PULEVA FOOD S.L.
Madrid. 5 December 2002
HISTORY-1
• 1954 Unión Vinícola Industrial S.A. is converted into Unión
Industrial y Agroganadera S.A. (UNIASA)
• 1958 Uniasa opens 1st Factory for Milk and Dairy Products
• 1975 Uniasa opens 2nd Factory to substitute the first
• 1976 Uniasa buys 50% of EDDA
• 1982 Uniasa buys 100% of EDDA
• 1987-89 Uniasa buys the dairies:
La Merced (Jerez), Colema (Málaga), Cunia (Sevilla) and Ledesa
(Salamanca)
• 1990 Uniasa builds plant in Montouban (France)
• 1992 Uniasa changes its name to Puleva S.A.
• 1992 Builds new baby food factory
• 1992 Strategic change of focus. Functional milks
• 1994 Puleva SA goes into receivership
HISTORY-2
•1994 Sale of tangible and intangible assets of the Baby Foods
Divison and the R+D Dept. to Abbott Lab (USA)
•1995 Industrial Restructuring. Closing of Plants
•1996 Labour force adjustment plan (redundancies)
•1996 Lifting of receivership
•1996 Creation of new R+D Dept. and recovery of key employees
•1999 Puleva acquires Lactaria Española and Leyma
•2000 Puleva buys 80% of Granja Castelló
•2000 Puleva merges with Azucarera Ebro Agrícolas
•2000 New company created: Puleva Food S.L., subsidiary of EbroPuleva.
•2001 Puleva Food S.L. merges with Leyma, Lactaria Española and
Granja Castelló
•2001 Spin-off of R+D section. Creation of Puleva Biotech
The driving force behind strategic change
Baby Foods
t
u
r
n
o
v
e
r
1977
1988
1994
Process of change
•
•
•
•
•
•
•
•
The state of imitation
Search for distinction
Activation of R+D System
Scientific Knowledge Management
Creation of Knowledge (Patents)
Strategic Approach. Groups
The variables of Competition
Innovation Process
The research triangle
Puleva R+D
University
Hospitals
Strategic Positioning
confidence
Consumer
Values
Brand
Puleva
Food
Pharmaceuticals
EDDA
Prescription
Product
Properties
R+D
The Dairy Sector
Sector Traits
• Mature sector
• Milk production represents 5% of the European
total
• Regulated raw material. Quota system. Deficit
• Balance between real production and consumption
• Geared towards liquid milk and little towards dairy
products. Not distinguished
• Small companies in comparison with rest of Europe,
despite the concentration process begun (Puleva,
CAPSA)
• Excess of industrial capacity
• Heavy presence of dealers’ brands
• Minimum investment in R+D
• Significant presence of international enterprises
Countries
% Production
Germany
23%
France
20%
United Kingdom
12%
Netherlands
9.3%
Italy
9.2%
Sweden/Denmark
6.8%
Spain
4.8%
Ireland
4.5%
Dairy Sector. Product Portfolio
Spain
Cheese
5%
Europe
Others
4%
Butter
12%
Others
6%
Liq.Milk
40%
Yoghurt
12%
DriedMilk
15%
Liq.Milk
Cheese
27%
HOW TO GROW ?
