Olam Group Limited · SGX:VC2
Olam — FY2021 Earnings Presentation
49 slides from Olam's earnings presentation, Feb 28, 2022
Slide 1: Full Year 2021 Results Briefing
Full Year 2021 Results Briefing February 28, 2022
Slide 2: Notice
Notice This presentation should be read in conjunction with Olam International Limited’s Financial Statements and Management Discussion and Analysis for the Second-Half (“H2 2021”) and Full Year ended December 31, 2021 (“2021”) lodged on SGXNET on February 28, 2022. Olam International Limited Result
Slide 3: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements • This presentation and announcement entitled “Full Year 2021 Results” may contain statements regarding the business of Olam International Limited and its subsidiaries (the ‘Group’) that are of a forward-looking nature and are therefore based on manageme
Slide 4: Presenters
Presenters Sunny Verghese N. Muthukumar A. Shekhar Co-Founder and Group CEO Group CFO CEO, ofi Olam International Limited Olam International Limited Olam International Limited Results for Full Year ended December 31, 2021 | February 28, 2022 4
Slide 5: Agenda
AGENDA Re-organisation of Olam – Progress highlights 2021 Group financial highlights Segmental performance by operating group Business prospects and outlook Key takeaways
Slide 6: Re-organisation of Olam: Recap
Re-organisation of Olam: Recap Olam has announced a transformative Re-organisation Plan to split the Group into three new operating groups – Olam Food Ingredients (ofi), Olam Global Agri (now known as Olam Agri) and Olam International (OIL) via a carve-out, subsequent IPO and a concurrent demerger o
Slide 7: Re-organisation of Olam: Recap
Re-organisation of Olam: Recap Provide active stewardship to ofi & OGA Segments until carve-out, IPO & demerger, responsibly - De-prioritised/Exiting Assets divest non-core businesses & assets - Gestating Businesses: Packaged Foods (Caraway), Olam Palm Olam earmarked for exit, nurture & partially/fu
Slide 8: Re-organisation of Olam: Steps to be completed
Re-organisation of Olam: Step 4 to be completed STEP 4 ofi IPO and Demerger, Olam Agri Strategic Options STEP 3 • Target ofi listing by Q2 2022; ofi will be Carve-out and demerged from Olam Group by way of a distribution in specie of shares in OFIGL* STEP 2 Separation to Olam shareholders at the poi
Slide 9: Re-organisation of Olam: New Group structure
Re-organisation of Olam: New Group structure After completion of Proposed After completion of Separation After completion of Scheme Dividend in Specie, Proposed 1 (on or around 15 March) 2 Disposal, Proposed Dilution and Proposed Demerger Existing Existing New Public Existing Shareholders Shareholde
Slide 10: Re-organisation of Olam: Summary
Re-organisation of Olam: Summary 1 The Company has substantially completed the carve-out and separation of its businesses into three coherent operating groups: ofi, Olam Agri and OIL The Company sought and received shareholder approvals to implement the Re-organisation by way of: 1. Scheme of Arrang
Slide 11: 2021 Group financial highlights
2021 Group financial highlights
Slide 12: Group 2021 results at a glance
Group 2021 results At a glance Volume & Revenue EBIT PATMI 45.4 M MT S$47.0 B S$1,423 M S$686 M +2.3% +31.2% +33.0% +179.4% Operational Free Gearing PATMI Cash Flow S$961 M FCFE Unchanged at +41.8% -S$1.0 B 1.72x Olam International Limited Results for Full Year ended December 31, 2021 | February 28,
Slide 13: Group 2021 financial highlights
