36
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40
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42
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2012
DEMB
2013
JAB
2014
JAB/MDLZ
Why declined:
•
•
•
•
Commitments
banks € 750 mln
Economics
Euro crisis
Rating/Leverage
Concerns
Why joined:
•
•
•
•
Commitments
banks € 2.3 bln
Commitments
banks € 4.4 bln
Economics
Less crisis
Relationship
Convinced
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Value added cooperation
Sara Lee / DE
(NetherlandsAntilles)
2.25% Notes due 2012
EUR300 million
Sara Lee / DE
Joint Bookrunner
(NetherlandsAntilles)
2.274% FRN due 2006
EUR250 million
Sara Lee / DE
Joint Bookrunner
March 2010
D.E MASTER BLENDERS 1753 B.V.
5.211% FR
N due
2002
Syndicated
D.EJacobs
MASTER
Douwe
Revolving
BLENDERS
Egberts
Credit
1753
B.V.
Facility
N.V.
B.V.
EUR200 million
EUR Advisory
750,000,000
November 2004
Joint Bookrunner
Sara Lee
(NetherlandsAntilles)
Financial
Acquisition
Advisor public-to-private
Finance
6% Notes due 1997
Paying
Financial
& Exchange
Logistics
Agent
NLG 200 million
(NetherlandsAntilles)
Joint Bookrunner
November 2000
Coordinator, Bookrunner,
Mandated
Joint Lead
LeadArranger
Arranger &
Juli 1994
Mandated
Joint
Documentation
Financial
GlobalLead
Coordinator
Advisor
Arranger
Agent
May
2012
2013
2014
2012
Wallet distribution
Banks, fees & services
Quote uit termsheet coffee machines leasing proposal
...... een vast bedrag per maand waarmee de meeste diensten
gratis worden aangeboden.
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Why do banks participate in the financing
• Asset takers
– Yield is sufficient
• Ancillary business
– Nice to have
– Fair share
– Demanding
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Increased focus on cross-sell
Why?
Company
No. of deals
Basel
3:
•1. Rabobank
Higher
minimum
capital requirement
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ECB
belooft
strenge
stresstest
• Capital needs to be of higher quality
2. ABN AMRO
• Additional capital requirements for
system banks
3. ING
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4. Leonardo & Co.
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5. Lazard
4
Wallet / Ancillary business
• Lending/RCF is the entry ticket
– Level playing field taking Tiering into account
• Ancillary business
–
–
–
–
–
–
Cash management
Foreign exchange
Interest rate management
Financing
Credit cards
Pensions
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The Treasurer’s mantra:
&
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The reality is:
Cash
&
Profit
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The reality of Treasury is:
Too much on reporting
Too little on cash
Research?
Benchmarks?
Education?
Treasury is procurement!
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What do we do:
Financing
• Fees, interest margins
Cash management
• Fees, interest margins
FX
• Spot / forward 0.5 - 2 bps, FX-swaps 1.5 bps
Swaps
• IRS 1 bps, CCS 1,5 bps, coordination
Investments
• Depo’s / MMF’s 10 bps
Total Fees
Capital
• Total of loans + % of commitments
Total Capital
Total Fees / Total Capital = Return on Capital
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Risk perception drives return level
Risk Adjusted Return
Income
(Gross)
RAROC
Liquidity
Costs
Expected
Loss
Economic Capital
Credit Risk
Transfer Risk
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Key learnings
Vision on the role of banks
Before 2012
Service provider
Trusted advisor
After 2012
Finance provider - new
Service provider
increased
Trusted advisor
Internal / external factors have major impact on relationships
Treasury community needs to step up on wallet distribution
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Relationships with banks
Trust between banks and corporate at various levels is key
United Nation's World Happiness Report:
Denmark most happiest country of the world
Why: they trust each other….
NRC 23-10-14
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Thank you