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Building Relevant Scale : Delivering the Olam Strategy 11

Building Relevant ScaleDelivering the Olam Strategy

Investor Presentation

Updated on 15 May 2012


This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward looking nature and are therefore based on management’s assumptions about future developments.

Such forward looking statements are intended to be identified by words such as ‘believe’, ‘estimate’, ‘intend’, ‘may’, ‘will’, ‘expect’, and ‘project’ and similar expressions as they relate to the Group. Forward-looking statements involve certain risks and uncertainties because they relate to future events. Actual results may vary materially from those targeted, expected or projected due to several factors.

Potential risks and uncertainties includes such factors as general economic conditions, foreign exchange fluctuations, interest rate changes, commodity price fluctuations and regulatory developments. The reader and/or listener is cautioned to not unduly rely on these forward-looking statements. We do not undertake any duty to publish any update or revision of any forward looking statements.

Cautionary note on forward-looking statements


Demand

• Growing population

• Increasing food consumption per capita with rising income

• Dietary shift to protein and fat rich diets

• Rapid urbanisation resulting in higher per capita consumption

• Growing use of biofuel

Supply

• Decline in agricultural productivity• Declining arable land• Urbanisation impact• Water constraints• Carbon constraints• Impact of climate change• Environmental constraints• Logistics and storage chokes

Agri-commodity demand-supply imbalances expected to widen going forward

The Agri-complex is an attractive industry with strong growth prospects

We assessed key industry trends in 2009 to identify profitable new growth ideas


Goals

Strategic thrusts

Enablers

Excellence in execution Capital efficacyM&A effectiveness People & Values• Institutionalise Program Management capabilities

• Acquire capabilities in upstream plantation/farm management & midstream VA processing

• Complexity management• Scalable IT, Risk, Control & Compliance systems

• Continue to grow global talent pool• Deepen entrepreneurial culture• Continue to embed stretch and ambition

• Create ownership culture• Build empowered teams

• Actively build M&A pipeline and develop prioritisation

• Deepen due diligence capabilities• Institutionalise best-in-class integration practices

• Strengthen capital structure and build financial flexibility

• Continuously improve overhead and capital productivity

To be the leading global supply chain manager and processor of agri-commodities by:• Serving growers and customers globally • Pursuing select scalable & attractive niches in upstream (plantations/farming) and mid-stream (value added processing)• Capitalising on our emerging markets expertiseV

ision

Our governing objective is to maximise long term intrinsic value for our continuing shareholdersPursue 3 key drivers: 1) Open up Capital Spreads (ROE-KE, ROIC-WACC); 2) Increase the Rate of Profitable Growth;

and 3) Sustain duration of growth

• Increase Intrinsic Value by 3-4x over the next two 3-year cycles. NPAT target US$450 million by FY2015• Pursue profitable growth & improve margin structure (NPAT margin ≥4% by 2015) by selective participation in attractive value chain adjacencies (upstream & mid-stream)

• Maintain financial and strategic flexibility for a wide range of economic scenarios (developing minimalist, balanced & unconstrained plans)• Be widely recognised as a responsible and sustainable value creator

Downsize/exit/ prune

unattractive activities

Build onlatent assets

Optimise and extract

full valuefrom core

Invest to achieve

integrated value chain leadership

Selectively expand into

attractive value chain

adjacencies

Cocoa, Coffee, Edible Nuts, Spices & Vegetable Ingredients,

Natural Fibres

Grains, Sugar, Rice, Dairy, Palm & Rubber

Sesame &

Wood Products

Select product origins and profit centres,

eg. Pulses

Packaged Foods Business (PFB) in W. Africa,

Commodity Financial Services (CFS), Agri-Inputs (fertiliser)

And announced a 6-yr corporate strategy (FY10-15) to increase margins & quadruple intrinsic value


Building unique competitive advantages in each value chain step

• Cost leadership (below the marginal cost producer’s cost of production)

