IN VESTO R D AY 2019 Vision & Strategy - Andreas Fibig Chairman & CEO - IFF
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Andreas Fibig
INVESTOR
Chairman & CEO DAY 2019
Vision & Strategy
E X E C U T I V E S U M M A RY 1. Diversified product portfolio with ~20% sales derived from faster growing & profitable adjacencies 2. Strong multinational core list access; ~60% of sales from fast growing small & mid-sized customers 3. Industry-leading naturals portfolio & strongest innovation pipeline in Company history 4. Compelling Vision 2021 strategy focused on disciplined execution & integration 5. >12% Total Shareholder Return (TSR) goal, driven by >10% EPS growth*, and 2% dividend yield Note: All sales data based on 2018 combined sales *Excluding amortization 2 IFF Investor Day | Vision & Strategy
J O U R N E Y TO O U R A S P I R AT I O N
3 horizons to redefine IFF & build a stronger organization
LEADER
IN SCENT,
TASTE, &
ACCELERATE NUTRITION
INTEGRATE & EXECUTE
ENVISION & BUILD
IFF TODAY
FRUTAROM ACQUISITION
TIME
2015 - 2018 2019 - 2021 2021+
3 IFF Investor Day | Vision & Strategy
ENVISION & BUILD: VISION 2020
Strong advancements across all strategic pillars
VISION 2020
Innovating Winning where Becoming our customers’ Strengthening &
firsts we compete partner of choice expanding the portfolio
+Double-Digits
Encapsulation
#1 in Mid-Tier
Flavors NA
+13%
EAME
Expansion
Global core lists
Commercial
Excellence program
Expansion into Adjacencies
13 New +Double-Digits Acquisition Track Record
Captive fragrance
Modulation
ingredients
Launch of tastepoint
+12%
NOAM
9 New +6%
+5%
Natural flavor GA
modulators
PuraVitaTM LATAM
BUILDING OUR TALENT AND ORGANIZATION IFF University | Diversity & Inclusion | Employee Culture Survey
$
CONTINUOUSLY IMPROVING Productivity Programs | Implementation of Zero-Based Budgeting | Acquisition Synergies $
$
CREATING A SUSTAINABLE FUTURE Launched EcoEffective+ 2025 Goals | Top 100 Most Sustainable US Co’s. | FTSE4FGood
Developed Market Index
Note: Percentage increases reflects organic currency neutral sales CAGR between 2015 and 2018
4 IFF Investor Day | Vision & Strategy
R E S U LT S & P E R F O R M A N C E
Strong track record of profitable growth
Sales Adjusted EBITDA* Market capitalization
+10% +8% +14%
3-year CAGR 3-year CAGR 3-year CAGR
$4.0B $942M
$14.3B
$3.0B $712M
$9.6B
2015 2018 2015 2018 2015 2018
*Non-GAAP metrics: please see Non-GAAP disclosures at ir.iff.com
Note: 2018 sales are on a reported basis; market capitalization as of 12 / 31 of relevant year
5 IFF Investor Day | Vision & Strategy
F R U TA R O M A C Q U I S I T I O N
Unlocks new strategic opportunities
Greater exposure to naturals
Broad portfolio of adjacencies
Leader
in Scent, ~36,000 new customers
Taste &
Nutrition
$145M in cost synergy targets
Cross-selling & integrated solutions
6 IFF Investor Day | Vision & StrategyOUR EVOLUTION
We are a stronger company, with greater scale and broader capabilities
POSITION PORTFOLIO CUSTOMERS INNOVATION EMPLOYEES NET SALES
#2 ~20% sales
Expansive
TO Flavor & from faster Approx.
platforms and 13,000+ $5B+
Fragrance growing 39,000
capabilities
player adjacencies
#4
FROM Traditional Flavor &
Flavor & Approx.
