Sipef Sa · EURONEXT:SIP
Sipef Sa — Investor Presentation (February 2020)
67 slides from Sipef Sa's investor presentation, Feb 13, 2020
Slide 1: SIPEF Analyst presentation
SIPEF Analyst presentation February 13, 2020 The Connection to the world of Sustainable Tropical Agriculture 1
Slide 2: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 2 The Connection to the world of Sustainable Tropical Agricult
Slide 3: Company profile
SIPEF group – Company profile Agriculture • 1st segment of the supply chain - commodities Tropical • Recent industrialised countries Sustainable • Audited certifications Connection • Publicly quoted The Connection to the world of Sustainable Tropical Agriculture 3
Slide 4: Company profile: continuous production, diversified
SIPEF group – Company profile Continuous • Continuous crops production • Palm oil : basic commodity for food (and recently Diversified in energy) product • Rubber : cyclic business - tire industry • Indonesia : leading producing country within Asian Diversified in market origin • PNG : export orient
Slide 5: Company profile – Worldwide
SIPEF group – Company profile Worldwide The Connection to the world of Sustainable Tropical Agriculture 5
Slide 6: Company profile – Indonesia
SIPEF group – Company profile Indonesia 6
Slide 7: Company profile – Papua New Guinea
SIPEF group – Company profile Papua New Guinea The Connection to the world of Sustainable Tropical Agriculture 7
Slide 8: Planted hectares summary – December 2019
SIPEF group – Company profile Planted hectares summary 100% – 31 December 2019 Total Group 2019 Palm Rubber Tea Bananas Other % of total planted share Indonesia 60 506 6 159 1 768 0 0 68 433 82% 61 768 PNG 13 707 0 0 0 0 13 707 17% 13 707 Ivory Coast 0 0 0 796 31 827 1% 827 Total 74 213 6 159 1 768
Slide 9: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 9 The Connection to the world of Sustainable Tropical Agricult
Slide 10: Palm oil in the world - Population growth
SIPEF group – Palm oil in the world Palm oil in the world - Population growth • In the coming 40 years, mankind will have to produce more food than in the previous 10 000 years put together • Population growth will have a huge impact on future food demands • Rising middle class is causing diet chang
Slide 11: Oil and fat consumption
SIPEF group – Palm oil in the world Oil and fat consumption Oil and fat consumption per capita (in Kg) Source: Oilworld 80 72,58 70 67,32 59,43 60 55,77 54,95 +55% 49,47 50 39,05 40 35,54 29,93 30 27,55 25,52 26,07 25,86 21,46 20 18,29 15,57 15,15 14,04 10 0 EU-28 USA China India Indonesia Pakistan
Slide 12: Palm oil in the world - Land input
SIPEF group – Palm oil in the world Palm oil in the world - Land input • Increased demand for meat/fat/processed foods • Increased demand for biofuel • Decreasing Agricultural land per capita • Disposable income growth in developing countries The Connection to the world of Sustainable Tropical Agric
Slide 13: Comparison to other oils
SIPEF group – Palm oil in the world Palm oil in the world - Comparison to other oils Resources used per vegetable oil: The Connection to the world of Sustainable Tropical Agriculture 13
Slide 14: Vegetable oils
SIPEF group – Palm oil in the world Palm oil in the world - Vegetable oils Source: Oilworld 2019 : 234,7 million Ton 1994/95: 93,1 million tonnes Palm oil Others 32% Palm oil 19% 16% Palm kernel and coconut oil 5% Other oils/animal fats 37% Soya oil 21% Sunflower oil 9% Soybean oil Palm kernel and R
Slide 15: Palm oil production
SIPEF group – Palm oil in the world Palm oil in the world - Palm oil production 2019 Palm oil production Source: Oilworld Total of 75,6 Mn tonnes Middle & South America Other countries 4% 7% Africa 2% Thailand 4% Indonesia Malaysia 57% 26% Indonesia Malaysia Thailand Africa Middle & South America Ot
