23 slides from M.p. Evans's earnings presentation, Mar 19, 2024
Slide 1: 2023 full year results
2023 full year results More planted hectares, and record crop and production Tuesday 19 March 2024 A producer of sustainable Indonesian palm oil 1
Slide 2: Agenda
Agenda • Group overview • Strategy pillars • 150-year celebrations • Vegetable-oil market • Palm oil in context • Sustainable palm oil • Group operations: enhancing output • 2023 highlights • 2023 cash generation • Returns for investors • Outlook • Appendices 2
Slide 3: Who we are
Who we are M.P. Evans (AIM: MPE) is a long-term investor in Indonesian palm oil. The Group is committed to sustainable production and works in partnership with local communities and other stakeholders to deliver continued value. 150 years A producer 12,500+ Celebrating a of sustainable Group employe
Slide 4: Strategy pillars
Strategy pillars M.P. Evans is a responsible producer of sustainable Indonesian palm oil, striving for excellence in all its operations, with a focus on continuing growth and offering an increasing yield. Responsibility Excellence Growth Yield • RSPO members • Investing for the long • Increasing cro
Slide 5: 150-year celebrations
150-year celebrations After tracing its origins back to the 1870’s, the Group held events to AGM followed by mark its 150-year anniversary this 150-year celebratory lunch at Mansion year, celebrating the significant House on 9 June 2023 contribution made by so many people in shaping the Group over m
Slide 6: Vegetable-oil market
Vegetable-oil market • Palm oil is a vegetable oil, with an increasing share of growing worldwide demand for vegetable oil. • Since 1990, demand for vegetable oil has grown at an average of 4% per annum. Growth of world vegetable-oil production Vegetable-oil production (tonnes, millions) 250 40% Pal
Slide 7: Palm oil in context
Palm oil in context • Oil palms produce fresh fruit bunches (ffb) continuously over their 25-year life. Competing vegetable-oil seeds are annual crops. • Palm is extremely efficient in its use of land: it produces 40% of the world’s vegetable oil on only 8% of the area devoted to vegetable-oil culti
Slide 8: Sustainable palm oil
Sustainable palm oil • Palm oil, when produced sustainably, provides a high-yield and low-cost supply of vegetable oil to a growing global market. • The Group ensures that all its areas are developed and managed sustainably. This includes no deforestation and no burning. 1-0027-06-100-00 • The Group
Slide 9: Group operations: enhancing output
Group operations: enhancing output Independent suppliers FFB 421,500 t Group mills Group Group managed FFB production 1,201,400 t 95% 23.4% 362,100 t 5% 5.0% External mills 77,300 t 16,400 t 3,300 t 9
Slide 10: 2023 highlights
2023 highlights Increase Increase in Normalising in crop production CPO prices 2023 - 1.6m tonnes 2023 - 378,500 tCPO 2023 – US$729/t 2022 - 1.5m tonnes 2022 - 341,700 tCPO 2022 – US$854/t Decrease in Operating Cost revenue profit decrease management 2023 – US$307.4m 2023 – US$75.3m 2023 – US$427/t
Slide 11: 2023 cash generation
2023 cash generation • Group operations continue to be significantly cash generative. 1.4 Other 3.6 • Balance sheet strength enables management to focus on opportunities for future growth. Dividends from associates Sources 82.5 107.0 22.5 Opening cash Cash from operations New (US$m) borrowings Uses
Slide 12: Returns for investors
Returns for investors • Total normal dividend of 45p per share for 2023 • Further extension of long-term progressive dividend policy • Additional EPS enhancement from US$10m share buyback in year 50 45 Normal dividends (pence per share) 40 35 30 25 20 15 10 5 0 1993 1994 1995 1996 1997 1998 1999 200
Slide 13: Outlook
Outlook • First two months of 2024: Crop and milling capacity (tonnes millions) ⎻ Increase in cropping levels 2.0 ⎻ Crop from Group and scheme-smallholder areas Own crop - up by 23% 1.8 Scheme smallholder crop Independent smallholder crop ⎻ Total crop processed up by 16% to 245,700 1.6 Maximum milli
Slide 14: Appendices
Appendices 1. Summary financial information 2. Group net (debt)/cash 3. Summary operational information 4. Summary ESG information 5. Group map and locations 6. Historic CPO price data 7. Oil palm life cycle 8. Products containing palm oil 14
Slide 15: 1. Summary financial information
1. Summary financial information 2023 2022 Revenue US$m 307.4 326.9 Gross profit US$m 78.5 109.2 Gross margin % 26 33 Profit for the year US$m 56.4 78.4 Sustainability premium income US$m 6.5 7.5 Group cost per tonne US$m 427 402 Total cost per tonne US$m 498 527 Earnings per share pence 78.1 108.0
Slide 16: 2. Group net debt/cash
2. Group net debt/cash 90 USD Debt 70 IDR Debt 50 Gross cash 30 Net debt 10 (10) (30) (50) (70) (90) (110) 2019 2020 2021 2022 2023 16
Slide 17: 3. Summary operational information
3. Summary operational information Increase/ 2023 (decrease) 2022 Tonnes ‘000 % Tonnes ‘000s Crop Own crops 923 2 905 Scheme-smallholder crops 279 5 266 Independent crops purchased 421 24 341 1,623 7 1,512 Production Group mills 362 22 297 Third-party mills 16 (63) 44 378 11 341 17
Slide 18: 4. Summary ESG information
4. Summary ESG information 2023 2022 2021 tCO2e tCO2e tCO2e Carbon emissions Scope 1 203,900 194,200 188,000 Scope 2 600 500 400 Scope 3 2,046,700 2,275,200 2,594,400 2,251,200 2,469,900 2,782,400 Reduction from baseline year 19% 11% - Carbon intensity Per tonne of CPO 5.9 7.2 8.9 Per tonne of palm
Slide 19: 5. Group map and locations
5. Group map and locations SSIMPANG KIRI Mature ct-paim estate in the province of Ace, near the order wth Nort Sumatra, whic was acquire inthe ary 7980s. are processed ina nearby tia-pary Ini urter 20 hectares were auld near 202, BERTAM PROPERTIES, ‘Tristan was prevousiy te Group's Berta Estate, al
Slide 20: 6. Historic CPO price data
6. Historic CPO price data Source: Oil World 2023 data 20
Slide 21: 7. Oil palm life cycle
7. Oil palm life cycle As at end December 2023, M.P. Evans’ average age of planting was 10 years. Yield: 25 tonnes Yield: 20 tonnes Plant begins to yield approx. 30 months post planting. Yield: 15 tonnes Yield: 10 tonnes Plant will continue to yield beyond 25 years. Yield: 5 tonnes However, harvesti
Slide 22: 8. Products containing palm oil
8. Products containing palm oil Palm oil is used mainly as a cooking oil but also in a wide range of consumer goods and processed foods including biscuits, cakes, soap, cosmetics, lubricants, and in the production of bio-diesel. 22
Slide 23: mpevans.co.uk
The Group has published two reports over the last 12 months: the 2022 TCFD (Taskforce on Climate-related Financial Disclosures) report and the 2023 ESG (environmental, social and governance) report. The Group expects to publish a new TCFD report in 2024 and an updated ESG report in 2025. View both r