Astral Foods Limited · JSE:ARL
Astral Foods — FY2023 Earnings Presentation
63 slides from Astral Foods's earnings presentation, November 2023
Slide 1: Annual Results Presentation for the year ended 30 September 2023
20 ANNUAL RESULTS 23 PRESENTATION for the year ended 30 September 2023
Slide 2: Agenda
AGENDA ▪ Business Overview Slide 3 – Chris Schutte ▪ Operational Overview Slide 11 – Gary Arnold ▪ Industry Matters Slide 29 – Gary Arnold ▪ Financial Overview Slide 32 – Dries Ferreira ▪ Outlook Slide 44 – Chris Schutte ▪ Additional Information Slide 48 2
Slide 3: Business Overview
BUSINESS OVERVIEW Chris Schutte Chief Executive Officer
Slide 4: Open Message
Business Overview OPEN MESSAGE ▪ It is openly recognised that this set of financial results is hugely disappointing, and is regarded as the lowest point in Astral’s proud history ▪ The magnitude of the load shedding and power outages experienced were not anticipated, and there was insufficient emerg
Slide 5: Salient Points
Business Overview SALIENT POINTS ▪ Poultry feeding costs increased significantly on record high feed raw material input costs earlier in the year, together with higher levels of feed consumed on load shedding related impacts ▪ Broiler production efficiencies were negatively impacted for a period of
Slide 6: Key Financial Indicators
Business Overview KEY FINANCIAL INDICATORS ▪ Revenue @ R19,3 billion 0.4% ▪ Loss before interest and tax @ R621 million 143%88% ▪ Loss for the period @ R512 million 149% 89% ▪ Headline loss per share @ 1 324 cents 148% 88% ▪ Net cash outflow @ R1,1 billion ▪ No dividend declared for the year 6
Slide 7: Load Shedding Costs F2023
Business Overview LOAD SHEDDING COSTS F2023 (R’000) 400 000 1Q23 A = R246 m 2Q23 A = R495 m 3Q23 A = R828 m 4Q23 A = R85 m 350 000 300 000 250 000 200 000 150 000 100 000 50 000 - Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Additional feed cost Additional shif
Slide 8: Broiler Net Margin vs. Feed Price
Business Overview BROILER NET MARGIN vs. FEED PRICE 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18 1H2013 2H2013 1H2014 2H2014 1H2015 2H2015 1H2016 2H2016 1H2017 2H2017 1H2018 2H2018 1H2019 2H2019 1H2020 2H2020 1H2021 2H2021 1H2022 2H2022 1H2023 2H2023 Broiler net margin % Change in broiler f
Slide 9: PBIT Movement F2023 vs. F2022
Business Overview PBIT MOVEMENT F2023 vs. F2022 (R million) 1 600 1 400 1 200 1 000 907 800 600 1 440 75 Load shedding impact 400 200 0 1 059 (200) (621) (400) 427 (600) (800) 457 1 194 (1 000) 22 (1 200) 395 87 (1 400) (1 600) Additional feed material cost Water supply Bird flu recoveries Other LBI
Slide 10: Broiler Selling Price vs. Feed Price
-5% 10% 15% 20% 25% 30% 35% 40% -10% 0% 5% Oct-18 Nov-18 Dec-18 Jan-19 Source: Own Data Feb-19 Business Overview Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 % Change in broiler feed price Oct-20 Nov-20 Dec-20 Ja
Slide 11: Raw Materials
RAW MATERIALS Gary Arnold Group Chief Operating Officer
Slide 12: RSA Total Maize Supply & Demand
Operational Overview RSA TOTAL MAIZE SUPPLY & DEMAND Marketing year (May to April) 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 '000 tons Actual Actual Actual Actual Actual Estimate Forecast Carry In (1 May) 3 689 2 662 1 000 2 115 2 124 1 955 1 999 Crop Estimate 12 510 11 275 15 300 16 3
Slide 13: SAFEX Yellow Maize Price
Operational Overview SAFEX YELLOW MAIZE PRICE Source: CJA Strategic Risk Brokers 13
Slide 14: Durban Soya Meal Price
Operational Overview DURBAN SOYA MEAL PRICE Source: CJA Strategic Risk Brokers 14
Slide 15: Feed Division
FEED DIVISION Gary Arnold Group Chief Operating Officer
Slide 16: Feed Division
Operational Overview FEED DIVISION Revenue - R million Operating profit - R million 12000 800 11000 750 11 589 700 759 10000 650 10 362 9000 600 550 625 8000 500 7000 450 6000 400 5000 350 300 4000 250 3000 200 2000 150 100 1000 50 0 0 F2022 F2023 F2022 F2023 Revenue up 11.9% Operating profit up 21.
