Slide 1: FY 2020 Results Presentation
FY 2020 RESULTS PRESENTATION 1 11TH AUGUST 2020
Slide 2: Disclaimer
DISCLAIMER This presentation is provided for information purposes only and on the basis of the acceptance of this disclaimer. The information contained herein has not been reviewed or approved by any rating agency, government entity, regulatory body or listing authority and does not constitute listi
Slide 3: Your Presenters Today
YOUR PRESENTERS TODAY Eric Nicolas Gilbert Ghostine Chief Operating Officer & Chief Executive Officer Chief Financial Officer • 9 years at Firmenich • 6 years at Firmenich • Previously at Renault / Nissan Group most recently as SVP, • Previously 21 years at Diageo most recently leading APAC Corporat
Slide 4: Agenda
AGENDA 01 FY 2020 in Review 02 Our Business 03 Financial Review 04 Closing Remarks 05 Q&A 4
Slide 5: FY 2020 in Review
FY 2020 IN REVIEW GILBERT GHOSTINE 5
Slide 6: FY2020 at a Glance
FY2020 AT A GLANCE A Year of Resilience A Year of Leadership Continued industry Reinforced #1 in Flavors & profitability lead Fragrances ingredients • Net Revenue +2.8% Kept our people safe, Exceptional Supply • Gross Margin +90bps supported our Chain continuity • EBITDA Margin +60bps communities an
Slide 7: Solidarity Proved Stronger Than the Virus
SOLIDARITY PROVED STRONGER THAN THE VIRUS We protected our people We supported our We stood by communities our Customers Fast out of the gate to keep our Produced and donated 100 tons of Ensured business continuity, with colleagues safe worldwide hand sanitizer to hospitals in flexibility and creati
Slide 8: FY 2020: Highlights
FY 2020: HIGHLIGHTS Achievements Flavors Consumer Acquisitions Fragrance +4% +6% E-Commerce Smart Sugar Body Home Soap & Savory Southeast >CHF100m Platform Protein Reduction Body Wash Asia Debut Bond +11% CHF2.9bn +120% 20%+ +23% +21% +9% 20%+ +4% +11% Issuance Challenges -15% -6% -1% Fine Beverages
Slide 9: H2 2020: Resilient Performance Despite the Crisis
H2 2020: RESILIENT PERFORMANCE DESPITE THE CRISIS Achievements Flavors Consumer Southeast Middle East & Fragrance Asia Africa +7% +8% +12% +23% Smart Sugar Body Home Soap & Savory Protein Reduction Body wash North Latin America America +118% 20%+ +24% +22% +13% 20%+ +4% +21% +5% +3% Challenges -29%
Slide 10: Exceptional Supply Chain Resilience
EXCEPTIONAL SUPPLY CHAIN RESILIENCE Factories Stayed On Time and Operational In Full 95% Through the Crisis Delivered No Dilutions Record or Reformulations Volumes for our Customers 10
Slide 11: Strengthened Our Lead in Science
STRENGTHENED OUR LEAD IN SCIENCE Leadership in Bio-based Ingredients Launch of Dreamwood, our 4th white biotech ingredient, and our 1st with cosmetic benefits Shaping Smart Protein Solutions Innovating with vegetarian meat and seafood alternatives Science Our Engine of Growth Industry-Leading R&D Co
Slide 12: Strengthened Our Leadership as a Global Responsible Business
STRENGTHENED OUR LEADERSHIP AS A GLOBAL RESPONSIBLE BUSINESS TACKLING CLIMATE CHANGE ADVANCING SOCIAL IMPACT 100% Renewable Electricity UN Global Compact LEAD in All Operations WW 1/36 WW #1 in Industry 1/7 Companies WW Signatory of UN Disability Inclusion: LGBTI Standards 2% Workforce New In Top 5
Slide 13: Transformational Year for M&A
TRANSFORMATIONAL YEAR FOR M&A String of Pearls India savory and seasonings Lead in renewable ingredients with local taste expertise Acquired state-of-the art Establish world’s leading CO2 extraction facility from innovation platform for Evonik sustainable ingredients Become one of the largest Partne
Slide 14: DRT – Status Update
DRT – STATUS UPDATE Key Assumptions Confirmed Status of Integration • Leadership and integration teams High quality, lean and agile platform appointed • Financial reporting consolidation • Culture and talent mapping Energized DRT team with undisputable technical expertise and strong cultural fit • 9
Slide 15: Adapted and Reinforced Our Senior Leadership Team
ADAPTED AND REINFORCED OUR SENIOR LEADERSHIP TEAM New Additions New Roles Jean-Philippe Gianluca Colombo Lebudel Sarah Reisinger Ilaria Resta Benoit Fouilland Chief Procurement Boet Brinkgreve Chief Supply Chain SVP Research Perfumery, President Chief Financial Officer Officer Ingredients, President
Slide 16: Balanced and Experienced Executive Committee
BALANCED AND EXPERIENCED EXECUTIVE COMMITTEE Perfumery, President Chief Operating Officer Ilaria Resta Joined in March 2020, previously at P&G Eric Nicolas 9 years at Firmenich; previously at Renault Chief Financial Officer Ingredients, President Benoit Fouilland Boet Brinkgreve Joining September 20
