Olam Group Limited · SGX:VC2
Olam — Investor Presentation (August 2022)
44 slides from Olam's investor presentation, August 2022
Slide 1: Transforming to serve a changing world
Olam Group Limited Transforming Important instruction: Place an image in exactly the same position as this grey box. to serve a Subtitle and Date Select the image. [Mac] in the menu, select ‘Arrange’ changing world and then ‘Send to Back’. [PC] right click and then ‘send to Back’. This will then ren
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation may contain statements regarding the business of Olam Group Limited and its subsidiaries (the ‘Group’) that are of a forward-looking nature and are therefore based on management’s assumptions about future developments. Such forward look
Slide 3: Group overview
Group overview We are a leading food and agri-business supplying food, ingredients, feed and fibre to over 20,900 customers worldwide. We are We are We are We are farmers suppliers processors innovators Field and farming experts Connecting customers to Transforming raw Offering added value growing c
Slide 4: Over 30 years of growth
Over 30 years of growth Year: 1989 Year: 2021 Our products 1 47 Our countries Nigeria 60+ Our revenue S$2 million S$47.0 billion Our employees 43,100 * Employees refer to full-time employees. Including seasonal and temporary workers, employees at 82,300 in 2021. Olam Group Limited Investor Presentat
Slide 5: Our aspiration
Our aspiration Our Purpose Our To re-imagine global vision agriculture and food systems. Our To be the most governing objective differentiated and valuable global food and agri-business by 2040. To maximise long-term intrinsic value for our continuing shareholders. Olam Group Limited Investor Presen
Slide 6: Our shareholders
Our shareholders First listed on the Singapore Exchange in 2005, we are now listed as Olam Group Limited since March 16, 2022, supported by a diversified shareholder group with long-term investment horizon. Temasek Mitsubishi Kewalram Directors Other Holdings Corporation Chanrai Institutional Group
Slide 7: Our customers
Our customers Diversified base with long-term relationships Number of customers Strong and reputable customer base More than 20,900 customers worldwide, including several leading global brands Olam Group Limited Investor Presentation | August 2022 7
Slide 8: Re-organisation of Olam
Re-organisation of Olam In January 2020, Olam announced a transformational Re-organisation Plan to re-organise its diverse business portfolio into three distinct operating groups that are Purpose-led and future- ready in order to maximise Olam’s long-term value on a sustained basis. Objective To exp
Slide 9: Re-organisation of Olam
Re-organisation of Olam Creation of three distinct operating groups Olam Agri is a market leading and Remaining Olam Group is responsible ofi is a global leader in ingredients at the for the divestment of non-core assets, nurturing and forefront of food and beverage consumer differentiated food, fee
Slide 10: ofi in numbers
ofi in numbers Cocoa Coffee Nuts Spices Dairy 14.2 Billion revenue (S$) 1,1 4 Million 5 EBITDA (S$) 821 Million EBIT (S$) 110+ Manufacturing 49 Countries 22,000+ employees 11,000+ customers facilities Note: Data restated to reflect transfer of ofi’s Russian operations (primarily comprising the Rusmo
Slide 11: ofi: Growth framework
ofi: Growth framework Organic Growth – Growing & extending the core Extract full value from current investments Increase share of value with targeted strategic customers Contribution to medium-term Volume growth: Focus on cost competitiveness Low to Mid-single digit Expand innovation & sustainabilit
