Givaudan Sa · SIX:GIVN
Givaudan Sa — Investor Day (August 2020)
101 slides from Givaudan Sa's investor day presentation, Aug 27, 2020
Slide 1: Welcome to our half year investor conference: Strategy 2025
Welcome to our half year investor conference Strategy 2025 27 August 2020
Slide 2: Gilles Andrier, CEO
Gilles Andrier CEO 2020 Half Year Conference - Company proprietary information of Givaudan 2
Slide 3: 2020 Half year results
Half year investor conference 2020 Half year results
Slide 4: Summary - 2020 Half year results
Summary - 2020 Half year results Strong Financial Performance - 2020 guidance confirmed 202 0 Half
Slide 5: 2020 Half year results: Performance highlights
2020 Half year results Performance highlights Sales of CHF 3,221 million, up 4.0% on a like-for- like* basis and 4.1% in Swiss francs in million CHF Excellent performance of those parts of portfolio 3,221 which are not impacted by COVID-19 Strategic focus areas, acquired businesses and high growth m
Slide 6: COVID-19: Givaudan's focus throughout the crisis
COVID-19 Givaudan’s focus throughout the crisis 1. 2. 3. Protecting and Meeting the demands of Taking care of the supporting our our customers, communities in employees, be it particularly for those which we operate on-site or those products which support still working from consumers throughout home
Slide 7: 2020 Outlook: Key themes review
2020 Outlook Key themes review 2020 Outlook Focus on Operations Strategy • Continued confidence in the resilience of • Protecting and supporting all Givaudan • Strong focus on delivering 2020 guidance our industry and our company personnel • Continued integration of acquired • Visibility remains sho
Slide 8: Looking back: Value creation through our strategy 2020
Looking back Value creation through our strategy 2020
Slide 9: Our unique positioning
Our unique positioning Givaudan well positioned to benefit from multiple growth opportunities 1990s until today 2000s until today 2007 2010 until today Geographic Expansion Customer Diversification Quest scale up Expanding Core F&F and Beyond • Expansion from mature to high • Supporting growth of st
Slide 10: Responsible growth. Shared success.
Responsible growth. Shared success. Growing with Delivering Partnering for our customers with excellence shared success High growth Health and Innovators Suppliers markets well-being Excellence in execution Consumer Integrated People Communities preferred products solutions
Slide 11: Strategy 2020 Key achievements: Growing with our customers
Strategy 2020 Key achievements Growing with our customers Continued investment in commercial Attained No. 1 position in Fine Fragrance high growth markets market Sales growth of 5.1% CAGR (2016-2019) Investments in local & regional customer segment, both organically and via Incremental sales contrib
Slide 12: Strategy 2020 Key achievements: Delivering with excellence
Strategy 2020 Key achievements Delivering with excellence Strong focus on integration of acquired Successful global implementation of companies to ensure high levels of service Givaudan Business Solutions (GBS), with 3 quality during transition delivery centres established in Budapest, Highly dedica
Slide 13: Strategy 2020 Key achievements: Partnering for shared success
Strategy 2020 Key achievements Partnering for shared success Strengthening global innovation Deeper engagement with suppliers on ecosystem with opening of new flagship sustainability topics as well as extension Innovation Centre in Switzerland of the responsible sourcing initiatives Development of m
Slide 14: Value creation through acquisitions
Value creation through acquisitions Cosmetics business of Indena Active Beauty Strategy 2020 in motion Ungerer Speciality Ingredients Flavours & Fragrances Fragrance Oils L&R Fragrance drom Fragrances Vika Natural flavours Golden Frog Naturals Activ Induchem Cosmetics business of AMSilk Active Beaut
Slide 15: Value creation through acquisitions: Expanding our portfolio
Value creation through acquisitions Expanding our portfolio Local and regional customers Naturex Naturals Expressions Parfumées Spicetec drom Activ International Fragrance Oils Vika Ungerer Centroflora Nutra Naturex Albert Vieille Golden Frog Aligned with Ungerer Indena market trends and our strateg
