36 slides from M.p. Evans's earnings presentation, Apr 16, 2013
Slide 1: Preliminary results for the year ended 31 December 2012
28 Preliminary results for the year ended 31 December 2012 16 April 2013
Slide 2: Index
1 Index Page Corporate overview and financial highlights ................................................... 3 Strategic focus ........................................................................................... 8 Operational highlights.........................................................
Slide 3: Corporate overview and financial highlights
2 Corporate overview and financial highlights Preliminary results April 2013
Slide 4: Corporate overview
3 Corporate overview A UK, AIM-listed agri-business group producing palm oil in Indonesia and beef cattle in Australia, as well as owning residual Malaysian property assets in the course of disposal Geographical spread of Group assets Malaysia - property 8% Australia - beef cattle 16% Indonesia -
Slide 5: Corporate overview (continued) – Palm oil
4 Corporate overview (continued) Palm oil biggest and most-traded in world vegetable-oil market continuing and increasing demand from India, Indonesia, China, and Europe competitive yields and production costs compared to competing oils Indonesia biggest palm-oil producer with suitable cli
Slide 6: Corporate overview (continued) – Beef cattle
5 Corporate overview (continued) Beef cattle Australia well placed to serve Asia – world’s fastest growing beef consumer Australia world’s second-largest beef exporter green, clean image in Australia Preliminary results April 2013
Slide 7: Financial highlights
6 Financial highlights Profit for the year US$21.55 million (2011 US$39.70 million) Strong f.f.b. crop growth but fall in crude-palm-oil price; Indonesian gross profit similar to 2011 Reduced results from plantation associates; loss in cattle associate Earnings per share decreased to US cent
Slide 8: Strategic focus
7 Strategic focus Preliminary results April 2013
Slide 9: Strategic focus – Indonesian palm oil
8 Strategic focus – Indonesian palm oil To invest further in a fast-growing, low-cost food commodity in which the Group’s management has many years of experience To increase planted areas in Indonesia – the world’s biggest producer with land and plentiful labour available To plant and maintain
Slide 10: Strategic focus – Australian beef cattle
9 Strategic focus – Australian beef cattle To capitalise on strategic opportunity within NAPCo (e.g. feedlot expansion and increased bore holes on main breeding station) To continue pasture-improvement programme on Woodlands to increase cattle-carrying capacity To dispose of Woodlands in due c
Slide 11: Strategic focus – Malaysian property
10 Strategic focus – Malaysian property To continue to benefit from land sales and property- development profits at Bertam Properties To dispose of the small Bertam Estate and the 40% interest in Bertam Properties at appropriate time to reinvest in agricultural operations Preliminary results Apr
Slide 12: Operational highlights – Indonesian palm oil
11 Operational highlights – Indonesian palm oil Preliminary results April 2013
Slide 13: Operational highlights – palm oil
12 Operational highlights – palm oil Planted areas at end 2012 Ha Ha Established, mature North Sumatran estates 9,500 New projects - Kalimantan (7,200 ha mature) 9,700 - Bangka (2,000 ha mature) 3,500 ———— 13,200 ———— Total, majority-owned, areas 22,700 Effective share of associates’ established pla
Slide 14: Operational highlights – palm oil (continued)
13 Operational highlights – palm oil (continued) Remaining plantable areas on new projects (+/- 2 years) Group Smallholders Kalimantan Bangka Total Kalimantan Bangka Total Ha Ha Ha Ha Ha Ha Planted at end 2012 9,700 3,500 13,200 4,000 1,600 5,600 Current estimate to completion* 900 2,500 3,400 400 2
Slide 15: Operational highlights – palm oil (continued)
14 Operational highlights – palm oil (continued) Existing mature estates continue to improve – crops 4% higher than 2011 Crops on the two new projects more than doubled One mill (40-tonne) operating in North Sumatra and new mill (60- tonne) commissioned on time in Kalimantan at end 2011 Extr
Slide 16: Operational highlights – palm oil (continued)
15 Operational highlights – palm oil (continued) Planting programme on new projects started in 2005 – f.f.b. crops now increasing significantly Crop - tonnes f.f.b. 700,000 crop in 2010 – 198,000 tonnes 600,000 Smallholder co-operatives 500,000 crop in 2011 – 250,000 tonnes Group 400,000 cro
Slide 17: Operational highlights - Australian beef cattle
16 Operational highlights - Australian beef cattle Preliminary results April 2013
Slide 18: Operational highlights – Australian beef cattle
17 Operational highlights – Australian beef cattle Woodlands herd reduced at year end to 5,600 head good rainfall in early 2012 but forage crops not able to develop fully in dry second half - weight gains down on 2011 pasture improvement continues – sub-soil cultivation good rainfall in 20
