Olam Group Limited · SGX:VC2
Olam — Olam International — Merger or Acquisition (June 2012)
22 slides from Olam's merger presentation, Jun 7, 2012
Slide 1: Acquisition of Kayass Enterprises
Acquisition of Kayass Enterprises 7 June 2012 Building Relevant Scale : Delivering the Olam Strategy 1
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam International Limited (‘Olam’) and its subsidiaries (‘Group’) that are of a forward looking nature and are therefore based on management’s assumptions about future developments. Such
Slide 3: Presentation outline
Presentation outline Transaction Overview Investment Rationale Strategic Fit Financial Impact Q&A Building Relevant Scale : Delivering the Olam Strategy 3
Slide 4: Transaction Overview
Transaction Overview The Olam enters the Dairy products and beverage segments in Nigeria with Transaction the acquisition of Kayass Enterprises S.A., for US$66.5Mn (subject to working capital at close) The transaction adds to Olam’s packaged foods business footprint in West Africa with an entry into
Slide 5: Presentation outline
Presentation outline Transaction Overview Investment Rationale Strategic Fit Financial Impact Q&A Building Relevant Scale : Delivering the Olam Strategy 5
Slide 6: Investment is aligned to our 2009 strategic plan
Investment is aligned to our 2009 strategic plan * * Target subsequently raised to US$ 1 billion by FY2016 Building Relevant Scale : Delivering the Olam Strategy 6
Slide 7: Packaged Foods is a growing and important platform in Olam's strategic plan
Packaged Foods is a growing and important platform in Olam’s strategic plan Olam’s Packaged Food Business Strategy Build regional brand and market leadership in a minimum of 5 core packaged food categories by building deep consumer insights and a innovative pipeline of products that uniquely service
Slide 8: Why Africa?
Why Africa? Growing share of the world’s Population, Consumption and GDP growth will come from Africa in the next 2 decades The changing demographic profile, increasing urbanization of the population and greater discretionary spending power are driving strong growth in the processed / packaged food
Slide 9: Africa will exhibit the highest growth in population
Africa will exhibit the highest growth in population – It will double from 1 B to 2 B by Year 2050 Increase: 1.1 B, % growth: 26 % Increase: 0.2 B, Increase: 1.0 B, % growth: 12% % growth: 94% UN median population forecasts Building Relevant Scale : Delivering the Olam Strategy 9
Slide 10: Africa offers one of the highest growth rates for FMCG products
Africa offers one of the highest growth rates for FMCG products. Nigeria ranks No 2 in the world between 2001 and 2020 2001-2010 ‘10 Size : 54 B 2011-2020 ‘20 Size : 125 B Euromonitor data – Includes Food , Non Food and Beverages Building Relevant Scale : Delivering the Olam Strategy 10
Slide 11: Strategic Choice of Markets and Categories
Strategic Choice of Markets and Categories Choice within African Markets: Since significant front end investments are required in setting up Sales and Distribution infrastructure, as well as in the initial brand building efforts; we have decided to focus on a few large markets in Phase 1 of our stra
Slide 12: Strategic Choice of Markets and Categories
Strategic Choice of Markets and Categories Choice of Categories across these markets: There are hundreds of packaged food categories within and across these markets. We’ve gone through a detailed exercise of evaluation and identified target categories, based on the following filters: Market Size and
Slide 13: Large sized opportunity pipeline within identified categories and focus markets
Large sized opportunity pipeline within identified categories and focus markets Current Market Size Growth Category ($M) Rate (%) Tomato Paste 343 8-10% Biscuits 828 10-12% Pasta 587 10-12% Seasonings 747 6-8% Candies 273 12-15% Instant Noodles 312 12-15% Dairy Products & Beverages 1180 7-8% Total 4
Slide 14: Presentation outline
Presentation outline Transaction Overview Investment Rationale Strategic Fit Financial Impact Q&A Building Relevant Scale : Delivering the Olam Strategy 14
Slide 15: Olam's Current Footprint
Olam’s Current Footprint Started operations in 2007 in Nigeria with launch of Tasty Tom® tomato paste and currently present across multiple categories – Tomato Paste / Seasonings / Pasta / Biscuits / Noodles in key West African markets (Nigeria / Ghana / Ivory Coast / MBTN Cluster) 2nd largest playe
Slide 16: What we have built
What we have built Strong background and local context built over two decades of operating history in the region Investments have already been made in market research and consumer immersions designed to gain deep consumer insight, leading to focused and relevant product development that is better su
Slide 17: Overview of Kayass Enterprises S.A.
Overview of Kayass Enterprises S.A. Packaged Flavoured Milk Powder Milk Juices UHT Milk Building Relevant Scale : Delivering the Olam Strategy 17
Slide 18: Assets
Assets Apapa Factory Isolo Factory Powder Packing facility Beverages facility 6,201 sq meters of port-adjacent land 19,952 sq meters of land 4 bay warehouse with external area of 11 bay warehouse with an external area of 3,364 sq meters 10,349 sq meters 23 packaging lines Processing capacity of upto
Slide 19: Acquisition synergies
Acquisition synergies The Olam Advantage The Kayass Advantage A direct bolt-on to existing Packaged A high quality Dairy products & beverages foods business infrastructure in Nigeria manufacturing facility built to European standards (< 3 years old) Sales & Distribution infrastructure with a direct
Slide 20: Presentation outline
Presentation outline Transaction Overview Investment Rationale Strategic Fit Financial Impact Q&A Building Relevant Scale : Delivering the Olam Strategy 20
Slide 21: Financial Impact
Financial Impact Olam’s investment of US$ 66.5Mn to be funded from internal accruals and borrowings Expected to deliver EBITDA margins of ~20% by FY2016 and an equity IRR of 35% Transaction will be earnings accretive from FY2014 driven by higher capacity utilization at the plants Building Relevant S
Slide 22: Thank You!
Thank You! Building Relevant Scale : Delivering the Olam Strategy 22
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