Agthia Group · ADX:AGTHIA
Agthia — 9M 2023 Earnings Presentation
41 slides from Agthia's earnings presentation, Nov 7, 2023
Slide 1: Investor Presentation 9M'23 results
Investor Presentation 9M’23 results 7 November 2023
Slide 2: Disclaimer
02 Analyst and Investor Call Disclaimer Agthia Group PJSC and its management may make certain statements that constitute “forward-looking statements” with respect to the financial condition, results of operations and business of the Group. These statements can be identified by the fact that they do
Slide 3: Agenda
03 Analyst and Investor Call Agenda 1 2 3 Strategic Segmental Key financials update performance 4 5 Guidance Appendix
Slide 4: Recap: Our strategic vision to become a regional F&B leader by 2025
04 Analyst and Investor Call Recap: Our strategic vision to become a regional F&B leader by 2025 From… To… UAE centric Footprint MENA+ & beyond Becoming a Commoditized portfolio Value-add F&B brands regional F&B Stable financial performance Strong shareholder returns leader by 2025 Local organizatio
Slide 5: Progress on strategic vision – 9M'23
05 Analyst and Investor Call Progress on strategic vision – 9M’23 Delivering Growth Driving Efficiency Expanding Capabilities • Reported revenue growth +10.9% YoY; • Focus on productivity enhancement: • Investing in innovation: Snacking - 9.1% from volume1 & 1.8% from pricing launched new brands int
Slide 6: Key Financials
Key Financials
Slide 7: 9M'23 headlines: Strong and profitable growth led by Snacking, Agri, and Water & Food
07 Analyst and Investor Call 9M’23 headlines: Strong and profitable growth led by Snacking, Agri, and Water & Food Strong revenue growth... ...outpaced by EBITDA Healthy net profit1 growth.. 465 206 3,271 +18% +11% +13% 2,949 394 182 9M'22 9M'23 9M'22 9M'23 9M'22 9M'23 +3.5% LFL growth +10bps Δmargi
Slide 8: …amidst a challenging backdrop
08 Analyst and Investor Call …amidst a challenging backdrop Commodity inflation EGP devaluation Rising interest rates Average 30.6 3M 1.7% 5.4% LIBOR 69.1 17.9 + AED 30.5 +39MN 15 MN commodity inflation in 9M’23 9M'22 9M'23 9M'22 9M'23 Average EGP vs USD FX rate Net interest cost (AED MN) Devaluatio
Slide 9: Continued strengthening of balance sheet
09 Analyst and Investor Call Continued strengthening of balance sheet Average gross debt1 WC as % of sales FCFF 707 2,031 14% -5% -408bps +131% 10% 1,922 307 9M'22 9M'23 9M'22 9M'23 9M'22 9M'23 AED MN NWC % TTM sales AED MN 1AED300MN reduction in average gross debt since December 2022
Slide 10: Strong topline growth driven by Snacking and Agri
10 Analyst and Investor Call Strong topline growth driven by Snacking and Agri 9M 2023 revenue growth +10.9% YoY, with 9.1% from volume1 and 1.8% from pricing; +20.7% pre devaluation Group Revenue (AED MN) Group Revenue (AED MN) 3,271 62 (116) 114 47 2,949 215 after absorbing Inorganic EGP devaluati
Slide 11: EBITDA growth ahead of revenue driven by Snacking, Water & Food, Agri
11 Analyst and Investor Call EBITDA growth ahead of revenue driven by Snacking, Water & Food, Agri 9M 2023 EBITDA growth +18% YoY, +30% pre devaluation Group EBITDA (AED MN) 465 21 (26) 394 21 (26) 28 52 after absorbing Inorganic EGP devaluation of growth1 AED 48MN 9M'22 Snacking acquisition Water &
Slide 12: Net profit growth ahead of revenue despite higher interest rate environment
12 Analyst and Investor Call Net profit growth ahead of revenue despite higher interest rate environment 9M 2023 net profit growth +13% YoY, +27% pre devaluation Group net profit1 (AED MN) 14 (18) 20 33 (53) 206 182 27 after absorbing Inorganic EGP devaluation of growth3 AED 27MN 9M'22 Snacking Wate
Slide 13: Robust balance sheet with low leverage
13 Analyst and Investor Call Robust balance sheet with low leverage Net debt / EBITDA Interest coverage1 1.4x Down from FY’22 of 2.3x 6.7x Up slightly from H1’23 of 6.6x Liquidity2 AED 2.2BN Dividend yield3 3.6% H1’23 DPS = AED 0.0825 1Interest coverage = EBITDA / (interest expense net of interest i