Slide 12: Olam Agri in numbers
Olam Agri in numbers 3 Segments 1 Food & Feed - Origination & 30 9,100+ S$31.3b Merchandising countries employees revenue 2 Food & Feed - 41m 50+ 15.9% Processing & EBIT/IC Value-added tonnes in volume Manufacturing & handled processing facilities 3 S$930m S$753m Fibre, Agri- Industrials & Ag Servic
Slide 13: Olam Agri key highlights
Olam Agri key highlights 1 2 3 4 5 Strategically Participation in key Clear pathways to Helmed by a highly Market leading positioned as a food parts of the global agri significantly grow experienced, capable sustainability track security play in the market and targeted earnings on a and engaged reco
Slide 14: Olam Agri: Positioning for future growth
Olam Agri: Positioning for future growth The Saudi Agricultural and Livestock Investment Company (“SALIC”), a wholly owned subsidiary of Public Investment Fund (PIF) of the Kingdom of Saudi Arabia (KSA), to invest US$1.24 billion for an estimated 35.4% stake in Olam Agri 1. Illuminates and unlocks v
Slide 15: Remaining Olam Group
Remaining Olam Group Remaining Olam Group Olam Global Holdco (OGH) Olam Ventures Olam Technology and holds 5 de-prioritised assets earmarked for exit, acts as a foundry to build new sustainability and Business Services (OTBS) 3 gestating businesses and 1 continuing business, digital platforms for gr
Slide 16: Olam Ventures
Olam Ventures 1 2&3 4 5 6 Disruptive idea Built on the twin engines Strategic & Financial Material & Scalable Smart investing (digital of Digitalisation and value to Olam opportunity – large enough & sustainability) rather Sustainability opportunities that can than asset-heavy capital become new eng
Slide 17: Reporting segments and key performance metrics
Reporting segments and key performance metrics Operating group Businesses Reporting segments Key performance metrics Cocoa, Coffee, Dairy, Nuts, 1) Global Sourcing Segment-level Spices 2) Ingredients & Solutions Volume, Revenue, EBIT, EBIT ofi Margin, Invested Capital (IC), EBIT/IC Grains & Oilseeds
Slide 18: Group 2021 financials
Group 2021 financials Revenue by Operating Group EBIT by Operating Group Sales Revenue by Region (S$ Million) (’000 Metric Tonnes) (S$ Million) 2.4% 52.9% (14.4%) 16.5% 16.8% 66.5% 31.1% 61.5% 47,002.0 47,002.0 1,422.6 +31.2% +31.2% +33.0% 19.7% Americas ofi 47.0% Asia | Australia | Middle East Olam
Slide 19: Re-organisation: Progress update
Re-organisation: Progress update Completed substantial carve-out and Olam Group Limited as new parent separation of businesses into 3 operating holding 100% of ofi, Olam Agri, Olam groups: ofi, Olam Agri and Remaining Olam Global Holdco, Olam Ventures and OTBS Group, comprising Olam Ventures, Olam T
Slide 20: Re-organisation: Progress update
Re-organisation: Progress update New structure for Olam Group¹ Olam Group Limited 100.0% 100.0% Sale of Shares in ofi Group Ltd. Olam Agri Olam Holdings Pte. Ltd. 35.4%² 64.6%³ 100.0% 100.0% 100.0% Olam Agri Holdings Pte. Ltd. Olam Technology Olam Global Olam Ventures and Business Holdco Pte. Ltd. P
Slide 21: Re-organisation: Progress update
Re-organisation: Progress update Next steps Remaining Olam Group Remain committed and fully Complete the transaction with Continue to responsibly divest prepared to pursue an IPO SALIC by end-2022, obtaining all de-prioritised assets marked for exit and demerger pending regulatory approvals and secu
Slide 22: Group H1 2022 results
Group H1 2022 results At a glance Volume & 22.5 M MT S$28.4 B Operational S$472.5 M Revenue +0.5% +24.6% PATMI +8.2% S$802.1 M +S$864.0 M EBIT Free Cash +25.0% Flow S$466M S$429.1 M From 1.60x to PATMI Gearing +1.8% 1.73x 22 Olam Group Limited Investor Presentation | August 2022
