Omnia Holdings Limited · JSE:OMN
Omnia — H1 FY2024 Earnings Presentation
70 slides from Omnia's earnings presentation, November 2023
Slide 1: Interim Financial Results
INTERIM FINANCIAL RESULTS Presentation for six months ended 30 September 2023
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Throughout this presentation there are certain statements made that are “forward-looking” statements. Any statements preceded or followed by, or that include the words “forecasts”, “believes”, “expects”, “intends”, “plans”, “predictions”, “will”, “may”, “should”, “could”,
Slide 3: Our impact on food, water and mineral security
• We have a significant impact on food, water and mineral security • We sustain livelihoods, creating employment and opportunities for growth • We apply technology for the efficient use of natural resources • We care about the future of our planet and act in a sustainable manner
Slide 4: Disciplined execution of strategy delivers results
DISCIPLINED EXECUTION OF STRATEGY DELIVERS RESULTS In a declining and volatile commodity price environment Excellent progress on ESG, zero fatalities Revenue R10 448m 14% Operating profit R684m 15% Security of supply maintained to customers HEPS 282c 4% Strong performance in Mining, international gr
Slide 5: Content
5 CONTENT 1 SAFETY & ESG 2 BUSINESS UPDATE 3 FINANCE 4 GROWTH 5 OUTLOOK
Slide 6: Safety & ESG
SAFETY & ESG YEARS oF INNOVATION
Slide 7: Continuous improvement of our safety record
CONTINUOUS IMPROVEMENT OF OUR SAFETY RECORD Strengthening our effort towards creating a safer working environment International benchmarking (RCR) Source: Latest published results Recordable Case Rate (RCR) Fire, Explosion and Releases (FER) HY2024 RESULTS PRESENTATION | NOVEMBER 2023 7
Slide 8: Committed to protecting our environment
COMMITTED TO PROTECTING OUR ENVIRONMENT Exceptional progress achieved towards environmental goals Carbon emissions (Tonnes CO2e) Used oil consumed (ML) Carbon emissions reduced by 17% Consumption of 1 litre of used oil prevents potential contamination of 1 million litres of water Renewable energy ge
Slide 9: Enhancing sustainability within our business
ENHANCING SUSTAINABILITY WITHIN OUR BUSINESS Transitioning to a greener, more sustainable future Renewables Water AgriBio Customer propositions • Sasolburg expanded solar • Water consumption • Increased biostimulant capacity – 42ML water recycled product range – Exceeding 10MW peak – Reduced consump
Slide 10: Investing for a sustainable future
INVESTING FOR A SUSTAINABLE FUTURE Empowering local communities through collaboration Food security Education Partnering with Reel Life Agriculture Entrepreneurship Programme, • Innovative and resource efficient garden with Afrika Tikkun in a box • 12-month Agri-SETA accredited programme • 10 000 ho
Slide 11: Business Update
BUSINESS UPDATE YEARS oF INNOVATION
Slide 12: Strategic focus on growth and diversification
STRATEGIC FOCUS ON GROWTH AND DIVERSIFICATION Optionality embedded in our plan Achieved In progress The future Stabilise and Fix Renew and grow Globally diversified ✓ Reduced debt and • Grow volume and margin mix in • Global leader in mining safeguard balance sheet Agriculture Africa solutions ✓ Div
Slide 13: Operating model unlocks value & growth
OPERATING MODEL UNLOCKS VALUE & GROWTH Positioned for success whilst gearing towards future green technologies SADC focused businesses International growth Transformative investments & partnerships Agriculture International Agriculture Solutions FERTICOAT K-HUMATE Segments Business Mining Mining Sol
