Agthia Group · ADX:AGTHIA
Agthia — H1 2024 Earnings Presentation
45 slides from Agthia's earnings presentation, Aug 7, 2024
Slide 1: Investor Presentation H1'24 Results
Investor Presentation H1’24 Results 7 August 2024
Slide 2: Disclaimer
2 Analyst and Investor Presentation Disclaimer Agthia Group PJSC and its management may make 7. expected financial results; 8. sensitivity to changes in 4. various events which could disrupt operations, certain statements that constitute “forward-looking product prices; 9. sensitivity to key input p
Slide 3: Agenda
3 Analyst and Investor Presentation Agenda 01 Strategic update 04 Dividends 02 Key financials 05 Guidance 03 Segment performance 06 Q&A
Slide 4: Recap: Our strategic vision to become a regional F&B leader by 2025
4 Analyst and Investor Presentation Recap: Our strategic vision to become a regional F&B leader by 2025 From… To… UAE centric Footprint MENA+ & beyond Becoming a Commoditized portfolio Value-add F&B brands regional F&B Stable financial performance Strong shareholder returns leader by 2025 Local orga
Slide 5: Progress on strategic vision
5 Analyst and Investor Presentation Progress on strategic vision Delivering Growth Driving Efficiency Expanding Capabilities • Reported revenue growth +14.7% YoY; 11.2% • Focus on productivity • Strengthened leadership team; appointed CGO enhancement: from volume & 3.5% from pricing AED 63MN in H1’2
Slide 6: Investing in growth: Protein expansion in KSA
6 Analyst and Investor Presentation Investing in growth: Protein expansion in KSA Project overview ▪ Location: Jeddah, KSA ▪ Category: Protein ▪ Capex c. AED 90MN (Phase 1) ▪ Available land 9,436 sqm; Built-up area 6,600 sqm ▪ Capacity ≈ 6,500- 8,700 tons/annum ▪ ≈ 50 SKUs Rationale ▪ Strengthen foo
Slide 7: Key Financials
Key Financials
Slide 8: H1'24: Strong Growth and Significant Profitability Improvement
8 Analyst and Investor Presentation H1’24: Strong Growth and Significant Profitability Improvement Strong revenue growth… … outpaced by EBITDA Significant net profit growth AED MN AED MN AED MN +14.7% +19.9% +31.8% 2,526 382 190 2,201 319 144 H1'23 H1'24 H1'23 H1'24 H1'23 H1'24 +9.3% excluding one-o
Slide 9: ...amidst a volatile backdrop
9 Analyst and Investor Presentation …amidst a volatile backdrop 37% EGP devaluation Rising interest rate Average EGP vs USD FX Rate Average 3M LIBOR / SOFR1 +20bps 41.7 30.5 5.2% 5.4% H1'23 H1'24 H1'23 H1'24 Devaluation impact vs. last year • Revenue AED 144.5 MN • EBITDA AED 30.6 MN • Group net pro
Slide 10: Significant step up in EPS and Working Capital
10 Analyst and Investor Presentation Significant step up in EPS and Working Capital EPS Optimization of WC1 AED WC as % of Sales +34% -697bps 0.213 16.9% 0.158 10.0% H1'23 H1'24 H1'23 H1'24 1 WC is calculated based on the closing numbers for the period divided by annualized sales. Working capital is
Slide 11: Notable reduction of cash conversion cycle
11 Analyst and Investor Presentation Notable reduction of cash conversion cycle Cash Conversion Cycle Impact of change in NWC on FCF FCF CCC days NWC as of eop, AED MN AED MN 83 -183 -47% 45 -83 328 829 DSO 78 79 746 DIH 90 84 100 507 174 407 -85 DPO -118 H1’23 H1’24 FY'22 H1'23 FY'23 H1'24 H1'23 1
Slide 12: Strong balance sheet to fuel future growth and boost shareholder value
