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CAPITAL MARKET DAYS27 & 28 October 2016
AVIGNON - FRANCE
FROM NATURE TO YOU
Program
2
AgendaSharing experiences around natural ingredients
13h30 - 15h30: session 1
• Introduction:
Olivier RIGAUD - CEO
• Sourcing:
Identifying nature’s treasures
Serge SABRIER Chief of Procurement
• Innovation:
Unlocking the potential of plants
Doug KLAIBER - CEO NATUREX-DBS
and Global Open Innovation leader
• Manufacturing:
Large-scale extraction of the benefits
of natural ingredients
Iakovos MYARIS - Industrial Director
15h30 - 16h00: Coffee-Break
16h00 - 17h30: Session 2
• Markets:
Leading the way for our customers in shifting
from synthetic to natural
Oreste FIESCHI - Chief Commercial Officer
Jean-Philippe GIORGIS - SVP GM Asia-Pacific
Eric VILLAIN - SVP Marketing & Business Development
Leslie LANNEBERE – Global Category Manager Nutrition
• Roadmap Bright2020
François De GANTES - CFO
Olivier RIGAUD - CEO
• Conclusion and Questions / Answers
Program
3
Our talentsBusiness experts but mostly passionate people
The infinite potential of NatureHow we master the complexity of botanicals
to deliver all the benefits to our clients
Our value chainHow we are uniquely positioned to sustainably
grow our business
What you will discover today?
4
FROM NATURE TO YOU
IntroductionNature is back
Introduction
5
Nature is back
Urbanization Climate change Sustainability
Introduction
6
Artificial: Public Enemy No.1
EmergingMainstreamingEstablishedTrend maturity:
Source: Global Food & Drink trends 2016
Introduction
7
Clean label trendsTop 3 by geography
North America
23% All natural
21% No artificial preservatives
19% No artificial flavours
Western Europe
No artificial preservatives 31%
No artificial colours 29%
No artificial flavours 20%
Asia / Pacific
29% GMO Free
18% No artificial colors
17% No artificial preservatives
Australasia
No artificial colours 32%
No artificial flavours 26%
No artificial preservatives 20%
Source: Clean Label: Instilling consumer confidence
in global food and beverages – Vitafoods Switzerland 2016
Introduction
8
What does the consumer want?
I want to look good4
I want fresh and natural,
not processed and chemical5
US consumer want to see
familiar ingredients in their food
I want multi-ingredient solutions3
I want to feel good1
I want to be surprised: Wow factor2
73%I want to know the source
of my food6
1. Naturex thematic series #1
2. Innova 2014
3. Roper Report Worldwide 2015
4. Euromonitor 2015
5. Nielsen 2015 - Global Health & Wellness survey
6. Innova Market Insights - 2016
Global consumers want to buy
“All natural” products
84%
US consumers interested in
helping burn fat/calories products
75%
Americans are using some sort
of dietary supplement
Consumers interested in products
with proven health benefits
Consumers in Malaysia
believe that certain foods
and beverages are able to slow
the progress of aging 43%65%
61%
Introduction
9
How brands and retailers meet
their expectations?