Slide 14: Macro environment remains challenging
MACRO ENVIRONMENT REMAINS CHALLENGING Characterised by weak economic growth, volatile prices and infrastructure challenges Ongoing geopolitical conflicts Climate change Persistent local sociopolitical issues Battles: Apr – Sep ’23 Events: 20,015 Fatalities: 44,003 Last decade warmest on record South
Slide 15: Continued decline in average prices following elevated prices
CONTINUED DECLINE IN AVG PRICES FOLLOWING 2022/2023 ELEVATED PRICES Prices recovered in latter part of HY24, volatility expected to continue R/tonne 1H23 1H24 Change in average 91% 52% 33% (19%) (58%) Ammonia price Change in average Urea price 34% 97% (11%) (26%) (21%) R/tonne P2O5 HY2024 RESULTS PR
Slide 16: Financial indicators
FINANCIAL INDICATORS Performance in a challenging environment Revenue1 Gross Profit1 Operating Profit1 R10 188m R2 139m R699m (HY23: R11 566m) (HY23: R2 686m) (HY23: R1 066m) 12% 20% 34% Operating Margin1 Adjusted Headline Earnings Return on average 6.9% Per Share1 Equity (HY23: 9.2%) 290 cents 11.8
Slide 17: Operating resilience following two years of higher prices
OPERATING RESILIENCE FOLLOWING TWO YEARS OF HIGHER PRICES Gross profit margin recovery in volatile price environment Gross profit margin 24.8% 19.9% 22.8% 18.0% 22.5% 20.6% 22.5% 22.8% 23.2% 16.2% 21.0% Operating profit margin 1.5% (1.2%) 3.6% 3.7% 3.3% 6.3% 7.5% 9.0% 9.2% 6.4% 6.9% Continuing opera
Slide 18: Actions taken to protect the core
ACTIONS TAKEN TO PROTECT THE CORE Enhancing value through the cycle Cost saving initiatives (Rm) Investment in operational stability (Rm) 165 250 300 HY24 Working capital management (Rm) Robust cash position (Rm) 140 HY2024 RESULTS PRESENTATION | NOVEMBER 2023 18
Slide 19: Operating profit per segment
OPERATING PROFIT1 PER SEGMENT Margins impacted by macroeconomics and trading environment Omnia Group Agriculture Mining Chemicals 7.5% 9.2% 6.9% 9.9% 11.3% 6.9% 7.6% 8.3% 11.1% 3.5% 7.2% 0.5% Rm Rm Rm Rm • Sustained decline in commodity prices in first • Margin pressure impact due to declining • Org
Slide 20: EBITDA progression
EBITDA PROGRESSION Tracking well in difficult macroeconomic environment Excludes IFRS16 HY2024 RESULTS PRESENTATION | NOVEMBER 2023 20
Slide 21: Net working capital prudently managed
NET WORKING CAPITAL PRUDENTLY MANAGED Supporting strong financial position and cash generation Movement in Net Working Capital Rm 30 Sep 2023 % 30 Sep 2022 31 Mar 2023 (Rm) Net working capital 4 057 (22) 5 207 4 240 Inventory 4 679 (42) 8 094 4 651 Receivables 4 860 (7) 5 220 4 457 Movement y-o-y (6
Slide 22: Focused capital allocation
FOCUSED CAPITAL ALLOCATION Supporting investment for long term earnings growth Capital Allocation Framework Strong and flexible financial position Capital productivity Operating productivity • Ongoing financial discipline – Prudent working capital management – Disciplined capital expenditure Maximis
Slide 23: Finance
FINANCE YEARS or INNOVATION
Slide 24: SARS update on international tax dispute
SARS | UPDATE ON INTERNATIONAL TAX DISPUTE 17 15 09 17 30 FY Jun Nov Dec Feb Sept 2024 2021 2021 2022 2023 2023 Assessments Objection SARS' response Appeal SARS' response ADR Appeal received submitted to objection lodged to appeal process resumes Developments • On 9 December 2022, Omnia lodged notic
Slide 25: Statement of comprehensive income
STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited Revenue decreased due to lower commodity Rm 6 months % 6 months 12 months prices, partially offset by increased sales 30 Sep 23 30 Sep 22 31 Mar 23 volumes and the depreciation of the Rand Revenue 10 448 (14) 12 164 26 572 Gross margin de
Slide 26: Agriculture operating profit
AGRICULTURE1 | OPERATING PROFIT RSA International (ex Zim) Margins 11.0% 10.0% 4.4% 7.4% 16.7% 14.1% Rm Rm 190 184 108 Aus & Brazil: 26.6% 32.3% 27.9% Africa: 2.7% 10.5% 9.7% RSA: International (ex Zim): Commentary Revenue i 20%, Operating profit i 65% Revenue h 15%, Operating profit i 3% • Revenue
Slide 27: Mining operating profit
MINING | OPERATING PROFIT RSA International Margins 7.0% 8.5% 10.4% 8.2% 8.2% 11.8% Rm R million Rm RSA: International: Commentary Revenue i 5%, Operating profit h 16% Revenue i 6%, Operating profit h 36% • Revenue decreased modestly relative to lower ammonia prices • Revenue decreased due to lower
Slide 28: Chemicals operating profit
CHEMICALS | OPERATING PROFIT 3.5% 7.2% 0.5% Margins Rm Commentary Protea Chemicals: Revenue i 24%, Operating profit i95% • Challenging operating environment impacting sales volumes due to: – Declining manufacturing sector and commodity prices – Increased load shedding – Deteriorating road and rail i
Slide 29: Margin guidance range - full year
MARGIN GUIDANCE RANGE - FULL YEAR Committed to medium term guidance range Omnia Group Agriculture Mining Chemicals Medium term margin guidance 8% to 10% 9% to 12% 10% to 12% 6% to 8% Continuing operations excluding Zimbabwe HY2024 RESULTS PRESENTATION | NOVEMBER 2023 29
Slide 30: Margin enhancing initiatives
MARGIN ENHANCING INITIATIVES Benefits expected to reflect in the medium term Cost optimisation Growth Potential margin impact • Manufacturing and production efficiencies • AgriBio International • Specialities in South Africa Agriculture • Supply chain optimisation 2.0% – 3.5% • Volume growth in SADC
Slide 31: Statement of financial position
STATEMENT OF FINANCIAL POSITION Unaudited Unaudited Audited Total assets decreased by 12% Rm % 30 Sep 23 30 Sep 22 31 Mar 23 Property, plant & equipment 4 612 1 4 565 4 566 • Inventory decrease due to lower commodity prices and active management of working Right-of-use assets 402 (2) 412 384 capital
Slide 32: Capital expenditure
CAPITAL EXPENDITURE Investing to protect the core and drive growth underpinned by sustainability Rm R700m FY24 capex guidance FY24 | First half FY24 | Second half • Strengthening SADC core: MMU replacement, Ammonia road & • Strengthening SADC core (45%): MMU replacement, Plant rail tankers, Plant ma
Slide 33: Statement of cash flows
STATEMENT OF CASH FLOWS Unaudited Unaudited Audited Rm 30 Sep 23 30 Sep 22 31 Mar 23 Rm 30 Sep 23 30 Sep 22 31 Mar 23 Net cash inflow/(outflow) from operating activities 1 148 (693) 2 269 Cash generated from ops 1 445 (126) 2 991 Cash (utilised in) / generated from operations 1 445 (126) 2 991 Other
Slide 34: Net cash movement from FY23 to HY24
NET CASH MOVEMENT FROM FY23 TO HY24 Rm HY2024 RESULTS PRESENTATION | NOVEMBER 2023 34
Slide 35: Growth
GROWTH YEARS or eed INNOVATION
Slide 36: Solid progress on growth strategy
SOLID PROGRESS ON GROWTH STRATEGY Continuing to deliver against three key pillars 1 Protect and grow the core 2 Expand Agriculture International 3 Grow Mining International • Strengthened leadership and specialist skills • Enhance AgriBio distribution capacity in identified • Focused on regional and
Slide 37: Unlocking further value from the core
