Olam Group Limited · SGX:VC2
Olam — FY2023 Earnings Presentation
54 slides from Olam's earnings presentation, Feb 28, 2024
Slide 1: 2023 Results Briefing
2023 Results Briefing February 28, 2024
Slide 2: Notice
Notice This presentation should be read in conjunction with Olam Group Limited’s Financial Statements and Management Discussion and Analysis for the Year ended December 31, 2023 (“2023”) lodged on SGXNET on February 28, 2024. 2 Olam Group Limited Results for the Year ended December 31, 2023 | Februa
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation and announcement entitled “2023 Results Briefing” may contain statements regarding the business of Olam Group Limited and its subsidiaries (“the Group”) that are of a forward-looking nature and are therefore based on management’s assump
Slide 4: Presenters
Presenters Sunny Verghese N. Muthukumar A. Shekhar Co-Founder and Group CEO Group CFO CEO Olam Group Limited Olam Group Limited ofi Olam GroupLimited Olam Group Limited Results Results forfor thethe YearYear ended ended December December 31, |2023 31, 2023 | February February 28, 2024 28, 2024
Slide 5: Agenda
Agenda 1 2 3 4 5 2023 Group Segmental Business outlook Re-organisation Key takeaways financial highlights performance by and prospects update operating group Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 6: Group financial highlights
1 2023 Group financial highlights Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 7: Group H2 2023 results
Group H2 2023 results % Change % Change S$ million H2 2023 H1 2023 H2 2022 vs H1 2023 vs H2 2022 Volume ('000 MT) 22,779.7 21,317.7 6.9 20,383.3 11.8 EBITDA^ 1,316.5 1,176.3 11.9 1,160.9 13.4 EBIT^ 952.3 819.6 16.2 798.2 19.3 Adjusted EBIT^ 979.3 846.2 15.7 824.6 18.8 PAT 234.3 116.7 100.8 157.1 49.
Slide 8: Group 2023 results: At a glance
Group 2023 results: At a glance Volume & 44.1 M MT S$48.3 B Operational S$458.1 M Revenue PATMI¹ +2.9% -12.1% -41.4% S$1.8 B From 8.4% to -S$914.8 M EBIT¹ & EBIT¹/IC Free Cash Flow +10.1% 9.1% to Equity -S$2.9 B S$278.7 M From 1.47x to PATMI Gearing -55.7% 1.73x Note: All results are compared agains
Slide 9: Group 2023 financial highlights
Group 2023 financial highlights EBIT up 10.1% at S$1.8 billion Balance sheet remains strong Share buyback programme and Operational PATMI at S$458.1 despite higher working capital dividend million¹ • ofi delivered 11.1% growth in EBIT to • Increase in net Capex, working and • The Group is launching
Slide 10: Consolidated results by operating group
Consolidated results by operating group 2023 at a glance ofi Olam Agri Remaining Olam Group Invested Capital Volume ('000 MT) Revenue (S$ million) EBIT (S$ million) (S$ million) 2.9% 2.8% -1.4% 7.4% % 12.9% 32.3% 27.6% 46.8% 44,097.4 48,272.0 1,771.9 19,750.1 +2.9% -12.1% +10.1% +2.2% 89.7% 64.9% 54
Slide 11: Sales volume up 2.9%, or 1.2 million MT higher at 44.1 million MT
Sales volume up 2.9%, or 1.2 million MT higher at 44.1 million MT Volume growth by operating group ('000 MT) +2.9% 160 44,097 1,365 42,873 -301 2022 ofi Olam Agri Remaining 2023 Olam Group 11 Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 12: Improved operational performance with EBIT growing 10.1%
Improved operational performance with EBIT² growing 10.1% Adjusted EBIT up 10.0% EBIT² by operating group (S$ million) +10.1% 110 1,772 -30 83 1,609 2022 ofi Olam Agri Remaining 2023 Olam Group Adjusted EBIT² 1,659 +167 1,826 (S$ M) ²EBIT and Adjusted EBIT exclude exceptional items. 12 Olam Group Li
Slide 13: Operational PATMI at S$458.1 million
Operational PATMI at S$458.1 million Reported PATMI declined 55.7% to S$278.7 million as EBIT growth was offset by a full year impact of higher interest costs, increased minority interests from sale of minority stake in Olam and higher exceptional losses PATMI (S$ million) -55.7% 163 629 65 -27 -402
