Oceana Group Limited · JSE:OCE

Oceana — FY2013 Earnings Presentation

74 slides from Oceana's earnings presentation, 2013

  1. Slide 1: 2013 Annual Results Presentation

    2013 annual results presentation 2013 Annual Results Presentation Oceana Group 2013 annual results presentation

  2. Slide 2: Agenda

    Agenda Group Overview Financial Operational & Review Review Results Summary Oceana Group 2013 annual results presentation

  3. Slide 3: The Oceana Group

    The Oceana Group …is the largest Incorporated in 1918 fishing company in Important provider of food security with a significant Africa and is listed on protein footprint in Africa both the 3,706 Employees of which 3,275 are directly employed Johannesburg and Namibian stock Level 2 B-BBEE contributor

  4. Slide 4: Group overview

    Group overview Oceana Group 2013 annual results presentation

  5. Slide 5: Group overview: revenue & profit splits

    Group overview: revenue & profit splits 5 Year average 7% 13% 35% 30% 55% 48% 8% 5% Revenue Operating profit Canned fish Lobster, squid Horse mackerel CCS & fishmeal & french fries & hake Oceana Group 2013 annual results presentation

  6. Slide 6: 2013 Performance

    2013 Performance  Overall group shows good growth despite tough trading conditions in H2  Significant growth in Horse Mackerel and Hake  Bolstered by solid performances in Lobster and CCS  Offset by profit decline in Canned fish and Fishmeal  Results influenced by:  SA protein consumption decl

  7. Slide 7: Financials

    Financials Group Revenue ZAR'm 4 997 CAGR 11% 4 648 3 657 3 301 3 423 8% 2009 2010 2011 2012 2013 487.9 CAGR 15% 455.7 HEPS (cents) 333.6 315.2 279.4 7% 2009 2010 2011 2012 2013 Oceana Group 2013 annual results presentation

  8. Slide 8: Agenda

    Agenda Group Overview Financial Operational & Review Review Results Summary Oceana Group 2013 annual results presentation

  9. Slide 9: Summary

    Summary  Earnings growth shows benefit of diversified portfolio  Revenue growth in all four business units  Profitability impacted primarily by volumes  Share price has significant impact on income statement  Financial position remains strong  Working capital impacted in the short term  Retai

  10. Slide 10: Financial review

    Financial review Group income statement 2013 2012 R’000 R’000 % Revenue 4 997 354 4 647 951 8% Gross profit 1 948 132 1 772 186 10% GP margin 39.0% 38.1% 2% Operating profit 748 679 711 025 5% Operating profit margin 15.0% 15.3% -2% Net financing costs (10 282) (3 108) Headline earnings 489 325 456

  11. Slide 11: Group revenue: movement

    Group revenue: movement 46 24 205 74 4 997 Increase 4 648 September 2012 Canned fish and Horse mackerel Lobster, squid, CCS September 2013 fishmeal and hake french fries Oceana Group 2013 annual results presentation

  12. Slide 12: Group revenue: contribution

    Group revenue: contribution 5000 Rm's 7% 4500 7% 4000 6% 8% 3500 6% 7% 33% 8% 3000 9% 31% 2500 32% 27% 2000 1500 58% 54% 56% 53% 1000 500 0 2009 2010 2011 2012 2013 Canned fish and fishmeal Horse mackerel and hake LSF CCS Oceana Group 2013 annual results presentation

  13. Slide 13: Group revenue: regional

    Group revenue: regional 6% 4% 20% 69% 1% Oceana Group 2013 annual results presentation

  14. Slide 14: Group operating profit: movement

    Group operating profit: movement R'm 17 99 126 6 749 711 September 2012 Canned fish and Horse Mackerel & Lobster, Squid & Fries CCS September 2013 fismeal Hake Increase Decrease Oceana Group 2013 annual results presentation

  15. Slide 15: Group operating profit: contribution

    Group operating profit: contribution 700 Rm's 11% 600 9% 500 10% 400 16% 42% 56% 300 41% 53% 200 100 38% 34% 45% 29% 0 2009 2010 2011 2012 2013 Canned fish & fishmeal Horse mackerel & hake Lobster, squid, french fries CCS Logistics Oceana Group 2013 annual results presentation

