JAB - June 2021 - JAB Holding Company
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JAB – June 2021
Table of Contents JAB - At a glance 3 JAB Holding Company 4 Our Heritage 4 About JAB Consumer Fund (JCF) 6 Our Investment Philosophy 8 Our People 14 Our Governance 17 Risk Management 18
JAB1 at a glance
$50bn+ $23bn
JAB Managed Capital JAB Holding Company
A global Investment Net Asset Value
Company, with a
solid investment Our leading Investment Platforms
grade rating,
focused on the
consumer goods
Coffee & Fast-Casual Petcare Beauty & Indulgence
and services sector
Beverages Restaurants Luxury
With a total Enterprise Value of $120bn+
JAB’s Managed Capital has significantly increased
since its formation in 2012
75
50
25
-
S&P: BBB+ with stable outlook 2012 2013 2014 2015 2016 2017 2018 2019 2020
2020 Distributions
Moody’s: Baa2 with stable outlook JAB Total Managed Capital in $bn
Managed Capital
A privately held partnership
of ~50 professionals with global
investment offices in Washington D.C.,
London, Amsterdam, São Paulo,
Luxembourg and Mannheim
with a long-term global ambition
to invest in industry-leading consumer
businesses.
1
JAB in this context refers to JAB Holding Company, together with JAB Consumer Fund and other Co-investors
JAB – June 2021 | JAB Holding Company 3
JAB Holding Company
Our heritage
A global leading private
Investment Firm in Consumer
1823 Goods and Services, with a
strong heritage
The incorporation of
Benckiser as chemicals
producer in Germany
1980 - 1990
Peter Harf joins Benckiser
Benckiser acquisition of North
American and European household
products and cosmetics including
the spin off of the cosmetics
activities 1990 - 2010
Started investing in the Beauty &
Luxury Investment Platform
Beauty & Luxury
IPO Benckiser and Merger to form
Reckitt Benckiser
M&A of several cosmetics companies
2012 - 2013
The formation of JAB Holding
Company and core JAB team.
2013 - 2015
Olivier Goudet joins JAB
The creation of the fast casual multi
The creation of the channel restaurant Investment
Coffee & Beverages Platform starting with Platform
Investment Platform Investments in Caribou Coffee,
via the take private of Einstein Bagels and Espresso House
Peet’s Coffee and
Fast-Casual Restaurants
D.E Masterblenders
1753 (‘DEMB’)
Coffee & Beverages
IPO of Coty
Creation of the JAB Consumer Fund
(“JCF”)
JAB – June 2021 | JAB Holding Company 4
2015
Creation of Jacobs Douwe Egberts
(JDE) through the merger of
DEMB and MDLZ Coffee
2016
Take private of Krispy Kreme,
representing the first investment
in the Indulgence Investment
Platform
Indulgence
2017
Take private of Panera Bread
Take private of
Keurig Green Mountain
2018
Creation of Keurig Dr Pepper
through the merger of Dr Pepper
Snapple and Keurig Green Mountain
2019 Acquisition of Pret a Manger
The creation of the
Petcare Investment
Platform
Pet Care
2020
Acquisition of
Compassion-First Pet
Hospitals
Acquisition of NVA
IPO of JDE Peet’s
Closing of the third major fund raising
of JAB Consumer Fund. Total of $17bn
of committed capital raised since 2014
JAB – June 2021 | JAB Holding Company 5
About JAB Consumer Fund
(JCF)
Driven by investor demand to participate in the
investment strategy of JAB Holding Company,
JCF was established in 2014. JCF is a Luxembourg
based regulated investment fund comprised
of institutional investors, family offices,
endowments and other professional investors.
JCF is managed collectively with JAB Holding
Company by the same group of partners, and JCF
always invests alongside JAB Holding Company.
As at 31 December 2020, JCF has capital invested
of $15bn+ and has distributed $8bn+ of capital.
