Update on Five Year Plan - Almarai · 2020-02-08 · Volume growth of 13.9% excluding IDJ. Price & Mix effect accounted for 2.7% of the growth. Strong sales growth experienced across

Almarai Company

2012 Full Year 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 2 2012 Q4 Earnings Presentation

Business Highlights

Revenue of 9.9B SAR, growth of 24.3% driven by core business (poultry 58%, bakery 34% and juice 21%) and

inclusion of IDJ results in the top line.

Revenue growth of 17.6% in KSA, 17.1% in all other GCC states and 583.7% in rest of the world including

Jordan and Egypt, driven by first time consolidation of IDJ.

EBITDA of 2.4B SAR grew by 17.2%, EBITDA Margin now stands at 24.2% of revenue.

EBIT of 1.7B SAR grew by 10.2%. EBIT growth lags revenue growth due to delayed impact of commodity price

softening and higher overheads in line with capacity growth, which is yet to match revenue growth.

The net results of the company includes capital gain of 47.2M resulting from the sale of land to the government

to facilitate road widening in Al-Kharj.

Net operating cash flow of 2.4B SAR grew by 23.9% backed by EBIT growth of 10.2%, improvement in working

capital and higher sales of assets.

Capital expenditure spend for the full year was 3.1B SAR, which is in line with earlier forecasts.

The first tranche of Sukuk program was launched earlier in the year amounting to 1.0B SAR.

The Board of Directors propose for approval at the AGM a dividend of SAR 0.5B (SAR 1.25 / share).

Financial Highlights – Full year 2012


Volume growth of 13.9% excluding IDJ. Price & Mix effect accounted for 2.7% of the growth. Strong sales

growth experienced across all key product categories.

Distribution drive helped achieved higher sales growth, with particular focus for bakery expansion in Gulf and

new/improved distribution facilities. In addition, lean management program across the full supply chain and

stock replenishment program were introduced to achieved higher product penetration and lower wastage.

Manufacturing efficiency program helped further available capacity across major product lines, assisted by state

of the art line extention of bread line. Further the commercial start of baby food manufacturing plant, the

commissioning of poultry processing plant and expansion of Al-Badiya Farm were the key milestones during

the year.

Procurement & operational initiatives, along with commodity hedging, helped manage operating margin.

Staff strength stood at 28.5K, an increase of 28% yoy. Staff strength accounted for part of the increase of

overhead growth, including higher statutory charges, which is running in line with capacity expansion but behind

volume and revenue growth. Within KSA, Almarai ranking still stands at high end of green band in Nitaqat.

IDJ consolidation effect accounted for 7.7% of the full year growth. High double digit organic growth

experienced across all IDJ entities, especially Beyti. Most controls & processes are updated with Almarai

systems and this process will continue in 2013.

Lead the innovation efforts in our selected markets by launching 33 news products during the year

Operational Highlights – Full year 2012


Strong pipeline of innovation throughout 2012

6 2012 Q4 Earnings Presentation Almarai Company

Sales Highlights

8 .0

9.9

Sales Growth – Geography mix


KSA

71%

GCC

28%

All

Others1%

Full year 2011

KSA

67%

GCC

26%

All

Others7%

Full year 2012

0 .1

0 .7

2.2

2.6

5.7

6.7 KSA

All

Others

GCC

17.

6%

17.1

%

584

%

Almarai

Group 24.3

%

% Growth

2011 Rev in

B SAR

2012 Rev in

B SAR

Sales Analysis by Product & Region


Sales by Product

Participation vs Growth – YTD Q4 2012

20 12 20 11 % change

Fresh Dairy 4,062.1 3,475.7 16.9%

Long-Life Dairy 1,016.2 761.1 33.5%

Fruit Juice 1,243.2 888 .1 40.0%

Cheese & Butter 1,601.8 1,446.6 10.7%

Bakery 1,290 .6 966.4 33.6%

Poultry 504.4 319.2 58.0%

Arable and Horticulture 115.3 72.6 58.8%

Other Sales 49.4 21.2 132.8%

Total Sales 9,8 8 3.0 7,951.0 24.3%

Sales by Product

Group SAR M illion

YTD Q4

41.1%

16.2%

13.1%

12.6%

10.3%

5.1%

16.9%

10.7%

33.6%

40.0%

33.5%

58.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Fresh Dairy

Cheese & Butter

Bakery

Fruit Juice

Long-Life Dairy

Poultry

Participation YTD Q4 2012 Growth (YTD Q4 2012 v YTD Q4 2011)

40% 30% 20% 10% 0% 10% 20% 30% 40%

KSA67.3%

Kuwait4.9%

Qatar4.2%

Bahrain2.0%

UAE9.8%

Oman5.2% Egypt

3.3%

Jordan1.9%

Export / Others1.4%

Sales by Country - YTD Q4 2012

Statement of Income

Statement of Income – Full Year 2012


SAR million 20 12 20 11 Change

Net Sales 9 ,8 8 3.0 7,951.0 24 .3%

Cost of sales (6,371.9) (4,954.5) 28 .6%

Gross Profit 3,511.1 2,996 .5 17.2%

Selling and Distribution Expenses (1,616.7) (1,213.2) 33.3%

General and Administration Expenses (221.4) (265.7) (16.7%)

