Olam Group Limited · SGX:VC2
Olam — H1 2022 Earnings Presentation
47 slides from Olam's earnings presentation, Aug 12, 2022
Slide 1: Half-Year 2022 Results Briefing
Half-Year 2022 Results Briefing August 12, 2022
Slide 2: Notice
Notice This presentation should be read in conjunction with Olam Group Limited’s Financial Statements and Management Discussion and Analysis for the Half-Year ended June 30, 2022 (“H1 2022”) lodged on SGXNET on August 12, 2022. Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation and announcement entitled “Half-Year 2022 Results Briefing” may contain statements regarding the business of Olam Group Limited and its subsidiaries (“the Group”) that are of a forward-looking nature and are therefore based on managemen
Slide 4: Presenters
Presenters Sunny Verghese N. Muthukumar A. Shekhar Co-Founder and Group CEO Group CFO CEO, ofi Olam Group Limited Olam Group Limited Olam Olam Group Group LimitedResults Limited Results for for Half-Year Half-Year ended ended June June30, 30,2022 2022| |August August12,12, 2022 2022 4
Slide 5: Agenda
Agenda 1 2 3 4 5 H1 2022 Group Segmental Business Re-organisation Key financial performance by prospects and of Olam: takeaways highlights operating group outlook Progress update Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 5
Slide 6: H1 2022 Group financial highlights
1 H1 2022 Group financial highlights Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 6
Slide 7: Group H1 2022 results: At a glance
Group H1 2022 results: At a glance Volume & 22.5 M MT S$28.4 B Operational S$472.5 M Revenue +0.5% +24.6% PATMI +8.2% S$802.1 M +S$864.0 M EBIT Free Cash +25.0% Flow S$466M S$429.1 M From 1.60x to PATMI Gearing +1.8% 1.73x Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 202
Slide 8: Group H1 2022 financial highlights
Group H1 2022 financial highlights Strong EBIT growth and Disciplined capital Interim dividend improved Operational PATMI management • EBIT grew 25.0% with very strong • Strong cash generation with FCFF • Board of Directors declares interim contribution by Olam Agri which and FCFE of S$719.7 million
Slide 9: Consolidated results by operating group
Consolidated results by operating group H1 2022 at a glance ofi Olam Agri Remaining Olam Group Invested Capital Volume ('000 MT) Revenue (S$ million) EBIT (S$ million) (S$ million) 2.2% 2.7% (8.9)% 8.0% 16.1% 28.5% 25.4% 33.0% 22,490.0 28,445.1 802.1 19,924.1 +0.5% +24.6% +25.0% +11.1% 89.8% 68.8% 7
Slide 10: Sales volume up 0.5%
Sales volume up 0.5% Positive contribution by ofi, Olam Agri Volume by operating group ('000 MT) +0.5% 100 22,490 -32 55 22,367 H1 2021 ofi Olam Agri Remaining H1 2022 Olam Group Note: Post H1 2021, certain businesses were transferred between operating groups. The Coffee plantation business was tran
Slide 11: EBIT increased by 25.0% to S$802 million
EBIT increased by 25.0% to S$802 million Strong contribution from Olam Agri EBIT by operating group (S$ million) +25.0% 201 802 -5 642 -35 H1 2021 ofi Olam Agri Remaining H1 2022 Olam Group Note: Post H1 2021, certain businesses were transferred between operating groups. The Coffee plantation busine
Slide 12: Operational PATMI up 8.2% to S$473 million
Operational PATMI up 8.2% to S$473 million Reported PATMI up 1.8% to S$429 million PATMI and Operational PATMI (S$ million) +1.8% 160 422 -73 429 -48 -28 -4 H1 2021 EBIT^ Net Finance Taxation^ Exceptional Non- H1 2022 Costs^ Items controlling Interests Operational 437 +36 473 PATMI (S$ M) ^ Excludes
Slide 13: 11.1% increase in invested capital
11.1% increase in invested capital¹ Driven by working capital investments Invested Capital (S$ million) Gearing (times) Net gearing +11.1% Adjusted net gearing 19,924 17,938 1.72 1.73 1.60 Working Capital Fixed Capital 9,594 7,756 0.75 0.66 0.56 10,182 10,330 Jun-21 Jun-22 Jun-21 Dec-21 Jun-22 Inves
Slide 14: Positive free cash flow to equity at S$466 million
Positive free cash flow to equity at S$466 million Significantly lower gross Capex and cash from divestments led to positive FCFE Free Cash Flow to Equity (FCFE) (S$ million) +864 1,315 466 -62 224 -398 -593 -20 H1 2021 Operating Changes in Tax Paid Capex / Net Interest H1 2022 Cash Flow Working Inv
Slide 15: Strong liquidity position
Strong liquidity position Total borrowings and available liquidity (S$ million) as at June 30, 2022 10,109 24,339 Short-Term Long-Term +5,299 19,040 1,270 6,565 10,020 6,395 9,020 Cash and RMI* Secured Unutilised Available Total Short-term Receivables Bank Lines Liquidity Borrowings Fixed Deposits *
