COMPANY PRESENTATION STAR CONFERENCE 2006 LONDON 2006, 27 th September
AGENDA 1. THE GROUP AT A GLANCE 2. MARKET OVERVIEW 3. FINANCIALS 4. SHARE PRICE 5. STRATEGY STAR CONFERENCE 2006 Pag. 2
SPEAKERS LUIGI LUZZATI Chairman of Centrale del Latte di Torino & C. S.p.A. RICCARDO POZZOLI Chief Executive Officer of Centrale del Latte di Torino & C. S.p.A. NICOLA CODISPOTI Sales Manager of Centrale del Latte di Torino & C. S.p.A. VITTORIO VAUDAGNOTTI Chief Financial Officer of Centrale del Latte di Torino & C. S.p.A. STAR CONFERENCE 2006 Pag. 3
1. THE GROUP AT A GLANCE STAR CONFERENCE 2006 Pag. 4
1. THE GROUP AT A GLANCE MISSION Providing the Italian market with the highest quality milk and milk-derivatives products by exploiting our interregional network STAR CONFERENCE 2006 Pag. 5
1. THE GROUP AT A GLANCE GROUP IDENTITY Since 1950 Centrale del Latte is the leading brand of milk in Turin. During the years the Group experienced a day by day growth becoming a multiregional company active in the production and distribution of milk, milk derivatives and other fresh products SHAREHOLDERS Source: Centrale del Latte di Torino & C. S.p.A. 36.2% 51% 6.9% 5.9% High-quality production, strong diversification strategy and effective distribution network enabled the Group to become a leading regional player, always aiming to preserve its daily and dairy relationship with its customers Finanziaria Centrale del Latte di Torino S.p.A. Lavia S.S. Other family groups Free float STAR CONFERENCE 2006 Pag. 6
1. THE GROUP AT A GLANCE EQUITY STORY Source: Centrale del Latte di Torino & C. S.p.A. Centrale del Latte di Torino starts its activity Market liberalization Listing on the Italian Stock Exchange and introduction of PET packaging for dairy milk Acquisition of Centrale del Latte di Vicenza Mid-sixties 1999 2001 2005 1950 1974 2000 2002 Introduction of UHT milk and TETRAPAK packaging Acquisition of Centro Latte Rapallo Acquisition of the 40% of Frascheri and admission to the STAR segment of the Italian Stock Exchange The Group starts the building of a new production plant in Vicenza STAR CONFERENCE 2006 Pag. 7
1. THE GROUP AT A GLANCE GROUP STRUCTURE Source: Centrale del Latte di Torino & C. S.p.A. 100% 85.4% 40% 25% SALADS & FRUITS s.r.l. 40% 25% GPP GENOVA PASTA E PESTO S.p.A. BELGRAVIA s.r.l. STAR CONFERENCE 2006 Pag. 8
1. THE GROUP AT A GLANCE AN INTERREGIONAL POLE Torino Pavia* Vicenza Carmagnola Bardineto Rapallo * Salads & Fruits, plant under construction STAR CONFERENCE 2006 Pag. 9
1. THE GROUP AT A GLANCE A FULL SET OF FRESH PRODUCTS Source: Centrale del Latte di Torino & C. S.p.A. MILK YOGURT and DESSERT CHEESE READY-TO-EAT SALAD EGGS FRESH PASTA STAR CONFERENCE 2006 Pag. 10
1. THE GROUP AT A GLANCE NEW PRODUCTS Source: Centrale del Latte di Torino & C. S.p.A. FRESH MILK PROBIOTIC YOGURT READY-TO-DRINK OTHER FRESH PRODUCTS PROBIOTIC YOGURT WITH BRANS STAR CONFERENCE 2006 Pag. 11
1. THE GROUP AT A GLANCE PRODUCTION PLANTS Source: Centrale del Latte di Torino & C. S.p.A. Fresh milk packaging plant Fresh milk packaging plant STAR CONFERENCE 2006 Pag. 12
