AGTHIA Group · ADX:AGTHIA
AGTHIA — Agthia Group PJSC — EFG-Hermes 8th Annual London Conference 2018
26 slides from AGTHIA's conference presentation, Sep 12, 2018
Slide 1: Agthia Group PJSC – EFG-Hermes 8th Annual London Conference
Agthia Group PJSC EFG-HERMES 8th Annual London Conference London, 12-13 September 2018 1
Slide 2: Highlights
HIGHLIGHTS Year-to-date 30 June 2018 • Group net revenues reached AED 1.01 billion, growing 0.8% L4L • Group net profit reached AED 109 million, growing 6% L4L • Food and animal feed continued strong growth • Commercial production (of BW) started in Kuwait • Profit turnaround – 3 out of 5 BUs in sol
Slide 3: Bottled Water Market Shares
BOTTLED WATER MARKET SHARES Al Ain Water’s strong leadership continues Vol. Share %1 Total Agthia 29.8 +135bps Total Al Ain 27.8 +85bps Al Bayan 1.1 +20bps Alpin 0.9 +30bps 3 1 1 ACNielsen retail audit latest MAT shares in the UAE
Slide 4: Bottled Water – UAE Deep Dive
BOTTLED WATER – UAE DEEP DIVE 30% MAT VOLUME SHARE1 AL AIN PERCENTAGE CHANGE1 Category Category B. Water MAT 18 V 17 YTD 18 V 17 YTD 18 V 17 20% COMP A +5.2% +5.3% COMP B 10% +2.6% COMP C AM17 AM18 30% MAT VALUE SHARE1 AL AIN -0.1% 20% COMP A -4.0% -4.1% 10% COMP B VOLUME VALUE SHIPPED NET COMP C VO
Slide 5: Food
FOOD AED Millions 2014 Full Year 2017 Full Year 2018 1st Half 173.6 110.3 104.8 4.5 -2 -27.6 SEGMENT REVENUE SEGMENT PROFIT 5
Slide 6: Animal Feed
ANIMAL FEED Key business parameters stabilized in a mostly post-subsidy market 250.0 AED Millions 25.00% 200.0 19.0% 22.8% 20.00% 14.7% 15.8% 18.9% AED 150.0 17 157 15.00% back-to-back 148 143 132 138 grain trading and some 100.0 10.00% Qatar exports included in this figure 50.0 5.00% 12 12 14 14 17
Slide 7: Profit Turnaround
PROFIT TURNAROUND Outstanding loss reduction in 2 years AED Millions 1H16 1H17 1H18 Bakery (6.3) (5.9) (4.2) Dairy (5.5) (2.5) (2.8) Turkey (3.2) (0.3) 0.2 Egypt (0.7) 0.6 1.5 TP/FV (0.2) 0.9 1.8 (15.9) (7.2) (3.5) 7
Slide 8: Peers
PEERS1 REVENUE % Growth V. Year Ago PROFIT % Growth V. Year Ago GPM bps Change V. Year Ago L4L L4L +1 +5 AGTHIA Reported -5 Reported -7 +45 ~ ~ ~ SADAFCO -9 -35 -600 NADEC -3 -25 -30 ~ * Adjusted net income SAVOLA -11 -185 +40 • Low consumer spending, declining category sizes • Expat exodus (Saudi)
Slide 9: Financial Performance
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Slide 10: Group Revenue & Profit
GROUP REVENUE & PROFIT Both metrics posted growth on like-for-like basis Reported Like-for-Like AED 1H18 1H17 1H17 Net Revenues 1,008M 1,068M 1,000M -5.6% +0.8% Net Profit 109M 118M 103M -7.7% +6% 10
Slide 11: Group Revenues
GROUP REVENUES L4L1 Net Revenue YTD June 2018 vs 17 Growth | Percent B. Water (UAE) Flat Water (Non-UAE) -10 5G Water (UAE) +9 Beverages -14 Food (UAE) +13 Flour -6 Food (Egypt) +28 Animal Feed +5 Net Revenues AED729M AED278M +5% -8% 11 1 Excludes total AED 68 million from 1H17 net revenues pertaini
Slide 12: Group Revenue & Profit – Reconciling Items
GROUP REVENUE & PROFIT Reconciling items in growth NET REVENUES | AED MILLIONS NET PROFIT | AED MILLIONS 118.2 -5.9 1,068 -35 -3.6 -6.0 +6.4 109.1 -16 -16 +8 1,008 102.7 Land Cancelled Qatar Like-for- 1,000 Back to Qatar 1½ Like-for- lease Wheat Exports/B Like Back Exports months Like transfer Growt
Slide 13: Group P&L
GROUP P&L 2018 2017 2017 Actual Reported Variance L4L Variance Revenue 1,008 1,068 -6% 1,000 1% Gross profit 348 364 -4% 352 -1% Operating expenses 239 250 -4% 252 -5% Operating profit 109 115 -5% 100 9% Financial expense/(income) (0) (4) -92% (4) -92% Net profit 109 118 -8% 103 6% 13
Slide 14: Gross Profit Margin
GROSS PROFIT MARGIN Group Gross Profit Margin, % 35.0 34.5 Segment Gross Profit Margins1, % 33.1 34.5 32.0 Lower (market) 30.0 prices 28.0 27.1 Gross Profit Margin1, % 25.0 Subsidy 2013 2014 2015 2016 2017 2018 1H withdrawal Better mix, cost Scale, better Division Gross Profit Margins1, % optimizati
