Rusagro Group · RUS:RAGR
Rusagro — Ros Agro — Investor Presentation (November 2019)
36 slides from Rusagro's investor presentation, Nov 20, 2019
Slide 1: Investors Presentation Ros Agro PLC
INVESTORS PRESENTATION ROS AGRO PLC November 2019 20 November 2018
Slide 2: Ros Agro Overview
ROS AGRO OVERVIEW wZros acro VA PLC
Slide 3: Disclaimer
DISCLAIMER IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by ROS AGRO PLC (the “Company”) or any person on behalf of the Company, and any question-and-answer session that follows the oral pre
Slide 4: Company Overview
COMPANY OVERVIEW A LEADING AGRICULTURAL COMPANY IN RUSSIA WITH A 21-YEARS HISTORY AND CONTINUED GROWTH HIGHLIGHTS 2018 KEY GROWTH DRIVERS SALES EBITDA 1 2 3 Vertically 83 16 State-of-the-art Strong brand 5% 16% integrated and facilities with portfolio across RUB bn RUB bn diversified strategically p
Slide 5: Business Model
BUSINESS MODEL EFFICIENT AND STABLE CLUSTER-ORIENTED BUSINESS MODEL BENEFITING FROM SCALE, VERTICAL INTEGRATION AND DIVERSIFICATION MEAT SEGMENT OIL&FAT SEGMENT SUGAR SEGMENT MILK PRODUCTS B2B B2C B2B B2C1 B2B B2C B2B B2C Select clients Select clients Select clients #13 • Dehydrated IN RUSSIA AND AB
Slide 6: Products and Brands
BRANDS 13 KEY BRANDS WITH LEADING POSITIONS IN TARGET MARKETS SUPPORT GROUP’S STRATEGY BUSINESS SEGMENT BRANDS PRODUCTS • White and brown sugar SUGAR • Loose and pressed sugar • Shaped sugar and in sticks • Buckwheat • Rice • Large cuts MEAT • Portion cuts • Small cuts • Minced meat OIL & FATS • Sun
Slide 7: Geographical Presence
GEOGRAPHICAL PRESENCE ASSETS OF THE COMPANY ARE LOCATED IN 12 RUSSIAN REGIONS THE COMPANY IS WELL-POSITIONED TO DRIVE INDUSTRY CONSOLIDATION GIVEN ITS SCALABLE BUSINESS MODEL Tambov and Voronezh regions 3 sugar plants Yekaterinburg Ongoing deal with SolPro allows 1 desugarisation plant Ros Agro
Slide 8: Production
PRODUCTION ONE OF THE LARGEST SUGAR, MEAT, AGRI AND OIL&FATS PRODUCERS IN RUSSIA WITH TOP MARKET POSITIONS BUSINESS SEGMENT SHARE IN PRODUCTION PRODUCTION, THS TONNES INVESTMENTS ROS AGRO PLC operates in 5 …ensuring leading positions …supported by rapid capacity and production …supported by investme
Slide 9: Returns Structure
RETURNS STRUCTURE FOUR KEY BUSINESSES CONTRIBUTE EQUALLY TO RETURNS WITH MEAT SEGMENT TO BE THE MOST PROFITABLE BUSINESS SEGMENT SALES AND EBITDA MARGIN RETURNS STRUCTURE BY SEGMENT, 9M 2019 SALES STRUCTURE as % of total before intersegment adjustments 37.2 24.1 SUGAR 32.9 30.4 22.5 23.2 17.7 34% 2%
Slide 10: Rusagro by Segment
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Slide 11: Meat Russian Market
MEAT RUSSIAN MARKET CONTINUED PORK PRODUCTION GROWTH AND LIMITED EXPORT PUT PRESSURE ON LOCAL PRICES TOP-4 MEAT PRODUCERS PORK PRODUCTION PORK TRADE IN RUSSIA % of pork produced in Russia Slaughtered weight, million tonnes Thousand tonnes Export Import Sale price, RR/kg excl. VAT Per capita consumpt
Slide 12: Meat Results Update
MEAT RESULTS UPDATE SWITCH TO PROCESSED PORK TOGETHER WITH HIGH PRICES INCREASED SALES, BUT HIGH GRAIN COSTS STARTED TO PUSH MARGINS DOWN OPERATIONAL RESULTS PORK SALES VOLUME DYNAMICS SALE PRICE In 2019 Rusagro sold mostly culled Livestock pigs Processed pork Production, ths tn in live weight RUB/k
