Agthia Group · ADX:AGTHIA
Agthia — 9M 2021 Earnings Presentation
42 slides from Agthia's earnings presentation, Nov 3, 2021
Slide 1: Analysts & Investors Call Q3/9M'21 Results
Analysts & Investors Call Q3/9M’21 Results 3 November 2021
Slide 2: Agenda
Agenda 2025 Strategy Update Business Performance Financial Performance Q&A Appendix 2
Slide 3: Disclaimer
Disclaimer Agthia Group PJSC and its management may make certain statements that constitute “forward-looking statements” with respect to the financial condition, results of operations and business of the Group. These statements can be identified by the fact that they do not relate strictly to histor
Slide 4: 2025 Strategy Update
2025 Strategy Update 4
Slide 5: Strategy Re-Cap: Our Long-Term Ambition
Strategy Re-Cap : Our Long-Term Ambition From… To… UAE centric Footprint MENAP & beyond Becoming a regional F&B Commoditized portfolio Value-add F&B brands leader by 2025 Stable financial performance Superior shareholder returns Local organization mindset Consumer-centric & performance-driven Three
Slide 6: Delivering on our Strategy pillars
Delivering on our Strategy pillars GROWTH EFFICIENCY CAPABILITY Q3’21 highlights Q3’21 highlights Q3’21 highlights • Consolidated Atyab (protein) since Aug.1 • Recognized AED 12 MN in cost savings • Capitalized on Route-To-Market of • Announced the acquisition of BMB • Improved water & beverage net
Slide 7: Summary of Acquisitions
Summary of Acquisitions Announcement OCT 2020 DEC 2020 JAN 2021 APR 2021 AUG 2021 100% 100% 80% 75% 100% Consolidation Jan 1, 2021 Jan 27, 2021 April 1, 2021 Aug 1, 2021 Expected Q1 2022 Segment Snacking Snacking Protein Protein Snacking Footprint Int’l (GCC & Asia) Kuwait Jordan, GCC, Iraq Egypt KS
Slide 8: Agthia's Categories of Focus
Agthia’s Categories of Focus Category Water & Food Agribusiness Protein & Frozen Veg. Snacking Assets Key markets 8
Slide 9: Integration Framework
Integration Framework • The Group’s dedicated transformation office formulated “Integration Framework and Playbook” focused on: Seamless Transition Productivity Value Creation • While integration is a continuous journey, early results look promising: Al Foah: Al Faysal: ✓ progressing smoothly: 8 mon
Slide 10: Business Performance
Business Performance 10
Slide 11: Q3'21 Key Highlights
Q3’21 Key Highlights • Resilient overall quarter performance despite cost inflation headwinds • Continued segmental transformation towards a more balanced and diversified portfolio: Business o Protein: Consolidated Atyab in August 2021, building on the recent acquisition of Nabil o Snacking: Announc
Slide 12: Q3'21 Key Highlights (Cont'd)
Q3’21 Key Highlights (Cont’d) Protein (28% of Q3 revenues) • Nabil & Atyab contributed AED 195MN to top-line, creating a sizeable fully-focused Business Unit Snacking (13% of Q3 revenues) • Al Foah recorded AED 86MN driven by improved sales mix with higher retail sales • Al Faysal added AED 22MN (+2
Slide 13: 9M'21 Performance by Segment
9M’21 Performance by Segment 9M’21 vs 9M’20 Revenues1 Growth by Segment (y-o-y) 2382% 33% 34% Inner Ring 9M’20 revenues of /// AED 1.58bn 45% 48% Outer Ring 284% 9M’21 revenues of AED 2.1bn (+34% y-o-y) /// 1% 6% 34% 16% 17% -5% -4% Water & Food Protein & Frozen Veg Water & Protein & Snacking AgriBu
Slide 14: Water & Food
Water & Food Volume1 by category 90 84 Water & Food (34% of 9M revenues) UAE Water 58 59 /// • HOD: volumes up with the return of corporates 26 • BW: lower YTD sales impacted by weak sales in Q1’21 19 /// which lagged a strong pre-COVID Q1’20. In Q2 & Q3 1 1 3 3 2 2 sales improved versus last year d
Slide 15: UAE Water Update
UAE Water Update Firmer recovery across key channels Retail channel (Modern Trade, Traditional Trade, Convenience stores): • Overall category remains under pressure on oversupply and price competition: MAT Aug’21 volume & value down 4% & 8% y-o-y (Nielsen) • Agthia’s bottled water portfolio – Al Ain
