Frutarom Q2 & H1 Results August 2014

Frutarom - A Leading Fast Growing Global Flavor and Fine Ingredient House

3

Global company Broad product

portfolio Public company

Financial success since 2000

•Sales in 145 countries

•15,500 customers • A Top 10 flavor

house

•31,000 products •4,000 raw

materials • Innovative

pipeline

•Listed on London & TLV Stock Exchanges

•From $13M to approx. $1.45B market cap

•9.8x growth in sales (CAGR 19.2%)

•14.9x growth in EBITDA

•17.7x growth in net profit

10 81 108

197 287

425 518

618

792

0

200

400

600

800

1000

Renenue, $M

*Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013

Sales & Marketing – 79 Offices

Production – 34 Sites

R&D – 41 Labs

Frutarom - A Global Company We provide our customers with global and local support

Belgium

Brazil

China

Denmark

France

Germany

India

Indonesia

Israel

Italy

Kazakhstan

Mexico

Netherlands

Norway

Poland

Serbia

Singapore

Slovakia

Slovenia

South Africa

Turkey

Ukraine

UK South

UK North

Corona, CA New Jersey

Cincinnati, OH Switzerland

Moscow Saint Petersburg

Perm Saratov

Hong Kong

Costa Rica

Georgia

Guatemala

Novosibirsk Belarus

Moldova

Florida

5

Frutarom - A Profitable Growth Story (Sales, EBITDA, Net Profit, USD M)

1996 Tel Aviv stock exchange

IFF FS

Gewurzmuller

Adumim

Raychan

Rieber

EAFI

Savoury Flavours

Oxford

Balmey

Jupiter

FSI Corona

Nesse

CH Hansen DE

CH Hansen IT

Etol

Mylner

Aromco

FSI OH

Acatris

Flachsmann

Abaco

Tohar

Meer

Rayner HK F&F

CPL Aroma Flavour key

Baltimore

Botanicare Kunshan

AM Todd

Rad

London stock

exchange

Russia

Canada

Turkey

France Mexico

Ukraine

Poland

Kazakhstan

Hong Kong

Costa Rica

Czech Rep.

S. Africa

India

Brazil

JannDeRee

PTI

AROMA

Heglin

Net Profit 2000-2013

X17.7

EBITDA Profit 2000-2013

X14.9

Sales 2000-2013

X9.8 108

81 10

197

287

425

518

618 792*

4 6

18

30 33

42

52

71*

9 14

32

49

66

80

100

134*

1990 2000 2002 2004 2006 2009 2011 2012 2013

*Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013

5.9

10.1 12.3

17.6

25.5

11.8

17.4

22.2

32.5

43.4

91.7

106.7

130.6

168.6

218.1

-

50.0

100.0

150.0

200.0

250.0

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Q2/07 Q2/09 Q2/11 Q2/13 Q2/14

NET EBITDA SALES

(17.0%)

(16.3%)

(12.9%)

(19.9%)

(19.3%)

(EBITDA Margin)

6

Frutarom Presents Strong Q2 for 2014

Reached $218 M

Revenues grew 29.3%

6.2% YoY Pro-forma growth1

Over $ 85 M

41.6% gross margin in core activities

Reached $43.4 M , 19.9% EBITDA margin

21.6% EBITDA margin in core activities

Over $25M

11.7% net margin

Gross Profit

EBITDA

Growth

Revenues

1Pro- forma growth - assuming acquisitions performed in 2013 had been consolidated as of January 1, 2013 and that CitraSource, which was acquired during the first quarter of 2014, had been consolidated as of March 1, 2013

Net Profit

Results driven by: • Organic growth above average market growth rates • Successful integration of the acquisitions made in 2011-2012 • Improved product mix • New acquisitions already contributing to revenues – Successful implementation is expected to improve margins

($M)

61.1 66.3 82.1

Q2 2012 Q2 2013 Q2 2014

7

Constantly Improving Core Business Margins & Profits

Q2 Gross Profit Q2 EBITDA

28.3 32.3 42.6

Q2 2012 Q2 2013 Q2 2014

38.5%

41.6%

Margin

($M, Core business)

41.0% 17.8%

21.6%

Margin

($M, Core business)

20.0%

• Organic growth • Recent acquisitions • Improved product mix

Major contributors to growth in Profit & Profitability : • Successful Integration of acquisitions made in 2011-12 • Exploiting operational efficiencies

