M.p. Evans Group Plc · LSE:MPE
M.p. Evans — FY2015 Earnings Presentation
36 slides from M.p. Evans's earnings presentation, Apr 12, 2016
Slide 1: 2015 preliminary results
2015 preliminary results 12 April 2016 Preliminary results Preliminary results April April 2016 2015
Slide 2: Agenda
Agenda 1 1. Overview 2. Corporate overview 3. Operational highlights Indonesian palm oil Australian beef cattle Malaysian property 4. Preliminary results 5. Outlook and investment case 6. Appendices Preliminary results Preliminary results April April 2016 2015
Slide 3: Corporate overview & financial highlights
Corporate overview & financial highlights Preliminary results Preliminary results April April 2016 2015
Slide 4: Corporate overview
Corporate overview 3 A UK, AIM-listed agri-business group producing palm oil in Indonesia and beef cattle in Australia, with residual Malaysian property assets in the course of disposal Geographical spread of Group assets Malaysia 8% Australia 14% Indonesia 78% Preliminary results Preliminary resu
Slide 5: Financial highlights
Financial highlights 4 Profit for the year US$25.40 million (2014 US$28.26 million) Indonesian palm-oil profits substantially lower due to lower palm-oil prices Australian cattle operations very profitable as cattle prices rose strongly through the year Profit for Malaysian property developm
Slide 6: Strategy
Strategy Preliminary results Preliminary results April April 2016 2015
Slide 7: Strategy – Indonesian palm oil
Strategy – Indonesian palm oil 6 To invest further in a fast-growing, low-cost food commodity To expand the Group’s oil-palm areas in Indonesia in an environmentally-sustainable World vegetable-oil consumption manner and composition (Million tonnes) Continually to maintain and, 200.0 Other veg
Slide 8: Strategy – Australian beef cattle
Strategy – Australian beef cattle 7 To maximise productivity and capacity on NAPCo To capitalise on any future strategic opportunities re NAPCo Preliminary results Preliminary results April April 2016 2015
Slide 9: Strategy – Malaysian property
Strategy – Malaysian property 8 To continue to benefit from property-development and raw- land-sale profits at Bertam Properties To dispose of the small Bertam Estate and the 40% interest in Bertam Properties at appropriate time to reinvest in Indonesian palm oil Preliminary results Preliminary
Slide 10: Operational overview – Indonesian palm oil
Operational overview – Indonesian palm oil Preliminary results Preliminary results April April 2016 2015
Slide 11: Operational overview – palm oil
Operational overview – palm oil 10 Overall Group f.f.b. crop 423,900 tonnes, 10% higher than 2014 Associates’ f.f.b. crop 382,100 tonnes, marginally lower than in 2014 Palm-oil prices overall 24% lower than 2014 at US$622 per tonne, as abundant oil-seed crops harvested and mineral-oil prices f
Slide 12: Operational overview – palm oil (continued)
Operational overview – palm oil (continued) 11 Planting programme on new projects started in 2005 – Group f.f.b. crops increasing significantly Actual and projected fresh fruit bunch crop (Tonnes) 1,200,000 Co-operatives 1,000,000 Group 800,000 600,000 400,000 200,000 0 2010 2011 2012 2013 2014 20
Slide 13: Palm oil – opportunity for growth
Palm oil – opportunity for growth 12 Remaining plantable areas on new projects Group Smallholders Estimated still Total when Estimated still Total when to plant fully planted to plant fully planted (Ha) (Ha) (Ha) (Ha) Kalimantan 800 10,600 200 4,400 Bangka 600 6,000 1,100 4,000 Musi Rawas 6,200 7,
Slide 14: Increasing oil-palm plantings – planted areas
Increasing oil-palm plantings – planted areas 13 Planted at Total 31 December estimated 2015 fully planted Ha Ha New projects: Kalimantan 9,800 10,600 Bangka 5,400 6,000 Musi Rawas 800 7,000 16,000 23,600 Established North Sumatran estates 9,400 9,400 Total majority owned areas 25,400 33,000 Effecti
Slide 15: Operational overview – Australian beef cattle
Operational overview – Australian beef cattle Preliminary results Preliminary results April April 2016 2015
Slide 16: Operational overview – Australian beef cattle
Operational overview – Australian beef cattle 15 Woodlands Property sold in November 2015 Strong cattle trading result: profit of US$4.5 million (2014 US$2.0 million) Herd grew to 8,100 head in July 2015 Good cattle weight gains: total weight gained 78% higher than in 2014 Realised sales p
Slide 17: Operational overview – Australian beef cattle (continued)
Operational overview – Australian beef cattle (continued) 16 NAPCo Closing herd similar to 2014, as were average cattle weights Prices for cattle rose 30% during 2015 56,900 brandings: significantly higher than in 2014 (50,700) Weaker Australian Dollar boosted export demand and prices Welc
Slide 18: Operational overview – Malaysian property
Operational overview – Malaysian property Preliminary results Preliminary results April April 2016 2015
Slide 19: Operational highlights – Malaysian property
