International Flavors & Fragrances, Inc. · NYSE:IFF
International Flavors & Fragrances — Q4 2021 Earnings Presentation
24 slides from International Flavors & Fragrances's earnings presentation, Feb 10, 2022
Slide 1: Fourth Quarter & Full Year 2021 Earnings Conference Call
FOURTH QUARTER & FULL YEAR 2021 EARNINGS CONFERENCE CALL February 10, 2022
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Statements in this presentation, which are not historical facts or information, are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current assumptions, estimates a
Slide 3: Non-GAAP Financials
NON-GAAP FINANCIALS Use of Non-GAAP Financial Measures We provide in this presentation non-GAAP financial measures, including: (i) combined currency neutral sales; (ii) adjusted operating EBITDA and combined adjusted operating EBITDA; (iii) adjusted EBITDA margin and combined adjusted operating EBIT
Slide 4: Today's Speakers
TODAY’S SPEAKERS Andreas Fibig Glenn Richter Michael DeVeau Chairman & Executive Vice President, Chief Investor Relations Chief Executive Officer Chief Financial Officer & Communications Officer 4
Slide 5: Agenda
AGENDA FY 2021 Performance Review ____ Integration Progress ____ Q4 Detailed Financial Review ____ Outlook Ahead ____ Q&A 5
Slide 6: FY 2021 Highlights
FY 2021 HIGHLIGHTS Sales Adjusted Operating Free Cash Flow ² ³ $11.7B EBITDA Margin1 of 20.8% of $1,044M Combined sales grew +10%; Combined EBITDA grew +3%; ~9% of sales driven by Currency neutral growth of +8%¹ ² Margin pressured by inflation¹ ² robust cash generation Net Debt to Credit Synergy Por
Slide 7: Geographic Sales Review
FY 2021 GEOGRAPHIC SALES REVIEW NOAM : +8% ¹ ² Growth achieved in ASIA: +9% ¹ ² nearly all segments ____ Nourish, Scent and Pharma all achieved strong growth Performance led by ____ double-digit growth in H&B Performance led by double-digit growth in India & China LATAM : +11% ¹ ² EAM E: +9% ¹ ² Ach
Slide 8: Category Sales Review
FY 2021 CATEGORY SALES REVIEW Combined Currency Neutral Sales¹ ²: +8% +8% +2% +6% +9% +2% In Millions Flavors Home & Personal Fine Industrial Care Fragrance Ingredients Pharma $11,656 Cultures & Consumer Food Design Food Enzymes Fragrance $10,641 Grain Processing Ingredients Animal Nutrition Microbi
Slide 9: Segment Performance
FY 2021 SEGMENT PERFORMANCE ADJUSTED NET O P E R AT I N G SALES¹² SEGMENT EBITDA (Combined currency MARGIN¹² HIGHLIGHTS neutral vs. FY 20) (Change vs. FY 20) • Broad-based growth led by double-digit growth in Ingredients $6.3 billion 18.7% Nourish • EBITDA grew 8% led by strong volume growth, price
Slide 10: Strong Sales Growth vs Pre-COVID Levels
FY 2021 STRONG SALES GROWTH VS PRE -COVID LEVELS FY Sales in $ Millions1 USD growth vs. FY 2019 $11,656M / +9% Total $6,264M / +9% Nourish $2,329M / +8% H&B $2,254M / +11% Scent $809M / +8% Pharma 2021 2020 2019 1 Combined historical results for FY 2021 is defined as 12 months of legacy IFF results,
Slide 11: Synergy Realization
FY 2021 SYNERGY REALIZATION P&L Realized Cost Synergies $ millions ~$60M Revenue synergies a modest contributor of top-line performance; Project pipeline continues to develop ____ Strong cost synergy realization, with an incremental $20M in savings delivered in Q4 2021 ____ Exceeded year 1 cost syne
Slide 12: Consolidated Results
Q4 2021 CONSOLIDATED RESULTS In millions / % of sales 2020 2021 C H AN G E Combined currency neutral sales +10% driven by Revenue² $2,771 $3,031 9% double-digit growth in H&B and high-single digit increases in Nourish, Scent and Pharma; FX impacted ~1 ppt Adjusted gross margin¹ ² 34.8% 32.4% (240) b
Slide 13: Nourish Segment