13.5 15.7

25.4 31.6

43.8

25.1 31.9

43.7

58.3

75.5 172.2

205.1

251.6

320.8

406.5

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

H1 2007 H1 2009 H1 2011 H1 2013 H1 2014

NET EBITDA SALES

8

Frutarom Presents Strong First Half for 2014

Reached $406 M

Revenues grew 26.7%

4.6% YoY Pro-forma growth1

Reached $159.4 M

41.3% gross margin in core activities

Over $ 75 M, 18.6% EBITDA margin

20.1% EBITDA margin in core activities

Reached $43.8 M

10.8% net margin

1Pro- forma growth - assuming acquisitions performed in 2013 had been consolidated as of January 1, 2013 and that CitraSource, which was acquired during the first quarter of 2014, had been consolidated as of March 1, 2013

Gross Profit

EBITDA

Growth

Revenues

Net Profit

(17.4%)

(15.5%) (14.6%)

(18.6%)

(18.2%)

(EBITDA Margin)

($M)

115.2 122.7 152.8

H1 2012 H1 2013 H1 2014

52.9 57.9 74.3

H1 2012 H1 2013 H1 2014

9

Constantly Improving Core Business Margins & Profits

• Organic growth • Recent acquisitions • Improved product mix

H1 Gross Profit

Major contributors to growth in Profit & Profitability :

H1 EBITDA

37.9%

41.3%

Margin

($M, Core business)

39.8% 17.4%

20.1%

Margin

($M, Core business)

18.8%

• Successful Integration of acquisitions made in 2011-12 • Exploiting operational efficiencies

Profitable Growth Generates Solid Balance Sheet & Cash Flow from Operations

• $ 392 M - Cumulative cash flow since 2009 to end of H1 2014

Balance Sheet

• Net debt (30.06.14) - USD 188M

• Equity (30.06.2014) - USD 557 M

• Net Debt/EBITDA – consistently below 2x

10

($M)

Cumulative Cash Flow

85

147

183

274

362

392

2009 2010 2011 2012 2013 2014 H1

From Vision to Reality Strategic Milestones Accomplished

Sales Grew From $10M at 1990 to $792M at 2013*

Accelerating Growth In Emerging Markets.

Fastest growing markets

Expanding Market Share In The US.

World’s biggest flavor market

Supply Chain Optimization.

Supported also by acquisitions

Accelerated Profitable Growth

Solid Cash Flow

EBITDA Grew From $1M at 1990 to $134M at 2013*

11

Constantly improving product mix.

Towards more profitable segments

*Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013

Accelerated Growth and Market Share in Emerging Markets

Asia

Central & South America Africa

Central and Eastern Europe

• Acquired Etol in Slovenia and PTI in Russia

• One of the only global players with major production sites in Russia

• Market leadership in Central and East Europe

• Cross selling and optimization opportunities

• Fast growing operation in South Africa, reinforced by JannDeRee acquisition

• Enhanced R&D and sales force in fast growing markets (Kenya, Nigeria and others)

• Building state-of-the-art manufacturing facility

• Expanded R&D and sales force in China, Indonesia, Philippines, Thailand, Vietnam, Sri Lanka

• Setting up flavor operation in India

• Building a state-of-the-art plant in China with both savory and sweet flavors capabilities

• Evaluating strategic acquisition opportunities

• Acquired Mylner in Brazil and Aroma in Guatemala

• Set up an independent operation in Costa Rica and Mexico

• Evaluating strategic acquisition opportunities

12

Expanding Flavors’ Market Share in the US

USA

Focus on the US as a key strategic market

Fortifying US presence through 2

strategic acquisitions

Fast, above market rate, internal growth

Strengthening foothold through the

acquisitions of Hagelin & CitraSource

• Flavor Specialties in the West Coast in 2009

• Flavor Solutions in Cincinnati in 2011

• Lucrative beverage market • Diversified customer base • Technological know how • Strong position in Florida’s

Citrus Hub

122 (27%)

222 (36%)

355 (45%)

229 (51%)

262 (42%)

272 (34%)

41 (9%)

66 (11%)

86 (11%)

60 (13%)

68 (11%)

79 (10%)

2010 2012 2013 Proforma

Emerging Markets Western Europe USA ROW

14

196% growth in the emerging

markets**

31% growth

in the BRIC

countries*

100% growth in USA**

451

618

792*

Growth Rate

Growing Share of Emerging Markets and the USA

Sales by Geography

*

*Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013 ** 2013 on Pro-forma basis vs. 2010

Fine Ingredients ~19%* of sales

Taste Solutions ~72%* of sales

• Unique, high quality creation of sweet and savory flavors for food and beverage products

• Expertise in local and global tastes • Operational flexibility and local global

supply chain • Value-added functional savory solutions

for the food industry (snacks, meat, fish, organic, and culinary segments)

