Kernel Holding S.a. · GPW:KER
Kernel — Investor Presentation (July 2012)
34 slides from Kernel's investor presentation, July 2012
Slide 1: Kernel Holding S.A. Company Presentation
KERNEL HOLDING S.A. CO M PA N Y P R E S E N TAT I O N July 2012
Slide 2: Disclaimer
Disclaimer The information in this document has not been independently verified and no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of th
Slide 3: Company Overview
COMPANY OVERVIEW July 2012
Slide 4: Kernel – leading agribusiness company in Ukraine
Kernel – leading agribusiness company in Ukraine №1 №1OILSEED CRUSHER IN UKRAINE OILSEED CRUSHER IN UKRAINE №1 BULK SUNFLOWER OIL №1 EXPORTER IN UKRAINE №1 BULK SUNFLOWER BOTTLED OIL PRODUCER AND MARKETER IN UKRAINE OIL EXPORTER IN UKRAINE №1 BOTTLED AND AND LEADING GRAIN ORIGINATOR OIL PRODUCER MAR
Slide 5: Value chain management business model
Value chain management business model Kernel Farming + Sourcing + Processing + Logistics + Distribution = added value 330 000 ha(1) of farm land grain & oilseed origination 10 oilseed crushing plants 40+ grain silos providing 3.8 Mio tons of agricultural FY2012 guidance fully cultivated from over 2
Slide 6: Strategy
Strategy Geographic focus Asset base Operational discipline Become the leading exporter of soft com- Focus on developing asset base in each Limit commodity open market positions modities in the Black Sea region segment to a target VaR < US$ 5 Mio or 0.5% of total Lead the market consolidatio
Slide 7: Ukraine: undisputed world leader in production and export of sunflower oil
Ukraine: undisputed world leader in production and export of sunflower oil MAJOR PRODUCING COUNTRIES, season 11/12 (projected) EU - 27 Russia Average sunflower 8.2 Mio tons 9.6 Mio tons seed yields (t/ha) sunflower seed production sunflower seed production 2.9 Mio tons 3.4 Mio tons sunflower oil pro
Slide 8: Ukraine: global leader in sunflower oil trade and major exporter of grain
Ukraine: global leader in sunflower oil trade and major exporter of grain Ukraine accounts for half Ukrainian sunflower oil exports of global sunflower oil export by destination, season 2010/2011 Ukraine is the world’s largest exporter of sunflower oil, accounting for half of global sunflower oil
Slide 9: FY2011 Contribution by operating segment
FY2011 Contribution by operating segment Revenue by segment (1) Operating profit by segment (2) (US$ Mio / % of total revenue) (US$ Mio / % of total operating profit) US$ 54.7 / 2.7% US$ 33.1 / 1.7% US$ 26.6 / 1.3% US$ 152.1 / 7.6% US$ 571.2 / 28.6% US$ 1 157.9 / 58.0% US$ 1 899 US$ 277 US$ 165.8 /
Slide 10: FY2010 Contribution by operating segment
FY2010 Contribution by operating segment Revenue by segment (1) Operating profit by segment (2) (US$ Mio / % of total revenue) (US$ Mio / % of total operating profit) US$ 112.6 / 10.2% US$ 53.7 / 4.9% US$ 71.8 / 39.5% US$ 41.7 / 3.8% US$ 24.9 / 13.7% US$ 1 020 US$ 400.7 / 36.5% US$168 US$ 22.2 / 12.