Flavor & Fragrance 7,000+ $3B
Fragrance 3,000
Fragrance focused
player
Note: Sales data is from full year 2017 and full year 2018 combined
7 IFF Investor Day | Vision & StrategyHOW WE RANK AMONG PEERS
Significant progress towards market leadership
2018 Reported Sales
$5.1B
Note: Based on reported 2018 sales except (I) IFF 2018 reflects combined sales and (II) Firmenich is based on estimated 2018 sales . Mane is based on
estimated 2018 sales
8 IFF Investor Day | Vision & StrategyJ O U R N E Y TO O U R A S P I R AT I O N
3 horizons to redefine IFF & build a stronger organization
LEADER
IN SCENT,
TASTE, &
ACCELERATE NUTRITION
INTEGRATE & EXECUTE
ENVISION & BUILD
IFF TODAY
FRUTAROM ACQUISITION
TIME
2015 - 2018 2019 - 2021 2021+
9 IFF Investor Day | Vision & StrategySustained Trends
Consumers shift towards natural,
health & wellness, clean label, traceability
Small, mid-tier and private label
EVOLVING players gaining share
CONTEXT Continued momentum in sustainability
Adapting our strategy Emerging Trends
to rapidly changing world CPGs shifting towards growth & innovation
Raw material cost volatility
F&F expanding into adjacencies
Improved growth in emerging markets
10 IFF Investor Day | Vision & StrategyVISION 2021
Strategic framework to achieve ambition & accelerate profitable growth
L E A D E R I N TA S T E , S C E N T & N U T R I T I O N
T O P T H I R D T S R ( > 1 2 % ) | 5 - 7 % S A L E S G R O W T H | 1 0 % + E P S G R O W T H * | R A P I D D E B T P AY D O W N
UNLOCK
DRIVE
GROWTH
I N N O V AT I O N
OPPORTUNITIES
FOCUS ON
CUSTOMER A C C E L E R AT E
MANAGE
BUSINESS
PORTFOLIO
T R A N S F O R M AT I O N
C U LT U R E T E C H N O L O G Y & D ATA S U S TAI N AB I L I T Y M&A
TA L E N T & O R G A N I Z AT I O N
*Excluding amortization
11 IFF Investor Day | Vision & StrategyGROWTH ENGINES
Unlocking incremental shareholder value
Customer Base Geographic access Product Portfolio Innovation Pipeline
EXPOSURE • Global core lists • 45% sales in • ~20% of sales • Strongest pipeline
• Fast growth small- emerging markets from high-growth in company's
& mid-tier adjacencies history
ACTION • Gain share with • Invest in Asia, • Focused • Prioritize highest
recent core-listed Africa and Middle investments in return platforms
customers East adjacencies given
growth and margin
• Direct service
dynamics
model for mid-tier
C R O S S - S E L L I N G A N D I N T E G R AT E D S O L U T I O N S
VA L U E - A C C R E T I V E M & A
Note: Sales data based on 2018 combined sales
12 IFF Investor Day | Vision & StrategyF O C U S O N C U S TO M E R S
Broadest customer base in the industry
Customer base Customer segments Geographic growth potential
Large CPGs
Strong access
~40% to Global CPG
core lists
~39,000 Mid-Sized,
CUSTOMERS Small, Private
Label CPGs
Faster growth
~60% segments
Increase penetration in priority markets of Asia,
Africa and Middle East
Note: Sales data based on 2018 combined sales
13 IFF Investor Day | Vision & StrategyG R E AT E R A C C E S S I N AT T R A C T I V E A D J A C E N C I E S
Significantly increased market potential & strengthened growth exposure
Key markets of exposure
Estimated 2018 Growth (5-Year Projected CAGR)
7%
Market size ($B) 6% 6% 6%
5%
4% 4%
3% 3% 3%
2%
Total IFF Fragrance Fragrance Flavors Flavor Savory Cosmetic Inclusions1 Natural Natural Health
Market Ingredients Ingredients Solutions Actives Colors Food Ingredients
Protection
~$50B
$10B $4B $12.5B $1.5B $2.3B $2.6B $9B $1.5B $1B $4B
1. Includes Taura, Inventive and Leagel (Gelato ingredients)
Note: light blue refers to adjacent segments access gained through Frutarom acquisition
Source: Company estimates
14 IFF Investor Day | Vision & StrategyC R O S S - S E L L I N G A N D I N T E G R AT E D S O L U T I O N S
Two key sources for value creation
Opportunity to serve customer
Cross-Selling
needs by leveraging existing
relationships and expanded
$8M*
portfolio Quick
wins to
date
Combine product offering and
Integrated
Solutions value-added services into full $100M
"solutions"
2021 target
* On an annualized basis
15 IFF Investor Day | Vision & StrategyR O B U S T R & D P I P E L I N E A C R O S S P L AT F O R M S
Strongest innovation pipeline in company history
P L AT F O R M S Innovation Pipeline: 15-yr NPV EP1
• Naturals & Beyond • Active Cosmetics
• Modulation • Health & Nutrition ~50%
• Ingredients • Delivery Systems
E N A B L I N G C A PA B I L I T I E S
• Sensory • Biosciences
• AI, Data & Analytics • Applications Science
• Next Gen Processing • Crop Science
• Analytical • Clinical Research
C H E M I S T R Y & M AT E R I A L S C I E N C E
S U S TA I N A B I L I T Y 2014 2019
1NPV = Net Present Value, EP = Economic Profit
16 IFF Investor Day | Vision & StrategyPORTFOLIO ASSESSMENT
Diverse portfolio with different roles that dictate resource allocation guidelines
IFF Product Groups
Estimated EBITDA Margin (%)
AVG.
