Dsm-firmenich Ag · EURONEXT:DSFIR
Dsm-firmenich — Investor Day (June 2024)
31 slides from Dsm-firmenich's investor day presentation, Jun 3, 2024
Slide 1: Capital Markets Day
PARIS, JUNE 3 , 2024 RD Capital Markets Day We bring progress to life Ralf Schmeitz CFO
Slide 2: Our journey towards bringing progress to life
DREAM Our journey towards bringing progress to life Accelerate Tune Focus Merge Dream Integration Separation Updated mid-term and Synergies ANH Financial Targets 1
Slide 3: Strong progress towards successful delivery of our integration
MERGE Since Day 1, we have made strong progress towards the successful delivery of our integration We are aspiring for … and see strong traction ahead substantial value creation… of schedule on integration New operating model fully implemented Revenue synergies ~€500 mn sales/€175 mn Adj. EBITDA 750
Slide 4: Synergies ahead of schedule, continuing to deliver significant earnings
MERGE Synergies ahead of schedule, continuing to deliver significant earnings Actuals/Outlook Target Contribution to Adj. EBITDA, € mn 2023 2024 2025 2026 - 2028 Total 15 100-110 100-110 115-135 Cost G&A Procurement Direct Procurement Indirect Revenue All synergy streams continue to be on track, wit
Slide 5: Cost synergy delivery ahead of schedule with target of €175+ mn
MERGE Cost synergy delivery ahead of schedule with target delivery of €175+ mn Cumulative cost synergies, Cost synergy implementation € mn ahead of planning Direct Indirect G&A 175+ Examples include G&A: remove role duplications, leverage GES Remove management roles duplication, leverage Global Ente
Slide 6: Concrete steps toward our cost synergy realization
MERGE We have taken concrete steps toward our cost synergy realization Direct costs Indirect Costs G&A costs ~€20 mn ~€10 mn ~€10 mn ~€10 mn ~€25 mn removed duplication transfer of roles to office closure in combination and reduction of spend of senior roles and Shared Service Parsippany, renegotiat
Slide 7: Strong progress on revenue synergy with customers
MERGE Strong progress on revenue synergy with customers TTH HNC P&B Strong pipeline of … translates into confidence to revenue synergies… reach targets according to plan HNC Revenue growth synergies, € mn P&B 500 TTH GROUP 350+ Pipeline of revenue synergies, € mn 150+ 70 25 2023 24 25 26 2026+ Q2’23
Slide 8: Revenue synergies delivered through cross-selling and new product concepts
MERGE Revenue synergies delivered through cross-selling and new product concepts Sun protection P&B DHA HNC Combining TTH for every moment Supplement Health with Taste Sun care for easy High dosage DHA Sports beverages combining daily use, lightweight, gummies with no smell, sports premix and plant
Slide 9: Vitamin Transformation with €200 mn profit improvement, well under way
MERGE Vitamin Transformation with €200 mn profit improvement, well under way Cumulative profit improvement, € mn Optimization Streamlined Improved cash 200 of site network organization management Vitamin B6 plan More focused and agile Inventories reduced Xinghuo closed organization model by ~€100 mn
Slide 10: Acceleration of strategic review: separating out Animal Nutrition & Health
FOCUS Acceleration of strategic review: separating out Animal Nutrition & Health Strategic rationale Clear strategic for dsm-firmenich benefits for ANH Full focus on nutrition, health and beauty to Full potential of ANH best realized through different better drive superior innovation-led growth owne
Slide 11: ANH is a global leader in animal nutrition with a unique, integrated business model
FOCUS ANH is a global leader in animal nutrition with a unique, integrated business model Global market coverage with local Innovation leader with the Unique business model with presence for customer intimacy and most complete portfolio, customer-focused local solutions only non-Chinese producer of
Slide 12: ANH integrates diverse businesses that offer significant future potential
FOCUS ANH integrates diverse businesses that offer significant future potential ANH Group Sales, € bn Adj. EBITDA margin, % Mid-to-high single digit sales 3.7 18 18 3.0 3.3 3.1 14 growth over midterm, supported 6% 4 15+% by expected market recovery Strong cash generation potential 20 21 22 23 L10Y C
Slide 13: Proven track record in navigating separations and capturing value
FOCUS Proven track record in navigating separations and capturing value Strong track record Dedicated Staged in successful management separation separations team plan Experience in divestments and Experienced management team Focus on planning and separation minimizing stranded costs, e.g. sale inclu
Slide 14: ANH transaction in the course of 2025
FOCUS ANH transaction in the course of 2025. With ANH team focused on delivering strong results 2024 H2 2025 H2 Preparation Phase 2 Transaction phase 2024 Feb • Develop operational separation blueprint • Complete sign-to-close, Announcement • Prepare first steps of separation subject to external fac
Slide 15: A focused group consisting of 3 complementary Business Units