#Shift To Natural
Bioglan
Superfood powders
Innocent
100% pure fruit
General Mills
Removing artificial
Hard Rock Cafe
Veggie burger
Hipp
No preservative
Introduction
10
Sourcing
FROM NATURE TO YOUFROM NATURE TO YOU
SourcingIdentifying nature's treasures
Sourcing
12
Agronomist engineer
Joined NATUREX in 2000 as Purchasing Manager
Organisation of the Procurement Direction through the creation of 3 poles of expertise
(purchasing offices, raw material range, agronomy and sustainable development)
Implementation of the Sustainable Development program, Pathfinder
Member of the Executive Committee and Chairman of the Sustainable
Development Committee
Speaker biography
Serge SABRIERChief of Procurement
13
Only 5% of natures’ biodiversity is known
Sourcing
14
The major challengeswhen dealing with botanicals
Supply chain
Conformity
CompetitivitySeasonality Traceability
Sustainable Development
Biodiversity
Variability
AuthenticityQuality
Price volatility
AvailabilityRespect
Communities
Ethics
Regulation
Growing Demand
Practices
Forecasts
Selection
Crops
Pesticides
Pollution
Climate changes
Origin
Conservation of resources
Long-term vision
Suppliers
Anticipation
Competition
Sourcing
15
Differentiation through…Our local presence
Sourcing
16
Our field approachMastering supply chains and traceability
Close relationships with communities
and local suppliers
SOURCING
● New product development
● Market conquest
● Client oriented
AGRONOMIC EXPERTISE
Sourcing
17
950Active suppliers
450Supplier Visits
90Countries
Our sourcing expertise
500Plants60,000
Tons of raw materialpurchased
277New sourcing
18
Mastering access to the natural resource
KatemfeThaumatococcus Daniellii
Ivory Coast
19
Profit sharing with local population
KatemfeThaumatococcus Daniellii
Ivory Coast
20
Implementation of alternative
and sustainable solutions
KatemfeThaumatococcus Daniellii
Ivory Coast
21
Meeting regulatory requirements
and quality standards
Green TeaSichuan Province
China
22
Selecting suppliers,
crop harvest “Pathfinder”audits
and good agricultural practices
Green TeaSichuan Province
China
23
Improving the living conditions
of the local population
Green TeaSichuan Province
China
24
Our Approach
New and sustainable roadmaps without applying a rigid model …
Listening to local people and understanding the unique
characteristics of a specific environment
Combine economic success with environmental protection
and social responsibility
…be a driving force in this field
25
A 360° approach
RosemaryAtlas Mountains
Morocco
A responsibleand sustainablesourcingfor a historicsupply chain
Control of traceability
Proximity with the suppliers
Extraction in Morocco
CSR
Compliance with HACCP standards
Allowed under a tender
of the Ministry Water and Forestry
26
Taking care of the ecosystem
Proximity - Diversity - Quality - Expertise - Innovation
Dragon’s Blood in the heart of the
Amazon rainforest
Innovation
FROM NATURE TO YOU
InnovationUnlocking the potential of plants
Innovation
28
Doug KLAIBERCEO Naturex-DBS and Global Open Innovation program leader
Speaker biography
Education:
• B.S., Mechanical Engineering, Pennsylvania State University
• MBA, The Wharton School, University of Pennsylvania
Held Sr. Marketing & Business Development positions with
a few telecommunication based companies & start-ups
Financial analyst for a wireless telecommunications company
Former CEO of Decas Botanical Synergies acquired by Naturex September 2012
Currently CEO of Naturex-DBS and leader of Naturex’s Global Innovation program
Innovation
29
Is Innovation just a “Buzzword”*?
18
15
25
16
30+
Number of times
“Innovation” is mentioned Company
*Buzzword: an important-sounding
usually technical word or phrase,
often of little meaning, used chiefly
to impress laypersons.
Doug’s super scientific methodology
(10 minute company web site search)
26
Innovation
30
Innovation
Open InnovationOrganic Innovation Application labs
● Advanced research
● Clinical studies
● Customer collaboration
● Concepts - Applications
● Accelerator
● Partnerships
Innovation
31
Naturex-DBS A science-based company
Naturex - DBS
Providing the global health
and wellness market
Build upon the Cranberry
knowledge-base and
supply capabilities
While moving forward with
other proprietary science-based
botanical products targeted towards
specific health-related issues
With scientifically derived
proprietary fruit-based products
which offer maximum quality
and proven health efficacy
Specific and in-depth
consumer knowledge
32
Naturex Innovation at workCranberry Case Study
