Almarai Company · TADAWUL:2280
Almarai — FY2018 Earnings Presentation
26 slides from Almarai's earnings presentation, December 2018
Slide 1: Almarai Company Fiscal Year 2018 and Fourth Quarter 2018
Almarai Company Fiscal Year 2018 and Fourth Quarter 2018
Slide 2: Disclaimer
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. Neither we nor our advisors make any representation regarding, and assume no responsibility or lia
Slide 3: Macro Environment
Sa incl oll Almarai ~_ Macro Environment
Slide 4: Main Events Fiscal Year 2018
Main Events Fiscal Year 2018 Macro Changes for consumer and market sentiment • Introduction of VAT • Expat Levy and labor reform • Energy Reforms • Introduction of monthly stipend for eligible Saudi members of the workforce Good progress made against the strategic objectives set out in Almarai 2025
Slide 5: Almarai Defending Market Share Despite Declining KSA Food Market and Price increases
Almarai Defending Market Share Despite Declining KSA Food Market and Price increases Fresh Milk Laban 80% 7 0.5% 7 0.4% 7 1.1% 7 2 .3% 7 2 .2% 7 1.2% 80% 69.3% 69.2% 7 0.4% 68.6% 68.6% 68.5% 68.0% 68.6% 65.8% 70% 64.3% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Long Life (UHT) Milk Za
Slide 6: Almarai Defending Market Share Despite Declining KSA Food Market
Almarai Defending Market Share Despite Declining KSA Food Market Fresh Juice (Bottles) Bakery 60% 70% 49.8% 49.3% 51.6% 49.2% 57 .4% 58.5% 57.2% 57 .3% 46.9% 48.9% 47 .1% 56.3% 54.7 % 56.1% 55.7 % 60% 50% 43.2 % 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Total Foods 35.8% 37.4% 36.4% 36.8% 37 .2% 35.
Slide 7: Business Highlights
Sa incl oll Almarai ~_ Business Highlights
Slide 8: Highlights – Q4, 2018
Highlights – Q4, 2018 4.00 Revenue Operating Income 0.90 0.76 3.80 3.73 0.76 SAR in Billion SAR in Billion 3.60 3.42 3.39 0.70 0.60 3.23 3.37 0.48 3.40 0.47 3.20 0.50 3.00 0.30 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 2013 Last 5 Quarters SAR 11.2 B +
Slide 9: Financial Highlights
Sa incl oll Almarai ~_ Financial Highlights
Slide 10: Revenue Breakdown - Full Year and Q4, 2018
Revenue Breakdown - Full Year and Q4, 2018 Revenue by Product – Full Year Revenue by Country – 4th Quarter = +3% +4% = Poultry = Poultry 494 = Bakery 1,808 Bakery 15% Other Sales 1,737 13% Other Sales 475 13% 202 14% 38 Cheese, 1% Cheese, 1% = Butter & Butter & Cream 1,924 = Cream SAR 13,723 444 SAR
Slide 11: Revenue Breakdown - Full Year and Q4, 2018
Revenue Breakdown - Full Year and Q4, 2018 Revenue by Country – Full Year Revenue by Country – 4th Quarter +1% = +1% Bahrain Jordan +1% = +1% Jordan 331 Kuwait Bahrain 57 Export / Oman Egypt = 267 Oman 162 81 =2% Others = 748 Kuwait = 2% = 2% Egypt 6% 671 776 6% Export / -1% 193 6% 5% 199 = 2% 102 3
Slide 12: Innovation Pipeline 2018
Innovation Pipeline 2018 Innovation is a “Core Engine” of growth for Almarai. Segment Product Dairy & Juice Bakery Poultry Infant Nutrition Almarai Company 2018 Q4 Earnings Presentation 12
Slide 13: Statement of Income – Full Year and Q4, 2018
Statement of Income – Full Year and Q4, 2018 4th Quarter Full Year SAR Million 2017 2018 Change 2017 2018 Change Revenue 3,419 10 0 .0 % 3,389 10 0 .0 % (0.9%) 13,936 10 0 .0 % 13,723 10 0 .0 % (1.5%) Cost of sales (2,083) (60.9%) (2,154) (63.6%) (3.4%) (8,352) (59.9%) (8,277) (60.3%) 0.9% Gross Pro
Slide 14: Normalized Profit and Loss
Normalized Profit and Loss SAR in Million 4th Quarter Full Year 2018 Reported Net Income - 2018 370 2,009 One Off / Exceptional Items: Loss on Acquisition / Disposal 4 8 Asset impairment on Discontinuation of KSA 47 47 arable operation Operational Loss, including dilapidation 30 30 & Input costs for
