Almarai Company · TADAWUL:2280
Almarai — Q2 2017 Earnings Presentation
22 slides from Almarai's earnings presentation, 2017
Slide 1: Almarai Company Interim results – 2nd Quarter 2017
Almarai Company Interim results – 2nd Quarter 2017
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: Solid Q2 YTD results underpinned by turnaround of Poultry
Solid Q2 YTD results underpinned by turnaround of Poultry Group Turnover down 2.1% to 1.3 Group Operating Profit SAR 7.1 billion Up 7.0% Group Operating Income up 7.0% to SAR 1.2 billion 1.2 SAR in Billion Solid Results in Dairy and GCC market 1.1 Weakness in Egypt, Export and GCC Juice market conti
Slide 4: Revenue Variance
Revenue Variance 7,300 7,400 7,20 90 7,144 61 12 7,000 (171) (78) (41) (30) (8) SAR in Million 6,800 6,600 6,400 6,20 6,000 Q2 YTD 2016 Devaluation in Juice - GCC GCC Economic Export Bakery - GCC Infant Nutrition Poultry - GCC Core Category Q2 YTD 2017 Egypt Currency Situation (SAR 156 M) / (2.1%) G
Slide 5: Delivered on Key Focus Areas
Delivered on Key Focus Areas On track for Delivered Cost saving and CAPEX Key projects positive positive rationalization program including revenue EBIT program reduction is alfalfa growth in results for continue to in line with importation poultry and poultry deliver on the revised targets are key d
Slide 6: Market Share
Market Share Laban UHT Juices Puffs 66.2% 47.2% 65.7% 18.1% 65.1% 17.7% 44.6% 63.8% 2016 2017 2016 2017 2016 2017 2016 2017 Fresh Milk Bread Chicken Jar Cheese 69.2% 69% 45.2% 36.7% 36.3% 68% 67.7% 40.1% 2016 2017 2016 2017 2016 2017 2016 2017 Almarai Company 2017 Q2 Earnings Presentation 6
Slide 7: Statement of Profit and Loss
Statement of Profit and Loss 2nd Quarter 2nd Quarter YTD SAR million 2016 2017 Change 2016 2017 Change Net Sales 3,926 10 0 .0 % 3,760 10 0 .0 % (4.2%) 7,300 10 0 .0 % 7,144 10 0 .0 % (2.1%) Cost of sales (2,405) (61.3%) (2,205) (58.6%) (8.3%) (4,651) (63.7%) (4,412) (61.8%) (5.2%) Gross Profit 1,52
Slide 8: Operating Performance
2nd Quarter YTD 2017 Results Operating Performance Gross Profit Operating Income Profit Attributable to Shareholders % to Sales 36.3% 38.2% 1.9 pp 15.5% 16.9% 1.4 pp 13.0% 14.0% 1.0 pp SAR Million 2,732 SAR Million 2,648 1,209 SAR Million 1,131 1,002 +84 +79 947 +3.2% +55 +7.0% +5.8% 2nd Qtr YTD 2nd
Slide 9: Strong Domestic Performance
Strong Domestic Performance Dairy & Juice Bakery Poultry Others Total Turnover 5.4 0.9 0.7 0.1 7.1 SAR Billion (3.9%) (0.8%) 8.3% 15.4% (2.1%) Net Income 0.9 0.2 (0.0) (0.0) 1.0 SAR Billion (10.3%) 0.8% 80.1% 25.1% 5.8% Net Income 17.3% 16.9% (4.8%) (63.5%) 14.0% Margin SAR Billion Almarai Company 2
Slide 10: Dairy & Juice
Dairy & Juice 1,100.0 1,000.0 o Laban and Zabadi have continued to grow however 900.0 1,045.3 937.6 800.0 fresh milk growth has stabilized. 700.0 o Egypt devaluation impact accounts for 3.0% within D&J 600.0 500.0 segment. SAR in Q2 YTD 16 Q2 YTD 17 o Economic situation in the GCC had an adverse eff
Slide 11: Bakery
Bakery 153.0 o Revenue down 0.8%, it has however declined by 5.2% in 152.0 152.4 Q2 151.0 151.3 o Bread, Puff and Croissant growth has stalled 150.0 o Product revamp for key categories is underway SAR in Q2 YTD 16 Q2 YTD 17 Million o Margin improvement supported by Net Income • Manufacturing efficie
Slide 12: Poultry
