Update on Five Year Plan - Almarai · Highlights – Full Year 2016 2016 Earnings Presentation 2013...

Almarai Company

Annual Results – 2016

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 2016 Earnings Presentation 2

Business Highlights

Industry & Environment Overview

Almarai Company 4 2016 Earnings Presentation

2016

First Half Second Half

• Increased competition from Brazilian

frozen products

• Increases in fuel and electricity costs

• Reduction in Government spending

• Commodity prices remain at historically

low levels

• Slow down in government subsidy

payments

• Egyptian currency devaluation of 14%

• Improvement in frozen poultry pricing

leading to reduction in poultry losses

• Lower consumer confidence/sentiment

and slower market growth, specially in

discretionary sectors like juice and cheese

• Resumption of subsidy payments

• Egyptian currency devaluation of +120%

• Almarai hailed as a National Champion

How Almarai Responded?

• Poultry industry lobby efforts

• Kick off cost optimization and efficiency

projects

• Increase portfolio management

• Opening of Hail factory

Main events during 2016


Purchase of

Additional

Agricultural

Land in

California

Increase in the

Share Capital

from SAR 6.0B

to 8.0B

Partial and

Gradual

Commissioning of

the New Bakery

Plant in Hail

January April September November

Egyptian Pound

Devaluation

from 8.9 to ~18.0

EGP to 1 USD

Launch of Cupcake

Category

Launch of Milk

Powder

February March

Egyptian

Pound

Devaluation

from 7.8 to 8.9

EGP to 1 USD

16 New Products Lunched in 2016

44% 38%

2015 2016

67%

69%

2015 2016

60%

69%

2015 2016

45%

47%

2015 2016

20% 18%

2015 2016

66% 68%

2015 2016

Market Share - KSA


36% 36%

2015 2016

Puffs Juices UHT Laban

Jar Cheese Chicken Bread Fresh Milk

68% 68%

2015 2016


Innovation Pipeline for 2016

Q1 Q2

Q3 Q4

Financial Highlights

Highlights – Full Year 2016

2016 Earnings Presentation

2013

SAR 11.2 B +12.4%

EBITDA 2016

SAR 3.7 Billion

2015

SAR 3.3 Billion +11.5%

Net Sales 2016

SAR 14.7 Billion

2015


Net Income 2016

SAR 2.1 Billion

2015

SAR 1.9 B +8.6%

Operating Cash Flow 2016

SAR 4.4 Billion

2015

SAR 4.9 Billion (10.9%)

9 Almarai Company

Investing Cash Flow 2016

SAR 4.9 Billion

2015


Free Cash Flow 2016

SAR (0.5) Billion

2015

SAR 0.5 Billion

(196.9%)

Employees 2016

44.5 K

2015

42.4 k +5.1%

New Products • Dairy – Higher

• Food – Stable

• Bakery - Higher

• Poultry - Stable

Market Share

• 16 New products in 2016

2016 Earnings Presentation 10 Almarai Company

Sales Analysis by Segment by Product

Note: All Amounts in Million Saudi Riyals

Total

Net Sales

+6.6%

Net Sales

By Segment

Bakery

1,891 (13%)

(+265)

Poultry

1,368 (9%)

(+106)

Others

166 (1%)

(-0)

+16.3% +8.4% -0.0%

Fresh Dairy

6,088 (41%)

(+305)

Long-Life Dairy

1,543 (10%)

(+197)

Fruit Juice

1,952 (13%)

(+29)

Cheese&Butter

1,691 (12%)

(+2)

Bakery

1,891 (13%)

(+265)

Poultry

1,368 (9%)

(+106)

Other Sales

166 (1%)

(-0)

+5.3% +14.6% +1.5% +0.1% +16.3% +8.4% -0.0%

Net

Sales

By Product

14,699(+904)

Dairy & Juice

11,274 (77%)

(+533)

