9 mths ended 31 mar
TRANSCRIPT
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Olam International Limited
9M FY2005 Results Announcement
Presentation
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This presentation should be read in conjunction withOlam International Limiteds Third Quarter, FY2005
(Q3 FY2005) and Nine Months FY2005 (9M FY2005)
Financial Results for the period ended 31st
March 2005statement lodged on MASNET on 11th May 2005.
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Cautionary note on forward-looking statementsThis presentation may contain statements regarding the business of Olam International
Limited and its subsidiaries (Group) that are of a forward looking nature and aretherefore based on managements 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
uncertaint ies 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. Such factors that may affect Olams future
financial results are detailed in our listing prospectus, listed in this presentation, or
discussed in todays press release and in the management discussion and analysis
section of the companys 3Q FY2005 & 9M FY2005 report and fi lings with SGX. The
reader and/or listener is cautioned to not unduly rely on these forward-lookingstatements. We do not undertake any duty to publish any update or revision of any
forward looking statements.
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Introduction
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Present in all key producing countries for the 14 products
Subsidiaries in 39 countries (mostly wholly owned)
Russia Poland
France
UK
Italy
Holland
Ukraine
Europe
As ia
Singapore
China
Indonesia
Vietnam
India
PNG
Nigeria Ghana Benin Togo Ivory Coast Burkina Faso G. Bissau G. Conakry Cameroon Gabon D R Congo
W. Africa
Mozambique
Zimbabwe S. Africa
Southern Af rica
Tanzania
Kenya
Uganda
Madagascar
Mauritius
E. Afr ica
N. America
USA
Brazil
S. America
U.A.E
Turkmenistan
Uzbekistan
Kazakhstan
Middle East &
Central Asia
Linking key producing countries (origins), processing centres & markets
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Background
to analysing
our results
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Background to analysing our results: Structure
Contribution Analysis
Gross Contribution (GC)
Net Contribution (NC)
Underlying Volumes
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Background to analysing our results: Contribution Analysis
Sales Revenue
Less: Cost of goods sold
Shipping & Logistics
Commission & Claims
Gross Contribution (GC)
Less: Net Interest expense
Net Contribution (NC)Less: SG&A
Profit Before Tax (PBT)
Less: Tax
Net Profit After Tax (NPAT)
Profitability Analysis:
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Background to analysing our results: Volumes
Volume is more or less within our control and is a function of
the reach of our supply chain infrastructure in both origins &
markets.
Net Contribution / ton x Volume = Total Net Contribution
Margin or NC enhancement achieved through providing valueadded services including VMI, customised grades and
qualities, organic certification, FTP certi fication, risk
management solutions, etc.
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4 Reporting Segments
Product segments Products
Edible Nuts, Spices & Beans1.
Confectionery & BeverageIngredients
2.
Fibre & Wood Products4.
Food Staples &Packaged Foods
3.
Cashew nuts Other edible nuts Sesame Spices
Beans
Cocoa Coffee Sheanuts
Rice Sugar Diary products
Packaged foods
Cotton Wood products
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Results: 9M FY2005
Consolidated P&L
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Key Highlights: 9M FY2005
We continue to concurrently meet all 3 criteria for profitable growth:
Top line growth (9M FY2005 sales turnover of S$2.56 billion, up 46% from9M FY2004).
Bottom line growth (9M FY2005 of S$48.1 million, up 36% from 9MFY2004).
Earning more than ones cost of capital.
Well diversified and balanced portfolio: Broad based performance from all 4business segments; similarly well diversified sourcing contributions from origin
countries and revenue contributions from markets.Continuing to execute exceedingly well on organic growth initiatives inadjacent opportunities giving us good visibility on full year earnings prospectsand beyond.
Post listing, total shareholder funds grew by 143% as at 31st March 2005 toS$461.38 million as against S$189.86 million as at 30th June 2004.