Poultry 0.0 (35.9) Poultry EBIT break even for the first time during the quarter (100.0) (180.5) (200.0) o Revenue up 8.3% driven by strong volume growth SAR in Q2 YTD 16 Q2 YTD 17 Million o Poultry mortality continues to be within the target range Net Income for world best practice. o Q3 is expecte
Slide 13: Others
Others 0.0 o IPNC losses are in line with existing business plan. (51.8) (50.0) • Losses have reduced by 32% plus from last year (69.1) o Expansion of Alfalfa operations in both South and (100.0) North America remains on track. SAR in Q2 YTD 16 Q2 YTD 17 Million • Operations are still loss making bu
Slide 14: Sales Analysis by Segment by Product – Q2 YTD
Sales Analysis by Segment by Product – Q2 YTD Total 7,144 Net Sales (-156) (2.1%) Dairy & Juice Bakery Poultry Others Net Sales 5,415 (76%) 904 (13%) 744 (10%) 82 (1%) By Segment (-217) (-7) (+57) (+11) (3.9%) (0.8%) +8.3% +15.4% Net Sales Fresh Dairy Long-Life Dairy Fruit Juice Cheese&Butter Bakery
Slide 15: Sales Analysis by Region by Country – Q2 YTD
Sales Analysis by Region by Country – Q2 YTD Total 7,144 Net Sales (-156) (2.1%) Net KSA Other GCC Countries Other Countries Sales 4,705 (66%) 1,920 (27%) 519 (7%) By Region (+49) (+9) (-214) +1.1% +0.5% (29.3%) Net Sales KSA UAE Oman Qatar Kuwait Bahrain Egypt Jordan Others 4,705 (66%) 709 (10%) 37
Slide 16: Almarai continues 5 Year Plan CAPEX Investment
Almarai continues 5 Year Plan CAPEX Investment CAPEX spend for the 2nd Quarter Year to Date 2017 was SAR 1.6 Billion. • Manufacturing, Farming and Replacement spent CAPEX of SAR ~0.9 Billion for various capacity expansion projects. • Sales depot, Poultry and Logistics expansion accounted for SAR ~
Slide 17: Cash Flow Bridge – Rolling 12 Months
Cash Flow Bridge – Rolling 12 Months 66 4,975 (4,278) Loans Issues / Payments / Charges (718) 364 CAPEX / Biological 53 463 Assets Dividend Others Operating Cash Flow Cash at 30 Cash at 30 June 2016 + SAR 99 Million June 2017 Almarai Company 2017 Q2 Earnings Presentation 17
Slide 18: Net Debt
Net Debt 14,000 350% 3.1x 3.0x 2.9x 12,000 2.8x 2.8x 300% 2.7x 2.7x 2.7x 10,000 2.2x 250% 8,000 200% SAR Million 6,000 150% 98% 101% 4,000 81% 81% 85% 100% 74% 75% 75% 74% 2,000 50% 4,606 6,653 8,237 8,053 8,762 9,344 10,889 10,883 11,668 0 0% 2010 2011 2012 2013 2014 2015 2016 2016 Last 12 Months S
Slide 19: Quarterly Performance – Net Income
Quarterly Performance – Net Income 2017 versus 2016 800 Q2 = 2.4% 700 674 658 655 # 600 629 595 530 539 500 484 489 476 450 SAR Million 433 430 428 425 Q1 = 13.7% 398 400 380 373 363 369 343 349 328 306 309 * 300 # 284 286 274 255 249 235 242 289 234 200 100 0 # IFRS revaluation adjustments * Capita
Slide 20: EBIT and EBITDA margins are starting to improve…
EBIT and EBITDA margins are starting to improve… Net Sales, EBITDA and EBIT Evolution CAGR 2010 – 2017: 11.6% (w/o impact of acquisitions 7.7%) 27.2% 26.9% 25.6% 25.9% 24.2% 25.3% 24.4% 23.9% 24.2% 14,339 14,183 14,699 21.1% 13,795 19.1% 12,606 18.2% Net Sales 16.9% 11,219 17.3% 17.5% 16.4% SAR Mill
Slide 21: Key Share Data
Key Share Data Key Statistics for Almarai (4 July 2017) Share Price (SAR) 92.00 Current P/E Ratio (ttm) 35.82 Earnings Per Share (SAR) (ttm) 2.59 Market Cap (SAR Million) 74,336 Shares Outstanding (Million) 800 Dividend Indicated Gross Yield 0.97% Almarai Company 2017 Q2 Earnings Presentation 21
Slide 22: 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