Slide 1: Capital Markets Day 2017
CAPITAL MARKETS DAY 2017 Creating Sustainable Growth 9/11/2017
Slide 2: Welcome to our Capital Markets Day 2017
Welcome to our Capital Markets Day 2017 2 © 9/11/2017
Slide 3: Disclaimer
Disclaimer This presentation contains ‘forward-looking statements’, based on currently available plans and forecasts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future, and Cor
Slide 4: Strategic Update
STRATEGIC UPDATE TJERK DE RUITER (CEO) 9/11/2017
Slide 5: Corbion at a glance
Corbion at a glance NET SALES 2% Ingredient Solutions Innovation Platforms 98% 19% 10% Chemicals 26% Bakery 13% 15% Pharma/ 41% Medical 63% 50% Meat HPC 6% Other F&B 24% Animal 34% Health ▪ LEADING MARKET POSITIONS IN SUSTAINABLE FOOD INGREDIENTS AND BIOCHEMICALS ▪ LARGEST PRODUCER OF LACTIC ACID ▪
Slide 6: Corbion's alignment with UN Sustainable Development Goals
Corbions alignment with UN Sustainable Development Goals • End hunger • Food security Corbion’s value • Improved nutrition • Sustainable agriculture proposition Offering conscious choices through sustainable ingredient solutions uniquely tailored to create • Reduce, re-use & recycle • Circular econo
Slide 7: Purpose - Vision - Mission
Purpose - Vision – Mission 7 © 9/11/2017
Slide 8: 2014 – 2017: Disciplined Value Creation
2014 – 2017: Disciplined Value Creation Key events 2014 - 2017 • Clear target setting & strict capital allocation • Margin improvement through • Innovative new products • Commercial excellence CAGR 7.0% • Project Streamline • Optimized production footprint in the US • Bakery rationalization affected
Slide 9: 2018-2021: Disciplined Value Creation boosted by Creating Sustainable Growth
2018 -2021: Disciplined Value Creation boosted by Creating Sustainable Growth 9 © 9/11/2017
Slide 10: Driving for growth in Ingredient Solutions - Bakery
Driving for growth in Ingredient Solutions - Bakery • Expand in • US expansion in LatAm sweet goods • US foodservice channel expansion With US operations in better shape, expansion Bakery in Latin America, increased focus on non-bread applications, and foodservice channel expansion 10 © 9/11/2017
Slide 11: Driving for growth in Ingredient Solutions - Meat
Driving for growth in Ingredient Solutions - Meat Meat: Customer demands evolving in mature markets. Moving from product- to solution provider 11 © 9/11/2017
Slide 12: Driving for growth in Ingredient Solutions - Biochemicals
Driving for growth in Ingredient Solutions - Biochemicals • Strengthen broad derivative portfolio • Key growth segments • Pharma • Biomedical • Electronics • Agrochemicals 12 © 9/11/2017
Slide 13: Driving for growth in Innovation Platforms
Driving for growth in Innovation Platforms Recent initiatives in PLA and Algae technology will provide meaningful contributions in coming years 13 © 9/11/2017
Slide 14: Creating Sustainable Growth
Creating Sustainable Growth • • • • • • • • • 14 © 9/11/2017
Slide 15: Sustainability
SUSTAINABILITY MARCEL WUBBOLTS 9/11/2017
Slide 16: Creating a positive impact by growing our business in sustainable ingredient solutions
Creating a positive impact by growing our business in sustainable ingredient solutions and maximizing our contribution to zero hunger and responsible production and consumption (SDG 2 &12) 16 © 9/11/2017
Slide 17: Alignment with UN Sustainable Development Goals
Alignment with UN Sustainable Development Goals Maximize the positive impact of Corbion ✓ End hunger ✓ Reduce, re-use & recycle ✓ Food security ✓ Circular economy ✓ Improved nutrition ✓ Reduce food waste ✓ Sustainable agriculture ✓ Minimize environmental impact of chemicals How Corbion contributes H
Slide 18: Corbion's 2016 carbon footprint
Corbion’s 2016 carbon footprint 10% 51% 11% 10% 3% 1% 12% 1% UPSTREAM DOWNSTREAM 18 © 9/11/2017