Slide 17: Feed Division
Operational Overview FEED DIVISION ▪ SAFEX yellow maize price increased for the year under review F2023 avg. R4 205 per ton (F2022: R4 112) up R93 per ton (increase of 2.3%) ▪ DBN soya meal price increased for the year under review F2023 avg. R11 721 per ton F2022: R9 628) up R2 093 per ton (increas
Slide 18: Feed Division Sales Mix
Operational Overview FEED DIVISION Sales Mix - F2022 Sales Mix - F2023 29% 33% 1 468 338 tons 1 484 594 tons Volume Increase ≈ 1.1% 60% 6% 65% 7% ◼Poultry Integrated ◼ Poultry External ◼ Other 18
Slide 19: Poultry Division – Commercial
POULTRY DIVISION COMMERCIAL Gary Arnold Group Chief Operating Officer
Slide 20: Poultry Division - Consolidated
Operational Overview POULTRY DIVISION - CONSOLIDATED Revenue - R million Operating profit - R million 16000 800 15 963 15 833 600 802 14000 400 12000 200 10000 0 -200 8000 -400 6000 -600 4000 -800 -1000 -1 380 2000 -1200 0 -1400 F2022 F2023 F2022 F2023 Revenue down 0.8% Operating profit down 272% ▪
Slide 21: Poultry Division - Commercial
Operational Overview POULTRY DIVISION - COMMERCIAL ▪ Broiler sales volumes decreased on lower demand for Astral’s finished goods as a result of a change to the product basket, this as a result of slaughtering “big birds” brought about by a backlog in the slaughter programme as a result of load shedd
Slide 22: Poultry Division - Commercial
Operational Overview POULTRY DIVISION - COMMERCIAL F2023 F2022 % Birds slaughtered – number (‘000) per annum 257 017 303 418 (15.3) Birds slaughtered – live weight (tons) per annum 539 591 562 930 (4.1) Birds slaughtered – average number per week Festive (Olifantsfontein - Gauteng) 1 744 000 2 222 0
Slide 23: Poultry Division - Commercial Sales Mix
Operational Overview POULTRY DIVISION - COMMERCIAL Sales Mix - F2022 Sales Mix - F2023 22% 24% 7% 519 380 tons 50% 4% 469 308 tons 52% Volume Decrease ≈ 9.6% 12% 13% 4% 4% 3% 5% IQF Mixed Portions IQF Single Portions Frozen Fresh Value Added Tertiary 23
Slide 24: Poultry Division – Agriculture
POULTRY DIVISION AGRICULTURE Gary Arnold Group Chief Operating Officer
Slide 25: Poultry Division - Agriculture
Operational Overview POULTRY DIVISION - AGRICULTURE ▪ Parent stock sales from Ross Poultry Breeders increased for the year under review ▪ Feed input costs increased significantly on the back of record high raw material costs, adversely affecting the live bird production cost ▪ Broiler production sev
Slide 26: Poultry Division - Agriculture
Operational Overview POULTRY DIVISION - AGRICULTURE ▪ Contingency plans to counter the loss in broiler hatching egg production: ➢ Extending the depletion age of our national broiler breeder flock placements ➢ Setting eggs from younger flocks in our national broiler breeder program ➢ Aligned export v
Slide 27: Broiler Performance
Operational Overview BROILER PERFORMANCE 140% 135% 130% 125% 120% 115% 110% 105% 100% 95% 90% F2013 F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 1Q2023 2Q2023 3Q2023 4Q2023 Slaughter age Live weight Average daily gain Key indicators baselined to 100% in F2013 27
Slide 28: Broiler Performance
Operational Overview BROILER PERFORMANCE 140% 135% 130% 125% 120% 115% 110% 105% 100% 95% 90% 85% 80% 75% 70% 65% 60% 55% F2013 F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 1Q2023 2Q2023 3Q2023 4Q2023 Mortality Feed consumption Performance efficiency factor Key indicators baselined to 100%
