Slide 1: SIPEF Analyst presentation
SIPEF Analyst presentation August 13, 2020 The Connection to the world of Sustainable Tropical Agriculture 1
Slide 2: Summary
Summary SIPEF group - Company profile SIPEF group - Palm oil in the world SIPEF group - Update expansion SIPEF group - Production & prices SIPEF group – Financial performance SIPEF group - Peer review The Connection to the world of Sustainable Tropical Agriculture 2
Slide 3: Company profile
SIPEF group – Company profile Agriculture • 1st segment of the supply chain - commodities Tropical • Recent industrialised countries Sustainable • Audited certifications Connection • Publicly quoted The Connection to the world of Sustainable Tropical Agriculture 3
Slide 4: Company profile: continuous production, diversified
SIPEF group – Company profile Continuous • Continuous crops production • Palm oil : basic commodity for food (and recently Diversified in energy) product • Rubber : cyclic business - tire industry • Indonesia : leading producing country within Asian Diversified in market origin • PNG : export orient
Slide 5: Company profile Worldwide
SIPEF group – Company profile Worldwide The Connection to the world of Sustainable Tropical Agriculture 5
Slide 6: Company profile Indonesia
SIPEF group – Company profile Indonesia 6
Slide 7: Company profile Papua New Guinea
SIPEF group – Company profile Papua New Guinea The Connection to the world of Sustainable Tropical Agriculture 7
Slide 8: Planted hectares summary 100% – June 2020
SIPEF group – Company profile Planted hectares summary 100% – 30 June 2020 2020 Indonesia PNG Ivory Coast Hectares 100% % of total Group share % of total Palm 61 038 13 628 0 74 666 90% 69 151 90% Rubber 5 518 0 0 5 518 7% 4 980 7% Tea 1 786 0 0 1 786 2% 1 612 2% Bananas 0 0 794 794 1% 794 1% Other
Slide 9: Summary
Summary SIPEF group - Company profile SIPEF group - Palm oil in the world SIPEF group - Update expansion SIPEF group - Production & prices SIPEF group – Financial performance SIPEF Group - Peer review The Connection to the world of Sustainable Tropical Agriculture 9
Slide 10: Palm oil in the world - Population growth
SIPEF group – Palm oil in the world Palm oil in the world - Population growth • In the coming 40 years, mankind will have to produce more food than in the previous 10 000 years put together • Population growth will have a huge impact on future food demands • Rising middle class is causing diet chang
Slide 11: Oil and fat consumption
SIPEF group – Palm oil in the world Oil and fat consumption Oil and fat consumption per capita (in Kg) Source: Oilworld 80 72,58 70 67,32 59,43 60 55,77 54,95 +55% 49,47 50 39,05 40 35,54 29,93 30 27,55 25,52 26,07 25,86 21,46 20 18,29 15,57 15,15 14,04 10 0 EU-28 USA China India Indonesia Pakistan
Slide 12: Palm oil in the world - Land input
SIPEF group – Palm oil in the world Palm oil in the world - Land input • Increased demand for meat/fat/processed foods • Increased demand for biofuel • Decreasing Agricultural land per capita • Disposable income growth in developing countries The Connection to the world of Sustainable Tropical Agric
Slide 13: Comparison to other oils
SIPEF group – Palm oil in the world Palm oil in the world - Comparison to other oils Resources used per vegetable oil: The Connection to the world of Sustainable Tropical Agriculture 13