12 Analyst and Investor Presentation Strong balance sheet to fuel future growth and boost shareholder value Net debt / EBITDA1 Interest coverage2 1.6x FY Dec’23 - 1.3x 7.7x FY Dec’23 – 7.6x High borrowing capacity 1.8bn Avg Dividend yield3 FY Dec’23 – 1.8bn 3.9% FY’23 DPS = AED 0.235 1 Net debt as o
Slide 13: Improved dividend yield
13 Analyst and Investor Presentation Improved dividend yield Consistent cash dividend payout ratio of 50-60% +5% bonus shares 32% 35% 44% 43% 66% 85%1 58% 53% 56% 52% 50% Dividend payout % 0.185 0.165 0.165 0.165 0.150 0.150 0.150 0.150 +25% 0.125 0.103 Dividends 0.083 per share (AED) 2015 2016 2017
Slide 14: Strong topline growth across all segments
14 Analyst and Investor Presentation Strong topline growth across all segments H1’24 revenue growth +14.7% YoY, with 11.2% from volume and 3.5% from pricing; 9.3% excl. one-off wheat trading Group Revenue (AED MN) after absorbing after absorbing including AED 120 MN EGP devaluation of EGP devaluatio
Slide 15: EBITDA growth ahead of revenue
15 Analyst and Investor Presentation EBITDA growth ahead of revenue H1’24 EBITDA growth +19.9% YoY, +29.5% pre devaluation Group EBITDA (AED MN) after absorbing after absorbing EGP devaluation of EGP devaluation of AED 15.8MN AED 14.8MN 1 Others include digital and capability investments
Slide 16: Solid net profit growth despite continued macroeconomic headwind
16 Analyst and Investor Presentation Solid net profit growth despite continued macroeconomic headwind H1’24 reported net profit growth +31.8% YoY, +44.3% pre devaluation Group net profit1 (AED MN) after absorbing after absorbing EGP devaluation of EGP devaluation of AED 9.0MN AED 9.0MN 1 Net profit
Slide 17: Segmental performance
Segmental performance
Slide 18: Diversified growing portfolio in large scalable markets
18 Analyst and Investor Presentation Diversified growing portfolio in large scalable markets Diversified revenue by geography... …and segments 9% 22% 26% 23% 54% 22% 30% 14% UAE Other Arab Countries Protein & Frozen Water & Food RoW Snacking Agri Business GCC excl. UAE *H1’24 sales, excluding one-of
Slide 19: Snacking: Strong growth in dates and coffee
19 Analyst and Investor Presentation Snacking: Strong growth in dates and coffee Revenue, AED MN EBITDA1, AED MN Key highlights EBITDA margin 20.5% (+330 bps) Revenue • Strong revenue mainly led by coffee and dates’ notable +19.5% performance during the quarter. +42.5% o Abu Auf continued to deliver
Slide 20: Protein & Frozen: strong focus on profitability protection
20 Analyst and Investor Presentation Protein & Frozen: strong focus on profitability protection Revenue, AED MN EBITDA1, AED MN Key highlights EBITDA margin 13.0% (+143bps) Revenue +7.2% • Revenue +7.2% YoY, despite EGP devaluation and volatile macroeconomic environment. +20.5% 534 o In Egypt, robus
Slide 21: Water & Food: Consistent revenue growth, with EBITDA surpassing driven by step up in efficiency
21 Analyst and Investor Presentation Water & Food: Consistent revenue growth, with EBITDA surpassing driven by step up in efficiency Revenue, AED MN EBITDA1, AED MN Key highlights EBITDA margin 15.3% (+193bps) Revenue • +4.0% YoY on positive growth across local (UAE +4.0% +19.0% water +8.3%) and int
Slide 22: Agri-Business: Strong volumes in Flour and Feed
22 Analyst and Investor Presentation Agri-Business: Strong volumes in Flour and Feed Revenue, AED MN EBITDA1, AED MN Key highlights EBITDA margin 14.5% (+106 bps) Revenue +25.4% • Revenue +5.2% YoY excluding the one-off trading +35.3% on strong volume growth in Feed • +25.4% YoY reported growth 748
