innophos holdings, inc.€¦ · jefferies 2016 industrials conference, new york city | august 9,...
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Innophos Holdings, Inc. Jefferies 2016 Industrials Conference, New York City August 9, 2016
Today’s Presenter
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Kim Ann Mink, Ph.D. Chief Executive Officer and President
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Safe Harbor
• During the course of this presentation, management may make forward-looking statements regarding financial performance and future events.
• We will attempt to identify these statements by use of words such as expect, believe, anticipate, intend, and other words that denote future events. You should understand that, even though our forward looking statements are based on assumptions we believe are reasonable when made, they are still subject to uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
• We caution you to consider the important risk and other factors as set forth in the forward-looking statements section and in Item 1A risk factors in our Annual Reports on Form 10-K as filed with the U.S. Securities and Exchange Commission that could cause actual results to differ from those in the forward-looking statements as contained in this presentation.
• Forward looking statements made herein are summaries of previous public disclosures, do not represent revised guidance, and we do not undertake to revise or update them from the date or dates of previous disclosure.
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Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Innophos by the Numbers
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2 GLOBAL R&D
CENTERS
11 MANUFACTURING
FACILITIES
Technology and science driven specialty ingredients solutions
900 CUSTOMERS
10 YEARS ON
NASDAQ: IPHS
300 UNIQUE
PRODUCTS
40% SALES OUTSIDE USA
> 70 COUNTRIES
4 PRODUCT
TECHNOLOGIES
$0.8bn MARKET
CAPITALIZATION
1,400 EMPLOYEES
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Serving Attractive and Resilient End Markets
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Reporting Segment
* 2015 Full Year Revenue: $789m
72%
21%
Specialty Phosphates US/Canada Specialty Phosphates Mexico GTSP & Other
7%
Food and Health Industrial Specialties By-products and Other
US/Canada Mexico South America Asia-Pacific EMEA
52% 39%
9%
64%
14%
4%
Market Segment Geography
3%
Revenue*
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
15%
Innophos – Who We Are
• IPO in 2006. Nasdaq symbol: IPHS
• Leading position in functional ingredients across food, health and industrial specialties markets
• Technology and science driven with over a century of phosphates experience, and capability in other nutritional ingredients
• Supply capability centered in North America with >70 countries served
• ~1,400 employees across 12 locations
• 2015 Revenue of $789m. Adjusted EBITDA of $118m
• Strong cash flow delivery in mature market environment
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Who we are not: a commodity oriented, vertically integrated, mining and fertilizer end-market company
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Investment Thesis
• Phosphate: versatile ingredient providing core and economic functionality for food and beverages
• #1 or #2 positions in core product lines
• Industry leading manufacturing capability
• Energized leadership team with strong financial, yet disciplined, ambition
• Attractive EBITDA profile for Specialty Phosphates; >90% of total Company
• Steady cash delivery. Strong cash conversion rate
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Free Cash Flow (1)
12
99
>$300m FREE CASH FLOW (1)
OVER 5 YEAR PERIOD 2011-2015
0%
50%
100%
150%
200%
250%
300%
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2011 2012 2013 2014 2015
$ Millions % FCF Conversion
12
67
58
99
67
$329m DIVIDENDS AND SHARE BUYBACK
OVER 5 YEAR PERIOD 2011-2015
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
(1) Excludes acquisitions
Leading Position in Phosphate Technology
Phosphates have a broad range of functionalities and can be found in everyday food and beverages; breakfast, lunch and dinner
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A versatile ingredient for food and beverage applications
Meat, poultry and seafood Binding and hydration of delicatessen meats. Cured pork products (ham, bacon); comminuted meats (frankfurters, bologna); precooked breakfast sausages; poultry pieces (breasts, wings), and breaded chicken products (tenders, nuggets).