Slide 14: Vegetable oils
SIPEF group – Palm oil in the world Palm oil in the world - Vegetable oils Source: Oilworld 2019 : 234,7 million Ton 1994/95: 93,1 million tonnes Palm oil Others 32% Palm oil 19% 16% Palm kernel and coconut oil 5% Other oils/animal fats 37% Soya oil 21% Sunflower oil 9% Soybean oil Palm kernel and R
Slide 15: Palm oil production
SIPEF group – Palm oil in the world Palm oil in the world - Palm oil production 2019 Palm oil production Source: Oilworld Total of 75,6 Mn tonnes Middle & South America Other countries 4% 7% Africa 2% Thailand 4% Indonesia Malaysia 57% 26% Indonesia Malaysia Thailand Africa Middle & South America Ot
Slide 16: Palm oil in the world - Sustainability
SIPEF group – Palm oil in the world Palm oil in the world - Sustainability • Palm oil remains confronted with a European perception problem based on • Health issues • No fat <-> moderate use of saturated fat • Saturated fats – only 50% saturated and no transfats • Environmental issues • Deforestatio
Slide 17: Sources for deforestation
SIPEF group – Palm oil in the world Palm oil in the world - Sources for deforestation The Connection to the world of Sustainable Tropical Agriculture 17
Slide 18: Commodity commitment
SIPEF group – Palm oil in the world Palm oil in the world – Commodity commitment The Connection to the world of Sustainable Tropical Agriculture 18
Slide 19: Global land use
SIPEF group – Palm oil in the world Palm oil in the world – Global land use 19
Slide 20: Land use of foods per 1000 kcal
SIPEF group – Palm oil in the world Palm oil in the world – Land use of foods per 1000 kcal 20
Slide 21: Sustainable palm oil
SIPEF group – Palm oil in the world Palm oil in the world - Sustainable palm oil 3,05 Million Ha RSPO certified production area RSPO Certified Ha (in KHa) 3 500 3 000 2 500 2 000 1 500 1 000 500 0 The Connection to the world of Sustainable Tropical Agriculture 21
Slide 22: Biodiesel use of major feedstock
SIPEF group – Palm oil in the world Palm oil in the world - Biodiesel use of major feedstock (Mn T) Biodiesel use of major feedstock (Mn T) 50,00 45,00 40,00 10,16 9,46 35,00 8,26 6,52 30,00 7,62 5,93 6,69 6,35 25,00 5,50 6,94 6,84 4,57 7,21 20,00 3,67 17,62 6,30 6,96 14,61 2,71 6,20 6,23 11,47 15,0
Slide 23: Biodiesel worldwide
SIPEF group – Palm oil in the world Biodiesel worldwide Source: Oilworld Biodiesel worldwide 2017 Biodiesel worldwide 2019 Total of 35,8 Mn tonnes Total of 45,7 Mn tonnes 11% 10% 4% 4% 0% 31% 39% 6% 7% 1% 1% 14% 19% 27% 25% Palm Oil Soya Oil Rapeseed Oil Sunflower Oil Palm oil Soya Rapeseed oil Sunf
Slide 24: Palm oil use for biodiesel EU
SIPEF group – Palm oil in the world Palm oil use for biodiesel EU Source: Oilworld 2019: Palm oil use for Biodiesel 2017 Palm oil use for Biodiesel Total of 17,6 Mn tonnes Total of 11,7 Mn tonnes EU 26% EU 36% 4,5 Mn tonnes 4,2 Mn tonnes 7,4 Mn tonnes 13,1 Mn tonnes Non EU 64% NON EU 74% EU Non EU E
Slide 25: Summary
Summary SIPEF group - Company profile SIPEF group - Palm oil in the world SIPEF group - Update expansion SIPEF group - Production & prices SIPEF group – Financial performance SIPEF Group - Peer review The Connection to the world of Sustainable Tropical Agriculture 25
Slide 26: Strategy & expansion