JAB Consumer Fund - Managed Capital in $bn JCF Managed Capital by Investment Platform
JCF Managed Capital by Investment Category
15,00
-
2014 2015 2016 2017 2018 2019 2020
Managed Capital Distributions 2020 Coffee & Beverage Fast-Casual Restaurants Petcare Indulgence
JCF 2020 Highlights
Completion of over $8bn in aggregate JCF is a unique
investment fund,
distributions, a major JCF milestone, in
cash and shares of Keurig Dr Pepper,
driven by the significant value creation
in the Coffee & Beverages platform
investing alongside JAB
Holding Company for
The successful closing of the Global
Consumer Brands - III Fund, the Petcare long-term value creation
Co-Investment and the Co-Investment
IX Funds
Deployment of $3bn investment into
the Petcare Investment Platform,
alongside JAB Holding Company
JAB – June 2021 | JAB Holding Company 6
As a controlling or anchor shareholder, JAB exerts
significant influence over its Platform Investments
98% 98% 99%
95% 94%
91%
88%
55%
50%
34%
2 2
KDP
JAB Holding, JCF and Co-investors’ aggregate % of direct and indirect ownership. 3
JAB Holding Company and JAB Consumer Fund, together with Co-investors,
established a strong capital structure to support long-term growth and
sustainable value creation leading to solid compounded returns.
2
Coty and Bally are investments of JAB Holding only, without the participation of JAB Consumer Fund
3
As of Dec 31, 2020. Only includes investments with JAB Holdings, JCF and Co-Investors participation; does not include shares owned by management
JAB – June 2021 | JAB Holding Company 7
Our Investment Identify investment opportunities
through an agile and flexible investment
Philosophy approach, with a focus on consumer
goods and services companies,
leveraging the deep institutional
We believe sustainable long-term value creation experience and insights of our team
is built through partnerships and a clear focus
on shared values and benefits. Our investment
Enhance value through a unique
philosophy to achieve a long-term compounding
ownership and people model combined
return is based on the following three pillars:
with a tested and repeatable value-
creation approach
Drive long-term sustainable results
by doing the right things for our
stakeholders
ities
tun En
r
po
us Uni
foc q
a repe ue o
ith vices ata
p
w r ble wn
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to
h d se v
n
en
n
ds c
ce
er e cr
a
sh
on consumer g pro
al
a
Identify investm
u
ip ation approach
valu
t ap
oo
&p
e
investmen
eople
e
model
Agile
Do r
in g r ou
D sta t h e rig h t t hi n g s f o ty
ri keh o ci
e
l t
ve s
s
old ers
and f o r
s u
lo n e
g-te b l er
r m s u stain a
JAB – June 2021 | JAB Holding Company 8
s
itie
un En
rt
po
s
Identify investment opportunities
ocu Uni
f q
a s repe ue o
th vice ata
wi
p
ha
r ble wn
to
h d se
nc
v
en
n
ac
er e cr
ev
sh
on consumer g pro
al
a
Identify investm
through an agile and flexible investment
1
u
ds
ip
t ap
oo
alue
& p n approac
ea
investmen
eople
tio
approach, with a focus on consumer
model
Agile
h goods and services companies,
Do ur
in g ro
D sta t h e rig h t t hi n g s f o ty
leveraging the deep institutional
ri keh i e
t
ul
so c
ve
s
old ers
and for
lo n es
g-te le r
r m s u stain ab
experience and insights of our team
We invest, through our Investment Platforms, in
categories with attractive long-term dynamics,
including strong growth prospects, attractive
margins and cash flow characteristics, and
Our investment approach proven resilience. Our investment team has
is distinct and allows us deep institutional experience in investing,
operating and overseeing consumer businesses.
the flexibility to structure This has created a robust, proprietary network
which provides us with best-in-class access
investment solutions for each to deal flow for premium and iconic brands
particular situation that are well-recognised by consumers and
strongly positioned within their respective
categories and markets. We have a long track
record of leveraging our Platform Investment
approach and people model to attract the best
management teams, with the highest quality
assets, to partner with us for the long-term.
JAB – June 2021 | JAB Holding Company 9
Long-term value is created by identifying the Our Platform Investment approach is distinct. Our
highest quality assets and investing behind long-term focus investment model allows us to
them over a sustained period of time. Such create flexible, tailored investment structures as
value-creation opportunities include platform- needed so that we can find solutions to partner
consolidation, channel expansions, product and with the best people and the best businesses. Our
category innovation, digitisation, and complete track record demonstrates that we act quickly
business transformations of turn-around and maintain a solution-based, agile approach to
businesses to allow them to fully benefit from reviewing potential Platform Investments.
the underlying strength of their brands and the
category. Maintaining Investment Platforms across
different categories is important to our philosophy, Our leading Investment Platforms
as it drives resilience of investment returns.