Slide 16: Strategy 2020: Partner of choice
Strategy 2020 Responsible growth. Shared success. Creating additional value through 16 acquisitions Growing with Delivering with Partnering for since 2014 our customers excellence shared success 4-5% 12-17% Partner CHF 1.5 bn annualised revenue contribution from companies Average organic sales Avera
Slide 17: Value creation with our strategy 2020
Value creation with our strategy 2020 Responsible growth. Shared success. Market cap Number of employees Sales turnover From 16 to From 10, – From 4.4 to 35bn CHF 16,ooo ~ 6.5bn CHF 17
Slide 18: Looking forward: Future value creation through our strategy 2025
Looking forward Future value creation through our strategy 2025
Slide 19: Creating for happier, healthier lives with love for nature
Creating for happier, healthier lives with love for nature. Let’s imagine together. 2020 Half Year Conference - Company proprietary information of Givaudan 19
Slide 20: Let's imagine together
Creations Creating for happier, healthier lives Communities Let’s imagine together with with love for nature. Let’s imagine customers that through our Let’s imagine together that all communities benefit creations more people will enjoy together. by working with Givaudan happier, healthier lives Natu
Slide 21: Creating for happier, healthier lives with love for nature
Creating for happier, healthier lives with love for nature. Let’s imagine together. Creations Nature Let’s imagine together with our customers that through our Let’s imagine together that creations more people will enjoy happier, healthier lives we show our love for nature in everything we do Contri
Slide 22: Megatrends: Influencing our business
Megatrends Influencing our business 2020 Half Year Conference - Company proprietary information of Givaudan 22
Slide 23: Megatrends: Impacting 2025 strategy
Megatrends Impacting 2025 strategy Consumer base is Living longer and more Sustainability is of COVID-19: growing consciously high concern E-commerce, self-care and localisation gain Trend importance Impact • Asia and Africa • Consumer • Consumers will buy • Consumers will buy leading the way behavi
Slide 24: Trends: Consumer base is growing
Trends Consumer base is growing Impact Asia and Africa are leading the way Rising consumption in emerging countries, especially in Asia and Africa Major CPGs and large customers will have a focus on middleweight cities in emerging markets The product offering must be adapted to demographic developme
Slide 25: Trends: Living longer and more consciously
Trends Living longer and more consciously Impact Consumer behaviour is changing Improved service models and focus on food service providers and private labels Beauty, health and hygiene products will experience strong demand Attention to ingredient labelling is growing and drives interest in transpa
Slide 26: Trends: Sustainability is of high concern
Trends Sustainability is of high concern Impact Consumers will buy more consciously. Responsible companies will act 74% of the companies feel very strong or strong pressure to adopt sustainable solutions[1] Sustainability will become a business imperative for many companies Companies will assess the
Slide 27: Trends: Pandemic related trends
Trends Pandemic related trends Impact Consumers will buy more online and increase spending on self-care. Localisation E-Commerce will grow faster than expected will be even more and gain importance rapidly important Products and solutions supporting wellbeing will become even stronger Multinationals
Slide 28: Trends: Customers
Trends Customers Trends Impact Local and regional players are building consumer confidence and gaining relevance F&B companies and ingredient providers as trusted brands. Small brands dominate need to have tailored service models for CPG growth[1] local and regional customers as well as private labe
Slide 29: 2025 strategy: Committed to Growth, with Purpose
2025 strategy Committed to Growth, with Purpose 29
Slide 30: Strategy 2025: Committed to Growth, with Purpose
