Ioi Corporation Berhad · MYX:IOICORP
Ioi Corporation Berhad — Debt Investor Presentation (October 2021)
44 slides from Ioi Corporation Berhad's debt investor presentation, October 2021
Slide 1: IOI Corporation Berhad Investor Presentation
Confidential IOI Corporation Berhad Investor Presentation October 2021
Slide 2: Disclaimer
Disclaimer The following applies to the confidential information following this page, the oral presentation of such information and other materials distributed at, or in connection with, this presentation. By attending the meeting where this presentation is made, or by reading these presentation sli
Slide 3: Disclaimer
Disclaimer This presentation does not constitute an offering circular or other offering memorandum in whole or in part. This presentation does not form part of and should not be construed as an offer or invitation to sell or issue or the solicitation of an offer or invitation to buy or subscribe for
Slide 4: Presenters
Presenters Dato’ Lee Yeow Chor Kong Kian Beng Group Managing Director Group Chief and Chief Executive Financial Officer Dr. Surina Binti Ismail Amir Mohd Hafiz Bin Group Head of Sustainability Amir Khalid Head of Group Strategy Confidential I 3
Slide 5: Summary terms of the offering
Summary terms of the offering Issuer ▪ IOI Investment (L) Berhad Guarantor ▪ IOI Corporation Berhad Issuer ratings (M / S / F) ▪ Baa2 (stable outlook) / - / - Expected issuer ratings ▪ Baa2 / - / - (M / S / F) Use of proceeds ▪ To partially refinance the current USD600m 4.375% Notes due June 2022, t
Slide 6: Summary terms of the tender offer
Summary terms of the tender offer Offeror ▪ IOI Investment (L) Berhad Target securities ▪ US$600m 4.375% Notes due June 2022 Senior Unsecured Fixed Rate Securities (the “2022 Notes”) ▪ ISIN: XS0792911298 / Common Code: 079291129 Format ▪ Any or all Purchase price ▪ 102.3 New issue condition ▪ Succes
Slide 7: IOI is a leading global integrated and sustainable palm oil player
IOI is a leading global integrated and sustainable palm oil player Founded in 1969 Listed on the Main Market of Bursa Malaysia Securities Berhad with a market capitalisation of US$5.65bn as A leading global integrated of 30 September 2021 palm oil group with upstream and downstream operations Global
Slide 8: Group Financial Snapshot
Group Financial Snapshot Key financials and operational statistics (financial year ending 30 June) (US$m or otherwise stated) 2019 2020 2021 Revenue 1,778 1,878 2,708 EBIT 259 274 419 Net profit(1) 149 145 341 Plantation: FFB production (‘000 MT) 3,399 3,097 2,918 Plantation: Total oil palm area (‘0
Slide 9: Plantation Segment
Plantation Segment Business segment: Plantation (Upstream) ▪ 176,926 ha of oil palm plus 1,179 ha of rubber and other crops planted areas. ▪ 96 estates and 15 palm oil mills across Malaysia and Indonesia. ▪ Four R&D centers as well as a bio-tech center in Malaysia. ▪ 100% of Malaysian plantations (e
Slide 10: Resource-based Manufacturing Segment
Resource-based Manufacturing Segment Business segment: Resource-based manufacturing (Downstream) ▪ The resource-based manufacturing business, comprising of refining, oleochemical and specialty oils and fats sub-segments. ▪ Presence in specialty oils and fats sub-segment is represented by Bunge Loder
Slide 11: Key investment highlights
Key investment highlights 1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment 4 Well-managed and prudently run by an experienced management
Slide 12: Leading integrated palm oil group with a global presence
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment 4 Well-managed and prudently run by an experienced management team 5 Leading sustainabl
Slide 13: Leading integrated palm oil group with a global presence
Leading integrated palm oil group with a global presence ▪ A fully integrated business model with upstream and downstream operations to mitigate the impact of commodity price fluctuations ▪ The downstream business creates a natural hedge against palm oil volatility due to negative correlation of its
Slide 14: Global presence in 8 countries across 4 continents
Leading integrated palm oil group with a global presence Global presence in 8 countries across 4 continents with sales diversified to more than 80 countries Commodity(1) - Exports by regions Rest of World, 0.2% North America, 12.6% Asia, 40.2% Europe, 42.4% Africa, 4.6% Oleochemical - Exports by reg
Slide 15: One of the most efficient major palm oil producers
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment 4 Well-managed and prudently run by an experienced management team 5 Leading sustainabl
Slide 16: One of the most efficient major palm oil producers
One of the most efficient major palm oil producers Oil Palm plantation, cultivation and processing Weighted average age : 13.5 years Oil palm hectarage by age ▪ Proven track record as one of the most efficient major palm oil producers Immature 19.0% Past prime ▪ IOI Palm Biotech is a leading tissue
Slide 17: Strategic location of plantation operations further drive logistical efficiency
Strategic location of plantation operations further drive logistical efficiency Peninsular Malaysia East Malaysia (42,968 Ha) (112,824 Ha) Sabah Penang Pahang Selangor Sarawak IOI HQ KLIA Johor Plantation North-South expressway Kalimantan, Indonesia (21,134 Ha) Palm oil mill East coast expressway Ma
Slide 18: Well-established and innovative oleochemical segment supplemented by an efficient refining segment
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment 3 supplemented by an efficient refining segment 4 Well-managed and prudently run by an experienced management team 5 Leading sustainabl
Slide 19: Oleochemical segment supplemented by efficient refining segment
Well-established and innovative oleochemical segment supplemented by efficient refining segment Manufacturing and sales of oleochemicals ▪ Pioneer in the oleochemical segment and first in the industry to manufacture exclusive palm based oleochemical products and remain the largest fatty acids produc
Slide 20: Oleochemical and commodity exports by region
Well-established and innovative oleochemical segment supplemented by efficient refining segment Oleochemical – Exports by regions Commodity(1) – Exports by regions Rest of World, 0.4% Rest of World, 0.2% Asia, 40.2% South America, 0.9% North America, 2.6% North America, 12.6% Europe, 10.9% Asia, 82.
