Olam Group Limited · SGX:VC2
Olam — Olam International — 9M 2018 Earnings Presentation
27 slides from Olam's earnings presentation, Nov 14, 2018
Slide 1: 9M 2018 Results Briefing
9M 2018 Results Briefing November 14, 2018
Slide 2: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements for the Third Quarter (“Q3 2018”) and Nine Months ended September 30, 2018 (“9M 2018”) and Management Discussion and Analysis lodged on SGXNET on November 14, 2018. Olam International Limite
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward-looking nature and are therefore based on management’s assumptions about future developments. Such forward
Slide 4: Agenda
Agenda • 9M 2018 highlights • Segmental review • Key takeaways
Slide 5: 9M 2018 highlights
9M 2018 highlights
Slide 6: 9M 2018 results at a glance
9M 2018 results At a glance Volume EBITDA PATMI 23.3 M MT S$905 M S$273 M +57.8% -10.8% -13.6% Operational Free Cash Flow Gearing PATMI S$275 M FCFE from 1.82 S$466X to M -14.6% +S$602 M 1.38 X +28.1% Olam International Limited Results for the 9 Months ended September 30, 2018 | November 14, 2018 6
Slide 7: Volume grew 57.8%
Volume grew 57.8% Led by Food Staples & Packaged Foods Volume by segment, '000 MT +57.8% 8,646 129 23,257 14,739 -48 -209 9M 2017 Edible Nuts, Spices Confectionery Food Staples & Industrial Raw 9M 2018 & Vegetable & Beverage Packaged Foods Materials, Ag Ingredients Ingredients Logistics & Infrastruc
Slide 8: EBITDA declined 10.8% vs strong 9M 2017
EBITDA declined 10.8% vs strong 9M 2017 EBITDA by segment, S$ million -10.8% 1,015 30 905 -62 -43 -7 -29 9M 2017 Edible Nuts, Confectionery Food Staples & Industrial Raw Commodity 9M 2018 Spices & & Beverage Packaged Foods Materials, Ag Financial Services Vegetable Ingredients Logistics & Ingredient
Slide 9: PATMI declined 13.6% vs strong 9M 2017
PATMI declined 13.6% vs strong 9M 2017 Operational PATMI down 14.6% PATMI and Operational PATMI, S$ million -13.6% 316 63 2 4 1 273 -110 -4 9M 2017 EBITDA^ Depreciation & Net Finance Taxation^ Exceptional Non-controlling 9M 2018 Amortisation Costs Items Interests Operational PATMI (S$ M) 322 -14.6%
Slide 10: 4.5% reduction in invested capital
4.5% reduction in invested capital 5.8% reduction in working capital year-on-year S$ Million • Reduced Fixed Capital with -4.5% completion of planned divestments 16,649 15,832 15,942 15,233 14,375 • Working Capital reduction of 5.8% 8,853 7,705 7,924 7,462 despite the year-on-year volume 7,653 (+57.
Slide 11: Net gearing reduced to 1.38X
Net gearing reduced to 1.38X Net and adjusted debt / equity (basic) • Reduced net debt due to: • Lower working capital on 1.82 optimisation initiatives, also 1.46 1.38 supported by lower commodity 0.80 prices 0.51 • Lower gross Capex 0.43 • Cash release from divestments • Conversion of warrants into
Slide 12: Free cash flow
Free cash flow Improved, positive FCFE in Q3 2018 on reduced Capex Free Cash Flow to Equity, S$ million +43 +43 32 769 726 257 -22 -215 -9 Q3 2017 Operating Cash Changes in Tax Paid Capex / Net Interest Paid Q3 2018 Flow (before Working Capital Investments Interest & Tax) FCFF (S$ M) 870 +12 882 Ola
Slide 13: Free cash flow
Free cash flow Positive FCFE in 9M 2018 Free Cash Flow to Equity, S$ million -111 -111 713 80 602 -92 524 -568 -55 9M 2017 Operating Cash Changes in Tax Paid Capex / Net Interest Paid 9M 2018 Flow (before Working Capital Investments Interest & Tax) FCFF (S$ M) 1,109 -191 918 Olam International Limit
Slide 14: Available liquidity
