Olam Group Limited · SGX:VC2
Olam — Olam International — Q1 2019 Earnings Presentation
30 slides from Olam's earnings presentation, May 14, 2019
Slide 1: Q1 2019 Results Briefing
Q1 2019 Results Briefing May 14, 2019
Slide 2: Presenters
Presenters Sunny Verghese A. Shekhar N. Muthukumar Co-Founder Executive Director President and Group CEO and Group COO and Group CFO Olam International Limited Results for the First Quarter ended March 31, 2019 | May 14, 2019 2
Slide 3: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements and Management Discussion and Analysis for the First Quarter ended March 31, 2019 (“Q1 2019”) lodged on SGXNET on May 14, 2019. Olam International Limited Results for the First Quarter ended
Slide 4: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward-looking nature and are therefore based on management’s assumptions about future developments. Such forward
Slide 5: Agenda
Agenda • Q1 2019 highlights • Segmental review • Strategic Plan progress • Key takeaways
Slide 6: Q1 2019 highlights
Q1 2019 highlights
Slide 7: Q1 2019 results at a glance
Q1 2019 results At a glance Volume EBITDA PATMI 8.5 M MT S$420 M S$169 M +21.5% +14.2% +6.9% Operational Free Cash Flow Gearing PATMI S$181 M +FCFE from S$466 1.49x to M +11.3% S$313 M 1.35x +28.1% Olam International Limited Results for the First Quarter ended March 31, 2019 | May 14, 2019 7
Slide 8: Volume grew 21.5%
Volume grew 21.5% Led by Food Staples & Packaged Foods (Grains) Volume by segment, '000 MT +21.5% 84 8,461 1,428 6,965 25 -41 Q1 2018 Edible Nuts Confectionery Food Staples & Industrial Raw Q1 2019 & Spices & Beverage Packaged Foods Materials, Ingredients Infrastructure & Logistics Olam Internationa
Slide 9: EBITDA up 14.2%
EBITDA up 14.2% Led by Edible Nuts, Cocoa EBITDA by segment, S$ million +14.2% 73 6 420 20 -18 368 -28 Q1 2018 Edible Nuts Confectionery Food Staples & Industrial Raw Commodity Q1 2019 & Spices & Beverage Packaged Foods Materials, Financial Services Ingredients Infrastructure & Logistics Note: The a
Slide 10: PATMI up 6.9%
PATMI up 6.9% Higher EBITDA offset higher depreciation and finance charges Operational PATMI up 11.3% PATMI and Operational PATMI, S$ million +6.9% +7.0% 52 9 3 169 158 -29 -16 -8 Q1 2018 EBITDA^ Depreciation & Net Finance Taxation^ Exceptional Non-controlling Q1 2019 Amortisation Costs Items Intere
Slide 11: 5.5% reduction in invested capital
5.5% reduction in invested capital 19.8% reduction in working capital year-on-year S$ Million • Fixed Capital increased only because -5.5% of the adoption of SFRS(I) 16 with 16,649 16,167 15,832 15,283 addition of right-of-use assets 14,812 8,853 7,705 8,090 6,484 • Working Capital down 19.8% despit
Slide 12: Net gearing at 1.35x
Net gearing at 1.35x Excluding impact of SFRS(I) 16, net gearing improved to 1.27x Net and adjusted debt / equity (basic) • Higher net debt due to: 1.49 • Application of SFRS(I) 16 – net 1.32 1.35 1.49 increase of S$615 million in 1.32 1.27 lease liabilities • Compensated by lower working 0.47 0.29
Slide 13: Free cash flow
Free cash flow Strong, positive FCFE in Q1 2019 on improved operating cash, reduced working capital Free Cash Flow to Equity, S$ million +722 +722 897 9 313 -221 -8 46 -409 Q1 2018 Operating Cash Changes in Tax Paid Capex / Net Interest Paid Q1 2019 Flow (before Working Capital Investments Interest
Slide 14: Available liquidity
Available liquidity Sufficient to cover all repayment and Capex obligations Total borrowings and available liquidity, S$ Million as at March 31, 2019 9,505 18,827 +7,225 11,602 2,130 4,768 5,839 2,424 5,763 Cash and RMI* Secured Unutilised Available Liquidity Total Borrowings Short-term Receivables
Slide 15: Segmental review
Segmental review
Slide 16: Edible Nuts and Spices