Slide 14: Segmental performance
Segmental performance
Slide 15: Diversified growing portfolio in large growing scalable markets
15 Analyst and Investor Call Diversified growing portfolio in large growing scalable markets Diversified revenue by geography.. ..and segments.. 7% 27% 23% 27% 51% 23% 27% 15% UAE Other Arab Countries Protein & Frozen Water & Food RoW Snacking Agri Business GCC excl UAE
Slide 16: Snacking: strong growth in dates and contribution from Abu Auf
16 Analyst and Investor Call Snacking: strong growth in dates and contribution from Abu Auf Revenue EBITDA Commentary Revenue 174 • LFL growth of 8% including Abu Auf 873 • Dates: product and packaging innovation, +73% premiumization shift in consumer demand +46% driving growth across domestic and i
Slide 17: Protein: decline on FX headwinds in Egypt; revenue +19.4% excluding devaluation impact
17 Analyst and Investor Call Protein: decline on FX headwinds in Egypt; revenue +19.4% excluding devaluation impact Revenue EBITDA Commentary Revenue • -13% YoY including +62% YoY growth from 882 135 pricing in Egypt and FX devaluation impact -13% -19% of AED 287MN 766 109 • +19% YoY excluding FX de
Slide 18: Water & Food: positive growth on volumes and cost efficiencies
18 Analyst and Investor Call Water & Food: positive growth on volumes and cost efficiencies Revenue EBITDA Commentary Revenue 759 134 • +7% YoY on positive growth across local +27% (UAE excl. dairy +3%) and international +7% 106 channels (KSA +22%, Kuwait +28%), Turkey (+37%) 713 • UAE Bottled Water
Slide 19: Agri: strong volumes in Flour and Feed
19 Analyst and Investor Call Agri: strong volumes in Flour and Feed Revenue EBITDA Commentary Revenue 873 145 • +15% YoY on share gain in Flour and strong volume in Feed +17% +15% EBITDA • +17% YoY on good execution in Feed across commercial farms and open 125 market, cost efficiencies in Flour, and
Slide 20: Guidance
Guidance
Slide 21: Reaffirming FY'23 Guidance
21 Analyst and Investor Call Reaffirming FY’23 Guidance1 Revenue growth EBITDA margin Group net profit margin +10 to 12% +40 to 60bps +30 to 50bps • Current FX rates for USD / EGP 30.7 Assumptions • Current FX rates for USD / EGP 30.7 • 100% of Group profit including minorities • No further acquisit
Slide 22: A forward-looking company
22 Analyst and Investor Call A forward-looking company Market leading position across key categories and geographies Growing portfolio of consumer-centric brands in large, scalable markets Growth-oriented mindset focused on leveraging synergies, innovation and digitization Attractive economics with
Slide 23: For The Better
ForThe Better « Cy a> @ 3 2 PD oy
Slide 24: Appendix
ForThe Better * JA0UI Joi yo
Slide 25: Q3'23 Group headlines
25 Analyst and Investor Call Q3’23 Group headlines Double-digit revenue …driving strong net ...outpaced by EBITDA growth… profit1 growth 146 61 1,070 +30% +12% +17% 954 47 125 Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 +59bps Δmargin AED MN AED MN AED MN 1Net profit including minority interests
Slide 26: Q3'23 Snacking headlines
26 Analyst and Investor Call Q3’23 Snacking headlines Revenue1 EBITDA1 272 48 +52% +49% 32 182 Q3'22 Q3'23 Q3'22 Q3'23 +32bps Δmargin AED MN AED MN 1Q3’23 includes Abu Auf
Slide 27: Q3'23 Protein headlines
27 Analyst and Investor Call Q3’23 Protein headlines Revenue EBITDA 309 -13% 268 51 -30% 36 Q3'22 Q3'23 Q3'22 Q3'23 -318bps Δmargin AED MN AED MN
Slide 28: Q3'23 Water & Food headlines
28 Analyst and Investor Call Q3’23 Water & Food headlines Revenue EBITDA 254 51 +7% +56% 238 33 Q3'22 Q3'23 Q3'22 Q3'23 +624bps Δmargin AED MN AED MN
Slide 29: Q3'23 Agri headlines
29 Analyst and Investor Call Q3’23 Agri headlines Revenue EBITDA 276 +23% 48 225 +48% 32 Q3'22 Q3'23 Q3'22 Q3'23 +294bps Δmargin AED MN AED MN