SIPEF group – Expansion Strategy & expansion SIPEF group = 100.000 Ha planted Focus on core-business • Palmoil – Rubber – Bananas – Tea • Indonesia – Papua New Guinea Focus on ‘Sustainable Agriculture’ (RSPO) Expansion of existing activities Acquisition of new investments Balanced leverage The Conne
Slide 27: Increase in Ha (100%)
SIPEF group – Expansion Increase in Ha (100%) 100.000 91 568 Ha 92 407 Ha 90.000 82 968 Ha 80 540 Ha 80.000 78 213 Ha 69 439 Ha 70.000 56 811 Ha 60.000 48 093 Ha 50.000 40.000 30.000 20.000 10.000 0 2005 2008 2016 2017 2018 2019 2023 2029 North Sum North Sum expansion Bengkulu Bengkulu expansion PNG
Slide 28: Supply base (in hectares)
SIPEF group – Expansion Supply base (in hectares): own ha and outgrowers ha – 100% 140.000 120.000 23.029 23.029 23.029 23.029 23.029 23.029 23.029 23.029 22.755 100.000 22.208 21.370 80.000 60.000 92.385 92.407 92.407 92.407 92.220 91.747 91.568 90.244 87.542 84.985 82.968 40.000 20.000 0 2019 2020
Slide 29: 100% CPO production
SIPEF group – Expansion 100% CPO production (including plasma and outgrowers – NO FFB) 700.000 2029 600.000 Own: 481 Kton Outg: 92 Kton Total: 573 Kton 500.000 400.000 300.000 200.000 100.000 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Own Outgrowers 29
Slide 30: Musi Rawas Projects: Area Map
Musi Rawas Projects: Area Map The Connection to the world of Sustainable Tropical Agriculture
Slide 31: South Sumatra – full scope of development
SIPEF group – Expansion South Sumatra – full scope of development June 2020 Latest update Musi rawas Dendymarker Total Total Planted / Cleared 12 958 8 986 21 944 Identified 9 847 1 607 11 454 Potential development 22 805 10 594 33 399 INTI 19 004 7 813 26 817 PLASMA 3 801 2 781 6 582 The Connection
Slide 32: Musi Rawas – progress June 2020
SIPEF group – Expansion Musi Rawas – progress June 2020 MUSI RAWAS Acquired Ha Secured Ha PT AKL 4.990 4.591 92% PT ARU 3.672 2.770 75% PT AMR 7.823 5.597 72% Total OLD 16.485 12.958 79% Potential Ha 18.507 89% AMR III 33 0 0% AMRS 217 0 0% AKLE 143 0 0% Total NEW 393 0 0% Potential Ha 4.298 9% GRAN
Slide 33: Crop & Processing Requirements 2020-2030
Crop & Processing Requirements: Based on LTBP 2020-2030. South Sumatra Total Crop (Inti & Plasma): 2020-2030 AKL ARU AMR DIL 1.000.000 940,000 MT FFB 900.000 800.000 700.000 600.000 MT FFB 500.000 400.000 300.000 200.000 100.000 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 195 T/Hr DILPO
Slide 34: Summary
Summary SIPEF group - Company profile SIPEF group - Palm oil in the world SIPEF group - Update expansion SIPEF group - Production & prices SIPEF group – Financial performance SIPEF Group - Peer review The Connection to the world of Sustainable Tropical Agriculture 34
Slide 35: Group production palm oil – June 2020
SIPEF group - Production & prices Group production palm oil – June 2020 Palm Oil June 2020 June 2019 Variance Own Tolan Tiga Group 31 654 31 438 0,69% Umbul Mas Wisesa Group 17 593 18 300 -3,86% Agro Muko Group 42 630 35 723 19,33% South Sumatra Group 6 764 5 548 21,92% Hargy Oil Palms 32 253 37 069
Slide 36: Group production rubber – June 2020
SIPEF group - Production & prices Group production rubber – June 2020 Rubber June 2020 June 2019 Variance Own Tolan Tiga Group 270 384 -29,69% Melania 1 583 1 617 -2,10% Agro Muko 934 1 067 -12,46% Total own 2 787 3 068 -9,16% Outgrowers Tolan Tiga Group 259 296 -12,50% Total Rubber 3 046 3 364 -9,4