Group 2021 financial highlights Record Reported & Resilient balance sheet Operational PATMI Proposed final dividend despite rising prices 179.4% growth in PATMI in 2021 to Strong cash position of S$4.3 billion, Board of Directors declares S$686.4 million with available liquidity of S$22.5 billion se
Slide 14: Consolidated results by operating group
Consolidated results by operating group 2021 at a glance Volume ('000 MT) 1.5% Revenue (S$ m) 2.4% 9.1% Volume 31.1% ofi ('000 MT) ofi 45,425.3 Olam Agri 47,002.0 20,058.4 Olam Agri +2.3% OIL +31.2% +5.0% OIL 89.4% 66.5% EBIT (S$ m) IC (S$ m) (14.4%) 27.6% 13.5% ofi ofi 1,422.6 Olam Agri 19,007.1 Ol
Slide 15: Volume grew 2.3%
Volume grew 2.3% Contributed by both ofi and OGA Volume by operating group, '000 MT +2.3% 44,410 486 682 45,425 -151 2020 ofi Olam Agri OIL 2021 Note: 2020 financial results for the operating groups have been re-stated to reflect intra-group adjustments. Olam International Limited Results for Full Y
Slide 16: EBIT increased by 33.0% to S$1.4 billion
EBIT increased by 33.0% to S$1.4 billion Strong contribution from ofi and OGA EBIT by operating group, S$ million +33.0% 256 1,423 -29 126 1,070 2020 ofi Olam Agri OIL 2021 Note: 2019 and 2020 financial results for the operating groups have been re-stated to reflect intra-group adjustments. Olam Int
Slide 17: Record Reported & Operational PATMI
Record Reported & Operational PATMI Reported PATMI up 179.4%, Operational PATMI up 41.8% on strong EBIT growth PATMI and Operational PATMI, S$ million +179.4% 157 16 686 353 4 -90 246 2020 EBIT^ Net Finance Taxation Exceptional Non-controlling 2021 Costs Items Interests Operational 678 +41.8% 961 PA
Slide 18: 14.0% increase in invested capital
14.0% increase in invested capital Driven by Capex and working capital investments Working Capital Fixed Capital Net gearing Adjusted net gearing +14.0% 19,007 1.72 1.72 16,666 15,789 8,976 6,767 7,931 0.75 0.63 9,023 8,735 10,031 Restated 2019 Dec-20 Dec-21 EBIT/IC 6.9% 6.6% 8.0% 31-Dec-20 31-Dec-2
Slide 19: Free cash flow reflects strategic investments
Free cash flow reflects strategic investments Net operating cash flow grew S$762 million Free Cash Flow to Equity (FCFE), S$ million -438 671 -2 90 -592 9 -1,207 -1,031 2020 Operating Cash Changes in Tax Paid Capex / Net Interest H1 2021 Flow (before Working Capital Investments Paid Interest & Tax)
Slide 20: Strong liquidity position
Strong liquidity position Total borrowings and available liquidity, S$ Million as at December 31, 2021 Short-Term Long-Term 11,191 22,512 +5,802 16,710 7,075 1,065 5,938 4,318 9,635 Cash and Short- RMI* Secured Unutilised Available Total term Fixed Deposits Receivables Bank Lines Liquidity Borrowing
Slide 21: Segmental performance by operating group
Segmental performance by operating group
Slide 22: ofi 2021 results
afi 2021 results ofi
Slide 23: ofi in numbers
ofi in numbers Cocoa Coffee Nuts Spices Dairy 14.6 Billion revenue (S$) 1,217 Million EBITDA (S$) 875 Million EBIT (S$) 110+ Manufacturing 50 Countries 20,000+ employees 11,000+ customers facilities 23
Slide 24: ofi – attractive portfolio with strong growth prospects
ofi – attractive portfolio with strong growth prospects 1 Value-added ingredients & solutions, Leading on-trend portfolio, serving large, attractive serving ~US$743bn1 key end-use categories, and growing end-use categories which are growing at ~5% CAGR1,2 2 Integrated with Access to presence 2.6 mil
Slide 25: ofi 2021 results