Slide 30: Historical dividend trend
30 Analyst and Investor Call Historical dividend trend 32% 35% 44% 43% 66% 85%1 58% 51% 53% Dividend Payout % 0.165 0.165 0.165 0.150 0.150 0.150 0.150 0.125 Dividends per Share 0.0825 (AED) 2015 2016 2017 2018 2019 2020 2021 2022 H1 2023* 1Normalized EPS for 2020 *H1’2023 DPS approved by shareholde
Slide 31: A balanced mix of growing brands
31 Analyst and Investor Call A balanced mix of growing brands 23% of sales 27% of sales 23% of sales 27% of sales Category Agribusiness Protein & Water & Food Snacking Frozen Veg. Assets Key markets Staple Discretionary
Slide 32: Over AED 72MN in revenue generated YTD from strategic product innovation
32 Analyst and Investor Call Over AED 72MN in revenue generated YTD from strategic product innovation AED 12.6MN from Water AED 48.9MN from Snacking +154% vs 2022 AED 5.1MN from Protein & Frozen Veg AED 6.1MN from Food
Slide 33: Investing in growth: Protein expansion in KSA
33 Analyst and Investor Call Investing in growth: Protein expansion in KSA Project overview ▪ Location: Jeddah, KSA ▪ Category: Protein ▪ Capex c. AED 84MN (Phase 1) ▪ Available land 9,436 sqm; Built-up area 6,600 sqm ▪ Capacity ≈ 6,500- 8,700 tons/annum ▪ ≈ 50 SKUs Rationale ▪ Strengthen footprint
Slide 34: 5-year digital roadmap with clear priorities
34 Analyst and Investor Call 5-year digital roadmap with clear priorities Priority #1 Priority #2 Best customer / consumer Empowered employees in a experience collaborative environment • Seamless omnichannel experience with optimized • Integrated business planning and cross-domain online and in-stor
Slide 35: ESG is integral to Agthia's purpose
35 Analyst and Investor Call ESG is integral to Agthia’s purpose ENVIRONMENTAL SOCIAL GOVERNANCE Eco-friendly products driving CSR strategy built on community: Commitment and accountability revenue growth & lowering costs: -Strategic partnerships with start with BoD/BU Heads: -PLA and rPET growth or
Slide 36: Our Sustainability Agenda: adopting a "4 P" approach
36 Analyst and Investor Call Our Sustainability Agenda: adopting a “4 P” approach Packaging Processes • Packaging material reduction of 1,200 tons YTD • 5.4% reduction in water usage ratio (Q3’23 vs Q3’22) • 4.3% reduction in water usage for Water BU (Q3’23 vs Q3’22) • PLA: 315% YoY volume growth YT
Slide 37: Strong leadership team with track record of value creation
37 Analyst and Investor Call Strong leadership team with track record of value creation Group Functions Business Unit Functions Alan Sherif Ramy Vandy Dos Mujtaba Abdulla Mubarak Ahmad Ahmad Declan Smith Elfaham Merdan Santos Hussain Al Marzooqi Al Mansoori Yahya Sallakh Bennett Chief Executive Chie
Slide 38: Summary Profit & Loss Statement
38 Analyst and Investor Call Summary Profit & Loss Statement AED'000 9M’23 9M’22 YoY Revenue 3,270,964 2,949,164 11% Cost of sales -2,307,991 -2,105,917 10% Gross profit 962,973 843,247 14.2% Selling and distribution expenses -425,332 -385,719 10% General and administrative expenses -263,307 -249,86
Slide 39: Summary Balance Sheet Statement
39 Analyst and Investor Call Summary Balance Sheet Statement AED'000 9M’23 9M’22 Property, plant and equipment 1,384,868 1,446,027 Intangible assets & Goodwill 2,411,378 2,421,885 Others 113,599 104,299 Total non-current assets 3,924,785 3,972,433 Inventories 788,494 847,275 Trade and other receivab
Slide 40: Summary Cash Flow Statement
40 Analyst and Investor Call Summary Cash Flow Statement AED'000 9M’23 9M’22 YoY Profit before tax & zakat expenses 205,556 182,409 13% Adjustments for: Depreciation & Amortization 171,436 169,440 1% Provisions & Allowances 14,962 18,359 -19% Others 96,891 48,179 101% Change in: Inventories 57,897 -
Slide 41: Thank you
For The Better + JAoUI Joi yo 7 November 2023