Slide 15: Operating Performance – Full Year
Operating Performance – Full Year Profit Attributable to Gross Profit Operating Income Shareholders % to Sales 40.1% 39.7% -0.4 pp 18.5% 17.9% -0.6 pp 15.7% 14.6% -1.1 pp SAR Million SAR Million 2,583 2,592 * SAR Million 5,584 5,445 2,461 2,182 2,144 * -138 -122 2,009 -4.7% -173 -2.5% -7.9% YTD Q4,
Slide 16: Segment Reporting – Full Year and Q4, 2018
Segment Reporting – Full Year and Q4, 2018 Almarai SAR Million Dairy & Juice Bakery Poultry Other Activities Consolidated Q4 YTD 2018 Revenue 9,976 1,737 1,808 202 13,723 Depreciation and Amortisation (1,232) (250) (370) (193) (2,045) Profit Attributable to Shareholders 1,733 192 183 (99) 2,009 Perc
Slide 17: Net Income by Segment
Net Income by Segment Basic EPS* (SAR) 2.13 1.97 2,400 2,182 (316) 2,200 2,009 212 31 2,000 (100) SAR Million 1,800 1,600 1,400 1,200 1,000 YTD Q4, 2017 Dairy & Juice Bakery Poultry Other YTD Q4, 2018 Revenue Growth (5.1%) (3.9%) 23.5% 31.0% (1.5%) Net Income Growth (15.4%) (34.3%) n.a. 23.9% (7.9%)
Slide 18: Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan
Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan CAPEX spend for the full year 2018 was SAR 2.0 Billion. • Manufacturing and Farming spent CAPEX of SAR ~0.9 Billion for various capacity expansion projects. • Sales Depot, Poultry and Logistics expansion acc
Slide 19: Cash Flow Bridge
Cash Flow Bridge 2018 Free Cash Flow = SAR 1,217M (SAR 86M lower than 2017) 3,558 (1,700) 620 (2,460) Perpetual Sukuk Loan & Sukuk Repayment Net Movement 1,636 (748) 97 1,004 Operating Cash CAPEX / Biological Flow Assets Dividend Others Cash at 31 Dec 2017 Cash at 31 Dec 2018 (SAR 632 Million) Almar
Slide 20: Key Trends
Key Trends
Slide 21: Net Debt
Net Debt 14,000 350% 3.1x 3.0x 3.0x 3.0x* 3.2x* 12,000 2.8x 2.8x 2.7x 2.8x 300% 2.7x 2.7x 10,000 250% 8,000 200% SAR Million 6,000 150% 98% 101% 81% 87% 4,000 75% 75% 74% 81% 73% 100% 2,000 50% 6,653 8,237 8,053 8,762 9,344 10,889 10,883 10,910 12,659 0 0% 2011 2012 2013 2014 2015 2016 2016 2017 201
Slide 22: Quarterly Performance – Net Income Trend Analysis
Quarterly Performance – Net Income Trend Analysis 2018 versus 2017 800 Q2 = (2.0%) Q3 = (4.9%) 674 661 664 667 634 700 658 # # 595 655 629 Q4 Normalized = (2.4%) 600 530 539 536 513 476 484 # 501 500 433 450 489 430 428 Q1 = 4.8% 398 * 380 369 373 SAR Million 400 349 328 344 306 309 * 370 274 286 3
Slide 23: Debt Maturity Profile
Debt Maturity Profile 4.0 Debt Maturity by Age and Type 3.5 3.0 Sukuk 3 2.5 25% SAR Billion 2.0 1.5 Banks Govt / 8 1.0 Semi 58% Govt Inst. 0.5 2 0.0 17% <1yr 1-2 yr 2-3yr 3-4 yr 4-5yr >5yr Sukuk Govt / Semi Govt Inst. Banks Almarai Company 2018 Q4 Earnings Presentation 23
Slide 24: EBIT and EBITDA margins
EBIT and EBITDA margins Revenue, EBITDA and EBIT Evolution CAGR 2011 – 2018: 8.1% (w/o impact of acquisitions 4.0%) Net Sales EBIT % to Net Sales 28.1% 28.2% EBITDA % to Net Sales 14,699 14,339 13,795 13,936 13,723 25.6% 12,606 25.3% 26.0% 24.2% 24.4% 24.2% SAR Million 11,219 23.9% 19.1% 9,883 17.3%
Slide 25: Key Share Data
Key Share Data Key Statistics for Almarai (31 December 2018) Year to date total shareholder's Share Price (SAR) 48.00 Savola 30% return since listing Current P/E Ratio (ttm) * 29.55 25% Earnings Per Share (SAR) 1.97 25% 20% 16% HHPrince Market Cap (SAR Million) 48,000 35% 15% Sultan bin Shares Outst
Slide 26: Thank you
For Investor Relations matters please contact: [email protected] “We will encourage our major corporations to expand across borders and take their rightful place in global markets” QR Code for Almarai IR App. www.almarai.com Thank you