Fraser & Neave Ltd. · SGX:F99
Fraser & Neave — CLSA Investors' Forum 2012
37 slides from Fraser & Neave's conference presentation, Sep 13, 2012
Slide 1: Fraser and Neave, Limited – CLSA Investors' Forum 2012
Fraser and Neave, Limited CLSA Investors’ Forum 2012 (Hong Kong) 13 – 14 September, 2012
Slide 2: Important notice
Important notice Certain statements in this Presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual res
Slide 3: Proposed divestment of APB stakes: Transaction summary
Proposed divestment of APB stakes Transaction summary Transactions Disposal of interests in Asia Pacific Breweries Limited (“APB”) and Asia Pacific Investment Pte Ltd (“APIPL”) Consideration Aggregate consideration of $5.59b comprising: • $993.96m or $53.00 per APB share for F&N’s direct stake • $4.
Slide 4: Rationale for the Recommendation: Attractive valuation (premium)
Rationale for the Recommendation Attractive valuation • Attractive premium to historical trading prices • Unlocks substantial shareholder value in the Beer business $18.31 $18.51 $18.84 $20.70 $18.00 Premium ($) $53.00 +52.8% +53.7% +55.2% +64.1% +51.4% Premium (%) Price ($) $34.69 $34.49 $34.16 $35
Slide 5: Rationale: Attractive valuation vs trading multiples
Rationale for the Recommendation Attractive valuation Price offered by Heineken represents a significant premium to the historical trading multiples for comparable companies LTM P/E Multiple 40x 35x 35.1x 30x 27.3x 25x 24.6x 20x 15x 15.5x 10x Jan-2010 Jul-2010 Jan-2011 Jul-2011 Jan-2012 Jul-2012 LTM
Slide 6: Rationale: Attractive valuation vs precedent transactions
Rationale for the Recommendation Attractive valuation Implied LTM EV/EBITDA multiple of Heineken’s offer is higher than the corresponding multiples for recent precedent transactions for comparable companies LTM EV/EBITDA represented by Heineken’s Offer: 16.8x 15.7x LTM Emerging Markets EV/EBITDA Med
Slide 7: Rationale: Limited options for APIPL's stake
Rationale for the Recommendation Limited options for APIPL’s stake • Constraints in relation to APB business – Neither F&N nor Heineken can make unilateral decisions on the strategic direction of APB – Given Heineken has indicated that the shareholding changes of F&N and APB has “altered the fabric
Slide 8: Use of sale proceeds
Use of sale proceeds • Cash distribution of $4.0b through capital reduction; $1.6b repay debt • Efficient capital structure • Dividend policy remains intact • Strengthen balance sheet; flexibility to invest in growth opportunities Distribute and Deleverage $5.6b $1.6b 27.8% De- leverage $4.0b Capita
Slide 9: Use of sale proceeds: Capital reduction
Use of sale proceeds Capital reduction Rationale for Distribution of Proceeds through a Capital Reduction by Share Cancellation A capital reduction by share cancellation allows F&N to Achieve a more efficient capital structure Rightsize share base that commensurate with the reduction in earnings fro
Slide 10: Key dates
Key dates Expected Expected Expected Last date Expected Expected date for Books payment for effective date of High Court Closure date for lodgement Date of date of the completion approval of Date for capital of Proxy EGM Capital • On or abt Capital the Capital distri- Forms for • 28 Sep 12 Reduction
Slide 11: Summary: Assessment of Heineken's offer
Summary Assessment of Heineken’s What are alternatives to offer Heineken’s offer • Attractive premium to historical trading • Retain stake and reject offers prices of APB • Changing fabric of partnership • Premium to historical trading multiples • May not be able to fully realise the for comparable
Slide 12: Key business strategies
Fraser and Neave, Limited Key business strategies