1 UNLOCKING FURTHER VALUE FROM THE CORE Competitive advantage through supply chain flexibility and reliability Ammonia value chain • Flexibility and agility of supply – Multiple sources of supply for raw materials SOURCES MODES PLANTS MARKETS – Ability to optimise Ammonia value chain via • Newest pl
Slide 38: Unlocking further value from the core: volume growth
1 UNLOCKING FURTHER VALUE FROM THE CORE Volume growth in constrained markets Strategic sales1 Nitric acid volumes1 Nitrophos production volumes1 • Investment in ammonia logistics improved supply reliability in challenging environment • Strategic sales increased plant utilisation and flexibility • In
Slide 39: Strategy to scale distribution in AgriBio
2 STRATEGY TO SCALE DISTRIBUTION IN AGRIBIO Positioned to deliver high margins, robust returns and good cash generation Distributing to more than 40 countries • Attractive market with long term volume growth driven by the need for sustainable agriculture practices • Secured strategic trial-phase con
Slide 40: Agricultural technology (AgTech)
2 AGRICULTURAL TECHNOLOGY (AGTECH) Improving yield, nutrient and water use efficiency and profitability Key technologies in the Omnia AgTech offering are sensing systems, remote sensing, and more recently robotics Precision farming Artificial intelligence Autonomous vehicles • Data collection, • Col
Slide 41: Execution of Mining International growth strategy
3 EXECUTION OF MINING INTERNATIONAL GROWTH STRATEGY Positioned to drive further diversification MNK JV Canadian mobilisation Australian organic growth successfully established gaining momentum strategy in progress • Attractive market in a USD400bn economy, • Côté site operational - production volume
Slide 42: Investing in disruptive technology
3 INVESTING IN DISRUPTIVE TECHNOLOGY Transformative explosives technology to enable global miners to achieve sustainability goals • Minority shareholding in Hypex Bio • Niche player, unique ESG offering – Equity upside over the medium- term as European projects • State-of-the-art technology mobilise
Slide 43: Mining Chemicals well positioned for growth
3 MINING CHEMICALS WELL POSITIONED FOR GROWTH Leveraging BME footprint for synergistic benefits Key drivers of growth Global mining solution provider • Maximise opportunities in critical green minerals • Combined offering to international markets • Opportunity in uranium sector recovery • Broaden ma
Slide 44: Outlook
OUTLOOK YEARS oF INNOVATION
Slide 45: Business positively aligned to global mega trends
BUSINESS POSITIVELY ALIGNED TO GLOBAL MEGA TRENDS Factors driving demand for sustainable agriculture and minerals Population growth Food security Decarbonisation Climate change • Global population expected • To meet global food demand, • Global action towards net • Volatile weather conditions to inc
Slide 46: Strong and consistent cash generation
STRONG AND CONSISTENT CASH GENERATION Underpins robust financial position, quality earnings and return of capital Net cash position (Rm) Free cash flow (Rm) Capital returned (Rm) • Evolution from a net debt position in FY2020 to a • Delivered strong and consistent free cash flow • Returned c. R3 bil
Slide 47: Omnia provides a compelling investor proposition
OMNIA PROVIDES A COMPELLING INVESTOR PROPOSITION Primary markets, asset quality, strong returns and cash generation 1 2 3 4 5 Operate in Focused Operational Distinct competitive Robust capital primary sectors business model excellence advantage allocation and cash generation • Resilience of essentia
Slide 48: Questions?
