Rusagro Group · RUS:RAGR
Rusagro — Ros Agro — Q3 2017 Earnings Presentation
36 slides from Rusagro's earnings presentation, Nov 17, 2017
Slide 1: Investor Presentation 9M 2017 and Q3 2017
ROS AGRO PLC Investor Presentation 9M 2017 and Q3 2017 17 November 2017
Slide 2: Table of Contents
Table of Contents 1 9M 2017 and Q3 2017 (IFRS) Summary 3 2 Business Overview by division (IFRS) 9 3 Additional information 24 2
Slide 3: Section 1: Summary Key Indicators (IFRS)
Section 1 Summary Key Indicators (IFRS) 9M 2017 and Q3 2017 vs 9M 2016 and Q3 2016
Slide 4: Net revenue and Adjusted EBITDA Q3
Net revenue, Adjusted EBITDA: Actual Q3 2017 vs Actual Q3 2016 Comments Net revenue (IFRS) Actual Q3 2017 vs Actual Q3 2016 Net Revenue decreased by RR 308 million (-2%): • Sugar sales decreased by RR 1,995 million (-24%) as a result of a decrease in sales prices of 18,000 sugar. Sales decrease was
Slide 5: Net revenue and Adjusted EBITDA 9M
Net revenue, Adjusted EBITDA: Actual 9M 2017 vs Actual 9M 2016 Comments Net revenue (IFRS) Actual 9M 2017 vs Actual 9M 2016 60,000 Net Revenue decreased by RR 760 million (-1%): • Sugar sales decreased by RR 2,613 million (-11%) due to sugar sales prices decreased by 21% Sales decrease was partially
Slide 6: Debt profile (as of 30 September 2017)
Debt profile (as of 30 September 2017) Comments Debt position and liquidity management Variance • Gross debt increased by RR 1,870 million (+4%) up to RR 46,372 million in RR million 30 September 2017 31 December 2016 • Net debt decreased by RR 2,641 million (-61%) to RR 1,702 million Units % • Majo
Slide 7: Statement of financial position: key changes
Statement of financial position: Key changes 30 September 2017 vs 31 December 2016 Comments Assets as of 30 September 2017 vs 31 December 2016 170,000 ASSETS • PPE & LT biological assets* increased by RR 6,302 million (RR +3,449 million in Agriculture, RR +1,173 million in Meat, RR +1,320 million in
Slide 8: Cash Flows: Actual 9M 2017 vs 9M 2016
Cash Flows: Actual 9M 2017 vs Actual 9M 2016 Cash Flows according to Management view (Not IFRS presentation)**RR m illion Actual Actual Variances Comments 9M 2017 9M 2016 Units % Cash flow s from operating activities In 9M 2017 cash and cash equivalents increased by RR 15,907 million from RR 6,752 m
Slide 9: Section 2: Business Overview by division (IFRS)
Section 2 Business Overview by division (IFRS) 9M 2017 and Q3 2017 vs 9M 2016 and Q3 2016
Slide 10: Meat Q3 key indicators
Meat Key indicators Actual Q3 2017 vs Actual Q3 2016 (IFRS) Comments Meat: sales, Adjusted EBITDA and Adjusted EBITDA 6,000 margin 40% Sales (RR +519 million, +11%): 5,154 • an increase in sales volume of processed pork by 7 ths tn or 31%, that was partly offset by a decrease in sales volume of live
Slide 11: Meat 9M key indicators
Meat Key indicators Actual 9M 2017 vs Actual 9M 2016 (IFRS) Comments Meat: sales, Adjusted EBITDA and Adjusted EBITDA margin 60% 15,191 Sales (RR +2,699 million, +22%): 15,000 • an increase in sales volume of processed pork by 19 ths tn or 30%. Overall sales volume 50% increased due to an increase i
Slide 12: Meat: Strategy
Meat Sales and EBITDA margin dynamics (RUB bn) Challenges and Strategy Adj. EBITDA margin Average sale price, rub./kg excl. VAT 1 Transition to export economy to come in 3 years 23% 50% 42% 22% 15% 19% 27% 26% 28% 28% 33% 21% 30% 2 Excessive investments in meat processing and 97.2 competition for th
Slide 13: Sugar Q3 key indicators
Sugar Key indicators Actual Q3 2017 vs Actual Q3 2016 (IFRS) Comments Sugar: sales, Adjusted EBITDA and Adjusted EBITDA margin Sales (RR -1,995 million, -24%): 30% • Revenue from sales of sugar decreased by RR 1,761 million due to sales price decreased by 10,000 25%. Sales volume increased by 2% (Q3
Slide 14: Sugar 9M key indicators
Sugar Key indicators Actual 9M 2017 vs Actual 9M 2016 (IFRS) Comments Sugar: sales, Adjusted EBITDA and Adjusted EBITDA margin 25,000 23,605 40% Sales (RR -2,613 million, -11%): • Revenue from sales of sugar decreased by RR 2,945 million due to sales price decreased by 20,993 21%. Sales volume incre
Slide 15: Sugar segment highlights: Strategy
Sugar segment highlights Sales and EBITDA margin dynamics (RUB bn) Challenges and Strategy Adj. EBITDA margin Average sale price, rub./kg excl. VAT 1 Domestic sugar production growth and market 10% 21% 34% 26% 39% 22% 22% 26% 10% 16% 16% 27% 14% oversaturation 37.2 2 Transition to export economy 32.
