Astral Foods Limited · JSE:ARL
Astral Foods — FY2024 Earnings Presentation
64 slides from Astral Foods's earnings presentation, September 2024
Slide 1: 2024 Annual Results Presentation
2024 ANNUAL RESULTS PRESENTATION for the year ended 30 September 2024
Slide 2: Agenda
AGENDA ▪ Business Overview Slide 3 – Chris Schutte ▪ Operational Overview Slide 12 – Gary Arnold ▪ Industry Matters Slide 29 – Gary Arnold ▪ Financial Overview Slide 32 – Dries Ferreira ▪ Outlook Slide 44 – Chris Schutte ▪ Additional Information Slide 50 2
Slide 3: Business Overview
BUSINESS OVERVIEW Chris Schutte Chief Executive Officer
Slide 4: Key Financial Indicators
Business Overview KEY FINANCIAL INDICATORS ▪ Revenue @ R20,5 billion 6% ▪ Profit before interest and tax @ R1 125 million 281% ▪ Profit for the period @ R753 million 247% ▪ Headline earnings per share @ 1 920 cents 245% ▪ Gearing / debt levels cleared NIL ▪ Final dividend per share declared of 520 c
Slide 5: Salient Points
Business Overview SALIENT POINTS ▪ Broiler day-old chick costs increased following contingency measures to mitigate the impact of bird flu in 2023 ▪ Poultry feeding costs decreased significantly with reduced levels of feed consumed against the comparable period which suffered under “big birds” given
Slide 6: Salient Points
Business Overview SALIENT POINTS ▪ Broiler placement cutbacks were implemented, in an effort to better balance Astral’s supply with demand, this on the back of a weak macro-economic environment characterised by constrained consumer spending ▪ Poultry sales volumes increased on sales out of stock red
Slide 7: Load Shedding Costs – F2023 & F2024
Business Overview LOAD SHEDDING COSTS – F2023 & F2024 (R’000) 1H23 A = R741 m 2H23 A = R913 m 1H24 A = R101 m 2H24 A = R60 m 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 Additional feed cost Additional shifts & related costs Placement cutback costs Generator & other costs Slide to be dis
Slide 8: PBIT Movement F2024 vs. F2023
Business Overview PBIT MOVEMENT F2024 vs. F2023 1 700 (R million) Bird flu F2023 1 500 199 194 1 300 Load shedding F2023 81 144 1 100 250 900 700 1 125 500 988 300 100 (100) 88 100 (300) (621) 378 (500) (700) Other Insurance material cost LBIT F2023 Broiler selling Broiler sales Reduced feed PBIT F2
Slide 9: Broiler Net Margin vs. Feed Price
Business Overview BROILER NET MARGIN vs. FEED PRICE 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18 2H2015 1H2014 2H2014 1H2015 1H2016 2H2016 1H2017 2H2017 1H2018 2H2018 1H2019 2H2019 1H2020 2H2020 1H2021 2H2021 1H2022 2H2022 1H2023 2H2023 1H2024 2H2024 Broiler net margin % Change in broiler f
Slide 10: Broiler Price vs. Food Price Inflation
100 105 110 115 120 125 130 135 140 150 155 160 165 145 85 90 95 Oct-18 Dec-18 Feb-19 Apr-19 Business Overview Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Source: CJA Strategic Risk Brokers & Own Data Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Broiler selling price index Apr-21 Jun-21 Aug-21 Oct-21 Dec-21 Feb
Slide 11: Broiler Selling Price vs. Feed Price
-10% 10% 15% 20% 30% 35% -5% -15% 25% 0% 5% Oct-18 Dec-18 Feb-19 Source: Own Data Apr-19 Business Overview Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 % Change in broiler feed price Jun-21 Aug-21 Oct-21 Dec-21 Feb-22 Apr-22 Jun-22 Aug-22 BROILER SELLING PRICE
Slide 12: Raw Materials
RAW MATERIALS Gary Arnold Group Chief Operating Officer
Slide 13: RSA Total Maize Supply & Demand