• Multi products/origins

• Synergies across value chain

• Global footprint

• Global scale

• Out origination

• Value-added services

• Trading/Risk arbitrage/

Risk Management Skills

• High asset utilisation

• Control of choke points

• Customer loyalty

• Excess return opportunities

UpstreamUpstream Supply chainSupply chainMid/down

streamMid/down

stream


2009

Edible nuts, Spices & Beans

Confec. & Bev. Ingredients

Food Staples & PackagedFoods

Rubber

CoffeeCocoa

Nat. fibresWood Prod.Industrial Raw

Materials

Commodity FS

Palm

GrainsDairy

Sugar/SweetnrsRice

PFB

FertiliserCFS

CashewPeanutsAlmonds

SpicesSesameHazelnuts

Upstream Mid/downstreamSupply chain

Until 2009, portfolio largely focused on the asset light supply chain core


2015

Edible nuts, Spices & Beans

Confec. & Bev. Ingredients

Food Staples & PackagedFoods

Rubber

CoffeeCocoa

Nat. fibresWood Prod.Industrial Raw

Materials

Commodity FS

Palm

GrainsDairy

Sugar/SweetnrsRice

PFB

FertiliserCFS

CashewPeanutsAlmonds

SpicesSesameHazelnuts

Global leader FollowerRegional

Upstream Mid/downstreamSupply chain

Enter new products (Almonds, Hazelnuts,

Grains, Palm, Rubber & Sweeteners) & new

businesses (PFB, Fertiliser & CFS)

Plan envisaged significant change in portfolio shape by 2015


Our Portfolio has evolved over time, largely focused on a single commodity asset class: agri-complex

5 SegmentsEdible Nuts,

Spices & Beans

Confectionery & Beverage Ingredients

Food Staples & Packaged

Foods

Industrial Raw Materials

Commodity Financial Services

65 Countries, 4 regions Asia, Oceania & Middle East

EuropeAmericas Africa

Packaged Foods

FertilisersCommodity

Financial ServicesAgri Commodities4 Cores

Edible nuts

Spices & Vegetable

Ingredients

Coffee

Cocoa

CFS

Palm

Grains & Oilseeds

Dairy

Sugar/Sweeteners

PackagedFoods

Rubber

Natural Fibres

Wood Products

Fertilisers

15 Platforms

Rice

6

3

3

3

4

4

4

3

3

2

2

7

2

9

4 Value chain steps Supply Chain DownstreamMidstreamUpstream


Olam ADM Bunge Cargill Dreyfus Glencore Noble WilmarNo. of Major Competitors

Edible nuts None

SVI None

Coffee 2

Cocoa 3

Dairy None

Rice 2

Grains 7

Sugar/Sweeteners 6

Palm 4

PFB 1

Natural Fibres 4

Wood Products None

Rubber 1

Fertilisers None

CFS 3

Presence in products (#)

15 4 2 6 6 3 7 5

A highly defensible & differentiated portfolio


Our strategy is granular on where to compete

Number of initiatives over next 5 years

~65 initiatives over 5 yrs


• Gilroy Foods (US)

• Britannia Foods (UK)

• Almonds processing (AUS)

• Soluble coffee manufacturing (Vietnam)

• Cocoa grinding (IVC)

• Wheat milling (Nigeria/Ghana)

• Sugar refining (Indonesia/Nigeria)

• Cashew mechanical processing (IVC/Nigeria)

• Queensland Cotton (Aus)

• Coffee sourcing (Mexico/Guatemala)

• Wood products sourcing (Panama/Costa Rica)

• Other new countries: Cambodia, Ecuador, M’sia

• Almonds orchards (AUS/US)

• Fertilizer manufacturing (Gabon)

• Coffee plantations (Laos/Tanzania/Ethiopia)

• Dairy farming (Uruguay)

• Palm/rubber plantations (W. Africa)

• Timber Forestry Concessions (Gabon/RoC/Moz.)

