Announces Long-Term Outlook, Including Currency Neutral Organic
Sales Growth of 4 to 5% Annually and approximately 26% EBITDA
Margin by the End of 2023
Integration Planning Confirms Run-Rate Cost Synergy Expectation
of $300 Million and Run-Rate Revenue Synergy Opportunity of More
Than $400 Million by the End of 2023
Company Files Investor Presentation and Shares Additional
Management Commentary
IFF (NYSE: IFF) (TASE: IFF) today announced a preview of its
long-term outlook including three-year financial targets; confirmed
cost and revenue synergy expectations based on the extensive
integration work performed over the last year; and announced the
expected members of the Board of Directors for the new IFF
following the completion of the Company’s combination with DuPont’s
Nutrition & Biosciences business (N&B). IFF expects to
close the transaction on February 1, 2021.
The new IFF will lead the evolution of the global value chain
for consumer goods and commercial products with unmatched scale,
R&D capabilities and portfolio strength. The Company will be a
true innovation partner with customers able to deliver from concept
to delivery adding value from single ingredients to integrated
solutions to first-to-market breakthroughs.
“IFF will be a new Company for a new era,” said IFF Chairman and
CEO, Andreas Fibig. “We have seen acceleration and evolution of
consumer trends through the pandemic with long-term impacts.
Customers across end markets expect more from their value chain
partners and the new IFF is well-positioned to deliver.
Mr. Fibig continued, “As we start our journey together, we see
multiple paths to create value by capturing the innovation
potential of our two organizations, accelerating growth, delivering
meaningful cost synergies and optimizing our portfolio. Flawless
execution will define our success and is now at the center of all
that we do. I’m excited to welcome six new members to the IFF Board
and several new Executive Committee members who will have a
critical role in delivering the value we see ahead of us. I would
also like to thank and acknowledge the four directors that will be
departing our Board upon the completion of the merger. Marcello,
David, Katherine and Li-Huei have provided invaluable leadership
and expertise as IFF has pursued our transformation and created
this foundation for our next stage of growth.”
“These two companies are highly complementary. I look forward to
joining the Board and working with Andreas, the directors and the
executive team to capture the potential ahead of us,” said Ed
Breen, DuPont Executive Chairman and Chief Executive Officer, who
will join the board at close of the transaction and serve as IFF’s
Lead Independent Director starting June 1, 2021. “With market
leadership across all categories, a very strong R&D pipeline,
best-in-class EBITDA margin and strong free cash flow, we see
multiple paths to creating value for all stakeholders and I’m
confident we will succeed.”
Integration & Synergy
Update
The integration planning process has reconfirmed the previously
announced run-rate revenue synergies of $400 million by the end of
2023, which are expected to contribute at least $145 million of
EBITDA net of reinvestments. The revenue synergies are expected to
be realized through significant cross-selling opportunities,
leveraging IFF’s expanded capabilities across a broader customer
base, and delivering on the potential of integrated solutions. With
typical product development cycles of 12 to 18 months, the Company
expects to realize a rapid acceleration of revenue synergies in
year two post-close, including approximately $140 million in
2022.
The integration planning process has also confirmed the expected
run-rate cost synergies of at least $300 million by the end of
2023. The Company expects approximately $120 million of run-rate
cost synergies by the end of 2021, of which approximately $45
million will be realized on a full year basis.
Long-Term Outlook
The Company announced a long-term outlook with three-year
targets that include:
• Expected organic currency neutral sales growth of 4 to 5% per
year through 2023
• Estimated adjusted EBITDA margin of approximately 26% by the
end of 2023
• Estimated free cash flow of approximately $2 billion by the
end of 2023¹
• Net debt to EBITDA of <3.0x in 24 to 36 months post
transaction close
¹ Not inclusive of potential asset divestitures
Further information on the financial profile of the new IFF,
including integration planning status and long-term guidance can be
found in a presentation available at
www.strongerinnovationtogether.com/investors.
Enhanced Leadership Team for the new
IFF
As previously announced, IFF will benefit from an enhanced
Executive Committee that features a strong balance of leaders from
both organizations. The new leadership team will be composed of ten
current IFF executives, including two leaders that have joined the
organization within the last 12 months, as well as four executives
from DuPont N&B. The business division leadership of the New
IFF will be represented equally by IFF and N&B, demonstrating
the strong partnership between the organizations.