Operational Overview RSA TOTAL MAIZE SUPPLY & DEMAND Marketing year (May to April) 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 '000 tons Actual Actual Actual Actual Actual Estimate Forecast Carry In (1 May) 2 662 1 000 2 115 2 124 1 955 2 405 782 Crop Estimate 11 275 15 300 16 315 15 470
Slide 14: RSA Maize Production & Yield
Operational Overview RSA MAIZE PRODUCTION & YIELD 17,0 7,0 16,0 6,4 6,3 6,5 15,0 6,1 5,9 5,9 5,9 6,0 5,6 14,0 5,3 5,5 13,0 4,9 12,0 5,0 4,8 11,0 4,2 4,5 10,0 4,0 9,0 3,7 3,9 3,5 8,0 11,7 14,3 9,9 7,5 16,7 12,9 11,3 15,4 16,2 15,4 16,4 12,7 16,0 7,0 3,0 2014 2015 2016 2017 2018 2019 2020 2021 2022 20
Slide 15: SAFEX Yellow Maize Price
Operational Overview SAFEX YELLOW MAIZE PRICE Source: CJA Strategic Risk Brokers 15
Slide 16: Durban Soya Meal Price
Operational Overview DURBAN SOYA MEAL PRICE Source: CJA Strategic Risk Brokers 16
Slide 17: Feed Division
FEED DIVISION Gary Arnold Group Chief Operating Officer
Slide 18: Feed Division
Operational Overview FEED DIVISION Revenue - R million Operating profit - R million 12000 750 11000 11 589 700 759 10000 650 600 9000 9 826 550 8000 500 545 7000 450 6000 400 350 5000 300 4000 250 3000 200 150 2000 100 1000 50 0 0 F2023 F2024 F2023 F2024 Revenue down 15.2% Operating profit down 28.3
Slide 19: Feed Division
Operational Overview FEED DIVISION ▪ SAFEX yellow maize price decreased for the year under review FY2024 avg. R3 988 per ton (F2023: R4 205) down R217 per ton (decrease of 5.4%) ▪ DBN soya meal price decreased for the year under review FY2024 avg. R9 820 per ton (F2023: R11 721) down R1 901 per ton
Slide 20: Feed Division Sales Mix
Operational Overview FEED DIVISION Sales Mix – F2023 Sales Mix – F2024 29% 33% 1 484 594 tons 1 321 964 tons Volume Decrease ≈ 11.0% 58% 5% 66% 9% ◼Poultry Integrated ◼ Poultry External ◼ Other 20
Slide 21: Poultry Division – Commercial
COMMERCIAL POULTRY DIVISION Gary Arnold Group Chief Operating Officer
Slide 22: Poultry Division – Consolidated
Operational Overview POULTRY DIVISION - CONSOLIDATED Revenue - R million Operating profit - R million 18000 600 16000 17 055 400 580 14000 15 833 200 12000 0 -200 10000 -400 8000 -600 6000 -800 -1000 4000 -1200 -1 380 2000 -1400 0 -1600 F2023 F2024 F2023 F2024 Revenue up 7.7% Operating profit up 142
Slide 23: Poultry Division – Commercial
Operational Overview POULTRY DIVISION - COMMERCIAL ▪ Broiler sales volumes increased on better demand for Astral’s finished goods due to an improvement in the product basket, which suffered in the comparable period due to Astral processing “big birds” brought about by a backlog in the slaughter prog
Slide 24: Poultry Division – Commercial Sales Mix
Operational Overview POULTRY DIVISION - COMMERCIAL Sales Mix – F2023 Sales Mix – F2024 23% 22% 5% 469 308 tons 52% 7% 490 757 tons 51% Volume Increase ≈ 4.6% 13% 13% 4% 3% 3% 4% IQF Mixed Portions IQF Single Portions Frozen Fresh Value Added Tertiary 24
Slide 25: Poultry Division – Agriculture
AGRICULTURE POULTRY DIVISION Gary Arnold Group Chief Operating Officer
Slide 26: Poultry Division – Agriculture
Operational Overview POULTRY DIVISION - AGRICULTURE ▪ Parent stock sales decreased slightly as customers cancelled or moved placements due to the bird flu outbreak in 2023 and subsequent farm quarantine restrictions ▪ Breeder revenue increased on higher broiler day-old chick selling prices, due to t
Slide 27: Broiler Performance