Slide 17: Our Business
OUR BUSINESS GILBERT GHOSTINE 17
Slide 18: Successful Closing of Our Grow125 Strategic Cycle
SUCCESSFUL CLOSING OF OUR GROW125 STRATEGIC CYCLE Grow125 FY 2017 – FY 2020 OBJECTIVES Achievements Focus on regional Expand ✓ 5% revenue growth CAGR 1 and local commercial reach "dynamo“ customers and capabilities ✓ Best in class EBITDA margin ✓ Reinforced our ESG leadership "String of Pearls" Oper
Slide 19: Firmenich: A Global Leader in the Flavor & Fragrance Industry
FIRMENICH: A GLOBAL LEADER IN THE FLAVOR & FRAGRANCE INDUSTRY 3.9 Billion CHF 5.0% Revenue Growth CAGR2 22.1% Adjusted EBITDA Margin4 Revenues1 9.6% of Revenues Invested 1 100+ Markets1 in R&D Annually5 125 Years Swiss and 10,000 AAA A Recognized Environmental Leader Family-Owned colleagues1 Note: F
Slide 20: Firmenich Today
FIRMENICH TODAY Ingredients (strengthened) ➢ Global leader in F&F Ingredients #1 Ingredients3 ➢ Leading portfolio of sustainable, renewable, biodegradable and natural ingredients 20%1 Flavors Perfumery ➢ Global scale player ➢ Leading position across Perfumery ➢ Leading innovator in plant-based prote
Slide 21: Financial Review
FINANCIAL REVIEW ERIC NICOLAS 21
Slide 22: Financial Achievements
FINANCIAL ACHIEVEMENTS ✓ Strengthened EBITDA margin by 60bps, excluding non-recurring items ✓ Delivered CHF 454m Free Cash Flow, i.e. 55% Cash Conversion Ratio ✓ Low single digit Net Revenue growth ✓ Secured new 5-year Revolving Credit Facility ✓ Successful CHF 2.9bn equivalent Bond program 22
Slide 23: Firmenich Group Key Financials
FIRMENICH GROUP KEY FINANCIALS Net Revenue & Growth Rate Gross Profit & Margin Adj. EBITDA & Margin1 In CHF m In CHF m In CHF m 3 874 3 878 1 693 1 728 859 833 43.7% 44.6% 21.5% 22.1% 2019A 2020A 2019A 2020A 2019A 2020A LC Growth (%) Margin (%) Change in Margin (bps) Note: Financial Year ends 30 Jun
Slide 24: Revenue by Geography
REVENUE BY GEOGRAPHY Net Revenue by Region Growth Markets vs. Developed Markets In CHF m 3’874 3’878 LC Growth (%) Europe 1’252 1’191 (1.5%) Growth Developed 46% Markets 54% Markets 977 +0.4% North America 989 Latin America 506 503 +2.2% Balanced exposure to strongly growing markets including China
Slide 25: Perfumery & Ingredients
PERFUMERY & INGREDIENTS Net Revenue & Growth Adj. EBITDA & Margin1 In CHF m In CHF m 2 458 2 450 519 532 21.1% 21.7% 2019A 2020A 2019A 2020A LC Growth (%) Margin (%) Change in Margin (bps) ▪ Negative impact of Covid-19 crisis on Fine Fragrance, offset by strong performance of Consumer Fragrance ▪ Lo
Slide 26: Flavors
FLAVORS Net Revenue & Growth Adj. EBITDA & Margin1 In CHF m In CHF m 1 415 1 428 313 327 22.1% 22.9% 2019A 2020A 2019A 2020A LC Growth (%) Margin (%) Change in Margin (bps) ▪ Beverages decline linked to Covid-19 crisis, more than offset by ▪ Improved profitability linked to deep consumer insights to
Slide 27: Free Cash Flow Evolution
FREE CASH FLOW EVOLUTION In CHF m -36 -129 +248 55% 50% -188 ▪ Cost discipline ▪ Inventories and receivables increased, linked to Covid-19 crisis, but offset by 559 454 timing of payables cycle 421 ▪ Moderate capex reduction Net Adjustment Working Tax and Net FCF FCF Income for non- Capital Interest
Slide 28: Leverage & Financial Policy
LEVERAGE & FINANCIAL POLICY Inaugural Bond Issuances – Sources & Uses Mid-to-Long term Financial Policy (in CHFm) Sources Uses ▪ Aim to maintain a conservative capital structure commensurate with a strong 2026 / 2030 Eurobonds 1 585 Acquisition of DRT Equity 1 115 Leverage investment grade credit ra
Slide 29: DRT Financial Integration
DRT FINANCIAL INTEGRATION Income Statement Impact Goodwill ▪ Transaction closed end of May 2020 ▪ All DRT debt has been refinanced with ▪ FY2020 P&L impact not material proceeds from the Firmenich Bond program ▪ Fully consolidate DRT into Firmenich financials ▪ Purchase Price Allocation analysis res
Slide 30: Closing Remarks
CLOSING REMARKS GILBERT GHOSTINE 30
Slide 31: Why Firmenich Is a Good Investment
WHY FIRMENICH IS A GOOD INVESTMENT A market leader with critical scale and competitive advantages Proven track record of organic growth and successful bolt-on acquisitions Leadership in Science and highly innovative product portfolio Diversified across resilient end markets Private company operating
Slide 32: Adapted Strategy, Executed with Agility
ADAPTED STRATEGY, EXECUTED WITH AGILITY FUTURE-PROOFING OUR COMPANY 32
Slide 33: © Firmenich
© Firmenich