Almarai Company · TADAWUL:2280
Almarai — FY2020 Earnings Presentation
55 slides from Almarai's earnings presentation, December 2020
Slide 1: Almarai Company Full Year 2020 Earnings Presentation
Almarai® Company Full Year 2020 Earnings Presentation
Slide 2: Disclaimer
i Ar CncloJl Almarai. 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. We do not make any representation regarding, and assume no responsibility o
Slide 3: Contents
NO (ncl,oJl Almarai Contents Market Dynamics Business Performance Financial Performance Question & Answer Appendix Full Year 2020 Earnings Presentation
Slide 4: Market Dynamics
» Pit Full Year 2020 Earnings Presentation
Slide 5: Almarai response to COVID-19 Pandemic
Almarai’ response to COVID-19 Pandemic Almarai to deliver “Quality you can trust” to its consumers whilst being integral to the nation’s food security. Minimize business disruption and plan for a post crisis global economy. Protect our consumers and employees from any possible harm. Key actions take
Slide 6: Speed of recovery from COVID-19
1 “Recovering Economy” GDP 3 “Resurgent Economy” GDP Virus contained but sector damage; lower LT trend growth Virus contained; strong growth rebound TIME TIME Economics Almarai Economics Almarai • Strong GDP Growth • Strong Growth in Revenue and Market Share • Moderate GDP growth • Resize Business •
Slide 7: Almarai Value Share %
Almarai Value Share % Category Whilst | Dec-18 Almarai maintai Dec-19 Nov-20 Laban 65 65 63 1 Fresh Milk 69 67 64 1 UHT Milk 20 21 19 2 Food 36 39 37 1 Juice 43 43 43 1 55 54 53 41 37 36 Bakery Poultry (Fresh Chicken) Q4 2020 Earnings Presentation 7
Slide 8: Almarai Rating
Almarai® Rating No.1 Company Almarai Company Saudi Basic Industries Corp The Saudi Investment Bank Saudi Telecom Co. Sahara Inter, Petro National Industrialization Co. Zain KSA Saudi Electricity Company Jarir Marketing Co Saudi Arabian Mining Co Metals and Mining
Slide 9: Business Performance
og te ay a 3 Full Year 2020 Earnings Presentation
Slide 10: Q4 Financial Highlights
Revenue Operating Profit Net Income 3,820 500 336 +3% +0% +8% YoY Growth YoY Growth YoY Growth Q4 Financial Highlights
Slide 11: Q4 Top Line Growth
Q4 280 Q4 Top Line Growth
Slide 12: Q4 2020 Sales Bridge
Q4 2020 Sales Bridge SAR Million Reported Growth +3% | 0% 1% 3,820 2 3,704 (2%) 2% % Lea Like-for-like growth +2% Volume Price Mix Currency Others Q4 2020 Q4 2019 YoY %/ (YOY%) Qe eloll Q4 2020 Earnings Presentation Almarai ,,
Slide 13: Almarai top line growth by country
Almarai top line growth by count Q4 2020 Revenue Growth (SAR Million) KSA Others Total Revenue 2,467 566 3,820 % of Revenue 65% 15% 100% Growth -1% 42% 3% -16% +166 -25 +116 (SAR Million) G6) rst cncloJ Almarai
Slide 14: Q4 revenue growth by country
However Egypt and an grow Q4 2020 Total Revenue - SAR 3,820 Million Q4 2020 Total Growth -( SAR 116M (+3%) f 13% and 34% contributed the most to topline Q4 (1%) (3%) 13% 4% (16%) 34% 9% 137% 3% FY2020 6% 2% 16% 12% (12%) 31% 4% 62% 7% 1 ! I Jordan Bahrain Others : 5% | (138) (3%) «13% 4981696) 34% =
Slide 15: Fresh Dairy, LL Dairy, Foods and Juice contributed the most to topline growth
Fresh Dairy, LL Dairy, Foods and Juice contributed the most to topline growth Q4 2020 Total Revenue - SAR 3,820 Million Q4 2020 Total Growth -( SAR 116M (+3%) Other Sales 3% Fruit Juice 9% 4% (2%) 3% (9%) 11% 4% 62% 58 47 c 38 Long Life 2 [| 15 15 Dairy 2 1) oe) || = 10% Fresh Dairy oS || 36% Fresh