1. THE GROUP AT A GLANCE SALES BREAKDOWN (I H 2006) Source: Centrale del Latte di Torino & C. S.p.A. By region By product By distribution channel 1.8% 8.1% 3.4% 11.0% 24.0% 49.8% 19.6% 46.3% 50.0% 39.0% 24.4% 22.6% Piemonte Liguria Veneto Other regions Fresh milk Other packed products UHT milk Yogurt Unbottled milk and cream Large-scale distribution (1) Shops (2) Others (1) Nearly 1,250 point of sale daily served (2) Nearly 8,000 point of sale daily served STAR CONFERENCE 2006 Pag. 13
2. MARKET OVERVIEW STAR CONFERENCE 2006 Pag. 14
2. MARKET OVERVIEW: FRESH MILK COMPETITORS ANALISYS (market shares value I H 2006) TOTAL ITALIAN MARKET OF FRESH MILK Source: IHA Italia Family consumption PIEMONTE+LIGURIA+VENETO (16.6% OF TOTAL ITALIAN MARKET) 32.3% 4.1% 23.5% ITALY Market value: 1,011 million 3.3% 28.6% 31.7% CLT Group Parmalat Granarolo Private labels Others 42.2% 13.1% 21.2% PIEM-LIG-VEN Market value: 168 million CLT VS MARKET* (sales trend 2003-06) CLT MARKET SHARE ** 5.0% 4.0% 3.0% 2,0% 1.0% 0,0% -1.0% -2.0% -3.0% 2003 2004 2005 Jan-Jun '06 24.0% 23.5% 23.0% 22.5% 22.0% 21.5% 21.0% 20.5% 20.0% 2001 2002 2003 2004 2005 Jan-Jun '06 CLT Group P+L+V Market * Total value of Piemonte, Liguria and Veneto market **On total market value of Piemonte, Liguria and Veneto STAR CONFERENCE 2006 Pag. 15
2. MARKET OVERVIEW: UHT MILK COMPETITORS ANALISYS (market shares value I H 2006) TOTAL ITALIAN MARKET OF UHT MILK Source: IHA Italia Family consumption PIEMONTE+LIGURIA+VENETO (17.8% OF TOTAL ITALIAN MARKET) 32.6% 2.3% 30.3% CLT Group 40.4% 13.2% ITALY Market value: 753 million 13.4% 21.4% Parmalat Granarolo Private labels Others 19.3% 16.2% 11.0% PIEM-LIG-VEN Market value: 134 million CLT VS MARKET* (sales trend 2003-06) CLT MARKET SHARE ** 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 2003 2004 2005 Jan-Jun '06 CLT Group P+L+V Market 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0,0% 2001 2002 2003 2004 2005 Jan-Jun '06 * CLT vs total market of Piemonte, Liguria and Veneto **On total market of Piemonte, Liguria and Veneto STAR CONFERENCE 2006 Pag. 16
2. MARKET OVERVIEW: YOGURT COMPETITORS ANALISYS (market shares value I H 2006) TOTAL ITALIAN MARKET OF YOGURT Source: IHA Italia Family consumption PIEMONTE+LIGURIA+VENETO (27.6% OF TOTAL ITALIAN MARKET) ITALY Market value: 522 million 17.9% 1.2% 3.1% 5.4% 11.0% 4.0% 6.2% 7.8% 11.0% 32.4% CLT Group Danone Muller Yomo Parmalat Granarolo Private Labels Nestlè Mila Others 29.2% 12.9% 4.3% 4.2% 9.2% 11.3% 28.9% PIEM-LIG-VEN Market value: 144 million CLT VS MARKET* (sales trend 2003-06) CLT MARKET SHARE ** 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2003 2004 2005 Jan-Jun '06 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2001 2002 2003 2004 2005 Jan-Jun '06 CLT Group P+L+V Market * CLT vs total market of Piemonte, Liguria and Veneto **On total market of Piemonte, Liguria and Veneto STAR CONFERENCE 2006 Pag. 17
