Symrise Ag · XETR:SY1
Symrise — Investor Day (January 2019)
57 slides from Symrise's investor day presentation, January 2019
Slide 1: Corporate Update Strategic Outlook
Corporate Update Strategic Outlook Dr. Heinz-Jürgen Bertram (CEO), Olaf Klinger (CFO) – Symrise CMD USA January 2019
Slide 2: Agenda
Agenda — 1 Results 9M 2018 2 Achievements so far 3 Today’s market 4 Moving forward 5 Priorities, opportunities and long-term goals — 6 Financials in more detail - Olaf Klinger, CFO 2
Slide 3: Results 9M 2018
symrise & i ee ® & > if :
Slide 4: 9M 2018 – Financial and operational highlights
9M 2018 – Financial and operational highlights Positive business performance/Raising again the outlook Sales EBITDA margin Capacity Expansion Diana 2.383 +8.8% 20% Opening of new site in Georgia, Organic billion € growth USA (Investment: € 50 Mio.) EBITDA Symrise raises again Innovation outlook for
Slide 5: Sales by region in 9M 2018
Sales by region in 9M 2018 Growth in all regions/LA with highest rates By Region Sales split Mature organic sales growth in % and Emerging markets % of Group sales North +5,7% +5,5% EAME America 57 Mature markets 43 Latin Emerging markets +19,2% +12,9% Asia/Pacific America +12.8 % organic growth in
Slide 6: Targets 2018 and until 2020
Targets 2018 and until 2020 2018 outlook raised: Sales growth above 8 % Targets 2018 Mid-term Targets Market growth 3–4 % 2020 Guidance Q1 H1 9M Organic Growth 10 (CAGR) 5 –7% 5 Organic 5–7 % >7 % >8 % Growth rate 0 EBITDA margin EBITDA margin ~20% ~20% ~20% 19 –22% 6
Slide 7: Achievements so far
symrise & Achievements so far
Slide 8: Symrise: The growth story in our industry
Symrise: The growth story in our industry Our dynamic growth differentiates us from our competitors and is the main driver for the share price Organic growth External growth — To stay successful, we need External growth 2-4% • Strong organic growth Incremental growth • Successful implementation 1-2%
Slide 9: A look back at 2018
A look back at 2018 Consistent strategy implementation pays off All three pillars of the strategy Vision were once again consistently implemented in 2018 Growth Efficiency Portfolio Growth Focus on organic growth. • Growth in emerging • Specific efficiency • Portfolio expansion Implementation of inc
Slide 10: Sales and EBITDA since IPO
Sales and EBITDA since IPO Development of sales / EBITDA Sales and EBITDA in €m, margin in % EBITDA Margin 19.8 21.3 19.9 18.0 21.1 20.0 19.5 20.4 21.9 22.0 21.5 21.0 CAGR 06 – 17 8.4 % Sales 1.229 1.275 1.320 1.362 1.572 1.581 1.735 1.830 2.120 2.602 2.903 2.996 EBITDA 243 272 263 245 331 316 340 3
Slide 11: Continuous market share gains with good profitability
Continuous market share gains with good profitability Sales performance 2007 - 2017 EBITDA margin Organic growth % from sales % 175 ø – 2012 – 2017 20.7 Symrise 161 Symrise FY 2017 21 150 144 Givaudan ø – 2012 – 2017 23 142 IFF Givaudan FY 2017 21.6 125 ø – 2012 – 2017 21.3 IFF FY 2017 21.2 100 FY 0
Slide 12: Global competitors
Global competitors 2018 market shares for the leading suppliers Total market € 33 billion — Market share in % Estimated market shares Symrise 2018 11% Including major acquisitions of competitors Firmenich 11% — Givaudan and IFF Givaudan IFF increased share due to acquisitions. 17% 15% Givaudan acqui
Slide 13: Consistent further development of Symrise
Consistent further development of Symrise A third of sales outside the traditional business Scent Flavors — — Perfumes Nr.1 Nr.1 Natural vanilla F+F Oral care Savory industry Personal care Nr.1 Beverages Home care Sweet Fragrance ingredients Symrise portfolio Unique future-oriented focus in comparis
Slide 14: Sustainability objectives fully integrated into our growth ambitions
Sustainability objectives fully integrated into our growth ambitions Sustainability Environment An integral component of our growth story Sustainable, profitable sales Sourcing Growth in % Social impact lighthouse projects Innovation Today 100 Employees Environmental impact footprint Forecast 2020 3
Slide 15: Growth and sustainable business
Growth and sustainable business by implementing the United Nations Sustainable Development Goals United Nations Sustainable Recent Awards received We actively measure our progress Development Goals Carbon Disclosure Project Top rating in the categories: air, water, forest EcoVadis Gold status for co
