Rusagro Group · RUS:RAGR
Rusagro — Ros Agro — Investor Day (September 2021)
47 slides from Rusagro's investor day presentation, September 2021
Slide 1: Investor Presentation Ros Agro PLC
INVESTOR PRESENTATION ROS AGRO PLC September 2021
Slide 2: Presenting Team
PRESENTING TEAM MAXIM BASOV BORIS CHERNICHER SVETLANA KUZNETSOVA CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER IR & ESG DIRECTOR BOARD MEMBER 2
Slide 3: Agenda
Agenda 1 Ros Agro overview p.4 2 Industry backdrop p.6 3 Investment highlights p.15 4 Strategy p.28 5 2Q 2021 update p.32 6 Appendix p.40 3
Slide 4: Section 1: Ros Agro Overview
ROS AGRO O view WZ ROS AGRO With PLC
Slide 5: Ros Agro is a leading diversified vertically-integrated agricultural and consumer company
ROS AGRO IS A LEADING DIVERSIFIED VERTICALLY-INTEGRATED AGRICULTURAL AND CONSUMER COMPANY IN RUSSIA SALES1,2 ADJ. EBITDA1,2 ADJ. EBITDA MARGIN3 CAPEX1,2 LEVERAGE4 EMPLOYEES5 191 RUB billion |2.6 USD billion 42 RUB billion |0.6 USD billion 22 % 15 RUB billion |0.2 USD billion 1.6x Net debt / adj. EBI
Slide 6: Section 2: Industry Backdrop
SECTION 2 oy DUST BACKDHOM WZ ROS AGRO With PLC
Slide 7: Global Grain Market
GLOBAL GRAIN MARKET GRAIN PRODUCTION & CONSUMPTION/CONSUMPTION STRUCTURE LEADING COUNTRIES ON WHEAT MARKET • Current prospects for world Global Production & Consumption, million tonnes 4 Global consumption 20/21E by grain type (volume), % 4 Production 20/21E of wheat, million tonnes 4 Export 20 /21E
Slide 8: Russian Grain Market
RUSSIAN GRAIN MARKET GRAIN PRODUCTION / GRAIN PRODUCTION STRUCTURE TOP-5 LANDHOLDERS • Russia has one of the lowest Production, million tonnes 2 Production structure 20/21 (volume), % 2 ths ha 2 production costs globally in wheat, 1 047 LANDHOLDER sunflower and barley 865 № IN RUSSIA • Further decre
Slide 9: Global Oil & Fats Market
GLOBAL OIL & FATS MARKET OILSEEDS BALANCE / VEG. OIL CONSUMPTION STRUCTURE LEADING SUNFLOWER OIL PRODUCERS & EXPORTERS • Global oil and fats demand Oilseeds production and consumption, Vegetable oils consumption structure 20/21E by oil Production 20/21E of sunflower oil, million tonnes3,4 Export 20
Slide 10: Russian Oil & Fats Market
RUSSIAN OIL & FATS MARKET CRUDE VEGETABLE OIL PRODUCTION INDUSTRIAL AND CONSUMER OIL AND FATS PRODUCTION • Being one of the cost leaders in sunflower oil globally, Russia million tonnes2 17% 7,3 Industrial oil and fats, million tonnes2 Consumer oil and fats, million tonnes2 demonstrated stable growt
Slide 11: Global Sugar Market
GLOBAL SUGAR MARKET SUGAR PRODUCTION&CONSUMPTION / SUGAR SOURCES PRODUCTION STRUCTURE LEADING SUGAR CONSUMERS AND SUGAR BEET PRODUCERS • The current production 21/22F forecast of 176m tonnes falls short of Production and consumption, million tonnes 3 Sugar sources production structure’20/21, million
Slide 12: Russian Sugar Market
RUSSIAN SUGAR MARKET SUGAR PRODUCTION&CONSUMPTION / SUGAR SOURCES PRODUCTION STRUCTURE LARGEST SUGAR PRODUCERS IN RUSSIA • In Russia production of sugar million tonnes2 Sugar sources production structure’20/21, (volume), %2,3 million tonnes2 beet demonstrated growth and PRODUCER increase of cost eff
Slide 13: Global Pork Market
GLOBAL PORK MARKET MEAT PRODUCTION & CONSUMPTION/CONSUMPTION STRUCTURE LEADING COUNTRIES ON PORK MARKET • World meat output in 2021 is Global Production & consumption, million tonnes 3 Global consumption 2021E by meat type (volume), % 3 Production 2021E of pork, million tonnes 3 Export 2020 of pork,
Slide 14: Russian Pork Market