Slide 16: Palm oil in the world - Sustainability
SIPEF group – Palm oil in the world Palm oil in the world - Sustainability • Palm oil remains confronted with a European perception problem based on • Health issues • No fat <-> moderate use of saturated fat • Saturated fats – only 50% saturated and no transfats • Environmental issues • Deforestatio
Slide 17: Sources for deforestation
SIPEF group – Palm oil in the world Palm oil in the world - Sources for deforestation The Connection to the world of Sustainable Tropical Agriculture 17
Slide 18: Commodity commitment
SIPEF group – Palm oil in the world Palm oil in the world – Commodity commitment The Connection to the world of Sustainable Tropical Agriculture 18
Slide 19: Sustainable palm oil
SIPEF group – Palm oil in the world Palm oil in the world - Sustainable palm oil 3,05 Million Ha RSPO certified production area RSPO Certified Ha (in KHa) 3 500 3 000 2 500 2 000 1 500 1 000 500 0 The Connection to the world of Sustainable Tropical Agriculture 19
Slide 20: Number of certified production and/or operational units
SIPEF group – Palm oil in the world Number of certified production and/or operational units Certificates 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 RSPO 2 4 6 6 6 7 10 10 11 11 11 ISCC 2 2 2 4 4 5 5 5 5 4 ISPO 5 5 5 5 6 RA 2 3 5 5 GLOBALG.A.P. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I
Slide 21: Biodiesel use of major feedstock
SIPEF group – Palm oil in the world Palm oil in the world - Biodiesel use of major feedstock (Mn T) Biodiesel use of major feedstock (Mn T) 50,00 45,00 40,00 10,16 9,46 35,00 8,26 6,52 30,00 7,62 5,93 6,69 6,35 25,00 5,50 6,94 6,84 4,57 7,21 20,00 3,67 17,62 6,30 6,96 14,61 2,71 6,20 6,23 11,47 15,0
Slide 22: Biodiesel worldwide
SIPEF group – Palm oil in the world Biodiesel worldwide Source: Oilworld Biodiesel worldwide 2017 Biodiesel worldwide 2019 Total of 35,8 Mn tonnes Total of 45,7 Mn tonnes 11% 10% 4% 4% 0% 31% 39% 6% 7% 1% 1% 14% 19% 27% 25% Palm Oil Soya Oil Rapeseed Oil Sunflower Oil Palm oil Soya Rapeseed oil Sunf
Slide 23: Palm oil use for biodiesel EU
SIPEF group – Palm oil in the world Palm oil use for biodiesel EU Source: Oilworld 2018 Palm oil use for biodiesel 2017 Palm oil use for biodiesel Total of 14,2 Mn tonnes Total of 11,0 Mn tonnes EU 27% EU 35% 3,8 Mn tonnes 3,8 Mn tonnes 7,2 Mn tonnes 10,4 Mn tonnes Non EU 65% NON EU 73% EU NON EU EU
Slide 24: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 24 The Connection to the world of Sustainable Tropical Agricul
Slide 25: Volcano eruption 2019 – Hargy Oil Palms
SIPEF group – Volcanic eruption PNG Volcano eruption 2019 – Hargy Oil Palms The Connection to the world of Sustainable Tropical Agriculture 25
Slide 26: Volcano eruption 2019 – Hargy Oil Palms
SIPEF group – Volcanic eruption PNG Volcano eruption 2019 – Hargy Oil Palms The Connection to the world of Sustainable Tropical Agriculture 26
Slide 27: Potential volume & hectare impact
SIPEF group – Volcanic eruption PNG Potential volume & hectare impact • PNG volcanic eruption – potential impact on productive area 2019 2020 2021 2022 2023 Ha 2019 2020 2021 2022 2023 50% 100% 100% 100% 100% Yield prognoses Severe tall 0% 20% 40% 40% 80% 2,000 1,000 400 800 800 1,600 Severe young 2
Slide 28: Volume impact in KUSD + price impact 2019
SIPEF group – Volcanic eruption PNG Volume impact in KUSD + price impact 2019 Strong decrease in volumes in HOPL triggered by: o Adverse weather first semester o 3 volcano eruptions HOPL actual 2019 against KUSD Actual 2018 Total sales price impact -13 032 Total volume impact -8 839 Total reduction
Slide 29: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 29 The Connection to the world of Sustainable Tropical Agricul
Slide 30: Strategy & expansion
