International Flavors & Fragrances, Inc. · NYSE:IFF
International Flavors & Fragrances — Investor Presentation (January 2021)
28 slides from International Flavors & Fragrances's investor presentation, January 2021
Slide 1: A Clear Path to Deliver Compelling Shareholder Value
A Clear Path to Deliver Compelling Shareholder Value January 2021
Slide 2: Cautionary Statement
C A U T I O N A RY S TAT E M E N T This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding IFF’s expected future financial position,
Slide 3: Non-GAAP Measures; Additional Information
N O N - G A A P M E A S U R E S ; A D D I T I O N A L I N F O R M AT I O N Use of Non-GAAP Financial Measures We provide in this presentation non-GAAP financial measures, including: (i) currency neutral sales; (ii) adjusted EBITDA; (iii) adjusted EBITDA margin; (iv) free cash flow; (v) net debt to a
Slide 4: Speakers
Andreas Fibig Rustom Jilla Michael DeVeau Chairman and Executive Vice Senior Vice President, Chief Executive Officer President, Chief Investor Relations Financial Officer & Communications SPEAKERS
Slide 5: Agenda
AGENDA 1. A New Industry-Defining Leader 2. ESG Leadership at the Core of Business 3. Substantial Synergy Opportunities to Drive Value Creation 4. Best-in-Class Financial Profile 5. Strong Management Team and Board of Directors 6. Summary 5
Slide 6: A Compelling Combination
A C O M P E L L I N G C O M B I N AT I O N Significant value creation opportunities across all stakeholders STRATEGIC RATIONALE VALUE PROPOSITION A global leader in taste, BROADENS • Expands breadth of capabilities scent and nutrition C AT E G O RY • #1 or #2 position across complementary EXPOSURE h
Slide 7: The New IFF
THE NEW IFF We Will Win On A REIMAGINED INNOVATION PARTNER… Execution • Unmatched scale, R&D capabilities and portfolio strength to lead industry evolution • A partner that is uniquely positioned at the intersection of science and creativity to deliver essential solutions through industry-leading in
Slide 8: The New Industry-Defining Leader
T H E N E W I N D U S T RY- D E F I N I N G L E A D E R Scale & portfolio strength creates competitive advantage as industry transforms ~26% ~48% ~43% +$11B 1.5X #1 or #2 pro-forma pro-forma sales to pro-forma pro-forma pro-forma in core small, medium & emerging EBITDA revenue R&D investment categor
Slide 9: Leader Across Attractive Markets
L E A D E R A C R O S S AT T R A C T I V E M A R K E T S Breadth of capability & exposure establishes leading competitive position IFF + DuPont N&B Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Functional Solutions(1) ✔ ✔ Beverage ✔ Food & Emulsifiers & Lecithin Sweeteners (2) ✔ Plant Protein (2) ✔ Cult
Slide 10: Consumer Trends Reshaping Value Chain
CONSUMER TRENDS RESHAPING VALUE CHAIN Significant opportunity for IFF customers with innovation S U S TA I N E D A C C E L E R AT I N G I M PA C T I N G A L L TRENDS TRENDS CUSTOMERS Natural, health Healthy Food Global Champions & wellness All of this leads Plant Protein Regional Leaders to higher C
Slide 11: Well-Positioned to Win
W E L L - P O S I T I O N E D TO W I N Strongest partner to co-create essential solutions for on-trend innovation C U S TO M E R E X P E C TAT I O N S I F F ’ S C O M P E T I T I V E A D VA N TA G E Customers are outsourcing innovation ✓ Leading co-creation capability supported by the & becoming inc
Slide 12: Broadest Product Offering
BROADEST PRODUCT OFFERING Enhanced offering with the highest product value for all customers IFF OFFERING VA L U E TO C U S TO M E R Single Ingredients Quality of category-leading Broadest portfolio of single ingredients Highly competitive field ingredient portfolio Quality of category leader Multip
Slide 13: Unrivaled Innovation Platform
U N R I VA L L E D I N N O VAT I O N P L AT F O R M Unlocking value for customers in line with consumer demand FABRIC CARE FOOD & BEVERAGE INGREDIENTS Superior Cold Water Laundry Detergent Better Plant-Based Burger More Secure & Robust Ingredient Pipeline CONSUMER Plant Health Food Sustainability He
Slide 14: ESG Core to Our Success
E S G C O R E TO O U R S U C C E S S Ambitious targets with increased focus on reporting and transparency FOCUS OUR EFFORTS SET CLEAR TARGETS REPORT PROGRESS Reducing greenhouse gas 2025 EcoEffective+ goals (GHG) emissions, include Science Based On track to achieve 2025 Environmental Footprint conse
Slide 15: Proven Ability to Accomplish Objectives
P R O V E N A B I L I T Y TO A C C O M P L I S H O B J E C T I V E S Our commitment to ESG has set the standard for the industry R AT I N G S RANKINGS We are committed to making real progress at every opportunity ESG Score: 79 (Leader) Met and exceeded 3 of 4 2020 6 / 127 Chemicals industry environm
