Almarai Company · TADAWUL:2280
Almarai — Q3 2020 Earnings Presentation
44 slides from Almarai's earnings presentation, October 2020
Slide 1: Almarai Company Q3 2020 Earnings Presentation
Almarai® Company Q3 2020 Earnings Presentation Awards & Recognitions iddle East's KSA Most Chi KSA Most ? @ } 0 0} ies FMCG Brand Influential Brands
Slide 2: Disclaimer
incholl Almarai Disclaimer Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed, and it may not contain all material information concerning the company. We do not make any representation regarding, and assume no responsibility or liab
Slide 3: Contents
_\—a choll Almarai Contents Market Dynamics Business Performance Financial Performance Capex) Capital Management & Share Price Key Takeaways Almarai’ Q3 2020 Earnings Presentation
Slide 4: Market Dynamics
\n QnchoJl Almarai Market Dynamics Almarai® Q3 2020 Earnings Presentation
Slide 5: COVID-19 Pandemic
Almaraii =—sCCOVID-19 Pandemic ¢ Almarai to deliver “Quality you can trust” to its consumers whilst being an integral to the nation’s food security. ¢ Working in partnership with government and customers. * Protect our consumers and employees from any possible harm. ¢ Post COVID economic scenario pl
Slide 6: Speed of recovery from COVID-19
1 “Recovering Economy” GDP 3 “Resurgent Economy” GDP Virus contained but sector damage; lower LT trend growth Virus contained; strong growth rebound TIME TIME Economics Almarai Economics Almarai • Strong GDP Growth • Strong Growth in Revenue and Market Share • Moderate GDP growth • Resize Business •
Slide 7: Maintaining market share leadership
> =u Dec-18 Dec-19 Aug-20 Aug-20 Whilst Category Almarai Value | Almarai Value | Almarai Value Almarai ® Share % Share % Share % Rank Almarai . eo . Laban 65 65 +4 ; maintaining | ° : : : Market Share Fresh Milk Leadershipin (sbi 0 x = ~~ revs 36 39 36 1 Juice 43 43 46 1 55 54 54 37 36 Bakery Poultr
Slide 8: Business Performance
—\n CnchoJl Almarai Business Performance Q3 2020 EarningsiRresentation
Slide 9: 4,00 3,80 3,60 0 3,40 0 3,20 0 50 0 42 5 200 3,00
72 5 4,00 0 350 80 0 3,80 0 62 5 300 70 0 3,60 0 52 5 250 60 0 3,40 0 3,20 0 50 0 42 5 200 3,00 0 40 0 32 5 150 2,80 0 30 0 22 5 2,60 0 100 20 0 2,40 0 12 5 50 10 0 2,20 0 25 2,00 0 - 0 -75 -10 0 -20 0 45 0 0% 90 0 25 000 % 3,70 0 25 000 % 40 0 80 0 3,20 0 -50 00% 35 0 20 000 % 70 0 20 000 % 2,70 0
Slide 10: Q3 2020 Sales Bridge
Q3 2020 Sales Bridge Reported Growth +8% | 2% 3,863 1% (0%) 0% c SS ea = 3,573 = ec 5 | Like-for-like growth +6% Q3 2019 Volume Price Mix Currency Others Q3 2020 acholl Almarai Q3 2020 Earnings Presentation 10
Slide 11: Almarai top line grew in all countries except Oman
Almarai top line grew in all countries except Oman... Q3 2020 Revenue Growth (SAR Million) KSA Others Total Revenue 2,530 537 3,863 % of Revenue 66% 14% 100.0% Growth 5% 35% 8% (9%) +SAR 141M +SAR 115M (4SAR 290M (8%) ) Q3 2020 Earnings Presentation (Reboll Almarai’ ,,
Slide 12: KSA growth contributed the most to topline
