Kernel Holding S.a. · GPW:KER
Kernel — Investor Presentation (April 2013)
38 slides from Kernel's investor presentation, April 2013
Slide 1: Kernel Holding S.A. Company Presentation
KERNEL HOLDING S.A. CO M PA N Y P R E S E N TAT I O N April 2013
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: Company Overview
COMPANY OVERVIEW KERNEL April 2013
Slide 4: Kernel at a glance
Kernel at a glance EDIBLE OIL FY2012 EBITDA: US$ 199 Mio, 56% of total(1) Bulk oil segment #1 oilseed crusher and exporter in Ukraine 3 Mio tons/year sunflower seed crushing capacity Bottled oil segment #1 bottled sunflower oil producer and marketer in Ukraine with 32% market share GRAIN F
Slide 5: Value chain management business model
Value chain management business model Kernel Farming + Sourcing + Processing + Logistics + Distribution = added value 422 000 ha(1) of farm land grain & oilseed origination 10 oilseed crushing plants 40+ grain silos providing 4.7 Mio tons of agricultural FY2012: fully cultivated from over 2 000 farm
Slide 6: FY2012 Contribution by operating segment
FY2012 Contribution by operating segment Revenue by segment (1) EBITDA (2) (US$ Mio / % of total revenue) (US$ Mio / % of EBITDA) US$ 99.1 / 4.2% US$ 20.0 / 5.7% US$ 51.0 / 2.2% US$ 18.3 / 5.2% US$ 28.9 / 1.2% US$ 13.7 / 3.9% US$ 203.0 / 8.7% US$ 31.8 / 9.1% US$ 2 157 Mio US$ 1 191.6 / 50.9% US$ 322
Slide 7: Segmental Review
SEGMENTAL REVIEW KERNEL April 2013
Slide 8: Bulk oil segment
Bulk oil segment Crushing capacity Kernel – No1 oilseed crusher in Ukraine with (% of Ukraine `s total capacity, Kernel `s estimate) 2.6 Mio tons/year sunflower seed crushing capacity KERNEL 36 % Kernel – 36% estimated market share (percent of Ukraine `s total crushing capacity) Other 44 % Main
Slide 9: Bottled oil segment
Bottled oil segment Kernel – leading bottled oil producer Bottled oil sales and marketer in Ukraine (% of total Ukrainian market, FY2012 Kernel `s estimate) Consolidated bottled oil sector Kernel and Bunge supply over 50% of bottled Korolivsky smak, 7% oil sold in Ukraine Other, 39% Kernel and B
Slide 10: Grain segment
Grain segment Leading grain supply chain operator in Ukraine with 9% market share of grain & oil-bearing Major grain exporters in season 11/12 (1) crops export in the 2011/12 season Khlibinvestbud 14% Extensive and well-established origination base Nibulon 10% Origination effected directly at
Slide 11: Export terminals segment
Export terminals segment TransBulkTerminal (“TBT”) 2nd largest grain terminal in Ukraine, 4 Mio tons/year grain throughput capacity Key features: 200 000 tons grain storage capacity in 38 vertical bins directly alongside berth Handles all types of grain Grain & oilseeds delivery to terminal by
Slide 12: Silo services segment
Silo services segment Largest private grain silo network in Ukraine with 2.5 Mio tons grain storage capacity Strategic location of silos in key origination areas and close to Kernel `s crushing plants All silos connected to national railway network, allowing grain shipment to port by railcar 1
Slide 13: Farming segment
Farming segment Kernel’s farming acreage ths.ha 450 422.0(1) Prime location of farms in grain and sunflower belt of Ukraine 400 Kernel has been active in farming since 2002 350 Farms benefit from close location to Kernel `s grain silos and processing plants 300 Largest landbank among listed Uk
Slide 14: Sugar production & marketing
Sugar production & marketing 100 000 tons sugar produced in FY2013, ~4% of Ukraine`s total Kernel`s sugar plants sugar production Sugar prices depressed for a second year in a row Non-core business due to high volatility of the margins and limited export potential Ukraine`s sugar market: Average a
Slide 15: Taman Deep Water Grain Transshipment Facility – Transaction Overview
TAMAN DEEP WATER GRAIN TRANSSHIPMENT FACILITY – TRANSACTION OVERVIEW April 2013
Slide 16: Transaction highlights
Transaction highlights Target description Structure One of the largest deep water grain export terminals on Russia’s Black 50/50 joint venture between Kernel Holding S.A. and Sea coast, strategically located in close proximity to Southern Russia’s Renaisco BV, a subsidiary of Glencore Internatio
Slide 17: Acquisition rationale
Acquisition rationale Deep water grain transshipment is a major logistical bottleneck in Russia: Sea of Azov Available capacity is sufficient for only 1/2 of Russian grain export needs Additional demand from Kazakhstan grain transit Ability to expand existing transshipment capacities is clos
Slide 18: Russian grain export value chain: margin enhancement tools
Russian grain export value chain from farm gate to FOB: margin deboning & enhancement tools EBITDA contribution per ton Contributors: Silo services margin Grain exports margin Own terminal => higher grain export volumes Origination(1) Possible synergies Profit enhancement tools: Operational flexibil
Slide 19: Strategy Highlights
STRATEGY HIGHLIGHTS April 2013
Slide 20: Strategy pillars
Strategy pillars Geographic focus Strong asset base Operational discipline We believe that the Black Sea region is one of We consider our constantly growing and bal- It is our core priority to maintain a low-risk pro- few areas in the world capable of increasing anced asset base as the vital element
