M.p. Evans Group Plc · LSE:MPE
M.p. Evans — Investor Presentation (June 2021)
12 slides from M.p. Evans's investor presentation, Jun 15, 2021
Slide 1: Investor Meetings
A PRODUCER OF SUSTAINABLE INDONESIAN PALM OIL INVESTOR MEETINGS Tuesday 15 June 2021
Slide 2: Agenda
AGENDA 1. Who we are 2. Producing certified sustainable palm oil 3. Overview of recent results 4. Operational overview 5. Why the Group is at an inflection point 2
Slide 3: Who we are
WHO WE ARE A producer of sustainable Indonesian palm oil Established track record of growth and financial returns Diverse portfolio of high-quality, sustainably- managed plantations Young average palm age: foundation for future crop growth Attractive earnings profile leading to sharply 1 Pangkatan g
Slide 4: Producer of certified sustainable Indonesian palm oil
PRODUCER OF CERTIFIED SUSTAINABLE INDONESIAN PALM OIL … PROTECT OUR SUSTAINABLE PALM-OIL POSITIVE IMPACT ON ENVIRONMENT PRODUCTION COMMUNITIES s Greenhouse gases Water Community Forest protection Traceability Fair labour 4
Slide 5: From sustainable operations
… FROM SUSTAINABLE OPERATIONS • 100% of Group and scheme smallholder areas operated to RSPO standards; • 53% RSPO certified to date: target 100% certified sustainable palm oil once mills completed • Zero waste: empty bunches turned to compost and methane from mill effluent used to generate electrici
Slide 6: 2020 profit sharply higher as revenue and margin increased
2020 PROFIT SHARPLY HIGHER AS REVENUE AND MARGIN INCREASED … Revenue Operating profit Operating cash generated +46% +94% +19% Revenue up 46% to Increase in operating profit Cash generated by US$174.5 million to US$31.3 million operating activities before (2019 US$119.3 million) s (2019 US$16.1 milli
Slide 7: Helped by strong CPO price recovery after initial Covid-19 dip
… HELPED BY STRONG CPO PRICE RECOVERY AFTER INITIAL COVID-19 DIP CPO price (cif Rotterdam) since January 2020 • Abrupt price fall with onset of Covid-19 pandemic (US$ per tonne) • Emphatic rebound starting in May 2020 continuing to present • Average price US$1,127/t cif Rotterdam in 5 months to May
Slide 8: Strong crop growth from young plantings
STRONG CROP GROWTH FROM YOUNG PLANTINGS … • Operations remain unaffected by Covid-19 • Total 2020 crop processed up 21% to 1.2 million tonnes • Total crop processed in 5 months to May 2021 up 26% on same period in 2020 • CPO production up to 132,400 tonnes in 5 months to May 2021 • Musi Rawas planti
Slide 9: And growth in mill capacity set to continue
… AND GROWTH IN MILL CAPACITY SET TO CONTINUE Crop processed and mill capacity 2010-2025 • Crop grew 17% pa in decade to 2020 (‘000 tonnes) • Expect further 6% pa growth to 2027 • Current crop peak at 1.4m tonnes in 2027, continuing to produce at this level for another decade • Rising capacity can m
Slide 10: Milling means margin
MILLING MEANS MARGIN • Margin gain from milling own crop vs sale to outside mill: ▫ Direct mill cost US$12/t ffb vs US$23/t ffb ▫ No automatic ‘grading’ deduction from tonnage delivered ▫ Oil extraction 24.5% vs maximum 22.0% ▫ Sustainability premiums • Margin gain from using spare capacity to mill
Slide 11: The Group has reached an inflection point
THE GROUP HAS REACHED AN INFLECTION POINT Illustrative EPS (p) Key assumptions Higher volumes and more 1.0m 1.2m 1.6m own mills producing rising 600 (US$) Crop (t) Crop (t) Crop (t) 3 MILL GATE PRICE 1 81 p margin + 400 (US$) Sharply falling capital COST PER TONNE PALM2 expenditure after 2022 + 200(
Slide 12: Investor Meetings
A PRODUCER OF SUSTAINABLE INDONESIAN PALM OIL INVESTOR MEETINGS Tuesday 15 June 2021