Our large, consumer centric and innovation driven
investment portfolio, as well as the institutional
experience of our team, provides us with a unique Coffee & Fast-Casual Petcare
window into consumer trends and changing Beverages Restaurants
behaviours. We proactively identify contemporary
brands, new technologies and disruptive innovation
and digitisation in order to invest behind winners,
further driving long-term growth. Beauty & Indulgence
Luxury
A global investment portfolio with strong asset diversity4
Our investment philosophy is focused on building businesses that are diversified by themselves
a diversified Investment Platform portfolio within through their unique combination of brands,
the consumer and services sectors, with low or product and service categories, and distribution
An overview
negative correlation between of JAB
the assets and withHoldings' Investment Portfolio
channels.
Krispy Kreme
4%
Coty - Consumer beauty Coty - Luxury Others
4% 4% 1%
KDP - Coffee Systems
Compassion First 18%
Pet Hospitals
NVA
2%
5%
Caribou
2%
Espresso House
1% Pret a Manger
2%
Panera
9%
KDP - Packaged Beverages
23%
JDE Peet's - Out-of-home
3%
JDE Peet's - CPG - APAC
2%
KDP - Beverage Concentrates
6%
JDE Peet's - CPG - JDE Peet's - CPG -
Europe KDP - Latin America
Larmea JDE Peet's - Peet's
9% Beverages
3% 2% 2%
An overview of JAB Holding Company’s investment portfolio
4
The underlying FY19 sales data by investment has not been subject to the scope of the JAB Holding Company external audit
JAB – June 2021 | JAB Holding Company 10Our Business Diversity
JAB is exposed to multiple business segments, either through the respective Investment Platforms in
which our businesses operate or through the underlying diversification within the businesses held.
Below we present a simplified overview of diversification within our Investment Platforms.
Our leading Investment Platforms
Coffee & Beverages through direct, Fast Casual Restaurants through
wholesale, retail, bottlers, food service retail-owned, retail-franchised,
and e-commerce digital, catering and CPG
Coffee & Fast-Casual
Beverages Restaurants
Covering all meals:
Premium coffee brands
Mainstream coffee brands Breakfast
Coffee systems Lunch
Carbonated soft Drinks Dinner
Juices
Water
Beauty & Luxury through retail,
Energy drinks wholesale, online, and other
Beauty &
Luxury Fragrance
Petcare through at-premise, home- Color cosmetics
delivery and online
Skin and body care
Petcare
Luxury
Hair care
Indulgence through retail-owned,
retail-franchised, digital, home
General care delivery and CPG
Indulgence
Specialty Doughnuts
Vaccine & pharmacy Cookies
Pet resorts
JAB – June 2021 | JAB Holding Company 11s
itie
un En
rt
po
s
Enhance value through a unique
ocu Uni
f q
a s repe ue o
th vice ata
wi
p
ha
r ble wn
to
h d se
nc
v
en
n
ac
er e cr
ev
sh
on consumer g pro
al
a
Identify investm
ownership and people model combined
2
u
ds
ip
t ap
oo
alue
& p n approac
ea
investmen
eople
tio
with a tested and repeatable value
model
Agile
h creation approach
Do ur
in g ro
D sta t h e rig h t t hi n g s f o ty
ri keh i e
t
ul
so c
ve
s
old ers
and for
lo n es
g-te le r
r m s u stain ab
Our unique ownership and people model is
a core part of the JAB DNA. Our investment
philosophy is centred around investment and
entrepreneurship. We believe we can only
attract the best people by identifying those
who want to invest alongside and partner
with JAB, and who have a long-term value
creation mindset. With the aim of achieving
Through our long-term solid investment returns for our stakeholders,
we are closely involved in the selection and
partnerships and value recruitment of management teams at our
businesses, and ensure alignment with JAB
creation approach we through shared ownership.
are able to generate
sustainable growth
We are an active partner for our Platform
Investments. As a controlling or anchor
shareholder we exert significant influence over
the capital structure and the dividend policy of
our Platform Investments, and we embed the JAB
ownership and management culture in each of our
Platform Investments. Together, we continuously
re-assess the strategy of our businesses, and
review opportunities to enhance operational
and financial performance. We strongly believe
continued challenge and refinement of strategy is
necessary for sustained long-term value creation.
