Olam Group Limited · SGX:VC2
Olam — H1 2023 Earnings Presentation
49 slides from Olam's earnings presentation, Aug 11, 2023
Slide 1: Half-Year 2023 Results Briefing
Half-Year 2023 Results Briefing August 11, 2023
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 Half-Year ended June 30, 2023 (“H1 2023”) lodged on SGXNET on August 11, 2023. 2 Olam Group Limited Results for the Half-Year ended June 30, 2023 | Aug
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation and announcement entitled “Half-Year 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 managemen
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 OlamGroup Olam Group Limited Limited Results Results for for the the Half-Year Half-Year ended ended June June 30, 30,| 2023 2023 | August August 11, 202311, 2023
Slide 5: Agenda
Agenda 1 2 3 4 5 H1 2023 Group Segmental Business prospects Re-organisation Key takeaways financial highlights performance by and outlook of Olam: operating group Progress update Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 6: H1 2023 Group financial highlights
1 H1 2023 Group financial highlights Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 7: Group H1 2023 results: At a glance
Group H1 2023 results: At a glance Volume & 21.3 M MT S$24.7 B Operational S$184.0 M Revenue PATMI -5.2% -13.2% -61.6% S$819.6 M S$846.2 M -S$483.7 M EBIT & Adjusted Free Cash Flow EBIT¹ +1.1% +1.4% to Equity -S$949.4 M S$47.9 M From 1.73x to PATMI Gearing -88.8% 1.74x Note: All results are compared
Slide 8: Group H1 2023 financial highlights
Group H1 2023 financial highlights EBIT at S$819.6 million Balance sheet remains strong Operational PATMI at S$184.0 Interim dividend despite higher working capital million • ofi delivered higher EBIT¹ of S$277.2 • Increase in working capital and higher • Board of Directors declares interim million
Slide 9: Consolidated results by operating group
Consolidated results by operating group H1 2023 at a glance ofi Olam Agri Remaining Olam Group Invested Capital Volume ('000 MT) Revenue (S$ million) EBIT (S$ million) (S$ million) 2.8% 2.8% -2.0% 8.0% % 13.4% 31.2% 29.5% 33.8% 21,317.7 24,685.1 819.6 19,811.2 -5.2% -13.2% +1.1% -0.6% 89.2% 66.0% 68
Slide 10: Sales volume at 21.3 million MT
Sales volume at 21.3 million MT 5.2% decline on lower grains & oilseeds and cotton volumes Volume by operating group ('000 MT) -5.2% 22,490 106 21,318 -99 -1,180 H1 2022 ofi Olam Agri Remaining H1 2023 Olam Group 10 Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023 N
Slide 11: Steady operational performance with EBIT at S$819.6 million
Steady operational performance with EBIT²at S$819.6 million Adjusted EBIT up 1.4% EBIT by operating group (S$ million) +1.1% 9 55 820 811 -55 H1 2022 Restated ofi Olam Agri Remaining H1 2023 Olam Group Adjusted EBIT 834 +12 846 Restated (S$ M) ²EBIT and Adjusted EBIT exclude exceptional items. H1 20
Slide 12: Operational PATMI lower at S$184.0 million
Operational PATMI lower at S$184.0 million Reported PATMI declined 88.8% to S$47.9 million PATMI (S$ million) -88.8% 429 9 46 -246 -87 48 -104 H1 2022 EBIT^ Net Finance Taxation^ Exceptional Non-controlling H1 2023 Costs^ Items Interests Operational 479 -295 184 PATMI (S$ M) ^ Excludes exceptional i
Slide 13: Invested capital remains unchanged
Invested capital³ remains unchanged Invested Capital (IC, S$ million) Gearing (times) Net gearing -0.6% Adjusted net gearing 19,924 19,811 1.73 1.74 Working Capital 1.47 Fixed Capital 9,594 9,946 0.86 0.66 0.64 10,330 9,865 Jun-22 Jun-23 Jun-22 Dec-22 Jun-23 Higher working capital investments on red
Slide 14: Free cash flow
Free cash flow Higher working capital requirements and increase in interest and net Capex led to negative FCFE Free Cash Flow to Equity (FCFE) (S$ million) -949 466 -107 -405 -12 -171 -254 -484 H1 2022 Operating Changes in Tax Paid Capex / Net Interest H1 2023 Cash Flow Working Investments Paid (bef
Slide 15: Strong liquidity position
Strong liquidity position Total borrowings and available liquidity (S$ million) as at June 30, 2023 12,092 21,909 Short-Term Long-Term +5,805 16,104 4,164 832 5,606 11,940 3,379 Cash and RMI* Secured Unutilised Available Total Short-term Receivables Bank Lines Liquidity Borrowings Fixed Deposits * R
Slide 16: Segmental performance by operating group
2 Segmental performance by operating group Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 17: ofi H1 2023 results