Slide 16: Modern Trade channel growth was a key highlight for the quarter
Modern Trade channel growth was a key highlight for the quarter Q4 2020 Total Revenue - SAR 3,820 Million Food Service 13% Other/ Exports 11% Traditional Trade 51% Q4 2020 Total Growth -( SAR 116M (+3%) (1%) 1% 45% 123 = g (13) 9 ) — Traditional Trade Modern Trade Food Service Other / Exports Total
Slide 17: Full Year Financial Highlights
Revenue Operating Profit Net Income - 15,357 2,522 1,984 +7% +2% +10% YoY Growth YoY Growth YoY Growth Full Year Financial Highlights 17
Slide 18: Revenue: Full Year Top Line Growth
Revenue 15,357 +7% FY 280 Full Year Top Line Growth
Slide 19: Full Year 2020 Sales Bridge
Full Year 2020 Sales Bridge | Reported Growth +7% | 1% 0 0% 15,357 2 % 14,351 4% % | 8 = c Fi Like-for-like growth +7% FY 2019 Volume Price Mix Currency Others FY 2020 tacholl YoY %/(YoY%) 4 2020 Earnings Presentation Almarai’ ;,
Slide 20: Almarai topline grew in all countries except Oman
Almarai topline grew in all countries except Oman... Full Year 2020 Revenue Growth (SAR Million) KSA Others Total Revenue 10,286 1,873 15,357 % of Revenue 67% 12% 100% +16% Growth 6% 29% 7% +10% in LC (12%) +423 +549 (41,006 (SAR Million) Ucholl Q4 2020 Earnings P Almarai’ 5
Slide 21: All Countries are showing growth except Oman
All Countries are showing growth except Oman Growth % - FY 2019 SAR Million = - w 2 KSA Kuwait UAE Bahrain Oman Other Countries FY 20. 20 YoY %/ (YOY%) Q4 2020 Earnings Presentation 21
Slide 22: All categories performed well except for Bakery
.. All categories performed well except for Bake (Grows —> | 158] (8H 2m | 2%) [60% | | 7% | 161 132 58 . — ne | ee | oe o | | opr 00! FY 2019 Food Long Life Poultry Fresh Dairy — Fruit Juice _ __ _ Dairy tacholl YoY %/(YoY%) 4 2020 Earnings Presentation Almarai’ >
Slide 23: Revenue by channel
SAR in Million FY 2019 Traditional Trade Modern Trade Export Food Service Others FY 2020
Slide 24: Financial Performance
Full Year 2020 Earnings Presentation
Slide 25: Resilient Financial Performance Despite Pandemic
Revenue Operating Profit Net Income 3,820 15,357 500 2,522 +3% +7% +0% +2% u————_ u—_—_ YoY Growth YoY Growth Resilient Financial Performance Despite of Pandemic 25
Slide 26: Financial Performance Q4 and FY 2020
Financial Performance - Q4 2020 vs. Q4 2019 SAR Million 3% 0% — — Revenue Operating Profit 0 | 500 FY 2020 vs. FY 2019 YoY %/ (YOY%) SAR Million 7% %to Revenue 16% 2,522 | 020 8% Net Profit 10% 13% Net Profit 1,984 | Q4 2020 Earnings Presentation Revenue - Resilient post VAT & pandemic E Maintain ma
Slide 27: Gross profit chart
• 11 ,0 00 10 ,8 00 • 10 ,6 00 • 10 ,4 00 10 ,2 00 10 ,0 00 • 9,80 0 1,48 0 14% 1,47 0 14% 14% 1,46 0 14% 1,45 0 14% 1,44 0 14% 1,43 0 14% 1,42 0 13% 1,41 0 13% 1,40 0 13%
Slide 28: Operating profit chart
• 1,80 0 1,78 0 1,76 0 1,74 0 1,72 0 1,70 0 1,68 0 • 1,66 0 1,64 0 1,62 0 1,60 0 26 0 14% 13% 25 0 13% 24 0 13% 13% 23 0 13% 22 0 13% 13% 21 0 13% 20 0 13%
Slide 29: Net income chart
• 2,35 0 2,30 0 • 2,25 0 2,20 0 2,15 0 • 2,10 0 2,05 0 2,00 0 40 0 16% 14% 35 0 12% 30 0 10% 25 0 8% 6% 20 0 4% 15 0 2% 10 0 0%
Slide 30: Growth chart
45 0 • 40 0 35 0 30 0 25 0 20 0 15 0 10 0 50 0 • 0% -2000% -4000% -6000% -8000% -10000% -12000%
Slide 31: Working Capital, Capex, Free Cash Flow