The incentives of our management teams are tied
to the businesses for which they are responsible.
This fosters a culture of accountability and focus
for our respective CEOs and leadership teams, who
receive strong support from JAB and who are able
to fully utilise the extensive and industry-leading
network of our ecosystem.
JAB – June 2021 | JAB Holding Company 12s
itie
un En
rt
po
s Uni
Drive long-term sustainable results by
focu q
a s repe ue o
th vice ata
wi
p
ha
r ble wn
to
h d se
nc
v
en
n
ac
er e cr
ev
sh
on consumer g pro
al
doing the right things for our stakeholders
a
Identify investm
3
u
ds
ip
t ap
oo
alue
& p n approac
ea
investmen
eople
tio
model
Agile
h
We are an investment firm with a clear understanding
Do
in g ro
sta t h e rig h t t hi n g s f o ty
ur and appreciation of the next generation of consumers,
D
ri t
combined with a strong focus on ESG (Environmental,
keh i e
ul
so c
ve
s
old ers
and for
lo n es
g-te le r
r m s u stain ab Social, Governance). We have a fundamental belief that
taking a sustainable approach to business pays off for
our consumers, our businesses, our Co-investors, our
debt investors, and us.
With a clear We are committed to an investment philosophy of
understanding and working collaboratively and serving as long-term stewards
of the organisations and brands, and to build long-term
appreciation of the sustainable businesses. We achieve this by incorporating
next generation of ESG principles into our investment philosophy. We
encourage our investments to embed sustainability
consumers, we generate activities in their policies and procedures, and we regularly
evaluate our investment’s sustainability performance
sustainable investment based on key performance indicators.
results Working with trusted debt and equity capital partners
enables us, and our investments, to generate long-term
growth. We maintain strong relationships with our capital
partners, and we are confident that our long-term vision
and sustainable investment philosophy are supported
by our investors. JCF and other Co-investors are primary
equity capital partners of JAB Holding Company and are
important contributors to the success of our long-term
investment philosophy.
JAB participates in G7 Business for
Inclusive Growth coalition
As part of our ongoing commitment to ESG, within our investment strategy. JAB recognises
JAB participates in the G7 Business for Inclusive that this is a long-term challenge and we
Growth (B4IG) coalition powered by the OECD commit to putting our passion and energy into
and sponsored by French President Emmanuel ensuring that JAB and our investments help to
Macron. This initiative is designed to pool bring this to life over time, for the benefit of
and strengthen efforts by public and private all. Underpinning our pledge is the view that
companies to reduce inequalities linked to such engagement is not just good corporate
opportunity, gender and territory, and to build responsibility but rather the future of successful
greater synergies with government led efforts business. Business benefits from more inclusive
in these areas. This focus is also presented growth models through a more educated and
engaged workforce; a larger middle-class of
consumers with greater purchasing power;
more stable operating environments; and a
high level of trust from employees, consumers,
customers and other stakeholders.
JAB – June 2021 | JAB Holding Company 13Our People
A high-performing team is at the heart of Working together as a powerful team
our success. Our culture is entrepreneurial, high energy and
high performance. We have an ambitious and
Our team has deep institutional investment and motivated team which drives our long-term
sector knowledge and experience. The fast-paced ambition. A core characteristic in all of us is the
and dynamic environment in which we operate aligned focus on value creation for all of JAB and its
requires a team with an entrepreneurial spirit stakeholders.
focused on the collective success of JAB.
We operate from investment offices in Washington In an invested and full-on environment
D.C., London, Amsterdam, São Paulo, Luxembourg
and Mannheim. Our team is led by our managing Our team is invested towards the same goals as
partners Peter Harf and Olivier Goudet, together our shareholders and Co-investors. Invested means
with 9 other partners and senior partners, each that financial interests are aligned to enable our
of whom has significant experience and success value-enhancing strategy. Invested also means
in investing and overseeing businesses in the personal commitment and being full-on to deliver
consumer goods and services industries. They are sustainable results in a fast-paced and highly
supported by a global team of 40+ investment and demanding environment.
industry professionals.
