analyst day - actusnews wire · in 2015, naturex will concentrate on addressing major operational...
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Analyst DayAvignon - 13 January 2015
Topic Timing Speaker(s) Positions
Welcome, safety briefing and introduction 10:00-10:20 Thierry-Bertrand Lambert CFO
Plant tour 10:30-11:30 Maxime AngelucciClément Cordier
COOPlant Manager
Presentation 11:40-13:00 Olivier RigaudMaxime AngelucciThierry-Bertrand LambertMarc Roller
CEOCOOCFOCSO
LunchQ&A session, discussions
13:10-14:10 Olivier RigaudMaxime AngelucciThierry-Bertrand LambertMarc Roller
CEOCOOCFOCSO
Pilot plant tour 14:15-14:40 Sébastien VeilletMarc Roller
Pilot Plant ManagerCSO
SpringLab experience 14:50-16:45 Anne PassemardMarc RollerMaxime Angelucci
F&B Application lab ManagerCSOCOO
Conclusion 16:45-17:00 Olivier RigaudMaxime AngelucciThierry-Bertrand LambertMarc Roller
CEOCOOCFOCSO
Agenda of the day
Welcome to NATUREX
Key members of the Executive Committee
Who will you meet with ?
Some operational members from Industrial and Scientific Directions
Clément Cordier
Plant Manager
Sébastien Veillet
Pilot Plant Manager
Anne Passemard
F&B application lab Manager
Who will you meet with ?
Avignon - France
Complex extraction site for Europe
Central site for liquid and dry formulation
Logistics hub for exportation
Avignon site
Created in 1992
450 people on site
Group headquarter
R&D center with application labs
Pilot plant
Production site
Safety briefing procedures
From Nature to YouPresentation of Naturex
Conquest & CashMain priorities for 2015
Building a value-added international natural specialty ingredients specialist
Summary
OUR GROUP
WHO WE ARE
WORLD LEADER IN NATURAL SPECIALTY
INGREDIENTS
From nature to you
FOOD & BEVERAGE NUTRITION & HEALTH PERSONAL CARE
OUR MISSION: DRAW ON NATURE TO
DELIVER UNIQUE BENEFITS THROUGH
EACH EXTRACT
FOR HEALTH, BEAUTY, AND ENJOYMENT
Our rich and broad product portfoliofor a global and customized offer
Solutions for colorful, flavorful,
healthy and delicious foods
By extracting the finest natural ingredients with
organoleptic and nutritional properties that are
perfectly suited for food and beverage.
Individualized health remedies
inspired by plants
By extracting the finest natural ingredients for the
formulation of health and nutritional products.
Universal, pure and sustainable
beauty
By extracting the finest natural ingredients
for cosmetic formulations
67% of sales
9-month sales 2014 per activity. Remaining 1% corresponding to Toll Manufacturing
29% of sales
2% of sales
Closer to our customers locally and worldwidefor a personalized full-service support
Innovation at the heart of our developmentfor value-added systems and concepts
SPRING LabPharma/ASMF
DevelopmentPilot plant
Analytical
R&D
Innovation Platform
R&D R&DR&D R&D
Support labs
7517 Ph. D
30 Engineers
28 Technicians
5 to 10Scientific
publications/year
50Patent families
In-House innovation
Encouraging local creation
Open innovation
Building collaborative bridges
START-UP
UNIVERSITIES,
RESEARCH CENTRES
COLLABORATIVE
PROJECTS
EQUIPMENT
SUPPLIERS
ORTESAA joint research lab for
optimising eco-extraction
Between NATUREX and the GREEN research laboratory from
the University of Avignon
AMAZONIANFruit Project
Conquest & CashOur main priorities for 2015
In 2015, NATUREX will concentrate on addressing
major operational challenges, pursuing 4 main lines
of action
Driving quality organic growth
Maximising industrial efficiency and profitability
Strengthening controls over OPEX
Reducing significantly working capital requirements
With the aim to focus, improve and grow
Our main priorities for 2015
A long-term strategic plan 2020 is underway
The outline of this plan will be communicated in June 2015
A structured organization
for a new phase of
development
To pursue our development
− Rapid growth in few years, both organic and external
− 14 acquisitions over the last 12 years
− Transformational acquisitions with new businesses(ex: in 2009 with Natraceutical’s ingredients division)
− Build up of the industrial footprint in the 5 continents(14 factories acquired out of 16)
Structuration: A necessary step
