Oceana Group Limited · JSE:OCE
Oceana — FY2024 Earnings Presentation
53 slides from Oceana's earnings presentation, Nov 25, 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION For the year ended 30 September 2024
Slide 2: Agenda
AGENDA 1 CEO OVERVIEW 5 FISHMEAL & FISH OIL (USA) 2 WILD CAUGHT SEAFOOD 6 GROUP FINANCIAL RESULTS 3 LUCKY STAR FOODS 7 OUTLOOK & STRATEGY 4 FISHMEAL & FISH OIL (AFRICA) 8 QUESTIONS 2
Slide 3: CEO Overview
3 CEO OVERVIEW NEVILLE BRINK 01
Slide 4: Oceana Business Pillars
OCEANA BUSINESS PILLARS LUCKY STAR FOODS WILD CAUGHT SEAFOOD FISHMEAL & OIL (FMO) Affordable branded food for Wild caught fish for Omega-3 rich fish protein for human consumption human consumption animal/aquaculture consumption HORSE MACKEREL SQUID FISH FOODS HAKE LOBSTER Grow consumption through Ma
Slide 5: Strong Operating Platform
STRONG OPERATING PLATFORM ength of our well-established operating platform provides a solid foundation te deliver operating leverage and meaningful growth by the growing demand for food security. BRAND STRENGTH Our iconic South African Lucky Star brand, internationally respected seafood brands and t
Slide 6: CEO Overview: Key Performance Highlights
CEO OVERVIEW KEY PERFORMANCE HIGHLIGHTS LUCKY STAR WILD CAUGHT FMO (AFRICA) FMO (USA) INVESTMENT SA’s number one Turnaround in hake Lower volumes Record earnings by Major capex iconic brand delivered operations impacted Daybrook, contributing expenditure of R645 strong margin growth Vessel breakdown
Slide 7: Wild Caught Seafood
7 WILD CAUGHT SEAFOOD OPERATIONAL PERFORMANCE 02
Slide 8: Wild Caught Seafood Performance
WILD CAUGHT SEAFOOD PERFORMANCE R’ million 2024 2023 VAR Revenue 1 587 1 737 (8.6%) Operating profit (53) 127 (141.7%) OP margin (3.3%) 7.3% (10.6%) HORSE MACKEREL HAKE SQUID & LOBSTER 8
Slide 9: Horse Mackerel Performance
HORSE MACKEREL PERFORMANCE CATCH RATES & SEA DAYS HORSE MACKEREL - PERFORMANCE DRIVERS 100 600 80 500 400 South Africa: Catch Rates 60 Sea Days 80 300 40 78 • Catch volumes down 85.1% due to lower sea days linked to 69 200 20 55 the major mechanical failure on the Desert Diamond. 37 100 19 - - • Cat
Slide 10: Hake Performance
HAKE PERFORMANCE CATCH RATES & SEA DAYS HAKE - PERFORMANCE DRIVERS 1 200 10,8 12 10,4 1 000 8,9 10 • Strong hake turnaround yet still short of optimal 800 8 Catch Rates performance. Sea Days 600 6 1 069 859 400 762 4 • Catch volumes up 36.3% due to increased sea days and 200 2 improved vessel perfor
Slide 11: Squid & Lobster Performance
SQUID & LOBSTER PERFORMANCE SQUID CATCH AND SELLING PRICE SQUID & LOBSTER - PERFORMANCE DRIVERS 377 1 600 400 1 400 350 Squid: Kg per day / R per kg 1 200 262 300 218 580 1 000 250 Sea Days 226 800 178 200 • Significant increase in catch rates of 43.9% 600 168 150 following strong April catches. 400
Slide 12: Lucky Star Foods
12 LUCKY STAR FOODS OPERATIONAL PERFORMANCE 03
Slide 13: Lucky Star Foods Performance
