Sime Darby Bhd. · MYX:SIME
Sime Darby Bhd — Shareholder Meeting (November 2016)
39 slides from Sime Darby Bhd's shareholder meeting presentation, Nov 2, 2016
Slide 1: Annual General Meeting: Presentation to Shareholders
ANNUAL GENERAL MEETING Presentation to Shareholders 2nd November 2016
Slide 2: FY2016 Financial Highlights
FY2016 FINANCIAL HIGHLIGHTS PROSPECTS / OUTLOOK MOVING AHEAD 2
Slide 3: FY2016 at a Glance
FY2016 at a Glance REVENUE TOTAL DIVIDEND RM43.96bn 1% PAYOUT FY2015 : RM43.73bn YoY RM1.7bn NET EARNINGS DIVIDEND YIELD RM2.41bn 1% FY2015 : RM2.43bn YoY 3.6% DIVIDEND PAYOUT BASIC EARNINGS PER SHARE RATIO 38.43 sen 3% FY2015 : 39.57 sen YoY 71% 6 sen 21 sen 27 sen INTERIM FINAL FULL YEAR DIVIDEND
Slide 4: Key Challenges Throughout the Year
Key Challenges Throughout the Year 01 Volatile commodity prices 02 Unpredictable weather pattern 03 Weak consumer sentiment Consolidation in the Australian mining 04 sector 05 Tighter regulation 4
Slide 5: Actual Results vs KPI Targets
Actual Results vs KPI Targets FY2016 Net Profit RM2,000.00 million KPI Target 20% FY2016 Actual Net Profit RM2,408.80 million FY2016 ROE 6.3% KPI Target FY2016 1.3% Actual 7.6% points ROE ROE – Return on average shareholders’ equity 5
Slide 6: A Journey of Active Deleveraging
A Journey of Active Deleveraging June March June Dec 2015 2016 2016 2016 TARGET D/E RATIO 57% 48% 44% <38% BORROWINGS RM18.1 RM16.6 RM15.8 bn bn bn 6
Slide 7: Stabilisation in Credit Rating
Stabilisation in Credit Rating Rating: BBB+ Outlook: Stable As at 11 Oct’16 7
Slide 8: Plantation PBIT since the Merger
Plantation PBIT since the Merger GFC La Nina Crude Oil Sharp Decline El Nino RM’mn RM/MT 4,203 3,927 SD Plantation PBIT (LHS) 7,000 (4 Mar’08) (14 Feb’11) 4,000 CPO Price (RHS) 3,483 (2 Apr’12) 3,500 6,000 2,846 2,835 2,804 (4 May’09) (3 Mar’14) (31 Oct’16) 3,000 5,000 2,500 4,000 2,000 2,048 1,961
Slide 9: Plantation Division
Plantation Division Industry-wide decline in FFB production Sime Darby Plantation’s FFB production in Indonesia vs Peers January 2016 to June 2016 (YoY) • Sime Darby Plantation’s FFB production in Indonesia between Jan and June declined by -22% YoY due to the lag effect from the Super El Nino phenom
Slide 10: Plantation Division: FY2016 PBIT at a glance
Plantation Division FY2016 PBIT at a glance RM’mn 1,400 Total PBIT RM1,290.8mn FY2016 VS FY2015 78 1,200 Total PBIT Plantation Division’s PBIT RM1,052.4mn 1,000 242 -19% 800 Upstream 600 1,213 -33% 400 811 Downstream 200 >+100% 0 FY15 FY16 Upstream Midstream & Downstream 10
Slide 11: NBPOL's Contribution to Reinforce SDP's Capabilities
NBPOL’s Contribution to Reinforce SDP’s capabilities Upstream operational excellence 01 • Dami seeds for SD Indonesia • 1.6mn MT of crop; average age of 11 years • Optimisation of feedstock supply between refineries 02 • Range and volume of High Value Added products Market Share 03 • ~70% of UK CSPO
Slide 12: New Britain Palm Oil Limited (NBPOL)
New Britain Palm Oil Limited (NBPOL) NBPOL’s Historical FFB Yield (MT/ha) since FY2009 26.0 25.4 23.7 23.8 23.6 23.3 23.2 21.7 21.9 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2018 Target Target to increase its FFB Yield to 23.6MT/ha in FY2018 12
Slide 13: New Britain Palm Oil Limited (NBPOL)
New Britain Palm Oil Limited (NBPOL) FY2015 FY2016 RM’mn (Mar - Jun 15) (Jul 15 – Jun 16) Revenue at NBPOL level 723 1,749 PBIT at NBPOL level 109 193 Amortisation of bearer plants (36) (130) Amortisation of fair value (44) (138) uplifts NBPOL PBIT at Group Level 29 (75) KEY FACTORS IMPACTING PERFOR
Slide 14: Industrial PBIT since the Merger
Industrial PBIT since the Merger RM’mn Acquisition Weakening coal prices & consolidation of USD/MT of Bucyrus the Australian mining sector 4,500 315.0 370 4,000 (1 Jul’11) As at 1 Nov’16, 298.0 Coking coal: 260.0 3,500 (1 Jun’08) Thermal coal: 111.0 270 3,000 81.0 (4 Jan’16) 2,500 129.0 48.8 (1 Apr’