Slide 19: Operational highlights – Australian beef cattle (continued)
18 Operational highlights – Australian beef cattle (continued) NAPCo strong operating cash inflows higher sales more than offset by (unrealised) lower year-end herd valuation – resulting from lower prices and lighter weights modest write down of property portfolio herd maintained at approx
Slide 20: Operational highlights - Malaysian property
19 Operational highlights - Malaysian property Preliminary results April 2013
Slide 21: Operational highlights - Malaysian property
20 Operational highlights - Malaysian property Operational highlights continuing development of housing and commercial buildings minimal land sales in 2012 but several expected to be completed in 2013 Bertam Properties’ profits periodically distributed as dividends. Group board content to co
Slide 22: Operational highlights – Malaysian assets
21 Operational highlights – Malaysian assets Estate and investment disposals to date Sold and Years cash Property of sales received To be sold Total US$’m US$’m US$’m Malaysian estates 2006-08 77.00 — 77.00 Other Malaysian and Thai disposals 2008-10 6.81 — 6.81 Bertam Properties (40% holding) — 36.5
Slide 23: 2012 results
22 2012 results Preliminary results April 2013
Slide 24: 2012 results – overall result and financial position
23 2012 results – overall result and financial position Operational progress in 2012 not mirrored in financial results profit down 54% to US$21.55 million EPS down 33.88 US cents to 32.51 US cents Strong cash flow from operations: US$33.90 million (2011 US$48.34 million) Shareholders’ equi
Slide 25: 2012 results – revenue and gross profit
24 2012 results – revenue and gross profit Strong growth in revenue (44%) but fall in gross profit (11%) 2012 2011 Increase/(decrease) Revenue Gross profit Revenue Gross profit Revenue Gross profit US$’000 US$’000 US$’000 US$’000 % % Plantations 77,106 25,182 55,275 25,762 39 (2) Cattle 6,061 (2,1
Slide 26: 2012 results – revenue and gross profit (continued)
25 2012 results – revenue and gross profit (continued) result explained by high plantation-crop growth offset by lower CPO price plantation revenue up 39% to US$77.11 million average CPO price US$998 v US$1,123 – 11% decrease loss of gross margin partly temporary: crop from newly-mature hect
Slide 27: 2012 results – other operating flows, financing and tax
26 2012 results – other operating flows, financing and tax Biological gain and planting expenditure both lower than 2011, combined making similar net contribution of US$2.12 million (2011 US$2.32 million) Other administrative expense US$4.29 million (2011 US$2.70 million) due to: Absence of 20
Slide 28: 2012 results – share of associates’ profits
27 2012 results – share of associates’ profits Group share of associates’ results casting shadow over 2012 performance of subsidiaries 2012 2011 Increase/(decrease) Revenue Profit Revenue Profit Revenue Profit US$’000 US$’000 US$’000 US$’000 % % Plantations 37,862 13,241 40,024 18,621 (5) (29) Cat
Slide 29: 2012 results – share of associates’ profits (continued)
28 2012 results – share of associates’ profits (continued) Plantation results reflect lower CPO price and lower extraction rates on joint venture, PT Agro Muko NAPCo sales similar to previous year, but result reduced by A$4.79 million downward property re-valuation and lower (unrealised) year-en
Slide 30: Investment case
29 Investment case Preliminary results April 2013
Slide 31: Investment case
30 Investment case M.P.Evans well positioned to benefit from sharply-increasing f.f.b. production derived both from new projects and mature estates Opportunity for value creation as plantings on the new projects mature Increasing demand from rapidly-expanding Asian economies for cooking oil an
Slide 32: Appendices
31 Appendices Preliminary results April 2013
Slide 33: Consolidated income statement
32 Consolidated income statement Year ended Year ended 31 December 2012 31 December 2011 US$’000 US$’000 Revenue 83,213 57,756 ———— ———— Gross profit 23,035 25,919 Biological-asset adjustment 2,123 2,317 Exchange differences (1,761) 528 Administrative expenses, etc. (4,275) (2,557) ———— ———— Operati
Slide 34: Consolidated balance sheet
33 Consolidated balance sheet 2012 2011 US$’000 US$’000 Non-current assets Goodwill 1,157 1,157 Biological assets, property, plant and equipment 246,696 223,458 Investments 130,852 131,804 Deferred-tax asset and non-current debtor 6,454 4,997 ———— ———— 385,160 361,416 Net current assets 42,574 47,56
Slide 35: Consolidated cash-flow statement
34 Consolidated cash-flow statement 2012 2011 US$’000 US$’000 Net cash generated by operating activities 33,897 48,339 ———— ———— Investing activities Interest received 1,338 1,078 Proceeds on disposal of assets 239 598 Purchase of property, plant and equipment (18,540) (31,789) Planting expenditure
Slide 36: Location of the Group’s properties and those of its associates
Location of the Group’s properties and those of its associates 35 Preliminary results April 2013