Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Olam International — H1 FY2010 Earnings Presentation
47 slides from Singapore Exchange's earnings presentation, Feb 11, 2010
Slide 1: Second Quarter and First Half FY2010 Results Briefing
Olam International Limited Second Quarter and First Half FY2010 Results Briefing 11th February 2010 | Singapore 1 1
Slide 2: Presentation to be read with financial results statement
This presentation should be read in conjunction with Olam International Limited’s Second Quarter (Q2 FY2010) and Half Year (H1 FY2010) Financial Results for the period ended 31st December 2009 statement lodged on SGXNET on 11th February 2010. 2 H1 FY2010 Results Briefing 2
Slide 3: 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 4: Results Presentation: Outline
Results Presentation : Outline Results: H1 FY2010 - Consolidated P&L Analysis Results: H1 FY2010 - Segmental Analysis Results: H1 FY2010 - Balance Sheet Analysis M & A Update 4 H1 FY2010 Results Briefing 4
Slide 5: Results: H1 FY2010 Consolidated P&L Analysis
Results: H1 FY2010 Consolidated P&L Analysis 5 H1 FY2010 Results Briefing 5
Slide 6: Summary
Summary H1 FY2010 H1 FY2009 % Increase (S$’000) (S$’000) Sales Volume (MT) 3,376,577 2,809,456 20.2 Sales Value 4,609,714 3,859,654 19.4 Net Contribution (NC) 361,116 280,897 28.6 Profit After Tax 86,801 62,385 39.1 (Excluding Exceptional Gains) Exceptional Gains 91,099 55,939 62.9 Profit After Tax
Slide 7: Consolidated P&L Analysis: H1 FY2010
Consolidated P&L Analysis: H1 FY2010 Sales Volume: 3.377 million metric tons Volume grew by 0.567 million metric tons 20.2% growth over H1 FY2009 Volume growth across all 4 segments 7 H1 FY2010 Results Briefing 7
Slide 8: Volumes
Volumes H1 FY2010 H1 FY2009 % Change (MT/’000) (MT/’000) Edible Nuts, Spices & Beans 511 394 29.7 Confectionery & Beverages Ingredients 587 555 5.6 Food Staples & Packaged Foods 1,646 1,295 27.1 Total Food Category 2,744 2,244 22.3 Industrial Raw Materials 633 565 12.1 Consolidated Total 3,376 2,809
Slide 9: Sales Volume Growth: Segmental Contribution
Sales Volume Growth: Segmental Contribution Sales Volume Sales Volume growth 20.2%, 0.567 mts (MT/’000) 4000 68 3500 32 351 117 3000 12% 2500 6% 61% 2000 21% 3377 2809 1500 1000 500 0 H1FY2009 Edible Nuts, Confectionery & Food Staples & Industrial Raw H1FY2010 Spices & Beans Beverage Packaged Foods
Slide 10: Consolidated P&L Analysis: H1 FY2010
Consolidated P&L Analysis: H1 FY2010 Total Sales Revenue: S$4,610 million 19.4% growth over H1 FY2009 Revenue growth across all segments Revenue growth driven by growth in volumes 10 H1 FY2010 Results Briefing 10
Slide 11: Sales Revenue Growth: Segmental Contribution
Sales Revenue Growth: Segmental Contribution Sales growth 19.4%, S$750 million Sales Revenue (S$ M) 5000 115 254 4500 206 175 4000 34% 15% 3500 23% 28% 3000 4,610 2500 3,860 2000 1500 1000 500 0 H1FY2009 Edible Nuts, Confectionery & Food Staples & Industrial Raw H1FY2010 Spices & Beans Beverage Pack
Slide 12: Sales Revenue Growth: Sources
Sales Revenue Growth: Sources Sales Revenue Sales growth 19.4%, S$750 million (S$ M) 5000 632 118 4500 4000 3500 16% 84% 3000 2500 3,860 4,610 2000 1500 1000 500 0 H1FY2009 Volume Price H1FY2010 12 H1 FY2010 Results Briefing 12
Slide 13: Consolidated P&L Analysis: H1 FY2010
Consolidated P&L Analysis: H1 FY2010 Net Contribution (NC): S$361 million NC growth from S$281m to S$361m 28.6% growth over H1 FY2009 NC growth across all segments 13 H1 FY2010 Results Briefing 13
