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Almarai Company 2013 Q3 Earnings Presentation
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 Almarai Company management under any circumstances.
Almarai Company
2013 Q3 Earnings Presentation
2
Business Highlights
Highlights – Q3, 2013 Q3 2013 Group Revenue Net Income
Year to date Q3 2013
SAR ' M
Growth over last year
SAR ' M
Growth over last year
2,926.1
9.5%
8,211.0
13.5%
475.6
5.7%
1,128.9
5.4%
Revenue of 8.2B SAR, growth of 13.5% driven by poultry 69%, Juice 18%, Bakery 12% and inclusion of IDJ results.
Revenue growth of 10.1% in KSA, 9.9% in all other GCC states and 63.1% in rest of the world including Jordan and Egypt, driven by first time consolidation of IDJ in Q2, 2012. Revenue growth during Ramadan was subdued due to Visa restrictions for Umra and construction in the Holy Mosque.
EBIT of 1.3B SAR grew by 8.3% over YTD Q3, 2012. Whilst margin over material are now growing at a higher growth rate than revenue growth, higher labour overheads, higher depreciation and inclusion of IDJ overheads have resulted in lower EBIT growth.
Net operating cash flow of 1.8 B SAR is 8.4% ahead of last year. Whilst operating cashflow prior to working capital at 2.4B SAR were 14.8% better than last year, working capital expansion continue to run at a higher rate in line with revenue and capacity expansion.
Capital expenditure for the last three quarters was 2.1B SAR. Our capex spend profile remain in line with our earlier forecast of 3.1B capex spend for the full year 2013.
Staff strength stood at +32K at end of Q3, 2013. Headcount growth of 20.3% partly accounted for the increase in overhead growth which is running in line with capacity expansion, but growing faster than volume and revenue growth.
Almarai successfully completed the issuance of the perpetual sukuk amounting to 1.7B SAR on the last day of the quarter.
Almarai Company
2013 Q3 Earnings Presentation
4
Strong pipeline of innovation continues in 2013
Almarai Company
2013 Q3 Earnings Presentation
5
Sales Highlights
Sales Growth – Geography mix YTD Q3 2012
YTD Q3 2013
All O thers 6.4%
All Others 9.2 % G CC 2 5.3%
G CC 2 6.1% K SA 67.5 %
5.38
KSA
4.88 2.08 1.89
GCC All Others
K SA 65 .5%
9.9% YTD Q3 2013 Rev in B SAR
0.75 0.46
Almarai Group
Almarai Company
10.1%
63.1%
YTD Q3 2012 Rev in B SAR
8.21
13.5% %
7.24
2013 Q3 Earnings Presentation
Growth
7
Sales Analysis by Product & Region Sales by Product
Sales by Country - YTD Q3 2013 Bahrain 2.1%
Y T D 3r d Qua r ter
Sa les by Pr oduct G r oup SAR M illion Fresh Dairy Long-Life Dairy Fruit Juice Cheese & Butter Bakery Poultry Arable and Horticulture Other Sales T ota l Sa les
2 013
2 012
% chang e
3,408.4 767.5 1,075.7 1,197.0 1,035.1 577.8 132.3 17.2
2,996.5 728.5 912.8 1,191.2 921.3 341.9 103.9 41.3
8,2 11.0
7,2 37.5
13.7% 5.4% 17.8% 0.5% 12.4% 69.0% 27.3% (58.5%) 13.5 %
Oman 5.1%
UAE 9.0%
Egypt 4.6%
Qatar 4.2%
Jordan 2.5% Export / Others 2.1%
Kuwait 5.0%
KSA 65.5%
Participation vs Growth – YTD Q3 2013 Participation YTD Q3 2013
Growth YTD Q3 2013 v YTD Q3 2012
