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Refinancing Transactions

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Presentation on theme: "Refinancing Transactions"— Presentation transcript:

0 From Sara Lee to Jacobs Douwe Egberts
Noordwijk, 14 November 2014 Jan Schets D.E. Master Blenders 1753 Sander Honingh Rabobank Amsterdam, June3rd

1 Refinancing Transactions
Agenda Company Snapshot Refinancing Transactions Bank Relationships Wallet Distribution Key Learnings Q&A

2 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. source: The Rebirth of the Blend (1.1aIntroandDiscovery&Creation(SS).pptx) Slide 12 Note: 72% is total company sales in countries where D.E MASTER BLENDERS has a number 1 or 2 position in retail coffee. 2

3 We have strong local brands
Denmark France Spain Brazil Australia Hungary Norway NL & BE Global Global

4 Our sales split by geography
2013: € 2,5 bln Other includes New Zealand, Norway, Denmark, Poland, Thailand, Greece, Hungary, Czech Rep, UK

5 Roast & Ground

6 Senseo

7 Capsules

8 Tea

9 Intended JV with Mondelez announced
Announced on May 7th To become the world’s leading pure-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

10 Our History March – June 2012: The new company name “D.E MASTER BLENDERS 1753” revealed and Company is listed on the NYSE Euronext Exchange May 2014 DEMB announced the intended partnership with Mondelez on combining Coffee activities The business expands into Western Europe Senseo coffee system launched Douwe Egberts established 1753 1936 1940s 1978 2001 2010 2012 2013 2014 Pickwick established Sept 2013 Oak Leaf B.V acquired 95% of the shares In DEMB 1753 Launched the L’OR EspressO capsules compatible with the Nespresso® single-serve system ADD: STOCK LISTING AND SENSEO SARISTA LAUNCH Douwe Egberts acquired by Sara Lee OOH: Out of Home

11 Refinancing transactions

12 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 Surplus cash CM / FX banks Q2 Q3 Q4 Q1 2012 2013 2014 2015 12

13 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 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 AEX-listed BBB rated USPP $650 mln RCF €750 mln Sara Lee Spin-off Q2 Q3 Q4 Q1 2012 2013 2014 2015 13

14 September 2013, JAB-led acquisition
Privatized B+ / BB- rated RCF €300 mln Loans - banks €2,000 mln - investors €1,000 mln Bank group JAB / existing bank relations - 25 banks - 7 dropped-out - 4 reconsidered - 18 new Sara Lee Spin-off JAB led acquisition Q2 Q3 Q4 Q1 2012 2013 2014 2015 14

15 July 2014, refinancing in view of intended partnership with Mondelez per July 2015
JAB+ 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 JAB led acquisition Mondelez refinancing Mondelez partnership Q2 Q3 Q4 Q1 2012 2013 2014 2015 15

16 Bank relationships

17 Development of bank commitments
Why declined: Economics Euro crisis Rating/Leverage Concerns Commitments banks € 750 mln Why joined: Economics Less crisis Relationship Convinced Commitments banks € 2.3 bln Commitments banks € 4.4 bln 17

18 Value added cooperation
Jacobs Douwe Egberts B.V. Acquisition Finance Financial Logistics Mandated Lead Arranger 2014 D.E MASTER BLENDERS 1753 N.V. Financial Advisor public-to-private Paying & Exchange Agent Joint Lead Arranger Joint Global Coordinator 2013 D.E MASTER BLENDERS 1753 B.V. Syndicated Revolving Credit Facility EUR 750,000,000 Coordinator, Bookrunner, Mandated Lead Arranger & Documentation Agent May 2012 D.E MASTER BLENDERS 1753 B.V. Advisory Financial Advisor 2012

19 Wallet distribution

20 Banks, fees & services Quote uit termsheet coffee machines leasing proposal een vast bedrag per maand waarmee de meeste diensten gratis worden aangeboden.

21 Why do banks participate in the financing
Asset takers Yield is sufficient Ancillary business Nice to have Fair share Demanding

22 Increased focus on cross-sell
Why? ECB belooft strenge stresstest Basel 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

23 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

24 The Treasurer’s mantra:

25 The reality is: PROFIT AN OPINION & Cash Profit

26 The reality of Treasury is:
Too much on reporting Too little on cash Research? Benchmarks? Education? Treasury is procurement!

27 What do we do: Financing Fees, interest margins Cash management FX
Spot / forward 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

28 Risk perception drives return level
(Gross) RAROC Risk Adjusted Return Economic Capital Income Liquidity Costs Expected Loss Credit Risk Transfer Risk

29 Key learnings

30 Vision on the role of banks
Before 2012 Service provider Trusted advisor After 2012 Finance provider new Internal / external factors have major impact on relationships Treasury community needs to step up on wallet distribution increased

31 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

32 Thank you

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