Slide 14: Net Contribution Growth: Segmental Share
Net Contribution Growth: Segmental Share NC growth 28.6%, S$80 million Net Contribution (S$ M) 400 10 36 350 14 20 300 12% 45% 18% 250 25% 361 200 281 150 100 50 0 H1FY2009 Edible Nuts, Confectionery & Food Staples & Industrial Raw H1FY2010 Spices & Beans Beverage Packaged Foods Materials Ingredient
Slide 15: Net Contribution Growth: Segmental Share
Net Contribution Growth: Segmental Share Net Contribution Net Contribution / MT H1FY2010 H1FY2009 % H1FY2010 H1FY2009 % S$million S$million change S$ S$ change Edible Nuts, Spices & 73.6 53.4 +37.8 143.9 135.5 +6.2 Beans Confectionery & 96.0 81.5 +17.9 163.7 146.7 +11.6 Beverages Ingredients Food St
Slide 16: Net Contribution Growth: Sources
Net Contribution Growth: Sources NC growth 28.6%, S$80 million Net Contribution (S$ M) 400 28 52 350 35% 300 65% 250 200 281 361 150 100 50 0 H1FY2009 Volume Growth Margin Growth H1FY2010 16 H1 FY2010 Results Briefing 16
Slide 17: Impact of FRS 102
Impact of FRS 102 The following two employee Share Schemes come under the ambit of FRS 102: • Employee Share Subscription Scheme (ESSS) • Employee Share Options Scheme (ESOS) The impact of FRS 102 on the Financial Statements is as follows: Carried Prior Period H1FY2010 Total Forward S$’000 S$’000 S$
Slide 18: Consolidated P&L Analysis: H1 FY2010
Consolidated P&L Analysis: H1 FY2010 SG&A increased by 22.3% to S$239.2 million in H1 FY2010 H1 FY2010 H1 FY2009 Change SG&A (S$million) 239.2 191.6 24.8% SG&A/Sales Ratio 5.19% 5.07% 0.12% 18 H1 FY2010 Results Briefing 18
Slide 19: Consolidated P&L Analysis: H1 FY2010
Consolidated P&L Analysis: H1 FY2010 Profit After Tax (PAT): S$177.9 million • 50.3% growth over H1 FY2009 Profit After Tax (excluding exceptional gains): S$86.8 million • 39.1% growth over H1 FY2009 Earnings per Share (EPS) • 8.92 cent/share in H1 FY2010 vs 6.91 cent/share in H1 FY2009 • 29.1% grow
Slide 20: Results: H1 FY2010 Segmental Analysis
Results: H1 FY2010 Segmental Analysis 20 H1 FY2010 Results Briefing 20
Slide 21: Segmental Analysis H1 FY2010: Summary
Segmental Analysis H1 FY2010: Summary Olam Consolidated •Turnover S$ 4,610 million • Volume 3.377 mmts • NC S$ 361 m • NPAT S$ 178 m Edible Nuts, Confectionery Food Staples & Industrial Raw Spices & Beans & Beverage Packaged Foods Materials Ingredients •Turnover S$700 m •Turnover S$1,651 m •Turnover
Slide 22: Well Diversified Sourcing: Origins
Well Diversified Sourcing: Origins Africa Africa Americas 18.8% Americas 14.7% 23.9% 25.6% Europe Europe 8.7% 12.3% Asia & Middle East Asia & Middle East 51.0% 45.0% Sourcing Volume Sourcing Volume H1 FY2010 H1 FY2009 22 H1 FY2010 Results Briefing 22
Slide 23: Well Diversified Sales: Markets
Well Diversified Sales: Markets Americas Africa 15.9% Americas Africa 18.7% 22.9% 19.5% Asia & Europe Europe Middle 27.2% East 33.4% 24.2 % Asia & Middle East 38.2% Sales Turnover Sales Turnover H1 FY2010 H1 FY2009 23 H1 FY2010 Results Briefing 23
Slide 24: Results: H1 FY2010 Balance Sheet Analysis
Results: H1 FY2010 Balance Sheet Analysis 24 H1 FY2010 Results Briefing 24
Slide 25: Balance Sheet Analysis: Summary
Balance Sheet Analysis: Summary (Figures in S$ million) H1FY2010 FY2009 Change % Change Fixed assets 974.0 534.0 Long term investments 502.6 400.9 Goodwill & Intangibles 123.7 127.5 Total Fixed / Long Term Investments 1,600.3 1,062.4 537.9 50.6% Inventories 2,701.7 1,966.4 Trade receivables 657.6 73
Slide 26: Long Term Capital / Fixed Investments