Slide 19: Circular economy Packaging example
Circular economy Packaging example 19 © 9/11/2017
Slide 20: Sustainability 2030 Targets
Sustainability 2030 Targets Responsible sourcing • 100% of key agricultural raw materials responsibly sourced • Carbon footprint target for Scope 3 upstream emissions based on science based targets methodology Responsible operations • Zero waste to landfill • 100% renewable electricity • Carbon foot
Slide 21: R&D
R&D MARCEL WUBBOLTS 9/11/2017
Slide 22: Corbion R&D: designed by science and powered by nature
Corbion R&D: designed by science and powered by nature • R&D is a team of 200+ diverse professionals • Corbion R&D will adopt to accommodate the solution model • Stage gate approach to drive success rate • TerraVia asset acquisition adds exciting expansion in our innovation pipeline • R&D intensity
Slide 23: Corbion Key Science & Technology Competences
Corbion Key Science & Technology Competences • Microbiology • Enzymology and biochemistry • Strain development • Industrial microbiology • Process development • Process design • Formulation technology • Polymer technology • Organic chemistry and catalysis • Physical and colloid chemistry • Analytica
Slide 24: Algae fermentation offers wider scope to Corbion
Algae fermentation offers wider scope to Corbion 24 © 9/11/2017
Slide 25: Algae: high yielding, versatile platform for tailored oils
Algae: high yielding, versatile platform for tailored oils Algae cells (>80% lipid content) Triglycerides (e.g. SOS, POP) PUFAs (e.g. Omega-3 DHA) Saturated Fatty Acids (e.g. C14:0) Unsaturated Fatty Acids (e.g. C18:1) Micro-algae can make the same compounds that plants can make – only faster and in
Slide 26: ... and a strong innovation pipeline
... and a strong innovation pipeline 26 © 9/11/2017
Slide 27: Ingredient Solutions
INGREDIENT SOLUTIONS ANDY MULLER 9/11/2017
Slide 28: Ingredient Solutions
Ingredient Solutions € mln CAGR 5.2% • High value ingredients • Shared production platform – lactic acid & 24% Food emulsifiers Biochemicals • Serving multiple end markets: food & non 76% food 28 © 9/11/2017
Slide 29: Ingredient Solutions - Food
Ingredient Solutions - Food € mln CAGR 4.7% • North American market leader in Bakery ingredient-solutions 26% • Worldwide market leader in meat Bakery preservation/antimicrobials 50% Meat Other food • Leading positions in selected niches in 24% confectionery, beverages 29 © 9/11/2017
Slide 30: The consumer conflict: Where dreams clash with reality
The consumer conflict: Where dreams clash with reality 30 © 9/11/2017
Slide 31: How does Corbion help its customers with these dilemmas
How does Corbion help its customers with these dilemmas • Consumer insight - what is driving the customers of our customers? • Application and Tech Service Capability - facilitate rapid implementation of our solutions together with our customers • Conscious choices - in our co-creation with customer
Slide 32: Bakery
BAKERY ANDY MULLER 9/11/2017
Slide 33: Corbion Bakery at a glance
Corbion Bakery at a glance 1% 1% Functional 9% North America 18% blends 14% 31% Mixes & Bases Bread LatAm 18% Sweet goods Emulsifiers EMEA 23% 68% Other APAC Other 28% 89% • Market leading positions in Functional blends and Emulsifiers (25-30% share) in North America • High exposure to Bread and Ind
Slide 34: North American bakery products market
North American bakery products market Bimbo Bakeries USA Bread 2% 24% 30% Flowers Foods 24% Cakes 42% Frozen Baked Pepperidge Farm Goods (Campbell) 4% Pastries 21% Other private label 19% Other 6% Others 28% • North American bread market flat; growth in selected products/channels • Number of large b
Slide 35: Bakery – North America market trends
