Slide 1: Kernel Holding S.A. Q3 FY2018 results and company presentation
Kernel Holding S.A. Q3 FY2018 results and company presentation May 2018
Slide 2: Disclaimer
Disclaimer The information in this document has not been independently verified and no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither th
Slide 3: 1. Q3 FY2018 results
1. Q3 FY2018 results AY aya a . WALL XY Se
Slide 4: 1.1 Q3 FY2018 highlights
Q3 FY2018 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.1 Q3 FY2018 highlights Q3 Q3 9M 9M y-o-y y-o-y US$ million except ratios and EPS FY17 FY18 FY17 FY18 Revenue reduced 12% y-o-y to US$ 541 million in Q3 FY2018 Income statement highlights – Lower sales volumes of sun
Slide 5: 1.2 Segment results Q3 and 9M of FY2018
Q3 FY2018 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.2 Segment results Q3 and 9M of FY2018 Revenue, US$ m EBITDA, US$ m Volume, k t 1 EBITDA margin, US$ / t Sunflower oil Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 y-o-y y-o-y y-o-y y-o-y 849k t of sunflower seeds processed in Q3 FY2018,
Slide 6: 1.3 Financial statements
Q3 FY2018 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.3 Financial statements Balance sheet highlights P&L highlights US$ million 31 Mar 2017 31 Dec 2017 31 Mar 2018 US$ million, except ratios and EPS Q3 FY2017 Q3 FY2018 y-o-y Invested Capital Revenue 615.0 541.4 (12%) Ca
Slide 7: 2. Kernel Today
2. KERNEL TODAY
Slide 8: 2.1 Kernel today
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.1 Kernel today Sunflower oil segment Key financials, US$ m1 FY14 FY15 FY16 FY17 LTM EBITDA 1, US$ million 213 Revenue 2,393 2,330 1,989 2,169 2,124 #1 sunflower oil exporter in the world 178 EBITDA 223 397 346 319 232
Slide 9: 2.2 What we do
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.2 What we do 1 Own farming: Kernel 6 Bottled sunflower oil: 7 Export terminals: Kernel operates 560 thousand ha of Approximately 10% of gross operates farmland in Ukraine bulk sunflower oil produced is • Deep-water grai
Slide 10: 2.3 Unique and well-invested asset base
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.3 Unique and well-invested asset base Sunflower seed crushing capacity in thousand tons Transshipment capacity in thousand tons Poltava 429 Prykolotne 172 Vovchansk 363 Prydniprovskyi 560 Ellada1 275 Kirovogradoliya 429
Slide 11: 2.4 Kernel's key milestones
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.4 Kernel’s key milestones Asset-light Acquisition of IPO & listing Extending oilseed • Entering the Russian market by Exit of highly Acquisition of export platform sunflower oil brand on the Warsaw crushing capacity in
Slide 12: 2.6 Sunflower oil segment
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.6 Sunflower oil segment Sunflower oil sales EBITDA margins Widening S&D gap keeps crushing margins under pressure, thousand tons 1,315 US$ / ton of sunflower oil sold opening doors for market consolidation and streaml
Slide 13: 2.7 Grain and infrastructure segment
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.7 Grain and infrastructure segment Grain exports, Grain segment’s EBITDA margin Grain: thousand tons Key export markets in FY2017 Decline in grain export volumes following the 5,060 14.0 4,744 12.5 assignment of Taman
Slide 14: 2.8 Farming segment
Q3 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.8 Farming segment Acreage harvested, Crop yields1, 593 thousand ha tons per ha, net Acquisition of Ukrainian Agrarian Investments and FY2018 47 8.9 FY2017 Agro-Invest Ukraine in summer 2017 expanded the 65 FY2016 leas
Slide 15: 3. Kernel 2021: a road to US$ 500 million EBITDA
3. Kernel 2021: a road to US$ 500 million EBITDA
Slide 16: 3.1 Kernel's mid-term strategy
Q3 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.1 Kernel’s mid-term strategy We aim to profitably double export volumes by FY2021, providing unique complex solutions to our clients (customers and suppliers), with balanced development of our business segments resulting
Slide 17: 3.2 Road to US$ 500m EBITDA by 2021
Q3 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.2 Road to US$ 500m EBITDA by 2021 1,753 FY17 FY21F Volumes due to greenfield construction of new crushing 1 1,040 920 1,030 984 1,084 Production kt 1,328 1,877 plant or acquisition of local player in Western Ukraine