Working Capita! Capex Free Cash Flow 3,048 3,623 1,650 969 2,373 2,830 +21% +24% 11% 6% +17% +18% u—_—_—— uU—_—— UI % of Revenue % of Revenue % of Revenue Strong Financial Management 31
Slide 32: Highlights on Balance Sheet and Cash Flow
SAR Million Net Operating Assets 2019 2020 27,275 27,095 Operating Cash Flow 2019 2020 4,732 4,203 +33% +27% uU——_————_ % of Revenue a. \7 choll Almarai. Bo Highlights on Balance Sheet and Cash Flow
Slide 33: Capex continues to decline
CAPEX continu Capital Investment 2015 to 2020 SAR Million 29% 30% 3,986 2015 2016 2017 2018 2019 2020 maNet Cash Used in Investing Activities -e-Investment as a % of Net Sales ° Capex cash spend continues to decline in line with current 5 year plan and available capacity footprint New Capex approved
Slide 34: Free Cash Flow remains strong
Free Cash Flow remain strong [___frce Cashew = $A 75 CashFlow=SAR28B (0.5) OperatingCashFlow Working Capital SAR Billion 0.4 a Cash 31 Dec 2020 0.3 as Cash 31 Dec 2019 let Payment for Funding Cost and Debt (SAR 0.0 Billion) > Full Year 2020 Free Cash Flow = SAR 2.8B °* OCF: SAR +4.2 Billion... Busin
Slide 35: Net Debt and EBITDA/EBIT Margins trend
Net Debt and EBITDA/ EBIT Margins trend Net Debt Trend EBITDA and EBIT Margins 3.2x ter 2018 2019 2020 miNet Debt (SARM) Net Debt/Equity Ratio «Net Debt / EBITDA 30% 28% 2018 2019 2020 mNetSales(SARM) @EBITDA%toNetSales EBIT % to Net Sales * Net of Time Deposit Q4 2020 Earnings Presentation
Slide 36: Debt Maturity Profile
Debt Maturity Profile highlights average debt tenure at 3.86 Years (SAR Billion) Debt Maturity by Age and Type (10: 34! = fo.s! = 2.7) fo7i 19 0.4 0.3 0.3 03 0.6 0.5 0.5 0.4 Upto 1Yr 1-2 Yrs 2-3Yrs 3-4 Yrs 4-5 Yrs mBanks mGovt/SemiGovtInst. gj Islamic Bonds >5 Yrs m Banks 23% @ Govt / Semi Govt Inst
Slide 37: Strong balance sheet to support future growth
Strong balance sheet to support future growth WMcholl 1 Strong - 2.7xNet Debt to EBITDA as at Q4 2020 = ~ investment grade BBB-(S & P), Baa3 (Moody's) with stable Outlook Almarai 2 Successful + SAR 787 MLocal Sukuk settled on 31st Mar 2020 Refinancing * SAR 850M Dividend payment Significant 3 * SAR
Slide 38: Cash Dividend Since Listing
Cash Dividend Since Listing 13% 45% 3 411% 42% — 42% any 40% 36% 36% 35% s = c < no 2006 2007 2008 2009 2010 2011 2012) 2013) 2014 = 2015 Cash Dividends Payout Ratio Q4 2020 Earnings Presentation AT% 42% 35% 34% 720 750 850 850 2016 2017 2018 2019 2020 * 2020 Cash Dividendis subject to AGM Approval
Slide 39: Full Year 2020
= . : Full Year 2020 Earnings Presentation
Slide 40: Key Market Data
Key re Data Key Statistics for Almarai (31 Dec 2020) m Savola Year to date total shareholder's return since listing 30% Share Price (SAR) 54.90 os © P/E Ratio (ttm) 2 m HHPrince Sultan sone 14 urren ati tim " bin Mohammed tov % Earnings Per Share (SAR) (ttm) 2.02 A. = PIF tow Market Cap (SAR Million
Slide 41: Full Year 2020
Full Year 2020 Earnings Presentation
Slide 42: Current Performance
Current Performance ° Top line performance remains positive in 4" quarter however it came off the high growth achieved earlier in the year * Gross Profit remained under stress due to alfalfa and COVID-19 related costs pressure. Cessation of subsidies impacted both dairy and poultry segment resulting
Slide 43: Key Challenges & Opportunities
Key Challenges & Opportunities ° Pricing and product rationalization post VAT and subsidy phase out experienced in Q4 2020 ° Maintain positive momentum in Food service market in 2021 and further expand in export markets ° Manage opening-up of new territories within the GCC ° Utilize strong cash gene