P ou ltry
7.0 %
69.0 %
Lon g-Life D airy
9.3 %
5.4%
F ruit Juice
13 .1%
17.8%
Bak ery
12.6%
12.4%
C h eese & Butter
14.6%
0 .5%
F resh Dairy
41.5% 0% 40%
Almarai Company
10% 30%
20% 20%
10% 30%
13 .7%
0%
40% 10%
50%20%
2013 Q3 Earnings Presentation
60% 30%
70% 40%
80% 50%
90%
8
Change in growth rates and IDJ consolidation results in higher share of poultry, juice and dairy Revenue Contribution 10 0 % 90 %
80 %
2 .0%
0.7%
0.5 %
4.7%
4.8%
6.1%
6.7%
10.4%
9.4%
10.9%
10.7%
13.3%
13.8%
12 .5%
11.9%
1.3%
2 .6%
4.7% 10.5% 10.2%
70 % 14.4% 12 .9%
60 %
11.3%
14.0%
14.1%
3.4%
7.1% 9.1%
13.4%
12 .9%
1.4%
O t h er Sales
7.3% 8.5 %
P ou ltry
13.8%
Lon g-Life D airy 11.1%
F ruit Juice 50 %
19.4%
15 .4%
15 .3%
15 .5%
13.3% 16.4%
14.4%
40 %
Bak ery
30% 20 %
39.6%
40.7%
43.4%
40.3%
39.6%
39.9%
44.7%
10 %
C h eese & Butter
F resh Dairy
0%
Q 1 20 12
Almarai Company
Q 2 20 12
Q 3 2012
Q 4 20 12
Q 1 20 13
Q 2 20 13
2013 Q3 Earnings Presentation
Q 3 2013
9
Statement of Income 3rd Quarter 2012 Change
Year to Date 3rd Quarter 2013 2012 Change
SAR million
2013
Sales Cost of sales
2,926.1 (1,821.1)
2,673.0 (1,660.8)
9.5% 9.7%
8,211.0 (5,243.8)
7,237.5 (4,596.3)
13.5% 14.1%
Gross Profit Selling and Distribution Expenses General and Administration Expenses
1,105.0 (470.9) (80.5)
1,012.2 (418.3) (85.3)
9.2% 12.6% (5.7%)
2,967.2 (1,378.4) (250.4)
2,641.2 (1,166.4) (239.2)
12.3% 18.2% 4.7%
EBIT Share of Results of Associates Funding and Currency Costs
553.6 (3.4) (62.9)
508.6 (3.9) (41.3)
8.9% (13.1%) 52.5%
1,338.4 (25.2) (159.8)
1,235.6 (21.6) (110.9)
8.3% 16.5% 44.1%
Income from Main Operations Zakat and Income Tax
487.3 (8.8)
463.4 (14.6)
5.2% (39.6%)
1,153.4 (28.5)
1,103.1 (35.6)
4.6% (19.9%)
478.5
448.8
6.6%
1,124.9
1,067.5
4.0
4.1
1,128.9
1,071.6
Income before Non Controlling Interest Non Controlling Interest Net Income Earnings Per Share
Net Income %
Almarai Company
(2.9)
1.2
n.a
475.6
450.0
5.7%
0.80
0.75
1.89
1.79
16.3%
16.8%
13.7%
14.8%
2013 Q3 Earnings Presentation
5.4% (2.2%) 5.4%
• Margin over material has continued to show higher growth than revenue in the first three quarters. However, higher depreciation, IDJ consolidation effect from Q2 2012 and higher headcount to manage poultry roll out resulted in lower gross profit growth compared to revenue growth. • Similarly, growth in overheads is driven by head count increase and IDJ consolidation in Q1, resulting in lower net profit growth relative to revenue growth
10
Segment Reporting S AR M i l l i on
D ai ry & Ju i ce
Bak ery
P ou l try
Arabl e an d H orti cu l tu re
O th er Acti vi ti es
Al marai C on sol i dated
Q 3 YTD 20 13 Sales
6,477.5
1,035.1
577.8
320.9
1.2
8,412.5
Third Party Sales
6,464.5
1,035.1
577.8
132.3
1.2
8,211.0
(100.6)
(110.1)
(54.2)
(12.9)
(966.9)
(212.3)
47.4
(51.7)
1,124.9
Depreciation Income / (loss) before Non Controlling Interest
(689.1) 1,264.3
77.3
Total Assets
13,672.8
2,099.7
Total Liabilities
(5,944.9)
(671.4)
(4,824.3)
19.6%
7.5%
10.1%
1,021.2
23,227.4
(246.7)
(1,145.9)
(12,833.2)
(36.7%)
35.8%
n.a.
13.7%
12.4%
69.0%
27.3%
n.a.