Both teams have worked diligently in 2020 through the
integration process to create a clear path to execute, including
setting a clear vision, purpose and operating model as well as
establishing leadership positions within business units and central
functions. The new IFF has already appointed the extended
leadership across the Company, including 55% of these leaders who
are either from N&B or are new to the organization, reflecting
a detailed integration planning process aimed at moving rapidly to
unlock the merger’s potential. Additional detail on IFF’s Executive
Committee can be found at:
https://strongerinnovationtogether.com/executive-committee/.
Board of Directors for the new
IFF
The Company also announced the members of the Board of Directors
for the combined company, effective upon the completion of the
merger with DuPont N&B.
The Board of Directors for the new IFF will have 13 members,
comprising seven current IFF directors and six directors appointed
by DuPont, until the Annual Meeting in 2022, when one of the
current IFF directors will resign. Four of IFF’s current directors
will resign upon the completion of the DuPont N&B transaction.
As previously announced, DuPont Executive Chairman and Chief
Executive Officer Ed Breen will join Board of Directors following
the close of the transaction and will assume the role of Lead
Independent Director for IFF on June 1, 2021.
• Andreas Fibig, Chairman and CEO of IFF
- Mr. Fibig has overseen IFF’s transformational strategy and
industry-leading sustainability efforts since 2014 and brings
extensive knowledge in international business, product development
and strategic planning, in addition to a deep understanding of
IFF’s people and businesses.
• Edward Breen, Executive Chairman and CEO of DuPont
- Mr. Breen brings to the Board extensive global management
experience, including leading the strategic direction and execution
of DuPont and through the transformative separation from
DowDuPont.
• Dr. Kathryn Boor, Dean of the Graduate School and Vice Provost
for Graduate Education at Cornell University
- Dr. Boor brings to the Board extensive knowledge of food and
beverage science, including competence in food safety and quality.
Until assuming her current role in October 2020, Dr. Boor was
responsible for developing and implementing the strategic direction
of Cornell’s College of Agriculture and Life Science and made
important contributions in food and beverage research.
• Carol Anthony (John) Davidson, former Senior Vice President,
Controller and Chief Accounting Officer at Tyco International
- Mr. Davidson brings to the Board years of experience overseeing
financial reporting, internal controls and developing accounting
policies for public companies. He is a Certified Public Accountant,
with more than 30 years of leadership experience across multiple
industries.
• Michael Ducker, former President and CEO of FedEx Freight
- Mr. Ducker brings to the Board significant senior executive and
international experience and extensive expertise in complex
operations, logistics, risk assessment, strategic planning and
corporate culture.
• Roger W. Ferguson Jr., President and CEO of TIAA
- Mr. Ferguson brings to the Board sound business judgement,
extensive knowledge of the financial services industry and
regulatory experience, as well as enhanced perspective on issues
applicable to IFF and from his experience on other significant
public company boards.
• John Ferraro, former global Chief Operating Officer for Ernst
& Young
- Mr. Ferraro was responsible for the overall operations and
services of Ernst & Young worldwide and brings to the Board
extensive executive, auditing and accounting experience, as well as
an extensive understanding of global business operations, markets
and risks.
• Christina Gold, former CEO of The Western Union Company
- Ms. Gold brings extensive international and domestic business
experience and financial expertise to the Board, as well as a deep
knowledge of IFF’s customer base, which is further complemented by
a distinguished career in the beauty and fragrance industry.
• Ilene Gordon, former Chairman, President, and CEO of Ingredion
Incorporated
- Ms. Gordon brings to the Board extensive knowledge of the
development and implementation of growth strategies from her
experience as CEO at a leading global producer of nature-based
ingredient solutions for global food, beverage, brewing and
industrial customers.
• Dr. Matthias Heinzel, President of DuPont’s Nutrition &
Biosciences business
- Dr. Heinzel brings to the Board deep industry experience from
having overseen the strategic direction and operations of N&B.
He has worked closely with IFF throughout the integration planning
stage.
• Dale Morrison, Founding Partner of Twin Ridge Capital
- Mr. Morrison brings to the Board significant executive
management, sales and marketing experience, including through roles
with global food and consumer product manufacturers.
• Kare Schultz, President and CEO of Teva Pharmaceuticals
- Mr. Schultz is a seasoned executive with global executive
leadership experience in the healthcare industry and brings to the
Board his experience overseeing financial and growth initiatives in
markets worldwide.
• Stephen Williamson, Senior Vice President and CFO of Thermo
Fisher Scientific
- Mr. Williamson is responsible for Thermo Fisher’s finance, tax,
treasury and global business services functions and brings to the
Board a formidable accounting background as well as a deep
understanding for innovation-led value creation.
