Earnings P r e s e n t a t i o n October, 2016
Disclaimer Information contained in this presentation is subject to change without prior notice. Its accuracy is not guaranteed and it may not contain all material information related to the company. Neither SADAFCO nor its associates make any representation regarding, and assume no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein. Nothing in this presentation shall form the basis of any contract or commitment whatsoever. This presentation is furnished to you solely for your information. You may not redistribute it to any other person. This presentation contains forward-looking statements that are made on the basis of current knowledge and assumptions. Various factors could cause future results, performance or events to differ materially from those mentioned in the presentation. 2
Our Vision, Mission & Values VISION To be the Brand of Choice MISSION Develop, produce and market a range of nutritious food propositions for all age groups and create maximum shareholder value through teamwork 3
Business Highlights Sales 4.9% YoY H1 2016/17 : SAR953mn H1 2015/16 : SAR1,003mn H1 2016/17 : SAR160mn H1 2015/16 : SAR113mn Net Profit 41.8% YoY Cash Flow Operating Cash Flows H1 2016/17 : SAR299mn H1 2015/16 : SAR233mn Capital Expenditure H1 2016/17 : SAR43mn H1 2015/16 : SAR24mn Low Fat Milk 2L New Products Laban 200ml & 1L Soy Drink 1L Date Milk 200ml & 1L Recent Developments Celebrating Saudia s Distributed dividend of SAR 4 per share for FY2015/16 MOU for SELECT concluded: 40 th Anniversary Land transferred in SADAFCO s name; will facilitate future growth and enhance cost efficiencies 4
100 90 80 70 60 50 40 30 20 10 0 250.00 230.00 210.00 190.00 170.00 150.00 130.00 110.00 90.0 0 70.0 0 50.0 0 30% 25% 20% 15% 10% 5% 0% 80% 70% 60% 50% 40% 30% 20% 10% 0% Sales & Profitability Sales Gross Profit 482 496 484 491 463 34% 35% 39% 42% 41% 166 172 191 207 189 Q2'15/16 Q3'15/16 Q4'15/16 Q1'16/17 Q2'16/17 Q2'15/16 Q3'15/16 Q4'15/16 Q1'16/17 Q2'16/17 As % of Net Sales Net Profit 11% 14% 17% 18% 16% 54 68 80 86 73 Q2'15/16 Q3'15/16 Q4'15/16 Q1'16/17 Q2'16/17 As % of Net Sales 5
400 350 300 250 200 150 100 50 0 40% 35% 30% 25% 20% 15% 10% 5% 0% Strong Balance Sheet Steady Asset Base build by Internally generated funds 1,234 1,375 1,375 1,378 1,484 1,234 1,375 1,391 1,378 1,484 287 361 297 331 363 947 1,014 1,094 1,047 1,120 Q2'15/16 Q3'15/16 FY'15/16 Q1'16/17 Q2'16/17 Q2'15/16 Q3/15/16 FY'15/16 Q1'16/17 Q2'16/17 Shareholders' Equity Non Interest bearing Liabilities Working Capital* 16% 15% 19% 16% 14% 299 301 370 318 277 Q2'15/16 Q3'15/16 FY'15/16 Q1'16/17 Q2'16/17 Working Capital As % of Net Sales** Note: *Working Capital calculated as Current Assets net of Current Liabilities. Current Assets: Accounts receivable + Inventories + Deposits, prepayments & other current assets Current Liabilities: Accounts payable + Due to related parties + Accrued zakat + Dividend payable + Accruals & other current liabilities **Rolling 12-months net sales 6
Cash Flow Summary Cash Flow Bridge for rolling 12-months as of 30 Sept, 2016 (87) 428 (130) (3) 370 161 Free Cash Flow = SAR341mn Cash and Cash Equivalents (30 Sept 2015) Net cash from operating activities Purchase of Property, Plant and Equipment (PP&E) Dividends Paid Others Cash and Cash Equivalents (30 Sept 2016) Distributed Dividend of SAR 4 per share for FY2015/16 in Q1 16/17 Note: Dividends of SAR 3.5 per share for 2014/15 paid in Q2 of 2015/16 7
Product Portfolio UHT Milk Milk Powder Cheese Products Frozen Tomato Products Others UHT Milk Whole, Low Fat, Skimmed, Gold Milk Flavored Milk Date Milk Milk Powder Instant Feta Cheese Processed Cheese Triangles Ice cream French Fries Butter Ketchup Tomato paste Arabic Coffee Laban & Twist Crispy Cream Juices Growing-up EVAP Majestique Soy Drink 8
Shareholding Structure Shareholding (as of 18 October 2016) Public & Others 59.9% 40.1% Qurain Petrochemicals Industries (QPIC) is the largest shareholder of SADAFCO QPIC, incorporated in 2004, is a private sector holding company in the energy, petrochemical, food and related sectors QPIC is a part of KIPCO group, which is one of the biggest diversified holding companies in the Middle East and North Africa. KIPCO Group has assets of around USD 32 billion under management or control KIPCO and QPIC both are listed on the Kuwait Stock Exchange Source: Tadawul Stock Exchange 9
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 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 SAR Shareholders Returns Share Price Performance 220 180 140 100 60 20 SAR 94.0 52 Week High 157.1 (SAR) 52 Week Low 102.8 (SAR) Market Cap (SAR Mn): 3,769 (18 October 2016) SAR 116.0 16 14 12 10 8 6 4 2 0 Trading Volume, Mn Shares SASE Index SADAFCO Volume (Mn) Source: Bloomberg; SAR Saudi Riyal; SASE Index (Rebased to SAR 94.0 on 01October 2013) Consistent Dividends SAR per share 4.0 3.5 3.5 13/14 14/15 15/16 Declared Dividend per share Compounded Annual Return # of 13.1% over the last 3 years Note: # Annualized Return calculated as sum of share price appreciation/depreciation and dividends paid during the period ending 30 Sept 2016, assuming no reinvestment of dividends 10
Going Forward SADAFCO continues to strengthen its premium branded positions, at healthy margins, whilst achieving market share growth in main categories of Milk, Tomato Paste and Ice Cream 11