Givaudan Sa · SIX:GIVN
Givaudan Sa — H1 2018 Earnings Presentation
25 slides from Givaudan Sa's earnings presentation, Jul 19, 2018
Slide 1: 2018 Half year results: Strong recovery in high growth markets
2018 Half year results Strong recovery in high growth markets 19 July 2018
Slide 2: Gilles Andrier, Chief Executive Officer
Gilles Andrier Chief Executive Officer 2018 Half Year Results Presentation 19 July 2018 2
Slide 3: Performance highlights
2018 Half year results Performance highlights • Sales of CHF 2,674 million, up 5.6% on a like-for-like basis and 7.7% in Swiss francs • Project pipeline and win rates sustained at a high level • Strategic focus areas and acquired businesses strongly contributing to growth • EBITDA of CHF 601 million
Slide 4: Sales performance: Strategic focus areas delivering in both divisions
2018 Sales performance Strategic focus areas delivering in both divisions In million CHF 2,674 1,451 1,223 Group Fragrances Flavours % 2018 growth on LFL* basis 5.6% 6.5% 4.9% % 2018 growth in CHF 7.7% 7.5% 7.8% * LFL (like-for-like) excludes the impact of currency, acquisitions and disposals 2018 H
Slide 5: Sales evolution by market
Sales evolution by market Strong recovery in high growth markets In million CHF 1,531 1,415 1,143 1,068 HY2017 HY2018 HY2017 HY2018 Mature High Growth % of total sales 57% 57% 43% 43% % 2018 growth on LFL* basis 4.0% 7.8% * LFL (like-for-like) excludes the impact of currency, acquisitions and dispos
Slide 6: Sales evolution by region
Sales evolution by region Good growth achieved across all geographies In million CHF 971 832 712 665 686 683 300 308 HY HY HY HY HY HY HY HY 2017 2018 2017 2018 2017 2018 2017 2018 LATAM APAC NA EAME % 2018 growth on LFL* basis 10.8% 7.1% 1.9% 5.6% * LFL (like-for-like) excludes the impact of curren
Slide 7: Divisional sales performance: Fragrance Division
Divisional sales performance Fragrance Division Fine Fragrance increased 15.6% LFL* Fragrance Division sales in CHF million • New business wins across all customer groups combined with volume growth on established business at key accounts 1,223 Consumer Products grew 3.9% LFL 1,137 • Growth delivere
Slide 8: Divisional sales performance: Flavour Division
Divisional sales performance Flavour Division Naturals, Health and Well-being, Integrated Flavour Division sales Solutions and Targeted Customers contributed in CHF million positively to the overall performance 1,451 Asia Pacific grew 7.0% LFL* 1,346 • Double-digit growth in key markets of China and
Slide 9: Acquisition update: 2020 Strategy in motion
Acquisition update 2020 Strategy in motion 2014 2016 2018 Soliance Spicetec Centroflora Nutra Active Beauty Naturals Naturals Integrated Solutions Expressions Approx. Parfumées L&R Fragrances CHF 1 billion of incremental revenues** Naturex* 2015 2017 Naturals H&W CHF 2.5 billion invested in Induchem
Slide 10: Naturex acquisition update
Naturex acquisition update Compelling transaction rationale and strategic fit Fits perfectly with Givaudan’s 2020 strategy Relevance for global key trends Naturals Health and well-being ‒ Naturals ‒ Functional ingredients ‒ Active Beauty Customers living longer Consumer preferred products and more ‒
Slide 11: Givaudan Business Solutions: Implementation in progress
Givaudan Business Solutions Implementation in progress – First benefits in 2018 • GBS fully on track, with the previously communicated costs and benefits fully confirmed. • First transitions successfully completed. • GBS centres in Budapest, Buenos Aires and Kuala Lumpur fully operational. • Europe
Slide 12: Tom Hallam, Chief Financial Officer
Tom Hallam Chief Financial Officer 2018 Half Year Results Presentation 19 July 2018 12
Slide 13: Financial highlights
2018 Half year results Financial highlights • Sales of CHF 2,674 million, up 5.6% on a like-for-like* basis and 7.7% in Swiss Francs • EBITDA of CHF 601 million compared to CHF 597 million in 2017 • Reported EBITDA margin of 22.5% compared to 24.0% in 2017, with the underlying EBITDA remaining stron
Slide 14: Exchange rate development
2018 Half year results Exchange rate development: Operating results largely unaffected by currencies, despite the continued currency swings 8% 7% 6% 3% 1% 0% -3% -5% -10% JPY USD GBP EUR SGD BRL CNY MXN IDR HY 2018 0.89 0.96 1.32 1.17 0.73 0.28 0.15 0.05 0.70 HY 2017 0.88 0.99 1.25 1.08 0.71 0.31 0.
