Earnings Presentation
Earnings Presentation Q4 2017
www.savola.com
DISCLAIMER This presentation contains forward-looking statements which may be identified by the use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, market position, expenditures, and financial results, are forward looking statements.
Forward-looking statements are based on certain assumptions and expectations of future events. The Savola Group (Savola or Group), its subsidiaries and its affiliates (the “Companies”) referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements of the Companies, could thus differ materially from those projected in any such forward-looking statements. The Companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. The Q4 2017 numbers are based on interim unaudited financials.
2
GROUP – HIGHLIGHTS •
In Q4 2017, the Group reported a net loss of SAR 37.5 mn; compared to a loss of SAR 915.7 mn last year due to margins improvement and lower operating expenses, and lower exceptional items.
•
Savola’s retail segment recorded a net loss of SAR 407.6 mn for Q4 2017 compared to a loss of SAR 543 last year. This year loss includes a SAR 302 mn goodwill impairment and store closure and project write-off cost while last year’s net loss included SAR 377 mn loss from the inventory reduction campaign, implying a loss of SAR 106 vs. SAR 166 mn in the same quarter last year. The turnaround is ongoing; the business has maintained the negative working capital position and cash flow from operations is positive.
•
Savola Foods recorded a net profit of SAR 198 mn; with an adjusted net profit of SAR 258 mn compared to a loss of 221 last year given the sugar losses and impairments in the same period last year.
•
Herfy recorded a net income of SAR 47.8 mn for the quarter, a decline of 13.9% compared to the same quarter last year.
•
Almarai recorded a profit of SAR 512.9 mn in Q4, translating into SAR 177.1 mn net income contribution to the Group.
•
Savola share of goodwill impairment and store closure costs is SAR 275 mn. 3
Q4 2017 – SNAPSHOT
GROUP
RETAIL
FOODS
HERFY INVESTMENTS
»
Q4 2017 revenue of SAR 5.8 bn (Q4 2016: SAR 6.8 bn)
»
Q4 2017 net loss SAR 37.5 mn (Q4 2016 net loss : SAR 915.7 mn)
»
Q4 2017 adjusted net income is SAR 328 mn
»
»
Q4 2017 revenue of SAR 3.0 bn (Q4 2016: SAR 3.4 bn) Q4 2017 net loss of SAR 407.6 mn (Q4 2016: net loss of SAR 543.0 mn) Goodwill impairment of SAR 222 mn and stores closure and project write-off of SAR 80 mn Q4 2017 adjusted net loss is SAR 106 mn
»
Q4 2017 revenue of SAR 2.6 bn (Q4 2016: 3.1 bn)
»
Q4 2017 net income of SAR 198.0 mn (Q4 2016: net loss of SAR 224.0 mn)
»
Currency exchange effect of SAR 60 mn
»
Q4 2017 adjusted net income is SAR 258 mn
»
Q4 2017 revenue of SAR 299.0 mn (Q4 2016: SAR 280.2 mn)
»
Q4 2017 net income of SAR 47.8 mn (Q4 2016: SAR 55.5 mn)
»
Almarai recorded quarterly net income of SAR 512.9 mn
» »
4
FY2017 – SNAPSHOT »
GROUP
» » » »
RETAIL
FOODS
HERFY INVESTMENTS
2017 revenue of SAR 23.8 bn (2016: SAR 26.3 bn) 2017 net profit of SAR 1,025.6 mn (2016 net loss : SAR 363.3 mn) Capital gain of SAR 693.9 million from the sale of 2% of Almarai shares 2017 adjusted net income is SAR 645 mn
»
