Disposal of Remaining Stake in Noble Agri December 2015
Executive summary» Noble Group and COFCO International Limited (CIL) 1 have entered into an agreement for Noble Group to sell its remaining stake in Noble Agri Limited (NAL) to CIL 1. 1 Improved leverage and liquidity with credit ratios comfortably within investment grade levels Cash proceeds to be used to repay outstanding debt Removal of guarantees for 49% of NAL s debt, positively impacting rating metrics Rating agency metrics will exceed thresholds and place us comfortably within investment grade levels Further enhances our conservative funding profile with liquidity headroom increasing to US$2.7 billion on a Q3 2015 proforma basis 2. 2 Exceeds commitment to raise at least US$500 million in capital Cash proceeds payable to Noble Group of US$750 million Exceeds commitment made during the Q3 2015 results announcement on November 12th that we will raise at least US$500 million through asset disposals and / or strategic transactions 3. 3 Retains long-term value upside Future value upside retained in Noble Agri through an additional deferred payment at the time of IPO / trade sale 4. 4 Focus on driving core business performance Elimination of our share of Noble Agri s losses in the income statement We are well positioned to capture a diverse range of income opportunities from our core Energy, Gas & Power, Mining & Metals and Carbon Steel Materials businesses Excluding any value attributable to upside and assuming a conservative consideration value of US$750 million, the transaction will result in a non-cash loss of US$546 million, being the difference between the carrying value of Noble Agri as of 30 September 2015 and the cash consideration received, booked through the profits & losses on supply chain assets line item (1) CIL is the investment vehicle through which COFCO Corporation and its investor consortium hold the equity stakes in NAL and Nidera B.V. 1 DEC 2015
Key terms Item Transaction Purchase Consideration Deferred Consideration Guarantees Conditions Precedent Key Terms» Noble Group Limited (NGL) to sell all of its remaining shares in Noble Agri Limited (NAL) to a subsidiary of COFCO International Limited ( CIL )» US$750 million payable in cash to NGL by CIL at Closing; plus» Deferred Consideration (see below)» NGL will further receive Deferred Consideration following the earlier of an IPO or trade sale of CIL, the vehicle through which COFCO and its investor consortium holds its interests in NAL and Nidera B.V. (Nidera)» The Deferred Consideration will be 5% of the future value creation over and above the total consideration paid by COFCO for the full stake in Noble Agri subject to certain adjustments and a cap of US$200 million» Further details are contained in the SGX announcement and are available on Noble s website» Replace existing guarantees no later than 4 months after Closing» Release NGL from further performance and liabilities under the guarantees» COFCO (Hong Kong) Limited, the company which executes COFCO Corporation s overseas business strategy, to indemnify NGL from and against all losses suffered or incurred in its capacity as guarantor» Closing subject to Noble Group shareholder approval and approval from the Australian Foreign Investment Review Board that they have no objections to the transaction» No anti-trust approvals required 2 DEC 2015
Impact on rating agency metrics» Repayment of debt with the cash proceeds and elimination of the 49% guarantee for Noble Agri s debt, results in Noble Group s rating agency metrics being comfortably above investment grade thresholds S&P - Proforma FFO/Adjusted Debt 27.6% Moody s - Proforma RCF/Adjusted Net Debt 25.5% 19.8% Threshold raised to 25% from 20% in June 2015 22.3% Threshold 20% LTM 3Q 2015 LTM 3Q 2015 Proforma Agri Sale LTM 3Q 2015 LTM 3Q 2015 Proforma Agri Sale 3 DEC 2015
Impact on liquidity and leverage» This transaction further enhances our conservative funding profile as the net proceeds of the transaction will be used by Noble Group to bolster its liquidity position and pay down debt. On a proforma Q3 2015 basis, this transaction - Increases our liquidity headroom to US$2.7 billion - Reduces adjusted net debt to US$1.8 billion - Reduces proforma net debt to capitalization ratio to 43.1% (1)» The Group s balance sheet remains well capitalized with a conservative leverage profile in relation to other commodity trading peers and liquidity further supported by declining prices (US$ MM) 30 Sep 2015 Actual 30 Sep 2015 Pro forma Gross Debt 5,455 5,455 Less Cash (2) 1,280 2,030 Net Debt 4,175 3,425 Proforma Leverage (3) 49.7% 45.5% 45.1% 37.8% 43.1% (1) Adj. Net Debt (4) 2,506 1,756 Shareholders Equity 5,074.1 4,527.2 (1) Net Debt/Capitalization (3) 45.1% 43.1% FY2013 FY2014 30 Jun 2015 30 Sep 2015 Proforma (1) Adjusted for the proforma book value post NAL sale NAL disposal (2) Cash includes cash balances with brokers not immediately available for use (3) Capitalization = net debt + shareholders equity (unrelated to the market value or share price movement) (4) Adjusted for RMI 4 DEC 2015
