Olam International Limited
Re-imagining Olam: Offering tomorrow’s products and services Investor Presentation | November 2019 Cautionary note on forward-looking statements
This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward-looking nature and are therefore based on management’s assumptions about future developments.
Such forward looking statements are intended to be identified by words such as ‘believe’, ‘estimate’, ‘intend’, ‘may’, ‘will’, ‘expect’, and ‘project’ and similar expressions as they relate to the Group. Forward-looking statements involve certain risks and uncertainties because they relate to future events. Actual results may vary materially from those targeted, expected or projected due to several factors.
Potential risks and uncertainties includes such factors as general economic conditions, foreign exchange fluctuations, interest rate changes, commodity price fluctuations and regulatory developments. The reader and/or listener is cautioned to not unduly rely on these forward-looking statements. We do not undertake any duty to publish any update or revision of any forward-looking statements.
Olam International Limited Investor Presentation November 2019 2 Company overview
We are a leading, global food and agri-business, sourcing raw materials and transforming them to deliver food, feed and fibre to 19,800 customers worldwide.
We are Farmers We are Suppliers We are Processors We are Innovators
Field and farming experts Connecting customers Transforming raw 12 innovation centres growing 16 different to the source via our materials into bespoke offering added value crops in 13 countries network of 4.8M farmers ingredients across our solutions through the Scale gives us global On the ground, all year 170 facilities supply chain market insight, shared executing procurement, Focus on safety, fairness, Expertise includes, learnings and efficiencies traceability, warehousing, quality, efficiency and the product innovation and logistics, paperless environment customisation, digital trading apps and co-manufacturing
Olam International Limited Investor Presentation November 2019 3 30 years of growth
1989 2001 2018
Products 1 10 46
Nigeria Countries 1 20 60+
Revenue S$2 M S$1.6 B S$30.5 B
Employees 2 1,500 38,000*
* Employees refer to full-time employees. Including seasonal and temporary workers, employees at 74,500 in 2018.
Olam International Limited Investor Presentation November 2019 4 Our shareholders
Listed on the Singapore Exchange since 2005, we have a diversified supportive shareholder base with long-term investment horizon.
Other Temasek Mitsubishi Kewalram Olam’s Institutional Holdings Corporation Chanrai Group Management and Public
53.6% 17.4% 7.0% 6.3% 15.7%
Note: Shareholdings are based on 3,186,316,778 shares (excluding treasury shares) as of September 30, 2019. Olam’s management refers to the executive committee. 5 Other Institutional and Public includes substantial shareholder Orbis Group at 6.9%.
Olam International Limited Investor Presentation November 2019 5 Our portfolio 16 businesses across 5 segments
Edible Nuts and Confectionery Food Staples and Industrial Raw Commodity Spices and Beverage Packaged Foods Materials, Financial Services Ingredients Infrastructure and Logistics Edible Nuts Spices Cocoa Dairy Cotton Funds Management Almonds Onion Coffee Edible Oils Rubber Quant strategies Cashews Garlic Grains & Animal Feed Wood Products Hazelnuts Chilli Packaged Foods Fertiliser Peanuts Herbs Rice Infrastructure & Pistachios Pepper Sugar & Sweeteners Logistics Walnuts Purees Sesame Tomatoes
Olam International Limited Investor Presentation November 2019 6 Our portfolio Uniquely shaped and well-diversified across value-chain participation
Infrastructure and Logistics
Funds Management
Olam International Limited Investor Presentation November 2019 7 Our 2018 financials Diversified across products and regions
Sales Revenue By Segment Sales Revenue By Region Sourcing Volume By Region (S$ MILLION) (S$ MILLION) (‘000 METRIC TONNES) Industrial Raw Edible Nuts Materials, and Spices Infrastructure and 15.4% Logistics 14.9% 14.1% 16.9% 29.6% 37.8% 30,479.0 30,479.0 32,867.6 23.4% (2017: 26,272.5) (2017: 22,534.6) (2017: 26,272.5) 24.7%
10.6% 47.6% Confectionery 43.0% Food Staples and Beverage and Packaged Ingredients ● Americas 22.0% Foods ● Asia, Australia, Middle East >85% of portfolio is food and Strong focus on ● Europe Balanced portfolio across countries food related emerging markets ● Africa and both hemispheres