Slide 29: Industry Matters
INDUSTRY MATTERS Gary Arnold Group Chief Operating Officer
Slide 30: Poultry Imports
Industry Matters POULTRY IMPORTS Tons 65 000 60 000 55 000 50 000 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Oct-18 Feb-19 Jun-19 Oct-19 Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 Oct-21 Feb-22 Jun-22 Feb-23 Jun-23 Oct-22 Apr-19 Apr-20 Apr-21 Apr-22 Ap
Slide 31: Industry Overview
Industry Matters INDUSTRY OVERVIEW ▪ Based on industry statistics broiler slaughter numbers are approximately 20.0 million birds per week (October 2023) ▪ Imports for the period averaged 33 386 tons per month (≈ 6.0 million bpw) being approximately 23% of local consumption (F2022: 33 318 tons per mo
Slide 32: Financial Overview
FINANCIAL OVERVIEW Dries Ferreira Chief Financial Officer
Slide 33: Income Statement
Financial Overview INCOME STATEMENT 2023 2022 % change Year ended 30 September R million R million Revenue 19 251 19 334 0.4% Operating (loss) / profit (621) 1 440 143% Op– incl. gain on disposal of interest in subsidiaries - 29 Op– incl. impairment of goodwill - (16) Operating (loss) / profit margi
Slide 34: Group Annual Revenue
Financial Overview GROUP ANNUAL REVENUE (R billion) 19,3 19,3 15,9 10,4 11,6 13,5 13,9 13,0 8,3 12,0 12,4 11,3 7,0 6,2 6,6 9,6 6,6 8,5 6,2 7,2 8,2 7,4 7,0 7,2 6,9 5,5 16,0 15,8 6,3 4,3 4,9 13,1 4,8 5,2 4,0 3,6 3,5 3,7 3,9 4,1 3,5 5,1 9,9 10,6 10,9 11,3 2,5 2,7 8,7 9,1 2,8 2,7 2,7 7,0 2,7 5,1 5,3 5,8
Slide 35: Group Annual Operating Profit
Financial Overview GROUP ANNUAL OPERATING PROFIT 15,0% 1942 (R million) 14,8% 457 7,4% 12,3% 12,8% 1440 9,8% 8,7% 9,6% 9,3% 1101 1086 6,5% 8,4% 5,9% 625 882 8,3% 766 809 6,6% 813 4,5% 7,3% 6,7% 423 4,6% 391 711 5,9% 674 5,8% 5,1% 597 548 581 585 549 1453 272 333 477 493 489 389 214 3,1% 508 328 282
Slide 36: Group Six Monthly Operating Profit
Financial Overview GROUP SIX MONTHLY OPERATING PROFIT (R million) 1 044 898 875 191 785 266 655 207 550 551 538 295 429 503 330 379 374 98 -719 280 186 237 243 337 617 239 275 467 203 213 233 120 616 836 59 351 212 250 265 381 378 310 265 335 197 252 258 287 265 173 157 194 184 156 45 59 113 61 86 -
Slide 37: Balance Sheet
Financial Overview BALANCE SHEET September 2023 September 2022 R million R million % change Non-current assets (excl. ROU assets) 3 414 3 260 5% Non-current assets – ROU assets 252 289 Net working capital 2 280 1 751 30% Current assets (excl. cash) 4 732 4 167 Current liabilities (excl. borrowings &
Slide 38: Capital Expenditure
Financial Overview CAPITAL EXPENDITURE F2023 F2022 R million R million Depreciation and amortisation 310 307 Property, plant & equipment 224 211 Right of use assets 86 96 Total capex spend 398 258 Normal capex 230 248 Load shedding & water related 168 10 Outstanding commitments 594 737 Ross – GGP fa
Slide 39: Working Capital
Financial Overview WORKING CAPITAL September 2023 September 2022 Variance R million R million R million Current assets 4 732 4 167 565 Biological assets 1 048 1 246 (198) Inventory - Poultry 1 426 697 729 - Feed 470 482 (12) Trade receivables 1 488 1 524 (36) Other receivables 300 218 82 Current lia
Slide 40: Cash Flow Movement
