Givaudan Sa · SIX:GIVN

Givaudan Sa — H1 2007 Earnings Presentation

33 slides from Givaudan Sa's earnings presentation, Aug 3, 2007

  1. Slide 1: Half Year 2007 Results

    Half Year 2007 Results Solid growth and integration on track Vernier, 3 August 2007

  2. Slide 2: Gilles Andrier, CEO

    Givaudan® leading Sensory Innovation Gilles Andrier CEO

  3. Slide 3: Financial Highlights

    Half Year Results 2007 Financial Highlights ƒ Strong sales growth in local currencies • 36.3% in actual terms • 4.4% in pro forma terms (5.7% excl. streamlining) ƒ Fragrances 6.8% growth in local currencies ƒ Flavours 2.4% growth in local currencies (4.9% excl. streamlining) ƒ Comparable pro forma E

  4. Slide 4: Integration On Track

    Integration On Track ƒ Half year integration milestones achieved as planned ƒ New platform for growth reinforced • Complementary customer base • Enhanced talent pool • Unique innovation capabilities Expected savings target increased to CHF 200 million from CHF 150 million by 2010 4 Half Year Results

  5. Slide 5: Sales Half Year 2007 - In Actual Terms

    Sales Half Year 2007 - In Actual Terms + 36.3% Growth vs. 2006 in local currencies In Mio CHF + 36.0% Growth vs. 2006 in CHF 2,500 + 49.8% + 26.8% 2,005 2,000 + 49.9% + 26.2% 1,500 1,096 1,000 909 500 0 Group Fragrances Flavours 5 Half Year Results 2007, 3 August 2007

  6. Slide 6: Sales Half Year 2007 - In Pro Forma Terms

    Sales Half Year 2007 - In Pro Forma Terms + 4.4 % Growth vs. 2006 in local currencies In Mio CHF + 4.6 % Growth vs. 2006 in CHF 2,500 2,239 + 6.8 % + 2.4 % 2,000 + 7.5 % + 2.2 % 1,500 1,201 1,038 1,000 500 0 Group Fragrances Flavours 6 Half Year Results 2007, 3 August 2007

  7. Slide 7: Continued Portfolio Rationalisation

    Continued Portfolio Rationalisation ƒ Half year 2007 elimination of lower value adding flavour ingredients: • CHF 27 million in Flavour Division • No streamlining in Fragrance Division ƒ Estimated full year rationalisation impact in 2007: • Flavours: CHF 48 million • Fragrances: no streamlining fore

  8. Slide 8: Sales Evolution by Region - In Pro Forma Terms

    Sales Evolution by Region - In Pro Forma Terms In Mio CHF LATAM 11% Total Sales – Pro Forma Asia Pacific EAME HY 2006 CHF 2,140 mio 21% 42% HY HY 2007 CHF 2,239 mio +4.4 % in l.c. 2007 235 USA / Canada Latin America 245 + 5.1 % in l.c. 26% 431 Asia Pacific 462 + 6.3 % in l.c. 627 North America 594 -

  9. Slide 9: Fragrance Division Sales, Operating Profit and EBITDA

    Fragrance Division Sales, Operating Profit and EBITDA Ó In Pro Forma Terms In Mio CHF In % of Sales + 7.5 % in CHF 40% 1,250 + 6.8 % in l.c. 35% 1,038 965 1,000 30% 25% 750 19.5% 19.8% 20% 500 15% + 10% 10.0% 10.9% + 18% 10% 188 206 250 96 113 5% 0 0% HY 2006 PF HY 2007 PF HY 2006 PF HY 2007 PF Sale

  10. Slide 10: Fragrance Division Highlights

    Fragrance Division Highlights ƒ Fine Fragrance sales advanced against strong comparables • Strong performance in Europe and Latin America • Good business momentum in North America offset by inventory reduction at one client ƒ Consumer Products with strong growth in all regions • Double digit growth

