Omnia Holdings Limited · JSE:OMN
Omnia — H1 FY2018 Earnings Presentation
38 slides from Omnia's earnings presentation, November 2017
Slide 1: Unaudited Results for the six months ended 30 September 2017
UNAUDITED RESULTS for the six months ended 30 September 2017 ner wealth by leveraging knowledge
Slide 2: Agenda
PAGE 1 OMNIA at a glance GROUP overview AGRICULTURE overview MINING overview CHEMICALS overview AGENDA FINANCIAL overview PROSPECTS Page 1
Slide 3: Omnia at a Glance
PAGE 2 OMNIA AT A GLANCE AGRICULTURE MINING CHEMICALS Omnia’s Agriculture division Omnia’s Mining division services The chemicals division’s comprises Fertilizer RSA and the mining industry through BME main business is through Fertilizer International and Protea Mining Chemicals Protea Chemicals
Slide 4: Our Vision and Mission
PAGE 3 OMNIA AT A GLANCE | OUR VISION AND MISSION
Slide 5: Our Value Proposition
PAGE 4 OMNIA AT A GLANCE | OUR VALUE PROPOSITION We differentiate ourselves from 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 unique products and
Slide 6: Geographic Scope: 30 countries
PAGE 5 OMNIA AT A GLANCE | GEOGRAPHIC SCOPE Business operations and offices in 30 countries
Slide 7: Group Overview: Section Highlights
PAGE 6 SECTION HIGHLIGHTS Revenue down 3% to R7.7bn Operating profit up 19% to R488m Operating margin 6.3% EPS up 29% Pages 6–15 423 cents GROUP HEPS up 31% 420 cents OVERVIEW Interim dividend up 25% 200 cents
Slide 8: Group Overview: Salient Features
PAGE 7 GROUP OVERVIEW | SALIENT FEATURES AGRICULTURE MINING CHEMICALS • Normalisation of Agriculture Trading • Sustainable recovery compared to H2 • South African bulk trading business business 2017 under pressure • Timing of the planting season has • Reduced product and transport units costs • Impr
Slide 9: Group Overview: Economic Environment
PAGE 8 GROUP OVERVIEW | ECONOMIC ENVIRONMENT • Challenging trading environment across all sectors • Rand volatility continues • Harsh drought conditions were broken across most of South Africa • Drought persists in Western Cape • Depressed maize prices (in rands) • Improved ammonia:urea ratio • Comm
Slide 10: Rand:USD Exchange Rate
PAGE 9 GROUP OVERVIEW | ECONOMIC ENVIRONMENT RAND:USD EXCHANGE RATE R17 FY2017 H1 FY2018 H1 RAND:USD Average: R14.51 +15% Average: R13.22 (9%) 30 Sep 2016 R16 Average R14.51 R15 Closing R13.72 R14 RAND:USD 31 Mar 2017 R13 Average R14.00 Closing R13.38 R12 R11 RAND:USD 30 Sep 2017 R10 Average R13.22
Slide 11: SAFEX Yellow Maize (per tonne)
PAGE 10 GROUP OVERVIEW | ECONOMIC ENVIRONMENT SAFEX YELLOW MAIZE (PER TONNE) R4 500 $200 Total harvest at 30 September R4 000 $180 '000 tonnes 2013 6 203 $160 R3 500 2014 6 540 Yellow maize (Rand) $140 2015 5 220 Yellow maize (USD) R3 000 2016 4 370 $120 2017 6 851 R2 500 $100 USD: rand exchange rat
Slide 12: Ammonia vs Urea Price
PAGE 11 GROUP OVERVIEW | ECONOMIC ENVIRONMENT AMMONIA VS UREA PRICE $800 2.5 Urea – prices at 30 September – USD $700 2013 290 2.0 2014 347 Urea and Ammonia (USD per tonne) $600 2015 252 2016 194 Ammonia:Urea ratio $500 2017 273 1.5 Ammonia – prices at $400 30 September – USD 2013 436 1.0 $300 2014
Slide 13: Precious Metals
PAGE 12 GROUP OVERVIEW | ECONOMIC ENVIRONMENT PRECIOUS METALS $1 600 $1 200 Gold - prices at 30 September - USD $1 400 2013 1 338 $1 000 Platinum and gold (USD per ounce) 2014 1 214 $1 200 2015 1 146 Palladium (USD per ounce) $800 2016 1 327 $1 000 2017 1 279 Platinum - prices at $800 $600 30 Septem
Slide 14: Energy/Commodity Prices
PAGE 13 GROUP OVERVIEW | ECONOMIC ENVIRONMENT ENERGY/COMMODITY PRICES $140 Oil – prices at 30 September – USD $120 2013 112 2014 98 2015 49 Energy/ commodity (USD) $100 2016 49 2017 58 $80 Coal – prices at 30 September – USD $60 2013 78 2014 68 2015 51 $40 2016 74 2017 91 $20 Uranium – prices at 30
