Financial Results - Q2&H1 2012

Transcription

1 Financial Results - Q2&H1 2012

2 FORWARD-LOOKING STATEMENTS This presentation includes statements data, forecasts, goals and Company plans that are "forward-looking statements, as defined in the Securities Law , 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 immediate 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 2011, published on March 15, 2012, and the Company's periodic 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.

3 Who We Are A Leading Global Flavor and Fine Ingredient House Global Company Sales in 130+ countries 14,000+ customers 650 Revenue, $M Broad Product Portfolio 30,000+ products 4,000+ raw materials Public Company Listed on London and Tel Aviv Stock Exchanges (FRUT) Financial Success Since x growth in sales 9x growth in EBITDA 11.5x growth in net profit * 2011, Proforma 3

4 A Top-Ten Flavor House Estimated Flavor Sales (US$ M*) 2,500 2,000 1,500 1, smaller companies - Source: Public reports of relevant companies, Leffingwell & Associates. JP Morgan, Deutsche Bank * Based on 2011 results 4

5 Frutarom - A Global Company Accelerated growth - organic and through strategic acquisitions Etol S. Africa Czech Rep. Mylner 1996 Tel Aviv stock exchange HK F&F Tohar Flavour key Ukraine Russia Turkey Brazil Kazakhstan Rayner Hong Kong CPL Aroma Mexico Canada Flachsmann France IFF FS London stock exchange Poland AM Todd Acatris Nesse Rad Gewurzmuller Abaco Adumim Raychan CH Hansen DE FSI Corona Oxford Costa Rica FSI OH Aromco CH Hansen IT EAFI Savoury Flavours Baltimore Meer India Jupiter Rieber Botanicare Kunshan Balmey Sales office acquisition 5

6 Frutarom - A Global Company (Sales, EBITDA, Net Profit, USD M) 1996 Tel Aviv stock exchange 10 HK F&F Tohar Flavour key Kazakhstan Ukraine Rayner Russia Turkey Brazil 81 Net Profit X11.5 Hong Kong CPL Aroma 109 Mexico Canada Flachsmann France 197 IFF FS London stock exchange EBITDA Profit X9 Poland AM Todd 32 Acatris Nesse Rad Gewurzmuller Abaco Adumim Raychan Sales S. Africa X6.5 CH Hansen DE 66 FSI Corona Oxford Czech Rep. Costa Rica FSI OH Aromco CH Hansen IT EAFI Etol Mylner 80 Savoury Flavours Baltimore Botanicare Meer Kunshan India Jupiter Balmey Rieber

7 Proven Acquisition Track Record 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 of cross selling opportunities Optimization and harmonization of resources

8 Jan Feb M&A Activity Accelerates Growth 2010 Total revenues over $145M* Strategic move to strengthen Central- and Eastern European leadership; diversified natural product portfolio Strengthening US activity, initiating US Savory activity, innovative products (flavored coffee & shakes), penetrating food service sector First significant entry to flavors market in Brazil. Base for expansion in Latin America Reinforcing Savory position in Europe and emerging markets Enhancing savory activity and presence in the UK and emerging markets, synergistic with UK savory activity (proximate operation sites) Fortifying European savory activity with focus on Scandinavian markets Supporting growth in emerging markets, synergistic with UK activity, extensive and diversified technology base * Based on acquired companies yearly revenues as reported in Frutarom s immediate reports; 8

9 The Acquisitions Contribution The integration of the 8 acquisitions is progressing successfully as planned: - Merging Sales and R&D activities - Optimizing production, supply chain and logistics infrastructures The acquisitions created opportunities for further improvement in profit and profitability: - Merging production sites/activities - Transfer activities to lower cost countries - Improvement in service and supply chain efficiencies - Global logistics - Global purchasing Acquisitions are already contributing to sales & profit - higher contribution to profit and profitability is expected in 2013

10 Fast Growth in Sales Record high in sales despite challenging market conditions & Currency effect Revenues Q2 Revenues H1 (US$ M) (US$ M) Q Q Q Q Q Q2 * Growth in local currency terms; in dollar term sales grew by 26.2% ** Growth in local currency terms; in dollar term sales grew by 25.6% 2000 H H H H H H1 10