Slide 16: Protein & Frozen Vegetables
Protein & Frozen Vegetables Volume1 by category (‘000 tons) 38 Protein & Frozen Veg (18% of 9M revenues) Protein 22 22 • Nabil: consolidation since April 1 added AED 190MN 20 to top-line 11 • Atyab: consolidation since Aug. 1 added AED 89MN 7 to top-line, creating fully-focused protein business - -
Slide 17: Protein - Pre & Post Acquisition Performance
Protein - Pre & Post Acquisition Performance Nabil1 Atyab1 AED’MN AED’MN 183 190 89 12 11 66 +35% 25% NCI +4% 10% 9% 18 18 17% 14% 20% NCI 2020 2021 2020 2021 2020 2021 2020 2021 Revenues Net profit NPM (%) Revenues Net profit NPM (%) • Marginally better versus last year despite continued • Higher r
Slide 18: Snacking
Snacking Volume1 by category (‘000 tons) 70 66 Snacking (16% of 9M revenues) /// Dates /// • Al Foah: consolidation since Jan. 1 added AED 273MN to top-line 4 Bakery - 1 1 • Kuwait: Al Faysal consolidation since Jan. 27 added AED 59MN to top-line Al Foah Bakery UAE + Kuwait Total Snacking • UAE: Low
Slide 19: Snacking - Pre & Post Acquisition Performance
Snacking - Pre & Post Acquisition Performance Al Foah1 Al Faysal1 AED’MN AED’MN 11 286 273 31 65 59 8 19% -5% 11% -8% 12% 11 4% 2020 2021 2020 2021 2020 2021 2020 2021 Revenues Net profit NPM (%) Revenues Net profit NPM (%) • Slightly lower revenues despite higher volume due to • Lower revenues on r
Slide 20: Agribusiness
Agribusiness Volume1 by category (‘000 tons) 588 Agribusiness (32% of 9M revenues) 523 Flour 342 339 • Lagging last year sales which was driven by World Food Program order and wheat trading 246 184 • Favourable mix with higher pricing significantly reducing the impact of increased raw material / fre
Slide 21: Financial Performance
Financial Performance 21
Slide 22: Group P&L highlights
Group P&L highlights 796 +34% 492 +62% 1,582 2,113 Revenues Revenues • Sustainable leadership position across key (AED MN) categories Q3'20 Q3'21 9M'20 9M'21 • Growth largely driven by the consolidation of Al Foah, Al Faysal, Nabil & Atyab 31% 234 29% 624 Gross Profit 150 484 Gross Profit 31% 30% •
Slide 23: Profitability metrics
Profitability metrics1 +223bps +158bps Profitability margins 14.6% 13.8% • On normalized basis, EBITDA margin enhanced EBITDAm 12.4% 12.3% by 158bps y-o-y driven by: ✓ consolidation of 4 margin accretive entities Q3'20 Q3'21 9M'20 9M'21 ✓ cost optimization via integration & productivity enhancements
Slide 24: Top line reconciliation
Top line reconciliation Group revenues (AED MN) 2,113 1,582 (62) (16) (23) 20 1,502 611 9M'20 WFP flour order & UAE Water Lower Beverage Others 9M'21 Agthia Inorganic growth* 9M'21 Agthia grain trading sales Standalone Consolidated Higher base in Discontinuation of Organic growth Al Foah (Jan 1) H1’
Slide 25: Bottom line reconciliation
Bottom line reconciliation Group net profit (AED MN) 103 (7) 5 69 (36) 8 (31) 65 9.9 89 9M'20 One-offs in 2020 UAE Water Impact of Higher grain Others 9M'21 Agthia M&A & Newly acquired 9M'21 Agthia discontinuing cost, net of standalone Transformation companies* Consolidated Bev pricing associated fe
Slide 26: Inorganic growth
Inorganic growth Group revenues (AED MN) Group net profit (AED MN) 2,113 89 190 9 59 14 1,502 273 (31) 103 11 69 31 9M'21 Agthia Al Foah Al Faysal Nabil Atyab 9M'21 Agthia 9M'21 Agthia Al Foah Al Faysal Nabil Atyab M&A 9M'21 Agthia Standalone consolidated Standalone associated consolidated fees 1Pos
Slide 27: Proforma P&L
Proforma P&L LTM Sept’21 Revenue (AED’MN) LTM Sept’21 EBITDA1 (AED’MN) 59% 13% 3% 11% 14% 12% 20% 23% 18% 17% 14% 3,342 467 482 87 382 79 1,982 425 20 67 230 86 Agthia Al Foah Al Faysal Nabil Atyab Pro-forma Agthia Al Foah (Adj.) Al Faysal Nabil Atyab Pro-forma standalone revenue standalone EBITDA (
Slide 28: Proforma Margins
Proforma Margins LTM Sept’21 EBITDA margin (%) LTM Sept’21 net profit margin (%) 14.4% 0.4% 0.3% 0.5% 7.9% 0.7% 11.6% 1.5% 0.5% 0.3% 4.7% 1.7% +279bps +314bps Agthia (Adj.) Al Foah (adj.) Al Faysal Nabil Atyab Pro-forma contribution contribution contribution contribution EBITDAm Agthia (Adj.) Al Foa
