2015 ANNUAL RESULTS PRESENTATION

Transcription

1 2015 ANNUAL RESULTS PRESENTATION Francois Kuttel & Imraan Soomra

2 AGENDA Group Overview Financial Review Operational Review & Outlook Guidance

3 GROUP OVERVIEW South Africa s most empowered listed company 2nd year running Updated core purpose be a proudly African company, efficiently converting global fishing rights into shared value.

4 B-BBEE AUDIT RESULTS SCORECARD % NEW CODES

5 THE OCEANA GROUP Incorporated in 1918 is the largest fishing company in Africa and is listed on both the Johannesburg and Namibian stock exchanges Important provider of food security with a significant protein footprint in Africa, USA, Europe and the Far East 6,503 Employees of which 4,033 are directly employed Level 2 B-BBEE contributor, most empowered company on the JSE 3m Lucky Star servings /day in Africa and 1.4m estimated servings of horse mackerel/day in Africa. 135,000 tons of fishmeal and fish oil traded (annualised) 99.7 % of targeted rights on Sassi green list Trade over 275,000 tons of product each year

6 GROUP OVERVIEW 9 steel refrigerated seawater vessels in South Africa 3 steel refrigerated seawater vessels in Namibia 8 vessels, wholly owned, co-owned or joint ventures 3 canneries 4 fishmeal plants 1 horse mackerel trawler in South Africa 10 west coast lobster vessels 3 horse mackerel trawler in Namibia 1 south coast lobster vessel 5 hake freezer trawlers 4 lobster facilities 2 hake wet fish trawlers 5 freezer vessels for squid 2 hake facilities 1 French fries processing plant stores in South Africa, Namibia and Angola pallets for cold storage production facility fishing vessels spotter planes

7 2015 REVIEW TAILWINDS Improved volumes Fishmeal and Fish Oil, Hake, Namibian Horse Mackerel Weaker R/$ on exported products CCS two new sites and improved throughput, high occupancies maintained Foodcorp approved Dec 14, successfully integrated Feb 15 Daybrook pay away exchange rate R12/$, opening cash balances positive, good fishing season, production yields solid HEADWINDS Canned fish - SA volumes under pressure and import cost increases Namibian Horse Mackerel cost of quota negatively impacted margin SA Horse Mackerel historical volumes not restored

8 AGENDA Group Overview Financial Review Operational Review & Outlook Guidance

9 GROUP VOLUME & PRICE ANALYSIS 60% % % % % 10% % % Operating profit Sales volumes SP per ton CP per ton -

10 INCOME STATEMENT Group income statement R'000 Var R'000 Revenue % Gross profit % GP margin 38% -3% 39% Operating profit before share based payments % Share-based payments (91 086) (21 604) Operating profit before abnormal items % Abnormal items Transaction costs R80,8m Forex gain R97,7m Operating profit % Net interest (96 884) (3 829) Headline earnings % HEPS (cents) 588 7% 549

11 INCOME STATEMENT DAYBROOK EFFECT Group income statement 2015 SA Business (excl Daybrook) 2014 R'000 Var R'000 Var R'000 Revenue % % Gross profit % % GP margin 38% -3% 37% -5% 39% Operating profit before share based payments % %

12 REVENUE MOVEMENT SEGMENT R m September 2014 Canned fish and fishmeal Daybrook Horse mackerel and hake Lobster, squid, french fries Commercial cold storage September 2015 Increase

13 REVENUE GEOGRAPHIC AND SPECIES 8% 12% 9% 10% 9% 6% 1% 6% 2% 7% 2% 2% 5% 12% 12% 14% 19% 52% 43% 75% 9% 64% 21% South Africa and Namibia UK & Europe America Other Africa Far East Other Canned Fish Horse Mackerel Lobster Other Fishmeal & Fish oil Hake Squid 2015 Outer circle 2014 Inner circle

14 OPERATING PROFIT MOVEMENT R'm September 2014 Canned fish and fismeal Daybrook Horse Mackerel & Hake Increase Decrease LSF CCS September 2015

15 REVENUE & OPERATING PROFIT CONTRIBUTION R m R m Canned fish and fishmeal Horse mackerel & hake Lobster, squid, french fries CCS Logistics Daybrook REVENUE OPERATING PROFIT

16 CURRENCY ANALYSIS REVENUE COST 33% 65% 67% 58% 68% 57% 67% 35% 33% 42% 32% 43% ZAR Other currencies

17 FINANCIAL POSITION Group Balance Sheet R'000 R'000 Property, plant and equipment Intangible assets Deferred taxation Investments and loans SA R394m USA R787m Current assets Stock days Debtors days Net Cash Non-current assets held for sale Total assets Shareholders interest Non-controlling interest Deferred taxation Long term loans Other liabilities Creditors days Total equity and liabilities

18 CASH FLOW Opening cash cash Cash flow flow from from operations Interest & Tax Dividends Capex Other investing activities Cash flow prior to business acquisitions Rights offer Long term debt Business acquisition Interest and abnormal items Closing cash Negative contribution to cash flow Positive contribution to cash flow