Strategy 2025 Committed to Growth, with Purpose Creations Nature We create inspiring solutions We show our love for nature for happier, healthier lives GROWING through impactful actions TOGETHER WITH OUR CUSTOMERS People Communities We nurture a place where we We bring benefits to all all love to be
Slide 31: Three growth drivers: Portfolio, customers and markets
Where to play Three growth drivers Portfolio, customers and markets 31
Slide 32: Our growth drivers - Portfolio, Customers and Markets
Strategy 2025 Our growth drivers – Portfolio, Customers and Markets EXPAND THE PORTFOLIO • Core business • Health, wellbeing, nutrition and beauty FOCUSSED MARKET STRATEGIES GROWING • Integrated solutions and delivery TOGETHER systems • Maximise mature market opportunities WITH OUR CUSTOMERS • Exten
Slide 33: Four growth enablers: Creations, people, nature, communities
How to win Four growth enablers Creations, people, nature, communities 33
Slide 34: Creations
Creations We create inspiring products for happier, healthier lives Customer and consumer Digital enabled innovation Continued focus on preferred solutions innovating eco-systems and partnerships We will focus our creations on Smart creation and selection will We will expand and deepen strategic ren
Slide 35: Nature
Nature We show our love for nature through impactful actions Creating for a more Sourcing for good Reducing environmental sustainable world footprints We will evolve our value proposition and We will strengthen our responsible We will continue successful initiatives and fuel success by anticipating
Slide 36: People
People We nurture a place where we all love to be and grow Everyone feels welcome, Caring for health and Building the leadership and valued and inspired well-being expertise of all our people Through being a leading employer for We will care for our people through We will accelerate new leadership d
Slide 37: Communities
Communities We bring benefits to all communities that work with us Doing business with our suppliers Leveraging Givaudan business as a in a responsible way force for good Together with our suppliers we will further embed We will empower our employees to create responsible sourcing by fostering high
Slide 38: Excellence, Innovation and Simplicity
How we act Excellence, Innovation and Simplicity In everything we do 38
Slide 39: Excellence, Innovation & Simplicity - in everything we do
Strategy 2025 Excellence, Innovation & Simplicity - in everything we do Tailor-made service models will enable most Differentiated customer efficient processes in the relationship with our experience partners Expanded technology enabled collaboration will help to improve processes and our customer r
Slide 40: Louie D'Amico, President Flavour Division
Louie D’Amico President Flavour Division 40
Slide 41: Strategy 2025: Flavour Division
Strategy 2025 Flavour Division
Slide 42: Food and nutrition opportunity
Strategy 2025 Beverages Food and nutrition opportunity Savoury / Snacks Flavour & Taste 13.1 bn CHF Flavour Dairy Market Potential as of 2020 & Taste Sweet Goods + Givaudan market share as of 2020 Market potential as of 2020 Functional Functional Ingredients & Nutrition Functional 14.1 bn CHF & Nutr
Slide 43: Food and nutrition market trends
Strategy 2025 Food and nutrition market trends Consumer base is Living longer and more Sustainability is of COVID-19: growing consciously high concern E-commerce, self-care and localisation gain Trend importance Impact • More opportunities • Demand for • Innovation (eg. • Accelerated digital in high
Slide 44: Strategic pillars to drive growth in Flavours
Strategy 2025 Strategic pillars to drive growth in Flavours Our Ambition Our ambition is to shape the future of food by becoming the co-creation partner of choice to our customers Our strategic pillars Where to play How to win New customer High growth Best in class Product Strategic segmentation & m
Slide 45: Performance ambition - sales growth
Strategy 2025 Performance ambition – sales growth CHF 750m to CHF 1bn additional sales by 2025 4-5% CAGR% Best in class High growth New customer product markets segmentation offering & partnerships 2020 Half Year Conference - Company proprietary information of Givaudan 45
Slide 46: Best in class product offering
Where to play Best in class product offering 46