IN A MATURE SECTOR
Strategic Positioning
confidence
Consumer
Values
Brand
Segmentation
Puleva
Health
Food
Cooperatives
R+D
Product
Properties
Strategic equation
Food
Health
Food
Function
A+D, Calcium,
Omega…
Creation of value
Company
Consumer
PRODUCT STRATEGY
Inoculate the market
ALIMENTO
LIQUID MILK
FUNCIN
PRODUCT STRATEGY
Development of new segment
Change of competition variables
ALIMENTO
FUNCIN
Market of liquid milk
Share in litres
100%
1.6
4.3
2.3
7
in value
4.7
10.9
5.3
11.3
14.4
84.4
83.4
78.6
7
80%
60%
94.1
90.7
40%
20%
0%
C.A.G.JJ99
C.A.G.AS00
Classical
C.A.G.AS01
Calcium
C.A.G.AS02
C.A.G.AS02
Special
Source: Nielsen Retailers Panel
(added vitamin milks included in special. account for1.8 points)
High-calcium and special milks is the segment of
growth promoted by Puleva
Shares in functional milks
C.A.G. AS 2001
C.A.G. AS 2002
45,0%
40,0%
35,0%
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0%
PULEVA
PASCUAL
ASTURIANA
DEALERS'BRANDS
REST
% TOTAL MARKET LIQUID MILK
BRANDS
C.A.G. AS 2001
C.A.G. AS 2002
45,0%
38.7%
40,0%
35,0%
26.5%
30,0%
25,0%
20,0%
13.7%
15,0%
11.7%
9.4%
10,0%
5,0%
0,0%
PULEVA
Source: Nielsen
PASCUAL
ASTURIANA
DEALERS'BRANDS
REST
Fuente: Datos Internos
% TOTAL MARKET LIQUID MILK
GROUPS
C.A.G. AS 2001
C.A.G. AS 2002
15,5%
15.0%
15,0%
14.6%
14,5%
14.1%
14,0%
13,5%
13,0%
PULEVA GROUP
Source: Nielsen
PASCUAL GROUP
ASTURIANA GROUP
Fuente: Datos Internos
A+D Enriched
WHOLE
219.692
NUTRITIONAL
192.900
171.851
(000)
EVOLUTION OF SALES BY AREAS 1995 - 2002 Volume in Thous. of Litres
LONG-LIFE MILK
142.308
149.444
131.157
136.821
118.163
95.832116.245
31.776
38.238
13.589
1995
Source: Own compilation
51.685
28.982
1996
38.318
1997
37.022
1998
35.194
1999
114.298
109.456
31.819
2000
36.200
2001
104.439
36.932
2002
Fuente: Datos Internos
LONG-LIFE MILK
400.000
350.000
Omega3
Thousands of Litres
300.000
250.000
High-Calcium
200.000
150.000
A+D Enriched
100.000
50.000
Classical
Whole
0
`95
`96
`97
Fuente: Datos Internos
`98
`99
`00
`01
`02
Years
CLASSICAL
HIGH CALC.
25.000
20.000
15.000
OMEGA 3
10.000
5.000
0
1995
1996
1997
CLASS.WHOLE
1998
1999
2000
2001
8.000
HI-CALC.WHOLE
6.000
4.000
2.000
0
1995
(000)
EVOLUTION OF SALES BY AREAS 1995 - 2001 Volume in Thous. of Litres
10 M.A. Barcelona
25.000
1996
SEMI A+D
1997
1998
1999
2000
2001
8.000
SEMI CALC.
6.000
OMEGA 3
20.000
4.000
SPECIAL
2.000
MILK DRINKS
15.000
0
SKIMMED HI-CALC.
SKIMMED A+D
10.000
SEMI CALC.
1995
1996
SKIMMED A+D
1997
1998
1999
2000
6.000
SKIMMED HIGH-CALCIUM
SEMI A+D
4.000
HI-CALC.WHOLE
5.000
CLASS.WHOLE
2.000
0
1995
1996
1997
Source: Own Compilation
1998
1999
2000
2001
2001
0
1995
1996
1997
1998
1999
2000
2001
CLASSICAL
HIGH-CALC.
30.000
OMEGA 3
20.000
10.000
0
1995
1996
1997
CLASS. WHOLE
1998
1999
2000
2001
8.000
HIGH CALC. WHOLE
6.000
4.000
2.000
0
(000)
EVOLUTION OF SALES BY AREAS 1995 - 2001 Volume in Thous. of Litres
40 M.A. Madrid
1995
1996
SEMI A+D
30.000
25.000
1997
1998
1999
2000
10.000
8.000
6.000
SEMI HIGH-CALC.
OMEGA 3
4.000
2.000
0
SPECIAL
20.000
MILK DRINKS
SKIMMED HI-CALC.
