Olam Group Limited · SGX:VC2
Olam — Olam International — 9M 2019 Earnings Presentation
31 slides from Olam's earnings presentation, Nov 13, 2019
Slide 1: 9M 2019 Results Briefing
9M 2019 Results Briefing November 13, 2019
Slide 2: Presenters
Presenters Sunny Verghese A. Shekhar N. Muthukumar Co-Founder Executive Director Group CFO and Group CEO and Group COO Olam International Limited Results for 9 Months ended September 30, 2019 | November 13, 2019 2
Slide 3: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements and Management Discussion and Analysis for the Third Quarter (“Q3 2019”) and Nine Months ended September 30, 2019 (“9M 2019”) lodged on SGXNET on November 13, 2019. Olam International Limite
Slide 4: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward-looking nature and are therefore based on management’s assumptions about future developments. Such forward
Slide 5: Agenda
Agenda • 9M 2019 highlights • Segmental review • Strategic Plan progress • Key takeaways
Slide 6: 9M 2019 highlights
9M 2019 highlights
Slide 7: 9M 2019 results at a glance
9M 2019 results At a glance Volume EBITDA PATMI 29.0 M MT S$1,058 M S$251 M +24.9% +16.9% -8.0% Operational Free Cash Flow Gearing PATMI S$269 M +FCFE from S$466 1.38x to M -2.3% S$767 M 1.37x +28.1% Olam International Limited Results for 9 Months ended September 30, 2019 | November 13, 2019 7
Slide 8: Volume grew 24.9%
Volume grew 24.9% Led by Food Staples & Packaged Foods (Grains) Volume by segment, '000 MT +24.9% 5,861 29,037 -51 23,257 26 -56 9M 2018 Edible Nuts Confectionery Food Staples & Industrial Raw 9M 2019 & Spices & Beverage Packaged Foods Materials, Ingredients Infrastructure & Logistics Olam Internati
Slide 9: EBITDA grew 16.9%
EBITDA grew 16.9% Growth in all segments except Industrial Raw Materials, Infrastructure and Logistics EBITDA by segment, S$ million +16.9% 49 1,058 23 63 -16 34 905 9M 2018 Edible Nuts Confectionery Food Staples & Industrial Raw Commodity 9M 2019 & Spices & Beverage Packaged Foods Materials, Financ
Slide 10: PATMI declined 8.0%
PATMI declined 8.0% Excluding impact of SFRS(I) 16, PATMI would have declined marginally by 0.9% to S$270 million; Operational PATMI up 4.9% at S$288 million PATMI and Operational PATMI, S$ million -8.0% 153 -87 273 17 13 251 -102 -16 9M 2018 EBITDA^ Depreciation & Net Finance Taxation^ Exceptional
Slide 11: 1.7% reduction in invested capital
1.7% reduction in invested capital 14.9% reduction in working capital year-on-year S$ Million • Fixed Capital increased on adoption of 16,649 -1.7% SFRS(I) 16 with addition of right-of- 15,832 use assets and investments in line 14,812 15,233 14,976 with Strategic Plan 8,853 7,705 6,351 6,844 7,461 •
Slide 12: Net gearing at 1.37x
Net gearing at 1.37x Excluding impact of SFRS(I) 16, net gearing improved to 1.28x Net and adjusted debt / equity (basic) • Reduced net debt: 1.38 1.37 1.32 • Despite impact of application of 1.38 1.32 SFRS(I) 16 – net increase of 1.28 S$556 million in lease liabilities 0.43 • Supported by lower wor
Slide 13: Free cash flow
Free cash flow Improved, positive FCFE in 9M 2019 on higher operating cash, reduced working capital Free Cash Flow to Equity, S$ million +165 426 32 159 -356 767 602 -96 9M 2018 Operating Cash Changes in Tax Paid Capex / Net Interest Paid 9M 2019 Flow (before Working Capital Investments Interest & T
Slide 14: Available liquidity
Available liquidity Sufficient to cover all repayment and Capex obligations Total borrowings and available liquidity, S$ Million as at September 30, 2019 9,296 18,954 +7,135 11,819 2,043 4,858 6,122 2,757 5,697 Cash and RMI* Secured Unutilised Available Total Borrowings Short-term Receivables Bank L
Slide 15: Segmental review
Segmental review
Slide 16: Edible Nuts and Spices
Edible Nuts and Spices EBITDA, S$ Million Invested capital, S$ Million +12.4% +8.0% 438 4,069 332 340 3,643 3,604 3,610 3,768 311 277 1,421 1,875 1,608 1,666 1,927 2,222 1,996 1,944 1,841 2,194 2016 2017 2018 9M 2018 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19 • Higher EBITDA due to better contributi
