Quantum Foods Holdings Ltd · JSE:QFH
Quantum Foods — FY2020 Earnings Presentation
28 slides from Quantum Foods's earnings presentation, September 2020
Slide 1: Results Presentation for the year ended 30 September 2020
RESULTS PRESENTATION for the year ended 30 September 2020 QUANTUM FOODS | RESULTS PRESENTATION 2020
Slide 2: Agenda
Agenda Business overview H Lourens Financial overview A Muller Operational overview H Lourens Outlook and management focus H Lourens QUANTUM FOODS | RESULTS PRESENTATION 2020 2
Slide 3: Business Overview
BUSINESS OVERVIEW BUSINESS OVERVIEW H Lourens QUANTUM FOODS | RESULTS PRESENTATION 2020
Slide 4: Salient features
Salient features BUSINESS OVERVIEW • Solid performance in volatile industry Operating conditions Revenue profit • No material negative impact from COVID-19 15% 10% • Raw material cost increase across the board mainly due to ZAR weakness Total dividend HEPS 2020 • Major changes in shareholder base: C
Slide 5: Financial Overview
FINANCIAL OVERVIEW FINANCIAL OVERVIEW A Muller QUANTUM FOODS | RESULTS PRESENTATION 2020
Slide 6: Statement of income
Statement of income FINANCIAL OVERVIEW 2020 2019 % For the year ended 30 September Rm Rm change Revenue 5 095.1 4 417.7 15 Operating profit* 218.5 245.2 (11) (Loss)/income from associates (0.4) 0.2 Net finance (cost)/income (2.6) 11.1 Profit before tax 215.5 256.6 (16) Tax (60.6) (67.4) Profit for t
Slide 7: Revenue analysis
Revenue analysis FINANCIAL OVERVIEW Total R5 095 million (2019: R4 418 million) ANIMAL FEEDS EGGS FARMING AFRICA R2 237 R1 230 R1 350 R278 44% 24% 27% 5% 2019: R1 759 | 40% 2019: R1 095 | 25% 2019: R1 325 | 30% 2019: R239 | 5% QUANTUM FOODS | RESULTS PRESENTATION 2020 7
Slide 8: Segment results
Segment results FINANCIAL OVERVIEW 2020 2019 Adjusted operating profit Rm Rm Eggs 6.3 38.3 Farming 121.5 112.1 Animal feeds 99.3 89.1 Other African countries 5.9 14.2 Head office costs (13.4) (9.1) Profit for the year 219.6 244.6 QUANTUM FOODS | RESULTS PRESENTATION 2020 8
Slide 9: Statement of financial position
Statement of financial position FINANCIAL OVERVIEW 2020 2019 At year-end 30 September Rm Rm Non-current assets 1 222.1 1 181.5 Right-of-use assets 57.9 – Other 1 164.2 1 181.5 Net working capital (excluding lease liabilities) 713.6 693.2 Non-current liabilities (excluding lease liabilities) (229.9)
Slide 10: Statement of cash flow
Statement of cash flow FINANCIAL OVERVIEW 2020 2019 For the year ended 30 September Rm Rm Cash profit from operating activities 332.5 329.8 Working capital (outflow)/inflow (70.3) (109.2) Changes in exchange rates (4.2) 1.3 Cash effect of hedging activities 2.7 (6.7) Tax paid (48.6) (51.2) Net finan
Slide 11: Capital expenditure
Capital expenditure FINANCIAL OVERVIEW 2020 Future Rm Rm RSA Expansion/efficiency 26.6 76.5 – Feed mills 16.1 6.6 – Layer hatchery 0.4 – – Farms 2.5 63.4 – Packing stations 7.0 0.5 – Energy 0.7 6.0 Replacement/compliance 40.8 63.1 Africa Expansion/efficiency 19.0 14.5 – Uganda layer farm and breeder
Slide 12: Sensitivities: Eggs
Sensitivities: Eggs FINANCIAL OVERVIEW Effect of movement in: Rand value EBIT/annum Selling prices – Eggs (R/doz) 1% 15 c R12.6 m Raw material costs – Maize R/ton R100 R8.6 m – Soya bean meal R/ton R100 R2.6 m QUANTUM FOODS | RESULTS PRESENTATION 2020 12
Slide 13: Operational Overview
OPERATIONAL OVERVIEW OPERATIONAL OVERVIEW H Lourens QUANTUM FOODS | RESULTS PRESENTATION 2020
Slide 14: Nova Feeds