Slide 15: Metal Commodity Prices: Iron Ore
PAGE 14 GROUP OVERVIEW | METAL COMMODITY PRICES $100 Iron ore – prices at 30 September – USD $90 2013 134 $80 2014 82 2015 57 Iron ore China (USD per tonne) $70 2016 57 2017 70 $60 $50 $40 $30 $20 $10 $0 Sep 2014 Mar 2015 Sep 2015 Mar 2016 Sep 2016 Mar 2017 Sep 2017 Iron ore China +22.8%
Slide 16: Metal Commodity Prices: Cobalt and Copper
PAGE 15 GROUP OVERVIEW | METAL COMMODITY PRICES $70 000 $8 000 Cobalt – prices at 30 September – USD $60 000 $7 000 2013 26 220 2014 31 910 $6 000 2015 27 695 $50 000 Copper (USD per tonne) Cobalt (USD per tonne) 2016 27 500 $5 000 2017 59 094 $40 000 Copper – prices at $4 000 30 September– USD $30
Slide 17: Agriculture Overview: Section Highlights
PAGE 16 SECTION HIGHLIGHTS Revenue down 11% to Pages 16–19 R3.2bn AGRICULTURE R111m Operating profit up 113% to OVERVIEW Operating margin 3.5%
Slide 18: Agriculture Overview: Revenue
PAGE 17 AGRICULTURE OVERVIEW | REVENUE Restated Restated Rm H1 2018 H2 2017 H1 2017 FY 2017 FY 2016 Volumes down Revenue 3 192 4 553 3 606 8 159 8 218 Agriculture RSA 1 632 2 626 1 817 4 443 4 650 (8%) Agriculture Trading 541 523 808 1 331 1 632 Agriculture International 1019 1 404 981 2 385 1 936 •
Slide 19: Agriculture Overview: Operating Profit
PAGE 18 AGRICULTURE OVERVIEW | OPERATING PROFIT Restated Restated Rm H1 2018 H2 2017 H1 2017 FY 2017 FY 2016 Revenue 3 192 4 553 3 606 8 159 8 218 Operating profit 111 384 52 436 431 Agriculture RSA 9 253 2 255 369 Agriculture Trading 8 25 (35) (10) (1) Agriculture International 94 106 85 191 63 Ope
Slide 20: Agriculture Overview: FY2018 H2 Outlook
PAGE 19 AGRICULTURE OVERVIEW | FY2018 H2 – OUTLOOK • In general the nutrient extraction of the large crop and heavy rains have led to depleted levels of fertilizer and minerals in the soil for the 2017/18 planting season • Mostly favourable farming conditions should support fertilizer sale volumes a
Slide 21: Mining Overview: Section Highlights
PAGE 20 SECTION HIGHLIGHTS Revenue up 2% to Pages 20–23 R2.5bn MINING Operating profit up 21% to R337m OVERVIEW Operating margin 13.5%
Slide 22: Mining Overview: Revenue
PAGE 21 MINING OVERVIEW | REVENUE Rm H1 2018 H2 2017 H1 2017 FY 2017 FY 2016 Volumes up Revenue 2 494 1 925 2 453 4 378 4 551 Mining RSA 1 024 862 913 1 775 1 875 3% Mining International 1 470 1 063 1 540 2 603 2 676 • Markets remained challenging but the business has shown sustainable growth compar
Slide 23: Mining Overview: Operating Profit
PAGE 22 MINING OVERVIEW | OPERATING PROFIT Rm H1 2018 H2 2017 H1 2017 FY 2017 FY 2016 Operating profit 337 176 278 454 546 Mining RSA 182 44 108 152 253 Mining International 155 132 170 302 293 Operating margin (%) 13.5 9.1 11.3 10.4 12.0 • Margin growth in Mining RSA through internal efficiencies a
Slide 24: Mining Overview: FY2018 H2 Outlook
PAGE 23 MINING OVERVIEW | FY2018 H2 – OUTLOOK • Mining will be focusing on adding more value to assist customers overcome the challenges of the proposed Mining Charter in South Africa • Some new contracts expected to ramp up in H2 2018 • Pricing pressure from clients expected to continue • Continue
Slide 25: Chemicals Overview: Section Highlights
PAGE 24 SECTION HIGHLIGHTS Revenue up 7% to Pages 24–27 R2.0bn CHEMICALS Operating profit down 8% to R65m OVERVIEW Operating margin 3.2%
Slide 26: Chemicals Overview: Revenue
PAGE 25 CHEMICALS OVERVIEW | REVENUE Rm H1 2018 H2 2017 H1 2017 FY2017 FY 2016 Volumes up Revenue Chemicals RSA 2 020 1 792 1 844 1 725 1 888 1 747 3 732 3 472 4 005 3 822 4% Chemicals International 228 119 141 260 183 • Improved product diversification and growth in international business • Slight