Slide 47: Leveraging the full portfolio to reach our growth ambitions
Best in class product offering Leveraging the full portfolio to reach our growth ambitions Flavour & Taste Health, Wellbeing Strengthen our core and Nutrition Build market leadership Naturals Space Flavour & Taste Natural Functional Ingredients Naturals Colouring Protein Preservatives Texturants Nat
Slide 48: Best in class product offering
Best in class product offering Flavour & Taste Protein enablers Functional ingredients Health & Wellbeing (salt, sugar, fat) Naturals (incl. Nutritional Biotechnology) ingredients Integrated Solutions 48 2020 Half Year Conference - Company proprietary information of Givaudan
Slide 49: New customer segmentation & partnerships
Where to play New customer segmentation & partnerships 49
Slide 50: Customer segmentation
Customer segmentation Delivering new ways to segment & partner to win with customers Emerging Leading Large Consumer Packaged Goods Local & Regionals* Private Label Food Service *incl. emerging customers and disruptive Opportunistic innovators 2020 Half Year Conference - Company proprietary informat
Slide 51: High growth markets
Where to play High growth markets 51
Slide 52: High growth markets: Our key focus countries and regions
High growth markets Our key focus countries and regions to capture growth Design Develop Portfolio Commercial & Innovation footprint Cost Eastern Europe China Distribution Network Regulatory South-East Asia India Africa & Middle East Deliver Digitalise Latin America Localised Operations Innovation &
Slide 53: Product development
How to win Product development 53
Slide 54: Pioneering innovative & efficient product development
Pioneering innovative & efficient product development Focussed on full recipe development Service models aligned Enabled by artificial with customer and intelligence and consumer needs digital tools Different end-to-end brief Digital tools to reinvent brief processes based on opportunity execution p
Slide 55: Strategic Sourcing
How to win Strategic Sourcing 55
Slide 56: Strategic sourcing
Strategic sourcing Ensure cost, quality and security of supply Expand, deepen Accelerate Value strategic digitally enabled relationship capabilities Leadership with innovative suppliers Robust programmes to strengthen traceability and sustainability credentials 2020 Half Year Conference - Company pr
Slide 57: Operations
How to win Operations Ih Givaudan
Slide 58: Operations
Operations Become the industry’s operations lighthouse Flexible and Digital transformation optimised and automation of footprint supply chain and manufacturing processes Cost, quality Climate Business and service agenda Continuity leadership commitments Plan (CO2, water, and waste targets) 2020 Half
Slide 59: Digital
How to win Digital 59
Slide 60: Digitalised value chain
Digitalised value chain End-to-end digitalisation of our value chain Marketing / Sales Product Development Operations Consumer Customer Smart Creation Understanding Interaction Innovation & Selection Sourcing Production Supply Value chain 2020 Half Year Conference - Company proprietary information o
Slide 61: People
How to win People 61
Slide 62: Our People
Our People Engagement Continue to foster a culture that develops, supports and motivates our people Diversity Implement plans to deliver on our diversity commitments Skills Build stronger leadership and expertise of our people 2020 Half Year Conference - Company proprietary information of Givaudan 6
Slide 63: Taste & Wellbeing
Taste & Wellbeing Our new Division name 63
Slide 64: Our new Division name: Taste & Wellbeing
Our new Division name Taste & Wellbeing Our ambition is to shape the future of food by becoming the co-creation partner of choice to our customers Built on our global leadership position in flavour and taste, we go beyond to create food experiences that do good and feel good, for body, mind and plan
Slide 65: Maurizio Volpi, President Fragrance Division
Maurizio Volpi President Fragrance Division 65
Slide 66: Strategy 2025: Fragrance Division
Strategy 2025 Fragrance Division
Slide 67: Fragrance market overview