Slide 11: Segmental Review
SEGMENTAL REVIEW July 2012
Slide 12: Bottled oil segment
Bottled oil segment Kernel – leading bottled oil producer Bottled oil sales and marketer in Ukraine (% of total Ukraine market, FY2011 Kernel estimate) Consolidated bottled oil sector Kernel and Bunge supply over 60% of bottled Other 29 % oil sold in Ukraine Kernel and Bunge only nationwide mark
Slide 13: Bulk oil segment
Bulk oil segment Crushing capacity Kernel – No1 oilseed crusher in Ukraine with (% of Ukraine capacity, Kernel estimate) 2.6 Mio tons/year sunflower seed crushing capacity KERNEL 36 % Kernel – 36% estimated market share (percent of Ukraine total capacity) Other 44 % Main competitors: Cargill – 1
Slide 14: Export terminals segment
Export terminals segment TransBulkTerminal (“TBT”) 2nd largest grain terminal in Ukraine, 4 Mio tons/year grain throughput capacity (20% of total Ukrainian grain throughput capacity) Located in Illichevsk, major Black Sea port and key gateway to international grain markets Owned and operated by Kern
Slide 15: Grain segment
Grain segment Leading grain supply chain operator in Ukraine with 10% market share of grain & oil-bearing Major grain exporters in season 10/11 (1) crops export in season 10/11 KERNEL 9% Extensive and well-established origination base Origination effected directly at farm level through Nibulon
Slide 16: Silo services segment
Silo services segment Largest private grain silo network in Ukraine with 2.7 Mio tons grain storage capacity Strategic location of silos in key origination areas and close to Kernel crushing plants All silos connected to national railway network, allowing grain shipment to port by railcar 400 000 to
Slide 17: Farming segment
Farming segment Kernel farming acreage(1) ths.ha 350 Kernel in farming since 2002 320.0 Prime location of farms in grain and sunflower belt of Ukraine 300 Farms benefit from close location to Kernel grain silos and 250 processing plants Largest landbank among listed Ukrainian companies 200 183.0 150
Slide 18: Sugar production & marketing
Sugar production & marketing Ukraine market suffers from shortage of domestically pro- duced sugar Kernel sugar production platform Average yearly sugar consumption: 1.8-2.0 Mio tons 2nd largest sugar beet processing capacity in Ukraine: 4 sugar plants total 2 Mio tons/year sugar beet processing c
Slide 19: Geographical Expansion Opportunity: acquisition of Russian Oils
Geographical Expansion Opportunity: acquisition of Russian Oils Kernel signs SPA to acquire Russian Oils in August 2011 400 000 tons/year sunflower seed crushing capacity 100 000 tons oil refining and bottling capacity per year 3 plants located in Krasnodar and Stavropol regions, southern Russ
Slide 20: Financial Highlights FY2006 – FY2011
FINANCIAL HIGHLIGHTS FY2006 – FY2011 July 2012 20
Slide 21: Income statement highlights FY2006 – FY2011
Income statement highlights FY2006 – FY2011 (1) Amounts in USD millions, except for EPS and margins FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Revenue 215.2 350.4 663.1 1 047.1 1 020.5 1 899.1 EBITDA (2) 17.0 46.3 123.2 190.0 190.1 309.6 Result from operating activities (EBIT) 12.0 38.6 111.6 166.6 1
Slide 22: Balance sheet highlights FY2006 – FY2011
Balance sheet highlights FY2006 – FY2011 (1) Amounts in USD millions FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Invested Capital Cash & cash equivalent 6.4 25.3 88.5 129.3 59.5 115.9 Net trade accounts receivable 9.1 9.8 48.7 32.4 65.5 111.6 Inventory 32.3 40.2 144.7 99.1 147.8 183.7 Of which: Readil