Edible Nuts and Spices EBITDA, S$ Million Invested capital, S$ Million +5.8% 438 4,040 4,277 3,643 3,604 3,610 332 340 +14.9% 1,831 1,421 1,980 1,608 1,666 136 156 2,222 1,996 2,060 2,446 1,944 2016 2017 2018 Q1 2018 Q1 2019 Dec-16 Dec-17 Dec-18 Mar-18 Mar-19 Working Capital Fixed Capital • Improved
Slide 17: Confectionery and Beverage Ingredients
Confectionery and Beverage Ingredients EBITDA, S$ Million Invested capital, S$ Million -11.7% 444 6,110 407 5,347 5,268 4,935 4,650 328 +118.5% 4,569 3,819 3,434 3,773 2,994 134 61 1,541 1,528 1,501 1,495 1,656 2016 2017 2018 Q1 2018 Q1 2019 Dec-16 Dec-17 Dec-18 Mar-18 Mar-19 Working Capital Fixed C
Slide 18: Food Staples and Packaged Foods
Food Staples and Packaged Foods EBITDA, S$ Million Invested capital, S$ Million -3.3% 360 4,678 4,578 4,849 4,688 330 4,522 289 1,131 1,317 1,107 1,498 1,118 -18.0% 100 82 3,024 3,547 3,460 3,532 3,581 2016 2017 2018 Q1 2018 Q1 2019 Dec-16 Dec-17 Dec-18 Mar-18 Mar-19 Working Capital Fixed Capital •
Slide 19: Industrial Raw Materials, Infrastructure and Logistics
Industrial Raw Materials, Infrastructure and Logistics EBITDA, S$ Million Invested capital, S$ Million 2,221 -17.4% 197 2,105 176 1,879 1,572 1,552 135 1,213 1,050 891 439 -42.4% 511 66 38 1,008 1,055 1,061 989 1,113 2016 2017 2018 Q1 2018 Q1 2019 Dec-16 Dec-17 Dec-18 Mar-18 Mar-19 Working Capital F
Slide 20: Strategic Plan progress
Strategic Plan progress
Slide 21: 2019-2024 Strategic Plan Progress
2019-2024 Strategic Plan Progress Investments • Completed acquisition of Cotonchad in TChad for US$16 million • Completed acquisition of 85% of BT Cocoa in Indonesia for US$90 million • Proposed acquisition of Dangote Flour Mills in Nigeria for NGN130 billion (~US$361 million) Divestments • Disposed
Slide 22: Key takeaways
Key takeaways
Slide 23: Key takeaways
Key takeaways • Good start to 2019 with Operational PATMI up 11.3%, EBITDA up 14.2% and strong positive cash flow generation of S$313 million • Focused execution of 2019-2024 Strategic Plan to capitalise on key consumer growth trends and achieve sustainable and profitable growth • Strengthened balan
Slide 24: Appendix
Appendix
Slide 25: P&L statement
P&L statement S$ million Q1 2019 Q1 2018 % Change Volume ('000 MT) 8,460.6 6,965.2 21.5 Revenue 7,347.9 6,295.4 16.7 Net loss in fair value of biological assets (1.0) (4.1) (74.7) EBITDA^ 420.3 368.1 14.2 Depreciation & amortisation (124.7) (95.7) 30.3 Net Finance costs (103.7) (87.4) 18.7 Taxation^
Slide 26: P&L statement: Impact of SFRS(I) 16
P&L statement Impact of SFRS(I) 16 S$ million Q1 2019 Q1 2019 Q1 2019 SFRS(I) 16 Excluding Profit & Loss Statement Reported Impact SFRS(I) 16 EBITDA 420.3 24.6 395.7 Depreciation & Amortisation (124.7) (23.6) (101.1) Net Finance costs (103.7) (7.5) (96.2) PATMI 168.8 (6.4) 175.2 Operational PATMI 18
Slide 27: Exceptional items
Exceptional items S$ million Q1 2019 Q1 2018 Profit on sale of land in US - 13.6 Profit on sale of Subsidiary 0.6 5.7 Exit/Closure costs (11.7) - Loss on sale of JV/Associate (1.1) (24.0) Exceptional Items (12.2) (4.7) Olam International Limited Results for the First Quarter ended March 31, 2019 | M
Slide 28: Balance sheet
Balance sheet Change Change S$ million 31-Mar-19 31-Dec-18 31-Mar-18 vs Dec 18 vs Mar 18 Uses of Capital Fixed Capital 8,478.2 8,349.3 128.9 8,534.6 (56.4) Right-of-use assets 693.0 - 693.0 - 693.0 Working Capital 6,136.4 6,376.4 (240.0) 7,926.5 (1,790.1) Cash 2,424.0 2,480.4 (56.4) 1,863.5 560.5 Ot
Slide 29: Cash flow statement
Cash flow statement S$ million Q1 2019 Q1 2018 YoY Operating Cash flow (before Interest & Tax) 419.4 373.8 45.6 Changes in Working Capital 209.8 (687.0) 896.8 Net Operating Cash Flow 629.2 (313.1) 942.4 Net interest paid (110.3) (102.4) (7.9) Tax paid (14.2) (23.2) 9.0 Cash from divestments 9.1 251.
Slide 30: Q1 2019 Results Briefing
Q1 2019 Results Briefing olamgroup.com/investors.html ir@olamnet.com