13.5%
20.5%
15.0%
231.6%
8.2%
82.1%
5.4%
Q 3 20 13 Sales
2,354.1
324.8
212.9
120.2
0.3
3,012.4
Third Party Sales
2,354.1
324.8
212.9
34.0
0.3
2,926.1
(18.4)
(5.2)
(335.4)
Return on Sales
4,631.1
1,802.6
Growth versus Q3 YTD 2012 - Third Party Sales - Income / (loss) before Non Controlling Interest
Depreciation Income / (loss) before Non Controlling Interest
(225.5)
(37.1)
(49.2)
556.4
11.7
(75.1)
1.7
(16.2)
478.5
Return on Sales
23.6%
3.6%
(35.3%)
5.0%
n.a.
16.4%
6.9%
7.2%
67.1%
(14.3%)
n.a.
9.5%
29.4%
(21.3%)
303.9%
(94.5%)
83.1%
6.6%
Growth versus Q3 2012 - Third Party Sales - Income / (loss) before Non Controlling Interest
Almarai Company
2013 Q3 Earnings Presentation
11
Trend charts
Robust revenue growth with challenging – but anticipated – EBITDA & EBIT trend Revenue, EBITDA and EBIT Evolution
25.7%
SAR in Million
19.4%
26.0%
20.7%
26.7%
27.2% 25.6%
25.3%
21.0%
24.2% 21.8%
21.1% 19.1%
9,883 16.9%
CAGR 2006 – 2013: 22.5% (w/o impact of acquisitions 16.4%)
24.5%
10,857 16.4%
7,951
Revenues
6,931
EBIT % EBITDA %
5,869 5,030
3,770 2,757 2006
Almarai Company
2007
2008
2009
2010
2013 Q3 Earnings Presentation
2011
2012
12 Months Ended Se pt 13
13
50
100
Almarai Company 2013 Q3 Earnings Presentation
475.6
369.0
285.5
283.5
248.8
219.2
193.1
250
450.0
429.7
424.5
363.4
293.7
2013 versus 2012
130.2
186.1
398.2
379.5
349.3
4 50
122.6
200
343.1
287.1
235.2
165.3
255.1
242.1
235.2
300
121.8
150
234.1
197.4
162.2
122.8
90.6
SAR Million
Quarterly Performance – Net Income Q3 = 5.7%
Q2 = 4 .9%
4 00
350
Q1 = 5.4%
0
14
Cash Flows
Cash Flow Statement (YTD Q3 2013) 2,474
5, 000
2,400
4 , 500
Higher revenue growth resulted in positive operating cash flow, which was partially subdued by working capital expansion,….
S AR M i l l i on From Operating Activities Used in Investing Activities Cashflow Av'ble for Dist'n From Financing Activities Increase/(Decrease) in Cash Currency Translation Impact on Cash and Cash Equivalents Cash at beginning of period C ash at en d of peri od
Almarai Company
SAR Million
4 , 000 3, 500
3, 000
1,792
2, 500
9
2,274
2, 000 1, 500 1, 000
4 17
500 0
C ash at beginning of period
F rom O perating Activities
Q 3 YTD 20 13 20 12 1,792 1,653 (2,400) (2,466) (608) (813) 2,474 743 1,866 (70) (9)
0
417 2,274
272 20 2
2013 Q3 Earnings Presentation
F rom Financing Activities
Used in In vesting Act ivities
C u rrency Impact
C ash at end of period
….but additional capex investment, especially for poultry (0.4B) resulted in negative free cash flow of 0.7B
16
Cash Flow Bridge – rolling 12 months
1,300
4
Bank Loan Sukuk
Loans Issues / Payments / Others
1,700
(3,073)
2,875
(494) Equity Issued Perpetual Sukuk
(240)
Capex
2,274
Dividend Others
202 Operating Cash Flow Ca sh at 30 Se pt 2012
Almarai Company
+ SAR 2,072 m
2013 Q3 Earnings Presentation
Ca sh at 30 Se pt 2013
17
Balance Sheet
Balance Sheet S AR M i l l i on Net Operating Working Capital Biological Assets Property, Plant and Equipment Net Operating Assets Intangible Assets - Goodwill Investment & Financial Assets, Deferred Charges and Derivatives Net Debt End of Service Benefits Deferred Tax (Net) Total Equity Net Capital Employed
Net Debt to Equity Ratio
Almarai Company
2013 Q3 Earnings Presentation
3 0 /0 9/13 1,456 966 14,614 17,036 1,335
3 0 /0 9/12 1,381 883 12,849 15,113 1,383
373
300
18,744
16,796
7,920 324 106 10,394 18,744
8,421 279 129 7,968 16,796
76.2%
105.7%
19