SELECT EXAMPLES

Strong momentum in successfully executing this plan


We committed to the strategy by investing US$2.81 billion in the first 21/2 years of the plan

BUs FY10 (US$M) FY11 (US$M) H1 FY12 ($USM) Total ($USM)

Spices 100 11 22 133

Cashew 18 24 2 43

Peanuts - - - -

Almonds 277 100 10 387

Hazelnuts - - 50 50

Coffee 42 86 53 181

Cocoa - 71 28 99

Dairy 10 235 68 312

Sugar - 180 90 270

Sesame 0 - - 0

PFB - 8 225 233

Rice - - 39 39

Grains 58 82 50 189

Timber - 42 - 42

Cotton - - - -

Fert - 678 - 678

Palm - 133 16 149

Rubber - - - -

Total 504 1,649 652 2,805

Of the above, US$1.7 billion has already been spent


Goals & Boundary Conditions:

• PAT margin >4%; RoE 25%; No further equity dilution

105 124194

293

Strong trajectory prompted us to revise our aspirationto achieve US$1B PAT by rolling forward our plan by 1 year to FY2016

//

Core earnings

Reported earnings

Olam PAT (US$ M)


Well diversified across scale platforms

PAT by BU (US$ M)

3 platforms:>$100M PAT

7 platforms:$50-100M PAT

4 platforms:<$50M PAT


Leading to a well balanced portfolio with greater than 25% ROE

PAT (US$ M)ROE FY16

26%

27%

31%

20%

* Upstream includes Fertilisers


Capital allocated in line with strategy

2016 Total Capital Employed


Strong operating cashflow outlook

Free cash flow profile

Free cash flow

Cash Balance


Our Governing Objective is to maximise long term intrinsic value for our continuing shareholders in an ethical, socially responsible

& environmentally sustainable manner

Our Governing Objective is to maximise long term intrinsic value for our continuing shareholders in an ethical, socially responsible

& environmentally sustainable manner

Open up capital spreads

Increase the rate of profitable

growth

Sustain duration of

growth

3 key drivers to achieving our governing objective

ROE-KE: 15%ROIC-WACC: 7%

PAT growth FY11-16: 26%

PAT growth Horizon 2

Revised plan is in line with our Governing Objective


Open up capital spreads

Increase the rate of profitable

growth

Sustain duration of

growth

ROE-KE: 15%ROIC-WACC: 7%

PAT growth FY11-16: 26%

PAT growth Horizon2

3 key drivers to achieving our Governing Objective

Double net profit margin

to 4% by:

� Selectively integrating

upstream

� Selectively expanding

into midstream

Developing new latent

asset businesses (CFS,

PFB & Fertiliser).

Differentiate, build

sustainable competitive

advantage & scale

Invest to secure

future growth in

Horizon 2 (FY2017-

2021).

Grow by expanding in

to adjacent products,

geographies,

businesses & value

chains.


Improve rural livelihood of farmers/growers(launched the Olam Livelihood Charter)

110+ initiatives across 30 countries including crop financing of $21m, $2.4m in training to 58,000

farmers with a buy back of $102m

Improve rural livelihood of farmers/growers(launched the Olam Livelihood Charter)

110+ initiatives across 30 countries including crop financing of $21m, $2.4m in training to 58,000

farmers with a buy back of $102m

CR&S: A core part of our beliefs & embedded in our business model

30Countries

110+Initiatives

>1.5M Farmers

Full compliance with Sustainable Forest Management standards, RSPO & other relevant

industry standards

Full compliance with Sustainable Forest Management standards, RSPO & other relevant

industry standards

Provide Environmental stewardship - working with academic institutions, industry experts & NGOs to

bring international standards into emerging economies to take leadership in sustainable supply chains

Provide Environmental stewardship - working with academic institutions, industry experts & NGOs to

bring international standards into emerging economies to take leadership in sustainable supply chains


Olam 2009 Corporate Strategy Recap

Financials

Shareholding Structure

Recognitions

Agenda


Summary – Since IPO

Description FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 CAGR (%)

Volume(‘000 metric tonnes)

2,553 3,172 3,773 4,926 5,721 7,006 8,452 22.1

Revenue (S$m) 3,369 4,361 5,456 8,112 8,588 10,455 15,735 29.3

NC (S$m) 193 259 351 518 607 901 1,223 36.0

NC/tonne (S$) 76 82 93 105 106 129 145 11.4

NPAT (S$m) 66 87 109 168 252 360 445 37.5

NPAT (S$m)

(Ex. Exceptionals) 66 87 109 151 182 272 373 33.5

EPS (Cents) 5.11 5.61 6.85 10.28 14.71 17.91 20.27 25.8

EPS (Cents)

