Slide 1: Kernel Holding S.A. FY2017 results and company presentation
Kernel Holding S.A. FY2017 results and company presentation 23 October 2017
Slide 2: Disclaimer
Disclaimer The information in this document has not been independently verified and no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither th
Slide 3: 1. Kernel Today
1. KERNEL TODAY
Slide 4: Kernel today
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.1 Kernel today Sunflower oil segment Key financials, US$ million1 FY2014 FY2015 FY2016 FY2017 EBITDA 1, US$ million 213 199 Revenue 2,393 2,330 1,989 2,169 #1 sunflower oil exporter in the world 178 EBITDA 223 397 346 319 #1 sunflower
Slide 5: What we do
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.2 What we do 1 Own farming: Kernel 6 Bottled sunflower oil: 7 Export terminals: Kernel operates 600 thousand ha of Approximately 10% of gross operates farmland in Ukraine bulk sunflower oil produced is • Deep-water grain terminal in produ
Slide 6: Unique and well-invested asset base
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.3 Unique and well-invested asset base Sunflower seed crushing capacity in thousand tons Transshipment capacity in thousand tons Poltava, 429 Prykolotne, 172 Vovchansk, 363 Prydniprovskyi, 560 Ellada1, 275 Kirovogradoliya, 429 Bandurka, 52
Slide 7: Kernel's key milestones
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.4 Kernel’s key milestones Asset-light Acquisition of IPO & listing Extending oilseed • Entering the Russian market by Exit of highly Acquisition of export platform sunflower oil brand on the Warsaw crushing capacity in acquisition of Russ
Slide 8: Low risk platform
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.5 Low risk platform Key credit risks and mitigating factors Kernel has significantly deleveraged its balance sheet over recent years and has a Kernel's export-oriented business model has current leverage of net debt / EBITDA of 1.6x (
Slide 9: Sunflower oil segment
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.6 Sunflower oil segment Sunflower oil sales EBITDA margins Widening S&D gap keeps crushing margins under pressure, opening thousand tons US$ / ton of sunflower oil sold doors for market consolidation and streamlining of demand 1,207 F
Slide 10: Grain and infrastructure segment
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.7 Grain and infrastructure segment Key export markets in FY2017 Grain exports, Grain segment’s EBITDA margin Grain: thousand tons 5,060 14.0 A record Ukrainian harvest, along with strong in- 4,744 12.5 22% 28% 4,244 4,409 10.5 house pro
Slide 11: Farming segment
Financials and Kernel Kerneltoday today Kernel 2021 outlook 1.8 Farming segment Consistent application of modern farming Acreage harvested by crop, Crop yields, technologies, along with the favorable weather thousand ha tons per ha, net 593 FY2017 conditions, led to the record crop yields 8.9 Corn
Slide 12: 2. Kernel 2021: a road to US$ 500 million EBITDA
2. Kernel 2021: a road to US$ 500 million EBITDA
Slide 13: Kernel's mid-term strategy
Financials and Kernel today Kernel 2021 Kernel 2021 outlook 2.1 Kernel’s mid-term strategy We aim to profitably double export volumes by FY2021, providing unique complex solutions to our clients (customers and suppliers), with balanced development of our business segments resulting from an efficient
Slide 14: Road to US$ 500m EBITDA by 2021 (1/2)
Financials and Kernel today Kernel 2021 Kernel 2021 outlook 2.2 Road to US$ 500m EBITDA by 2021 (1/2) Road to US$ 500m EBITDA Comments Full historical performance in FY21F 1,753 FY17 FY21F Volumes due to greenfield construction of new crushing 1,040 920 1,030 984 1,084 Production kt 1,328 1,877
Slide 15: Road to US$ 500m EBITDA by 2021 (2/2)
Financials and Kernel today Kernel 2021 Kernel 2021 outlook 2.2 Road to US$ 500m EBITDA by 2021 (2/2) Expansion CapEx US$ m In October 2016 Kernel declared an extensive US$ 500m investment program to Silo network expansion 57 466 support Strategy 2021, reinforced with long-term capital via issuanc