Available liquidity Sufficient to cover all repayment and Capex obligations Total borrowings and available liquidity, S$ Million as at September 30, 2018 9,466 18,371 +6,568 11,803 1,927 4,727 4,379 2,599 7,076 Cash and RMI* Secured Unutilised Available Liquidity Total Borrowings Short-term Receivab
Slide 15: Segmental review
Segmental review
Slide 16: Edible Nuts, Spices & Vegetable Ingredients
Edible Nuts, Spices & Vegetable Ingredients EBITDA, S$ Million Invested capital, S$ Million +23.8% 438 -18.3% 394 332 339 3,643 3,604 3,768 3,463 277 3,043 1,415 1,421 1,608 1,927 1,057 2,048 2,222 1,996 1,986 1,841 2015 2016 2017 9M 2017 9M 2018 restated Dec-15 Dec-16 Dec-17 Sep-17 Sep-18 restated
Slide 17: Confectionery & Beverage Ingredients
Confectionery & Beverage Ingredients EBITDA, S$ Million Invested capital, S$ Million 407 +12.1% -26.4% 328 284 279 6,110 6,082 249 5,681 5,347 4,478 4,330 4,569 4,546 3,819 2,973 1,351 1,541 1,528 1,536 1,505 2015 2016 2017 9M 2017 9M 2018 restated Dec-15 Dec-16 Dec-17 Sep-17 Sep-18 restated Working
Slide 18: Food Staples & Packaged Foods
Food Staples & Packaged Foods EBITDA, S$ Million Invested capital, S$ Million 360 -14.6% +0.3% 330 291 5,031 5,044 249 4,522 4,678 212 1,131 1,558 1,644 3,231 1,498 915 3,024 3,547 3,473 3,400 2,316 2015 2016 2017 9M 2017 9M 2018 restated Dec-15 Dec-16 Dec-17 Sep-17 Sep-18 restated Working Capital F
Slide 19: Industrial Raw Materials, Ag Logistics & Infrastructure
Industrial Raw Materials, Ag Logistics & Infrastructure EBITDA, S$ Million Invested capital, S$ Million 197 185 2,221 +2.6% -4.8% 2,105 1,918 135 139 132 1,693 1,736 1,213 1,050 912 671 712 1,006 1,008 1,055 1,022 1,024 2015 2016 2017 9M 2017 9M 2018 Dec-15 Dec-16 Dec-17 Sep-17 Sep-18 restated resta
Slide 20: Key takeaways
Key takeaways
Slide 21: Key takeaways
Key takeaways • Steady financial performance in Q3 2018 and 9M 2018 against strong prior period • Stronger balance sheet: Further reduced net debt, improved gearing and positive impact from optimisation initiatives, resulting in strong, positive FCFE in 9M 2018 • Continue to execute on 2016-2018 Str
Slide 22: Appendix
Appendix
Slide 23: P&L statement
P&L statement S$ million 9M 2018 9M 2017 % Change Volume ('000 MT) 23,256.7 14,738.6 57.8 Revenue 22,018.6 19,037.3 15.7 Net (loss) / gain in fair value of biological assets (9.6) (1.1) 789.2 EBITDA^ 905.1 1,015.1 (10.8) Depreciation & amortisation (290.7) (287.1) 1.3 Net Finance costs (310.5) (373.
Slide 24: Exceptional items
Exceptional items S$ million 9M 2018 9M 2017 Q3 2018 Q3 2017 Sale of SVI asset (land) in US 13.8 - 0.1 - Sale of PT ACE 5.9 - 0.1 - Sale of Café Enrista brand 2.7 - - - SVI Wage agreement settlement - (6.2) - 0.1 Sale of 50% stake in Nauvu (24.5) - (0.2) - Exceptional Items (2.1) (6.2) 0.0 0.1 Olam
Slide 25: Balance sheet
Balance sheet Change S$ million 30-Sep-18 31-Dec-17 Change 30-Sep-17 vs Sep 17 Uses of Capital Fixed Capital 8,223.3 8,633.2 (409.9) 8,536.9 (313.6) Working Capital 6,718.9 7,280.3 (561.4) 7,576.9 (858.0) Cash 2,599.0 1,986.4 612.6 1,709.5 889.5 Others 753.4 309.0 444.4 244.5 508.9 Total 18,294.6 18
Slide 26: Cash flow statement
Cash flow statement S$ million 9M 2018 9M 2017 Change Q3 2018 Q3 2017 Change Operating Cash flow (before Interest & Tax) 915.5 1,007.7 (92.2) 229.8 251.3 (21.5) Changes in Working Capital 270.7 838.2 (567.5) 658.7 873.3 (214.6) Net Operating Cash Flow 1,186.2 1,845.9 (659.7) 888.5 1,124.6 (236.1) Ne
Slide 27: 9M 2018 Results Briefing
9M 2018 Results Briefing olamgroup.com/investors.html ir@olamnet.com