Annual Report 2011 - Corbion
Annual Report 2011Repositioning forprofitable growth
ContentsCSM at a glanceMessage from CEO Gerard HoetmerFinancial highlightsKey Figures46810Report of the Board of Management11Our vision and strategyFinancial Commentary 2011,Dividend Proposal, Prospects for 2012CSM Bakery SuppliesPuracOur peopleInnovationProcurementCorporate GovernanceRisk ManagementKey risk areasReport of the Supervisory BoardCommittees of the Supervisory BoardRemuneration Policy12152026323644465051626366Sustainability report693Financial Statements91Contents Financial Statements 201193Consolidated Income StatementConsolidated Statement of Comprehensive IncomeConsolidated Statement of Financial PositionConsolidated Statement of Changes in EquityConsolidated Statement of Cash Flows9393949596Other Information141Statutory Arrangement for Appropriation of ProfitAuditor’s Report to the General Meeting ofShareholders of CSM nvBrief Resumés of the Members of theSupervisory BoardBrief Resumés of the Members of the Board ofManagementGroup StructureFive years in figuresInformation on the CSM ShareImportant DatesTrend in the Share Price142143144146147148150151151
4 CSM Annual Report 2011CSM at a glanceBakery productsWe continue to strengthen our leading position in themanufacturing and sale of premium finished andsemi-finished pastry products, such as fully decoratedcakes, donuts, muffins, European style viennoiserie andAmerican cookies. Our innovation strengths, combinedwith deep market insights are our engine for growththat gives us our competitive edge in the market. Ouractivities have been focused on North America andEurope, where we are a leading supplier, and we areincreasing our presence in fast-growing emergingmarkets, , such as in Asia and the Middle East.Our mission is to make our customers successful by creatingunique experiences through the best products, technologiesand services.CSM operates worldwide and generates annual sales of 3.1 billion and has a workforce of around 9,800 employeesin 28 countries. CSM is listed on NYSE EuronextBakery SuppliesBakery SuppliesCSM has leadership positions in two large business-to-businessmarkets. Bakery Supplies is a leading global supplier of bakeryproducts and ingredients. Purac is a fermentation powerhousewith a leading position in the field of food preservation,biobased chemicals and bio-plastics components produced fromlactic acid, lactic acid derivatives and other fermentation-basedmaterials.Bakery ingredientsCSM is market leader in ingredients such as breadimprovers, bread and pastry mixes, bakery margarinesand emulsifiers, fruit and (non) dairy-based pastry creams,fillings, icings and glazes. We focus on areas where wecan offer added value, meaning that we do not offer basicbakery product ingredients such as flour and sugar. CSMhas a strong reputation in ingredient technology, whichis the backbone of our strategy to drive growth.Within this segment, our customer base comprisestraditional artisan bakeries, industrial bakers andsupermarkets that offer in-store finishing of bakeryproducts.
CSM at a glance 5Bakery SuppliesPuracCSM Bakery Supplies offers a full line of the finest ingredientsand bakery products available, and all the benefits of ourextensive global expertise and technology. Our bakery productportfolio ranges from bakery margarines, bread improvers,mixes and fruit fillings, to frozen dough, and part and fullybaked products. Our customers include artisan and industrialbakeries, supermarkets, takeaway establishments, coffeechains and caterers.Purac is a leading player in the field of food preservation,biobased chemicals and bio-plastics components producedfrom lactic acid, lactic acid derivatives and other fermentationbased products. Purac delivers innovative solutions andbusiness concepts which are based on pure, natural ingredientsand processes. Purac is active in preservation, mineralfortification and biobased chemicals for the food, health care,chemical and polymer industries.We offer natural preservation solutions for safe,healthy and delicious food. Our focus is on productsthat enhance food safety and prolong shelf life so ourcustomers can reduce waste and minimize qualitydeterioration. Natural preservation solutions are theperfect response to our market’s preference for natural,healthy and clean label products. All our ingredients areproduced from renewable agricultural products used ina broad range of processed foods and beverages.PURACPURACPreservationBiobased chemicalsand bioplasticsMore sustainable solutions are replacing traditionalmineral oil-based chemicals. We are one mostexperienced companies in the production of ingredientsand chemicals through the fermentation ofcarbohydrates. Our technology is based on renewableresources, and we have developed a number ofsuccessful products based on lactic acid, for thepolymers and chemical industry.