+5.0%


Sales Analysis by Region by Country

Note: All Amounts in Million Saudi Riyals

Total

Net Sales

Net

Sales

By Region

KSA

9,283 (63%)

(+495)

+5.6%

KSA

9,283 (63%)

(+495)

UAE

1,446 (10%)

(+110)

Oman

742 (5%)

(+38)

Qatar

727 (5%)

(+39)

Kuwait

665 (4%)

(+17)

Bahrain

301 (2%)

(+11)

Egypt

975 (7%)

(+87)

Jordan

282 (2%)

(+6)

Others

278 (2%)

(+100)

Growth in Saudi Riyals +5.6% +8.2% +5.4% +5.7% +2.7% +3.9% +9.8% +2.2% +56.2%

Growth in Local Currency +9.5% +33.5%

Net

Sales

By Country

14,699(+904)

+6.6%

Other GCC Countries

3,880 (26%)

(+216)

Other Countries

1,536 (11%)

(+193)

+5.9% +14.4%

2,262 2,542

Full Year 2015 Full Year 2016

SAR Million

Operating Income

+280

(+12.4%)

5,283 5,834


SAR Million

Gross Profit

+550

(+10.4%)

% to Sales

Full Year 2016 Results

Operating Performance


38.3% 39.7% 16.4% 17.3% 13.9% 14.2% 1.4 pp 0.9 pp 0.3 pp

1,916 2,080


SAR Million

Net Income

+164

(+8.6%)

Statement of Income


SAR million 2015 2016 Change 2015 2016 Change

Sales 3,584 3,610 0.7% 13,795 14,699 6.6%

Cost of sales (2,246) (2,150) (4.3%) (8,511) (8,865) 4.2%

Gross Profit 1,338 1,461 9.2% 5,283 5,834 10.4%

Selling and Distribution Expenses (671) (696) 3.7% (2,612) (2,856) 9.3%

General and Administration Expenses (95) (104) 9.0% (409) (436) 6.6%

Operating Income 573 661 15.5% 2,262 2,542 12.4%

Share of Results of Associates (3) 4 (258.8%) (37) 13 (135.7%)

Other (Expense) / Income (34) (74) 122.3% (131) (91) (30.1%)

Funding Costs (80) (97) 21.4% (276) (351) 27.4%

Exchange and Currency Gains/(Losses) 24 9 (60.8%) 46 45 (3.2%)

Income from Main Operations 480 504 4.8% 1,864 2,157 15.7%

Zakat and Foreign IncomeTax (11) (17) 61.2% (66) (74) 13.1%

Income before Non Controlling Interest 470 486 3.5% 1,799 2,083 15.8%

Non Controlling Interest 14 2 (83.3%) 117 (2) (102.0%)

Net Income 484 489 1.0% 1,916 2,080 8.6%

Earnings Per Share (Basic) 0.59 0.58 2.35 2.54

Net Income % 13.5% 13.5% 13.9% 14.2%

4th Quarter Full Year

Segment Reporting


SAR Million Dairy & Juice Bakery PoultryOther

Activities

Almarai

Consolidated

Q4 YTD 2016

Net Sales 11,274 1,891 1,368 166 14,699

Depreciation (1,207) (178) (295) (114) (1,795)

Net Income 2,239 332 (294) (196) 2,080

Net Income % to Sales 19.9% 17.6% (21.5%) (118.4%) 14.2%

Total Assets 17,934 2,478 5,620 2,991 29,023

Growth versus 2015

- Net Sales 5.0% 16.3% 8.4% (0.0%) 6.6%

- Net Income 6.8% 62.0% 37.6% 14.6% 8.6%

Q4 2016

Net Sales 2,696 506 376 32 3,610

Depreciation (371) (42) (67) (49) (529)

Net Income 517 87 (42) (73) 489

Net Income % to Sales 19.2% 17.1% (11.2%) (228.9%) 13.5%

Growth versus Q4 2015

- Net Sales (2.4%) 6.6% 16.0% 33.3% 0.7%

- Net Income 0.5% 7.0% (13.9%) 15.8% 1.0%

2,080

1,916

143

127 (81)

