Omnia Holdings Limited · JSE:OMN
Omnia — FY2015 Earnings Presentation
47 slides from Omnia's earnings presentation, 2015
Slide 1: Results Presentation for the Year Ended 31 March 2015
RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2015
Slide 2: Agenda
AGENDA Mining overview at a Omnia at a Agriculture Group Agriculture Mining Chemicals Financial Prospects Chemicals Prospects Financial glance overview glance overview overview overview overview overview 2
Slide 3: Omnia at a Glance
OMNIA AT A GLANCE Agriculture Mining Chemicals Omnia’s Agriculture division Omnia’s Mining division services The Chemicals division’s comprises Omnia Fertilizer the mining industry through BME main business is through and Omnia Specialities and Protea Mining Chemicals Protea Chemicals 3
Slide 4: Geographical Scope
GEOGRAPHICAL SCOPE • • Operations in 16 countries on the African continent, including South Africa • Focused operations in Australasia, Brazil, China and Mauritius 4
Slide 5: Our Vision and Strategy
OUR VISION AND STRATEGY Vision ‘Create customer wealth by leveraging knowledge’ Strategy • Providing specialised chemical products and services used in agricultural, mining and chemical markets • Focusing on unique market offerings that create value and, in so doing, earn a premium • Diversifying ge
Slide 6: Our Value Proposition
OUR VALUE PROPOSITION • We differentiate ourselves from other commodity chemical suppliers by applying our intellectual capital and technologies to all key points along our supply and service chains • This enables Omnia to create value throughout by tailoring our products and services to the specifi
Slide 7: Key Drivers – FY2015
KEY DRIVERS – FY2015 • Weaker SA rand • Unfavourable ammonia to urea ratio • Good growth in sales in Agriculture division with a step change in operational performance • Weaker performance in Mining division against downturn in industry, especially in West Africa • Flat performance in Chemicals divi
Slide 8: Overview of Results
OVERVIEW OF RESULTS 2015 % 2014 Revenue (Rbn) 16.8 +4 16.3 Profit before tax (Rm) 1 331 - 1 329 Profit after tax (Rm) 934 -6 992 Basic earnings per share – cents 1 402 -6 1 496 Headline earnings per share – cents 1 465 +3 1 428 Total dividend – cents 490 +3 475 Debt: Equity (%) 12.3 5.7 8
Slide 9: Other Key Highlights
OTHER KEY HIGHLIGHTS • Revenue at an all-time high of R16.8 billion • Operating profit up 4.2% to R1.5 billion • Headline earnings per share up 2.6% to R14.65 • Cash generated from operations steady at R1.8 billion • Debt: equity ratio at 12.3% remains low • Our safety performance improved – recorda
Slide 10: Agriculture Overview
AGRICULTURE OVERVIEW 10
Slide 11: Agriculture – Overview
AGRICULTURE – OVERVIEW 2015 % 2014 Revenue (Rbn) 7.3 +9 6.7 Operating profit (Rm) 656 +52 431 Operating margin (%) 9.0 6.5 • The demand for fertilizer remained steady despite difficult season • Higher production and sales volumes • Increased growth in our trading and wholesale businesses • Ammonia:
Slide 12: Crop Prices – USD/Tons
CROP PRICES – USD/TONS $ 400 $ 700 $ 350 $ 600 $ 300 $ 500 Maize and wheat $ 250 Soybean $ 400 $ 200 $ 300 $ 150 $ 200 $ 100 $ 50 $ 100 $0 $0 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 Maize $/tonne Wheat $/tonne Soybean $/tonne 12
Slide 13: Maize – Rand
13 R1 000 R2 000 R3 000 R4 000 R5 000 R6 000 R7 000 R8 000 Apr-12 May-12 MAIZE – RAND Jul-12 Sep-12 Oct-12 Dec-12 Feb-13 Mar-13 Soya May-13 Jul-13 Aug-13 Wheat Oct-13 Dec-13 Jan-14 Mar-14 May-14 White Maize Jun-14 Aug-14 Oct-14 Nov-14 Jan-15 Mar-15
Slide 14: Ammonia vs Urea Price
AMMONIA VS UREA PRICE $ 800 $ 700 $ 600 $ 500 $ 400 $ 300 $ 200 $ 100 $0 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 Urea gran Ammonia 14
Slide 15: Phosphate and Potash Prices – USD/Tonne
PHOSPHATE AND POTASH PRICES – USD/TONNE $ 700 $ 600 $ 600 $ 500 $ 500 $ 400 $ 400 MOP DAP $ 300 $ 300 $ 200 $ 200 $ 100 $ 100 $0 $0 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 DAP US Gulf MOP NW Europe 15
Slide 16: Agriculture – Production and Sales