Olam International Limited Investor Presentation November 2019 8 Our customers Diversified base with long-term relationships
Number of customers Strong and reputable customer base
More than 19,800 customers worldwide, including several leading global brands
Olam International Limited Investor Presentation November 2019 9 Our capabilities and how we are differentiated
Olam International Limited Investor Presentation November 2019 10 Our aspiration and goals
Olam International Limited Investor Presentation November 2019 11 Pivotal moment to re-imagine Olam
Olam International Limited Investor Presentation November 2019 12 2019-2024 Strategic Plan
Re-imagining Olam: Offering tomorrow’s products and services
We have refreshed our strategy to meet the changing consumer landscape by continuing to: a) Invest in our capabilities to enhance our leadership position b) Invest and capitalise on the key emerging trends of health and wellness, traceability and sustainability
We are focused on furthering our leadership in our chosen businesses and creating greater value for our shareholders, customers, suppliers, employees and partners.
Olam International Limited Investor Presentation November 2019 13 Four key trends informed our choices
Olam International Limited Investor Presentation November 2019 14 Strategic priorities and roadmap Four pathways
Olam International Limited Investor Presentation November 2019 15 We will invest behind attractive/proven businesses, while we streamline our portfolio
Olam International Limited Investor Presentation November 2019 16 Business unit strategy (1/2)
Olam International Limited Investor Presentation November 2019 17 Business unit strategy (2/2)
Olam International Limited Investor Presentation November 2019 18 Cost and capital efficiency
Olam International Limited Investor Presentation November 2019 19 Offer differentiated products/services in existing and new channels
AtSource Risk Management Solutions Value-added services
First of its kind comprehensive Bespoke market-price risk Offering certified/verified raw Sustainable Sourcing Solution in management intelligence, tools materials, organic certification, agri B2B market-place offering and solutions permitting selective customised grades and quality information on multiple participation in risk and/or reward sustainability indicators to producers, traders, and consumers
Olam International Limited Investor Presentation November 2019 20 Offer differentiated products/services in existing and new channels
Ingredients specialists Product innovation
Capturing higher value by taking Becoming the innovation partner our processing capabilities further of choice for our customers by and transforming products to leveraging scale and consumer ingredients insights
Olam International Limited Investor Presentation November 2019 21 Capitalising on growing customer segments and channels
Co-manufacturing Food service E-commerce
Meeting increasing customer Meeting increasing consumer Offering omni-channel access demand for co-manufacturing their demand for out of home and reducing cost to serve brands consumption, with focus on health customers and wellness, and sustainable offerings
Olam International Limited Investor Presentation November 2019 22 New engines for growth
Olam International Limited Investor Presentation November 2019 23 Strategic priorities and roadmap Key enablers
Olam International Limited Investor Presentation November 2019 24 Key enablers
Olam International Limited Investor Presentation November 2019 25 Key enablers
Our expertise and global presence mean we are strongly positioned to re-imagine global agriculture and food systems in order to address major environmental and social challenges.
Purpose Re-Imagining Global Agriculture and Food Systems
Purpose Prosperous Farmers Thriving Communities Regeneration of the Living World Outcomes and Food Systems
Material Areas Economic Safe and Education Health and Diversity and Climate Healthy Eco Healthy Water Reduced Opportunity Decent work and Skills Nutrition Inclusion Action Systems Soils Waste
Impact on UN SDGs SDGs
Enablers Olam International Limited Investor Presentation November 2019 26 Key enablers
The digital transformation of our Company continues at an accelerated pace across 3 areas – Olam Direct, Olam Inside and Olam Forward.