  16. Slide 16: Group volume & price analysis

    Group volume & price analysis 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2009 2010 2011 2012 2013 -5% Sales volumes SP per ton CP per ton Oceana Group 2013 annual results presentation

  17. Slide 17: Share price & share costs effect

    Share price & share costs effect Share based costs of R152.4m for F’13 (F’12: R75m): 56% increase in share price Oceana Group 2013 annual results presentation

  18. Slide 18: Financial position

    Financial position Group financial position 2013 2012 R’000 R’000 R500 m increase in Property, plant and equipment 473 821 435 850 inventory of Intangible assets canned fish 102 802 88 638 Deferred taxation 30 360 23 187 Investments and loans 118 424 142 940 Current assets 2 046 182 1 601 935 Stock

  19. Slide 19: Return on equity and net assets

    Return on equity and net assets 45% 41% 39% 38% 37% 31% 30% 27% 27% 26% 2009 2010 2011 2012 2013 Return on net assets Return on shareholders funds Oceana Group 2013 annual results presentation

  20. Slide 20: Headline earnings and dividends

    Headline earnings and dividends 488 456 334 322 315 301 279 208 220 184 2009 2010 2011 2012 2013 HEPS DPS 1.5 times dividend cover Oceana Group 2013 annual results presentation

  21. Slide 21: Agenda

    Agenda Group Overview Financial Operational & Review Review Results Summary Oceana Group 2013 annual results presentation

  22. Slide 22: Operational review: Canned fish and fishmeal

    Operational review: Canned fish and fishmeal

  23. Slide 23: Canned fish and fishmeal: overview

    Canned fish and fishmeal: overview Catch Procurement Canned fish sales Fishmeal sales Oceana Group 2013 annual results presentation

  24. Slide 24: Canned fish: performance

    Canned fish: performance  Sales volumes:  YOY volume decline of 1.2% - Growth of 16% in H1 offset in H2 by destocking at major customers and reduction in protein consumption patterns by consumers Oceana Group 2013 annual results presentation

  25. Slide 25: Canned fish: sales volumes

    Canned fish: sales volumes 5.6m 6.0m 7.3m 8.7m 8.6m cartons cartons cartons cartons cartons 44% 53% 50% 52% 56% H2 H1 56% 47% 50% 48% 44% 2009 2010 2011 2012 2013 Oceana Group 2013 annual results presentation

  26. Slide 26: Canned fish: trade destocking

    Canned fish: trade destocking Canned fish stock levels 51% 50% 49% 52% Retailer A Retailer B Wholesaler A Wholesaler B March April May June July Aug Sept Oct Jan 5%, Feb 15%, Mar 16% YTD on 2012 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2013 2012 2011 Canned fish sales volumes Oceana Group

  27. Slide 27: Canned fish: retail protein volumes

    Canned fish: retail protein volumes Nielsen Retail Scanning Basket Volume Growth Unit Share 12MM 6MM 3MM Protein 39.0% 0.4% -0.2% 2.3% Red Meat 11.9% 6.2% 8.5% 9.2% IQF Chicken 6.5% -1.9% -4.3% 0.5% Chilled Processed Meat 5.9% -3.9% -4.9% -3.1% Baked Beans 5.2% 5.7% 7.6% 4.4% Whole Chicken 3.2% -6.7

  28. Slide 28: Canned fish: performance

    Canned fish: performance  Sales volumes:  YOY volume decline of 1.2% - Growth of 16% in H1 offset in H2 by destocking at major customers and reduction in protein consumption patterns by consumers  Supply  Improved catch levels and production yields in 2013  Quota • SA – 13,508 owned, 16,215 con

  29. Slide 29: Canned fish: supply analysis (cartons)

    Canned fish: supply analysis(cartons) 10 % growth in imports to meet projected demand 17 % growth in own production due to good catches and improved yields 6539 5922 4091 2793 3897 3577 2985 3063 2125 2074 2009 2010 2011 2012 2013 Own production Other SA Imports Oceana Group 2013 annual results pres