owever KSA growth of 5% contributed the most to topline Q3 2020 Total Revenue - SAR 3,863 Million Q3 2020 Total Growth -( SAR 290M (8%) Bahrain| | Jordan Others 5% 6% ~—«-23%~—«*14%6~=—«(9%) «10% +=: 19% 87% Kuwait 51 5% SAR Million = co N un KSA UAE Egypt Kuwait Oman Bahrain Jordan Others Qi 8% 7%
Slide 13: Long Life Dairy & Fresh Dairy contributed the most to topline growth
LL Dairy & Fresh Dai ributed the most to topline growth Q3 2020 Total Revenue - SAR 3,863 Million Q3 2020 Total Growth -( SAR 290M (8%) YoY %/ (YoY%) Other Sales Long Life Dairy 4% 4% 1] 1] 1] 1] 1] 10% | 1 76 72 - 55 45 66 if » aT = Fruit Juice’ Fresh Dairy H © || nz 11% 36% 1 ° || 1] 1] 1 Fresh Da
Slide 14: Traditional Trade channel growth was a key highlight for the quarter
Traditional Trade channel growth was a key highlight for the quarter Q3 2020 Total Revenue - SAR 3,863 Million Food Service 12% Traditional Trade 57% Q3 2020 Total Growth -( SAR 290M (8%) 10% 7% (2%) 40% 146 § 91 Es 60 Fa . Modern Trade Traditional Trade Food Service Other / Exports Qi 16% 4% 16% (1
Slide 15: Performance on Key ESG Issues (July 2020)
Almarai Performance on Key ESG Issues (July 2020) ©ESG Invest Hina Biodversity Management 8y SUSTAINABILITY SAOQOAOETHTI Water Management — XCELLENCE a eee Company: Alara Company J Fnvtenmenal i Transportation : ; Waste Management Sil I 77 ISI: SAOOOAOETHT! ago a — laste Managemen Sodas : Product Sa
Slide 16: Financial Performance
\On ehoJl Almarai Financial Performance Q3'2020 Earnings'Presenfation
Slide 17: Financial Performance - Q3 2020
Financial Performance - Q3 2020 Q3 2020 vs. Q3 2019 YoY % /(YOY%) 8% 1% % to Revenue a im © Revenue Operating Profit 750 SAR Million 7% Net Profit Q3 2020 Earnings Presentation Revenue - Resilient post VAT & pandemic * Maintain market leadership in all key categories * Food & Long life Dairy contrib
Slide 18: Results by Segment - Q3 2020
Results by Segment - Q3 2020 Revenues by Segment (SAR Million) io | 9% Juice Ee mw Q3 2020 mw Q3 2019 YoY %/ (YOY%) Profit Margin By Segments Juice 15% Bakery 72 Poultry 14% Ee a @Q32020 mQ32019 YoY %/(YOY%) Q3 2020 Earnings Presentation Dairy &Juice * Higher Food and Long Life Dairy sales, mainly v
Slide 19: Capex, Capital Management & Share Price Performance
(ne ichoJl Capex, Atmarai Capital Vag ent iit vate Performance 2020Earnings Presentation
Slide 20: Capex spend
SAR Million 29% 3,986 2015 ma Net Cash Used in Investing Activities 30% 2016 2017 2018 2019 —-Investment as a % of Net Sales TTM Q3 2020 x Capex cash spend continues to decline in line with current available capacity New Capex approved comprised of mostly maintenance Capex centered on utilities, pro
Slide 21: Free Cash Flow remains strong
Free Cash Flow remain strong ~~ SAR 3.1B Free Cash Flow Free Cash Flow = SAR (1.5) ssets 5 = OPPE ao H & (0.6) 1.0 a 0.8 Cash 30 Sept 2019 || Operating Cash Flow Working Capital Capex / Debt Movement Dividend ' Others Cash 30 Sept 2020 (SAR 0.2 Billion) > Q3 2020 TTM Free Cash Flow = SAR 3.0B * OCF:
Slide 22: Net Debt and EBIT / EBITDA Margins