Perpetual Sukuk On 24 Dhul Qadah 1434 A.H. (30 September 2013), the Company issued its first Perpetual Sukuk - Series 1 amounting to SAR 1,700.0 million at a par value of SAR 1 million each without discount or premium, bearing a return based on SIBOR plus a pre-determined margin. The Company may redeem the Perpetual Sukuk, in full or in part, at its own discretion and may defer, in full or in part, payment of any profit distribution at its own discretion. The Company is not subject to any limitation on the number of times that it may defer such payment at its own discretion and such deferral is not considered as an event of default. The Perpetual Sukuk rank in priority to all subordinated obligations and the ordinary share capital of the Company. These Sukuk do not carry the right to vote, however each sukukholder participates in the Sukuk Assets. The terms of the Sukuk entitle the Company to commingle its own assets with the Sukuk Assets. Sukuk Assets comprise the sukukholders’ share in the Mudaraba Assets and the sukukholders’ interest in the Murabaha Transaction, together with any amounts standing to the credit of the Sukuk account and the Reserve retained by the Company from the Sukuk account.
Almarai Company
2013 Q3 Earnings Presentation
20
Net Debt 9,0 00
3 .0 x
8,0 00
in million SAR
3 0 0%
2.8x
7,0 00
2.3 x
6,0 00 5,0 0 0
3 50 %
3 .1x
1.7x
2.3 x
250 %
2.2x
1.9x
20 0 %
4,0 00
150 %
3 ,0 00 2,0 00 1,0 00 0
70 %
72%
10 1% 76%
74%
10 0 % 50 %
1,3 20
2,454
3 ,3 98
3 ,869
4,60 6
6,653
8,23 7
7,920
20 0 6
20 0 7
20 0 8
20 0 9
20 10
20 11
20 12
Last 12 months
N e t Debt
Almarai Company
98%
94%
80 %
N e t Debt / Equity Ratio
2013 Q3 Earnings Presentation
0%
N e t Debt / EBITDA
21
Debt Profile highlights balanced approach for funding….
3 .5
Debt Maturity by Age and Type
2.3 , 23%
3 .0
S AR Billion
2.5
0 .8, 8%
Isl amic Bonds
7.1, 69%
Govt / Semi Govt Inst.
2.0
Ban ks 1.5 1.0 0 .5 0 .0 5y r
22
Capital Expenditure
Capex spend in line with Guidance…
Capex spend of 2.1B SAR, which is in line for with our earlier forecast of 3.1B SAR for the full year 2013. Poultry capex spend for the first three quarter amounted to more than 0.7B SAR. The key highlight for the first three quarters is the commercial start of the first line in Q1 and second line in Q2 as previously communicated.
Sales depot and logistics expansion accounted for ~0.5B SAR for the first three quarters, resulting in our our growing foot print across the GCC.
Manufacturing and Farming consumed capex of ~0.3B SAR each for various capacity expansion projects
Replacement and other capex including IDJ, accounted for another 0.3B SAR.
Almarai Company
2013 Q3 Earnings Presentation
24
Key Share Data 3 0 0%
250 %
Key S t at i st i cs for Al marai (28 S ept 20 13 ) C u rren t P /E R at i o (t t m) Est i mat ed P /E(12/20 13 ) Earn i n gs P er S h are (S AR ) (t t m) M ark et C ap (M S AR ) S h ares O u t st an di n g (M ) 3 0 D ay Average V ol u me D i vi den d In di cat ed Gross Yi el d C ash D i vi den d (S AR ) Last D i vi den d 5 Year D i vi den d Growt h
22.6 22.2 2.5 3 3 ,298 60 0 .0 1,0 0 6,677 1.5% 0 .8 4/3 /20 13 11.7%
20 0 %
150 %
10 0 %
50 %
0%
Almarai Almarai Company
TASI
2013 Q3 Earnings Presentation
25
Thank you
Almarai Company Exit 7, North Circle Road Al Izdihar District P.O. Box 8524 Riyadh, 11492 Saudi Arabia Contact for investor relations matters: Khalid M. Al Nasser +966 11 470 00 05 ext 1280 [email protected]
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 Almarai Company management under any circumstances.