Slide 16: Segmental performance by operating group
2 Segmental performance by operating group Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 16
Slide 17: ofi H1 2022 results
ati woke i{ real H1 2022 results ofi
Slide 18: ofi in numbers
ofi in numbers Cocoa Coffee Nuts Spices Dairy 14.2 Billion revenue (S$) 1,1 4 Million 5 EBITDA (S$) 821 Million EBIT (S$) 110+ Manufacturing 49 Countries 22,000+ employees 11,000+ customers facilities Note: Data restated to reflect transfer of ofi’s Russian operations (primarily comprising the Rusmo
Slide 19: ofi H1 2022 results
ofi H1 2022 results S$ Million S$ Million EBIT Invested Capital Global Sourcing -11.8% Ingredients & Solutions 300 +6.8% 265 36% 11,652 10,914 48% 43% 45% 64% 52% 55% 57% H1 2021 Restated H1 2022 Jun-21 Restated Jun-22 EBIT margin 4.5% 3.3% • ofi’s EBIT decline of 11.8% is set against a very strong
Slide 20: ofi: Global Sourcing
ofi: Global Sourcing S$ Million S$ Million EBIT Invested Capital +17.6% Working Capital +1.4% 128 Fixed Capital 4,889 4,956 109 3,140 3,340 1,749 1,616 H1 2021 Restated H1 2022 Jun-21 Restated Jun-22 EBIT margin 2.4% 2.2% • Strong EBIT growth of 17.6% was driven by performances • IC remained broadly
Slide 21: ofi: Ingredients & Solutions
ofi: Ingredients & Solutions S$ Million Invested Capital EBIT -28.4% Working Capital +11.2% 192 Fixed Capital 6,696 6,024 137 2,840 2,622 3,402 3,856 H1 2021 H1 2022 Jun-21 Restated Jun-22 Restated EBIT margin 6.0% 3.8% • EBIT decreased 28.4% driven by the adverse impact of input costs, • IC increas
Slide 22: ofi: Growth framework
ofi: Growth framework Organic Growth – Growing & extending the core Extract full value from current investments Increase share of value with targeted strategic customers Contribution to medium-term Volume growth: Focus on cost competitiveness Low to Mid-single digit Expand innovation & sustainabilit
Slide 23: Olam Agri H1 2022 results
A Olam Agri H1 2022 results
Slide 24: Olam Agri in numbers
Olam Agri in numbers 3 Segments 1 Food & Feed - Origination 30 9,100+ S$31.3b & countries employees revenue Merchandisin g 2 Food & 41m 50+ 15.9% Feed - EBIT/IC Processing tonnes in volume Manufacturing & & Value- handled processing facilities added 3 Fibre, Agri- Industrials & S$930m S$753m Ag Serv
Slide 25: Olam Agri H1 2022 results
Olam Agri H1 2022 results Food & Feed - Origination & Merchandising Food & Feed - Processing & Value-added Fibre, Agri-industrials & Ag Services S$ Million +49.4% S$ Million +43.5% EBIT 609 Invested Capital 5,055 17% 38% 3,524 408 8% 36% 49% 29% 48% 32% 33% 44% 34% 32% H1 2021 H1 2022 Jun-21 Jun-22
Slide 26: Olam Agri: Food & Feed - Origination & Merchandising
Olam Agri: Food & Feed - Origination & Merchandising S$ Million S$ Million +57.8% +204.2% EBIT Invested Capital 229 862 Working Capital Fixed Capital 145 596 283 104 179 266 H1 2021 H1 2022 Jun-21 Jun-22 EBIT/MT (S$) 9 14 Grains exports out of Russia and Ukraine were significantly lower during this
Slide 27: Olam Agri: Food & Feed - Processing & Value-added
Olam Agri: Food & Feed - Processing & Value-added S$ Million S$ Million EBIT +35.8% +45.3% Invested Capital 177 Working Capital 2,467 Fixed Capital 130 1,698 1,159 418 1,280 1,308 H1 2021 H1 2022 Jun-21 Jun-22 EBIT/MT (S$) 57 85 Strong EBIT growth of 35.8% despite escalating grains prices as Olam IC
Slide 28: Olam Agri: Fibre, Agri-industrials & Ag Services
Olam Agri: Fibre, Agri-industrials & Ag Services S$ Million S$ Million EBIT +53.5% Invested Capital +11.9% 203 Working Capital 1,727 1,543 Fixed Capital 132 1,094 1,331 449 396 H1 2021 H1 2022 Jun-21 Jun-22 16 EBIT/MT (S$) 111 7 Solid EBIT performance: Cotton led the pack with strong report card on
Slide 29: Olam Agri key takeaways
Olam Agri key takeaways 1 2 3 4 5 Strategically Participation in key Clear pathways to Helmed by a highly Market leading positioned as a food parts of the global agri significantly grow experienced, capable sustainability track security play in the market and targeted earnings on a and engaged recor
Slide 30: Remaining Olam Group H1 2022 Results
Remaining Olam Group H1 2022 Results Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 30
Slide 31: Remaining Olam Group
