Savola Group · TADAWUL:2050
Savola — Investor Presentation (March 2013)
32 slides from Savola's investor presentation, March 2013
Slide 1: Investors Presentation March 2013
Investors Presentation March 2013
Slide 2: Contents
Contents 1. Overview 2. Strategy and Growth 3. Financial Highlights and Projections Appendix – Financial Results 2
Slide 3: Overview
Where we are now, and how we got here OVERVIEW 3
Slide 4: Group snapshot
Group snapshot Savola today • Listed on the Saudi stock exchange • Sales of SAR 27 billion in 2012 and SAR 25 billion in 2011 • One of the largest players in a fast growing region • Net Profit of SAR 1,402 million in 2012 and • Leading brands SAR 1,202 million in 2011 • Modern state of technology an
Slide 5: History – Key stages of development
History – Key stages of development Issued Sukuk worth SAR 1.5 billion 2012-13 Acquired additional stake of 6.5% in Almarai 2011 Acquired Pasta business in Egypt Acquisition of Giant and Géant by Panda 2008 - 09 Acquisition of Yudum in Turkey Formed Kinan in 2005 and disposed 70% stake in 2006 2004
Slide 6: 2012 Key achievements
2012 Key achievements The Group has achieved SR 1.4 billion net income, despite: – Arab spring – Significant devaluation of currencies in Iran, Egypt and Sudan Continued divestment of non-core investments Acquisition of additional 6.5% stake in Almarai Debut Sukuk program of SR 5 billion was
Slide 7: 2012 Key achievements
2012 Key achievements Foods • SFC achieved record profits of SAR 626 million, • Successfully launched Afia Olive Oil and despite challenges in the region liquid sugar in Arabia • Increased net profit by 28% compared to 2011 • Newly acquired business of pasta delivered • Achieved high volume growths
Slide 8: Group structure
Group structure Savola Group Plastics Foods Retail Investments Packaging Total Revenue SAR 16.4 billion SAR 10.2 billion SAR 1.1 billion SAR 27.4 billion Super and Oils Percentage of Revenue Hyper 2012 2011 Sugar Retail Retail Pasta 37.1% 36.5% Foods Foods 59.8% 60.5% Plastics Plastics 3.8% 4.0% 8
Slide 9: Strategy and Growth
Where we want to go, and how we will get there STRATEGY AND GROWTH 9
Slide 10: Holding structure
Holding structure Focused Growth Autonomy and Accountability Entering new businesses OpCos to be managed independently Moving away from non-core investments Governance system Profitability enhancement and cost rationalization + Management structures Mergers & Acquisitions Organic expansion Human res
Slide 11: Operating model
Operating model The Savola Group Board of Directors Group Level Audit Committee Investment Committee Risk Committee CSR Committee CNCG Committee Holding No reporting lines between Level portfolio businesses and Group The Savola Group CEO holding Board of OpCo’s (7 members) to be formed as follows: G
Slide 12: Savola Foods – a regional leader
Savola Foods – a regional leader SF History and Sales Evolution (SAR) • Large player 16.4 Bn 15.2 Bn • Business expertise – B2B, B2C, Exports, Value addition 7.6 Bn Pasta acquisition • Distribution network 5.9 Bn in Egypt • Repeatable success formula 4.4 Bn Yudum acquisition • Branding power in Turk
Slide 13: Savola Foods – Strong presence in all markets
Savola Foods – Strong presence in all markets Oil Sugar • Established in 1979 • Established in 1997 • Manufacturing facilities in 8 countries • Strategic partnership with Tate and Lyle, England • Exports to 30 countries with strong marketing and • Raw Cane Refineries in Saudi and Egypt distribution
Slide 14: Savola Foods - Strategic direction
Savola Foods - Strategic direction Strategic Direction Description Rationale Achieve business sustainability Focus on markets that contribute the most to Savola’s profits through portfolio diversification De-prioritize markets where Savola has formidable challenges instead of upstream integrat
Slide 15: Panda – a regional giant
Panda – a regional giant Strong growth in sales (SAR millions) • Largest and fastest growing retailer in the country Acquisition of Giant stores Acquisition of Géant • Rapid expansion of hypermarkets 10,157 9,182 • Well established brand name with 24% CAGR 8,183 equity in produce, trust and value 7,
Slide 16: Expanding retail market
Expanding retail market CAGR Retail market estimations (SAR Bn) CAGR 06-11 11-16 6.7% 393 367 344 10.1% 322 302 285 6.4% 254 246 228 230 216 216 192 203 190 176 180 161 146 140 9.7% 125 114 137 148 7.2% 111 119 128 92 104 11.0% 67 75 82 62 2006A 2007A 2008A 2009A 2010A 2011A 2012F 2013F 2014F 2015F
Slide 17: Optimal demographics – large and young population expected to drive retail demand
