Current Report Filing (8-k)
September 10 2015 - 7:30AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 2015
International Flavors & Fragrances Inc.
(Exact Name of Registrant as Specified in its Charter)
New York
(State or Other Jurisdiction of
Incorporation)
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1-4858
| 13-1432060
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(Commission File Number) | (IRS Employer Identification No.) |
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521 West 57th Street, New York, New York | 10019 |
(Address of Principal Executive Offices) | (Zip Code) |
(212)765-5500
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
____________________________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
In connection with its presentation at Barclays Back-to-School Consumer Conference, being held today, Thursday, September 10, 2015 in Boston, Massachusetts, International Flavors & Fragrances Inc. (the “Company”) is hereby furnishing a copy of the slide presentation, which provides updated full year 2015 financial guidance.
The information in this Current Report on Form 8-K (including the exhibits hereto) is being furnished under Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Non-GAAP Financial Measures
Certain of the presentations furnished with this Current Report on Form 8-K contain non-GAAP financial measures, including (i) adjusted EPS, (ii) adjusted operating profit and (iii) currency neutral sales. These measures are not intended to represent a presentation in accordance with GAAP. In discussing the Company’s historical and expected future results and financial condition, the Company believes it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period-to-period comparable basis, financial amounts both including and excluding identified items. The Company believes such non-GAAP measures provide investors with an overall perspective of the period-to-period performance of its business. In addition, management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to our business. A material limitation of these non-GAAP measures is that such measures do not reflect actual GAAP amounts. The Company compensates for such limitations by presenting reconciliations of the non-GAAP measures contained in the furnished presentations to the most directly comparable GAAP measures. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. A reconciliation of these non-GAAP measures to GAAP measures can be accessed by visiting the Investor Relations section of the Company’s website.
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Item 9.01. | Financial Statements and Exhibits. |
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Exhibit No. | | Description |
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99.1 | | Barclays Back-to-School Slide Presentation dated September 10, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
Date: September 10, 2015
By: /s/ Alison Cornell
Name: Alison Cornell
Title: Executive Vice President and Chief Financial Officer
EXHIBIT INDEX
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Exhibit Number | Description |
99.1 | Barclays Back-to-School Slide Presentation dated September 10, 2015. |
Barclays Back to School Alison Cornell, Executive Vice President & CFO September 10, 2015
Statements made in this presentation that relate to our future performance or future financial results or other future events (identified by such terms as “expect”, “anticipate”, “believe”, “outlook”, “guidance”, “may”, “target” or similar terms and variations thereof) are forward-looking statements, including the Company’s 2015 guidance, its long-term financial guidance, the impact of recent developments in China and emerging markets on its final results and the Company’s expectations regarding the impact of its 2020 strategy on its financial and operational results, including its ability to fund through cost-savings and the impact of acquisitions. These statements are based on our current beliefs and expectations and are subject to significant risks and uncertainties. Actual results may materially differ from those set forth in the forward-looking statements. Factors that could cause IFF’s actual results to differ materially include (1) macroeconomic trends affecting the emerging markets; (2) the Company’s ability to implement its Vision 2020 strategy; (3) the Company’s ability to benefit from its investments and expansion in emerging markets; (4) the impact of currency fluctuations or devaluations in the Company’s principal foreign markets; (5) risks associated with the Company’s supply chain, including availability and pricing of raw materials, energy and transportation; (6) economic, regulatory and political risks associated with the Company’s international operations; (7) changes in consumer demand, either due to changes in preferences or consumer confidence; (8) the Company’s ability to successfully increase its sales through acquisitions, collaborations and joint ventures including its ability to identify, acquire on terms consistent with the Company’s return criteria and successfully integrate bolt-on or adjacent companies; (9) the Company’s ability to implement its business strategy, including the ability to fund growth through anticipated cost savings; and (10) the Company’s ability to successfully develop new and competitive products and technology that appeal to its customers and consumers as well as those risks described in the Risk Factor forward-looking statements sections of our Annual Report on Form 10-K for the year ended December 31, 2014 and in our other periodic reports filed with the SEC, all of which are available on our website under Investor Relations, at www.iff.com. We do not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements. We have disclosed certain non- GAAP measures within this presentation. Please see reconciliations to their respective measures prescribed by accounting principles generally accepted in the U.S., all of which are available on our website under Investor Relations, at www.iff.com. Cautionary Statement