RUSSIAN PORK MARKET PORK PRODUCTION LARGEST PORK PRODUCERS IN RUSSIA • Pork production in Russia has Slaughtered weight, million tonnes1 % of pork produced in Russia1 grown by 9% to 4.3m tonnes +9% 4,3 PRODUCER in slaughtered weight in 2020 3,7 3,9 0,5 № IN RUSSIA 3,5 9,5% 3,3 0,5 IN 2020 • Small fa
Slide 15: Section 3: Investment Highlights
SECTION 3 INVESTMENT HIGHLIGHTS
Slide 16: Drivers of Our Success
DRIVERS OF OUR SUCCESS 1 Large-scale, stable and diversified agribusiness with leading positions across the key segments 2 State-of-the-art facilities in strategically important locations 3 Robust vertical integration driving superior efficiency: from field to consumer 4 Tech-enabled operations util
Slide 17: Large-scale, stable and diversified agribusiness with leading positions
LARGE-SCALE, STABLE AND DIVERSIFIED AGRIBUSINESS WITH LEADING POSITIONS ACROSS 1 THE KEY SEGMENTS OIL AND FATS BUSINESS AGRICULTURE BUSINESS sunflower oil3, consumer №1 margarine4 and mayonnaise SALES1,2 SALES1,2 producer4 in Russia №3 agricultural land holder in Russia5 №2 industrial fats producer
Slide 18: State-of-the-art facilities in strategically important locations
2 STATE-OF-THE-ART FACILITIES IN STRATEGICALLY IMPORTANT LOCATIONS Orel Region Penza Region LAND BANK 1 sugar plant 1 elevator • Russia accounts for 50+% of the world's 44 ths ha superior quality Black Earth (chernozem) area, Ulyanovsk Region which is partially located in the Belgorod and 1 dairy pr
Slide 19: Robust vertical integration: from field to consumer
3 ROBUST VERTICAL INTEGRATION DRIVING SUPERIOR EFFICIENCY: FROM FIELD TO CONSUMER MEAT OIL A N D FATS BUSINESS BUSIN ESS Slaughtering Oil extraction Production of Meal and production oil-and-fats and meat processing of co-products products В2С Large cuts, В2С portion cuts, Compound Bottled vegetable
Slide 20: Tech-enabled operations utilizing advanced farming technologies
4 TECH-ENABLED OPERATIONS UTILIZING ADVANCED FARMING TECHNOLOGIES KEY GOALS INNOVATIONS Advanced selection methods Biotechnologies in crop farming SUSTAINABLE DEVELOPMENT TECH-ENABLED Development of innovative products Improvement of crop yields OPERATIONS DIGITAL TRANSFORMATION Precision farming Ar
Slide 21: Strong consumer brand portfolio across key products
5 STRONG CONSUMER BRAND PORTFOLIO ACROSS THE KEY PRODUCTS OIL AND FATS DAIRY BUSINESS SHARE OF ROS AGRO’S BRANDS OF FAT AND OIL PRODUCTS IN THE RUSSIAN MARKET, % PRODUCTS CONSUMER MARGARINE MAYONNAISE OTHER BRANDS 4 5 №11 №12 №13 №1 №1 12% 13% 10% 70% 32% share of consumer share of consumer share of
Slide 22: Ability to benefit from vast export opportunities
6 ABILITY TO BENEFIT FROM VAST EXPORT OPPORTUNITIES ACROSS ALL SEGMENTS 61 countries of Ros Agro’s products sales SUGAR BUSINESS AGRICULTURE BUSINESS Exports, ths tonnes Exports, ths tonnes 275 196 +30% 255 203 +35% 20% 19% in total in total sales sales 2018 2020 2018 2020 Indirect exposure to expor
Slide 23: Established platform with proven track record of organic and inorganic growth
ESTABLISHED PLATFORM WITH PROVEN TRACK RECORD OF ORGANIC AND 7 INORGANIC GROWTH 2015 34 RUB billion 2018 1.8 RUB billion 2018 35 RUB billion 2019 8.5 RUB billion Acquisition of rights to PROVEN INORGANIC Acquisition of debt and equity Acquisition of Acquisition of 22.5% stake purchase the majority g
Slide 24: Strong financial performance
