update on five year plan - almarai · highlights – full year 2016 2016 earnings presentation 2013...
TRANSCRIPT
Almarai Company
Annual Results – 2016
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. Neither we nor our advisors make any representation regarding, and assume no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, to any information contained herein.
In addition, the information contains projections and forward-looking statements that reflect the company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the company’s assumptions are correct. Actual results may differ materially from those projected.
This presentation is strictly not to be distributed without the explicit consent of Almarai Company management under any circumstances.
Almarai Company 2016 Earnings Presentation 2
Business Highlights
Industry & Environment Overview
Almarai Company 4 2016 Earnings Presentation
2016
First Half Second Half
• Increased competition from Brazilian
frozen products
• Increases in fuel and electricity costs
• Reduction in Government spending
• Commodity prices remain at historically
low levels
• Slow down in government subsidy
payments
• Egyptian currency devaluation of 14%
• Improvement in frozen poultry pricing
leading to reduction in poultry losses
• Lower consumer confidence/sentiment
and slower market growth, specially in
discretionary sectors like juice and cheese
• Resumption of subsidy payments
• Egyptian currency devaluation of +120%
• Almarai hailed as a National Champion
How Almarai Responded?
• Poultry industry lobby efforts
• Kick off cost optimization and efficiency
projects
• Increase portfolio management
• Opening of Hail factory
Main events during 2016
Almarai Company 5 2016 Earnings Presentation
Purchase of
Additional
Agricultural
Land in
California
Increase in the
Share Capital
from SAR 6.0B
to 8.0B
Partial and
Gradual
Commissioning of
the New Bakery
Plant in Hail
January April September November
Egyptian Pound
Devaluation
from 8.9 to ~18.0
EGP to 1 USD
Launch of Cupcake
Category
Launch of Milk
Powder
February March
Egyptian
Pound
Devaluation
from 7.8 to 8.9
EGP to 1 USD
16 New Products Lunched in 2016
44% 38%
2015 2016
67%
69%
2015 2016
60%
69%
2015 2016
45%
47%
2015 2016
20% 18%
2015 2016
66% 68%
2015 2016
Market Share - KSA
Almarai Company 6 2016 Earnings Presentation
36% 36%
2015 2016
Puffs Juices UHT Laban
Jar Cheese Chicken Bread Fresh Milk
68% 68%
2015 2016
Almarai Company 7 2016 Earnings Presentation
Innovation Pipeline for 2016
Q1 Q2
Q3 Q4
Financial Highlights
Highlights – Full Year 2016
2016 Earnings Presentation
2013
SAR 11.2 B +12.4%
EBITDA 2016
SAR 3.7 Billion
2015
SAR 3.3 Billion +11.5%
Net Sales 2016
SAR 14.7 Billion
2015
SAR 13.8 Billion +6.6%
Net Income 2016
SAR 2.1 Billion
2015
SAR 1.9 B +8.6%
Operating Cash Flow 2016
SAR 4.4 Billion
2015
SAR 4.9 Billion (10.9%)
9 Almarai Company
Investing Cash Flow 2016
SAR 4.9 Billion
2015
SAR 4.4 Billion +11.1%
Free Cash Flow 2016
SAR (0.5) Billion
2015
SAR 0.5 Billion
(196.9%)
Employees 2016
44.5 K
2015
42.4 k +5.1%
New Products • Dairy – Higher
• Food – Stable
• Bakery - Higher
• Poultry - Stable
Market Share
• 16 New products in 2016
2016 Earnings Presentation 10 Almarai Company
Sales Analysis by Segment by Product
Note: All Amounts in Million Saudi Riyals
Total
Net Sales
+6.6%
Net Sales
By Segment
Bakery
1,891 (13%)
(+265)
Poultry
1,368 (9%)
(+106)
Others
166 (1%)
(-0)
+16.3% +8.4% -0.0%
Fresh Dairy
6,088 (41%)
(+305)
Long-Life Dairy
1,543 (10%)
(+197)
Fruit Juice
1,952 (13%)
(+29)
Cheese&Butter
1,691 (12%)
(+2)
Bakery
1,891 (13%)
(+265)
Poultry
1,368 (9%)