Slide 27: Chemicals Overview: Operating Profit
PAGE 26 CHEMICALS OVERVIEW | OPERATING PROFIT Rm H1 2018 H2 2017 H1 2017 FY2017 FY 2016 Operating profit 65 72 71 143 191 Chemicals RSA 36 63 60 123 179 Chemicals International 29 9 11 20 12 Operating margin (%) 3.2 3.9 3.8 3.8 4.8 • Continued lack of recovery in South African manufacturing sector •
Slide 28: Chemicals Overview: FY2018 H2 Outlook
PAGE 27 CHEMICALS OVERVIEW | FY2018 H2 – OUTLOOK • Limited growth in the South African manufacturing sector expected • Additional volumes expected in Chemicals RSA on the back of new principle contracts • Recent uptick in crude oil will create some price inflation for oil derivative products • Focus
Slide 29: Financial Overview: Section Highlights
PAGE 28 SECTION HIGHLIGHTS Revenue down 3% to Pages 28–32 R7.7bn FINANCIAL Operating profit up 19% to R488m OVERVIEW Operating margin 6.3%
Slide 30: Financial Overview: Income Statement
PAGE 29 FINANCIAL OVERVIEW | INCOME STATEMENT Restated* 30 Sep 30 Sep 31 Mar Rm 2017 % 2016 2017 Revenue 7 706 (3) 7 947 16 269 Timing of summer planting season Cost of sales (5 916) 9 (6 475) (12 802) Gross profit 1 790 22 1 472 3 467 Improved market and operating conditions Distribution expenses (
Slide 31: Income Statement Ratio Analysis
PAGE 30 FINANCIAL OVERVIEW | INCOME STATEMENT RATIO ANALYSIS Restated 30 Sep 30 Sep 31 Mar 2017 2016 2017 Gross margin (%) 23.2 18.5 21.3 Operating margin (%) 6.3 5.2 6.4 Finance cost cover* 5.4 4.2 5.7 Effective tax rate (%) 28.4 28.7 30.8 Dividend cover 2.1 2.1 2.6 * Operating profit divided by ne
Slide 32: Financial Overview: Balance Sheet
PAGE 31 FINANCIAL OVERVIEW | BALANCE SHEET Restated 30 Sep 30 Sep 31 Mar Rm 2017 % 2016 2017 Non-current assets 5 065 8.9 4 651 4 937 Normal capex and depreciation levels and ERP project Current assets 9 403 5.6 8 902 7 827 Growth in Agriculture International and timing of Inventories 4 453 6.7 4 17
Slide 33: Financial Overview: Cashflow
PAGE 32 FINANCIAL OVERVIEW | CASHFLOW Restated 30 Sep 30 Sep 31 Mar Rm 2017 % 2016 2017 Cash flow from operating activities* (1 059) 20.8 (1 338) 886 Cash outflow from investing activities (335) (23.6) (271) (772) Increase in property, plant and equipment (226) (5.1) (215) (658) • Replacement (79) 2
Slide 34: Prospects Overview
PAGE 33 IN THIS SECTION Pages 33–35 Umongo PROSPECTS Petroleum Recap Outlook OVERVIEW FY2018 H2
Slide 35: Prospects: Umongo Petroleum Recap
PAGE 34 PROSPECTS | UMONGO PETROLEUM RECAP • Leading distributor of additives, base oils and other related petroleum, oil and lubricant products in South Africa and sub-Saharan Africa • Recent achievements • awarded Shell Supplier of the year • appointment as distributor of Chevron Group II base oil
Slide 36: Prospects: FY2018 H2 Outlook
PAGE 35 PROSPECTS | FY2018 H2 – OUTLOOK • The Group’s balance sheet remains strong and the business well placed for the upturn in markets • A good season is expected for Agriculture underpinned by well priced inventory, the favourable ammonia: urea ratio and good farming conditions, coupled with low
Slide 37: Forward-Looking Statements
PAGE 36 FORWARD-LOOKING STATEMENTS Throughout this report there are statements made that are ‘forward-looking statements’. Any statements preceded or followed by, or that include the words ‘forecasts’, ‘believes’, ‘expects’, ‘intends’, ‘plans’, ‘prediction’, ‘will’, ‘may’, ‘should’, ‘could’, ‘antici
Slide 38: www.omnia.co.za
www.omnia.co.za Creating customer wealth by leveraging knowledge