  30. Slide 30: Canned fish: performance

    Canned fish: performance  Sales volumes:  YOY volume decline of 1.2% - Growth of 16% in H1 offset in H2 by destocking at major customers and reduction in protein consumption patterns by consumers  Supply  Improved catch levels and production yields in 2013  Quota • SA – 13,508 owned, 16,215 con

  31. Slide 31: Canned fish: volumes, price and profitability

    Canned fish: volumes, price and profitability 60% 50% 40% 30% 20% 10% 0% 2009 2010 2011 2012 2013 -10% -20% Sales volumes SP per ctn CP per ctn Comparatives indexed to 2009 Oceana Group 2013 annual results presentation

  32. Slide 32: Canned fish: performance

    Canned fish: performance  Sales volumes:  YOY volume decline of 1.2% - Growth of 16% in H1 offset in H2 by destocking at major customers and reduction in protein consumption patterns by consumers  Supply  Improved catch levels and production yields in 2013  Quota • SA – 13,508 owned, 16,215 con

  33. Slide 33: Canned fish: stock levels

    Canned fish: stock levels 350% 300% 250% 200% 150% 100% 50% 0% H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 Comparatives indexed to 2009 Oceana Group 2013 annual results presentation

  34. Slide 34: Canned fish: import supply chain

    Canned fish: import supply chain 85 days Frozen fish Catching Canning sea voyage 17 days 17 days 51 days 163 days Release and Canned fish Customer transport to sea voyage delivery warehouse 30 days 10 days 38 days Oceana Group 2013 annual results presentation

  35. Slide 35: Canned fish: inventory reduction

    Canned fish: inventory reduction 350% 300% Reduce to 90 days – 250% reduction takes long lead times 200% into account 150% 100% 50% 0% H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 Oceana Group 2013 annual results presentation

  36. Slide 36: Canned fish: performance

    Canned fish: performance  Sales volumes:  YOY volume decline of 1.2% - Growth of 16% in H1 offset in H2 by destocking at major customers and reduction in protein consumption patterns by consumers  Supply  Improved catch levels and production yields in 2013  Quota • SA – 13,508 owned, 16,215 con

  37. Slide 37: Canned fish: outlook

    Canned fish: outlook  Domestic growth will remain under pressure due to economic environment  Price increase planned for 2014 – remains to be seen whether market can absorb this  Expect further penetration into African markets – Nigeria, Mozambique, Zimbabwe  Reduction in inventory levels and po

  38. Slide 38: Fishmeal: performance

    Fishmeal: performance  Weather patterns have affected landings due to impact on fishing Fishmeal: Outlook Oceana Group 2013 annual results presentation

  39. Slide 39: Fishmeal: different fishing methods

    Fishmeal: different fishing methods Oceana Group 2013 annual results presentation

  40. Slide 40: Fishmeal: performance

    Fishmeal: performance  Weather patterns have affected landings due to impact on fishing  Profitability severely impacted by reduction in industrial fish landings  50 year industrial landings review Outlook Fishmeal:  Oceana landings 5 years Oceana Group 2013 annual results presentation

  41. Slide 41: Fishmeal: 50 year industrial landings review

    - 100 000 150 000 200 000 250 000 300 000 350 000 400 000 450 000 500 000 550 000 600 000 650 000 700 000 50 000 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 20

  42. Slide 42: Fishmeal: Oceana 5 year landings

    Fishmeal: Oceana 5 year landings tons 129 276 123 423 105 360 87 919 36 780 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2009 2010 2011 2012 2013 Oceana Group 2013 annual results presentation

  43. Slide 43: Fishmeal: performance

    Fishmeal: performance  Weather patterns have affected landings due to impact on fishing  Profitability severely impacted by reduction in industrial fish landings  50 year industrial landings review Outlook Fishmeal:  Oceana landings 5 years  Volumes, price and costs per ton analysis Oceana Grou