2. MARKET OVERVIEW MARKET PENETRATION (1) Source: Gfk IHA The Group s main products (fresh/uht milk and yogurt) market penetration (2) has been growing in the last three years 2003 2004 2005 FRESH MILK 53% 54% 54% BRAND AWARENESS* 2005 Source: Astra Demoscopea (quantitative research- CATI) The Group Brand Awareness reached almost 100% in 2005 95% UHT MILK 32% 32% 33% 90% YOGURT 16% 17% 18% (1) Centrale del Latte di Vicenza data not available (2) Penetration % = n of families buying Centrale del Latte brand total n of brands marketing the same product class in Piemonte, Liguria and Veneto 94% * Brand awareness %: solicited awareness of the Group s brands in Piemonte, Liguria and Veneto STAR CONFERENCE 2006 Pag. 18
2. MARKET OVERVIEW MARKETING INITIATIVES IN 2006 Source: Centrale del Latte di Torino & C. S.p.A. The Group reached a strong positioning in its interregional market also by exploiting high marketing and communications investments MARKETING INVESTMENTS 3.4 mln 2005 (3.6% on sales 05) 1.7 mln 1H 06 (3.4% on sales IH 06) STAR CONFERENCE 2006 Pag. 19
2. MARKET OVERVIEW MARKETING INITIATIVES IN 2006 Source: Centrale del Latte di Torino & C. S.p.A. STAR CONFERENCE 2006 Pag. 20
3. FINANCIALS STAR CONFERENCE 2006 Pag. 21
3. FINANCIALS CONSOLIDATED INCOME STATEMENT (IFRS compliant) Source: Centrale del Latte di Torino & C. S.p.A. Euro million 30-Jun-06 30-Jun-05 31-Dec-05 % % % IFRS IFRS IFRS Sales 49.47 99.0% 48.14 99.2% 95.21 99.2% Value of production 49.98 100.0% 48.52 100.0% 95.98 100.0% Services (11.67) (23.3%) (11.06) (22.8%) (22.20) (23.1%) Consumption of raw materials (26.44) (52.9%) (25.83) (53.2%) (51.61) (53.8%) Cost of production (39.07) (78.2%) (37.77) (77.8%) (75.49) (78.6%) Cost of labour (5.47) (10.9%) (5.71) (11.8%) (10.88) (11.3%) EBITDA 5.44 10.9% 5.04 10.4% 9.62 10.0% Depreciation & Amortization (2.11) (4.2%) (2.18) (4.5%) (4.51) (4.7%) EBIT 3.33 6.7% 2.85 5.9% 5.11 5.3% Financial income (expenses) (0.20) (0.4%) (0.27) (0.6%) (0.42) (0.4%) Profit (loss) before tax 3.13 6.3% 2.58 5.3% 4.71 4.9% Tax (1.69) (3.4%) (1.49) (3.1%) (2.83) (3.0%) Profit (loss) after tax 1.44 2.9% 1.09 2.2% 1.87 2.0% Minorities (0.08) (0.2%) (0.05) (0.1%) (0.16) (0.2%) Net profit 1.52 3.0% 1.14 2.4% 2.03 2.1% The consolidation perimeter includes financial statements of Centrale del Latte di Torino & C. S.p.A., Centro Latte Rapallo S.p.A. and Centrale del Latte di Vicenza S.p.A. It doesn t include stakes in affiliate companies. STAR CONFERENCE 2006 Pag. 22
3. FINANCIALS VALUE OF PRODUCTION TREND (06/2005 06/2006) Source: elaboration on CLT data 120 100 IH 2005 96 IH 2006 80 60 40 48.5 50 20 0 30-jun-2005 31-dec-2005 30-jun-2006 Euro million EBITDA ed EBIT TREND (06/2005 06/2006) Source: elaboration on CLT data *Ebit adjusted on consolidation depreciation 12 10 8 6 4 2 0 IH 2005 9.6 IH 2006 5.0 5.1 5.4 2.9 3.2 30-jun-2005 31-dec-2005 30-jun-2006 Ebitda Ebit* Euro million STAR CONFERENCE 2006 Pag. 23