Almarai Company
2013 Q3 Earnings Presentation
2
Business Highlights
Highlights – Q3, 2013 Q3 2013 Group Revenue Net Income
Year to date Q3 2013
SAR ' M
Growth over last year
SAR ' M
Growth over last year
2,926.1
9.5%
8,211.0
13.5%
475.6
5.7%
1,128.9
5.4%
Revenue of 8.2B SAR, growth of 13.5% driven by poultry 69%, Juice 18%, Bakery 12% and inclusion of IDJ results.
Revenue growth of 10.1% in KSA, 9.9% in all other GCC states and 63.1% in rest of the world including Jordan and Egypt, driven by first time consolidation of IDJ in Q2, 2012. Revenue growth during Ramadan was subdued due to Visa restrictions for Umra and construction in the Holy Mosque.
EBIT of 1.3B SAR grew by 8.3% over YTD Q3, 2012. Whilst margin over material are now growing at a higher growth rate than revenue growth, higher labour overheads, higher depreciation and inclusion of IDJ overheads have resulted in lower EBIT growth.
Net operating cash flow of 1.8 B SAR is 8.4% ahead of last year. Whilst operating cashflow prior to working capital at 2.4B SAR were 14.8% better than last year, working capital expansion continue to run at a higher rate in line with revenue and capacity expansion.
Capital expenditure for the last three quarters was 2.1B SAR. Our capex spend profile remain in line with our earlier forecast of 3.1B capex spend for the full year 2013.
Staff strength stood at +32K at end of Q3, 2013. Headcount growth of 20.3% partly accounted for the increase in overhead growth which is running in line with capacity expansion, but growing faster than volume and revenue growth.
Almarai successfully completed the issuance of the perpetual sukuk amounting to 1.7B SAR on the last day of the quarter.
Almarai Company
2013 Q3 Earnings Presentation
4
Strong pipeline of innovation continues in 2013
Almarai Company
2013 Q3 Earnings Presentation
5
Sales Highlights
Sales Growth – Geography mix YTD Q3 2012
YTD Q3 2013
All O thers 6.4%
All Others 9.2 % G CC 2 5.3%
G CC 2 6.1% K SA 67.5 %
5.38
KSA
4.88 2.08 1.89
GCC All Others
K SA 65 .5%
9.9% YTD Q3 2013 Rev in B SAR
0.75 0.46
Almarai Group
Almarai Company
10.1%
63.1%
YTD Q3 2012 Rev in B SAR
8.21
13.5% %
7.24
2013 Q3 Earnings Presentation
Growth
7
Sales Analysis by Product & Region Sales by Product
Sales by Country - YTD Q3 2013 Bahrain 2.1%
Y T D 3r d Qua r ter
Sa les by Pr oduct G r oup SAR M illion Fresh Dairy Long-Life Dairy Fruit Juice Cheese & Butter Bakery Poultry Arable and Horticulture Other Sales T ota l Sa les
2 013
2 012
% chang e
3,408.4 767.5 1,075.7 1,197.0 1,035.1 577.8 132.3 17.2
2,996.5 728.5 912.8 1,191.2 921.3 341.9 103.9 41.3
8,2 11.0
7,2 37.5
13.7% 5.4% 17.8% 0.5% 12.4% 69.0% 27.3% (58.5%) 13.5 %
Oman 5.1%
UAE 9.0%
Egypt 4.6%
Qatar 4.2%
Jordan 2.5% Export / Others 2.1%
Kuwait 5.0%
KSA 65.5%
Participation vs Growth – YTD Q3 2013 Participation YTD Q3 2013
Growth YTD Q3 2013 v YTD Q3 2012
P ou ltry
7.0 %
69.0 %
Lon g-Life D airy
9.3 %
5.4%
F ruit Juice
13 .1%
17.8%
Bak ery
12.6%