Optimal demographics – large and young population expected to drive retail demand 2011 Population GCC Demographics 19.4 M 9.0 M 28.4 M 11% 9% 10% 23% 30% 51% 19% 18% 16% 48% 41% 24% Saudis Non-Saudis Total <20 years 20 - 29 years 30-49 years >50 years • Total population- is expected to reach 32.8M b
Slide 18: Modern retail share is expected to increase to 45%
Modern retail share is expected to increase to 45% Small Grocery & Others Hypermarkets Supermarkets 148 137 128 37 25.3% 119 25.2% 35 111 32 25.1% 104 30 24.9% 28 24.8% 19.6% 24.7% 29 26 26 19.2% 24 18.6% 21 18.0% 16.7% 19 17.4% 17 55.1% 81 55.1% 57.1% 56.3% 76 55.7% 57.8% 57.8% 68 72 61 58.6% 64 20
Slide 19: Strong potential due to high fragmentation
Strong potential due to high fragmentation 24% 25% 41% 36% 62% 16% 57% 23% 39% 23% Avg. 59% 36% 24% 19% 25% 15% UAE Italy Spain UK KSA Small Grocery Retails Hypermarkets Supermarkets Average share of small grocery retailers in other economies averages at 24% compared to 59% in KSA Source: Euromonito
Slide 20: Savola Plastics, a regional leader
Savola Plastics, a regional leader • SPC is focused on building a well- Strong growth in sales (SAR millions) positioned rigid plastic packaging business and a high-volume 15% CAGR 100 100 91 export-driven flexible plastics 87 packaging business 57 • SPC operates in Saudi Arabia and 40 36 Egypt and
Slide 21: Investment portfolio: Strategy definition and execution
Investment portfolio Strategy definition and execution Investment Executed strategy Asfan - In-kind contribution to Masharef project Yasmine Riyadh - Sold to Kinan with realized capital gain of SAR 76 million and SAR 77 million Land & Hanaki Jeddah in 2011 Medina land - Agreement signed to sell to K
Slide 22: Other investments
Other investments All numbers are in SAR millions Book Value December 2012 116 25 2,705 209 365 Listed Land entities 263 514 Financial Other 10 Services and 455 62 Funds Kinan or 278 managed 409 by Kinan Ownership % 80% 49% 11.4% 0.88% 5% 30% 30% 50% 14% 15% 4.67% • Total investment portfolio reduce
Slide 23: Financial Highlights and Projections
What we got, and what we plan to get FINANCIAL HIGHLIGHTS AND PROJECTIONS 23
Slide 24: Financial results - Snapshot
Financial results - Snapshot All numbers are in SAR millions Share price Revenue 27,391 25,196 1,053 1,002 21,029 17,917 884 10,157 9,182 13,821 751 8,183 10,410 772 7,359 558 5,611 3,815 15,224 16,389 12,027 9,351 5,766 7,027 2007 2008 2009 2010 2011 2012 Tadawul All Share Index Herfy Almarai Savol
Slide 25: Financial results - Revenue
Financial results - Revenue All numbers are in SAR millions Revenue - 2012 1,053 27,391 10,157 (207) 39% 20% 37% 2% 4% (1)% 100% 449 5,375 Others includes HQ costs and eliminations Revenue 10,565 growth of Oil Sugar Pasta Retail Packaging Others Total around 9% contributed Revenue - 2011 9,182 1,002
Slide 26: Financial results - Profitability
Financial results - Profitability Net Profits - 2012 All numbers are in SAR millions 100% 31% 10% 22% (13)% 31% 3% 7% 6% 2% 1,402 1,355 435 0 32 (47) 100 (188) 85 311 144 44 438 Adjusted profit Net Profits - 2011 100% growth of 26% 28% 6% 3% around 25% 14% 1% 17% 8% (2)% 33 340 1,202 1,082 30 72 (15
Slide 27: Less reliance on non-managed businesses
Less reliance on non-managed businesses All numbers are in SAR millions 61% 39% 2012 853 549 2011 682 520 2010 527 360 Managed 2009 494 458 Non Managed 2008 102 101 8% 92% 2007 99 1,131 Non Managed business include share of profits from Al Marai, Herfy, Kinan, capital gains, impairments and non- cor
Slide 28: Diminished reliance on capital gains
Diminished reliance on capital gains All numbers are in SAR millions Projected net profit excluding capital gains 47 153 753 97 660 1,500 1,355 1,082 855 933 488 477 496 -294 -46 2006 2007 2008 2009 2010 2011 2012 2013P Income from Core operations Capital gains - net 28
Slide 29: Appendix – Financial Results
Appendix FINANCIAL RESULTS 29
Slide 30: Income statement by segments
Income statement by segments Full year (all figures are in SAR millions) Segment Wise Financials December 2012 December 2011 Revenue Gross Profit EBIT Net Income EBITDA Revenue Gross Profit EBIT Net Income EBITDA Food Oil-Mature Markets 9,008 1,593 1,028 395 1,134 7,958 1,081 591 234 680 Oil-Start-u
Slide 31: Thank You
THANK YOU 31
Slide 32: Disclaimer
Disclaimer This Presentation (“Presentation”), dated March 2013, has been prepared by Savola Group (“Savola’’), and is based on the business plan and related information of Savola Group (“Savola” or the “Company”). The Presentation does not constitute or form part of and should not be construed as,