Quantum Foods Holdings Ltd · JSE:QFH
Quantum Foods — FY2017 Earnings Presentation
21 slides from Quantum Foods's earnings presentation, Sep 30, 2017
Slide 1: Results presentation for the year ended 30 September 2017
Results presentation for the year ended 30 September 2017
Slide 2: Agenda
AGENDA Business Financial Operational Outlook and Overview: Overview: Overview: management focus: H Lourens A Muller H Lourens H Lourens Results presentation 2017 2
Slide 3: Business Overview
BUSINESS OVERVIEW Operating Revenue profit ECONOMY 4% 67% › ZAR strengthened by 9% › GDP per capita decline › Low consumer confidence Cash HEPS generated INDUSTRY 74% R265m › Drought followed by good summer rains › Sharp decline in maize and related raw material prices Dividend Dividend › Egg supply
Slide 4: Rand vs US$
RAND VS US$ 18 14.76 16 13.84 13.71 13.42 13.55 14 12.13 11.28 12 10 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Results presentation 2017 4
Slide 5: Safex Yellow Maize Rand per Ton
SAFEX YELLOW MAIZE RAND PER TON 4 500 3 121 4 000 3 016 3 500 2 924 2 436 3 000 2 044 1 953 2 5001 770 2 000 1 500 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Results presentation 2017 5
Slide 6: Average Layers per Annum (Millions)
AVERAGE LAYERS PER ANNUM (MILLIONS) 26 25 25.04 24.85 24.80 24.55 24 24.34 24.20 23 22 21 20 2012 2013 2014 2015 2016 2017 Source: SAPA Results presentation 2017 6
Slide 7: Financial overview
Financial overview 2017
Slide 8: Statement of Income
STATEMENT OF INCOME 2017 2016 % For the year ended 30 September 2017 Rm Rm change Revenue 4 051.9 3 913.1 4 Operating profit* 170.1 124.3 37 Income from associates 1.1 0.3 Net finance income 6.4 6.8 Profit before tax 177.6 131.4 Tax (50.0) (40.0) Profit for the period 127.6 91.4 * Operating profit i
Slide 9: Dividends and Share Repurchases
DIVIDENDS AND SHARE REPURCHASES › 2015 and 2016 dividends declared at a HEPS cover of approximately 5 times › For 2017 • Dividend at a HEPS cover of 4.1 times 12 cents • Special dividend due to 2017 cash generation 22 cents • Total dividend 34 cents › 9 488 659 shares repurchased in 2017 at average
Slide 10: Revenue Analysis
REVENUE ANALYSIS Total R4 052 million (2016: R3 913 million) R1 485m R1 052m R1 311m R204m 37% 26% 32% 5% ANIMAL FEED EGGS FARMING AFRICA 2016: R1 421m 2016: R1 005m 2016: R1 327m 2016: R160m 36% 26% 34% 4% Results presentation 2017 10
Slide 11: Segment Results
SEGMENT RESULTS 2017 2016 Adjusted operating profit Rm Rm Eggs 46.5 (26.8) Farming 47.3 * 61.0 Animal Feeds 77.8 72.5 Other African countries (9.7) (0.2) Head Office costs (12.4) (17.1) 149.5 89.4 * Avian Influenza charge of R30m included Results presentation 2017 11
Slide 12: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION 2017 2016 At year end Rm Rm Non-current assets 1 076.8 1 071.7 Net working capital 590.4 687.4 Non-current liabilities (230.8) (236.1) Cash 261.5 79.5 Total net assets 1697.9 1 602.5 Borrowings (6.3) (6.4) Equity 1 691.6 1 596.1 Net working capital 590.4 687.4 Invento
Slide 13: Statement of Cash Flow
STATEMENT OF CASH FLOW 2017 2016 For the year ended 30 September 2017 Rm Rm Cash operating profit 200.4 164.3 Working capital inflow / (outflow) 115.2 (173.6) Change in exchange rate 0.7 10.5 Cash effect of hedging activities 3.4 (3.0) Tax paid (61.3) (29.7) Net finance income 6.9 7.3 Cash generated
Slide 14: Capital Expenditure
CAPITAL EXPENDITURE 2017 Future R’m R’m Olifantskop feed mill expansion 6.4 - Grader Brackenfell packing station 18.4 - Capacity increase Western Cape layer farm 2.5 3.0 Hartbeespoort broiler hatchery expansion 4.1 7.4 Broiler farm: gas to coal conversion 0.7 1.1 Layer breeders convert to broiler br
Slide 15: Operational Review
OPERATIONAL REVIEW ANIMAL FEED FARMING EGGS AFRICA
Slide 16: Nova Feeds
NOVA FEEDS › Volumes increased in a declining market ANIMAL FEED › Olifantskop phase one upgrade completed › Technical performance of feed excellent › Competitive raw material position in volatile market Outstanding price/volume › Cost increases below inflation management › Procurement partnerships
Slide 17: Farming Operations
FARMING OPERATIONS BROILER FARMING FARMING › Grand Parent & Parent operation best performance in AEME › Commercial Broilers: South: outstanding performance North: above standard performance exceptional › Clearsprings Broiler hatchery conversion completed FARMING performance › Expansion at Hartbeespo
Slide 18: Farming Operations
FARMING OPERATIONS LAYER FARMING FARMING › Breeder performance above Lohmann breed standard › Rearing performance mixed – Exit Sterkstroom rental › Change in rearing philosophy – Emphases on body weight › Commercial layer performance improved by 4% › Avian Influenza (AI): 17% commercial layers effec
Slide 19: Egg Business
EGG BUSINESS › Nulaid remained number one Egg brand EGGS › All operational indicators improved › Product mix (CDL) now under control +R19m Price › High value egg sales improved by 5.5% 7.5% › Senior management team strengthened › Pack station nominal cost increase below inflation Volumes › Successfu
Slide 20: Africa
AFRICA › Raw material prices have peaked AFRICA › Economies in which we operate are recovering › Full layer placements achieved in Zambia and Uganda › Zambia profitable throughout the year › Uganda positive pick up during last six months operating environment › Mozambique exposed to similar egg dyna
Slide 21: Expectations and management response
Quantum Foods Expectations response • Volatile raw material prices • Forward purchase for egg business • Investment in bio-security • Continued Avian Influenza risk • Maintain strong balance sheet • Muted egg supply • Price/Volume management on national level • Improved industry environment in rest
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