Olam Group Limited · SGX:VC2
Olam — Olam International — H1 2019 Earnings Presentation
31 slides from Olam's earnings presentation, Aug 14, 2019
Slide 1: H1 2019 Results Briefing
H1 2019 Results Briefing August 14, 2019
Slide 2: Presenters
Presenters Sunny Verghese A. Shekhar N. Muthukumar Co-Founder Executive Director Group CFO and Group CEO and Group COO Olam International Limited Results for 6 Months ended June 30, 2019 | August 14, 2019 2
Slide 3: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements and Management Discussion and Analysis for the Second Quarter (“Q2 2019”) and Six Months ended June 30, 2019 (“H1 2019”) lodged on SGXNET on August 14, 2019. Olam International Limited Resul
Slide 4: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward-looking nature and are therefore based on management’s assumptions about future developments. Such forward
Slide 5: Agenda
Agenda • H1 2019 highlights • Segmental review • Strategic Plan progress • Key takeaways
Slide 6: H1 2019 highlights
H1 2019 highlights
Slide 7: H1 2019 results at a glance
H1 2019 results At a glance Volume EBITDA PATMI 19.1 M MT S$772 M S$230 M +40.4% +14.1% -8.5% Operational Free Cash Flow Gearing PATMI S$248 M +FCFE from S$466 1.46x to M -2.4% S$864 M 1.28x +28.1% Olam International Limited Results for 6 Months ended June 30, 2019 | August 14, 2019 7
Slide 8: H1 2019 highlights
H1 2019 highlights Steady results amid global uncertainties Interim dividends maintained affecting market conditions Continued top line growth in volume, revenue Board of Directors declares interim dividend of 3.5 cents per share (H1 2018: Steady growth in EBITDA 3.5 cents) Strong, positive FCFE Str
Slide 9: Volume grew 40.4%
Volume grew 40.4% Led by Food Staples & Packaged Foods (Grains) Volume by segment, '000 MT +40.4% 5,473 71 19,100 13,607 16 -67 H1 2018 Edible Nuts Confectionery Food Staples & Industrial Raw H1 2019 & Spices & Beverage Packaged Foods Materials, Ingredients Infrastructure & Logistics Olam Internatio
Slide 10: EBITDA up 14.1%
EBITDA up 14.1% Growth in all segments except Industrial Raw Materials, Infrastructure and Logistics EBITDA by segment, S$ million +14.1% +14.1% 62 9 16 772 676 19 -10 H1 2018 Edible Nuts Confectionery Food Staples & Industrial Raw Commodity H1 2019 & Spices & Beverage Packaged Foods Materials, Fina
Slide 11: PATMI down 8.5%
PATMI down 8.5% Excluding impact of SFRS(I) 16, PATMI would have declined 3.4% to S$243 million and Operational PATMI up 2.8% at S$261 million PATMI and Operational PATMI, S$ million -8.5% -8.6% 96 252 -61 15 7 230 -63 -16 H1 2018 EBITDA^ Depreciation & Net Finance Taxation^ Exceptional Non-controll
Slide 12: 9.2% reduction in invested capital
9.2% reduction in invested capital 26.9% reduction in working capital year-on-year S$ Million • Fixed Capital increased on adoption of -9.2% SFRS(I) 16 with addition of right-of- 16,649 15,832 15,997 use assets and investments in line 14,812 14,527 with Strategic Plan 8,853 7,705 8,070 6,844 5,900 •
Slide 13: Net gearing at 1.28x
Net gearing at 1.28x Excluding impact of SFRS(I) 16, net gearing improved to 1.19x Net and adjusted debt / equity (basic) • Reduced net debt: 1.46 • Despite impact of application of 1.32 1.28 1.46 1.32 SFRS(I) 16 – net increase of 1.19 S$574.4 million in lease liabilities 0.37 0.29 • Supported by lo
Slide 14: Free cash flow
Free cash flow Strong, positive FCFE in H1 2019 on improved operating cash, reduced working capital Free Cash Flow to Equity, S$ million +1,031 +1,031 1,153 39 864 -185 -61 84 -167 H1 2018 Operating Cash Changes in Tax Paid Capex / Net Interest Paid H1 2019 Flow (before Working Capital Investments I
Slide 15: Available liquidity
Available liquidity Sufficient to cover all repayment and Capex obligations Total borrowings and available liquidity, S$ Million as at June 30, 2019 8,807 19,305 +7,033 12,272 1,763 5,038 5,125 3,697 7,147 Cash and RMI* Secured Unutilised Available Liquidity Total Borrowings Short-term Receivables B