● Master knowledge and access of raw materials
● Semi-process at the source to reduce cost and build barrier to entry
● Continue to build on the research and use patents and trade secrets
● Establish a comprehensive R&D roadmap using both
organic and open innovation
● Obtain government sanctioned product-specific health claims
● Expand the market potential via new categories and uses
● Reinforce the Supply Chain and Science
● Continue to break through boundaries
Innovation
33
Breaking through boundariesby setting a new industry standard
Pacran® is a proprietary blend of the whole cranberry standardized
and optimized for urinary tract health with a full spectrum approach
Skin
FleshJuice
Seeds
Fractionate Reengineer/ Optimize Dry and Mill
Skin
Seeds
FleshJuice
Pacran™
34
Cranberry#4 Botanical Sold in the US, “The UTI botanical”
Urinary Tract Infection
● Universal problem, 2nd most common infection
● 50% of women will suffer from UTI
at least once in their lives
● 33% of these women will suffer recurrences
Pacran® for Urinary Tract Health offers:
● A unique full spectrum all natural formulation
● Demonstrated bacterial anti-adhesion activity(AAA)
● Gold standard clinical evidence
● Multiple government sanctioned health claims
Innovation
35
A reproducible model for successAronia Melanocarpa
Juice
Skin, Seeds, Flesh
Aronia melanocarpa
● Purified extract of aronia fruit concentrate dried
● Standardization: 40% Total Polyphenols as catechin equivalent
● Substantiation: Clinically shown to improve risk factors related to blood pressure
and LDL / total cholesterol
Juice
Extract
Phyto-
chemicals
Dry Extract Standardize
Innovation
36
A reproducible model for successAronia Melanocarpa
We are taking ownership of:
● Aronia, for nutraceutical cardiovascular health
We are differentiating our products through:
● Species
Strategic supply relationships with aronia growers in North America
● Authenticity
Our ability to authenticate the species through our new ID packs
● Science
Clinical study with specific health benefits
● Global agreement with Polish pharmaceutical company,
Adamed, for the global rights to Aronox (a clinically studied aronia
nutraceutical for cardiovascular health)
Manufacturing
FROM NATURE TO YOU
ManufacturingLarge-scale extraction of the benefits
of natural ingredients
Manufacturing
38
Iakovos MYARISIndustrial Director
TEI Piraeus, Electronic Engineering
Results oriented Manager with experiences at Manufacturing Industry
with P&L responsibility
Global experiences leading for 30 years sites to countries
such as USA, Greece, Germany, Bulgaria, Poland
Plant Director at PepsiCo Int. (Poland)
Plant Director at Naturex Poland
Industrial Director at Naturex Group
Speaker biography
39
ManufacturingOur 15 specialized production sites
Valence
Spain
Swadlincote
United-Kingdom
Manaus
Brazil
Milan
Italy
Avignon and Reyssouze
France
South Hackensack
USA
Sydney
Australia
Bishcofszell and Burgdorf
Switzerland
Jaslo
PolandChicago
USA
Roha
India
Legend
Specialties
Extraction
Formulation/Distribution
Linares
Chile
Casablanca
Morocco
Manufacturing
40
Transforming and rising expertiseFrom a commodity business to a specialty model
Switzerland
Burgdorf
& Bischofszell
Part of the natraceutical
ingredient division
India
Roha
Valentine
2012
USA
Chicago
Vegetable
Juices Inc
2014
Our F&V specialty business is coming from 4 acquisitions
Poland
Jaslo
Pektowin
20122009
Manufacturing
41
Our production processStep by step
Powder
Formulation
Solid
Ingredient
Raw Material Extraction Concentration Purification
Liquid
IngredientLiquid
Formulation
42
Adding value to our F&V
Specialty businessCase Study
● Identify our differentiating strengths
● Drive People to success
● Create close relationships with local suppliers
● Reduce complexity with lean manufacturing
● Develop synergies within the Group
● Raise customers’ awareness
Manufacturing
43
A clear roadmap to engage everyone
Step 1
Build the agenda
Step 2
Take Others with You
Step 3
Empowering employees
Step 4
Motivation mood
● Interviews with key
individuals to understand
their needs and way
of thinking
● Identify future candidates
to guide the Management
Team
● Create a sense of urgency
● Communication
on long-term vision
● Boundaries implementation
● Site Key Performance
Indicators (KPI’s)
● New Organizational
Structure & Senior
Leadership Teams (SLT’s)
● Effective Change
Communication to all
Employees passing
a simple & clear message:
“Performance”
● Assigned job descriptions
and agreed responsibilities
● Build with the Leaders
achievable and S.M.A.R.T.
