Sipef Sa · EURONEXT:SIP
Sipef Sa — Investor Presentation (February 2016)
56 slides from Sipef Sa's investor presentation, Feb 18, 2016
Slide 1: The Connection to the world of Sustainable Tropical Agriculture
Analyst presentation February 18th, 2016 The Connection to the world of Sustainable Tropical Agriculture
Slide 2: Summary
Summary Sipef group – Company profile Palm oil in the world The “El Niño” phenomenon SIPEF group – Productions & prices SIPEF group – Financial performance Peer review
Slide 3: Company profile
SIPEF group Company profile The Connection to the world of Sustainable Tropical Agriculture Agriculture • 1st segment of the supply chain - commodities Tropical • Recent industrialised countries Sustainable • Audited certifications Connection • Publicly quoted
Slide 4: Company profile: continuous production, diversified products and origin
SIPEF group Company profile The Connection to the world of Sustainable Tropical Agriculture 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 w
Slide 5: Company profile map
SIPEF group AZ Company profile Za A 4 Belgium as Zs Luxembourg Af 2 Ivory Coast “jf \ :
Slide 6: Company profile - Indonesia
SIPEF group Company profile - Indonesia
Slide 7: Company profile – Papua New Guinea
SIPEF group Company profile – Papua New Guinea
Slide 8: Planted hectares summary – December 2015
SIPEF group Planted hectares summary – 31 december 2015 Palm Rubber Tea Bananas Other Total % Group share Indonesia 44 762 6 250 1 777 52 789 75% 38 364 PNG 13 558 3 283 58 16 899 24% 16 899 Ivory coast 630 42 672 1% 672 58 320 9 533 1 777 630 100 70 346 100% 55 935 % 82% 14% 3% 1% 0% 100,0% Group s
Slide 9: Strategy and expansion
SIPEF group Strategy and expansion SIPEF group= 100.000 Ha planted (group’ share) 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
Slide 10: Expansion
SIPEF group Expansion • Beneficial interest from 38 359 Ha to 66 793 Ha • Future expansion of 18 475 Ha Musi Rawas and South Sumatra expansion • Further increase participation interests in existing subsidiaries Indonesia • Both in oil palm and rubber • Beneficial interest from 16 899 to 15 102 Ha •
Slide 11: Future expansion
SIPEF group Future expansion 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 2005 2008 2014 2020 2025 North Sum North Sum expansion Bengkulu Bengkulu expansion PNG PNG expansion Musi Rawas Ivory Coast Ivory Coast expansion
Slide 12: Summary
Summary Sipef group – Company profile Palm oil in the world The “El Niño” phenomenon SIPEF group – Productions & prices SIPEF group – Financial performance Peer review
Slide 13: Vegetable oils
Palm oil in the world Vegetable oils • Vegetable oils are oils or fats extracted from a plant. Their texture can be described as liquid, oily and fatty • Most vegetable oils can either be used as cooking oil, be used for food and cosmetics or for fuel and diesel production • The most common oil type
Slide 14: Oil palm plantations
Palm oil in the world Oil palm plantations Oil palm plantations
Slide 15: Fresh fruit bunches
Palm oil in the world Fresh fruit bunches Fresh fruit bunches
Slide 16: Vegetable oils production mix
Palm oil in the world Vegetable oils 2014/15: 201,7 million tonnes 1994/95: 93,1 million tonnes 21% 30% 16% 5% 37% 8% 21% 13% 6% 23% 11% 9% Palm oil Soya oil Palm oil Soya oil Rape oil Sunflower oil Rape oil Sunflower oil Palm kernel and coconut oil Other oils/animal fats Palm kernel and coconut oil
Slide 17: Palm oil production
Palm oil in the world Palm oil production 2014/15 - Palm oil world production Palm oil production is primarily 1% 6% 1% done in Asia: 4% 3% – Indonesia and Malaysia represent 85% of the world’s palm oil production 53% – Oceania includes our subsidiary Hargy Palm Oils Ltd 32% – Total Sipef production
Slide 18: Palm oil consumption
Palm oil in the world Palm oil consumption 2014/15 World consumption • Asia and the Middle-east consists mainly of China, India, Indonesia, 0% 14% 11% 2% Malaysia and Pakistan 2% 6% • Africa consists mainly of Nigeria, Egypt, Ghana and Kenya • Very limited CPO consumption in North and South America
Slide 19: Advantages of Palm oil