Slide 18: 3.3 Sunflower oil
Q3 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.3 Sunflower oil Strong case for the construction of greenfield crushing plant in Western Ukraine Extremely high crushing margins over the past 5-6 years drove substantial investment into the sector and EBITDA bridge (s
Slide 19: 3.4 Grain and infrastructure
Q3 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.4 Grain and infrastructure Construction of TransGrainTerminal and new silos Capital deployment TransGrainTerminal highlights US$ million Construction started in 2017 Commissioning date: autumn 2019 Transshipment ca
Slide 20: 3.5 Farming
Q3 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.5 Farming Integration of acquired leasehold land bank to uplift productivity to Kernel’s standard Expansion CapEx US$ million US$ 128 million (adjusted for storage capacity and net working capital) has been Ukrainian A
Slide 21: 4. Financials and outlook
4. FINANCIALS AND OUTLOOK
Slide 22: 4.1 Consolidated statement of profit or loss
Q3 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.1 Consolidated statement of profit or loss US$ million, except ratios and EPS FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 LTM Revenue 215 350 663 1,047 1,020 1,899 2,072 2,797 2,393 2,330 1,989
Slide 23: 4.2 Balance sheet
Q3 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.2 Balance sheet Balance sheet highlights 31 Mar US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 2018 Cash & cash equivalents 6 25 89 129 59 116 83 79 65 129 60 143 175 Net trade accounts
Slide 24: 4.3 Cash flow statement
Q3 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.3 Cash flow statement US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 LTM EBITDA 17 46 123 190 190 310 319 288 223 397 346 319 232 Net purchase of PP&E (6) 2 (24) (89) (56) (48) (93) (91
Slide 25: 4.4 Outlook for FY2018 and FY2019
Q3 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.4 Outlook for FY2018 and FY2019 FY2018 outlook Market environment this season remains challenging and we don’t expect any major positive surprises until the beginning of new harvesting campaign. Along with th
Slide 26: IR contact
IR contact Michael Iavorskyi Investor Relations Manager ir@kernel.ua Tel.: +38 (044) 461 88 01, ex. 7275 3 Tarasa Shevchenka Lane, Kyiv Ukraine, 01001 Investor calendar Q4 FY2018 Operations Update 17 July 2018 FY2018 Financial Report 22 October 2018 www.kernel.ua Company presentation May 2018 25
Slide 27: Appendices
APPENDICES 2
Slide 28: A1. Key highlights
A1. Key highlights Kernel operates in globally competitive growing Ukrainian agri sector Integrated, resilient and simple business model built around scale & global reach Leader across all market segments supported by unparalleled world-class asset base with high barriers to entry Top standa
Slide 29: A2. Markets and business environment: sunflower oil
A2. Markets and business environment Sunflower oil Global edible oils market trends Global consumption of vegetable oils Global sunflower oil exports Following the global demographic trends, world consumption of vegetable million tons million tons oils is expected to achieve healthy 3.7% y-o-y gro
Slide 30: A2. Markets and business environment: grain and infrastructure
A2. Markets and business environment Grain and infrastructure Global trends Top 5 grain exporters from Ukraine Global grain exports Top grain exporting countries 2013/14 2014/15 2015/16 2016/17 million tons 420 435 million tons 394 377 429 Nibulon Nibulon SFGCU Nibulon 28 28 29 United States Louis D
Slide 31: A2. Low cycle of soft commodity prices
A2. Markets and business environment Low cycle of soft commodity prices Index of soft commodity prices, US$-inflation adjusted 300% 250% 200% 150% 100% 50% Jun‐03 Jun‐04 Jun‐05 Jun‐06 Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17 1 2 3 Wheat Corn Sunflower oil Note 1.
Slide 32: A3. Low risk platform
A3. Low risk platform Key credit risks and mitigating factors Kernel has significantly deleveraged its balance sheet over recent years and has a current Kernel's export-oriented business model has leverage of net debt / EBITDA of 1.6x (as of 30 June 2017) Country demonstrated resilience to downt