Sd Guthrie Bhd · MYX:SDG
Sd Guthrie Bhd — Sime Darby Plantation — IPO Roadshow (November 2017)
44 slides from Sd Guthrie Bhd's IPO roadshow presentation, November 2017
Slide 1: Sime Darby Plantation Management Roadshow
SIME DARBY PLANTATION Management Roadshow November 2017
Slide 2: Disclaimer
Disclaimer This document is strictly confidential to the recipient. It is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. Upon request, you shall p
Slide 3: Table of Contents
Table of Contents Section Page 1. Sime Darby Pure Play Exercise - Transaction Overview 3 2. Sime Darby Plantation - Company Overview 9 - Key Investment Highlights 12 - Business Strategies & Future Plans 24 - Industry Outlook 34 - Financial Overview 37 Strictly Private & Confidential 2
Slide 4: Sime Darby Pure Play Exercise - Transaction Overview
Sime Darby Pure Play Exercise - Transaction Overview Strictly Private & Confidential 3
Slide 5: Sime Darby Pure Play Exercise – Transaction Overview
Sime Darby Pure Play Exercise – Transaction Overview Existing Corporate Structure Corporate Structure Post Proposals Other Other ASB PNB EPF KWAP ASB PNB EPF KWAP Shareholders Shareholders 40.79% 6.15% 11.12%* 5.61%^ 36.33% 40.79% 6.15% 11.12%* 5.61%^ 36.33% Sime Darby Same set of shareholders will
Slide 6: Listing of Pure Plays – Reference Prices
Listing of Pure Plays – Reference Prices Illustrative Reference Price Based on Percentage Allocation Range Percentage Companies Allocation Mid-Point Minimum Maximum Range Share Market Share Market Share Market Price Cap Price Cap Price Cap (RM) (RM’bn) (RM) (RM’bn) (RM) (RM’bn) Sime Darby 60%-68% 5.
Slide 7: Justification for Sime Darby Plantation's Reference Price
Listing of Pure Plays – Justification for Sime Darby Plantation’s Reference Price 1 Net Earnings Per Share Sime Darby Plantation’s adjusted net EPS of 19.48 sen per share for FY2017. 2 Price-to-Earnings Ratio (PER) Sime Darby Plantation Mid-Point Minimum Maximum Share Price (RM) 5.79 5.43 6.15 FY201
Slide 8: Justification for Reference Price (cont'd)
Listing of Pure Plays – Justification for Sime Darby Plantation’s Reference Price (cont’d) 4 Sime Darby Plantation’s Competitive Strengths • The world’s largest oil palm plantation company by oil palm planted areas; • The world’s largest CSPO producer; • A wide and diverse geographical reach; and •
Slide 9: Milestones Following Actual Listing Submission
Milestones Following Actual Listing Submission 24 Aug 26 Oct 3 Nov 4 Nov 20 Nov Target Thu Thu Fri Sat Mon End Nov • Listing EGM • The approval • Securities • Announcement • Despatch of Submission of • Issuance of from the Commission of notice of Circular to confirmation of Prospectus Board of Sime
Slide 10: Company Overview
Company Overview Strictly Private & Confidential 9
Slide 11: Business Overview
Business Overview Integrated Plantation Company Involved in the Entire Palm Oil Value Chain Upstream Downstream Others Oil palm estate Mill Refinery Food application High-yielding Renewables genome seeds Oil palm, rubber & sugarcane Bulk and refined oils & fats R&D estates Production and sales of
Slide 12: Snapshot of Oil Palm Plantation Operational Statistics
Snapshot of Oil Palm Plantation Operational Statistics FY16/17 unless otherwise PNG & Solomon stated Malaysia Indonesia Islands Liberia Total Total oil palm 303,367 202,191 86,493 10,401 602,452 planted area(1) (ha) Mature area(1) (ha) 251,629 161,621 76,281 9,356 498,887 8% 7% 5% 12% 10% Palm tree
Slide 13: Key Investment Highlights
Key Investment Highlights Strictly Private & Confidential 12
Slide 14: Investment Highlights – Plantation
INVESTMENT HIGHLIGHTS – PLANTATION World’s Largest Sustainable Palm Oil Producer 1 Strong Market Position as the World’s Largest Oil Palm Plantation Company by Oil Palm Planted Area, with Established Reputation as the World’s Largest Producer of Certified Sustainable Palm Oil 2 Well Positioned to Be
Slide 15: World's Largest Oil Palm Plantation Company
1 World’s Largest Oil Palm Plantation Company with More Than 600,000 Hectares of Planted Area We are the world’s largest oil palm plantation company by oil palm planted area with c.2.8% market share(1) and total landbank of more than 983,000 hectares across Malaysia, Indonesia, PNG & Liberia ~600,00
Slide 16: Our Journey to Sustainability
World’s Largest Oil Palm Plantation Company by Oil Palm Planted Area, with 1 a Wide and Diverse Geographical Reach and the World’s Largest Producer of Certified Sustainable Palm Oil Future: “RSPO and Our journey to sustainability Beyond” vision • To prevent value 2015 erosion in our • Acquisition of