Slide 13: Strategy on track: Deliver sustainable shareholder value
Strategy on track Deliver sustainable Focus on shareholder value Asia Pacific and core businesses Build on Deliver footprint and EPS Growth shareholder leading value Ave 10% pa growth brands Leading player in Asia Pacific Gearing Maintain up to 80% strategic Targeted alliances; acquisitions utilise
Slide 14: Sharpen focus on core businesses: geographic reach
Sharpen focus on core businesses F&N’s geographic reach Core businesses have presence in over 20 countries… Leadership positions in key markets Food & Beverage Properties Slide 14
Slide 15: Food & Beverage
Food & Beverage (excludes Beer) Key strategies: Sharpening focus, accelerating growth Slide 15
Slide 16: A proven track record of success
Sharpen focus on core businesses Soft Drinks & Dairies (Non-Beer) A proven track record of success FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Revenue ‘million $694 $714 $737 $790 $846 $835 $1,240 $1,547 $1,520 $1,688 $1,825 Revenue 10-year CAGR 10%: Soft Drinks & Dairies $1,825m Non-Beer
Slide 17: Soft Drinks & Dairies: Profit outpaced top line growth
Sharpen focus on core businesses Soft Drinks & Dairies (Non-Beer) Profit outpaced top line growth PBIT recorded a 10-year CAGR 15% 8.2% $150m Non-Beer Margin 5.6% Non-Beer PBIT $39m FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Full year ended 30th Sep 2011 Figures are
Slide 18: Mainly conducted through F&N Holdings Bhd
Sharpen focus on core businesses Soft Drinks & Dairies (Non-Beer) • Mainly conducted through F&N Holdings F&N Holding Bhd Quick Facts F&NL effective interest of 56.7% Bhd Operations in Malaysia and Thailand • Strong leading positions Listed on Kuala Lumpur Stock Exchange • 11 manufacturing facilitie
Slide 19: Accelerate growth in Asia: Leverage strategic partnerships
Accelerate growth in Asia Leverage strategic partnerships • Leverage strategic partnership/network to Partners: • Thai Beverage Public Company expand market reach Ltd • Kirin Holdings • Focus on ASEAN • Sunkist Growers — Large growing population of ~600m • RedBull • Nestle — Increasing consumption o
Slide 20: Summary Food & Beverage
Summary Food & Beverage Re-balance F&B profit contribution 40% of Group Profit Intra-market • Strategic brand investments, marketing excellence and product growth innovation • Pursue operational excellence • Driving market development, increasing brand penetration influencing consumption and expandi
Slide 21: Properties
Properties Key strategies: Sharpening focus, accelerating growth Slide 21
Slide 22: Properties: Revenue tripled
Sharpen focus on core businesses Properties A proven record of success - Revenue tripled Properties Revenue $’ million $644 $1,023 $930 $531 $1,115 $1,348 $1,648 $1,474 $1,839 $1,915 $2,128 Properties Revenue 10-year CAGR 13% Full year ended 30th Sep 2011 Figures are as previously reported, excludes
Slide 23: Properties: Profit doubled
Sharpen focus on core businesses Properties Profit doubled PBIT recorded a 10-year CAGR 9% Properties $569m Properties $233m Full year ended 30th Sep 2011 Figures are as previously reported, excludes discontinued operations – not re-stated for accounting changes Slide 23
Slide 24: Properties: Well-balanced portfolio
Properties Well-balanced portfolio Portfolio of properties offer income diversification as well as growth opportunities Property Assets * by Segment 1H2012: $8.2b Investment Prop $1,567m Singapore 19% $2,101m 26% Development REIT $4,427m China, $765m , $1,035m 54% 9% 13% Aust/NZ $1,145m Hospitality
Slide 25: To be a leading global property group