An environment with compounding performance
opportunities
We attract, evaluate and compensate talent
with the objective of successfully delivering
compounding long-term value of our Platform
Investments. As such, we provide our team with
opportunities and stretch goals for continuous Managing
development and growth. partners
(Senior) Partners
Professionals
JAB – June 2021 | JAB Holding Company 14JAB partners
JAB is overseen by its two Managing Partners, Peter Harf as our Chairman and Olivier Goudet
as our CEO, together with nine other partners and senior partners, and our CFO.
Peter Harf Olivier Goudet
Managing Partner, Chairman Managing Partner, CEO
Mr. Harf joined JAB in 1981 and is the visionary and Mr Goudet joined JAB as CEO and Managing Partner in
founder of the current JAB investment firm structure 2012. Mr. Goudet is the key architect of and leads JAB’s
created in 2012. Over the past 40 years he has overseen Investment Platform strategy for all areas of the Firm
JAB as managed capital has grown from $100 million to and has led $40bn+ increase in managed capital in the
over $50 billion. Mr. Harf has been CEO and Chairman last nine years. He is currently the Chairman of Krispy
of several of JAB’s portfolio companies, and is currently Kreme , JDE Peet’s, and Pret a Manger and is a member
the Chairman of Coty and a member of the Board of of the Board of Directors of several other portfolio
Directors of JDE Peet’s and Keurig Dr Pepper. He is also companies including Keurig Dr Pepper, Coty, NVA and
the Founder of Delete Blood Cancer (“DKMS”), a global Panera. Previously, he spent 20 years at Mars, where he
cancer fighting organization which has over 10m donors was EVP and CFO, and was also previously the Chairman
registered. Mr. Harf has previously been Chairman of of Anheuser-Busch InBev.
Anheuser-Busch InBev and a Board member of Burger
King.
Joachim Creus David Bell
Senior Partner, Vice Chairman Senior Partner
Mr. Creus joined JAB in 2010 and has played a critical role Mr Bell is in his 10th year at JAB, having joined in
in building it into a global investment firm. He has been 2012. Over the past nine years he has led all of JAB’s
at the center of JAB’s major investments and expansion major portfolio transactions. He has over 25 years of
intiatives, including all of its platform acquistions and the investment, oversight and business strategy experience,
creation of JAB Consumer Fund. A lawyer by training, he which includes spending four years at Mars driving
has over 20 years of experience in M&A, complex cross Corporate Strategy and M&A, and eight years in the
border legal & tax matters, and equity and debt financing. Consumer Investment Banking Group at Goldman
Mr. Creus serves as a Director for many JAB companies, Sachs.
including JDE Peet’s and Coty. Prior to joining JAB, Joachim
held senior legal & tax positions at Siemens, Rodl &
Partner and at Tiberghien Lawyers.
Patricia Capel Frank Engelen
Partner Partner
Ms. Capel joined JAB in 2021 following 25 years at AB Mr. Engelen joined JAB in 2020. Previously, he was a
InBev and Ambev, where she most recently led the partner at PwC for more than 15 years, of which five
commercial operations in Chili, Bolivia and Paraguay. years were as a member of the Management Board
She has extensive global experience including in the of PwC Netherlands and two years were as a member
United States, Russia, Latin America, Belgium and of the Executive Board of PwC Europe. He has almost
Canada, and held numerous roles including as VP of 25 years of experience in international tax, business
Global People, and was a member of the ABI Global restructurings and M&A. After having obtained his PhD
Diversity & Inclusion Council. Ms. Capel has also at the Erasmus University Rotterdam, he was appointed
worked at PWC and Cargill Agricola S.A. Professor of International Tax Law at Leiden University
in 2005.
JAB – June 2021 | JAB Holding Company 15Luuk Hoogeveen Konrad Meyer
Chief Financial Officer Partner
Mr Hoogeveen joined JAB in 2019 as a principal and Mr Meyer joined JAB in 2018 as principal and was
was promoted to Chief Financial Officer in 2021. He promoted to partner in 2020. He brings 15+ years of
brings 15+ years of finance expertise including in industry and investment expertise and previously held
the area of finance transformations, capital market a position as Investment Director at Waterland Private
transactions, internal & external financial reporting, Equity and as interim CFO at Pret a Manger.
and risk management. Prior to JAB he held senior
finance positions at JDE and PwC.