Bakery – North America market trends Clean Label Shifting Purchase Behaviors Consumers seeking labels shorter Consumers can now purchase baked in length and utilize ingredients items in channels other than the recognizable as something they traditional retailer (convenience may use at home store, on
Slide 36: Expand in sweet goods North America
Expand in sweet goods North America WHY • Sweet goods is faster growing than bread • Our penetration of addressable market is lower • Changing market trends drive a need for our technology in the market • Our differentiated freshness technology will enable us to gain market share HOW 20% • Higher R&
Slide 37: Expand in foodservice channel North America
Expand in foodservice channel North America WHY • North American foodservice market (growing at 5% 17% In-store each year) 33% Foodservice/Out of home 17% • Customer has come to expect more than “just Wholesale convenience” – quality, experience, and taste rule 33% Industrial • Foodservice providers
Slide 38: Expand into Latin America
Expand into Latin America WHY • Our customers continue to expand in LatAm • We can leverage existing customer relationships • Selected markets resemble North America • Industry consolidation creates a shift from artisan to industrial bread • Attractive demographic and market trends HOW Grupo Bimbo •
Slide 39: Cleaner label in bread
Cleaner label in bread Ingredients: Dextrose, Vegetable Ingredients: Sugar, Wheat Flour, Shortening (Partially Hydrogenated Salt, Canola Oil, Enzymes and Soybean, Cottonseed and/or Canola Ascorbic Acid. Oil), Salt, Sugar, Diacetyl Tartaric Acid Esters of Mono- and Diglycerides (DATEM), Soy Flour, Co
Slide 40: Customer example
Customer example “Shipping posed the biggest challenge of all. [...] It was incredibly expensive (each route required a driver, a truck, gas and insurance), eating up 36% of revenue each year.” “The magic bullet turned out to be chemistry. Metropoulos spent millions on R&D, working with food lab Cor
Slide 41: Meat
MEAT RUUD PEERBOOMS 9/11/2017
Slide 42: Global market Meat ingredients
Global market Meat ingredients 40 • Worldwide processed meat market is 35 US$ 600bn 30 25 20 15 • Specialty Meat ingredients market is 10 US$ 3bn 5 0 Beef, Veal Pig meat Poultry 2012 2022 Preservation/Anti microbials 22% Antioxidants 34% Texture/Yield 6% Batters/Breading 16% Colors/Flavors 22% 42 ©
Slide 43: Market trends
Market trends • From lowest cost production... • Reduction of protein cost • Reduction of overhead cost (such as RD&A) • … to Better 4 U: Consumers are moving towards ‘better 4 U’ solutions • but this provides dilemmas for the meat processor Corbion is well positioned to help meat processor customer
Slide 44: Breakthrough of clean label solutions
Breakthrough of clean label solutions 0%4% 6% 20% Clean label Core Economy/LCiU 96% 74% • Clean label solutions have been driving our growth • Clean label solutions have become major category in only 5 years. Rise of economy solutions halted in 2014 44 © 9/11/2017
Slide 45: From product to solution
From product to solution From mostly red meat market to above average growth markets • Poultry • Meat snacks • Affordable meat Increasingly source external ingredients for these functionalities • Anti-oxidation • Yield enhancement • Texturing • Leveraging current position as trusted supplier of food
Slide 46: Transforming low cost Hotdog into a "Better 4 U" item
Transforming low cost Hotdog into a “Better 4 U” item Ingredients MECHANICALLY SEPARATED Ingredients TURKEY, MECHANICALLY MECHANICALLY SEPARATED SEPARATED CHICKEN, PORK, TURKEY, MECHANICALLY WATER, CULTURED DEXTROSE* , SEPARATED CHICKEN, PORK, CONTAINS LESS THAN 2% OF WATER, CORN SYRUP, CONTAINS DEX
Slide 47: Biochemicals
BIOCHEMICALS FREDERIK FEDDES 9/11/2017
Slide 48: Corbion Biochemicals at a glance