2017 revenue of SAR 11.6 bn (2016: SAR 13.6 bn) 2017 net loss of SAR 1,016.0 mn (2016: net loss of SAR 810.6 mn) Goodwill impairment of SAR 222 mn, stores closure and project write-off of SAR 80 mn and a capital gain of SAR 68 mn from lease rights 2017 adjusted net loss is SAR 782 mn
»
2017 revenue of SAR 11.4 bn (2016: 11.9 bn)
»
2017 net income of SAR 606.7 mn (2016: net income of SAR 126.1 mn)
»
Currency exchange effect of SAR 60 mn
»
2017 adjusted net income is SAR 651 mn
»
2017 revenue of SAR 1.2 bn (2016: SAR 1.2 bn)
»
2017 net income of SAR 200.0 mn (2016: SAR 217.6 mn)
»
Almarai recorded yearly net income of SAR 2,182.3 mn
» »
5
GROUP – CONSOLIDATED FINANCIAL SNAPSHOT
EBIT
Net Income
Adjusted Net Income
1,152
311
(38)
328
-14.5% vs. LY
+25.8% vs. LY
vs. (105) LY
vs. (916) LY
+866% vs. LY
23,832
4,386
1,023
1,026
645
-9.5% vs. LY
-6.8% vs. LY
-2.3% vs. LY
vs. (363) LY
-28% vs. LY
Revenue
Gross Profit
5,796
SAR Mn
Q4 2017
2017
6
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS SAR Mn
YoY Sales
Growth
Margin
FY Sales -10%
-6%
-9%
-8%
-14% 26,331
6,422
5,833
Q1 2016 Q1 2017
7,141
6,711
Q2 2016 Q2 2017
5,993
5,492
6,775
5,796
Q3 2016
Q3 2017
Q4 2016
Q4 2017
YoY Gross Profit -14%
-18%
1,273
1,040
Q1 2016 Q1 2017 19.8%
17.8%
1,333
1,140
Q2 2016
Q2 2017
18.7%
17.0%
Note: the figures presented in the charts are rounded
FY 2017
-7%
+26%
1,054
Q3 2016 Q3 2017 19.7%
FY 2016
FY Gross Profit
-11%
1,183
23,832
19.2%
916
Q4 2016 13.5%
4,704
4,386
Q4 2017
FY 2016
FY 2017
19.9%
17.9%
18.4%
1,152
7
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS SAR Mn
YoY EBITDA
Growth
Margin
FY EBITDA +3%
-36%
-35%
+5% 683
512
440
332
+589%
512
488
1,761
1,817
FY 2016
FY 2017
533 77
Q1 2016 Q1 2017 8.0%
5.7%
Q2 2016 Q2 2017 9.6%
6.6%
Q3 2016
Q3 2017
8.1%
9.3%
Q4 2016 1.1%
Q4 2017 9.2%
YoY Net Profit -96%
-10%
-96%
829 254
Q1 2016 Q1 2017 1.9%
0.1%
(916)
(363)
180 Q2 2016 Q2 2017 3.6%
3.4%
Note: the figures presented in the charts are rounded
Q3 2016 3.0%
1,026
(38)
229
5
7.6%
FY Net Profit
+362%
119
6.7%
Q3 2017
Q4 2016
15.1%
-13.5%
Q4 2017 -0.6%
FY 2016 -1.4%
FY 2017 4.3% 8
GROUP – CONSOLIDATED REVENUE MIX, NET DEBT & CAPEX SAR Bn
Revenue by Business
FY 2016 SAR 26.3 Bn
Net Debt
FY 2017 SAR 23.8 Bn
4.3%
-21%
4.8% 44.7%
51.0%
7,659
Foods Food Services
6,048
47.1%
Retail
48.1% Dec-16
Revenue by Geography
CAPEX
FY 2017 SAR 23.8 Bn
FY 2016 SAR 26.3 Bn
-57%
7.2%
7.7% 10.5% 8.7%
KSA
11.0%
Egypt
1,268
9.0%
Iran
550
Others
73.2%
Dec-17
72.9% FY 2016
FY 2017 9
(451) (363)
26
YTD 2017 Adjusted NI
25
Gain on Sale of Marai Shares
Panda Goodwill Impairment
65 60
Store closure and project write-off
62
FX impact
33
Share of impairment loss from an associate
1,026
Capital Gain on Sale of Hyper Panda UAE
Adjusted FY 2016 Net Income
Dilution Gain on USCE
YTD 2017 reported NI
374
YTD Dec 2016 normalized NI
343
Pandati store closures cost
Inventory Cleanup
Morocco Reinstatement
FX impact
SFC Impairments
20
Loss from Hosoon
88 272
Non-Core Impairment
YTD 2016 IFRS adjusted NI
IFRS Adjustment
YTD Dec 2016 reported NI
IMPLICATIONS OF EXCEPTIONAL ITEMS SAR Mn
Adjusted FY 2017 Net Income
-28%
202
73 694
645
898
245
10
PANDA RETAIL COMPANY