annual KPI’s
● Coaching to boost
performance
● Frequent meetings
to support The Leader
● Scorecards to ensure
we “do-it the right way”
● Celebrate quick wins
● Build A Performance Driven
Environment with PRIDE
● People actions: Safety,
trainings to all Managers
● Reward and Recognize
success
● Identity with our Brands,
evaluation matrixes
and Employees development
paths
● Desire for success achieving
KPI’s and Group ranking
● Engagement on every
Site action
44
Value-Added Red Beet From seed to product
A reproducible model
● Focus on specific raw material
● Barriers to entry/technology
● Client service/Quality
Worldwide synergies
● With the product range
● With the Group Specialty capabilities
● With different markets
45
Selection of red beet, high betanine value
Strong actions for technology process and quality
Manufacturing
46
Multiple applicationsin the product range
Nutrition & HealthNatural Colors
Antioxydant
High Value
juice concentrate
Manufacturing
47
F&V
Specialty business
Transfer of know-How and synergies
United
Kingdom
Chicago
● Colors
● Direct flow
● Know How
● Client service/Quality
● High Value Beverage Cucumber
● Know How/Flexibility
● New product development
● Client service/Quality
India
● Know How
● Banana/samples
● Build same procedures
● Exchange tips & tricks
● Colors: Red Beet
● Baby Food: Strawberry
● Align specifications
● Client service/Quality
Switzerland
Poland
Manufacturing
48
Route to success
Markets
FROM NATURE TO YOU
MarketsLeading the way for our customers
in shifting from synthetic to natural
Markets
50
Oreste FIESCHIChief Commercial Officer
Degrees in chemistry and marketing along with an MBA
Over 20 years of experience in B2B across many industry sectors
Expertise in the food industry and especially the ingredients sector in Latin America
with major players (Tate & Lyle, Solae do Brasil, IFF...)
Senior Vice President and General Manager of the Latin America area at NATUREX
Chief Commercial Officer in charge of the sales and marketing activity
Member of the Executive Committee
Speaker biography
Markets
51
Experience feedbackLatin America zone
9 months 2015 9 months 2016 est.
YTD Revenue
9 months 2015 vs 2016 (e)
Main actions
Latin America
● New governance
● Simplification of the Sales model
● Focus on key clients
● Selection of distributors
● Implementation of the Frontline
● Improvement of Client service
Growth > 20%
SpringLab
Sales Office
Sao PauloBRAZIL
Production site
Sales Office
ManausBRAZIL
Production site
Sales Office
LinaresCHILE
Sales Office
MexicoMEXICO
Markets
52
A more focused and reactive
organization: Global-Regional-Local
Europe
Africa
Middle eastLatin America
Asia
Pacific
New governance
with 4 VP, General Manager
Implementation of the Frontline(Redeployment of 30 Headcounts)
Springlabs development
Extension
of our salesforce
Setting up a distribution
network (hybrid model)
North America
Markets
53
Graduated with a Bachelor’s degree in Biology from the University
of Nice-Sophia-Antipolis, France
Master’s of Science and Technology in Chemistry and Food Flavouring
from the Institut Supérieur International du Parfum, de la Cosmétique,
et de l’Aromatique Alimentaire (I.S.I.P.C.A.) in Versailles, France
Technical Director /Flavourist for Sensient China, located in Guangzhou
General Manager of Sensient Asia-Pacific Innovation Center in Melbourne, Australia
General Manager of Sensient Singapore, and ultimately Sales Director Flavors US,
in Indianapolis, USA
General Manager Asia-Pacific for AFB International, a leading manufacturer
of flavours for pet-food
Joined NATUREX in September 2015 as SVP, General Manager Asia-Pacific
Jean-Philippe GIORGISSVP, General Manager Asia-Pacific
Speaker biography
Markets
54
Experience feedbackAsia-Pacific zone
Main actions
Asia-Pacific
● Build up of a regional governance
based in Singapore
● Focus on sales,
improvement of client service
and local Management
● Creation of Key Accounts position
● Technical support from
3 Springlabs
● Better positionning as
a global player
9 months 2015 9 months 2016 est.