Corbion Biochemicals at a glance € mln CAGR 7.0% • Health and Safety drivers dominate growth in Biochemicals 10% Chemicals 41% HPC • Growth in recent years driven by 34% Pharma/Medical Medical/Pharma and Chemicals, offset by slower Animal health market growth in segments impacted by low oil 10% pric
Slide 49: Biomedical – business update key innovations
Biomedical – business update key innovations Strategic positioning Independent partner in medical and pharmaceutical markets combining our expertise in resorbable polymers with expertise of partners in medical devices and pharmaceutical formulations Orthopedics Drug Delivery FiberLive: high strength
Slide 50: Agrochemicals – crop protection
Agrochemicals – crop protection fungi 3% Herbicides 27% weeds 42% Insecticides Fungicides Other 28% Strategy ▪ Grow attainable market ▪ Expand addressable market by developing desired new solvents, surfactants and emulsifiers ▪ Explore new applications within agrochemicals 50 © 9/11/2017
Slide 51: Innovation Platforms
INNOVATION PLATFORMS MARC DEN HARTOG 9/11/2017
Slide 52: Future growth in Innovation Platforms
Future growth in Innovation Platforms Recent initiatives in PLA and Algae technology will provide meaningful contributions in coming years 52 © 9/11/2017
Slide 53: Innovation Platforms at a glance
Innovation Platforms at a glance • Define new strategic value propositions with sizeable market potential • Alignment with mega trends and Corbion’s long term vision • Building strategic partnerships to win in the market place • Leveraging Corbion’s feedstock, fermentation & Down Stream Processing c
Slide 54: Lactic acid: Corbion's anchor product
Lactic acid: Corbion’s anchor product Lactic acid market still attractive • Driven by legislation/regulation changes • Contributor to Food waste prevention • (Food) Safety • Favorable footprint compared to oil- based materials New initiatives to enable further growth • PLA, Bioplastics • Gypsum-free
Slide 55: Progressing our PLA journey
Progressing our PLA journey • 50/50 joint venture with Total • Construction on schedule and budget • Expected opening H2 2018 • Pilot plant opening end of 2017 • Securing further customer approvals • Supportive (EU) dynamics for bioplastics • New application development based on unique properties 55
Slide 56: Construction PLA plant
Construction PLA plant 56 © 9/11/2017
Slide 57: PLA – New applications
PLA – New applications Nonwoven tea bags & coffee pads Thermoformed PLA tray Benefits Benefits • Biobased • High content of renewable resources • Compostable • GMO-free • High heat resistance • Biodegradable • Aroma neutral • Heat resistant up to 135°C (depending on process conditions) • Soft & silk
Slide 58: Biobased Succinic acid (BBSA)
Biobased Succinic acid (BBSA) PBS market development will determine success 1. Partner with BASF – monitor progress market growth and application development biobased PBS by BASF 2. Optimize technology route to be ready for future production, condition to positive market development. Minimize curren
Slide 59: FDCA: Partnerships are key to develop the value proposition
FDCA: Partnerships are key to develop the value proposition Product and Polymer development and production • Industry partners for PEF and other FDCA-based (co-) polymer production • Working with leading manufacturers for selected other FDCA applications PEF applications in food and beverage packagi
Slide 60: Versatile algae product platform
Versatile algae product platform 60 © 9/11/2017
Slide 61: Current algae ingredient portfolio
Current algae ingredient portfolio Omega-3 DHA New source of DHA, enabling algae biomass sustainable growth of aquaculture Specialty fatty Medium chain fatty acids from acids additional supply source besides palm Functional fats and Saturated fat lowering solutions for a.o. oils bakery applications.