Slide 16: Segmental review
Segmental review
Slide 17: Edible Nuts and Spices
Edible Nuts and Spices EBITDA, S$ Million Invested capital, S$ Million +0.9% 438 4,091 4,128 3,643 3,604 3,610 332 340 +8.0% 1,421 2,280 1,941 237 256 1,608 1,666 2,222 1,996 1,944 1,810 2,187 2016 2017 2018 H1 2018 H1 2019 Dec-16 Dec-17 Dec-18 Jun-18 Jun-19 Working Capital Fixed Capital • Improved
Slide 18: Confectionery and Beverage Ingredients
Confectionery and Beverage Ingredients EBITDA, S$ Million Invested capital, S$ Million 444 6,110 -7.3% 407 5,347 +34.7% 4,935 4,763 328 4,416 240 4,569 3,819 3,434 3,230 178 2,767 1,541 1,528 1,501 1,533 1,649 2016 2017 2018 H1 2018 H1 2019 Dec-16 Dec-17 Dec-18 Jun-18 Jun-19 Working Capital Fixed Ca
Slide 19: Food Staples and Packaged Foods
Food Staples and Packaged Foods EBITDA, S$ Million Invested capital, S$ Million -12.8% 360 5,035 330 4,522 4,678 4,578 4,392 289 1,484 +5.2% 1,131 1,118 753 1,498 167 176 3,024 3,547 3,460 3,552 3,639 2016 2017 2018 H1 2018 H1 2019 Dec-16 Dec-17 Dec-18 Jun-18 Jun-19 Working Capital Fixed Capital • E
Slide 20: Industrial Raw Materials, Infrastructure and Logistics
Industrial Raw Materials, Infrastructure and Logistics EBITDA, S$ Million Invested capital, S$ Million -22.7% 197 2,221 2,105 176 1,934 135 -10.2% 1,572 1,495 1,213 1,050 904 94 511 348 85 1,008 1,055 1,061 1,030 1,147 2016 2017 2018 H1 2018 H1 2019 Dec-16 Dec-17 Dec-18 Jun-18 Jun-19 Working Capital
Slide 21: Strategic Plan progress
Strategic Plan progress
Slide 22: 2019-2024 Strategic Plan Progress
2019-2024 Strategic Plan Progress Investments • Completed acquisition of Cotonchad in TChad for US$16 million • Completed acquisition of 85% of BT Cocoa in Indonesia for US$90 million • Proposed acquisition of Dangote Flour Mills in Nigeria for NGN120 billion (~US$331 million) • Completed acquisitio
Slide 23: Key takeaways
Key takeaways
Slide 24: Key takeaways
Key takeaways • Continued top line growth; steady EBITDA growth in H1 2019 • Strong positive cash flow generation of S$864 million; interim dividends maintained • Stronger balance sheet; reduced gearing at 1.28x • Expect significant Capex investments and higher working capital deployment in H2 2019
Slide 25: Appendix
Appendix
Slide 26: P&L statement
P&L statement S$ million H1 2019 H1 2018 % Change Q2 2019 Q2 2018 % Change Volume ('000 MT) 19,100.2 13,606.6 40.4 10,639.6 6,641.4 60.2 Revenue 15,943.9 13,724.6 16.2 8,596.0 7,429.2 15.7 Net loss in fair value of biological assets (4.0) (9.8) (59.3) (3.0) (5.7) (48.2) EBITDA^ 771.5 676.0 14.1 351.
Slide 27: P&L statement: impact of SFRS(I) 16
P&L statement Impact of SFRS(I) 16 S$ million H1 2019 Q2 2019 SFRS(I) 16 Excluding SFRS(I) 16 Excluding Profit & Loss Statement Reported Reported Impact SFRS(I) 16 Impact SFRS(I) 16 EBITDA 771.5 49.5 722.0 351.2 24.9 326.3 Depreciation & Amortisation (249.5) (47.4) (202.1) (124.8) (23.8) (101.0) Net
Slide 28: Exceptional items
Exceptional items S$ million H1 2019 H1 2018 Q2 2019 Q2 2018 Profit on sale of land in US - 13.7 - 0.1 Profit on sale of Subsidiary 0.6 5.7 - 0.1 Sale of Café Enrista brand - 2.6 - 2.6 Loss on sale of JV/Associate (1.1) (24.1) - (0.2) Exit/Closure costs (17.2) - (5.5) - Exceptional Items (17.7) (2.1
Slide 29: Balance sheet
Balance sheet Change Change S$ million 30-Jun-2019 31-Dec-2018 30-Jun-2018 vs Dec 18 vs Jun 18 Uses of Capital Fixed Capital 8,337.8 8,349.3 (11.5) 8,388.5 (50.7) Right-of-use assets 656.4 - 656.4 - 656.4 Working Capital 5,757.2 6,376.4 (619.2) 7,646.4 (1,889.2) Cash 3,697.2 2,480.4 1,216.8 2,426.3
Slide 30: Cash flow statement
Cash flow statement S$ million H1 2019 H1 2018 Change Q2 2019 Q2 2018 Change Operating Cash flow (before Interest & Tax) 770.0 685.7 84.3 350.6 311.9 38.7 Changes in Working Capital 765.3 (388.1) 1,153.4 555.5 298.9 256.6 Net Operating Cash Flow 1,535.3 297.6 1,237.7 906.1 610.8 295.3 Net interest p
Slide 31: H1 2019 Results Briefing
H1 2019 Results Briefing olamgroup.com/investors.html ir@olamnet.com