Frutarom Q2 & H1 Results. August 2014

Transcription

1 Frutarom Q2 & H1 Results August 2014

2 Frutarom - A Leading Fast Growing Global Flavor and Fine Ingredient House Global company Broad product portfolio Financial success since 2000 Public company Sales in 145 countries 15,500 customers A Top 10 flavor house 31,000 products 4,000 raw materials Innovative pipeline 9.8x growth in sales (CAGR 19.2%) 14.9x growth in EBITDA 17.7x growth in net profit Listed on London & TLV Stock Exchanges From $13M to approx. $1.45B market cap Renenue, $M *Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1,

3 Frutarom - A Global Company We provide our customers with global and local support Corona, CA Cincinnati, OH New Jersey Mexico Georgia Guatemala Florida Norway Denmark Netherlands UK North Germany UK South Belgium France Switzerland Italy Saint Petersburg Belarus Moscow Ukraine Novosibirsk Poland Perm Slovakia Saratov Serbia Moldova Kazakhstan Slovenia Turkey China Israel India Hong Kong Costa Rica Indonesia Singapore Brazil Production 34 Sites R&D 41 Labs Sales & Marketing 79 Offices South Africa

4 Frutarom - A Profitable Growth Story (Sales, EBITDA, Net Profit, USD M) Tel Aviv stock exchange Baltimore Botanicare HK F&F Tohar Flavour key Meer Kunshan 81 Ukraine Kazakhstan Russia Rayner Net Profit Turkey Hong Kong X17.7 Brazil India CPL Aroma Mexico Canada Flachsmann France IFF FS 32 London stock exchange Poland AM Todd Acatris EBITDA Profit X Nesse Rad Gewurzmulle r Abaco Adumim Raychan Jupiter Balmey S. Africa CH Hansen DE FSI Corona 80 Oxford 618 Sales Czech Rep. X9.8 Costa Rica FSI OH Aromco CH Hansen IT EAFI Rieber Etol Mylner Savoury Flavours 71* 792* 134* JannDeRee PTI AROMA Heglin *Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013

5 Frutarom Presents Strong Q2 for ($M) NET EBITDA SALES (EBITDA Margin) (12.9%) (16.3%) (17.0%) (19.3%) (19.9%) 43.4 Q2/07 Q2/09 Q2/11 Q2/13 Q2/ Revenues Growth Gross Profit EBITDA Net Profit Reached $218 M Revenues grew 29.3% 6.2% YoY Pro-forma growth 1 Over $ 85 M 41.6% gross margin in core activities Reached $43.4 M, 19.9% EBITDA margin 21.6% EBITDA margin in core activities Over $25M 11.7% net margin Results driven by: Organic growth above average market growth rates Successful integration of the acquisitions made in Improved product mix New acquisitions already contributing to revenues Successful implementation is expected to improve margins 1 Pro- forma growth - assuming acquisitions performed in 2013 had been consolidated as of January 1, 2013 and that CitraSource, which was acquired during the first quarter of 2014, had been consolidated as of March 1,

6 Constantly Improving Core Business Margins & Profits Q2 Gross Profit Q2 EBITDA ($M, Core business) 41.6% ($M, Core business) 21.6% Margin 38.5% 41.0% 17.8% Margin 20.0% Q Q Q Q Q Q Major contributors to growth in Profit & Profitability : Organic growth Recent acquisitions Improved product mix Successful Integration of acquisitions made in Exploiting operational efficiencies 7

7 Frutarom Presents Strong First Half for 2014 NET EBITDA SALES (EBITDA Margin) ($M) Revenues Reached $406 M (14.6%) (18.6%) 75.5 (18.2%) 58.3 (17.4%) (15.5%) H H H H H Growth Gross Profit EBITDA Net Profit Revenues grew 26.7% 4.6% YoY Pro-forma growth 1 Reached $159.4 M 41.3% gross margin in core activities Over $ 75 M, 18.6% EBITDA margin 20.1% EBITDA margin in core activities Reached $43.8 M 10.8% net margin 1 Pro- forma growth - assuming acquisitions performed in 2013 had been consolidated as of January 1, 2013 and that CitraSource, which was acquired during the first quarter of 2014, had been consolidated as of March 1,

8 Constantly Improving Core Business Margins & Profits H1 Gross Profit H1 EBITDA ($M, Core business) 41.3% ($M, Core business) 20.1% Margin 37.9% 39.8% Margin 17.4% 18.8% H H H H H H Major contributors to growth in Profit & Profitability : Organic growth Recent acquisitions Improved product mix Successful Integration of acquisitions made in Exploiting operational efficiencies 9

9 Profitable Growth Generates Solid Balance Sheet & Cash Flow from Operations Cumulative Cash Flow ($M) $ 392 M - Cumulative cash flow since 2009 to end of H Balance Sheet Net debt ( ) - USD 188M Equity ( ) - USD 557 M Net Debt/EBITDA consistently below 2x H1 10

10 From Vision to Reality Strategic Milestones Accomplished Accelerating Growth In Emerging Markets. Fastest growing markets Expanding Market Share In The US. World s biggest flavor market Constantly improving product mix. Towards more profitable segments Supply Chain Optimization. Supported also by acquisitions Accelerated Profitable Growth Sales Grew From $10M at 1990 to $792M at 2013* EBITDA Grew From $1M at 1990 to $134M at 2013* Solid Cash Flow *Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1,