SIPEF group – Expansion Strategy & expansion SIPEF group= 100.000 Ha planted Focus on core-business • Palmoil – Rubber – Bananas – Tea • Indonesia – Papua New Guinea Focus on ‘Sustainable Agriculture’ (RSPO) Expansion of existing activities Acquisition of new investments Balanced leverage The Connec
Slide 31: Increase in Ha (100%)
SIPEF group – Expansion Increase in Ha (100%) 100.000 91 568 Ha 92 407 Ha 90.000 82 968 Ha 80 540 Ha 80.000 78 213 Ha 69 439 Ha 70.000 56 811 Ha 60.000 48 093 Ha 50.000 40.000 30.000 20.000 10.000 0 2005 2008 2016 2017 2018 2019 2023 2029 North Sum North Sum expansion Bengkulu Bengkulu expansion PNG
Slide 32: Supply base (in hectares)
SIPEF group – Expansion Supply base (in hectares): own ha and outgrowers ha – 100% 140.000 120.000 23.029 23.029 23.029 23.029 23.029 23.029 23.029 23.029 22.755 100.000 22.208 21.370 80.000 60.000 92.385 92.407 92.407 92.407 92.220 91.747 91.568 90.244 87.542 84.985 82.968 40.000 20.000 0 2019 2020
Slide 33: Planted hectares and production of CPO
SIPEF group – Expansion Planted hectares and production of CPO (sale of FFB not included) 170% + 65% 160% 150% 140% 130% 120% + 19% 110% 100% 90% 80% Palm Hectares Palm own production The Connection to the world of Sustainable Tropical Agriculture 33
Slide 34: 100% CPO production
SIPEF group – Expansion 100% CPO production (including plasma and outgrowers – NO FFB) 700.000 2029 600.000 Own: 481 Kton Outg: 92 Kton Total: 573 Kton 500.000 400.000 300.000 200.000 100.000 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Own Outgrowers 34
Slide 35: Musi Rawas expansion
SIPEF group – Expansion Musi Rawas expansion The Connection to the world of Sustainable Tropical Agriculture
Slide 36: South Sumatra – full scope of development
SIPEF group – Expansion South Sumatra – full scope of development Latest update Musi rawas Dendymarker Total Izin Lokasi HGU 23 834 17 793 41 627 Expansion Izin Lokasi 8 594 0 8 594 TOTAL HGU/IZIN 32 428 17 793 50 221 2019 Opening balance Planted / Cleared 10 653 8 730 19 383 2019 Additional Planted
Slide 37: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 37 The Connection to the world of Sustainable Tropical Agricul
Slide 38: Group production palm oil – December 2019
SIPEF group – Productions & prices Group production PALM OIL – December 2019 Palm Oil 2019 2018 Variance Own Tolan Tiga Group 70 489 72 492 -2,76% Umbul Mas Wisesa Group 38 089 41 568 -8,37% Agro Muko Group 82 007 85 219 -3,77% South Sumatra Group 14 227 6 147 131,45% Hargy Oil Palms 59 829 85 015 -
Slide 39: Group production rubber – December 19
SIPEF group – Productions & prices Group production RUBBER – December 2019 Rubber 2019 2018 Variance Own Tolan Tiga Group* 972 1 383 -29,72% Melania 2 379 2 976 -20,06% Agro Muko 2 144 2 571 -16,61% Total own 5 495 6 930 -20,71% Outgrowers Tolan Tiga Group* 831 1 052 -21,01% Total Rubber 6 326 7 982
Slide 40: Group production tea and bananas – December 2019
SIPEF group – Productions & prices Group production TEA and BANANAS – December 2019 Tea 2019 2018 Variance Melania 2 331 2 422 -3,76% Total Tea 2 331 2 422 -3,76% Bananas 2019 2018 Variance Azaguie 1 4 976 4 530 9,85% Azaguie 2 9 928 9 197 7,94% Agboville 8 836 7 749 14,03% Motobe 9 109 6 312 44,31%
Slide 41: Bull & Bear
SIPEF group – Productions & prices Bull & Bear Rating Bullish inputs Bearish inputs Palm Oil Bullish - Prod outlook in Malaysia expected to drop for 2020. Indo small - CORONA VIRUS – creates so much uncertainty – sell first and think later Feb 750 growth at best. Driven by resting cycle, dry spell,
Slide 42: CPO prices CIF Rotterdam 2018-2019-2020
SIPEF group – Productions & prices CPO prices CIF Rotterdam 2018-2019 -2020 Crude Palm Oil in $/mt CIF Rotterdam 850 800 750 700 650 600 550 500 450 J F M A M J J A S O N D 2018 2019 2020 42
Slide 43: Palm-soy spread