1 200 1 500 1 800 -1 200 600 900 0 300 -900 -600 -300 Opening Balance 701 01 Oct 2022 Financial Overview (R million) Dividend payment 226 (F2022) Incentives paid 270 (F2022) Cash profit 1 608 Working capital 323 Additional feed cost 1 059 CASH FLOW MOVEMENT Other load 562 cash outflow shedding costs
Slide 41: Statement of Cash Flows
Financial Overview STATEMENT OF CASH FLOWS 2023 2022 For the twelve months ended 30 September R million R million Cash operating (loss) / profit (601) 1 906 Working capital movement (323) (414) (924) 1 492 Tax paid (47) (294) Net interest (paid) / received (50) 25 Capital expenditure paid (372) (281
Slide 42: HEPS & Dividend Per Share
Financial Overview HEPS & DIVIDEND PER SHARE 3 712 2 762 No dividend for F2023 2 016 1 914 1 674 1 441 1 286 1 381 1 228 1 148 958 890 960 864 965 840 787 631 487 434 272 326 90 108 168 230 380 585 700 700 700 760 810 656 222 440 1 150 490 1 055 2 050 900 775 700 1 380 0 -1 324 F2006 F2001 F2002 F20
Slide 43: In Summary
Financial Overview IN SUMMARY • Revenue at R19,3 billion down 0.4% (prior year at R19,3 billion) • Operating loss at R621 million on devastating load shedding and bird flu costs incurred • Capital expenditure of R398 million higher than normal, due to capex spend of R168 million on emergency power a
Slide 44: Outlook
OUTLOOK Chris Schutte Chief Executive Officer
Slide 45: Prospects
Outlook PROSPECTS ▪ Astral will focus on rebuilding the balance sheet through F2024, which is key to providing resilience through the cyclical nature of the poultry sector in South Africa ▪ Embedded diesel cost as load shedding in South Africa continues unabated, although at lower levels for the pas
Slide 46: Prospects
Outlook PROSPECTS ▪ Astral’s Re-Set, Re-focus and Re-start campaign (Project 3R) centres around various initiatives to normalise the business post the load shedding disaster ▪ Improved biological efficiencies following the load shedding “big bird era” have improved dramatically, which go a long way
Slide 47: Thank You
Astral’s strategy is to be the THANK best cost integrated poultry producer YOU in selected Southern African countries Confirmed March 2022
Slide 48: Additional Information
ADDITIONAL INFORMATION
Slide 49: Key Financial Ratios
Additional Information KEY FINANCIAL RATIOS 70 30 65 61 60 55 25 51 48 48 50 20 49 41 42 37 36 46 45 36 40 31 34 15 39 39 31 30 14,8 29 30 29 24 33 25 36 19 15,0 31 12,8 26 26 23 20 8,3 12,3 21 10 7,3 21 12 28 24 20 5,9 9,6 6,5 15 9,3 13 9,8 8,7 5,9 8,0 7,8 8,4 19 5,8 7,4 5 6,1 16 17 10 5,5 5,5 14 4
Slide 50: Key Financial Indicators
Additional Information KEY FINANCIAL INDICATORS 140 124,65 120 107,60 106,08 96,06 97,45 100 104,50 78,00 80 61,07 61,05 60 49,95 46 41,36 41,65 44,16 37,43 40 33,47 34,24 35,38 34 34 29 28,28 30 26 27 27 27 26 22 23,83 24 24 21 19 21 17,36 17 16 18 20 14 15 23 20 14,34 11 10 10 9 21 12 12 14 15 2 8
Slide 51: World Corn Ending Stocks
Additional Information WORLD CORN ENDING STOCKS 400 26,2% 375 25,0% 27,8% 27,7% 350 25% 22,8% 23,1% 22,2% 21,7% 21,9% 325 21,5% 20,5% 300 20% 275 250 225 15% 200 175 150 10% 125 100 75 5% 50 25 0 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025F End Stock Maize stock to use ratio Source: C
Slide 52: El Niño Oscillation
Additional Information EL NIÑ0 OSCILLATION Source: International Research Institute for Climate and Society (IRI) – Columbia University 52
