20190214 Analystenpresentatie PP - SIPEF · Bull & bear The Connection to the world of Sustainable...

Analyst presentationAnalyst presentationAnalyst presentationAnalyst presentationFebruary 14, 2019

The Connection to the world of Sustainable Tropical Agriculture 1

SIPEF financial statements SIPEF financial statements SIPEF financial statements SIPEF financial statements December 2018December 2018December 2018December 2018

SummarySummarySummarySummary

1. SIPEF Group Company profile

2. SIPEF group - Expansion

3. SIPEF Group – Productions & prices

4. SIPEF group – Financial performance

5. Peer review

The Connection to the world of Sustainable Tropical Agriculture

2

1. SIPEF group - Company profile


Agriculture • 1st segment of the supply chain - commodities

Tropical • Recent industrialised countries

Sustainable • Audited certifications

Connection • Publicly quotedPublicly quotedPublicly quotedPublicly quoted

1. SIPEF group - Company profile


Continuous production

• Continuous crops

Diversified in product

• Palm oil : basic commodity for food (and recently energy)

• Rubber : cyclic business - tire industry

Diversified in origin

• Indonesia : leading producing country within Asian market

• PNG : export oriented with strong agronomical basics

1. SIPEF group - Company profileWorldwide


1. SIPEF group - Company profileIndonesia

6

1. SIPEF group - Company profilePapua New Guinea


1. SIPEF group - Company profilePlanted hectares summary – 31 December 2018


Palm Rubber Tea Bananas Other Total % Group share

Indonesia 58 035 6 275 1 763 66 073 82% 59 572

PNG 13 687 13 687 17% 13 687

Ivory coast 749 31 780 1% 780

Total 71 722 6 275 1 763 749 31 80 540 100% 74 039

% 89% 8% 2% 1% 0% 100%

Group share 66 291 5 376 1 591 749 31 74 039

1. SIPEF group - Company profilePalm oil in the world - Sustainable palm oil


2,81 Million Ha RSPO certified production area






5. Peer review


10

2. SIPEF group - ExpansionStrategy & expansion


SIPEF group= 100.000 Ha planted (group’ share)

• Palmoil – Rubber – Bananas – Tea

• Indonesia – Papua New Guinea

Focus on core-business

Focus on ‘Sustainable Agriculture’ (RSPO)

Expansion of existing activities

Acquisition of new investments

Balanced leverage

Indonesia

• Beneficial interest from 59 572 Ha (December 2018) to 71 058 Ha (by 2028)

• Further expansion of 9 385 Ha Musi Rawas/South Sumatra expansion to a total of 18 028 Ha

• Further expansion of 1 682 Ha in PT Dendymarker to a total of 7 051 Ha

• Both in oil palm and rubber

PNG

• Beneficial interest from 13 687 Ha (December 2018) to 15 191 Ha (by 2028)

• Finalize palm oil expansion with an additional 1 504 Ha

• In area where we are operating

Ivory Coast

• Beneficial interest from 780 Ha (December 2018) to 940 Ha (by 2028)

• Additional bananas development of 160 Ha

2. SIPEF group - ExpansionStrategy & expansion

2. SIPEF group - ExpansionPlanted area (in hectares) – Beneficial interest

13

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

2005 2008 2016 2017 2018 2023 2028

North Sum North Sum expansion Bengkulu Bengkulu expansion PNG PNG expansion Musi Rawas Dendy Marker Ivory Coast Ivory Coast expansion