RETAIL – HIGHLIGHTS • In November 2017 Dr. Bandar joined as Panda’s CEO replacing Rayan Fayez who was the acting CEO. • The transformation exercise started end of last year and continued in 2017 with several initiatives being made throughout the year. • One supermarket was closed and one opened during the 4th quarter while 37 Pandati stores were closed. Total retail selling space decreased by -0.29% in Q4 2017 from Dec 2016. • Month on month customer count and average daily sales trends have improved over the year, although the year was challenging with deflation, overall decline in retail market, expat exodus and pressure on disposable incomes. • Reported net loss for Q4 2017 for Retail was SAR 408 mn, compared to SAR 543 mn last year • Adjusted Net loss for Q4 after removing Goodwill impairment and exceptional items is SAR 106 mn, compared to a loss of SAR 543 mn in Q4 2016. 12
RETAIL - SNAPSHOT
Revenue
Gross Profit
Net Loss
Adjusted Net Loss
Selling Space
2,985
652
(408)
(106)
-12.6% vs. LY
+191% vs. LY
vs. (543) LY
vs. (166) LY
Reduced by 6,136 m2
11,644
2,326
(1,016)
-14.2% vs. LY
-1.3% vs. LY
vs. (811) LY
SAR m
Q4 2017
2017
(782) vs. (359) LY
Total Space 750,625 m2
13
RETAIL – FINANCIAL HIGHLIGHTS
Growth
SAR Mn
Margin
FY Sales
YoY Sales
-14% -13% -17%
-15%
-13% 13,572
3,874 3,271
3,389
2,721
Q1 2016
Q1 2017
Q2 2016
Q2 2017
3,014
2,549
Q3 2016
Q3 2017
3,414
2,985
Q4 2016
Q4 2017
11,644
FY 2016
FY 2017
FY Gross Profit
YoY Gross Profit
-1% -29%
741
-20%
529
735
-15%
586
656
+191% 2,357
2,326
Q4 2017
FY 2016
FY 2017
21.9%
17.4%
653
558 224
Q1 2016
Q1 2017
Q2 2016
22.7%
19.5%
19.0%
Q2 2017
Q3 2016
Q3 2017
17.3%
21.8%
21.9%
Note: the figures presented in the charts are rounded
Q4 2016 6.6%
20.0% 14
RETAIL – FINANCIAL HIGHLIGHTS
Margin
SAR Mn
YoY EBITDA
99
FY EBITDA
34 (18)
4 (409)
Q3 2016
Q3 2017
Q4 2016
Q4 2017
FY 2016
FY 2017
-0.6%
-2.8%
-12.0%
0.1%
-2.2%
-2.1%
(293)
(86)
Q1 2016 Q1 2017 3.0%
-3.1%
Q2 2016 Q2 2017 0.9%
-2.5%
YoY Net Profit
(32)
(94)
(160)
-1.0%
-8.4%
Q2 2016 Q2 2017 -2.4%
-4.7%
Note: the figures presented in the charts are rounded
FY Net Profit
(142)
(408)
(811)
Q4 2016
Q4 2017
FY 2016
FY 2017
-15.9%
-13.7%
-6.0%
-8.7%
(219)
(543)
Q3 2016
Q3 2017
-4.5%
-8.1%
(230)
Q1 2016 Q1 2017
(241)
(75)
(84)
(1,016)
15
RETAIL – NUMBER OF STORES BY QUARTER Hyper Hyper
Super 4 in Egypt
1 KSA 1 Egypt
163
1
2
(4)
KSA Hyper
162 66
Dec 2016
Q1 ’17
Q2 ’17
Q3 ’17
Q4 ’17
Closures YTD ’17
Dec 2016
UAE Hyper
Egypt Hyper
1
1
Q1 ’17
Q2 ’17
(1)
Q3 ’17
67
Q4 Closures YTD ’17 ’17
Total Total
Pandati
Selling Area 750,625 m2
Selling Area 752,784 m2
(YTD Decline: -0.29%)
181
410
1
138
3
(49)
(44) Dec 2016
Q1 ’17
Q2 ’17
Q3 ’17
Q4 Closures YTD ’17 ’17
367
1
2
Dec 2016
Q1 ’17
Q2 ’17
Q3 ’17
Q4 Closures YTD ’17 ’17 16
SAVOLA FOODS
FOODS – HIGHLIGHTS • Q4 2017 total revenue of SAR 2.59 billion is 17.7% below Q4 2016 revenue of SAR 3.14 billion while 2017 revenue was 11.38 billion vs. 2016 revenue of 11.89 billion (-4.2%) attributed to the following: • • •
Oil revenues decreased by 3.6% across Arabia, Egypt, Iran and Turkey Sugar revenues decreased by 3.4% due to USC KSA Pasta revenues decreased by 21.7%
• Total volume of 3,319 k MT 2.2% below 2016 attributed to the following: • Oil volumes increased by 1.6% • Sugar volumes decreased by 6.5% • Pasta volumes decreased by 2.6% • Reported net income for Q4 2017 for Food was SAR 198 mn; compared to a loss of 221 last year due to lower forex and impairment charges compared to the previous period last year. The adjusted net profit is SAR 258 mn.
