34 slides from Pt Sinar Mas Agro Resources & Technology Tbk's investor presentation, 2006
Slide 1: Company Presentation
smart agribusiness and food
Slide 2: Disclaimer
Disclaimer PT SMART Tbk (the "Company", where in context, the "Company shall also mean all the subsidiaries of PT SMART Tbk), subject to the disclaimer below, uses its best endeavours to ensure the information stored on this website is accurate at the time of publication. The user accepts the inform
Slide 3: Disclaimer
Disclaimer Sophisticated Investors should be aware that any projections concerning potential rates of return and future performance of the Company and all statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company's
Slide 4: Investment Highlights
Investment Highlights The only Indonesian publicly-listed ♦ SMART is the only publicly listed palm oil player (in Jakarta & Surabaya Stock Exchange since 1992) with Integrated Palm-oil fully integrated operations. company ♦ Continuously growing company with “early prime” age profile (85% of “mature”
Slide 5: Investment Highlights
Investment Highlights Strong fundamental growth supported by increase in production volume CPO Production and FFB Yield/Ha EBITDA CAGR: 16% (’03 – ’05) 500 25 462 700 CAGR: 87% 450 20.9 (’03 – ’05) 603 400 386 20 600 343 350 18.2 470 500 16.1 300 15 000s tons 267 392 400 Tons (Rp Bn) 250 200 11.1 10
Slide 6: Table of Contents
Table of Contents SECTION 1 Corporate overview 6 SECTION 2 Industry overview 12 SECTION 3 Operational Overview 22 SECTION 4 Financial Overview 31 SECTION 5 Conclusion 34 GEN0190n.ppt 5 5
Slide 7: Corporate Overview
Section 1 Corporate Overview
Slide 8: Overview of SMART
Overview of SMART Publicly listed company in the Jakarta Stock Exchange and Surabaya Stock Exchange since 1992 Primary activities include cultivating and harvesting of oil palm trees, processing of fresh fruit bunch into crude palm oil (CPO) and palm kernel oil, and refining CPO into value-added
Slide 9: Corporate and Shareholding Structure
Corporate and Shareholding Structure Golden Agri-Resources Ltd. Listed in SGX 100% Public PT Purimas Sasmita Total consolidated planted area: 296,747 ha (holding company) 25.4% 74.6% PT SMART Tbk (25,288 ha) Total consolidated planted area:109,320 ha (Oil palm plantation, refineries and marketing) (
Slide 10: History of SMART
History of SMART ♦ CPO production reached ♦ CPO production 462,000 ton ♦ CPO production reached 314,000 ton ♦ FILMA received reached 158,000 ♦ Concentrated in main ‘Superbrands’ status Established ♦ Changed its name ton business by divesting and ‘Indonesian with the name tea and banana Customer Loya
Slide 11: Business Strategy
Business Strategy Improve ♦ Using high yielding seeds, agronomy best practices, improved planting, operational fertilizing techniques, harvesting, transportation and processing efficiencies efficiency ♦ Increase portion of CPO requirements sourced internally enhancing level of Increase cost integrat
Slide 12: Sales breakdown
Sales breakdown Expanding market reach to increase variety of product sales in domestic and regional markets Domestic vs. Export markets Sales breakdown by product Others 2% CPO 28% Export 43% Domestic 57% Refined 70% Export sales breakdown by region Branded vs Unbranded (Refined products) Others Af
Slide 13: Industry Overview
oa) smart 4 agribusiness and food Section 2 Industry Overview
Slide 14: Palm Oil's Growing Popularity as an Edible Oil
Palm Oil’s Growing Popularity as an Edible Oil Palm and kernel oil continue to be the world’s most produced and consumed edible oil No.1 produced edible oil … with fast growing consumption Others1 10.0% Lard 5.4% 8.8% 9.0% 5.3% Soybean 8.3% Butter 23.9% 8.0% 4.7% Tallow & grease 7.0% (2001 - 2005 CA
Slide 15: Edible Oils Industry
Edible Oils Industry Favourable growth opportunity for palm oil Edible oil consumption vs. GDP per capita1 60 40,000 Edible oil consumption per capita GDP/capita Edible oil consumption Kgs/capita 50.70 34,883 35,000 50 43.70 36,300 GDP per capita (USD) 30,000 40 25,492 34.40 25,000 30 Countries with
Slide 16: Indonesia will be the world's largest palm oil producer
Indonesia will be the world’s largest palm oil producer in the near future Producers of palm oil (million tons) Consumers of palm oil (million tons) 18.0 6.0 16.0 15.3 5.0 14.0 13.9 12.0 12.4 4.0 10.6 3.6 3.7 10.0 3.4 9.4 3.2 3.0 2.9 3.0 8.0 8.1 6.0 2.0 4.0 2.0 1.0 - - 2001 2002 2003 2004 2005 2006F
Slide 17: Numerous and Increasing Applications for Palm Oil
Numerous and Increasing Applications for Palm Oil Biodiesel is a new growing market. FRESH FRUIT BUNCHES MILL PROCESS PALM KERNEL Fruit Residues Technical Uses CRUDE PALM OIL Soaps, etc. Other Uses Crushing Extraction Fuel Being Researched Fractionation & Palm Kernel Meal Soaps Palm Kernel Oil Refin
Slide 18: Attractive Long-term Industry Prospects
Attractive Long-term Industry Prospects Europe is the main market for Bio Diesel consumption - The main driver in Europe is EU directive No.2003/30/EC, whereby mandatory blending of bio fuels by 31 Dec 2005: 2.00% and 31 Dec 2010: 5.75% World diesel fuel consumption is expected to increase to 1.
