Kernel Holding S.a. · GPW:KER
Kernel — Q1 FY2018 Earnings Presentation
33 slides from Kernel's earnings presentation, November 2017
Slide 1: Q1 FY2018 results and company presentation
Q1 FY2018 results and company presentation November 2017
Slide 2: Disclaimer
Disclaimer The information in this document has not been independently verified and no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither th
Slide 3: 1. Q1 FY2018 results
1. Q1 FY2018 results
Slide 4: 1.1 Q1 FY2018 highlights
FY2018 Q1 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.1 Q1 FY2018 highlights During Q1 FY2018, our revenues increased by 39.6% y-o-y to US$ 536.1 million, primarily driven USD million except ratios and EPS Q1 FY2017 Q1 FY2018 y-o-y by higher sales volumes of sunflower
Slide 5: 1.2 Segment results
FY2018 Q1 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.2 Segment results Revenue, US$ million EBITDA, US$ million Volume, thousand tons 1 EBITDA margin, US$ / t Q1 FY17 Q1 FY18 y-o-y Q1 FY17 Q1 FY18 y-o-y Q1 FY17 Q1 FY18 y-o-y Q1 FY17 Q1 FY18 y-o-y Sunflower oil sold in b
Slide 6: 1.3 Harvest update
FY2018 Q1 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.3 Harvest update Combined landbank Acreage, thousand hectares Net yield, tons/ha1 Net tonnage, thousand tons FY2017 FY2018 y-o-y FY2017 FY2018 y-o-y FY2017 FY2018 y-o-y Corn 138.6 203.2 46.5% 8.9 6.5 (26.4%) 1,230.7 1
Slide 7: 1.4 Financial statements
FY2018 Q1 FY2018 Financials and results results Kernel today Kernel 2021 outlook 1.4 Financial statements Balance sheet highlights P&L highlights US$ million 30 Sep 2016 30 June 2017 30 Sep 2017 US$ million, except ratios and EPS Q1 FY2017 Q1 FY2018 y-o-y Invested Capital Revenue 384.1 536.1 39.6% C
Slide 8: 2. Kernel Today
2. KERNEL TODAY
Slide 9: 2.1 Kernel today
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.1 Kernel today Sunflower oil segment Key financials, US$ m1 FY14 FY15 FY16 FY17 LTM EBITDA 1, US$ million Revenue 2,393 2,330 1,989 2,169 2,321 #1 sunflower oil exporter in the world 213 EBITDA 223 397 346 319 293 #
Slide 10: 2.2 What we do
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.2 What we do 1 Own farming: Kernel 6 Bottled sunflower oil: 7 Export terminals: Kernel operates 600 thousand ha of Approximately 10% of gross operates farmland in Ukraine bulk sunflower oil produced is • Deep-water grai
Slide 11: 2.3 Unique and well-invested asset base
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.3 Unique and well-invested asset base Sunflower seed crushing capacity in thousand tons Transshipment capacity in thousand tons Poltava 429 Prykolotne 172 Vovchansk 363 Prydniprovskyi 560 Ellada1 275 Kirovogradoliya 429
Slide 12: 2.4 Kernel's key milestones
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.4 Kernel’s key milestones Asset-light Acquisition of IPO & listing Extending oilseed • Entering the Russian market by Exit of highly Acquisition of export platform sunflower oil brand on the Warsaw crushing capacity in
Slide 13: 2.5 Low risk platform
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.5 Low risk platform Key credit risks and mitigating factors Kernel has significantly deleveraged its balance sheet over recent years and has a current Kernel's export-oriented business model has leverage of net debt
Slide 14: 2.6 Sunflower oil segment
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.6 Sunflower oil segment Sunflower oil sales EBITDA margins Widening S&D gap keeps crushing margins under pressure, thousand tons US$ / ton of sunflower oil sold opening doors for market consolidation and streamlining
Slide 15: 2.7 Grain and infrastructure segment
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.7 Grain and infrastructure segment Grain exports, Grain segment’s EBITDA margin Grain: thousand tons Key export markets in FY2017 14.0 A record Ukrainian harvest, along with strong in- 5,060 12.5 4,744 4,409 4,684 10.