YTD Revenue
9 months 2015 vs 2016 (e)
Growth > 22%
SydneyAUSTRALIA
Roha/MumbaiINDIA
DubaiUAE
SingaporeSINGAPORE
BangkokTHAILAND
ShanghaiCHINA
SeoulKOREA
TokyoJAPAN
SpringLab
SpringLab
SpringLab
Markets
55
Eric VILLAINSVP, Marketing & Business Development
Agricultural engineer and MBA at CPA
20 years expertise in the Food Industry
Expertise in Sales & Marketing(Group marketing and R&D Director, Category Development
and Innovation Director, Business Unit Director, National
Key Account manager)
Experience in various countries
Last position at Campofrio Food Group
Joined NATUREX in November 2013
SVP, Marketing & Business Development
Speaker biography
Markets
56
Food Colors Market (in M$)
47%
Natural Food
Color Market
53%
Synthetic Food
Color Market
North America
Food Colors Market Size: 645M$
65%
Natural Food
Color Market
35%
Synthetic Food
Color Market
EMEA
Food Colors Market Size: 554M$
60%
Natural Food
Color Market
40%
Synthetic Food
Color Market
APAC
Food Colors Market Size: 420M$
54%
Natural Food
Color Market
46%
Synthetic Food
Color Market
LATAM
Food Colors Market Size: 175M$
Source: NATUREX
Markets
57
Natural ColorsAn actual reality
IN EUROPELegislation regulatesthe use of food coloring
IN AMERICAS AND ASIAConsumer advocacyplays an important role
73%of US consumers
65%of Chineseconsumers
68%of Europeanconsumers
WANT TO SEE
FAMILIAR INGREDIENTS
IN THEIR FOOD
NORTHERN AMERICA
50%Food and drinks launchesuse natural colors
EUROPE
89%Food and drinks launchesuse natural colors
ASIA PACIFIC
69%Food and drinks launchesuse natural colors
DECIDED TO SWITCH TO
NATURAL COLORS DUE
TO CONSUMER PRESSURES
BETWEEN 2015AND 2016
Source: NATUREX
Markets
58
Phytoactives and dietary supplementsAlready a major contribution, but with a bright future
2011 2013 2015 2017 2019
30,198
34,90038,599
43,280
48,913
US Dietary Supplement Sales Trends - M$
2011 2013 2015 2017 2019
5,302
6,0336,777
7,576
8,566
US Herbals & Botanicals Sales Trends - M$
NATURE’S ARSENAL
AGAINST CVD:
2 bilionOverweight adults wordlwide
1 bilionPeople are diagnosed with hypertension
17.5 millionPeople die from CVD every day
COCOACTIVE,
EFSA 13.5 HEALTH CLAIM
Garlic Red rice yeast Hawthorn Olive leaf
Flavanols increaseblood vessels elasticity by 23%
Source: NATUREX
Markets
59
Phytoactives and cosmeticsStanding up for sustainable beauty
THE AVERAGE AMERICAN WOMAN
USES 12 PERSONAL CARE
PRODUCTS A DAY
GLOBAL FACIAL
CARE MARKET
WAS WORTH
$120 bilionin 2015
+
Source: NATUREX
Markets
60
Specialty fruits and vegetablesRaw land to conquer
≥5
<5
DUE TO LOW FRUIT & VEG INTAKE>millionANNUAL DEATHS1.7
MEN WHO
CONSUME
F&V
SERVINGS
A DAY
= 2799 mg/d
= 1137 mg/d > BETA
CAROTENE
COUNTRIES
WITH NUTRITION
TARGETS
DIABETES
REDUCTION
55
OBESITY
REDUCTION
63
SALT
REDUCTION
43
Source: NATUREX
Markets
61
NATUREX secretThe cross-fertilization
● Phytoactives/Food
● Phytoactives/Cosmetic
● Phytoactives/Nutra
A holistic approach
● Sensory profile
● Natural color
● Phytoactives/Nutra
● Antioxydant
● Micro-Nutrients
● Natural Color
● Phytoactives
Markets
62
Leslie LANNEBEREGlobal Category Manager Nutrition
ISAB engineer Diploma in Nutrition and Health along with
an Advanced Master in International Marketing Management
from ESSEC Business School
Experience in sales and marketing with Nestle and Phythea
Good understanding of customers needs and requested
consumer focus approach
Global Category Manager Nutrition at NATUREX
Speaker biography
Markets
63
Our two strategic platforms
Nutrition
My natural
selfcare
My natural
food
Markets
64
Our Nutrition Offer
MY
NATURAL
SELFCARE
MY
NATURAL
FOOD
FORTIFICATIONNatural sources of macro
& micro nutriments from Fruits/
Vegetables/ Superfoods
INTUITIVE
NUTRITIONStealth health, intuitive perception
of nutrition
Markets
65
New trends
See you
in December to
learn more
66
FROM NATURE TO YOU
Roadmap Bright2020
Bright2020
67
Heading to Bright 2020
François DE GANTÈSChief Financial Officer
11,5%
13,6%
20%
2014 2015 2020 est.