19 DEBIT AND INTEREST LONG TERM DEBT 60% US Debt Fixed 100% SA Debt Floating 6% 13% 42% 25% 20% 75% 19% WEIGHTED AVERAGE RATE 6.2% OET 3 year bullet 3 year bullet 4 year bullet 5 year amortisation US Debt Floating Fixed

20 REVENUE AND HEPS GROUP REVENUE ZAR'm HEPS (cents) CAGR 14% CAGR 15% % 7%

21 DIVIDENDS 2015 var 2014 Headline earnings R000's % Dividend required to maintain 1.5 times cover R000's % Number of shares in issue (net of treasury shares) 000's % Weighted average number of shares 000's % Headline earnings per share* cents 588 7% 549 Dividends per share (weighted) cents 392 7% 366 Dividends per share cents 365-3% 377 Interim dividend cents Final dividend cents * headline earnings per share based on weighted average number of shares in issue.

22 AGENDA Group Overview Financial Review Operational Review & Outlook Guidance

23 CANNED FISH & FISHMEAL

24 CANNED FISH REVIEW Local sales volumes flat in H1 and declined in H2 Continued consumer pressure and xenophobic attacks negatively impact H2 volumes Price increase in February of 8% Overall SA market share remained intact Positive signs in the rest of Africa volumes up 6% Cost of imported product negatively impacted by weaker ZAR Partially offset by renegotiating lower dollar import prices Focus on reducing costs in warehousing and distribution has yielded positive results (R22m) Operating profit growth in this segment and margins maintained Good contributor to working capital improvements enhanced NRCS process, improved demand & supply planning

25 MONTHLY CANNED FISH VOLUMES - SA F2014 F PRICE INCREASE 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

26 MONTHLY CANNED FISH VOLUMES - SA F2014 F2015 Linear (F2014) Linear (F2015) PRICE INCREASE 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

27 MARKET SHARE - SA Oct 13 Sept 14 vol. share Oct 14 Sept 15 vol. share Last 3 month vol. share Lucky Star in Retail 70,0 % 70.1 % 68,1 % Pilchards in Retail - 2,0 % +0,1 % - 5,4 % HOUSEHOLDS/YEAR (%) CONSUMPTION/HOME/YEAR (KG) 90.0% 88.0% 86.0% 84.0% 82.0% 80.0% 78.0% 76.0% 74.0% 72.0% 70.0% 88.8% 88.0% 85.2% FY 2014 FY 2013 FY 2015 Pilchard Category 77.2% FY % 80.1% FY 2014 FY 2015 Lucky Star FY 2014 FY 2015 FY 2013 Pilchard Category FY 2015 FY 2013 FY 2014 Lucky Star

28 CANNED FISH VOLUMES - REST OF AFRICA VOLUMES (EXCL. SA) BNLS ROA

29 CANNED FISH PRODUCTION Material increase in cost of imported product. Average converted rate of R12.11 compared to R10.50 in 2014 Focus has shifted to utilising spare capacity in local plants (SA and Namibia) to augment expensive imports with frozen local production Poor weather conditions have affected local landings in September and October

30 IMPORTS vs LOCAL PRODUCTION (cartons 000) 100% 90% 80% 70% 60% 50% 40% 30% Reduction due to lower landings in 2015 FY 20% 10% 0% Own fresh Own frozen Procured SA Procured internationally

31 FISHMEAL REVIEW Significant improvement in landings over the period Overall weather conditions more favourable compared to prior year Added benefit of Foodcorp volumes International pricing reduced during the period due to Peruvian production back on line during H1 Pricing improvement in H2 Weaker exchange rate has had a positive effect on export sales

32 LANDINGS DAILY LANDINGS TO SHB, HTB & AP FMP'S FIN YEARS Oct-Dec 17-Jan 20-Jan 23-Jan 26-Jan 29-Jan 01-Feb 04-Feb 07-Feb 10-Feb 13-Feb 16-Feb 19-Feb 22-Feb 25-Feb 28-Feb 03-Mar 06-Mar 09-Mar 12-Mar 15-Mar 18-Mar 21-Mar 24-Mar 27-Mar 30-Mar 02-Apr 05-Apr 08-Apr 11-Apr 14-Apr 17-Apr 20-Apr 23-Apr 26-Apr 29-Apr 02-May 05-May 08-May 11-May 14-May 17-May 20-May 23-May 26-May 29-May 01-Jun 04-Jun 07-Jun 10-Jun 13-Jun 16-Jun 19-Jun 22-Jun 25-Jun 28-Jun 01-Jul 04-Jul 07-Jul 10-Jul 13-Jul 16-Jul 19-Jul 22-Jul 25-Jul 28-Jul 31-Jul 03-Aug 06-Aug 09-Aug 12-Aug 15-Aug 18-Aug 21-Aug 24-Aug 27-Aug 30-Aug 02-Sep 05-Sep 08-Sep 11-Sep 14-Sep 17-Sep 20-Sep 23-Sep 26-Sep 29-Sep 10 year average