12.4%
C h eese & Butter
14.6%
0 .5%
F resh Dairy
41.5% 0% 40%
Almarai Company
10% 30%
20% 20%
10% 30%
13 .7%
0%
40% 10%
50%20%
2013 Q3 Earnings Presentation
60% 30%
70% 40%
80% 50%
90%
8
Change in growth rates and IDJ consolidation results in higher share of poultry, juice and dairy Revenue Contribution 10 0 % 90 %
80 %
2 .0%
0.7%
0.5 %
4.7%
4.8%
6.1%
6.7%
10.4%
9.4%
10.9%
10.7%
13.3%
13.8%
12 .5%
11.9%
1.3%
2 .6%
4.7% 10.5% 10.2%
70 % 14.4% 12 .9%
60 %
11.3%
14.0%
14.1%
3.4%
7.1% 9.1%
13.4%
12 .9%
1.4%
O t h er Sales
7.3% 8.5 %
P ou ltry
13.8%
Lon g-Life D airy 11.1%
F ruit Juice 50 %
19.4%
15 .4%
15 .3%
15 .5%
13.3% 16.4%
14.4%
40 %
Bak ery
30% 20 %
39.6%
40.7%
43.4%
40.3%
39.6%
39.9%
44.7%
10 %
C h eese & Butter
F resh Dairy
0%
Q 1 20 12
Almarai Company
Q 2 20 12
Q 3 2012
Q 4 20 12
Q 1 20 13
Q 2 20 13
2013 Q3 Earnings Presentation
Q 3 2013
9
Statement of Income 3rd Quarter 2012 Change
Year to Date 3rd Quarter 2013 2012 Change
SAR million
2013
Sales Cost of sales
2,926.1 (1,821.1)
2,673.0 (1,660.8)
9.5% 9.7%
8,211.0 (5,243.8)
7,237.5 (4,596.3)
13.5% 14.1%
Gross Profit Selling and Distribution Expenses General and Administration Expenses
1,105.0 (470.9) (80.5)
1,012.2 (418.3) (85.3)
9.2% 12.6% (5.7%)
2,967.2 (1,378.4) (250.4)
2,641.2 (1,166.4) (239.2)
12.3% 18.2% 4.7%
EBIT Share of Results of Associates Funding and Currency Costs
553.6 (3.4) (62.9)
508.6 (3.9) (41.3)
8.9% (13.1%) 52.5%
1,338.4 (25.2) (159.8)
1,235.6 (21.6) (110.9)
8.3% 16.5% 44.1%
Income from Main Operations Zakat and Income Tax
487.3 (8.8)
463.4 (14.6)
5.2% (39.6%)
1,153.4 (28.5)
1,103.1 (35.6)
4.6% (19.9%)
478.5
448.8
6.6%
1,124.9
1,067.5
4.0
4.1
1,128.9
1,071.6
Income before Non Controlling Interest Non Controlling Interest Net Income Earnings Per Share
Net Income %
Almarai Company
(2.9)
1.2
n.a
475.6
450.0
5.7%
0.80
0.75
1.89
1.79
16.3%
16.8%
13.7%
14.8%
2013 Q3 Earnings Presentation
5.4% (2.2%) 5.4%
• Margin over material has continued to show higher growth than revenue in the first three quarters. However, higher depreciation, IDJ consolidation effect from Q2 2012 and higher headcount to manage poultry roll out resulted in lower gross profit growth compared to revenue growth. • Similarly, growth in overheads is driven by head count increase and IDJ consolidation in Q1, resulting in lower net profit growth relative to revenue growth
10
Segment Reporting S AR M i l l i on
D ai ry & Ju i ce
Bak ery
P ou l try
Arabl e an d H orti cu l tu re
O th er Acti vi ti es
Al marai C on sol i dated
Q 3 YTD 20 13 Sales
6,477.5
1,035.1
577.8
320.9
1.2
8,412.5
Third Party Sales
6,464.5
1,035.1
577.8
132.3
1.2
8,211.0
(100.6)
(110.1)
(54.2)
(12.9)
(966.9)
(212.3)
47.4
(51.7)
1,124.9
Depreciation Income / (loss) before Non Controlling Interest
(689.1) 1,264.3
77.3
Total Assets
13,672.8
2,099.7
Total Liabilities
(5,944.9)
(671.4)
(4,824.3)
19.6%
7.5%
10.1%
1,021.2
23,227.4
(246.7)
(1,145.9)
(12,833.2)
(36.7%)
35.8%
n.a.
13.7%
12.4%
69.0%
27.3%
n.a.