32 784 Ha

40 804 Ha

55 125 Ha

71 865 Ha74 039 Ha

87 039 Ha 87 189 Ha

2. SIPEF group - ExpansionPlanted hectares and production of CPO (sale of FFB not included) (BI)


100%

110%

120%

130%

140%

150%

160%

170%

180%

BI hectares

BI production

+ 74%

+ 23%

2. SIPEF group - ExpansionSupply base (in hectares): own ha and outgrowers ha – 100%


80

54

0

87

40

8

91

20

3

93

29

6

94

09

9

94

26

5

94

33

1

94

32

9

94

44

1

94

46

2

94

47

0

19

65

6

20

53

8

21

28

6

21

65

2

21

78

6

21

78

6

21

78

6

21

78

6

21

78

6

21

78

6

21

78

6

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Own ha Outside ha

2. SIPEF group - ExpansionMusi Rawas expansion


2. SIPEF group - ExpansionMusi Rawas – South Sumatra summary of project status

17

Latest update Musi Rawas Musi Rawas II Dendymarker DIL Newplant Total

Izin Lokasi HGU 24 607 17 793 42 400

Expansion Izin Lokasi 8 594 8 594

TOTAL HGU/IZIN 24 607 8 594 17 793 0 50 994

Planted /Cleared 10 653 8 986 0 19 639

Identified 7 855 4 298 1 604 13 755

Potential

development 18 507 4 298 8 986 1 604 33 394

INTI 15 423 3 581 6 205 1 604 26 812

PLASMA 3 084 717 2 781 0 6 582

2. SIPEF group - ExpansionMusi Rawas – progress December 2018

18

MUSI RAWAS Acquired Ha Secured Ha

PT AKL 4 654 4 241 91%

PT ARU 3 333 2 206 66%

PT AMR 7 443 4 205 56%

Total OLD 15 429 10 653 69%

Potential Ha 18 507

83%

AMR III 23 0 0%

AMRS 39 0 0%

AKLE 50 0 0%

Total NEW 111 0 0%

Potential Ha 4 298

3%

GRAND TOTAL 15 540 10 653 69%

Potential HA 22 805 22 805 100%

% of total 68% 47%

2. SIPEF group - ExpansionMusi Rawas – progress December 2018

19

Compensation Ha Cleared/Planted Ha

Correct Planted Cleared Planted/

Area YTD 2017 Dec-18 TOTAL YTD 2017 planted Dec-18 Dec-18 TOTAL compensated

AKL 3 759 318 4 077 3 776 -407 277 68 3 71491,1%

ARU 2 626 235 2 861 1 558 -13 270 35 1 85064,7%

AMR 4 789 1 437 6 226 2 410 -33 1 263 201 3 84161,7%

AMR 3 0 23 23 0

AMR S 0 39 39 0

AKL E 0 50 50 0

Plasma 2 109 157 2 266 929 -39 280 77 1 24855,1%

TOTAL 13 283 2 257 15 540 8 673 -491 2 090 380 10 653 68,5%






5. Peer review


20

3. SIPEF group – Productions & pricesDecember production 2018

21

Palm Oil 2018 2017 Variance

Own

Tolan Tiga Group 72 492 69 477 4,34%

Umbul Mas Wisesa Group 41 568 39 640 4,86%

Agro Muko Group 85 219 79 827 6,75%

South Sumatra Group 6 147 1 679 266,11%

Hargy Oil Palms 85 015 81 689 4,07%

Total own 290 441 272 312 6,66%

Total outgrowers 61 316 58 646 4,55%

Total Palm Oil 351 757 330 958 6,28%

Total Rubber 7 982 8 179 -2,41%

Total Tea 2 422 2 402 0,83%

Total Bananas 27 788 29 772 -6,66%

3. SIPEF group – Productions & pricesMonthly palm oil (CIF Rotterdam USD/ton)


450

500

550

600

650

700

750

800

850

January February March April May June July August September October November December

CPO prices

2016 2017 2018

3. SIPEF group – Productions & pricesBull & bear


Rating Bullish inputs Bearish inputs

Palm OilFeb 540

March 560

AMJ 590

JAS 595

Friendly - Production peak is behind us, stocks will decrease

- Production is expected to take a rest

- Cheap palm oil prices have triggered good demand

- Indonesia determined to achieve 20% biodiesel

blending, full support by Jokowi government. Will

they achieve 30%?

- 2019 demand for palm will surpass supply with

approximately 3 mln mt

- Soybean prod in Brazil is hampered due to hot & dry

weather….8 mln mt less

- More domestic biodiesel mandates in Indo, Malaysia,

Brazil, as well as smaller countries…will be 4 mln mt

growth

- High stocks in Malaysia, Indo is finally under better control

- How fast are stocks dropping before palm cycle turns?