Slide 23: Egypt: turning to a competitive advantage
23 Analyst and Investor Presentation Egypt: turning to a competitive advantage Strong revenue growth and profitability improvement Revenue, AED MN EBITDA (AED MN) & EBITDA margin (%) “Export Hub” strategy +20.3% 472.0 15.8% +308 bps +43.6% 18.9% AED 50.7 MN exports from Egypt in H1’24 89.3 392.4 • 5
Slide 24: H1'24: Over AED 92MN in revenue generated from strategic product innovation
24 Analyst and Investor Presentation H1’24: Over AED 92MN in revenue generated from strategic product innovation Snacking Protein & Frozen Veg Dates: new organic date Jordan: launched new range of range, chocolate-coated nuts chicken strip products under Nabil Abu Auf: instant coffee jars brand for
Slide 25: FY'24 outlook
FY’24 outlook
Slide 26: FY'24 Guidance
26 Analyst and Investor Presentation FY’24 Guidance1 Revenue growth EBITDA margin improvement Net profit margin improvement* +10% to 12% +40 to 60 bps +30 to 50 bps Assumptions • 100% of Group profit including • FY average FX rate of up to USD / EGP 40 • FY average FX rate of up to USD / EGP 40 mino
Slide 27: A forward-looking company
27 Analyst and Investor Presentation A forward-looking company Market leading position across key categories and geographies Growing portfolio of consumer-centric brands in large, scalable markets Growth-oriented mindset focused on leveraging synergies, innovation and digitization Attractive economi
Slide 28: Q&A
Q&A
Slide 29: Appendix
Appendix
Slide 30: Q2'24 Group headlines
30 Analyst and Investor Presentation Q2’24 Group headlines Solid revenue growth… … outpaced by EBITDA Significant profitability expansion AED MN AED MN AED MN +31.5% +5.7% +15.0% 62 1,077 150 130 1,019 47 Q2'23 Q2'24 Q2'23 Q2'24 Q2'23 Q2'24 +15.7% excluding EGP devaluation EBITDA margin 13.9% Net pr
Slide 31: Q2'24 segment performance
31 Analyst and Investor Presentation Q2’24 segment performance Snacking Protein & Frozen Revenue, AED MN EBITDA, AED MN Revenue, AED MN EBITDA, AED MN +22.6% y-o-y +45.3% y-o-y, EBITDA margin +222bps -1.7% y-o-y +32.7% y-o-y, EBITDA margin +382bps 271 38 221 246 241 36 26 27 Q2'23 Q2'24 Q2'23 Q2'24
Slide 32: Agthia is on track to achieve 2025 external guidance
32 Analyst and Investor Presentation Agthia is on track to achieve 2025 external guidance Robust revenue growth EBITDA margin improvement Net profit margin growth Significant improvement of RoIC1 to AED 6 BN 15.5-16.5% to 8.5-10.0% to 9-10% in FY 2025 in FY 2025 in FY 2025 in FY 2025 2023 Results: a
Slide 33: Snacking: Innovation-led growth in dates and healthy snacks
33 Analyst and Investor Presentation Snacking: Innovation-led growth in dates and healthy snacks, combined with excellent execution and agility in Abu Auf Innovation drives market share growth Agility and execution excellence in Abu Auf Innovation Strong results in H1’24 • Launched new Date Crown or
Slide 34: Protein & Frozen: Expanding capabilities and gain on innovations
34 Analyst and Investor Presentation Protein & Frozen: Expanding capabilities and gain on innovations Portfolio premiumization New investment updates Nabil launched actively promoted new premium line category KSA: New Protein facility in Jeddah started officially launched and that plays around the h
Slide 35: Water & Food: Broad-based strong performance with improved business fundamentals