8 STRONG FINANCIAL PERFORMANCE… KEY PERFORMANCE INDICATORS Consolidated sales, RUB billion Adj. EBITDA & Net profit adj.EBITDA Net profit RUB billion ~2x Adj. EBITDA margin 22% 18% 19% 14% 20% 16% 21% +15% 159,0 Net profit margin 17% 7% 15% 7% 15% 13% 17% 138,2 +45% +2x 104,4 +65% 84,3 +45% 79,1 83,
Slide 25: Compelling dividend proposition
8 …WITH COMPELLING DIVIDEND PROPOSITION DIVIDEND POLICY HISTORICAL DIVIDEND PAYOUTS Dividend payout ratio as % of net profit 2013-1H 2021 STARTING FROM 2H 2021 75 Target payout At least 25% At least 50% 39 45 50 50 of net profit under IFRS of net profit under IFRS 31 35 25 • Semi-annual basis: payme
Slide 26: Thorough ESG factors control
9 THOROUGH ESG FACTORS CONTROL HR Social Green agenda HUMAN CAPITAL DEVELOPMENT PROMOTING DIVERSITY PHILANTHROPY PROGRAMME BUDGET REDUCING THE ENVIRONMENTAL FOOTPRINT Share of internal recruitment, % RUB mn GHG emissions, ths tonnes -4% YoY 36% 63% 51% 242 728 721 21 MN CU. M share of women 33,0 34,
Slide 27: Seasoned management team with proven track record
10 SEASONED MANAGEMENT TEAM WITH PROVEN TRACK RECORD OF PROFITABLE GROWTH Maxim Basov Boris Chernicher Svetlana Kuznetsova Sergey Koltunov Olga Fedorova Chief Executive Officer, Chief Financial Officer IR & ESG Director Director of Legal HR Director Member of the Board and Corporate Affairs Business
Slide 28: Section 4: Strategy
_ STRATEGY — WZ ROS AGRO With PLC
Slide 29: Key Strategy Pillars: Business Expansion
KEY STRATEGY PILLARS: BUSINESS EXPANSION ORGANIC GROWTH INORGANIC GROWTH • Monitor new areas of business for the ongoing Agriculture 41% Oil and fats 27% business expansion Arable land, ths ha Sunflower seeds processing capacity, t per day • Selective accretive acquisitions 600 4 610 5 400 INCREASIN
Slide 30: Key Strategy Pillars: B2C Channel Development
KEY STRATEGY PILLARS: B2C CHANNEL DEVELOPMENT DEVELOPING PRIVATE BRANDS AND PROMOTING THEM ON THE CONSUMER MARKETS EXPANDING THE CURRENT PRODUCT MIX Leading private Ros Agro’s brands in Russia: Oil and fats Sugar Meat Continue investments Development of Active development 1 into existing consumer in
Slide 31: Key Strategy Pillars: Automation and Innovation
KEY STRATEGY PILLARS: AUTOMATION AND INNOVATION Introducing the precision Developing the automation of Using advanced selection RUSAGRO Tech Challenge farming technologies production and operating processes methods in crops SECTOR MANAGEMENT FOCUS GOALS • Digital transformation strategy • Simulation
Slide 32: Section 5: 2Q 2021 Update
SECTION 5 2Q 2021 UPDATE
Slide 33: Net Revenue, Adj. EBITDA: 6M 2021 vs 6M 2020
NET REVENUE, ADJ. EBITDA: 6M 2021 VS 6M 2020 NET REVENUE (IFRS) 6M 2021 VS 6M 2020 COMMENTS RUB million +45% Revenue of Sugar segment increased by RUB 2,117 million (+15%) due to increase of sugar sales price partially compensated by sales volume decrease 24 837 104 372 3 885 (2,732) 72 161 2 117 4
Slide 34: Cash Flows: 6M 2021 vs 6M 2020
CASH FLOWS: 6M 2021 VS 6M 2020 KEY CONSOLIDATED CASH FLOW INDICATORS PRESENTED ACCORDING TO MANAGEMENT ACCOUNTS METHODOLOGY (NOT IFRS PRESENTATION) 1 CAPEX 6M 2021 VS 6M 2020, RUB MILLION Variance 6M 2021 6M 2020 RUB million 6M 2021 6M 2020 Units % 2,110 648 Net cash flow from operating activities,
Slide 35: Debt Profile (as of 30 June 2021)
DEBT PROFILE (AS OF 30 JUNE 2021) DEBT POSITION AND LIQUIDITY MANAGEMENT CREDIT PORTFOLIO (EXCL. NON-BANK LOANS)2 30 June 31 Dec. Variance RUB million 2021 2020 Units % Gross debt 181,555 114,929 66,626 58 7% Rosselhozbank Short-term borrowings 116,206 51,753 64,453 125 8% Long-term borrowings 65,34