(+106)
Other Sales
166 (1%)
(-0)
+5.3% +14.6% +1.5% +0.1% +16.3% +8.4% -0.0%
Net
Sales
By Product
14,699(+904)
Dairy & Juice
11,274 (77%)
(+533)
+5.0%
2016 Earnings Presentation 11 Almarai Company
Sales Analysis by Region by Country
Note: All Amounts in Million Saudi Riyals
Total
Net Sales
Net
Sales
By Region
KSA
9,283 (63%)
(+495)
+5.6%
KSA
9,283 (63%)
(+495)
UAE
1,446 (10%)
(+110)
Oman
742 (5%)
(+38)
Qatar
727 (5%)
(+39)
Kuwait
665 (4%)
(+17)
Bahrain
301 (2%)
(+11)
Egypt
975 (7%)
(+87)
Jordan
282 (2%)
(+6)
Others
278 (2%)
(+100)
Growth in Saudi Riyals +5.6% +8.2% +5.4% +5.7% +2.7% +3.9% +9.8% +2.2% +56.2%
Growth in Local Currency +9.5% +33.5%
Net
Sales
By Country
14,699(+904)
+6.6%
Other GCC Countries
3,880 (26%)
(+216)
Other Countries
1,536 (11%)
(+193)
+5.9% +14.4%
2,262 2,542
Full Year 2015 Full Year 2016
SAR Million
Operating Income
+280
(+12.4%)
5,283 5,834
Full Year 2015 Full Year 2016
SAR Million
Gross Profit
+550
(+10.4%)
% to Sales
Full Year 2016 Results
Operating Performance
2016 Earnings Presentation 12 Almarai Company
38.3% 39.7% 16.4% 17.3% 13.9% 14.2% 1.4 pp 0.9 pp 0.3 pp
1,916 2,080
Full Year 2015 Full Year 2016
SAR Million
Net Income
+164
(+8.6%)
Statement of Income
2016 Earnings Presentation 13 Almarai Company
SAR million 2015 2016 Change 2015 2016 Change
Sales 3,584 3,610 0.7% 13,795 14,699 6.6%
Cost of sales (2,246) (2,150) (4.3%) (8,511) (8,865) 4.2%
Gross Profit 1,338 1,461 9.2% 5,283 5,834 10.4%
Selling and Distribution Expenses (671) (696) 3.7% (2,612) (2,856) 9.3%
General and Administration Expenses (95) (104) 9.0% (409) (436) 6.6%
Operating Income 573 661 15.5% 2,262 2,542 12.4%
Share of Results of Associates (3) 4 (258.8%) (37) 13 (135.7%)
Other (Expense) / Income (34) (74) 122.3% (131) (91) (30.1%)
Funding Costs (80) (97) 21.4% (276) (351) 27.4%
Exchange and Currency Gains/(Losses) 24 9 (60.8%) 46 45 (3.2%)
Income from Main Operations 480 504 4.8% 1,864 2,157 15.7%
Zakat and Foreign IncomeTax (11) (17) 61.2% (66) (74) 13.1%
Income before Non Controlling Interest 470 486 3.5% 1,799 2,083 15.8%
Non Controlling Interest 14 2 (83.3%) 117 (2) (102.0%)
Net Income 484 489 1.0% 1,916 2,080 8.6%
Earnings Per Share (Basic) 0.59 0.58 2.35 2.54
Net Income % 13.5% 13.5% 13.9% 14.2%
4th Quarter Full Year
Segment Reporting
2016 Earnings Presentation 14 Almarai Company
SAR Million Dairy & Juice Bakery PoultryOther
Activities
Almarai
Consolidated
Q4 YTD 2016
Net Sales 11,274 1,891 1,368 166 14,699
Depreciation (1,207) (178) (295) (114) (1,795)
Net Income 2,239 332 (294) (196) 2,080
Net Income % to Sales 19.9% 17.6% (21.5%) (118.4%) 14.2%
Total Assets 17,934 2,478 5,620 2,991 29,023
Growth versus 2015
- Net Sales 5.0% 16.3% 8.4% (0.0%) 6.6%
- Net Income 6.8% 62.0% 37.6% 14.6% 8.6%
Q4 2016
Net Sales 2,696 506 376 32 3,610
Depreciation (371) (42) (67) (49) (529)
Net Income 517 87 (42) (73) 489
Net Income % to Sales 19.2% 17.1% (11.2%) (228.9%) 13.5%
Growth versus Q4 2015
- Net Sales (2.4%) 6.6% 16.0% 33.3% 0.7%
- Net Income 0.5% 7.0% (13.9%) 15.8% 1.0%
2,080
1,916
143
127 (81)
(25)
Full Year 2015 Dairy & Juice Bakery Poultry Other Full Year 2016
SAR Million
Full Year 2016 Results
Net Income by Segment:
2016 Earnings Presentation 15 Almarai Company
Basic EPS* (SAR) 2.35 2.54
Net Income % 14.2% 19.9% 17.6% (21.5%) (118.4%)
Net Sales Growth 6.6% 5.0% 16.3% 8.4% (0.0%)
Net Income Growth 8.6% 6.8% 62.0% 37.6% 14.6%
*EPS – Earnings Per Share
• Manufacturing and Farming spent CAPEX of SAR ~2.7 Billion for various capacity expansion
projects. Central Processing Plant 3, Hail Bakery and Cheese Plant A are the highest
contributors.
