Symrise Ag · XETR:SY1
Symrise — Deutsche Bank GACC 2010
41 slides from Symrise's conference presentation, May 20, 2010
Slide 1: Presentation – Deutsche Bank GACC
PRESENTATION Dr. Andrea Rolvering (Head of Investor Relations) Deutsche Bank GACC Frankfurt, Mai 20-21, 2010
Slide 2: Agenda
AGENDA Symrise – introduction Market overview flavors & fragrances Symrise strategy Q1 2010 update Outlook 2010 Appendix
Slide 3: Symrise Fact Sheet
SYMRISE FACT SHEET A leading player in the global Flavor and Fragrances („F&F“) market with an estimated 10% market share Operates globally in flavors & fragrances, but is unique against competition in having a Life Essentials and a Consumer Health business Formed in 2002 when EQT III Fund acquired
Slide 4: Symrise Investment Case
SYMRISE INVESTMENT CASE A leading position in a robust and resilient industry High margins and strong cash flow generation Strategically positioned for above-average growth (strong customers / growing markets) Attractive dividend policy: 50 cts per share returned to shareholders PAGE 4
Slide 5: Scent & Care Portfolio
SCENT & CARE PORTFOLIO Scent & Care develops and produces fragrance Scent & Care compositions, cosmetic Fragrances Life Essentials ingredients, aroma molecules and mint Aroma Molecules Oral Care products. They are used in perfumes, body care and cosmetic products, cleaning and washing products, air
Slide 6: Flavor & Nutrition Portfolio
FLAVOR & NUTRITION PORTFOLIO Flavor & Nutrition develops and produces flavorings Flavor & Nutrition and functional ingredients that are Beverages Sweet used in foods, beverages and Savory Consumer Health health products. This includes culinary products and snacks, sweet foods and desserts, dairy pro
Slide 7: Market Overview Flavors & Fragrances
MARKET OVERVIEW FLAVORS & FRAGRANCES PAGE 7
Slide 8: Small Group of Companies Leads the F&F Market
SMALL GROUP OF COMPANIES LEADS THE F&F-MARKET Global leadership in F&F (2009) Entry barriers into tier 1 Critical size (>1 billion turnover) to be Tier 1 Tier 2 a qualified supplier for international customers („globally local”) 19 % Entry barriers into industry 12 % 12 % + 500 others 10 % Customer/
Slide 9: It Is a Performance, Not a Price Driven Business
IT IS A PERFORMANCE, NOT A PRICE DRIVEN BUSINESS F&F only small cost of end product ... ... but a key buying criteria for consumers ~€1,500bn Fine fragrances1 78 8 5 3 Scent Overall Brand Fragrance experience image Premium food & beverage (re-purchase decision) 45 30 15 10 ~€13-14bn Taste Brand Pric
Slide 10: Comparing with the Leaders: Track Record of High Margins
COMPARING WITH THE LEADERS: TRACK RECORD OF HIGH MARGINS Weighted tier 1 average 1 2 25% 20% EBITDA margin in % 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 1 Weighted EBITDA margin average of Givaudan, IFF (2003-2008) and Quest (until 2006) (adjusted for restructuring expenses) PAGE 10 2 EBITDA
Slide 11: Symrise Strategy
: symrise@) SYMRISE STRATEGY
Slide 12: Our Performance: Delivering on Our Strategic Priorities
OUR PERFORMANCE: DELIVERING ON OUR STRATEGIC PRIORITIES Sales Profitability Market position Continued above- Achieve best in class Sharpen unique market growth profitability profile • Further exploit • Continued cost • Accelerate push into existing core lists and discipline throughout faster growing
Slide 13: Sales Development: Trend to Recovery in H2 2009
SALES DEVELOPMENT: TREND TO RECOVERY IN H2 2009 Sales development Symrise Group 1,009.5 1,022.5 1,037.5 1319,9 1362,0 1355,7 ++1.3% 2.8% + 2.7% + 3.2% 2008 2009 2009 in LC Sales development Scent & Care Sales development Flavor & Nutrition 671.8 682.3 678.4 648.1 679.7 677.3 + 1.6% + 1.0% + 4.9% + 4
Slide 14: Top Customers: Ahead of Total Sales Growth
TOP 10 CUSTOMERS: AHEAD OF TOTAL SALES GROWTH 2009 growth with top 10 customers Comments Group sales with top 10 customers ahead of total sales growth 9.0% in LC Top 10 customer sales account for 29% of Group sales Top 10 customer sales mainly driven by Flavor & Nutrition Top 10 customer sales in Sc
Slide 15: Geographical Development: Emerging Market Share Up to 41%