  44. Slide 44: Fishmeal: volumes, price and profitability

    Fishmeal: volumes, price and profitability Landings Price per ton Cost per ton 100% 80% 60% 40% 20% 0% -20% 2009 2010 2011 2012 2013 -40% -60% -80% Oceana Group 2013 annual results presentation

  45. Slide 45: Fishmeal: performance

    Fishmeal: performance  Weather patterns have affected landings due to impact on fishing  Profitability severely impacted by reduction in industrial fish landings  50 year industrial landings review Outlook Fishmeal:  Oceana landings 5 years  Volumes, price and costs per ton analysis  2014 outl

  46. Slide 46: Fishmeal: outlook

    Fishmeal: outlook  Improved industrial landings expected  Pricing to remain favourable  Operational efficiencies to be implemented at low activity sites Fishmeal: Outlook Oceana Group 2013 annual results presentation

  47. Slide 47: Operational review: Horse mackerel & hake

    Operational review: Horse mackerel & hake 2 Operational review Horse mackerel and hake

  48. Slide 48: Horse mackerel & hake: overview

    Horse mackerel & hake: overview Catch Horse Mackerel sales Hake sales Oceana Group 2013 annual results presentation

  49. Slide 49: Horse mackerel: performance

    Horse mackerel: performance  Good growth in operating profit  Supply  Reduction in Namibian quota by 19% offset by good catch rates  Increase in SA quota by 10% in addition to improved catch rates Oceana Group 2013 annual results presentation

  50. Slide 50: Horse mackerel: performance

    Horse mackerel: performance  Good growth in operating profit  Supply  Reduction in Namibian quota by 19% offset by good catch rates  Increase in SA quota by 10% in addition to improved catch rates  Volumes  Horse mackerel sales volumes directly linked to supply  As a result SA revenues improv

  51. Slide 51: Horse mackerel: volumes, price and profitability

    Horse mackerel: volumes, price and profitability Catch per day Price per ton Cost per ton 120% 100% 80% 60% 40% 20% 0% -20% 2009 2010 2011 2012 2013 -40% Oceana Group 2013 annual results presentation

  52. Slide 52: Hake: performance

    Hake: performance  Significant growth in operating profit  Supply  Increase in TAC of 7.8%  Additional quota from Lusitania acquisition  Volumes  Overall sales volumes improved to 9,396 tons (2012: 3,800 tons)  Pricing  Good pricing in all markets bolstered by favourable exchange rate Oceana

  53. Slide 53: Hake: volumes, price and profitability

    Hake: volumes, price and profitability 350% Sales volumes Price per ton Cost per ton 300% 250% 200% 150% 100% 50% 0% -50% 2009 2010 2011 2012 2013 Oceana Group 2013 annual results presentation

  54. Slide 54: Horse mackerel & hake: outlook

    Horse mackerel & hake: outlook  Horse mackerel  Reduction in Namibian quota, no change in SA  Pricing levels difficult to predict  Exploring Angolan opportunities – project commenced in 2013 starting to show promise  Hake  No change in quota  Consistent pricing levels  Improved catch levels

  55. Slide 55: Operational Review: Lobster, squid & french fries

    Operational Review: Lobster, squid & french fries

  56. Slide 56: Lobster, squid & fries: overview

    Lobster, squid & fries: overview Catch Lobster sales Squid sales French fries Oceana Group 2013 annual results presentation

  57. Slide 57: Lobster: performance

    Lobster: performance  Growth in operating profit for 2013  Volumes  Steady demand in key markets  Growth in live lobster products  Supply  TAC unchanged in 2013  Full quota allocated landed  Pricing  Improved pricing in most markets  Positively impacted by exchange rate Oceana Group 2013 a

  58. Slide 58: Lobster: volumes, price and profitability

    Lobster: volumes, price and profitability 40% 35% 30% 25% 20% 15% 10% 5% 0% 2009 2010 2011 2012 2013 Sales volumes Price per ton Cost per ton Oceana Group 2013 annual results presentation