Slide 15: Operating performance: Group
Operating performance Group: Sustained good profitability 45.6% Gross margin 44.2% EBITDA in CHF million Sales of CHF 2,674 million, an increase of 5.6% on a like-for-like basis and 7.7% in Swiss Francs 601 597 Gross margin of 44.2%, compared to 45.6% in 2017, as a result of the reduced gross margin
Slide 16: Operating performance: Fragrance Division
Operating performance Fragrance Division EBITDA in CHF million Sales of CHF 1,223 million, an increase of 6.5% on a like-for-like basis and 276 7.5% in Swiss Francs (9.4)% 250 EBITDA of CHF 250 million, lower than in 2017 largely due to the impact of a supply disruption of a major supplier of fragra
Slide 17: Operating performance: Flavour Division
Operating performance Flavour Division EBITDA in CHF million Sales of CHF 1,451 million, an increase 351 of 4.9% on a like-for-like basis and 321 7.8% in Swiss Francs +9.3% EBITDA of CHF 351 million, an increase of 9.3%, driven by continued productivity gains and cost discipline EBITDA margin of 24.
Slide 18: Amortisation of intangible assets
Amortisation of intangible assets • Pre Quest amortisation of Total annual amortisation charge intangible assets of (in million CHF, estimated) approx. CHF 17 million p.a. 104 111 108 104 103 73 • Quest (exc. Goodwill) • Other acquisitions: 40 40 Soliance, Induchem, 40 40 40 Spicetec, Activ, Vika, C
Slide 19: Net income
Net income 13.9% of sales Net income in CHF million Income before tax of CHF 431 million, down from CHF 451 million in 2017, driven 384 by the increase in non-operating expenses, as a result of higher foreign currency losses, most notably in Argentina 371 Net income of CHF 371 million, or 13.9% of s
Slide 20: Free cash flow
Free cash flow Sustained underlying performance Free cash flow in CHF million Free cashflow of CHF 113 million, compared to CHF 132 million in 2017, 132 FCF is 4.2% of sales compared to 5.3 % in 2017 Operating cash flow of CHF 269 million, the same level as in 2017 113 Total net investments of CHF 1
Slide 21: Gilles Andrier, Chief Executive Officer
Gilles Andrier Chief Executive Officer 2018 Half Year Results Presentation 19 July 2018 21
Slide 22: 2018 Outlook: Key themes
2018 Outlook Key themes Growth outlook Raw materials GBS • Strong recovery in high growth • Raw materials increasing by • Implementation is well markets in H1 2018, continuing 5-6%, as forecast and similar underway with previously from positive growth in the outlook for 2019 communicated costs and b
Slide 23: Partner of choice: Responsible growth. Shared success.
Responsible growth. Shared success. Growing with Delivering Partnering for our customers with excellence shared success 4-5% 12-17% Partner Average organic sales growth* Average free cash flow as % of sales* of choice * Over a five-year period by 2020 Creating additional value through acquisitions I
Slide 24: Q&A
Q&A 2018 Half Year Results Presentation 19 July 2018 24
Slide 25: 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 presentation/handout and disclaim any