18
FOODS - SNAPSHOT
EBIT
Net Income
Adjusted Net Income
415
266
198
258
-17.7% vs. LY
-11.3% vs. LY
+1.6% vs. LY
vs. (221) LY
vs. +138 LY
11,384
1,731
908
607
651
-4.2% vs. LY
-7.4% vs. LY
-5.8% vs. LY
+381% vs. LY
vs. +680 LY
Revenue
Gross Profit
2,585
SAR m
Q4 2017
2017
19
FOODS – FINANCIAL HIGHLIGHTS
Growth
SAR Mn
YoY Sales
Margin
FY Sales -4%
+1%
+1% -1%
2,954
2,925
Q1 2016
Q1 2017
-18% 11,887
11,384
FY 2016
FY 2017
3,146
3,103
Q2 2016
Q2 2017
2.717
2.699
3,142
Q3 2016
Q3 2017
Q4 2016
2,585
Q4 2017
YoY Gross Profit
FY Gross Profit -7%
-8%
-5%
-5%
447
425
Q1 2016
Q1 2017
15.3%
14.4%
523
481
432
Q2 2016
Q2 2017
16.9%
15.3%
Note: the figures presented in the charts are rounded
-11%
409
468
415
Q3 2016
Q3 2017
Q4 2016
Q4 2017
15.9%
15.2%
14.9%
16.1%
1,869
1,731
FY 2016
FY 2017
15.7%
15.2% 20
FOODS – FINANCIAL HIGHLIGHTS
Margin
Growth
SAR Mn
YoY EBITDA
FY EBITDA -4%
-11%
+3%
0%
-12% 261
339
303
228
227
297
306
Q2 2016
Q2 2017
Q3 2016
Q3 2017
Q4 2016
Q4 2017
10.9%
9.6%
8.4%
9.4%
11.8%
1,114
1,065
FY 2016
FY 2017
229
Q1 2016 Q1 2017 8.9%
7.8%
8.4%
YoY Net Profit +34%
+5%
9.4%
FY Net Profit
+8%
-190% +381%
198 106
111
Q1 2016 Q1 2017 3.6%
3.7%
144 Q2 2016 4.6%
192
98
106 (221)
Q2 2017 6.1%
Note: the figures presented in the charts are rounded
Q3 2016 36%
9.4%
Q3 2017 3.9%
Q4 2016 -7.0%
Q4 2017 7.7%
126
607
FY 2016
FY 2017
1.1%
5.3% 21
FOODS – OIL SEGMENT ANALYSIS SAR Mn
Volume (MT 000)
Revenues
+1.6%
1,580 5%
-3.6%
1,605 5% 5%
4%
8%
9%
9%
10%
31%
14%
29%
8,166
30%
13%
6%
11%
34%
Algeria YoY +14% Turkey YoY +3%
14%
Iran YoY -2%
29%
Egypt YoY -5%
7,871 5% 7%
11%
Morocco YoY +6% Sudan YoY +21%
4% 4%
28%
33%
11%
29%
KSA YoY +2%
FY 2016
FY 2017
Note: the figures presented in the charts are rounded
4%
Morocco YoY +13% Sudan YoY +17% Algeria YoY +18% Turkey YoY -7%
Iran YoY -5% Egypt YoY -22% KSA YoY -1%
FY 2016
FY 2017 22
FOODS – SUGAR SEGMENT ANALYSIS SAR Mn
Volume (MT ‘000) (1)
Revenues (1) KSA YoY -6%
KSA YoY -4%
Egypt YoY -9%
Egypt YoY 0%
-6.5%
-3.4%
3,184
1,521
3,076
1,422
89%
89%
89%
89%
11%
11%
11%
11%
FY 2016
FY 2017
FY 2016
FY 2017
(1) Sugar volumes and revenues include only the contribution from sugar operations (USC and ASC).
23
FINANCIAL SUMMARY
FINANCIALS – FY 2017 (all figures are in SAR millions) Segment Wise Financials FY 2017 Revenue Food Oil-Mature Markets Oil-Start-up Markets* Total Oil
Gross Profit
EBIT
FY 2016 Net Income
EBITDA
Revenue
Gross Profit
EBIT
Net Income
EBITDA
6,608 1,275 7,883
1,199 155 1,354
600 64 664
463 42 504
672 76 748
7,070 1,097 8,167
1,395 90 1,485
777 12 790
470 5 475
843 25 868
Sugar
3,084
318
216
86
278
3,188
263
108
(345)
166
Pasta
417
59
28
16
39
532
121
66
(4)
80
11,384
1,731
908
607
1,065
11,887
1,869
964
126
1,114
11,472 173 11,644
2,307 19 2,326
(758) (25) (783)
(1,057) 41 (1,016)
(224) (17) (241)
13,233 339 13,572
2,294 63 2,357
(739) (2) (741)
(809) (2) (811)
(297) 3 (293)
1,158 (355)
337 (8)
215 (55) 785 (47)
200 (55) 785 505
285 (55) 785 (22)
1,157 (285)
348 130
230 (55) 786 (137)
218 (55) 786 (628)
310 (55) 786 (101)
4,386
1,023
1,026
26,331
4,704
Total Foods Retail KSA Overseas Total Retail Herfy Real Estate Al Marai-Savola Share HQ/Elimination/Impairments Total
23,832
Adjustments Non-Core Impairments Foods Impairments Retail Inventory Reduction Foods FX Losses Store Closure and project write-off PANDA Goodwill Impairment-Geant Gain on Sale of USCE Gain on Sale of Hyper Panda UAE Gain on Sale of 2% of Al Marai Share of impairment Loss from an Associate Morocco Reinstatement Loss from Hosoon Adjusted Profit
60 73 202 (25) (62) (694) 65
645
1,817
1,047
(363)
1,761
272 245 343 374 33 (26) 20 898
* Start-up markets include Algeria, Morocco and Sudan
Note: FY2016 net income has been adjusted for IFRS, whereas Adjusted Profit excludes the impact of both SFC FX impact, USD sourcing and Panda one off items shown earlier in slide 10.