Nova Feeds OPERATIONAL OVERVIEW Excellent growth achieved • Volume growth of 13% • Improved R/ton margin driven by changes in product mix • Cost per unit declined due to diligent cost management and increased volumes • Load shedding remained a challenge and cost c. R3.5 million • Investments at Pret
Slide 15: Bergvlei Layer Farming
Bergvlei Layer Farming OPERATIONAL OVERVIEW Record commercial layer performance • Layer breeder performance continues to increase from current high levels • Challenging industry conditions affected the point-of-lay business negatively: • Cancellation of orders • Increased feed consumption due to del
Slide 16: Broiler Farming
Broiler Farming OPERATIONAL OVERVIEW Improved financial performance • Day-old chick volumes increased by 3.7% • Good cost management throughout the value chain with per unit cost decrease • Breeder performance remained disappointing • Broiler performance improved from already high level • Hartbeespo
Slide 17: Nulaid Eggs
Nulaid Eggs OPERATIONAL OVERVIEW Strong operational performance • Sales volumes increased by 15.4% – over one billion eggs sold • Egg prices declined by 2.4% • Margin compression of over R60 million due to feed cost increase and egg price decrease • Layer numbers peaked during April 2020 at 29.5 mil
Slide 18: Rest of Africa
Rest of Africa OPERATIONAL OVERVIEW Adverse industry conditions • High commodity prices due to drought: • Negative impact on margins • Negative impact on Day-old chick demand • Negative impact on agriculture in general • Kwacha weakening had severe cost impact on Zambia • Egg volumes increased by 15
Slide 19: Outlook and Management Focus
OUTLOOK AND MANAGEMENT FOCUS OUTLOOK AND MANAGEMENT FOCUS H Lourens QUANTUM FOODS | RESULTS PRESENTATION 2020
Slide 20: Outlook 2021
Outlook 2021 OUTLOOK AND MANAGEMENT FOCUS Expectations Quantum Foods’ response • High commodity prices in RSA into • Continued detailed focus on 2021 procurement • As economy opens egg prices could • Maintain egg volume base and sell decline into most profitable channels • Improvement in broiler ind
Slide 21: Thank you
Thank you OUTLOOK AND MANAGEMENT FOCUS QUANTUM FOODS | RESULTS PRESENTATION 2020 21
Slide 22: Appendix
APPENDIX APPENDIX QUANTUM FOODS | RESULTS PRESENTATION 2020
Slide 23: Safex yellow maize Rand per ton
Safex yellow maize Rand per ton APPENDIX 4 500 4 200 3 900 3 600 3 351 3 300 2 749 3 000 2 634 2 700 2 367 2 460 2 400 2 099 2 100 1 800 1 500 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 20 Average for financial year QUANTUM FOODS | RESULTS PRESENTATION 2020 23
Slide 24: CBOT US dollar soybean meal
CBOT US dollar soybean meal APPENDIX 430 410 390 370 350 339 341 330 313 314 306 310 297 290 270 250 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 20 Average for financial year QUANTUM FOODS | RESULTS PRESENTATION 2020 24
Slide 25: Rand:US dollar exchange rate
Rand:US dollar exchange rate APPENDIX 20 19 18 17 16.22 16 14.77 15 14.34 14 13.37 13.07 13 12.01 12 11 10 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 20 Average for financial year QUANTUM FOODS | RESULTS PRESENTATION 2020 25
Slide 26: Layer productivity index
Layer productivity index APPENDIX 140 135 130 125 120 115 110 105 100 95 90 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 QUANTUM FOODS | RESULTS PRESENTATION 2020 26
Slide 27: Broiler productivity index
Broiler productivity index APPENDIX 140 135 130 125 120 115 110 105 100 95 90 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 QUANTUM FOODS | RESULTS PRESENTATION 2020 27
Slide 28: www.quantumfoods.co.za
www.quantumfoods.co.za QUANTUM FOODS | RESULTS PRESENTATION 2020
Quantum Foods Holdings — FY2020 Earnings Presentation on 6ix