Olam Group Limited · SGX:VC2
Olam — Olam International — Shareholder Meeting (April 2016)
36 slides from Olam's shareholder meeting presentation, Apr 25, 2016
Slide 1: 21st Annual General Meeting
21st Annual General Meeting Olam International Limited 25th April 2016 I Singapore
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward looking nature and are therefore based on management’s assumptions about future developments. Such forward
Slide 3: Presentation Outline
Presentation Outline 1 Strategy & Performance Review (18M, Jul 2014 - Dec 2015) 2 Strategic Plan (FY2016 - FY2018) 3 The Olam Way 3
Slide 4: Strategy & Performance Review: Key Highlights
Strategy & Performance Review: Key Highlights 1 Strengthened and re-aligned our shareholder base 2 Continued to invest in our Strategic Priorities 3 Continued to grow talent and capabilities 4 Delivered strong Operational Performance 5 Executed Initiatives to unlock value and release cash 4
Slide 5: Strengthened & re-aligned our shareholder base
1 Strengthened & re-aligned our shareholder base Implications 14 Mar 2014 Stronger balance sheet: Temasek-led group offers $2.1 Raised S$915M of new equity growth capital billion for remaining Olam shares which provides us the financial capacity to achieve our growth ambitions Secured long term shar
Slide 6: Continued to invest in our Strategic Priorities
2 Continued to invest in our Strategic Priorities Acquired Amber Foods Ltd, Acquired ADM cocoa leading wheat miller and processing business for US Acquired More than Amber McCleskey doubled Foods Mills, coffeeLtd, manufacturer, for $275M US$275M $1.2B US$1.2B Acquired ADM cocoa leading third-largest
Slide 7: Continued to grow talent & capabilities: Upstream
3 Continued to grow talent & capabilities: Upstream Building our Team Victor Eremtsov (79 managerial FTEs) Investing in Research Global scientific innovation prize Upstream CoP Codifying knowledge and leveraging CoP* * COP = Communities of Practice 7
Slide 8: Continued to grow talent & capabilities: Trading
3 Continued to grow talent & capabilities: Trading Building our Team (127 traders) Trading CoP Codifying knowledge and leveraging CoP* Enhancing Enhanced risk Aligned KPIs our systems and management and incentive processes systems structures * COP = Communities of Practice 8
Slide 9: Continued to grow talent & capabilities
8_84 5_84 6_84 174_84 186_84 194_84 204_84 3 Continued to grow talent & capabilities Capability Building Capability Other Enhanced Enhanced Governance Model Building Highlights through Governance through CoP’s CoP’sModel Other Highlights Board Renewal Board Renewal Formalised ‘Olam Way’ Formalised ‘
Slide 10: Delivered strong Operational Performance
4 Delivered strong Operational Performance 18M FY15 12M 2015 12M 2014 12M % Change Revenue 28,230.6 19,052.6 19,772.0 (3.6) EBITDA 1,625.4 1,122.8 1,106.6 1.5 Depreciation & Amortisation (342.0) (237.1) (209.8) 13.0 Net Finance costs (677.8) (448.9) (474.5) (5.4) Taxation (137.9) (105.9) (94.9) 11.6
Slide 11: Delivered strong Operational Performance
4 Delivered strong Operational Performance Strong growth in Operational PATMI; up 20.1% to S$346.2 million (12M 2014: S$288.1 million) Reported PATMI recorded a loss of S$64.3 million on account of exceptional items (S$397.0 million net loss in 12M 2015 vs S$302.9 million net gain in 12M 2014) Detai
Slide 12: Change in basis of presentation of PureCircle Limited
4 Delivered strong Operational Performance: (Change in basis of presentation of PureCircle Limited) PureCircle was classified as an “available-for-sale” asset in Q1 2014 All fair value changes on the PCL investment between March 18, 2014 and September 30, 2015 were recorded under Other Comprehensive
Slide 13: Executed Initiatives to unlock value & release cash
41_84 68_84 43_84 42_84 69_84 73_84 77_84 81_84 109_84 5 Executed Initiatives to unlock value & release cash Capex Balance Sheet Change Unlocking Value Recalibration Optimisation Portfolio Shape ChangeCapex Balance Land asset Land Portfolio asset sale Recalibration Sheet Unlocking sale and and Shape
Slide 14: Presentation Outline
Presentation Outline 1 Strategy & Performance Review (18M, Jul 2014 - Dec 2015) 2 Strategic Plan (FY2016 - FY2018) 3 The Olam Way 14
Slide 15: Large and diversified agri-complex where we have a unique participation
Large and diversified agri-complex where we have a unique participation Olam participating in ~26% of ~US$5.9T agri-industry Significant Olam participation Limited Olam participation No Olam participation 15
Slide 16: No major shifts in key agri-trends since the last plan
No major shifts in key agri-trends since the last plan Demand Factors Supply Factors Growing population driving Growing scarcity of arable land demand growth Increased calorie consumption Slowing rate of agricultural driven by income growth & productivity improvement urbanisation Impact of climate c
Slide 17: Industry landscape: Key implications
Industry landscape: Key implications Overall, agri is a slow but No major shifts in the Africa remains an steady growth sector macro agri-trends over attractive opportunity for the past 3 years, though us – the market has Larger players are some trends are strong underlying growing because of accele
Slide 18: Our Strategy: Context & Background (1/2)
Our Strategy: Context & Background (1/2) We transitioned from being a pure supply chain manager (asset light) to a selectively integrated player (asset medium), to access more attractive profit pools and improve overall portfolio returns. Many of our investments were made at attractive valuations (p
Slide 19: Our Strategy: Context & Background (2/2)
Our Strategy: Context & Background (2/2) In six short years, we have built a differentiated and uniquely shaped portfolio in terms of products, geographic participation and selective value chain integration. We have also built a strong and experienced team with a proven track record, a strong entrep
Slide 20: Our Strategy: What is our 'Core'?