To enhance our organization and our processes
− Limited evolution of the structure despite the changes in scope
− Lack of management and coordination between divisions
− Difficult liaisons with local operations worldwide(ex: Industrial division vs local factories)
− Limited supply chain structure and coordination
CEO
Purchase Logistics Industrial R&D Sales
Marketing BU F&B BU N&H BU PCCorporate
Finance
Legal Accounting Control MgtFinancial
com.HR
20132000
X2 size increase
2009
Organization before structuration
A centralized and static organizational structure
2000-2013 sales in €m
Fast growing in size and activities
Structural and organizational changes were absolutely
necessary
Strong structural basisto lead and shape our future development
A more functional and skilled organization
− Creation of a Human Resources structure
− New positions in Middle Management to strengthen our
expertise
− Better coordination and more interactions between
divisions
Reorganizingdepartments/divisions to improve coordination
Strengtheningdepartments/divisions to optimize operational performance
Creating new departments to expand business expertise and improve risk management
Creation of an Operations divisionAppointment of a Managing Director for India
New positions for Regional Industrial Managers, Lead buyers…Structuring of Business Units
Agronomy and channels DptsHuman Resources, Reporting, Control Management
Som
e ex
amp
les
Main actions taken during the structuration processA new structured governance
and a more functional organization
A structured executive governance
− Implementation of the Executive Committee
− Creation of a COO position occupied by Maxime
Angelucci
− Appointment of Olivier Rigaud as CEO(October 2014)
− HR Director is part of the Executive Committee
CEOOlivier Rigaud
CSOMarc Roller
CFOThierry-Bertrand
Lambert
COOMaxime Angelucci
HR Alexis Mayer
CIOFrédéric Seguin
CPOSerge Sabrier
StéphaneDucroux
COO Americas
Antoine ThieryGroup Supply
Chain
Well investedto improve our ways of working and strengthen our positions
Strengthening our commercial organization
− Opening three new sales offices in the US
− Developing a more balanced salesforce with
skilled senior sales managers
− Improving business practices and customer
service rate, with the implementation of dedicated
tools
− CRM (Customer Relationship Management)
− Naturex Universities for salesforce training
− Touch Pad designed for NATUREX with new
catalogue of products
− New interactive Website linked with social media
A more customer-centric approach
Well investedto benefit from new businesses
We have invested in our industrial assets
− Strengthening our structure
− Extension of the Avignon headquarters
− Acquisition of the assets of Valencia (Spain) and extension
of capacity
− Strengthening our presence in high growth economies
− In Chile with the construction of a plant
− In India with the construction of a drying facility
− In Poland with the implementation of a juice and puree
production line
We have invested in our science asset
− Upgrading our R&D expertise
− R&D labs, analytical lab, 7 application labs and a pilot plantDrum Dryer – Roha plant (India)
Strong investments to support our structuration program
Driving quality
organic growth
CUSTOMER PORTFOLIO
Big potential of multinational and local brands
GLOBAL AND LOCAL MARKETS
Strengthening our presence in emerging countries
INNOVATIVE OFFER
Ambitious and value-added projects (concepts, systems, partnerships…)
Conquest for growthOptimize and maximize interactions with our clients
NEW KEY DRIVERS FOR GROWTH AND INNOVATION
THROUGH A CUSTOMER-CENTRIC APPROACH
FULL-SERVICE SUPPORT
Reducing time to market(from raw material to finished product)
Roll-out our growth strategy in our 3 activities, capitalizing on our multi-
specialist expertise to drive innovation and create new concepts/systems
anticipating market trends
Anticipating market trendsTailoring our range to customer’s expectations
Worldwide populationSharply increasing
+ 2 billion peoplein 2050, mainly in emerging
countries
Emerging countries will account for 50% of global GDP in 2020
820 million people aged over 65 in 2025 in the World
vs 470 million today
