Olam Group Limited · SGX:VC2
Olam — Olam International — FY2016 Earnings Presentation
29 slides from Olam's earnings presentation, Feb 28, 2017
Slide 1: Full Year 2016 Results Briefing
Important instruction: Place an image in exactly Olam International Limited the same position as this Full Year 2016 Results Briefing grey box. Q1 201628, February Results 2017 Briefing Select the image. May 13, 2016 [Mac] in the menu, select ‘Arrange’ and then ‘Send to Back’. [PC] right click and t
Slide 2: Presenters
Presenters Sunny Verghese Co-Founder and Group CEO A. Shekhar Executive Director and Group COO N. Muthukumar President and Group CFO 2
Slide 3: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Results statement for the Fourth Quarter and 12 Months ended December 31, 2016 (“12M 2016” or “2016”), and Management Discussion and Analysis lodged on SGXNET on February 28, 2017. 3
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 • 2016 highlights • Financial and operating performance • Segmental analysis • Value chain analysis • Key takeaways 5
Slide 6: 2016 highlights
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Slide 7: 2016 highlights
2016 highlights • Stronger financial position in 2016 • PATMI at S$351.3 million on improved operational performance and lower exceptional losses compared to 2015 • Operational PATMI grew 23.1% to S$363.8 million • Reduced effective cost of borrowing through optimised debt tenure mix and cost • Subs
Slide 8: 2016 highlights (cont’d)
2016 highlights (cont’d) • Continued to execute on 2016-2018 Strategic Plan • Organic and inorganic growth initiatives across prioritised platforms and Africa: Grains & Animal Feed, Edible Nuts, Coffee, Edible Oils (Palm) and Rubber • Improved shareholder returns • Board of Directors recommends fina
Slide 9: Financial and operating performance
Financial and operating performance
Slide 10: P&L Analysis
P&L Analysis SGD Mn 12M 2015 12M 2016 % Change Restated Volume ('000 MT) 14,415.8 12,506.7 15.3 Revenue 20,587.0 19,052.6 8.1 Net gain/(loss) in fair value 14.1 (51.9) n.m. of biological assets EBITDA 1,202.8 1,085.2 10.8 Depreciation & (353.5) (266.6) 32.6 Amortisation Net Finance costs (403.5) (44
Slide 11: EBITDA and Invested Capital
EBITDA and Invested Capital SGD Mn EBITDA SGD Mn Invested Capital 16,649.0 1,400 18,000 1,199.9 1,202.8 14,374.7 1,129.0 16,000 1,200 1,085.2 11,412.2 11,560.7 14,000 1,000 12,000 8,852.8 800 10,000 7,652.8 8,000 5,840.2 6,017.2 600 6,000 400 4,000 7,796.2 200 5,572.0 5,543.5 6,721.8 2,000 0 0 2013
Slide 12: Segmental analysis
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Slide 13: Edible Nuts, Spices & Vegetable Ingredients
Edible Nuts, Spices & Vegetable Ingredients SGD Mn EBITDA SGD Mn Invested Capital 3,642.7 4,000 3,610.0 3,363.6 3,463.0 450 393.5 400 3,500 346.7 360.5 350 331.8 3,000 1,421.0 300 1,850.4 1,415.0 2,500 1,587.1 250 2,000 200 1,500 150 1,000 2,048.0 2,221.7 100 1,759.6 1,776.5 50 500 0 0 2013 2014 201
Slide 14: Confectionery & Beverage Ingredients
Confectionery & Beverage Ingredients SGD Mn EBITDA SGD Mn Invested Capital 450 7,000 407.2 6,109.5 400 5,680.9 6,000 350 300 268.5 275.6 284.0 5,000 250 4,000 3,246.9 4,568.7 200 4,329.7 3,000 2,346.6 150 2,000 2,745.4 100 1,855.4 50 1,000 1,351.2 1,540.8 0 491.2 501.5 0 2013 2014 2015 2016 Dec'13 D
Slide 15: Food Staples & Packaged Foods
Food Staples & Packaged Foods SGD Mn EBITDA SGD Mn Invested Capital 400 378.2 5,000 4,500 4,522.1 350 330.2 295.2 4,000 3,612.8 300 3,230.6 1,498.3 3,500 3,075.1 250 212.1 3,000 1,088.2 708.7 915.0 200 2,500 150 2,000 1,500 3,023.8 100 2,524.6 2,366.4 2,315.6 1,000 50 500 0 0 2013 2014 2015 2016 Dec
