Golden Agri-Resources Ltd. Company Presentation. SIAS Corporate Profile Seminar, 17 November 2012

Transcription

1 Golden Agri-Resources Ltd. Company Presentation SIAS Corporate Profile Seminar, 17 November

2 Disclaimer This presentation has been prepared by Golden Agri-Resources Ltd. ( GAR or Company ) for informational purposes, and may contain 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 which 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. A prospective investor must make its own independent decision regarding investment in securities. Opinions expressed herein reflect the judgement of the Company as of the date of this presentation and may be subject to change without notice if the Company becomes aware of any information, whether specific to the Company, its business, or in general, which may have a material impact on any such opinions. The information is current only as of its date and shall not, under any circumstances, create any implication that the information contained therein is correct as of any time subsequent to the date thereof or that there has been no change in the financial condition or affairs of GAR since such date. This presentation may be updated from time to time and there is no undertaking by GAR to post any such amendments or supplements on this presentation. The Company will not be responsible for any consequences resulting from the use of this presentation as well as the reliance upon any opinion or statement contained herein or for any omission. Golden Agri-Resources Ltd. All rights reserved. 1

3 Table of Contents SECTION 1 Corporate Overview 3 SECTION 2 Key Competitive Strengths 8 SECTION 3 Growth Strategy 16 SECTION 4 Financial Performance 20 2

4 Section 1 Corporate Overview

5 Overview of GAR GAR is listed on SGX since 1999 The largest Indonesian plantation group with integrated operations for the production of palm oil-based edible oil and fat products Integrated operations in China including a deep sea port, soybean crushing plants, and production of refined edible oil products Plantation Profile Planted Area (as of 30 Sep 2012) 1 : 459,500 ha Output of Palm Products 2 YTD Sep 2012 : 2,058,000 MT FY 2011 : 2,640,000 MT Financial Statistics (in US$ million) YTD Sep 2012 FY 2011 Revenue : 4,533 5,953 EBITDA : Net Profit 3 : Equity 4 : 8,503 8,025 Crude palm oil (CPO) Palm Kernel (PK) Palm Kernel Oil (PKO) Palm Kernel Meal Soybean Oil Soybean Meal Key Products Cooking Oil Margarine Shortening Specialty Fats Stearin Oleochemicals Notes: 1. Including plasma 2. CPO and PK 3. Net profit attributable to owners of the Company excluding effect of net gain from changes in fair value of biological assets, foreign exchange gain and exceptional item 4. Attributable to owners of the Company 4

6 Corporate and Shareholding Structure Flambo International Ltd % Public 50.05% Golden Agri-Resources Ltd. (Market Cap: US$6.5 bn SGX listed) 2 100% 100% Indonesia Operations China Operations 97% PT SMART Tbk 3 (Oil palm plantation, refinery and marketing) 69% Ningbo Port (Deep sea oil & grain port) 100% PT Ivo Mas Tunggal (Oil palm plantation) 100% Shining Gold (Oilseed crushing & refinery) 100% PT Sawit Mas Sejahtera (Oil palm plantation) 85% Zhuhai Gold (Refined products) 100% 100% PT Sinar Kencana Inti Perkasa (Oil palm plantation) PT Binasawit Abadipratama (Oil palm plantation) 100% Florentina International (Manufacturing and marketing of food products) Notes: 1. Widjaja Family has aggregate ownership of 49.95% in GAR 2. Market capitalisation as of 12 November Listed on the Indonesia Stock Exchange 4. Simplified organisation structure with principal operating subsidiaries 5

7 Corporate Governance GAR makes continuous efforts towards better corporate governance practices Shareholding Structure Clear and independent shareholding structure High free float with 50.05% direct public ownership High liquidity with GAR consistently among the top 5 traded stocks on the Singapore Exchange and inclusion into the MSCI AC Far East Ex-Japan since May 2008 and the STI since Sep 2008 Interested Person Transactions GAR operates independently as each business group of Widjaja Family has its own separate management team and independent directors Interested person transactions are minimal and based on arms-length commercial terms, transparent and subject to Independent Directors and/or shareholders approval Board of Directors Nine board members including six not related to the Controlling Shareholder: four Independent and two Executive Directors Proportion of Independent Directors more than the one third stipulated by Singapore Code of Corporate Governance Audit Committee, Nominating Committee and Remuneration Committee headed by Independent Directors Corporate Transparency Quarterly Analysts and Press Briefings Almost daily meetings with investors and analysts, participation in international road shows and investor forums Comprehensive website with dedicated IR section GAR has approximately twenty analysts covering its stock Awarded by SIAS as one of the Most Transparent Companies in

