Continued Journey of Growth October 2017 Passion for Taste & Health
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Continued Journey of Growth October 2017
Passion for Taste & Health
DISCLAIMERThis presentation includes statements data, forecasts, goals and Company plans that are "forward-looking statements“, as defined in theSecurities Law - 1968, whose occurrence is not certain and which are not solely in the Company's control. These forward-looking statementsare included, inter alia, in discussions of strategy, objectives, goals, plans, events, future intentions or other information relating to futureevents 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 factorswhich 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 theability of the company to consummate the Enzymotec acquisition on the anticipated timing, or at all, the current status of the Company andits business, the current situation in the industry in which the Frutarom Group operates, macro-financial facts and information, all as areknown to the Company on the date on which this presentation was prepared, some of which were given to the Company by externalsources, the content of which was not independently examined by the Company, and therefore the Company is not responsible for theirverity.
This presentation must be read together with the Company's periodic and immediate reports, and was not meant to replace the need forstudy of reports the Company has published, including, inter alia, the Company's periodic report for 2016, published on March 2017, andthe Company's periodic and immediate reports subsequently published. These reports could include, inter alia, updates to the informationregarding 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-lookingstatements appearing in this presentation, and is not required to publish any additional presentations for its shareholders in future.
It is to be emphasized that the financial estimations and the pro-forma figures included in this presentation are based on figures which werenot audited or reviewed by an auditor and therefore the actual results may differ from these financial estimations.
A Leading Fast Growing Global Flavor & Fine Ingredient House
Global Presence
Public Company
Financial Success
2000-2016
Broad Product Portfolio
• A Top 10 flavor house • Sales in over 160
countries• Over 30,000 customers
• 60,000 products• Over 6,000 raw
materials• Innovative pipeline
• Listed on London & TLV Stock Exchanges
• From $13M to above$4.5 B market cap
• 14x growth in sales (CAGR 18%)
• 24x growth in EBITDA*
• 35x growth in Net Profit*
* Excluding non-recurrent expenses** As of Oct 2017, following its accelerated internal growth and acquisitions made so far, Frutarom’s annual sales run-rate already reaches close to 1.5B$
<1500
Global Expansion throughout the years
2000-2016 Sales CAGR of 18%Amco
Wiberg
2016
Sales office
Acquisition
2006 2007 2009 20121990-2000 20112001 -2004 2013-20142005
1996 Tel Aviv stock
exchange
IFF FS
Adumim
Raychan
Rieber
EAFI
SavouryFlavours
Oxford
Belmay
Jupiter
FSI Corona
Nesse
CH Hansen DE
CH Hansen IT
Etol
Mylner
Aromco
FSI OH
Acatris
FlachsmannTohar
Meer
RaynerHK F&F
CPL Aroma
FlavourKey
Baltimore
Botanicare
Kunshan
AM Todd
Russia
Canada
Turkey
France
Mexico
Ukraine
Poland
Kazakhstan
Hong Kong
Costa Rica
Czech Rep.
S. Africa
India
Brazil
Gewurzmuller
Abaco
Rad
London stock
exchange
JannDeRee
PTI
Aroma
Hagelin
CitraSource
Montana
2015
Ingrenat
Food Blenders
Sonarome
BSA
Taiga
Foote&Jenks
Scandia
Vitiva
Nutrfur
Inventive
Taura
Grow
Algalo
ExtraktChemie
Redbrook
NardiAromas
Piasa
2017
Unique Flavors
Rene Laurent
WFF
F&E
SDFLC
MÜHLEHOF GEWÜRZE
Turpaz
Mighty
Enzymotec
Global Presence
79 R&D laboratories
102 Sales & Marketing offices
66 Production sites
A Profitable Growth Story
* Excluding non-recurrent expenses** As of Oct 2017, following its accelerated internal growth and acquisitions made so far, Frutarom’s annual sales run-rate already reaches close to 1.5B$
<1500
Realizing Strategy through Acquisitions
Additional improvement in margins
Strong management, R&D and sales Cross-selling opportunitiesLeveraging Synergies Optimization & Savings
Geographic Focus
Food protection Natural ColorsHealth Ingredients
TauraBelgium, New Zealand, AustraliaEnhancing market position in Natural Fruit-Based Ingredients and specialty solutions
Scandia Citrus• Enhancing market
position in the US• Specialty Citrus solutions Expertise
CitraSource• Enhancing Citrus
capabilities & leadership• Presence in Florida – World
Center for Citrus
Inventive China