Long Term Capital / Fixed Investments Increase/ (in S$ million) H1FY2010 FY2009 Decrease Fixed Assets 974.0 534.0 +440.0 Long Term Capital / 502.6 400.9 +101.7 Investments Goodwill & Intangibles 123.7 127.5 -3.8 Total 1,600.3 1,062.4 +537.9 Fixed Investments excluding Goodwill & Intangibles/ Total 2
Slide 27: Balance Sheet Analysis: Ratios
Balance Sheet Analysis: Ratios H1FY2010 FY2009 Change Debtors (days) 26 31 5 Stock (days) 119 92 (27) Advance to Suppliers 20 13 (7) (days) Trade Creditors (days) (20) (31) (11) Cash to cash cycle 145 105 (40) Current Ratio(x) 1.44 1.36 0.08 27 H1 FY2010 Results Briefing 27
Slide 28: Balance Sheet Analysis: Stock
Balance Sheet Analysis: Stock Increase / (in S$ million) H1FY2010 FY2009 Decrease Edible Nuts, Spices & Beans 434.4 282.3 152.1 Confectionery & Beverage 1,476.9 901.8 575.1 Ingredients Food Staples & Packaged 416.0 459.8 (43.8) Foods Industrial Raw Materials 374.4 322.5 51.9 Total 2,701.7 1,966.4 73
Slide 29: Debt Facilities: Limits
Debt Facilities: Limits % Increase/ (in S$ million) H1FY2010 FY2009 Increase/ (Decrease) (Decrease) Short Term Banking 3,715.6 4,149.1 (433.5) (10.4) Facilities Medium Term Facilities 1,842.6 1,168.9 1,153.1 57.6 Long Term Facilities 1,233.3 215.0 538.9 473.6 Total in S$ 6,791.5 5,533.0 1,258.5 22.7
Slide 30: Debt Facilities & Utilisation
Debt Facilities & Utilisation Only 59.6% of total credit facilities were used as of 31st December 2009 (in S$ million) Amount % Share Limits % Utilised Short Term Facilities 2,359.0 58.2 3,715.6 63.5 Medium Term Facilities 938.1 23.2 1,842.6 50.9 Long Term Facilities 753.9 18.6 1,233.3 61.1 Total Bo
Slide 31: Balance Sheet Analysis: Gearing
Balance sheet Analysis: Gearing H1 FY2010 FY2009 Change Leverage (x) Gross Debt to Equity (x) 2.12 2.59 0.47 Net Debt to Equity (x) 1.87 2.15 0.28 Liquidity Cash to Sales (%) 5.29 6.22 (0.93) Cash & Cash Equivalents 487.6 m 533.8 m (46.2) Margin Deposit with Brokers 265.9 m 64.8 m 201.1 31 H1 FY2010
Slide 32: Balance Sheet: Analysis of Gearing
Balance Sheet: Analysis of Gearing Adjusting : hedged, liquid inventory Net Debt/Equity (x) 3 2.5 1.87x (2.15x) 2 1.5 1 -2,304 0.42x (0.39x) 0.5 - 465 0 Net Debt/Equity Adj. Stock Adj. Debtors Adj. Net Debt/Equity 32 H1 FY2010 Results Briefing 32
Slide 33: Financial Summary
Financial Summary Volume grew by 20.2% to 3.377 million MT Net Contribution grew by 28.6% to S$361.1 million Profit after tax (excluding exceptional gains) grew by 39.1% to S$86.8 million Profit after tax grew by 50.3% to S$177.9 million Earnings per Share (EPS) increased by 29.1% to 8.92 cents per
Slide 34: Results: H1 FY2010 Strategy and M&A update
Results: H1 FY2010 Strategy and M&A update 34 H1 FY2010 Results Briefing 34
Slide 35: Our Strategy-on-a-Page
Our Strategy-on-a-Page Our governing objective is to maximise intrinsic value for our long term shareholders To be the leading global supply chain manager and processor of agri-commodities by: Vision • Serving growers and customers globally • Pursuing select scalable and attractive niches in upstrea
Slide 36: Change in the Portfolio
Change in the Portfolio FY2009 FY2015 Upst’m Core Midst’m Upst’m Core Midst’m Downst’m Cashew Integrated Peanuts value chain Almonds global leadership Coffee Palm* Rubber* Dairy Selective Spices &Dehydrates value chain Grains expansion Sugar Cocoa Rice Cotton Sesame Core optimisation Pulses Timber C
Slide 37: Strategy to significantly diversify our portfolio & achieve step order change in margin profile