Slide 53: Vegetative Health Index
Additional Information VEGETATIVE HEALTH INDEX VHI of current year VHI of previous year October 28, 2023 (week 43) October 28, 2022 (week 43) Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI) 53
Slide 54: Broiler Feed Ingredient Contribution
Additional Information BROILER FEED INGREDIENT CONTRIBUTION 100% 0,4 0,3 3,1 0,3 0,4 0,3 0,3 3,7 3,3 2,2 1,8 3,0 1,7 2,9 1,8 2,4 1,8 2,7 7,3 6,0 6,4 5,4 5,4 90% 9,2 9,8 11,5 14,2 14,7 16,2 17,3 0,7 0,6 5,2 0,4 19,9 0,2 80% 13,2 4,7 16,1 0,7 0,8 4,4 5,4 20,3 22,7 23,0 4,1 3,8 4,6 4,4 3,0 5,6 3,7 2,0
Slide 55: Broiler Feed Cost Breakdown
Additional Information BROILER FEED COST BREAKDOWN Inclusion (%) Cost Contribution (%) 14 43 10 64 20 15 Maize Soya meal Extruded soya Sunflower meal Fish meal Soya oil Other Vitamins & Minerals Source: Own Data 55
Slide 56: Broiler Price vs. Food Price Inflation
90% 95% 85% 100% 105% 110% 120% 125% 130% 135% 140% 145% 115% Apr-18 Jun-18 Aug-18 Additional Information Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Source: CJA Strategic Risk Brokers & Own Data Oct-19 Dec-19 Feb-20 SA food price index Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21 Oc
Slide 57: RSA Protein Price Comparison
Additional Information RSA PROTEIN PRICE COMPARISON Cents per kilogram 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 Oct-18 Oct-19 Oct-20 Oct-21 Oct-22 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Aug-19 Aug-20 Aug-21 Aug-22 Aug-
Slide 58: RSA Poultry Market Share
Additional Information RSA POULTRY MARKET SHARE 18% 27% 5% 4% 8% 20% 7% 11% Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Local broiler production ≈ 20,0 million birds per week (October 2023) Source: SAPA & Own Estimates 58
Slide 59: RSA Poultry Market Share
Additional Information RSA POULTRY MARKET SHARE 23% 21% 16% 13% 3% 9% 3% 7% 5% Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Imports Avg. poultry imports ≈ 6.0 million birds per week (12 months ended September 2023) Source: CJA Strategic Risk Brokers & Own Data 59
Slide 60: Total Poultry Imports
Additional Information TOTAL POULTRY IMPORTS Tons 600 000 500 000 400 000 300 000 200 000 100 000 F2021 F2022 F2023 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep F2021 44 514 85 247 123 398 153 294 189 826 238 230 274 805 304 583 343 344 380 748 417 132 451 324 F2022 34 965 69 465 104 383 138 18
Slide 61: Total Poultry Imports
Additional Information TOTAL POULTRY IMPORTS ▪ 2022 ▪ 2023 September YTD Other 1,4% Other 2,0% US 9,9% US 12,8% Argentina 4,7% EU 1,0% Argentina 9,0% EU 0,6% Brazil Brazil 75,6% 83,0% 373 049 tons 323 115 tons Source: SAPA 61
Slide 62: Total Poultry Imports
Additional Information TOTAL POULTRY IMPORTS Country (tons) 2021 2022 2023 Sep YTD Brazil 287 880 282 128 268 328 United States 67 308 47 774 31 872 Poland - - - Argentina 23 715 33 455 15 181 Ireland 852 - 1 288 Denmark 100 - 28 Spain 37 077 2 061 646 Thailand 4 576 1 101 430 Canada 6 462 1 358 - C
Slide 63: Contact Details
CONTACT Chris Schutte DETAILS Chief Executive Officer Tel: +27 (0) 12 667 5468 Dries Ferreira Chief Financial Officer Tel: +27 (0) 12 667 5468 For any further Investor Relations questions please contact: Gary Arnold Marlize Keyter Group Chief Operating Officer Keyter Rech Investor Solutions Tel: +27