ati woke i real H1 2023 results ofi
Slide 18: ofi H1 2023 results
ofi H1 2023 results S$ Million S$ Million EBIT +3.4% Invested Capital 277 Global Sourcing 268 Ingredients & Solutions -2.9% 37% 48% 11,652 11,318 43% 36% 63% 52% 64% 57% H1 2022 Restated H1 2023 Jun-22 Jun-23 EBIT/MT (S$) 149 163 +4.1% Adjusted EBIT (S$) 288 300 • ofi’s EBIT grew 3.4% led by Ingredi
Slide 19: ofi: Global Sourcing
ofi: Global Sourcing S$ Million S$ Million EBIT Invested Capital -19.0% -18.2% 128 Working Capital 4,956 Fixed Capital 4,052 104 3,340 2,505 1,616 1,547 H1 2022 H1 2023 Jun-22 Jun-23 EBIT/MT (S$) 83 71 -18.5% Adjusted EBIT (S$) 131 107 • EBIT decreased 19.0% against a very strong comparative period,
Slide 20: ofi: One-off Almond impact
ofi: One-off Almond impact • The entire Australian almond industry faced a significant and unprecedented decline in crop yield in the 2022/2023 growing season compared to historical yields and expectations for the season • The decline in crop yield and quality was observed due to a combination of lo
Slide 21: ofi: Ingredients & Solutions
ofi: Ingredients & Solutions S$ Million Invested Capital EBIT +23.6% Working Capital +8.5% 174 Fixed Capital 7,267 6,696 141 2,840 3,099 3,856 4,168 H1 2022 H1 2023 Jun-22 Jun-23 Restated EBIT/MT (S$) 223 284 +22.8% Adjusted EBIT (S$) 157 193 • EBIT increased by a solid 23.6% to S$173.7 million driv
Slide 22: Transforming food, feed & fibre
Transforming food, feed & fibre
Slide 23: Olam Agri H1 2023 results
Food & Feed - Origination & Merchandising Food & Feed - Processing & Value-added Fibre, Agri-industrials & Ag Services S$ Million S$ Million +15.5% -9.0% EBIT 614 Invested Capital 5,837 559 5,056 37% 28% 32% 17% 29% 49% 39% 49% 34% 34% 33% 19% H1 2022 Restated H1 2023 Jun-22 Jun-23 EBIT/MT (S$) 30 2
Slide 24: Olam Agri: Food & Feed - Origination & Merchandising
S$ Million S$ Million EBIT Invested Capital +91.3% -25.3% 230 1,648 Working Capital 172 Fixed Capital 862 1,468 596 266 180 H1 2022 H1 2023 Jun-22 Jun-23 EBIT/MT (S$) 14 11 Volume decreased primarily due to lower trading volumes in Grains & IC increased by S$786.4 million due to the sharp increase i
Slide 25: Olam Agri: Food & Feed - Processing & Value-added
S$ Million S$ Million EBIT +60.5% Invested Capital -7.2% 283 2,467 Working Capital 2,289 Fixed Capital 1,159 177 1,223 1,308 1,066 H1 2022 H1 2023 Jun-22 Jun-23 EBIT/MT (S$) 85 141 Segment continued its stellar performance in H1 2023 from IC eased by 7.2% or S$177.7 million despite the increase in 2
Slide 26: Olam Agri: Fibre, Agri-industrials & Ag Services
S$ Million S$ Million EBIT -49.9% Invested Capital +10.0% 208 Working Capital 1,900 1,727 Fixed Capital 104 1,331 1,478 396 422 H1 2022 Restated H1 2023 Jun-22 Jun-23 EBIT/MT (S$) 171 102 Segmental performance was comparatively weaker against the strong IC increased by 10.0% or S$173.1 million mainl
Slide 27: Remaining Olam Group H1 2023 Results
Remaining Olam Group H1 2023 Results Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022
Slide 28: Remaining Olam Group
Remaining Olam Group Remaining Olam Group Olam Global Holdco (OGH) Nupo Ventures (formerly Olam Ventures) Mindsprint (formerly Olam Technology houses de-prioritised assets ear-marked for exit, acts as a foundry to build new sustainability and digital and Business Services) nurtures gestating assets
Slide 29: Remaining Olam Group
Remaining Olam Group De-prioritised/Exiting Assets Continuing/Gestating Businesses Incubating Businesses EBIT Invested Capital +76.8% -17.4% S$ Million S$ Million 2 3,216 14 4 552 2,656 -33 570 -46 -17 2,656 2,062 -30 -72 8 24 H1 2022 H1 2023 Jun-22 Jun-23 • EBIT losses came down to S$16.7 million i
Slide 30: Business outlook and prospects
3 Business outlook and prospects Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 31: Business outlook and prospects
Business outlook and prospects 1 2 3 ofi is leveraging recent Olam Agri’s results were in line with The Group expects to continue investments to further grow its the average historical phasing of its to incur expenses associated innovation pipeline and deliver earnings between the first-half and wit
Slide 32: Re-organisation of Olam
4 Re-organisation of Olam Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 33: Progress update & next steps