Net t and EBIT / EBITDA Margins Almarai leverage target is to reach 2.5x-2.7x Net Debt to EBITDA in the next 6 months Net Debt Trend EBIT and EBITDA Margins 3.2x 29.7% NK 28x =< 28.0% 26.8% — a 15,241 14,351 4 12,743 12,545 13,558 88.1% 82.2% 2018 2019 TTM Q3 2020 2018 2019 TTM Q3 2020 MNetDebt(SARM
Slide 23: Debt Maturity Profile highlights average debt tenure at 3.93 Years
Debt Maturity Profile highlights average debt tenure at 3.93 Years (SAR Billion) ( >) 0.4 0.9 Upto1Yr 1-2Yrs_—-2.3Yrs ss 3-4Yrs ss 4-5Yrs > Sr = Banks = Govt / Semi Govt Inst. = Islamic Bonds Banks M®Govt/SemiGovtinst. Mmlslamic Bonds Ne ) Ss acholl Q3 2020 Earnings Presentation
Slide 24: Strong balance sheet to support future growth
Strong b alance sheet to support future growth We Strong + 2.8x Net Debt to EBITDA as at Q3 2020 choll investment grade + BBB-(S &P), Baa3 (Moody's) with stable Outlook = Almarai * SAR 787 M Local Sukuk settled on 315 Mar 2020 * SAR 850M Dividend payment Successful Refinancing Significant * SAR 591
Slide 25: Key Share Data
Key e Data Key Statistics for Almarai (30 Sept 2020) m Savola Year to date total shareholder's return since listing 30% 5 Share Price (SAR) 52.90 an | Cl {P/E Ratio (tt 4 m HHPrince Sultan som urren ato (ttm) - bin Mohammed oe 14% Earnings Per Share (SAR) (ttm) 2.00 = PIF | Market Cap (SAR Million)
Slide 26: Key Takeaways
a nchoJl Almarai Key Takeaways Almarai® @3'2020 Earnings Presentation
Slide 27: Current Performance
Current Performance ° Top line performance remains strong in 34 quarter, even after adjusting for increase in VAT from 5% to 15% on 15t July. * Gross Profit remains under stress due to alfalfa and COVID-19 related costs pressure. This is partly offset with positive change in product and channel mix.
Slide 28: Key Challenges & Opportunities
Key Challenges & Opportunities ° Pricing and product rationalization post VAT * Lifting of curfew and opening of all activities from 21st June generated positive momentum in Food service market and we expect the growth momentum to continue in the future ° Subsidy phase out for dairy products by end
Slide 29: maral®
maral® 2020 Earnings Presentation
Slide 30: Q3 2020 Earnings Presentation
Q3 2020 Earnings Presentation
Slide 31: Appendix
—\ QehoJl Almarai Appendix Almarai® Q3 2020 Earnings Presentation
Slide 32: ,0 1,000 2,20 00% 1,80 ,0 1,60 2,00 0 50 00% 800 1,40 0
12 ,0 00 1,000 2,20 0 60 00% 1,80 0 900 11 ,0 00 1,60 0 2,00 0 50 00% 800 1,40 0 10 ,0 00 700 1,80 0 40 00% 1,20 0 600 9,00 0 1,00 0 500 1,60 0 30 00% 8,00 0 80 0 400 1,40 0 20 00% 60 0 300 7,00 0 40 0 200 1,20 0 10 00% 6,00 0 100 20 0 5,00 0 - 1,00 0 0% 0 3,60 0 25 000 % 1,40 0 0% 2,50 0 70 000 % 3
Slide 33: Q3 YTD 2020 Sales Bridge
Q3 YTD 2020 Sales Bridge Reported Growth +8% | 1% (0%) 0% 0% 11,537 10,647 8 = ec 5 Like-for-like growth +8% Q3 YTD 2019 Volume Price Mix Currency Others Q3 YTD 2020 choll Almarai Q3 2020 Earnings Presentation 33
Slide 34: Almarai topline grew in all countries except Oman
Almarai topline grew in all countries except Oman... Q3 YTD 2020 Revenue Growth (SAR Million) KSA Others Total Revenue 7,818 1,308 11,537 % of Revenue 68% 11% 100% Growth 8% 25% 8% (11%) +SAR 890M (8%) +SAR 258M +SAR 573M (Reboll Q3 2020 Earnings Presentation Almarai’ 3,4