Overview Investment Thesis Summary Vision 2020 Recent Performance Agenda
Total Global F&F Market (B$) Segment Share of F&F Market (%) North America GA 3.1 21.6 LATAM Europe 6.4 2.0 5.0 5.1 18.0 2.4 4.8 1.6 4.6 4.6 10.6 6.5 3.5 2014 Flavors (~4% CAGR) CAGR (14-19) ~75% growth expected in emerging markets 2.2% 1.7% 4.5% 5.9% 5.2% Africa & Mid-East Fragrance Ingredients (2% CAGR) Fragrance compounds (~3% CAGR) Flavor & Fragrance Market Overview Source: IAL Consultants: Overview of the Global Favours & Fragrances market (8th edition, 2014) and Company estimates
• IFF holds ~16% market share • Top 4 represent 2/3 of market • Market fragmented outside top players • Barriers to entry include: – Research & Development – Customer relationships – Regulatory expertise – Consumer insight – Global platform 25% 16% 16% 12% 31% Givaudan IFF Symrise Firmenich Other Source: IAL Consultants: Overview of the Global Favours & Fragrances market (8th edition, 2014) and Company estimates Flavor & Fragrance Market Share Dynamics F&F Market Share
$0.7 $0.7 Bioland 10% 7% 5% 4% 4% 4% 4% 3% 3% 3% 53% Cosmetic Actives Market Share Natural Actives (6 to 7% CAGR)* Synthetic Actives (~2 to 4% CAGR)* BASF Silab Air Liquide Gattefossé Other Cosmetic Actives Market Overview Lonza IFF DSM Croda Symrise $1.4B Total Cosmetic Actives Market * Expected annual growth Source: Company estimates
• 126 Years Old & 51 Years on NYSE • S&P 500 Company • ~$9.2 Billion Market Capitalization • $3.1 Billion in Sales, with Top Tier Adjusted EBITDA Margin of 22.2%* • 79% of Sales outside the U.S. • 29 Manufacturing Facilities • 31 Creative Centers • ~6,400 Employees at a Glance * Adjusted EBITDA margin is a Non-GAAP metric, please see our GAAP to Non-GAAP Reconciliation at IFF.com
• Consumer Insight • Research and Development • Creative Expertise • Consumer Experience How We Compete to Win
• Strong Growth Dynamics • Proven Profitability • Excellent Cash Flow Generation • Industry-Leading Returns High Quality Investment Thesis
5% 5% 6% 4% 6% 7% 7% 5% 6% 1-Yr CAGR 3-Yr CAGR 5-Yr CAGR Strong Growth Dynamics Currency Neutral Sales Growth For year ending 2014 Total Company: Currency Neutral Sales Growth Flavors: Like-For-Like Currency Neutral Sales Growth Fragrances: Currency Neutral Sales Growth * Currency neutral sales are Non-GAAP metrics, please see our GAAP to Non-GAAP Reconciliation at IFF.com
Proven Profitability 15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5% 20.0% $300 $350 $400 $450 $500 $550 $600 2010 2011 2012 2013 2014 Adjusted Operating Profit Adjusted Operating Profit Margin Adjusted Operating Profit Trends * Adjusted operating profit and adjusted operating profit margin are Non-GAAP metrics, please see our GAAP to Non-GAAP Reconciliation at IFF.com
Excellent Cash Flow Generation * Adjusted operating cash flow is a Non-GAAP metrics, please see our GAAP to Non-GAAP Reconciliation at IFF.com 4.5% 6.5% 8.5% 10.5% 12.5% 14.5% 16.5% 18.5% $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 2010 2011 2012 2013 2014 Adjusted Operating Cash Flow Trends Adjusted Operating Cash Flow Adjusted Operating Cash Flow as % of Sales
Industry-Leading Returns 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% $120 $140 $160 $180 $200 $220 $240 $260 $280 2010 2011 2012 2013 2014 Adjusted Economic Profit Adjusted Economic Profit Spread Adjusted Economic Profit / Spread Trends * Adjusted economic profit and adjusted economic profit spread are Non-GAAP metrics, please see our GAAP to Non-GAAP Reconciliation at IFF.com
We are the catalyst for discoveries that spark the senses & transform the everyday Build Our Talent and Organization Continuously Improving Create a Sustainable Future Lead in key markets Close gaps across value enhancing categories Achieve #1 position with targeted customers Drive differentiation in key technologies Develop responsible products to meet the future needs of our customers & consumers Actively support our customers' success Achieve commercial excellence & service leadership Become a marketing powerhouse Strengthen the F&F core Stretch into adjacencies Pursue partnerships & collaborations Win Where We Compete Innovating Firsts Become Our Customers’ Partner of Choice Strengthen & Expand Portfolio 2020 Vision
Currency neutral operating profit growth 7-9% Currency neutral EPS growth 10% Currency neutral sales growth 4-6% 2016 to 2020 Financial Targets
Targeting $500M to $1B of sales through acquisitions by 2020 Accelerate Growth Through M&A
Cash Returned to Shareholders Goal 50-60% of net income Dividend Share Authorization +20% +$250M Accelerating Shareholder Return
Currency neutral adjusted operating profit growth* +7% Currency neutral adjusted EPS growth* +10% Currency neutral sales growth* +5% Q2 2015 1H 2015 +9% +11% +6% * Currency Neutral Sales, Currency Neutral Adjusted Operating Profit & Adjusted EPS are Non-GAAP metrics, please see our GAAP to Non-GAAP Reconciliation at IFF.com Financial Highlights
* Currency Neutral Sales, Currency Neutral Adjusted Operating Profit & Adjusted EPS are Non-GAAP metrics, please see our GAAP to Non-GAAP Reconciliation at IFF.com FY 2015 Currency Neutral Outlook Acquisition-related sales strength offsetting organic softness arising from macro-economic conditions in emerging markets Sales growth ~6% ~10% Adjusted EPS growth* Adjusted operating profit growth* ~9%
Summary • IFF is a high-quality investment with a proven track-record of success • Strategy focused on growth, differentiation and shareholder value • Solid year-to-date financial performance • Expecting to finish 2015 strong… financially & strategically… and enter 2016 on solid footing
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