Slide 16: Industrial Raw Materials, Ag Logistics & Infrastructure
Industrial Raw Materials Ag Logistics & Infrastructure SGD Mn EBITDA SGD Mn Invested Capital 2,500 2,220.9 250 218.6 215.6 1,839.4 1,872.0 1,917.5 2,000 200 185.1 1,500 1,212.7 150 135.2 974.2 911.9 1,043.6 100 1,000 50 500 1,005.6 1,008.2 795.8 897.8 0 0 2013 2014 2015 2016 Dec'13 Dec'14 Dec'15 Dec
Slide 17: Value chain analysis
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Slide 18: Upstream
Upstream SGD Mn EBITDA SGD Mn Invested Capital 250 4,000 3,764.2 208.8 204.9 3,500 3,074.6 481.2 2,830.4 200 2,707.5 3,000 358.9 154.9 304.0 150 2,500 322.6 2,000 100 79.2 1,500 3,283.0 2,526.5 2,715.7 2,384.9 1,000 50 500 0 0 2013 2014 2015 2016 Dec'13 Dec'14 Dec'15 Dec'16 restated restated restate
Slide 19: Supply chain
Supply chain SGD Mn EBITDA SGD Mn Invested Capital 800 6,537.7 7,000 700.2 700 608.8 599.9 6,000 600 4,842.1 4,936.3 4,851.9 503.5 5,000 500 4,000 400 5,749.8 300 3,000 4,156.8 4,396.6 4,230.3 200 2,000 100 1,000 0 685.3 539.7 621.6 787.9 0 2013 2014 2015 2016 Dec'13 Dec'14 Dec'15 Dec'16 restated re
Slide 20: Mid/Downstream
Mid/Downstream SGD Mn EBITDA SGD Mn Invested Capital 700 7,000 6,448.2 6,347.1 620.1 600 6,000 500 5,000 3,063.7 2,621.8 3,862.6 3,794.0 400 4,000 315.3 330.4 290.9 1,360.8 300 3,000 1,316.6 200 2,000 3,384.5 3,725.3 100 1,000 2,501.8 2,477.4 0 0 2013 2014 2015 2016 Dec'13 Dec'14 Dec'15 Dec'16 resta
Slide 21: Gestation mix
Gestation mix Upstream Supply Chain Mid/Downstream EBITDA/ Avg IC EBITDA/ Avg IC EBITDA/ Avg IC 2.3% 8.8% 9.7% -2.2% 9.9% 1.2% 5.1% 9.5% Expected EBITDA/IC Expected EBITDA/IC Expected EBITDA/IC at steady state: 15-18% at steady state: 10-13% at steady state: 13-16% 21
Slide 22: Balance sheet and cash flow
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Slide 23: Balance sheet
Balance sheet Optimising tenure and borrowing mix SGD Mn 31-Dec-15 Change 31-Dec-16 Restated vs Dec 15 Uses of Capital Fixed Capital 8,169.5 7,340.5 829.0 Working Capital 8,517.7 8,295.6 222.1 Cash 2,144.0 2,143.2 0.8 Others 473.5 (165.7) 639.2 Total 19,304.7 17,613.6 1,691.1 Sources of Capital Equi
Slide 24: Cash flow analysis
Cash flow analysis SGD Mn 12M 2015 Cash Flow Summary 12M 2016 12M YOY 2014 2013 Restated Operating Cash flow (before Interest & Tax) 1,243.5 1,150.8 92.7 1,148.3 1,144.9 Changes in Working Capital (227.7) (995.9) 768.2 (766.2) (98.2) Net Operating Cash Flow 1,015.8 154.9 860.9 382.1 1,046.7 Net inte
Slide 25: Gearing
Gearing SGD Mn 31-Dec-15 Change 31-Dec-16 Restated vs Dec 15 Gross debt 13,670.5 12,293.9 1,376.6 Less: Cash 2,144.0 2,143.2 0.8 Net debt 11,526.5 10,150.7 1,375.8 Less: Readily marketable 5,909.2 5,232.9 676.3 inventory Less: Secured receivables 1,381.4 1,155.8 225.6 Adjusted net debt 4,235.9 3,762
Slide 26: Liquidity position
Liquidity position S$ million as at Dec 31, 2016 • Available liquidity sufficient to cover all repayment and Capex obligations • Continue to optimise debt tenure and cost and rebalance borrowing mix of long and short term debt to match Fixed and Working Capital needs *RMI: inventories that are liqui
Slide 27: Key takeaways
Key takeaways
Slide 28: Key takeaways
Key takeaways • Improved operational performance in 2016 with strong growth from Confectionery & Beverage Ingredients and Food Staples & Packaged Foods compared to 2015 • Continue to focus on turning around underperforming businesses and ensuring gestating businesses reach full potential • Debt opti
Slide 29: Q4 2016 Results Briefing
Q4 2016 Results Briefing olamgroup.com/investor-relations/ ir@olamnet.com