6 CSM Annual Report 2011Message fromCEO Gerard HoetmerRepositioning forprofitable growth2011 was a very challenging year for us. We faced substantialraw material cost inflation in a difficult consumer environmentimpacting our volumes in an intensified competitive landscape.This put our 2011 results under severe pressure and led to adisappointing EBITA level.
CSM Annual Report 2011 7During this year, we have seen an accelerating structuralshift from the European traditional artisan bakery channeltowards in-store- bakery and out-of-home channels. We had torecognize that our European Bakery Supplies business, basedon its portfolio and positioning in 2011, would no longer havethe cash flow generating capacity that justified the carryingvalue of its assets. This has unfortunately led to a non-cashimpairment charge of 249 million. This does not reflect thestrengthening of the strategic position of our European BakerySupplies activities as addressed in our business review.We are committed to turning the challenges we face intoopportunities by strengthening our competitiveness, loweringour cost base, improving our agility and making clear choiceshow we allocate our resources. As a consequence we haveinitiated a restructuring program and have done a businessreview, which we believe will result in a more focused businessfor the future.Our business review has resulted in a distinct series ofconclusions and actions for each division clustered into fourkey points: Reassessment of the cost base Simplifying the Bakery Supplies Organization Reshaping the Bakery Supplies portfolio (predominantly inEurope) Aggressively growing Purac while reducing its financialdependency on Bakery SuppliesWe are rapidly implementing our restructuring program,announced and initiated in October 2011. This has led to a FTEreduction of 400 so far, progressing in line with our guidance ofa total reduction of 500 FTE for the full cost reduction plan.We have concluded that approx. 30% of our business in BakerySupplies Europe is not matching our criteria. This means thatthese businesses should either enhance their performanceI would like to express my gratitude to all ourstakeholders for their confidence in CSM. Our suppliersand customers have also faced the same tough marketconditions as we and this experience has highlighted,more than ever, the value of working in partnership.It has also been a tough year for our shareholders andwe endeavor to keep them updated on the progress ofour strategy and the implementation of our businessreview in 2012. Last but not least, I would like to thankour employees. Saying goodbye to valued employees isone of the toughest decisions a CEO has to make andthey are never taken lightly. I would like to thank eachand every employee who contributed to CSM in 2011.or strategic action will follow. So far we have earmarked, aspart of this 30% of BSEU, at least 100 million of sales to bedivested, which we plan to pursue in 2012.In Bakery Supplies North America we are strategically wellpositioned. Our portfolio has been strengthened significantlythrough Best Brands in 2010. Operational improvement is keyfor improving our profitability, for which we have the actionsin place.Purac is performing in line with its strategic intent, and shouldnow grow faster and leverage its fermentation capability to beself-sustaining in growth and investments. Next to growingour baseline and enhancing agility, we will accelerate thispath to self-sustainability by actively pursuing alliances andpartnerships.In light of exploiting the opportunities from our businessreview and reflecting on the 2011 results, we will propose adividend of 0.70 per common share.It is clear that the trading environment in 2012 will remainvery challenging. With our actions I am confident that CSM isbetter positioned to face these challenges head on to improveour long term profitability.Gerard Hoetmer, CEO
8 CSM Annual Report 2011Financial highlightsSalesEBITACash FlowOrganic sales growth 3.7%decreasedby 1.7%EBITA exclusing one off costsdecreased by 30%Decreased by 40.6 million 3,122.6 mln 150.8 mlnNet sales 2007-2011, bakery andlactic acid activitiesEBITA 2007-2011, bakery andlactic acid activities2011millions of eurosBakery Supplies North America1,628Bakery Supplies Europe2011millions of euros, before exceptional items/one-off costsBakery Supplies North America94.9Bakery Supplies Europe1,078Purac 148 mln38.4Purac407201046.12010Bakery Supplies North America1,567Bakery Supplies EuropePurac1,023Bakery Supplies North America123.4Bakery Supplies EuropePurac400200994.061.856.62009Bakery Supplies North America1,187Bakery Supplies EuropePurac1,013Bakery Supplies North America94.0Bakery Supplies Europe45.3Purac355200837.92008Bakery Supplies North America1,181Bakery Supplies EuropePurac1,093Bakery Supplies North AmericaBakery Supplies EuropePurac326200771.156.622.82007Bakery Supplies North America1,116Bakery Supplies EuropePurac1,059310Bakery Supplies North America75.2Bakery Supplies EuropePurac72.522.3
Financial highlights 9Healthybalance sheet ratiosHealthy balance sheet ratiosEarnings per shareROCEExcluding one-off costs2.8x EBITDA -2.646.80%Net sales by divisionNumber of employees by division2011201110% Purac13% Purac1% Corporate43% BakerySupplies Europe34% BakerySupplies Europe52% Bakery SuppliesNorth America46% Bakery SuppliesNorth AmericaNet sales by region and Number of Employees by region910The Netherlands4,707North America57.2%Number of Employees2011 by regionNet sales 2011by region4.9%34.1%3,888Rest of Europe3.8%385Other Countries