Olam Direct Olam Inside Olam Forward
Digital Origination AtSource Smart Factories OFIS E-Commerce Smart Farms Olam Traceability E-Trade Finance Digital Warehouse Digital Procurement
Olam International Limited Investor Presentation November 2019 27 Key enablers
Olam International Limited Investor Presentation November 2019 28 2019-2024 Strategic Plan Investments
• Acquisition of U.S. almond processor and ingredients company Hughson Nut and related assets for US$54 million; to be completed by end-Nov 2019 • Completed acquisition of Dangote Flour Mills in Nigeria for NGN120 billion (~US$331 million) • Completed acquisition of 100% in Rusmolco
• Completed acquisition of 85% of BT Cocoa in Indonesia for US$90 million • Completed acquisition of Cotonchad in TChad for US$16 million
Olam International Limited Investor Presentation November 2019 29 2019-2024 Strategic Plan Divestments
• Disposed 100% interest in peanut shelling in Argentina and exited peanut farming
• Sold remaining 51% interest in Collymongle ginning in Australia
• Exited Sugar, Rubber and Fertiliser trading, Fundamental Fund and Wood Products in Latin America
• All the above divestments have reduced invested capital by US$153.6 million in 9M 2019
• Continually reviewing options for divesting and/or restructuring various assets and businesses in line with the Strategic Plan, some of which may be concluded in this financial year. The outcome, timing and the range of financial impact (viz. one-off exit costs, gains/losses on sale and/or potential impairment of these assets/businesses) is uncertain and subject to multiple factors outside our control. We will make appropriate disclosures as and when there are material developments in this regard.
Olam International Limited Investor Presentation November 2019 30 2018 results At a glance
Volume EBITDA PATMI
32.9 M MT S$1,236 M S$348 M +45.9% -6.9% -40.1% Operational Free Cash Flow Gearing PATMI S$347 M FCFE from S$4661.46x toM -19.7% +S$1,066 M +28.1%1.32x
Olam International Limited Investor Presentation November 2019 31 2018 highlights
Results below expectations amid tougher Dividends maintained market conditions
Continued top line growth in Board of Directors recommended final volume, revenue dividend of 4.0 cents per share
Strong, positive FCFF and FCFE Total dividend of 7.5 cents per share for 2018 (2017: 7.5 cents) Maintained EBITDA/IC at 8.1% (2017: 8.2%)
Stronger balance sheet Refreshed 2019-2024 Strategic Plan to capitalise on key consumer trends Strengthen, streamline and focus the portfolio Reduced net debt by S$813.7 million Drive margin improvement Generate additional revenue streams by offering Reduced gearing to 1.32x (2017: differentiated products/services 1.46x) Explore partnerships and investments in new engines for growth
Olam International Limited Investor Presentation November 2019 32 2018 results P&L analysis
S$ million 2018 2017 % Change Volume ('000 MT) 32,867.6 22,534.6 45.9 Revenue 30,479.0 26,272.5 16.0 Net (loss) / gain in fair value of biological assets 61.3 (15.3) n.m. EBITDA^ 1,235.8 1,327.9 (6.9) Depreciation & amortisation (392.8) (380.7) 3.2 Net Finance costs (468.8) (465.6) 0.7 Taxation^ (52.3) (79.2) (34.0) Exceptional items 1.2 149.2 (99.2) PAT 323.1 551.6 (41.4) PATMI 347.8 580.7 (40.1) Operational PATMI 346.6 431.5 (19.7)
^ Excluding exceptional items
Olam International Limited Investor Presentation November 2019 33 2018 results Volume growth led by Food Staples & Packaged Foods
