Givaudan SA · SIX:GIVN
Givaudan SA — Investor Day (April 2009)
62 slides from Givaudan SA's investor day presentation, Apr 3, 2009
Slide 1: Annual Investor Conference / Q1 sales 2009
Annual Investor Conference / Q1 sales 2009 Consumer Products and Flavours resilient Vernier, 3 April 2009
Slide 2: Gilles Andrier, CEO
Givaudan® leading Sensory Innovation Gilles Andrier CEO
Slide 3: Agenda
Agenda Q1 2009 sales (Gilles Andrier) Actual and short term situation (Gilles Andrier) Full Year 2008 (Matthias Waehren) Consumer Products (Colin O’Neill) Flavours (Louie D’Amico) Outlook (Gilles Andrier) 3 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 4: Sales Q1 2009
Sales Q1 2009 Growth vs. 2008 in local currencies - 2.6% - 2.1% Growth vs. 2008 in CHF In Mio CHF Excluding impact of divested flavour business - 7.3% 1'100 976.1 1'000 900 - 0.3% + 0.8% 800 - 5.4% - 4.6% 700 -10.4% 600 537.7 500 438.4 400 300 200 100 0 Group Fragrances Flavours 4 Annual Investor Co
Slide 5: Actual fragrance and flavour market situation
Actual fragrance and flavour market situation Strong destocking throughout the supply chain in Q1 Fine Fragrance sales most probably to suffer in whole 2009 (consumer confidence, travel activity) Sales of some discretionary items in consumer products fragrances and flavours under pressure as l
Slide 6: First quarter sales Fragrances
First quarter sales Fragrances Fine Fragrances declined in North America and Europe due to destocking and weak demand Fine Fragrances in Latin America showed solid growth as a result of new wins and volume gains of existing business Sales in Consumer Products were flat, declining in mature mar
Slide 7: First quarter sales Flavours
First quarter sales Flavours Sales in Asia Pacific were flat, declining in mature markets whilst in developing markets sales showed a strong momentum Sales in Europe overall declined slightly. Africa and the Middle East showed good sales growth Sales in North America overall declined, wherea
Slide 8: Additional profitability drivers in 2009
Additional profitability drivers in 2009 Negative elements in 2009 • Average raw material cost 0-2% up in 2009 compared with 2008 • Working through peak raw material costs from Q4 2008 • Higher pension fund costs of CHF 23 million Positive elements in 2009 • Price increases as from 1 January 200
Slide 9: Matthias Wahren, CFO
Givaudan® leading Sensory Innovation Matthias Wahren CFO
Slide 10: Financial Summary (1)
Financial Summary (1) Solid sales growth, pro forma local currencies excluding streamlining 2.5% Operating performance sustained despite higher input costs, partially offset by integration savings, adjusted EBITDA margin 20.6% (2007: 20.9%) Operating cash flow CHF 541 million impacted by curre
Slide 11: Financial Summary (2)
Financial Summary (2) Net debt decreased to CHF 2,438 million (2007: CHF 2,621 million) Strong Balance Sheet with 41% equity including mandatory convertible security Aim to further deleverage balance sheet to minimise refinancing requirements in 2011 and beyond 11 Annual Investor Conference /
Slide 12: Key Operating Ratios
Key Operating Ratios Pro Forma FY 2008 FY 2007 PF in % of Sales (at comparable basis) Gross Profit Margin 45.6% 47.1% Operating Return On Sales (EBIT) 11.9% 11.9% EBITA 17.6% 18.0% EBITDA 20.6% 20.9% EBIDA 19.5% 18.3% Gross Additions to PPE 4.7% 4.4% 12 Annual Investor Conference / Q1 sales 2009, Ve
Slide 13: Non-Operating Financial Performance
Non-Operating Financial Performance FY 2008 versus FY 2007 In Mio CHF FY 2008 FY 2007 - Driven by the acquisition of Quest Interest expense (118) (121) International Net gains (losses) on interest derivatives (12) (2) - 85% of debt (including MCS) is fixed rate, Mandatory conversion feature of the M
Slide 14: Financial guidance
Financial guidance Growth • 2009 – 2013: CHF 620 million sales, incremental to market growth in the coming 5 years EBITDA margin • Achieve pre-acquisition EBITDA margin by the end of 2010 (22.7%) CAPEX • 2009: 3% to 4% • 2010 - 2012: approximately 4% Tax rate • Improving to 19% by 2012 14 An