33 HISTORIC FISHMEAL PRICES 4 year view Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 US$/t

34 HISTORIC FISHMEAL PRICES 10 year view US$/t Oct-05 Feb-06 Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15

35 DAYBROOK

36 DAYBROOK Fully integrated into Oceana structures Management team in place New MD and CFO have been appointed (names to be announced in due course) Landings improved by 20% on last season Overall production output improved on business plan Stock levels at year end better than expected

37 LANDINGS COMPARISON DAYBROOK CATCH COMPARISON Standard Fish Weeks Year Av

38 PRODUCTION STATS % % Metric Tons % 15.0% 10.0% % 0 Jul - Sept 2015 Jul - Sept Bus. Plan Landings Fishmeal Output Fishoil Output Fishmeal Yield % Fishoil Yield % Linear (Fishoil Yield %) 0.0%

39 INVENTORY Metric tons Meal Oil

40 HORSE MACKEREL & HAKE

41 2015 HORSE MACKEREL SA Reduced landings in the period 1st Quarter: Rudder repair and then fished in Namibia on contracted quota 2nd Quarter: Returned to SA and caught 35 mt/day 3rd Quarter: Fished in Namibia on expensive contracted quota 4th Quarter: Returned to SA and caught at 4mt/day and was laid up thereafter Oceana and DAFF scientists exploring reasons for decline

42 2015 HORSE MACKEREL NAMIBIA TAC unchanged but own quota reduced Significant increase in purchase quota costs Landings have increased over the period Jewel in Angola for H1 excess capacity in Namibia Diamond assisted in H2 when additional quota was purchased Pricing remained fairly stable in USD terms Profit margins reduced to almost two thirds of prior year

43 HORSE MACKEREL NAMIBIA % % 80% 70% % Tons % 50% 40% % 20% % 5% % 0% Own quota Contracted quota Quota usage fees price increase

44 HORSE MACKEREL PRICING HORSE MACKEREL AVERAGE EX HATCH PRICES (US$ PER TON) Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep m

45 HAKE REVIEW Solid overall performance bolstered by Foodcorp volumes and capacity Vessel utilisation and catch rates on frozen fleet have improved Revenue negatively impacted by smaller size mix ZAR strength against Euro

46 HAKE CATCH STATS Own quota Joint ventures Contracted quota Average catch rate Vessels -

47 IMPACT ON HAKE SALES PRICES EURO / ZAR Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Month end closing 2014 average 2015 average

48 LOBSTER, SQUID & FRIES

49 2015 REVIEW Lobster Volumes up 100% of quota landed, production mix improved Pricing stable in USD, exchange rate benefit Squid Volumes doubled Euro pricing down 20% Fries Volumes down due to load shedding and lower quality raw material Margins negatively impacted by lower production volumes and raw material cost pressures

50 CCS LOGISTICS

51 2015 REVIEW Consistently high occupancy levels average 88% for % increase in number of pallets handled New sites Midrand 1 and 2 have been positive contributors Fruit performance solid Transport business growing steadily off a low base Angola site opened September 2015

52 PALLET CAPACITY & OCCUPANCY % Number of Pallet spaces % 80% 70% 60% 50% 40% 30% 20% 10% Years Frozen Ambient Occupancy Linear (Occupancy) 0%

53 OUTLOOK

54 2016 Canned Fish South Africa price increases will be kept to a minimum, timing planned to coincide with expected higher food inflation period increase in promotional activity local production ramping up further efficiencies on merchandising, freight and distribution costs Canned Fish Rest of Africa growth steady off low base moving origin from Thailand to SA/Namibia reduces import duties Fishmeal and fish oil effect of Peru El-Nino on pricing Angola fishmeal plant commissioned 1 December 2015 additional vessel from mid November

55 PRODUCTION STATS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Own fresh Own frozen Procured SA Procured internationally

56 MERCURY

57 ANGOLA

58 2016 Horse Mackerel Namibia Excess and underperforming capacity has been sold, expect margin improvement as a result volumes owned and contracted 60,000 tons (50/50 split) Horse Mackerel SA Frap 2016 approval to fish West of 20 degrees East TAC reduction of 8% expected Hake FRAP 2016 inshore further synergies from Foodcorp integration wet fish margin improvement

59 2016 Lobster 11% TAC increase, FRAP 2016 Squid resource looks healthy and similar catches expected Fries steady demand expected, potato crops early indicators look positive CCS Angola now online high occupancy levels expected to continue Brownfield expansion opportunities being considered Namibianisation of CCS Walvis Bay (30% sale to local partner)

60 AGENDA Group Overview Financial Review Operational Review & Outlook Guidance

61 GUIDANCE 2016 Effect of Daybrook and Foodcorp for full 12 months CAPEX will remain at current levels Fishmeal pricing positively impacted by El-Nino Export businesses impacted by ZAR/USD rate movements Continue to extract efficiencies Finance shared services Phase 1 launch 1 December 2015 Supplier list reduced more than threefold Centralised procurement Targeted savings R70m in 2016 Human Resources Group logistics costs

62 THANK YOU