  59. Slide 59: Squid: performance

    Squid: performance  Further losses in squid business for 2013  Supply  Lower industry catch rates in 2013  Our catch rates declined by 25%  Pricing  Consistent pricing in most markets  Positively impacted by exchange rate Oceana Group 2013 annual results presentation

  60. Slide 60: Squid: supply – 7 year landings

    Squid: supply – 7 year landings 11 446 10 995 9 176 8 900 8 679 6 301 4 726 estimated 2007 2008 2009 2010 2011 2012 2013 Total industry landings (tons) Oceana Group 2013 annual results presentation

  61. Slide 61: Squid: volumes, price and profitability

    Squid: volumes, price and profitability Sales volumes Price per ton Cost per ton 100% 80% 60% 40% 20% 0% -20% 2009 2010 2011 2012 2013 -40% -60% -80% Oceana Group 2013 annual results presentation

  62. Slide 62: French fries: performance

    French fries: performance  Operating loss in 2013  Volumes  Strong volumes in QSR market  Supply  Production input marginally increased  Offset by poor potato quality in the first quarter, resulting in lower yields  Pricing  Positively impacted by import duty in latter part of the year Ocean

  63. Slide 63: French fries: volumes, price and profitability

    French fries: volumes, price and profitability 30% 20% 10% 0% -10% 2009 2010 2011 2012 2013 -20% -30% Sales volumes Price per ton Cost per ton Oceana Group 2013 annual results presentation

  64. Slide 64: Lobster, squid & french fries: outlook

    Lobster, squid & french fries: outlook  Lobster  Reduction in quota expected  Strong pricing levels should remain  Squid  Performance will be impacted by resource availability  Steady demand still expected  French fries  Plant at full capacity  Pricing still favourable in light of import ta

  65. Slide 65: Operational Overview: CCS Logistics

    Operational Overview: Operational Overview: CCS CCSLogistics Logistics

  66. Slide 66: CCS: overview

    CCS: overview Cold stores Oceana Group 2013 annual results presentation

  67. Slide 67: CCS: performance

    CCS: performance  Significant improvement in profitability in 2013  Revenue  Improved due to additional storage capacity  Bolstered by higher occupancy levels  Strong customer focus delivering returns  Operating costs  Continued focus on efficiencies has yielded positive results  Offset by e

  68. Slide 68: CCS: volumes, price and profitability

    CCS: volumes, price and profitability 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% 2009 2010 2011 2012 2013 -10% Pallets handled Revenue/pallet Cost/pallet Oceana Group 2013 annual results presentation

  69. Slide 69: CCS: Outlook

    CCS: Outlook  Expansion in Walvis Bay  New site in Midrand  Small site in Angola  Continued focus on customer service and volume throughput Oceana Group 2013 annual results presentation

  70. Slide 70: Looking Ahead

    LOOKING AHEAD

  71. Slide 71: Foodcorp transaction

    Foodcorp transaction  Foodcorp acquisition approved by the Competition Commission on 29 October 2013  Subject to two conditions: • Divestiture of the Glenryck brand • Divestiture of pilchard quota (in order to support the Glenryck brand)  First condition was expected  Second condition will be jo

  72. Slide 72: Foodcorp transaction

    Foodcorp transaction Brands with local quota losing share to procurers and importers (Lucky Star & House brands). Oceana Group 2013 annual results presentation

  73. Slide 73: Foodcorp transaction

    Foodcorp transaction  Foodcorp acquisition approved by the Competition Commission on 29 October 2013  Subject to two conditions: • Divestiture of the Glenryck brand • Divestiture of pilchard quota (in order to support the Glenryck brand)  First condition was expected  Second condition will be jo

  74. Slide 74: Oceana Empowerment Trust

    Oceana Empowerment Trust  Oceana Empowerment Trust currently holds 11.7% of Oceana shares  Established to enable Oceana to facilitate direct participation to existing and future black employees and simultaneously to secure an increased direct broad-based black shareholding  Current lock-in period

Oceana Group — FY2013 Earnings Presentation on 6ix