Progress update & next steps Remaining Olam Group Target concurrent listing¹ of Olam Agri on Plan primary listing on the On completion of Olam Agri and ofi IPOs, mainboard of SGX and Saudi Exchange by premium segment of LSE and a the Remaining Olam Group will remain H1 2024, subject to all requisite
Slide 34: Key takeaways
5 Key takeaways Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 35: Key takeaways
Key Keytakeaways takeaways 1 2 3 The focused and Target Olam Agri IPO for concurrent listing in Overall, we remain cautiously differentiated strategies of Singapore and Saudi Arabia by H1 2024 optimistic about the Group’s our operating groups will prospects for 2023, despite ofi IPO to take place se
Slide 36: Appendix – Operating groups
Appendix – Operating groups Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 37: ofi in numbers
ofi in numbers Cocoa Coffee Nuts Spices Dairy 16.4 Billion revenue (S$) 1,112 Million EBITDA (S$) 789 Million ADJUSTED EBIT (S$) 110+ Manufacturing 49 Countries 20,000+ employees 10,000+ customers facilities Note: All financial figures and customers are for full year 2022. Olam Group Limited Results
Slide 38: 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 39: Olam Agri in numbers
1 30+ countries 9,600+ employees S$36.9b revenue 2 38m 60+ 16.5% tonnes in Manufacturing & EBIT/IC volume handled processing facilities 3 Note: All numbers are as of December 31, 2022. S$1,068m EBITDA 2019-2022 CAGR: 28.5% S$858m EBIT 2019-2022 CAGR: 30.8% Olam Group Limited Investor Presentation |
Slide 40: Olam Agri's strategic partnership with SALIC and differentiated model
1 2 3 4 5 Strategically Participation in key More asset intensive Helmed by a highly Market leading positioned as a food parts of the global in the processing and experienced, capable sustainability track security play in the agri market and value-added segment and engaged record aligned to its grow
Slide 41: Remaining Olam Group in numbers
Remaining Olam Group in numbers Olam Global Holdco Volume 1,112,600 MT Revenue S$1.6 B Invested S$2.7 B EBIT S$4.5 M Capital Customers 3,100+ Employees 18,000+ Note: All numbers are as of December 31, 2022. Olam Group Limited Results for Half-Year ended June 30, 2023 | August 11, 2023 41 Not for dis
Slide 42: Nupo Ventures' vision to create new businesses
Nupo Ventures’ vision is to create new businesses that build a more sustainable future for people, communities & our planet We looked at 6 topics – of which 4 are In 2022 we set up Nupo Ventures, a start-up foundry, as a new entity Nupo Ventures: Culmination still ongoing ventures. These are at of a
Slide 43: Reimagining businesses with talent, technology and insights
Reimagining businesses with talent, technology and insights Customized Offerings Customer-Centricity at Bringing the & Solutions the core outside-in Mindsprint has developed a unique Mindsprint has strengthened its customer Mindsprint has revamped its portfolio of integrated total solutions base in
Slide 44: Appendix – Financials
Appendix – Financials Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 45: P&L statement
P&L statement S$ million H1 2023 H1 2022 % Change Volume ('000 MT) 21,317.7 22,490.0 (5.2) Revenue^ 24,685.1 28,446.9 (13.2) EBITDA^ 1,176.3 1,156.8 1.7 EBIT^ 819.6 810.5 1.1 Adjusted EBIT^ 846.2 834.2 1.4 PAT 116.7 394.5 (70.4) PATMI 47.9 429.2 (88.8) Operational PATMI^ 184.0 478.6 (61.6) ^ Excludi
Slide 46: Exceptional items
Exceptional items S$ million H1 2023 H1 2022 Re-organisation cost (24.8) (23.7) Accelerated charge on share-based expenses - (25.7) Australia almond lower crop yield (111.3) - Exceptional items (136.1) (49.4) 46 Olam Group Limited Results for the Half-Year ended June 30, 2023 | August 11, 2023
Slide 47: Balance sheet
Balance sheet S$ million Jun-2023 Jun-2022 Change Fixed Capital 9,271.2 9,689.3 (418.1) Right-of-use assets 841.0 882.5 (41.5) Uses of Working Capital 9,730.5 7,791.8 1,938.7 Capital Cash 3,378.5 6,395.3 (3,016.8) Others 424.3 1,525.9 (1,101.6) Total 23,645.5 26,284.8 (2,639.3) Equity & Reserves 7,2
Slide 48: Cash flow statement
Cash flow statement S$ million H1 2023 H1 2022 Change Operating Cash flow (before Interest & Tax) 1,043.4 1,150.7 (107.3) Changes in Working Capital (643.3) (238.4) (404.9) Net Operating Cash Flow 400.1 912.3 (512.2) Net interest paid (508.1) (254.0) (254.1) Tax paid (126.1) (114.2) (11.9) Cash from
Slide 49: H1 2023 Results Briefing
H1 2023 Results Briefing olamgroup.com/investors.html ir@olamnet.com