QUESTIONS? YEARS oF INNOVATION
Slide 49: Annexures
ANNEXURES YEARS oF INNOVATION
Slide 50: Governance | Board
GOVERNANCE | BOARD Tina Eboka Seelan Gobalsamy Stephan Serfontein Chair Chief Executive Officer BOARD MEMBERS Joined the board in 2016 and Appointed as non-executive director Finance Director Appointed in 2020 with appointed as chair in 2022 with over in 2018, CEO in 2019 with close to 20 years’ int
Slide 51: Management team
MANAGEMENT TEAM Seelan Gobalsamy Stephan Serfontein Tiaan Kotzé Michelle Nana Simphiwe Mdluli Nerina Bodasing Bronwyn Murray CEO Finance Director COO Company Secretary Legal and Communications Human Resources Compliance and Investor Chartered Accountant Chartered Accountant Chartered Accountant B Ar
Slide 52: Our global presence
OUR GLOBAL PRESENCE1 Strong and growing international presence Agriculture Mining: BME Mining: Mining Chemicals Chemicals Distribution Centres Canada USA China Senegal Mali Burkina Faso Sierra Leone Ivory Coast Kenya Indonesia DRC Tanzania Brazil We have a physical presence in Angola Zambia 26 count
Slide 53: Mining segment - R&D
MINING SEGMENT – R&D Meet customer and industry demands through differentiated solutions 3 Blast Design & Data Management 1 Software Suite 4 2 Control station Telematics and Digital Track & Trace (SC electronic management) initiation System Technology development Product & systems development • Enab
Slide 54: Agriculture segment - R&D
AGRICULTURE SEGMENT - R&D Continued innovation as an element of the Nutriology® model Nutriology® Solution Development • Nitrogen Use Efficiency (NUE) solution to monitor and remediate crops • Advanced irrigation solution to optimise water and nutrient application • Unique remote sensing and monitor
Slide 55: Accounting matters
ACCOUNTING MATTERS Omnia Zimbabwe MNK JV Hypex Bio (Change in functional currency) (Investment in Joint Venture) (Equity investment) • Effective 1 April 2023 • Effective 31 May 2023 - four months results • Effective 9 October 2023 (subsequent included in HY24 event) • No further requirement to apply
Slide 56: Statement of comprehensive income (ex Zimbabwe)
STATEMENT OF COMPREHENSIVE INCOME (EX ZIMBABWE) As reported Zimbabwe Ex Zimbabwe Ex Zimbabwe Zimbabwe As reported Rm 30 Sep 23 30 Sep 23 30 Sep 23 % 30 Sep 22 30 Sep 22 30 Sep 22 Revenue 10 448 260 10 188 (12) 11 566 598 12 164 Cost of sales (8 292) (242) (8 050) 9 (8 880) (340) (9 220) Gross profit
Slide 57: Revenue growth | volume and price mix
REVENUE GROWTH | VOLUME AND PRICE MIX Total revenue1 decreases in HY24 by 14% % Revenue Relative Average Volumes Comments Contribution price Strong volume growth supported by favourable agronomic conditions and Agriculture RSA (20) 36 (32) 17 replenishment of soil nutrients. Sharp drop in commodity
Slide 58: BME revenue by commodity
BME REVENUE BY COMMODITY HY24 HY23 Does not include Indonesia as the JV is accounted for using the equity method HY2024 RESULTS PRESENTATION | NOVEMBER 2023 58
Slide 59: Operating profit movement
OPERATING PROFIT MOVEMENT R367m Rm 34% decrease Gross margin 24.2% 23.2% 21.0% 20.6% Operating margin 6.6% 9.2% 6.9% 6.5% HY2024 RESULTS PRESENTATION | NOVEMBER 2023 59
