Omnia Holdings Limited · JSE:OMN
Omnia — FY2017 Earnings Presentation
43 slides from Omnia's earnings presentation, Aug 21, 2017
Slide 1: Results Presentation FY2017
OMNIA HOLDINGS LIMITED mg HSTOMIER “WEALTH BY RESULTS PRESENTATION FY2017
Slide 2: Agenda
AGENDA Omnia at a glance Agriculture overview Mining overview Chemicals overview Financial overview Prospects Page 1
Slide 3: Omnia at a Glance
OMNIA AT A GLANCE AGRICULTURE MINING CHEMICALS Omnia’s Agriculture division Omnia’s Mining division services The Chemicals division’s main comprises Omnia Fertilizer and the mining industry through business is through Protea Omnia Specialitiess BME and Protea Mining Chemicals Chemicals Page 2
Slide 4: Our Vision and Strategy
OUR VISION AND STRATEGY Strategy • Providing specialised solutions to the agriculture, mining and chemicals markets • Focusing on unique market offerings that create value for customers and, in so doing, enhances the return for the business and shareholders • Build strong relationships with customer
Slide 5: Our Value Proposition
OUR VALUE PROPOSITION • We differentiate ourselves from other commodity chemical suppliers by applying our intellectual capital and technologies to all key points along our supply and service chains • This enables Omnia to create value throughout by tailoring our products and services to the specifi
Slide 6: Geographical Scope
GEOGRAPHICAL SCOPE 4 Agriculture 4 Mining: BME A Mining: Protea Mining Chemicals & Chemicals Angola Jal Botswana a Lesotho a Mozambique a Namibia a Zimbabwe |.&| 4 | East Africa Kenya al aa Mauritius AaAaAA Tanzania a Zambia A A Central Africa ORC aa ©” Southern Africa | West Africa Burkina Faso Gui
Slide 7: Key Drivers – FY2017
KEY DRIVERS – FY2017 • Currencies • Stronger SA rand • Agriculture division • Growth in international business • Record sales volumes in specialities and liquids • Higher unit production costs – NAP2 breakdown, lower offtake volumes (BME), key raw material overcharge • Close out of trading position
Slide 8: Overview of Audited Results
OVERVIEW OF AUDITED RESULTS Restated 2017 % 2016 Revenue Rbn 16.3 (3) 16.8 Profit before tax Rm 856 (8) 929 Profit after tax Rm 592 (8) 642 Basic earning per share cents 885 (7) 953 Headline earnings per share cents 881 (7) 944 Total dividend cents 340 (6) 360 Debt:Equity % (1) (3) • FY2016 results
Slide 9: Other Key Features
OTHER KEY FEATURES • Revenue down 3% to R16.3 billion • Operating profit down 6% to R1 040 million • Profit before tax down 8% to R856 million • Profit after tax of R592 million down 8% • Headline earnings per share down 7% to 881 cents per share • Ungeared balance sheet of R90 million • Cash genera
Slide 10: Key Acquisition of Umongo Petroleum
KEY ACQUISITION OF UMONGO PETROLEUM • Leading distributor of additives, base oils and other related petroleum, oil and lubricant products in South Africa and sub-Saharan Africa • FY2017 – R1 billion turnover; R77.4 million profit after tax (normalised*) • Earnings enhancing and strong growth potenti
Slide 11: Agriculture Overview
AGRICULTURE OVERVIEW x ~ = — BES he S 4 as = ———— — - he we = ¥ ae } 4 i ‘i ' t } , ¢ \ ‘
Slide 12: Agriculture Overview
AGRICULTURE OVERVIEW • Volumes up 10%: South Africa +2.5%, International +11.5% • Record sales of local and international speciality fertilizers • Strong growth internationally and improved hedging strategies • Operating margin of 5.4% (2016: 5.0%) below guidance of 7% to 9% • Trading business: loss
Slide 13: Crop Prices – USD per Tonne
CROP PRICES – USD PER TONNE Maize – prices at 31 March – USD $ 400 $ 700 2013 248 2014 176 $ 350 $ 600 2015 140 2016 132 $ 300 $ 500 2017 130 Maize and Wheat $ 250 Wheat – prices at $ 400 Soya 31 March – USD $ 200 2013 246 $ 300 2014 248 $ 150 2015 181 $ 200 2016 165 $ 100 2017 152 $ 50 $ 100 Soya -
Slide 14: Crop Prices – Rand per Tonne
CROP PRICES – RAND PER TONNE Maize – prices at 31 March – Rand R5 500 R7 000 2013 2 325 2014 2 650 R5 000 R6 000 2015 2 436 R4 500 2016 3 265 R5 000 2017 2 044 R4 000 Maize and Wheat Wheat – prices at R4 000 Soya R3 500 31 March – Rand 2013 3 480 R3 000 R3 000 2014 3 975 2015 3 883 R2 500 R2 000 201