GEOGRAPHICAL DEVELOPMENT: EMERGING MARKET SHARE UP TO 41% Regional Sales Split 2009 Comments Western North America Europe Emerging markets remain a growth (+11.5 % in LC) (-3.8 % in LC) engine (in total + 4.5 % in LC) Improvement in the US: 22% excluding acquisitions, stable Asia / Mature 33% market
Slide 16: Profitability: Almost on Last Year's Level
PROFITABILITY: ALMOST ON LAST YEAR´S LEVEL EBITDA and EBITDA margin Group Comments 19.9% 18.0% 19.5% Profitability improved throughout 262.5 245.6 265.4 2009 2008 2009 2009 Operating leverage impact from normalized 1 higher sales EBITDA and EBITDA margin S&C Results of restructuring efforts paid off
Slide 17: Our Unique Product Portfolio Promises Higher Growth Rates
OUR UNIQUE PRODUCT PORTFOLIO PROMISES HIGHER GROWTH RATES GOING FORWARD • Similar technology platforms Flavors Fragrances Traditional F&F business market growth ~2-3% p.a. market growth ~2-3% p.a. • Same consumers • Often the same customers • Often the same Consumer Additional business end products
Slide 18: Unique Product Portfolio Targets Fast Growing Market Segments
UNIQUE PRODUCT PORTFOLIO TARGETS FAST GROWING SELECTED MARKET SEGMENTS Fast growing market segments1) Unique portfolio Conventional Differentiated Functional Fra- Cosmetic Consumer Flavors food 13.8% grances Ingredients Health Symrise Slimming 10.1% Givaudan products IFF Organic CAGR 2010–2013 (%) f
Slide 19: Examples for Innovative New Products
EXAMPLES FOR INNOVATIVE NEW PRODUCTS CARE AND CONSUMER HEALTH SymHelios® 1031 Aronia Berry Extract FLAVOR & NUTRITION Consumer Health SCENT & CARE Life Essentials THE CLAIM A new way of thoroughly Superfruit with high protecting the skin from UV antioxidant value radiation SymHelios® 1031 is deep pr
Slide 20: Investments and Acquisitions Focussing on Fast Growing Markets
INVESTMENTS AND ACQUISITIONS FOCUSSING ON FAST GROWING MARKETS AND SEGMENTS Opening of a competence center for 2010: acquisition of Health & Nutrition in a fully integrated Holzminden production site near Moscow Opening of branch office in Dubai Strategic acquistion of Opening of a pilot Futura Labs
Slide 21: 2009 in a Nutshell: We Weathered the Storm
2009 IN A NUTSHELL: WE WEATHERED THE STORM 2.7 % 19.5 % sales growth in LC; normalized EBITDA margin; we outperformed the market forecasted margin overachieved 1.11 € 12.2 % adjusted earnings per share; operating free cashflow/sales; 8% above last year’s level strong cashflow generation 2.2 times 0.
Slide 22: Q1 2010 Update
Q1 2010 UPDATE Q1 2010 UPDATE PAGE 22
Slide 23: Major Headlines – Successful Start into 2010
MAJOR HEADLINES – SUCCESSFUL START INTO 2010 Strong sales increase of 13% in LC; all regions and application areas are showing significant improvements versus the year-ago period Profitability improved strongly mainly due to operating leverage; EBITDA margin at 21.3 % Net income nearly doubled compa
Slide 24: Sales Development: Strong Start in Q1 2010
SALES DEVELOPMENT: STRONG START IN Q1 2010 in €m Sales growth Symrise Group 346.7 391.0 392.5 +12.8% + 13.2% Q1 2009 Q1 2010 Q1 2010 in LC Sales development Scent & Care Sales development Flavor & Nutrition 179.8 204.8 205.2 166.9 186.2 187.3 + 13.9% +14.1% + 11.6% + 12.3% Q1 2009 Q1 2010 Q1 2010 in
Slide 25: Top Customers: Core Listings in F&N Show Strong Impact
TOP 10 CUSTOMERS: CORE LISTINGS IN F&N SHOW STRONG IMPACT 2010 growth with top 10 customers Comments Group sales with top 10 customers in line with total Group sales 18.2% in LC growth Top 10 customer sales account for 30% of Group sales Group sales growth 13.2% in LC 9.9% in LC Top 10 customer sale
Slide 26: Geographical Development Q1 2010: Growth in All Regions
GEOGRAPHICAL DEVELOPMENT Q1 2010: GROWTH IN ALL REGIONS Regional sales split Q1 2010 1 Comments North America Western Excellent momentum and Europe (+12.7% in LC) (+11.8% in LC) normalized customer order patterns Asia / Mature Double-digit growth in almost all markets 18% regions (+4.2% in LC) 4% 34
Slide 27: EBITDA Margin: On Track with >20% in Both Divisions