AGRICULTURE – PRODUCTION AND SALES • Drought in Southern Africa with 1.3% reduction in total maize planted in RSA • Overall sales volumes up 6%, with international sales up 4% and local sales up 2% • Revenue from the trading and wholesale business up 46% or R331 million year-on-year • Increase in nu
Slide 17: Agriculture – Net Working Capital
AGRICULTURE – NET WORKING CAPITAL 2015 % 2014 Net working capital 1 837 110 765 Inventories 2 553 42 1 795 Trade and other receivables 1 395 37 1 016 Trade and other payables (2 111) 3 (2 046) Net working capital ratio (%) 25.2 11.5 • Higher net working capital at year end due to: • summer drought i
Slide 18: Mining Overview
MINING OVERVIEW 18
Slide 19: Mining – Overview
MINING – OVERVIEW 2015 % 2014 Revenue (Rbn) 5.4 -2 5.5 Operating profit (Rm) 720 -13 829 Operating margin (%) 13.5 15.2 • Good performance in very tough market conditions • BME • Softer demand in mining with volumes down 2.7% • Various once-off costs due to mine closures and competitive pressure • R
Slide 20: Precious Metals USD/Ounce from 2001 to March 2015
PRECIOUS METALS USD/OUNCE– FROM 2001 TO MARCH 2015 $2 500 $2 000 $1 500 $1 000 $500 $0 Mar-10 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 GOLD Gold PLATINUM Platinum PALLADIUM Palladium 20
Slide 21: Commodity Prices – Energy
COMMODITY PRICES – ENERGY $ 140 $ 120 $ 100 $ 80 $ 60 $ 40 $ 20 $ $0 - 31-Mar-10 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 Brent Crude $/barrel Coal $/ton ne Uranium $/lb 21
Slide 22: Commodity Prices – Metals
COMMODITY PRICES – METALS $12 000 $250 $10 000 $200 $8 000 $150 $6 000 $100 $4 000 $50 $2 000 $0 $0 Dec-11 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-12 Dec-13 Dec-14 Copper COPPER Iron Ore IRON OREChina CHINA 22
Slide 23: Mining – Production and Sales
MINING – PRODUCTION AND SALES • Softer demand in mining commodity and mineral markets throughout Africa • Reduced new greenfield and brownfield mining activity • West Africa under pressure – mine closures, Ebola and lost contract • Weaker rand supported sales prices, export business and foreign earn
Slide 24: Chemicals Overview
CHEMICALS OVERVIEW i" Ne vi Ee Be Code Wee — LEVERAGING KNOWLEDGE CREATING CUSTOMER WEALTH
Slide 25: Chemicals – Overview
CHEMICALS – OVERVIEW 2015 % 2014 Revenue (Rbn) 4.2 +2 4.1 Operating profit (Rm) 100 -36 156 Operating margin (%) 2.4 3.8 • Continuing difficult trading environment • Prior year results include the once off gain of R52 million on disposal of our interest in Nalco Africa • Margins flat at 2.4% after a
Slide 26: Index – Physical Manufacturing Volumes – South Africa
INDEX – PHYSICAL MANUFACTURING VOLUMES – SOUTH AFRICA JANUARY 2009 – APRIL 2015 125 120 115 110 Index 105 100 95 90 85 80 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Seasonally adjusted 26
Slide 27: Chemicals – Restructuring
CHEMICALS – RESTRUCTURING • Business successfully restructured to centralised ‘One Protea’ model • Further cost rationalisation in progress • Refined product offering and improved customer service model 27
Slide 28: Financial Overview
FINANCIAL OVERVIEW 28
Slide 29: Key Drivers of Revenue and Profits
KEY DRIVERS OF REVENUE AND PROFITS • Exchange rates • Weakening SA rand: US dollar – positive with improvement in net margin • Currency hedge – translation of earnings from foreign operations • Commodity prices • Generally lower across all three divisions • Volumes • Positive in agriculture but unde
Slide 30: USD: Rand Exchange Rate – Average and Year End
USD: RAND EXCHANGE RATE – AVERAGE AND YEAR END R 13.00 FY2014 Ave – R10.16 FY2015 Ave – R11.12 +19% +9% R 12.00 R 11.00 R 10.00 R 9.00 R 8.00 31 March 2014 – R10.53 +14% 31 March 2015 – R12.14 +15% R 7.00 31-Mar-13 30-Sep-13 31-Mar-14 30-Sep-14 31-Mar-15 30
Slide 31: Income Statement
INCOME STATEMENT Audited Audited 2015 % 2014 Revenue 16 835 +4 16 259 Cost of sales (12 898) +2 (12 647) Gross profit 3 937 +9 3 612 Distribution expenses (1 524) +15 (1 324) Administrative expenses (907) - (908) Other operating expenses (90) +14 (79) Other operating income 60 -48 115 Operating prof
Slide 32: Sales Mix and Volumes – % Change
SALES MIX AND VOLUMES – % CHANGE Average Revenue Volumes price Agriculture +9 +6 +3 Mining -2 -3 +1 Chemicals +2 +3 -1 32