Core business performance Strong underlying pro forma performance excluding Noble Agri Proforma results (annualised Q1 2014 to Q3 2015 average) (1) (US$ MM) / Million Tonnes) Energy Gas & Power Mining & Metals Corporate (2) Group Tonnage 130-37 74 240 Revenue 62,696 644 13,695 2,683 79,718 Operating Income from Supply Chains 718 442 263 17 1,440 Profit before Interest & Tax 539 268 106 (161) 752 Net Profit 544 (1) Proforma annualised results based on Q1 2014 to Q3 2015 average performance, adjusted for Noble Agri discontinued operations (pre-disposal) and share of profits & losses (postdisposal), impairments and negative goodwill. Q1 2014 to Q3 2015 average annualized impairments and negative goodwill c.us$155 million (2) Includes share of profit / losses of Yancoal and other associates, and chartering» Strong core business performance of US$544 million in average annualized net profit, adjusted for share of losses of Noble Agri, impairments and negative goodwill» 9M 2015 Highlights Tonnage for the nine months to 30 September 2015 up 44% year-on-year to 206 million tonnes, while tonnage for the latest three months up almost 50% over the same period in 2014 Energy and Gas & Power Segments Operating Income from Supply Chains at a record US$971 million for the nine months ended 30 September 2015. Equal to an annualized run rate of US$1.3 billion Costs down every quarter since Q4 2014, on track to meet US$70M cost savings target 5 DEC 2015
Core business performance (cont d) Results underpinned by geographic and product diversity Annual volume contribution by region to 30 September 2015 (1) Diversified contribution by core businesses to Operating Income from Supply Chains (2) (Cumulative Q1 2014 to Q3 2015) 12% North America 32% Gas & Power, 13% 42% China Oil Liquids, 30% Metals, 10% 27% NAES, 19% 23% Asia (ex-china) Energy Coal & CSM, 28% 26% 23% Others 15% 2008 2009 2010 2011 2012 2013 2014 9M 2015 (1) Excludes Gas & Power Segment volumes (2) Excludes Corporate Segment and discontinued Agricultural Segment 6 DEC 2015
Appendix Noble Group Noble Group (SGX: N21) manages a portfolio of global supply chains covering a range of industrial and energy products, as well as having a 49% interest in Noble Agri, its agricultural partnership with COFCO. Operating from over 60 locations, Noble facilitates the marketing, processing, financing and transportation of essential raw materials. Sourcing bulk commodities from low cost regions such as South America, South Africa, Australia and Indonesia, the Group supplies high growth demand markets, particularly in Asia and the Middle East. We are ranked number 77 in the 2015 Fortune Global 500. COFCO Corporation Founded in 1949, COFCO Corporation is a leading supplier of agricultural products, diversified foodstuffs and services in China, integrating agri-trading, logistics, processing, production and sale links, and providing grain and oil products to one quarter of global population. Aiming to meet the market's need with a global horizon, COFCO closely connects its corporate development with supply and demand situation of global grain and foodstuffs. COFCO creates a wholly-new business model to build a fully-integrated value chain covering all links from the farmland to the dining table. Relying on its global network and domestic storage and logistics presence, COFCO makes grain production and circulation more efficient. COFCO owns global producing and purchasing platforms and trading network, involving plantation, purchasing, storage, logistics and port facilities, and also establishes the stable grain corridor between the largest producing areas and Asian emerging markets with highest demand increase in grain. COFCO s value chain now extends to origination and husbandry, logistics and storage, raw materials processing, biofuels, branded food production and sales, hotels and real estate, financial services, among others. COFCO is committed to building its core competencies at each stage of the value chain and maximizing value for our stakeholders, customers and employees. With its good business performance, COFCO has consecutively been ranked among the world's Fortune 500 companies, and tops the list of Top 100 companies of China s food industry. 7 DEC 2015