• Replacement and other CAPEX including IDJ (~0.2 Billion) and US & Argentina land
development (~0.3 Billion) accounted for another SAR ~0.8 Billion.
• Sales depot and logistics expansion accounted for SAR ~0.6 Billion.
• Poultry CAPEX spend for the year reached SAR ~0.3 Billion.
Almarai continues 5 Year Plan CAPEX Investment
16 Almarai Company
CAPEX spend for the year of 2016 was SAR 4.4 Billion.
Accommodation
Blow Molding Machine with Baggers
Consolidation WH B9A
2016 Earnings Presentation
Cash Flow Bridge
2016 Earnings Presentation 17 Almarai Company
2,039
4,394 (63) (4,901)
(688)
(51) 730
Cash at 31
Dec 2015
Operating Cash Flow
CAPEX / Biological
Assets Dividend Others
Cash at 31
Dec 2016(SAR 1,309 Million)
Loans Issues /
Payments /
Charges
Net Debt
2016 Earnings Presentation 18 Almarai Company
3,869 4,606 6,653 8,237 8,053 8,762 9,344 10,889
72% 74%
98% 101%
75% 75% 74% 81%
2.3x 2.2x
2.8x
3.1x 3.0x
2.8x 2.7x 2.7x
0%
50%
100%
150%
200%
250%
300%
350%
0
2,000
4,000
6,000
8,000
10,000
12,000
2009 2010 2011 2012 2013 2014 2015 2016
Net Debt Net Debt / Equity Ratio Net Debt / EBITDA
SA
R M
illi
on
Quarterly Performance – Net Income
2016 Earnings Presentation 19 Almarai Company
* Capital gain of SAR 47m in 2012
197
234 235 242 255 274
306 309 287
343 349
380 398
433
530
629
363
425 430
450
476
539
595
655
249
284 286
369 373
428
484 489
0
100
200
300
400
500
600
700
SA
R M
illi
on
2016 versus 2015
Q 1 = 0.7%
*
Q2 = 18.5%
Q 3 = 10.0%
Q4 = 1.0%
EBIT and EBITDA margins are starting to improve……
Net Sales, EBITDA and EBIT Evolution
2016 Earnings Presentation 20 Almarai Company
5,869
6,931
7,951
9,883
11,21912,606
13,79514,69921.8%
21.1%
19.1%
16.9%16.0% 15.8% 16.4%
17.3%
26.7% 27.2%
25.6%
24.2% 24.4%23.9%
24.2%25.3%
2009 2010 2011 2012 2013 2014 2015 2016
SA
R M
illio
n
Net Sales
EBIT % to Net Sales
EBITDA % to Net Sales
CAGR 2009 – 2016: 13.0% (w/o impact of acquisitions 9.6%)
Key Share Data
2016 Earnings Presentation 21 Almarai Company
Share Price (SAR) 68.50
Current P/E Ratio (ttm) 26.57
Earnings Per Share (SAR) (ttm) 2.53
Market Cap (SAR Million) 54,792
Shares Outstanding (Million) 800
Dividend Indicated Gross Yield 1.31%
Key Statistics for Almarai (1 January 2017)
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