Investor Presentation &
Webcast
IFF has filed an investor presentation to accompany this
announcement and Company management pre-recorded a webcast to
discuss the initiatives in more detail. To access the presentation
and prepared remarks, please visit the IFF Investor Relations
events page at: https://ir.iff.com/events-presentations.
# # #
Welcome to IFF
At IFF (NYSE:IFF) (TASE: IFF), we’re using Uncommon Sense to
create what the world needs. As a collective of unconventional
thinkers and creators, we put science and artistry to work to
create unique and unexpected scents, tastes, experiences and
ingredients for the products our world craves. Learn more at
iff.com, Twitter, Facebook, Instagram, and LinkedIn.
Additional Information and Where to Find It
This communication is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote of approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended (the “Securities Act”). In connection with the proposed
combination of Nutrition & Biosciences, Inc. (“N&B”), a
wholly owned subsidiary of DuPont, and IFF, which will immediately
follow the proposed separation of N&B from DuPont (the
“proposed transaction”), IFF has filed a registration statement on
Form S-4 containing a prospectus, dated December 31, 2020, and
N&B has filed a registration statement on Form S-4/S-1
containing a prospectus, dated December 31, 2020 (together, the
“registration statements”), and DuPont has filed a Schedule TO with
the Securities and Exchange Commission (“SEC”). INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENTS,
PROSPECTUS, THE AMENDMENTS TO THESE FILINGS, AND ANY SUPPLEMENTS,
AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT IFF, N&B, NEPTUNE
MERGER SUB I INC., NEPTUNE MERGER SUB II LLC AND THE PROPOSED
TRANSACTION. Such documents can be obtained free of charge from the
SEC’s website at www.sec.gov. Free copies of these documents, once
available, and each of the companies’ other filings with the SEC
may also be obtained from the respective companies by contacting
the investor relations department of DuPont or IFF.
Cautionary Note on Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act, and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as “expect,” “anticipate,” “intend,” “plan,”
“believe,” “seek,” “see,” “will,” “would,” “target,” similar
expressions, and variations or negatives of these words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
proposed transaction, the expected timetable for completing the
proposed transaction, the benefits and synergies of the proposed
transaction, future opportunities for the combined company and
products, the benefits of the proposed organizational and operating
model of the combined company and any other statements regarding
DuPont’s, IFF’s and N&B’s future operations, financial or
operating results, capital allocation, dividend policy, debt ratio,
anticipated business levels, future earnings, planned activities,
anticipated growth, market opportunities, strategies, competitions,
and other expectations and targets for future periods. There are
several factors which could cause actual plans and results to
differ materially from those expressed or implied in
forward-looking statements. Such factors include, but are not
limited to, (1) the parties’ ability to meet expectations regarding
the timing, completion and accounting and tax treatments of the
proposed transaction, (2) changes in relevant tax and other laws,
(3) any failure to obtain anticipated tax treatment or any required
financing or to satisfy any of the other conditions to the proposed
transaction, (4) the possibility that unforeseen liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, economic performance, indebtedness, financial condition,
losses, future prospects, business and management strategies that
could impact the value, timing or pursuit of the proposed
transaction, (5) risks and costs and pursuit and/or implementation
of the separation of N&B, including timing anticipated to
complete the separation, any changes to the configuration of
businesses included in the separation if implemented, (6) risks
related to indemnification of certain legacy liabilities of E. I.
