Almarai Company · TADAWUL:2280
Almarai — Q1 2018 Earnings Presentation
26 slides from Almarai's earnings presentation, April 2018
Slide 1: Almarai Company Interim Results – 1st Quarter 2018
Almarai Company Interim Results – 1st Quarter 2018
Slide 2: Disclaimer
Disclaimer Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or lia
Slide 3: Macro Environment
Sa incl oll Almarai ~_ Macro Environment
Slide 4: Main Events Q1 2018
Main Events Q1 2018 • Introduction of VAT • Higher uncertainty amid multiple reforms and macroeconomic changes • Lower consumer confidence/sentiment and slower market growth, especially within discretionary categories • Growth in the quarter adversely affected by contraction in export markets • Good
Slide 5: Almarai Gaining Market Share Despite Declining KSA Food Market
Almarai Gaining Market Share Despite Declining KSA Food Market MAT Category Almarai MAT Val. Almarai Rank • Almost all of the Dairy and Foods categories are growth (Value)% Shr Change (Value) declining in KSA in MAT Feb 2018 compared to MAT PLAIN REGULAR LABAN -12.3% +1.5 1 Feb 2017. PLAIN FRESH MIL
Slide 6: Business Highlights
Sa incl oll Almarai ~_ Business Highlights
Slide 7: Highlights
Highlights 3.8 Net Sales 1.0 Operating Income 3.6 3.4 3.4 SAR in Billion SAR in Billion 3.8 3.4 3.4 3.2 0.8 0.8 0.5 3.2 0.6 0.5 3.0 0.4 2.8 - Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 2013 Last 5 Quarters Last 5 Quarters SAR 11.2 B +12.4% 1.0 Free Cash
Slide 8: Sales Trends
Sales Trends
Slide 9: Sales Analysis by Product – Q1
Sales Analysis by Product – Q1 By Product 2017 By Product 2018 -1% +3% Poultry Poultry Bakery 356 Bakery 421 469 10% Other Sales 416 13% Other Sales 14% 13% Cheese, 64 49 Butter & 2% Cheese, 2% Cream Butter & 538 = Cream 16% SAR 3,384 529 SAR 3,232 Million 16% Million Fresh Dairy Fruit Juice Fresh D
Slide 10: Sales Analysis by Product – Q1
Sales Analysis by Product – Q1 Growth % of Total Net Sales in SAR Million SAR in Million 2018 vs 2017 Growth 3,384 3,232 Fresh Dairy (141) (4%) ( YoY -11%) Cheese, Butter & Cream (10) (0%) 39% 36% ( YoY -2%) Bakery (53) (2%) ( YoY -11%) Poultry 64 2% 16% 16% ( YoY +18%) Fruit Juice (14) (0%) 13% 14%
Slide 11: Sales Analysis by Country – Q1
Sales Analysis by Country – Q1 By Geography 2017 By Geography 2018 +1% = = = Kuwait Egypt Kuwait Egypt 161 158 Bahrain Export / Oman 163 Qatar 127 Export / +1% 5% 5% 79 = Others 4% Bahrain Oman 33 173 5% 172 Others UAE 2% 71 171 1% 5% 5% Jordan 28 339 Jordan UAE 2% 5% 1% 11% 55 336 62 2% 10% 2% SAR
Slide 12: Sales Analysis by Country – Q1
Sales Analysis by Country – Q1 SAR in Million Gro w th % o f To ta l 2 018 vs 2 017 Gro w th Net Sales in SAR Million KSA (1 5) (0% ) 3,384 3,232 ( YoY -1%) UAE 4 0% ( YoY +1%) Oman (2) (0% ) ( YoY -1%) Kuwait (3) (0% ) 66% 69% ( YoY -2%) Egypt 31 1% ( YoY +24%) Qatar (1 72) (5% ) ( YoY -100%) Bahra
Slide 13: Innovation Pipeline Q1, 2018
Innovation Pipeline Q1, 2018 Almarai Company 2018 Q1 Earnings Presentation 13
Slide 14: Financial Highlights
Sa incl oll Almarai ~_ Financial Highlights
Slide 15: Operating Performance
Operating Performance Profit Attributable to Gross Profit Operating Income Shareholders % to Sales 34.8% 38.8% 4.0 pp 12.4% 14.9% 2.4 pp 9.7% 10.6% 09 pp SAR Million SAR Million SAR Million 481 1,253 421 344 1,177 +60 328 +75 +16 +14.1% +6.4% +4.8% Q1, 2017 Q1, 2018 Q1, 2017 Q1, 2018 Q1, 2017 Q1, 20