25
www.savola.com
DISCLAIMER This presentation contains forward-looking statements which may be identified by the use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, market position, expenditures, and financial results, are forward looking statements.
Forward-looking statements are based on certain assumptions and expectations of future events. The Savola Group (Savola or Group), its subsidiaries and its affiliates (the “Companies”) referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements of the Companies, could thus differ materially from those projected in any such forward-looking statements. The Companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. The Q4 2017 numbers are based on interim unaudited financials.
2
GROUP – HIGHLIGHTS •
In Q4 2017, the Group reported a net loss of SAR 37.5 mn; compared to a loss of SAR 915.7 mn last year due to margins improvement and lower operating expenses, and lower exceptional items.
•
Savola’s retail segment recorded a net loss of SAR 407.6 mn for Q4 2017 compared to a loss of SAR 543 last year. This year loss includes a SAR 302 mn goodwill impairment and store closure and project write-off cost while last year’s net loss included SAR 377 mn loss from the inventory reduction campaign, implying a loss of SAR 106 vs. SAR 166 mn in the same quarter last year. The turnaround is ongoing; the business has maintained the negative working capital position and cash flow from operations is positive.
•
Savola Foods recorded a net profit of SAR 198 mn; with an adjusted net profit of SAR 258 mn compared to a loss of 221 last year given the sugar losses and impairments in the same period last year.
•
Herfy recorded a net income of SAR 47.8 mn for the quarter, a decline of 13.9% compared to the same quarter last year.
•
Almarai recorded a profit of SAR 512.9 mn in Q4, translating into SAR 177.1 mn net income contribution to the Group.
•
Savola share of goodwill impairment and store closure costs is SAR 275 mn. 3
Q4 2017 – SNAPSHOT
GROUP
RETAIL
FOODS
HERFY INVESTMENTS
»
Q4 2017 revenue of SAR 5.8 bn (Q4 2016: SAR 6.8 bn)
»
Q4 2017 net loss SAR 37.5 mn (Q4 2016 net loss : SAR 915.7 mn)
»
Q4 2017 adjusted net income is SAR 328 mn
»
»
Q4 2017 revenue of SAR 3.0 bn (Q4 2016: SAR 3.4 bn) Q4 2017 net loss of SAR 407.6 mn (Q4 2016: net loss of SAR 543.0 mn) Goodwill impairment of SAR 222 mn and stores closure and project write-off of SAR 80 mn Q4 2017 adjusted net loss is SAR 106 mn
»
Q4 2017 revenue of SAR 2.6 bn (Q4 2016: 3.1 bn)
»
Q4 2017 net income of SAR 198.0 mn (Q4 2016: net loss of SAR 224.0 mn)
»
Currency exchange effect of SAR 60 mn
»
Q4 2017 adjusted net income is SAR 258 mn
»
Q4 2017 revenue of SAR 299.0 mn (Q4 2016: SAR 280.2 mn)
»
Q4 2017 net income of SAR 47.8 mn (Q4 2016: SAR 55.5 mn)
»
Almarai recorded quarterly net income of SAR 512.9 mn
» »
4
FY2017 – SNAPSHOT »
GROUP
» » » »
RETAIL
FOODS
HERFY INVESTMENTS
2017 revenue of SAR 23.8 bn (2016: SAR 26.3 bn) 2017 net profit of SAR 1,025.6 mn (2016 net loss : SAR 363.3 mn) Capital gain of SAR 693.9 million from the sale of 2% of Almarai shares 2017 adjusted net income is SAR 645 mn
»