Operational Overview BROILER PERFORMANCE 130% 125% 120% 115% 110% ✓ 105% 100% 95% ✓ 90% F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 Slaughter age Live weight Average daily gain Key indicators baselined to 100% in F2014 27
Slide 28: Broiler Performance
Operational Overview BROILER PERFORMANCE 135% 130% ✓ 125% 120% 115% 110% 105% 100% 95% 90% 85% ✓ 80% 75% F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 Mortality Feed consumption Performance efficiency factor Key indicators baselined to 100% in F2014 28
Slide 29: Industry Matters
INDUSTRY MATTERS Gary Arnold Group Chief Operating Officer
Slide 30: Poultry Imports
Industry Matters POULTRY IMPORTS Tons 65 000 60 000 55 000 50 000 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Feb-20 Feb-21 Feb-22 Feb-23 Feb-24 Apr-20 Aug-20 Aug-21 Aug-22 Aug-23 Aug-24 Oct-19 Oct-20 Oct-21 Oc
Slide 31: Poultry Imports
Industry Matters POULTRY IMPORTS ▪ Based on industry statistics broiler slaughter numbers are approximately 21.2 million birds per week (July 2024) ▪ Imports for the period averaged 34 232 tons per month (≈ 6.1 million bpw) being approximately 22% of local consumption (F2023: 33 394 tons per month)
Slide 32: Financial Overview
FINANCIAL OVERVIEW Dries Ferreira Chief Financial Officer
Slide 33: Income Statement
Financial Overview INCOME STATEMENT 2024 2023 Year ended 30 September R million R million % change Revenue 20 480 19 251 6.4 Operating profit / (loss) 1 125 (621) 281 Operating profit / (loss) margin 5.5% -3.2% Finance income 37 33 Finance charges (138) (109) Profit / (Loss) before tax 1 024 (697) 2
Slide 34: Group Annual Revenue
Financial Overview GROUP ANNUAL REVENUE (R billion) 20,5 19,3 19,3 9,8 15,9 10,4 11,6 13,5 13,9 13,0 8,3 12,0 12,4 11,3 7,0 6,2 6,6 9,6 6,6 8,5 6,2 7,2 8,2 7,4 7,0 7,2 17,0 6,9 5,5 16,0 15,8 6,3 4,3 4,9 13,1 4,8 5,2 4,0 3,6 3,5 3,5 5,1 10,9 11,3 3,7 3,9 4,1 2,7 9,1 9,9 10,6 2,8 2,5 8,7 2,7 2,7 7,0 2
Slide 35: Group Annual Operating Profit
Financial Overview GROUP ANNUAL OPERATING PROFIT 14,8% 1 942 (R million) 15,0% 12,8% 7,4% 12,3% 457 1 440 9,8% 8,7% 5,5% 9,6% 9,3% 1 125 1 101 1 086 6,5% 5,9% 8,3% 8,4% 882 4,5% 625 5,8% 5,1% 813 -621 7,3% 766 809 423 4,6% 391 711 6,7% 6,6% 674 545 5,9% 597 585 549 1453 272 333 548 581 477 3,1% 493
Slide 36: Group Six Monthly Operating Profit
Financial Overview GROUP SIX MONTHLY OPERATING PROFIT (R million) 1044 875 898 191 785 266 655 207 550 551 538 295 550 575 503 330 429 186 237 379 337 374 381 -719 266 279 239 243 280 275 213 233 120 212 250 265 378 265 98 157 197 252 265 351 310 194 184 616 836 617 258 113 287 8 61 86 467 335 284 2
Slide 37: Balance Sheet
Financial Overview BALANCE SHEET September 2024 September 2023 R million R million % change Non-current assets (excl. ROU assets) 3 283 3 414 4 Non-current assets – ROU assets 178 252 Net working capital 2 286 2 280 Current assets (excl. cash) 4 872 4 732 Current liabilities (excl. borrowings & leas
Slide 38: Capital Expenditure
Financial Overview CAPITAL EXPENDITURE F2024 F2023 R million R million Depreciation and amortisation 321 310 Property, plant & equipment 231 224 Right of use assets 90 86 Total capex 275 398 Normal capex 147 230 Load shedding & water related 128 168 Outstanding commitments 218 594 Ross – GGP farm pu
Slide 39: Working Capital
