Savola Group · TADAWUL:2050
Savola — Q4 & FY 2016 Earnings Presentation
29 slides from Savola's earnings presentation, 2017
Slide 1: Earnings Presentation Q4 & FY 2016
Earnings Presentation Q4 & FY 2016 www.savola.com
Slide 2: Disclaimer
DISCLAIMER This presentation contains forward-looking statements which may be identified by the use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about
Slide 3: Group – Highlights
GROUP – HIGHLIGHTS • Challenging environment in all key markets in the region, characterized by: • Difficult economic conditions • Lower consumption patterns in KSA due to reduction in oil based GDP • FX fluctuation and restrictions mainly in Egypt • Egyptian Pound (EGP) devalued from EGP/SAR 2.09 a
Slide 4: Retail – Highlights
RETAIL – HIGHLIGHTS • Total retail selling space increased by 0.7% in FY 2016 as 18 new stores were added and 106 stores (102 Pandati, 3 Supers and 1 Hyper) were closed • LFL sales decreased by 2.9% during FY 2016, which is due to a reduction in basket size across both supermarket and hypermarket fo
Slide 5: Foods – Highlights
FOODS – HIGHLIGHTS • FY 2016 total revenue of SAR 11.8 bn (FY 2015: SAR 11.8 bn) • Total volume across all geographies in 2016 was 4.0 mn MT, same as last year • FY 2016 net income was SAR 14 mn (FY 2015: SAR 688 mn) • Assets and goodwill impairment recorded due to Egyptian related business of aroun
Slide 6: Q4 2016 - Snapshot
Q4 2016 - SNAPSHOT » Q4 2016 revenue of SAR 6.2 bn (Q4 2015: SAR 6.3 bn) » Q4 2016 net loss of SAR 964 mn (Q4 2015: net income at SAR 515 mn) GROUP » Adjusted net income of SAR 74 mn after adding back one-off impairments, currency losses, extraordinary inventory impact and other exceptional items »
Slide 7: FY 2016 - Snapshot
FY 2016 - SNAPSHOT » FY 2016 revenue of SAR 25.0 bn (FY 2015: SAR 25.1 bn) » FY 2016 net loss of SAR 451 mn (FY 2015: net income at SAR 1,792 mn) GROUP » Adjusted net income of SAR 810 mn after adding back one-off impairments, currency losses, extraordinary inventory impact and other exceptional ite
Slide 8: Group – Consolidated Financial Snapshot
GROUP – CONSOLIDATED FINANCIAL SNAPSHOT Adjusted Net Gross Net Revenue EBIT Income / Profit Income / (Loss) (Loss) SAR Mn Q4 6,248 755 (176) (964) 74 2016 -0.2% vs LY -40.7% vs LY Q4 2015: 378 Q4 2015: 515 FY 25,008 4,425 835 (451) 810 2016 -0.5% vs -11.9% vs -53.2% vs -45.2% vs FY 2015 FY 2015 FY 2
Slide 9: Group – Consolidated Financial Highlights
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS Growth Margin SAR Mn YoY Sales -0.5% 25,126 25,008 -3.2% -2.1% -0.2% +4.3% 6,224 6,023 7,036 6,890 5,604 5,847 6,262 6,248 Q1’15 Q1’16 Q2’15 Q2’16 Q3’15 Q3’16 Q4’15 Q4’16 FY 2015 FY 2016 YoY Gross Profit -11.9% -4.7% -6.6% -40.7% +5.5% 5,025 4,425 1,159 1,22
Slide 10: Group – Consolidated Financial Highlights
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS SAR Mn Growth YoY EBIT Margin -53.2% -23.7% -23.0% -37.0% 1,785 543 414 494 835 371 285 311 378 -176 Q1’15 Q1’16 Q2’15 Q2’16 Q3’15 Q3’16 FY 2015 FY 2016 Q4’15 Q4’16 6.0% 4.7% 7.7% 6.0% 8.8% 5.3% 6.0% -2.8% 7.1% 3.3% YoY Net Profit 1,792 471 515 434 247 372 1
Slide 11: Group – Consolidated Revenue Mix & Capex
GROUP – CONSOLIDATED REVENUE MIX & CAPEX SAR Bn Revenue by Business Revenue by Geography -0.5% KSA FY 2015 FY 2016 25.1 25.0 YoY +2% SAR 25.1 Bn SAR 25.0 Bn Egypt YoY -7% Iran 70% 72% YoY +2% 46.6% 46.6% Others 53.4% 53.4% YoY -16% 9% 8% 11% 11% 11% 9% Foods Retail FY 2015 FY 2016 Net Debt CAPEX -1.