Slide 17: Confectionery and Beverage Ingredients
Confectionery and Beverage Ingredients EBITDA, S$ Million Invested capital, S$ Million 444 +22.6% 6,110 +7.8% 407 5,347 342 4,935 4,829 328 4,478 279 4,569 3,819 3,434 3,202 2,973 1,541 1,528 1,501 1,505 1,627 2016 2017 2018 9M 2018 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19 • Strong growth in EBITD
Slide 18: Food Staples and Packaged Foods
Food Staples and Packaged Foods EBITDA, S$ Million Invested capital, S$ Million -11.6% 360 +9.3% 5,044 330 4,522 4,678 4,578 4,457 289 272 249 1,131 1,118 1,644 800 1,498 3,024 3,547 3,460 3,400 3,657 2016 2017 2018 9M 2019 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19 • EBITDA growth from improved con
Slide 19: Industrial Raw Materials, Infrastructure and Logistics
Industrial Raw Materials, Infrastructure and Logistics EBITDA, S$ Million Invested capital, S$ Million 197 2,221 -12.1% 2,105 176 -12.0% 1,736 135 132 1,572 1,527 1,213 1,050 117 712 511 385 1,008 1,055 1,061 1,024 1,142 2016 2017 2018 9M 2018 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19 Working Capit
Slide 20: Strategic Plan progress
Strategic Plan progress
Slide 21: 2019-2024 Strategic Plan: Investments
2019-2024 Strategic Plan Investments • Acquisition of U.S. almond processor and ingredients company Hughson Nut and related assets for US$54 million; to be completed by end-Nov 2019 • Completed acquisition of Dangote Flour Mills in Nigeria for NGN120 billion (~US$331 million) • Completed acquisition
Slide 22: 2019-2024 Strategic Plan: Divestments
2019-2024 Strategic Plan Divestments • Disposed 100% interest in peanut shelling in Argentina and exited peanut farming • Sold remaining 51% interest in Collymongle ginning in Australia • Exited Sugar, Rubber and Fertiliser trading, Fundamental Fund and Wood Products in Latin America • All the above
Slide 23: Key takeaways
Key takeaways
Slide 24: Key takeaways
Key takeaways • Continued top line growth; steady EBITDA growth in 9M 2019 • Improved, positive free cash flow generation of S$767 million • Maintained strong balance sheet and gearing at 1.37x; well-positioned to undertake significant Capex for strategic investments and higher working capital deplo
Slide 25: Appendix
Appendix
Slide 26: P&L statement
P&L statement S$ million 9M 2019 9M 2018 % Change Q3 2019 Q3 2018 % Change Volume ('000 MT) 29,036.9 23,256.7 24.9 9,936.7 9,650.1 3.0 Revenue 24,255.2 22,018.6 10.2 8,311.3 8,294.0 0.2 Net loss in fair value of biological assets (5.2) (9.6) (46.0) (1.2) 0.2 n.m. EBITDA^ 1,058.4 905.1 16.9 286.9 229
Slide 27: P&L statement: SFRS(I) 16 impact
P&L statement Impact of SFRS(I) 16 S$ million 9M 2019 Q3 2019 SFRS(I) 16 Excluding SFRS(I) 16 Excluding Profit & Loss Statement Reported Reported Impact SFRS(I) 16 Impact SFRS(I) 16 EBITDA 1,058.4 74.6 983.8 286.9 25.1 261.8 Depreciation & Amortisation (378.0) (71.5) (306.5) (128.5) (24.1) (104.4) N
Slide 28: Exceptional items
Exceptional items S$ million 9M 2019 9M 2018 Q3 2019 Q3 2018 Profit on sale of land in US - 13.8 - 0.1 Profit on sale of Subsidiary 0.6 5.9 - 0.1 Sale of Café Enrista brand - 2.7 - - Loss on sale of JV/Associate (1.1) (24.5) - (0.2) Exit/Closure costs (17.3) - (0.1) - Exceptional Items (17.8) (2.1)
Slide 29: Balance sheet
Balance sheet Change Change S$ million 30-Sep-2019 31-Dec-2018 30-Sep-2018 vs Dec 18 vs Sep 18 Uses of Capital Fixed Capital 8,326.5 8,349.3 (22.8) 8,223.3 103.2 Right-of-use assets 639.3 - 639.3 - 639.3 Working Capital 5,900.4 6,376.4 (476.0) 6,718.9 (818.5) Cash 2,757.4 2,480.4 277.0 2,599.0 158.4
Slide 30: Cash flow statement
Cash flow statement S$ million 9M 2019 9M 2018 Change Q3 2019 Q3 2018 Change Operating Cash flow (before Interest & Tax) 1,074.4 915.5 158.9 304.4 229.8 74.6 Changes in Working Capital 696.2 270.7 425.5 (69.0) 658.7 (727.7) Net Operating Cash Flow 1,770.6 1,186.2 584.4 235.4 888.5 (653.1) Net intere
Slide 31: 9M 2019 Results Briefing
9M 2019 Results Briefing olamgroup.com/investors.html ir@olamnet.com