Kernel Holding S.a. · GPW:KER
Kernel — Q1 FY2020 Earnings Presentation
31 slides from Kernel's earnings presentation, November 2019
Slide 1: Kernel Holding S.A. Q1 FY2020 results and company presentation
Kernel Holding S.A. Q1 FY2020 results and company presentation November 2019
Slide 2: Disclaimer
Disclaimer The information in this document has not been independently verified and no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither th
Slide 3: Content
Content 1. Q1 FY2020 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 4: 1.1 Q1 FY2020 highlights
Q1 FY2020 results and results and Balanced outlook outlook Kernel today growth strategy Financials 1.1 Q1 FY2020 highlights US$ m except EPS Q1 FY2019 Q1 FY2020 y-o-y ◼ Revenue down 26% y-o-y to US$ 846m: Income statement highlights – Lower Avere trading volumes (limited impact on Group profitabilit
Slide 5: 1.2 Segment results
Q1 FY2020 results and results and Balanced outlook outlook Kernel today growth strategy Financials 1.2 Segment results Segment volumes, m tons EBITDA margin EBITDA, US$ m Oilseed 3.4 120 3.0 3.1 3.2 Processing 2.7 83 76 129 67 109 115 54 100 1.4 1.6 1.5 77 1.1 1.2 FY16 FY17 FY18 FY19 LTM FY16 FY17 F
Slide 6: 1.3 Segments results and harvest update
Q1 FY2020 resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.3 Segments results and harvest update Segments results Oilseed Processing segment Revenue, US$ m EBITDA, US$ m Volume, k t 1 EBITDA margin, US$ / t2 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 ◼ EBITDA margin 85% y-o-y
Slide 7: 1.4 IFRS 16 impact
Q1 FY2020 resultsand results and Balanced outlook outlook Kernel today growth strategy Financials 1.4 IFRS 16 impact 1 ◼ Starting from Q1 FY2020, Kernel introduced IFRS 16 Leases with application of retrospective approach and did not restate comparatives, as permitted under the transitional provisio
Slide 8: 1.5 Outlook for FY2020
Q1 FY2020 results and results and Balanced outlook outlook Kernel today growth strategy Financials 1.5 Outlook for FY2020 ◼ Full-year EBITDA margin to average near US$ 85 per ton of oil sold – Strong supply of seeds on the market: we expect 15.9 million tons harvest of sunflower seeds in the current
Slide 9: Content
Content 1. Q1 FY2020 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 10: 2.1 Kernel today
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.1 Kernel today Oilseed Processing segment Key financials FY2016 FY2017 FY2018 FY2019 LTM EBITDA 1, US$ million ◼ #1 sunflower oil producer (8% of global production) and Revenue US$ m 1,989 2,169 2,403 3,992
Slide 11: 2.2 What we do
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.2 What we do 1 Own farming: Kernel 6 Grain export: Kernel exported 6.1 million tons of grains and operates 530 thousand ha of oilseeds from Ukraine, entering into forward contracts within the leasehold farm
Slide 12: 2.3 Efficient and well-invested asset base
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.3 Efficient and well-invested asset base Sunflower seed crushing capacity, thousand tons per year Poltava Grain transshipment capacity, thousand tons per year 462 Vovchansk 356 Starokostiantyniv Prykolotne
Slide 13: 2.4 Kernel's key milestones
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.4 Kernel’s key milestones Asset-light Acquisition of IPO & listing on Extending oilseed • Entering the Russian market by Exit of highly Acquisition of • Active export platform sunflower oil brand the Warsaw
Slide 14: 2.5 Oilseed Processing segment
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.5 Oilseed Processing segment LTM LTM Sales EBITDA Segment performance Profitability drivers and FY2020 outlook Segment volumes Sunflower oil price million tons ◼ Record oilseed processing volumes: 1 US$ per
Slide 15: 2.6 Infrastructure and Trading segment
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.6 Infrastructure and Trading segment LTM LTM Sales EBITDA Segment performance Profitability drivers and FY2020 outlook Segments volumes Grain supply in Ukraine million tons ◼ Highest ever 6.3m t of grain ex
Slide 16: 2.7 Farming segment
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.7 Farming segment LTM LTM Sales EBITDA Segment performance Profitability drivers and FY2020 outlook Kernel’s key crop production ◼ We completed FY2020 harvesting 1 Ukraine corn and wheat prices, US$ per ton