• Comprehensive sweet and savory food systems

• Unique technologies for fruit, spice, vegetable, meat and fish preparations

• Specialty botanical extracts, distillates, essential oils and aroma chemicals

• Innovative, science-based health ingredients for phyto-pharmaceuticals, nutraceuticals, dietary supplements, functional foods, cosmetics, and personal care

• Supporting the growing demand for health, wellness and beauty

15

Trade & Marketing, ~9%* of sales Strengthening Frutarom’s partnership and offering to customers

Growing the Core Business

*Pro-forma basis - had the acquisitions made in 2013 and the beginning of 2014 been consolidated starting from January 1, 2013

We share the…

Passion for Taste & Health

Taste Solutions Fine Ingredients

We develop tailored solutions combining excellent

taste with health and functionality all under one roof 16

6.6 11.9

49.5

75.8

92.7

122.5 125.1

156.7

2000 2002 2006 2009 2011 2012 2013 2014

13.4 22.7

94.2

143.1 172.9

231.4 235.7

290.9

2000 2002 2006 2009 2011 2012 2013 2014

Flavors - Most Profitable Activity Growing Fast

17

Q2 2014

• Above average market growth rates • Increasing market share in Emerging Markets - Latin America, Asia, Central

and Eastern Europe, Africa • North America flavor sales grew by X5.5 times since 2010*

H1 2014 (US$ M)

18.5%

* based on sales in 1H 2014 compared with 1H 2010

15.4% 14.7%

72% 32%

16.3%

14.3%

13.8%

Operating margin

(US$ M)

% of total sales

Operating margin

Fine Ingredients – Improved profitability

18

Operating Profit

• Enhanced product mix

• Focus on Natural high added value fine ingredients

• New innovative products successfully launched

Improvement was driven by (% Operating Profit)

14.7%

9.6%

13.0% 13.1%

H1 2012 H1 2013 H1 2014

Frutarom’s Strategy: Clear Focus Going Forward Profitable Internal Growth

Customer Focus

Mid-sized and local Private label Multinational

Market Focus

Developed markets (Europe and USA) Emerging markets (e.g. Asia, Central & South America, Central

and Eastern Europe, Africa)

Product Portfolio

Natural (extracts, fruit bases specialty essential oils) Natural functional food ingredients Comprehensive, integrated solutions Cost reduction solutions

Core Competencies

R&D and innovation – internal and external Efficiencies, scale and synergies – cross selling Experienced global management Sales-driven organization

19

37 successful acquisitions

Strict acquisition criteria: Highly valuable and experienced

employees

Major synergies and cross-selling

potential

Additional unique products and

technology

Positive impact on EPS

Focus on integration execution Optimization of cross selling

opportunities

Optimization and harmonization

of resources

Proven Acquisition Track Record

21

2013 & 2014: 5 Acquisitions in Emerging Markets and the US

• Strengthening market position in South Africa and Africa.

• Complementary Savory activity

JannDeRee South Africa

PTI Russia & CIS

• Strengthening Leadership in East Europe

• Savory Solutions leadership

Aroma Guatemala

• Strengthening market position in Central America.

Hagelin USA

• Strengthening market position in the US & EM

• Expertise in beverages

Strong management, R&D, sales and operational force.

Leverage operational efficiencies.

Opportunities for additional rationalization plans and improved margins.

Continued implementation of rapid profitable growth strategy

CitraSource USA

• Strengthening Citrus capabilities and leadership

• Presence in Florida – world center for citrus

Ongoing Projects for Resource Optimization Leveraging economy of scale

Production Sourcing & Purchasing

Logistics Sales &

Marketing R&D

Rationalizing Global R&D

Resources - CPM

Global Purchasing at countries of

origin

Production sites integration

Global Logistics integration

Sales force integration

• Capitalizing on the operational synergies created by the 5 acquisitions completed since May 2013;

• Other projects for optimization and margin improvement under way;

• Building and strengthening the global purchasing organization;

Above-Industry Organic Growth

Frutarom’s Strategy

Proven Acquisition

Track Record

Margin Expansion

23

Reaching revenues of $1 billion

Continue successful strategy of combining rapid profitable organic growth with strategic acquisitions

Achieving 20% EBITDA in our core business , given the current product mix

Positive Outlook for 2014/5

Profitable internal growth

Focus on innovative natural healthy product mix

Successful integration of the recent acquisitions

Additional projects to improve efficiency and merge activities and operations

Strengthening & leveraging global purchasing

Strong acquisitions pipeline

24

(EPS)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60 Market Cap ($ B)

EPS ($)

* EPS LTM June 2014, Market Cap 30 June, 2014

Frutarom’s Vision

25

To Be The Preferred Partner For Tasty And Healthy Success