Olam Group Limited · SGX:VC2
Olam — Olam International — FY2018 Earnings Presentation
34 slides from Olam's earnings presentation, Feb 28, 2019
Slide 1: Full Year 2018 Results Briefing
Full Year 2018 Results Briefing February 28, 2019
Slide 2: Presenters
Presenters Sunny Verghese A. Shekhar N. Muthukumar Co-Founder Executive Director President and Group CEO and Group COO and Group CFO Olam International Limited Results for the Full Year ended December 31, 2018 | February 28, 2019 2
Slide 3: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements for the Fourth Quarter (“Q4 2018”) and Full Year ended December 31, 2018 (“2018”) and Management Discussion and Analysis lodged on SGXNET on February 28, 2019. Olam International Limited Res
Slide 4: 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 5: Agenda
Agenda • 2018 highlights • Segmental and value chain review • Key takeaways
Slide 6: 2018 highlights
2018 highlights
Slide 7: 2018 results at a glance
2018 results At a glance Volume EBITDA PATMI 32.9 M MT S$1,236 M S$348 M +45.9% -6.9% -40.1% Operational Free Cash Flow Gearing PATMI S$347 M FCFE fromS$466 1.46x to M -19.7% +S$1,066 M 1.32x +28.1% Olam International Limited Results for the Full Year ended December 31, 2018 | February 28, 2019 7
Slide 8: 2018 highlights
2018 highlights Results below expectations amid tougher Dividends maintained market conditions Continued top line growth in Board of Directors recommends final volume, revenue dividend of 4.0 cents per share Strong, positive FCFF and FCFE Total dividend of 7.5 cents per share for 2018 (2017: 7.5 cen
Slide 9: Volume grew 45.9%
Volume grew 45.9% Led by Food Staples & Packaged Foods Volume by segment, '000 MT +45.9% 10,195 366 32,868 22,535 -1 -227 2017 Edible Nuts Confectionery Food Staples & Industrial Raw 2018 & Spices & Beverage Packaged Foods Materials, Ingredients Infrastructure & Logistics Olam International Limited
Slide 10: EBITDA declined 6.9% vs strong 2017
EBITDA declined 6.9% vs strong 2017 EBITDA by segment, S$ million -6.9% 1,328 116 1,236 -71 -21 -18 -99 2017 Edible Nuts Confectionery Food Staples & Industrial Raw Commodity 2018 & Spices & Beverage Packaged Foods Materials, Financial Services Ingredients Infrastructure & Logistics Olam Internation
Slide 11: PATMI declined 40.1% on exceptional items recorded in 2017
PATMI declined 40.1% on exceptional items recorded in 2017 Operational PATMI down 19.7% PATMI and Operational PATMI, S$ million -40.1% 581 27 -92 -12 -3 348 -148 -4 2017 EBITDA^ Depreciation & Net Finance Taxation^ Exceptional Non-controlling 2018 Amortisation Costs Items Interests Operational PATMI
Slide 12: 6.4% reduction in invested capital
6.4% reduction in invested capital 11.2% reduction in working capital year-on-year S$ Million • Reduced Fixed Capital with 16,649 disciplined and targeted Capex, while 15,832 14,375 14,812 executing planned divestments 11,561 8,853 7,705 6,844 • Working Capital reduction of 11.2% 7,653 despite the y
Slide 13: Net gearing reduced to 1.32X
Net gearing reduced to 1.32X Net and adjusted debt / equity (basic) • Reduced net debt due to: 1.46 • Lower working capital due to 1.32 optimisation initiatives, change in product mix and improved access to supplier credit 0.51 0.29 • Lower gross Capex • Cash release from divestments 31-Dec-17 31-De
Slide 14: Free cash flow
Free cash flow Strong, positive FCFE in 2018 on reduced Capex, working capital Free Cash Flow to Equity, S$ million +46 +46 220 1,066 1,020 0 96 -56 -215 2017 Operating Cash Changes in Tax Paid Capex / Net Interest Paid 2018 Flow (before Working Capital Investments Interest & Tax) FCFF (S$ M) 1,484
Slide 15: Available liquidity
Available liquidity Sufficient to cover all repayment and Capex obligations Total borrowings and available liquidity, S$ Million as at December 31, 2018 9,680 19,018 +7,750 11,268 2,104 4,777 4,754 2,480 6,491 Cash and RMI* Secured Unutilised Available Liquidity Total Borrowings Short-term Receivabl
Slide 16: Segmental review
Segmental review
Slide 17: Edible Nuts and Spices
Edible Nuts and Spices EBITDA, S$ Million Invested capital, S$ Million -22% +0.2% 438 3,463 3,643 3,604 3,610 394 3,364 361 332 340 1,415 1,421 1,608 1,666 1,587 1,777 2,048 2,222 1,996 1,944 2014 2015 2016 2017 2018 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated restated restated EBITDA/ 10.3
Slide 18: Confectionery and Beverage Ingredients
