Agthia Group · ADX:AGTHIA
Agthia — Investor Presentation (April 2021)
41 slides from Agthia's investor presentation, Apr 14, 2021
Slide 1: Agthia Group
Agthia Group An F&B leader embarking on a transformational growth story April 2021
Slide 2: Disclaimer
Disclaimer The information provided by Agthia Group PJSC (“we,” “us” or “our”) is for general informational purposes only. All information is provided in good faith; however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliabilit
Slide 3: Today's Presenters
Today’s Presenters Alan Smith Ammar Al Ghoul Mubarak Al Mansoori Chief Executive Officer Chief Financial Officer Chief Human Capital & Corporate Services Officer Ahmad Yahya Mujtaba Hussain Sahar Srour Executive VP – Growth & Categories Senior VP – Mergers & Acquisitions Investor Relations Manager S
Slide 4: Today's Agenda
Today’s Agenda Agthia Group Today Agthia’s 2025 Strategy: Accelerating Growth Financial Performance Agthia: A journey to becoming a regional F&B leader by 2025
Slide 5: Agthia Group Today
Agthia Group Today Strictly Confidential
Slide 6: Agthia Group at a glance
Agthia Group at a glance Product mix Manufacturing Revenues2 Water Feed Flour 11 sites AED 2.06BN+ Juices Sauces Dairy 2.3MN Tons 2020 Brands Distribution reach EBITDA2 19 brands 210k+ customers AED 251MN 2020 Footprint1 Workforce Profitability2 30 + countries 4.2 K FTEs 12 % EBITDA Margin 2020 Stri
Slide 7: Our History: Over 40-year establishment built on a proud heritage
Our History: Over 40-year establishment built on a proud heritage Government-owned and managed company Publicly-listed company Launch of Al Ain Plant Bottle and Yoplait Grass-Fed Production and Acquisition of Al Bayan Yoghurt, appointment of new Privatization of the Board and leadership team, Acquis
Slide 8: A diversified product portfolio…
A diversified product portfolio… Consumer Business Division Agri Business Division Leadership position in the region Innovation supporting healthy lifestyles Incumbent brands with market leader Presence across all channels, inc. B2B position and B2C Diversified product portfolio #1 e-commerce player
Slide 9: … and a regional geographic footprint
… and a regional geographic footprint Strictly Confidential # of manufacturing facilities 9
Slide 10: Segmental Overview
Segmental Overview Consumer Business Division Agri Business Division 2020 2020 45% 2020 2020 50% 50% Revenue 55% EBITDA1 Revenue EBITDA1 Water & Beverages Food Flour Animal Feed 2020 Revenue 2020 EBITDA1 2020 Revenue 2020 EBITDA1 2020 Revenue 2020 EBITDA1 2020 Revenue 2020 EBITDA1 9% 29% 49% 49% 71%
Slide 11: Agthia has a solid base to expand upon
Agthia has a solid base to expand upon Market leadership Resilient financial Innovation leadership across all base products performance despite headwinds and sustainability role-modeling Rank, Share, 2015 2020 +2% p.a. by volume1 volume % 2,061 Bottled water 1 27% Revenues2 AED’MN 1,866 648 +1% p.a.