- Significant volume of Latin American palm oil coming to EU,

particularly April-Aug.

- Palm discount vs sbo is not big anymore for Q2 onwards

- China/US trade war still having a big impact on US soy market,

where soybean stocks are burdensome

- Sunflower oil keeps gaining market share as Russia and Ukraine

keep expanding acreage

- Strong dollar has been bearish commodities, but is expected to

turn around in 2019…….

RubberRSS3 1595

SIR10 1340

Neutral - Rubber is cheap - Large stocks overhang, but S&D getting in more balance

- Chinese economy slowing down

- Customers very lackluster.

Tea Neutral at

best

- - Kenyan production continues to outperform with add capacity

build to overcome the peak production

- Pakistan has low turnover with high stocks

- Pakistan instable politics / economy, IMF bail-out

93%

19%

69%

135%

49%

163%

97%91%

125%

33%

123%

58%

149%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

450

500

550

600

650

700

750

2018 Jan Feb Mrt Apr Mei Jun Jul Aug Sep Okt Nov Dec 2019 Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dec

Actual sales vs budget & realised prices vs current market

Calender year 2019

% Volume sold vs budget

Realised sales price

Current market price

Weighted realised price

Weighted realised price +

RSPO premium + duty

Average market price during

month

These are prices Cif

Rotterdam in USD,

excluding premiums,

excluding duties

6 February 2019

1. Market/sales prices & productionsSales prices 2018 - 2019


3. SIPEF group – Productions & pricesMonthly rubber (RSS3 Singapore USD/ton)


1 000

1 200

1 400

1 600

1 800

2 000

2 200

2 400

2 600

2 800


Rubber prices

2016 2017 2018

3. SIPEF group – Productions & pricesMonthly tea prices (Mombasa/Nairobi auctions USD/ton)


1 800

2 000

2 200

2 400

2 600

2 800

3 000

3 200

3 400


Tea prices

2016 2017 2018






5. Peer review


27

4. SIPEF group – Financial performanceSales – Consolidated gross margin

28

Total consolidated turnover (including corporateTotal consolidated turnover (including corporateTotal consolidated turnover (including corporateTotal consolidated turnover (including corporate)– December 2018: 275 270 KUSD

– December 2017: 321 641 KUSD

278 272

16 0327 507

18 386

240 057

11 6995 454

17 119

-50 000

0

50 000

100 000

150 000

200 000

250 000

300 000

Palm Rubber Tea Bananas

2017 Sales 2017 Gross Margin 2018 Sales 2018 Gross Margin

39,8%

28,7%

20,7% -9,1% 14,9% 11,5% 20,8% 16,3%

4. SIPEF group – Financial performanceGross margin – per product

29

In KUSD 2018 % 2017 %

Palm 68 800 95,4% 110 763 91,9%

Rubber -1 065 -1,5% 3 324 2,8%

Tea 627 0,9% 1 116 0,9%

Bananas and plants 2 793 3,9% 3 827 3,2%

Corporate and other 941 1,3% 1 444 1,2%

Gross margin 72 096 100% 120 474 100%

4. SIPEF group – Financial performanceProfit and loss statement

30

IN KUSD (management presentation) 2018 2017

Gross margin 72 096 120 474

General and administrative expenses -31 759 -31 175

Other operating income/(charges) 2 352 962

Operating result 42 689 90 261

Financial income 2 308 1 644

Financial charges -3 733 -3 211

Exchange differences -1 666 1 248

Financial result -3 091 - 319

Profit before tax 39 598 89 942

Tax expense -14 155 -24 045

Profit after tax 25 443 65 897

Share of results of associated companies and joint ventures - 854 3 137

Result from continuing operations 24 589 69 034


31

IN KUSD (management presentation) 2018 2017

Result from continuing operations 24 589 69 034

Revaluation gain acquisition PT Agro Muko 0 79 324

Gain on sale BDM-ASCO 7 376 0

Profit for the period 31 965 148 358

Result from continuing operations share of the group 22 713 64 481

Revaluation gain acquisition PT Agro Muko share of the group 0 75 182

Gain on sale BDM-ASCO share of the group 7 376 0

Profit share of the group 30 089 139 663


32

Sale BDM-ASCO insurance

• As announced on 18 December 2017, the sale of BDM-ASCO was finalised and handed over on 7 June 2018

• Total net cash amount received: 20 463 KUSD (20 800 KUSD – 337 KUSD)

• Total one-off gain: 7 376 KUSD

• Deconsolidated as of 1 January 2018. The result up to 7 June 2018 was immaterial.