13.5%
20.5%
15.0%
231.6%
8.2%
82.1%
5.4%
Q 3 20 13 Sales
2,354.1
324.8
212.9
120.2
0.3
3,012.4
Third Party Sales
2,354.1
324.8
212.9
34.0
0.3
2,926.1
(18.4)
(5.2)
(335.4)
Return on Sales
4,631.1
1,802.6
Growth versus Q3 YTD 2012 - Third Party Sales - Income / (loss) before Non Controlling Interest
Depreciation Income / (loss) before Non Controlling Interest
(225.5)
(37.1)
(49.2)
556.4
11.7
(75.1)
1.7
(16.2)
478.5
Return on Sales
23.6%
3.6%
(35.3%)
5.0%
n.a.
16.4%
6.9%
7.2%
67.1%
(14.3%)
n.a.
9.5%
29.4%
(21.3%)
303.9%
(94.5%)
83.1%
6.6%
Growth versus Q3 2012 - Third Party Sales - Income / (loss) before Non Controlling Interest
Almarai Company
2013 Q3 Earnings Presentation
11
Trend charts
Robust revenue growth with challenging – but anticipated – EBITDA & EBIT trend Revenue, EBITDA and EBIT Evolution
25.7%
SAR in Million
19.4%
26.0%
20.7%
26.7%
27.2% 25.6%
25.3%
21.0%
24.2% 21.8%
21.1% 19.1%
9,883 16.9%
CAGR 2006 – 2013: 22.5% (w/o impact of acquisitions 16.4%)
24.5%
10,857 16.4%
7,951
Revenues
6,931
EBIT % EBITDA %
5,869 5,030
3,770 2,757 2006
Almarai Company
2007
2008
2009
2010
2013 Q3 Earnings Presentation
2011
2012
12 Months Ended Se pt 13
13
50
100
Almarai Company 2013 Q3 Earnings Presentation
475.6
369.0
285.5
283.5
248.8
219.2
193.1
250
450.0
429.7
424.5
363.4
293.7
2013 versus 2012
130.2
186.1
398.2
379.5
349.3
4 50
122.6
200
343.1
287.1
235.2
165.3
255.1
242.1
235.2
300
121.8
150
234.1
197.4
162.2
122.8
90.6
SAR Million
Quarterly Performance – Net Income Q3 = 5.7%
Q2 = 4 .9%
4 00
350
Q1 = 5.4%
0
14
Cash Flows
Cash Flow Statement (YTD Q3 2013) 2,474
5, 000
2,400
4 , 500
Higher revenue growth resulted in positive operating cash flow, which was partially subdued by working capital expansion,….
S AR M i l l i on From Operating Activities Used in Investing Activities Cashflow Av'ble for Dist'n From Financing Activities Increase/(Decrease) in Cash Currency Translation Impact on Cash and Cash Equivalents Cash at beginning of period C ash at en d of peri od
Almarai Company
SAR Million
4 , 000 3, 500
3, 000
1,792
2, 500
9
2,274
2, 000 1, 500 1, 000
4 17
500 0
C ash at beginning of period
F rom O perating Activities
Q 3 YTD 20 13 20 12 1,792 1,653 (2,400) (2,466) (608) (813) 2,474 743 1,866 (70) (9)
0
417 2,274
272 20 2
2013 Q3 Earnings Presentation
F rom Financing Activities
Used in In vesting Act ivities
C u rrency Impact
C ash at end of period
….but additional capex investment, especially for poultry (0.4B) resulted in negative free cash flow of 0.7B
16
Cash Flow Bridge – rolling 12 months
1,300
4
Bank Loan Sukuk
Loans Issues / Payments / Others
1,700
(3,073)
2,875
(494) Equity Issued Perpetual Sukuk
(240)
Capex
2,274
Dividend Others
202 Operating Cash Flow Ca sh at 30 Se pt 2012
Almarai Company
+ SAR 2,072 m
2013 Q3 Earnings Presentation
Ca sh at 30 Se pt 2013
17
Balance Sheet
Balance Sheet S AR M i l l i on Net Operating Working Capital Biological Assets Property, Plant and Equipment Net Operating Assets Intangible Assets - Goodwill Investment & Financial Assets, Deferred Charges and Derivatives Net Debt End of Service Benefits Deferred Tax (Net) Total Equity Net Capital Employed
Net Debt to Equity Ratio
Almarai Company
2013 Q3 Earnings Presentation
3 0 /0 9/13 1,456 966 14,614 17,036 1,335
3 0 /0 9/12 1,381 883 12,849 15,113 1,383
373
300
18,744
16,796
7,920 324 106 10,394 18,744
8,421 279 129 7,968 16,796
76.2%
105.7%
19
Perpetual Sukuk On 24 Dhul Qadah 1434 A.H. (30 September 2013), the Company issued its first Perpetual Sukuk - Series 1 amounting to SAR 1,700.0 million at a par value of SAR 1 million each without discount or premium, bearing a return based on SIBOR plus a pre-determined margin. The Company may redeem the Perpetual Sukuk, in full or in part, at its own discretion and may defer, in full or in part, payment of any profit distribution at its own discretion. The Company is not subject to any limitation on the number of times that it may defer such payment at its own discretion and such deferral is not considered as an event of default. The Perpetual Sukuk rank in priority to all subordinated obligations and the ordinary share capital of the Company. These Sukuk do not carry the right to vote, however each sukukholder participates in the Sukuk Assets. The terms of the Sukuk entitle the Company to commingle its own assets with the Sukuk Assets. Sukuk Assets comprise the sukukholders’ share in the Mudaraba Assets and the sukukholders’ interest in the Murabaha Transaction, together with any amounts standing to the credit of the Sukuk account and the Reserve retained by the Company from the Sukuk account.