Slide 62: AlgaPrime DHA
ALGAPRIME DHA WALT RAKITSKY 9/11/2017
Slide 63: Marine Omega-3s are important at all stages of life
Marine Omega-3s are important at all stages of life 63 © 9/11/2017
Slide 64: Large segments of the population fail to meet health recommendation
Large segments of the population fail to meet health recommendation Over 6 billion people are below 200 mg/day minimum recommended intake 64 © 9/11/2017
Slide 65: New sources for Omega-3s needed
New sources for Omega-3s needed The majority of health organizations recommend a minimum of 200MG E ACH DAY 200 mg of marine omega-3s each day for healthy adults Supply DE MAN D With a growing population of seven billion people – 500 kT demand for marine omega-3s is at an all time high Global annual
Slide 66: SB Oils joint venture
SB Oils joint venture ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ 66 © 9/11/2017
Slide 67: SB Oils joint venture production location
SB Oils joint venture production location Located on the site of Bunge’s Moema sugar mill; about 500km from São Paulo 67 © 9/11/2017
Slide 68: AlgaPrime DHA at a glance
AlgaPrime DHA at a glance • The original source of DHA: Whole algae ingredient from fermentation • High levels of DHA (~30%): Provides C22:6 n3 (DHA) flexibility to formulators 2%2% 6% C16:0 (Palmitic) 29% • Quality: Pure source of oil, rich in DHA 9% C22:5 n6 (DPA) • Stable powder form: Easily inco
Slide 69: Strategic partnership in aquaculture
Strategic partnership in aquaculture 69 © 9/11/2017
Slide 70: Market Leaders in salmon farming
Market Leaders in salmon farming 70 © 9/11/2017
Slide 71: Consumers surrounded by Omega-3 benefit messages
Consumers surrounded by Omega-3 benefit messages Mediterranean Diet Benefits The Human Brain Thanks To Omega-3 Fatty Acids, Fruits And Vegetables “Omega 3s can not only speed your workout recovery, boost your gains, and help you hit new athletic goals, but are also necessary for cardiovascular, brai
Slide 72: Global Salmon Consumer Study
Global Salmon Consumer Study Harris Poll received 11,000 responses from 4,700 consumers across 6 countries. Consistently across consumers in all six countries, the following resonated the most: #1 “Responsibly Farmed Salmon” #2 “Meets Heart Healthy Claim” “Highest in Good Fat” #3 Source: 2017 Harris
Slide 73: Responding to Industry Needs
Responding to Industry Needs 73 © 9/11/2017
Slide 74: Financials
FINANCIALS EDDY VAN RHEDE VAN DER KLOOT 9/11/2017
Slide 75: Disciplined Value Creation – Financial target review
Disciplined Value Creation – Financial target review All guidance targets have been met ahead of schedule, except for organic top- line growth 75 © 9/11/2017
Slide 76: €296M cash returned to shareholders
€ 296M cash returned to shareholders 76 © 9/11/2017
Slide 77: Reporting changes
Reporting changes • Proportionate Consolidated figures in addition to IFRS reporting (for Innovation Platforms) • IFRS: JV results reported on after tax basis; not included in reported Sales and EBITDA • Proportionate consolidation: In addition to IFRS sales and EBITDA, disclosure of proportionately
Slide 78: Updated Guidance - Growth and margin ambitions raised
Updated Guidance - Growth and margin ambitions raised 78 © 9/11/2017
Slide 79: Margin Drivers for Ingredient Solutions
Margin Drivers for Ingredient Solutions 79 © 9/11/2017
Slide 80: Innovation Platforms
Innovation Platforms • Negative EBITDA in earlier years due to ramp up phase of main industrial scale plants (PLA, Omega 3) • Approaching EBITDA (proportionate consolidation) break-even around 2021 80 © 9/11/2017
Slide 81: Capital Expenditures
Capital Expenditures 80 60 40 20 0 2014 2015 2016 Guidance Ingredient Solutions - Maintenance Ingredient Solutions -Expansion Innovation Platforms • Non-recurring capex 2014 – 2016: € 20M • Maintenance capex guidance unchanged • Expansion capex guidance raised • Recurring capex guidance raised from
Slide 82: Progressive dividend policy
Progressive dividend policy Regular dividend • Ambition to pay out annually a stable to gradually increasing absolute dividend amount per share • As a consequence, the payout ratio is an outcome • Payout ratio expected to be in range of 35 – 65% (was 35 – 45%) of the net profit adjusted for one-off
Slide 83: Creating Sustainable Growth
Creating Sustainable Growth • • • • • • • • • • • • • 83 © 9/11/2017
Slide 84: Our vision for 2021
Our vision for 2021 84 © 9/11/2017
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