Slide 14: Marginal increase in invested capital
Marginal increase in invested capital3 Invested Capital (IC, S$ million) Gearing (times) Net gearing +2.2% Adjusted net gearing 19,333 19,750 1.73 Working Capital 1.47 Fixed Capital 9,266 9,749 0.64 0.65 10,066 10,001 Dec-22 Dec-23 Dec-22 Dec-23 The increase in invested capital came mainly from work
Slide 15: Free cash flow
Free cash flow Increase in net Capex, higher working capital requirements and interest paid led to negative FCFE Free Cash Flow to Equity (FCFE) (S$ million) -2,864 1,949 62 -960 -21 -1,565 -381 -915 2022 Operating Changes in Tax Paid Capex / Net Interest 2023 Cash Flow Working Investments Paid (bef
Slide 16: Strong liquidity position with diversified pools of capital
Strong liquidity position with diversified pools of capital Total borrowings and available liquidity (S$ million) as at December 31, 2023 9,740 21,255 Short-Term Long-Term +4,962 16,293 1,889 6,550 6,044 3,582 9,743 Cash and RMI* Secured Unutilised Available Total Short-term Receivables Bank Lines L
Slide 17: Segmental performance by operating group
2 Segmental performance by operating group Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 18: ofi 2023 results
afi 2023 results ofi
Slide 19: ofi 2023 results
ofi 2023 results S$ Million S$ Million EBIT +0.5% Invested Capital +4.5% +11.1% Global Sourcing +1.8% 821 829 Ingredients & Solutions 747 11,546 11,754 36% 10,762 50% 45% 39% 36% 43% 64% 50% 55% 61% 64% 57% 2021 2022 2023 Restated EBIT/MT (S$) 223 208 253 Dec-21 Dec-22 Dec-23 +1.5% Restated +10.9% A
Slide 20: ofi: Global Sourcing
ofi: Global Sourcing S$ Million S$ Million EBIT Invested Capital -15.4% -5.0% Working Capital Fixed Capital -5.7% 413 -12.9% 4,673 4,476 339 4,219 295 2,792 2,694 2,467 1,881 1,782 1,752 2021 2022 2023 Dec-21 Dec-22 Dec-23 Restated Restated EBIT/MT (S$) 138 114 109 -15.2% -12.7% EBIT/IC 8.4% 7.4% 6.
Slide 21: ofi: Ingredients & Solutions
ofi: Ingredients & Solutions S$ Million Invested Capital EBIT +14.4% Working Capital Fixed Capital +11.3% +31.1% 534 +6.6% 408 408 7,536 7,070 6,088 3,137 3,517 2,624 2021 2022 2023 3,933 4,019 3,464 Restated EBIT/MT (S$) 327 321 431 +15.4% Dec-21 Dec-22 Dec-23 +29.2% Restated Adjusted EBIT 431 444
Slide 22: Recap - our strategy & business model
Recap - our strategy & business model Confectionery Diversified and complementary portfolio Beverages redients & Solution Culinary ng s Integrated platforms I Spices Cocoa combining a strong al Sourcin Global Sourcing network Bakery lob Snacking G and delivering value- g added Ingredients & Categori
Slide 23: Focused & resilient execution of chosen Strategy amid challenging market conditions
Focused & resilient execution of chosen Strategy amid challenging market conditions Targeted Strategic Significant capability ‘Customer First’ focus Recognized as a leader investments in I&S enhancement in Sustainable Innovation Winner: • Brazil Soluble Coffee • Innovation – 4 Customer • Launched th
Slide 24: Olam Agri 2023 results
AA Olam Agri Transforming food, feed & fibre 2023 results
Slide 25: Olam Agri EBIT and invested capital
Food & Feed - Origination & Merchandising Food & Feed - Processing & Value-added Fibre, Agri-industrials & Ag Services S$ Million S$ Million EBIT Invested Capital +13.4% +2.0% +6.5% +12.8% 5,242 5,124 5,458 968 858 15% 25% 753 23% 27% 29% 40% 34% 40% 45% 49% 61% 37% 45% 28% 35% 29% 21% 16% Dec-21 De
Slide 26: Food & Feed - Origination & Merchandising
S$ Million S$ Million EBIT Invested Capital -6.7% +30.9% Working Capital -10.9% Fixed Capital -2.8% 258 252 224 1,387 1,349 788 1,191 1,199 597 191 196 150 Dec-21 Dec-22 Dec-23 2021 Restated 2022 Restated 2023 Restated Restated EBIT/MT (S$) 8 8 7 EBIT/IC (%) 32.2% 23.2% 16.4% EBIT declined 10.9% to