LUCKY STAR FOODS PERFORMANCE* R’ million 2024 2023 VAR Revenue 4 591 4 576 0.3% Operating profit 428 346 23.7% OP margin 9.3% 7.6% 1.7% * Revenue and operating profit includes Oceana Group Limited statutory results 13
Slide 14: Lucky Star Foods Performance
LUCKY STAR FOODS PERFORMANCE LUCKY STAR SALES VOLUMES & PRICE LUCKY STAR FOODS - PERFORMANCE DRIVERS 12 12% 10,1% 9.6m 10 8,4% 8.8m 9.3m 10% • Efficiencies coupled with innovative brand investment, Cartons (Millions) 8 4,6 8% supported strong margin and profit growth. 4,5 4,6 6 6% • Key focus areas
Slide 15: Lucky Star Foods Performance: Closing Stock and Pilchard Biomass
LUCKY STAR FOODS PERFORMANCE CLOSING STOCK HISTORIC SA SAPILCHARD PILCHARDBIOMASS BIOMASS(TONS) 6 1 200 000 4.8m 5 1 000 000 4.0m 4 800 000 Cartons (millions) 3.4m 3.4m 3 600 000 2.0m 2 400 000 1 200 000 0 2020 2021 2022 2023 2024 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022
Slide 16: Operating Conditions
OPERATING CONDITIONS SA FOOD INFLATION TRENDS LUCKY STAR FOODS – OPERATING CONDITIONS 25% • Improved consumer sentiment on the back of 20% 18,8% better economic prospects. 16,1% • Confidence in ability to meet demand given good 15% 12,3% inventory levels and raw materials secured. 10% • Capacity to
Slide 17: Brand Extension Strategy
BRAND EXTENSION STRATEGY Canned Chicken • Purchase of Graaff Reinet production facility. • Improved capacity and efficiencies of existing production to better meet the significant demand from school feeding schemes. • Introduction of canned chicken into Botswana retail market. Corned Meat • Good cro
Slide 18: Lucky Star Foods Outlook
LUCKY STAR FOODS OUTLOOK As the canned fish category leaders, we will remain relentless in keeping the category fully available, affordable, and versatile to consumers to insure its long-term growth and relevance. In the canned meat and canned chicken categories we will extract full value in terms o
Slide 19: Fishmeal & Fish Oil (Africa)
19 FISHMEAL & FISH OIL (AFRICA) OPERATIONAL PERFORMANCE 04
Slide 20: Fishmeal & Fish Oil (Africa) Performance
FISHMEAL & FISH OIL (AFRICA) PERFORMANCE R’ million 2024 2023 VAR Revenue 877 977 (10.2%) Operating profit 79 150 (47.3%) OP margin 9.0% 15.4% (6.4%) 20
Slide 21: Fishmeal & Fish Oil (Africa) Performance
FISHMEAL & FISH OIL (AFRICA) PERFORMANCE SALES VOLUME & PRICE FMO PRODUCTION INPUT (TONS) 25 000 +12% 6 000 120 000 +66% 101 608 14 000 99 500 5 000 100 000 91 827 20 000 21 625 12 000 20 249 21% 24% 17 773 4 000 80 000 23% 10 000 Sales volume 15 000 Sales Price 8 000 Tons Tons 3 000 60 000 10 000 6
Slide 22: Industrial Resource Opportunity
INDUSTRIAL RESOURCE OPPORTUNITY INDUSTRY RED EYE LANDINGS ANCHOVY RECRUITMENT BIOMASS (TONS) 200 000 120% 2 500 000 96% 82% 100% 150 000 2 000 000 73% 80% 54% 56% 1 500 000 Tons 100 000 48% 47% 60% 40% 1 000 000 50 000 20% 500 000 - 0% 2018 2019 2020 2021 2022 2023 2024 0 1987 1988 1989 1990 1991 19
Slide 23: Fishmeal & Fish Oil (USA)