Slide 13: Meat Segment Strategy
MEAT SEGMENT STRATEGY PRODUCTION EXPANSION AND FURTHER INCREASE OF PROCESSED PORK SALES ARE KEY GROWTH TRIGGERS MID-TERM GOALS PRODUCTION GROWTH PLANT SALES STRUCTURE PLAN 2021 Thousand tonnes of pork in live weight % of sales volume • TIMELY LAUNCH OF ONGOING Ongoing projects will increase livestoc
Slide 14: Oil&Fat Russian Market
OIL&FAT RUSSIAN MARKET HIGH YIELDS INCREASED OIL PRODUCTION IN RUSSIA AND ALLOWED EXPORT GROWTH TO BENEFIT FROM FAVORABLE GLOBAL PRICES CRUDE VEGETABLE OIL PRODUCTION OIL&FAT PRODUCTION CRUDE VEGETABLE OIL TRADE IN RUSSIA Million tonnes Million tonnes Million tonnes 2017 2018 Export Import Sunflower
Slide 15: Oil&Fat Segment Results
OIL&FAT SEGMENT RESULTS THREE FOLD SALES GROWTH AND GRADUALL EBITDA INCREASE SUPPORTED SEGMENT’S 3Q RESULTS OPERATIONAL RESULTS OIL&FAT B2C PRODUCTS SALES VOLUME OIL&FAT B2B PRODUCTS SALES VOLUME 439 SALE PRICE Industrial fats Bulk oil Meal RUB/kg excl. VAT Mayonnaise Margarine Bottled oil 144 Produ
Slide 16: Oil&Fat Segment Strategy
OIL&FAT SEGMENT STRATEGY SOLPRO INTEGRATION AND SALES GROWTH WILL CONTINUE TO BE THE PRIORITY MID-TERM GOALS MARKET POSITION • INTEGRATION OF SOLPRO ASSETS VEGETABLE OIL №2 2 • INCREASE EXCTRACTION CAPACITIES SolPro deal turned Rusagro into Vegetable Oil top-2 producer of vegetable oil, • EXPAND IND
Slide 17: Sugar Russian Market
SUGAR RUSSIAN MARKET HIGH STOCKS LEVEL AND EXPECTED SUGAR PRODUCTION GROWTH PUSHED PRICES DOWN TO RECORD LOW LEVEL TOP-3 SUGAR PRODUCER SUGAR PRODUCTION SUGAR TRADE IN RUSSIA % of sugar produced in Russia Million tonnes Million tonnes Sugar content Export Import 17.8% 17.8% 16.0% 16.9% 17.9% PRODUCE
Slide 18: Sugar Segment Results
SUGAR SEGMENT RESULTS LOW SUGAR SALE PRICE PUSHED EBITDA AND MARGINS DOWN OPERATIONAL RESULTS SUGAR SALES VOLUME Production, ths tn SUGAR SALE PRICE Rusagro sale price is above Thousand tonnes RUB/kg excl. VAT wholesale market level due to its Rusagro’s processing capacity stayed at the 990 sales ch
Slide 19: Sugar Projects
SUGAR PROJECTS MID-TERM GOALS DESUGARIZATION STATION PROJECT • SUGAR LOSS DECREASE THROUGH THE OVERVIEW LAUNCH OF NEW DESUGARIZATION STATION Desugarization station Purpose: molasses deep processing for extra-grade sugar production • INCREASE STORAGE TERM FOR SUGAR BEET Capacity p.a.: 70 ths tn of su
Slide 20: Agriculture Russian Market Overview
AGRICULTURE RUSSIAN MARKET OVERVIEW RUSSIA IS EXPECTED TO HAVE GOOD HARVEST IN 2019 TOP-4 LANDHOLDERS, 2018 GRAINS AND OIL CROPS HARVEST GRAINS EXPORT Thousand hectares Million tonnes Million tonnes Per hectare yields, tonnes Grains Russia mostly exports grains with Egypt 2.9 3.0 3.4 3.2 3.1 and Tur
Slide 21: Agriculture Segment Results
AGRICULTURE SEGMENT RESULTS HIGH SALES PRICE AND VOLUMES LED TO SALES AND EBITDA GROWTH OPERATIONAL RESULTS CROPS SALES VOLUME Sugar beet production, mln tn SALE PRICE Grains Oil crops Grains production, ths tn Thousand tonnes Oil crops production, ths tn RUB/kg excl. VAT 4.3 Grains Oil crops 3.5 3.