Enhancing market position in Southeast AsiaAlgalo Israel
Biotechnology startup for Algae-Based products
Grow USA Biotechnology products for the supplement and nutraceutical market
Natural & Healthy
North America Emerging MarketsHagelin• Enhancing market position
in the US and EM• Expertise in Beverages
CitraSource• Enhancing Citrus
capabilities & leadership• Presence in Florida – World
Center for Citrus
BSA Canada , India• Enhancing savory position in
North America and India
Scandia Citrus• Enhancing market position
in the US• Expertise in specialty Citrus
solutions
WibergUSA, Canada• Enhancing savory position in
North America
PTI Russia & CIS• Savory Solution leadership position
in Eastern Europe
Amco Poland
Enhancing savory solutions leadership in Eastern Europe
Sonarome India
Enhancing market position in India and Africa
Inventive China
Enhancing market position in Southeast Asia
Nardi Aromasbeverage flavoring in Brazil
Aroma Guatemala
Enhancing market position inCentral America
VitivaSlovenia
Montana FoodPeru & Chile Enhancing market position in LATAM
Montana FoodPeru & ChileEnhancing market position in LATAM
Continuing to improve product mix and Enhancing position in Health & Wellness
IngrenatSpainFood protection Natural Colors
NutrafurSpecialty natural plant extracts for food, health and food protection
Extrakt ChemieNatural extracts for Pharma
PiasaSavory solutions leadership in Mexico
Unique Flavors WFF Vietnam
S. Africa
SDFLC Brazil Enzymotec Israel Innovative specialty nutrition SolutionsMIGHTY Thailand
Frutarom signed an agreement to acquire 60% of Mighty, Thailand’s leading savory flavoring company, for 12M$
Mighty revenues for the LTM ended in Aug 17 totaled at approx. 15M$ reflects 4 years CAGR of 12%
• The company has a leading position in Thailand’s flavors market and is among the most innovative flavors companies in Southeast Asia based on independent R&D
• Product portfolio includes flavors, seasoning blends and marinades as well as specialty functional raw materials for the F&B industry with emphasis on the field of convenience foods, snacks, noodles, fish, meats, baked goods, beverages and dairy
• Advanced innovative R&D activity with an interesting pipeline of patent protected flavoring products including two major patent based solutions for mallard reaction and infused oils savory blends
1989Founded
15M$Sales (LTM Aug 2017)
180Employees
Bangkok, Thailand
October, 2017
Location
Acquisition Date
Mighty Savory Solutions Acquisition – Transaction Highlights
Global Leadership in Savory Solutions
A Leading Player in the global Savory market
Presence in over 120 countries
Value-added functional savory solutions for the food industry (snacks, convenient food, meat, fish, organic and culinary)
Innovative and diversified product range - flavors, seasoning blends, marinades, functional ingredients, starter cultures, natural food protection and natural colors
Over 150 industry-leading experts in R&D and applications
State-of-the-art production facilities, modern labs and application centers
Highest quality brands, providing innovative solutions and excellent service
Innovative solutions - meeting consumer trends of natural, healthy and tasty products
1992 2006 2007 2009 20111999 2012 2013 2015
PTI
BSA
Amco
Tohar Nesse
Reyhan
Rad
Gewurzmuller
Chr. Hansen
Riber EAFI
Chr. Hansen FSI
Etol
Savory Flavors
JannDeRee
Food Blenders
Baltimore Spice
Wiberg
New Plant China
Redbrook
2016
Piasa
Rene
Laurent
2017
Unique
Flavors
Mighty
Enzymotec Acquisition – Transaction Highlights
Frutarom entered into agreement to acquire 100% of Enzymotec (Nasdaq: ENZY) at net investment of approx. 210M$*
Frutarom currently holds ~19% of Enzymotec shares, which were purchased according to a PPS of 9.6 USD, and agreed with Enzymotec’s BOD to acquire its remaining shares by a way of a full merger at a PPS of 11.9 USD
Closing of the transaction is expected at Q1/2018**
* Including cost of vested options and RSU’s and estimated transaction expenses** Closing is pending to Enzymotec shareholders’ approval
1998Founded
47M$Sales (LTM June 2017)
235Employees
Israel, US, ChinaMain Locations
Enzymotec Acquisition – Company ID
Enzymotec develops and manufactures specialty nutritional ingredients and medical foods based on cutting-edge, proprietary technologies
Global leader in lipids technology providing key ingredients for use in products spanning across the entire human life-cycle – from infancy to old age, in both infant formula and nutritional supplements