3. FINANCIALS SALES BREAKDOWN BY PRODUCT (01/2006 06/2006) Source: elaboration on CLT data 60 4.15 1.56 49.47 50 11.24 40 9.64 30 22.88 20 10 - Fresh milk UHT milk Other packed yogurt milk and cream products unbottled total Sales by product Total sales jan-jun 2006 Euro million SALES BREAKDOWN BY PRODUCT (01/2005 06/2005) Source: elaboration on CLT data 60 50 40 30 21.94 9.81 10.64 3.95 1.80 48.14 Sales by product Total sales jan-jun 2005 20 10 - Fresh milk UHT milk Other packed yogurt milk and cream products unbottled total Euro million STAR CONFERENCE 2006 Pag. 24
3. FINANCIALS EBIT and EBITDA MARGINS Source: elaboration on CLT data 100 50 15 10 5 - IH 2005 95 IH 2006 IH 2005 IH 2006 Sales 48.1 49.5 Ebitda 10.9% 10.4% 10% 9.6 Ebit 5 5.1 5.4 5.9% 2.9 3.3 Ebitda/Sales 5.3% 6.7% 30-jun-05 31-dec-05 30-jun-06 Ebit/Sales 30-jun-05 31-dec-05 30-jun-06 12% 9% 6% 3% - NFP/EQUITY Source: elaboration on CLT data EBIT (1) /CAPITAL INVESTED (2) (Ki) Source: elaboration on CLT data 80 60 40 20 IH 2005 IH 2006 0.02x 0.07x 0.09x 0.2x 0.15x 0.1x 0.05x Equity NFP PFN/Equity Ki Ebit EBIT/Ki rolling 2005 EBIT/Ki rolling 2006 10.9% 11% 60 50 40 30 10 5-30-jun-05 31-dec-05 30-jun-06 0.0x LTM 05 LTM 06 - (1) EBIT I semester + EBIT II semester of the previous year (2) Average between Ki at 30/06 and Ki at 31/12 of the previous year STAR CONFERENCE 2006 Pag. 25
3. FINANCIALS CONSOLIDATED BALANCE SHEET Source: Centrale del Latte di Torino & C. S.p.A. Euro million 30-Jun-06 % 30-Jun-05 % 31-Dec-05 % IFRS IFRS IFRS Tangible assets 32.30 62.3% 27.26 57.3% 30.98 61.8% Intangible assets 15.37 29.6% 16.61 34.9% 15.99 31.9% Net fixed assets 49.16 94.8% 44.81 94.2% 47.94 95.7% Trade receivables 16.59 32.0% 16.01 33.6% 17.76 35.4% Inventories 2.63 5.1% 2.62 5.5% 2.83 5.7% Other current assets 9.57 18.4% 8.74 18.4% 8.83 17.6% Trade payables (17.94) (34.6%) (17.68) (37.2%) (21.66) (43.2%) Other current liabilities (8.13) (15.7%) (6.91) (14.5%) (5.60) (11.2%) Net working capital 2.71 5.2% 2.77 5.8% 2.17 4.3% NET ASSETS 51.86 100.0% 47.59 100.0% 50.11 100.0% Severance prov & other LT liab 4.10 7.9% 3.90 8.2% 4.13 8.2% Total LT liabilities 6.27 12.1% 6.47 13.6% 6.35 12.7% Cash and equivalents (10.56) (20.4%) (11.63) (24.4%) (11.97) (23.9%) Financial debt 14.08 27.2% 12.56 26.4% 14.60 29.1% Net financial position 3.52 6.8% 0.93 2.0% 2.64 5.3% Share capital 20.60 39.7% 20.60 43.3% 20.60 41.1% Profit and loss of the year 1.52 2.9% 1.14 2.4% 2.03 4.0% Shareholders Equity 39.81 76.8% 37.74 79.3% 38.77 77.4% Minorities 2.27 5.2% 2.45 5.2% 2.35 5.2% NET LIABILITIES 51.86 100.0% 47.59 100.0% 50.11 100.0% STAR CONFERENCE 2006 Pag. 26
4. SHARE PRICE STAR CONFERENCE 2006 Pag. 27
4. SHARE PRICE SHARE PRICE 2001-2006 Source: elaboration on JCF and Bloomberg data 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 5.4 IPO price at euro 6.80 NY September 11 th, 2001 2.53 2.3 3.33 31/12/2000 31/12/2001 31/12/2002 31/12/2003 31/12/2004 CLT expressed its interest in acquisition of some industrial assets likely to be sold in Italy by the Parmalat Group 4.69 4.51 31/12/2005 4.11 30/06/2006 Share price at 14/09/2006 (4.22) Price in euro PRICE PER SHARE (2001-2006) Source: elaboration on JCF and Bloomberg data 8 7 6 5 4 3 5.5 3.8 3.1 3.3 2.3 2.6 2.1 2.0 2.4 3.6 4.2 6.8 4.2 4.6 5.0 4.1 4.4 5.02 Year min Year avg Year max 2 1 0 2001 2002 2003 2004 2005 2006 YTD Price in euro Share price at 14/09/2006 (4.22) STAR CONFERENCE 2006 Pag. 28