(Ex. Exceptionals) 5.11 5.61 6.85 10.09 10.96 14.58 17.58 22.9


Summary – FY 2011

(in S$ million) FY2011 FY2010 % Change

Sales Volume (MMT) 8.452 7.006 20.6

Sales Value 15,734.9 10,455.0 50.5

Net Contribution (NC) 1,222.8 900.7 35.8

NC/ton 145 129 12.5

Profit After Tax

(Excluding exceptional items) 372.8 271.8 37.1

Exceptional Items 57.1 87.6 (34.8)

Non-controlling interests 14.7 0.3 -

Reported Net Profit 444.6 359.7 23.6

PAT margin (%)

(Excluding exceptional items) 2.4% 2.6% -

PAT margin (%)

(Excluding exceptional items)

2.8% 3.4% -


(in S$ million) 9M FY2012 9M FY2011 % Change

Sales Volume (MMT) 7.219 6.158 17.2

Sales Value 11,947.7 11,239.6 6.3

Net Contribution (NC) 941.7 815.8 15.4

NC/ton 130 132 (1.5)

Profit For the Period 289.0 301.7 (4.2)

(-) Exceptional Items - 35.8 -

(-) Non-controlling interests 27.6 (0.7) -

Operational Profit for the Period 261.4 266.6 (2.0)

9M FY2012: Strong growth in Volumes and Net Contribution


FY2011 FY2010

(MT/’000) (MT/’000)

Edible Nuts, Spices & Beans 1,275 1,108 15.0

Confectionery & Beverage

Ingredients1,484 1,288 15.2


Foods4,102 3,207 27.9

Food Category Total 6,860 5,603 22.4

Industrial Raw Materials 1,591 1,403 13.4

Consolidated Total 8,452 7,006 20.6

Segments % Change

FY 2011: Sales Volume


9M FY2012 9M FY2011

(MT/’000) (MT/’000)

Edible Nuts, Spices & Beans 1,034 904 14.4


Ingredients1,267 1,156 9.6


Foods3,776 2,980 26.7

Food Category Total 6,077 5,040 20.6

Industrial Raw Materials 1,142 1,118 2.1

Consolidated Total 7,219 6,158 17.2

Segments % Change

9M FY12: Segmental Sales Volume


FY2011 FY2010

S$million S$million

Edible Nuts, Spices & Beans 296.6 210.9 40.7

NC/MT (S$ / ton) 232.7 190.3 22.3

Confectionery & Beverage Ingredients 314.4 222.8 41.1

NC/MT (S$ / ton) 211.8 172.9 22.5

Food Staples & Packaged Foods 302.5 233.9 29.3

NC/MT (S$ / ton) 73.7 72.9 1.1

Food Category Total 913.6 667.6 36.8

NC/MT (S$ / ton) 133.1 119.1 11.8Industrial Raw Materials 283.9 208.1 36.4

NC/MT (S$ / ton) 178.3 148.2 20.3

Commodity Financial Services Group 25.4 25.1 1.4

Consolidated Total 1,222.8 900.7 35.8

NC/MT (S$ / ton) 144.6 128.5 12.5

SegmentsNet Contribution

% change

FY 2011: Net Contribution & NC/ MT Growth: Segmental Analysis


9M FY2012 9M FY2011

S$million S$million

Edible Nuts, Spices & Beans 264.2 192.8 37.0

NC/MT (S$ / ton) 255.3 213.1 19.8

Confectionery & Beverage Ingredients 272.4 210.5 29.4

NC/MT (S$ / ton) 215.1 182.1 18.1

Food Staples & Packaged Foods 305.7 240.0 27.4

NC/MT (S$ / ton) 80.9 80.5 0.5

Food Category Total 842.2 643.3 30.9

NC/MT (S$ / ton) 138.5 127.6 8.5

Industrial Raw Materials 98.6 151.3 (34.8)

NC/MT (S$ / ton) 86.3 135.3 (36.2)

Commodity Financial Services 0.8 21.1 (96.0)

Consolidated Total 941.7 815.8 15.4

NC/MT (S$ / ton) 130.4 132.4 (1.5)