Slide 22: Appendix
APPENDIX wG ros acro Wii PIC 22
Slide 23: Seasoned Management Team and Corporate Governance
SEASONED MANAGEMENT TEAM AND BEST-IN-CLASS CORPORATE GOVERNANCE PRACTICES PUBLICLY LISTED SINCE 2011 KEY MANAGEMENT TEAM MEMBERS CORPORATE GOVERNANCE STRUCTURE Dmitriy Garnov GENERAL SHAREHOLDERS MEETING Maxim Basov Head of Agricultural Business Chief Executive Officer • 1 year Rusagro Group • 10 ye
Slide 24: Net Revenue, Adjusted EBITDA: Q3 2019 vs Q3 2018
NET REVENUE, ADJUSTED EBITDA: 24 ACTUAL Q3 2019 VS ACTUAL Q3 2018 Comments Net revenue (IFRS) Actual Q3 2019 vs Actual Q3 2018 Net Revenue increased by RR 14,368 million (+74%): 45 000 • Sugar sales increased by RR 505 million (+7%) as a result of expected growth in sales 11 000 997 33 754 35 000 vo
Slide 25: Net Revenue, Adjusted EBITDA: 9M 2019 vs 9M 2018
NET REVENUE, ADJUSTED EBITDA: 25 ACTUAL 9M 2019 VS ACTUAL 9M 2018 Comments Net revenue (IFRS) Actual 9M 2019 vs Actual 9M 2018 Net Revenue increased by RR 52,690 million (101%): 110 000 2 829 104 891 35 550 • Sugar sales increased by RR 5,508 million (31%) as a result of significantly higher stock a
Slide 26: Statement of Comprehensive Income (IFRS)
STATEMENT OF COMPREHENSIVE INCOME (IFRS) 26 ROS AGRO PLC Varianсes Varianсes Description Actual 9M 2019 Actual 9M 2018 Actual 3Q 2019 Actual 3Q 2018 Units % Units % Sales 104,891 52,201 52,690 101 33,754 19,386 14,368 74 Net gain / (loss) on revaluation of biological assets and (3,284) 4,211 (7,495)
Slide 27: Debt Profile (as of 30 September 2019)
DEBT PROFILE (AS OF 30 SEPTEMBER 2019) 27 Comments Debt position and liquidity management Variance Gross debt decreased by RR 5,929 million (-6%) up to RR 89,173 million in RR million 30 September 2019 31 December 2018 Units % • Net debt decreased by RR 4,116 million (-8%) to RR 50,226 million Gross
Slide 28: Statement of Financial Position: Key Changes
STATEMENT OF FINANCIAL POSITION: KEY CHANGES 30 SEPTEMBER 2019 VS 28 31 DECEMBER 2018 Comments ASSETS Assets as of 30 September 2019 vs 31 December 2018 • PPE & LT biological assets* increased by RR 10,520 million (RR +8,398 million in Meat, RR +1,181 million in Sugar, RR +684 million in Agriculture
Slide 29: Cash Flows: Actual 9M 2019 vs 9M 2018
CASH FLOWS: ACTUAL 9M 2019 VS ACTUAL 9M 29 2018 Comments Cash Flows according to Management view (Not IFRS presentation)** Main variances in cash flow statement line items between 9M 2019 and 9M 2018: RR million Variances Actual Actual Net cash from operating activities: Actual vs Previous 9m 2019 9
Slide 30: Adjusted EBITDA 9M 2019 (IFRS) Breakdown by Divisions
ADJUSTED EBITDA 9M 2019 (IFRS) BREAKDOWN BY DIVISIONS 30 ROS AGRO PLC 9M 2019 Sugar Meat Agriculture Oil and Fat Other Elim ination Total Sales 23,242 18,296 15,218 50,217 3,052 (5,134) 104,891 Net gain / (loss) on revaluation of biological assets and agricultural produce - (456) (2,245) - - (584) (
Slide 31: Adjusted EBITDA 9M 2018 (IFRS) Breakdown by Divisions
ADJUSTED EBITDA 9M 2018 (IFRS) BREAKDOWN BY DIVISIONS 31 ROS AGRO PLC 9M 2018 Sugar Meat Agriculture Oil and Fat Other Elim ination Total Sales 17,734 15,384 7,028 14,667 825 (3,436) 52,201 Net gain / (loss) on revaluation of biological assets and agricultural produce - (53) 4,266 - - (2) 4,211 Cost
Slide 32: Statement of Cash Flows According to Management View
STATEMENT OF CASH FLOWS ACCORDING TO MANAGEMENT VIEW (NOT IFRS 32 PRESENTATION) ROS AGRO PLC RR million Variances Actual Actual Actual vs Previous 9m 2019 9m 2018 Units % Cash flows from operating activities Profit before income tax 7,264 10,410 (3,146) (30) Adjustments for non-cash and non-operatin
Slide 33: Statement of Cash Flows – Continuance
STATEMENT OF CASH FLOWS ACCORDING TO MANAGEMENT VIEW (NOT IFRS 33 PRESENTATION) – CONTINUANCE ROS AGRO PLC Variances Actual Actual (*) Including in net cash Actual vs Previous 9m 2019 9m 2018 flows on financial assets Units % related to financial Cash flows from investing activities - - activities.
Slide 34: Statement of Financial Position (IFRS)
STATEMENT OF FINANCIAL POSITION (IFRS) 34 ROS AGRO PLC RR m illion 30 Septem ber 31 Decem ber Variances 2019 2018 Units % ASSETS 233,108 223,779 9,329 4 Current assets Cash and cash equivalents 4,968 1,728 3,240 187 Restricted cash 236 0 236 480,724 Short-term investments 8,898 8,551 347 4 Trade and
Slide 35: Statement of Financial Position (IFRS) – Continuance
STATEMENT OF FINANCIAL POSITION (IFRS) 35 – CONTINUANCE ROS AGRO PLC RR m illion 30 Septem ber 31 Decem ber Variances 2019 2018 Units % Liabilities and EQUITY 233,108 223,779 9,329 4 Current liabilities Short-term borrow ings 23,693 32,514 (8,821) (27) Trade and other payables 21,086 12,190 8,896 73
Slide 36: Contacts
CONTACTS Svetlana Kuznetsova Head of Investment Department E-mail: IR@rusagrogroup.ru Tel.: +7 (495) 363-1661 www.rusagrogroup.ru/eng 36