Olam Group Limited · SGX:VC2
Olam — Olam International — FY2017 Earnings Presentation
35 slides from Olam's earnings presentation, Feb 27, 2018
Slide 1: Full Year 2017 Results Briefing
Full Year 2017 Results Briefing February 27, 2018
Slide 2: Presenters
Presenters Sunny Verghese A. Shekhar N. Muthukumar Co-Founder Executive Director President and Group CEO and Group COO and Group CFO Olam International Limited Results for the 12 Months ended December 31, 2017 | February 27, 2018 2
Slide 3: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements for the Fourth Quarter (“Q4 2017”) and 12 Months ended December 31, 2017 (“2017”) and Management Discussion and Analysis lodged on SGXNet on February 27, 2018. Olam International Limited Res
Slide 4: 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 5: Agenda
Agenda • 2017 highlights • Segmental and value chain review • Strategic Plan update • Key takeaways
Slide 6: 2017 highlights
2017 highlights
Slide 7: 2017 results at a glance
2017 results At a glance Volume EBITDA PATMI 22.5 M MT S$1,328 M S$581 M +56.3% +10.4% +65.3% Operational Free Cash Flow Gearing PATMI S$432 M Positive FCFE from 1.99 S$466X to M +18.6% S$1,020 M 1.46 X +28.1% Olam International Limited Results for the 12 Months ended December 31, 2017 | February 27
Slide 8: 2017 highlights
2017 highlights Strong financial performance Improved dividends Volume, Revenue, EBITDA, PATMI, Operational PATMI growth Board of Directors recommends final dividend of 4.0 cents per share Improved returns - EBITDA/IC of 8.2% (2016: 7.7%) Higher total dividend of 7.5 cents per - ROE of 9.0% (2016: 6
Slide 9: Volume growth from all segments
Volume growth from all segments Led by volumes in Food Staples & Packaged Foods Volume by segment, '000 MT +56.3% 7,413 208 22,535 14,416 122 376 2016 Edible Nuts, Confectionery Food Staples and Industrial Raw 2017 Spices and and Beverage Packaged Foods Materials, Ag Vegetable Ingredients Logistics
Slide 10: EBITDA grew 10.4%
EBITDA grew 10.4% With growth from most segments EBITDA by segment, S$ million +10.4% 62 6 1,328 107 30 1,203 -80 2016 Edible Nuts, Confectionery Food Staples Industrial Raw Commodity 2017 Spices and and Beverage and Packaged Materials, Ag Financial Vegetable Ingredients Foods Logistics & Services (
Slide 11: PATMI grew 65.3%
PATMI grew 65.3% Operational PATMI grew 18.6% PATMI and Operational PATMI, S$ Million 65.3% 162 17 581 125 15 351 -27 -62 2016 EBITDA^ Depreciation Net Finance Taxation^ Exceptional Non- 2017 & costs^ items controlling amortisation interest Operational PATMI (S$ M) 364 18.6% 432 ^ Excludes exception
Slide 12: 4.9% reduction in invested capital
4.9% reduction in invested capital 13.0% reduction in working capital S$ Million • Fixed Capital up with continued -4.9% committed investments in upstream and 16,649 15,832 midstream assets, partly offset by capital 14,375 release from sale of edible nuts farmland 11,412 11,561 8,853 7,705 assets in
Slide 13: Net gearing reduced to 1.46X
Net gearing reduced to 1.46X Net and adjusted debt / equity (basic) • Reduction due to lower net debt caused by: 1.99 • Lower working capital aided by lower commodity prices 1.46 • Lower gross Capex 0.73 • Cash release from divestments 0.51 • Conversion of warrants into equity • Between Jan 1 and wa
Slide 14: Record FCFE in 2017
Record FCFE in 2017 Improved by S$1.8 B S$ Million +1,786 748 1,020 -116 1,062 -34 126 -766 2016 Operating Changes Tax paid Capex/ Net interest 2017 Cash flow in Working Investments paid (before Capital Interest & Tax) FCFF (S$ M) -418 +1,903 1,484 Olam International Limited Results for the 12 Month
Slide 15: Available liquidity
Available liquidity Sufficient to cover all repayment and capex obligations Total borrowings and available liquidity, S$ Million as at December 31, 2017 +5,154 8,501 16,742 11,588 1,715 Short Term 4,540 4,660 Long Term 1,986 6,928 Cash and RMI* Secured Unutilised Available Liquidity Total Borrowings
Slide 16: Segmental review
Segmental review
Slide 17: Edible Nuts, Spices & Vegetable Ingredients
Edible Nuts, Spices & Vegetable Ingredients EBITDA, S$ Million Invested capital, S$ Million +32.1% -1.1% 438 3,610 3,643 3,604 394 3,364 3,463 347 361 332 1,850 1,415 1,421 1,608 1,587 1,760 1,777 2,048 2,222 1,996 2013 2014 2015 2016 2017 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 restated restated restate
Slide 18: Confectionery & Beverage Ingredients