Slide 12: Agthia's 2025 Strategy: Accelerating Growth
Agthia’s 2025 Strategy: Accelerating Growth Strictly Confidential
Slide 13: Our Long-Term Ambition
Our Long-Term Ambition From… To… Footprint MENAP & UAE centric beyond Becoming a Commoditized Value-add F&B brands regional F&B portfolio leader by 2025 Stable financial Superior shareholder performance returns Local organization Consumer-centric mindset & performance-driven Strictly Confidential 13
Slide 14: Three strategic pillars to deliver on the vision
Three strategic pillars to deliver on the vision 1 2 3 Growth Efficiency Capability Pursue disciplined expansion Protect the core Ensure our organization is set- plan focused on M&A business and get leaner up to deliver our strategy Strictly Confidential 14 14
Slide 15: Agthia's long-term capital allocation principles
Agthia’s long-term capital allocation principles DEPLOYING CAPITAL FOR PROFITABLE GROWTH RETURNING CAPITAL TO SHAREHOLDERS Invest in growth Targeted & accretive M&A Dividends Disciplined leverage • Focus on margin expansion & • Prioritize growth markets and • Ongoing commitment to • Proactively mana
Slide 16: Growth
01 Growth Strictly Confidential 16
Slide 17: Agthia's Approach to Disciplined M&A
Agthia’s Approach to Disciplined M&A Expanding into attractive … to create value by categories & markets…. accelerating profitable growth Geographic Expansion: • Enhance and harmonize performance management to allow for • Large MENAP markets for proximity & scale effective oversight and capital allo
Slide 18: A funnel approach to prioritizing the geographic expansion
A funnel approach to prioritizing the geographic expansion Some of the geographical filtering criteria include: Market Size Tier 1 countries include: Demand & Supply Fundamentals Availability of Acquisition Targets Competitive Landscape Regulatory Framework Valuations Strictly Confidential 18
Slide 19: A funnel approach to prioritizing the category expansion
A funnel approach to prioritizing the category expansion Some of the category filtering criteria include: Market Size Categories of focus include: Growth Potential Consumer Proposition / Value Added Concept Protein Snacking Master Brand Potential Size of Opportunity Competitive Landscape Plant-based
Slide 20: A clear framework to identify M&A targets
A clear framework to identify M&A targets Market Leading Trusted Brands (Top 3) Player Investment Criteria Value Accretive for Experienced Shareholders Management Teams Strictly Confidential 20
Slide 21: Accelerating Agthia's growth By 2025
Accelerating Agthia’s growth By 2025: Strengthen our base Upscale priority ❑ Re-energize the water category markets ❑ Protect Flour and Feed categories ❑ Shift portfolio mix towards higher margin categories Expand into value- add categories Expand beyond ❑ Disciplined M&A Drive EBITDA margin ❑ Focus
Slide 22: Delivering on our disciplined M&A strategy
Delivering on our disciplined M&A strategy Announcement Oct 2020 Dec 2020 Jan 2021 April 2021 Dates & derivatives, Bakery snacking Frozen & chilled processed Frozen & chilled processed Categories confectionary Protein products Protein products International with strong Kuwait mainly Jordan 50%, GCC
Slide 23: Shifting towards higher-margin categories
Shifting towards higher-margin categories Higher EBITDA1 Lower EBITDA1 margin categories: margin categories: - Bakery (Al Faysal): 24% - Existing businesses: 12% - Protein (Atyab): 19% - Protein (Nabil): 17% Benchmark: <15% - Dates (Al Foah): 16% Benchmark: >15% >75% 72% 55% 28% Larger & more Narrow
Slide 24: Efficiency
02 Efficiency Strictly Confidential 24
Slide 25: Agthia has a proven track record of cost optimization
Agthia has a proven track record of cost optimization Cost reduction programs 2015-2020 Y-o-Y cost savings, AED’MN X % of SG&A1 SG&A reduction 7% 7% 7% 11% 18% 7% 11% 18% 8% 8% 8% 8% 259 40 41 Design to Value optimization 81 48 Distribution efficiency 27 22 2015 2016 2017 2018 2019 2020 Total Strict
Slide 26: Our efficiency effort focus going forward
Expected impact i. Synergies • Commercial excellence (channel ubiquity, e-com, home delivery) • World-class procurement, manufacturing and supply chain Extraction + • Working Capital excellence • Strategic partnerships (distribution, manufacturing) Our efficiency • Operational optimization effort fo
Slide 27: Capability
03 Capability Strictly Confidential 27