23 FISHMEAL & FISH OIL (USA) OPERATIONAL PERFORMANCE 05
Slide 24: Fishmeal & Fish Oil (USA) Performance
FISHMEAL & FISH OIL (USA) PERFORMANCE R’ million 2024 2023 VAR Revenue 3 006 2 697 11.5% Operating profit 1 178 810 45.4% OP margin 39.2% 30.0% 9.2% USD’ million FISH OIL FISHMEAL Revenue 160.3 146.5 9.4% Operating profit 62.2 44.4 40.1% Av. USD: Rand 18.9 18.4 2.7% 24
Slide 25: Fishmeal & Fish Oil (USA) Performance
FISHMEAL & FISH OIL (USA) PERFORMANCE FISH OIL SALES VOLUMES & PRICE FISHMEAL SALES VOLUME & PRICE 20 000 +49% 6 000 60 000 2 000 +7% (2%) 18 000 1 800 17 638 5 000 50 000 16 000 52 804 1 600 14 000 +23% 14 947 4 000 1 400 Sales Volume 40 000 42 238 Sales Price Sales Volume 12 000 1 200 Sales Price
Slide 26: Fishmeal & Fish Oil (USA) Performance
FISHMEAL & FISH OIL (USA) PERFORMANCE GULF MENHADEN LANDINGS (000 FISH) – FISCAL YEAR CLOSING STOCK 35 000 800 000 14% 12,1% 30 186 30 000 28 873 700 000 12% 10,7% 26 540 10,4% 600 000 9,9% 10% 25 000 500 000 8,1% 8% 20 000 17 249 000 Fish Tons 400 000 704 289 670 674 6% 15 000 13 091 300 000 566 91
Slide 27: Supply Outlook
SUPPLY OUTLOOK GULF MENHADEN – SPAWNING STOCK BIOMASS PERU LANDINGS (TONS) 6 000 000 2023 : 5.4 million tons 2024 Second Season 6 000 allocation: 2.51m tons 5 000 000 5 000 2037 4 000 000 4 000 2077 1345 Tons 3 000 000 3 000 944 416 2 000 000 2 000 3183 2695 1144 2455 2375 2400 1 000 1 000 000 808 0
Slide 28: Group Financial Results
28 GROUP FINANCIAL RESULTS ZAF MAHOMED 06
Slide 29: 2024 Financial Highlights
2024 FINANCIAL HIGHLIGHTS OPERATING NET DEBT : REVENUE * HEPS * DIVIDENDS PROFIT * EBITDA ▲ 0.7% ▲ 9.5% ▲13.5% ▲ 13.8% 1.3x 2024: R10.1bn 2024: R1.6bn 2024: 917.6c 2024: 495 cps (2023: 1.2x) (2023: R10.0bn) (2023: R1.5bn) (2023: 808.8c) (2023: 435 cps) * From continuing operations. CCS Logistics was
Slide 30: 5 Year Operating Profit Review
5 YEAR OPERATING PROFIT REVIEW H1 : H2 OPERATING PROFIT (R MILLION) OPERATING PROFIT BY SEGMENT (R MILLION) * 1 632 18,0% 1 600 16,8% 1 600 15,3% 1 490 16,2% 16,0% 15,3% 428 1 399 1 400 1 400 14,9% 127 615 14,0% 507 1 244 79 1 200 1 200 357 150 346 1117 12,0% 842 1 000 496 1 000 794 392 150 10,0% 47
Slide 31: Income Statement Review
INCOME STATEMENT REVIEW R’ million 2024 2023 VAR • Revenue increase driven by strong fish oil sales prices Revenue 10 061 9 987 0.7% together with improved hake and squid sales volumes. Revenue growth offset by lower fishmeal and horse mackerel Gross profit 3 199 2 853 12.1% sales volumes. Operating
Slide 32: Working Capital
WORKING CAPITAL* Working capital increased to 151 days: WORKING CAPITAL DAYS • Inventory days increased due to higher frozen fish 180 180 inventory carried by Lucky Star and increased fish oil inventory carried by Daybrook. 160 151 160 • Debtors days increased largely due to a high value fish 140 14
Slide 33: Capex
