Earnings P r e s e n t a t i o n April 2018
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 5.3% YoY FY 2017/18 : SAR1,693mn FY 2016/17 : SAR1,787mn* FY 2017/18 : SAR260mn FY 2016/17 : SAR304mn* Net Profit 14.5% YoY Cash Flow Cash and Deposit Balances FY 2017/18 : SAR559mn FY 2016/17 : SAR544mn Above balance after dividend payment of SAR195mn New Products Launched in-line with company s commitment to constantly innovate Fiery Ketchup: Variant in ketchup range targeting new consumers Still Water: To address consumer needs Recent Developments Jeddah Central Warehouse construction in progress and completion expected during the year Capital Expenditure FY 2017/18 : SAR131mn FY 2016/17 : SAR85mn* * Financial Statements for FY16/17 has been reclassified as per IFRS Fiery Ketchup Still Water 4
350 300 250 200 150 100 50 0 800.00 700.00 600.00 500.00 400.00 300.00 200.00 100.00 23% 18% 13% 8% 3% 80% 70% 60% 50% 40% 30% 20% 10% 0% Sales & Profitability Sales Gross Profit 1,553 1,807 1,983 1,787 1,693 32% 31% 36% 39% 37% 493 552 709 690 634 13/14 14/15 15/16 16/17* 17/18 13/14 14/15 15/16 16/17* 17/18 As % of Net Sales Net Profit 13% 17% 15% 11% 8% 172 141 261 304 260 13/14 14/15 15/16 16/17* 17/18 As % of Net Sales * Income Statement for FY16/17 has been reclassified as per IFRS 5
450 400 350 300 250 200 150 100 50 0 40% 35% 30% 25% 20% 15% 10% 5% 0% Strong Balance Sheet Steady Asset Base build by Internally generated funds 1,138 1,209 1,391 1,642 1,763 1,138 1,209 1,391 1,642 1,763 215 260 297 379 442 923 949 1,094 1,263 1,321 13/14 14/15 15/16 16/17 17/18 13/14 14/15 15/16 16/17 17/18 Shareholders' Equity Non Interest bearing Liabilities Working Capital* 25% 21% 19% 13% 13% 392 375 367 228 212 13/14 14/15 15/16 16/17 17/18 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 31 March, 2018 850 130 750 650 341 195 550 450 350 250 150 50 544 559 Free Cash Flow = SAR 211mn -50 Cash and Cash Equivalents (31 Mar 2017) Net cash from operating activities Purchase of Property, Plant and Equipment (PP&E) Dividends Paid Cash and Cash Equivalents (31 Mar 2018) Total proposed and paid dividend of SAR 4 per share: Distributed Interim Dividend of SAR 2 per share for FY2017/18 in Q3 17/18. Proposed an additional SAR 2 per share (subject to AGM approval). Note: Does not depict other cash outflow of ~SAR1mn which includes non-controlling interest and effect of exchange rate fluctuations 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 Jump Crispy Cream Juices Growing-up EVAP Majestique Soy Drink Still Water 8
Shareholding Structure Shareholding (as of 22 April 2018) 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 an associate 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
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 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 SAR Shareholders Returns Share Price Performance 220 180 140 100 60 20 SAR 119.0 52 Week High 135.0 (SAR) 52 Week Low 113.0 (SAR) Market Cap (SAR Mn): 3,835 (22 Apr 2018) SAR 118.0 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 119.0 on 05 April 2015) Consistent Dividends 3.5 4.0 4.0 SAR per share 14/15 15/16 16/17 17/18* Declared Dividend per share * Interim dividend of SAR 2/ share had been declared in Dec 17. The Board recommends an additional dividend of SAR2/ share subject to the approval by General Assembly. A total of SAR 4/ share for the full financial year. 2.0 Compounded Annual Return # of 2.9% over the last 3 years Note: # Annualized Return calculated as sum of share price appreciation/depreciation and dividends paid during the period ending 31 March 2018, assuming no reinvestment of dividends 10
Going Forward Whilst we remain alert and agile in light of the new realities we face, we remain committed to delivering profitable sales investing behind our brands, and delivering a respectable return on our sales. We are working on enhancing our existing broad non-uht Milk range, as well as adding to our overall consumer proposition. We will also continue to invest behind our Saudia brand, as it is a key component in delivering sales that are profitable. Although we are facing challenging market conditions, we remain confident that we are well placed to meet existing and new consumer needs, and deliver sustainable returns in the future to our shareholders. 11