Kernel Holding S.a. · GPW:KER
Kernel — Q3 2019 Earnings Presentation
30 slides from Kernel's earnings presentation, May 2019
Slide 1: Kernel Holding S.A. Q3 FY2019 results and company presentation
Kernel Holding S.A. Q3 FY2019 results and company presentation May 2019
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: Content
Content 1. Q3 FY2019 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 4: Q3 FY2019 highlights
Q3 FY2019 9M resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.1 Q3 FY2019 highlights US$ million except EPS Q3 FY18 Q3 FY19 y-o-y 9M FY18 9M FY19 y-o-y ◼ Revenue at US$ 803m, up 48% y-o-y driven by stronger sales of grain and Income statement highlights sunfl
Slide 5: Segment results Q3 FY2019
Q3 FY2019 9M resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.2 Segment results Q3 FY2019 Segments results (new format) Oilseed processing Revenue, US$ m Revenue, US$ m Q3 Q3 9M 9M ◼ The highest ever volumes processed in Q3 y-o-y y-o-y FY2018 FY2019 FY2018 FY
Slide 6: Segment results Q3 FY2019 (old format)
Q3 FY2019 9M resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.3 Segment results Q3 FY2019 (old format) Segments results (old format) Revenue, US$ m EBITDA, US$ m Volume, k t 1 EBITDA margin, US$ / t 2 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 y-o-y y-o-y y-o-y y-o-y FY2018 FY2
Slide 7: Recent transactions highlights
Q3 FY2019 9M resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.4 Recent transactions highlights M&A transactions Debt transactions Acquisition of 100% interest in RTK-Ukraine (Feb 2019) Loan from European Investment Bank (Dec 2018) ◼ Assets acquired: 2,949 gra
Slide 8: Outlook for FY2019
Q3 FY2019 9M resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.5 Outlook for FY2019 Oilseed Processing ◼ Improvement of crushing margin is expected as a record sunflower seed harvest of around 15.3m tons in FY2019 (up 17% y-o-y) shall improve oilseed supply wh
Slide 9: Kernel today
Content 1. Q3 FY2019 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 10: Kernel today
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.1 Kernel today Oilseed processing segment EBITDA 1, US$ million Key financials, US$ m1 FY15 FY16 FY17 FY18 LTM ◼ #1 sunflower oil producer and exporter in the world 213 Revenue 2,330 1,989 2,169 2,403 3,847
Slide 11: What we do
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.2 What we do 1 Own farming: Kernel 6 Bottled sunflower oil: 7 Export terminals: Kernel operates 530 thousand ha of Approximately 8% of gross operates farmland in Ukraine bulk sunflower oil produced is • Dee
Slide 12: Efficient and well-invested asset base
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.3 Efficient and well-invested asset base Sunflower seed crushing capacity in thousand tons Poltava Transshipment capacity in thousand tons 462 Vovchansk 363 Prykolotne 172 Prydniprovskyi 617 Ellada1 275 Kir
Slide 13: Kernel's key milestones
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.4 Kernel’s key milestones Asset-light Acquisition of IPO & listing on Extending oilseed • Entering the Russian market by Exit of highly Acquisition of • Active export platform sunflower oil brand the Warsaw
Slide 14: Oilseeds Processing segment
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.5 Oilseeds Processing segment Sunflower oil sales EBITDA margin ◼ Segment’s EBITDA on the LTM basis up 30% y-o-y, to US$ 105m 1,591 thousand tons US$ / ton of sunflower oil sold 1,413 190 1,207 1,123 1,072
Slide 15: Infrastructure and Trading segment
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.6 Infrastructure and Trading segment Key segment volumes Operational highlights Key export markets in FY2018 ◼ 5.7m tons of grain exported from Ukraine on the LTM basis, 55% up y-o-y Thousand tons (excl. Av
Slide 16: Farming segment
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.7 Farming segment Acreage harvested Crop yields 1 thousand hectares 596 tons per hectare, net FY2019 529 FY2018 50 9.9 ◼ LTM EBITDA of US$ 169m, 113% up y-o-y 8.9 FY2017 65 34 FY2016 383 391 385 36 7.2 FY20
Slide 17: Credit highlights
9M FY2019 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.8 Credit highlights Credit portfolio as of 31 March 2019, US$ m Kernel-2022 Eurobonds mid-YTM Amount outstanding Interest rate Maturity 12% 10.6% Eurobonds 496 8.75% Jan 2022 10% 8.5% 8% 50 / 250 limit Libo
Slide 18: Balanced growth strategy
Content 1. Q3 FY2019 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 19: Kernel's mid-term strategy
9M FY2019 Balanced results and growth Balanced outlook Kernel today strategy growth strategy Financials 3.1 Kernel’s mid-term strategy We aim to profitably double export volumes by FY2021, providing comprehensive solutions to our clients (customers and suppliers), with balanced development of our bu
Slide 20: Strategy 2021 serves as a solid basis for future growth
9M FY2019 Balanced results and growth Balanced outlook Kernel today strategy growth strategy Financials 3.2 Strategy 2021 serves as a solid basis for future growth Strategy 2021 pipeline overview: Approximate CapEx budgets, US$ m (excl. VAT) I Construction of greenfield oilseed processing plant in W
Slide 21: Financials
Content 1. Q3 FY2019 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 22: Consolidated statement of profit or loss
9M FY2019 results and Balanced outlook Kernel today growth strategy Financials Financials 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 FY18 LTM Revenue 215 350 663 1,047 1,020 1,899 2,072 2,797 2,393 2,330
Slide 23: Balance sheet
9M FY2019 results and Balanced outlook Kernel today growth strategy Financials Financials 4.2 Balance sheet Balance sheet highlights 31 Mar US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 2019 Cash & cash equivalents 6 25 89 129 59 116 83 79 65 129 60 143 132 126 Net tra
Slide 24: Cash flow statement
9M FY2019 results and Balanced outlook Kernel today growth strategy Financials Financials 4.3 Cash flow statement US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 LTM EBITDA 17 46 123 190 190 310 319 288 223 397 346 319 223 312 Finance cost paid (9) (18) (28) (32) (23) (3
Slide 25: IR contact and investor calendar
IR contact and investor calendar 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 ▪ Q3 FY2019 Financial Report 27 May 2019 ▪ Q4 FY2019 Operations Update 17 July 2019 ▪ FY2019 Financial Report
Slide 26: Appendices
Content 1. Q3 FY2019 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 27: 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 28: Markets and business environment: Sunflower oil
A2. Markets and business environment Sunflower oil Global consumption of vegetable oils Global sunflower oil exports Global edible oils market trends million tons million tons ◼ Consumption of edible oils increased by 4.3% y-o-y in marketing year 206 10.4 10.2 10.2 2018/19, versus 4.8% growth a year
Slide 29: Markets and business environment: Infrastructure and Trading
A3. Markets and business environment Infrastructure and Trading Global grain exports Top grain exporting countries Top 5 grain exporters from Ukraine million tons million tons 2014/15 2015/16 2016/17 2017/18 2018/19 429 415 427 439 Nibulon SFGCU Nibulon Nibulon Kernel 377 USA 28 28 26 28 SFGCU Kerne
Slide 30: Low cycle of soft commodity prices
A4. Markets and business environment Low cycle of soft commodity prices Index of soft commodity prices, US$-inflation adjusted 300% 250% 200% 150% 100% 50% May-04 May-05 May-06 May-07 May-08 May-09 May-10 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 1 2 3 Wheat Corn Sunflower oil N