CAPEX* CAPITAL EXPENDITURE (R MILLION) Capital expenditure increased by R187 million: 700 645 • R215 million spent to modernise the canneries, fishmeal and fish oil plants, and boiler infrastructure, as well as commission a new canned 600 Includes c. R125 meat facility. 193 million replacement capex
Slide 34: Debt Analysis
DEBT ANALYSIS NET DEBT ANALYSIS GROSS DEBT MOVEMENT 2 581 4 000 700 3 341 2 500 2 500 3 500 3 060 ( 121) 3 000 481 ( 241) 426 53 2 474 2 500 R million 2 000 ( 147) ( 46) 2 036 ( 824) 1 500 2 000 2 000 1 000 1 923 500 1 760 0 1 743 wn wn n nt n nt t ce t g g g en en tio tio sin sin sin 884 me me an d
Slide 35: Net Cash & Cash Equivalents
NET CASH & CASH EQUIVALENTS* R millions 3 000 SA: R707m SA: (R166m) SA: (R369m) US: R1.3bn US: (R351m) US: (R260m) 2024 34% 2 500 1 985 2023 82% 2 000 ( 517) 1 500 SA: R1 087m US: (R133m) ( 629) 1 000 954 760 ( 146) 500 439 ( 669) ( 657) - 2023 Cash operating profit Working Interest and Dividends Ca
Slide 36: 5 Year RONA and DPS Analysis
5 YEAR RONA AND DPS ANALYSIS 14 000 GROUP RONA % * 16,0% DIVIDENDS PER SHARE 14.4% 13.9% 13.8% 14.0% 600 14,0% 628 550 606 784 918 HEPS 3,500 12 000 12.8% 495 12,0% 500 3,000 10 000 435 393 10,0% 400 2,500 358 Cents per share 8 000 346 R million 8,0% 1.80x 1.85x 2,000 1.75x 300 1.60x 6 000 12 061 1.
Slide 37: Capital Allocation
CAPITAL ALLOCATION Following two years of strategic capital expenditure, Oceana will prioritise growth opportunities while maintaining sustainable shareholder returns and prudent debt management. GROWTH WORKING GROWTH DIVIDENDS DEBT RE-INVEST CAPITAL Pursue organic and Balancing Manage debt Upgrade
Slide 38: Outlook & Strategy
38 OUTLOOK & STRATEGY NEVILLE BRINK 07
Slide 39: Outlook and Focus for FY25
OUTLOOK AND FOCUS FOR FY 25 LUCKY STAR FOODS WILD CAUGHT SEAFOOD FISHMEAL & OIL (FMO) GROW CONSUMPTION / EXPAND THE BRAND DELIVER ON FLEET INVESTMENT OPTIMISE CAPACITY & EFFICIENCY • Drive canned fish consumption – • Drive performance of upgraded vessels - Africa: consistent availability, innovation
Slide 40: Legal Disclaimer and Basis of Preparation
LEGAL DISCLAIMER AND BASIS OF PREPARATION • For the purposes of this notice, the presentation (the “Presentation”) shall mean and include the slides that follow, the oral presentation of the slides by Oceana Group Limited (the “Company”) and/or its advisers, any question-and-answer session that foll
Slide 41: Questions
41 QUESTIONS NEVILLE BRINK & ZAF MAHOMED 08
Slide 42: Appendices
42 APPENDICES 9
Slide 43: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME * R’ million 2024 2023 VAR 1. Increase driven by strong fish oil sales prices together with Revenue 1 10 061 9 987 0.7% improved hake and squid sales volumes. Lower fishmeal Gross profit 2 3 199 2 853 12.1% and horse mackerel sales volumes partially offset revenue g
Slide 44: Discontinued Operations
