35 slides from M.p. Evans's earnings presentation, Apr 17, 2012
Slide 1: Preliminary results for the year ended 31 December 2011
28 Preliminary results for the year ended 31 December 2011 17 April 2012
Slide 2: Index
1 Index Page Corporate overview and financial highlights .............. Peter Hadsley-Chaplin, chairman 3 Strategic focus ...................................................... Peter Hadsley-Chaplin, chairman 8 Operational highlights.....................................Philip Fletcher, Group managin
Slide 3: Corporate overview and financial highlights
2 Corporate overview and financial highlights Peter Hadsley‐Chaplin ‐ chairman Preliminary results April 2012
Slide 4: Corporate overview
3 Corporate overview ¾ A UK, AIM-listed agri-business group producing palm oil in Indonesia and beef cattle in Australia, as well as residual Malaysian property assets in the course of disposal Preliminary results April 2012
Slide 5: Corporate overview (continued) – palm oil
4 Corporate overview (continued) ¾ Palm oil biggest and most-traded oil in world vegetable-oil market – continuing price strength continuing and increasing demand from India, China, Europe and Indonesia historically low stock: usage ratios for major oils competitive yields and production cos
Slide 6: Corporate overview (continued) – beef cattle
5 Corporate overview (continued) ¾ Beef cattle Australia well placed to serve Asia – world’s fastest growing beef consumer green, clean image in Australia Preliminary results April 2012
Slide 7: Financial highlights
6 Financial highlights ¾ Profit for the year increased by 62% to US$39.70 million (2010 US$24.45 million) following strong palm-oil prices and higher crops ¾ Earnings per share increased by 61% to US cents 66.39 (2010 US cents 41.17) ¾ Total dividend increased to 8.00p (2010 - 7.50p) – 2.25p interim
Slide 8: Strategic focus
7 Strategic focus Peter Hadsley‐Chaplin ‐ chairman Preliminary results April 2012
Slide 9: Strategic focus – Indonesian palm oil
8 Strategic focus – Indonesian palm oil ¾ To invest further in a fast-growing, low-cost food commodity in which the Group’s management has many years of experience ¾ To increase planted areas in Indonesia – the world’s biggest producer with land and plentiful labour available ¾ To plant and maintain
Slide 10: Strategic focus – Australian beef cattle
9 Strategic focus – Australian beef cattle ¾ To increase 34.37% holding in NAPCo to capitalise on strategic opportunity within NAPCo (e.g. feedlot expansion and increased bore holes on main breeding station) ¾ To complete pasture-improvement programme on Woodlands and to increase cattle-carrying c
Slide 11: Strategic focus – Malaysian property
10 Strategic focus – Malaysian property ¾ To continue to benefit from property-development and land-sale profits at Bertam Properties ¾ To dispose of the small Bertam Estate and the 40% interest in Bertam Properties at appropriate time to reinvest in Indonesian palm oil and Australian beef cattle Pr
Slide 12: Operational highlights – Indonesian palm oil
11 Operational highlights – Indonesian palm oil Philip Fletcher – Group managing director Preliminary results April 2012
Slide 13: Operational highlights – palm oil: planted areas
Operational highlights – palm oil 12 Planted areas at end 2011 Ha Ha Established, mature North Sumatran estates 9,400 New projects - Kalimantan (3,700 ha mature) 9,200 - Bangka (1,450 ha mature) 3,000 ———— 12,200 ———— Total, majority-owned, areas 21,600 Effective share of associates’ established pla
Slide 14: Operational highlights – palm oil: remaining plantable areas
13 Operational highlights – palm oil (continued) Remaining plantable areas on new projects (+/- 3 years) Group Smallholders Kalimantan Bangka Total Kalimantan Bangka Total Ha Ha Ha Ha Ha Ha Planted at end 2011 9,200 3,000 12,200 3,600 1,400 5,000 Current estimate to completion* 2,200 3,000 5,200 1,0
Slide 15: Operational highlights – palm oil (continued)
14 Operational highlights – palm oil (continued) ¾ Existing mature estates continue to improve – crops on upward trend (16% higher than 2010) ¾ New projects starting to produce crops (2011 – 50,000 tonnes, 100% higher than 2010) ¾ One mill (40‐tonne) operating in North Sumatra and new mill (60‐tonne
Slide 16: Operational highlights – palm oil: crop projections
15 Operational highlights – palm oil (continued) ¾ Planting programme on new projects started in 2005 – f.f.b. crops now increasing significantly crop in 2010 – 198,000 tonnes crop in 2011 – 250,000 tonnes projected crop 2012 – 300,000 tonnes projected crop 2015 – 500,000 tonnes Note: crops
Slide 17: Operational highlights – Australian beef cattle
16 Operational highlights ‐ Australian beef cattle Philip Fletcher – Group managing director Preliminary results April 2012
Slide 18: Operational highlights – Australian beef cattle: Woodlands
17 Operational highlights – Australian beef cattle ¾ Woodlands herd maintained at over 10,000 head – could be increased further as pastures improve good rainfall in 2011 but forage crops not able to be fully grown – full extra weight gain not achieved pasture improvement continues – sub-soil c