TUNE A focused group consisting of 3 complementary Business Units dsm-firmenich, building a company with over €10 bn sales Perfumery & Beauty Taste, Texture & Health Health, Nutrition & Care 5-6% 22-24% 6-8% 21-23% 4-6% 21-23% Organic sales growth, mid-term Adj. EBITDA Margin, mid-term 14
Slide 16: Mid-term targets for sales and Adj. EBITDA margin as well as cash conversion
ACCELERATE Mid-term targets¹ for sales and Adj. EBITDA margin as well as cash conversion Organic Sales Growth Adj. EBITDA margin Cash-to-Sales conversion² 5-7% 22-23% >10% Dividend pay-out average 40-60% of adjusted net core earnings Stable 1.5x-2.5x Net debt/Adj. EBITDA 1. For the new group dsm-fir
Slide 17: Pathway to achieve 5-7% Organic Sales Growth
ACCELERATE Pathway to achieve 5-7% Organic Sales Growth Pro forma Organic Sales Growth Bridge, % Overview Historically, Group has been delivering ~1-2% 5-7% sustainable organic growth of 4-5% Delivery of revenue synergies will contribute ~1% ~1pp to yearly organic sales growth in foreseeable future
Slide 18: Pathway to achieve 22-23% Adj. EBITDA Margin
ACCELERATE Pathway to achieve 22-23% Adj. EBITDA Margin Pro forma Adj. EBITDA Margin Bridge, % Overview Historically, Group has been delivering ~1-2% 22-23% ~2-3% 19-20% Adj. EBITDA margin % 19-20% ~1% 18% 2023 margin of 18% will benefit from Vitamin transformation to gain ~1pp, mainly in HNC and to
Slide 19: Mid-term target of >10% Cash-to-sales conversion
ACCELERATE Mid-term target of >10% Cash-to-sales conversion based on strict cash management while maintaining growth investment Metric Guidance Overview Adj. EBITDA margin 22-23% Cash improvement as priority for dsm-firmenich Aim to maintain Operating Working Capital Target ~28% based on disciplined
Slide 20: Other financial metrics
ACCELERATE Other financial metrics Core ROCE Effective tax rate Mid-term guidance +100 bps/year 21-22% Excluding PPA, versus 24% in 2023 post carve out Goodwill, tax estimate divestments 19
Slide 21: Capital allocation policy
ACCELERATE Capital allocation policy 1st 2nd 3rd 4th Disciplined CAPEX Dividend M&A Share buybacks for organic growth 5-6% of sales to be On average, mid-term Prudent and disciplined To be considered invested into CAPEX payout ratio target approach in absence of of 40-60% of adjusted value-creating
Slide 22: Strong balance sheet enables sustained organic growth
ACCELERATE Strong balance sheet enables sustained organic growth Group debt maturity profile, € mn Commentary Strong investment grade credit ratings • Moody’s: A3 (stable) 750 • S&P: A- (stable) 750 Prudent financing strategy • Strong liquidity position at 2024 Q1 (€2.1 bn) • €1.75 bn revolving cred
Slide 23: Confident in delivering our ambition
ACCELERATE Confident in delivering our ambition 5-7% Organic Sales Growth 22-23% Adj. EBITDA margin Accelerate Focus Tune >10% Dream Merge High quality Innovation-led growth in high Cash-to-Sales Leadership portfolio with growth, high Conversion Synergy delivery position in proven ability margin 2 i
Slide 24: Fact slides
Z”\ ANNEX Fact slides dsm-firmenich ese
Slide 25: Animal Nutrition & Health in a glance
ANIMAL NUTRITION & HEALTH Animal Nutrition & Health in a glance 3.2 bn 6% 15% € Revenues1 Organic Sales Growth 2 Adj. EBITDA Margin 2 7,000 55 premix Employees worldwide 5 R&D locations Feeding the planet without costing the Earth 1) 2023 Actuals 24 2) Time period last 10 years 24
Slide 26: Global Presence
ANIMAL NUTRITION & HEALTH Global Presence ANH €3.2 bn 2023 Sales by destination (%) Africa: 73 employees Europe Latin America Asia & Pacific China North America ANH has a well-balanced global presence with more than 50 premix and blending facilities 25 25
Slide 27: Key products
ANIMAL NUTRITION & HEALTH Key products ANH €3.2bn ANHby 2023 Sales €3.2 bn (%) * Product Vitamins Carotenoids Premix Solutions 2023 Sales by Product (%) * Vitamins are essential for well- being and good health. They play Carotenoids are essential ingredients that are important in We offer our client
Slide 28: End-Markets - strong basis across all species
ANIMAL NUTRITION & HEALTH End-Markets - strong basis across all species Split ANH 2023 sales by specie Poultry Swine Ruminants Aqua 47% 20% 23% 10% Global Animal Protein Production 2023* dsm-firmenich 2023 ANH Sales (million of tonnes) (€ m) 200 1 600 100 800 0 Poultry Swine Ruminants Aqua 0 Poultry
Slide 29: Productivity & sustainability drive demand for feed solutions
ANIMAL NUTRITION & HEALTH Productivity & sustainability drive demand for feed solutions Key trends Key trends Offering new opportunities … … for which dsm-firmenich is uniquely positioned Digital Professionalization of farming and Sustell®, Verax, FarmTell® Precision farming, labeling ensuring farme
Slide 30: Forward-looking statements
This presentation contains forward-looking statements with respect to dsm-firmenich’s future (financial) performance and position. Such statements are based on current expectations, estimates and projections of dsm-firmenich and information currently available to the company. dsm-firmenich cautions
Slide 31: We bring progress to life
dsm-firmenich ese We bring progress to life