11 Accelerated Growth and Market Share in Emerging Markets Asia Expanded R&D and sales force in China, Indonesia, Philippines, Thailand, Vietnam, Sri Lanka Setting up flavor operation in India Building a state-of-the-art plant in China with both savory and sweet flavors capabilities Evaluating strategic acquisition opportunities Central & South America Acquired Mylner in Brazil and Aroma in Guatemala Set up an independent operation in Costa Rica and Mexico Evaluating strategic acquisition opportunities Central and Eastern Europe Acquired Etol in Slovenia and PTI in Russia One of the only global players with major production sites in Russia Market leadership in Central and East Europe Cross selling and optimization opportunities Africa Fast growing operation in South Africa, reinforced by JannDeRee acquisition Enhanced R&D and sales force in fast growing markets (Kenya, Nigeria and others) Building state-of-the-art manufacturing facility 12

12 Expanding Flavors Market Share in the US USA Focus on the US as a key strategic market Fortifying US presence through 2 strategic acquisitions Flavor Specialties in the West Coast in 2009 Flavor Solutions in Cincinnati in 2011 Fast, above market rate, internal growth Strengthening foothold through the acquisitions of Hagelin & CitraSource Lucrative beverage market Diversified customer base Technological know how Strong position in Florida s Citrus Hub

13 Growing Share of Emerging Markets and the USA Sales by Geography Growth Rate 792* 79 (10%) (11%) 68 (11%) (11%) 272 (34%) 60 (13%) 41 (9%) 229 (51%) 262 (42%) 355 (45%) 100% growth in USA** 31% growth in the BRIC countries* 196% growth in the emerging markets** 222 (36%) 122 (27%) Proforma * Emerging Markets Western Europe USA ROW *Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013 ** 2013 on Pro-forma basis vs

14 Growing the Core Business Taste Solutions ~72%* of sales Fine Ingredients ~19%* of sales Unique, high quality creation of sweet and savory flavors for food and beverage products Expertise in local and global tastes Operational flexibility and local global supply chain Value-added functional savory solutions for the food industry (snacks, meat, fish, organic, and culinary segments) Comprehensive sweet and savory food systems Unique technologies for fruit, spice, vegetable, meat and fish preparations Specialty botanical extracts, distillates, essential oils and aroma chemicals Innovative, science-based health ingredients for phyto-pharmaceuticals, nutraceuticals, dietary supplements, functional foods, cosmetics, and personal care Supporting the growing demand for health, wellness and beauty Trade & Marketing, ~9%* of sales Strengthening Frutarom s partnership and offering to customers *Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1,

15 Taste Solutions Fine Ingredients We share the Passion for Taste & Health We develop tailored solutions combining excellent taste with health and functionality all under one roof 16

16 Flavors - Most Profitable Activity Growing Fast Q H (US$ M) Operating margin 14.7% 15.4% % (US$ M) Operating margin 14.3% 13.8% % % of total sales % 72% Above average market growth rates Increasing market share in Emerging Markets - Latin America, Asia, Central and Eastern Europe, Africa North America flavor sales grew by X5.5 times since 2010* * based on sales in 1H 2014 compared with 1H

17 Fine Ingredients Improved profitability (% Operating Profit) Operating Profit Improvement was driven by 13.1% 13.0% 9.6% H H H Enhanced product mix Focus on Natural high added value fine ingredients New innovative products successfully launched 14.7% 18

18 Frutarom s Strategy: Clear Focus Going Forward Profitable Internal Growth Customer Focus Market Focus Product Portfolio Mid-sized and local Private label Multinational Developed markets (Europe and USA) Emerging markets (e.g. Asia, Central & South America, Central and Eastern Europe, Africa) Natural (extracts, fruit bases specialty essential oils) Natural functional food ingredients Comprehensive, integrated solutions Cost reduction solutions Core Competencies R&D and innovation internal and external Efficiencies, scale and synergies cross selling Experienced global management Sales-driven organization 19

19 Proven Acquisition Track Record 37 successful acquisitions Strict acquisition criteria: Highly valuable and experienced employees Major synergies and cross-selling potential Additional unique products and technology Positive impact on EPS Focus on integration execution Optimization of cross selling opportunities Optimization and harmonization of resources

20 2013 & 2014: 5 Acquisitions in Emerging Markets and the US JannDeRee South Africa PTI Russia & CIS Aroma Guatemala Hagelin USA CitraSource USA Strengthening market position in South Africa and Africa. Complementary Savory activity Strengthening Leadership in East Europe Savory Solutions leadership Strengthening market position in Central America. Strengthening market position in the US & EM Expertise in beverages Strengthening Citrus capabilities and leadership Presence in Florida world center for citrus Strong management, R&D, sales and operational force. Leverage operational efficiencies. Opportunities for additional rationalization plans and improved margins. Continued implementation of rapid profitable growth strategy 21

21 Ongoing Projects for Resource Optimization Leveraging economy of scale R&D Sourcing & Purchasing Production Logistics Sales & Marketing Rationalizing Global R&D Resources - CPM Global Purchasing at countries of origin Production sites integration Global Logistics integration Sales force integration Capitalizing on the operational synergies created by the 5 acquisitions completed since May 2013; Other projects for optimization and margin improvement under way; Building and strengthening the global purchasing organization;

22 Frutarom s Strategy Above-Industry Organic Growth Margin Expansion Proven Acquisition Track Record Continue successful strategy of combining rapid profitable organic growth with strategic acquisitions Reaching revenues of $1 billion Achieving 20% EBITDA in our core business, given the current product mix 23

23 Positive Outlook for 2014/5 Profitable internal growth Focus on innovative natural healthy product mix Successful integration of the recent acquisitions Additional projects to improve efficiency and merge activities and operations Strengthening & leveraging global purchasing Strong acquisitions pipeline (EPS) Market Cap ($ B) EPS ($) * EPS LTM June 2014, Market Cap 30 June,

24 Frutarom s Vision To Be The Preferred Partner For Tasty And Healthy Success 25