Slide 15: Colin O'Neill, Global Head Consumer Products
Colin O’ Neill Global Head - Consumer Products
Slide 16: Agenda
Agenda Market Framework Why This Moment Is Exciting Developing Markets Winning With The Consumer Looking Forward 16 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 17: Market Framework
Givaudan® Leading Sensory Innovation
Slide 18: Givaudan: Leadership in Fragrances and Flavours
Givaudan: Leadership in Fragrances and Flavours Fragrances • Signature fragrances • Line extensions • Fabric & personal wash • Internal use • Third party sales • Hair & skin care CHF 1,898 • Household and air care • Oral care million Fine Fragrances: Consumer Products: Ingredients: 21% 66% 13% • Sof
Slide 19: CP Global Fragrance Market Potential
CP Global Fragrance Market Potential Asia Pacific Developing Countries (26%) (42%) N. America (24%) Consumer Consumer Consumer Products/ Products Products / Developed vs Total = CHF 5 B Region Developing Europe Latin America (38%) (12%) Developed Countries (58%) OralCare (6%) Fabric & Soap Personal
Slide 20: Our Market Share: Consumer Products
Our Market Share: Consumer Products Market size: CHF 5 billion 1600 1400 Sales – CHF Mio 1200 1000 800 600 400 200 0 Others Share 27% 20% 16% 8% 28% 20 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 21: Market Conditions: Understanding the Crisis
Market Conditions Understanding the Crisis Consumer dynamics in «crisis» periods by type of categories Increase Meal & Dishes Volume Replace Hold on restaurants Deo Shampoo Impact on volume Face Cosmetics Trade down Consume less, FF,Skin same brands Reduce Volume Fabric & cleansing & Home Oral Car
Slide 22: Market Conditions: A Challenging Environment
Market Conditions A Challenging Environment Softer consumer end demand, particularly on discretionary items Consumers continue to trade down, less in foods Inventory reduction throughout the supply chain Foreign exchange rate volatilities Increasing product regulations Givaudan well placed
Slide 23: Why This Moment Is Exciting
Givaudan® Leading Sensory Innovation
Slide 24: Growth Opportunities 2009 - 2013
Growth Opportunities 2009 - 2013 Fragrance Consumer Products Without considering price “pass through” we aim at generating CHF 170 million of incremental sales in addition to underlying market growth: Share growth in developing markets Market share growth with two leading players Regional and
Slide 25: Givaudan – Uniquely Positioned For Success
Givaudan – Uniquely Positioned For Success Turning Consumer Opportunities into Growth Opportunities Developing Markets Simplification Value Offerings Premium Select Innovation Sensory Benefits Product Safety Leveraging scale to deliver custom tailored solutions 25 Annual Investor Confe
Slide 26: Developing Markets
Givaudan® Leading Sensory Innovation
Slide 27: Growth Opportunities
Growth Opportunities Developed Countries Developing Countries Size Outlook Size Outlook 2007 US$ bio 2007-2012 2007 US$ bio 2007-2012 Hair Care 31,5 25,6 Laundry Deterg. 19,8 22,8 Oral Care 16,7 12,9 Skin Cleansing 13,4 11,7 Surface care 10,1 5,9 Deodorants 7,8 6,6 Dish Wash 7,1 4,4 Fabric Condit. 4
Slide 28: Developing Markets: Reasons To Believe
Developing Markets: Reasons To Believe Do you know the per capita spending in Hair Care in the following countries? 2-Russia $13.1/ head 1-USA $34.7 / head 5-China 6-India $0.3 / head $0.1 / head France $36.5 / head 3-Brazil $31.6 / head 4-Saudi Arabia $11.9 / head Source: Euromonitor 28 Annual In
Slide 29: Developing Markets: Infrastructure
Developing Markets: Infrastructure Developing regions are very diverse and represent Moscow geographically most Beijing of the world’s surface Instanbul Mumbai Mexico Dubai Delhi Shanghai Guangzhou City Ho Chi Min Hong Kong Bangkok Strong local presence Bogotà Manila Singapore Jakarta and knowle
Slide 30: Developing Markets: Consumer Understanding
Developing Markets: Consumer Understanding brochure Each year we interview more than 250.000 consumers in developing regions Resources in consumer & newsletter market understanding: 25 people in Asia Pacific, 5 people in the newly created CAMEA region (Russia, Middle East & Africa), 20 in Latam