Ricardo Rittes Lubomira Rochet
Partner Partner
Mr Rittes joined JAB in 2019. He brings 20+ years Ms Rochet joined JAB in 2021. She previously spent
of financial risk management and capital markets seven years as Chief Digital Officer and member of
experience and started his career as an investment the Executive Committee at L’Oréal. There, she led
banker in London, NY and Latin America. Subsequently, the beauty giant’s marketing and commercial pivot to
he spent 14 years as part of a small leadership team a digital-first company. She is a recognized leader in
building AB InBev (NY, Brussels and Latin America). In digital business transformation, with extensive global
that capacity, he has partnered with rating agencies and experience across multiple industries. Ms Rochet has
financial institutions across the world as the Finance also held senior roles at Microsoft and Valtech, a digital
VP responsible for cash flow integration, banking marketing agency.
relationship and treasury where he, among others,
executed $75+ billion financings. He also served as CFO
of Ambev, a NYSE listed company, and led its successful
expansion in Central America.
Jacek Szarzynski Justine Tan
Partner Partner
Mr Szarzynski joined JAB in 2019. Prior to Joining Ms Tan, CFA, joined JAB in 2020 as a partner. She has
JAB, Mr Szarzynski held various senior Finance, more than 20 years of international experience in
Demand and Supply positions in his 20+ years at investing, banking and operations, having lived in and
Mars. During his career he consistently achieved covered key markets in North America, Europe and
above market growth while also delivering significant Asia across a range of transaction types and businesses
margin improvement and is currently translating this including in the consumer retail, real estate, services
experience to the fast-casual restaurant Investment and industrial sectors. Prior to JAB, she was a founding
Platform. He has a strong passion for ESG and is an member of Temasek USA and an investment banker at
inspiring leader who engages teams to only deliver the Goldman Sachs.
best results.
JAB – June 2021 | JAB Holding Company 16Our Governance
Governance Our senior advisors
JAB is overseen by the two Managing Partners, JAB is partnering with two globally recognized
Peter Harf and Olivier Goudet, supported senior advisors, Antonio Weiss and Bertrand
by nine other partners and senior partners, Badré, who provide us with advice on
and our Chief Financial Officer. The Firm’s various governance and strategy matters,
governance principles are based on mutuality, which are within their respective areas of
trust and consensus. Management and decision- expertise including business development,
making are delegated to the managing partners mergers and acquisitions, and social and
and require unanimous consent. There is full environmental matters. As JAB, we highly
alignment between JAB management and value independent advice as it provides us
our shareholders, since the partners are also with a fresh perspective on where we stand,
invested into JAB. on our intentions and on our journey.
Our businesses are managed independently by
their respective CEOs and related leadership
teams. The members of these leadership teams
invest their own wealth into their businesses
resulting in strong alignment of interests with
Antonio Weiss
those of JAB. Each of our companies has an Senior Advisor
independent Board of Directors, an Audit
Committee and a Remuneration Committee on
which JAB partners are represented. Mr Weiss has advised JAB since its formation
as a global investment firm in 2012. His
work spans business strategy and public
policy. He is a research fellow at Harvard
Kennedy School’s Mossavar-Rahmani Center
for Business and Government. From 2014
to 2017, he served as Counselor to the
Secretary of the U.S. Treasury, where he
oversaw the domestic finance department.
Prior to this, he held various leadership
roles at Lazard over twenty years in the US
and Europe, including as Global Head of
JAB signed the Investment Banking from 2009 to 2014.
UN Principles for
Responsible Investment Bertrand Badré
In June 2020, we signed the UN Principles for Senior Advisor
Responsible Investments (PRI). Doing so, we
embrace the PRI principles for incorporating Mr Badré is the founder and CEO of Blue like
ESG matters into our investment practice, an Orange Sustainable Capital, an investment
investment policies, disclosures, reporting Company that manages investments for
and responsibilities. Important requirements social and environmental impact to foster
for a signatory to meet are the Responsible inclusive and sustainable growth and reduce
Investment (“RI”) policy, senior-level oversight risk. Mr Badré also serves as a guarantor to
over, and our professionals implementing, the ‘One Planet Lab’ initiative. Previously,
responsible investing. In order to provide the he served as Managing Director and CFO of
firm and our investments with an experienced the World Bank Group, Group CFO of both
sounding board on ESG-related issues and Société Générale and Crédit Agricole, Partner
questions, we are proud to cooperate with Mr at Lazard and was an advisor to previous
Bertrand Badré. French President Jacques Chirac’s diplomatic
team.