Slide 21: Well-managed and prudently run by an experienced management team
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment Well-managed and prudently run by an experienced 4 management team 5 Leading sustainabl
Slide 22: Well-managed and prudently run by an experienced management team
Well-managed and prudently run by an experienced management team Dato’ Lee Yeow Chor Kong Kian Beng Lim Jit Uei Group MD and Chief Group Chief Financial Group Head of Commodity Executive Officer Marketing ▪ Appointed to the Board ▪ Joined in 2006 with more ▪ Joined in 2015 with more of IOI Corporati
Slide 23: IOI five-year plan (2020-2024)
IOI five-year plan (2020-2024) Progress from a cost competitive palm oil producer to a high value-added diversified palm- based products producer, to increase resilience and competitiveness for the future ▪ Target: Increase plantation oil yields by 15% by 2024 1 ▪ Utilise elite clonal palms in 50% o
Slide 24: IOI five-year plan (2020-2024) (cont'd)
IOI five-year plan (2020-2024) Progress from a cost competitive palm oil producer to a high value-added diversified palm- based products producer, to increase resilience and competitiveness for the future (cont’d) ▪ Target: Convert oil palm by-products and processing waste into value-added products
Slide 25: Leading sustainable and responsible player
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment 4 Well-managed and prudently run by an experienced management team 5 Leading sustainabl
Slide 26: Leading sustainable and responsible player
Leading sustainable and responsible player IOI is committed to embedding sustainability into its core business and operations Sustainability framework ▪ IOI’s sustainability framework remains focused on our pillars of sustainability - People, Planet, Prosperity plus Partnership that covers all aspec
Slide 27: IOI's sustainability commitment
IOI’s sustainability commitment IOI is committed to embedding sustainability into its core business and operations Key commitments of IOI group’s sustainable palm Continuous support of the UN’s SDGs oil policy ✓ Continue to be an active supporter of certification schemes such ▪ IOI is supportive of
Slide 28: IOI assessed and rated by global ESG indices and platforms
IOI continues to be assessed and rated by various global ESG indices and platforms ▪ Remained a ▪ Rated BB for ▪ As of Oct 2020, the ▪ In the 2020 constituent of the performance in ESG group’s ESG risk benchmark report, index with an overall issues rating stays as IOI placed within the ESG Rating of
Slide 29: IOI ESG Performance
IOI ESG Performance SUSTAINALYTICS – Measures how well Risk is being managed Current ESG risk rating Industry Comparison - Leading ESG risk rating (Last update: Oct 6, 2021) ESG Risk Rating Industry Rank 25.5 Medium Risk IOI Corp Bhd 25.5 Medium 73 out of 569 Sime Darby Plantation RANKING: Industry
Slide 30: Stable growth in revenue with resilient earnings
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment 4 Well-managed and prudently run by an experienced management team 5 Leading sustainabl
Slide 31: Stable growth in revenue with resilient earnings
Stable growth in revenue with resilient earnings Well diversified by geographical location and business segment which provides for more stable earnings profile across business and economic cycles in Malaysia and globally Strong growth in revenue(1) … …coupled with growth in operating profit(2) (US$m
Slide 32: Resilience amid Covid-19 pandemic
Resilience amid Covid-19 pandemic IOI Group has remained resilient during Covid-19 albeit facing some challenges, with revenue and EBIT increasing by 44% and 53% respectively from FY2020 to FY2021 Plantation business Resource-based manufacturing ▪ As an essential service sector, plantation business
Slide 33: Strong diversified cash flows and a solid balance sheet position