2017 revenue of SAR 11.6 bn (2016: SAR 13.6 bn) 2017 net loss of SAR 1,016.0 mn (2016: net loss of SAR 810.6 mn) Goodwill impairment of SAR 222 mn, stores closure and project write-off of SAR 80 mn and a capital gain of SAR 68 mn from lease rights 2017 adjusted net loss is SAR 782 mn
»
2017 revenue of SAR 11.4 bn (2016: 11.9 bn)
»
2017 net income of SAR 606.7 mn (2016: net income of SAR 126.1 mn)
»
Currency exchange effect of SAR 60 mn
»
2017 adjusted net income is SAR 651 mn
»
2017 revenue of SAR 1.2 bn (2016: SAR 1.2 bn)
»
2017 net income of SAR 200.0 mn (2016: SAR 217.6 mn)
»
Almarai recorded yearly net income of SAR 2,182.3 mn
» »
5
GROUP – CONSOLIDATED FINANCIAL SNAPSHOT
EBIT
Net Income
Adjusted Net Income
1,152
311
(38)
328
-14.5% vs. LY
+25.8% vs. LY
vs. (105) LY
vs. (916) LY
+866% vs. LY
23,832
4,386
1,023
1,026
645
-9.5% vs. LY
-6.8% vs. LY
-2.3% vs. LY
vs. (363) LY
-28% vs. LY
Revenue
Gross Profit
5,796
SAR Mn
Q4 2017
2017
6
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS SAR Mn
YoY Sales
Growth
Margin
FY Sales -10%
-6%
-9%
-8%
-14% 26,331
6,422
5,833
Q1 2016 Q1 2017
7,141
6,711
Q2 2016 Q2 2017
5,993
5,492
6,775
5,796
Q3 2016
Q3 2017
Q4 2016
Q4 2017
YoY Gross Profit -14%
-18%
1,273
1,040
Q1 2016 Q1 2017 19.8%
17.8%
1,333
1,140
Q2 2016
Q2 2017
18.7%
17.0%
Note: the figures presented in the charts are rounded
FY 2017
-7%
+26%
1,054
Q3 2016 Q3 2017 19.7%
FY 2016
FY Gross Profit
-11%
1,183
23,832
19.2%
916
Q4 2016 13.5%
4,704
4,386
Q4 2017
FY 2016
FY 2017
19.9%
17.9%
18.4%
1,152
7
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS SAR Mn
YoY EBITDA
Growth
Margin
FY EBITDA +3%
-36%
-35%
+5% 683
512
440
332
+589%
512
488
1,761
1,817
FY 2016
FY 2017
533 77
Q1 2016 Q1 2017 8.0%
5.7%
Q2 2016 Q2 2017 9.6%
6.6%
Q3 2016
Q3 2017
8.1%
9.3%
Q4 2016 1.1%
Q4 2017 9.2%
YoY Net Profit -96%
-10%
-96%
829 254
Q1 2016 Q1 2017 1.9%
0.1%
(916)
(363)
180 Q2 2016 Q2 2017 3.6%
3.4%
Note: the figures presented in the charts are rounded
Q3 2016 3.0%
1,026
(38)
229
5
7.6%
FY Net Profit
+362%
119
6.7%
Q3 2017
Q4 2016
15.1%
-13.5%
Q4 2017 -0.6%
FY 2016 -1.4%
FY 2017 4.3% 8
GROUP – CONSOLIDATED REVENUE MIX, NET DEBT & CAPEX SAR Bn
Revenue by Business
FY 2016 SAR 26.3 Bn
Net Debt
FY 2017 SAR 23.8 Bn
4.3%
-21%
4.8% 44.7%
51.0%
7,659
Foods Food Services
6,048
47.1%
Retail
48.1% Dec-16
Revenue by Geography
CAPEX
FY 2017 SAR 23.8 Bn
FY 2016 SAR 26.3 Bn
-57%
7.2%
7.7% 10.5% 8.7%
KSA
11.0%
Egypt
1,268
9.0%
Iran
550
Others
73.2%
Dec-17
72.9% FY 2016
FY 2017 9
(451) (363)
26
YTD 2017 Adjusted NI
25
Gain on Sale of Marai Shares
Panda Goodwill Impairment
65 60
Store closure and project write-off
62
FX impact
33
Share of impairment loss from an associate
1,026
Capital Gain on Sale of Hyper Panda UAE
Adjusted FY 2016 Net Income
Dilution Gain on USCE
YTD 2017 reported NI
374
YTD Dec 2016 normalized NI
343
Pandati store closures cost
Inventory Cleanup
Morocco Reinstatement
FX impact
SFC Impairments
20
Loss from Hosoon
88 272
Non-Core Impairment
YTD 2016 IFRS adjusted NI
IFRS Adjustment
YTD Dec 2016 reported NI
IMPLICATIONS OF EXCEPTIONAL ITEMS SAR Mn
Adjusted FY 2017 Net Income
-28%
202
73 694
645
898
245
10
PANDA RETAIL COMPANY