Slide 15: 2018 Guideline Estimates
2018 GUIDELINE ESTIMATES Strong like-for-like top line growth, flat bottom line +0.16 to 2.06 – GROUP 2.05 -0.15 +0.17 2.07 (Vs. 2017) NET REVENUE AED MILLIONS Net Revenue + 0-1% Saudi, Qatar, Projected L4L (Base adjusted + 7-9%) Bulk trading growth Net Profit Flat 2017 A 2018 E (Base adjusted + 8-9
Slide 16: Disclaimer – Forward-looking Statements
Disclaimer – Forward-looking Statements: Agthia Group PJSC and its management may make certain statements that constitute “forward-looking statements” with respect to the financial condition, results of operations and business of the Group. These statements can be identified by the fact that they do
Slide 17: Agthia Group PJSC – Corporate (Introductory) Presentation
Agthia Group PJSC Corporate (Introductory) Presentation London, 12-13 September 2018 17
Slide 18: Agthia Group PJSC
AGTHIA GROUP PJSC Abu Dhabi based food & beverage For the year ended 31 Dec 2017, USD Millions public joint stock company except EPS and P/E Ratio manufacturing in 61 countries Net Revenues 556 11 factories and 18 warehouses Gross Profit 184 4 thousand employees exporting to more than 20 countries N
Slide 19: Shareholders
SHAREHOLDERS A semi-government company with 51% owned by Senaat 5% Free About Free Float | @ 31 Dec 2017 Float, • 264 million shares held by > 70k investors 44% • 51 million shares held by 214 foreign1 investors 51% • Institutional investment 58 percent (153 About SENAAT | Major shareholder millio
Slide 20: Our History
OUR HISTORY A 40-year establishment built on a proud heritage • Acquisition of Al Bayan A Government-owned and managed company Water Company in the • Acquisition of Al UAE Ain Vegetable 1978 • Flour Mills and Animal Feed Production • Distribution Company • Production and and agreement with Al JV wit
Slide 21: Business Structure
BUSINESS STRUCTURE Business Category Brands Production Locations Water & Beverages UAE, KSA, Kuwait, Oman, Bottled Water, 5-Gallon Water, Turkey Juice Drinks, Fresh Juice Food UAE, Egypt Fruit Yogurt, Kids Yogurt, Flour, Processed Food, Ambient & Frozen Bakery, Dates, Trading Items Animal Feed UAE A
Slide 22: Net Revenues
NET REVENUES Transforming the business into a consumer-driven one in ten years Group Revenues, AED Share in Group Revenues, % 0.58B 1.33B 2.05B 17% 36% 53% Consumer | Water, Beverages and Food excl. Flour • First-time ever > 50% of Group revenues 83% • Higher growth potential, profitability 64% 47%
Slide 23: Gross Profit Margin
GROSS PROFIT MARGIN 1,500 bps margin improvement in ten years Gross Profit Margin, % Subsidy Commodity cost rationalization hikes. High 2nd High Speed vulnerability with Bottling line higher Agri 34.5 33.1 share in 32.0 AGTHIA business Low-margin Agri 26.2 27.1 28.0 1st High Speed business 83% of 25
Slide 24: Net Profit
NET PROFIT 11 percent CAGR over the last five years 300 20.0% 17.1% 17.6% 15.6% 18.0% 250 14.1% 16.0% • Long standing Flour 15.4% EBITDA Margin 13.1% 14.0% and Animal Feed 200 12.4% 12.6% government 11.7% 10.1% 12.0% 10.5% subsidies have Net Profit Margin 150 9.3% 10.0% gradually been 254 removed si
Slide 25: Key Performance Ratios
KEY PERFORMANCE RATIOS Return on Total Assets 7% Return on Net Capital 12% Employed Return on Equity 12% Net Debt to Equity (Ratio) -5% Avg. Working Capital (Ratio to NR) 29% 25
Slide 26: Disclaimer – Forward-looking Statements
Disclaimer – Forward-looking Statements: Agthia Group PJSC and its management may make certain statements that constitute “forward-looking statements” with respect to the financial condition, results of operations and business of the Group. These statements can be identified by the fact that they do
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