1 Leading integrated palm oil group with a global presence 2 One of the most efficient major palm oil producers Well-established and innovative oleochemical segment supplemented by an 3 efficient refining segment 4 Well-managed and prudently run by an experienced management team 5 Leading sustainabl
Slide 34: Strong diversified cash flows and a solid balance sheet position
Strong diversified cash flows and a solid balance sheet position Strong cash flows and high levels of liquidity keep the Group financially nimble, poised to capitalize on future investment opportunities Cash and cash equivalents(1) Net gearing(2) (US$m) (%) 625 24.8% 28.6% 29.4% 557 487 FY2019 FY202
Slide 35: Awards and achievements
Awards and achievements Strongest Adherence to Corporate Governance 2019/20 Prime Minister’s Hibiscus Awards Best Senior Management IR Support Challenge Trophy(1) Best CFO in Malaysia (Environmental Performance) (Alpha Southeast Asia’s 10th Annual Institutional Investor Corporate Awards 2020) Enviro
Slide 36: Appendix
IOI Oleo GmbH, Germany Appendix N:\IBD_Regional_Documents_Repository_SASIA_Clients\IOI Corp Bhd(IC7L)\Spider\XIOIB\04 Presentations\02 Investor prez\Project Orion - Investor presentation 211018_vF.pptx Confidential I 35
Slide 37: Update: Letter from US CBP
Update: Letter from US CBP Circulation of a letter from US Customs and Border Protection (CBP) to Andy Hall dated 26 May 2021 ▪ CBP acknowledges the receipt of a petition by Andy Hall, a Migrant Worker Rights Specialist, alleging forced labour conditions at IOI. ▪ CBP will commence an investigation
Slide 38: Update: Letter from US CBP (cont'd)
Update: Letter from US CBP (cont’d) Circulation of a letter from US Customs and Border Protection (CBP) ▪ Policies that the Group are practicing to address allegation of forced labour indicators include: − Zero recruitment fee policy − No retention of workers’ identity documents or withholding of wo
Slide 39: Corporate structure and ownership
Corporate structure and ownership Dato’ Lee Yeow Chor Lee Yeow Seng 77.50% 22.50% Progressive Holdings Employees Provident General Public/ Sdn Bhd Fund Board Investors(1) 50.21% 13.21% 36.42% 0.16% Listed on the Main Market of IOI Corporation Bursa Malaysia Berhad (Stock Code: 1961) Resource-Based P
Slide 40: Historical income statement
Historical income statement For the year ended 30 June (MYRmn) 2019 2020 2021 Revenue 7,385.6 7,802.2 11,251.7 Cost of sales (6,205.4) (6,127.2) (8,962.0) Gross profit 1,180.2 1,675.0 2,289.7 Other operating income 850.8 675.4 833.5 Marketing and selling expenses (181.9) (177.6) (202.2) Administrati
Slide 41: Historical balance sheet
Historical balance sheet For the year ended 30 June (MYRmn) 2019 2020 2021 ASSETS Non-current assets: Property, plant and equipment 8,472.9 8,531.8 8,608.7 Intangible assets 412.2 424.2 423.4 Investments in associates 2,610.1 2,727.0 3,144.5 Derivative assets 154.3 98.3 87.4 Deferred tax assets 9.5
Slide 42: Historical balance sheet (cont'd)
Historical balance sheet (cont’d) For the year ended 30 June (MYRmn) 2019 2020 2021 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 788.1 790.2 791.1 Treasury shares – (68.1) (141.2) Reserves 34.6 105.1 25.3 Retained earnings 8,476.9 8,469.0 9,330.2 Equity attributab
Slide 43: Historical cash flow statement
Historical cash flow statement For the year ended 30 June (MYRmn) 2019 2020 2021 Net cash from operating activities 1,212.7 872.3 671.6 Net cash used in investing activities (206.3) (278.6) (276.2) Net cash used in financing activities (1,178.3) (878.1) (682.4) Net decrease in cash and cash equivale
Slide 44: N:\IBD_Regional_Documents_Repository_SASIA_Clients\IOI Corp Bhd(IC7L)\Spider\XIOIB\04 Presentations\02 Investor prez\…
N:\IBD_Regional_Documents_Repository_SASIA_Clients\IOI Corp Bhd(IC7L)\Spider\XIOIB\04 Presentations\02 Investor prez\Project Orion - Investor presentation 211018_vF.pptx Credit Suisse does not provide any tax advice. Any tax statement herein regarding any U.S. federal tax is not intended or written
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