From Sara Lee to Jacobs Douwe Egberts Amsterdam, June3rd. 2014 Noordwijk, 14 November 2014 Jan Schets D.E. Master Blenders 1753 Sander Honingh Rabobank
From Sara Lee to Jacobs Douwe Egberts
Amsterdam, June3rd. 2014
Noordwijk, 14 November 2014
Jan SchetsD.E. Master Blenders 1753
Sander HoninghRabobank
Agenda
Refinancing
Transactions
Bank
RelationshipsKey Learnings
Wallet
DistributionQ&A
Company
Snapshot
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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.
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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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We have strong local brands
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France
Spain
Australia
Brazil
NL & BE
Global Hungary
Denmark
Global Norway
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2013: € 2,5 bln
29%
Brazil17%
France13%
Belgium7%
Germany6%
Australia6%
Spain6%
Other16%
Netherlands
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Other includes New Zealand, Norway, Denmark, Poland, Thailand, Greece, Hungary, Czech Rep, UK
Our sales split by geography
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Roast & Ground
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Senseo
8
Capsules
9
Tea
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Intended JV with Mondelez announced
Announced on May 7th
To become the world’s leadingpure-play coffee company
JV:Mondelez #2 sales €2.9 bln 49%DEMB #3 sales €2.5 bln 51%JV #2 sales €5.4 bln 100%
Merger is complimentary in regions and in coffee expertise.
Many 1st and 2nd positions in key markets
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Our History
1936 1940s 1978 20121753 2001
Pickwick established
Senseo coffee system launched
March – June 2012: The new company name
“D.E MASTER BLENDERS 1753” revealed and
Company is listed on the NYSE Euronext Exchange
2010
Launched the L’OR EspressO capsules compatible with the
Nespresso® single-serve system
OOH: Out of Home
Douwe Egberts established
The business expands into Western Europe
Douwe Egberts acquired by Sara Lee
2013
Sept 2013Oak Leaf B.V acquired
95% of the shares In DEMB 1753
2014
May 2014DEMB announced the intended partnership
with Mondelez on combining
Coffee activities
Refinancing transactionsRefinancing transactions
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Before July 2012
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015
Utrecht Treasury- FX Global- CM ROW- Group financing
Surplus cashCM / FX banks
Chicago Treasury - DCM- CM America’s- Insurance
NYSE listedBBB ratedPublic DebtBank funded RCF
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July 2012, spin-off from Sara Lee
Sara LeeSpin-off
Bank groupExisting bank relationsSelection of banks based on our global footprint- 10 banks (out of 18)- NL banks eager- FR banks dropped out
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015
Chicago Treasury - DCM- CM America’s- Insurance Amsterdam Treasury
- Capital markets- FX Global- CM Global- Insurance
AEX-listedBBB ratedUSPP $650 mlnRCF €750 mln
NYSE listedBBB ratedPublic DebtBank funded RCF
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September 2013, JAB-led acquisition
JAB+
PrivatizedB+ / BB- ratedRCF €300 mlnLoans - banks €2,000 mln - investors €1,000 mln
Bank groupJAB / existing bank relations- 25 banks - 7 dropped-out - 4 reconsidered - 18 new
JAB ledacquisition
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015
Sara LeeSpin-off
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July 2014, refinancing in view of intended partnership with Mondelez per July 2015
PrivatizedBB / BB- ratedRCF €500 mlnLoans - banks €3,900 mln - investors €3,200 mln
Bank groupMondelez / JAB / Existing bank relations- 40 banks - 2 dropped-out - 9 reconsidered - 8 new
Mondelezrefinancing
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015
JAB ledacquisition
Sara LeeSpin-off
Mondelezpartnership
JAB+
Bank relationships