Slide 27: Food & Feed - Processing & Value-added
S$ Million S$ Million EBIT Invested Capital +2.9% +46.6% Working Capital Fixed Capital -4.8% +39.8% 2,307 2,195 591 2,074 423 816 1,062 972 275 1,258 1,245 1,223 2021 2022 2023 Dec-21 Dec-22 Dec-23 EBIT/MT (S$) 61 105 143 EBIT/IC (%) 14.0% 19.3% 26.3% Segment continued to deliver strong results in 2
Slide 28: Fibre, Agri-industrials & Ag Services
S$ Million S$ Million EBIT Invested Capital -16.8% Working Capital -10.3% Fixed Capital -16.8% 2,381 +33.8% 220 183 1,914 152 1,430 1,955 1,441 1,009 426 421 473 2021 Restated 2022 Restated 2023 Dec-21 Dec-22 Dec-23 Restated Restated EBIT/MT (S$) 99 78 71 EBIT/IC (%) 11.2% 9.6% 9.1% Segment remained
Slide 29: Remaining Olam Group 2023 Results
Remaining Olam Group 2023 Results Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 29
Slide 30: Remaining Olam Group
Remaining Olam Group De-prioritised/Exiting Assets Continuing/Gestating Businesses Incubating Businesses EBIT Invested Capital S$ Million 5 S$ Million 14 3,009 -4.7% 2,663 2,538 52 53 564 551 523 -27 -11 -62 -48 -67 2,430 -25 2,098 1,991 -77 -151 14 14 24 2021 Restated 2022 2023 Dec-21 Restated Dec-
Slide 31: Nupo Ventures' vision is to create new businesses for a more sustainable future
Nupo Ventures’ vision is to create new businesses that build a more sustainable future for people, communities & our planet We looked at 6 topics – of which 3 are In 2022 we set up Nupo Ventures, a venture studio, as a new entity Nupo Ventures: Culmination still ongoing ventures. These are at of a 5
Slide 32: 2023 has been a year of transition for Nupo Ventures
2023 has been a year of transition for Nupo Ventures; focus has been on growth of our portfolio companies JIVA Terrascope Tract Jiva is building a holistic farmer services Terrascope is an e2e decarbonisation TRACT™ is building a ground-breaking ecosystem with a mission to improve the platform and i
Slide 33: Reimagining businesses with talent, technology and insights
Reimagining businesses with talent, technology and insights Strengthened value Focus on the Value leader in delivery and proposition fundamentals innovation + By identifying a unique portfolio of services + Mindsprint has invested in our fundamentals to + To keep our customers at the center of all t
Slide 34: Customers & Solutions
Customers & Solutions Technology Solutions: ▪ Advanced Data and Analytics ▪ Digital Transformation ▪ SAP & Enterprise solutions ▪ Cloud and infrastructure Services ▪ Cybersecurity assessment and implementation ▪ Business process services Industry Solutions: ▪ Supply Chain ▪ Logistics ▪ Trade & Risk
Slide 35: Business outlook and prospects
3 Business outlook and prospects Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 36: Olam Nigeria and its subsidiaries
Olam Nigeria and its subsidiaries • As announced on February 19, 2024, an independent internal investigation launched by the Olam Group Board and its Audit & Risk Committee comprising external counsels and independent auditor has concluded. The investigation team found no evidence supporting any of
Slide 37: Business outlook and prospects
Business outlook and prospects 1 2 3 4 ofi continues to execute its Olam Agri continues to execute In light of the challenges faced Global macro risks and strategy by investing for the its strategy of scaling up its by our start-up B2C purpose market volatilities are future with new manufacturing gl
Slide 38: Re-organisation update
4 Re-organisation update Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 39: Re-organisation update
Re-organisation update The Olam Agri IPO will not take place in H1 2024 as the regulatory framework is 1 still being finalised in the Kingdom of Saudi Arabia to enable the listing of foreign companies and the issuance of Saudi Depositary Receipts on the Saudi Exchange. The Group remains committed to
