International Flavors & Fragrances : Glenn Richter - Finance Perspective

GLENN RICHTER

INVESTOR DAY 2022

EVP, Chief Financial Officer	Finance Perspective

W E L L - P O S I T I O N E D I N G R O W I N G & P R O F I TA B L E I N D U S T RY

A GREAT COMPANY, IN A GREAT INDUSTRY

AT T R A C T I V E S E C T O R	G R E AT C O M PA N Y
Strong growth fundamentals	Market leader in most categories
Increasing value of innovation	Broadest product platform
as differentiator	Industry-leading R&D pipeline
Robust/sticky customer relationships
Unrivaled capabilities to co-create
Economic cycle resiliency
Global scale advantage
Increasing value of scale
Highly diversified customer base
Strong, stable cash flows

Significant Value Creative Opportunity

2

C H A L L E N G I N G N E A R - T E R M M A C R O E C O N O M I C E N V I R O N M E N T

NAVIGATING UNPRECEDENTED CONDITIONS

D A M P E N D E D	P E R S I S T E N T	U N P R E D I C TA B L E	T I G H T
C O N S U M E R D E M A N D	I N F L AT I O N P R E S S U R E S	S U P P LY C H A I N	L A B O R M A R K E T

~1.5%		~3x		65%		40%
U.S. GDP growth		Increase in utility prices		Increase in trucking costs		Of employees likely to
expected in 2022						leave job in next year
(1.8%) to 1.6%		10%+ PPI		+1.5-3x		80%+
Range in expected		Highest inflation		Volatility in raw		Of workers would like
2023 GDP decline / growth		since 1970s		material prices		to continue hybrid setting
Modest volume		"Above and beyond"		Pressure on margin		Attraction &
growth		2023 pricing actions		& customer service		retention challenges

3

R O A D M A P F O R S U C C E S S

TWO-PHASED PLANNING HORIZON

Market

Demand

Inflation

Global Supply Chain

IFF Focus

2023 Navigate & Accelerate

Demand (volume) challenges:

• Recessionary impact on consumer
• Customer destocking

More challenging 1H 2023

Modest raw material inflation overlap

Energy Volatility continues

Meaningfully improved

• China/Ukraine uncertainties remain

Solid financial results

Drive business improvement via targeted investments & enhanced execution

2024-26 Aspire & Achieve

Global economic outlook improves

• Industry volumes ~3%/year

Expect stable inflationary environment

Expect to return to pre-covid global supply chain environment

• However, supply chain resiliency remains critical for customers

Accelerated financial results consistent with best-in- class peers:

• Growth focused
• ROIC guided
• Full execution of growth, productivity & capital plans

B U I L D I N G A F O U N D AT I O N F O R A C C E L E R AT E D P E R F O R M A N C E

NAVIGATING CURRENT MARKET CHALLENGES

Revenue growth

Pricing & Inflation

Productivity

EBITDA

Capital,

Portfolio &

Leverage

2023 Navigate & Accelerate

Modest volume expectations

• Foundational improvements
• Accelerate sales execution

Additional pricing actions

(although moderated) to offset inflation

Accelerate current in-flight productivity programs Launch additional cost take-outprogram

Reinvest in strategic initiatives (growth focused)

Preliminarily mid single-digit currency neutral growth

Intense focus on improving cashflow

Complete current divestitures pipeline

Prioritizing adjusted free cash flow generation

• Working capital (inventory) opportunity; Must balance with maintaining service levels
• CAPEX up modestly for ERP

Surgical pricing execution by business & region reflective of unique competitive dynamics

Accelerate ongoing productivity programs & identify added opportunities

• "Ring fence" sales generating teams

Foundational sales execution improvements to accelerate top-line 2024+; Investments funded by productivity

Complete "in-flight"non-core divestitures & review additional portfolio opportunities