Ageing populationGaining ground
ConcernsObesity and diabetes are the scourge of 21st Century
More than 30% of humanity is overweight or obese. In 2030,
diabetes will be the 7th leading cause of death worldwide
Emerging countriesIncreasing urbanization and higher purchasing power
Significant megatrends
Strong underlying market trends
Sport & nutrition
Convenience
Health & Wellness
Clean label Healthy, clean label and
nutritional claims
Extend shelf-life
Formulability and stability
Innovation
Naturalness
Pleasure
Nutrition
Taste
Food safety
What our customers want What final consumers want
INGREDIENT
CONCEPTS
For specialized
brands
Convergence between Food & HealthScaling up our offer by further integrating the value chains
Single natural ingredient Systems/Concepts Partnerships (B2B2C)
SENSORIAL
APPEAL
ENHANCE &
STABILIZE
HEALTH &
WELLNESS
Improving taste,
naturally
Endless colors
possibilities
Natural flavouring
ingredients
FOOD & BEVERAGE
NUTRITION
NUTRITION & HEALTH
Natural food
preservation
Foaming &
emulsifying
The best from
Fruits & vegetables
Creating texture,
naturally
BOTANICAL
EXTRACTS
For nutraceutical
industry
Powders and standardized
plant extracts
API / ASMF
For pharmaceutical
industry
CONVERGENCE
Tailor-made
API
Botanicals for
healthy F&B
High quality concepts
backed by clinical studies
Combination of food
ingredients with active
and nutritive components
Evolution of our approach to customers
Headwinds impacting 2014 growth
Adverse global economic environment
− Economic weakness in developed countries (United
States, Euro zone) combined with less optimistic
growth prospects in several emerging countries
− Crisis flashpoints in Eastern Europe (Ukraine/Russia),
Africa and Middle East
Highly volatile foreign exchange environment
− Affecting mainly US and several emerging countries
currencies
− With unfavourable Fx effects on NATUREX sales,
leading to a loss of €4.3 million sales over the 9-
month period 2014 compared to the same period in
2013
Macro-economic factors Factors specific to NATUREX activity
Worsening market conditions for N&H activity in
the US
− Slower growth in the US market for dietary supplements
in capsule and tablet forms
− Reflecting combined effects of customer destocking and
increased competitive pressure
− Negative PR regarding several categories of the
nutraceutical market
− Base effects from exceptional conditions in 2013 for the
green coffee bean extract with slimming effects (Svetol®)
leading to a €5.9 million negative impact over 9 months
Negative base effect for Toll Manufacturing activity
− Decrease in krill extraction sales due to negative media
campaigns worldwide regarding Omega-3 benefits,
leading to a €5.1 million negative impact over 9 months
− Transfer of krill extraction to the joint-venture with Aker
BioMarine in Houston since September 2014
Positive momentum from our F&B activity
Measures implemented from 2013 have produced
renewed momentum for Food & Beverage
Strengthened by the recent acquisition of
Vegetable Juices Inc. in the United States
Improved positioning is driving growth
Optimization of the commercial offering
Key accounts approach to customers
Review of our HR strategy towards the
sales force
Creation of regional application labs
Opening new growth drivers
Reinforcing the positioning in the F&B
business in the United States
Cross-selling with Naturex existing range
Potential synergies and transfer of know-
how (liquid/dry technologies)
New convergent solutions (F&B/N&H)
Industrial know-how (Extraction/Purification/Drying/Formulation)
Combined expertise in ingredients, fruit &
veg., plant extracts, APIs, molecules…
Sustainable compliance
Capitalizing on our expertiseCombining efforts to drive innovation and be closer to our customers
Our expertise of multi-specialist
7 regional application labs worldwide(Chicago, Birmingham, Avignon, Moscow, Sao Paulo, Shanghai, Sydney)
Our full-service approach
Fully managed process until finished product
Unique sourcing of raw material
Improve time to market for customers
Innovate on a closer relationship
Adapt our solutions to local markets
1. GENERATE
Brainstorming area
2. CREATE
Application lab.