Slide 17: 2.8 Credit highlights
Q1 FY2020 results and Balanced outlook Kernel Kernel today today growth strategy Financials 2.8 Credit highlights Credit portfolio as of 30 September 2019, US$ m Kernel Eurobonds mid-YTM Amount outstanding 12% 10.6% as of 30 September 2019 Interest rate Maturity 10% Eurobond 2022 496.4 8.75% Jan 202
Slide 18: Content
Content 1. Q1 FY2020 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 19: 3.1 Kernel's mid-term strategy
Q1 FY2020 Balanced results and growth Balanced outlook Kernel today strategy growth strategy Financials 3.1 Kernel’s mid-term strategy We aim to profitably double export volumes by FY2021, providing comprehensive solutions to our clients (customers and suppliers), with balanced development of our bu
Slide 20: 3.2 Strategy 2021 serves as a solid basis for future growth
Q1 FY2020 Balanced results and growth Balanced outlook Kernel today strategy growth strategy Financials 3.2 Strategy 2021 serves as a solid basis for future growth across all business segments Strategy 2021 investments pipeline overview: Status Segment US$ million FY2017 FY2018 FY2019 FY2020 FY2021
Slide 21: Content
Content 1. Q1 FY2020 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 22: 4.1 Consolidated statement of profit or loss
Q1 FY2020 results and Balanced outlook Kernel today growth strategy Financials Financials 4.1 Consolidated statement of profit or loss US$ million, except ratios and EPS FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 LTM Revenue 215 350 663 1,047 1,020 1,899 2,072 2,797 2,393
Slide 23: 4.2 Balance sheet
Q1 FY2020 results and Balanced outlook Kernel today growth strategy Financials Financials 4.2 Balance sheet Balance sheet highlights US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 30 Sep 19 Cash & cash equivalents 6 25 89 129 59 116 83 79 65 129 60 143 132 77 80 Ne
Slide 24: 4.3 Cash flow statement
Q1 FY2020 results and Balanced outlook Kernel today growth strategy Financials Financials 4.3 Cash flow statement US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 LTM EBITDA 17 46 123 190 190 310 319 288 223 397 346 319 223 346 352 Finance cost paid (9) (18) (28) (32
Slide 25: IR contact and investor calendar
IR contact and investor calendar Michael Iavorskyi Investor Relations Manager ir@kernel.ua Tel.: +38 (044) 461 88 01, ex. 7275 3 Tarasa Shevchenka Lane, Kyiv Ukraine, 01001 Investor calendar ▪ Annual general shareholders’ meeting 10 December 2019 ▪ Q2 FY2020 Operations Update 21 January 2020 ▪ H1 FY
Slide 26: Content
Content 1. Q1 FY2020 results and outlook 2. Kernel today 3. Balanced growth strategy 4. Financials Appendices
Slide 27: A1. Key highlights
A1. Key highlights ◼ Kernel operates in globally competitive growing Ukrainian agri sector ◼ Integrated, resilient and simple business model built around scale & global reach ◼ Leader across all market segments supported by unparalleled world-class asset base with high barriers to entry ◼ Top standa
Slide 28: A2. Markets and business environment
A2. Markets and business environment Oilseed Processing Infrastructure and Trading Farming Global production of vegetable oils Global production and export of Global grain exports Top grain exporting countries Grain yields in MY2019/20 million tons sunflower oil million tons million tons t / ha mill
Slide 29: A3. Markets and business environment
A3. Markets and business environment Low cycle of soft commodity prices Index of soft commodity prices, US$-inflation adjusted 30 June 2004 = 100% 300% 250% 200% 150% 100% 50% Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 1 2 3 Wheat
Slide 30: A4. Recent transactions highlights
A4. Recent transactions highlights Acquisitions Debt raising Acquisition of 100% interest in RTK-Ukraine (Feb 2019) Loan from European Investment Bank (Dec 2018) ◼ Assets acquired: 2,949 grain railcars (#1 private fleet of grain hopper ◼ US$ 250m project financing from the EIB wagons in Ukraine). ◼
Slide 31: A5. Environmental, social and corporate governance (ESG)
A5. Environmental, social and corporate governance (ESG) Kernel's global goal in the field of sustainable development and social responsibility is the development of society through the voluntary contribution of business to the social, economic and environmental spheres related to the activities and