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Development of bank commitments
< 2012 2012 2013 2014Sara Lee DEMB JAB JAB/MDLZ
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1011121314151617181920212223242526272829303132333435363738394041424344
Why joined:• Economics• Less crisis• Relationship• Convinced
Why declined:• Economics• Euro crisis• Rating/Leverage• Concerns
Commitments banks € 750 mln
Commitments banks € 2.3 bln
Commitments banks € 4.4 bln
Sara Lee / DE(Netherlands Antilles)
2.25% Notes due 2012EUR 300 million
Joint Bookrunner
March2010
Sara Lee / DE(Netherlands Antilles)
2.274% FRN due 2006EUR 250 million
Joint Bookrunner
November 2004
Sara Lee / DE(Netherlands Antilles)
5.211% FRN due 2002EUR 200 million
Joint Bookrunner
November 2000
Sara Lee(Netherlands Antilles)
6% Notes due 1997NLG 200 million
Joint Bookrunner
J uli 1994
D.E MASTER BLENDERS 1753 B.V.Syndicated Revolving Credit Facility
EUR 750,000,000
Coordinator, Bookrunner,Mandated Lead Arranger &
Documentation AgentMay 2012
D.E MASTER BLENDERS 1753 B.V.Syndicated Revolving Credit Facility
EUR 750,000,000
Coordinator, Bookrunner,Mandated Lead Arranger &
Documentation AgentMay 2012
D.E MASTER BLENDERS 1753 B.V.Advisory
Financial Advisor2012
D.E MASTER BLENDERS 1753 B.V.Advisory
Financial Advisor2012
Value added cooperation
D.E MASTER BLENDERS 1753 N.V.
Financial Advisor public-to-privatePaying & Exchange Agent
Joint Lead ArrangerJoint Global Coordinator
2013
D.E MASTER BLENDERS 1753 N.V.
Financial Advisor public-to-privatePaying & Exchange Agent
Joint Lead ArrangerJoint Global Coordinator
2013
Jacobs Douwe Egberts B.V.
Acquisition FinanceFinancial Logistics
Mandated Lead Arranger2014
Jacobs Douwe Egberts B.V.
Acquisition FinanceFinancial Logistics
Mandated Lead Arranger2014
Wallet distribution
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Quote uit termsheet coffee machines leasing proposal
Banks, fees & services
...... een vast bedrag per maand waarmee de meeste diensten
gratis worden aangeboden.
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• Asset takers
– Yield is sufficient
• Ancillary business– Nice to have– Fair share– Demanding
Why do banks participate in the financing
Increased focus on cross-sell
Why?
ECB belooft strenge stresstestBasel 3:• Higher minimum capital
requirement• Capital needs to be of higher
quality• Additional capital
requirements for system banks
Company No. of deals
1. Rabobank 41
2. ABN AMRO 22
3. ING 27
4. Leonardo & Co. 6
5. Lazard 4
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• 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
Wallet / Ancillary business
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The Treasurer’s mantra:
PROFITAN
OPINION
&
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&
The reality is:
PROFITAN
OPINION
Cash
Profit
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The reality of Treasury is:
Too much on reporting
Too little on cashResearch?Benchmarks?Education?
Treasury is procurement!
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What do we do:
Financing• Fees, interest marginsCash management • Fees, interest marginsFX• Spot / forward 0.5 - 2 bps, FX-swaps 1.5 bpsSwaps• IRS 1 bps, CCS 1,5 bps, coordinationInvestments• Depo’s / MMF’s 10 bps
Capital• Total of loans + % of commitments
Total Fees / Total Capital = Return on Capital
Total Fees
Total Capital
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Risk perception drives return level
(Gross)RAROC
Risk Adjusted Return
Economic Capital
IncomeLiquidity
CostsExpected
Loss
Credit Risk Transfer Risk
Key learnings
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Vision on the role of banks
Before 2012Service providerTrusted advisor
After 2012Finance provider - newService providerTrusted advisor
Internal / external factors have major impact on relationships
Treasury community needs to step up on wallet distribution
increased
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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
Thank you