RESOURCE
ALLOCATED
AVG. TO MAXIMIZE
RETURNS
(>12%+ TSR)
Scent Taste Nutrition & Ingredients Future growth rate
Relative Bubble Size = Estimated Annual Sales
17PORTFOLIO
MANAGEMENT
ROLES DRIVE FIX
RESOURCE 10%
A L L O C AT I O N
GROWTH
$ 40%
GROWTH
RESOURCE
Invest for profitable growth AL L O C AT I O N
BALANCED $
Growth and margin BALANCED
50%
FIX
Rapidly fix or de-prioritize
(%) Revenue share as a % of total
18 IFF Investor Day | Vision & StrategyB U S I N E S S T R A N S F O R M AT I O N
Comprehensive programs unlock value for reinvestment & margin expansion
3-year savings target ($M)
~100 ~245
145
Integration synergies Productivity programs Total
19 IFF Investor Day | Vision & StrategyG L O B A L L E A D E R I N S U S TA I N A B I L I T Y 2019
Significant & broad-based improvements
2018
2017
2016
2015
2014 We launched Surpassed 3
our 2020 of our 4 eco-
Environmental efficiency 2020 SAM 'Industry
2013 Sustainability goals Mover'
Goals
2012 Barron’s CDPs 'A' List
CDP 'A' List, F&F industry’s Achieved 100 Most for Water
2011 Created a climate first on-site industry first Sustainable Security
Green change Turbine GreenCircle Companies
Ambitious Chemistry certified LLC Historical
First 2020 Product 4KW Solar EcoVadis Euronext Zero waste to Euronext partnership
sustainability sustainability Evaluation field opening CSR Gold Vigeo landfill Vigeo World with
report targets Tool in Hazlet (top 5%) U.S. 50 index certification 120 Index Yellowstone
20DEC
2018
TECHNOLOGY
M&A JAN
2019
SAVORY SOLUTIONS
Strengthened
M&A capabilities MAR
INCLUSIONS
2019
Robust deal pipeline
APR TECHNOLOGY
Aligned with portfolio roles 2019 VENTURE INVESTMENT
MAY
2019 SAVORY SOLUTIONS
Corporation
(Canada)
21 IFF Investor Day | Vision & StrategyPORTFOLIO ALIGNMENT
Redefining our business units for accelerate profitable growth
NUTRITION &
SCENT TA S T E INGREDIENTS
Fine Fragrances Flavors (Frutarom Flavors) Natural Health
Ingredients
Consumer Savory Solutions
C AT E G O R I E S Fragrances Natural Colors
Inclusions
Fragrance Ingredients (Taura, Inventive & Natural Food
Leagel) Protection
Cosmetic Active
Ingredients Flavor Ingredients
22 IFF Investor Day | Vision & Strategy New categories within BUTA L E N T A N D O R G A N I Z AT I O N
Getting the best of both organizations
SCENT TA S T E NUTRITION & INGREDIENTS
Nicolas Mirzayantz Matthias Haeni Yoni Glickman
Cosmetic Natural Natural
Fine Consumer Fragrance Flavor Savory Natural Flavor
Active Inclusions Health Food
Fragrances Fragrances Ingredients Compounds Solutions Colors Ingredients
Ingredients Ingredients Protection
Managed by Legacy IFF leader Managed by Legacy Frutarom leader
Key Accomplishments Critical Next steps
Defined new organization Align incentive systems
Retained critical talent from Selectively integrate IT systems
Frutarom aligned with business priorities
23 IFF Investor Day | Vision & Strategy5 – 7%
Revenue growth*
2% Expand
Dividend margin
yield
VISION 2021
TOP THIRD
FINANCIAL TSR >12%+
OBJECTIVES
10%+ Repay debt
EPS growth* (E X E C U T I V E S U M M A RY 1. Diversified product portfolio with ~20% sales derived from faster growing & profitable adjacencies 2. Strong multinational core list access; ~60% of sales from fast growing small & mid-sized customers 3. Industry-leading naturals portfolio & strongest innovation pipeline in Company history 4. Compelling Vision 2021 strategy focused on disciplined execution & integration 5. >12% Total Shareholder Return (TSR) goal, driven by >10% EPS growth*, and 2% dividend yield *Excluding amortization 25 IFF Investor Day | Vision & Strategy
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