RETAIL – HIGHLIGHTS • In November 2017 Dr. Bandar joined as Panda’s CEO replacing Rayan Fayez who was the acting CEO. • The transformation exercise started end of last year and continued in 2017 with several initiatives being made throughout the year. • One supermarket was closed and one opened during the 4th quarter while 37 Pandati stores were closed. Total retail selling space decreased by -0.29% in Q4 2017 from Dec 2016. • Month on month customer count and average daily sales trends have improved over the year, although the year was challenging with deflation, overall decline in retail market, expat exodus and pressure on disposable incomes. • Reported net loss for Q4 2017 for Retail was SAR 408 mn, compared to SAR 543 mn last year • Adjusted Net loss for Q4 after removing Goodwill impairment and exceptional items is SAR 106 mn, compared to a loss of SAR 543 mn in Q4 2016. 12
RETAIL - SNAPSHOT
Revenue
Gross Profit
Net Loss
Adjusted Net Loss
Selling Space
2,985
652
(408)
(106)
-12.6% vs. LY
+191% vs. LY
vs. (543) LY
vs. (166) LY
Reduced by 6,136 m2
11,644
2,326
(1,016)
-14.2% vs. LY
-1.3% vs. LY
vs. (811) LY
SAR m
Q4 2017
2017
(782) vs. (359) LY
Total Space 750,625 m2
13
RETAIL – FINANCIAL HIGHLIGHTS
Growth
SAR Mn
Margin
FY Sales
YoY Sales
-14% -13% -17%
-15%
-13% 13,572
3,874 3,271
3,389
2,721
Q1 2016
Q1 2017
Q2 2016
Q2 2017
3,014
2,549
Q3 2016
Q3 2017
3,414
2,985
Q4 2016
Q4 2017
11,644
FY 2016
FY 2017
FY Gross Profit
YoY Gross Profit
-1% -29%
741
-20%
529
735
-15%
586
656
+191% 2,357
2,326
Q4 2017
FY 2016
FY 2017
21.9%
17.4%
653
558 224
Q1 2016
Q1 2017
Q2 2016
22.7%
19.5%
19.0%
Q2 2017
Q3 2016
Q3 2017
17.3%
21.8%
21.9%
Note: the figures presented in the charts are rounded
Q4 2016 6.6%
20.0% 14
RETAIL – FINANCIAL HIGHLIGHTS
Margin
SAR Mn
YoY EBITDA
99
FY EBITDA
34 (18)
4 (409)
Q3 2016
Q3 2017
Q4 2016
Q4 2017
FY 2016
FY 2017
-0.6%
-2.8%
-12.0%
0.1%
-2.2%
-2.1%
(293)
(86)
Q1 2016 Q1 2017 3.0%
-3.1%
Q2 2016 Q2 2017 0.9%
-2.5%
YoY Net Profit
(32)
(94)
(160)
-1.0%
-8.4%
Q2 2016 Q2 2017 -2.4%
-4.7%
Note: the figures presented in the charts are rounded
FY Net Profit
(142)
(408)
(811)
Q4 2016
Q4 2017
FY 2016
FY 2017
-15.9%
-13.7%
-6.0%
-8.7%
(219)
(543)
Q3 2016
Q3 2017
-4.5%
-8.1%
(230)
Q1 2016 Q1 2017
(241)
(75)
(84)
(1,016)
15
RETAIL – NUMBER OF STORES BY QUARTER Hyper Hyper
Super 4 in Egypt
1 KSA 1 Egypt
163
1
2
(4)
KSA Hyper
162 66
Dec 2016
Q1 ’17
Q2 ’17
Q3 ’17
Q4 ’17
Closures YTD ’17
Dec 2016
UAE Hyper
Egypt Hyper
1
1
Q1 ’17
Q2 ’17
(1)
Q3 ’17
67
Q4 Closures YTD ’17 ’17
Total Total
Pandati
Selling Area 750,625 m2
Selling Area 752,784 m2
(YTD Decline: -0.29%)
181
410
1
138
3
(49)
(44) Dec 2016
Q1 ’17
Q2 ’17
Q3 ’17
Q4 Closures YTD ’17 ’17
367
1
2
Dec 2016
Q1 ’17
Q2 ’17
Q3 ’17
Q4 Closures YTD ’17 ’17 16
SAVOLA FOODS
FOODS – HIGHLIGHTS • Q4 2017 total revenue of SAR 2.59 billion is 17.7% below Q4 2016 revenue of SAR 3.14 billion while 2017 revenue was 11.38 billion vs. 2016 revenue of 11.89 billion (-4.2%) attributed to the following: • • •
Oil revenues decreased by 3.6% across Arabia, Egypt, Iran and Turkey Sugar revenues decreased by 3.4% due to USC KSA Pasta revenues decreased by 21.7%
• Total volume of 3,319 k MT 2.2% below 2016 attributed to the following: • Oil volumes increased by 1.6% • Sugar volumes decreased by 6.5% • Pasta volumes decreased by 2.6% • Reported net income for Q4 2017 for Food was SAR 198 mn; compared to a loss of 221 last year due to lower forex and impairment charges compared to the previous period last year. The adjusted net profit is SAR 258 mn.
