M.p. Evans Group Plc · LSE:MPE
M.p. Evans — H1 2024 Earnings Presentation
24 slides from M.p. Evans's earnings presentation, Sep 16, 2024
Slide 1: 2024 interim results
2024 interim results Higher crop, increased production and strong profitability Monday 16 September 2024 A producer of sustainable Indonesian palm oil 1
Slide 2: Agenda
Agenda • H1 2024 overview • Group operations • H1 2024 results • REGY strategy deployment • H2 2024 outlook • Summary • Appendices 2
Slide 3: H1 2024 overview
H1 2024 overview Total crop processed up 5% to 759,700 tonnes (2023: 721,700) with own crops up 7% Total CPO production up 6% to 177,000 tonnes (2023: 166,200) with OER up to 23.4% CPO mill-gate prices up 2% to US$771 per tonne (2023: US$755) Gross profit up 82% to US$42.1 million due to lower costs
Slide 4: Group operations: increasing output
Group operations: increasing output Independent suppliers FFB 193,500 t 2023: 188,100t Group mills 95% Group Group managed FFB production 566,200t +0.7% 23.4% 168,700 t 2023: 533,000t 2023: 159,100t 5% 5.2% External mills 37,500 t 2023: 33,100t 8,300 t 1,700 t 2023: 7,100t 2023: 1,500t 4
Slide 5: H1 2024 results: price, revenue and cost
H1 2024 results: price, revenue and cost Mill gate CPO price per tonne Revenue +2% +22% -14% Group cost per tonne of pp H1 2024: US$771 per tonne H1 2024: US$164m H1 2024: US$458 H1 2023: US$755 per tonne H1 2023: US$134m H1 2023: US$535 5
Slide 6: H1 2024 results: gross profit, EPS and interim dividend
H1 2024 results: gross profit, EPS and interim dividend Earnings per share 44.9p +81% Interim dividend 15p +20% 6
Slide 7: H1 2024 results: cash generation
H1 2024 results: cash generation • Group operations continue to be significantly cash generative • Balance sheet strength enables management to focus on opportunities for future growth Cash conversion of 39.3 60.0 144% Sources Opening cash Cash from operations (US$m) 9.8 9.9 9.6 6.0 21.9 3.5 35.7 Us
Slide 8: Strategy pillars (REGY)
Strategy pillars (REGY) M.P. Evans is a responsible producer of sustainable Indonesian palm oil, striving for excellence in all its operations, with a focus on continuing growth and offering an increasing yield. Responsibility Excellence Growth Yield • RSPO members • Investing for the • Increasing c
Slide 9: Strategy pillars: responsibility
Strategy pillars: responsibility All six Group palm-oil mills producing certified sustainable palm oil Certified output up by 24% to 119,500 tonnes in H1 2024 5th mill received RSPO accreditation in H1 2024, and 6th mill RSPO audit took place in early H2 2024 Two new sustainability reports (TCFD and
Slide 10: Strategy pillars: excellence
Strategy pillars: excellence A continued focus on staff Experienced management, able to Determination to maximise ffb per training, development and respond positively to industry, hectare and mill-extraction rates wellbeing agronomic and environmental challenges 10
Slide 11: Strategy pillars: growth
Strategy pillars: growth Acquired 5% interest (1,700ha effective) from minority partner during H1 at US$9,000/ha – EPS enhancing for long term Management working to integrate 10,000ha acquired during 2023: • Replanting taking place at Simpang Kiri • ABK/NAS crop being processed at Kota Bangun mills
Slide 12: Strategy pillars: yield
Strategy pillars: yield • Interim dividend of 15p per share for 2024, up 20% on prior year • Further extension of over 30-year progressive dividend policy • The Group continues to prioritise sustainable dividend growth 50 Interim Final 45 40 35 30 25 20 15 10 5 0 2014 2015 2016 2017 2018 2019 2020 2
Slide 13: H2 2024 outlook
H2 2024 outlook • Crop ⎻ Total crop processed expected to be similar to prior year. Peak months later in 2024 than in 2023. Depending on rainfall, some crop could harvest in early 2025 • Price ⎻ Average mill-gate price US$777 per tonne for 8 months to August 2024 ⎻ Strong price environment continues
Slide 14: Summary
Summary • Crop, production and price all up in H1 2024 compared to the previous year • Strong profitability, leading to EPS of 44.9p for H1 and 20% increase in interim dividend to 15p per share • Acquisition of minority 5% holding, will benefit EPS from H2 onwards • Higher pricing to date in H2 offs
Slide 15: Appendices
Appendices 1. The Group: who we are 2. Summary operational information 3. Summary financial information 4. Vegetable-oil market 5. Palm oil in context 6. Historic CPO price data 7. Oil palm life cycle 8. Products containing palm oil 15
Slide 16: 1. The Group: who we are
1. The Group: who we are M.P. Evans (AIM: MPE) is a long-term investor in Indonesian palm oil. The Group is committed to sustainable production and works in partnership with local communities and other stakeholders to deliver continued value. 150 years A producer 12,500+ Group with a of sustainable
Slide 17: 2. Summary operational information
2. Summary operational information H1 2024 Increase H1 2023 Tonnes ‘000 % Tonnes ‘000 Crop Own crops 438 7 408 Scheme-smallholder crops 128 3 125 Independent crops purchased 194 3 188 760 5 721 Production Group mills 169 6 159 Third-party mills 8 17 7 177 6 166 17
Slide 18: 3. Summary financial information
3. Summary financial information H1 2024 H1 2023 Revenue US$m 163.7 134.5 Gross profit US$m 42.1 23.1 Gross margin % 26 17 Profit for the period US$m 31.7 17.8 Sustainability premium income US$m 3.0 3.2 Group cost per tonne US$ 458 535 Total cost per tonne US$ 529 574 Earnings per share pence 44.9 2
Slide 19: 4. Vegetable-oil market
4. Vegetable-oil market • Palm oil is a vegetable oil, with an increasing share of growing worldwide demand for vegetable oil. • Since 1990, demand for vegetable oil has grown at an average of 4% per annum. Growth of world vegetable-oil production Vegetable-oil production (Tonnes, millions) 250 40%
Slide 20: 5. Palm oil in context
5. Palm oil in context • Oil palms produce fresh fruit bunches (ffb) continuously over their 25-year life. Competing vegetable-oil seeds are annual crops. • Palm is extremely efficient in its use of land: it produces 40% of the world’s vegetable oil on only 8% of the area devoted to vegetable-oil cu
Slide 21: 6. Historic CPO price data
6. Historic CPO price data Source: Oil World 21
Slide 22: 7. Oil palm life cycle
7. Oil palm life cycle As at end December 2023, M.P. Evans’ average age of planting was 10 years. Yield: 25 tonnes Yield: 20 tonnes Plant begins to yield approx. 30 months post planting. Yield: 15 tonnes Yield: 10 tonnes Plant will continue to yield beyond 25 years. Yield: 5 tonnes However, harvesti
Slide 23: 8. Consumer products containing palm oil
8. Consumer products containing palm oil Palm oil is used mainly as a cooking oil but also in a wide range of consumer goods and processed foods including biscuits, cakes, soap, cosmetics, lubricants, and in the production of bio-diesel.
Slide 24: M.PEvansfy
M.PEvansfy GROUP PLC.