3. TEST
Sensory Panel4. ANALYZE
Analytical lab.
Enhance the customer experienceConcepts and prototypes designed in our Springlabs
Generating ideas
Helping customers finding inspiration or answering a specific
request
Translating ideas
Development of prototypes, solutions…
that fit perfectly to customer’s requirement
Testing concepts
Sensory panel designed to ensure products meet customer’s expectations
(taste, texture, visual appeal…)
Providing analysis
Providing analytical support to identify active components, along with more advanced systems
Showcase of our application/concepts and
partnership know-how
1ST SELF-CARE
MEDICAL DEVICE KIT
FOR THE TREATMENT &
PREVENTION
OF BROWN SPOTS
Food & Beverage
Supporting innovation with our
drying expertise
Nutrition & Health
Creating new concepts
Personal Care
Driving change with partnerships
Kit containing 3 applications specifically formulated
with high quality extracts and tasty fruit powders:
Immunity boost drinkWith Vitamin C from Acerola, Echinacea purpurea,
Elderberry, Thyme, Zinc and Vitamin D which
contribute to the normal function of the immune
system
Tonic bost fast melt powderWith Vitamin C from Acerola and Magnesium which
contribute to a reduction of tiredness and fatigue
Soothing gumWith Vitamin C from Acerola and sage extract which
helps to soothe the mouth and throat.
A new range of fruit powders or granules, improving
nutritional profile of applications (cereal bars, snack
bars, bakery, biscuits, instant drinks, chocolate
tablets) :
Fruit content: 40 to 50%
Fiber content: 35 to 48% (inulin or gum arabic)
Optimized nutritional profile- No added sugar
- Less carbohydrates
- Fewer calories
Clean label: fruit, dietary fiber
Food safety and health concerns
Partnership with Medical Brands:
Naturex mastersthe raw materials sourcing, the
process of extraction/purification,
reveals the actives
Medical Brands buildsthe active medical ingredient and
finished product concept
Together we designunique ingredients and
product concept
Maximising industrial
efficiency and profitability
An ongoing program regarding our industrial assets
Other actions are under review and will be part of the long-term strategic plan
RATIONALISE OPTIMISE INVEST
Closure of the manufacturing
site of Shingle Springs in
August 2014 (California)
− Limited capacity
(blends of nutraceutical
extracts originating from the
New Jersey site)
− 17 employees concerned
Current strategic plan in
Poland
− Optimisation of cost
structure in pectins activity (efficiency and energy)
− Impairment tests on pectins
assets underway
− Industrial base for liquid Fruit
& Veg. and transfer of know-
how from VJI
Leveraging existing
capabilities resulting from
recent investments
− In India, with the completed
construction of a Fruit &
vegetable powder plant
− In Chile, with the
development of Chile
Botanics’ industrial capacity
Maximising industrial efficiency and profitability
Saving: $0.7 million out of $2
millions local costs
Strengthening controls
over OPEX
Initial efforts to reduce external charges are
already visible despite the drop in sales
− Efficient costs management due to a 1st year
implementation of budget process in the ERP
− Decrease in all expenditure categories thanks to
optimization measures (insourcing of certain recruitment,
negotiations on insurance expenses, industrial maintenance and spare-parts,
travel expenses…)
Still room for improvements
− Formalisation and generalisation of the OPEX budget
process to the entire Group
− Additional management and monitoring tools
− Detailed view of all budget lines (industrial, G&A…)
Tight control on operating expenses
in €m (30.09.2014)
Strengthening controls over OPEX
OPEX will remain under control with sales
growth
61.3
2,1
58.8
(0,7)
(1.5)
(2.4)
30/09/2013 Scope effect(Chile Botanics
& VJI)
Fx Effect Volume effect(decrease on
sales)
Cost reductionefforts
30/09/2014
6% decrease excluding scope and Fx effect, o/w