Current Operating EBITDA margin (%)
Bright2020
68
Heading to Bright 2020
Main levers
to achieve our
Bright2020
EBITDA target
Pricing Power 200 bps
Simplification 200-300 bps
Operational excellence 200-300 bps
Indirect Procurement 100 bps
R&D - 200 bps
EBITDA Target 20%
Bright2020
69
SimplificationDedicated Industrial lean management team in place
Active reduction of SKUs
2013 2014 2015 2016 2017
● Rationalisation of the number of SKUs
to reduce complexity and move to a higher
value-added portfolio
● Customer segmentation: Focusing
on our major customers, minimum order
and quantity values
● Reduction of technical requests and samples
to focus on real innovation projects
Main actions already engaged
▷ Next step: Internal flows reduction project /
new innovation process
Bright2020
70
2014 2015 2016
● Better utilization of our production capacity due
to higher volumes
● Improvement of our productivity with limited Capex:
• Italy: automatisation => +20% additional
production capacity achieved in 2016
• Morocco: Rationalisation of the product mix => +30%
additional production capacity achieved in 2016
● Better operationnal practices
Operational excellenceStructuring and optimising our capabilities
▷ Next step: Continuous improvement performance /
implement lean management
Main actions already engaged
Activity Index
Bright2020
71
2013 2014 2015 2016 2017 est.
Research & DevelopmentA differentiation strategy
● Differentiation through higher investment
in science-based innovation in health
has been implemented
● Nutrition & Health clinical studies pipeline
has been restored
● Stronger focus on innovation projects
versus routine technical support
● Open innovation / Ingenium governance
in place and delivering
Main actions already engaged
Randomized clinical trials launched▷ Target to increase R&D spending from
3% to 5% of sales by 2020
Bright2020
72
Heading to Bright 2020
Main levers
to achieve our
Bright2020
EBITDA target
Pricing Power 200 bps
Simplification 200-300 bps
Operational excellence 200-300 bps
Indirect Procurement 100 bps
R&D - 200 bps
EBITDA Target 20%
73
Conclusion
FROM NATURE TO YOU
Conclusion
74
● Restructuring actions initiated
● True expertise along the value chain
● Important barriers to entry
● High level of science and innovation
● Strong and agile commercial organization
● Skilled and engaged talents
Building a strong and sustainable
model
Conclusion
75
4 Key take-aways
Sourcing
By cultivating proximity
with local suppliers
and communities across
the globe, our agricultural
engineers have developed
close long-term relations
and in-depth knowledge
of the biodiversity of
each region.
Innovation
Our agile and responsive
organisation allows us
to break through boundaries
and advance beyond
market standards in terms
of science innovation
to develop new formulas
for active ingredients
and innovative production
processes to improve
the performance of our
ingredients.
Manufacturing
We apply a continuous
improvement approach
to our processes in order to
constantly optimise methods
and applied technologies ;
this makes it possible
to reduce our complexity,
maximize yields and
increase productivity.
Markets
Our offering allows
us to actively participate
in creating new products
that are constantly at the
cutting-edge of consumer
trends throughout the world.
Monitoring and anticipating
these trends and achieving
synergies supports our
mission of actively
encouraging the shift
from synthetic to natural.
FROM NATURE TO YOU
naturex.com
250 rue Pierre BAYLE - BP 81218
84911 AVIGNON Cedex 9
FRANCE
+33 (0)4 90 23 96 89