Confectionery & Beverage Ingredients EBITDA, S$ Million Invested capital, S$ Million -19.5% -12.5% 407 6,110 328 5,681 5,347 269 276 284 3,247 4,330 4,569 3,819 2,347 2,745 1,855 1,351 1,541 1,528 491 501 2013 2014 2015 2016 2017 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 restated restated restated restated
Slide 19: Food Staples & Packaged Foods
Food Staples & Packaged Foods EBITDA, S$ Million Invested capital, S$ Million +8.9% +3.5% 378 360 4,522 4,678 330 295 3,613 1,498 1,131 3,075 3,231 212 1,088 915 709 3,024 3,547 2,525 2,366 2,316 2013 2014 2015 2016 2017 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 restated restated restated restated EBITDA/
Slide 20: Industrial Raw Materials, Ag Logistics & Infrastructure
Industrial Raw Materials, Ag Logistics & Infrastructure EBITDA, S$ Million Invested capital, S$ Million +45.9% -5.2% 219 216 2,221 2,105 197 1,872 1,918 185 1,839 135 912 1,213 1,050 1,044 974 796 898 1,006 1,008 1,055 2013 2014 2015 2016 2017 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 restated restated res
Slide 21: Value chain review
Value chain review
Slide 22: Upstream
Upstream EBITDA, S$ Million Invested capital, S$ Million +137.8% +4.0% 209 205 3,764 3,915 188 429 2,830 3,075 481 155 2,708 304 359 323 79 3,283 3,487 2,385 2,526 2,716 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 restated restated restated restated EBITDA/ 8.2% 6.6% 5.2% 2.3% 4.9% Avg IC Work
Slide 23: Supply chain
Supply chain EBITDA, S$ Million Invested capital, S$ Million -11.2% 700 -10.4% 6,538 609 600 5,804 504 4,842 4,936 4,852 451 5,750 4,914 4,157 4,397 4,230 685 540 622 788 890 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 restated restated restated restated EBITDA/ 13.9% 12.5% 12.3% 8.8% 7.3% Wor
Slide 24: Mid/Downstream
Mid/Downstream EBITDA, S$ Million Invested capital, S$ Million +11.1% -3.7% 689 6,448 6,347 6,113 620 3,064 2,622 2,362 3,863 3,794 291 315 330 1,361 1,317 3,385 3,725 3,751 2,502 2,477 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 restated restated restated restated EBITDA/ 8.2% 8.2% 6.5% 9.7%
Slide 25: Gestation mix
Gestation mix Upstream Supply Mid/Downstream Chain 15.8 2.1 2.1 0.3 3.6 4.1 4.1 5.8 11.9 0.3 0.3 Invested 1.5 1.5 2.0 2.0 Capital (S$ billion) Fully Partly Gestating Total Fully Fully Partly Total Olam Total Contributing Contributing contributing Contributing Contributing EBITDA/ 7.8% 2.8% -0.5% 4.9
Slide 26: Strategic Plan update
Strategic Plan update
Slide 27: Turning around underperforming assets
Turning around underperforming assets • Dairy farming in Uruguay continued to report improved financial and operating results • Rice farming in Nigeria completed its restructuring and started to report better results from H2 2017 • Restructuring underway in Olam Tomato Processors to address cost str
Slide 28: Pursuing growth in prioritised platforms
Pursuing growth in prioritised platforms • Edible Nuts: Increasing almond, pistachio and walnut acreage • Spices & Vegetable Ingredients: Upstream pepper farming in Vietnam and Brazil • Coffee: Plantations in Laos, Zambia, Tanzania and Brazil • Cocoa: Powder facility in the US • Grains & Animal Feed
Slide 29: Key takeaways
Key takeaways
Slide 30: Key takeaways
Key takeaways • Strong financial performance in 2017 across all key metrics – Volume, EBITDA, PATMI, Operational PATMI, FCFE, gearing • Enlarged share capital and stronger balance sheet • Continued to execute on 2016-2018 Strategic Plan by pursuing growth in prioritised platforms and turning around
Slide 31: Appendix
Appendix
Slide 32: P&L statement
P&L statement S$ million 2017 2016 % Change Volume ('000 MT) 22,534.6 14,415.8 56.3 Revenue 26,272.5 20,587.0 27.6 Net gain/(loss) in fair value of biological assets (15.3) 14.1 n.m. EBITDA^ 1,327.9 1,202.8 10.4 Depreciation & amortisation (380.7) (353.5) 7.7 Net Finance costs^ (465.6) (403.5) 15.4
Slide 33: Balance sheet
Balance sheet S$ million 31-Dec-17 31-Dec-16 Change Uses of Capital Fixed Capital 8,633.2 8,169.5 463.7 Working Capital 7,280.3 8,517.7 (1,237.4) Cash 1,986.4 2,144.0 (157.6) Others 309.0 473.5 (164.5) Total 18,208.9 19,304.7 (1,095.8) Sources of Capital Equity & Reserves 6,574.4 5,797.1 777.3 Non-c
Slide 34: Cash flow statement
Cash flow statement 2015 2014 S$ million 2017 2016 YoY Restated Restated Operating Cash flow (before Interest & Tax) 1,369.2 1,243.5 125.7 1,127.2 1,148.3 Changes in Working Capital 834.7 (227.7) 1,062.4 (995.9) (766.2) Net Operating Cash Flow 2,203.9 1,015.8 1,188.1 131.3 382.1 Net interest paid (4
Slide 35: 2017 Results Briefing
2017 Results Briefing olamgroup.com/investor-relations/ ir@olamnet.com