International Flavors & Fragrances, Inc. · NYSE:IFF
International Flavors & Fragrances — Merger or Acquisition (May 2018)
26 slides from International Flavors & Fragrances's merger presentation, May 7, 2018
Slide 1: IFF & Frutarom: Creating a Global Leader in Taste, Scent & Nutrition
2 IFF & Frutarom Creating a Global Leader in Taste, Scent & Nutrition
Slide 2: Cautionary Statement
Cautionary Statement 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 or Frutarom’s expected future financial position,
Slide 3: Important Additional Information & Where to Find It
Important Additional Information & Where to Find It This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation
Slide 4: Conference Call Participants
Conference Call Participants Andreas Fibig Ori Yehudai Richard O’Leary Chairman & Chief Executive Officer, President & Chief Executive Officer, Executive Vice President & IFF Frutarom Chief Financial Officer, IFF 4
Slide 5: Agenda
Agenda IFF & Frutarom: A Compelling Combination IFF Q1 2018 Earnings Results & FY 2018 Outlook Q&A Discussion
Slide 6: A Compelling Combination
A Compelling Combination Establishes a global leader in natural taste, scent and nutrition with expected 2018 pro-forma sales of $5.3 billion Unique position in natural solutions Brings new opportunities in attractive and fast-growing adjacencies, including enzymes, antioxidants, health ingredients
Slide 7: Enhanced Value for Shareholders
Enhanced Value for Shareholders • IFF to acquire Frutarom for $106.25* per share; 67% cash / 33% stock C O N S I DE RA TIO N • Represents $71.19 per share in cash and 0.249 of a share of IFF common stock • Transaction valued at ~$7.1 billion, including assumption of Frutarom’s net debt • Represents
Slide 8: Foundation for Growth
Foundation for Growth • Cash consideration expected to be financed with a combination of existing cash on hand, new debt raised and new equity FI N A N C IN G • Commitment to maintain investment grade credit rating; reduce leverage to 3.0x adjusted EBITDA or lower within 18-24 months after closing •
Slide 9: Frutarom's Impressive Growth Story
Frutarom’s Impressive Growth Story 23%1 Sales in $M ~2,250 ~22%1 268 EBITDA Revenue 217 Above 170 1,600 152 1,362 120 1,147 100 80 873 820 66 49 618 674 32 518 14 425 9 287 197 81 108 2000 2002 2004 2006 2009 2011 2012 2013 2014 2015 2016 2017 2018E 2020 (1) Core business EBITDA Previously Announced
Slide 10: Frutarom's Business Profile
Frutarom’s Business Profile Taste Solutions 75% OF SALES • Unique, high quality creation of sweet and savory flavors for food and beverage • Leader in value-added functional savory solutions • Comprehensive sweet and savory food systems • Unique technologies for fruit, spice, vegetable, meat and fis
Slide 11: Compelling Strategic Rationale
Compelling Strategic Rationale N A TUR A L • Creates global leader in natural solutions • Well-positioned to address customer & consumer demands • Expands beyond flavors and fragrances into fast-growing POR TFOL I O categories of natural colors, enzymes, antioxidants & health ingredients • Comprehen
Slide 12: Compelling Product Portfolio Leading in Naturals
Compelling Product Portfolio Leading in Naturals Capabilities Natural Extracts Natural Botanicals Natural Antioxidants Natural Colors Scent Taste Nutrition Fragrance Flavor Health & Wellness Top-tier player in Leader in the Unique exposure the Fragrance market Flavor market to prioritized Adjacencie
Slide 13: IFF & Frutarom Creates a Global Leader
IFF & Frutarom Creates a Global Leader $6 5.3 $4 3.7 $2 1.6 $0 + Estimated 2018 Total Sales ($B) 13
Slide 14: Differentiating Portfolio of Fast-Growing Categories