  11. Slide 11: Flavour Division Sales, Operating Profit and EBITDA

    Flavour Division Sales, Operating Profit and EBITDA Ó In Pro Forma Terms In Mio CHF In % of Sales + 2.2% in CHF 40% 1,500 + 2.4% in l.c. 35% 1,250 1,175 1,201 30% 1,000 25% 22.6% 22.1% 20% 750 15% 13.9% 13.5% 500 - 1% - 0% 10% 266 265 250 163 162 5% 0 0% HY 2006 PF HY 2007 PF HY 2006 PF HY 2007 PF S

  12. Slide 12: Flavour Division Highlights

    Flavour Division Highlights ƒ Continued strong, double digit growth in developing markets of Asia Pacific and Eastern Europe ƒ Latin America showed high single digit growth ƒ Solid single digit sales growth in mature markets of Europe, Africa and Middle East ƒ North American sales - excluding the co

  13. Slide 13: Leading Sensory Innovation

    Leading Sensory Innovation ƒ Leveraging combined sensory and consumer understanding capabilities ƒ Three new captive molecules for our perfumers palette: • Zinarine; natural green and tomato leaf notes • Paradisamide; fresh tropical fruit note • Florymoss; floral, green, mossy note ƒ Joint venture a

  14. Slide 14: Matthias Wahren, CFO

    Givaudan® leading Sensory Innovation Matthias Wahren CFO

  15. Slide 15: Introductory Remarks

    Introductory Remarks ƒ For comparison purposes, pro forma figures were prepared to reflect both years as if the acquisition had occurred 1 January 2006. Main adjustments relate to : • Incorporation of Quest activity for both half year periods • Elimination of sales between the two companies • Elimin

  16. Slide 16: Exchange Rates Development

    Exchange Rates Development Average Exchange Rates Period-End Exchange Rates HY 2007 vs. HY 2006 30.06.2007 vs. 31.12.2006 7% 4% 3% 3% 1% 0% -3% -3% -7% JPY USD GBP EUR JPY USD GBP EUR 30.06.07 1.02 1.23 2.42 1.63 30.06.07 0.99 1.23 2.46 1.66 30.06.06 1.10 1.27 2.27 1.56 31.12.06 1.02 1.22 2.39 1.61

  17. Slide 17: Business Statement

    Business Statement Pro Forma HY 2007 PF HY 2006 PF Change In Mio CHF in % of sales in % of sales in % Sales 2,239 100.0 2,140 100.0 5% Cost of sales (1,174) (52.4) (1,123) (52.5) 5% Gross Profit 1,065 47.6 1'017 47.5 5% Marketing, development & distribution expenses (555) (24.8) (531) (24.8) 5% Admi

  18. Slide 18: Key Operating Ratios

    Key Operating Ratios Pro Forma HY 2007 PF HY 2006 PF in % of Sales - Comparable basis Gross Profit Margin 47.6% 47.5% Operating Return On Sales (EBIT) 12.6% 11.6% EBITA 18.6% 17.9% EBITDA 21.3% 20.7% Gross Additions to PPE 4.3% 3.9% 18 Half Year Results 2007, 3 August 2007

  19. Slide 19: Income Statement

    Income Statement Pro Forma HY 2007 PF HY 2006 PF Change In Mio CHF in % of sales in % of sales in % Sales 2,239 100.0 2,140 100.0 5% Operating profit 275 12.3 259 12.1 6% Financial income (expenses), net (55) (2.5) (31) (1.4) 77% Result before taxes 220 9.8 228 10.7 -4% Income taxes (75) (3.3) (48)

  20. Slide 20: Income Statement: Actual and Pro Forma Results

    Income Statement Actual and Pro Forma Results Pro Forma Actual In Mio CHF HY 2007 HY 2006 Change in % HY 2007 HY 2006 Change in % Sales 2,239 2,140 5% 2,005 1,474 36% Operating profit 275 259 6% 185 313 -41% Financial income (expenses), net (55) (31) 77% (42) 12 n.r. Result before taxes 220 228 -4%