Slide 31: Developing Markets: after BRIC
Developing Markets: after «BRIC» (Brazil, Russia, India and China) The so called « Next 13 » • Among other developing countries, 13 emerging economies already have all the characteristics of “future BRIC” • The key “next” regions — Africa — Middle East — Central Asia 31 Annual Investor Conference
Slide 32: Developing Markets: Technology
Developing Markets: Technology Destroying 2 myths: • Technology needs to be expensive • Technology is only for developed countries Several cases show that: • Technology can be designed for low income consumers at a reasonable cost • Technology can improve the life for developing countries’ consu
Slide 33: Winning With The Consumer
Givaudan® Leading Sensory Innovation
Slide 34: From Knowledge to Innovation
From Knowledge to Innovation Knowledge Innovation Technology 34 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 35: From Knowledge to Innovation: example 1
From Knowledge to Innovation: example 1 Knowledge Consumers love long lasting fragrance Fabric Care with long lasting freshness Innovation Technology Delivery systems, MechacapsTM 35 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 36: From Knowledge to Innovation: example 2
From Knowledge to Innovation: example 2 Knowledge Consumers want to “control” malodour Odour control across categories Innovation Technology NeutraqTM NeutrazoneTM 36 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 37: From Knowledge to Innovation: example 3
From Knowledge to Innovation: example 3 Knowledge Consumer/Retailer move to “concentrated products” higher quality fragrance ingredients/ reduced environmental Technology impact/lower supply Compacted or chain costs Concentrated Innovation fragrances 37 Annual Investor Conference / Q1 sales 2009, Ve
Slide 38: Looking Forward
Givaudan® Leading Sensory Innovation
Slide 39: Fragrance Consumer Products Business
Fragrance Consumer Products Business Givaudan has the most experienced Consumer Products Management Team in the industry The business has outgrown the market for the past 8 years Our developing markets footprint and infrastructure will facilitate continued growth and market leadership Our sc
Slide 40: Louie D'Amico, Regional Head EMEA Flavours
Louie D’Amico Regional Head Europe/Middle East/Africa Flavours
Slide 41: Agenda
Agenda EMEA Market Context Today’s Challenging Environment EMEA Growth Opportunities – Why Givaudan? Looking Ahead 41 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 42: Food & Beverage Retail Market in EMEA
Food & Beverage Retail Market in EMEA EMEA Retail market value for key categories of processed foods and beverages is estimated at CHF 900 billion out of CHF 2.5 trillion globally EMEA Flavour industry market value estimated at CHF 3.3 billion out of CHF 9.8 billion globally Sources: Euromontor,
Slide 43: EMEA Flavour Market Potential
EMEA Flavour Market Potential 3.7 3.3 Estimated CAGR of +2.9% from 2009-2013 (in CHF Billion) Sources: IAL, Givaudan estimates 43 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 44: Our Flavour Business in EMEA
Our Flavour Business in EMEA Four main segments (approximate) Market View (approximate) 44 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 45: Regional Setup
Regional Setup Naarden Dortmund Milton Keynes Helsinki Lund Moscow Bromborough Horsholm Argenteuil Prague Kiev Warsaw Budapest Zurich Vienna Madrid Istanbul Barcelona Teheran Milan Cairo Dubai Givaudan Centers of Excellence Givaudan centers of business Sales and Marketing office locations Johannesbu
Slide 46: Agenda
Agenda EMEA Market Context Today’s Challenging Environment EMEA Growth Opportunities – Why Givaudan? Looking Ahead 46 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 47: Market Conditions in EMEA
Market Conditions in EMEA Today’s Challenging Environment Customers volume declines in Q1 ‘09 Eastern European Markets impacted most F&B companies fight to maintain their prices F&B companies focus on maintaining market share Foodservice is growing modestly New Flavour regulations effect