du Pont de Nemours and Company (“Historical EID”) in connection
with the distribution of Corteva Inc. on June 1, 2019 (the “Corteva
Distribution”), (7) potential liability arising from fraudulent
conveyance and similar laws in connection with DuPont’s
distribution of Dow Inc. on April 1, 2019 and/or the Corteva
Distributions (the “Previous Distributions”), (8) failure to
effectively manage acquisitions, divestitures, alliances, joint
ventures and other portfolio changes, including meeting conditions
under the Letter Agreement entered in connection with the Corteva
Distribution, related to the transfer of certain levels of assets
and businesses, (9) uncertainty as to the long-term value of DuPont
common stock, (10) potential inability or reduced access to the
capital markets or increased cost of borrowings, including as a
result of a credit rating downgrade, (11) inherent uncertainties
involved in the estimates and judgments used in the preparation of
financial statements and the providing of estimates of financial
measures, in accordance with the accounting principles generally
accepted in the United States of America and related standards, or
on an adjusted basis, (12) the integration of IFF and its Frutarom
business and/or N&B being more difficult, time consuming or
costly than expected, (13) the failure to achieve expected or
targeted future financial and operating performance and results,
(14) the possibility that IFF may be unable to achieve expected
benefits, synergies and operating efficiencies in connection with
the proposed transaction within the expected time frames or at all
or to successfully integrate Frutarom and N&B, (15) customer
loss and business disruption being greater than expected following
the proposed transaction, (16) legislative, regulatory and economic
developments; (17) an increase or decrease in the anticipated
transaction taxes (including due to any changes to tax legislation
and its impact on tax rates (and the timing of the effectiveness of
any such changes)), (18) potential litigation relating to the
proposed transaction that could be instituted against DuPont, IFF
or their respective directors, (19) risks associated with third
party contracts containing consent and/or other provisions that may
be triggered by the proposed transaction, (20) negative effects of
the announcement or the consummation of the transaction on the
market price of DuPont’s and/or IFF’s common stock, (21) risks
relating to the value of the IFF shares to be issued in the
transaction and uncertainty as to the long-term value of IFF’s
common stock, (22) the impact of the failure to comply with U.S. or
foreign anti-corruption and anti-bribery laws and regulations, (23)
the ability of N&B or IFF to retain and hire key personnel,
(24) the risk that N&B, as a newly formed entity that currently
has no credit rating, will not have access to the capital markets
on acceptable terms, (25) the risk that N&B and IFF will incur
significant indebtedness in connection with the potential
transaction, and the degree to which IFF will be leveraged
following completion of the potential transaction may materially
and adversely affect its business, financial condition and results
of operations, (26) the ability to obtain or consummate financing
or refinancing related to the transaction upon acceptable terms or
at all, (27) that N&B may not achieve certain targeted cost and
productivity improvements, which could adversely impact its results
of operations and financial condition, (28) the risk that natural
disasters, public health issues, epidemics and pandemics, including
the novel coronavirus (COVID-19), or the fear of such events, could
provoke responses that cause delays in the anticipated transaction
timing or the completion of transactions related thereto,
including, without limitation, as a result of any government or
company imposed travel restrictions or the closure of government
offices and resulting delays with respect to any matters pending
before such governmental authorities and (29) other risks to
DuPont’s, N&B’s and IFF’s business, operations and results of
operations including from: failure to develop and market new
products and optimally manage product life cycles; ability, cost
and impact on business operations, including the supply chain, of
responding to changes in market acceptance, rules, regulations and
policies and failure to respond to such changes; outcome of
significant litigation, environmental matters and other commitments
and contingencies; failure to appropriately manage process safety
and product stewardship issues; global economic and capital market
conditions, including the continued availability of capital and
financing, as well as inflation, interest and currency exchange
rates; changes in political conditions, including tariffs, trade
disputes and retaliatory actions; impairment of goodwill or
intangible assets; the availability of and fluctuations in the cost
of energy and raw materials; business or supply disruption,
including in connection with the Previous Distributions; security
threats, such as acts of sabotage, terrorism or war, natural
disasters and weather events and patterns, disasters, public health
issues, epidemics and pandemics, including COVID-19, or the fear of
such events, and the inherent unpredictability, duration and
severity of such events, which could result in a significant
operational event for DuPont, N&B or IFF, adversely impact
demand or production; ability to discover, develop and protect new
technologies and to protect and enforce DuPont’s, N&B’s or
IFF’s intellectual property rights;, as well as management’s
response to any of the aforementioned factors. These risks, as well
as other risks associated with the proposed merger, are more fully
discussed in the registration statement and proxy statement filed
by IFF and the registration statement filed by N&B. While the
list of factors presented here is, and the list of factors
presented in registration statements filed by each of IFF and
N&B in connection with the transaction, are considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Further lists and
descriptions of risks and uncertainties can be found in IFF’s
annual report on Form 10-K for the year ended December 31, 2019,
DuPont’s annual report on Form 10-K for the year ended December 31,
2019, and each of IFF’s and DuPont’s respective subsequent reports
on Form 10-Q, Form 10-K and Form 8-K, the contents of which are not
incorporated by reference into, nor do they form part of, this
announcement. Any other risks associated with the proposed
transaction are more fully discussed in the registration statements
filed with the SEC. While the list of factors presented here is,
and the list of factors presented in the registration statements,
as amended, filed by each of IFF or N&B are representative, no
such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on IFF’s, DuPont’s or N&B’s consolidated
financial condition, results of operations, credit rating or
liquidity. None of IFF, DuPont nor N&B assumes any obligation
to publicly provide revisions or updates to any forward-looking
statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20210111005546/en/
Michael DeVeau Head of Investor Relations and Communications
212.708.7164 Michael.DeVeau@iff.com