Almarai Company · TADAWUL:2280
Almarai — FY2017 Earnings Presentation
28 slides from Almarai's earnings presentation, 2018
Slide 1: Almarai Company Annual Results – 2017
Almarai Company Annual Results – 2017
Slide 2: Disclaimer
Disclaimer Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or lia
Slide 3: Macro Environment
Sa incl oll Almarai ~_ Macro Environment
Slide 4: Industry and Environment Overview
Industry and Environment Overview 2017 First Half Second Half • Higher uncertainty amid multiple reforms and • Continued expansion in non-traditional channels like Food macroeconomic changes services & Iktisaab (rural distribution model in Egypt) • Lower consumer confidence/sentiment and slower mark
Slide 5: Almarai Gaining Market Share Despite Declining KSA Food Market
Almarai Gaining Market Share Despite Declining KSA Food Market MAT Category Almarai MAT Val. Almarai Rank growth (Value)% Shr Change (Value) • KSA Food Market is declining by 3.0% on PLAIN REGULAR LABAN -9.6% +1.7 1 MAT basis. PLAIN FRESH MILK -4.9% +1.3 1 • Core Dairy - Both Laban and Fresh milk FL
Slide 6: Market Share (Volume) - KSA
Market Share(Volume) - KSA Laban UHT Juices Puffs 69.8 71.8 65.1 67.2 47.0 47.0 17.3 19.4 MAT NOV 16 MAT NOV 17 MAT NOV 16 MAT NOV 17 MAT NOV 16 MAT NOV 17 MAT NOV 16 MAT NOV 17 Fresh Milk Bread Chicken Jar Cheese 70.5 69.3 37.2 35.8 37.2 35.8 68.3 66.8 MAT NOV 16 MAT NOV 17 MAT NOV 16 MAT NOV 17 MA
Slide 7: Business Highlights
Sa incl oll Almarai ~_ Business Highlights
Slide 8: Highlights – Full Year 2017
Highlights – Full Year 2017 • Almarai is FCF positive SAR 1.3B after a 10+ year investment cycle • Strong turnaround in our poultry operations resulting in first ever annual breakeven of poultry operations at SAR 0.6M • Amid generally lower market growth trends across product categories, we have ret
Slide 9: Key Trends for 2017
Key Trends for 2017 4.0 Net Sales 1.0% Operating Income 0.3% 1.0 15.0% SAR in Billion 3.8 0.0% 13.2% -1.0% 0.8 10.0% Y 2017 SAR in Billion 3.6 3.9% -2.0% 0.6 5.0% Y 2017 3.4 Y 2016 3.1% -4.2% -3.0% 0.4 0.0% Y 2016 -4.5% -2.6% Y17 v Y16 -5.7% 3.2 -4.0% Y17 v Y16 0.2 -5.0% 3.0 -5.0% - -10.0% 2013 SAR
Slide 10: Sales Trends
Sales Trends
Slide 11: Sales Analysis by Product – Full Year
Sales Analysis by Product – Full Year By Product 2016 By Product 2017 Poultry Poultry Bakery 1,332 Bakery 1,464 1,881 9% 1,807 Other Sales 10% Cheese & 13% 13% Other Sales 165 Cheese & 154 Butter 1% Butter 1% 1,681 1,749 12% 13% SAR 14,339 SAR 13,936 Fruit Juice Million Fruit Juice 1,877 Million 1,6
Slide 12: Sales Analysis by Product – Full Year
Sales Analysis by Product – Full Year Growth % of Total Net Sales in SAR Million 2017 v 2016 Growth 14,339 13,936 Fresh Dairy (229) (2%) ( YoY -4%) Bakery (74) (1%) ( YoY -4%) 41% 41% Cheese & Butter 68 0%) ( YoY +4%) Fruit Juice (276) (2%) 13% 13% ( YoY -15%) Long Life (15) (0%) 12% 13% ( YoY -1%)
Slide 13: Sales Analysis by Country – Full Year
Sales Analysis by Country – Full Year By Geography 2016 By Geography 2017 Bahrain Qatar Bahrain Export / 301 338 321 Qatar Egypt Others Oman 2% 2% Egypt 2% Export / Oman 727 975 278 757 Kuwait 649 Jordan Others 742 5% 7% Jordan 2% 5% 5% Kuwait 282 715 5% 203 UAE 286 665 2% 5% 2% 1,477 2% UAE 4% 1,44
Slide 14: Sales Analysis by Country – Full Year
Sales Analysis by Country – Full Year Gro w th 2 017 % o f To ta l Net Sales in SAR Million v 2 016 Gro w th KSA 243 2% 14,339 13,936 ( YoY +3%) UAE 27 0% ( YoY +2%) Oman 15 0% ( YoY +2%) Kuwait 48 0% 63% 67% ( YoY +7%) Egypt (326 ) (2% ) Egypt Local Currency ( YoY -33%) Growth = 35.2% Qatar (374) (
Slide 15: Innovation Pipeline 2017
Innovation Pipeline 2017 Q1 Q2 Q4 Q3 Almarai Company 2017 Q4 Earnings Presentation 15