4% decreased linked to cost reduction efforts
Reducing significantly
Working Capital
Requirement (WCR)
New key role of the Credit Management
− Centralisation of processes: creation of new clientaccounts, credit lines granted, payment terms,locking/unlocking of account receivables…
− Implementation of a new Group Credit Policy
New commitments for the Sales team
− Combined efforts with Credit Management:coordination, training, teaching & learning to developGroup culture in this field…
− A part of the bonus scheme will be linked to the DSOlevel
We are confident in our ability to improve our DSO
Reduction on DSO (Days of Sales Outstanding)
TOP 100 references
(Skus) represent 30%
of Group total sales
1/3 generate 90% of
Group total sales(H1 2014)
600 families of raw materials, classified under different categories,
sourced in more than 50 countries worldwide
45% of references generate
sales lower than 10 k€ /Skus
(H1 2014)
A high number of references (Skus) but
a small part generating sales
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Botanicals categories
A complex product portfolio
− High number of botanicals categories, declined in many commercial
references (Skus)
− Dependence on agricultural cycles (crops and harvests)
− Historical focus on specificities duplicated to all categories whatever the
size or the potential of the business
A necessary step to rationalize our inventory level
Improving Supply Chain to an integrated
S&OP approach
− To support the change in structure and rationalise
the diversity of our references (Skus)
− To increase our customer service quality
A global action plan through
an enhanced client-driven approach
Optimization ofour product range
Implementation of dedicated tools
A clearer product portfolio
A central role for the Supply Chain
Drastic reduction of the number
of references
(from 30,000 to 10,000 ref.)
Objective to continue decreasing
to 6,000 references in 2016
Reliability and quality of supplies
A more powerful and targeted offer
Catalogue for standard products
Governance rules between Sales
division and R&D for non-
catalogue specific requests
Simplification of the offer
More focus on business size and
potential
Better positioning of the product
range
Improvement of R&D
developments
Improvement of customer service
quality
Implementation of CRMDemand Planning plugged in the ERP
Implementation in 2014
Improved visibility of future sales
A collaborative S&OP approach
(sales and operations)
Implementation in the course of
2015
Global monitoring of the Supply
Chain from procurement to sales
with dedicated Committee
Increasingly accurate and reliable
forecasts throughout 2015
Improvement of level of inventory
with a key objective end 2016
(Inventory = 40% sales)
The long-term strategic plan will address the following:
Strengthening our commercial strategy
Operational excellence
Financial discipline focusing on returns
High performance culture
Building a value-addedinternational natural specialty ingredients specialist
Merci de votre attention
Appendices
Staff costs as at 30 September 2014
In Thousand euros
9 months
2014VJI Chile Botanics
Sept 2014 excluding
scope effect
(VJI and Chile Botanics)
Fx effectSept 2014 excluding
scope and Fx effects
9 months
2013
Staff costs 56 193 2 206 124 53 863 (527) 54 390 51 218
OPEX as at 30 September 2014
In Thousand euros 30/09/2014 30/09/2013 Scope effect* Fx effect
Other production costs 24 618 24 129 489 2% 1 184 (133) (561) -2%
Leasing 4 971 5 179 (208) -4% 34 (104) (138) -3%
Fees 6 760 7 332 (573) -8% 332 (67) (838) -11%
Marketing expenses 2 782 2 500 282 11% 22 (44) 304 12%
Shipping costs 12 362 14 140 (1 777) -13% 304 (196) (1 885) -13%
Travel and subsistence expenses 3 741 4 043 (302) -7% 102 (65) (339) -8%
Other external charges 3 604 3 949 (345) -9% 133 (72) (406) -10%
Total external charges 58 838 61 271 (2 433) -4% 2 110 (681) (3 862) -6%
* VJI, Chile Botanics and Naturex Industrial SL
Variation Variation