DISCONTINUED OPERATIONS • The Group entered into an agreement to dispose of its cold • Operating profit for segmental disclosure differs to that for storage business, Commercial Cold Storage Group Limited (“CCS discontinued operation disclosure due to intercompany Logistics”) in the September 2022 f
Slide 45: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION R’ million 2024 2023 VAR Property, plant & equipment * 1 2 540 2 241 13.3% 1. R645 million (2023: R458 million) capital expenditure, Intangible assets 2 5 604 6 077 (7.8%) due to strategic investments in SA. Other assets 570 522 9.2% 2. Mainly goodwill, intellectual p
Slide 46: Debt Analysis
DEBT ANALYSIS 1. The Group successfully refinanced its SA debt during R’ million 2024 2023 VAR the year, converting R700 million to long term debt. The Africa (R million) refinancing supported the capital investment programme in SA. Gross debt 2 086 979 113% Net debt 1 1 743 884 97% 2. SA net debt /
Slide 47: 5 Year Debt Analysis
5 YEAR DEBT ANALYSIS 4000 000 2,5 Exchange 16.8 15.1 18.2 18.9 17.3 Rate 3500 000 R3.6 bn R3.3 bn R3.1 bn 2,0 3000 000 R3.0 bn 1.7x 38% R2.5 bn 2500 000 56% 1.5x 1,5 1.4x 1,3x 55% 59% R 000 2000 000 60% 1,2x 1,0 1500 000 1000 000 62% 44% 0,5 45% 41% 500 000 40% - - 2020 2021 2022 2023 2024 SA Gross
Slide 48: Oceana Strategic Framework to 2027
OCEANA STRATEGIC FRAMEWORK TO 2027 REBALANCE OUR PORTFOLIO STRATEGIC LEVERS LUCKY STAR FOODS WILD CAUGHT SEAFOOD FISHMEAL & OIL (FMO) • Canned fish: grow consumption • Hake: invest in fleet to drive • US: optimise throughput and levels at sustained margins reliability produce quality product to meet
Slide 49: ESG Investing for the Future
ESG INVESTING FOR THE FUTURE ENVIRONMENT SOCIAL Creating Long-Term Value Positively Impacting Lives • Ratings: MSCI: AA (Leadership) & CDP B (Management: Climate Change & Water Security) • R3.8 mill spent on CSI and community training programmes • Installation of 500 KW Solar Panels and 2500 • Level
Slide 50: 2024 Key Performance Indicators
2024 KEY PERFORMANCE INDICATORS Segment KPI Unit 2024 2023 VAR Revenue R million 4 591 4 576 0.0% Sales volumes 000 cartons 9 294 9 612 (3.3%) Pilchard quota (own & contracted) tons 22 697 14 670 54.7% Pilchard landings tons 13 164 14 005 (6.0%) Own cartons produced 000 cartons 4 039 5 232 (22.8%) C
Slide 51: 2024 Key Performance Indicators
2024 KEY PERFORMANCE INDICATORS Segment KPI Unit 2024 2023 VAR Revenue USD million 160.3 146.5 9.4% Menhaden landings (fiscal year) 000 fish 526 977 670 674 (21.4%) Fishmeal sales volumes tons 42 238 52 804 (20.0%) Fish oil sales volumes tons 14 947 12 729 17.4% FMO (US) (Daybrook) Operating profit
Slide 52: 2024 Key Performance Indicators
2024 KEY PERFORMANCE INDICATORS Segment KPI Unit 2024 2023 VAR Revenue R million 580 541 7.2% Sales volumes tons 10 420 8 086 28.9% Quota (own & contracted) tons 13 471 14 732 (8.8%) Av. Price movement Euro/ton (6%) ● 13% ● HAKE Fleet utilisation % (10%) ● 1% ● Catch rates tons/day 23% ● (10%) ● Ves
Slide 53: Thank You
OCEANA OCEANA LUCKY STAR FISHMEAL FOODS & FISH OIL