Slide 29: Resilient cash flow generation
Resilient cash flow generation 817 30.6% 634 Operating Cash Flow Net Working Capital 26.6% • Robust liquidity position (AED MN) • Focus on WC overhaul (WC% sales up by 400bps y-o-y) 9M'20 9M'21 • Better Cash flow conversion cycle by 13 days versus last year 482 23% CAPEX Operating Cash Flow 10% 159
Slide 30: Robust balance sheet
Robust balance sheet Borrowings Cash & Equivalents Borrowings AED 1.4 BN AED 1.1 BN • Higher borrowings versus last year mainly from minus raising new debt to fund Al Faysal, Nabil and Atyab acquisitions +161% vs. FY 2020 +44% vs. FY 2020 Net Debt / EBITDA equal • Balance sheet remains robust with l
Slide 31: Dividends
Dividends Dividends per Share Semi-Annual Dividends Policy AED Dividend payout ratio1 • Agthia recently adopted a semi-annual dividend policy, in-line with our commitment 32% 35% 44% 43% 66% 102% 87% to maximizing shareholders’ returns 0.165 0.15 0.15 0.15 0.15 0.125 • On Sept. 27, 2021, shareholder
Slide 32: Q&A
Q&A 32
Slide 33: Appendix
Appendix 33
Slide 34: Sustainability Highlights
Sustainability Highlights 10% 7% 6% 8% Reduction Reduction Increase Decrease in electricity consumption in green house gas emissions in recycled waste in Waste Per Ton of production 70 Tons 1 Plant-based bottles Going towards of recyclable waste collected in partnership with 1st in the Zero Waste re
Slide 35: Sustainability Highlights: packaging initiatives
Sustainability Highlights: packaging initiatives Implemented projects related to cartons/secondary packaging from 100% recycled paper that resulted in: 15% 7,500 750mt Reduction Fully Grown Trees Paper Waste Saved In Weight Saved from being cut Equivalent to 100 fully loaded trailers Implemented pla
Slide 36: Overview of Al Foah
Overview of Al Foah Business Overview Key highlights ▪ Al Foah Company was established in 2005 by the Abu Dhabi Government to develop the date palm sector in the UAE AED 479m AED 91m 1 ▪ Al Foah’s product portfolio consists of a wide variety of locally and LTM Sep 2020 Net sales Adj. LTM Sep 2020 EB
Slide 37: Overview of Al Foah seasonality
Overview of Al Foah seasonality Quarterly harvest & Sales cycle (volume) Q1 Q2 Q3 Q4 Harvest Season Sales Seasonality Pre-Ramadan Sales Post-Ramadan Sales Ramp-up start Sales Peak Sales and wind-down to steady-state off-season No Harvest No Harvest Start of Harvest (Aug) Season wind-down Harvest and
Slide 38: Overview of Al Faysal Bakery
Overview of Al Faysal Bakery Business Overview Key highlights ▪ Al Faysal, established in 1991, is a leading artisanal bakery based in Kuwait AED 90 m 1 AED 21 m 1 ▪ The bakery is located in Sabhan Industrial Area with a built-up area of 3,500 LTM Sep 2020 Net sales LTM Sep 2020 EBITDA sqm ▪ Bakes a
Slide 39: Overview of Nabil Foods
Overview of Nabil Foods Business Overview Key highlights ▪ Founded in 1945 by Mr. Nabil Rassam, Nabil Foods is a leading Jordan- based producer of frozen and chilled processed protein products sold AED 366m AED 70m 2 under the “Nabil” brand LTM Sep 20 Net sales LTM Sep 2020 Adj. EBITDA ▪ Nabil Foods
Slide 40: Overview of Ismailia
Overview of Ismailia Business Overview Key highlights ▪ Established in 2008, Ismailia Agricultural and Industrial Investments (“Atyab”) is a producer of value added / processed beef and poultry AED 433mn AED 76mn products in Egypt. LTM June’21 Net sales LTM June’21 EBITDA ▪ The Company owns four bra
Slide 41: Overview of BMB Group
Overview of BMB Group Business Overview 1 Key highlights ▪ BMB was founded in 2007 as a chocolate and bakery ingredients trading business and has now evolved into a well diversified confectionary and AED 268mn AED 54mn snacking business LTM June’21 Net sales LTM June’21 EBITDA ▪ BMB’s portfolio incl
Slide 42: Investor Relations Department
Investor Relations Department November 2021