10 CSM Annual Report 2011Key Figures20112010Income StatementNet sales3,112.62,990.1EBITA excluding one-off costs150.8215.2EBITA130.2193.8Operating result-149.5158.1EBITDA excluding one-off costs222.8286.8Result after taxes-174.399.3Balance SheetNon-current assets1,558.91,791.1Current assets excluding cash and cash equivalents740.4717.5Non-interest-bearing current liabilities478.5483.1Net debt position ey data per common shareNumber of issued common shares67,658,69965,998,134Number of common shares with dividend rights67,580,37265,873,803Weighted average number of outstanding common shares*67,557,75467,515,917Price as at 31 December12.0826.19Highest price in calendar year26.8826.27Lowest price in calendar year9.2518.55Market capitalization as at 31 December8161,725Earnings in euros 2 *-2.641.41Diluted earnings in euros 2 *-2.641.402.132.73Cash flow from operating activities per common share, in euros 2 *Other key dataCash flow from operating activities148.0188.6Depreciation/amortization fixed assets102.7107.3Capital expenditure on (in)tangible fixed assetsNumber of employees at closing dateNumber of issued cumulative preference sharesEquity per share in euros iosEBITA margin % 44.26.5Result after taxes / net sales %-5.63.3ROCE % 55.99.1Net debt position/EBITDA 62.82.17.69.71:0.41:0.4Net debt position : equity1:1.51:1.8Current assets : current liabilities1:0.61:0.6Interest cover 7Balance sheet total : equity* previous year is restated for stock dividend1 Net debt position comprises interest-bearing debts less cash and cash equivalents.2 Per common share in euros after deduction of dividend on cumulative preference shares.3 Equity per share is equity divided by the number of shares with dividend rights.4 EBITA margin % is EBITA divided by net sales x 100.5 ROCE % is EBITA for the year divided by the average capital employed x 100. The goodwillincluded in capital employed relates to management goodwill, being the goodwillcapitalized and the goodwill charged directly to equity since 1978, the year whenCSM started its diversification process.6 EBITDA is "Earnings Before Interest, Taxes, Depreciation, Amortization and Impairmentof intangible fixed assets", here including acquisition and divestment results for the fullyear 2011 and excluding one-off costs.7 Interest cover is EBITDA as defined in Note 6 divided by net interest income and charges.
Report of the Boardof Management
12 CSM Annual Report 2011Our vision and strategyCSM is a leading global organization with a strong localpresence that is underpinned by its people through the sharedvalues of passion, partnership and performance. We haveleadership positions in two large business-to-business markets.Bakery Supplies is a leading global supplier of bakery productsand ingredients. Purac is a fermentation powerhouse with aleading position in the field of food preservation, biobasedchemicals and bio-plastics components produced from lacticacid, lactic acid derivatives and other fermentation-basedmaterials.As a preferred partner, we are supporting the development ofsome of the world’s leading brands. We have achieved thisthrough the vision and strategy, which is the framework forour day-to-day business decisions.Delighting consumers with health & wellness, with indulgentand with anywhere, anytime consumer products:We see an increasing demand for health and wellness options asconsumers across the world pursue healthier lifestyles and makehealthier food choices.In 2011, CSM has developed a unique range of Better4U andGood4U products. Using state of the art technologies, we havebrought products to the market that are reduced in fat,saturated fat, sugar, salt or calories. Some of our innovationsprovide more fruit, nuts, vitamins, minerals, fiber, or wholegrains. In addition we have developed the means to offercleaner labels.We also see an increasing trend for more sophisticated tastes;as many consumers begin to experiment with new productsand new flavors.Our visionWe aspire to improve the quality and sustainability of life. Wesupport this vision by contributing to a society where peoplecan make a conscious choice for safe, healthy, nutritious anddelicious food. We are passionate about providing the very bestproducts, technologies and services to our customers tohelping them to succeed.Our missionWe aim to make our customers successful by creatingunique experiences through the best products, technologiesand services. We combine products and services to provideeffective solutions based on our intimate knowledgeof customer requirements. This means going beyondunderstanding our customers’ needs, by also understandingthe consumer’ needs. These insights impact everything wedo, from product development to collaborating as strategicpartner.At the same time, consumers are looking for the highest qualityproducts in places other than the traditional outlets andchannels, resulting in a demand for access to ‘anytime, anyplace’ bakery products.In this trend of evolving sales channels in the bakery suppliesmarket, we have seen the shift from the traditional artisanchannel towards retail channels accelerating in 