Slide 17: Sustainability – Committed to Good Agriculture Practices
1 Sustainability – Committed to Good Agriculture Practices RSPO Certification Status Open Palm Traceability 97% Sime Darby Open Palm Traceability Dashboard Upstream – Mill Traceable up to RSPO-certified provides SD Plantation’s plantations As at 30 Sep 2017 customers with access to source the produc
Slide 18: Sustainability – Driving Market Demand
1 Sustainability – Driving Market Demand CSPO Production Capacity 660k MT/year NURI REFINERY (MALAYSIA) Sime Darby Plantation 20% 11.8 NEW BRITAIN OILS (UK) mn MT Global CSPO Production Capacity (as of 31 Jul 2017) Other All of SD Plantation’s refineries are RSPO- Certified certified Players 80%
Slide 19: Well Positioned to Benefit from Sound Industry Fundamentals (1/2)
2 Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (1/2) Our wide & diverse geographical reach of business operations will allow us to leverage on strong industry fundamentals Strong Geographical Presence Upstream Operations FY17 Total Revenue = RM14,779 mm
Slide 20: Well Positioned to Benefit from Sound Industry Fundamentals (2/2)
2 Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (2/2) Our wide & diverse geographical reach of business operations will allow us to leverage on strong industry fundamentals Capitalising on strong demand growth for palm oil Demand for Palm Oil Estimated to
Slide 21: Fully Integrated Business Model Along the Palm Oil Value Chain
3 Fully Integrated Business Model with Diversified Operations Along the Palm Oil Value Chain With a fully integrated business model, we are able to diversify our earnings risk from volatility of commodity price and leverage on operational synergies Upstream Downstream Crushing Transportation, plants
Slide 22: Market Leading R&D Supports Operational Efficiency & Productivity
4 Market Leading R&D Supports Operational Efficiency & Productivity Market Leading Research & Development • Global network of 5 R&D centres in Malaysia, Indonesia & PNG, and 3 innovation centres in Malaysia, the Netherlands and South Africa • Supports operational efficiency and improvements to upstr
Slide 23: Sound Financial Profile & Resilient Business Model
5 Sound Financial Profile & Resilient Business Model We sustain long-term growth whilst maintaining ready access to capital markets and preserve our ability to repay and service debt obligations over time evidenced by our investment grade ratings along with a stable outlook Sound Financial Profile &
Slide 24: Experienced and Sound Board & Management Team
6 Experienced and Sound Board & Management Team Our Board and management team have the ability to drive our Group through transformation into the next phase of growth which is to innovate, execute and create value Board of Directors Board members have Tan Sri Dato’ Tan Sri Dato’ Seri Dato’ Mohamad D
Slide 25: Business Strategies & Future Plans
Business Strategies & Future Plans Strictly Private & Confidential 24
Slide 26: The Strategy Moving Forward – What is Different?
The Strategy Moving Forward – What is Different? VISION ‘The Leading Global Integrated Palm Oil Player’ The global brand for plantation sustainability 1 UPSTREAM 2 DOWNSTREAM 3 INTEGRATION DRIVING OPERATIONAL SERVING THE MAXIMISING RETURNS STRATEGY GROWTH EXCELLENCE VIA CUSTOMERS OF THE ACROSS THE P
Slide 27: Medium to Long Term Targets
Medium to Long Term Targets LONG-TERM CURRENT FY2025 FY2017 25 FFB Yield (MT/ha) 19 FFB Yield (MT/ha) 25% OER 21.3% Lower OER Cost to customer Higher 5.2% Downstream Contribution1 Downstream Contribution1 1 % of Contribution to Plantation PBIT , Source: Company Presentation Strictly Private & Confid
Slide 28: Upstream – Driving Operational Excellence
Upstream –Driving Operational Excellence ELEVATING YIELD PERFORMANCE THROUGH ON- GOING PROCESS ENHANCEMENTS A ACCELERATED B SUPERIOR C WATER D MECHANISATION REPLANTING PLANTING MANAGEMENT • Enhancing automation • Group : 5% MATERIAL • Effective water & digitisation (Indonesia : 7% • High yielding ma
Slide 29: Upstream – Replanting with High Yielding Materials
A ACCELERATED REPLANTING B SUPERIOR PLANTING MATERIAL Upstream – Replanting with High Yielding Materials Replanting Rate 5-7% Average Age 10 yrs By 2025 Malaysia Indonesia PNG & SI Liberia 8% 7% 5% 17% 12% 10% 20% 12% 18% Average Age Avg age: Avg age: 9% Avg age: 24% Avg age: 12.6 yrs 20% 39% 14.3 y