4. SIPEF group – Financial performanceConsolidated balance sheet

33

In KUSD (management presentation) DEC 2018 DEC 2017

Biological assets (depreciated costs) - bearer plants 283 712 268 086

Goodwill 104 782 103 008

Other fixed assets 375 593 361 408

Net assets held for sale 0 12 010

Net current assets, net of cash 91 932 65 316

Net cash position -121 443 -83 697

Total net assets 734 576 726 131

Shareholders' equity, group share 644 509 634 636

Non controlling interest 34 250 33 140

Provisions and deferred tax liabilities 55 817 58 355

Total net liabilities 734 576 726 131

4. SIPEF group – Financial performanceConsolidated cash flow

34

In KUSD (management presentation) 2018 2017

Cash flow from operating activities 81 899 124 842

Change in net working capital -13 680 8 622

Income taxes paid -34 537 -13 611

Cash flow from operating activities after tax 33 682 119 853

Acquisitions intangible and tangible assets -69 428 -59 625

Sales of PP&E and financial assets (excl. BDM-ASCO) 2 671 1 946

Acquisition financial assets - 300 - 650

Recurring free cash flow -33 375 61 524

Selling price BDM-ASCO 20 463 0

Purchase price PT Dendymarker 0 0

Purchase price PT Agro Muko 0 -124 977

Capital increase 0 95 095

Other financing activities 6 327 40 157

Net increase in investments, cash and cash equivalents -6 585 18 971

4. SIPEF group – Financial performanceCurrent assets/ current liabilities


CA/CL changes in mgt report (in KUSD) Expected recovery

Variation working capital -35 160 2019 2020 Later

Taxes payable 14 778

Taxes prepaid -34 536

Tax receivable increase -19 758 -19 758

Sipef - payment to VBS -1 110 -1 110

Indo - VAT -1 929 -1 929

Indo - plasma financing -1 929 -1 929

Hargy - VAT receivable -2 228 -2 228

Sipef Group stock increasse -5 247 -5 247

Other -2 959 -2 959

Total -35 160 -9 404 -19 758 -5 998

4. SIPEF group – Financial performanceValue per hectare

36

Sensitivity 31/12/2018

Stock price @ USD per hectare

48,80 8 532

50,00 8 721

55,00 9 510

60,00 10 298

65,00 11 086

70,00 11 874

75,00 12 663

4. SIPEF group – Financial performanceDividend history

37

0,30 0,300,40

0,80 0,80

1,10

1,50

1,70 1,70

1,25 1,25

0,60

1,25

1,60

0,55

17%

23%22%

24%

21%

25% 25% 25%

32% 32%

30% 31% 31%30% 30%

0%

5%

10%

15%

20%

25%

30%

35%

,000

,2000

,4000

,6000

,8000

1,000

1,2000

1,4000

1,6000

1,8000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Dividend History Sipef

EUR/share Pay-out

4. SIPEF group – Financial performanceHistorical evolution NFP, equity and turnover

38

-200

-100

0

100

200

300

400

500

600

700

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013* 2014 2015 2016 2017 2018

In M

US

D

Turnover

Equity USD

Net financial position USD

Result, share of the Group

4. SIPEF group – Financial performanceProspects – comments press release February 14, 2019

39

Production

- Tough start due to the rainy season in PNG and recovery of floods in UMW/TUM;

- Productions expected to be gradually increasing over next weeks;

- No structural reasons to expect that the volume of 380 000 tons will not be achieved;

Markets

- Important to see how quickly stocks will be reduced in the next 4 months;

- World production outlook is only a moderate growth for 2019;

- Biodiesel mandates continue to increase in Indonesia and Malaysia, but also in Brazil and the US;

- Expected that in 2019 vegetable oil demand will outpace the supply growth;

- External matters such as the China – US trade war and petroleum markets can impact vegetable oil

markets.