Slide 23: Group H1 2022 results
Group H1 2022 results Consolidated results by operating group ofi Olam Agri Remaining Olam Group Invested Capital Volume ('000 MT) Revenue (S$ million) EBIT (S$ million) (S$ million) 2.2% 2.7% (8.9)% 8.0% 16.1% 28.5% 25.4% 33.0% 22,490.0 28,445.1 802.1 19,924.1 +0.5% +24.6% +25.0% +11.1% 89.8% 68.8%
Slide 24: Group H1 2022 financial highlights
Group H1 2022 financial highlights Strong EBIT growth and Disciplined capital Interim dividend improved Operational PATMI management • EBIT grew 25.0% with very strong • Strong cash generation with FCFF • Board of Directors declares interim contribution by Olam Agri which and FCFE of S$719.7 million
Slide 25: Group H1 2022 results: P&L
Group H1 2022 results: P&L S$ million H1 2022 H1 2021 % Change Volume ('000 MT) 22,490.0 22,367.4 0.5 Revenue^ 28,445.1 22,833.4 24.6 EBITDA^ 1,148.0 935.5 22.7 EBIT^ 802.1 641.6 25.0 PAT 394.4 382.7 3.1 PATMI 429.1 421.5 1.8 Operational PATMI^ 472.5 436.6 8.2 ^ Excluding exceptional items Olam Grou
Slide 26: Group H1 2022 results: Sales volume up 0.5%
Group H1 2022 results: Sales volume up 0.5% Positive contribution by ofi, Olam Agri Volume by operating group ('000 MT) +0.5% 100 22,490 -32 55 22,367 H1 2021 ofi Olam Agri Remaining H1 2022 Olam Group Note: Post H1 2021, certain businesses were transferred between operating groups. The Coffee plant
Slide 27: Group H1 2022 results: EBIT increased by 25.0%
Group H1 2022 results: EBIT increased by 25.0% to S$802 million Strong EBIT contribution by Olam Agri EBIT by operating group (S$ million) +25.0% 201 802 -5 642 -35 H1 2021 ofi Olam Agri Remaining H1 2022 Olam Group Note: Post H1 2021, certain businesses were transferred between operating groups. Th
Slide 28: Operational PATMI up 8.2% to S$473 million
Operational PATMI up 8.2% to S$473 million Reported PATMI up 1.8% to S$429 million PATMI and Operational PATMI (S$ million) +1.8% 160 422 -73 429 -48 -28 -4 H1 2021 EBIT^ Net Finance Taxation^ Exceptional Non- H1 2022 Costs^ Items controlling Interests Operational 437 +36 473 PATMI (S$ M) ^ Excludes
Slide 29: Group H1 2022 results: Balance sheet
Group H1 2022 results: Balance sheet S$ million Jun-2022 Jun-2021 Change Fixed Capital 9,689.3 9,724.1 (34.8) Right-of-use assets 882.5 746,7 135.8 Uses of Capital Working Capital 7,791.8 7,319.9 471.9 Cash 6,395.3 3,542.3 2,853.0 Others 1,525.9 502.0 1,023.9 Total 26,284.8 21,835.0 4,449.8 Equity &
Slide 30: Group H1 2022 results: Strong liquidity position
Group H1 2022 results: Strong liquidity position Total borrowings and available liquidity (S$ million) as at June 30, 2022 10,109 24,339 Short-Term Long-Term +5,299 19,040 1,270 6,565 10,020 6,395 9,020 Cash and RMI* Secured Unutilised Available Total Short-term Receivables Bank Lines Liquidity Borr
Slide 31: ofi H1 2022 results
ofi H1 2022 results S$ Million S$ Million EBIT Invested Capital Global Sourcing -11.8% Ingredients & Solutions 300 +6.8% 265 36% 11,652 10,914 48% 43% 45% 64% 52% 55% 57% H1 2021 Restated H1 2022 Jun-21 Restated Jun-22 EBIT margin 4.5% 3.3% • ofi’s EBIT decline of 11.8% is set against a very strong
Slide 32: ofi H1 2022 results: Global Sourcing
ofi H1 2022 results: Global Sourcing S$ Million S$ Million EBIT Invested Capital +17.6% Working Capital +1.4% 128 Fixed Capital 4,889 4,956 109 3,140 3,340 1,749 1,616 H1 2021 Restated H1 2022 Jun-21 Restated Jun-22 EBIT margin 2.4% 2.2% • Strong EBIT growth of 17.6% was driven by performances • IC
Slide 33: ofi H1 2022 results: Ingredients & Solutions