Clinically validated products that address dietary needs, medical disorders and common diseases, using molecules familiar to the human body
Fully integrated from research through manufacturing to marketing and sales with proprietary, scalable technology platform and clinical research capabilities integrated across segments
State of the art GMP certified production site in Migdal Ha’emeq, Israel with offices in China and US
235
Enzymotec Acquisition – Key Businesses
Acquired in Aug 17 Union Spring Health Products
Enzymotec Acquisition – Transaction Rational
Frutarom will take steps to utilize and integrate Enzymotec’s R&D, sales and marketing infrastructure and production and supply chain platform with Frutarom’s global Health business
This merger transaction offers significant advantages and efficient implementation of the strategic change in Enzymotec’s operations as well as effective and much faster realization of the significant synergies
Frutarom will leverage and realize the many cross-selling opportunities, knowledge base and capabilities of Enzymotec’s nutrition ingredients business which generated sales of 36.5M$ and adjusted* EBITDA of 15.7M$ (for the LTM ended in June 2017)
Frutarom will decide on an appropriate strategy for future VAYA Medical food supplements B2C activity with the goal of it delivering a positive contribution as quickly as possible to Frutarom shareholders
Frutarom will finance the acquisition through bank or financial institutional debt
* Frutarom’s Estimation, on Non-GAAP basis, net of non-recurring expenses for inventories write-down
Innovative and market-oriented ingredients geared toward growing markets, such as cognitive health, cardiovascular health and overall wellness
Concepts and healthy solutionsfor:
FUNCTIONAL FOODS &
BEVERAGES
PHARMA DIETARY SUPPLEMENTS
COSMETICS
Frutarom Health BusinessWhat we offer
14
USA Health
Fermentation Grow NJ
Formulation ; OH
Sales and Marketing –
NJ,FL,CA
EUR Health
Extraction:
• Spain: Germany ; Slovenia ;
Switzerland
Algae, Elderly Nutrition :
• Israel
Sales and Marketing Belgium,
Netherlands,
Germany, Switzerland, Spain
LATAM Health
Extraction: Peru
Sales and Marketing - Lima
Asia Health
Sales and Marketing Japan ,Korea,
Australia, Indonesia, Malaysia, India
Philippines
Frutarom Health Business Where we are
Customer in the CentreA Unique product offering
Positive Outlook for 2017 & 2018 and Onwards
Recent Acquisitions
Strategy
Financial Strength
Announced 42 acquisitions since 2011 and 28 acquisitions since 2015
17 companies acquired since 2016 for ~570M$
9 companies acquired since the beginning of 2017
Cross-selling will contribute to improved accelerated growth of the combined activities
Operational efficiencies and synergies from successful integration of acquisitions expected to generate savings of 20-22 M$ Vs Frutarom’s Q2/2016 cost structure
Global purchasing will further contribute to improvement in profits and margins
Strong acquisitions pipeline for supporting growth strategy remains intact
Maintaining a solid balance sheet based on strong business fundamentals, healthy profitability and robust cash flow from operations
Cumulative cash flow since 2000 - approx. 900M$
As of Oct 2017, following its accelerated internal growth and acquisitions made so far, Frutarom’s annual sales run-rate already reaches close to 1.5B$
Product Focus - unique offering and product portfolio focused on innovative integrated solutions combining taste and health, natural and clean label products
Customer Focus - mid-size and local customers, the private label sector and unique added value solutions to MNCs
Geographic Focus - Global leading position with focus on North America and on high growth Emerging Economies
Positive Outlook for 2017 & 2018 and Onwards
Profitable rapid internal growth in core business
Focus on innovative, health & wellness oriented, natural product mix
Additional projects to improve efficiency, merge activities and operations
Successful integration of the recent acquisitions
Strong acquisitions pipeline
Enhancing & leveraging global purchasing
* Excluding non-recurrent expenses
Focus on small, mid-size and private label customers with better organic growth rate than the MNC’s
Frutarom’s Strategic Goals
Combining rapid profitable organic growth with strategic acquisitions
* Given current product mix
Continue Margin Expansion Above-industry Growth
$2 Billion in revenues in 2020
Above 22% EBITDA in our core business by 2020
Continue Acquisitions Strategy
*
Frutarom’s Vision
To Be The Preferred Partner For Tasty And Healthy
Success
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