Slide 16: Sunflower oil
Financials and Kernel today Kernel 2021 Kernel 2021 outlook 2.3 Sunflower oil Strong case for the construction of greenfield crushing plant in Western Ukraine Extremely high crushing margins over the past 5-6 years drove substantial investment into the sector and Timeline for capital deployment re
Slide 17: Grain and infrastructure
Financials and Kernel today Kernel 2021 Kernel 2021 outlook 2.4 Grain and infrastructure Construction of TransGrainTerminal and new silos Timeline for capital deployment TransGrainTerminal highlights US$ millions Construction started in 2017 Silo construction Commissioning date: autumn 2019 Acqu
Slide 18: Farming
Financials and Kernel today Kernel 2021 Kernel 2021 outlook 2.5 Farming Integration of acquired leasehold land bank to uplift productivity to Kernel’s standard Expansion CapEx US$ millions US$ 128 million (adjusted for storage capacity and net working capital) has been invested into leasehold farm
Slide 19: 3. Financials and Outlook
3. FINANCIALS AND OUTLOOK
Slide 20: Consolidated statement of profit or loss
Financialsand Financials & Kernel today Kernel 2021 outlook outlook 3.1 Consolidated statement of profit or loss US$ million, except ratios and EPS FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Revenue 215 350 663 1,047 1,020 1,899 2,072 2,797 2,393 2,330 1,989 2,169 Net IAS 41 gain /
Slide 21: Balance sheet
Financialsand Financials & Kernel today Kernel 2021 outlook outlook 3.2 Balance sheet Balance sheet highlights US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Cash & cash equivalents 6 25 89 129 59 116 83 79 65 129 60 143 Net trade accounts receivable 9 10 49 32 65 112 146 15
Slide 22: Cash flow statement
Financialsand Financials & Kernel today Kernel 2021 outlook outlook 3.3 Cash flow statement US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 EBITDA 17 46 123 190 190 310 319 288 223 397 346 319 Net purchase of PP&E (6) 2 (24) (89) (56) (48) (93) (91) (42) (23) (30) (40) Financ
Slide 23: Outlook for FY2018
Financialsand Financials & Kernel today Kernel 2021 outlook outlook 3.4 Outlook for FY2018 We broadly assume weak business conditions to prevail in FY2018 keeping financial performance under pressure. Ukrainian farmers are expected to deliver close to 13.0 million tons of sunflower seeds as unfa
Slide 24: IR contact
IR contact Michael Iavorskyi Investor Relations Manager m.iavorskyi@kernel.ua Tel.: +38 (044) 461 88 01, ex. 7275 3 Tarasa Shevchenka Lane, Kyiv Ukraine, 01001 Investor calendar ▪ Q1 FY2018 Financial Report 27 November 2017 ▪ Annual general shareholders’ meeting 11 December 2017 ▪ Q2 FY2018 Operatio
Slide 25: Appendices
APPENDICES
Slide 26: A1. Key highlights
A1. Key highlights Kernel operates in globally competitive growing Ukrainian agri sector Integrated, resilient and simple business model built around scale & global reach Leader across all market segments supported by unparalleled world-class asset base with high barriers to entry Top standa
Slide 27: A2. Markets and business environment: Sunflower oil
A2. Markets and business environment Sunflower oil Global edible oils market trends Global consumption of vegetable oils Global sunflower oil exports 182 10.2 Following the global demographic trends, world consumption of vegetable million tons million tons oils achieved healthy 2.5% y-o-y growth i
Slide 28: A2. Markets and business environment: Grain and infrastructure
A2. Markets and business environment Grain and infrastructure Global trends Top 5 grain exporters from Ukraine Global grain exports Top grain exporting countries 2013/14 2014/15 2015/16 2016/17 million tons 430 million tons 374 394 376 Nibulon Nibulon SFGCU Nibulon 301 29 Louis Dreyfus SFGCU Kernel
Slide 29: A2. Markets and business environment: Low cycle of soft commodity prices
A2. Markets and business environment Low cycle of soft commodity prices Index of soft commodity prices, US$-inflation adjusted 300% 250% 200% 150% 100% 50% Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 1 2 3 Wheat Corn Sunflower oil Note 1.