JAB – June 2021 | JAB Holding Company 17Risk Management
Risk management is an integral part of transformations. We believe COVID-19 accelerates
the governance structure. The Firm’s risk trends, such as digitisation and channel-
management approach is established to identify expansion, and we will continue to support our
and analyse risks faced by JAB Holding Company, businesses to adapt to these trends and emerge
to monitor risks and to implement remediation out of the crisis even stronger.
initiatives to ensure adherence to limits. The risk
From our investing and financing activities, we
management approach is reviewed regularly
are exposed to a variety of risks including market
to reflect changes in market conditions and the
risks, price risk, credit risk, liquidity risk, and
activities of JAB.
cash flow risk. It is our objective to manage and
mitigate these risks to acceptable levels. Market
Risk Management Policy risk refers to the Firm’s exposure to fluctuations
in foreign exchange rates and interest rates.
Our risk management policy contemplates a
Foreign exchange risk on transactions is hedged
broad range of stakeholders, including fixed
through forward exchange contracts as necessary.
income investors, equity investors, and the
The Firm is exposed to price risk as a result of its
communities where we operate.
investments and subsidiaries. This exposure is
On financial risk management, the policy’s not hedged as at 31 December 2020. We actively
objective is to maintain a level of cash flow manage our exposure to interest rate fluctuations.
uncertainty that is acceptable to our stakeholders, When the Firm is exposed to such fluctuations
including equity and fixed income investors, given on floating rate long-term debt the Firm enters,
a certain expected return. when thresholds have been exceeded, into
In practice, we monitor closely topics related to: interest swap agreements. No hedge accounting
is applied on any of the derivative transactions as
• Capital structure, financing, and liquidity at 31 December 2020. Our exposure to credit risk
• Transactional risks mainly relates to cash and cash equivalents and
is mitigated by transacting with counterparties
• Translational and balance sheet risk with high credit ratings. Exposure to liquidity risk
• Counterparty credit risk (cash, marketable is limited, as sufficient liquidity is available in the
securities and derivatives) form of cash, and under our credit facilities.
• Environmental, Social, Governance and Within our risk management framework
Reputation risks continued consideration is given to fraud risk. Our
approach is to minimize fraud risks from the start,
both internal and external, and to continuously
Principal Risks and Uncertainties
monitor and update our procedures to detect and
Our financial position is impacted by the if applicable remediate from potential fraudulent
performance of our Platform Investments, events. As an example, our Code of Conduct
including the resulting impact on valuation. outlines the norms, and responsibility of our team
By having a controlling or anchor stake in our with the aim to reduce the likelihood of unethical
investments, and via representation on the actions and to protect JAB and its stakeholders.
Boards, we are able to oversee and influence the As a long-term investor we are dedicated to
financial and operational performance of our having our businesses acting in accordance
portfolio companies, with the aim to achieve solid with the highest ethical and professional
compounded investment returns. standards and together address Environmental,
The loss of key talent could have a negative Social, Governance and Reputation risks. We
impact on our operations. This risk is mitigated are commited to an investment management
by investment and long-term equity opportunity philosophy of working with our businesses to
of our leadership teams, and by promoting a address and monitor their material sustainability
culture of ownership and opportunity. In this way issues. JAB incorporates sustainability issues
we continue to attract talented people with the into decision-making and ownership practices
mindset and skillsets to drive long-term value across its majority owned portfolio of Platform
creation. Investments. In cases where we have limited
ability to influence, we encourage companies
The impact of the COVID-19 pandemic remains to consider relevant activities covered in the
unpredictable and, if significant, may have Investment monitoring section of this policy.
an adverse effect on our business, financial
condition, results of operations and prospects.
After taking initial measures to protect our
employees, customers and businesses, COVID-19
provides an opportunity to accelerate business
JAB – June 2021 | JAB Holding Company 18You can also read