Slide 37: Group production tea & bananas – June 2020
SIPEF group - Production & prices Group production tea & bananas – June 2020 Tea June 2020 June 2019 Variance Melania 1 478 1 312 12,65% Total Tea 1 478 1 312 12,65% Bananas June 2020 June 2019 Variance Azaguie 1 2 670 2 505 6,59% Azaguie 2 4 327 4 311 0,37% Agboville 4 552 4 804 -5,25% Motobe 4 620
Slide 38: Bull & Bear
SIPEF group - Production & prices Bull & Bear Rating Bullish inputs Bearish inputs - Indo & Mal prod is slightly lower than expected. Our BBC shows - Covid – 19: turned the global economy in a never foreseen recession. Impact not Palm Oil Neutral a flat production instead of the seasonal increase. f
Slide 39: CPO prices CIF Rotterdam 2019-2020
SIPEF group - Production & prices CPO prices CIF Rotterdam 2019-2020 Crude Palm Oil in $/mt Source: Oilworld CIF Rotterdam 850 800 750 700 650 600 550 500 450 J F M A M J J A S O N D 2019 2020 The Connection to the world of Sustainable Tropical Agriculture 39
Slide 40: Spread crude palm oil – soybean oil
400 600 800 1000 1200 1400 1600 2010M01 2010M03 2010M05 2010M07 2010M09 2010M11 2011M01 2011M03 2011M05 2011M07 2011M09 2011M11 2012M01 2012M03 2012M05 2012M07 2012M09 2012M11 2013M01 2013M03 Spread crude palm oil – soybean oil 2013M05 2013M07 2013M09 SIPEF group - Production & prices 2013M11 2014M0
Slide 41: Rubber prices 2019-2020
SIPEF group - Production & prices Rubber prices CIF Rotterdam 2019-2020 RSS3 in $/mt Source: Worldbank FOB Singapore 2 000 1 900 1 800 1 700 1 600 1 500 1 400 1 300 1 200 J F M A M J J A S O N D The Connection to 2019 the world of Sustainable 2020 Tropical Agriculture 41
Slide 42: Tea prices 2019-2020
Markets, sales prices & productions Tea prices CIF Rotterdam 2019-2020 Tea in $/mt Source: Worldbank average auction Mombasa 2 650 2 550 2 450 2 350 2 250 2 150 2 050 1 950 1 850 1 750 J F M A M J J A S O N D 2019 2020 The Connection to the world of Sustainable Tropical Agriculture 42
Slide 43: Summary
Summary SIPEF group - Company profile SIPEF group - Palm oil in the world SIPEF group - Update expansion SIPEF group - Production & prices SIPEF group – Financial performance SIPEF Group - Peer review The Connection to the world of Sustainable Tropical Agriculture 43
Slide 44: Sales – consolidated gross margin
SIPEF group – Financial performance Sales – consolidated gross margin 120 000 100 229 100 000 93 847 80 000 60 000 40 000 19,8% 20 000 13,6% 11 443 10 943 4 938 16,9% 3 116 -48,1% 2 247 2 922 15,8% --7,1% -24,7% -17,8% 0 Palm Rubber Tea Bananas -20 000 2019 Sales 2019 Gross Margin 2020 Sales 2020 Gr
Slide 45: Gross margin – Results before tax
SIPEF group – Financial performance Gross margin – Results before tax (management presentation) In KUSD (condensed) June 2020 June 2019 change Gross margin per product Palm 19 823 12 748 7 075 Rubber -1 498 - 350 -1 148 Tea - 519 - 555 36 Bananas and flowers 1 844 1 806 38 Corporate 373 682 -309 Tot
Slide 46: Net profit after tax
SIPEF group – Financial performance Net profit after tax (management presentation) In KUSD (condensed) June 2020 June 2019 %change Profit before tax 2 468 -3 725 6 193 Tax expense -1 686 - 412 -1 274 Effective tax rate -68,3% 11,1% -79,4% Result after tax 782 -4 137 4 919 Share of associated compani
Slide 47: Consolidated balance sheet