Slide 23: Cash flow highlights FY2006 – FY2011
Cash flow highlights FY2006 – FY2011 (1) Amounts in USD millions FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Operating profit before working capital changes 16.6 45.4 116.1 188.2 205.7 275.2 Changes in working capital (35.9) (14.7) (210.2) (25.0) (97.3) (180.1) Cash obtained from/(used in) operations
Slide 24: Credit metrics FY2006 – FY2011
Credit metrics FY2006 — FY2011 (1) Amounts in USD million, except ratios FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Gross interest-bearing debt 93.3 164.3 255.8 294.6 345.2 422.0 Cash 6.4 25.3 88.5 129.3 59.5 115.9 Net interest-bearing debt 86.9 139.0 167.3 165.3 285.7 306.1 Readily marketable invent
Slide 25: Financial Highlights Q3 FY2012
FINANCIAL HIGHLIGHTS Q3 FY 2012 July 2012
Slide 26: Financial Highlights
Financial Highlights (1) Amounts in USD millions, except for EPS and margins Q3 FY2011 Q3 FY2012 % change Revenue 515.4 598.9 16.2% Profit from operating activities 81.8 44.8 (45.3%) (2) Net profit 77.9 37.2 (52.2%) EBITDA(3) 90.1 62.5 (30.6%) EPS(4) 1.04 0.46 (55.8%) Net debt / EBITDA(5) 1.7 x 2.2
Slide 27: Financial Highlights – 9 months to 31 March
Financial Highlights – 9 months to 31 March (1) Amounts in USD millions, except for EPS 9 months ended 9 months ended % change 31 march 2011 31 march 2012 Revenue 1 427.8 1 584.8 11.0% Profi t from operating activities 207.1 161.2 (22.2%) (2) Net profit 164.1 139.1 (15.2%) EBITDA(3) 231.5 211.2 (8.8
Slide 28: Income Statement Highlights
Income Statement Highlights (1) Amounts in USD millions, except for EPS and margins Q3 FY2011 Q3 FY2012 % change Revenue 515.4 598.9 16.2% Gross profit 148.6 113.7 (23.5%) Profit from operating activities 81.8 44.8 (45.3%) Net profit(2) 77.9 37.2 (52.2%) (3) EBITDA 90.1 62.5 (30.6%) EPS(4) 1.04 0.46
Slide 29: Balance Sheet Highlights
Balance Sheet Highlights (1) Amounts in USD Mio 31 March 2011 31 December 2011 31 March 2012 Invested Capital Cash & cash equivalents 59.3 129.8 91.9 Net trade accounts receivable 116.9 116.1 186.9 Inventory 388.9 561.3 588.6 of which: readily marketable inventories(2) 384.3 531.3 503.0 Other curren
Slide 30: Cash Flow Highlights
Cash Flow Highlights (1) Amounts in USD millions Q3 FY2011 Q3 FY2012 Operating profi t before working capital changes 89.8 67.8 Changes in working capital 113.2 (146.3) Cash obtained from/ (used in) operations 203.0 (78.5) Finance costs paid (14.0) (16.2) Income tax paid (0.5) (1.6) Net cash obtaine
Slide 31: Segmental Results
Segmental Results Revenue(1), USD million Operating profit(2), USD million Operating margin, % Tonnage(3) Q3 FY11 Q3 FY12 % change Q3 FY11 Q3 FY12 % change Q3 FY11 Q3 FY12 Q3 FY11 Q3 FY12 % change Bottled oil 33.0 44.5 35.1% 3.5 5.8 63.5% 10.7% 13.0% 22.8 29.3 28.7% Bulk oil 354.2 321.3 (9.3%) 68.8
Slide 32: Liquidity Position & Credit Metrics
Liquidity Position & Credit Metrics Amounts in USD millions, except ratios 31 March 2011 31 December 2011 31 March 2012 Cash 59.3 129.8 91.9 Inventory 388.9 561.3 588.6 of which: readily marketable inventories 384.3 531.3 503.0 RMI / Inventories 98.8% 94.7% 85.5% Gross interest‐bearing debt 562.0 73
Slide 33: FY2012 Revised Guidance
FY2012 Revised Guidance(1) Revenue of US$ 2 300 Mio EBITDA of US$ 330 Mio Net profit of US$ 215 Mio 1. Revised guidance issued as of May 15, 2012 July 2012 33
Slide 34: IR Contact
IR Contact • Yuriy Kovalchuk Investor Relations Director [email protected] • Yegor Samusenko Investor Relations Manager [email protected] Tel.: (+38-044) 461-88-03 July 2012 34