Scienza e Tecnologia
Firmenich Proved its Resilience in a Year of Significant Uncertainty
[1] Adjustments include restructuring charges, past service cost, post-employment benefit obligations, employee benefits, impairment of PPE and intangible assets, acquisition costs, professional services / dismantlement costs, strategic consultant fees and gain / loss of sales of PPE.
[2] Free Cash Flow is calculated as Operating Cash Flow – Net Capex; Cash Conversion calculated as (OCF –Net Capex) / EBITDA; Net Capex includes Disposals and Government grants.
"This year was marked by many strategic breakthroughs, from acquisitions to key innovation launches and a wealth of global recognition for our leadership in responsible business", said Patrick Firmenich , Chairman of the Board, Firmenich. "I extend my deepest appreciation to Gilbert, the management team and our 10,000 colleagues for setting new standards for Firmenich and our industry."
"Firmenich proved its resilience and leadership during the past year, creating value for its stakeholders, while navigating the unprecedented challenges of Covid-19. We supported our clients across the food, personal, body and home care supply chains to continue to deliver essential products to consumers around the world. We have continued to invest for growth and completed our largest transaction with the acquisition of DRT, a leader in renewable and sustainable perfumery ingredients. We also accessed the public financial markets for the first time in our history, successfully raising the equivalent of CHF 2.9bn in corporate bonds."
We achieved 2.8% revenue growth in l.c., including +2.2% in Perfumery & Ingredients and +3.8% in Flavors. Worldwide lockdowns and travel bans affected some of our business segments, in particular Foodservice and Fine Fragrance, with a knock-on effect on perfumery ingredients. This impact was more than offset by our strong performance in Savory, Sugar Reduction, Plant-Based Proteins, Personal Care, Body Care and Home Care.
We achieved EBITDA margins of 22.1% due to continued productivity gains and cost discipline. We generated CHF 454m of Free Cash Flow, an increase of 8%, due mainly to our focus on cost reduction and cash preservation measures in response to the covid crisis.
One of our key differentiating factors is our passion to innovate with our clients. We are a research-driven, innovation-led organization – dedicating more resources to R&D as a percentage of revenue, than any of our competitors. We pride ourselves on identifying the critical consumer trends across Fragrance and Taste and leveraging our industry-leading R&D capabilities to help our customer stay ahead of the curve. We are also committed to continuing to improve and expand our best-in-class ingredients palette by introducing new natural, sustainable, biodegradable and renewable ingredients. Key innovation highlights during FY 2020 include:
FY2020 has been a transformational year in acquisitions and partnerships. The acquisition of DRT positions Firmenich for continued success by enhancing our portfolio and strengthening our core capabilities. This acquisition allows us to lead in renewable ingredients, to establish the world's leading innovation platform for sustainable ingredients and to become one of the largest backward-integrated solution providers in this space.
In addition to DRT, in July 2019 , we acquired a 65% equity stake in VKL, a leader in spices and seasonings in India , broadening our raw material palette for clean label ingredients and customer reach in this critical strategic market. In November 2019 , we acquired the CO extraction facility from Evonik, significantly expanding our capabilities in super-critical fluid extraction. We also announced a partnership with MG International, a leading fragrance company renowned for its creative fragrance solutions and first-class service to mid-size customers across Turkey , the Middle East , Eastern Europe and Africa .
We continued our legacy of leading the industry in corporate, social and environmental responsibility. We are proud to be the first in the industry to complete the UN Sustainable Development Goals Action Manager assessment, examining the contribution of our entire operations to the SDG. A key milestone for B Corp Certification, the assessment confirmed our strength in areas such as Health, Human Rights and Climate Action. We also became one of a handful of companies in the world, and the first in our industry, to power all our operations globally with 100% renewable electricity. We are one of only two companies worldwide to have received a CDP triple "A" rating for climate change, water security and forests, two years in a row, recognizing our global environmental leadership. Our commitment to the most ethical, traceable and sustainable supply chain was further recognized by the highest Platinum rating of 83/100 from EcoVadis for environmental and social performance, placing Firmenich in the top 1% of the 65,000 suppliers assessed.
We continue to operate in a context of unparalleled uncertainty. We remain committed to continuing to support our clients and suppliers and to ensure the health and safety of our colleagues around the world. Notwithstanding any near-term challenges, we remain focused on investing for the long-term to help our clients reach their ambitions with innovation, creativity and a commitment to sustainable future.
The financial statements will be approved by the shareholders at the annual general meeting to be scheduled in October 2020 . The shareholders will also decide on the dividend, based on the proposal from the Board which foresees a reduction vs. the dividend paid for the previous business year. Other AGM matters are still under consideration by the Board. This information is provided by Firmenich International S.A. pursuant to the EU Market Abuse Regulation 596/2014 and the Swiss FMIA. The information was submitted for publication, through the contact persons set out below, at 7:00 CEST on 11 August 2020 . Further information is available for investors on http://investors.firmenich.com.
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