Volume by segment, '000 MT +45.9%
10,195 366 32,868
22,535 -1 -227
2017 Edible Nuts Confectionery Food Staples & Industrial Raw 2018 & Spices & Beverage Packaged Foods Materials, Ingredients Infrastructure & Logistics
Olam International Limited Investor Presentation November 2019 34 2018 results EBITDA declined 6.9% versus strong 2017
EBITDA by segment, S$ million
-6.9% 1,328 116 1,236 -71 -99 -21 -18
2017 Edible Nuts Confectionery Food Staples & Industrial Raw Commodity 2018 & Spices & Beverage Packaged Foods Materials, Financial Services Ingredients Infrastructure & Logistics
Olam International Limited Investor Presentation November 2019 35 2018 results PATMI declined 40.1% on exceptional items recorded in 2017 Operational PATMI down 19.7% PATMI and Operational PATMI, S$ million -40.1% 581
27
-92 -12 -3 348 -148 -4
2017 EBITDA^ Depreciation & Net Finance Taxation^ Exceptional Non-controlling 2018 Amortisation Costs Items Interests
Operational PATMI (S$ M) 432 -19.7% 347
^ Excludes exceptional items
Olam International Limited Investor Presentation November 2019 36 2018 results Edible Nuts and Spices EBITDA, S$ Million Invested capital, S$ Million
--22.5%22.4% +0.2% 438 3,643 3,604 3,610 394 3,364 3,463 361 340 332 1,421 1,587 1,415 1,608 1,666
1,777 2,048 2,222 1,996 1,944
2014 2015 2016 2017 2018 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated restated restated EBITDA/ Working Capital Fixed Capital Avg IC 10.3% 11.5% 9.3% 12.1% 9.4%
• Overall EBITDA lower compared with a strong 2017 • Working Capital increased marginally due to higher Edible Nuts inventory • Edible Nuts had lower EBITDA in 2018 mainly due to peanut farming in Argentina affected by drought and currency • Lower Fixed Capital following sale of land assets in the US, devaluation partly offset by investment in cashew processor Long Son in Vietnam • Spices performed better in 2018 on lower tomato processing losses
Olam International Limited Investor Presentation November 2019 37 2018 results Confectionery and Beverage Ingredients
EBITDA, S$ Million Invested capital, S$ Million
+35.5%
444 -7.7% 407 5,681 6,110 328 5,347 4,935 276 284 3,247 4,569 4,330 3,819 3,434 2,745 1,351 1,541 1,528 1,501 501 2014 2015 2016 2017 2018 restated restated Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated EBITDA/ Avg IC 9.9% 6.4% 6.9% 5.7% 8.6% Working Capital Fixed Capital • EBITDA grew on the exceptional performance in Cocoa supply chain and processing, compensating for lower Coffee contribution • Significant reduction in Working Capital due to optimisation initiatives, lower coffee prices and reduction of inventory • Coffee supply chain was adversely impacted by the down holding period cycle for most of the year; Soluble coffee continued to perform well
Olam International Limited Investor Presentation November 2019 38 2018 results Food Staples and Packaged Foods
EBITDA, S$ Million Invested capital, S$ Million
-19.7% -2.1% 360 330 4,522 4,678 4,578 295 289 1,131 1,118 212 3,075 3,231 1,498 709 915 3,024 3,547 3,460 2,366 2,316
2014 2015 2016 2017 2018 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated restated restated EBITDA/ Avg IC 8.8% 6.7% 8.5% 7.8% 6.2% Working Capital Fixed Capital
• EBITDA was down against a strong 2017 mainly due to lower contribution from Dairy, Rice and Edible Oils • In spite of higher Grains volumes, Working Capital was lower with continued optimisation initiatives, change in product mix • Grains/Animal Feed had marginally lower EBITDA due to margin pressures on animal feed business in Nigeria and improved access to supplier credit • Sugar had a steady performance; Packaged Foods continued to improve and delivered higher EBITDA