Slide 15: Industrial Division: FY2016 PBIT at a glance
Industrial Division FY2016 PBIT at a glance RM’mn 600 Total PBIT RM521.2mn FY2016 VS FY2015 500 Industrial Division’s PBIT 400 192 Total PBIT RM326.3mn -37% 300 73 Australasia Malaysia 112 200 102 -62% -40% 130 China/HK SE Asia (Others) 100 99 88 53 -9% -24% 0 FY15 FY16 Malaysia SE Asia ex M'sia Chi
Slide 16: Industry Leadership
Industry Leadership Machine PINS versus Peers Australia (mining) China/HK Malaysia Singapore 58% 13% 22% 19% Industrial Division Industrial Division Industrial Division Industrial Division 15% 16% 18% 23% KUBOTA SANY HEAVY HITACHI KOBELCO 14% 9% 14% 18% BOBCAT KOMATSU KOMATSU HITACHI Data as at 30 J
Slide 17: Motors PBIT since the Merger
Motors PBIT since the Merger • Expansion of BMW distributorship and dealership in Brisbane (Aus) & Vietnam 800 • Penetration into Taiwan via KIA RM’mn 700 600 500 400 702 711 300 633 635 474 503 200 386 100 179 158 0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 SD Motors PBIT 17
Slide 18: Motors Division: FY2016 PBIT at a glance
Motors Division FY2016 PBIT at a glance RM’mn 600 Total PBIT Total PBIT RM502.5mn FY2016 VS FY2015 500 RM473.6mn Motors Division’s PBIT 90 400 118 134 +6% 300 124 Malaysia China/HK/Macau 200 28 191 -57% +8% 100 204 SE Asia (Others) Aus/NZ 0 87 >+100% -24% FY15 FY16 Malaysia SE Asia ex M'sia China/HK
Slide 19: Growth in the Motors Division
Growth in the Motors Division GROWTH FACTORS BMW Malaysia’s EEV policy Increase in COE quota Increased contribution from After- Sales business STRATEGIC INITIATIVES Consolidation of New Ferrari Additional BMW Body showrooms dealership in & Paint facility in Brisbane Ho Chi Minh City 19
Slide 20: Property PBIT since the Merger
Property PBIT since the Merger RM’mn 1,800 60% 1,600 50% 1,400 40% 1,200 1,065 30% 1,000 889 20% 800 259 671 10% 600 400 0% 443 572 600 630 462 493 456 467 394 -10% 200 0 -20% FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Housing Loan Approval Rate Series1 Series2 SD Property PBIT S
Slide 21: Property Division: FY2016 PBIT at a glance
Property Division FY2016 PBIT at a glance RM’mn 1,200 Total PBIT RM1,064.7mn FY2016 VS FY2015 Total PBIT 1,000 RM889.4mn Property Division’s PBIT 800 259 671 +20% 600 Property Development 400 -38% 630 200 Property Investment 394 0 >+100% FY15 FY16 Property Development Asset Monetisation 21
Slide 22: Logistics PBIT since the Merger
Logistics PBIT since the Merger RM’mn mn MT 32.5 30.3 31.0 120 29.1 28.3 26.1 100 26.0 22.8 98 80 21.0 77 70 16.0 60 17.2 63 58 53 40 9.7 9.9 11.0 33 30 20 6.0 17 0 1.0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 PBIT Total Port Throughput (RHS) 22
Slide 23: Logistics Division: FY2016 PBIT at a glance
Logistics Division FY2016 PBIT at a glance RM’mn 100 90 80 70 FY2016 VS FY2015 Logistics Division’s PBIT 60 50 98 +27% 40 77 30 20 10 0 FY15 FY16 FY15 FY16 23
Slide 24: Prospects / Outlook
FY2016 FINANCIAL HIGHLIGHTS PROSPECTS / OUTLOOK MOVING AHEAD 24
Slide 25: Positive Uptrend in Commodity Prices
Positive Uptrend in Commodity Prices MOVEMENT OF BRENT CRUDE OIL MOVEMENT OF CPO PRICES MOVEMENT OF COAL PRICES PRICES +127% +221% 31 Oct’16: 31 Oct’16: YTD 2016 YTD 2016 USD/BARREL USD49.5/barrel RM/MT RM2,804/MT USD/MT (Thermal Coal) (Coking Coal) 55 3,000 300 50 250 1 Nov’16: Coking Coal USD260.0
Slide 26: Improving Consumer Sentiment
Improving Consumer Sentiment CONSUMER SENTIMENT TOTAL LOANS APPROVED BY M’SIAN KEY CATALYSTS IN INDEX (MALAYSIA) BANKS (MONTHLY) IN 2016 VEHICLE SALES Index points RM’mn 110 10,000 Launch of New 100 8,000 Models 90 6,000 80 Energy Efficient 4,000 70 Vehicles Incentives 60 2,000 Fiscal/Monetary For p
Slide 27: Recovering Trade Activity in China
