Company Overview - Frutarom · This presentation includes statements data, forecasts, goals and...
Transcript of Company Overview - Frutarom · This presentation includes statements data, forecasts, goals and...
Company Overview
FORWARD-LOOKING STATEMENTS
This presentation includes statements data, forecasts, goals and Company plans that are "forward-looking
statements“, as defined in the Securities Law - 1968, whose occurrence is not certain and which are not solely in the
Company's control. These forward-looking statements are included, inter alia, in discussions of strategy, objectives,
goals, plans, events, future intentions or other information relating to future events or issues whose occurrence is
not certain.
By their nature, forward-looking statements involve risk and uncertainty. Whether the forward looking information
occurs or not is affected, inter alia, by risk factors characteristic to the Company's operations and developments in
the general environment and external factors which impact the Frutarom Group and its area of activities.
This forward looking information could include facts and data based on the Company's subjective assessment,
including with regards to the current status of the Company and its business, the current situation in the industry in
which the Frutarom Group operates, macro-financial facts and information, all as are known to the Company on the
date on which this presentation was prepared, some of which were given to the Company by external sources, the
content of which was not independently examined by the Company, and therefore the Company is not responsible
for their verity.
This presentation must be read together with the Company's periodic and current reports, and was not meant to
replace the need for study of reports the Company has published, including, inter alia, the Company's periodic
report for 2010, published on March 24, 2011, and the Company's quarterly reports subsequently published. These
reports could include, inter alia, updates to the information regarding the Company's activities or of the forward
looking statements appearing in this presentation.
Subject to the requirements of applicable law, the Company does not intend to update any industry information or
forward-looking statements appearing in this presentation, and is not required to publish any additional
presentations for its shareholders in future.
Frutarom’s Foundations
Founded in 1933, Frutarom
combined the cultivation of aromatic
plants and flowers with the
extraction and distillation of flavors,
fine ingredients and essential oils.
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A Leading Global Flavor and Fine Ingredient House
• Sales in 130+ countries
• 13,000+ customers Global
Company
• 20,000+ products
• 4000+ raw materials
Broad Product Portfolio
• Listed on London and Tel Aviv Stock Exchanges (FRUT)
Public Company
• Since 2000**:
• 6x growth in sales
• 8x growth in EBITDA
• 11x growth in net profit
Financial
Success
0
100
200
300
400
500
600
Revenue, $M
4
Who we are?
* 2011LTM 30.9.2011
** 2000-2010 growth
*
Frutarom Becoming Global
Note: Acquisitions appear in squares. New locations appear as the flag of the relevant country.
USA: Flavour
Key acquired
Frutarom has grown dramatically -
organically and via acquisitions
1990-2000 2001 2002 2004 2003 2005 2006 2007 2009 2011
Israel: Tohar
acquired
(seasonings)
UK: HK
Flavours &
Fragrances
acquired
USA: Meer
acquired
Frutarom
Europe
established
Botanicare
acquired
China:
Kunshan
Flavours
acquired
Israel:
Baltimore Spice
Israel acquired
ArtChem
activity
established
CPL Flavours
and Ingredients
divisions
acquired Rayner
industrial
flavours activity
acquired
Frutarom
listed on TA
100 Index of
top 100
Israeli shares
Switzerland
Flachsmann
acquired
Food systems
business in
Switzerland,
Germany and
France
acquired
Nesse
acquired
A.M. Todd
Flavors
Extracts
business
acquired
Acatris
acquired
Belmay UK
acquired
Jupiter UK
acquired
Abaco USA
acquired
Reychan
acquired
Adumim
acquired
Gewurz
acquired
RAD
acquired
FSI USA
acquired
Oxford
acquired
Rieber
Industrial
Savory
Solutions
acquired
EAFI
acquired
Christian
Hansen
Aromco
acquired
FSI USA
acquired
Savoury
Flavours
Etol
2012 5
Chr.
