Almarai Company · TADAWUL:2280
Almarai — H1 2018 Earnings Presentation
26 slides from Almarai's earnings presentation, July 2018
Slide 1: Almarai Company Interim Results – 1st Half 2018
Almarai Company Interim Results – 1st Half 2018
Slide 2: Disclaimer
Disclaimer Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or lia
Slide 3: Macro Environment
Sa incl oll Almarai ~_ Macro Environment
Slide 4: Main Events Q2 2018
Main Events Q2 2018 • Growth in the quarter adversely affected by contraction in export markets • Higher uncertainty amid multiple reforms and macroeconomic changes • Lower consumer confidence/sentiment and slower market growth, particularly within discretionary categories • On going impact from the
Slide 5: Almarai Gaining Market Share Despite Declining KSA Dairy and Food Market
Almarai Gaining Market Share Despite Declining KSA Dairy and Food Market MAT Category Almarai MAT Val. Almarai Rank • Almost all of the Dairy and Foods categories are growth (Value)% Shr Change (Value) declining in KSA in MAT May 2018 compared to PLAIN REGULAR LABAN -6.4% +0.9 1 MAT May 2017. PLAIN
Slide 6: Business Highlights
Sa incl oll Almarai ~_ Business Highlights
Slide 7: Highlights
Highlights Revenue Operating Income 3.80 3.76 3.73 1.00 0.79 0.76 3.60 3.42 0.78 0.60 SAR in Billion SAR in Billion 3.37 3.40 3.23 0.48 0.50 3.20 3.00 2.80 - Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 2013 Last 5 Quarters Last 5 Quarters SAR 11.2 B +12.
Slide 8: Revenue Breakdown
Sa incl oll Almarai —~_ Revenue Breakdown
Slide 9: Revenue Analysis by Product – YTD Q2, 2018
Revenue Analysis by Product – YTD Q2, 2018 By Product 2017 By Product 2018 -1% +2% Poultry Bakery Poultry 744 Bakery 904 857 Cheese, 10% Other Sales 828 13% 12% Other Sales Butter & 82 12% Cheese, 115 Cream 1% 2% +1% Butter & 1,094 Cream 15% 1,088 SAR 7,144 SAR 6,963 16% Million Fruit Juice Million
Slide 10: Revenue Analysis by Product – YTD Q2, 2018
Revenue Analysis by Product – YTD Q2, 2018 Growth % of Total SAR in Million 2018 vs 2017 Growth Fresh Dairy (302) (4%) Net Sales in SAR Million ( YoY -10%) 7,144 6,963 Cheese, Butter & Cream (7) (0%) ( YoY -1%) 39% Bakery (76) (1%) 42% ( YoY -8%) Poultry 113 2% ( YoY +15%) 16% 15% Fruit Juice (25) (
Slide 11: Revenue Analysis by Country – YTD Q2, 2018
Revenue Analysis by Country – YTD Q2, 2018 By Geography 2017 By Geography 2018 Jordan Bahrain = = +1% Bahrain 137 Kuwait Qatar 155 Jordan 164 Oman 359 325 Egypt 2% Egypt 128 372 5% 291 2% Export / = Oman Kuwait 377 2% Export / 5% 5% 4% Others UAE 371 338 5% 2% = Others 116 UAE 92 684 5% 5% = 2% 1% 7
Slide 12: Revenue Analysis by Country – YTD Q2, 2018
Revenue Analysis by Country – YTD Q2, 2018 Gro w th % o f To ta l SAR in Million 2 018 vs 2 017 Gro w th Net Sales in SAR Million KSA 81 1% 7,144 6,963 ( YoY +1%) UAE (24) (0% ) ( YoY -3%) Oman (1 ) (0% ) ( YoY -0%) Kuwait (21 ) (0% ) 66% 69% ( YoY -6%) Egypt 86 1% ( YoY +29%) Qatar (325) (5% ) ( Yo
Slide 13: Innovation Pipeline Q2, 2018
Innovation Pipeline Q2, 2018 Almarai Company 2018 Q2 Earnings Presentation 13
Slide 14: Financial Highlights
Sa incl oll Almarai ~_ Financial Highlights
Slide 15: Operating Performance – YTD Q2, 2018
Operating Performance – YTD Q2, 2018 Profit Attributable to Gross Profit Shareholders Operating Income % to Sales 38.2% 39.6% 1.4 pp 16.9% 17.8% 0.9 pp 14.0% 14.4% 0.4 pp SAR Million SAR Million SAR Million 2,732 2,758 1,209 1,240 +26 +31 1,002 1,005 +2.6% +1.0% +2 +0.2% YTD Q2, 2017 YTD Q2, 2018 YT