Slide 16: Rising share price and dividends
Rising share price and dividends Attractive dividends and continuous value generation Dividends 2007 – 2017 … — 80 85 88 per share in € cents Symrise share 65 70 75 50 60 62 beats German DAX and 50 50 MDAX during the same period Share price 2007 – 2018 — Symrise Continuous value 320 creation for our
Slide 17: Who we are today
Who we are today The company with the most dynamic growth in our industry A unique profile dedicated to health and well-being for the whole family Clear opinion leader for new roles for F&F · Expanding capabilities of F&F · Backward integration with key raw materials Well-known with high expectation
Slide 18: Today's market
Today’s market 18
Slide 19: Today's market dominated by strong dynamics
Today’s market dominated by strong dynamics High volatility is the new normal Higher volatility Regulatory Currency More volatile New trends and requirements translation effects markets technologies VUCA Volatility – Uncertainty – Complexity – Ambiguity 19
Slide 20: A driving force for change – in our industry, too
Digitalization A driving force for change – in our industry, too Compliance, Marketing & Product Requirement Inbound Autonomous Outgoing Invoicing, production, Authorities Customer sales Design Planning Logistics Maintenance Logistics Payment storage — “Goods in time.” “Have reached minimum. Network
Slide 21: Moving forward
Moving forward 21
Slide 22: Our mid-term and long-term plan remain valid
Our mid-term and long-term plan remain valid But to successfully implement them, we need to pull all levers Organic growth External growth — The measuring stick varies External growth within our different areas. 1-3% Incremental growth External effects, such as exchange 2-3% rate fluctuations, are o
Slide 23: Solid basis for further growth
Solid basis for further growth In the past years, we have sown the seeds for sustained growth Significant changes in portfolio and organization — Transformational acquisitions in F&N (Diana) and S&C (Pinova). Integration completed, resulting in best-in-class backward integration. — New technology ba
Slide 24: The benefit and rationale of Pinova
The benefit and rationale of Pinova Driving efficiency and sustainability excellence Raw Materials Process Products Conversion — — — Pinova: Solid raw material base Pinova’s process based on old Good product fit to Symrise fashioned chemistry fragrance and oral care palette — Fully Sustainable — — C
Slide 25: Results of Pinova in line with business plan
Results of Pinova in line with business plan Pinova — Sensory and Fragrance Ingredients Further increase of (w/o industrial business) efficiency possible — ~ $ 220 Best-in-class backward Mio turnover in 2019 integration for Fragrance Ingredients ~ $ 150 Mio turnover in 2015 ~ 20 %* ~ 10%* *EBITDA 25
Slide 26: Organic growth
Organic growth The target is ambitious, but achievable Organic growth External growth — The measuring stick varies External growth within our different areas. 1-3% Incremental growth External effects, such as exchange 2-3% rate fluctuations, are only partially Organic growth 4-5% considered € 4.0 –
Slide 27: From aspiration to reality: Incremental growth
From aspiration to reality: Incremental growth Strategy remains valid, but individual value levers adjusted Growth Efficiency Portfolio — — — Growth in Optimization of the Portfolio expansion Identify white spots emerging markets raw materials portfolio Further selective — Portfolio expansion — — Bo
Slide 28: Pillar: Growth
Pillar: Growth Utilizing our full potential with the right customers and markets Win with winning customer. Begin to expand the share of Further expand the share of — Retain a well-balanced portfolio private label and business in emerging Commercialization faced e-commerce markets with significant c
Slide 29: Significant improvement of Symrise innovation
Significant improvement of Symrise innovation Optimistic for implementation and commercialization Relevance of patents — Share of patent asset index in a comparison of competitors Innovation is not our problem. Ogawa 2.3 % T. Hasegawa 2.3 % Ogawa 1.4 % T. Hasegawa 2.7 % — Mane 2.7 % Robertet 0.6 % M