Slide 16: Financial Highlights
Sa incl oll Almarai ~_ Financial Highlights
Slide 17: Operating Performance
Operating Performance Profit Attributable to Gross Profit Operating Income Shareholders % to Sales 38.5% 40.1% 1.6 pp 17.6% 18.5% 0.9 pp 15.0% 15.7% 07 pp SAR Million SAR Million SAR Million 5,584 2,518 2,583 5,522 +61 +66 2,148 2,182 +1.1% +2.6% +35 +1.6% Year 2016 Year 2017 Year 2016 Year 2017 Yea
Slide 18: Statement of Income
Statement of Income 4th Quarter Full Year SAR million 2016 2017 Change 2016 2017 Change Net Sales 3,509 3,419 (2.6%) 14,339 13,936 (2.8%) Cost of sales (2,120) (2,083) (1.7%) (8,816) (8,352) (5.3%) Gross Profit 1,389 1,335 (3.8%) 5,522 5,584 1.1% Selling and Distribution Expenses (579) (556) (4.0%)
Slide 19: Segment Reporting
Segment Reporting Almarai SAR Million Dairy & Juice Bakery Poultry Other Activities Consolidated Q4 YTD 2017 Net Sales 10,510 1,807 1,464 154 13,936 Depreciation and Amortisation (1,222) (228) (309) (161) (1,920) Profit Attributable to Shareholders 2,049 293 (29) (130) 2,182 Percent to Net Sales of
Slide 20: Net Income by Segment
Net Income by Segment Basic EPS* (SAR) 2.10 2.13 2,500 2,148 (224) 48 2,182 265 SAR Million 2,000 (40) 1,500 1,000 Year 2016 Dairy & Juice Bakery Poultry Other Year 2017 Net Sales Growth (4.1%) (3.9%) 9.9% (6.4%) (2.8%) Net Income Growth (10.4%) (11.9%) 90.1% 26.8% 1.6% Net Income % 19.5% 16.2% (2.0
Slide 21: Investing Cash Flows continue the downward trend
Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan CAPEX spend for the 4th Quarter Year to Date 2017 was SAR 2.8 Billion. • Manufacturing and Farming spent CAPEX of SAR ~1.7 Billion for various capacity expansion projects. • Sales Depot, Poultry and Logistic
Slide 22: Cash Flow Bridge
Cash Flow Bridge Free Cash Flow = SAR 1.3 B (SAR1.8B over 2016) 565 (3,312) 4,614 Loans Issues / Payments / Charges (718) CAPEX / Biological (78) 1,636 Assets Dividend 564 Others Operating Cash Flow Cash at 31 Cash at 31 Dec 2016 + SAR 1,072 Million Dec 2017 Almarai Company 2017 Q4 Earnings Presenta
Slide 23: Key Trends
Key Trends
Slide 24: Net Debt
Net Debt 12,000 350% 3.1x 3.0x 2.8x 2.8x 2.8x 300% 10,000 2.7x 2.7x 2.7x 2.2x 250% 8,000 200% SAR Million 6,000 150% 4,000 98% 101% 74% 75% 75% 74% 81% 81% 100% 73% 2,000 50% 4,606 6,653 8,237 8,053 8,762 9,344 10,889 10,883 10,910 0 0% 2010 2011 2012 2013 2014 2015 2016 2016 2017 SOCPA IFRS Net Deb
Slide 25: Quarterly Performance – Net Income Trend Analysis
Quarterly Performance – Net Income Trend Analysis 2017 versus 2016 800 Q3 = 0.4% Q2 = 2.4% 700 658 674 664 667 # Q4 = (1.6%) # 595 655 600 629 530 539 536 513 500 484 # 476 450 489 SAR Million 433 425 430 428 Q1 = 13.7% 398 400 380 369 373 343 349 328 306 309 * 300 284 286 274 # 255 234 235 242 289
Slide 26: EBIT and EBITDA margins are starting to improve
EBIT and EBITDA margins are starting to improve… Net Sales, EBITDA and EBIT Evolution CAGR 2010 – 2017: 10.5% (w/o impact of acquisitions 6.9%) 28.1% 27.2% 25.6% 25.9% 24.2% 25.3% 24.4% 23.9% 24.2% 14,339 14,699 13,936 21.1% 13,795 19.1% 12,606 18.5% Net Sales 16.9% 11,219 17.3% 17.5% 16.4% SAR Mill
Slide 27: Key Share Data
Key Share Data Year to date total shareholder's Savola 30% return since listing 450% 25% Key Statistics for Almarai (31 December 2017) 17% 400% 20% 25% HHPrince 350% Share Price (SAR) 53.75 35% Sultan bin 15% Current P/E Ratio (ttm) 25.37 10% Mohammed Dec-16 Dec-12 Dec-15 Dec-10 Dec-11 Dec-14 Dec-13
Slide 28: Thank you
For Investor Relations matters please contact: investor.relations@almarai.com “We will encourage our major corporations to expand across borders and take their rightful place in global markets” QR Code for Almarai IR App. www.almarai.com Thank you