Slide 16: Significant Synergy Opportunities
SIGNIFICANT SYNERGY OPPORTUNITIES Combination creates platform for strong shareholder value creation REVENUE SYNERGIES COST SYNERGIES $400M $300M Run-rate achieved by the end of year three Run-rate achieved by the end of year three EBITDA Impact of $145M Net of Reinvestments Cost to Achieve Year Thr
Slide 17: Expected Revenue Synergy Contribution
EXPECTED REVENUE SYNERGY CONTRIBUTION Accelerating top-line performance in year two and year three post deal close REVENUE SYNERGY APPROACH REVENUE SYNERGY RAMP ◤ Expecting 12–18-month incubation to commercialization SALES EBITDA leading to a rapid ramp up post year one 2021 Identify opportunities t
Slide 18: Defining Priority Growth Opportunities
DEFINING PRIORITY GROWTH OPPORTUNITIES Leveraging customer scale to sharpen go-to-market approach End Market Example Proactive Initiatives • Solutions for delivering superior mouthfeel for beverages targeting low sugar, clean label • Engaging in many conversations with Food & • Meat alternatives: so
Slide 19: Expected Cost Synergy Contribution
EXPECTED COST SYNERGY CONTRIBUTION Substantial opportunity to drive margin expansion with $300 million of synergies COST SYNERGY TIMING S O U R C E S O F VA L U E C R E AT I O N $300M $285M $220M 50% 35% 15% $180M PROCUREMENT $120M $45M GENERAL & A D M I N I S T R AT I V E C O S T S • XXXXX • XXXXX
Slide 20: Clear Execution Plan
CLEAR EXECUTION PLAN Unlocking savings by leveraging combined strength & optimizing non-strategic costs GENERAL & PROCUREMENT O P E R AT I O N S A D M I N I S T R AT I V E C O S T S Accelerate Rationalization Streamline Rationalization & Harmonization Overhead Expenses Operations ◤ Supplier consolid
Slide 21: Long-Term Financial Outlook
LONG-TERM FINANCIAL OUTLOOK Execution set to deliver best-in-class financial profile 4 - 5% ~26% ~$2B <3.0x Currency Neutral EBITDA Free Targeting Organic Sales Margin Cash Flow¹ Net Debt to Growth in 2023 Generation EBITDA in 24 to in 2023² 36months post close Strong Position to Generate Shareholde
Slide 22: Best-in-Class Financial Profile
B E S T- I N - C L A S S F I N A N C I A L P R O F I L E Leading revenue, EBITDA margin & free cash flow generation REVENUE1 $11.1B $7.1B $6.7B $6.7B $4.0B IFF + N&B Peer 1 3 Peer 2 Peer 3 3 Peer 4 Significant Valuation EBITDA MARGIN1 ~26% by 20234 22 Multiple Expansion 22% 21% 21% 21% 18% Opportuni
Slide 23: Capital Allocation Policy
C A P I TA L A L L O C AT I O N P O L I C Y Committed to maintaining strong balance sheet to deliver shareholder value CAPEX INVESTMENT TO SUPPORT BUSINESS 1 2 Debt Repayment Dividend Policy Free cash flow net of dividend IFF is committed payments to be deployed to to maintaining pay down debt curre
Slide 24: Defined Structure to Ensure Execution
DEFINED STRUCTURE TO ENSURE EXECUTION Cross-functional group empowered to deliver value creation opportunity I N T E G R AT I O N M A N A G E M E N T O F F I C E STRUCTURED APPROACH ✓ Full-year of integration planning process completed CEO/CFO Ownership • Ensure accountability ✓ Transition of integr
Slide 25: Exceptional Leadership Team
LEGACY IFF LEGACY N&B EXCEPTIONAL LEADERSHIP TEAM NEW TO IFF (SINCE 2020) Highly talented, diverse and experienced team focused on execution DIVISIONAL LEADERSHIP CHAIRMAN & CEO TASTE, FOOD & BEVERAGE H E AL T H & B I O S C I E N C E S SCENT PHARMA SOLUTIONS Andreas Kathy Simon Nicolas Angela Fibig
Slide 26: Best-in-Class Board of Directors
BEST-IN-CLASS BOARD OF DIRECTORS Global insight with a fresh perspective and focus on execution Andreas Fibig Significant representation from both IFF and DuPont – equal representation as of IFF Chairman and CEO 2022 Annual Meeting (since 2014) • President and Chairman of Bayer Proven executives wit
Slide 27: Best-in-Class Board of Directors
BEST-IN-CLASS BOARD OF DIRECTORS Global insight with a fresh perspective and focus on execution Christina Gold Ilene Gordon Former CEO, Western Union Former Chairman, President and CEO (2006-2010) of Ingredion Incorporated • Board of Directors, IFF (Since 2013) (2009-2018) • Non-Executive Chairman,
Slide 28: The New IFF
THE NEW IFF Highly Focused on Execution to Deliver ✓ Unmatched scale & portfolio to lead industry evolution & accelerate growth Shareholder Value ✓ Disciplined focus on synergies & productivity to lead to industry-leading margin ✓ Proven ability to embed ESG into strategy & enhance our leading ESG p
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