Slide 21: Russia: Taman acquisition unlocks the development of Russian operations
Russia: Taman acquisition unlocks the development of Russian operations Kernel`s objectives in Russia: FY2016 2 500 000 tons of grain transshipment (1) 2 500 000 tons of grain export volumes 1 000 000 tons of sunflower oilseed processing volumes Estimated EBITDA contribution of about US$ 120
Slide 22: Ukraine: combination of organic and acquisitive growth strategy
Ukraine: combination of organic and acquisitive growth strategy Organic: FY2013-2014 Full capacity utilization at crushing plants Increase in transshipment volumes at Transbulkterminal Improvement of farming EBITDA through integration of acquired entities Greenfield inland silo development t
Slide 23: Financial Highlights H1 FY2013
FINANCIAL HIGHLIGHTS H1 FY2013 April 2013
Slide 24: Income Statement
Income Statement(1) Amounts in USD millions H1 FY2013 H1 FY2012 % change Revenue 1 474.1 985.9 49.5% Gross profit 233.4 218.9 6.6% Profit from operating activities 119.0 116.4 2.2% Net profit attributable to equity holders of Kernel Holding S.A. 69.7 101.9 (31.6%) EBITDA 157.7 148.6 6.1% EPS (2) 0.8
Slide 25: Balance Sheet
Balance Sheet(1) Amounts in USD millions 31 December 2012 31 December 2011 Invested сapital Cash & cash equivalents 45.9 129.8 Net trade accounts receivable 223.4 116.1 Inventory 907.7 561.3 of which: readily marketable inventories 788.3 531.3 Other currents assets 422.1 373.5 Net property, plant &
Slide 26: Cash Flow
Cash Flow(1) Amounts in USD millions H1 FY2013 H1 FY2012 Operating profit before working capital changes 151.6 147.0 Changes in working capital (521.7) (175.3) Cash obtained from/ (used in) operations (370.2) (28.4) Finance costs paid (37.6) (25.2) Income tax paid (19.8) (1.0) Net cash obtained from
Slide 27: Liquidity position & credit metrics
Liquidity position & credit metrics(1) Amounts in USD millions, except ratios 31 December 2012 31 December 2011 Cash 45.9 129.8 Inventory 907.7 561.3 of which: readily marketable inventories 788.3 531.3 RMI / Inventories 86.8% 94.7% Gross interest-bearing debt 1 233.4 736.5 Net interest-bearing debt
Slide 28: Financial Highlights FY2006 – FY2012
FINANCIAL HIGHLIGHTS FY2006 – FY2012 April 2013
Slide 29: Income statement FY2006 – FY2012
Income statement FY2006 – FY2012 (1) Amounts in USD million, except for EPS and margins FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Revenue 215.2 350.4 663.1 1 047.1 1 020.5 1 899.1 2 157.4 (2) EBITDA 17.0 46.3 123.2 190.0 190.1 309.6 322.0 Result from operating activities (EBIT) 12.0 38.6 111.
Slide 30: Balance sheet FY2006 – FY2012
Balance sheet FY2006 – FY2012 (1) Amounts in USD million FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Invested Capital Cash & cash equivalent 6.4 25.3 88.5 129.3 59.5 115.9 82.5 Net trade accounts receivable 9.1 9.8 48.7 32.4 65.5 111.6 146.4 Inventory 32.3 40.2 144.7 99.1 147.8 183.7 410.2 Of w
Slide 31: Cash flow FY2006 – FY2012
Cash flow FY2006 – FY2012 (1) Amounts in USD million FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Operating profit before working capital changes 16.6 45.4 116.1 188.2 205.7 275.2 291.4 Changes in working capital (35.9) (14.7) (210.2) (25.0) (97.3) (180.1) (242.1) Cash obtained from/(used in) op
Slide 32: Credit metrics FY2006 – FY2012
Credit metrics FY2006 – FY2012 (1) Amounts in USD million, except ratios FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Gross interest-bearing debt 93.3 164.3 255.8 294.6 345.2 422.0 692.8 Cash 6.4 25.3 88.5 129.3 59.5 115.9 82.5 Net interest-bearing debt 86.9 139.0 167.3 165.3 285.7 306.1 610.3 R
Slide 33: Segmental Results
Segmental Results(1) Revenue(2), USD million EBITDA(3), USD million EBITDA(3) margin, % Tonnage(4) FY11 FY12 % change FY11 FY12 % change FY11 FY12 FY11 FY12 % change Bulk oil 1 157.9 1 191.6 2.9% 175.9 166.6 (5.2%) 15.2% 14.0% 820 987 828 370 0.9% (5) Farming 54.7 171.0 212.8% 31.5 73.8 134.2% 57.6%
Slide 34: Appendices
APPENDICES KERNEL April 2013
Slide 35: Ukraine: market leader in production and export of sunflower oil
Ukraine: market leader in production and export of sunflower oil Major producing regions, season 2012/13 Average sunflower EU - 27 Russia seed yields (t/ha) 7.0 Mio tons 8.0 Mio tons sunflower seed production sunflower seed production 2.9 Mio tons 3.0 Mio tons sunflower oil production sunflower oil
Slide 36: Ukraine: global leader in sunflower oil trade and major exporter of grain
Ukraine: global leader in sunflower oil trade and major exporter of grain Ukraine accounts for half of global sunflower oil export Ukrainian sunflower oil exports by destination, season 2011/2012 Ukraine is the world’s largest exporter of sunflower oil, accounting for half of global sunflower oil
Slide 37: Risks
Risks Low harvest of grain or sunflower seed in Ukraine Increased competition An availability of raw materials influences the Company’s operations and accordingly its The Company could face increased competition from current and new operators in financial results. Adverse weather conditions can lead
Slide 38: IR Contact
IR Contact • Yuriy Kovalchuk Investor Relations Director investor_relations@kernel.ua • Yegor Samusenko Investor Relations Manager y.samusenko@kernel.ua Tel.: (+38-044) 461-88-03 April 2013 38