EBIT 1,672.9 1,517.6 10 .2%

Share of Results of Associates (24.6) (42.3) (41.9%)

Impairment Loss (160 .2) n.a

Bank Charges (157.5) (135.0 ) 16.7%

Income from Main and Continuing

Operations1,490 .9 1,18 0 .1 26 .3%

Zakat and Income Tax (50 .9) (33.2) 53.6%

Net income before Minority Interest 1,439 .9 1,146 .9 25.5%

Minority Interest 0 .7 (7.4) (109.7%)

Net Income 1,440 .6 1,139 .5 26 .4%

Earnings Per Share 3.60 2.8 5

Full Year

Evolution of key financial metrics - during the year 2012


Q1 Q2 Q3 Q4 Full Year

Net Sales 2,040 .3 2,524.1 2,673.0 2,645.5 9,883.0

Gross Profit 707.3 921.7 1,012.2 869.9 3,511.1

EBITDA 447.5 606.8 699.3 633.5 2,387.1

EBIT 292.5 434.6 508 .6 437.3 1,672.9

Net Income 242.1 379.5 450 .0 369.0 1,440 .6

EPS 0 .6 0 .9 1.1 0 .9 3.6

Q1 Q2 Q3 Q4 Full Year

Net Sales 17.0% 25.4% 27.0% 26.6% 24.3%

Gross Profit 11.5% 18 .7% 16.2% 20 .2% 16.8%

EBITDA 11.6% 15.7% 13.9% 27.3% 17.2%

EBIT 0 .3% 7.1% 6.6% 27.4% 10 .2%

Net Income 2.9% 8.7% 4.7% 29.2% 26.4%

EPS 2.9% 8.7% 4.7% 29.2% 26.4%

20 12

20 12 Growth rate

*

*

* The full year growth includes the effect of Zain impairment of 160.2M SAR in 2011

Segment Reporting


SAR M illionDairy &

JuiceBakery Poult ry

Arable and

Hort iculture

O ther

Act ivit ies

Almarai

Consolidated

YTD Q 4 20 12

Sales 7,988 .4 1,290 .6 504.4 386.0 0 .0 10 ,169.4

Third Party Sales 7,972.7 1,290 .6 504.4 115.3 0 .0 9,883.0

Net Depreciat ion (481.3) (114.2) (50 .3) (68 .3) 0 .0 (714.2)

Income/(loss) before Minority

Interest1,371.8 171.8 (96.8 ) 30 .9 (37.8 ) 1,439.9

Total Assets 11,047.0 2,002.5 3,728 .6 1,736.2 1,004.4 19,518 .6

Total Liabilit ies (10 ,050 .0 ) (233.5) (287.5) (243.7) (533.0 ) (11,347.7)

Return on Sales 17.2% 13.3% (19.2%) 26.8% n.a. 14.6%

Growth versus Q4 YTD 2011

- Third Party Sales 20 .9% 33.6% 58 .0% 58 .8% n.a. 24.3%

- Income before Minority Interest 13.9% 45.6% n.a. (41.4%) n.a. 25.5%

Q 4 20 12

Sales 2,107.7 369.3 162.5 97.4 0 .0 2,736.9

Third Party Sales 2,102.4 369.3 162.5 11.4 0 .0 2,645.5

Net Depreciat ion (134.1) (31.3) (13.6) (17.3) 0 .0 (196.2)

Income/(loss) before Minority

Interest366.0 61.5 (32.8 ) (12.9) (9.4) 372.4

Return on Sales 17.4% 16.6% (20 .2%) (113.4%) n.a. 14.1%

Growth versus Q4 2011

- Third Party Sales 24.5% 33.1% 64.0% (53.1%) n.a. 26.6%

- Income before Minority Interest 41.5% 102.3% 47.7% (136.7%) (44.0%) 30 .5%

Trend charts

Robust revenue growth with challenging – but

anticipated – EBITDA & EBIT trend


Revenue, EBITDA and EBIT Evolution

• After excluding the impact of IDJ consolidation, Net Operating income % for 2012 is revised to 17.9%.

2,757

3,770

5,030

5,869

6,9317,951

9,883

19.4%

20.7% 21.0%21.8%

21.1%

19.1%

16.9%

25.7% 26.0%25.3%

26.7% 27.2%

25.6%

24.2%

2006 2007 2008 2009 2010 2011 2012

SA

R in

Mil

lio

n

Revenues

EBIT %

EBITDA %

CAGR 2006 – 2012: 23.7% (w/o impact of acquisitions 17.8%)

Quarterly Performance – Net Income


90

.6

12

2.8

16

2.2

19

7.4

23

4.1

23

5.2

24

2.1

12

1.8

16

5.3

23

5.2

28

7.1

34

3.1

34

9.3

37

9.5

12

2.6

18

6.1

29

3.7

36

3.4

42

4.5

42

9.7

45

0.0

13

0.2

19

3.1

219

.2

24

8.8

28

3.5

28

5.5

36

9.0

0

50

100

150

200

250

300

350

400

450

500

SA

R M

illio

n Q1 = 2.9%

2012 versus 2011

Q2 = 8.7%

Q3 = 4.7%

Q4 = 29.2%

= Impairment Loss on Zain Investment16 0 .2m

Cash Flows

Cash Flow Statement (Full year 2012)


Strong revenue growth

resulted in positive operating

cash flow….