Strategy 2025 Fragrance market overview CP Consumer Products FF 14.8 bn CHF Fine Fragrances Market Potential as of 2019 FIB Fragrance Ingredient Business Market potential as of 2019 AB Givaudan market share as of 2019 Active Beauty 2020 Half Year Conference - Company proprietary information of Givau
Slide 68: Fragrance market trends
Strategy 2025 Fragrance market trends Consumer base is Living longer and more Sustainability is of COVID-19: growing consciously high concern E-commerce, self-care and localisation gain Trend importance Impact • Urbanisation in high • New demographics, • Biodegradable, • Retail channels growth marke
Slide 69: Our ambition
Strategy 2025 Our ambition We create for happier, healthier lives with love for nature Let’s imagine together… By reinforcing our leadership in fragrances we want to become the creative partner of choice not only in personal, fabric, hygiene and home care but also in Fine Fragrance and beauty overal
Slide 70: Strategic pillars to drive growth in Fragrances
Strategy 2025 Strategic pillars to drive growth in Fragrances Our Ambition By reinforcing our leadership in fragrances we want to become the creative partner of choice not only in personal, fabric, hygiene and home care but also in Fine Fragrance and beauty overall Our strategic pillars Where to pla
Slide 71: Performance ambition - sales growth
Strategy 2025 Performance ambition – sales growth CHF 650m to CHF 800m additional sales by 2025 4-5% CAGR% New and superior Growing with all High growth product offering customer segments markets 2020 Half Year Conference - Company proprietary information of Givaudan 71
Slide 72: New and superior product offering
Where to play New and superior product offering 72
Slide 73: New and superior product offering
New and superior product offering Biotechnology Beauty Leverage our capabilities Further expand our and acquisitions for our offering in Active Beauty ingredients Naturals Delivery Systems Provide our customers with Provide the next the most innovative and generation of bio-caps qualitative ingredie
Slide 74: Growing with all customer segments
Where to play Growing with all customer segments 74
Slide 75: Growing with all customers segments
Growing with all customers segments Global Consumer Enriched Innovations Packaged Goods portfolio Large Local & Regionals Long tail of Local & Regionals Leveraging M&A with Givaudan capabilities 2020 Half Year Conference - Company proprietary information of Givaudan 75
Slide 76: Growing with all customers across all categories
Growing with all customers across all categories Deos, bath, Estimated retail Fabric & value shower, hair Fragrances Skin care Make-up (bn CHF) home care (Source & oral care Euromonitor) 160 200 50 140 70 2020 Half Year Conference - Company proprietary information of Givaudan 76
Slide 77: High growth markets
Where to play High growth markets 77
Slide 78: High growth markets: Our key focus countries and regions
High growth markets Our key focus countries and regions to capture growth Latin America China Focus on leveraging our Leverage the drom latest investments in the region and capture the growing customers base HGM ca 1.5 x CAGR acquisition Vs mature markets Middle East & Africa South-East Asia Keep in
Slide 79: Leverage M&A
Where to play Leverage M&A 79
Slide 80: Leverage our acquisitions
Leverage our acquisitions Outstanding portfolio aligned with market trends Naturals Local and regional Albert Vieille Naturex customers Indena Expressions Parfumées drom Fragrance Oils Ungerer Aligned with market trends and Active our strategic Beauty Soliance priorities Induchem Naturex Centroflora
Slide 81: Purpose driven innovation and sourcing
How to win Purpose driven innovation and sourcing 81
Slide 82: Sustainability meeting current and future needs
Purpose driven innovation and sourcing Sustainability meeting current and future needs 01 03 Science Sourcing Biotechnology Responsible sourcing Bio-based capsules Best in class for FiveCarbon Path™ Sustainability and Traceability 02 Creation Naturality index Naturals innovation Artificial intellige
Slide 83: Operations
How to win Operations 83
Slide 84: Operations