EBITDA MARGIN: ON TRACK WITH > 20% IN BOTH DIVISIONS EBITDA and EBITDA margin Group Comments 21.3% 16.9% 17.6% Operating leverage impact from 58.7 61.0 83.3 higher sales Q1 2009 Q1 2009 Q1 2010 Lower raw material prices in normalized 1 selected areas EBITDA and EBITDA margin S&C at AR Favourable pro
Slide 28: Scent & Care: Operational Highlights in Q1 2010
SCENT & CARE: OPERATIONAL HIGHLIGHTS IN Q1 2010 Scent & Care Award for Symrise Cosmetic research: SymSitive ® wins the 2010 BSB innovation prize Proven impact in clinical studies for sensitive skin BSB Innovation Developed Price 2010 in close cooperation with our partners BRAIN and In-Cosmetics Pari
Slide 29: Flavor & Nutrition Operational Highlights in Q1 2010
FLAVOR & NUTRITION OPERATIONAL HIGHLIGHTS IN Q1 2010 Flavor & Nutrition Investment project in Russia on track: production start expected in 2nd half of 2010 with powder blending Encouraging development of new business unit Consumer Health with active ingredients Opening of new production capacities
Slide 30: Outlook 2010
: symrise@) OUTLOOK 2010
Slide 31: Outlook 2010: Market Recovery Strengthens Confidence
OUTLOOK 2010: MARKET RECOVERY STRENGTHENS CONFIDENCE Back to reasonable growth F&F > Further normalization of stock-keeping and order patterns Industry > Improvement in luxury segments expected to continue in line with economic recovery > Raw materials costs 2010 overall remain on high level Strateg
Slide 32: Appendix
APPENDIX PAGE 32
Slide 33: Financials Q1 2010
S symrise always inspiring more... FINANCIALS Q1 2010
Slide 34: Strong Growth in Q1 2010 with Good Conversion into Profitability
STRONG GROWTH IN Q1 2010 WITH GOOD CONVERSION INTO PROFITABILITY Growth of 13.2% in LC (12.8% at AR) Sales 1,319.9 (€m) 1,274.5 346.7 391.0 Divisional growth rates in LC: • F&N 12.3% Q1 2009 Q1 2010 • S&C 14.1% EBITDA margin up from 16.9% to EBITDA 262.5 (€m) 272.1 21.3% driven by strong gross margi
Slide 35: Minor Currency Effect on Sales in Q1 2010
MINOR CURRENCY EFFECT ON SALES IN Q1 2010 -4.7 3.6 -1.4 0.7 0.3 392.5 391.0 Sales USD CNY GBP MXN Others Sales adjusted reported Currency Rate Q1 2010 Rate Q1 2009 in % vs € USD 1,38 1,30 6,4 MXN 17,67 18,72 -5,6 BRR 2,49 3,01 -17,1 GBP 0,89 0,91 -2,2 CNY 9,45 8,89 6,3 JPY 125,56 121,69 3,2 PAGE 35
Slide 36: EBITDA Bridge: Strong Impact from Sales Recovery
EBITDA BRIDGE: STRONG IMPACT FROM SALES RECOVERY in € m 18.4 3.6 2.1 - 3.1 - 2.8 24.8 83.3 58.7 EBITDA Q1 2009 Sales Raw material Operating costs Acquisitions Currencies EBITDA Q1 2010 costs PAGE 36
Slide 37: Financial Expenses Lower Non-Interest Finance Items
FINANCIAL EXPENSES LOWER NON-INTEREST FINANCE ITEMS Financial expenses Q1 2009 (€ m) Comments > Q1 2010: € 1.9 m exchange gain 1.0 9.8 € 0.9 m loss on swaps 1.2 9.4 8.8 € 1.0 m sum 8.2 > Q1 2009: € 2.6 m exchange gain € 1.4 m loss on swaps Q1 2009 Q1 2010 € 1.2 m sum P&L interest Non-interest financ
Slide 38: Earnings per Share Q1 2010: Almost Doubled YoY
EARNINGS PER SHARE Q1 2010: ALMOST DOUBLED YOY €m Q1 2009 Q1 2010 % Sales 346.7 391.0 13 Cost of sales 203.3 218.3 Gross profit 143.4 172.7 20 Operating cost 105.3 110.2 EBIT (profit from operations) 38.1 62.5 64 Financial Result 8.2 8.8 Profit before tax (PBT) 29.9 53.7 80 Effective tax @ 25% (30%)
Slide 39: Operating Cashflow Influenced by Increase in Working Capital
OPERATING CASHFLOW INFLUENCED BY INCREASE IN WORKING CAPITAL Comments €m Q1 2009 Q1 2010 Net income for the period 20.9 40.4 Strong business momentum Income tax expenses 8.9 13.3 supported by consciously Net interest expenses 9.4 9.8 Sub-total 39.3 63.5 extended working capital Amortization and depr
Slide 40: Symrise's Investor Relations
SYMRISE´S INVESTOR RELATIONS PLEASE DO GET IN TOUCH WITH US: SYMRISE AG An der Welle 8 60322 Frankfurt, Germany Dr. Andrea Rolvering Vice President Investor Relations Tel.: +49 - (0)69 - 7593 - 7594 Fax: +49 - (0)5531 - 90 - 49994 andrea.rolvering@symrise.com PAGE 40
Slide 41: Disclaimer
DISCLAIMER This document contains forward-looking statements, which are based on the current estimates and assumptions by the corporate management of Symrise AG. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticip