Almarai Company · TADAWUL:2280
Almarai — Q2 2020 Earnings Presentation
47 slides from Almarai's earnings presentation, Jul 1, 2020
Slide 1: Q2 2020 Earnings Presentation
Q2 2020 Earnings Presentation
Slide 2: Disclaimer
NZ nclhol Almarai 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. We do not make any representation regarding, and assume no responsibility or li
Slide 3: Contents
Contents Market Dynamics Business Performance Financial Performance Capex, Capital Management & Share Price Key Takeaways Almarai’ Q2 2020 Earnings Presentation
Slide 4: Market Dynamics
Slide 5: Strategy and COVID-19 response
Almarai’ Strategy Key actions taken to support strategy Current Priorities COVID-19 Pandemic Almarai to deliver “Quality you can trust” commitment to its consumers whilst being an integral part of the Nation’s food security and understanding that “Our responsibility is bigger”. Proactively implement
Slide 6: Speed of recovery from COVID-19
1 “Recovering Economy” GDP 3 “Resurgent Economy” GDP Virus contained but sector damage; lower LT trend growth Virus contained; strong growth rebound TIME TIME Economics Almarai Economics Almarai • Strong GDP Growth • Strong Growth in Revenue and Market Share • Moderate GDP growth • Resize Business •
Slide 7: Maintaining market share leadership
Dec-18 Dec-19 May-20 May-20 Whilst Category Almarai Value | Almarai Value | Almarai Value Almarai Almarai® Share % Share % Share % Rank maintaining Laban 65 65 66 1 Market Share § Ee@tur 69 67 64 Leadership UHT Milk 20 21 16 Food 36 39 30 Juice 43 43 46 Bakery 55 54 52 Poultry (Fresh Chicken) 37 40
Slide 8: Business Performance
<a eloJl Almarai Business Performance Q2 2020 Earnings Presentation
Slide 9: 00% 4,20 00% 00% 00% 0 4,00 0 14 00% 50 00% 250 75
70 0 70 00% 4,20 0 350 77 0 18 00% 16 00% 60 00% 300 76 0 65 0 4,00 0 14 00% 50 00% 250 75 0 60 0 3,80 0 12 00% 40 00% 200 74 0 10 00% 55 0 3,60 0 80 0% 30 00% 150 73 0 50 0 3,40 0 60 0% 20 00% 100 72 0 40 0% 45 0 3,20 0 10 00% 50 71 0 20 0% 40 0 0% 3,00 0 - 70 0 0% 40 0 0% 1,20 0 60 000 % 3,70 0 16
Slide 10: Q2 2020 Sales Bridge
Q2 2020 Sales Bridge Reported Growth +8.4% | 0.9% 0.8% 0.5% (0.5%) 4,082 ————EE Es SAR Million Like-for-like growth +8.5% Q2 2019 Volume Price Mix Currency Others Q2 2020 Q2 2020 Earnings Presentation 10
Slide 11: Q2 2020 Revenue Growth
Q2 2020 Revenue Growth (SAR Million) KSA Others Total Revenue 2,819 429 4,082 % of Revenue 69% 11% 100% Growth 11% 17% 8% (5%) (15%) +SAR 317M (8%) +SAR 63M +SAR 276M (Reboll Q2 2020 Earnings Presentation Almarai’ ,,
Slide 12: Total Revenue by Geography - SAR 4,082 Million
Total Revenue - SAR 4,082 Million wth of 11% contributed the most to topline Total Growth 4 SAR 317M (8%) Bahrain Jordan 2% Q2YoY %/(YOY%) 11% (2%) 13% 10% (15%) (5%) 38% 10% 276 SAR Million 6) 28 19 (31) (4) 26 9 — x=” ~—D KSA UAE Egypt Kuwait Oman Bahrain Jordan Others 9% 2% 15% 15% (11%) (1%) 36%
Slide 13: Total Revenue by Category - SAR 4,082 Million
ibuted the most to topline growt Total Revenue - SAR 4,082 Million Total Growth -(SAR 317M (8%) Q2 YoY %/(YoY%) 1% 21% 17% 8% (3%) 22% 26% 117 87 a : 30 16 16 (13) — = — Fresh Dairy Cheese, Poultry Bakery Fruit Juice Long Life Other Sales Other Sales 2% Long Life Dairy 8% Fresh Dairy SAR Million Pou
Slide 14: Trade channel growth was a key highlight for the quarter
nal Trade channel growth was a key highlight for the quarter Total Revenue - SAR 4,082 Million Total Growth 4 SAR 317M (8%) Other/ Food Service Q2 YoY %/(YoY%) Exports 1 1 1 1 6% 5% | 12% 1596 (37%) 1596 1 | 320 1 : = J 12 (147) 25 i - on | I Modern Trade Traditional Trade Food Service Other / Expor
Slide 15: Growth delivered mainly in KSA and for Foods, Poultry & LL Dairy
Growth was delivered mainly in KSA and for Foods, Poultry & LL Dai Revenue By Geography - SAR Million Revenue By Category - SAR Million Other Sale: Fresh Dairy Q2 2019 Q2 2020 Q2 2019 Q2 2020. Poultry 7 Cheese, Butter YoY 9 /(YOY%) -_— oll 2 2020 Earnings Presentation Almarai’ ,,
Slide 16: ,0 % 9% ,0 8% 7% 9,00 6% 8,00 5% 4% 7,00 0 3%
11 ,0 00 10 % 9% 10 ,0 00 8% 7% 9,00 0 6% 8,00 0 5% 4% 7,00 0 3% 2% 6,00 0 1% 5,00 0 0% 3,30 0 3% 3,20 0 2% 3,10 0 3,00 0 2% 2,90 0 1% 2,80 0 2,70 0 1% 2,60 0 2,50 0 0% 1,60 0 25 % 1,50 0 20 % 1,40 0 15 % 1,30 0 10 % 1,20 0 5% 1,10 0 1,00 0 0%
Slide 17: Almarai ESG Rating
Almarai_ Rating Performance on Key ESG Issues Biodiversity Management 48/100 ESG Invest Amann Water Management 48/100 SAOOOAOETHTI “ene ; Energy Consumption 85/100 Rating Date March 2020 Environmental Impact from 48/100 Transportation Waste Management 51/100 Company Amari Company Environmental SME |
Slide 18: Financial Performance
Performance Almarai® Q2 2020 Earnings Presentation
Slide 19: Financial Performance - Q2 2020
Financial Performance - Q2 2020 Q2 2020 vs. Q2 2019 YoY %/(YoY%) Revenue - Resilience during pandemic * Stable Market growth for Fresh products however 10.5% long life product market, including poultry experiencing high growth due to COVID-19 8.4% impact * Maintain market leadership in all key categ
Slide 20: Results by Segment - Q2 2020
Results by Segment - Q2 2020 (Resilience during pandemic) Revenues by Segment (SAR Million) Dairy & ice [itt i mw Q2 2020 m Q2 2019 YoY %/ (YoY%) Profit Margin By Segments oak 39 oe 27 20% a 'D 83 m@Q22020 mQ22019 YoY %/(YoY%) Q2 2020 Earnings Presentation Dairy &Juice * Higher Food Sales and Long l
Slide 21: Net Income by Segment - Q2 2020
Net Income by Segment - Q2 2020 Basic EPS* (SAR) 0.59 0.66 42 (15) 644 583 — § Pe = c & Q2 2019 Dairy & Juice Bakery Poultry Others Q2 2020 Net Sales Growth 7% 8% 17% 26% 8% Net Income Growth 5% 46% 51% 147% 11% Net Income % to Net Sales 17% 9% 20% na 16% ” EPS - Earnings Per Share acholl Almarai' 5
Slide 22: Capex, Capital Management & Share Performance
nc icholl Capex, Almarai Capital wartagement share Performance 2 2020 Earnings Presentation
Slide 23: CAPEX continues to decline
CAPEX continu Capital Investment 2015 to 2020 at 29% 30% SAR Million 3,986 2015 2016 2017 2018 2019 TTM Q2 2020 maNet Cash Used in Investing Activities —-Investment as a % of Net Sales * Capex cash spend continues to decline in line with current available capacity ° New Capex approved comprised of m
Slide 24: Cash flow and free cash flow
0.5 Bio Assets 5 = .2PPE a g (0.9) _ 0.3 —l ee 04 a : : a Cash 30 June 2019 ‘Operating Cash Flow Working Capital t Debt Movement Dividend Others Cash 30 June 2020 > illion) Q2 2020 TTM Free Cash Flow = SAR 2.9B * OCF: SAR +4.6 Billion........Business performance continues to perform strongly however