SIPEF group – Financial performance Consolidated balance sheet (management presentation) In KUSD (management presentation) 30/06/2020 31/12/2019 Biological assets (depreciated costs) - bearer plants 310 134 306 342 Goodwill 104 782 104 782 Other fixed assets 361 497 365 412 Receivables > 1 year 15 0
Slide 48: CPO inventory overview
SIPEF group – Financial performance Inventory overview CPO inventory overview 50.000 45.000 40.000 35.000 30.000 Tons of CPO 25.000 2019 2020 20.000 15.000 10.000 5.000 0 1 2 3 4 5 6 7 8 9 10 11 12 The Connection to the world of Sustainable Tropical Agriculture 48
Slide 49: Covenant testing
SIPEF group – Financial performance Covenant testing Net debt (IFRS definition) June 2020 -165 569 7-12m19 1-6m20 12m period Operating result 7 018 4 621 11 639 Exceptional items 0 0 0 Recurring operating result 7 018 4 621 11 639 Depreciation 22 583 21 371 43 954 REBITDA 29 601 25 992 55 593 Minus
Slide 50: Cash flow (management presentation)
SIPEF group – Financial performance Cash flow (management presentation) Cash flow in KUSD June 2020 Cash flow from operations before working capital 26 416 Working capital movements 160 Taxes paid -3 821 Cash flow from operations (a) 22 755 Cash flow from investing -21 948 Cash flow from desinvestin
Slide 51: Cash flow and net financial position
SIPEF group – Financial performance Cash flow (management presentation) Cash flow in KUSD (continued) June 2020 Free cash flow (a+b) 1 913 Dividends paid by subsidiaries to minorities -516 Interest received/paid -2 343 Net increase/decrease in NFP -946 Net financial position in KUSD June 2020 NFP op
Slide 52: Value per hectare sensitivity
SIPEF group – Financial performance Value per hectare Sensitivity 30/06/2020 Stock price @ USD per hectare 30,00 5 796 40,00 7 289 50,00 8 781 60,00 10 274 70,00 11 767 80,00 13 259 46,50 (dd 11/08/2020) 8 259 52
Slide 53: Prospects: production and markets
SIPEF group – Financial performance Prospects Production Prospects for palm oil production for the third quarter are rather poor (likely affected by last year’s long drought); The previously announced 10% increase in annual volumes will probably not be achieved; The Pestalotiopsis fungus is
Slide 54: Prospects: cash flow, expansion and result
SIPEF group – Financial performance Prospects Cash flow and expansion Investment policy remains to be fully focused on development of palm oil activities in South Sumatra; Steadily continuing on replanting of own palm plantation areas in Dendymarker; Group remains faithful to its intention t
Slide 55: Summary
Summary SIPEF group - Company profile SIPEF group - Palm oil in the world SIPEF group - Update expansion SIPEF group - Production & prices SIPEF group – Financial performance SIPEF Group - Peer review The Connection to the world of Sustainable Tropical Agriculture 55
Slide 56: Peer review Disclaimer
Peer review Disclaimer The information contained in this section is provided for your general information only and is not designed nor intended to offer anything more than information only. The information with respect to the companies included in the Peer Review was retrieved from publicly availabl
Slide 57: Peer review: principle assumptions
