Givaudan Sa · SIX:GIVN
Givaudan Sa — FY2005 Earnings Presentation
29 slides from Givaudan Sa's earnings presentation, Feb 21, 2006
Slide 1: Full Year 2005 Results
Full Year 2005 Results Givaudan’s Leadership Position Further Strengthened
Slide 2: Gilles Andrier, CEO
Givaudan® leading Sensory Innovation Gilles Andrier CEO
Slide 3: Results 2005 Highlights
Results 2005 Highlights Above market sales growth in core business Further improved operating performance Net profit increased from CHF 337 million to CHF 406 million, the net profit margin from 12.6% to 14.6% EPS increased 27% from CHF 44.64 to CHF 56.57 3rd share buy back programme ongoi
Slide 4: Sales 2005
Sales 2005 + 2.5 % Growth vs. 2004 in local currencies In Mio CHF + 3.6 % Growth vs. 2004 in CHF 3'000 2'778 + 4.2 % + 1.3 % 2'500 + 5.4 % + 2.5 % 2'000 1'647 1'500 1'131 1'000 500 0 Group Fragrances Flavours 4 Full Year 2005, 21 February 2006
Slide 5: Continued Portfolio Rationalisation
Continued Portfolio Rationalisation Sales of fragrance ingredients reduced by CHF17 million Elimination of low margin flavour ingredients by CHF 10 million Further estimated rationalisation impact in 2006: • Flavours CHF 25 million • Fragrances CHF 20 million 5 Full Year 2005, 21 February 2006
Slide 6: Sales Evolution by Quarter
Sales Evolution by Quarter In Mio CHF Q1 2005 versus Q1 2004 Q2 2005 versus Q2 2004 in CHF in l.c. in CHF in l.c. Fragrances 273.1 -1.9% 0.8% 281.9 2.3% 3.2% Flavours 395.6 -6.5% -3.2% 417.4 -1.1% 0.0% Givaudan Total 668.7 -4.7% -1.6% 699.3 0.2% 1.3% Q3 2005 versus Q3 2004 Q4 2005 versus Q4 2004 in
Slide 7: Sales Evolution by Region
Sales Evolution by Region In Mio CHF LATAM Total Sales 10% 2004 CHF 2’680 mio EAME Asia Pacific 37% 2005 CHF 2’778 mio +2.5 % in l.c. 20% Year 2005 257 USA / Canada Latin America 290 + 4.7 % in l.c. 33% 516 Asia Pacific 548 + 5.7 % in l.c. 872 North America 902 + 2.7 % in l.c. 1'035 EAME 1'038 + 0.1
Slide 8: Further Improved Operating Performance
Further Improved Operating Performance Positive impact of European site consolidation in flavours and full benefits of the margin improvement initiatives announced two years ago Gross profit margin improved from 47.7% to 48.9% Operating profit improved from CHF 480 million to CHF 513 million,
Slide 9: Continued Site Consolidation
Continued Site Consolidation Flavour production transfer from Barneveld (Netherlands) successfully completed Tremblay (Paris) closed, culinary centre moved to Kemptthal, flavour commercial team to Argenteuil US site closures in New Milford and Oconomowoc announced 9 Full Year 2005, 21 February
Slide 10: Fragrance Division
Fragrance Division Sales, Operating Profit and EBITDA (bef. restruct. and impairments) In Mio CHF In % of Sales + 5.4 % in CHF + 4.2 % in l.c. 30% 1250 1'131 1'073 25% 1000 20.0% 20% 17.9% 750 16.0% 15% 14.2% 500 - 6% - 6% 10% 172 215 161 203 250 5% 0 0% 2004 Rest. 2005 2004 Rest. 2005 Sales Operati
Slide 11: Fragrance Division Highlights 2005
Fragrance Division Highlights 2005 Significant above market growth in Consumer Products for the fifth consecutive year Sustained sales in Fine Fragrances after two years of double digit growth Continued momentum in speciality ingredients • Double-digit sales growth • Commercialisation of two i
Slide 12: Flavour Division
Flavour Division Sales, Operating Profit and EBITDA (bef. restruct. and impairments) In Mio CHF + 2.5% in CHF In % of Sales + 1.3% in l.c. 30% 1750 1'607 1'647 26.5% 24.3% 25% 1500 22.6% 20.5% 1250 20% 1000 15% + 12% 750 + 13% 10% 500 329 390 373 437 5% 250 0 0% 2004 Rest. 2005 2004 Rest. 2005 Sales
Slide 13: Flavour Division Highlights 2005
Flavour Division Highlights 2005 Good growth in areas of strategic focus • Asia Pacific, Eastern Europe, Latin America • Beverages and Foodservice Flat sales growth in North America and Europe due to portfolio rationalisation and lower market prices for vanilla Increased profitability primaril
Slide 14: Matthias Währen, CFO
Givaudan® leading Sensory Innovation Matthias Wahren CFO
Slide 15: Exchange Rates Development
Exchange Rates Development Average Exchange Rates Period-End Exchange Rates 2005 vs. 2004 31.12.2005 vs. 31.12.2004 16% 4% 1% 1% 1% 0% 0% -1% -2% JPY USD GBP EUR JPY USD GBP EUR 2005 1.13 1.25 2.26 1.55 2005 1.11 1.32 2.26 1.56 2004 1.15 1.24 2.28 1.54 2004 1.11 1.14 2.18 1.55 2003 1.16 1.34 2.20 1.