Slide 44: Question & Answer
Full Year 2020 Earnings Presentation
Slide 45: Appendix
Full Year 2020 Earnings Presentation
Slide 46: Financial Highlights
(ncholl Revenue Almarai Q42020 FY2020 3,820 15,357 5 +3% +7% = uU——_—+ S YoY Growth o : : <t_ Working Capital Capex ep) 2019 2020 2019 2020 3,048 3,623 1,650 969 +21% +24% 11% 6% u,-——— UU, % of Revenue % of Revenue Financial Highlights
Slide 47: Full Year revenue growth by country
growth of 6% co Full Year 2020 Total Revenue - SAR 15,357 Million ributed the most to topline Full Year 2020 Total Growth -(SAR 1,006M (+7%) Bahrain 2% Others 3% Q4 2020 Earnings Presentation 1 1 | YoY % /(YOY%) | 6% 2% 16% 12% (12%) 31% 4% 62% H 1 1 1 & 193 I S 139 9¢ 92 { & 24 90) 15 H 3 42 © mm *
Slide 48: Foods, LL Dairy & Poultry contributed the most to topline growth
Foods, LL Dairy & Poultry contributed the most to topline growth Full Year 2020 Total Revenue - SAR 15,357 Million Full Year 2020 Total Growth -(SAR 1,006M (+7%) YoY %/ (YOY%) Fruit Juice Other Sales 2% 15% 8% ~——(2%6)-—=s«18%— 3% = 60% 1 1 1 1 1 1 9% 3% | 321 1 1 Long Life | g oO 168 CO Dairy H ‘i
Slide 49: Modern Trade channel growth was a key highlight
Modern Trade channel growth was a key highlight for 4 Quarters Full Year 2020 Total Growth -(SAR 1,006M (+7%) Full Year 2020 Total Revenue - SAR 15,357 Million Food Service 11% 4 Other / Exports 5% Traditional Trade 58% ee” 1 1 | YoY % /(YOY%) 7™% 10% (3%) 20% i 571 5 iF 357 1 = 3 i” (56) = H ° || 1
Slide 50: Revenue by geography and category
All countries recorded positive result except Oman.... while all categories recorded positive results Except Bakery Revenue By Geography - SAR Million Revenue By Category - SAR Million Bahrain ~ Others Long Life Dairy FY 2019 FY 2020 Share % je | Shares cnceoll YoY %/ Almarai Q4 2020 Earnings Presen
Slide 51: Profit & Loss Statement - Full Year 2020
Profit & Loss Statem - Full Year 2020 4th Quarter ! Full Year SAR Million : 2020 2019 Change : 2020 2019 Change Revenue 3,820 100.0% 3,704 100.0% 3.1% H 15,357 100.0% 14,351 100.0% 7.0% Cost of sales (2,587) (67.7%) (2,410) (65.1%) (7.3%) 1 (9,821) (64.0561 (8,985) (62.6%) (9.3%) Gross Profit 1,232
Slide 52: Balance Sheet as of end December 2020
Balance Sheet as of end December 2020 SAR Million EndofDec2020 End of Dec 2019 Dec?0v Dect? Change % Net Operating Working Capital 3,238 2,668 570 21% Property, Plant and Equipment 22,465 23,226 (760) (3%) Biological Assets 1,392 1,381 11 1% Net Operating Assets 27,095 27,275 (180) (1%) Goodwill and
Slide 53: Cash Flow Statement December 2020
Cash Flow Statem December 2020 oo 4th Quarter i Full Year SAR in Million 2020 2019 Change % H 2020 2019 Change % Net Income before NCI 333 288 45 16% H 1,936 1,802 134 7% Working Capital and Other 936 1,360 (424) (31%) | 2,268 2,930 (663) (23%) Operating Cash Flow 1,269 1,648 (379) (23%) H 4,203 4,7
Slide 54: Results by Segment
esults by Seg Almarai Dairy uice Bakery Pou Others Consolidated Revenue 10,924 1,712 2,293 429 15,357 Depreciation and Amortisation (1,387) (209) (375) (165) (2,136) Profit Attributable to Shareholders 1,473 226 343 (58) 1,984 Growth versus 2019 - Revenue - 2019 10,210 1,749 2,125 267 14,351 (2.1%)
Slide 55: Full Year 2020 Earnings Presentation
Full Year 2020 Earnings Presentation