ofi 2021 results S$ Million Invested Capital EBIT +7.0% Global Sourcing Ingredients & Solutions +12.1% +16.8% 875 +20.1% 765 750 11,187 52% 8,901 9,312 50% 49% 46% 62% 59% 50% 51% 48% 54% 38% 41% Restated 2019 Restated 2020 2021 Restated Restated Dec-21 Dec-19 Dec-20 EBIT Margin 6.5% 6.1% 6.0% EBIT/
Slide 26: ofi: Global Sourcing
ofi: Global Sourcing S$ Million EBIT Invested Capital +9.1% -3.7% Working Capital +23.7% Fixed Capital -7.2% 455 5,496 5,491 5,095 382 368 3,278 3,279 2,907 2,218 2,212 2,188 Restated Restated 2021 Restated Restated Dec-21 2019 2020 Dec-19 Dec-20 EBIT Margin 4.1% 3.7% 4.5% EBIT/IC 7.3% 6.7% 8.6% • S
Slide 27: ofi: Ingredients & solutions
ofi: Ingredients & solutions S$ Million EBIT Invested Capital +4.9% +33.8% Working Capital +10.1% Fixed Capital +59.4% 421 6,092 383 382 2,633 3,822 3,405 1,662 1,967 3,459 1,743 1,855 Restated Restated 2021 Restated Restated Dec-21 2019 2020 Dec-19 Dec-20 EBIT Margin 7.9% 7.3% 6.3% EBIT/IC 11.2% 10
Slide 28: 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 & sustainabil
Slide 29: Olam Agri 2021 results
AA Olam Agri 2021 results
Slide 30: Olam Agri at a glance
3 Segments 30 8,900+ S$31.3b 1 countries Employees revenue Food & Feed - Origination & Merchandising 41m 50+ 2 tonnes in volume handled Manufacturing & processing facilities Food & Feed - Processing & Value added 3 S$930m S$753m EBITDA 2018-2021 CAGR: 42.5% EBIT 2018-2021 CAGR: 46.7% Fibre, Agri-Ind
Slide 31: Olam Agri: Key highlights
Olam Agri: Key highlights 1 Strategically positioned in the attractive food & agri sector supported by strong secular fundamentals, with a clear focus on high-growth emerging consumption markets 2 Participation in key parts of the global agri market and targeted sub-markets through a differentiated
Slide 32: Olam Agri 2021 results
Olam Agri 2021 results S$ Million Food & Feed - Origination & Merchandising Food & Feed - Processing & Value-added Fibre, Agri-industrials & Ag Services EBIT Invested Capital +40.1% +27.7% +51.5% +24.5% 753 5,242 4,211 16% 35% 497 3,214 19% 384 8% 40% 38% 37% 44% 39% 60% 36% 50% 44% 28% 32% 37% 25%
Slide 33: Olam Agri: Food & Feed - Origination & Merchandising
Olam Agri: Food & Feed - Origination & Merchandising S$ Million EBIT Invested Capital +33.2% +79.3% +42.7% Working Capital +4.7% 267 Fixed Capital 813 851 187 150 657 677 265 131 134 136 194 Restated Restated Dec-21 Restated 2019 Restated 2020 2021 Dec-19 Dec-20 EBIT/MT (S$) 5 6 8 EBIT/IC 42.1% 34.7
Slide 34: Olam Agri: Food & Feed - Processing & Value-added
Olam Agri: Food & Feed - Processing & Value-added S$ Million EBIT Invested Capital +40.6% +4.2% Working Capital +9.6% Fixed Capital +11.6% 275 251 2,074 1,912 1,859 514 591 816 139 1,398 1,268 1,258 Restated 2019 Restated 2020 2021 Restated Restated Dec-21 Dec-19 Dec-20 EBIT/MT (S$) 42 58 61 EBIT/IC
Slide 35: Olam Agri: Fibre, Agri-industrials & Ag Services
Olam Agri: Fibre, Agri-industrials & Ag Services S$ Million EBIT Invested Capital Working Capital +49.7% +49.4% Fixed Capital +256.9% +50.6% 211 2,317 1,538 94 1,038 1,894 59 1,073 689 349 465 423 Restated 2019 Restated 2020 2021 Restated Restated Dec-21 Dec-19 Dec-20 EBIT/MT (S$) 47 29 95 EBIT/IC 1
Slide 36: Exploring various strategic options to maximise long-term value
Exploring various strategic options to maximise long-term value Olam Agri delivered another record set of OG is exploring various strategic options to maximise the results across all its segments as it continues to value of Olam Agri and find opportunities for further take advantage of key secular t
Slide 37: Olam International (OIL)