Slide 15: Ammonia vs Urea (Gran) Price – USD per Tonne
AMMONIA VS UREA (GRAN) PRICE – USD PER TONNE Urea (Gran) – prices at 31 March – USD $ 700 2.0 2013 400 2014 320 $ 600 2015 263 1.5 2016 201 2017 209 Ammonia: Urea ratio $ 500 Urea & Ammonia May 2017 188 1.0 Ammonia – prices at 31 March – USD $ 400 0.5 2013 545 2014 475 $ 300 2015 428 0.0 2016 338 20
Slide 16: Phosphate and Potash Prices – USD per Tonne
PHOSPHATE AND POTASH PRICES – USD PER TONNE Phosphate – prices at 31 March – USD $ 700 2013 513 $ 650 2014 498 2015 473 $ 600 2016 360 2017 370 $ 550 $ 500 Potash – prices at 31 March – USD Phosphate $ 450 2013 405 $ 400 2014 305 2015 308 $ 350 2016 242 2017 222 $ 300 $ 250 $ 200 Mar 2013 Mar 2014 M
Slide 17: Mining Overview
= uu ze Lu > fe) o < z =
Slide 18: Mining Overview
MINING OVERVIEW • Overall volumes up 3% • 43% increase in AXXISTM sales volumes • Significant increase in Zambia volumes (copper) • Offset by mine closures in South Africa and lost business in Botswana and Namibia • Secured new West African contracts (gold) – positive impact in FY2018 • Continued lo
Slide 19: Precious Metals USD per Ounce
PRECIOUS METALS USD PER OUNCE Gold – prices at $2 000 $1 000 31 March – USD 2013 1 595 $900 2014 1 294 $1 800 2015 1 200 $800 2016 1 222 $1 600 $700 2017 1 249 Platinum and Gold $600 Palladium $1 400 Platinum – prices at 31 March – USD $500 2013 1 571 $1 200 $400 2014 1 405 2015 1 145 $1 000 $300 20
Slide 20: Energy/Commodity Prices in USD
ENERGY/COMMODITY PRICES IN USD Oil – prices at 31 March – USD $ 140 2013 108 2014 107 $ 120 2015 56 2016 40 $ 100 2017 53 Oil, Coal and Uranium $ 80 Coal – prices at 31 March – USD 2013 80 $ 60 2014 72 2015 60 $ 40 2016 51 2017 74 $ 20 Uranium – prices at 31 March – USD $- 2013 42 Mar 2013 Mar 2014
Slide 21: Metal Commodity Prices in USD per Tonne
METAL COMMODITY PRICES IN USD PER TONNE Copper – prices at 31 March – USD $12 000 $200 2013 7 469 $180 2014 6 730 $10 000 2015 6 105 $160 2016 4 754 $140 2017 5 824 $8 000 $120 Iron ore – prices at Iron ore Copper 31 March – USD $6 000 $100 2013 140 $80 2014 112 $4 000 2015 57 $60 2016 53 2017 87 $4
Slide 22: Chemicals Overview
CHEMICALS OVERVIEW 2
Slide 23: Chemicals Overview
CHEMICALS OVERVIEW • Volumes down 8% • Subdued manufacturing sector, low economic growth • Drought affecting animal feeds sector • Reduced operating margin • Lower crude oil and commodity prices • Reduced volumes • Expense base contained Restated 2017 % 2016 Revenue Rbn 3.7 (7) 4.0 Operating profit
Slide 24: Index of the Physical Volume of Manufacturing – South Africa
INDEX OF THE PHYSICAL VOLUME OF MANUFACTURING – SOUTH AFRICA 115 110 Index 105 100 95 2013 2014 2015 2016 2017 Seasonally adjusted Page 23
Slide 25: Financial Overview
FINANCIAL OVERVIEW
Slide 26: Key Drivers of Revenue and Profits
KEY DRIVERS OF REVENUE AND PROFITS Revenue Volumes Average price % % % Agriculture (1) +10 (13) Mining (4) +3 (7) Chemicals (7) (8) +1 • Exchange rates: stronger SA rand:US dollar at year end • Commodity prices: mixed • Ammonia:Urea ratio: unfavourable ratio during the year Page 25
Slide 27: Rand:USD Exchange Rates
RAND:USD EXCHANGE RATES 17.00 FY2016 Average – R13.84 FY2017 Average – R14.00 16.00 +24% +1% 15.00 14.00 13.00 12.00 Rand 11.00 10.00 9.00 31 March 2016 – R14.72 31 March 2017 – R13.38 8.00 +21% (9%) 7.00 31 Mar 2015 30 Sep 2015 31 Mar 2016 30 Sep 2016 31 Mar 2017 Page 26
Slide 28: Income Statement
INCOME STATEMENT • FY2016 restated by R83 million (pre tax) and R60 million (after tax) • Gross profit general slow down in sectors and competitive pricing • Distribution expenses higher volumes offset by lower pricing • Administrative expenses new products, technologies, territories and contracts i
Slide 29: Income Statement
INCOME STATEMENT • Net finance expense • Finance expense of R251 million (2016: R239 million) - net of interest capitalised on capital projects under construction of R11 million (2016: R24 million) • Finance income of R67 million (2016: R60 million) - higher cash balances • Income tax expense • Effe