Slide 16: Statement of Income – 6 months and Q2
Statement of Income – 6 months and Q2 2nd Quarter 2nd Quarter YTD SAR million 2017 2018 Change 2017 2018 Change Revenue 3,760 10 0 .0 % 3,731 10 0 .0 % (0.8%) 7,144 10 0 .0 % 6,963 10 0 .0 % (2.5%) Cost of sales (2,205) (58.6%) (2,225) (59.6%) (0.9%) (4,412) (61.8%) (4,205) (60.4%) 4.7% Gross Profit
Slide 17: Segment Reporting – 6 months and Q2, 2018
Segment Reporting – 6 months and Q2, 2018 Almarai SAR Million Dairy & Juice Bakery Poultry Other Activities Consolidated 1st Half 2018 Revenue 5,163 828 857 115 6,963 Depreciation and Amortisation (633) (121) (180) (92) (1,026) Profit Attributable to Shareholders 827 87 92 (2) 1,005 Percent to Reven
Slide 18: Net Income by Segment (6 Months)
Net Income by Segment (6 Months) Basic EPS* (SAR) 0.97 0.98 1,200 1,002 (110) 50 1,005 1,000 128 (65) SAR Million 800 600 400 200 0 YTD Q2, 2017 Dairy & Juice Bakery Poultry Other YTD Q2, 2018 Revenue Growth (4.6%) (8.4%) 15.2% 41.2% (2.5%) Net Income Growth (11.8%) (42.9%) n.a. (97.0%) 0.2% Net Inc
Slide 19: Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan
Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan CAPEX spend for the 2nd Quarter Year to Date 2018 was SAR 0.9 Billion. • Manufacturing and Farming spent CAPEX of SAR ~0.4 Billion for various capacity expansion projects. • Sales Depot, Poultry and Logistic
Slide 20: Cash Flow Bridge – Rolling 12 Months
Cash Flow Bridge – Rolling 12 Months 4,149 (985) YTD Q2,2018 Free Cash Flow = SAR 425M (SAR238M over 2017) (2,603) Loans Issues / Payments / Charges (746) 463 CAPEX / Biological (59) 219 Assets Operating Cash Flow Dividend Cash at 30 Others Cash at 30 June 2017 (SAR 244 Million) June 2018 Almarai Co
Slide 21: Key Trends
Key Trends
Slide 22: Net Debt
Net Debt 12,000 350% 3.1x 3.0x 2.8x 2.8x 2.9x 10,000 2.7x 2.7x 2.7x 2.8x 300% 250% 8,000 200% SAR Million 6,000 150% 4,000 98% 101% 75% 75% 74% 81% 81% 73% 75% 100% 2,000 50% 6,653 8,237 8,053 8,762 9,344 10,889 10,883 10,910 11,422 0 0% 2011 2012 2013 2014 2015 2016 2016 2017 Last 12 Months SOCPA I
Slide 23: Quarterly Performance – Net Income Trend Analysis
Quarterly Performance – Net Income Trend Analysis 2018 versus 2017 800 Q2 = (2.0%) 700 674 661 664 667 658 # 600 # 595 655 629 530 539 536 513 500 476 484 # 450 489 433 SAR Million Q1 = 4.8% 425 430 428 398 400 380 369 373 344 349 328 306 309 * 300 274 # 284 286 255 235 242 289 200 100 0 # IFRS reva
Slide 24: EBIT and EBITDA margins are starting to improve…
EBIT and EBITDA margins are starting to improve… Revenue, EBITDA and EBIT Evolution CAGR 2011 – 2018: 8.8% (w/o impact of acquisitions 5.6%) Net Sales EBIT % to Net Sales 14,699 14,339 EBITDA % to Net Sales 13,795 13,936 13,755 24.4% 12,606 29.3% 28.1% SAR Million 25.6% 11,219 25.3% 26.0% 24.2% 23.9
Slide 25: Key Share Data
Key Share Data Key Statistics for Almarai (28 June 2018) Year to date total shareholder's 30% return since listing 25% Share Price (SAR) 60.40 Savola 18% 20% Current P/E Ratio (ttm) 30.91 Earnings Per Share (SAR) (ttm) 1.95 15% Market Cap (SAR Million) 60,400 25% HHPrince 10% 35% Dec-11 Dec-10 Dec-1
Slide 26: Thank you
For Investor Relations matters please contact: investor.relations@almarai.com “We will encourage our major corporations to expand across borders and take their rightful place in global markets” QR Code for Almarai IR App. www.almarai.com Thank you