Croda International Plc · LSE:CRDA
Croda International — Merger or Acquisition (November 2020)
23 slides from Croda International's merger presentation, November 2020
Slide 1: Proposed acquisition of Iberchem and c.£600m placing
Croda International Plc: November 2020 Proposed acquisition of Iberchem and c.£600m placing
Slide 2: Cautionary statement 1 of 2
Cautionary statement 1 of 2 The information contained in this Presentation is strictly private and confidential and may not be reproduced, redistributed or disclosed in THIS PRESENTATION, ITS CONTENTS AND ANY INFORMATION PROVIDED any way in whole or in part to any other person without the prior writ
Slide 3: Cautionary statement 2 of 2
Cautionary statement 2 of 2 No representation or warranty, express or implied, is given by or on behalf of the Company or any of its parent or subsidiary undertakings or This Presentation is not an offer to sell or a solicitation of an offer to buy any securities and is not for publication or distri
Slide 4: Agenda
Agenda • Transaction summary and financing • About Iberchem • Combination benefits 4
Slide 5: Transaction summary and financing
Transaction summary and financing 5
Slide 6: Strengthening Personal Care and Home Care with targeted F&F acquisition
Strengthening Personal Care and Home Care with targeted F&F acquisition Strong strategic alignment with Croda High growth segment, particularly in emerging markets • Global fragrance market expected to reach $58.8bn in 2024 (1) Smart Science to Improve LivesTM Our purpose • 5.6% global CAGR 2020-202
Slide 7: Acquisition of Iberchem, a global F&F specialist
Acquisition of Iberchem, a global F&F specialist Compelling strategic rationale Strong financial rationale EPS accretive from year 1 and strongly 1. Excellent financial track record 1. accretive thereafter Access to high growth adjacency with significant 2. emerging markets exposure 2. Significant m
Slide 8: Transaction summary and financing
Transaction summary and financing Transaction summary • €820m total consideration (c.£736m) on a debt-free, cash-free basis; 20.5x EV/EBITDA(1) • Funded via: – Group’s existing debt facilities – Placing of new ordinary shares to institutional investors o Expected net proceeds of c.£600m o Conducted
Slide 9: About Iberchem
About Iberchem Smart Science to Improve lives™
Slide 10: Iberchem: a global fragrance-led company with distinctive positioning
Iberchem: a global fragrance-led company with distinctive positioning Sales by division(2) Sales by region(2) € 187m €40m LatAm 8% revenues in 2020F Flavours 20% EBITDA in 2020F Asia 36% + 14% 21% Europe 17% growth (CAGR 2016-20F) EBITDA margin Home Care Personal Care Middle East Fragrances Fragranc
Slide 11: Focused on fragrances for Personal Care and Home Care
Focused on fragrances for Personal Care and Home Care 80% fragrances 20% flavours 36,500 fragrance references 18,000 flavour references 50% Personal Care 50% Home Care 80% food and drink • Perfumes • Fabric care • Hair care • Surface cleaner • Bath and shower • Air care • Facial care • Dishwashing 2
Slide 12: Highly compatible business model aligned to "the Croda way"
Highly compatible business model aligned to “the Croda way” Iberchem business model Iberchem business model strengths Croda key strengths 2. Global platform Strong growth through favourable macro-trends 1. Excellent financial with significant track record exposure to high growth markets Focus on Per
Slide 13: 1. Excellent financial track record
1. Excellent financial track record Consistent organic growth across the cycle Strong profit growth and attractive cash profile +15% CAGR +20% CAGR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F Revenue EBITDA • Revenue €174m (c.£153m)
Slide 14: 2. Global platform with significant exposure to high growth markets
2. Global platform with significant exposure to high growth markets Revenues by region(1) LatAm Russia 8% Europe Asia 17% 36% €174m (2019A) 25% of total Iberchem Middle East Italy sales to China 17% Africa 22% Turkey India Spain Tunisia China Dubai Mexico Thailand 83% of total Iberchem Ethiopia Colo
Slide 15: 3. Long-standing customer-centric model
3. Long-standing customer-centric model • Strong customer intimacy(1) Number of active customers • Focused on customer niches not targeted by larger competitors 4000 +12% • “Fast-to-customer” model well suited to mid-size customers 3500 CAGR • Tailor-made products 3000 • Growth strategy targeting 25
Slide 16: 4. Strong, customer-driven R&D focus
4. Strong, customer-driven R&D focus Formulation-led approach State of the art and recent R&D laboratories • Well established culture of innovation • 10 R&D centres and 240 R&D technicians(1) • 2019: invested in state-of-the-art applications laboratory • 22 Perfumers, 9 Flavourists New development I
Slide 17: Combination benefits
Combination benefits Smart Science to Improve lives™
Slide 18: Strong financial fundamentals and significant revenue synergies
Strong financial fundamentals and significant revenue synergies Strong financial fundamentals Organic revenue(1) Net working capital growth EBITDA margin (2) Cash conversion (3) as % sales Capex as % sales 2019A 20.0% 19.7% 85.3% 25.5% 2.9% 2020F 7.4% 21.2% 84.5% 28.8% 3.3% Targeting €25m annual rev
Slide 19: Croda and Iberchem – creating a full service formulation and fragrance offer
Croda and Iberchem – creating a full service formulation and fragrance offer EXAMPLE FORMULA Croda “Clearly Conditioning” Shampoo Ingredients % w/w Deionised Water 67.40 Croda ingredients Standard cleansing agent 20.00 Boosts and stabilises foam Crodateric CAB 30 5.00 Iberchem ingredients Provides v
Slide 20: Significant cross selling opportunities
Significant cross selling opportunities Regions where Croda is stronger Region Croda Iberchem Regions where Iberchem is stronger Europe 37% 17% N America 27% - A region where both companies Latam 10% 8% have a significant presence Asia 22% 36% Middle East 2% 17% Africa 2% 22% Table shows % 2019A rev
Slide 21: Driving our focus on Consumer Care
Driving our focus on Consumer Care • Group’s Core Business will comprise 3 sectors: – Consumer Care Core Business – Life Sciences – Performance Technologies Life Consumer Performance Industrial • New Consumer Care sector Sciences Care Technologies Chemicals from 2021 • Comparative 2020 numbers to be
Slide 22: Compelling strategic rationale
Compelling strategic rationale Compelling strategic rationale 1. Excellent financial track record Access to high growth adjacency with significant 2. emerging markets exposure 3. Creates a one stop shop for Consumer Care customers 4. Long-standing, agile and responsive customer-centric model 5. Dyna
Slide 23: CRODA
CRODA
Croda International — Merger or Acquisition (November 2020) on 6ix