Olam Group Limited · SGX:VC2
Olam — H1 2024 Earnings Presentation
49 slides from Olam's earnings presentation, Aug 14, 2024
Slide 1: H1 2024 Results Briefing
H1 2024 Results Briefing August 14, 2024
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, 2024 (“H1 2024”) lodged on SGXNET on August 14, 2024. Olam Group Limited Results for the Half Year ended June 30, 2024 | Augus
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward- looking statements This presentation and announcement entitled “H1 2024 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 management’s a
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 Olam GroupLimited Olam Group Limited Results Results forfor thethe HalfHalf YearYear ended ended June June 30, 30,| 2024 2024 | August August 14, 202414, 2024
Slide 5: Agenda
Agenda 1 2 3 4 5 H1 2024 Group Segmental Business outlook Re-organisation Key takeaways financial performance by and prospects update highlights operating group Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 6: H1 2024 Group financial highlights
1 H1 2024 Group financial highlights Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 7: Group H1 2024 results: At a glance
Group H1 2024 results: At a glance 24.3 M MT S$26.9 B Operational S$73.5 M Volume & Revenue PATMI¹ +13.9% +9.1% -60.1% S$888.0 M Free Cash -S$5.4 B EBIT¹ Flow to +8.3% Equity -S$4.9 B S$48.1 M From 1.74x to PATMI Gearing +0.4% 2.6x Note: All results are compared against H1 2023 ¹EBIT and Operational
Slide 8: Group H1 2024 results: Resilient EBIT growth of 8.3%; PATMI steady
Group H1 2024 results: Resilient EBIT growth of 8.3% at S$888.0 million; PATMI steady at S$48.1 million S$ million H1 2024 H1 2023 % Change Volume ('000 MT) 24,272.0 21,317.7 13.9 EBITDA^ 1,258.1 1,176.3 7.0 EBIT^ 888.0 819.6 8.3 Adjusted EBIT^^ 915.7 846.2 8.2 PAT 67.2 116.7 (42.4) PATMI 48.1 47.9
Slide 9: Group H1 2024 results: High interest rates and challenging market conditions
Group H1 2024 results: High interest rates and challenging market conditions • Significantly higher working capital and net debt due to commodity market volatility and higher benchmark interest rates, impacting cycle time, gearing and free cash flow • Mainly due to record prices for some commodities
Slide 10: Consolidated results by operating group
Consolidated results by operating group H1 2024 at a glance ofi Olam Agri Remaining Olam Group Invested Capital Volume ('000 MT) Revenue (S$ million) EBIT (S$ million) (S$ million) 2.2% 2.1% -11.2% 6.9% 10.1% 35.7% 26.6% 53.5% 24,272.0 26,920.3 888.0 25,842.0 +13.9% +9.1% +8.3% +30.4% 90.9% 62.2% 57
Slide 11: Sales volume up 13.9% at 24.3 million MT
Sales volume up 13.9%, 3 million MT higher at 24.3 million MT Volume growth by operating group ('000 MT) +13.9% 3,043 24,272 -58 21,318 -30 H1 2023 ofi Olam Agri Remaining H1 2024 Olam Group Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024 11
Slide 12: Improved operational performance with EBIT growing 8.3%
Improved operational performance with EBIT²growing 8.3% Adjusted EBIT up 8.2% EBIT²by operating group (S$ million) +8.3% 198 -47 888 -83 820 H1 2023 ofi Olam Agri Remaining H1 2024 Olam Group Adjusted EBIT³ 846 +70 916 (S$ M) ² EBIT and Adjusted EBIT exclude exceptional items. Olam Group Limited Res
Slide 13: Operational PATMI at S$73.5 million
Operational PATMI at S$73.5 million PATMI flat at S$48.1 million as EBIT growth was offset by significantly higher interest costs and increased taxes PATMI (S$ million) +0.4% 68 48 50 48 111 -217 -11 H1 2023 EBIT^ Net Finance Taxation^ Exceptional Non-controlling H1 2024 Costs^ Items Interests Opera
Slide 14: Higher working capital deployment led to increased invested capital and gearing
Higher working capital deployment led to increased invested capital³ and gearing Invested Capital³ (IC, S$ million) Gearing (times) Net gearing +30.4% Adjusted net gearing 25,842 2.60 Working Capital 19,811 Fixed Capital 15,462 1.74 1.73 9,946 1.04 0.86 0.65 9,865 10,380 Jun-23 Jun-24 Jun-23 Dec-23
Slide 15: Free cash flow
Free cash flow Increase in working capital requirements and interest payments further impacted FCFE Free Cash Flow to Equity (FCFE) (S$ million) -4,893 180 -484 0 -4,849 -18 -206 -5,377 H1 2023 Operating Changes in Tax Paid Capex / Net Interest H1 2024 Cash Flow Working Investments Paid (before Capi
