M.p. Evans Group Plc · LSE:MPE
M.p. Evans — FY2021 Earnings Presentation
16 slides from M.p. Evans's earnings presentation, Mar 22, 2022
Slide 1: 2021 Full Year Results
2021 FULL YEAR RESULTS TUESDAY 22ND MARCH 2022 RECORD TRADING RESULTS DRIVEN BY STRONG PALM-OIL PRICE
Slide 2: Agenda
AGENDA 1 Who we are 2 Group strategy 3 2021 highlights 4 Palm-oil market 5 Sustainable palm-oil market 6 Group operations 7 2021 results 8 Outlook 9 Returns for investors 10 Summary 2
Slide 3: Who We Are
WHO WE ARE 150 year history with an ambitious vision for the future 10,000+ Group employees 52,600 total hectares of planted oil palm between Group’s six estates and associated scheme smallholders >$500 million invested in growth of Indonesian business since 2005 RSPO (Roundtable on Sustainable Palm
Slide 4: Group Strategy
GROUP STRATEGY M.P. Evans is a responsible producer of sustainable Indonesian palm oil, striving for excellence in its operations, with a focus on continuing growth and offering an increasing yield. RESPONSIBILITY EXCELLENCE GROWTH YIELD • RSPO member • Investing for the • Increasing crops as • Deli
Slide 5: 2021 Highlights
2021 HIGHLIGHTS 13% 15% 37% 65% INCREASE INCREASE INCREASE INCREASE IN TOTAL CROP IN TOTAL CPO IN AVERAGE CPO MILL IN SUSTAINAILITY PROCESSED PRODUCTION GATE PRICE PREMIA 58% 266% 296% 59% INCREASE INCREASE INCREASE INCREASE IN REVENUE IN OPERATING PROFIT IN BASIC EARNINGS IN NORMAL DIVIDEND PER SHA
Slide 6: Palm-Oil Market
PALM-OIL MARKET • Average cif Rotterdam price up by 67% to US$1,195 per tonne • Average mill-gate price up 37% to US$810 per tonne • Demand recovered more quickly than supply. Ongoing challenges with Malaysian production. • Post year end: • Sharp increase in prices – cif Rotterdam over US$1,900 in e
Slide 7: Sustainable Palm-Oil Market
SUSTAINABLE PALM-OIL MARKET • Sustainable palm oil provides a high yield and low-cost solution to meet growing demand while safeguarding people and our planet. • By 2050, global demand for palm oil is projected to grow from over 70 million tonnes today to between 120 and 156 million tonnes • 20% of
Slide 8: Group Operations – Crop Growth
GROUP OPERATIONS – CROP GROWTH 2021 Increase 2020 (tonnes) (%) (tonnes) Own crops 809,700 12 724,300 Scheme-smallholder 229,300 19 193,000 crops Independent crops 327,200 13 289,700 purchased Total crop processed 1,366,200 13 1,207,000 8
Slide 9: Group Operations – Increasing Milling Capacity
GROUP OPERATIONS – INCREASING MILLING CAPACITY 2.0 • CPO production 312,900 tonnes (2020 – 271,700 tonnes) 1.8 • Mill output unaffected by Covid-19 in year 1.6 • Production cost lowest when milling own crop in Group mills 1.4 • Production cost from own crop US$350 per tonne: total 1.2 production cos
Slide 10: Group Operations – Continuing Investment
GROUP OPERATIONS – CONTINUING INVESTMENT • Planting restarted at Musi Rawas – expect total planted area at least 10,000ha • Mill six at Musi Rawas construction being completed in 2022 • Continued investment in Group’s estates – biogas, bulking facilities, infrastructure, regional offices • Acquisiti
Slide 11: 2021 Results – Dramatic Increase in Profitability
2021 RESULTS – DRAMATIC INCREASE IN PROFITABILITY Revenue up 58% Gross profit US$103.6 million Earnings per share 115.6 pence • Revenue up to US$276.6 • Gross margin up to 37% • Increase in earnings per million (2020 US$174.5 million) (2020 – 20%) share by 296% • Increase in CPO production • Increas
Slide 12: 2021 Results – Cash Generation and Balance Sheet Strength
2021 RESULTS – CASH GENERATION AND BALANCE SHEET STRENGTH Operating cash generation Net debt almost eliminated in a Step up in Group more than doubled year balance sheet • Operating cash before • Closing net debt US$5.4 • Net assets increased to interest and tax US$109.2 million (2020 US$78.1 millio
Slide 13: Outlook
OUTLOOK • First two months of 2022: • Seasonal, 10% decrease in crop, but long-term trend of increases expected to continue • Group CPO tenders with average mill-gate price US$1,050 • Highly cash generative: net cash by mid-March 2022 of US$27 million • Continuing to pursue sustainable acquisition o
Slide 14: Returns for Investors
RETURNS FOR INVESTORS • 5p special dividend • Total normal dividend for 2021 of 35p • Long-term (30 year+) track record of increasing normal dividends for shareholders 35.00 Normal dividends - pence per share 30.00 25.00 20.00 15.00 10.00 5.00 0.00 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Slide 15: Summary
SUMMARY DELIVERING IN OUTSTANDING STRATEGY UPDATE EXCITING PROSPECTS OPERATIONS RESULTS • Responsibility • Growing crop • Revenue up 58% • Future increases in • Excellence • Increasing milling • Gross margin 37% crop, yield and capacity milling • Growth • EPS 115.6p • Continuing • Support higher • Y
Slide 16: 2021 Full Year Results
2021 FULL YEAR RESULTS TUESDAY 22ND MARCH 2022 RECORD TRADING RESULTS DRIVEN BY STRONG PALM-OIL PRICE