Financial Overview WORKING CAPITAL September 2024 September 2023 Variance R million R million R million Current assets 4 872 4 732 140 Biological assets 1 331 1 048 283 Inventory - Poultry 1 084 1 413 (329) - Feed 470 482 (12) Trade receivables 1 721 1 488 233 Other receivables 267 300 (33) Current
Slide 40: Cash Flow Movement
1 000 200 400 600 800 0 (1 000) (800) (600) (400) (200) Opening Balance 1 Oct 2023 -1 031 Financial Overview Cash 1 429 profit Insurance 249 claims paid Proceeds on sale 142 of investment CASH FLOW MOVEMENT 62 Tax paid Working 221 capital Capital 258 expenditure Finance expense 235 and other Closing
Slide 41: Statement of Cash Flows
Financial Overview STATEMENT OF CASH FLOWS 2024 2023 For the twelve months ended 30 September R million R million Cash operating profit / (loss) 1 677 (601) Working capital movement (221) (323) 1 456 (924) Tax paid (62) (47) Net interest paid (74) (50) Capital expenditure paid (258) (372) Lease paym
Slide 42: HEPS & Dividend per Share
Financial Overview HEPS & DIVIDEND PER SHARE 3712 2762 2016 1914 1920 1674 1441 1286 1381 1228 1148 958 890 960 864 965 840 787 631 487 434 272 326 90 108 168 230 380 585 700 700 700 760 810 656 222 440 1150 490 1055 2050 900 775 700 1380 0 520 -1324 F2007 F2001 F2002 F2003 F2004 F2005 F2006 F2008 F
Slide 43: In Summary
Financial Overview IN SUMMARY • Revenue at R20,5 billion up 6.4% (F2023: R19,3 billion) • Operating profit at R1 125 million on return to profitability • Capital expenditure of R275 million at a normalised level • Cash inflow of R1,1 billion clearing the debt on the balance sheet • Dividend declared
Slide 44: Outlook
OUTLOOK Chris Schutte Chief Executive Officer
Slide 45: Outlook
OUTLOOK ▪ Bird flu remains a major risk to the local poultry industry, with slow progress towards approval for the vaccination of broiler breeding stock ▪ Water supply disruptions are of concern, as these have become common place with emergency supply measures being costly ▪ Constrained consumer spe
Slide 46: Outlook
OUTLOOK ▪ Formation of a Government of National Unity may stabilise the economy, and support much needed investment and growth ▪ Expected interest rate cuts may result in improved economic prospects in 2025, and the two-pot retirement reforms could provide a boost to consumer spending ▪ Weather fore
Slide 47: Q&A
Q&A Astral’s strategy is to be the BEST COST INTEGRATED POULTRY PRODUCER in selected Southern African countries Confirmed March 2022
Slide 48: Closing Word
CLOSING WORD Dr. Theuns Eloff Chairman: Astral Foods Limited
Slide 49: Personal Message
PERSONAL MESSAGE This then concludes my 32nd and final results presentation and roadshow. Thank you to everybody that has been part of this incredibly eventful journey over the past 40 years. Carpe Diem! Goodbye and good luck. ~ DFIU 49
Slide 50: Additional Information
ADDITIONAL INFORMATION
Slide 51: Key Financial Ratios
Additional Information KEY FINANCIAL RATIOS 70 30,0 65 61 60 55 25,0 51 48 48 49 50 46 45 41 42 20,0 39 39 40 37 36 36 34 31 14,8 31 31 15,0 30 29 33 29 28 15,0 30 12,3 12,8 26 36 19 24 24 25 26 23 20 21 24 9,6 9,3 21 9,8 15 17 20 8,4 19 17 14 8,3 8,0 7,8 8,7 10,0 7,3 12 7,4 5,9 16 6,5 5,9 11 5,8 5,
Slide 52: Key Financial Indicators
Additional Information KEY FINANCIAL INDICATORS 140 124,65 122,38 120 107,60 106,08 96,06 97,45 100 104,50 78,00 80 61,05 61,07 60 49,95 46 41,36 41,65 44,16 41 37,43 40 33,47 34,24 35,38 34 34 29 28,28 30 26 27 27 27 22 21 23,83 24 24 19 21 17,36 17 16 18 20 23 12 15 2010,79 14,34 11 10 8,53 9 26 2