Strategy to significantly diversify our portfolio & achieve step order change in margin profile 2009 2015 Net Profit Value Chain Segments Margin Breakdown Breakdown Upstream 5% 15% 15.0% Core + VAS* 75% 40% 2.2% Midstream & Downstream 15% 35% 4.0% Latent Assets ** 5% 10% 5.0% Total 100% 100% N.A. PB
Slide 38: M&A Update: Acquisition of Tomato Processing Facilities
M&A Update: Acquisition of Tomato Processing Facilities In July 2009, acquired tomato processing assets of SK Foods and RHM Industrial for a cash consideration of US$39.0 million 1.5 million tonnes tomato processing facilities in 2 plants located on 82 acres in the Central California city of Lemoore
Slide 39: M&A Update: Acquired 14.35% stake in New Zealand Farming Systems Uruguay
M&A Update: Acquired 14.35% stake in New Zealand Farming Systems Uruguay In September 2009, acquired 14.35% stake in New Zealand Farming Systems Uruguay (“NZFSU”), an operator of large scale Kiwi-style dairy farming operations in Uruguay for a cash consideration of NZ$14.37 million (US$9.88 million)
Slide 40: M&A Update: Acquisition of Almond Orchards
M&A Update: Acquisition of Almond Orchards In September 2009, signed agreement to acquire 8,096 hectares of planted almond orchards, 1,700 hectares of unplanted land and 40,825 mega litres of permanent water rights from Timbercorp in Australia for a cash consideration of A$128 million. In November 2
Slide 41: M&A Update: Investment in PureCircle
M&A Update: Investment in PureCircle In July 2008, Olam announced formation of a 50:50 Joint venture company, Olam Wilmar Investments Holdings Pte. Ltd (“OWIH”) to acquire 20% interest in PureCircle Limited (“PureCircle”), leading producer of natural zero-calorie, high-intensity sweeteners from the
Slide 42: M&A Update: Acquisition of Crown Flour Mills
M&A Update: Acquisition of Crown Flour Mills In January 2010, Olam acquired Crown Flour Mills (CFM) in Nigeria for a total purchase consideration of US$108m: 99.5% equity ownership of CFM for an enterprise value of US$88 million and equity value of US$39 million; Additional US$20 million for surplus
Slide 43: Greenfield Investment: Wheat Milling in Ghana
Greenfield Investment: Wheat Milling in Ghana Olam to Invest US$31.5 million in a Greenfield wheat milling facility in Ghana. Wheat mill to be located near Tema Port in Accra, close to the largest flour market in Ghana The facility will have a capacity of 500 MT/day and the flour production is expec
Slide 44: Upstream: Planned initiatives
Upstream: Planned initiatives Upstream Plantations: 1. Palm - W. Africa 2. Rubber - W. Africa • Plantations (perennial tree crops) 3. Coffee - Laos, Ethiopia, Indonesia 4. Cocoa - Indonesia, Nigeria 5. Cashew - Tanzania • Farming (annual crops) 6. Almonds - Australia, USA • Forestry concessions Farm
Slide 45: Midstream: Planned initiatives
Midstream: Planned initiatives Secondary Processing: Midstream 1. Almond processing & ingredient manufacturing - Australia, USA 2. Basmati Rice milling – India • Secondary 3. Cashew mechanical processing – Africa processing 4. Palm Oil refining - IVC, DRC 5. Peanuts Ingredient manufacturing - USA 6.
Slide 46: Leveraging Latent Assets
Leveraging Latent Assets Packaged Foods Business (PFB): 1. West Africa 2. Russia Leveraging Commodity Financial Services Group (CFSG): Latent 1. Market making & volatility arbitrage Assets 2. Risk management solutions 3. Relative Value Fund Fertiliser Manufacturing 1. West Africa 46 46
Slide 47: Thank You
Thank You 47 Q1 FY2010 Results Briefing & Investor Presentation 47