(25)

Full Year 2015 Dairy & Juice Bakery Poultry Other Full Year 2016

SAR Million

Full Year 2016 Results

Net Income by Segment:


Basic EPS* (SAR) 2.35 2.54

Net Income % 14.2% 19.9% 17.6% (21.5%) (118.4%)

Net Sales Growth 6.6% 5.0% 16.3% 8.4% (0.0%)

Net Income Growth 8.6% 6.8% 62.0% 37.6% 14.6%

*EPS – Earnings Per Share

• Manufacturing and Farming spent CAPEX of SAR ~2.7 Billion for various capacity expansion

projects. Central Processing Plant 3, Hail Bakery and Cheese Plant A are the highest

contributors.

• Replacement and other CAPEX including IDJ (~0.2 Billion) and US & Argentina land

development (~0.3 Billion) accounted for another SAR ~0.8 Billion.

• Sales depot and logistics expansion accounted for SAR ~0.6 Billion.

• Poultry CAPEX spend for the year reached SAR ~0.3 Billion.

Almarai continues 5 Year Plan CAPEX Investment

16 Almarai Company

CAPEX spend for the year of 2016 was SAR 4.4 Billion.

Accommodation

Blow Molding Machine with Baggers

Consolidation WH B9A

2016 Earnings Presentation

Cash Flow Bridge


2,039

4,394 (63) (4,901)

(688)

(51) 730

Cash at 31

Dec 2015

Operating Cash Flow

CAPEX / Biological

Assets Dividend Others

Cash at 31

Dec 2016(SAR 1,309 Million)

Loans Issues /

Payments /

Charges

Net Debt


3,869 4,606 6,653 8,237 8,053 8,762 9,344 10,889

72% 74%

98% 101%

75% 75% 74% 81%

2.3x 2.2x

2.8x

3.1x 3.0x

2.8x 2.7x 2.7x

0%

50%

100%

150%

200%

250%

300%

350%

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 2012 2013 2014 2015 2016

Net Debt Net Debt / Equity Ratio Net Debt / EBITDA

SA

R M

illi

on

Quarterly Performance – Net Income


* Capital gain of SAR 47m in 2012

197

234 235 242 255 274

306 309 287

343 349

380 398

433

530

629

363

425 430

450

476

539

595

655

249

284 286

369 373

428

484 489

0

100

200

300

400

500

600

700

SA

R M

illi

on

2016 versus 2015

Q 1 = 0.7%

*

Q2 = 18.5%

Q 3 = 10.0%

Q4 = 1.0%

EBIT and EBITDA margins are starting to improve……

Net Sales, EBITDA and EBIT Evolution


5,869

6,931

7,951

9,883

11,21912,606

13,79514,69921.8%

21.1%

19.1%

16.9%16.0% 15.8% 16.4%

17.3%

26.7% 27.2%

25.6%

24.2% 24.4%23.9%

24.2%25.3%

2009 2010 2011 2012 2013 2014 2015 2016

SA

R M

illio

n

Net Sales

EBIT % to Net Sales

EBITDA % to Net Sales

CAGR 2009 – 2016: 13.0% (w/o impact of acquisitions 9.6%)

Key Share Data


Share Price (SAR) 68.50

Current P/E Ratio (ttm) 26.57

Earnings Per Share (SAR) (ttm) 2.53

Market Cap (SAR Million) 54,792

Shares Outstanding (Million) 800

Dividend Indicated Gross Yield 1.31%

Key Statistics for Almarai (1 January 2017)

expand across borders and take their rightful place in global markets.

Thank you

QR Code for Almarai IR App.

“We will encourage our major corporations to

expand across borders and take their rightful

place in global markets”

For Investor Relations matters please

contact:

[email protected]

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Update on Five Year Plan - Almarai · Highlights – Full Year 2016 2016 Earnings Presentation 2013...

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