Slide 30: Significant improvement of Symrise innovation
Significant improvement of Symrise innovation Optimistic for implementation and commercialization One research machine Upscaling and product registration, use in new formulations Products We don’t have an innovation problem, Pro- but we have to Symrise opportunistically curement Application areas im
Slide 31: Unique Portfolio
Unique Portfolio Innovations by networking our application platforms — We have successfully expanded our competences in the last five years — Our focus is on One third of our sales are generated boosting the growth outside the classic F&F business Symrise application areas opportunities for — We hav
Slide 32: Incremental growth
Incremental growth Additional boost for accelerated organic growth Organic growth External growth — The measuring stick varies External growth within the different areas. 1-3% Incremental growth External effects, such as exchange 2-3% rate fluctuations, are only partially Organic growth 4-5% conside
Slide 33: Incremental growth projects
Incremental growth projects Potentials and timing First Sales Project Region Division Project Start Expected New Cosmetic Ingredient Plant NA CI 2015 2018 Expansion Menthol NA AM 2016 2019 New Site Food Ingredients NA Diana/FLA 2016 2018 Production Line Food Protection EAME/NA Diana/FLA 2016 2018 Ne
Slide 34: External growth
External growth Acquisitions remain a solid component of our growth strategy Organic growth External growth — The contribution from External growth acquisitions has been reduced 1-3% to our planned, medium-term goals Incremental growth 2-3% (from 3–4 % to 1–3 %). Organic growth 4-5% Current prices a
Slide 35: External growth: Acquisition rationale
External growth Acquisition rationale Flavor/Nutrition — Cosmetic Symrise had always a Innovative Ingredients disciplined and very technologies for focused approach Technologies, natural towards acquisitions which support and declaration existing portfolio — friendly solutions Targeted Recently Symr
Slide 36: Tying it all together
Tying it all together The target is ambitious, but achievable Organic growth External growth — The measuring stick varies External growth within our business areas. 1-3% External effects, such as growth Incremental growth 2-3% fluctuations are not considered. Organic growth 4-5% € 4.0 – 4.5 bn € 3.0
Slide 37: Continuation of the successful path
Continuation of the successful path Symrise 2008 Symrise 2015 Symrise 2022 € 1.3 billion € 2.8 billion € 4.0 - 4.5 billion Organic growth NUTRITION Focus on Fragrance, Flavor, Aroma Molecules, Cosmetic Ingredients, Diana 37 ~ 10 % ~ 30 % Incremental growth ~ 40 % outside of Flavor outside of Flavor
Slide 38: Priorities, opportunities and long-term goals
Priorities, opportunities and long-term goals 38
Slide 39: Growth beyond 2022
Growth beyond 2022 Symrise has reached a leading position through transformative acquisitions and incremental growth. The Process of transformation is the lever for further success Industry 4.0 Industry 4.0 Holistically connected processes Holistically and skills connected processes and skills No co
Slide 40: Long-term, further shifts in portfolio
Long-term, further shifts in portfolio Significant growth contribution through shift into fast growing segments - will also lead to higher profitability margins Today 2022 2025 > 30 % ~ 40 % ~ 50 % outside of Flavor outside of Flavor outside of Flavor and Fragrance and Fragrance and Fragrance 40
Slide 41: Strategic priorities
Strategic priorities Major initiatives driving growth and profitability Flavor Fragrance Nutrition Care Vanilla Fragrances Natural Food Ingredients Cosmetic Ingredients Expand leadership position through Increase capacities in Fragrance in- Expand agro-based portfolio in functi- Strong focus on acti
Slide 42: Mid-term goals 2020
Mid-term goals 2020 Remain valid / Confident to achieve Financial goals Operative goals Sales growth Share of sales Customer mix Growth 5 –7 % p.a. > 50 % 1/3 (CAGR) in emerging markets global, regional, local Raw materials EBITDA margin Efficiency 19 % – 22 % 2/3 from backward integration 1/3 FLA,
Slide 43: Updated goals 2025