Slide 16: 2.8 Farming segment
Q1 FY2018 Financials and results Kernel Kernel today today Kernel 2021 outlook 2.8 Farming segment Acreage harvested by crop, Crop yields, thousand ha tons per ha, net Consistent application of modern farming 593 8.9 FY2017 FY2016 technologies, along with the favorable weather 44 7.27.2 FY2015 con
Slide 17: 3. Kernel 2021: a road to US$ 500 million EBITDA
3. Kernel 2021: a road to US$ 500 million EBITDA
Slide 18: 3.1 Kernel's mid-term strategy
Q1 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.1 Kernel’s mid-term strategy We aim to profitably double export volumes by FY2021, providing unique complex solutions to our clients (customers and suppliers), with balanced development of our business segments resulting
Slide 19: 3.2 Road to US$ 500m EBITDA by 2021 (1/2)
Q1 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.2 Road to US$ 500m EBITDA by 2021 (1/2) 1,753 FY17 FY21F Volumes due to greenfield construction of new crushing 1 1,040 920 1,030 984 1,084 Production kt 1,328 1,877 plant or acquisition of local player in Western Uk
Slide 20: 3.2 Road to US$ 500m EBITDA by 2021 (2/2)
Q1 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.2 Road to US$ 500m EBITDA by 2021 (2/2) Expansion CapEx, US$ m In October 2016 Kernel declared an extensive US$ 500m investment program to Silo network expansion 57 466 support Strategy 2021, reinforced with long-term
Slide 21: 3.3 Sunflower oil
Q1 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.3 Sunflower oil Strong case for the construction of greenfield crushing plant in Western Ukraine Extremely high crushing margins over the past 5-6 years drove substantial investment into the sector and Timeline for cap
Slide 22: 3.4 Grain and infrastructure
Q1 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.4 Grain and infrastructure Construction of TransGrainTerminal and new silos Timeline for capital deployment TransGrainTerminal highlights US$ millions Construction started in 2017 Silo construction Commissioning date
Slide 23: 3.5 Farming
Q1 FY2018 Financials and results Kernel today Kernel Kernel 2021 2021 outlook 3.5 Farming Integration of acquired leasehold land bank to uplift productivity to Kernel’s standard Expansion CapEx US$ millions US$ 128 million (adjusted for storage capacity and net working capital) has been Ukrainian
Slide 24: 4. Financials and outlook
4. FINANCIALS AND OUTLOOK
Slide 25: 4.1 Consolidated statement of profit or loss
Q1 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.1 Consolidated statement of profit or loss US$ million, except ratios and EPS FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 LTM Revenue 215 350 663 1,047 1,020 1,899 2,072 2,797 2,393 2,330 1,989
Slide 26: 4.2 Balance sheet
Q1 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.2 Balance sheet Balance sheet highlights 30 Sep US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 2017 Cash & cash equivalents 6 25 89 129 59 116 83 79 65 129 60 143 117 Net trade accounts
Slide 27: 4.3 Cash flow statement
Q1 FY2018 Financials Financialsand and results Kernel today Kernel 2021 outlook outlook 4.3 Cash flow statement US$ million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 LTM EBITDA 17 46 123 190 190 310 319 288 223 397 346 319 293 Net purchase of PP&E (6) 2 (24) (89) (56) (48) (93) (91
Slide 28: IR contact
IR contact Michael Iavorskyi Investor Relations Manager ir@kernel.ua Tel.: +38 (044) 461 88 01, ex. 7275 3 Tarasa Shevchenka Lane, Kyiv Ukraine, 01001 Investor calendar Annual general shareholders’ meeting 11 December 2017 Q2 FY2018 Operations Update 20 January 2018 H1 FY2018 Financial Report
Slide 29: Appendices
APPENDICES
Slide 30: A1. Key highlights
A1. Key highlights Kernel operates in globally competitive growing Ukrainian agri sector Integrated, resilient and simple business model built around scale & global reach Leader across all market segments supported by unparalleled world-class asset base with high barriers to entry Top standa
Slide 31: A2. Markets and business environment: sunflower oil
A2. Markets and business environment Sunflower oil Global edible oils market trends Global consumption of vegetable oils Global sunflower oil exports Following the global demographic trends, world consumption of vegetable 182 10.2 million tons million tons oils achieved healthy 2.5% y-o-y growth i
Slide 32: A2. Markets and business environment: grain and infrastructure
A2. Markets and business environment Grain and infrastructure Global trends Top 5 grain exporters from Ukraine Global grain exports 430 Top grain exporting countries 374 394 376 2013/14 2014/15 2015/16 2016/17 million tons 29 million tons 301 45 Nibulon Nibulon SFGCU Nibulon 23 29 31 43 44 40 Louis
Slide 33: A2. Low cycle of soft commodity prices
A2. Markets and business environment Low cycle of soft commodity prices Index of soft commodity prices, US$-inflation adjusted 300% 250% 200% 150% 100% 50% Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 1 2 3 Wheat Corn Sunflower oil Note 1.