Slide 16: Sufficient liquidity with diversified pools of capital
Sufficient liquidity with diversified pools of capital Total borrowings and available liquidity (S$ million) as at June 30, 2024 9,299 24,122 Short-Term Long-Term 22,396 +1,726 8,967 3,258 8,050 13,429 3,515 Cash and RMI Secured Unutilised Available Total Short-term Receivables Bank Lines Liquidity
Slide 17: Segmental performance by operating group
2 Segmental performance by operating group Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 18: ofi
afi H1 2024 results ofi
Slide 19: ofi H1 2024 results
ofi H1 2024 results S$ Million S$ Million EBIT +71.5% Invested Capital Global Sourcing 476 Ingredients & Solutions 22% +44.5% 16,356 277 11,318 37% 37% 78% 36% 63% 63% 64% H1 2023 H1 2024 Jun-23 Jun-24 EBIT/MT (S$) 163 285 +66.1% Adjusted EBIT (S$) 300 498 • EBIT grew 71.5%, led by the Ingredients &
Slide 20: ofi: Global Sourcing
ofi: Global Sourcing S$ Million S$ Million EBIT +2.1% Invested Capital +49.4% 106 Working Capital 6,053 104 Fixed Capital 4,052 4,182 2,505 1,547 1,871 H1 2023 H1 2024 Jun-23 Jun-24 EBIT/MT (S$) 71 79 +2.0% Adjusted EBIT (S$) 107 109 • EBIT increased 2.1%, supported by normalised almond yield • IC w
Slide 21: ofi: Ingredients & Solutions
ofi: Ingredients & Solutions S$ Million Invested Capital EBIT +112.9% Working Capital +41.8% 370 Fixed Capital 10,303 7,267 6,127 174 3,099 4,168 4,176 H1 2023 H1 2024 Jun-23 Jun-24 EBIT/MT (S$) 284 587 +101.4% Adjusted EBIT (S$) 193 389 • EBIT was up 112.9%. The Cocoa business was able to navigate
Slide 22: Olam Agri H1 2024 results
AA Olam Agri Transforming food, feed & fibre H1 2024 results
Slide 23: Olam Agri: Food & Feed - Origination & Merchandising
Food & Feed - Origination & Merchandising Food & Feed - Processing & Value-added Fibre, Agri-industrials & Ag Services S$ Million S$ Million +17.6% -8.4% EBIT 559 Invested Capital 6,863 512 5,837 27% 21% 32% 27% 51% 33% 58% 39% 34% 35% 22% 21% H1 2023 H1 2024 Jun-23 Jun-24 EBIT/MT (S$) 29 23 EBIT do
Slide 24: Olam Agri segment: Food & Feed - Processing & Value-added
S$ Million S$ Million EBIT Invested Capital +35.6% -31.2% 153 2,164 Working Capital Fixed Capital 105 1,597 2,011 1,419 178 153 H1 2023 Restated H1 2024 Jun-23 Restated Jun-24 EBIT/MT (S$) 10 6 EBIT declined 31.2% in H1 2024 on significantly lower contribution from IC grew by 35.6% driven mainly by
Slide 25: Olam Agri segment: Fibre, Agri-industrials & Ag Services
S$ Million S$ Million EBIT +4.8% +0.4% Invested Capital 283 297 2,289 2,298 Working Capital Fixed Capital 1,223 1,044 1,066 1,254 H1 2023 H1 2024 Jun-23 Jun-24 EBIT/MT (S$) 141 122 Segment continued to deliver good results despite inflationary pressures IC remained flat at S$2.3 billion: Fixed capit
Slide 26: Olam Agri segment results
S$ Million S$ Million EBIT -10.6% Invested Capital +23.0% 123 Working Capital 2,401 110 Fixed Capital 1,952 1,878 1,527 425 523 H1 2023 Restated H1 2024 Jun-23 Restated Jun-24 EBIT/MT (S$) 120 92 EBIT declined 10.6%: Cotton market saw further decline in prices and our IC was up 23.0% on higher worki
Slide 27: Remaining Olam Group H1 2024 Results
Remaining Olam Group H1 2024 Results
Slide 28: Remaining Olam Group
Remaining Olam Group De-prioritised/Exiting Assets Continuing/Gestating Businesses Incubating Businesses EBIT -495.8% Invested Capital -1.2% S$ Million S$ Million 2 2,656 2,624 14 -13 570 524 -33 -17 -63 2,062 2,063 -24 -100 24 37 H1 2023 H1 2024 Jun-23 Jun-24 • Remaining Olam Group reported higher
Slide 29: Business outlook and prospects
3 Business outlook and prospects Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 30: Business outlook and prospects
Business outlook and prospects 1 2 3 4 ofi expects markets to remain Olam Agri continues to execute The Remaining Olam Group The Group expects operating volatile and challenging in the its strategy of scaling up its businesses continue to tap the conditions in H2 2024 to near term, particularly for
Slide 31: Re-organisation update
4 Re-organisation update Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 32: Re-organisation update