Slide 16: Statement of Income
Statement of Income 1st Quarter SAR million 2017 2018 Change Net Sales 3,384 100.0% 3,232 100.0% (4.5%) Cost of sales (2,206) (65.2%) (1,979) (61.2%) 10.3% Gross Profit 1,177 34.8% 1,253 38.8% 6.4% Selling and Distribution Expenses (601) (17.8%) (598) (18.5%) 0.6% General and Administration Expenses
Slide 17: Segment Reporting
Segment Reporting Almarai SAR Million Dairy & Juice Bakery Poultry Other Activities Consolidated Q1 2018 Net Sales 2,346 416 421 49 3,232 Depreciation and Amortisation (316) (61) (81) (42) (501) Profit Attributable to Shareholders 281 40 25 (2) 344 Percent to Net Sales of Profit Attributable to Shar
Slide 18: Net Income by Segment
Net Income by Segment Basic EPS* (SAR) 0.31 0.33 400 51 344 350 328 (62) 55 SAR Million 300 (27) 250 200 150 100 Q1, 2017 Dairy & Juice Bakery Poultry Other Q1, 2018 Net Sales Growth (5.9%) (11.2%) 18.0% (23.2%) (4.5%) Net Income Growth (18.1%) (40.4%) 187.3% 96.1% 4.8% Net Income % 12.0% 9.6% 6.0%
Slide 19: Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan
Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan CAPEX spend for the 1st Quarter Year to Date 2018 was SAR 0.5 Billion. • Manufacturing and Farming spent CAPEX of SAR ~0.2 Billion for various capacity expansion projects. • Sales Depot, Poultry and Logistic
Slide 20: Cash Flow Bridge – Rolling 12 Months
Cash Flow Bridge – Rolling 12 Months Q1,2018 Free Cash Flow = SAR 60M (SAR350M over 2017) 4,555 (547) (2,919) Loans Issues / Payments / Charges (718) CAPEX / Biological 16 1,006 620 Assets Dividend Others Operating Cash Flow Cash at 31 Cash at 31 Mar 2017 + SAR 386 Million Mar 2018 Almarai Company 2
Slide 21: Key Trends
Key Trends
Slide 22: Net Debt
Net Debt 12,000 350% 3.1x 3.0x 2.8x 2.8x 2.7x 2.8x 2.8x 300% 10,000 2.7x 2.7x 250% 8,000 200% SAR Million 6,000 150% 4,000 98% 101% 75% 75% 74% 81% 81% 73% 71% 100% 2,000 50% 6,653 8,237 8,053 8,762 9,344 10,889 10,883 10,910 10,924 0 0% 2011 2012 2013 2014 2015 2016 2016 2017 Last 12 Months SOCPA I
Slide 23: Quarterly Performance – Net Income Trend Analysis
Quarterly Performance – Net Income Trend Analysis 2018 versus 2017 800 700 658 674 664 667 # # 595 655 600 629 530 539 536 513 500 476 484 # 450 489 SAR Million Q1 = 4.8% 433 425 430 428 400 398 380 369 373 344 343 349 328 * 306 309 300 274 # 284 286 289 235 242 255 200 100 0 # IFRS revaluation adju
Slide 24: EBIT and EBITDA margins are starting to improve…
EBIT and EBITDA margins are starting to improve… Net Sales, EBITDA and EBIT Evolution CAGR 2011 – 2018: 9.2% (w/o impact of acquisitions 5.9%) Net Sales EBIT % to Net Sales 14,699 14,339 EBITDA % to Net Sales 13,795 13,936 13,784 24.4% 12,606 29.0% 28.1% SAR Million 25.6% 11,219 25.3% 26.0% 24.2% 23
Slide 25: Key Share Data
Key Share Data 30% Year to date total shareholder's return since listing 25% 20% 17% Savola 15% 450% 25% 35% 10% Dec-11 Dec-10 Dec-15 Dec-13 Dec-14 Dec-17 Dec-16 Dec-07 Dec-12 Dec-08 Dec-09 Mar-18 400% Key Statistics for Almarai (29 March 2018) HHPrince Sultan bin 350% Share Price (SAR) 55.38 Mohamm
Slide 26: Thank you
For Investor Relations matters please contact: investor.relations@almarai.com “We will encourage our major corporations to expand across borders and take their rightful place in global markets” QR Code for Almarai IR App. www.almarai.com Thank you