Our Strategy: What is our ‘Core’? Distinctive Capabilities SC*/Midstream Strong sourcing & origination capability Strong customer relationships Trading & Supply-Demand analysis capability Processing / Manufacturing capability Logistics (Inland & Marine) skills Robust risk management capability Cost
Slide 21: Our Strategy: How are we differentiated?
Our Strategy: How are we differentiated? Focus on niche commodities & niche businesses with leadership Adopt defensible niche strategies in mainstream commodities Unique Africa footprint and operating capabilities Out-origin our competition - buying at the farm-gate Provide value added solutions and
Slide 22: Guiding principles for capital allocation and portfolio shape
Strategic Plan FY2016-18: Guiding principles for capital allocation and determining portfolio shape Address areas where performance has not met expectations Double down on strong BUs to strengthen leadership Focus new investments on areas where we have the highest winnability and returns Streamline
Slide 23: Portfolio organised into clusters
Strategic Plan FY2016-18: Portfolio organised into 4 clusters Each ‘cluster’ of BUs has different strategic imperatives Cluster Cluster 11 Cluster Cluster Cluster22 4 Cluster 3 Cluster 3 Cluster Cluster 44 Business Businessunits unitsininattractive attractivemarkets markets Cluster Cluster Strategic
Slide 24: Portfolio organised into clusters: strategic imperatives
Strategic Plan FY2016-18: Portfolio organised into 4 clusters Each ‘cluster’ of BUs has different strategic imperatives C1 C2 C3 C5 Accelerate Ensure Prove model investments minimum Prioritise before to achieve profit size & Africa scaling leadership high returns C4 Deconsolidate/ Monetize 24
Slide 25: Cluster 1: Accelerate investments to achieve leadership
2_84 7_84 4_84 6_84 8_84 9_84 252_84 264_84 334_84 340_84 353_84 359_84 493_84 499_84 512_84 518_84 531_84 537_84 550_84 Cluster 1: Accelerate investments to achieve leadership Edible Nuts: Edible Extend Leadership Nuts: Extend Leadership Cocoa: Be Cocoa: Be the the Leading Leading Deepen Existing G
Slide 26: Cluster 2: Prove model before scaling
Cluster 2: Prove model before scaling Palm & Rubber: PFB: Dairy: CFSG: Leverage Africa as a Participate in African Improve Performance to Leverage Existing Dairy: Globally CFSG: Palm Competitive Leverage & Rubber: Improve Existing Leverage Performance PFB:Consumer Capabilities Africainas to Story Ex
Slide 27: Cluster 3: Ensure minimum profit size and high returns
2_84 4_84 6_84 129_84 135_84 176_84 182_84 195_84 261_84 274_84 Cluster 3: Ensure minimum profit size and high returns Rice Rice Wood Wood Wood Rice Sugar Sugar Sugar Deepen Deepenposition positionininMiddle MiddleEast East Low Lowinvestment investmentLatAm Latammodel model Maintain Maintainasset as
Slide 28: Cluster 5: Prioritise Africa, focus as a separate vertical
6_84 3_84 4_84 9_84 107_84 113_84 119_84 125_84 131_84 18_84 Cluster 5: Prioritise Africa, focus as a separate vertical Leverage Africa as a Supply Food Leverage Staples Africa as& a Globally Participate in Competitive Invest in Africa Agri Globally Competitive Supply Invest Participate Food in Afri
Slide 29: Four new competencies critical to delivering our Vision
Four new competencies are critical to delivering our Vision New competencies World’s Superior Capital Project Best Trading Structure Mgmt. Planter Capabilities Innovation Excellence Growth Privileged Existing Origination, trading, enabling assets & networks Effective competencies skills (4M farmers
Slide 30: Presentation Outline
Presentation Outline 1 Strategy & Performance Review (18M, Jul 2014 - Dec 2015) 2 Strategic Plan (FY2016 - FY2018) 3 The Olam Way 30
Slide 31: Our Goals and Objectives
Our Goals and Objectives Why are we in business? Our Governing Objective What is our aspiration? Our Vision How do we do business? Our Purpose 31
Slide 32: Our Governing Objective: Why are we in business?
Our Governing Objective: Why are we in business? To maximise long term intrinsic value for our continuing shareholders Three key drivers Open up capital spread Increase the rate of profitable growth Increase duration of growth 32
Slide 33: Our Vision: What is our Aspiration?
Our Vision: What is our Aspiration? To be the most differentiated and valuable global agri-business by 2040 First Aim to grow differentiate TSR by 10% before you CAGR over the scale next 24 years 33
Slide 34: Our Purpose: How do we do business?
Our Purpose: How do we do business? Our purpose is to grow responsibly We ensure profitable growth is achieved in an ethical, socially responsibly and environmentally sustainable manner This is integral to our business model and woven into everything we do 34
Slide 35: Our Soul and Spirit
Our Soul and Spirit What are our desirable modes of conduct? Our Shared Values What do we stand for? Our spirit is to be an insurgent in our industry. We are not afraid to disrupt the status quo. We are pioneers, inventing and innovating to create Our Spirit solutions for our suppliers and customers
Slide 36: Olam
AA Olam
Olam International — Shareholder Meeting (April 2016) on 6ix