400 600 800 1 000 1 200 1 400 1 600 2003M01 2003M04 2003M07 2003M10 2004M01 2004M04 2004M07 2004M10 2005M01 Palm-soy spread 2005M04 2005M07 2005M10 2006M01 2006M04 2006M07 2006M10 2007M01 2007M04 2007M07 2007M10 2008M01 2008M04 2008M07 2008M10 SIPEF group – Productions & prices 2009M01 2009M04 2009M
Slide 44: RSS3 Rubber prices 2018-2019
SIPEF group – Productions & prices RSS3 Rubber prices 2018-2019 RSS3 in $/mt FOB Singapore 2 000 1 800 1 600 1 400 1 200 1 000 J F M A M J J A S O N D 2018 2019 2020 The Connection to the world of Sustainable Tropical Agriculture 44
Slide 45: Tea prices 2018-2019
SIPEF group – Productions & prices Tea prices 2018-2019 Tea in $/mt average auction Mombasa 3 150 2 950 2 750 2 550 2 350 2 150 1 950 1 750 J F M A M J J A S O N D 2018 2019 2020 The Connection to the world of Sustainable Tropical Agriculture 45
Slide 46: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 46 The Connection to the world of Sustainable Tropical Agricul
Slide 47: Sales – consolidated gross margin
SIPEF group – Financial performance Sales – consolidated gross margin 300 000 250 000 240 057 210 251 200 000 150 000 100 000 28,7% 50 000 16,4% 22 024 17 119 11 699 10 330 16,3% 21,3% -9,1% -21,7% 5 454 5 072 11,5% -7,3% 0 Palm Rubber Tea Bananas -50 000 2018 Sales 2018 Gross Margin 2019 Sales 2019
Slide 48: Gross margin – Results before tax
SIPEF group – Financial performance Gross margin – Results before tax In KUSD (condensed) 31/12/2019 31/12/2018 % diff Gross margin per product Palm 34 445 68 800 -50% Rubber -2 244 -1 065 111% Tea - 370 627 -159% Bananas and flowers 4 697 2 794 68% Corporate 634 941 -33% Total gross margin 37 162 7
Slide 49: Net profit after tax + tax expense detail
SIPEF group – Financial performance Net profit after tax + tax expense detail In KUSD (condensed) 31/12/2019 31/12/2018 Profit before tax 852 39 597 Tax expense* -6 772 -14 155 Effective tax rate -794,8% -35,7% Profit after tax -5 920 25 442 Share of results of associated companies -1 485 - 854 Gain
Slide 50: Consolidated balance sheet (management presentation)
SIPEF group – Financial performance Consolidated balance sheet (management presentation) In KUSD 31/12/2019 31/12/2018 Biological assets (depreciated costs) - bearer plants 306 342 283 712 Goodwill 104 782 104 782 Other fixed assets 365 412 364 480 Receivables > 1 year 13 442 11 112 Net current asse
Slide 51: Outstanding CPO receivables
SIPEF group – Financial performance Outstanding CPO receivables The Connection to the world of Sustainable Tropical Agriculture 51
Slide 52: Financial covenant LT loan per December 2019
SIPEF group – Financial performance Financial covenant LT loan per 31 December 2019 • Level of financial covenant according to new LT loan dd August 2019: 3,5 X REBITDA as per 31/12/2019 • Waiver for testing was obtained from our bankers for end December 2019 because of too much uncertainty as also
Slide 53: Cash flow (management presentation)
SIPEF group – Financial performance Cash flow (management presentation) 31/12/2019 31/12/2018 Diff Cash flow from operations before working capital 48 226 81 899 -33 673 Working capital movements -1 646 -13 680 12 034 Taxes paid -14 692 -34 537 19 845 Cash flow from operations (a) 31 887 33 682 -1 7
Slide 54: Value per hectare – Sensitivity 31/12/2019
SIPEF group – Financial performance Value per hectare Sensitivity 31/12/2019 Stock price @ USD per hectare 30,00 5 816 40,00 7 318 50,00 8 819 60,00 10 321 70,00 11 823 80,00 13 325 52,70 (04/02/2020) 9 225 54,80 (31/12/2019) 9 540 54
Slide 55: Summary
Summary 1. SIPEF Group – Company profile 2. SIPEF Group – Palm oil in the world 3. SIPEF Group – Volcanic eruption PNG 4. SIPEF Group – Expansion 5. SIPEF Group – Productions & prices 6. SIPEF Group – Financial performance 7. Peer review 55 The Connection to the world of Sustainable Tropical Agricul
Slide 56: Peer review – Disclaimer