Slide 35: KSA growth of 8% contributed the most to topline
.. However KSA growth of 8% contributed the most to topline Q3 YTD 2020 Total Revenue - SAR 11,537 Million Others 3% 8% 573 SAR Million KSA Q3 2020 Earnings Presentation 3% 34 18% 107 15% 78 UAE Egypt Kuwait (11%) (59) — Oman Q3 YTD 2020 Total Growth -(SAR 890M (8%) 3% 29% 7 63 — Bahrain Jordan 38%
Slide 36: Food, Poultry & LL Dairy contributed the most to topline growth
Food, Poultry & LL Dairy contributed the most to topline growth Q3 YTD 2020 Total Revenue - SAR 11,537 Million Q3 YTD 2020 Total Growth -(SAR 890M (8%) Other Sales 3% Fruit Juice: 9% onde Dairy __ 10% 2% 19% 12% 0% 20% 2% 60% 306 182 186 115 73 [7 6 3 zz Fresh Dairy Foods Poultry Bakery LongLife Fru
Slide 37: Q3 YTD 2020 Total Revenue - SAR 11,537 Million
Q3 YTD 2020 Total Revenue - SAR 11,537 Million Modern Trade channel growth was a key highlight for 3 Quarters Food Service 10% Traditional Trade 58% Other / Exports 5% 13% SAR Million Modern Trade Q3 2020 Earnings Presentation Traditional Trade (5%) (57) — Food Service Q3 YTD 2020 Total Growth -(SAR
Slide 38: All categories recorded positive results - Q3 YTD 2020
All categories recorded positive results - Q3 YTD 2020 Revenue By Geography - SAR Million Revenue By Category - SAR Million Other Sales FruitJuice £296 _ Q3YTD 2019 Q3YTD 2020 Q3 YTD 2019 Q3YTD 2020 YoY %/ clholl Q3 2020 Earnings Presentation Almarai’ 3,
Slide 39: Profit & Loss Statement - Q3 YTD
Profit & Loss State t-Q3 YTD -_ 3rd Quarter YTD 3rd Quarter SAR Million 2019 2020 Change 2019 2020 Change Revenue 3,573 100.0% 3,863 100.0% 8.1% 10,647 100.0% 11,537 100.0% 8.4% Cost of sales (2.128) (59.6%) (2,348) (60.8%) (10.4%) (6,574) (61.7%) (7,234) (62.7%) (10.0%) Gross Profit 1,445 40.4% >)
Slide 40: Balance Sheet as of end September 2020
Balance Sheet as of end September 2020 _ EndofSept EndofSept Sept20 v Sept19 SAR Million 2019 2020 Change % Net Operating Working Capital 3,254 3,461 207 6% Property, Plant and Equipment 23,298 22,666 (632) (3%) Biological Assets 1,364 1,359 (5) (0%) Net Operating Assets 27,916 27,486 (430) (2%) Goo
Slide 41: Cash Flow Statement as of end of September
Cash Flow State tas of end of Septem eRe 3rd Quarter YTD 3rd Quarter 2019 2020 Change % 2019 2020 Change % Net Income before NCI 593 615 22 3.8% 1,514 1,602 89 5.9% Working Capital and Other 534 480 (54) (10.1%) 1,571 1,332 (239) (15.2%) Operating Cash Flow 1,127 1,095 (32) (2.8%) 3,084 2,934 (150)
Slide 42: Results by segment
aA Almarai SAR Million Dairy & Juice Bakery Poultry Others . Consolidated Q3 YTD 2020 Revenue 8,257 1,276 1,698 307 11,537 Depreciation and Amortisation (1,030) (155) (285) (123) (1,594) Profit Attributable to Shareholders 1,254 161 270 (37) 1,648 Percent to Revenue of Profit Attributable to Shareho
Slide 43: (SAR Million)
2005 (SAR Million) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 2020 Earnings Presentation 43
Slide 44: Q3 2020 Earnings Presentation
Q3 2020 Earnings Presentation