Slide 30: Upstream – Innovative Watering Initiatives
C WATER MANAGEMENT Upstream – Innovative Watering Initiatives Innovative and cost effective irrigation techniques to ensure that our estates and mills maintain adequate and consistent water supply during prolonged dry months PAPUA NEW GUINEA MALAYSIA INDONESIA LIBERIA & SI • Installing mobile pumpin
Slide 31: Upstream – Focusing on Cost Reduction
D MECHANISATION Upstream – Focusing on Cost Reduction HOW ? MECHANISATION Enhanced processes, new technologies and automation to drive better OER Increase manpower ratio per ha TRANSFORMATIVE RESTRUCTURING Continuous implementation of Lean Six Sigma across the entire value chain Undertaking
Slide 32: Upstream – Connected, Integrated, Automated and Sustainable Plantation
D MECHANISATION Upstream – Moving Towards a Connected, Integrated, Automated and Sustainable Plantation SIME DARBY DIGITAL SIME DARBY DRONE MECHANISATION INITAITIVE SUPERVISION (SDDS) MONITORING Among the first in the Malaysian Lower manpower requirement Deployment of unmanned aerial oil palm in
Slide 33: Downstream – Preferred Sustainable Palm Oil & Fats Specialist
Downstream – To become the preferred sustainable palm oil & fats specialist and customer solutions provider HOW DO WE DELIVER VALUE ? • Focus on differentiated, sustainable and traceable high value products • Explore & expand opportunities to increase our presence in key geographical markets Such as
Slide 34: Downstream – Shifting Into High Margin Specialty Products
Downstream – Shifting Into High Margin Specialty Products & Deriving Full Value from CSPO Drive physical CSPO sales Drive production of differentiated products A B Emphasis on Physical CSPO Differentiated Sales vs Commodity Increase production of PQ oil Segregated & traceable refineries C D PQ Oil a
Slide 35: Industry Outlook
Industry Outlook Strictly Private & Confidential 34
Slide 36: Demand Drivers of the Global Oil Palm and Edible Oils Industry
Demand Drivers of the Global Oil Palm Plantation and Edible Oils Industry Growing Competitive Wide Range of Increased Demand for Pricing of Palm Uses for Palm Oil, Increased in consumer Food due to Oil and Price Palm Kernel Oil Biodiesel awareness on Increase in Affordability of and their Related De
Slide 37: Outlook of the Global Palm Oil and Edible Oils Market
Outlook of the Global Palm Oil and Edible Oils Market Global CPO production, palm oil consumption, demand Demand for Edible Oils Expected to Remain Strong Over for CSPO and CPO prices expected to increase the Next 5 Years Global CPO Production and Consumption Forecast Global Consumption of Selected
Slide 38: Financial Overview
Financial Overview Strictly Private & Confidential 37
Slide 39: Key Financial Metrics
Key Financial Metrics Revenue (RM'bn) PBIT (RM'mn) FY15 10.30 FY15 1,538 FY16 11.95 FY16 1,259 FY17 14.78 FY17 1,987 3-year average 12.34 3-year average 1,595 PATAMI (RM'mn) ROIC % FY15 997 FY15 7 FY16 967 FY16 4 FY17 1,038 FY17 8 3-year average 1,001 3-year average 6 Note: FY17’s PBIT and PATAMI ex
Slide 40: Revenue and PBIT
Revenue and PBIT FY17 Revenue FY17 Revenue Revenue by Segment by Geography RM’mn Increase was primarily due to the Others Increase was primarily due to the 0.4% increase in sales of our refined increase in the sales of our palm South PNG China Liberia oil products (i.e. our upstream Africa & 2% 0% e
Slide 41: Expenses, Operating Profit & PAT
Expenses, Operating Profit & PAT Operating Expenses Operating Profit & Operating Profit Margin RM’mn RM’mn The lower overall operating profit Increase due to the higher margin is a result of lower FFB revenue and gain from the Increase is mainly due to yield. However, this was partially sale of the
Slide 42: Working Capital & Capitalisation and Indebtedness
Working Capital & Capitalisation and Indebtedness Working Capital Turnover Period Indebtedness by Maturity Days RM’mn Receivables Inventory Payables 4,690.5 85 78 71 52 46 44 39 38 34 1,325.4 1,037.0 685.0 2015 2016 2017 Within 1 year 1-2 years 2-5 years More than 5 years Current Ratio Gearing Ratio
Slide 43: Dividend Policy
Dividend Policy We propose to pay dividends out of cash generated from our operations after setting aside necessary funding for capital expenditure and working capital requirements. As part of this policy, our Company targets a dividend payout ratio of not less than 50.0% of our consolidated profit
Slide 44: Thank You
Thank You Strictly Private & Confidential 43