15.000
SKIMMED A+D
SEMI CALC.
10.000
1995
1996
SKIMMED A+D
1997
1998
1999
2000
6.000
HI-CALC.WHOLE
4.000
CLASS.WHOLE
2.000
0
1995
2001
8.000
SKIMMED HIGH-CALC.
SEMI A+D
5.000
2001
0
1996
1997
Source: Own compilation
1998
1999
2000
2001
1995
1996
1997
1998
1999
2000
2001
New Challenges. Puleva
A brand focusing on health is an adults’
brand
The brand must be worked on to secure its
position in the world of children and young people
Pleasure
Milk
shakes
Yoghurt
Milkshake Market. Food
TOT.SPAIN
C.A.G. C.A.G.
AS 2001 AS 2002
AS2001ON2001DE2002FM2002AM2002 JJ2002 AS2002
TOTAL
100.0% 100.0%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
PULEVA
17.3%
20.0%
17.5% 19.1% 19.4% 19.4% 21.3% 19.5% 21.1%
RAM
3.4%
2.1%
2.4%
2.8%
CACAOLAT
10.2%
9.1%
9.4%
10.0% 11.2%
PASCUAL
9.1%
8.9%
6.8%
9.5%
CHOLECK
11.3%
10.3%
OKEY
6.2%
ASTURIANA
2.7%
2.4%
1.5%
1.3%
9.7%
8.6%
8.2%
8.1%
10.5% 10.7% 10.1%
7.4%
7.0%
12.6% 10.1%
9.7%
10.1%
9.5%
11.2% 10.8%
5.8%
6.3%
5.8%
6.2%
5.6%
5.5%
5.8%
6.1%
5.1%
4.7%
4.9%
4.8%
4.7%
4.7%
4.3%
4.9%
4.7%
EL PRADO
4.6%
4.2%
7.3%
3.1%
1.9%
2.1%
2.9%
6.8%
6.4%
NESQUIK
1.3%
1.4%
1.0%
1.7%
1.6%
1.6%
1.7%
1.2%
1.0%
KAIKU
0.5%
0.7%
0.7%
0.9%
0.9%
0.9%
0.7%
0.6%
0.5%
COVAP
2.5%
1.9%
2.3%
2.5%
2.8%
2.1%
1.7%
1.5%
1.0%
DEALER BR.
22.1%
25.5%
23.6% 23.9% 22.4% 24.6% 26.1% 27.2% 26.9%
REST
6.2%
5.2%
5.2%
PULEVA GP.
21.4%
22.2%
20.1% 22.1% 22.3% 22.2% 23.7% 21.0% 22.4%
5.7%
2.8%
5.8%
5.7%
5.2%
4.3%
5.1%
New Challenges. 2
Optimise the other brands: Ram, Castillo,
Leyma
• Regional position of El Castillo in the area of
Catalonia and Leyma in Galicia
• National position of Ram as second brand
Optimise the industrial structure
INDUSTRIAL PLANTS
Arteixo
Lugo
Mollerusa
León
Granada
Sevilla
Jerez
EVOLUTION EARNINGS-EBITDA
Earnings
1995
1996
1997
1998
1999
2000
2001
2002
(000 euro)
128,773
141,586
150,746
171,457
372,844
511,936
538,355
512,349
EBITDA
1.00
1.10
1.17
1.33
2.90
3.98
4.18
3.98
2,915
11,137
15,121
16,690
29,588
34,605
42,972
48,607
% EBITDA
1.00
3.82
5.19
5.73
10.15
11.87
14.74
16.68
2.26%
7.87%
10.03%
9.73%
7.94%
6.76%
7.98%
9.49%
Analysis of strong points
•
•
•
•
•
•
•
•
•
Gearing towards consumer
Leadership in innovation
Leadership in clinical research
Referente en el sector.
Referente tecnológico
Well-known brand
Portfolio of brands
Generator of cash-flow
Organic growth and growth capacity through
acquisitions