Slide 12: Implications of Exceptional Items
IMPLICATIONS OF EXCEPTIONAL ITEMS SAR Mn Adjusted FY 2015 Net Income Adjusted FY 2016 Net Income 1,792 -45.3% 304 1,480 86 94 810 33 343 26 374 245 20 272 -451 Group Foods Group Foods Retail 12
Slide 13: Panda Retail Company
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Slide 14: Retail - Snapshot
RETAIL - SNAPSHOT Adjusted Net Gross Net Selling Revenue Income / Profit Income / Space (Loss) (Loss) SAR m Q4 3,155 296 (540) (152) Added 4,447 m2 2016 -9.0% vs. LY -66.4% vs. LY Q4 2015: 29 -81.1% vs. LY Total Space FY 13,475 2,644 (773) (359) 752,784 m2 2016 -0.4% vs. -18.5% vs. FY 2015: 146 FY 2
Slide 15: Retail - Financials
RETAIL - FINANCIALS SAR Mn Growth Margin YoY Sales -0.4% +2.4% -9.0% 13,533 13,475 +2.5% +2.7% 3,782 3,874 3,467 3,155 3,192 3,271 3,092 3,175 Q1’15 Q1’16 Q2’15 Q2’16 Q3’15 Q3’16 Q4’15 Q4’16 FY 2015 FY 2016 YoY Gross Profit -18.5% -66.4% +14.5% -10.6% -3.8% 3,245 2,644 830 742 881 720 824 813 782 29
Slide 16: Retail - Financials
RETAIL - FINANCIALS SAR Mn Growth Margin YoY EBITDA -143.0% +1.7% -66.6% 562 110 112 153 162 (3) 137 51 Q1’15 Q1’16 Q2’15 Q2’16 Q3’15 Q3’16 (401) (241) Q4’15 Q4’16 FY 2015 FY 2016 3.5% 3.4% 4.0% 1.3% 5.3% -0.1% 3.9% -12.7% 4.2% -1.8% YoY NI 18 48 51 29 146 (21) (80) (131) Q1’15 Q1’16 -540 Q2’15 Q2’1
Slide 17: Retail – Number of Stores by Quarter
RETAIL – NUMBER OF STORES BY QUARTER Includes 1 Includes 1 Super in Super Hyper in Hyper Egypt UAE 163 152 4 4 2 3 4 64 66 0 3 0 0 1 Includes 1 store opening in Egypt 2015 Q1 Q2 Q3 Q4 Closures FY 2015 Q1 Q2 Q3 Q4 Closures FY ’16 ’16 ’16 ’16 ’16 ’16 ’16 ’16 ’16 ’16 Selling Area Selling Area Pandati 7
Slide 18: Retail Transformation Update
Retail Transformation Update 18
Slide 19: Retail Transformation: Key Metrics
RETAIL TRANSFORMATION Key metrics Decline in LFL starting 2015 resulted in contracting yields and KSA Numbers Only ‘12 ‘13 ‘14 ‘15 ’16 partially wiped out the uplift provided by new LFL1 Same Store Sales Growth – Based at 100 in 2012 stores 1002 104 107 105 103 Total store sales Total Store Sales –
Slide 20: Retail Transformation: Guiding Principles of the Future Organization
RETAIL TRANSFORMATION Guiding principles of the future organization Customer driven organization Differentiated value propositions of formats Empowerment of stores P&L ownership aligned with accountability Clear lines of ownership Economies of scale Flexibility and speed of action 20
Slide 21: Retail Transformation: Transformation Projects
