Slide 1: Investor Presentation October 2021
Investor Presentation October 2021
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only and is not intended to, and does not constitute or form part of, any offer, recommendation or the solicitation of an offer to buy or sell any securities in Vitarich Corporation (“VITA”, the “Company”), nor shall this presentation (or any
Slide 3: VITA at a Glance
VITA at a Glance Key 2020 figures 70 years Operating history FEEDS FOODS FARMS P7.9B animal feeds, health and nutritional broiler chickens sold to hotels, day-old chicks (DOC) and pullets Revenues products, and supplements sold to restaurants, institutional (HRI) clients, sold to commercial end user
Slide 4: VITA through the decades
2016 Ricardo Manuel M. Sarmiento became the President VITA through the decades and CEO on June 24 Granted successful exit from corporate rehabilitation on September 16 (6 years ahead of schedule) 2017 Opened a new feed mill in Davao under a lease agreement, automated the feed mill facilities in Iloi
Slide 5: Investment Highlights
Investment Highlights 1 Experienced leadership team with strong execution track record 2 Scalable operations with multiple growth levers and advantaged synergies 3 Attractive Philippine economy and favorable demographics 4 Rising domestic demand and prospects for poultry 5 Focused on accelerating gr
Slide 6: Experienced leadership team with extensive industry expertise
1| Experienced leadership team with extensive industry expertise Ricardo Manuel M. Sarmiento Stephanie Nicole Sarmiento-Garcia Reynaldo D. Ortega Alicia G. Danque President and CEO EVP, Treasurer and Corporate Services SVP, Poultry, Food and Feed Sales VP, Supply Chain Director 20+ years experience,
Slide 7: Scalable operations with multiple growth levers and advantaged synergies
2| Scalable operations with multiple growth levers and advantaged synergies Feed milling Breeding Contract growing Processing Branding, marketing, and further processing Feeds Farms Foods Competitive advantages: Our multi-channel, multi-product portfolio, and well-established relationships with stak
Slide 8: Attractive Philippine economy and favorable demographics
3| Attractive Philippine economy and favorable demographics Dynamic Philippine economy rooted in strong macroeconomic fundamentals Rapid urbanization to contribute to changes in lifestyle and dietary patterns ▪ Over 109 million population, with annual growth rate of 1.6% (2015–2020)1 Percentage of P
Slide 9: Rising domestic demand and prospects for poultry
| Rising domestic demand and prospects for poultry Meat consumption to continue to shift towards poultry1 Higher poultry and pork consumption expected in the Philippines1 ▪ Meat demand is directly shaped by population and income growth, and kg/capita Beef Pork Poultry food prices. Other key determin
Slide 10: Focused on accelerating growth while maintaining financial discipline
5| Focused on accelerating growth while maintaining financial discipline P4.4B Revenues, up 15% (1H 2021) P382.0M Operating income Our continued strong performance, long-term demand expectation, and +9x yoy on growing demand and increased strengthened balance sheet with reduced debt give us increase
Slide 11: Growth Strategy
Growth Strategy 1 Grow the core 2 Diversify into adjacent opportunities 3 Transform the cost base and deliver profitable growth 4 Invest and adapt for the future 5 Create shared value 11
Slide 12: Grow the core
1| Grow the core Our select existing HRI customers ▪ Win new key accounts for contract chicken production and processing, and deepen our relationships with many of our existing hotels, restaurants, institutional (HRI) customers through joint product development, customization suited to customer spec
Slide 13: Diversify into adjacent opportunities
2| Diversify into adjacent opportunities Feeds volume contribution (sold to external customers) Hog Poultry Others ▪ Seek growth closer to the core by diversifying into hog growing and 8% 2% 1% 1% 6% 5% production—an adjacent growth strategy which involves managed risk through leveraging current str
Slide 14: Transform the cost base and deliver profitable growth
3| Transform the cost base and deliver profitable growth ▪ Hedge against volatility of raw material prices through setting up ▪ Continue forming strategic and mutually beneficial relationships of new warehouses with HRI businesses while being mindful of our gross margins and profitability targets ▪