….but additional capex

investment especially for

poultry (1.8B) resulted in

negative free cash flow of

0.5B

SAR M illion 20 12 20 11

From Operat ing Act ivit ies 2,384 1,924

Used in Invest ing Act ivit ies (2,933) (3,237)

Cashflow Av'ble for Dist 'n (548 ) (1,313)

From Financing Act ivit ies 694 1,345

Increase/(Decrease) in Cash 145 31

Cash at beginning of period 272 241

Cash at end of period 417 272

Q 4 YTD

(449)

(266)

(97)

264

(548)

383 486 526

989

2,384

-

500

1,000

1,500

2,000

2,500

3,000

(600)

(500)

(400)

(300)

(200)

(100)

0

100

200

300

400

SA

R M

illio

n

Free Cash Flow Operating Cash Flow

Cash Flow Bridge


272

2,38 4 20 6

1,0 00 (2,937)

(512)

4 417

Cash Dec 20 11

Operating Cash Flow

Loans Issues / Others

Sukuk

Capex

DividendInvestment in

Subsidiary

Cash Dec 20 12

+ SAR 145 m

Balance Sheet

Balance Sheet


SAR M illion 31.12.12 31.12.11

932 805

901 818

13,416 10 ,508

15,249 12,131

1,335 821

295 907

16,880 13,859

8 ,305 6,749

287 243

116 88

8 ,171 6,778

16,880 13,859

101.6% 99.6%

Net Operat ing Working Capital

Biological Assets

Property , Plant and Equipment

Net Operat ing Assets

Total Equity

Net Capital Employed

Net Debt to Equity Rat io

Intangible Assets - Goodwill

Investment and Financial Assets & Deferred

Charges

Net Debt

Employee Terminat ion Benefits

Deferred Tax (Net)

Net Debt


1,315 2,463 3 ,499 3 ,951 4 ,679 6 ,749 8 ,305

69% 8 1%

96% 73% 76%

10 0 % 10 2%

2.0 x

2.3x 2.3x 2.3x 2.2x

2.8 x

3 .2x

0%

50%

100%

150%

200%

250%

300%

350%

0

1,0 00

2,0 00

3 ,0 00

4 ,0 00

5,0 0 0

6 ,0 00

7,0 00

8 ,0 00

9 ,0 00

20 0 6 20 0 7 20 0 8 20 0 9 20 10 20 11 20 12

N et Debt N et Debt / Equity Ratio N et Debt / EBITDA

in m

illio

n

3.0 x

3.3x 3.3x

3.2x

Net Averge Debt to EBITDA by Quarter

Debt Profile highlights balanced approach for

funding….


5.8, 66%

1.9, 22%

1.0, 12%

0.0

0.5

1.0

1.5

2.0

2.5

2013 2014 2015 2016 2017 2018 & Beyond

SA

R B

illi

on

Debt Maturity by Age and Type

Islamic Bonds

Govt / Semi Govt Inst.

Banks

Capital Expenditure

Capex spend in line with Guidance…


Capex spend of 3.1B SAR in line with earlier forecast provided and on track for our 5 year projection.

Poultry capex spend for the year amounted to 1.8B SAR. Poultry plant started commissioning late in Q4

and is expected to be in full swing by mid Q1.

General sales expansion accounted for 0.4B SAR

driven by expansion in depot and sales van. It also

included fleet expansion in long haul reefers.

Manufacturing and Farming capex, including 0.1B for

baby food plant, accounted for 0.5B SAR for the year

2012.

Replacement and other capex including IDJ,

accounted for 0.4B SAR.

Key Share Data


0%

50%

100%

150%

200%

250%

300%

Almarai TASI

Key Statistics for Almarai (19 Jan 2013)

Current P/E Ratio (ttm) 21.7

Estimated P/E(12/2012) 18.4

Earnings Per Share (SAR) (ttm) 3.0

Market Cap (M SAR) 25,998

Shares Outstanding (M) 400.0

30 Day Average Volume 286,033

Dividend Indicated Gross Yield 2.0%

Cash Dividend (SAR) 1.3

Last Dividend 04-03-12

5 Year Dividend Growth 17.6%

Q & A


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 1 470 00 05 ext 1280

[email protected]

Documents

Update on Five Year Plan - Almarai · 2020-02-08 · Volume growth of 13.9% excluding IDJ. Price & Mix effect accounted for 2.7% of the growth. Strong sales growth experienced across