Olam International Limited Investor Presentation November 2019 39 2018 results Industrial Raw Materials, Infrastructure and Logistics
EBITDA, S$ Million Invested capital, S$ Million
-10.7% -25.3% 216 2,221 197 2,105 185 176 1,872 1,918 1,572 135 1,213 1,050 974 912 511
898 1,006 1,008 1,055 1,061
2014 2015 2016 2017 2018 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 restated restated restated restated EBITDA/ 11.6% 9.8% 6.5% 9.1% 9.6% Avg IC Working Capital Fixed Capital
• EBITDA reduced on lower contribution from GSEZ • Working Capital decreased significantly with continued inventory optimisation initiatives • Wood Products and Rubber performed better than 2017
Olam International Limited Investor Presentation November 2019 40 2018 results Upstream
EBITDA, S$ Million Invested capital, S$ Million
-21.4% +3.7% 205 4,061 188 3,764 3,915 429 436 155 148 2,830 3,075 481 304 359 79 3,283 3,487 3,625 2,526 2,716
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 restated restated restated restated
EBITDA/ 6.6% 5.2% 2.3% 4.9% 3.7% Avg IC Working Capital Fixed Capital
• EBITDA declined mainly on lower contribution from peanut • Fixed Capital higher on continued investments in OPG farming in Argentina, Dairy farming in Uruguay and Olam Palm Gabon (OPG), partly offset by better performance in Wood Products from its forestry concessions in Republic of Congo
Olam International Limited Investor Presentation November 2019 41 2018 results Supply chain
EBITDA, S$ Million Invested capital, S$ Million
-11.3% 609 600 -10.1% 6,538 504 5,804 451 4,936 4,852 5,151 405 5,750 4,914 4,397 4,230 4,561
540 622 788 890 590 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 restated restated restated restated
EBITDA/ 12.5% 12.3% 8.8% 7.3% 7.4% Avg IC Working Capital Fixed Capital
• EBITDA declined mainly on lower contribution from Coffee, • Working Capital came down with positive impact from Rice and Dairy optimisation initiatives, change in product mix and better access to supplier credit
Olam International Limited Investor Presentation November 2019 42 2018 results Mid/Downstream
EBITDA, S$ Million Invested capital, S$ Million
-0.9% -8.4% 689 683 6,448 6,347 6,113 620 5,600 3,064 2,622 2,362 3,794 1,847 315 330 1,317 3,725 3,751 3,753 2,477 3,385
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 restated restated restated restated
EBITDA/ 8.2% 6.5% 9.7% 11.1% 11.7% Avg IC Working Capital Fixed Capital
• EBITDA held steady as higher contribution from Cocoa, • Working Capital reduction caused by positive optimisation Soluble Coffee, Spices and Packaged Foods was offset by impact on Cocoa and wheat milling lower share of results from PT DUS and GSEZ, and reduced contribution from peanut processing, Edible Oils and animal feed businesses
Olam International Limited Investor Presentation November 2019 43 2018 results Gestation mix
Upstream Supply Mid/Downstream Chain
5.6 14.8 0.3 0.3 0.3 2.2 5.2 5.3 5.3
4.0 5.2 12.3 0.3 0.3 Invested 1.9 1.9 Capital 1.8 1.8 (S$ billion) Fully Partly Gestating Total Fully Fully Partly Total Olam Total ContributingContributing contributing Contributing Contributing
EBITDA/ 6.8% 1.2% -1.0% 3.7% 7.4% Avg IC 14.6% 0.5% 11.7% 8.1%
Gestating Partly contributing Fully contributing