Differentiating Portfolio of Fast-Growing Categories E x p e c t e d C A T E G O R I E S IFF I F F + F r u t a r o m G 14
Slide 15: Integrated Solutions Create New Platform for Growth
Integrated Solutions Create New Platform for Growth • Flavors • Fragrances Robust innovation pipeline and R&D Fine • R&D and Innovation capabilities to develop Fragrance value-added solutions & Consumer bundling Cosmetic F R U T AR O M E X P E R T I S E Global operational footprint in relevant Suppl
Slide 16: Expands Exposure to Small & Mid-Sized Customers
Expands Exposure to Small & Mid-Sized Customers % of 2018 Sales Global Multinational Foundational Growth 40% C ustomers Opportunities 50% Local, Regional Accelerated 60% & Private Label Growth 50% Opportunities Customers 2x+ Growth Rate IFF IFF + & Flavors Flavors Increased Exposure To Faster Growin
Slide 17: Combination Creates Significant Synergies
Combination Creates Significant Synergies S I G N I F I C A N T P O T E N T I AL C O S T S Y N E R G I E S $145M Annual Cost Synergies By Third Full Year Procurement: Accelerate rationalization & harmonization Infrastructure: Optimize global footprint General & Administrative: Streamline overhead ex
Slide 18: Compelling Value Creation Opportunity
Compelling Value Creation Opportunity Sales Accelerating Organic and Inorganic Revenue Generation Profit EBITDA Margin Expansion via Realization of Cost and Cross-Selling Synergies EPS Double Digit Adjusted Cash EPS Accretive 2 in Year Cash Flow Enhanced Cash Flow to Meet Operating, Financing and St
Slide 19: Transaction Aligns with IFF's Strategy
Transaction Aligns with IFF’s Strategy S T R AT E G I C P R I O R I T Y F R U T AR O M I M P AC T DRIVE Drive enhancements in key R&D platforms: naturals, modulation, DIFFERENTIATION delivery, ingredients, active cosmetics and health & nutrition BALANCE Accelerate growth with regional & local custom
Slide 20: IFF Q1 2018 Earnings Results
IFF Q1 2018 Earnings Results May 7, 2018
Slide 21: Executive Summary: Q1 2018
Executive Summary: Q1 2018 Currency Neutral Sales Growth* • Broad-based growth driven by balanced contribution from both Flavors and Fragrances Currency Neutral Adjusted Operating Profit* • Principally driven by volume growth, the benefits associated with cost and productivity initiatives and favora
Slide 22: Flavors Review: Q1 2018
Flavors Review: Q1 2018 +11%*Led by strong double-digit growth in Africa and the Middle East as well as mid-single EAME digit growth in Europe +10%* NORTH AMERICA Driven by double-digit growth at Tastepointâ„ and strong new wins in Beverage and Dairy (2)%* LATIN AMERICA Mid-single digit growth in th
Slide 23: Fragrance Review: Q1 2018
Fragrance Review: Q1 2018 +8% TOTAL SALES* +6%* CONSUMER FRAGRANCE Growth achieved in all categories, led by high-single digit performances in Home Care, Toiletries, and Hair Care +4%* FINE FRAGRANCE Led by strong double-digit growth in LATAM and North America +18%* FRAGRANCE INGREDIENTS Driven by g
Slide 24: 2018 Financial Outlook
2018 Financial Outlook ADJUSTED IMPACT OF AD JUSTED* CURRENCY NEUTRAL* CURRENCY SALES 3.0%—5.0% ~3.0 ppt 6.0%—8.0% OPERATING 5.0%—7.0% ~1.5 ppt 6.5%—8.5% PROFIT EPS 4.0%—6.0% ~1.5 ppt 5.5%—7.5% Reconfirming 2018 Guidance; Expect to be closer to upper-end of sales & operating profit range * Currency
Slide 25: Summary
Summary • IFF & Frutarom combination establishes a global leader in natural taste, scent and nutrition with expected 2018 pro-forma sales of $5.3 billion • Unique position in natural solutions, new opportunities in attractive adjacencies & strengthens exposure to fast-growing customers • Enhanced pl
Slide 26: Q&A
NTERNATIONAL FLAVORS & FRAGRANCES Q&A
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