Slide 53: World Corn Ending Stocks
Additional Information WORLD CORN ENDING STOCKS 400 30% 27,8% 27,7% 375 26,2% 350 25% 325 22,8% 23,1% 22,2% 22,0% 21,9% 300 21,2% 20,6% 20,5% 275 20% 250 225 200 15% 175 150 10% 125 100 75 5% 50 25 0 0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025E 2026F End Stock Maize stock to use ratio Sourc
Slide 54: El Niño Oscillation
Additional Information EL NIÑO OSCILLATION Source: International Research Institute for Climate and Society (IRI) – Columbia University 54
Slide 55: Vegetative Health Index
Additional Information VEGETATIVE HEALTH INDEX VHI of current year VHI of previous year November 3, 2024 (week 44) November 4, 2023 (week 44) Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI) 55
Slide 56: Broiler Feed Ingredient Contribution
Additional Information BROILER FEED INGREDIENT CONTRIBUTION 0,3 0,4 0,3 0,3 0,4 0,4 100% 1,8 3,0 1,7 2,9 1,8 2,4 1,8 2,6 2,2 3,0 2,0 3,0 6,0 6,4 5,4 5,4 6,0 5,0 90% 16,2 17,3 14,2 14,7 15,7 17,9 0,2 0,2 0,4 0,2 0,7 19,9 5,4 20,2 80% 4,6 22,7 0,8 23,0 4,4 6,0 21,8 24,2 5,6 3,0 5,9 3,7 4,4 3,0 0,8 3,0
Slide 57: Broiler Feed Cost Breakdown
Additional Information BROILER FEED COST BREAKDOWN Inclusion (%) Cost Contribution (%) 34 17 58 23 14 20 Maize Soya meal Extruded soya Sunflower meal Fish meal Soya oil Other Vitamins & Minerals Source: Own Data 57
Slide 58: RSA Protein Price Comparison
Additional Information RSA PROTEIN PRICE COMPARISON Cents per kilogram 11 000 9 000 7 000 5 000 3 000 1 000 Chicken Pork Beef Mutton Feed Conversion Rate 1.45 2.2 5.5 5.0 Per Capita Consumption 35,5 kg 5,7 kg 16,0 kg 2,7 kg Source: SAPA, FNB, Red Meat Industry Forum 58
Slide 59: RSA Poultry Market Share
Additional Information RSA POULTRY MARKET SHARE 19% 26% 5% 5% 8% 22% 5% 10% Astral Rainbow Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Local broiler production ≈ avg. 21,2 million birds per week (YTD July 2024) Source: Own Estimates 59
Slide 60: RSA Poultry Market Share
Additional Information RSA POULTRY MARKET SHARE 23% 20% 17% 14% 4% 8% 4% 6% 4% Astral Rainbow Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Imports Avg. poultry imports ≈ 6.1 million birds per week (12 months ended September 2024) Source: SAPA & Own Estimates 60
Slide 61: Total Poultry Imports
Additional Information TOTAL POULTRY IMPORTS Tons 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep F2022 34 965 69 465 104 383 138 181 171 050 224 088 264 514 305 551 335 049 358 237 378 734 399 817 F2023 17 730 45 948 77 515 11
Slide 62: Total Poultry Imports
Additional Information TOTAL POULTRY IMPORTS ▪ 2023 ▪ 2024 September YTD US 4,0% Other 1,4% Argentina US 9,4% Other 1,7% Argentina 4,2% 6,3% EU 2,3% EU 6,9% Brazil Brazil 81,4% 82,4% 414 975 tons 318 922 tons Source: SAPA 62
Slide 63: Total Poultry Imports
Additional Information TOTAL POULTRY IMPORTS Country (tons) 2022 2023 2024 Sep YTD Brazil 282 128 342 095 259 530 United States 47 774 39 071 12 722 Poland - - 2 081 Argentina 33 455 17 288 20 214 Ireland - 3 924 6 231 Denmark - 53 368 Spain 2 061 4 351 10 573 Thailand 1 101 2 097 2 045 Canada 1 358
Slide 64: Contact Details
CONTACT DETAILS Chris Schutte Dries Ferreira Gary Arnold Chief Executive Officer Chief Financial Officer Group Chief Operating Officer Tel: +27 (0) 12 667 5468 Tel: +27 (0) 12 667 5468 Tel: +27 (0) 11 991 6000 For any further Investor Relations questions please contact: Marlize Keyter www.astralfood