Olam International Limited Investor Presentation November 2019 44 2018 results Balance sheet
S$ million 31-Dec-18 31-Dec-17 Change
Uses of Capital Fixed Capital 8,349.3 8,633.2 (283.9) Working Capital 6,376.4 7,280.3 (903.9) Cash 2,480.4 1,986.4 494.0 Others 526.2 309.0 217.2 Total 17,732.3 18,208.9 (476.6) Sources of Capital Equity & Reserves 6,652.9 6,574.4 78.5 Non-controlling interests 138.7 177.4 (38.7) Short term debt 4,777.1 4,660.2 116.9 Long term debt 6,491.1 6,927.7 (436.6) Fair value reserve (327.5) (130.8) (196.7) Total 17,732.3 18,208.9 (476.6)
Olam International Limited Investor Presentation November 2019 45 2018 results Cash flow statement
S$ million 2018 2017 Change Operating Cash flow (before Interest & Tax) 1,154.7 1,369.2 (214.5)
Changes in Working Capital 930.6 834.7 95.9
Net Operating Cash Flow 2,085.3 2,203.9 (118.6)
Net interest paid (464.1) (464.0) (0.1)
Tax paid (137.9) (82.1) (55.8)
Cash from divestments 435.8 333.2 102.6
Free cash flow before capex/ investments 1,919.1 1,991.0 (71.9)
Capex/ Investments (852.8) (970.6) 117.8
Free cash flow to equity (FCFE) 1,066.3 1,020.4 45.9
Olam International Limited Investor Presentation November 2019 46 9M 2019 results P&L statement
S$ million 9M 2019 9M 2018 % Change Q3 2019 Q3 2018 % Change Volume ('000 MT) 29,036.9 23,256.7 24.9 9,936.7 9,650.1 3.0 Revenue 24,255.2 22,018.6 10.2 8,311.3 8,294.0 0.2 Net loss in fair value of biological assets (5.2) (9.6) (46.0) (1.2) 0.2 n.m. EBITDA^ 1,058.4 905.1 16.9 286.9 229.1 25.2 Depreciation & amortisation (378.0) (290.7) 30.0 (128.5) (102.0) 25.9 Net Finance costs (412.6) (310.5) 32.9 (147.7) (108.8) 35.8 Taxation^ (33.4) (50.7) (34.1) (1.7) (3.6) (52.8) Exceptional items (17.8) (2.1) n.m. (0.1) - n.m. PAT 216.6 251.1 (13.7) 8.9 14.7 (39.2) PATMI 250.7 272.6 (8.0) 20.4 20.7 (1.5) Operational PATMI 268.5 274.7 (2.3) 20.5 20.7 (1.0)
^ Excluding exceptional items
Olam International Limited Investor Presentation November 2019 47 9M 2019 results Balance sheet
Change Change S$ million 30-Sep-2019 31-Dec-2018 30-Sep-2018 vs Dec 18 vs Sep 18 Uses of Capital Fixed Capital 8,326.5 8,349.3 (22.8) 8,223.3 103.2 Right-of-use assets 639.3 - 639.3 - 639.3 Working Capital 5,900.4 6,376.4 (476.0) 6,718.9 (818.5) Cash 2,757.4 2,480.4 277.0 2,599.0 158.4 Others 539.1 526.2 12.9 753.4 (214.3) Total 18,162.7 17,732.3 430.4 18,294.6 (131.9) Sources of Capital Equity & Reserves 6,637.6 6,652.9 (15.3) 6,691.7 (54.1) Non-controlling interests 117.0 138.7 (21.7) 150.2 (33.2) Short term debt 6,042.2 4,766.4 1,275.8 4,716.7 1,325.5 Long term debt 5,130.0 6,407.7 (1,277.7) 6,995.0 (1,865.0) Short term lease liabilities 80.1 10.7 69.4 10.0 70.1 Long term lease liabilities 566.7 83.4 483.3 80.5 486.2 Fair value reserve (410.9) (327.5) (83.4) (349.5) (61.4) Total 18,162.7 17,732.3 430.4 18,294.6 (131.9)
Olam International Limited Investor Presentation November 2019 48 9M 2019 results 1.7% reduction in invested capital 14.9% reduction in working capital year-on-year
S$ Million • Fixed Capital increased on adoption of SFRS(I) 16 with addition of right-of- 16,649 -1.7% 15,832 14,812 15,233 14,976 use assets and investments in line with Strategic Plan 8,853 7,705 6,844 7,461 6,351 • Continued optimisation led to reduction in Working Capital by 14.9% despite the year-on-year volume 7,796 8,128 7,968 7,771 8,625 (+24.9%) and revenue increase (+10.2%)
Dec-16 Dec-17 Dec-18 Sep-18 Sep-19