35 Analyst and Investor Presentation Water & Food: Broad-based strong performance with improved business fundamentals Delivering our Water Strategy across GCC Winning with communications Al Ain bottled water retaining its market leadership position Continue to strengthen brand loyalty through: Notab
Slide 36: Agri-Business: Grow together with our customers
36 Analyst and Investor Presentation Agri-Business: Grow together with our customers Growth and innovation Digitalization Flour: Launch of Agrivita marketplace 2 new products: Shandar and Asad • New partnership with Sherwood flour, to meet the needs of our • Introducing Pest Control Category custome
Slide 37: 5-year digital roadmap with clear priorities
37 Analyst and Investor Presentation 5-year digital roadmap with clear priorities Priority #1 Priority #2 Best customer / consumer experience Empowered employees in a collaborative environment • Seamless omnichannel experience with optimized • Integrated business planning and cross-domain online and
Slide 38: Progress on digital agenda
38 Analyst and Investor Presentation Progress on digital agenda Key achievements in H1’24 Accelerate digital transformation by Adopting AI Restructuring of Digital & Technology We signed a Memorandum of Understanding (MoU) with Microsoft UAE leadership team with the arrival of The MoU focusses on: e
Slide 39: Agthia Sustainability Strategy Pillars
39 Analyst and Investor Presentation Agthia Sustainability Strategy Pillars Environmental Integrity Scaling Health and Wellness • 7.6% reduction in CO2 emissions H1’24 vs H1’23 • Continued growth in our Water Sustainable Portfolio (H1’24 vs H1’23): • RECAPP Sponsorship: 583 tons CO2 reduced; 552 ton
Slide 40: Board of Directors
40 Analyst and Investor Presentation Board of Directors Chairman / Vice Chairman Board Member Khalifa Sultan Salmeen Khamis Mohamed Ms. Mariam Ahmed Gil Adotevi Svet Varadzhakov Ms. Caitlin Nguyen Ms. Sharmila Murat Maurizio Patarnello Al Suwaidi Alameri Buharoon Al Shamsi Al Remeithi Chairman Vice
Slide 41: Strong leadership team with track record of value creation
41 Analyst and Investor Presentation Strong leadership team with track record of value creation Group Functions Business Units Hala Alan Sherif Ramy Vandy Dos Rafik Abdulla Mahammad Mubarak Ahmad Declan Nizar Hobeiche Smith Elfaham Merdan Santos Lawendy Al Marzooqi Amro Al Mansoori Yahya Bennett Kay
Slide 42: Summary Profit & Loss Statement
42 Analyst and Investor Presentation Summary Profit & Loss Statement AED'000 H1’24 H1’23 YoY Revenue 2,525,930 2,201,333 14.7% Cost of sales -1,780,399 -1,577,356 12.9% Gross profit 745,531 623,977 19.5% Selling and distribution expenses -311,330 -260,014 19.7% General and administrative expenses -1
Slide 43: Summary Balance Sheet Statement
43 Analyst and Investor Presentation Summary Balance Sheet Statement AED'000 H1'24 FY’23 Property, plant and equipment 1,411,891 1,460,821 Intangible assets & Goodwill 2,401,544 2,408,106 Others 128,787 128,038 Total non-current assets 3,942,222 3,996,965 Inventories 711,301 926,834 Trade and other
Slide 44: Summary Cash Flow Statement
44 Analyst and Investor Presentation Summary Cash Flow Statement AED'000 H1'24 H1'23 YoY Profit before tax & zakat expenses 189,983 144,105 31.8% Adjustments for: Depreciation & Amortization 112,204 114,338 -1.9% Provisions & Allowances 23,334 10,168 129.5% Others 75,712 62,836 20.5% Cash generated
Slide 45: Thank you
Thank you | 7 August 2024