11 Flavors - Most Profitable Activity Growing Fast (US$ M) Share of total sales (US$ M) 42% Revenues Q2 71% % Q Q Q Q Q Operating Profit Q % % Growth was driven by Internal growth above average market growth rates USA, Latin America, Asia, Central and eastern Europe, Africa Organic growth in Europe despite challenging market conditions Organic growth rate** 4.1% Q Q Q Q * Growth in local currency terms; in dollar term sales grew at 32.1% ** Net of acquisitions and currency effect 11

12 Geographic Highlights North America High growth in Flavors Evaluating acquisition opportunities Corona, CA Cincinnati, OH NB, New Jersey Georgia Western Europe Growth in flavors market (despite economic challenges) Evaluating acquisition opportunities Denmark Norway Netherlands UK North Germany UK South Belgium France Switzerland Italy Saint Petersburg Moscow Poland Ukraine Slovakia Perm Saratov Serbia Kazakhstan Slovenia Turkey Israel Central & Eastern Europe Strengthening R&D and application centers in Russia, Ukraine, Kazakhstan Strong base in Central Europe Evaluating acquisition opportunities China Mexico Latin America Strong base in Brazil Expanding penetration Investment in R&D and applications centers in Mexico & Costa Rica Evaluating acquisition opportunities Costa Rica Brazil Africa Growth in south Africa and sub Sahara region Production, R&D and application center Evaluating acquisition opportunities South Africa India Asia Hong Kong Singapore Expanding Indonesia R&D and sales force in China, Singapore, Indonesia, Philippines, Thailand, Vietnam, India, Sri Lanka Building a state-of-the art, highcapacity plant in China with both traditional and savory flavor capabilities 12

13 Record in Gross Profit Gross Profit Q2 Improvement is driven by: (US$ M) Gross profitability 37.1% % 61.8 (38.5% net of Etol s trade & marketing activity) Adjusting selling prices Stabilization and some decrease in raw material prices Further actions to improve profitability 2011 Q Q2 Gross Profit H1 Adjusting selling prices (US$ M) Gross profitability 37.4% % (37.9% net of Etol s trade & marketing activity) Harmonization of raw materials Strengthening global purchasing Substantial increase in purchasing power 2011 H H1 Operational synergies, including from recent acquisitions 13

14 Record in Operating Profit (US$ M) Operating Profit Q2 Operating Profit H % % 12.5% % Q Q Q Q Q Q H H H H H H1 14

15 Record in EBITDA (US$ M) EBITDA Q2 EBITDA H % % % % Q Q Q Q Q Q H H H H H H1 15

16 Record in Net Profit and EPS (US$ M) Net Profit Q2 Net Profit H1 (US$ M) EPS ($) EPS ($) % % % % Q Q Q Q Q Q H H H H H H1 * 2009 Net of acquisitions 'related one time expenses Record high in net profit was negatively influenced by currency effect Increase in financing exchange rates expense ($2.4 M Vs. $0.4 M) Due to USD strength Reporting in USD effect * 16

17 Profitable Growth Generates Strong Balance Sheet & Cash Flow from Operations (USD M) Cumulative Cash Flow Cash flow $ 222 M Cumulative cash flow in the past 3.5 years Q2: $ 22.3 M vs. $ 13.1 M H1: $ 39.9 M vs. $ 15.9 M H1 Balance Sheet Net debt ( ): USD M Equity ( ) - USD M 17

18 Frutarom s Strategy: Clear Focus Going Forward Profitable Internal Growth Customer Focus Market Focus Product Portfolio Core Competencies Mid-sized and local Private label Multinational Developed markets (Europe and USA) Emerging markets (e.g. Asia, Central & South America, Central and Eastern Europe, Africa) Natural (extracts, fruit bases specialty essential oils) Natural functional food ingredients Comprehensive, integrated solutions Cost reduction solutions R&D and innovation internal and external Efficiencies, scale and synergies cross selling Experienced global management Sales-driven organization 18

19 Frutarom s Strategy Above-Industry Organic Growth Margin Expansion Proven Acquisition Track Record 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 19

20 Frutarom s Vision To Be The Preferred Partner For Tasty And Healthy Success 20