Working Capital Fixed Capital Invested Capital excludes: (a) Gabon Fertiliser Project (30 Sep 2019: S$239.1 million; 30 Sep 2018: S$247.9 million;); and (b) Long-term Investments (30 Sep 2019: S$101.7 million; 30 Sep 2018: S$205.7 million)
Olam International Limited Investor Presentation November 2019 49 9M 2019 results Net gearing at 1.37x Excluding impact of SFRS(I) 16, net gearing improved to 1.28x
Net and adjusted debt / equity (basic) • Reduced net debt:
1.38 1.32 1.37 • Despite impact of application of 1.38 1.32 1.28 SFRS(I) 16 – net increase of S$556 million in lease liabilities 0.43 0.29 0.33 • Supported by lower working capital due to change in product mix and improved access to 30-Sep-18 31-Dec-18 30-Sep-19 supplier credit Net gearing Adjusted net gearing Net gearing (ex SFRS(I) 16)
Olam International Limited Investor Presentation November 2019 50 9M 2019 results Free cash flow: Improved, positive FCFE in 9M 2019 on higher operating cash, reduced working capital Free Cash Flow to Equity, S$ million
+165
426 32
159 -356 767 602 -96
9M 2018 Operating Cash Changes in Tax Paid Capex / Net Interest Paid 9M 2019 Flow (before Working Capital Investments Interest & Tax)
FCFF (S$ M) 919 +260 1,179
Olam International Limited Investor Presentation November 2019 51 9M 2019 results Available liquidity: Sufficient to cover all repayment and Capex obligations
Total borrowings and available liquidity, S$ Million as at September 30, 2019
9,296 18,954
+7,135 11,819 2,043 4,858 6,122
2,757 5,697
Cash and RMI* Secured Unutilised Available Total Borrowings Short-term Receivables Bank Lines Liquidity Fixed Deposits Short Term Long Term * RMI: inventories that are liquid, hedged and/or sold forward
Olam International Limited Investor Presentation November 2019 52 9M 2019 results Edible Nuts and Spices EBITDA, S$ Million Invested capital, S$ Million
438 +12.4% +8.0% 4,069 340 332 311 3,643 3,604 3,610 3,768 277 1,875 1,421 1,608 1,666 1,927
2,222 1,996 1,944 1,841 2,194 2016 2017 2018 9M 2018 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19 • Higher EBITDA due to better contribution from Almonds, Spices Working Capital Fixed Capital • Peanut business impacted by cessation of operations in Argentina and reduced shelling volumes and margins in U.S.; Hazelnut business impacted by tight trading conditions in Turkey which are expected to continue into Q4 2019 and • Working Capital reduced with lower peanut prices beyond • Fixed Capital increased on account of SFRS(I) 16 impact • Spices business to cease industrial tomato and canning operations and review options to divest the assets and business by H1 2020 Note: EBITDA includes positive impact from the adoption of SFRS(I) 16. Olam International Limited Investor Presentation November 2019 53 9M 2019 results Confectionery and Beverage Ingredients
EBITDA, S$ Million Invested capital, S$ Million
444 +22.6% 6,110 +7.8% 407 5,347 4,935 4,829 328 342 4,478 279 4,569 3,819 3,434 2,973 3,202
1,541 1,528 1,501 1,505 1,627
2016 2017 2018 9M 2018 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19
• Strong growth in EBITDA as Cocoa continued stellar Working Capital Fixed Capital performance in supply chain and processing with improved margins • Increase in Working Capital due to higher Cocoa inventory • Green coffee volumes and margins improved yoy; soluble coffee continued to perform well; plantations performance • Fixed Capital higher on acquisition of BT Cocoa and impact impacted by persistent low prices from SFRS(I) 16 adoption Note: EBITDA includes positive impact from the adoption of SFRS(I) 16.