Baked goods The major use of phosphates in cereal and grain products is the leavening of cakes, cookies, muffins, doughnuts, crackers, biscuits, battered and breaded foods, pancakes, and waffles
Dairy Fluidity of evaporated milk, even melt of processed cheese. Protein dispersion, to buffer, for ion exchange, acidification, gelation promotion, nutrient supplementation, and sequestrants
Beverages The distinctive flavor of cola beverages; the mineral content of isotonic beverages
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Megatrends Inform Our Direction
• Health and Wellness
• Energized Ageing
• Convenience and Time Effectiveness
• Protection and Preservation
• Clean Label/Greener Food
• Sustainability
• Indulgence and Exclusivity
• Affordability
• Multicultural Consumerism
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Markets and Applications
Strategic Approach
Strengthen the core
Expand into adjacencies
Pursue strategic partnerships
Responding to consumer trends and customer needs with our technology and science
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Managing the Present, Planning for the Future
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Strong Organization and Cultural Transformation
Value Creation
Operational Excellence
Commercial Excellence
Strategic Growth
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Operational Excellence
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Continuous improvement and every day great execution
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
CORPORATE SCORECARD
Volume ________________________
EBITDA ________________________
Working Capital ________________________
Expense ________________________
CapEx ________________________
ROIC ________________________
• Get the business “fit”
• Drive better alignment across business segments
• Establish a routine and robust integrated business management process
• Increase supply chain visibility to drive faster response to changing market conditions
• Implement lean manufacturing to drive efficiency, reduce costs and increase utilization
Commercial Excellence
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Marketing and technology to drive customer engagement and value creation
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Align product and service offerings with customer needs and preferences
Establish purposeful decision processes to ensure that we are capturing the value we deliver to the market
Manage input costs and pricing while evolving mix to higher value products and services
Customer Segmentation
Sales Channel Management
Pricing Discipline
Margin Management
Deliver the right products through the right channels to the right customers
MARKETING + R&D
Portfolio Management
Investments in new products and innovation
M&A in adjacent markets
Strategic Growth
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Strengthen core and accelerate growth through M&A
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Building a Strong Management Team
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2015 2016
12/15 Kim Ann Mink
appointed CEO and President
04/16 Han Kieftenbeld
appointed SVP and CFO
04/16 Amy Hartzell appointed
VP Supply Chain and Purchasing
07/16 Sherry Duff appointed
VP and CMO 12/15
Robert Zatta and Peter Thomas appointed to
Board of Directors
Energized leadership team with strong financial, yet disciplined, ambition
• Market and customer driven
• Industry knowledgeable
• Strategically driven
• Functionally adept
• Continuous improvement oriented
• Globally experienced
Focused on expanding company’s leadership positioning
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Perform and Transform to Maximize Shareholder Value
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Perform
Transform
• Continuous improvement and disciplined execution
• Ongoing focus on cash generation
• Enhanced return on investment
• Criteria based capital allocation
• Greater external transparency
• Strengthen the core
• Pursue growth informed by megatrends
• Differentiated focus and ambition by segment
• Leverage technology and science
• Optimize the supply network
&
Balancing profitability, risk and growth
=
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
Strong Shareholder Return
Approach
• Balance profitability, risk and growth
• Apply disciplined investment criteria
• Maintain capital structure flexibility
Capital allocation
• Targeted investments in our core business
• Value enhancing M&A opportunities
• Return excess cash to shareholders
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12
99
0%
20%
40%
60%
80%
100%
120%
140%
160%
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2011 2012 2013 2014 2015
$ Millions % Pay-out ratio
20 25 32 38 39
Cash Returned to Shareholders
>$300m FREE CASH FLOW (1)
OVER 5 YEAR PERIOD 2011-2015
$329m DIVIDENDS AND SHARE BUYBACK
OVER 5 YEAR PERIOD 2011-2015
6 7 7
30
125
Share buy back Dividends Pay-out ratio
24%
35%
66% 60%
149%
Jefferies 2016 Industrials Conference, New York City | August 9, 2016
(1) Excludes acquisitions
ABOUT THE COMPANY Innophos (NASDAQ: IPHS) is a leading international producer of performance critical and nutritional specialty ingredients, with applications in food, beverage, dietary supplements, pharmaceutical, oral care, and industrial end markets. Headquartered in Cranbury, New Jersey, Innophos has manufacturing operations across the United States, in Canada, Mexico and China. For more information please visit www.innophos.com
CONTACT Investors: Mark Feuerbach, 609-366-1204 or [email protected] Media: Bryan Armstrong, FTI Consulting, Inc., 312-553-6707
Jefferies 2016 Industrials Conference, New York City | August 9, 2016