Slide 48: Consumer Dynamics in Crisis by F&B Categories
Consumer Dynamics in «Crisis» by F&B Categories QSR Increase Instant beverages Volume Alcohol Frozen meals More cooking Dehydrated products at home Snacks Ice Cream Restaurant Impact on Baked Goods Dining , QSR volume Soft Drinks Fresh Dairy Chilled Foods From chilled to frozen Reduce Bottled Water
Slide 49: Agenda
Agenda EMEA Market Context Today’s Challenging Environment EMEA Growth Opportunities – Why Givaudan? Looking Ahead 49 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 50: Our Growth Pillars in EMEA
Our Growth Pillars in EMEA Developing Markets Top 100 F&B Health & Wellness Foodservice 50 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 51: Growth Opportunity: EMEA Developing Markets
Growth Opportunity: EMEA Developing Markets Africa/ Middle East growth plan accelerated with Quest acquisition 2009 will be a challenging year for Eastern Europe Local presence and understanding is key to success Multi-nationals and key local players will grow share during this crisis Cent
Slide 52: Growth Opportunity: EMEA Top F&B companies
Growth Opportunity: EMEA Top 100 F&B companies Leading market share with Top 10 Food and Beverage companies Accelerate growth with Target 25 F&B companies Innovation platforms are key to drive accelerated growth New opportunities with expanded product portfolio in snacks, juice based compoun
Slide 53: Growth Opportunity: EMEA Health and Wellness
Growth Opportunity: EMEA Health and Wellness Flavour technology plays a key role in taste solutions Givaudan has the most extensive taste research program Major focus areas for EMEA • Sugar and Salt • Natural (all segments) • MSG /clean label (snacks and savory) Requires more intimate and ex
Slide 54: From Consumer Insight to Innovation
From Consumer Insight to Innovation Great Tasting Soup Healthier Food with Natural Flavours Consumer needs Natural Customer Natural Culinary Meat Flavours Pioneering Comprehensive Technologies Portfolio & Smart Tools 54 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 55: Growth Opportunity: EMEA Foodservice
Growth Opportunity: EMEA Foodservice Despite economic crisis, QSR’s are growing modestly Growth in Foodservice is driven by success in core menu items and geographic expansion Our innovation is driving advances in H&W, ingredient development and flavour delivery In-depth consumer understandi
Slide 56: Agenda
Agenda EMEA Market context Today’s Challenging environment EMEA Growth Opportunities – Why Givaudan? Looking Ahead 56 Annual Investor Conference / Q1 sales 2009, Vernier, 3 April 2009
Slide 57: Looking Ahead
Looking Ahead Focus on customers and co-develop winning solutions Focus on strategic growth opportunities • Developing Markets • Top 100 F&B • Health and Wellness (natural, clean label, salt, etc.) • Foodservice Focus on innovation to deliver differentiated, consumer-winning products Turn ch
Slide 58: Gilles Andrier, CEO
Givaudan® leading Sensory Innovation Gilles Andrier CEO
Slide 59: Short-term outlook 2009
Short-term outlook 2009 Uncertainties ahead, but Givaudan fundamentals strong Tight inventory management throughout the supply chain resulting in destocking The underlying market should remain resilient for the remainder of the year, with the exception of Fine Fragrances and, to a lesser extent,
Slide 60: Well on Track towards an Exciting Future
Well on Track towards an Exciting Future From Number One to Leadership Unique platform for future growth in place Balanced portfolio across customers, geography, segments Critical mass and financial capability to invest into innovation In-depth global consumer understanding Best talent pool
Slide 61: Givaudan: Leading Sensory Innovation
Givaudan® Leading Sensory Innovation
Slide 62: Disclaimer
Disclaimer No warranty and no liability: While Givaudan is making great efforts to include accurate and up-to-date information, we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided on this handout and disclaim any liability fo