Almarai Company. Fiscal Year 2018 and Fourth Quarter 2018

Size: px

Start display at page:

Download "Almarai Company. Fiscal Year 2018 and Fourth Quarter 2018"

Myrtle Gregory
5 years ago
Views:

1 Fiscal Year 2018 and Fourth Quarter 2018

2 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 management under any circumstances Q4 Earnings Presentation 2

3 Macro Environment

4 Main Events Fiscal Year 2018 Macro Changes for consumer and market sentiment Introduction of VAT Expat Levy and labor reform Energy Reforms Introduction of monthly stipend for eligible Saudi members of the workforce Good progress made against the strategic objectives set out in Almarai 2025 The company managed to gain and maintain GCC market share in most categories despite market slowdown Notably strong performance in the Poultry Segment driven by HORECA channel expansion (over 50% of Poultry Sales) Infant Nutrition segment broke even for the first time at an EBIT level on an annualized basis Cost Rationalization and efficiency program known as AAA achieved close to SAR 500M savings for 2017 / % importation of alfalfa feed achieved by the 3 rd November 2018 inline with statutory deadline (Royal Decree 66 for the growth of green forage) Increase in the price of Fresh Milk and Laban on 6 SKUs by 4-8% on July 2nd Reduced capital investment resulting in stronger Free Cash Flow Almarai Engines for Growth Innovation Albashayer(Value Brand), Bake Rolls, Greek Yogurt Geographic Expansion Continued growth and market share gain in Egypt HORECA Leveraging our current portfolio for B2B customers 2018 Q4 Earnings Presentation 4

5 Almarai Defending Market Share Despite Declining KSA Food Market and Price increases Fresh Milk Laban 80% 70% 7 0.5% 7 0.4% 7 1.1% 7 2.3% 7 2.2% 7 1.2% 68.6% 68.6% 80% 70% 68.5% 68.0% 68.6% 69.3% 69.2% 7 0.4% 65.8% 64.3% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Long Life (UHT) Milk Zabadi 30% 25 % 20% 2 0.5% 16.5% 19.7% 2 4.2% 2 2.2% 2 0.4% 2 1.9% 2 2.2% 80% 70% 60% 50% 67.4% 68.4% 68.6% 67.2% 66.7% 7 0.1% 66.3% 66.1% 15% 40% 10% 30% 5% 0% 20% 10% 0% 2018 Q4 Earnings Presentation 5

6 Almarai Defending Market Share Despite Declining KSA Food Market Fresh Juice (Bottles) Bakery 60% 50% 46.9% 43.2 % 48.9% 49.8% 49.3% 51.6% 49.2% 47.1% 70% 60% 57.4% 58.5% 57.2% 56.3% 54.7 % 57.3% 56.1% 55.7 % 40% 30% 50% 40% 30% 20% 20% 10% 10% 0% 0% Total Foods 40% 35% 35.8% 32.6% 37.4% 36.4% 36.8% 34.6% 37.2% 35.8% 30% 25 % 20% 15% 10% 5% 0% 2018 Q4 Earnings Presentation 6

7 Business Highlights

8 Highlights Q4, 2018 SAR in Billion SAR in Billion SAR in Billion In Thousand SAR 11.2 B +12.4% 3.23 Revenue Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 Last 5 Quarters SAR in Billion Operating Income Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 Last 5 Quarters (0.50) 0.70 Free Cash Flow (0.00) 0.79 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 Last 5 Quarters Profit Attributable to Shareholders Employees Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q4, 2018 Last 5 Quarters Last 5 Quarters 2018 Q4 Earnings Presentation 8

9 Financial Highlights

Revenue Breakdown - Full Year and Q4, 2018

Country 4 th Quarter = -1% Cheese, Butter &

Bakery 1,737 13% Poultry 1,808 13% Other

Sales 38 1% Fresh Dairy 1,225 36% = 1,341

10 Revenue Breakdown - Full Year and Q4, 2018 Revenue by Product Full Year Revenue by Country 4 th Quarter = -1% Cheese, Butter & Cream 1,924 14% Fruit Juice 1,528 11% = +3% Bakery 1,737 13% Poultry 1,808 13% Other Sales 202 1% SAR 13,723 Million Fresh Dairy 5,182 38% Long-Life Dairy = -3% = -2% = Bakery % Cheese, Butter & Cream % Fruit Juice % Long-Life Dairy Poultry 494 SAR 3,889 Million +4% 15% Other Sales 38 1% Fresh Dairy 1,225 36% = 1,341 10% % -3% +1% +1% 2018 Q4 Earnings Presentation 10