Re-organisation update The Group remains committed to list ofi and Olam Agri and will retain 1 flexibility on the listing sequence, as well as exploring other strategic options to unlock value. The Group will consider both internal and external factors, such as business performance of all three oper
Slide 33: Key takeaways
5 Key takeaways Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 34: Key takeaways
Key takeaways 1 2 3 4 EBIT growth in H1 2024 and The Group expects operating The Group bought back 25.1 The Group remains steady PATMI despite high conditions in H2 2024 to million shares equivalent to committed to list ofi and interest rates and challenging continue being affected by S$28.5 million
Slide 35: Appendix – Operating groups
Appendix – Operating groups Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 36: ofi in numbers
ofi in numbers Cocoa Coffee Nuts Spices Dairy 15.6 Billion revenue (S$) 1,219 Million EBITDA (S$) 829 Million EBIT (S$) 120+ Manufacturing 46 Countries ~18,000 employees 11,000 customers facilities Note: All numbers are for 2023. 36 Olam Group Limited Results for the Half-Year ended June 30, 2024 |
Slide 37: 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 38: Recap – our strategy & business model
Recap – our strategy & business model Confectionery Diversified and complementary portfolio Beverages redients & Solution Culinary ng s Integrated platforms I Spices Cocoa combining a strong al Sourcin Global Sourcing network Bakery lob Snacking G and delivering value- g added Ingredients & Categori
Slide 39: Focused & resilient execution of chosen Strategy
Focused & resilient execution of chosen Strategy amid challenging market conditions Targeted Strategic Significant capability ‘Customer First’ focus Recognized as a leader investments in Ingredients enhancement in Sustainable Innovation & Solutions Winner: • Brazil Soluble Coffee • Innovation – 4 Cu
Slide 40: Olam Group Limited Results for the Half-Year Ended June 30, 2024 | August 14,
40 Olam Group Limited Results for the Half-Year Ended June 30, 2024 | August 14, 2024
Slide 41: Olam Group Limited Results for the Half-Year Ended June 30, 2024 | August 14,
41 Olam Group Limited Results for the Half-Year Ended June 30, 2024 | August 14, 2024
Slide 42: Remaining Olam Group in numbers
Remaining Olam Group in numbers Olam Global Holdco Volume 1,272,400 MT Revenue S$1.4 B Invested S$2.5 B EBIT -S$25.1 M Capital Customers 2,600+ Employees 11,000+ Note: All numbers are as of December 31, 2023. 42 Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 43: Remaining Olam Group
Remaining Olam Group Remaining Olam Group Olam Global Holdco (OGH) Nupo Ventures Mindsprint • Houses de-prioritised assets: Edible oil refinery in • Acts as a foundry to build new sustainability and • Provides IT, digital and shared services to the Mozambique; 60% stake in Olam Rubber Gabon; digital
Slide 44: Appendix – Financials
Appendix – Financials Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 45: P&L statement
P&L statement S$ million H1 2024 H1 2023 % Change Volume ('000 MT) 24,272.0 21,317.7 13.9 Revenue^ 26,920.3 24,685.1 9.1 EBITDA^ 1,258.1 1,176.3 7.0 EBIT^ 888.0 819.6 8.3 Adjusted EBIT^^ 915.7 846.2 8.2 PAT 67.2 116.7 (42.4) PATMI 48.1 47.9 0.4 Operational PATMI^ 73.5 184.0 (60.1) ^ Excluding except
Slide 46: Exceptional items
Exceptional items S$ million H1 2024 H1 2023 Re-organisation cost (10.2) (24.8) Funds Management business closure (15.2) - Australia almond lower crop yield - (111.3) Exceptional items (25.4) (136.1) 46 Olam Group Limited Results for the Half Year ended June 30, 2024 | August 14, 2024
Slide 47: Balance sheet
Balance sheet S$ million Jun-2024 Jun-2023 Change Fixed Capital 9,756.6 9,271.2 485.4 Right-of-use assets 867.8 841.0 26.8 Uses of Working Capital 16,776.8 9,730.5 7,046.3 Capital Cash 3,514.9 3,378.5 136.4 Others (998.2) 424.3 (1,422.5) Total 29,917.9 23,645.5 6,272.4 Equity & Reserves 7,266.3 7,29
Slide 48: Cash flow statement
Cash flow statement S$ million H1 2024 H1 2023 Change Operating Cash flow (before Interest & Tax) 1,243.1 1,063.3 179.8 Changes in Working Capital (5,512.3) (663.2) (4,849.1) Net Operating Cash Flow (4,269.2) 400.1 (4,669.3) Net interest paid (713.9) (508.1) (205.8) Tax paid (126.0) (126.1) 0.1 Cash
Slide 49: H1 2024 Results Briefing
H1 2024 Results Briefing olamgroup.com/investors.html ir@olamnet.com