Slide 28: Leveraging capability to define our competitive advantage
Leveraging capability to define our competitive advantage People Organization Culture & know-how • Blending senior leadership • BU led, with empowered • Distinctive in RGM embedded locally experience (over 150 years accountable leaders through CoE’s and leveraged across in FMCG) with a strong • Righ
Slide 29: Experienced Board of Directors
Experienced Board of Directors Khalifah Al Suwaidi Salmeen Obaid Alameri Gil Adotevi Khamis Bu Haroun Chairman of the Board Vice Chairman Board Member Board Member Current role Group Chief Investment Officer - Chief Executive Officer – Investment Director - Chairman – ADQ Al Dahra UAE Division ADQ A
Slide 30: Leadership Team
Leadership Team Alan Smith Ammar Al-Ghoul Mubarak Al Mansoori Ramy Merdan Dr. Rabih Kamleh Ahmad Yahya Current role Chief Executive Officer Chief Financial Officer Chief Human Capital and Chief Operating Officer Chief R&D and QA Officer Executive VP – Growth & Corporate Services Officer Categories T
Slide 31: Sustainability & innovation at the forefront of our strategy
Sustainability & innovation at the forefront of our strategy Product innovation is accelerating our 1 topline growth Increased SKUs in flour from 3 to 26 which protected us post-subsidy ❑ Evolving in line with changing consumer trends towards health and wellness Product innovation in line with UAE’s
Slide 32: Financial Performance
Financial Performance Strictly Confidential
Slide 33: Historical financial performance
Historical financial performance Revenue EBITDA1 AED’MN AED’MN Growth vs. standalone 64% Growth vs. standalone Margin 92% 17% 18% 15% 16% 14% 12% 14% 2.0% 3,371 481 2,012 2,048 2,001 2,039 2,061 1,866 356 318 313 316 285 251 2015 2016 2017 2018 2019 2020 2020 2015 2016 2017 2018 2019 2020 2020 Net I
Slide 34: Strong balance sheet provides support to fuel growth
Strong balance sheet provides support to fuel growth Solid balance sheet 2020 Net Debt / (Net Cash) position over EBITDA 2020 reported cash balance 2.4x AED776MN 1.0x 2020 reported net cash position AED239MN Average cost of debt funding ~1.5% (1.0x) Agthia Agthia (Pro-forma)* Median of Peers Strictl
Slide 35: We have already made big strides toward achieving our targets
We have already made big strides toward achieving our targets 2020 Revenue 2020 EBITDA1 AED’MN AED’MN 61% 13% 3% 11% 13% 52% 14% 4% 13% 16% 2020 Net Income1 AED’MN 50% 18% 4% 11% 16% Normalization adjustments AED'MN One-off IFRS bad debt provisions2 58.1 Capri Sun inventory & machinery write-off3 9.
Slide 36: Shareholder returns at the core of our decision-making…
Shareholder returns at the core of our decision-making… Dividends per Share1 2020 Total Shareholder Returns1,3 AED Dividend payout ratio2 32% 35% 44% 43% 66% 102% Dividend distribution policy for the year 0.15 0.15 0.15 0.15 0.165 2021 onward to be on a semi-annual basis 0.125 +23% 22.6% 2015 2016 2
Slide 37: … and are expected to continue increasing in light of recent share price performance
… and are expected to continue increasing in light of recent share price performance Announcement of Announcement of Announcement of acquisition of acquisition of 8 acquisition of Al Nabil Foods Atyab Announcement of Appointment of acquisition with Al Faysal Bakery Appointment of Foah new Board & ne
Slide 38: Financial framework and targets
Financial framework and targets Enhance profitability through emphasis on higher Guidance margin product categories & high growth geographies • Continue with acquisitive strategy Continued focus on maximizing cost efficiencies and High Growth across geographies and product capturing synergies catego
Slide 39: Agthia: A journey to becoming a regional F&B leader by 2025
Agthia: A journey to becoming a regional F&B leader by 2025 Strictly Confidential
Slide 40: Agthia: A journey to becoming a regional F&B leader by 2025
Agthia: A journey to becoming a regional F&B leader by 2025 Build market leadership positions and master brands across the region Optimize our product portfolio mix Maintain a principled capital allocation framework Adopt a best-in-class ESG framework Deliver shareholder returns in line with global
Slide 41: Thank You
Thank You For all inquiries and questions concerning investor relations, please contact: Sahar Srour, CFA Investor Relations Manager T: +971 2 596 0672 E : [email protected]