Palm oil in the world Advantages of Palm oil Palm oil has many advantages: • Highest-yielding vegetable oil crop: less than a third of the land required compared to other crops • Usable in a wide range of products, from margarine and chocolate to ice cream, soaps, cosmetics and fuel • India, China,
Slide 20: Comparison to other oils
Palm oil in the world Comparison to other oils Resources used per vegetable oil:
Slide 21: Sustainable palm oil
Palm oil in the world Sustainable palm oil
Slide 22: Our approach to sustainability
Palm oil in the world Sustainable palm oil Our approach to sustainability: • Social • Economical • Environmental
Slide 23: Social, economical, environmental
Palm oil in the world Sustainable palm oil Social Economical Environmental Respecting worker’s rights / Employment and financial Securing natural resources Human rights security Equal opportunities Cost savings Biodiversity Training employees Smallholders economic growth Climate change Providing edu
Slide 24: SIPEF foundation
Sustainable palm oil SIPEF foundation The SIPEF foundation supports two long-term projects in Indonesia: – SIPEF Biodiversity project (SBI) holds a 60-year license to restore a forest area of 12 672 hectares in Sumatra – SIPEF sea turtle project protects the egg-laying area of several sea turtle spe
Slide 25: SIPEF foundation projects
Sustainable palm oil SIPEF foundation SIPEF Foundation: Left: SIPEF biodiversity Below: SIPEF turtle project
Slide 26: Environmental and social responsibility
Sustainable palm oil SIPEF GROUP Environmental responsibility Social responsibility
Slide 27: Papua New Guinea
Sustainable palm oil Papua New Guinea Papua New Guinea has very challenging conditions: – Communities are very isolated; – Local governments have scarce resources and multiple priorities; – The national government counts on the agricultural sector for the path to development; “One hour principle” fo
Slide 28: Continuing process: certifications
Sustainable palm oil Continuing process To accompany and support its growth, SIPEF continues to fulfil its sustainable development obligations: – ISO 9001 and ISO 14001 certified – RSPO certified – ISCC certified – ISPO certified – EurepGAP/GlobalGAP – United Nations clean Development Mechanism – Ra
Slide 29: Summary
Summary Sipef group – Company profile Palm oil in the world The “El Niño” phenomenon SIPEF group – Productions & prices SIPEF group – Financial performance Peer review
Slide 30: The El Niño phenomenon: general
The “El Niño” phenomenon General In 2015 an unusual number of weather phenomenons are happening: - Droughts in Africa, South-East Asia and Oceania; - Excessive rain fall in Northern China, Pakistan, Afghanistan and parts of South America; - Unpredictable weather patterns all over the world All these
Slide 31: What is El Niño
The “El Niño” phenomenon What is “El Niño”
Slide 32: What is El Niño
The “El Niño” phenomenon What is “El Niño”
Slide 33: Summary
Summary Sipef group – Company profile Palm oil in the world The “El Niño” phenomenon SIPEF group – Productions & prices SIPEF group – Financial performance Peer review
Slide 34: Current production
SIPEF group Current production In Tonnes: Total 2015 Total 2014 YoY% Palm oil own - Tolan Tiga Group 69 297 65 895 +5,2% - UMW/TUM Group* 27 789 19 530 +42,3% - PT Agro Muko 77 640 77 704 -0,1% - Hargy Oil Palms 63 822 56 494 +12,3% Total palm oil own 238 548 219 623 +8,6% Total palm oil outgrowers
Slide 35: CPO prices
SIPEF group CPO price - CIF Rotterdam – USD CPO prices 1 300 1 200 2012 1 100 1 000 2013 900 800 2014 700 2015 600 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 36: Rubber prices
SIPEF group Rubber price – FOB Malaysia - USD Rubber prices 4 500 4 000 3 500 2012 3 000 2 500 2013 2 000 2014 1 500 1 000 2015 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 37: Tea prices
SIPEF group Tea prices – FOB Indonesia - USD Tea prices 3 300 3 100 2 900 2012 2 700 2 500 2013 2 300 2014 2 100 1 900 2015 1 700 1 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 38: Summary