2011. To besuccessful in the in-store-bakery and out- of-home channels,operating in partnership is key, as these channels requirestrong innovation skills.Building partnerships through the best customer service:Customers in all of our markets are looking to suppliers to form anew kind of relationship. Partnerships are increasinglyimportant, including support in key capabilities like productdevelopment, logistics solutions and promotional activities,which require multi-functional business solutions.Our strategyOur strategy is focused on further building our leadershipposition for both Bakery Supplies and Purac to ensuresustainable and profitable growth, while delivering returnswhich are above the market average. This means that we aimfor number one or two positions in the markets where we wishto compete, which is consistent with the outcome of our recentbusiness review.Our ambition is to deliver the best products to serve the needsof the market and to be the preferred partner for ourcustomers, and make them successful in their markets. Thefollowing strategic initiatives enable us to achieve this anddeliver sustainable and profitable growth:These partnerships are being activated in tailored Key AccountManagement programs. In 2011 we were able to achieve volumegrowth with our key accounts in a declining market.Expanding into new markets across the globe:High-growth emerging economies like China, Brazil, the NearEast and Asia-Pacific represent exciting opportunities for bothBakery Supplies and Purac.Our preferred route to new geographies is to embark on existingcustomer relationships or through joint ventures that enables usto start up rapidly with limited investments.
Report of the Board of Management 13In 2011 we have opened a new facility in China, which hassignificantly increased CSM's reach to the market in GreaterChina. Furthermore, we achieved a leading position in NorthAfrica through a joint venture with the Tunisian basedcompany GIAS s.a. In order to reap the benefits and to beable to progress fast, we have invested in key people in thenew regions.Driving value through global sustainability leadership:Our businesses are facing sustainability requirements acrossthe value chain, from consumers to regulators to our ownbusiness partners. This trend greatly benefits Purac, with itsnatural preservatives and bio-plastics, while Bakery Supplies ispositioning itself as a supplier to customers looking to workwith partners that have a sustainable approach to theenvironment. For more information, read our sustainabilityreport on page 69.Our competitive strengthIn our highly competitive environment, we have uniquecompetitive strengths supporting the successful executionof our strategy:Scale of operationsBoth our Bakery Supplies and Purac activities are leaders intheir respective markets. We have, in contrast to many of ourcompetitors the scale to substantially invest in capabilities thatstrengthen our competitive edge, and further drive growth andprofitability. These include: Innovation and product development centers around theworld staffed by the best practitioners in their field; Marketing, market data and customer intimacy, whichprovide insights into not only our customers, but also theircustomers, which are often the end consumer. This is part ofour service offering to our customers and simultaneouslydrives our innovation efforts to make sure they deliver onmarket needs; Technology and supply chain expertise. Our productionplants do benefit from our insights into the latesttechnologies and improvement programs; A global procurement department, staffed with experts onspecific raw materials who understand the market dynamics.Our capability of attracting and investing in the right peoplefor the right job.Global presencePurac is a worldwide operating organization, present on allcontinents. Bakery Supplies is predominantly active in theNorth American and European markets but is expanding intoother continents. This global presence offers the followingbenefits: The opportunity to serve international customers worldwidewith advice, service and safe and consistent products. The ability to generate insights into new developments fromaround the world and apply
Bakery Supplies CSM Bakery Supplies offers a full line of the finest ingredients and bakery products available, and all the benefits of our extensive global expertise and technology. Our bakery product portfolio ranges from bakery margarines, bread improvers, mixes and fruit fillings, to frozen dough, and part and fully baked products.
4 CSM Annual report 2012 CSM at a glance Bakery products Bakery ingredients We have a leading position in the manufacturing and sale of premium finished and semi-finished pastry products, such as cakes, donuts, muffins, viennoiserie, and American cookies. Our innovative strengths, combined with deep market insights are our engines for
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Annual Report 2020 compared to our 2019 Annual Report. The total carbon footprint for printing CIMB Annual Report 2020 was 11,588kgCO2e, compared to 14,987kgCO2e for our 2019 annual report. The carbon footprint for the 3 books of CIMB Annual Report 2020 is 14.485kgCO2e. We are committed to reducing the environmental impact of our annual report .
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