  21. Slide 21: Detail of Financial Income (Expenses)

    Detail of Financial Income (Expenses) Actual in Mio CHF HY 2007 HY 2006 Interest charges (55) (23) Net currency related gain (losses) incl. Derivatives (3) (9) Other derivatives net gains (losses) 15 25 Other financial income (expenses), net 1 19 Total financial income (expenses), net (42) 12 21 Hal

  22. Slide 22: Cash Flow Statement

    Cash Flow Statement Actual in Mio CHF HY 2007 HY 2006 Cash flows from (for) operating activities 157 192 Increase (decrease) in debt, net 2,709 11 Other cash flows from (for) financing activities (185) (304) Cash flows from (for) financing activities 2,524 (293) Cash effect of Quest acquisition (2,7

  23. Slide 23: Balance Sheet

    Balance Sheet CHF 4,700 mio CHF 8,247 mio ST 13% ST 17% ST 41% 29% ST 31. Dec 2006 LT 28% 30. June 2007 LT 50% LT 59% Equity 59% LT 71% Equity 33% ^ëëÉíë iá~ÄáäáíáÉë ^ëëÉíë iá~ÄáäáíáÉë in mio CHF Assets Liabilities and Equity 31.12.2006 Current Current SNV NIVOM 30.06.2007 Assets Liabilities NIPVN O

  24. Slide 24: Financial Summary

    Financial Summary ƒ Strong sales growth (pro forma l.c. 4.4%, excl. streamlining 5.7%) ƒ Strong operating performance with comparable pro forma EBITDA of CHF 478 million; 21.3% margin (20.7% in previous year) ƒ Financial performance impacted by lower financial income, higher interest expenses and on

  25. Slide 25: Gilles Andrier, CEO

    Givaudan® leading Sensory Innovation Gilles Andrier CEO

  26. Slide 26: Project Outlook

    Project Outlook ƒ Business transformation project (supply chain, regulatory and finance) on track ƒ Successfully entered pilot phase in mid June ƒ Scope expanded to include former Quest sites ƒ Implementation plan confirmed • Start go live mid-year 2008 • Implementation completed by 2010 26 Half Yea

  27. Slide 27: Integration Update

    Integration Update Achieved key milestones and deliverables By end of April By end of June ƒ One face to top accounts 9 ƒ One face to all customers 9 ƒ Coordinated account ƒ All positions nominated 9 management 9 ƒ Key business processes defined 9 ƒ Organisation fully defined ƒ Commercial site footp

  28. Slide 28: Integration Update: Savings and Integration Costs

    Integration Update Estimated phasing of targeted savings and integration costs ƒ CHF 200 million savings ƒ CHF 440 million of total integration costs, of which approximately CHF 340 million cash costs In Mio CHF E2007 E2008 E2009 E2010 Estimated Savings 200 15% 50% 75% 100% Estimated one-off costs 4

  29. Slide 29: Integration Update

    Integration Update Key highlights of a transformational deal Major organisational upgrade across the company Significant strengthening of leadership and talent Multiple complementary capabilities (R&D, Creation) Upgrade of processes and systems 29 Half Year Results 2007, 3 August 2007

  30. Slide 30: Outlook

    Outlook From Number One to Leadership ƒ Confident to outperform the underlying market growth in 2007 and to improve pro forma profitability ƒ Successful product streamlining strategy to be applied to the combined portfolio to enhance profitability 2008 and beyond ƒ Streamlining combined with focus o

  31. Slide 31: Givaudan - Leading Sensory Innovation

    Givaudan® Leading Sensory Innovation

  32. Slide 32: 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

  33. Slide 33: Half Year Results 2007, 3 August 2007

    33 Half Year Results 2007, 3 August 2007

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