Quantum Foods Holdings Ltd · JSE:QFH
Quantum Foods — FY2015 Earnings Presentation
33 slides from Quantum Foods's earnings presentation, Nov 27, 2015
Slide 1: Results Presentation
QUANTUM ” FOODS RESULTS PRESENTATION 26 - 27 November 2015
Slide 2: Key features
Key features Operational review » Feeds » Layers » Broilers » Africa Strategic Feedback Results presentation 2015 G 2
Slide 3: Much improved financial performance
“Much improved financial performance” Headline earnings Cash Capital Maiden dividend per share generated invested declared a a R153.9 million R81.2 million Results presentation 2015 G 3
Slide 4: Satisfactory operating performance
“Satisfactory operating performance” (¥) Successful implementation of new broiler model Hartebeespoort abattoir sold @) Recovery of layer business Feeds maintain growth momentum (9) Africa disappointing financial performance Results presentation 2015 G 4
Slide 5: Financial Overview
QUANTUM ” FOODS FINANCIAL OVERVIEW
Slide 6: Statement of Income
STATEMENT OF INCOME 2015 2014 % Year ended 30 September Rm Rm change Revenue 3 468.3 3 560.9 vy 2.6 Operating profit/(loss}* 164.1 (20.9) Income from associates 0.6 0.6 Net finance income 8.0 0.9 Profit/(loss) before tax 172.7 (19.4) Tax (45.8) 10.9 Profit/(loss) for the year 126.9 (8.5) * Operating
Slide 7: Revenue Analysis
REVENUE ANALYSIS @ Broilers @ Layers @ Feeds © Africa R1 241m 35% Results presentation 2015 G 7
Slide 8: Operating profit
Operating profit Rm Rm Feeds 65.5 60.9 Broilers 39.7 (51.8)* Layers 40.6 (16.4) Africa 25.3 35.1 Unallocated (7.0) 0.8 Total 164.1 28.6 * Excluding impairment of R49.5m Results presentation 2015 G 8
Slide 9: Profit Bridge
PROFIT BRIDGE % change Adjusted operating profit for year ended 30 September 2014 27.0 Decrease in revenue (92.6) 2.6 Decrease in direct cost of sales 16.4 46 Increase in naked margin 23.8 2.4 Decrease in cost base 11.7 11.4 Adjusted operating profit for the year ended 30 September 2015 162.5 Result
Slide 10: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION 2015 2014 At year end Rm Rm Non-current assets* 1029.0 1061.4 Net working capital 518.8 490.3 Non-current liabilities (220.7) (195.9) Cash 187.5 105.5 Total net assets 1514.6 1 461.3 Borrowings - - Equity 1514.6 1461.3 * 2015 Include Hartebeespoort abattoir, classifie
Slide 11: Statement of Cash Flow
STATEMENT OF CASH FLOW 2015 2014 Year ended 30 September Rm Rm Cash operating profit 232.1 70.9 Working capital outflow (53.6) (27.6) Changein exchange rate (18.4) (2.0) Cash effect from hedging activities 11 - Tax paid (15.8) (1.4) Net finance income 8.5 1.6 Cash generated before investment activit
Slide 12: Capital Expenditure
CAPITAL EXPENDITURE Approved YTD Future 2015 (Rm) 2015 Sept 2015 cash flow Maintenance capex 35.8 26.0 7.0 KZN egg pack station 6.0 5.8 Zambia expansion 36.0 22.8 13.2 Uganda expansion 38.0 911 28.8 Acquisition of Safe Eggs 7.5 17.5 Total 133.3 81.2 49.0 2016 (Rm) Maintenance capex 24.0 Acquisition
Slide 13: EBIT/annum sensitivity
e% EBIT/annum Effect of movement in: Impact Movement Rand value Rm Selling prices Eggs dozens R/doz Eggs 1% RO.13 R10.0 Raw material costs Maize R/ton Eggs R100 R8.1 Soya bean meal R/ton Eggs R100 R11 Conversion costs Layer farm FCR Kg/doz Eggs 1% RO.06 R4.8 Forex ZAR/USD Soya Eggs/layer livestock 1
Slide 14: Quantum Foods (Feeds)
QUANTUM ” FOODS
Slide 15: Solid performance underpinned by growth strategy and cost control
“Solid performance underpinned by growth strategy and cost control” * Strong growth in external volumes of 7.7% * Internal volumes lower by 2.3% * Operating cost increases lower than inflation, due to focused cost control and efficiency improvements * Good execution of price volume management Result
Slide 16: Focus Areas