Olam International (OIL) Once Scheme is effective, OG takes over the role of OIL to provide active stewardship to ofi & OGA until IPOs & demergers and operates the following businesses: 1 Olam Global Holdco (OGH) holds de-prioritised and gestating assets and will responsibly divest these non-core as
Slide 38: Olam International (OIL)
Olam International (OIL) S$ Million De-prioritised/Exiting Assets Gestating Businesses Incubating Businesses (including corp adjustments) EBIT Invested Capital -16.2% -18.0% 3,674 -35 -27 3,143 -46 1,251 -1 923 2,578 -45 564 -87 -102 -91 2,423 2,219 2,000 -56 -77 -177 Restated Restated Dec-21 -206 D
Slide 39: Olam Ventures
Olam Ventures Criteria for selecting Engine 2 ventures 1• Built on the twin engines of Digitalisation and Sustainability 2• Leveraging Olam’s core strengths & unique assets 3• Strategic & Financial value to Olam 4• Disruptive idea 5• Material & Scalable opportunity – large enough opportunities that
Slide 40: Business prospects and outlook
Insert Business sub-header prospects and text outlook here
Slide 41: Business prospects and outlook
Business prospects and outlook • Even as the Covid-19 pandemic continues and the pace of economic recovery across the world is uneven, we have observed a discernible pick-up in demand since 2021 as the major economies, including the US, EU, UK, China and Japan, as well as in emerging markets in Asia
Slide 42: In summary
In summary Record Reported and Operational PATMI 01 • Reported PATMI growth of 179.4% to S$686.4 million; Operational PATMI at S$961.1 million, a 41.8% growth over 2020, with strong contribution from both ofi and Olam Agri • EBIT growth by ofi (16.8%) and Olam Agri (51.5%) in 2021 On track to delive
Slide 43: Appendix
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Slide 44: P&L statement
P&L statement S$ million 2021 2020 % Change Volume ('000 MT) 45,425.3 44,409.7 2.3 Revenue 47,002.0 35,820.0 31.2 Net gain/(loss) in fair value of biological assets^ 97.7 (60.3) n.m. Depreciation & Amortisation (627.2) (561.3) 11.7 EBIT^ 1,422.6 1,069.5 33.0 Net Finance costs^ (411.2) (415.7) (1.1)
Slide 45: P&L statement
P&L statement S$ million H2 2021 H2 2020 % Change Volume ('000 MT) 23,057.9 24,351.3 (5.3) Revenue 24,168.5 18,739.5 29.0 Net gain/(loss) in fair value of biological assets^ 104.1 (64.1) n.m. Depreciation & Amortisation (333.3) (288.7) 15.5 EBIT^ 781.0 645.8 20.9 Net Finance costs^ (214.0) (185.5) 1
Slide 46: Exceptional items
Exceptional items S$ million 2021 2020 H2 2021 H2 2020 Profit on sale of partial stake in ARISE P&L - 121.0 - (2.0) Profit on sale of stake in Subsidiary, net 4.9 - - - Profit on sale of Sugar plant in India - 1.5 - 1.5 Profit on Sale of stake in JV/Associate, net 8.6 48.3 8.6 (0.7) Acquisition rela
Slide 47: Balance sheet
Balance sheet S$ million 2021 2020 Change Fixed Capital 9,532.9 8,309.9 1,223.0 Right-of-use assets 782.7 712.2 70.5 Uses of Working Capital 8,120.6 7,455.7 664.9 Capital Cash 4,317.5 3,115.9 1,201.6 Others 735.1 601.7 133.4 Total 23,488.8 20,195.4 3,293.4 Equity & Reserves 7,210.5 6,425.4 785.1 Non
Slide 48: Cash flow statement
Cash flow statement S$ million 2021 2020 Change Operating Cash flow (before Interest & Tax) 1,787.3 1,697.3 90.0 Changes in Working Capital (489.2) (1,160.9) 671.7 Net Operating Cash Flow 1,298.1 536.4 761.7 Net interest paid (427.7) (437.0) 9.3 Tax paid (179.9) (177.8) (2.1) Cash from divestments 1
Slide 49: 2021 Results Briefing
2021 Results Briefing olamgroup.com/investors.html [email protected]