Updated goals 2025 Reflects the execution of our successful strategy Financial goals 2020 2025 Sales growth 5 – 7 % pa (CAGR) 5 – 7 % pa (CAGR) Sales in Emerging markets > 50 % > 50 % Customer mix 1/3 global, regional, local 1/3 global, regional, local EBITDA margin 19 – 22 % 20 – 23 % due to more f
Slide 44: Our strategy has proven to be successful
Our strategy has proven to be successful and remains the basis for our long-term growth Long-term goals for 2025 7 – 8 % CAGR — in € billion On track to reach our mid-term goals and prepared to realize our 8 % CAGR long-term goals 12 % CAGR € 5.5 – 6.0 bn € 4.0 – 4.5 bn € 3.0 bn € 1.3 bn 2009 2017 2
Slide 45: Our vision becomes reality
Our vision becomes reality We have created a new role model for the industry Strong backward integration Provide customers with benefit Care for the whole family 45
Slide 46: Financials in more detail
Financials in more detail Olaf Klinger, CFO 46
Slide 47: Updated goals 2025
Updated goals 2025 Reflects the execution of our successful strategy Financial goals 2020 2025 Sales growth 5 – 7 % pa (CAGR) 5 – 7 % pa (CAGR) Sales in Emerging markets > 50 % > 50 % Customer mix 1/3 global, regional, local 1/3 global, regional, local EBITDA margin 19 – 22 % 20 – 23 % due to more f
Slide 48: Working Capital ambition
Working Capital ambition A clear focus WoC absolute & as % of Sales Drivers Opportunities Inventories Trade Receivables Trade Payables Net WoC 2016 • Strict Working Capital Management with • Pinova Acquisition ? regard to payment terms 1.033 • Further Backward Integration Longer Supply 954 • Limited
Slide 49: Business Free Cash Flow introduced as a new internal KPI for 2018
Business Free Cash Flow introduced as a new internal KPI for 2018 BFCF as % of Sales EBITDA Growth above topline 16.4% growth = profitable growth Working Capital Growth below 13.3% 12.5% topline growth 11.8% ? CAPEX according to guidance: 9.9% 9.9% 6% until 2020 / 4 –5% until 2022 2012 2013 2014 201
Slide 50: Amortization from business combinations
Amortization from business combinations Major effects are fading out Diana Other M&A 2003 Merger Main drivers Merger of Haarmann & Reimer and 18 17 Dragoco in 2003: Recipes 16 16 15 18 18 Acquisition of Diana in 2014: 12 11 11 15 Brands, customer base and recipes 9 4 56 56 56 56 56 3 9 6 3 51 6 45 4
Slide 51: Pensions
Pensions Obligations are fully under control Pensions (in Mio. Euro) — 90 % (5%) of pensions are in Germany (USA) — 474 445 523 523 H&R and Dragoco pension systems were closed in 367 332 2003, the US pension systems were closed in 2003/2012 2012 2013 2014 2015 2016 2017 — In Germany participation in
Slide 52: Tax Policy
Tax Policy A Good Corporate Citizen Effective Tax Rate (ETR) — Our tax policy strives to ensure to comply with local laws and international regulations in all countries we operate in — Our Effective Tax Rate is comparable with other German based Multinationals < 30 % ~ 28 % 26–28 % — Our tax policy
Slide 53: Solid Financing Structure
Solid Financing Structure Clear focus on Investment Grade Maturity Profile as of December 31, 2018 Net debt / EBITDA Net debt + pension provisions/EBITDA ratio Net debt/EBITDA ratio 600 3,5 3,0 400 2,5 2,0 200 Pinova 1,5 Diana Step changes 0 1,0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019
Slide 54: Rising share price and dividends
Rising share price and dividends Attractive dividends and continuing value generation … Dividends 2007 – 2017 per share in € cents — 50 50 50 60 62 65 70 75 80 85 88 Symrise share beats German DAX and 2.08 … Earnings 2007 – 2017 per share in € cents MDAX 0.82 0.76 0.71 1.13 1.24 1.33 1.45 1.69 1.90
Slide 55: Updated goals 2025
Updated goals 2025 Reflects the execution of our successful strategy Financial goals 2020 2025 Sales growth 5 – 7 % pa (CAGR) 5 – 7 % pa (CAGR) Sales in Emerging markets > 50 % > 50 % Customer mix 1/3 global, regional, local 1/3 global, regional, local EBITDA margin 19 – 22 % 20 – 23 % due to more f
Slide 56: Summary
Summary We are well prepared for the future — Proven strategy with strong growth dynamics — Targeting mega trends and changing business environment — Industry leading backward integration with focus on naturals and sustainability — Differentiated portfolio supported by innovative technologies — Focu
Slide 57: symrise &
symrise &