RETAIL TRANSFORMATION Transformation projects Items Details • Focus on some categories as destination categories (both food and non-food) Category reset that have sales and spillover uptake • Increase in sales from improved assortment and range optimization • Improve stock loss and markdowns Store o
Slide 22: Savola Foods
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Slide 23: Foods - Snapshot
FOODS - SNAPSHOT Adjusted Net Gross Net Revenue EBIT Income / Profit Income/ (Loss) (Loss) SAR Mn Q4 3,142 459 225 (262) 138 2016 +12.1% vs LY +17.1% vs LY +48.3% vs LY Q4 2015: 271 FY 11,782 1,781 838 14 568 2016 -0.3% vs FY 2015 0% vs FY 2015 -1.2% vs FY 2015 -97.9% vs FY 2015 -16.2% vs FY 2015 23
Slide 24: Foods – Oil Segment Analysis
FOODS – OIL SEGMENT ANALYSIS SAR Mn Volume (MT 000) Revenues -5.0% 8,482 3% 8,062 -3.7% 8% 4% 4% 1,627 6% 6% 1,567 4% Morocco 5% 5% 11% 11% YoY +10% 7% 4% 8% Morocco Sudan 9% YoY +10% YoY -55% 9% Algeria Sudan YoY -11% 32% 34% YoY +1% 31% Algeria Turkey 32% YoY +14% YoY -7% Turkey Iran YoY -3% YoY +
Slide 25: Foods – Sugar Segment Analysis
FOODS – SUGAR SEGMENT ANALYSIS SAR Mn Volume (MT 000)* Revenues* +13.7% 3,188 2,803 +6.6% 1,441 1,536 89% KSA KSA 88% YoY +15% YoY +5% Egypt 89% 88% Egypt YoY +5% YoY +18% 11% 12% 12% 11% FY 2015 FY 2016 FY 2015 FY 2016 USCE Volume (MT 000) USCE Revenues +2.2% 1,300 1,329 -14.4% 718 615 FY 2015 FY 2
Slide 26: Foods – Financials Highlights
FOODS – FINANCIALS HIGHLIGHTS SAR Mn Growth Margin YoY Sales -0.3% -7.9% 11,812 11,782 -8.6% +12.1% +6.4% 3,087 3,369 3,103 2,820 2,554 2,717 2,803 3,142 Q1’15 Q1’16 Q2’15 Q2’16 Q3’15 Q3’16 Q4’15 Q4’16 FY 2015 FY 2016 YoY Gross Profit 0.0% +17.1% -6.1% +1.6% 1,781 1,781 -9.3% 439 540 507 409 416 392
Slide 27: Foods - Financials
FOODS - FINANCIALS Growth Margin SAR Mn YoY EBITDA 0.0% -8.3% -14.3% +43.2% 1,058 1,058 -5.2% 275 342 314 236 255 241 268 187 Q1’15 Q1’16 Q2’15 Q2’16 Q3’15 Q3’16 Q4’15 Q4’16 FY 2015 FY 2016 8.9% 8.4% 10.2% 10.1% 10.0% 8.9% 6.7% 8.5% 9.0% 9.0% YoY Net Profit -97.9% -35.7% -23.8% 688 -40.7% 210 271 95
Slide 28: Financial Summary
JgoLA FINANCIAL SUMMARY SAVOLA
Slide 29: Financials – FY 2016
FINANCIALS – FY 2016 (all figures are in SAR millions) Segment Wise Financials FY - 2016 FY - 2015 Revenue Gross Profit EBIT Net Income EBITDA Revenue Gross Profit EBIT Net Income EBITDA Savola Foods Oil-Mature Markets 6,965 1,316 687 380 764 7,021 1,335 737 544 806 Oil-Start-up Markets* 1,097 116 4