Operations Industry leader in automation Next Generation Factories Best in class business Best palette & continuity plan vertical integration Operations Risk Ingredients Advantage Management 2020 Half Year Conference - Company proprietary information of Givaudan 84
Slide 85: Leverage digital
How to win Leverage digital 85
Slide 86: Expanding our digital capabilities
Leverage digital Expanding our digital capabilities Digital Rewire Digital for Digital for better innovation speed and products & for new areas efficiency services 2020 Half Year Conference - Company proprietary information of Givaudan 86
Slide 87: People
How to win People 87
Slide 88: Fragrance Division key specific initiatives
People Fragrance Division key specific initiatives Achieve our targets for diversity in high growth markets and gender Skills Engagement Diversity Acquire and develop Continue to foster the skills needed to a culture that achieve our ambitions develops, supports and motivates its people 2020 Half Ye
Slide 89: Fragrance & Beauty
Fragrance & Beauty Our new Division name 89
Slide 90: Our new Division name: Fragrance & Beauty
Our new Division name Fragrance & Beauty Our ambition : By reinforcing our leadership in fragrances we want to become the creative partner of choice not only in personal, fabric, hygiene and home care but also in Fine Fragrance and beauty overall 2020 Half Year Conference - Company proprietary infor
Slide 91: Tom Hallam, Chief Financial Officer
Tom Hallam Chief Financial Officer 91
Slide 92: Value creation history at Givaudan
Value creation history at Givaudan A strong track record of growth & value creation
Slide 93: Value creation at Givaudan: The journey of growth
Value creation at Givaudan The journey of growth The post Quest era The 1st Five Year Cycle The 2nd Five Year Cycle 2007-2010 2011-2015 2016-2019 159 949 39 994 876 1,017 348 1,146 5y CAGR 4y CAGR 532 4.3% 5.3% 6,203 4y CAGR 4,239 4,239 4,396 4,396 2,909 4.3% As at 1st Jan LFL Acquisitions Currency
Slide 94: Industry leading financial performance
Value creation at Givaudan Industry leading financial performance Sales growth Free Cash Flow as % of sales 9.2% 13.2% 12.7% 12.7% 8.0% 11.8% 12.8% 6.3% 9.7% 5.8% 5.6% 9.2% 4.9% 8.0% 4.2% 4.7% 5.0% 6.0% 4.0% 5.1% 4.6% 6.0% 3.0% 3.0% 2016 2017 2018 2019 2016 2017 2018 2019 Givaudan Symrise IFF Givaud
Slide 95: Sustained value creation for shareholders
Value creation at Givaudan Sustained value creation for shareholders 70 Share price evolution vs SMI Dividend per share in CHF 60 1000% 50 800% 40 600% 30 400% 20 200% 10 0% 0 2000 2005 2010 2015 2020 2000 2005 2010 2015 Givaudan SMI 35 billion Average annual yield of >CHF of total shareholder retur
Slide 96: Strategy 2025: Performance ambitions
Strategy 2025 Performance ambitions 96
Slide 97: Performance ambitions
Strategy 2025 Performance ambitions Sales growth Free cash flow Purpose ambitions 4.0 – 5.0% >12% of sales Purpose linked targets 2021 – 2025 2021 – 2025 2021 – 2025 Average Like for Like* Sales Growth Average FCF** as % of sales Progress towards all published purpose targets *Like-for-like (LFL) is
Slide 98: Performance ambitions - organic sales growth
Strategy 2025 Performance ambitions – organic sales growth 2016 – 2020 Guidance 2016 – 2019 4.0 – 5.0% 5.1% Average Like for Like* Sales Growth Average Like for Like* Sales Growth 2021 – 2025 Guidance 4.0 – 5.0% Average Like for Like* Sales Growth 2020 Half Year Conference - Company proprietary info
Slide 99: Performance ambitions - Free Cash Flow
Strategy 2025 Performance ambitions – Free Cash Flow 2016 – 2020 Guidance 2016 – 2019 12 – 17% 12.5% Average FCF** as % of sales Average FCF** as % of sales We are fully on course to deliver the set target range 2021 – 2025 Guidance >12% of sales Average FCF** as % of sales 2020 Half Year Conference
Slide 100: Performance ambitions - Purpose linked targets
Strategy 2025 Performance ambitions - Purpose linked targets Nature People Before 2030 Before 2025 Our operations’ carbon emissions will be cut by 70% Everyone on our sites will have and our supply chain emissions access to mental and physical by 20% health initiatives, tools and Communities Creatio
Slide 101: Follow us on social media
Follow us on social media @givaudan 2020 Half Year Conference - Company proprietary information of Givaudan 101