Confectionery and Beverage Ingredients EBITDA, S$ Million Invested capital, S$ Million +35.5% 444 -7.7% 407 6,110 5,681 5,347 328 4,935 276 284 3,247 4,330 4,569 3,819 3,434 2,745 1,351 1,541 1,528 1,501 501 2014 2015 2016 2017 2018 restated restated Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 EBITDA/ restat
Slide 19: Food Staples and Packaged Foods
Food Staples and Packaged Foods EBITDA, S$ Million Invested capital, S$ Million -19.7% -2.1% 360 4,678 330 4,522 4,578 295 289 1,131 1,118 212 3,075 3,231 1,498 709 915 3,024 3,547 3,460 2,366 2,316 2014 2015 2016 2017 2018 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated restated restated EBITD
Slide 20: Industrial Raw Materials, Infrastructure and Logistics
Industrial Raw Materials, Infrastructure and Logistics EBITDA, S$ Million Invested capital, S$ Million -10.7% -25.3% 216 2,221 2,105 185 197 1,918 176 1,872 1,572 135 1,213 1,050 974 912 511 898 1,006 1,008 1,055 1,061 2014 2015 2016 2017 2018 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated res
Slide 21: Value chain review
Value chain review
Slide 22: Upstream
Upstream EBITDA, S$ Million Invested capital, S$ Million -21.4% +3.7% 205 3,915 4,061 188 3,764 3,075 429 436 155 148 2,830 481 304 359 79 3,487 3,625 3,283 2,526 2,716 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 restated restated restated restated EBITDA/ 6.6% 5.2% 2.3% 4.9% 3.7% Avg IC Worki
Slide 23: Supply chain
Supply chain EBITDA, S$ Million Invested capital, S$ Million -11.3% 609 600 -10.1% 6,538 504 5,804 451 4,936 4,852 5,151 405 5,750 4,914 4,397 4,230 4,561 540 622 788 890 590 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 restated restated restated restated EBITDA/ 12.5% 12.3% 8.8% 7.3% 7.4% Work
Slide 24: Mid/Downstream
Mid/Downstream EBITDA, S$ Million Invested capital, S$ Million -0.9% -8.4% 689 683 6,448 6,347 6,113 620 5,600 3,064 2,622 2,362 1,847 3,794 315 330 1,317 3,385 3,725 3,751 3,753 2,477 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 restated restated restated restated EBITDA/ 8.2% 6.5% 9.7% 11.1%
Slide 25: Gestation mix
Gestation mix Upstream Supply Mid/Downstream Chain 5.6 14.8 0.3 0.3 0.3 2.2 5.2 5.3 5.3 4.0 5.2 12.3 0.3 0.3 Invested 1.9 1.9 Capital 1.8 1.8 (S$ billion) Fully Partly Gestating Total Fully Fully Partly Total Olam Total Contributing Contributing contributing Contributing Contributing EBITDA/ 6.8% 1.
Slide 26: 2019-2024 Strategic Plan
2019-2024 Strategic Plan Why Our Governing Objective Our Vision Our Purpose To maximise long-term intrinsic To be the most differentiated and valuable Re-imagining Global Agriculture & value for our continuing shareholders global food and agri-business (by 2040) Food Systems What: Our Goals How to w
Slide 27: Key takeaways
Key takeaways
Slide 28: Key takeaways
Key takeaways • Results below expectations amid tougher market conditions • Continued top line growth, stronger balance sheet to support further growth • Strong, positive FCFE of S$1.1 billion • Improved net gearing of 1.32x • Maintained total dividends at 7.5 cents per share for 2018 • Refreshed 20
Slide 29: Appendix
Appendix
Slide 30: P&L statement
P&L statement S$ million 2018 2017 % Change Q4 2018 Q4 2017 Volume ('000 MT) 32,867.6 22,534.6 45.9 9,610.9 7,796.0 Revenue 30,479.0 26,272.5 16.0 8,460.4 7,235.2 Net gain/(loss) in fair value of biological 61.3 (15.3) n.m. 70.9 (14.2) assets EBITDA 1,235.8 1,327.9 (6.9) 330.7 312.8 Depreciation & (
Slide 31: Exceptional items
Exceptional items S$ million 2018 2017 Q4 2018 Q4 2017 Sale of lands in US 18.6 34.2 4.8 34.2 Sale of PT ACE 5.8 - (0.1) - Sale of Café Enrista brand 2.7 - - - Sale of 50% stake in Nauvu (24.6) - (0.1) - Profit on sale of 50% stake in FEA - 121.2 - 121.2 SVI Wage agreement settlement - (6.2) - - Los
Slide 32: Balance sheet
Balance sheet S$ million 31-Dec-18 31-Dec-17 Change Uses of Capital Fixed Capital 8,349.3 8,633.2 (283.9) Working Capital 6,376.4 7,280.3 (903.9) Cash 2,480.4 1,986.4 494.0 Others 526.2 309.0 217.2 Total 17,732.3 18,208.9 (476.6) Sources of Capital Equity & Reserves 6,652.9 6,574.4 78.5 Non-controll
Slide 33: Cash flow statement
Cash flow statement S$ million 2018 2017 Change Q4 2018 Q4 2017 Change Operating Cash flow (before Interest & Tax) 1,154.7 1,369.2 (214.5) 239.2 361.5 (122.3) Changes in Working Capital 930.6 834.7 95.9 660.0 (3.4) 663.4 Net Operating Cash Flow 2,085.3 2,203.9 (118.6) 899.2 358.1 541.1 Net interest
Slide 34: 2018 Results Briefing
2018 Results Briefing olamgroup.com/investors.html ir@olamnet.com