Recovering Trade Activity in China PORT CLIMATE INDEX : BOHAI RIM (CHINA) CHINA’S PURCHASING MANAGER INDEX (PMI) Index points Index points 195 EXPANSION 51 190 50 185 CONTRACTION 180 49 175 170 48 • Signs of potential trade recovery • Increase in port operator business in Bohai Bay • Expansion in Ch
Slide 28: Moving Ahead
FY2016 FINANCIAL HIGHLIGHTS PROSPECTS / OUTLOOK MOVING AHEAD 28
Slide 29: Sime Darby's Journey FY2011 – FY2015
Sime Darby’s Journey FY2011 – FY2015 STRATEGIC POSITIONING FOR FUTURE GROWTH ACQUISITIONS/EXPANSIONS HEALTHCARE PORT EXPANSION JOINT VENTURE 29
Slide 30: Sime Darby Today: Strong Leadership Position
Sime Darby Today Strong Leadership Position 629,000 110 28,000 43mn Leading hectares branches acres of Automotive MT/p.a. World’s Largest Third Largest landbank Player in the (capacity) Listed Oil Palm CAT Dealer in Leading Asia Pacific Leading Plantation the World Township region Multi- Company Dev
Slide 31: The Journey Ahead: Plantation Division
The Journey Ahead Plantation Division SOLID FOUNDATION EXECUTION VALUE CREATION ~629,000 ha NBPOL INTEGRATION Strengthening SDP World’s Largest Listed Oil • Increased FFB production • 99% RSPO certified Palm Plantation Company • Downstream expansion (in terms of planted area) • Differentiated/ premi
Slide 32: Accelerated Replanting with High-Yielding Materials
The Journey Ahead Accelerated Replanting with High-Yielding Materials Group Malaysia Indonesia 5% 4-5% 7-6-5% Staggered • To improve yields to >25 MT/Ha by FY2021 • To improve average age profile from 13 years to 10 years by FY2021 • To-date, we have replanted 120,000 ha and targets to replant addit
Slide 33: The Journey Ahead: Industrial Division
The Journey Ahead Industrial Division SOLID FOUNDATION EXECUTION VALUE CREATION STRATEGIC INNOVATION 110 branches DIVERSIFIED Third Largest CAT Dealer in The World PRESENCE Broadened global footprint and range of products MINE ENERGY China SOLUTIONS MARKET LEADERSHIP TOP 2 IN PINS & POPS-C Malaysia
Slide 34: The Journey Ahead: Motors Division
The Journey Ahead Motors Division SOLID FOUNDATION EXECUTION VALUE CREATION PENETRATION INTO NEW ~130 outlets MARKETS & MARQUES INCREASE in 10 countries/territories in global footprint across Asia Pacific • Outlet expansion • Launch of new models HIGHER EXPANSION OF INOKOM China ASSEMBLY PLANT EARNI
Slide 35: The Journey Ahead: Property Division
The Journey Ahead Property Division SOLID FOUNDATION EXECUTION VALUE CREATION RIGHT PRODUCT AND 28,000 acres PRICING TO MARKET HIGHER TAKE-UP RATES of landbank • Focus on landed residential Product-specific strategies Leading township affordable properties developer in Malaysia • Improve quality and
Slide 36: The Journey Ahead: Logistics Division
The Journey Ahead Logistics Division SOLID FOUNDATION EXECUTION VALUE CREATION CAPACITY EXPANSION HIGHER HANDLING • Completion of Weifang Port CAPABILITY & Jining Port expansion Diversified cargo base • Logistics park expansion – Focus on Halal Park BETTER VALUE PROPOSITION ENHANCEMENT OF WEIFANG OP
Slide 37: Driving the Journey: The Sustainability Journey
Driving the Journey THE SUSTAINABILITY JOURNEY High Carbon Stock (HCS) Study Hotspot Dashboard Lean 6-Sigma Benefits 300 5-YEAR RM244 mn TARGET RM209 250 RM775mn mn 200 RM123 150 mn 100 RM28 50 mn 0 Sustainability Purpose Integrated Report FY2013 FY2014 FY2015 FY2016 Responsible Agriculture Charter
Slide 38: Performance Driven Culture
Performance Driven Culture PERFORMANCE TRANSFORMATION RISE Transformation Initiative Innovating For The Future Ideation Platforms Idea Commercialisation Mechanism Ideas Labs & Hackathons Stage Gate Process Effective Training Programmes Driving Performance • Talent Exchange Capable & Engaged Leaders
Slide 39: Thank You
Thank You Sime Developing Sustainable Futures
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