Sharpen focus on core businesses Properties To be a leading global property group focused on providing integrated real estate solutions for a complete spectrum of property classes Key Brands: PROPERTIES Development Commercial Hospitality LISTED Slide 25
Slide 26: Enhancing and extending our core offerings to key markets
Sharpen our focus CHINA Properties Beijing, Changzhou, Chengdu, KOREA Nanjing, Shanghai, Shenzhen, Seoul UNITED KINGDOM INDIA Suzhou, Tianjin, Wuhan and Wuxi - Serviced Residences Edinburgh, Glasgow and London Bangalore, Chennai and - Homes • 2 properties, 450 rooms - Homes Enhancing and extending o
Slide 27: Development Property: Focus on capital management
Focus on core business Development Property Focus on capital management in key markets • Focus on delivering pipeline projects • Unbilled sales of $3.2b to support earnings Singapore, China and Australia • Strong focus on capital management • Fast turnover of land bank; maintain target to sell 1,000
Slide 28: Commercial and Investment Property: capital management
Focus on core business Commercial Property Focus on capital management Investment Property • Proven ability to recycle capital • Optimise earnings stream from integrated model; continue to unlock asset value through injection into REITs and enhancement works • Disciplined land banking approach Acqui
Slide 29: Summary
Summary Key strategies: Sharpening focus, accelerating growth Slide 29
Slide 30: Group Summary
Group Summary • Proven strategies in place for a sustainable long-term growth – Committed to diversified business model – Strong brands and extensive footprint Slide 30
Slide 31: Thank you
Fraser and Neave, Limited Thank you Analyst contact: Jennifer Yu Investor Relations Fraser and Neave, Limited Tel: (65) 6318 9231 | Email: jenniferyu@fngroup.com.sg | Web: fraserandneave.com
Slide 32: Notes on profit recognition (Singapore)
Notes on profit recognition (Singapore) Cumulative % units sold % Completion @ Current Projects No of units to 30 June 2012 30 June 2012 Soleil @ Sinaran 417 99.0% 100.0% Residences Botanique 81 100.0% 100.0% Caspian 712 100.0% 95.0% 8 @ Woodleigh 330 100.0% 94.3% Waterfront Key2 437 99.7% 97.7% Fla
Slide 33: Notes on profit recognition (Overseas)
Notes on profit recognition1 (Overseas) No of Cumulative % Target residential Country Current Projects units sold to completion units 30 June 2012 date launched Lumiere Residences 456 99% Completed Trio/Alexandra, City Quarter 409 99% Completed Lorne Killara 40 82% Completed Putney Hill 172 59% Sep
Slide 34: Notes on profit recognition (Overseas)
Notes on profit recognition1 (Overseas) No of Cumulative % Target residential Country Current Projects units sold to completion units 30 June 2012 date launched Baitang One Ph 1a 426 99% Completed China Baitang One Ph 1b 542 75% 4Q2012 Baitang One Ph 2a 244 25% 4Q2013 Note: Profit recognition for ov
Slide 35: Singapore land bank
Singapore land bank Total est Effective Total est no saleable Land bank share of units area (’m sqf) eCO (Bedok South) 33.3% 634 0. 68 Tampines Ave 10 33.3% 670 0.60 Cuppage Road (former Starhub Centre) 100.0% 249 0.24 TOTAL 1,553 1.52 Slide 35
Slide 36: China land bank
China land bank Total est Total est no of Land bank Effective share saleable area units (’m sqf) Shanshui Four Seasons 76% 5,360 7.3 (Ph 2 – 5) Suzhou Baitang (Ph 2 – 4) 100% 2,608 3.8 Residential 7,968 11.1 Chengdu Logistic Park (Ph 2 – 4) 80% - 4.4 Vision Shenzhen Business Park 56% - 2.6 Commercia
Slide 37: Australia/NZ land bank
Australia/NZ land bank Total est no of Total est saleable Land bank Effective share units area (’m sqf) Central Park, Sydney -Fraser/Sekisui JV 37.5% 250 1.151 -Non-JV land bank 75.0% 553 0.44 Killara Pavillions, Sydney 75.0% 99 0.10 Morton, Sydney 75.0% 637 0.59 RRCS site, Sydney 75.0% 619 0.76 Fra