Almarai Company
2013 Q3 Earnings Presentation
20
Net Debt 9,0 00
3 .0 x
8,0 00
in million SAR
3 0 0%
2.8x
7,0 00
2.3 x
6,0 00 5,0 0 0
3 50 %
3 .1x
1.7x
2.3 x
250 %
2.2x
1.9x
20 0 %
4,0 00
150 %
3 ,0 00 2,0 00 1,0 00 0
70 %
72%
10 1% 76%
74%
10 0 % 50 %
1,3 20
2,454
3 ,3 98
3 ,869
4,60 6
6,653
8,23 7
7,920
20 0 6
20 0 7
20 0 8
20 0 9
20 10
20 11
20 12
Last 12 months
N e t Debt
Almarai Company
98%
94%
80 %
N e t Debt / Equity Ratio
2013 Q3 Earnings Presentation
0%
N e t Debt / EBITDA
21
Debt Profile highlights balanced approach for funding….
3 .5
Debt Maturity by Age and Type
2.3 , 23%
3 .0
S AR Billion
2.5
0 .8, 8%
Isl amic Bonds
7.1, 69%
Govt / Semi Govt Inst.
2.0
Ban ks 1.5 1.0 0 .5 0 .0 5y r
22
Capital Expenditure
Capex spend in line with Guidance…
Capex spend of 2.1B SAR, which is in line for with our earlier forecast of 3.1B SAR for the full year 2013. Poultry capex spend for the first three quarter amounted to more than 0.7B SAR. The key highlight for the first three quarters is the commercial start of the first line in Q1 and second line in Q2 as previously communicated.
Sales depot and logistics expansion accounted for ~0.5B SAR for the first three quarters, resulting in our our growing foot print across the GCC.
Manufacturing and Farming consumed capex of ~0.3B SAR each for various capacity expansion projects
Replacement and other capex including IDJ, accounted for another 0.3B SAR.
Almarai Company
2013 Q3 Earnings Presentation
24
Key Share Data 3 0 0%
250 %
Key S t at i st i cs for Al marai (28 S ept 20 13 ) C u rren t P /E R at i o (t t m) Est i mat ed P /E(12/20 13 ) Earn i n gs P er S h are (S AR ) (t t m) M ark et C ap (M S AR ) S h ares O u t st an di n g (M ) 3 0 D ay Average V ol u me D i vi den d In di cat ed Gross Yi el d C ash D i vi den d (S AR ) Last D i vi den d 5 Year D i vi den d Growt h
22.6 22.2 2.5 3 3 ,298 60 0 .0 1,0 0 6,677 1.5% 0 .8 4/3 /20 13 11.7%
20 0 %
150 %
10 0 %
50 %
0%
Almarai Almarai Company
TASI
2013 Q3 Earnings Presentation
25
Thank you
Almarai Company Exit 7, North Circle Road Al Izdihar District P.O. Box 8524 Riyadh, 11492 Saudi Arabia Contact for investor relations matters: Khalid M. Al Nasser +966 11 470 00 05 ext 1280 [email protected]