ofi H1 2022 results: Ingredients & Solutions S$ Million Invested Capital EBIT -28.4% Working Capital +11.2% 192 Fixed Capital 6,696 6,024 137 2,840 2,622 3,402 3,856 H1 2021 H1 2022 Jun-21 Restated Jun-22 Restated EBIT margin 6.0% 3.8% • EBIT decreased 28.4% driven by the adverse impact of input cos
Slide 34: Olam Agri H1 2022 results
Olam Agri H1 2022 results Food & Feed - Origination & Merchandising Food & Feed - Processing & Value-added Fibre, Agri-industrials & Ag Services S$ Million +49.4% S$ Million +43.5% EBIT 609 Invested Capital 5,055 17% 38% 3,524 408 8% 36% 49% 29% 48% 32% 33% 44% 34% 32% H1 2021 H1 2022 Jun-21 Jun-22
Slide 35: Olam Agri: Food & Feed - Origination & Merchandising
Olam Agri: Food & Feed - Origination & Merchandising S$ Million S$ Million +57.8% +204.2% EBIT Invested Capital 229 862 Working Capital Fixed Capital 145 596 283 104 179 266 H1 2021 H1 2022 Jun-21 Jun-22 EBIT/MT (S$) 9 14 Grains exports out of Russia and Ukraine were significantly lower during this
Slide 36: Olam Agri: Food & Feed - Processing & Value-added
Olam Agri: Food & Feed - Processing & Value-added S$ Million S$ Million EBIT +35.8% +45.3% Invested Capital 177 2,467 Working Capital Fixed Capital 130 1,698 1,159 418 1,280 1,308 H1 2021 H1 2022 Jun-21 Jun-22 EBIT/MT (S$) 57 85 Strong EBIT growth of 35.8% despite escalating grains prices as Olam IC
Slide 37: Olam Agri: Fibre, Agri-industrials & Ag Services
Olam Agri: Fibre, Agri-industrials & Ag Services S$ Million S$ Million EBIT +53.5% Invested Capital +11.9% 203 Working Capital 1,727 1,543 Fixed Capital 132 1,094 1,331 449 396 H1 2021 H1 2022 Jun-21 Jun-22 EBIT/MT (S$) 111 167 Solid EBIT performance: Cotton led the pack with strong report card on I
Slide 38: Remaining Olam Group H1 2022 results
Remaining Olam Group H1 2022 results De-prioritised/Exiting Assets Continuing/Gestating Businesses Incubating Businesses EBIT Invested Capital -9.1% -8.1% S$ Million S$ Million 4 3,501 -12 3,216 855 552 -16 -46 -38 2,643 2,656 -30 -66 -72 3 8 H1 2021 Restated H1 2022 Jun-21 Restated Jun-22 • EBIT lo
Slide 39: Business outlook and prospects
Business outlook and prospects 1 2 3 4 5 The significant demand ofi anticipates In light of the current The Group expects Overall, given the growth rate and pick-up improved margins and high commodity price to incur additional H1 2022 results and seen in H2 2021 has EBIT in H2 2022 as and rising int
Slide 40: Governance: Board of directors
Governance Board of directors Olam Group Limited Investor Presentation | August 2022 40
Slide 41: Governance: Five Board Committees oversee risk management
Governance Five Board Committees oversee risk management • Trading: e.g. Price, • Operational: Stock, • Operational: Project • Agricultural: Weather, • Key Persons Basis, Liquidity Quality, Fraud, Execution, Asset Pests, Diseases, Systems & Controls Utilisation Agronomy • Operational: Credit, Counte
Slide 42: Governance: Living our Purpose
Governance: Living our Purpose Sustainability framework Our Purpose Re-Imagining Global Agriculture and Food Systems Purpose Outcomes Prosperous Farmers Thriving Communities Re-generation of the Living World and Food Systems Priority Diversity Economic Safe and Education Nutrition Climate Healthy Ec
Slide 43: Recognitions
Recognitions • Featured in 2022’s and 2021’s Fortune Global 500 • IR Magazine Southeast Asia Awards 2020 and 2019: Best Annual Report (Mid-cap) • The Asset Triple A Country Awards 2020: Best Issuer for Sustainable Finance and Best Sustainability- linked Loan • Singapore Corporate Awards 2019, Best A
Slide 44: Olam Group Limited Investor Presentation | August 2022
Olam Group Limited Investor Presentation | August 2022 olamgroup.com/investors.html [email protected] 44