4. SIPEF group – Financial performanceProspects – comments press release February 14, 2019

40

Cash flow and expansion

• Investment policy remains focused on South Sumatra palm oil activities (PT Dendymarkerand Musi Rawas);

• The acquisition of PT DM and the additional concessions of Musi Rawas will bring the SIPEF group closer to the 100 000 hectares of which 80 000 are already planted and a 120 000 hectare supply base.

Result

• 23% of expected 2019 palm oil production sold at USD 584 per ton CIF Rotterdam;

• The Group will gradually put volumes in the market at an expected excess of USD 600 per ton;

• only 13% of the expected rubber volumes was sold at an average price of USD 1 384 per tonne;

• The recurring result will be determined by the achievement of the expected production growth, the level of market prices, the retention of existing export levies and cost price trends.






5. Peer review


41

5. Peer reviewDisclaimer

The information contained in this section is provided for your general information only and is not designed nor intended to offer anything more than information only.

The information with respect to the companies included in the Peer Review was retrieved from publicly available information being annual reports and company websites on the one hand and from analyst reports we received on the other hand. In some cases we had to give our own interpretation to the available information in order to get comparable indicators.

As a consequence of using different sources combined with giving our own interpretation to the available information, the information may not always be correct and SIPEF does not accept any liability for loss and damage that may arise from relying upon this information.


5. Peer reviewPrinciple assumptions

• Benchmark of main industrial competitors

• Age profile based on own ageing interpretation

• Market capitalization is calculated based on the average exchange rate & average share price of the year

• Benchmark based on own CPO productions of competitors:

• Representative sample of comparable industry competitors (2017): 32,3%

• Industrial comparable companies (50%)


Tons

CPO own production benchmark (2017) 10.972.924

Worldwide production (Oilworld 2017) 66.860.000

5. Peer reviewOwn planted Oil Palm Hectares in KHa (2017)


37

39

44

65

83

89

96

126

131

144

180

225

174

211

240

248

342

400

603

69

MP Evans

Socfinasia

R.E.A. Holdings

Anglo Eastern Plantations

SIPEF

Sampoerna Agro

Socfinaf

London Sumatra Indon

Eagle High Plantations

Bumitama

Genting Plantations

IOI Corporation

First Resources

Kuala Lumpur Kepong

Astra Agro Lestari

Wilmar International

Salim Ivomas Pratama

Felda Global Ventures

Golden Agri-Resources

Sime Darby

Plantation

Integrated

Sipef

5. Peer reviewAge Profile: Average age planted hectares (2017)


7,0

8,4

8,9

10,0

10,0

10,0

10,0

10,8

11,1

14,1

15,0

15,2

11,0

12,4

13,2

14,5

14,5

15,0

16,0

10,3

MP Evans


Bumitama


First Resources

Genting Plantations

Sampoerna Agro

SIPEF

Socfinaf


R.E.A. Holdings

Kuala Lumpur Kepong

Sime Darby

Socfinasia

IOI Corporation




Astra Agro Lestari


Plantation

Integrated

Sipef

2016 2017 Var %

Average 11,74 11,97 1,9%

Sipef 9,91 10,26 3,5%

5. Peer reviewFFB Yield – MT/ha (2017)

46* Sipef excluding PT Dendymarker acquired per 1 August 2017 The Connection to the world of Sustainable Tropical Agriculture