Slide 15: Invest and adapt for the future
4| Invest and adapt for the future CAPEX Annual Target Segment Location Key CAPEX projects incremental completion Annual feeds 2021 2022 capacity production capacity Dressing plant upgrade (including water Foods Luzon P97.5M P20M 1Q 2022 17,200 MT treatment system), and 2020 kitchen installation 290
Slide 16: Create shared value for Philippines' food self-sufficiency
5| Create shared value for Philippines’ food self-sufficiency PURPOSE FORGING LIVELIHOOD, NOURISHING LIVES. VISION VITARICH will continue being the pioneer, agribusiness partner, and incubator in the feeds industry and will be the backbone of every Filipino farmer’s success by providing the best sol
Slide 17: Financial and Operating Performance
Financial and Operating Performance 1 17% 5-year revenue CAGR (2015-2020) 25% 4-year revenue CAGR (2015-2019) 2 Balanced mix and rising revenues from higher margin products 3 Continued improvement of profitability margins and productivity 4 Conservative financial position with reduced debt and cost
Slide 18: Financial highlights: 17% 5-year revenue CAGR
1| Financial highlights: 17% 5-year revenue CAGR Revenues 5-year CAGR (2015-2020): 17% PHP million 4-year CAGR (2015-2019): 25% 10,500 10,479 10,458 10,437 10,416 10,395 10,374 10,353 10,332 10,311 10,290 10,269 10,248 10,227 10,206 10,185 10,164 10,143 10,122 10,101 10,080 10,059 10,038 10,017 9,99
Slide 19: Balanced mix and rising revenues from higher margin products
2| Balanced mix and rising revenues from higher margin products % of Revenues Foods Feeds Farms Foods (PHP ‘000) 2016 2017 2018 2019 2020 1H 2021 6% 6% 7% 6% 6% 8% Revenues 1,873,620 2,761,884 3,827,839 4,031,723 3,118,889 1,929,037 Operating profit 214,358 287,592 265,807 593,776 (39,385) 266,337 5
Slide 20: Continued improvement of profitability margins and productivity
3| Continued improvement of profitability margins and productivity % of Revenues, customer type Feeds capacity, production, and plant utilization Commercial (B2B) Retail (B2C) 100% 300,000 300,000 in metric ton 250,000 80% 45% 44% 46% 48% 48% 47% 200,000 200,000 60% 150,000 100,000 100,000 40% 50,00
Slide 21: Conservative financial position and consistent cash generation
4| Conservative financial position and 5| Consistent cash generation PHP ‘000 2016 2017 2018 2019 2020 1H 2021 Total bank borrowings and average cost of long-term loans 1,200,000 1,197,600 1,195,200 1,192,800 1,190,400 1,188,000 1,185,600 1,183,200 1,180,800 1,178,400 1,176,000 1,173,600 1,171,200 P
Slide 22: Q&A
Q&A www.vitarich.com ir@vitarich.com 22
Slide 23: Appendix: Board of Directors
Appendix: Board of Directors Committee Memberships Audit, Risk Oversight, Nomination, Remuneration, Name Age Director since Related Party Transaction Corporate Governance 72 1982 – 1991 Rogelio M. Sarmiento, Chairman Emeritus 2003 – 2021 Jose Vicente C. Bengzon III, Chairman, Non-Executive Director
Slide 24: Appendix: Board of Directors
Appendix: Board of Directors Rogelio M. Sarmiento Jose Vicente C. Bengzon III Benjamin I. Sarmiento, Jr. Lorenzo Vito M. Sarmiento III Chairman Emeritus Chairman, Non-Executive Director Non-Executive Director Non-Executive Director ▪ Former Vice Chairman of our Board of ▪ Director of Rizal MicroBank
Slide 25: Appendix: Philippine poultry industry landscape
Appendix: Philippine poultry industry landscape Chicken production, Philippines Imported chicken meat in metric tons, liveweight in metric tons 2,200,000 2,195,604 2,191,208 2,186,812 2,182,416 2,178,020 2,173,624 2,169,228 2,164,832 2,160,436 2,156,040 2,151,644 2,147,248 2,142,852 2,138,456 2,134,
Slide 26: Appendix: Philippine swine industry landscape
Appendix: Philippine swine industry landscape Hog production, Philippines Imported pork meat in metric tons, liveweight in metric tons 2,800,000 2,794,404 2,788,808 2,783,212 2,777,616 2,772,020 2,766,424 2,760,828 2,755,232 2,749,636 2,744,040 2,738,444 2,732,848 2,727,252 2,721,656 2,716,060 2,710
Slide 27: Appendix: Nationwide presence
Appendix: Nationwide presence 27
Slide 28: Appendix: Feeds
Appendix: Feeds Hog feeds Broiler feeds Layer feeds General poultry 28
Slide 29: Appendix: Foods
Appendix: Foods Whole Breast Breast fillet Drumstick Leg quarter Thigh Thigh fillet Wings 29