Slide 30: Segmental Review
SEGMENTAL REVIEW Guidance Restated 2017* 2017 2016 Revenue (external) Rm 8 159 8 218 Operating Profit Rm 438 411 Operating Margin 7.0 - 9.0 % 5.4 5.0 Total Assets Rm 7 368 7 107 Revenue (external) Rm 4 378 4 551 Operating Profit Rm 457 526 Operating Margin 12.0 – 14.0 % 10.4 11.6 Total Assets Rm 3 0
Slide 31: Segmental Performance – Revenue
SEGMENTAL PERFORMANCE – REVENUE Five year Compound Annual Growth Rate of 8.6% 18 16.84 16.77 16.26 16.27 16 4.20 4.00 3.73 14 13.43 4.12 12 3.65 4.55 4.38 R billion 10 5.35 5.46 8 4.38 6 4 8.22 8.16 6.68 7.29 5.40 2 0 FY2013 FY2014 FY2015 FY2016 FY2017 Agriculture Mining Chemicals Page 30
Slide 32: Segmental Performance – Operating Profit
SEGMENTAL PERFORMANCE – OPERATING PROFIT Five year Compound Annual Growth Rate of 3.4% 1 600 1 476 1 416 1 400 100 156 1 231 1 200 53 1 108 1 040 1 000 720 171 145 R mllion 829 800 735 526 457 600 400 656 200 443 431 411 438 0 FY2013 FY2014 FY2015 FY2016 (restated) FY2017 Agriculture Mining Chemical
Slide 33: Balance Sheet – Assets
BALANCE SHEET – ASSETS Restated 2017 % 2016 Rm Non-current assets 5 009 7 4 701 Current assets 7 755 2 7 617 Inventories 3 229 (16) 3 850 Trade and other receivables 3 096 - 3 084 Cash 1 302 >100 572 Other 128 15 111 Total Assets 12 764 4 12 318 Non-current assets • Fixed assets • Capital expenditur
Slide 34: Balance Sheet – Debt and Equity
BALANCE SHEET – DEBT AND EQUITY Restated 2017 % 2016 Rm Total equity 7 542 (1) 7 602 Deferred tax 580 3 565 Liabilities 3 430 (10) 3 807 Debt 1 212 >100 344 12 764 4 12 318 Debt:Equity % (1.2) (3.0) Net cash 90 228 Net movement in equity of R60 million • Increase - Profit R593 million • Decrease - F
Slide 35: Cash Flow
CASH FLOW • Net cash flow from operating activities down R955 million • Investment in capital expenditure up R323 million • Financing movement (net) – reduction in dividend, additional debt raised • R90 million net cash positive (including debt of R172 million) Restated 2017 2016 Rm Cash generated f
Slide 36: Debt:Equity Ratio
DEBT: EQUITY RATIO 7 602 7 542 14% 7 400 12% 6 642 12% 11% 5 912 10% 5 400 4 952 Debt:equity ratio (%) Debt and equity (R m) 8% 3 400 6% 6% 4% 1 400 820 2% 564 335 0% - 600 (228) (90) (1%) -2% -2 600 (3%) -4% FY2013 FY2014 FY2015 FY2016 FY2017 (restated) Equity Debt Debt:equity ratio Page 35
Slide 37: Prospects
“” - O Lu O. ” O a ou
Slide 38: Group Outlook
GROUP OUTLOOK • SA rand:US dollar volatility • Strong balance sheet • Upgrading of IT platforms adding value • Strong management team and business model • Continue to improve our safety record • Growth opportunities • Closing Umongo transaction • Nitrophosphate plant approved – R670 million • Contin
Slide 39: Outlook – Agriculture Division
OUTLOOK – AGRICULTURE DIVISION • Ammonia:Urea ratio - expected to improve due to additional merchant ammonia production • SA rand:US dollar exchange rate – weaker rate has a positive effect on export sales and profit margins • Nitrophosphate facility - R670 million capital cost; two year build • Oth
Slide 40: Outlook – Mining Division
OUTLOOK – MINING DIVISION • Mining sector • Expected to move off low point in commodity cycle • International growth • West Africa, DRC, Columbia and Australia • AXXISTM sales • Underground market • Portable emulsion pumping system • Initiation system • Protea Mining Chemicals • Continued focus on r
Slide 41: Outlook – Chemicals Division
OUTLOOK – CHEMICALS DIVISION • International markets • Subdued South African manufacturing sector • International commodity prices – slow recovery expected • Growth • New business model – continued optimisation • Continued focus on developing business model towards value added service • Extend produ
Slide 42: Operating Margin
OPERATING MARGIN Target Actual Target FY2017 FY2017 FY2018 % % % Agriculture 7.0 – 9.0 5.4 6.0 – 8.0 Mining 12.0 – 14.0 10.4 12.0 – 14.0 Chemicals 3.5 – 4.5 3.9 3.5 – 4.5 Page 41
Slide 43: Thank You
THANK YOU WWW.OMNIA.CO.ZA Creating customer wealth by leveraging knowledge