18
FOODS - SNAPSHOT
EBIT
Net Income
Adjusted Net Income
415
266
198
258
-17.7% vs. LY
-11.3% vs. LY
+1.6% vs. LY
vs. (221) LY
vs. +138 LY
11,384
1,731
908
607
651
-4.2% vs. LY
-7.4% vs. LY
-5.8% vs. LY
+381% vs. LY
vs. +680 LY
Revenue
Gross Profit
2,585
SAR m
Q4 2017
2017
19
FOODS – FINANCIAL HIGHLIGHTS
Growth
SAR Mn
YoY Sales
Margin
FY Sales -4%
+1%
+1% -1%
2,954
2,925
Q1 2016
Q1 2017
-18% 11,887
11,384
FY 2016
FY 2017
3,146
3,103
Q2 2016
Q2 2017
2.717
2.699
3,142
Q3 2016
Q3 2017
Q4 2016
2,585
Q4 2017
YoY Gross Profit
FY Gross Profit -7%
-8%
-5%
-5%
447
425
Q1 2016
Q1 2017
15.3%
14.4%
523
481
432
Q2 2016
Q2 2017
16.9%
15.3%
Note: the figures presented in the charts are rounded
-11%
409
468
415
Q3 2016
Q3 2017
Q4 2016
Q4 2017
15.9%
15.2%
14.9%
16.1%
1,869
1,731
FY 2016
FY 2017
15.7%
15.2% 20
FOODS – FINANCIAL HIGHLIGHTS
Margin
Growth
SAR Mn
YoY EBITDA
FY EBITDA -4%
-11%
+3%
0%
-12% 261
339
303
228
227
297
306
Q2 2016
Q2 2017
Q3 2016
Q3 2017
Q4 2016
Q4 2017
10.9%
9.6%
8.4%
9.4%
11.8%
1,114
1,065
FY 2016
FY 2017
229
Q1 2016 Q1 2017 8.9%
7.8%
8.4%
YoY Net Profit +34%
+5%
9.4%
FY Net Profit
+8%
-190% +381%
198 106
111
Q1 2016 Q1 2017 3.6%
3.7%
144 Q2 2016 4.6%
192
98
106 (221)
Q2 2017 6.1%
Note: the figures presented in the charts are rounded
Q3 2016 36%
9.4%
Q3 2017 3.9%
Q4 2016 -7.0%
Q4 2017 7.7%
126
607
FY 2016
FY 2017
1.1%
5.3% 21
FOODS – OIL SEGMENT ANALYSIS SAR Mn
Volume (MT 000)
Revenues
+1.6%
1,580 5%
-3.6%
1,605 5% 5%
4%
8%
9%
9%
10%
31%
14%
29%
8,166
30%
13%
6%
11%
34%
Algeria YoY +14% Turkey YoY +3%
14%
Iran YoY -2%
29%
Egypt YoY -5%
7,871 5% 7%
11%
Morocco YoY +6% Sudan YoY +21%
4% 4%
28%
33%
11%
29%
KSA YoY +2%
FY 2016
FY 2017
Note: the figures presented in the charts are rounded
4%
Morocco YoY +13% Sudan YoY +17% Algeria YoY +18% Turkey YoY -7%
Iran YoY -5% Egypt YoY -22% KSA YoY -1%
FY 2016
FY 2017 22
FOODS – SUGAR SEGMENT ANALYSIS SAR Mn
Volume (MT ‘000) (1)
Revenues (1) KSA YoY -6%
KSA YoY -4%
Egypt YoY -9%
Egypt YoY 0%
-6.5%
-3.4%
3,184
1,521
3,076
1,422
89%
89%
89%
89%
11%
11%
11%
11%
FY 2016
FY 2017
FY 2016
FY 2017
(1) Sugar volumes and revenues include only the contribution from sugar operations (USC and ASC).
23
FINANCIAL SUMMARY
FINANCIALS – FY 2017 (all figures are in SAR millions) Segment Wise Financials FY 2017 Revenue Food Oil-Mature Markets Oil-Start-up Markets* Total Oil
Gross Profit
EBIT
FY 2016 Net Income
EBITDA
Revenue
Gross Profit
EBIT
Net Income
EBITDA
6,608 1,275 7,883
1,199 155 1,354
600 64 664
463 42 504
672 76 748
7,070 1,097 8,167
1,395 90 1,485
777 12 790
470 5 475
843 25 868
Sugar
3,084
318
216
86
278
3,188
263
108
(345)
166
Pasta
417
59
28
16
39
532
121
66
(4)
80
11,384
1,731
908
607
1,065
11,887
1,869
964
126
1,114
11,472 173 11,644
2,307 19 2,326
(758) (25) (783)
(1,057) 41 (1,016)
(224) (17) (241)
13,233 339 13,572
2,294 63 2,357
(739) (2) (741)
(809) (2) (811)
(297) 3 (293)
1,158 (355)
337 (8)
215 (55) 785 (47)
200 (55) 785 505
285 (55) 785 (22)
1,157 (285)
348 130
230 (55) 786 (137)
218 (55) 786 (628)
310 (55) 786 (101)
4,386
1,023
1,026
26,331
4,704
Total Foods Retail KSA Overseas Total Retail Herfy Real Estate Al Marai-Savola Share HQ/Elimination/Impairments Total
23,832
Adjustments Non-Core Impairments Foods Impairments Retail Inventory Reduction Foods FX Losses Store Closure and project write-off PANDA Goodwill Impairment-Geant Gain on Sale of USCE Gain on Sale of Hyper Panda UAE Gain on Sale of 2% of Al Marai Share of impairment Loss from an Associate Morocco Reinstatement Loss from Hosoon Adjusted Profit
60 73 202 (25) (62) (694) 65
645
1,817
1,047
(363)
1,761
272 245 343 374 33 (26) 20 898
* Start-up markets include Algeria, Morocco and Sudan
Note: FY2016 net income has been adjusted for IFRS, whereas Adjusted Profit excludes the impact of both SFC FX impact, USD sourcing and Panda one off items shown earlier in slide 10.
25