FOCUS AREAS * External growth drive continue * Successful conclusion and take-over of Olifantskop * Price volume management remain key * Cost control and efficiency improvement * Credit risk — livestock farmers under pressure Results presentation 2015 G 16
Slide 17: Layers
QUANTUM ” FOODS
Slide 18: Improved financial performance
“Improved financial performance” * Breeder farm efficiencies on standard * Day old pullet volumes flat with solid margin * Point of lay volumes increased by 27% * Disappointing layer farm efficiencies resulted in declined egg volumes * Improved egg prices * Incorporation of pasteurized eggs and East
Slide 19: Focus Areas
FOCUS AREAS * Improvement in farming and pack station efficiencies key priority * Effective distribution throughout the value chain * Growth in table egg volumes + Extract full value from the Sterkstroom point of lay facility * Improve human resource capacity Results presentation 2015 G 9
Slide 20: Broilers
QUANTUM ” FOODS BROILERS
Slide 21: Broiler livestock model now aligned
“Broiler livestock model now aligned” * All farming efficiencies improved * Broilers South had excellent efficiencies * Breeder performance in top tier of Cobb globally * Western Cape livestock model well executed Results presentation 2015 G 21
Slide 22: Focus Areas
FOCUS AREAS * Improve Broiler North farm efficiencies * Successful implementation of the Sovereign supply agreement * Successful implementation of farm logistics re-fleeting * Improve contract farmer base for Northern area Results presentation 2015 G 22
Slide 23: Africa
QUANTUM ” FOODS AFRICA
Slide 24: Acceptable operating performance
“Acceptable operating performance” ZAMBIA * Good results for egg business * Improved volumes in day old pullet market * Oversupply in day old broiler market * Exit distribution centre during year * Depreciation of Kwacha had negative financial effect UGANDA * Cost structure higher * Slow progress wi
Slide 25: Focus Areas
FOCUS AREAS ZAMBIA * Complete Mega expansion * Improvement in bio-security with separate rearing farm * Bring Chipata farm to full capacity * Best margins realised for additional capacity * Source adequate human resources UGANDA * Complete commercial egg project in Masindi * Improve bio-security on
Slide 26: Africa Future
AFRICA FUTURE * Three pronged approach » Expand in existing markets » Acquire existing businesses » Start green / brown fields projects * Building foundation for future expansion * Execution is time consuming Results presentation 2015 G 26
Slide 27: Strategic Feedback
QUANTUM ” FOODS STRATEGIC FEEDBACK
Slide 28: Strategic Framework
STRATEGIC FRAMEWORK Business/product Unlock World-class Organic High-performance composition supply chain value efficiency growth human capacity v Increase Cos! talent pool Trans- Procurement increased Farming centralised per unit operations el . Hermit QUALITATIVE <inflation capability | initiative
Slide 29: Prospects
QUANTUM ” FOODS PROSPECTS
Slide 30: Prospects
PROSPECTS 3.000 2700 2 400 2100 1800 1500 R1 747 SAFEX YELLOW MAIZE R2 857 May 14 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 1s Sep 15 Results presentation 2015 G 30
Slide 31: Prospects
PROSPECTS RAND VS US$ 15 14 13 n R13.67 12 R10.99 1 10 May 14 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 15 Sep 15 Results presentation 2015 G 31
Slide 32: Prospects
PROSPECTS * Raw material prices at higher level * Weakening exchange rate * Consumer under pressure * True test for new Quantum Foods business model * Management to continue focus on: > Efficiencies » Growth in feeds business » African acquisitions and organic growth » Increase human capacity Result
Slide 33: Questions?
QUESTIONS ?
Quantum Foods Holdings — FY2015 Earnings Presentation on 6ix