Slide 16: Agriculture Q3 key indicators
Agriculture Key indicators Actual Q3 2017 vs Actual Q3 2016 (IFRS) Comments Agriculture: sales, Adjusted EBITDA and Adjusted EBITDA margin Sales (RR -578 million, -16%): 3,900 40% 3,632 • the major positive factor is higher sales of wheat and sugar beet in Q3 2017 vs 2016; 3,054 • the major negative
Slide 17: Agriculture 9M key indicators
Agriculture Key indicators Actual 9M 2017 vs Actual 9M 2016 (IFRS) Comments Agriculture: sales, Adjusted EBITDA and Adjusted 10,000 EBITDA margin 50% Sales (RR -119 million, -1%): 8,179 8,060 • The major positive factor is higher sales volume of sugar beet, wheat, corn and sunflower. 40% • The major
Slide 18: Agriculture: Strategy
Agriculture Sales and EBITDA margin dynamics (RUB bn) Challenges and Strategy Adj. EBITDA margin 1 Growth in yields followed by the price drop 28% 41% 48% 29% 46% 6% 19% 30% 10% -23% 0% 28% 1% 2 Low world prices 21.2 4 Strengthening of the ruble 14.2 5 Overproduction in Russia 13.0 10.7 8.5 Strategy
Slide 19: Oil & Fats Q3 key indicators
Oil & Fats Key indicators Actual Q3 2017 vs Actual Q3 2016 (IFRS) Comments Oil & Fats: sales, Adjusted EBITDA and Adjusted EBITDA margin Sales (RR +1,685 million, +58%: EZHK RR -518 million, -22%; SAPP RR +1,480 million, 137%; Far 5,000 4,596 20% East RR +249 million, +77% and Eliminations RR +474 m
Slide 20: Oil & Fats Q3 volumes and prices
Oil & Fats Key indicators Actual Q3 2017 vs Actual Q3 2016 (IFRS) Comments Mayonnaise, margarine and bottled oil: volume and prices (excl. 30 VAT) 85 83.6 Sales and prices in Oil & Fats: 80.0 • sales volume of mayonnaise decreased by 6 ths tn (-32%) with 7% increase in price; 25 78.8 thousand rubles
Slide 21: Oil & Fats 9M key indicators
Oil & Fats Key indicators Actual 9M 2017 vs Actual 9M 2016 (IFRS) Comments Oil & Fats: sales, Adjusted EBITDA and Adjusted EBITDA margin Sales (RR -343 million, -2%: EZHK RR -904 million, -13%; SAPP RR -761 million, -9%; Far East RR 14,560 +324 million, +16% and Eliminations RR +998 million). 14,217
Slide 22: Oil & Fats 9M volumes and prices
Oil & Fats Key indicators Actual 9M 2017 vs Actual 9M 2016 (IFRS) Comments Mayonnaise, margarine and bottled oil: volume and prices (excl. 60 VAT) Sales and prices in Oil & Fats: 52 52 80.6 80 • sales volume of mayonnaise decreased by 9 ths tn (-17%) with 5% increase in price; • sales volume of marg
Slide 23: Oil and Fats: Strategy
Oil and Fats Sales and EBITDA margin dynamics (RUB bn) Challenges and Response Adj. EBITDA margin 1 Competition intensification due to overinvestment in 11% 13% 10% -2% 4% -4% -3% -5% -1% -5% 6% -1% 0% processing capacities and brands Strategy 19.9 Consolidation through merger, acquisition 17.3 or s
Slide 24: Section 3: Additional information
Section 3 Additional information
Slide 25: Statement of Comprehensive income (IFRS)
Statement of Comprehensive income (IFRS) ROS AGRO PLC RR m illion Variances Description Actual 9M 2017 Actual 9M 2016 (*) Units % Sales 54,829 55,588 (760) (1) Net gain/ (loss) on revaluation of biological assets and (2,555) 2,573 (5,128) (199) agricultural produce Cost of sales (41,494) (39,481) (2
Slide 26: Adjusted EBITDA 9M 2017 Breakdown by divisions
Adjusted EBITDA 9M 2017 (IFRS) Breakdown by divisions ROS AGRO PLC RR m illion 9M 2017 Sugar Meat Agriculture Oil and Fat Other Elim ination Total Sales 20,993 15,191 8,060 14,217 51 (3,683) 54,829 Net gain / (loss) on revaluation of biological assets and agricultural produce - (372) (231) - - (1,95