Slide 60: Tax rate reconciliation
TAX RATE RECONCILIATION 1 Expenses of capital nature comprise mainly legal % 30 Sep 2023 30 Sep 2022 and consulting fees, overseas travel, non-deductible Effective rate on taxation 30.0 31.0 employee expenses and IFRS adjustments 2 Other includes non-deductible interest and Adjusted for: Non-deducti
Slide 61: Elevated dividend yield
ELEVATED DIVIDEND YIELD Attractive long-term returns based on consistent cash generation HY2024 RESULTS PRESENTATION | NOVEMBER 2023 61
Slide 62: Commodities
COMMODITIES YEARS of INNOVATION
Slide 63: Rand/USD exchange rate
RAND/USD EXCHANGE RATE R17.84 R17.19 R14.77 R15.05 R14.60 R17.97 R17.79 R18.86 R15.00 R16.75 R16.19 R14.43 R14.84 R16.58 R17.00 R18.73 Closing rate Average rate 6.0% movement 31 Mar 23 to 30 Sep 23 10.2% movement 31 Mar 23 to 30 Sep 23 23.0% movement 31 Mar 22 to 30 Sep 22 11.7% movement 31 Mar 22 t
Slide 64: Continued decline in average prices
CONTINUED DECLINE IN AVE PRICES FOLLOWING 2022/2023 ELEVATED PRICES Prices recovered in latter part of HY24, volatility expected to continue R/tonne Change in 91% 52% 33% (19%) (58%) average Ammonia price Change in average 34% 97% (11%) (26%) (21%) Urea price 1H23 1H24 HY2024 RESULTS PRESENTATION |
Slide 65: Long term benefit of using phosphate rock
LONG TERM BENEFIT OF USING PHOSPHATE ROCK Prices declined from HY23 high R/tonne P2O5 1H23 1H24 HY2024 RESULTS PRESENTATION | NOVEMBER 2023 65
Slide 66: Ammonia vs urea | USD per tonne
AMMONIA VS UREA | USD PER TONNE Prices at USD 30 Sep 23 UREA (GRAN) 2019 260 2020 224 1.49 2021 475 1.31 2022 588 1.24 2023 300 1.04 0.91 AMMONIA 0.89 2019 223 0.88 2020 250 2021 580 2022 955 2023 525 6 MONTH AVERAGE AMMONIA:UREA RATIO Mar-21 0.91 Sep-21 1.31 Mar-22 1.04 Sep-22 1.49 Mar-23 1.24 (48.
Slide 67: Energy/commodity prices: USD
ENERGY/COMMODITY PRICES: USD Prices at USD 30 Sep 23 BRENT CRUDE 2019 62 2020 40 2021 79 2022 88 2023 95 COAL 2019 60 2020 53 2021 233 2022 328 2023 123 U URANIUM 2019 25 2020 31 2021 43 2022 49 2023 67 8% (62.5%) U 36.7% % Movement is for the year 30 Sep 22 to 30 Sep 23 HY2024 RESULTS PRESENTATION
Slide 68: International crop prices | USD per tonne
INTERNATIONAL CROP PRICES | USD PER TONNE Prices at USD 30 Sep 23 YELLOW MAIZE 2019 133 2020 131 2021 541 2022 242 2023 170 WHEAT 2019 174 2020 195 2021 269 2022 329 2023 193 SOYA 2019 316 2020 358 2021 445 2022 487 2023 455 (29.8%) (41.3%) (6.6%) % Movement is for the year 30 Sep 22 to 30 Sep 23 HY
Slide 69: Precious metals | USD per ounce
PRECIOUS METALS | USD PER OUNCE Prices at USD 30 Sep 23 AU GOLD 2019 1 500 2020 1 860 2021 1 760 2022 1 660 2023 1 848 Pt PLATINUM 2019 930 2020 847 2021 972 2022 859 2023 904 Pd PALLADIUM 2019 1681 2020 2216 2021 1919 2022 2158 2023 1246 AU 11.3% Pt 5.2% Pd (42.3%) % Movement is for the year 30 Sep
Slide 70: Metal commodity prices | USD
METAL COMMODITY PRICES | USD Prices at USD 30 Sep 23 COPPER 2019 5 749 2020 6 546 2021 9 131 2022 7 688 2023 8 239 IRON ORE 2019 93 2020 123 2021 116 2022 98 2023 120 7.2% 22.4% % Movement is for the year 30 Sep 22 to 30 Sep 23 HY2024 RESULTS PRESENTATION | NOVEMBER 2023 70