International Flavors & Fragrances, Inc. · NYSE:IFF
International Flavors & Fragrances — Q2 2020 Earnings Presentation
19 slides from International Flavors & Fragrances's earnings presentation, Aug 11, 2020
Slide 1: Q2 2020 Earnings Conference Call
Q2 2020 EARNINGS CONFERENCE CALL August 11, 2020
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: Cautionary Statement: Use of Non-GAAP Financial Measures
C A U T I O N A RY S TAT E M E N T Use of Non-GAAP Financial Measures We provide in this presentation non-GAAP financial measures, including: (i) currency neutral sales; (ii) adjusted operating profit ex amortization; (iii) currency neutral adjusted operating profit ex amortization; (iv) adjusted op
Slide 4: Today's Speakers
Andreas Fibig Rustom Jilla Michael DeVeau Chairman and Executive Vice Vice President, Chief Executive Officer President, Chief Investor Relations Financial Officer & Communications TODAY’S SPEAKERS
Slide 5: Agenda
AGENDA 1. Executive Highlights 2. COVID-19 Status 3. Financial Review 4. IFF & Dupont N&B Update 5. Q&A 5
Slide 6: Executive Highlights
EXECUTIVE HIGHLIGHTS 1H 2020 key accomplishments • Business resilient through first half of 2020 amid COVID-19 ‒ ~15%* of portfolio (Fine Fragrance & Food Service): (22)%** ‒ ~85%* of portfolio (Food, Beverage, Hygiene & Disinfection): +5%** • Frutarom integration progressing – achieved solid cost s
Slide 7: 1H 2020 Financial Summary
1 H 2 0 2 0 F I N A N C I A L S U M M A RY Business resilient amid COVID-19 $2.5B $478M $2.99 SALES ADJ. OPERATING PROFIT EX AMORT* ADJ. EPS EX AMORT* • Currency neutral sales* grew 1% led by strong growth in Consumer Fragrances & Savory Solutions • Adjusted operating profit ex amortization and adju
Slide 8: COVID-19 Impact Assessment
C O V I D - 1 9 : I M PA C T A S S E S S M E N T Continuing to successfully navigate and operate in the “new normal” 1 • Closely monitoring evolving global and local regulatory policies Health & Safety • Ensuring our employees’ safety and well-being #1 priority 2 • Cost continue to be higher due to
Slide 9: Q2 2020 Financial Performance
Q2 2020 FINANCIAL PERFORMANCE Results impacted during peak COVID-19 environment Q 2 R E S U LT S COMMENTARY • Currency neutral sales* decline 4% in Q2 $1.2B • Fine Fragrance & Food Service combined SALES declined 38% on a currency neutral basis* • Remainder of portfolio including food, beverage, hyg
Slide 10: Q2 2020 Sales Dynamics
Q2 2020 SALES DYNAMICS Insight into the drivers of year-over-year change CONTINUED S U P P LY M AR K E T STRENGTH C H AL L E N G E PRESSURE Taste Ex Consumer Fragrance Food Fine Fragrances / Food Service Fragrances Ingredients Service Cosmetic Actives 10
Slide 11: Q2 2020 Profitability Dynamics
Q 2 2 0 2 0 P R O F I TA B I L I T Y D Y N A M I C S Synergies & productivity offset primarily by lower sales volume, pricing & mix Currency Neutral Adjusted Operating Profit Ex Amortization* Q2 '19 Volume Price Mix Incremental COVID-19 Synergies Productivity Other Q2 '20 COVID-19 11 * Non-GAAP metr
Slide 12: Scent Results
S C E N T R E S U LT S Q2 2020 performance review C U R R E N C Y N E U T R AL S AL E S G R O W T H * SEGMENT PROFIT Q2 2020: (4)% Segment Profit • Double-digit performance in Consumer Fragrance $70M led by robust growth in Fabric, Home, Hair Care & Personal Wash • Fine Fragrance down 40% primarily
Slide 13: Taste Results
TA S T E R E S U LT S Q2 2020 performance review C U R R E N C Y N E U T R AL S AL E S G R O W T H * SEGMENT PROFIT Q2 2020: (5)% Segment Profit • Food Service experienced significant pressure $107M** declining 36% due to the impact of COVID-19 • North America showed resiliency, but the emerging 14.
Slide 14: Cash Flow Dynamics
CASH FLOW DYNAMICS Strong double-digit improvement in operating cash flow & free cash flow 1 H 2 0 2 0 C AS H F L O W C O M M E N TARY Operating Cash Flow • Operating cash flow +12% led by core working capital $160 $(137) • Core working capital improvement driven by Days Payable Outstanding & Days S
Slide 15: Q3 Sales Dynamics
Q3 SALES DYNAMICS Marked improvement since pandemic began with July sales positive Y E AR - O V E R - Y E AR M O N T H LY C O M M E N TARY P E R F O R M AN C E * Q1 ‘20 Q2 ‘20 Q3 ‘20 • Strong start to the year with mid-single digit currency neutral sales growth 10% 8% 6% • Emergence of COVID-19 impa
Slide 16: Looking Ahead
LOOKING AHEAD Global conditions remain volatile & unpredictable • Remain fortunate that majority of portfolio is essential for Food, Beverage, Hygiene & Disinfection products • Expect Fragrance Ingredients and Cosmetic Actives to improve going forward; Fine Fragrance & Food Service will remain under
Slide 17: N&B Integration Planning
N & B I N T E G R AT I O N P L A N N I N G Shareholder meeting announced; On-track with execution timeline Q4 FIRST HALF SECOND HALF Q1 POST 2019 2020 2020 2021 CLOSE Purpose, Integration Revenue Cleared U.S. Initial Vision, IFF Permanent $7.3B Cash Agreement Management Anticipated & Cost Regulatory
Slide 18: Summary
S U M M A RY Business resilient through first half of 2020 amid COVID-19 Frutarom integration progressing well, with solid revenue and cost synergies achieved to date Made significant advancements in N&B planning & announced the date for shareholder vote for August 27, 2020 Proud of our employees wh
Slide 19: IFF
iF F
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