Slide 19: Higher yield - lower production cost
Higher yield - lower production cost Palm oil has the lowest cost of production amongst other vegetable oils, with SMART enjoying lower cost compared to the industry average 6 5 SMART Annual Yield per Hectare (tonnes) Palm Oil 4 3 2 Rapeseed Oil 1 Sunflower Oil Soybean Oil 0 100 200 300 400 500 600
Slide 20: Historical CPO Price Trend
Historical CPO Price Trend Average CPO price for the last 17 years was over US$ 400/ton 800 Low soybean oil China reduces import US soybean production duty on palm oil Bumper crop 700 600 (Prices US$/tonne) 500 Average (1989-July 2006) 400 palm oil price US$430/ton 300 200 China imports China reduce
Slide 21: Plantation development process
Plantation development process Long-term nature of the plantation process exerts high entry barrier Pre-survey Land Estate Design land/soil Acquisition & Land preparation Seed Nursery production 35 Mature FFB I Yield/ha 30 m 25 m Avg age of SMART plantation 20 a 15 t u 10 r 5 e Young Prime Old Plant
Slide 22: Indonesia Palm Oil Advantages over Malaysia
Indonesia Palm Oil Advantages over Malaysia INDONESIA MALAYSIA 1. Abundant and low land acquisition cost 1. Lack of land availability for plantations Land scarcity in Peninsular Malaysia Plantations being converted to residential/industrial usage 2. New Plantations on prime agricultural land 2.
Slide 23: Operational Overview
Section 3 Operational Overview
Slide 24: Fully Integrated Oil Palm Operations
Fully Integrated Oil Palm Operations Processed Basic product Processing product Branded & CPO Refining unbranded cooking oil Production No of refineries 267,063 tons 2 (1H 2006) Capacity1 Fatty acid 461,523 tons 840,000 tons/year Harvest/plantation CPO mill (2005) Stearin Palm kernel Planted area1 N
Slide 25: Company Operations Location
Company Operations Location SMART has 38 plantations, 12 CPO processing mills, 2 PK crushing mills, and 2 refineries well spread geographically throughout Indonesia… Kalimantan (in ‘000 ha) Planted area 48 Nucleus 48 Plasma - Mature area 37 Nucleus 37 Plasma - Sumatra (in ‘000 ha) Planted area 61 Nu
Slide 26: Plantation Overview
Plantation Overview Prime age profile of trees has resulted in high FFB production yield Total planted area (in ‘000 ha) 120 68% 100 17 5 6 11 6 85% 80 15% 5% 60 92 93 91 86 12% 40 Young 20 Immature Prime 0 Mature Old 2003 2004 2005 1H2006 Mature Young Immature Total planted area1 (in Ha, % of total
Slide 27: Advanced management monitoring system
Advanced management monitoring system To monitor its widely spread out operations, SMART has increased IT system in the early stage SMART implemented advanced SAP monitoring system throughout all regions in 1996 Block-by-block Performance Analysis is a method of identifying blocks of planted are
Slide 28: Excellent Operational Control and R&D
Excellent Operational Control and R&D SMART is the industry leader in operational control and R&D Yield & K Response Curve to MOP 30.0 Fertilizing program is supported by SMART’s advance research and consults 1.10 29.5 1.00 with specialists from CIRAD (a French company which specializes in crop K
Slide 29: Market Positioning
Market Positioning Based on plantation area FFB yield per hectare 350 100% 30 300 95% 25 250 91.0% 94.6% 90% 20.9 (000 hectares) 19.2 19.4 84.3% 85% 20 (ton/ha) 200 18 87.5% 15.5 80% 150 9 15 75% 100 17 183 70% 10 11 157 50 91 79 65% 5 0 60% 0 SMART Astra Agro PP London Minamas SMART Astra Agro
Slide 30: Strong Positioning of Refined Palm Oil Products
Strong Positioning of Refined Palm Oil Products Filma is Indonesia’s leading cooking oil brand SMART boasts 5 products in Indonesia including cooking oil and margarine, which are key products, and marketed under brands such as Filma and Kunci Mas SMART’s refined palm brands (Filma and Kunci Mas)
Slide 31: SMART's Portfolio
SMART’s Portfolio SMART has a broad portfolio of products and brands across multiple regions Total number of Major Countries Key Products Brands Descriptions products Cooking Oil, Filma, Kunci Mas, 2nd largest market share in INDONESIA 5 Margarine Palmboom Indonesia PHILIPPINES 1 Cooking Oil Golden
Slide 32: Financial Overview
Section 4 Financial Overview
Slide 33: Financial Highlights
Financial Highlights Strong revenue growth Improving EBITDA CAGR: 18% 700 5,000 (’03 – ’05) 4,657 CAGR: 87% 603 4,500 4,275 600 (’03 – ’05) 4,000 500 470 3,500 3,332 392 3,000 400 (Rp Bn) (IDRBn) 2,357 2,500 300 2,000 1,500 200 173 1,000 100 500 - - 2003 2004 2005 1H 2006 2003 2004 2005 1H 2006
Slide 34: Financial Highlights
Financial Highlights 2003 2004 2005 1H 2006 (Audited) (Audited) (Audited) (Unaudited) (in billion Rp, unless stated otherwise) Sales 3,332 4,275 4,657 2,357 Gross Profit 411 616 722 518 Operating income 117 283 301 314 Net income (loss) 70 (108) 304 371 Net income margin 2.1% -2.5% 6.5% 15.8% EPS -