748 Kuwait Egypt 776 6% 671 UAE 6% 5% 1,399

6% 162 5% Egypt 199 6% Jordan Bahrain 57

SAR 13,723 Million SAR 3,389 Million KSA

11 Revenue Breakdown - Full Year and Q4, 2018 = Revenue by Country Full Year = +1% +1% Oman 748 Kuwait Egypt 776 6% 671 UAE 6% 5% 1,399 10% Bahrain = 331 2% = = Jordan 267 2% Export / Others 294 2% Revenue by Country 4 th Quarter UAE % +1% = Kuwait +1% Oman 193 6% 162 5% Egypt 199 6% Jordan Bahrain 57 Export / 81 = 2% Others 2% 102-1% +1% = 3% SAR 13,723 Million SAR 3,389 Million KSA 9,238 67% = -2% KSA 2,235 66% 2018 Q4 Earnings Presentation 11

12 Innovation Pipeline 2018 Innovation is a Core Engine of growth for Almarai. Segment Product Dairy & Juice Bakery Poultry Infant Nutrition 2018 Q4 Earnings Presentation 12

13 Statement of Income Full Year and Q4, 2018 SAR Million 4th Quarter Full Year Change Change Revenue 3, % 3, % (0.9%) 13, % 13, % (1.5%) Cost of sales (2,083) (60.9%) (2,154) (63.6%) (3.4%) (8,352) (59.9%) (8,277) (60.3%) 0.9% Gross Profit 1, % 1, % (7.5%) 5, % 5, % (2.5%) Selling and Distribution Expenses (533) (15.6%) (518) (15.3%) 2.8% (2,343) (16.8%) (2,331) (17.0%) 0.5% General and Administration Expenses (93) (2.7%) (101) (3.0%) (8.9%) (397) (2.9%) (376) (2.7%) 5.3% Other Expense, net (88) (2.6%) (177) (5.2%) (100.7%) (211) (1.5%) (301) (2.2%) (42.7%) Impairment (Reversal) / Loss on Financial Assets (23) (0.7%) % n.a (49) (0.4%) % n.a Operating Income % % (22.2%) 2, % 2, % (4.7%) Exchange Gain / (Loss) (3) (0.1%) % n.a 7 0.1% % 316.2% Finance Costs - net (105) (3.1%) (124) (3.6%) (17.6%) (401) (2.9%) (408) (3.0%) (1.6%) Share of Results of Associates and Joint Ventures 9 0.3% 1 0.0% (90.3%) % (5) (0.0%) n.a Profit Before Zakat and Income Tax % % (25.9%) 2, % 2, % (5.7%) Zakat and Foreign IncomeTax 9 0.3% (6) (0.2%) n.a. (42) (0.3%) (70) (0.5%) (66.9%) Profit for the Period % % (28.3%) 2, % 2, % (7.1%) Profit Attributable to Non Controlling Interest 5 0.1% 5 0.2% 17.2% % 2 0.0% (92.6%) Profit Attributable to Shareholders % % (27.9%) 2, % 2, % (7.9%) Earnings Per Share (Basic) (26.0%) (7.3%) Profit Attributable to Shareholders % 15.0% 10.9% 15.7% 14.6% 2018 Q4 Earnings Presentation 13

14 Normalized Profit and Loss SAR in Million 4th Quarter Full Year 2018 Reported Net Income ,009 One Off / Exceptional Items: Loss on Acquisition / Disposal 4 8 Asset impairment on Discontinuation of KSA arable operation Operational Loss, including dilapidation & Input costs for KSA arable operation Asset impairment - GCC Asset impairment - Non-GCC ( be fore N C I) Total One Off / Exceptional Items Normalized Net Income ,144 Net Income ,182 Growth % (2.4%) (1.7%) 2018 Q4 Earnings Presentation 14