SegmentsNet Contribution

% change

9M FY12: Net Contribution & NC/ MT Growth: Segmental Analysis


FY 2011: Key Earnings Metrics

Reported Net Profit : S$444.6 m

• 23.6% growth over FY2010

Operational Net Profit After Tax (Excluding Exceptional Items): S$372.8 m


Reported Earnings per Share (EPS)

• 20.27 cents/share in FY2011 vs 17.89 cents/share in FY2010


Operational Earnings per Share (EPS)



Net Asset Value (NAV before fair value adjustment)



Profit for the Period: S$289 m

• 4.2% decline over 9M FY2011

Operational Profit for the Period: S$261.4 m

• 1.9% decline over 9M FY2011

Reported Earnings per Share (EPS)

• 10.64 cents/share in 9M FY2012 vs 14.34 cents/share in 9M FY2011

Operational Earnings per Share (EPS)

• 10.64 cents/share in 9M FY2012 vs 12.64 cents/share in 9M FY2011

Net Asset Value (NAV before fair value adjustment)

• 144.76 cents/share in 9M FY2012 vs 114.88 cents/share in FY2011

9M FY12: Key Earnings Metrics


FY 2011: Key Return Metrics

ROE (BOPE)

• 21.3% in FY2011 vs 29.3% in FY2010• Equity Spread (ROE-KE) 11.3%

ROE (Average)

• 18.7% in FY2011 vs 22.2% in FY2010

ROIC (Average)

• 14.3% in FY2011 vs 14.0% in FY2010• Total Capital Spread (ROIC-WACC) 7.1%


Olam Consolidated• Turnover

• Volume

• NC

• NPAT

Confectionery

& Beverage

Ingredients• Turnover

• Volume

• NC

• NC Share

Industrial Raw

Materials

• Turnover

• Volume

• NC

• NC Share

Edible Nuts,

Spices & Beans

Food Staples &

Packaged

Foods• Turnover

• Volume

• NC

• NC Share

Commodity

Financial

Services Group

•NC

• NC Share

• Turnover

• Volume

• NC

• NC Share

S$ 2184 m

1.275 mmts

S$296.6 m

24.3%

S$15735 m

S$8.452 mmts

S$1222.8 m

S$444.6 m

S$6361 m

1.484 mmts

S$314.4 m

25.7%

S$3460 m

4.102 mmts

S$302.5 m

24.7%

S$3730 m

1.591 mmts

S$283.9 m

23.2%

S$25.4 m

2.0%

FY 2011: Segmental Analysis: Summary


Olam Consolidated• Turnover

• Volume

• NC

• NPAT

Confectionery

& Beverage

Ingredients• Turnover

• Volume

• NC

• NC Share

Industrial Raw

Materials

• Turnover

• Volume

• NC

• NC Share

Edible Nuts,

Spices & Beans

Food Staples &

Packaged

Foods• Turnover

• Volume

• NC

• NC Share

Commodity

Financial

Services Group

•NC

• NC Share

• Turnover

• Volume

• NC

• NC Share

S$1715 m

1.034 mmts

S$264.2 m

28.0%

S$11948 m

7.219 mmts

S$941.7 m

S$289 m

S$4597 m

1.267 mmts

S$272.4 m

28.9%

S$3055 m

3.776 mmts

S$305.7 m

32.5%

S$2581 m

1.142 mmts

S$98.6 m

10.5%

S$0.8 m

0.1%

9M FY12: Segmental Analysis: Summary


Value Chain Segmental Analysis

Value Chain

Initiatives

Jun-11 Jun-10 Jun-11 Jun-10 Jun-11 Jun-10

Supply

Chain & VAS13,784 9,163 50.4% 864 635 36.1% 572 403 41.9%

Margin (%) 6.3% 6.9% 4.2% 4.4%

Per Ton 121 109 80 70

Upstream 306 219 39.5% 170 110 54.3% 154 99 56.1%

Margin (%) 55.7% 50.4% 50.5% 45.1%

Per Ton 633 453 573 406

Midstream &

Downstream1,645 1,073 53.3% 189 156 21.3% 136 106 29.3%

Margin (%) 11.5% 14.5% 8.3% 9.8%

Per Ton 176 161 127 109

Total 15,735 10,455 50.5% 1,223 901 35.8% 863 608 42.0%

Margin (%) 7.8% 8.6% 5.5% 5.8%

Per Ton 145 129 102 87

Sales Revenue

(in S$ m)