Remaining Olam Group Remaining Olam Group Olam Global Holdco (OGH) Olam Ventures Olam Technology and holds 5 de-prioritised assets earmarked for exit, acts as a foundry to build new sustainability and Business Services (OTBS) 3 gestating businesses and 1 continuing business, digital platforms for gr
Slide 32: Olam Ventures
Olam Ventures 1 2&3 4 5 6 Disruptive idea Built on the twin engines Strategic & Financial Material & Scalable Smart investing (digital of Digitalisation and value to Olam opportunity – large enough & sustainability) rather Sustainability opportunities that can than asset-heavy capital become new eng
Slide 33: Remaining Olam Group
Remaining Olam Group De-prioritised/Exiting Assets Continuing/Gestating Businesses Incubating Businesses EBIT Invested Capital -9.1% -8.1% S$ Million S$ Million 4 3,501 -12 3,216 855 552 -16 -46 -38 2,643 2,656 -30 -66 -72 3 8 H1 2021 Restated H1 2022 Jun-21 Restated Jun-22 • EBIT losses increased t
Slide 34: Business outlook and prospects
3 Business outlook and prospects Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 34
Slide 35: Business outlook and prospects
Business outlook and prospects 1 2 3 4 5 The significant demand ofi anticipates In light of the current The Group expects Overall, given the growth rate and pick-up improved margins and high commodity price to incur additional H1 2022 results and seen in H2 2021 has EBIT in H2 2022 as and rising int
Slide 36: Re-organisation of Olam Progress Update
4 Re-organisation of Olam Progress Update Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 36
Slide 37: Re-organisation of Olam: H1 2022 update
Re-organisation of Olam: H1 2022 update Completed substantial carve-out and Olam Group Limited as new parent separation of businesses into 3 operating holding 100% of ofi, Olam Agri, Olam groups: ofi, Olam Agri and Remaining Olam Global Holdco, Olam Ventures and OTBS Group, comprising Olam Ventures,
Slide 38: Re-organisation of Olam: New Group structure
Re-organisation of Olam: New Group structure¹ Olam Group Limited 100.0% 100.0% Sale of Shares in ofi Group Ltd. Olam Agri Olam Holdings Pte. Ltd. 35.4%² 64.6%³ 100.0% 100.0% 100.0% Olam Agri Holdings Pte. Ltd. Olam Technology Olam Global Olam Ventures and Business Holdco Pte. Ltd. Pte Ltd. Olam Inte
Slide 39: Re-organisation of Olam: Next steps
Re-organisation of Olam: Next steps Remaining Olam Group Remain committed and fully Complete the transaction with Continue to responsibly divest prepared to pursue an IPO SALIC by end-2022, obtaining all de-prioritised assets marked for exit and demerger pending regulatory approvals and securing and
Slide 40: Key takeaways
5 Key takeaways Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 40
Slide 41: Key takeaways
Key takeaways 1 2 3 Re-organisation has led to sharper Significant progress in executing Group remains positive on its focus for the Group and improved Re-organisation Plan: Unlocked growth prospects based on the financial performance with EBIT value in Olam Agri by crystallising sharper focus on ea
Slide 42: Appendix
Appendix Olam Group Limited Results for Half-Year ended June 30, 2022 | August 12, 2022 42
Slide 43: P&L statement
P&L statement S$ million H1 2022 H1 2021 % Change Volume ('000 MT) 22,490.0 22,367.4 0.5 Revenue^ 28,445.1 22,833.4 24.6 EBITDA^ 1,148.0 935.5 22.7 EBIT^ 802.1 641.6 25.0 PAT 394.4 382.7 3.1 PATMI 429.1 421.5 1.8 Operational PATMI^ 472.5 436.6 8.2 ^ Excluding exceptional items Olam Group Limited Res
Slide 44: Exceptional items
Exceptional items S$ million H1 2022 H1 2021 Acquisition related cost (Olde Thompson) - (6.2) Net monetary gain arising from hyperinflationary economies 5.9 - Profit on sale of stake in subsidiary, net - 5.0 Share-based expenses on accelerated vesting of employee share (25.6) - award Re-organisation
Slide 45: Balance sheet
Balance sheet S$ million Jun-2022 Jun-2021 Change Fixed Capital 9,689.3 9,724.1 (34.8) Right-of-use assets 882.5 746,7 135.8 Uses of Capital Working Capital 7,791.8 7,319.9 471.9 Cash 6,395.3 3,542.3 2,853.0 Others 1,525.9 502.0 1,023.9 Total 26,284.8 21,835.0 4,449.8 Equity & Reserves 7,296.2 7,193
Slide 46: Cash flow statement
Cash flow statement S$ million H1 2022 H1 2021 Change Operating Cash flow (before Interest & Tax) 1,150.7 926.8 223.9 Changes in Working Capital (238.4) 355.0 (593.4) Net Operating Cash Flow 912.3 1,281.8 (369.5) Net interest paid (254.0) (192.3) (61.7) Tax paid (114.2) (94.5) (19.7) Cash from dives
Slide 47: H1 2022 Results Briefing
H1 2022 Results Briefing olamgroup.com/investors.html ir@olamnet.com