15 Operating Performance Full Year Gross Profit Operating Income Profit Attributable to Shareholders % to Sales 40.1% 39.7% -0.4 pp 18.5% 17.9% -0.6 pp 15.7% 14.6% -1.1 pp SAR Million 5,584 5, % 2,583 SAR Million 2,592 * 2, % 2,182 SAR Million 2,144 * 2, % YTD Q4, 2017 YTD Q4, 2018 YTD Q4, 2017 YTD Q4, 2018 YTD Q4, 2017 YTD Q4, 2018 * Normalized for exceptional Items 2018 Q4 Earnings Presentation 15

16 Segment Reporting Full Year and Q4, 2018 SAR Million Dairy & Juice Bakery Poultry Other Activities Almarai Consolidated Q4 YTD 2018 Revenue 9,976 1,737 1, ,723 Depreciation and Amortisation (1,232) (250) (370) (193) (2,045) Profit Attributable to Shareholders 1, (99) 2,009 Percent to Revenue of Profit Attributable to Shareholders 17.4% 11.1% 10.1% (49.0%) 14.6% Total Assets 19,120 2,352 5,316 5,531 32,318 Growth versus Revenue ,510 1,807 1, ,936 - Revenue Growth (5.1%) (3.9%) 23.5% 31.0% (1.5%) - Profit Attributable to Shareholders , (29) (130) 2,182 - Profit Attributable to Shareholders Growth (15.4%) (34.3%) n.a 23.9% (7.9%) Q Revenue 2, ,389 Profit Attributable to Shareholders (97) 370 Percent to Revenue of Profit Attributable to Shareholders 16.0% 9.8% 7.9% (252.7%) 10.9% Growth versus Q Revenue - Q4, , ,419 - Revenue Growth (5.7%) 1.7% 26.2% 9.6% (0.9%) - Profit Attributable to Shareholders - Q4, (70) Profit Attributable to Shareholders Growth (23.5%) (35.4%) 194.3% (37.6%) (27.9%) 2018 Q4 Earnings Presentation 16

17 SAR Million Net Income by Segment Basic EPS* (SAR) ,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 2,182 (316) ,009 (100) YTD Q4, 2017 Dairy & Juice Bakery Poultry Other YTD Q4, 2018 Revenue Growth (1.5%) (5.1%) (3.9%) 23.5% 31.0% Net Income Growth (15.4%) (34.3%) n.a. 23.9% (7.9%) Net Income % 17.4% 11.1% 10.1% (49.0%) 14.6% Q1 Net Income 328 (62) (27) Q2 Net Income 674 (48) (38) 73 (0) 661 (14) Q3 Net Income 667 (89) (9) (33) Q4 Net Income 513 (117) (25) 26 (26) 370 (143) Normalized Q4 NI 513 (67) (25) (12) Normalized Full Year NI 2,182 (266) (100) ,144 (38) *EPS Earnings Per Share 2018 Q4 Earnings Presentation 17

SAR in Millions 50 % 40 % 30 % 20 % 10 % 0% -10% -20 % -30 % Investing Cash Flows continue the downward

Manufacturing and Farming spent CAPEX of SAR ~0.9 Billion for various capacity expansion projects.

Replacement and other CAPEX including IDJ accounted for another SAR ~0.6 Billion.

29% 32% 33% 29% 25% 32% 4,409 33% 4,900 24% 18% 3,000 3,575 3,284 3,302 3,115 3,312 2,000 2,189 2,460 1,000