Slide 19: Operational highlights – Australian beef cattle: NAPCo
18 Operational highlights – Australian beef cattle (continued) ¾ NAPCo 2011 an excellent season with good rainfall and abundant pasture feedlot expansion completed in late 2011 – more flexibility fattening cattle of different ages continuing bore-hole construction and water distribution improv
Slide 20: Operational highlights – Malaysian property
19 Operational highlights ‐ Malaysian property Philip Fletcher – Group managing director Preliminary results April 2012
Slide 21: Operational highlights – Malaysian property
20 Operational highlights - Malaysian property ¾ Operational highlights continuing successful development of housing and commerical buildings minimal land sales in 2011 but several expected to be completed in 2012 Bertam Properties’ profits periodically distributed as dividends. Group board co
Slide 22: Operational highlights – Malaysian assets: disposals
21 Operational highlights – Malaysian assets Estate and investment disposals to date Sold and Years cash Property of sales received To be sold Total US$’m US$’m US$’m Malaysian estates 2006-08 77.00 — 77.00 Other Malaysian and Thai disposals 2008-10 6.81 — 6.81 Bertam Properties (40% holding) — 33.9
Slide 23: 2011 results
22 2011 results Tristan Price – Group finance director Preliminary results April 2012
Slide 24: 2011 results – overall result and financial position
23 2011 results – overall result and financial position ¾ Excellent result for 2011 profit up 62% to US$39.70 million EPS up 25.22 US cents to 66.39 US cents ¾ Strong cash flow from operations: US$48.34 million (2010 US$19.42 million) ¾ New loan facility agreed in Indonesia; facility renewed in
Slide 25: 2011 results – revenue and gross profit
24 2011 results – revenue and gross profit ¾ Strong growth in revenue (37%) and gross profit (18%) 2011 2010 Increase/(decrease) Revenue Gross profit Revenue Gross profit Revenue Gross profit US$’000 US$’000 US$’000 US$’000 % % Plantations 55,275 25,762 39,860 21,589 39 19 Cattle 2,435 111 2,184 251
Slide 26: 2011 results – revenue and gross profit (continued)
25 2011 results – revenue and gross profit (continued) ¾ Result driven by high plantation crop growth and increased CPO price plantation revenue up 39% to US$55.28 million average CPO price US$1,123 v US$905 – 24% increase ¾ Loss of gross margin is temporary: crop from newly-mature hectares insu
Slide 27: 2011 results – other operating flows, financing and tax
26 2011 results – other operating flows, financing and tax ¾ Biological gain and planting expenditure similar to 2010, making a net contribution of US$2.32 million (2010 US$2.39 million) ¾ Other administrative expenses US$2.23 million lower than 2010 reduced provision against loans made to smallho
Slide 28: 2011 results – share of associates' profits
27 2011 results – share of associates’ profits ¾ Group share of associates’ results match strong performance in subsidiaries 2011 2010 Increase/(decrease) Revenue Profit Revenue Profit Revenue Profit US$’000 US$’000 US$’000 US$’000 % % Plantations 40,024 18,621 26,995 7,773 48 140 Cattle 23,665 4,23
Slide 29: 2011 results – share of associates' profits (continued)
28 2011 results – share of associates’ profits (continued) ¾ Plantation sector thriving: notably joint venture, PT Agro Muko ¾ NAPCo sales higher after previous year when cattle were kept back to replenish the breeding herd ¾ Bertam Properties’ profit reduced as revenue from sales of developed prope
Slide 30: Investment case
29 Investment case Peter Hadsley‐Chaplin ‐ chairman Preliminary results April 2012
Slide 31: Investment case
30 Investment case ¾ M. P. Evans well positioned to benefit from sharply-increasing f.f.b. production derived both from new projects and from improving mature estates ¾ Opportunity for re-rating by market as plantings on the new projects mature ¾ Increasing demand from rapidly-expanding Asian econom
Slide 32: Appendices
31 Appendices Preliminary results April 2012
Slide 33: Consolidated income statement
32 Consolidated income statement Year ended Year ended 31 December 2011 31 December 2010 US$’000 US$’000 Revenue 57,756 42,091 ———— ———— Gross profit 25,919 21,887 Biological-asset adjustment 2,317 2,385 Exchange differences 528 739 Administrative expenses, etc. (2,557) (4,716) ———— ———— Operating p
Slide 34: Consolidated balance sheet
33 Consolidated balance sheet 2011 2010 US$’000 US$’000 Non-current assets Goodwill 1,157 1,157 Biological assets, property, plant and equipment 223,458 178,922 Investments 131,804 129,728 Deferred-tax asset and non-current debtor 4,997 808 ———— ———— 361,416 310,615 Net current assets 47,563 41,517
Slide 35: Consolidated cash-flow statement
34 Consolidated cash-flow statement 2011 2010 US$’000 US$’000 Net cash generated by operating activities 48,339 19,417 ———— ———— Investing activities Interest received 1,078 711 Proceeds on disposal of assets 598 690 Proceeds on disposal of investments — 3,255 Purchase of property, plant and equipme