Slide 27: Adjusted EBITDA 9M 2016 Breakdown by divisions
Adjusted EBITDA 9M 2016 (IFRS) Breakdown by divisions ROS AGRO PLC RR m illion 9M 2016 Sugar Meat Agriculture Oil and Fat Other Elim ination Total Sales 23,605 12,493 8,179 14,560 76 (3,325) 55,588 Net gain/ (loss) on revaluation of biological assets and agricultural produce - 126 4,118 - - (1,671)
Slide 28: Statement of cash flows (IFRS)
Statement of cash flows (IFRS) ROS AGRO PLC RR m illion Actual Actual Variances 9M 2017 9M 2016 Units % Cash flow s from operating activities Profit before incom e tax 3,067 11,348 (8,280) (73) Adjustments for non-cash and non-operating (income)/expenses, net: Depreciation and amortization 5,278 3,2
Slide 29: Statement of cash flows (IFRS) - continuance
Statement of cash flows (IFRS) - continuance ROS AGRO PLC RR m illion Actual Actual Variances 9M 2017 9M 2016 Units % Cash flow s from investing activities Purchases of property, plant and equipment (11,114) (6,417) (4,697) (73) Purchases of other intangible assets (237) (187) (50) (27) Proceeds fro
Slide 30: Statement of cash flows according to Management view
Statement of cash flows according to Management view (Not IFRS presentation) ROS AGRO PLC RR m illion Actual Actual Variances 9M 2017 9M 2016 Units % Cash flow s from operating activities Profit before incom e tax 3,067 11,348 (8,280) (73) Adjustments for non-cash and non-operating (income)/expenses
Slide 31: Management view cash flows - continuance
Statement of cash flows according to Management view (Not IFRS presentation) – continuance ROS AGRO PLC RR m illion Actual Actual Variances 9M 2017 9M 2016 Units % Cash flow s from investing activities - - (*) Including in net cash Purchases of property, plant and equipment (11,114) (6,417) (4,697)
Slide 32: Statement of financial position (IFRS)
Statement of financial position (IFRS) ROS AGRO PLC RR m illion 30 September 31 December Variances 2017 2016 Units % ASSETS Current assets Cash and cash equivalents 22,658 6,752 15,907 236 Restricted cash 0 0.04 0 8 Short-term investments 5,677 17,230 (11,553) (67) Trade and other receivables 2,966
Slide 33: Statement of financial position (IFRS) - continuance
Statement of financial position (IFRS) - continuance ROS AGRO PLC RR m illion 30 September 31 December Variances 2017 2016 Units % Liabilities and EQUITY Current liabilities Short-term borrow ings 8,943 11,704 (2,761) (24) Trade and other payables 10,125 6,989 3,136 45 Current income tax payable 42
Slide 34: Average FX rate, USD/RUR
Average FX rate, USD/RUR 1G RUSAGRO Ruble's exchange rate for oct. 2015 - sep. 2016 0.00 75.00 70.00 65.00 60.00 535.00 oc-as Nov-15 ee-15 Jon-16 Fee-16 Maris pris Moy-10 un-26 uae Aug-16 Sep-16 —eusnfRus @ max @ min trendline Ruble's exchange rate for oct. 2016 - sep. 2017 66.00 64.00 62.00 60.00 5
Slide 35: ROS AGRO PLC at a glance
ROS AGRO PLC at a glance ROS AGRO PLC – a leading vertically integrated diversified agriculture holding with exposure to highly attractive market segments in Russia and CIS Consolidated sales dynamics (RUB bn) Industry trends 1 Growth of yields and productivity 84.3 Limited local market growth oppor
Slide 36: Production assets and brands
Production assets and brands Production assets geography Brands • 4 sugar brands and • 1 pork brand Tambov and Voronezh regions Yekaterinburg 1 cereal brand • 5 oil and fats brands 3 sugar plants 1 oil and fats plant 7 pig farms (6 more to launch in 2019) 2 breeding farms 1 compound feed p