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Financial Highlights: 9M FY2005
Total Revenue: S$2.56 billion
46% growth over 9M FY2004
Revenue growth across all 4 segments
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Sales revenue growth: Segmental Contribution
9M FY2004 Edible Nuts,
Spices & Beans
Confectionery
& BeverageIngredients
Food Staples &
Packaged Foods
Fibre & Wood
Products
9M FY2005
1,751177
311
24572 2,556
0
500
1,000
1,500
2,000
2,500
$3,000M
SalesRevenue
(S$ M)
Sales growth 46%, S$805 million
22%39%
30%
9%
71% 44% 67% 17%Growth Over 9M FY2004:
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Sales revenue growth: Sources
9M FY2004 Volume Price 9M FY2005
1,751
499
306 2,556
0
500
1,000
1,500
2,000
2,500
$3,000M
SalesRevenue (S$ M)
62%
Sales growth 46%, S$805 million
38%
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Financial Highlights: 9M FY2005
Sales Volume: 1.98 mill ion metric tons
29% growth over 9M FY2004
Volume growth across all 4 segments
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Sales Volume growth: Segmental Contribution
9M FY2004 Edible Nuts,Spices & Beans
Confectionery& Beverage
Ingredients
Food Staples &Packaged Foods
Fibre & WoodProducts
9M FY2005
1,53671
77
20198 1,983
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
$2,000M
SalesVolume
('000 mts)
16%
Sales Volume growth 29%, 447 million mts
17%
45%
22%
33% 20%Growth Over 9M FY2004: 29% 39%
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Gross Contribution (GC): S$165 mill ion
38% growth over 9M FY2004
GC growth across all segments
Financial Highlights: 9M FY2005
G C t ib ti th S t l Sh
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Gross Contribution growth: Segmental Share
9M FY2004 Edible Nuts,
Spices & Beans
Confectionery
& BeverageIngredients
Food Staples &
Packaged Foods
Fibre & Wood
Products
9M FY2005
120.1 10.7
10.1
12.4
11.8 165.1
0
50
100
150
$200M
GrossContribution
(S$ M)
GC growth 38%, S$45 million
24%23%
28%26%
51% 20%Growth Over 9M FY2004: 58% 45%
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Gross Contribution growth: Sources
9M FY2004 Volume Growth Margin Growth 9M FY2005
120.1
33.8
11.2 165.1
0
50
100
150
$200M
Gross Contribution(S$ M)
GC growth 37%, S$45 million
75%
25%
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Net Contribution (NC): S$129.3 million
38% growth over 9M FY2004
NC growth across all segments
NC per ton growth across all segments
Financial Highlights: 9M FY2005
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Net Contribution growth: Segmental Share
9M FY2004 Edible Nuts,Spices & Beans
Confectionery& Beverage
Ingredients
Food Staples &Packaged Foods
Fibre & WoodProducts
9M FY2005
93.6
9.510.3
6.89.1 129.3
0
50
100
$150M
Net Contribution(S$ M)
NC growth 38%, S$35.7 million
19%29%27%
26%
55% 29%Growth Over 9M FY2004: 37% 41%
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Net Contribution growth: Sources
9M FY2004 Volume Growth Margin Growth 9M FY2005
93.6
27.08.7 129.3
0
50
100
$150M
Net Contribution
(S$ M)
NC growth 38%, S$35.7 million
75%
25%
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Results: 9M FY2005
Segmental P&L
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Segmental analysis: Edible Nuts, Spices & Beans
9M FY20049M FY2005
55.4%8117,1529426,659Net Contribution(S$000)
1,181
S$/Ton
70.5%250,6771,512427,483Revenue(S$000)
33.3%212,188282,772Volume
(metric tons)
Amount S$/Ton Amount % changeDescription
60% of NC growth was derived from Volume Expansion
40% of NC growth was derived from Margin Improvement initiatives.
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S t l l i F d St l & P k d F d
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Segmental analysis: Food Staples & Packaged Foods
9M FY20049M FY2005
37.4%2718,3092825,152Net Contribution(S$000)
527
S$/Ton
67.4%364,073683609,476Revenue(S$000)
29.1%690,591891,826
Volume
(metric tons)
Amount S$/Ton Amount % changeDescription
78% of NC growth was derived from Volume Expansion
22% of NC growth was derived from Margin Improvement initiatives.
Segmental analysis: Fibre & Wood products
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Segmental analysis: Fibre & Wood products
9M FY20049M FY2005
40.8%8922,3519031,471Net Contribution
1,686
S$/Ton
16.9%425,5531,420497,299Turnover
38.7%252,419350,107Volume
Amount S$/Ton Amount % changeDescription
95% of NC growth was derived from Volume Expansion
5% of NC growth was derived from Margin Improvement initiatives.
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Results: 9M FY2005
Balance Sheet
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Balance Sheet
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Fixed assets
Investment in Fixed assets amounted to S$14.2 million in 9M FY2005 ascompared to S$5.3 million in 9M FY2004. The major investments were in:
Purchase of Cashew Processing Facility in Brazil
Setting up Rice Milling Facility in Nigeria Enhancing procurement and logistics infrastructure in various origins
Equity & Reserves:
Increased by 143% mainly on account of a successful IPO as under:
S$217.9 mNet proceeds raisedS$10.6 mIPO expenses
S$38.9 m62.81m sharesVendor sale of shares
S$267.4 m431.25m sharesIPO size & Gross Proceeds
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Outlook &
Prospects
Outlook & Prospects
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Outlook & Prospects
Initiatives to broaden and deepen our business franchise are in placeand are expected to generate sustained growth via rising volumesand enhanced margins going forward
Contributing factors to the strong 9M FY2005 performance includefactors that are structural in nature, including growing volumes, betterscale economies & the margin enhancement initiatives yieldingresults. These positive structural trends remain intact. We therefore
continue to be optimistic on the overall business outlook as we headinto 4Q FY2005 and beyond.
Therefore, we believe, that we will do better this year (FY2005)compared to last year (FY2004), and are confident about our full yearFY2005 prospects.
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Dividends
We are targeting a dividend payout ratio of no less than 25% of
NPAT for FY2005.
Note:
Barring any unforeseen circumstances and assuming that there
are no material adverse developments before the end of the
Financial Year, and based on the final recommendation of the
Board.
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Thank You