Slide 40: Key takeaways
5 Key takeaways Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 41: Key takeaways
Key takeaways 1 2 3 4 5 H2 2023 results We are confident of our Launches share buyback The independent The Group is still improved over H1 2023 growth prospects and are programme for up to a internal investigation committed to list ofi taking steps to ensure we maximum of 5.0% of total has concluded
Slide 42: Appendix – Operating groups
Appendix – Operating groups Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 43: ofi in numbers
ofi in numbers Cocoa Coffee Nuts Spices Dairy 15.6 Billion revenue (S$) 1,219 Million EBITDA (S$) 829 Million EBIT (S$) 120+ Manufacturing 46 Countries 22,000+ employees 11,000+ customers facilities Note: All financial figures and customers are for 2023. 43 Olam Group Limited Results for Year ended
Slide 44: ofi: Growth framework
ofi: Growth framework Organic Growth – Growing & extending the core Extract full value from current investments Increase share of value with targeted strategic customers Contribution to medium-term Volume growth: Focus on cost competitiveness Low to Mid-single digit Expand innovation & sustainabilit
Slide 45: Olam Group Limited Results for Year
Olam Group Limited Results for Year ended December 31, 2023 | February 28, 2024
Slide 46: Olam Group Limited Results for Year ended December 31, 2023 | February 28, 2024
Olam Group Limited Results for Year ended December 31, 2023 | February 28, 2024 46
Slide 47: Remaining Olam Group in numbers
Remaining Olam Group in numbers Olam Global Holdco Volume 1,272,400 MT Revenue S$1.4 B Invested S$2.5 B EBIT -S$25.1 M Capital Customers 2,600+ Employees 18,000+ Note: All numbers except employees are as of December 31, 2023. 47 Olam Group Limited Results for Year ended December 31, 2023 | February
Slide 48: Remaining Olam Group
Remaining Olam Group Remaining Olam Group Olam Global Holdco (OGH) Nupo Ventures (formerly Olam Ventures) Mindsprint (formerly Olam Technology • Houses de-prioritised assets: 3 remaining assets 1) • Acts as a foundry to build new sustainability and and Business Services) Edible oil refinery in Mozam
Slide 49: Appendix – Financials
Appendix – Financials Olam Group Limited Results for the Year ended December 31, 2023 | February 28, 2024
Slide 50: P&L statement
P&L statement S$ million 2023 2022 % Change H2 2023 H2 2022 % Change Volume ('000 MT) 44,097.4 42,873.3 2.9 22,779.7 20,383.3 11.8 Revenue 48,272.0 54,901.0 (12.1) 23,586.9 26,454.1 (10.8) EBITDA^ 2,492.8 2,317.7 7.6 1,316.5 1,160.9 13.4 EBIT^ 1,771.9 1,608.7 10.1 952.3 798.2 19.3 Adjusted EBIT^ 1,8
Slide 51: Exceptional items
Exceptional items S$ million 2023 2022 H2 2023 H2 2022 Re-organisation cost (62.9) (130.2) (38.1) (106.5) Accelerated charge on share based expenses - (19.0) - 6.7 Acquisition related cost - (3.2) (3.2) Australia Almond lower crop yield (116.5) - (5.2) - Exceptional items (179.4) (152.4) (43.3) (103
Slide 52: Balance sheet
Balance sheet S$ million Dec-2023 Dec-2022 Change Fixed Capital 9,454.8 9,459.3 (4.5) Right-of-use assets 791.0 846.3 (55.3) Uses of Working Capital 9,580.5 8,538.9 1,041.6 Capital Cash 3,581.6 4,805.6 (1,224.0) Others 554.5 578.5 (24.0) Total 23,962.4 24,228.6 (266.2) Equity & Reserves 7,366.0 7,70
Slide 53: Cash flow statement
Cash flow statement S$ million 2023 2022 Change H2 2023 H2 2022 Change Operating Cash flow 2,255.7 2,193.3 62.4 1,192.4 1,008.3 184.1 (before Interest & Tax) Changes in Working Capital (1,224.8) (265.2) (959.6) (561.6) 7.3 (568.9) Net Operating Cash Flow 1,030.9 1,928.1 (897.2) 630.8 1,015.6 (384.8)
Slide 54: 2023 Results Briefing
2023 Results Briefing olamgroup.com/investors.html ir@olamnet.com