Slide 33: Income Statement
INCOME STATEMENT Audited Audited 2015 % 2014 Revenue 16 835 +4 16 259 Cost of sales (12 898) +2 (12 647) Gross profit 3 937 +9 3 612 Expenses / other income (2 461) +12 (2 196) Operating profit 1 476 +4 1 416 Finance expense - net (145) +67 (87) Profit before taxation 1 331 - 1 329 Income tax expens
Slide 34: Segmental Review – Rm
SEGMENTAL REVIEW – Rm Agriculture 2015 2014 2013 2012 2011 Revenue (external) 7 287 6 680 5 399 4 476 3 680 Operating profit 656 431 443 323 312 Operating margin (%) 9.0 6.5 8.2 7.2 8.5 Total assets 6 919 5 539 4 971 4 155 3 339 Mining Revenue (external) 5 351 5 458 4 379 3 051 2 092 Operating profi
Slide 35: Segmental Performance – Revenue
SEGMENTAL PERFORMANCE – REVENUE 18 16 4.20 14 4.12 12 3.65 10 5.35 R billion 3.33 5.46 8 3.54 4.38 6 3.05 2.09 4 6.68 7.29 5.40 2 4.48 3.68 0 FY2011 FY2012 FY2013 FY2014 FY2015 Agriculture Mining Chemicals • Four year Compound Annual Growth Rate of 16.0% 35
Slide 36: Segmental Performance – Operating Profit
SEGMENTAL PERFORMANCE – OPERATING PROFIT 1 600 100 156 1 400 53 1 200 1 000 720 82 R million 829 800 735 63 600 476 311 400 656 200 443 431 312 323 0 FY2011 FY2012 FY2013 FY2014 FY2015 Agriculture Mining Chemicals • Four year Compound Annual Growth Rate of 21.1% 36
Slide 37: Balance Sheet – Assets
BALANCE SHEET – ASSETS Audited Audited Rm 2015 % 2014 Non-current assets 4 473 +5 4 270 Current assets 7 031 +18 5 964 Inventories 3 886 +21 3 213 Trade and other receivables 3 145 +14 2 751 Total Assets 11 504 +12 10 234 • Non-current assets • Expansion capital R465m; Replacement capital R109m • De
Slide 38: Balance Sheet – Debt and Equity
BALANCE SHEET – DEBT AND EQUITY Audited Audited 2015 % 2014 Total equity 6 642 +12 5 912 Deferred tax 502 +47 342 Liabilities 3 540 -3 3 645 Debt 820 +100 335 11 504 +12 10 234 Debt: Equity (%) 12.3 5.7 • Net movement in equity of R730m • Increase due to profits of R939m; FCTR movement of R378m; • D
Slide 39: Cash Flow – Rm
CASH FLOW – Rm Audited Audited 2015 2014 Cash generated from operations 1 846 1 769 Utilised by working capital (878) (52) Net cash generated from operations 968 1 717 Finance cost – net (161) (113) Taxation paid (341) (289) Net cash inflow generated from operations 466 1 315 Cash outflow from inves
Slide 40: Debt: Equity Ratio
DEBT: EQUITY RATIO 7 000 25% 6 000 20% Debt: equity Ratio ( %) 5 000 Debt and equity (Rm) 15% 4 000 3 000 10% 2 000 5% 1 000 0 0% FY2011 FY2012 FY2013 FY2014 FY2015 Equity Debt Debt: equity ratio 40
Slide 41: Prospects
PROSPECTS 41
Slide 42: Group Outlook
GROUP OUTLOOK • Weak rand dollar expected to benefit all three divisions • Strong balance sheet – gear up to fund any large capital projects or potential acquisitions • Strong management team and business model • Continue to expand markets beyond Africa 42
Slide 43: Outlook – Agriculture Division
OUTLOOK – AGRICULTURE DIVISION • Ammonia to urea ratio improving • Continuing sales opportunities • Expansion of nitrophosphate facility • Continued ramp up of nitric acid 2 complex • On-going drive to improve energy and water utilisation • Electricity co-generation optimisation • Potential carbon c
Slide 44: Outlook – Mining Division
OUTLOOK – MINING DIVISION • Mining sector expected to remain weak • Various surface emulsion opportunities • BME to potentially benefit from new Eskom power station • Roll out of portable emulsion pumping system • On-going increase in used oil in emulsions • Protea Mining Chemicals – various opportu
Slide 45: Outlook – Chemicals Division
OUTLOOK – CHEMICALS DIVISION • South African manufacturing sector performance to remain weak • Target completion of restructuring during the year • Major simplification and focus for business • Real progress towards achieving targeted margin 45
Slide 46: Operating Margin – Target %
OPERATING MARGIN – TARGET % Target Actual Target FY2015 FY2015 FY2016 Agriculture 8.0 – 10.0 9.0 8.0 – 10.0 Mining 15.0 – 16.0 13.5 13.5 – 15.0 Chemicals 4.5 – 5.5 2.4 3.0 – 4.0 46
Slide 47: Thank You
THANK YOU WWW.OMNIA.CO.ZA creating customer wealth by leveraging knowledge