Slide 16: Business Statement
Business Statement 2005 2004 Restated Change In Mio CHF in % of sales in % of sales in % Sales 2'778 100.0 2'680 100.0 + 4% Cost of sales (1'419) (51.1) (1'402) (52.3) + 1% Gross Profit 1'359 48.9 1'278 47.7 + 6% Marketing, development & distribution expenses (658) (23.7) (633) (23.6) + 4% Administr
Slide 17: Key Operating Figures in USD
Key Operating Figures in USD 2005 2004 Restated Change In Mio CHF in CHF in USD in CHF in USD in CHF in USD Sales 2'778 2'229 2'680 2'157 + 3.6% +3.3% Operating profit before restruct./impairments 534 428 501 403 + 6.6% + 6.2% Operating profit 513 412 480 386 + 6.9% + 6.7% 17 Full Year 2005, 21 Febr
Slide 18: Key Operating Ratios
Key Operating Ratios 2004 in % of Sales 2005 Restated (before restructuring and impairments) Gross Profit Margin 48.9% 47.7% Operating Return On Sales (EBIT) 19.2% 18.7% EBITA 19.9% 19.4% EBITDA 23.0% 22.6% EBIDA 20.2% 18.9% Gross Additions to PPE 5.8% 5.6% 18 Full Year 2005, 21 February 2006
Slide 19: Income Statement
Income Statement 2005 2004 Restated Change In Mio CHF in % of sales in % of sales Sales 2'778 100.0 2'680 100.0 + 4% Operating profit 513 18.5 480 17.9 + 7% Financial income (expenses), net (26) (0.9) (51) (1.9) - 49% Result before taxes 487 17.6 429 16.0 + 14% Income taxes (80) (2.9) (92) (3.4) - 1
Slide 20: Detail of Financial Income (Expenses)
Detail of Financial Income (Expenses) 2004 In Mio CHF 2005 Restated Interest expense (64) (59) Amortisation of debt discount (1) - Exchange gains (losses), net 27 5 Net gains (losses) on currency derivatives (22) 15 Interest and dividend income 8 8 Net gains (losses) on marketable securities 27 (15)
Slide 21: Operating Cash Flow after Investments and Taxes
Operating Cash Flow after Investments and Taxes 2004 in Mio CHF 2005 Restated EBITDA before impairments 640 584 Changes in working capital, net (53) 26 Income taxes paid (92) (24) Other operating cash flows, net 7 - Operating Cash Flow after Taxes 502 586 Net additions to PPE and Intangibles (151) (
Slide 22: Financial Cash Flow
Financial Cash Flow 2004 in Mio CHF 2005 Restated Operating Cash Flow after Investments and Taxes 351 443 Net increase (decrease) in debt (47) 134 Sales and Purchase of marketable securities, net 67 22 Sales and Purchase of financial instruments, net (36) 30 Acquisition of own equity instruments, ne
Slide 23: Balance Sheet
Balance Sheet CHF 4,330 mio CHF 4,516 mio ST 17% ST 29% ST 38% ST 41% 31. Dec 2004 31. Dec 2005 LT 29% Restated LT 25% LT 59% Equity 46% LT 62% Equity 54% Assets Liabilities Assets Liabilities in mio CHF Assets Liabilities and Equity Cash & Marketable 777 Short-Term 492 31.12.2004 Rest. Securities R
Slide 24: Financial Summary
Financial Summary Strong operating performance with 7% EBIT growth Non-operating performance positively impacted by: • Gains on marketable securities • Low tax expenses Net profit increased by 21% EPS increased by 27% Good operating cash flow, CHF 351 million after investments CHF 286 mi
Slide 25: Gilles Andrier, CEO
Givaudan® leading Sensory Innovation Gilles Andrier CEO
Slide 26: Share Buy Back
Share Buy Back The second share buy back programme was finalised beginning of May 2005. Under the third programme, started in May 2005 and aiming at buying back 720,000 shares, 34,800 shares were bought back until mid February. The Board of Directors has decided to extend this programme until Ma
Slide 27: Dividend 2006
Dividend 2006 In view of the excellent results 2005, the Board of Directors will propose to the AGM on 7 April 2006, the payment of an ordinary dividend of CHF 17.60 per share 8% increase over the 2004 total dividend paid per share 27 Full Year 2005, 21 February 2006
Slide 28: Outlook
Outlook Focus on • High growth markets • High value adding segments • Innovation platform • Talent management Launch strategic initiatives to close gaps Maintain strict cost discipline Sustain focus on total shareholder return Givaudan is well positioned for another good result in 2006 28 Fu
Slide 29: Givaudan: Leading Sensory Innovation
Givaudan® Leading Sensory Innovation