Peer review Principle assumptions • Benchmark of main industrial competitors • Age profile based on own ageing interpretation • Market capitalization is calculated based on the average exchange rate & average share price of the year • Benchmark based on own CPO productions of competitors: Tons CPO o
Slide 58: Own planted oil palm hectares
Peer review Own planted Oil Palm Hectares in KHa (2018) Sime Darby 600 Golden Agri-Resources 394 Felda Global Ventures 339 Salim Ivomas Pratama 251 Wilmar International 230 Astra Agro Lestari 218 Kuala Lumpur Kepong 214 First Resources 180 Plantation IOI Corporation 174 Genting Plantations 144 Integ
Slide 59: Age profile: average age planted hectares
Peer review Age Profile: Average age planted hectares (2018) Golden Agri-Resources 16,0 London Sumatra Indon 16,0 Astra Agro Lestari 15,3 Salim Ivomas Pratama 15,0 Socfinasia 14,5 Felda Global Ventures 14,3 IOI Corporation 14,0 R.E.A. Holdings 13,8 Plantation Sime Darby 12,8 Kuala Lumpur Kepong 12,1
Slide 60: FFB Yield – MT/ha
Peer review FFB Yield – MT/ha (2018) Socfinasia 24,4 IOI Corporation 23,6 R.E.A. Holdings 23,1 Golden Agri-Resources 22,5 SIPEF 22,2 Astra Agro Lestari 21,8 Kuala Lumpur Kepong 21,6 Wilmar International 21,6 Plantation Sime Darby 20,5 Bumitama 20,4 Integrated MP Evans 19,3 First Resources 18,9 Anglo
Slide 61: Extraction rate from FFB to CPO
Peer review Extraction rate from FFB to CPO (2018) MP Evans 23,5% SIPEF 23,4% London Sumatra Indon 23,0% Socfinasia 22,9% Eagle High Plantations 22,9% First Resources 22,9% R.E.A. Holdings 22,5% Bumitama 22,1% Plantation Socfinaf 22,0% Salim Ivomas Pratama 22,0% Integrated Golden Agri-Resources 21,9
Slide 62: CPO Yield – MT/ha
Peer review CPO Yield – MT/ha (2018) Socfinasia 5,59 R.E.A. Holdings 5,40 SIPEF 5,19 IOI Corporation 4,93 Golden Agri-Resources 4,93 Kuala Lumpur Kepong 4,72 MP Evans 4,54 Bumitama 4,51 Plantation Astra Agro Lestari 4,40 First Resources 4,33 Integrated Wilmar International 4,32 Sime Darby 4,31 Sipef
Slide 63: Market Cap in MUSD
Peer review Market Cap in MUSD (2018) Wilmar International 14.804 Sime Darby 9.081 IOI Corporation 7.060 Kuala Lumpur Kepong 6.594 Golden Agri-Resources 2.872 First Resources 1.947 Genting Plantations 1.929 Astra Agro Lestari 1.676 Plantation Felda Global Ventures 1.415 Bumitama 883 Integrated SIPEF
Slide 64: Dividend Yields
Peer review Dividend Yields (based on average market cap 2018) Socfinasia 5,5% IOI Corporation 4,5% Bumitama 4,0% Wilmar International 3,3% Sime Darby 3,2% Sampoerna Agro 2,9% Astra Agro Lestari 2,7% Golden Agri-Resources 2,6% First Resources 2,0% Plantation Kuala Lumpur Kepong 1,8% MP Evans 1,8% In
Slide 65: Price Earning Ratio
Peer review Price Earning Ratio (based on average market cap 2018) Socfinaf 52,4 Genting Plantations 47,2 Kuala Lumpur Kepong 35,1 Anglo Eastern Plantations 31,8 SIPEF 31,0 London Sumatra Indon 25,4 Sime Darby 21,3 Astra Agro Lestari 16,6 First Resources 16,2 Plantation Wilmar International 13,1 Soc
Slide 66: Net financial position/Equity Ratio
Peer review Net financial position/Equity Ratio (2018) Eagle High Plantations 141,7% Wilmar International 83,7% Socfinaf 83,2% R.E.A. Holdings 72,5% Sampoerna Agro 70,0% Golden Agri-Resources 65,4% Felda Global Ventures 63,2% Bumitama 54,7% Plantation IOI Corporation 50,8% Salim Ivomas Pratama 43,9%
Slide 67: The Connection to the world of Sustainable Tropical Agriculture
The Connection to the world of Sustainable Tropical Agriculture 67