Hansen’s
Savory
Solution
German
activity
acquired
Mylner
Sales and Marketing – 50 Offices
Production – 27 Sites R&D – 28 Labs
A Global Company We provide our customers with global and local support
South Africa
UK- North UK - South
USA-Cincinnati
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Slovenia
Switzerland
Asia
• Expanding R&D and sales force in China, Indonesia, Philippines, Thailand, Vietnam
• Building a state-of-the art, high-capacity plant in China with both traditional and savory flavor capabilities
Central and Eastern Europe
• Strengthening R&D and Application Centers in Russia, Ukraine, and Kazakhstan
• Strong base in central Europe
• Evaluating acquisitions and local production opportunities
Central & South America
• Investment in R&D and Applications Centers in Mexico & Costa Rica
• Strong base in Brazil Expanding sales force
• Evaluating acquisition opportunities
Africa
• Production, R&D and Application Center
• Evaluating acquisition opportunities
Towards Accelerated Penetration of Emerging Markets
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Jan. 2011- Jan. 2012 M&A activity accelerates growth 2010 Total revenues – over $145M*
Strategic importance
Reinforcing Savory position in Europe and emerging markets
Supporting growth in emerging markets, synergistic to UK activity,
extensive and diversified technology base
Enhancing savory activity in UK market
Strategic move to strengthen Central- and Eastern European
leadership; Diversified natural product portfolio
Strengthening US activity, initiating Savory activity in the USA,
innovative products (flavored coffee and shakes), and penetration to the
food service sector
8 * Based on acquired companies revenues for 2012 as reported in Frutarom’s immediate reports
First significant entry to the flavors market in Brazil. Important base for
expansion in Latin America
Enhancing our savory activity and presence in the UK and emerging
markets, synergistic to UK savory activity (close to EAFI)
Reinforcing European savory activity with focus on Scandinavian market
Continued Growth in Sales and Profits
4 16
67 101
184
244
368
425 451
0
100
200
300
400
500
600
85 90 95 01 03 05 07 09 10 11E
Revenues $M
Average CAGR 2000-10
20%
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*
* 2011LTM 30.9.2011
Financial Highlights 10 Years of Profit Development
7 10
25
37
57 63
0
10
20
30
40
50
60
70
2000 2002 2004 2006 2008 2010
EBITDA
9
14
32
49
72 82
0
20
40
60
80
2000 2002 2004 2006 2008 2010
Operating Profit
Net Profit 2000-2010
X11
Shareholders’ Return 2000-2010
1300%
Operating Profit 2000-2010
X9
Net Profit
4
6
18
30
37 44
0
10
20
30
40
2000 2002 2004 2006 2008 2010
10
Estimated Flavor Sales
US$ M
A Top-Ten Flavor House
Source: Public reports of relevant companies, Leffingwell & Associates. JP Morgan, Deutsche Bank
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500+ smaller
companies
Above-Industry
Organic Growth
Frutarom’s Strategy
Proven
Acquisition
Track Record
Margin
Expansion
• Continue successful strategy of combining rapid profitable organic growth with strategic acquisitions
• Again doubling our revenue to reach $1 billion within 4 years, while continuously expanding margins
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Fine Ingredients Taste Solutions
• Unique sweet & savory Flavors
• Value-added functional Savory
Solutions
• Sweet and savory Food
Systems
• Unique technologies
• Expertise in local & global
tastes
• Innovative, science-based Health
Ingredients
• Natural Botanical Extracts
• Flavor & Fragrances Specialties
• Distillates & Essential Oils
• Citrus Specialties
• Specialty Aroma Chemicals
• Supporting the growing demand
for taste, health, wellness &
beauty
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~30% of sales ~70% of sales
We share the…
Passion for Taste & Health
Flavors Fine Ingredients
We develop tailored solutions combining excellent
taste with health and functionality all under one roof 14
Our Employees: Our Key Asset
~1,900 employees worldwide*15 * Including Etol employees
Growing Mid-Sized Food & Beverage Market
• Fragmented market
• New mid-sized/local
companies emerging
Private label
Developing markets
• Service expectations
Over 65% of Market Controlled by Mid-Sized and Local Companies
(% of Market Share)
Source: Feb, 2011 Datamonitor, Euromonitor and Frutarom’s estimations
The global food market is estimated
at US$1,640 billion
67.8%
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• Large F&F players with full
service platform, focused
on top multinational
customers
• Few mid-sized players with
both regional strength and
global platform
• Large number of small
niche companies with
limited service capability
and regional focus only
F&F Market Fragmented but Consolidating
*Source: Leffingwell & Associates
Large
53%
Mid-Size
17%
Small &
Local
30%
Above $1 bn
5 companies
$100-1 bn
7 companies
Below $100mm
+500 companies
(% of Market Share)
Market Share by size
2010 F&F Sales*
2010 Total Market Size $20.5bn
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Private Label – Mid-Sized and Local A US$86.4B Industry1
(1) Source: from The Nielsen Company, PLMA’s
2010 Private Label Yearbook,
(2) Source: The Nielsen Company, August 2009
(3) Source: DataMonitor, January 2011
(4) Source: Rabobank, February 2011
2009 Private label products held
20.4% of the food sector worldwide, with European
market penetration highest in the sector2
achieving 7.4% global growth
2010
48% of consumers report buying
more private label products compared to the year before2 88% of consumers
intend to continue purchasing private label products,
even after the economy improves3
Private labels expected to hold
50% of the global food market by 20254
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Private Label – Mid-Sized and Local A US$86.4B Industry
Source: ACNielsen, industry insights, 2008, Private Label: Who will win the battle of the shelf? Branded or private label products? Sep 2009, ACNielsen,
The global Staying Power of Private Label, Aug, 2010
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“
“ Health, Wellness & Functional Food
~85 million adults indicate that nutritional value / wellbeing is criteria #1
or #2 when deciding what to eat or drink*
Growth Drivers
• Aging population
• Rising obesity
• Nutrient deficiency
• Consumer demand
• Lifestyle & income
• Consumer awareness
Opportunities
• Unwilling to forgo taste - even for health
• Preference for convenience food
*Source: The NPD Group, 2011 20
Key Market Drivers – Food Growth in demand for:
Natural and clean label
Health/Wellness
• reduced fat, calories and salt
Functional food
• Products with illness - preventative properties
Innovation
Convenience food
Speed
• Timeline to deliver results – hypermarkets
Unique combinations
• Traveling opens consumer to trying new flavors
21 Cost reduction
Frutarom’s Strategy: Clear Focus Going Forward Profitable Internal Growth
Customer
Focus
Mid-sized and local
Private label
Multinational
Market
Focus
Developed markets (Europe and USA)
Emerging markets (e.g. Asia, Central & South America,
Central and Eastern Europe, Africa)
Product
Portfolio
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 22
32 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 and harmonization of
resources
Optimization of cross selling
opportunities
Proven Acquisition
Track Record
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Frutarom’s Vision
To Be The Preferred Partner For
Tasty And Healthy Success
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