Operational highlights – Malaysian property 18 Operational highlights Small decrease in sales of developed properties completed but at similar profit margin Two sales of raw land in 2015 at a profit of US$1.0 million (Group share US$0.4 million) Preliminary results Preliminary results April Apri
Slide 20: Preliminary results
Preliminary results Preliminary results Preliminary results April April 2016 2015
Slide 21: Preliminary results – overall results and financial position
Preliminary results – overall results and financial position 20 Results shown without bearer-biological assets following adoption of revised International Accounting Standard 41 ‘Biological assets’: palms now shown at depreciated historical cost Good level of profit: lower CPO price but higher c
Slide 22: Preliminary results – profit
Preliminary results – profit 21 Gross profit of US$15.1 million (2014 US$31.8 million) Reduction in plantation gross profit margin from 35% to 21% on a 24% reduction in CPO price Further fall in unit cost: now at US$350 per tonne of palm product Increase of US$4.2 million (28%) in share of a
Slide 23: Preliminary results – funding
Preliminary results – funding 22 Ambitious capital programme continues on new projects: could amount to US$75 million over 2016-2017 Continuing planting programme Bangka mill due to be commissioned mid-2016; second mill in Kalimantan commencing construction in 2017 Permanent housing programm
Slide 24: Outlook and investment case
Outlook and investment case Preliminary results Preliminary results April April 2016 2015
Slide 25: Outlook for palm oil
Outlook for palm oil 24 CPO price stable in Q4 2015; has risen to above US$700 in Q1 2016 World annual vegetable-oil consumption per capita (Kg / head, 2013) Crop growth expected to continue: Musi Rawas contributing from 2018 70.0 60.0 Young age profile of plantings - 50.0 approaching prime pr
Slide 26: Outlook for beef
Outlook for beef 25 Significant rainfall in early 2016 on many NAPCo properties in Queensland and Northern Territory Australian beef-cattle prices remain historically strong but have eased a little in early 2016 Modest recovery in Australian dollar has eroded some export competitiveness Prelim
Slide 27: Investment case
Investment case 26 M. P. Evans well positioned to benefit from sharply-increasing f.f.b. crops Young age profile of plantations will generate increasing crop for years to come Good cash flow provides a strong platform for continued expansion Good long-term price prospects for Indonesian palm
Slide 28: Appendices
Appendices Preliminary results Preliminary results April April 2016 2015
Slide 29: Appendix: Area of operations
Appendix: Area of operations 28 Cattle Preliminary Preliminaryresults results April April2016 2015
Slide 30: Appendix: Strategic disposal of Malaysian assets
Appendix: Strategic disposal of Malaysian assets 29 2005 strategy envisaged disposing of more than half of the Group’s assets for re-investment in new projects 140.0 120.0 100.0 US$ million 80.0 60.0 40.0 20.0 0.0 Sold to date To be sold Malaysian Estates Thai and other Bertam Properties Bertam Pr
Slide 31: Appendix: Consolidated income statement
Appendix: Consolidated income statement 30 Year ended Year ended 31 December 31 December 2015 2014 US$’000 US$’000 Revenue 72,528 89,956 ———— ———— Gross profit 15,059 31,767 Biological-asset adjustment (232) (424) Exchange differences (5,320) (2,379) Administrative expenses, etc. (2,388) (4,148) ———
Slide 32: Appendix: Consolidated balance sheet
Appendix: Consolidated balance sheet 31 Year ended Year ended 31 December 31 December 2015 2014 US$’000 US$’000 Non-current assets Goodwill 1,157 1,157 Property, plant and equipment 185,902 191,584 Investments 97,664 94,429 Deferred-tax asset 17,076 14,137 ———— ———— 301,799 301,307 Net current asset
Slide 33: Appendix: Consolidated cash flow
Appendix: Consolidated cash flow 32 Year ended Year ended 31 December 31 December 2015 2014 US$’000 US$’000 Net cash generated by operating activities 20,231 29,156 ———— ———— Investing activities Interest received 894 1,600 Sale of shares to minority — 926 Proceeds on disposal of assets 21,127 1,985
Slide 34: Appendix: CPO price
Appendix: CPO price 33 Crude palm-oil price, c.i.f. Rotterdam (US$) 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Preliminary Preliminaryresults results April April2016 2015
Slide 35: Appendix: Cattle prices
Appendix: Cattle prices 34 Eastern Young Cattle Indicator and 100-day short fed cattle prices (A$ / Kg) 6.50 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 EYCI (Woodlands) 100-day short fed (NAPCo) 2.00 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Preliminary
Slide 36: Appendix: World vegetable oil consumption
Appendix: World vegetable oil consumption 35 World vegetable-oil consumption 2015: 169 million tonnes 2005: 108 million tonnes 2% 2% 3% 4% 2015 9% 36% 2005 16% 28% Palm oil Soybean oil Rapeseed oil Sunflower oil Palm kernel oil Cotton oil Groundnut oil Coconut oil Source: Oil World Preliminary resul