Peer review Disclaimer The information contained in this section is provided for your general information only and is not designed nor intended to offer anything more than information only. The information with respect to the companies included in the Peer Review was retrieved from publicly availabl
Slide 57: Peer review – Principle assumptions
Peer review Principle assumptions • Benchmark of main industrial competitors • Age profile based on own ageing interpretation • Market capitalization is calculated based on the average exchange rate & average share price of the year • Benchmark based on own CPO productions of competitors: Tons CPO o
Slide 58: Own planted oil palm hectares (2018)
Peer review Own planted Oil Palm Hectares in KHa (2018) Sime Darby 600 Golden Agri-Resources 394 Felda Global Ventures 339 Salim Ivomas Pratama 251 Wilmar International 230 Astra Agro Lestari 218 Kuala Lumpur Kepong 214 First Resources 180 Plantation IOI Corporation 174 Genting Plantations 144 Integ
Slide 59: Age profile: average age planted hectares (2018)
Peer review Age Profile: Average age planted hectares (2018) Golden Agri-Resources 16,0 London Sumatra Indon 16,0 Astra Agro Lestari 15,3 Salim Ivomas Pratama 15,0 Socfinasia 14,5 Felda Global Ventures 14,3 IOI Corporation 14,0 R.E.A. Holdings 13,8 Plantation Sime Darby 12,8 Kuala Lumpur Kepong 12,1
Slide 60: FFB Yield – MT/ha (2018)
Peer review FFB Yield – MT/ha (2018) Socfinasia 24,4 IOI Corporation 23,6 R.E.A. Holdings 23,1 Golden Agri-Resources 22,5 SIPEF 22,2 Astra Agro Lestari 21,8 Kuala Lumpur Kepong 21,6 Wilmar International 21,6 Plantation Sime Darby 20,5 Bumitama 20,4 Integrated MP Evans 19,3 First Resources 18,9 Anglo
Slide 61: Extraction rate from FFB to CPO (2018)
Peer review Extraction rate from FFB to CPO (2018) MP Evans 23,5% SIPEF 23,4% London Sumatra Indon 23,0% Socfinasia 22,9% Eagle High Plantations 22,9% First Resources 22,9% R.E.A. Holdings 22,5% Bumitama 22,1% Plantation Socfinaf 22,0% Salim Ivomas Pratama 22,0% Integrated Golden Agri-Resources 21,9
Slide 62: CPO Yield – MT/ha (2018)
Peer review CPO Yield – MT/ha (2018) Socfinasia 5,59 R.E.A. Holdings 5,40 SIPEF 5,19 IOI Corporation 4,93 Golden Agri-Resources 4,93 Kuala Lumpur Kepong 4,72 MP Evans 4,54 Bumitama 4,51 Plantation Astra Agro Lestari 4,40 First Resources 4,33 Integrated Wilmar International 4,32 Sime Darby 4,31 Sipef
Slide 63: Market Cap in MUSD (2018)
Peer review Market Cap in MUSD (2018) Wilmar International 14.804 Sime Darby 9.081 IOI Corporation 7.060 Kuala Lumpur Kepong 6.594 Golden Agri-Resources 2.872 First Resources 1.947 Genting Plantations 1.929 Astra Agro Lestari 1.676 Plantation Felda Global Ventures 1.415 Bumitama 883 Integrated SIPEF
Slide 64: Dividend Yields
Peer review Dividend Yields (based on average market cap 2018) Socfinasia 5,5% IOI Corporation 4,5% Bumitama 4,0% Wilmar International 3,3% Sime Darby 3,2% Sampoerna Agro 2,9% Astra Agro Lestari 2,7% Golden Agri-Resources 2,6% First Resources 2,0% Plantation Kuala Lumpur Kepong 1,8% MP Evans 1,8% In
Slide 65: Price Earning Ratio
Peer review Price Earning Ratio (based on average market cap 2018) Socfinaf 52,4 Genting Plantations 47,2 Kuala Lumpur Kepong 35,1 Anglo Eastern Plantations 31,8 SIPEF 31,0 London Sumatra Indon 25,4 Sime Darby 21,3 Astra Agro Lestari 16,6 First Resources 16,2 Plantation Wilmar International 13,1 Soc
Slide 66: Net financial position/Equity Ratio (2018)
Peer review Net financial position/Equity Ratio (2018) Eagle High Plantations 141,7% Wilmar International 83,7% Socfinaf 83,2% R.E.A. Holdings 72,5% Sampoerna Agro 70,0% Golden Agri-Resources 65,4% Felda Global Ventures 63,2% Bumitama 54,7% Plantation IOI Corporation 50,8% Salim Ivomas Pratama 43,9%
Slide 67: The Connection to the world of Sustainable Tropical Agriculture
The Connection to the world of Sustainable Tropical Agriculture 67