Q4 2021 NOURISH SEGMENT In millions / % of sales 2020 2021 C H AN G E Currency neutral sales +9% driven by strong volume growth & pricing contributions; FX had no impact ____ Revenue² $1,488 $1,626 9% Continued strong growth in Flavors, improving mid-single digits, with increases in all regions Curr
Slide 14: Health & Biosciences Segment
Q4 2021 HEALTH & BIOSCIENCES SEGMENT In millions / % of sales 2020 2021 C H AN G E Currency neutral sales +13%; FX had no impact ____ Revenue² $572 $646 13% Double-digit increases in Health, Microbial Control, Animal Nutrition and Grain Processing Currency neutral growth¹ ² 0% – 13% ____ Cultures &
Slide 15: Scent Segment
Q4 2021 SCENT SEGMENT In millions / % of sales 2020 2021 C H AN G E Currency neutral sales +7%; FX impacted by ~1 ppt ____ Revenue² $524 $555 6% Continued rebound in Fine Fragrances, which grew double-digits, led by new wins & improved volumes ____ Currency neutral growth¹ ² 6% – 7% Consumer Fragran
Slide 16: Pharma Solutions Segment
Q4 2021 PHARMA SOLUTIONS SEGMENT In millions / % of sales 2020 2021 C H AN G E Currency neutral sales grew 9% with contributions Revenue² $188 $204 9% from volume & pricing; FX had no impact ____ Core Pharma led by price increases & growth Currency neutral growth¹ ² (4)% – 9% in control release port
Slide 17: Cash Flow & Leverage
FY 2021 CASH FLOW & LEVERAGE Strong cash flow generation; On-track with deleverage target C AS H F L O W L E V E R AG E Cash flow from operations totaled $1,437 million Cash and cash equivalents finished at $716 million ____ ____ Capex was $393 million or ~3.4% of sales Gross debt reduced $124 milli
Slide 18: Consolidated Outlook
FY 2022 CONSOLIDATED OUTLOOK In millions or as % of sales FY 2022¹ Operating environment will remain complex, with uncertainties due to COVID-19, political issues and supply chain challenges ____ Bullet number one Revenue $12.3 to $12.7B ____ Foreign exchange rates expected to be ~2 ppt headwind to
Slide 19: Cost Inflation Trends
COST INFLATION TRENDS C O S T O F G O O D S S O L D : Y E AR O V E R Y E AR C H AN G E Double digit increase High single digit increase 2020A Raw Energy Logistics Packaging 2021A Q1 Raw Energy Logistics Packaging 2022E COGS Materials /Other COGS Materials /Other COGS 19
Slide 20: Insight into Sales Guidance
FY 2022 INSIGHT INTO SALES GUIDANCE S AL E S R E C O N C I L I AT I O N +6% to +9% Comparable Growth $12.3 - $12.7B ~$500M $11.85B $11.65B ~$(300)M Reported 1 January 2 Fruit Prep 3 & Comparable 4 Pricing 5 Volume 6 FX 7 2022 8 2021 N&B Results Microbial 2021 Impact Guidance Actuals Divestitures1 Ba
Slide 21: Insight into EBITDA Guidance
FY 2022 INSIGHT INTO EBITDA GUIDANCE AD J U S T E D O P E R AT I N G E B I T D A ¹ R E C O N C I L I AT I O N +4% to +8% Comparable Growth Targeting Full ~$110M Cost Recovery $2.5 - $2.6B $2.4B $2.5B ~$(35)M Reported 1 January 2 Fruit Prep 3 & Comparable 4 Total 5 Price 6 Volume 7 Net Synergies 8 FX
Slide 22: Key Operating Priorities
FY 2022 KEY OPERATING PRIORITIES F O C U S AR E AS AC T I O N P L AN Increase investments in supply chain; 1 Maintain strong sales momentum Emphasize innovation & drive revenue synergies ____ 2 Execute broad-based pricing actions Fully recover total cost inflation; Implement additional actions as ne
Slide 23: Summary
SUMMARY Delivered strong year-over-year sales & profit growth in 2021 ____ Strong progress towards our integration efforts & delivered on year 1 synergy commitment ___ Operating environment remains complex, with significant inflationary pressures continuing into 2022 ____ Go-forward priorities are c
Slide 24: iF f
iF f Where science & creativity meet
International Flavors & Fragrances — Q4 2021 Earnings Presentation on 6ix