Slide 25: Net Debt and EBIT / EBITDA Margins
Net t and EBIT / EBITDA Margins Almarai leverage target is to reach 2.5x-2.7x Net Debt to EBITDA in the next 12 months Net Debt Trend EBIT and EBITDA Margins 32x _ 3.x 3.0x 23.036 28.0% 274% 12,743 12,545 14,351 88.1% 82.2% 2018 2019 2020TTM 2018 2019 2020TTM miNet Debt(SARM) «Net Debt/Equity Ratio
Slide 26: Debt Maturity Profile highlights average debt tenure at 4.12 Years
Debt Maturity Profile highlights average debt tenure at 4.12 Years (SAR Billion) Debt Maturity by Age and Type my 2.3 0.3 1.0 0.5 Upto 1Yr 1-2Yrs 2-3Yrs 3-4Yrs 45Yrs >5Yrs m@ Banks = Govt / Semi Govt Inst. g Islamic Bonds mBanks mGovt/SemiGovtinst. Islamic Bonds Ve acholl Q2 2020 Earnings Presentati
Slide 27: Strong balance sheet to support future growth
Strong balance sheet to support future growth Strong investment grade Successful Refinancing Significant cash in hands Back-up facilities Almarai® Q2 2020 Earnings Presentation 3.0x Net Debt to EBITDA as at Q2 2020 BBB- (S & P), Baa3 (Moody’s) with stable Outlook + SAR 787 M Local Sukuk settled on 3
Slide 28: Key Share Data
Key e Data Key Statistics for Almarai (30 June 2020) m Savola Year to date total shareholder's return since listing 30% - Share Price (SAR) 51.80 oo m HHPrince Sultan P/E Rati 277 7 Current ‘atio (ttm) bin Mohammed = | 14% Earnings Per Share (SAR) (ttm) 1.87 = PIF tom Market Cap (SAR Million) 51,800
Slide 29: Key Takeaways
<\ Cacho Almarai Key Takeaways Almarai® Q2 2020 Earnings Presentation
Slide 30: Current Performance
Current Performance Top line performance remains strong in 1st Half, because of diversity of product range and strong channel base. Gross Profit remains under stress due to alfalfa and COVID-19 related costs pressure. This is partly offset with positive change in product and channel mix. Cost contro
Slide 31: Key Challenges & Opportunities
Key Challenges & Opportunities The new VAT is effective from the 1S July directly impacting consumer purchasing power. Lifting of curfew and opening of all activities from 21st June generated positive momentum in market however introduction of VAT from 1st July will have an offsetting impact in the
Slide 32: Q & A
Q&A Almarai® Q2 2020 Earnings Presentation
Slide 33: Q2 2020 Earnings Presentation
Q2 2020 Earnings Presentation
Slide 34: Appendix
Gcholl Almarai Appendix Almarai® Q2 2020 Earnings Presentation
Slide 35: 8,00 1,30 00% 1,10 % 00% 7,50 ,25 0 1,00 0 10 000 %
8,00 0 700 1,30 0 50 00% 1,10 0 12 000 % 45 00% 600 7,50 0 1,25 0 1,00 0 10 000 % 40 00% 500 35 00% 7,00 0 1,20 0 90 0 80 00% 30 00% 400 6,50 0 1,15 0 25 00% 80 0 60 00% 300 20 00% 6,00 0 1,10 0 70 0 40 00% 15 00% 200 10 00% 5,50 0 1,05 0 60 0 20 00% 100 50 0% 5,00 0 - 1,00 0 0% 50 0 0% 1,00 0 0% 1,
Slide 36: 1st Half 2020 Sales Bridge
1St Half 2020 Sales Bridge Reported Growth +8.5% | 0.8% 0.1% 0.6% (0.6%) 7,674 c g = c a | Like-for-like growth +8.6% 1st Half 2019 Volume Price Mix Currency Others 1st Half 2020 acholl Almarai Q2 2020 Earnings Presentation 36
Slide 37: 1st Half 2020 Revenue Growth
1st Half 2020 Revenue Growth (SAR Million) KSA Others Total Revenue 5,290 770 7,674 % of Revenue 69% 10% 100% Growth 9% 18% 8% (1%) (11%) +SAR 600M (8%) +SAR 117M +SAR 457M (Reboll Q2 2020 Earnings Presentation Almarai’ 3,
Slide 38: 1H Revenue by Geography
owever KSA growth of 9% contributed the most to topline Total Revenue - SAR 7,674 Million Total Growth 4 SAR 600M (8%) Jordan 2% Others Bahrain 9% 2% 15% 15% (11%) (19) 36% 10% 1 1 1 i Oman 2% 2% 1 [ 1 4% H 457 i 1 Kuwait Is 5% H = Eoyptl_“ 1g 15 56 53 gy gy) 485 6% H —_ a —_ 1 KSA | KSA UAE Egypt K
Slide 39: 1H Revenue by Category
od, Poultry & LL Dairy contributed the most to topline growth Total Revenue - SAR 7,674 Million Total Growth 4 SAR 600M (8%) Fruit Juice 9% Other Sales 2% 1% 20% 14% 5% 20% 0% 37% 146 120 — |_| | Fresh Dairy Cheese, Poultry Bakery LongLife Fruit Juice Other Sales Butter & Dairy Cream Long Life Dairy
Slide 40: Modern Trade channel growth was a key highlight for the 1st Half
Modern Trade channel growth was a key highlight for the 1st Half Total Revenue - SAR 7,674 Million Total Growth 4 SAR 600M (8%) 14% 10% (11%) 7% I 1 1 1 1 Food Service | 1 9% I 397 I 265 1: i E i (85) on i] < ! e 7 1 i] Modern Trade Traditional Trade Food Service Other / Exports Traditional | Trade
Slide 41: Revenue By Geography and Category - SAR Million
Revenue By Geography - SAR Million 1st Half 2019 1st Half 2020 Revenue By Category - SAR Million Other Sales Fruit Juice 0% Fresh Dairy Long Life 1% Dairy 20% Bakery 5% 1st Half 2019 1st Half 2020 Poultry Cheese, Butter 14% & Cream 20% YoY %/(YoY%) Ucholl Q2 2020 Earnings Presentation Almarai’ 4,
Slide 42: Income statement - 1st Half
1st Half 202 oe 2nd Quarter 2nd Quarter YTD SAR Million 2019 2020 Change 2019 2020 Change Revenue 3,765 100.0% 4,082 100.0% 8.4% 7,074 100.0% 7,674 100.0% 8.5% Cost of sales (2,301) (61.1%) (2,547) (62.4%) (10.7%) (4,446) (62.9%) (4,886) (637%) (9.9%) Gross Profit 1,464 389% 1,535 37.6% 4.9% 2,628 3
Slide 43: Balance sheet summary
EndofJune EndofJune Jun20 v Jun19 SAR Million 2019 2020 Change % Net Operating Working Capital 3,026 3,171 145 5% Property, Plant and Equipment 23,323 22,893 (430) (2%) Biological Assets 1,358 1,389 31 2% Net Operating Assets 27,707 27,452 (255) (1%) Goodwill and Other Assets 1,075 1,170 95 9% Net C
Slide 44: Cash flow summary
2nd Quarter YTD 2nd Quarter SAR in Million 2019 2020 Change % 2019 2020 Change % Net Income before NCI 584 620 36 6.2% 921 987 67 7.2% Working Capital and Other 591 835 243 41.2% 1,036 855 (181) (17.5%) Operating Cash Flow 1,175 1,455 279 23.8% 1,957 1,842 (115) (5.9%) Capex (335) (208) 126 (37.8%)
Slide 45: Results by segment - 1st Half and Q2 2020
ara + . Almarai SAR Million Dairy & Juice Bakery Poultry Others . Consolidated 1st Half 2020 Revenue 5,486 857 1,173 158 7,674 Depreciation and Amortisation (660) (109) (194) (79) (1,041) Profit Attributable to Shareholders 777 98 198 (47) 1,027 Percent to Revenue of Profit Attributable to Sharehold
Slide 46: Dividends (SAR Million)
0 2005 200 2006 272 2007 460 381 2008 2009 (SAR Million) 690 600 600 518 518 599 | | 2010 2011. 20122013 Q2 2020 Earnings Presentation 2014 2015 720 2016 850 850 | | | 2017 2018 2019 Qe tacholl Almarai’ 4¢
Slide 47: Q2 2020 Earnings Presentation
Q2 2020 Earnings Presentation