Slide 36: Agriculture Key Financial and Operational Indicators
AGRICULTURE KEY FINANCIAL AND OPERATIONAL INDICATORS SALES, ADJUSTED EBITDA AND ADJUSTED EBTIDA MARGIN Adj. EBITDA Margin, RUB million Sales (RUB +2,349 million, +66%) Sales increase impact by main factors ▪ RUB +2,214 million of an increase in sales volume of wheat and 66% 23% 41% 52% 51% 48% soybe
Slide 37: Oil & Fats Key Financial and Operational Indicators
OIL & FATS key financial and operational indicators Sales, Adjusted EBITDA and Adjusted EBITDA margin¹ RUB million Adj. EBITDA Margin Sales (RUB +14,291 million, +73%)1 73% 12% 17% 8% 11% 13% ▪ Sales increase impact by main factors: RUB +14,412 million of price growth and RUB -279 million of the dec
Slide 38: Sugar Key Financial and Operational Indicators
SUGAR key financial and operational indicators Sales, Adjusted EBITDA and Adjusted EBITDA margin RUB million (14%) Adj. EBITDA Margin Sales (RUB -1,283 million, -14%): (21%) 28% 32% 19% 27% 26% ▪ Sugar sales decreased due to sales volume decrease of 46% (RUB -3,681 million) partially compensated by
Slide 39: Meat Key Financial and Operational Indicators
MEAT key financial and operational indicators Sales, Adjusted EBITDA and Adjusted EBITDA margin RUB million Adj. EBITDA Margin Sales (RUB +2,351 million, +32%) 32% 18% 32% 16% 20% 14% ▪ RUB +2,174 million of sales price growth as a result of average sales 1% 12% price increase in 2Q21 of all meat pr
Slide 40: Section 6: Appendix
SECTION 6 APPENDIX
Slide 41: 2021 Market Regulation
2021 MARKET REGULATION PRICES: SUGAR & BOTTLED OIL EXPORT: GRAIN AND OIL CROPS EXW PRICE, incl. VAT (RUB) RETAIL PRICE, incl. VAT (RUB) GRAIN CROPS OIL CROPS 15 Feb – 30 Jun 2021 Term 20 Dec – 1 Oct 2021 20 Dec – 1 Oct 2021 Quota No quota 17.5 mln tn1 36 RUB/kg Sugar 46 RUB/kg Duty WHEAT SUNFLOWER S
Slide 42: P&L Statement
P&L STATEMENT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2021 AND YEAR ENDED 31 DECEMBER 2020 RUB million Six months ended 30 June Year ended December 31 2021 2020 2020 2019 Sales 104,372 72,161 158,971 138,172 Net gain/(loss) on revaluation of biological assets
Slide 43: Cash Flow Statement
CASH FLOW STATEMENT CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2021 – NOT IFRS PRESENTATION¹ RUB million Variance 6M 2021 6M 2020 Units % CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax 19,356 9,543 9,812 103 Adjustments for non-cash & non operating (income)/
Slide 44: Financial Position Statement (1/2)
FINANCIAL POSITION STATEMENT (1/2) CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE SIX MONTHS ENDED 30 JUNE 2021 RUB million Six months ended 30 June Year ended December 31, 2021 2020 2019 LIABILITIES and EQUITY Current liabilities Short-term borrowings 116,206 51,753 31,835 Lease liabilities 9
Slide 45: Financial Position Statement (2/2)
FINANCIAL POSITION STATEMENT (2/2) CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE SIX MONTHS ENDED 30 JUNE 2021 RUB million Six months ended 30 June Year ended December 31, 2021 2020 2019 ASSETS Current assets Cash and cash equivalents 52,075 11,867 2,171 Restricted cash 37 144 0 Short-term in
Slide 46: Disclaimer
DISCLAIMER IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by ROS AGRO PLC (the “Company”) or any person on behalf of the Company, and any question-and-answer session that follows the oral pre
Slide 47: Contacts
CONTACTS Svetlana Kuznetsova IR & ESG Director E-mail: IR@rusagrogroup.ru Tel.: +7 (495) 363-1661 www.rusagrogroup.ru/eng 47