Net Contribution

(in S$ m)

EBITDA

(in S$ m) Growth

%

Growth

%

Growth

%


Segmental Net Contribution Trends

Segmental NC/Ton FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 CAGR (%)

Edible Nuts, Spices & Beans

114 110 121 155 159 190 233 12.6

Confectionery & Beverage Ingredients

114 130 148 142 144 173 212 10.9

Food Staples & Packaged Foods

25 32 37 52 58 73 74 19.7

Industrial Raw Materials

98 111 132 127 126 148 178 10.5

NC/tonne (S$) 76 82 93 105 106 129 145 11.4


Well Diversified Sourcing: Origins


Well Diversified Sales: Markets


• Investment in fixed term assets funded through permanent capital

• Investment in working capital funded through a combination of long term and short-term debt

In S$M, as of Mar 2012

Strong and resilient Balance Sheet


Cash-to-cash cycle (days)

Stock (days) andStock (days) andAdvance to Suppliers (days)

Debtor (days) and Trade Creditor Debtor (days) and Trade Creditor (days)

Working capital Analysis


Edible Nuts, Spices & 1,066 1,229 (163) 950


Ingredients 1,478 1,424 54 1,119


Foods 904 779 125 792

Industrial Raw Materials 1,089 1,138 (49) 723

Total 4,537 4,570 (33) 3,584

(in S$ million) 9M FY2012 FY2011H1 FY2012Increase /

Decrease

87.6% of inventories sold forward or hedged

Inventory Analysis


*RMI: inventories that are liquid, hedged, or sold forward

In S$M, as of Mar 2012

Strong liquidity profile


9M FY2012 FY2011 Change

Gross Debt to Equity (x) 2.22 2.56 (0.34x)

Net Debt to Equity (x) 1.89 2.22 (0.33x)

Adjusted Net Debt to

Equity (x)0.42 0.54 (0.12x)

Cash to Sales (%) 7.22% 5.54% -

Cash & Cash Equivalents (m) 1,150.3 872.2 278.1 m

Margin Deposit (m) (30.3) 457.1 (487.4 m)

Liquidity

Leverage (x)

Balance sheet Analysis: Gearing


Net debt/Equity as of Net debt/Equity as of June 30, 2011 (x)

Net debt/Equity as of Net debt/Equity as of March 31, 2012 (x)

*RMI: inventories that are liquid, hedged, or sold forward

Adjusted Net Gearing


Diversified Loan Profile


Description No. of shares %

Kewalram 479,265,793 19.62

Temasek (Seletar & Breedens) 390,398,453 15.98

Olam Management 218,107,201 8.93

Others 1,354,638,422 55.47

Total 2,442,409,869 100.00

Shareholding Structure

As of 31 Jan 2011 (Source: Thomson Reuters)

Management holding (including options) – 11.75%

46Building Relevant Scale : Delivering the Olam Strategy

Recognitions

Recipient of :

2011 Singapore Corporate Award winners for Best Managed Board and Best CEO – Mr. Sunny Verghese

Grass Roots Asia Pacific Award for Best Reward & Recognition Strategies, Singapore HRM Awards 2011

Medium-Cap Corporate of the Year (2010), Singapore by Asiamoney

Best Executive in Singapore (2010) – Mr. Sunny Verghese, CEO, by Asiamoney

Excellence in Innovation, Frost & Sullivan Growth Excellence Awards 2010

Forbes Asia's Fabulous 50, 2009 & 2010

Most Transparent Company (Commerce), SIAS Investors’ Choice Awards 2005-2011

Large Cap Corporate of the Year (2009), Singapore by Asiamoney

Global Top Company for Leaders and Top Company for Leaders in Asia Pacific 2009 by Hewitt Associates, The RBL Group and Fortune

2nd Runner-up (Singapore) – The Asset Corporate Governance Awards 2008

2008 World Business and Development Award

Singapore Corporate Awards 2007: Best Annual Report (Gold: Newly-Listed Firms), Best Managed Boards (Silver), Best Investor Relations (Bronze)

46


Thank You

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