Olam International Limited Investor Presentation November 2019 54 9M 2019 results Food Staples and Packaged Foods
EBITDA, S$ Million Invested capital, S$ Million
-11.6%
360 +9.3% 5,044 330 4,522 4,678 4,578 289 4,457 272 1,131 1,644 249 1,498 1,118 800
3,024 3,547 3,460 3,400 3,657
2016 2017 2018 9M 2019 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19
• EBITDA growth from improved contribution from Grains, Working Capital Fixed Capital Packaged Foods and Edible Oil supply chain, partly offset by reduction in Rice and Sugar
• Edible Oils refining and distribution was impacted by tropical • Working Capital lower on closure of Sugar trading desk and cyclone in Mozambique; low palm oil prices and lower than availability of supplier credit for bulk commodities anticipated yields adversely impacted Olam Palm Gabon (OPG) • Fixed Capital increased on continued investments by OPG • Rusmolco fared well but dairy farming in Uruguay continued to and Rusmolco, impact from SFRS(I) 16 adoption experience very difficult operating conditions Note: EBITDA includes positive impact from the adoption of SFRS(I) 16.
Olam International Limited Investor Presentation November 2019 55 9M 2019 results Industrial Raw Materials, Infrastructure and Logistics EBITDA, S$ Million Invested capital, S$ Million
197 2,221 2,105 -12.1% 176 -12.0% 1,736 1,572 135 132 1,213 1,050 1,527 117 511 712 385
1,008 1,055 1,061 1,024 1,142
2016 2017 2018 9M 2018 9M 2019 Dec-16 Dec-17 Dec-18 Sep-18 Sep-19
Working Capital Fixed Capital
• EBITDA declined on reduced contribution from Cotton due to • Working Capital reduced significantly on lower cotton prices sharp fall in cotton prices and tight trading conditions and reduced volumes following closure of deprioritised businesses • This was offset partly by improved Wood Products, GSEZ • Fixed Capital increased due to investment in Cotontchad, performance continued investments in Olam Rubber Gabon and impact from adoption of SFRS(I) 16
Olam International Limited Investor Presentation November 2019 56 Governance Board of directors
Olam International Limited Investor Presentation November 2019 57 Governance Risk management
As a general principle, Olam has appropriate policies for risks that are insurable across products and geographies
Olam International Limited Investor Presentation November 2019 58 Recognitions
• Singapore Corporate Awards 2019, Best Annual Report (Silver) • The Asset Triple A Country Awards 2018: ‘Best Loan in Singapore’ for Asia’s first sustainability-linked club loan • ASEAN Business Advisory Council (ASEAN-BAC) AGROW Awards: Champion Inclusive Agri-business • Top 30 ASEAN public listed companies in corporate governance practices 2018 • Africa CEO Forum Awards 2018: International Company of the Year • Singapore Sustainability Reporting Awards (SSRA) 2018 by Singapore Institute of Directors, SGX and Global Compact: Best Sustainability Report for Established Reporters • Winner of Sustainability Award, Runner-up of ‘Most Transparent Company’ Award, Commerce, SIAS 19th Investors’ Choice Awards 2018 • Sustainable Business Award, Large Organisation category, Singapore Apex Corporate Sustainability Awards, 2017 • Olam ranked No.23 on Fortune’s 2nd annual ‘Change the World’ list 2016 • Asia’s Best Sustainability Report (Standalone) 2016, Asia Sustainability Reporting Awards (ASRA) • IR Magazine Awards Southeast Asia for Best in Sector (Consumer Staples) and Most Progress in IR in 2014
Olam International Limited Investor Presentation November 2019 59