2016 2017 Var %

Average 16,9 17,8 5,2%

Sipef 22,4 23,9 6,6%

9,3

13,1

14,1

14,9

15,6

16,1

17,5

18,2

18,4

19,1

19,9

24,1

14,8

15,4

19,0

19,4

20,5

21,4

21,7

23,9


Sampoerna Agro

Socfinaf




R.E.A. Holdings

Bumitama


First Resources

Genting Plantations


Astra Agro Lestari

Sime Darby

MP Evans


Kuala Lumpur Kepong

IOI Corporation

SIPEF*

Socfinasia

Plantation

Integrated

Sipef

5. Peer reviewExtraction rate from FFB to CPO (2017)


20,5%

20,6%

21,4%

21,5%

22,0%

22,2%

22,7%

22,8%

22,9%

22,9%

23,4%

23,6%

19,8%

20,4%

21,3%

21,3%

21,7%

21,9%

22,2%

23,4%




Astra Agro Lestari

IOI Corporation

Sime Darby

Genting Plantations

Sampoerna Agro

Kuala Lumpur Kepong


Socfinaf


First Resources

Bumitama

R.E.A. Holdings


Socfinasia

SIPEF*


MP Evans

Plantation

Integrated

Sipef

* Sipef excluding PT Dendymarker acquired per 1 August 2017

5. Peer reviewCPO Yield – MT/ha (2017)


2,17

2,82

3,11

3,41

3,56

3,59

3,66

3,94

3,94

4,04

4,70

5,53

3,06

3,25

3,88

4,14

4,55

4,61

4,64

5,58


Sampoerna Agro


Socfinaf



R.E.A. Holdings


Bumitama


Astra Agro Lestari

Genting Plantations

First Resources

Sime Darby


IOI Corporation

Kuala Lumpur Kepong

MP Evans

Socfinasia

SIPEF*

Plantation

Integrated

Sipef

* Sipef excluding PT Dendymarker acquired per 1 August 2017

5. Peer reviewMarket Cap in MUSD (2017)


134

293

327

353

446

466

635

741

826

1 805

1 890

1 939

623

1 339

3 022

5 985

6 588

13 501

13 630

750

R.E.A. Holdings

Sampoerna Agro

Socfinaf


Socfinasia

MP Evans




SIPEF

Bumitama


Genting Plantations

First Resources

Astra Agro Lestari


Kuala Lumpur Kepong

IOI Corporation

Sime Darby


Plantation

Integrated

Sipef

5. Peer reviewDividend Yields (based on average market cap 2017)


0,0%

0,0%

0,5%

0,6%

1,2%

2,4%

2,6%

3,1%

3,5%

3,7%

3,7%

5,0%

1,9%

2,0%

2,1%

2,1%

2,7%

2,8%

2,9%

2,5%


R.E.A. Holdings


Socfinaf

Sampoerna Agro


Kuala Lumpur Kepong

IOI Corporation


Genting Plantations

SIPEF

Bumitama

Sime Darby




Astra Agro Lestari

First Resources

MP Evans

Socfinasia

Plantation

Integrated

Sipef

5. Peer reviewPrice Earning Ratio (based on average market cap 2017)


0,0

0,0

9,4

9,8

12,9

13,0

13,1

13,6

13,7

15,8

19,3

26,0

45,4

11,2

16,3

23,8

25,9

38,1

40,8

12,4

Eagle High Plantations *

R.E.A. Holdings *

Bumitama



SIPEF

Astra Agro Lestari


Socfinaf

Sampoerna Agro

First Resources

Socfinasia


MP Evans

Sime Darby

Kuala Lumpur Kepong

Genting Plantations

IOI Corporation



Plantation

Integrated

Sipef

* Not included as irrelevant (profit close to break-even or loss for the year)

5. Peer reviewNet financial position/Equity Ratio (2017)

52

* Cash surplus at the end of the year

-23%

-21%

-20%

-20%

20%

21%

43%

53%

63%

77%

79%

134%

3%

24%

40%

48%

69%

76%

86%

13%

Anglo Eastern Plantations*

Socfinasia*

London Sumatra Indon*

MP Evans*

Sime Darby

SIPEF

Astra Agro Lestari

First Resources

Kuala Lumpur Kepong


Genting Plantations


Bumitama

Sampoerna Agro



R.E.A. Holdings

Socfinaf

IOI Corporation


Plantation

Integrated

Sipef



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20190214 Analystenpresentatie PP - SIPEF · Bull & bear The Connection to the world of Sustainable...

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