4. SHARE PRICE SHARE PRICE YTD Source: elaboration on JCF and Bloomberg data 5.2 5.1 5 4.9 4.8 4.7 4.6 4.5 4.4 4.3 4.2 4.1 4 sep-05 oct-05 nov-05 dec-05 jan-06 feb-06 mar-06 apr-06 may-06 jun-06 jul-06 aug-06 sep-06 30500 30000 29500 29000 28500 28000 27500 27000 26500 26000 25500 25000 24500 CLT Mibtel Price in euro PRICE PER SHARE YTD (MONTHLY ANALYSIS) Source: elaboration on JCF and Bloomberg data Price per share at the end of each month 5.0 4.8 4.6 4.4 4.2 4.0 3.8 3.6 3.4 3.2 4.68 4.48 4.50 4.42 4.54 4.52 4.39 4.29 4.36 4.36 4.11 4.15 4.22* sep-05 oct-05 nov-05 dec-05 jan-06 feb-06 mar-06 apr-06 may-06 jun-06 jul-06 aug-06 sep-06 Price in euro *Last price at 14/09/2006 STAR CONFERENCE 2006 Pag. 29
5. STRATEGY STAR CONFERENCE 2006 Pag. 30
5. STRATEGY STRATEGY AND TARGETS 2007 Organic growth New production plant in Vicenza starts its activity Group sales expected to increase by 4.6% Packaging innovation for UHT and fresh milk and development of special milk and yogurt Start production of pre-packed salads and fruits in the new production plant of S&F in Casteggio (near Pavia) Highly effective production STAR CONFERENCE 2006 Pag. 31
5. STRATEGY STRATEGY AND TARGETS 2006-2009 CLT sales and EBITDA are expected to grow in the next three years with a Compound Annual Growth Rate of 5.8% and 13.2% respectively Sales EBITDA CAGR 13.2% EBITDA margin 120,000 115,000 110,000 105,000 100,000 95,000 90,000 85,000 97,600 CAGR 5.8% 102,100 109,300 115,500 2006 2007 2008 2009 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 15,100 13,000 13.1% 10,400 11,300 11.9% 11.1% 10.7% 2006 2007 2008 2009 14% 13.5% 13% 12.5% 12% 11.5% 11% 10.5% 10% Sales 2006-2009 2009 EBITDA 2006-2009 2009 STAR CONFERENCE 2006 Pag. 32
5. STRATEGY START PRODUCTION IN THE NEW PLANT OF SALADS & FRUITS The Group invested nearly Euro 3.4 million for the completion of the new plant of Salad & Fruits, which is expected to start its production activity in 2007 SALADS & FRUITS s.r.l. STAR CONFERENCE 2006 Pag. 33
5. STRATEGY START OF NEW PRODUCTION PLANT IN VICENZA New production plant in Vicenza is expected to start production of milk and yogurt by the Spring of 2007 Today Spring 2007 STAR CONFERENCE 2006 Pag. 34
CONTACTS THE GROUP Via Filadelfia, 220 10137 Torino ITALY www.centralelatte.torino.it Luigi Luzzati Vittorio Vaudagnotti Chairman Investor Relator Tel. +39 011 3240215 Fax. +39 011 3240300 vaudagnotti@centralelatte.torino.it THE SPECIALIST Via Gramsci, 7 10121 Torino ITALY www.gruppobim.it Valentino Molino Analyst Tel. +39 011 5162643 Fax. +39 011 5162630 valentino.molino@gruppobim.it STAR CONFERENCE 2006 Pag. 35