Summary Sipef group – Company profile Palm oil in the world The “El Niño” phenomenon SIPEF group – Productions & prices SIPEF group – Financial performance Peer review
Slide 39: IAS Restatement – Balance sheet
SIPEF group IAS 41 Restatement – Balance sheet In KUSD 2014 IAS 41 Restatement 2014 IAS 41R Biological assets (IAS 41) 328 859 -179 400 149 459 Other fixed assets 238 541 238 541 Investments in associates 73 557 -14 722 58 835 Financial assets 3 822 3 822 Deferred taks assets 3 013 +11 819 14 832 Ne
Slide 40: IAS Restatement – Profit and loss and cash flow
SIPEF group IAS 41 Restatement – Profit and loss and cash flow • 2014 IAS 41R result is approximately the “before IAS 41” result, with minor changes: – Additional capital gain on the sale of PT Timbang Deli – Return to “deemed cost” of the biological assets of Galley Reach Holding – Other minor item
Slide 41: Sales – Gross margin
SIPEF group Sales – Gross margin Total consolidated turnover (including corporate) – 2015: 225 935 KUSD – 2014: 285 899 KUSD 300 000 250 000 239 100 200 000 186 001 150 000 100 000 30% 20% 50 000 21 141 16 712 15 758 22% 15 062 28% 5% -9% 6 502 1% 7 345 23% 0 Palm Rubber Tea Bananas -50 000 2014 Sal
Slide 42: Gross margin – per product
SIPEF group Gross margin – per product (based on internal management reporting) Total gross margin 2015: KUSD 53 075 Total gross margin 2014: KUSD 92 841 2015 Gross margin 3,7% 2014 Gross Margin 6,5% 0,1% 10,5% 7,6% 1,5% 3,0% -2,2% 81,1% 88,2% Palm Rubber Tea Bananas Corporate Palm Rubber Tea Banana
Slide 43: Profit and loss
SIPEF group Profit and loss statement (based on internal management reporting) Profit and loss In KUSD 2015 2014 Gross Margin 53 075 92 841 Services and administration - 26 520 - 29 191 Other operating income/(charges) 888 7 995 Financial income/charges - 709 - 619 Exchange result 102 57 Result befo
Slide 44: Balance sheet
SIPEF group Consolidated balance sheet Balance sheet In KUSD 2015 2014 Biological assets- bearer plants 163 505 149 459 Other fixed assets 302 492 301 198 Net assets held for sale 6 943 7 522 Net current assets, net of cash 40 419 26 472 Net cash position - 50 521 - 24 617 Total net assets 462 838 4
Slide 45: Cash flow
SIPEF group Consolidated Cash Flow Cash flow In KUSD 2015 2014 Cash flow from operating activities 49 890 80 599 Change in net working capital -8 062 11 654 Income taxes paid -10 471 -18 516 Cash flow from operating activities after tax 31 357 73 737 Acquisitions intangible and tangible assets -49 0
Slide 46: Prospects
SIPEF group Prospects Production – Variable production patterns during the first months (El Niño!) – Young oil palms in Hargy will boost production Markets – We expect a slight increase in palm oil prices – Rubber prices will continue to struggle – Tea price is expected to remain stable Cash flow an
Slide 47: Summary
Summary Sipef group – Company profile Palm oil in the world The “El Niño” phenomenon SIPEF group – Productions & prices SIPEF group – Financial performance Peer review
Slide 48: 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 49: Peer review: owned planted hectares
Peer review Owned Planted Oil Palm Hectares in KHa (2014) 2013 2014 Var % Total 3.249 3.345 3,0% Sipef 54,54 55,69 2,1%
Slide 50: Peer review: age profile
Peer review Age Profile : Average Age Planted Hectares (2014) 2013 2014 Var % Average 11,5 11,7 1,7% Sipef 10,3 9,9 -3,9%
Slide 51: Peer review: FFB yields
Peer review FFB Yields – MT/ha (2014) 2013 2014 Var % Average 19,2 19,5 1,6% Sipef 20,7 22,2 7,4%
Slide 52: Peer review: extraction rate
Peer review Extraction Rate from FFB to CPO (2014) 2013 2014 Var % Average 22,1% 22,3% 0,8% Sipef 22,4% 22,6% 0,9%
Slide 53: Peer review: CPO yields
Peer review CPO Yields – MT/ha (2014) 2013 2014 Var % Average 4,24 4,35 2,5% Sipef 4,62 5,01 8,4%
Slide 54: Peer review: market cap
Peer review Market Cap in MUSD (July 2015) 2013 2014 Var % Total 4.006 3.186 -20,5% Sipef 660 466 -29,4%
Slide 55: Peer review: dividend yields
Peer review Dividend Yields (Based on Average Market Cap 2014) * No dividend pay-out
Slide 56: Peer review: net financial debt/equity
Peer review Net financial debt/Equity Ratio (2014)