At the Capital Markets Day for analysts and investors in Amsterdam, CSM presented its new company name, Corbion, and its new growth strategy for the period 2013 to 2016. The new name and strategy mark the latest stage of the ongoing transformation of the company into a leading provider of biobased products, with activities in biobased food ingredients and biochemicals. The company is on track to complete the earlier announced divestment of its Bakery Supplies business to Rhône Capital early Q3 2013.
Built on the strong foundations of Caravan Ingredients and Purac, Corbion has a wealth of expertise in the world of biobased food ingredients and biochemicals, combined with a rich history of service and innovations spanning more than a century.
In biobased food ingredients, Corbion is a leading player offering high value added ingredients to food companies, helping them solve their food integrity issues such as food safety, microbial spoilage, look and feel, and taste and smell. Corbion is especially strong in the bakery and meat sectors. Organic growth will be driven by leveraging its leadership positions into adjacent markets, and will be supported by selective M&A.
In biochemicals, Corbion is a fast-growing, innovative supplier of fermentation-derived, sustainably sourced biochemicals. Corbion's aim is to replace fossil-based chemicals in selected markets by offering products with similar or improved functionality, lower cost-in-use, and enhanced environmental credentials. Accelerating growth in biochemicals will be underpinned by investments in innovation and developing partnerships. Corbion has already reached a number of key milestones, such as the recently announced partnerships with BASF and Cargill.
Gerard Hoetmer, CEO of Corbion: "Our new name and logo signify the next phase in the development of our company. We will leverage our proprietary technologies and intimate understanding of customers and consumers to further develop our market positions in biobased products. In short, we create value for our customers through our biobased products, designed by science, powered by nature and delivered through our dedication. This will in turn create value for our shareholders."
Financial targets for the period 2013–2016
Average organic sales growth for Corbion is targeted at 6 to 9 percent CAGR. Within that, average organic sales growth for the Biobased Food Ingredients division is targeted at 3 to 5 percent, with a target of 15 to 20 percent for Biochemicals. The Biochemicals sales growth is expected to step up towards the end of the period, as lactide sales (mostly related to bioplastics) are expected to increase, and the new biobased molecule platforms start to generate initial revenues. Corbion's EBITDA margin is targeted to exceed 15 percent by 2016, reflecting growth and efficiency initiatives.
Investments in long-term innovation, the supply chain and market access will increase significantly in the coming years. In particular, there will be sizable investments in lactic acid capacity expansion in 2014-2015, which will drive further growth of Corbion. Corbion expects to be net cash/debt neutral by the end of 2013, taking into account the intended distributions to shareholders. Thereafter, Corbion targets a long-term capital structure of 1.5x net debt/EBITDA.
Corbion intends to return €250 million to shareholders in 2013, after completion of the divestment of the Bakery Supplies business, by means of a special all-cash dividend of €0.70 per share (€50 million in total) and the remainder through a share buy-back. Details of the mechanism for the planned share buy-back will be announced after completion of the divestment of the Bakery Supplies businesses, which is expected in early Q3 2013. Going forward, Corbion targets a dividend pay-out ratio of approx. 35 percent of net profits adjusted for non-cash one-off items. Corbion will critically review the debt position in relation to investment plans periodically, and decide upon potential further returns.
An extraordinary general meeting of shareholders will be held on October 11, 2013 in view of the new company name, the new dividend policy and the share buy-back. For the time being, the company's listing on Euronext Amsterdam will continue under the name CSM.