18 SAR in Millions 50 % 40 % 30 % 20 % 10 % 0% -10% -20 % -30 % Investing Cash Flows continue the downward trend in line with revised 5 year Business Plan CAPEX spend for the full year 2018 was SAR 2.0 Billion. Manufacturing and Farming spent CAPEX of SAR ~0.9 Billion for various capacity expansion projects. Sales Depot, Poultry and Logistics expansion accounted for SAR ~0.5 Billion. Replacement and other CAPEX including IDJ accounted for another SAR ~0.6 Billion. Dubai Solar Project CPP3 Phase 2 6,000 45% 39% Consolidation Warehouse B9A Dubai Depot 5,000 4,000 30% 31% 29% 32% 33% 29% 25% 32% 4,409 33% 4,900 24% 18% 3,000 3,575 3,284 3,302 3,115 3,312 2,000 2,189 2,460 1,000 1,488 1,572 1, Net Cash Used in Investing Activities Investment as a % of Net Sales 2018 Q4 Earnings Presentation 18

19 Cash Flow Bridge 3,558 (1,700) 2018 Free Cash Flow = SAR 1,217M (SAR 86M lower than 2017) 620 (2,460) Perpetual Sukuk Repayment Loan & Sukuk Net Movement 1,636 (748) Operating Cash Flow CAPEX / Biological Assets Dividend 97 1,004 Others Cash at 31 Dec 2017 (SAR 632 Million) Cash at 31 Dec Q4 Earnings Presentation 19

20 Key Trends

21 Net Debt SAR Million 14,000 12, x 3.1x 3.0x 3.0x* 3.2x* 2.8x 2.7x 2.7x 2.7x 2.8x 3.0x 350% 300% 10, % 8, % 6,000 4,000 98% 101% 75% 75% 74% 81% 81% 73% 87% 150% 100% 2, ,653 8,237 8,053 8,762 9,344 10,889 10,883 10,910 12, % 0% SOCPA IFRS Net Debt Net Debt / Equity Ratio Net Debt / EBITDA * Methods used by the rating agencies 2018 Q4 Earnings Presentation 21

22 Quarterly Performance Net Income Trend Analysis SAR Million 2018 versus # 289 Q1 = 4.8% Q2 = (2.0%) Q3 = (4.9%) # # * 428 Q4 Normalized = (2.4%) # * # IFRS revaluation adjustments * Capital gain of SAR 47m in 2012 Please note that 2016 and subsequent years are based on IFRS however earlier years are based on SOCPA accounting standards * Normalized Net Income 2018 Q4 Earnings Presentation 22

23 SAR Billion Debt Maturity Profile 4.0 Debt Maturity by Age and Type Sukuk 3 25% <1yr 1-2 yr 2-3yr 3-4 yr 4-5yr >5yr Sukuk Govt / Semi Govt Inst. Banks Govt / Semi Govt Inst. 2 17% Banks 8 58% 2018 Q4 Earnings Presentation 23

24 SAR Million EBIT and EBITDA margins Revenue, EBITDA and EBIT Evolution CAGR : 8.1% (w/o impact of acquisitions 4.0%) Net Sales EBIT % to Net Sales EBITDA % to Net Sales 25.6% 24.2% 24.4% 12,606 11, % 19.1% 9, % 16.0% 15.8% 13, % 16.4% 14,699 14, % 26.0% 17.3% 17.6% 28.1% 28.2% 13,936 13, % 17.9% 7, SOCPA IFRS 2018 Q4 Earnings Presentation 24

Key Share Data Key Statistics for Almarai (31 December 2018) Share Price (SAR) 48.00 Current P/E Ratio (ttm) * 29.55 Earnings Per Share (SAR) 1.

25 Key Share Data Key Statistics for Almarai (31 December 2018) Share Price (SAR) Current P/E Ratio (ttm) * Earnings Per Share (SAR) 1.97 Market Cap (SAR Million) 48,000 Shares Outstanding (Million) 1,000 Dividend Yield 1.56% 25% 16% 35% Savola HHPrince Sultan bin Mohammed PIF 30% 25% 20% 15% 10% Year to date total shareholder's return since listing Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 16% Dec-18 24% Others * Source: Bloomberg 2018 Q4 Earnings Presentation 25

26 For Investor Relations matters please contact: We will encourage our major corporations to expand across borders and take their rightful place in global markets QR Code for Almarai IR App. Thank you

Almarai Company. Interim Results 3 rd Quarter 2018

Almarai Company. Interim Results 3 rd Quarter 2018 Interim Results 3 rd Quarter 2018 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