8 Largest Indonesian Plantation Group with Integrated Operations Research & Development Basic product Processing Processed product Collaborate with CIRAD Seedling Dami Mas Seed Garden Capacity 1 24,000,000 seeds p.a. Plantations & Harvesting Planted area 1,2 Total 459,502 ha Nucleus 363,586 ha Plasma 95,916 ha Mature area 2 418,137 ha FFB production 2 8,508,746 MT (FY 2011) 6,868,861 MT (YTD Sep 2012) CPO milling No of mills 38 Capacity 1 10,270,000 MT FFB p.a. CPO Production 2,152,809 MT (FY 2011) 1,667,659 MT (YTD Sep 2012) Palm kernel (PK) Production 487,298 MT (FY 2011) 390,102 MT (YTD Sep 2012) Refining No of refineries 4 Capacity 1 1,380,000 MT p.a. Kernel crushing No of plants 8 Capacity 1 819,000 MT p.a. Oleochemical Branded & Unbranded Cooking Oil Margarine Specialty Fats Palm Kernel Meal Palm Kernel Oil Fatty Acids Notes: 1. Data as of September Including plasma Capacity 1 88,000 MT p.a. Glycerine 7

9 Section 2 Key Competitive Strengths

10 Key Competitive Strengths GAR is a leader in the high growth palm oil industry in Indonesia Largest Indonesian plantation groups with vertically integrated operations Sustained growth through expansion in upstream and downstream Management expertise and unrivalled technology platform underpin high production yields Well established downstream business in both domestic and export markets Continuous strong commitment to the environment and social community 9

11 Largest Indonesian Plantation Group with Vertically Integrated Operations Largest plantation group in Indonesia and second largest globally in terms of planted area 000 ha GAR Astra Agro Wilmar Indo Agri (incl Lonsum) Largest plantation group in Indonesia and third largest globally in terms of CPO production 1,2 000 MT 4,000 3,000 Indonesia Sampoerna Sime Darby IOI KLK Felda Planted Note: Based on latest publicly available information (including plasma), except Felda Indonesia Malaysia Malaysia 2,000 3,300 1,000 2,153 1, , , GAR Astra Agro Wilmar Indo Agri Sampoerna Sime Darby IOI KLK Felda Notes: 1. Based on latest full fiscal year data CPO 2. Felda is the largest CPO producer with about 68% of its FFB processed sourced from plasma farmers and other parties 10

12 Management Expertise Delivers High Production Yields GAR is one of the lowest cost producers with industry-leading efficiencies FFB yield per hectare 1 CPO yield per hectare 1 & 2 (MT/ha) (MT/ha) GAR Astra Agro Wilmar Indo Agri Note: 1. Based on full fiscal year data GAR Age Profile 1 Old 2 (> 25 yrs) 4% Old 1 (19-25 yrs) 21% Prime 2 (13-18 yrs) 33% Immature (1-3 yrs) 9% Young (4-6 yrs) 20% Prime 1 (7-12 yrs) 13% Note: 1. Data as of 30 Sep 2012, include plasma. Average age is 13 years 3.0 Notes: GAR Astra Agro Wilmar Indo Agri 1. Based on full fiscal year data 2. CPO yield/ha is derived from FFB yield/ha multiply by extraction rate (MT/ha) Palm is the highest yielding vegetable oil 5.0 Palm Oil (GAR) 3.7 Palm Oil (Industry) Source: Oil World and Company Rape Oil Sun Oil Soy Oil 11

13 Unrivalled Technology Platform Enhancing Operational Efficiency To monitor and manage its widely spread operations efficiently, GAR utilises a state-of-the-art proprietary information technology system War Room utilises SAP, GIS and Google Earth applications Block-by-block Performance Analysis (30 ha per block) is updated daily Facilitates problem identification (e.g. low yielding areas), enhancing management s ability to address issues early and prioritise improvements/changes Output of Palm Products ( 000 MT) 2, ,794 1,666 1,343 1,433 1,201 1,039 2,073 1,890 1,967 2,347 2,273 Note: output declined due to unfavourable weather conditions 12

14 Unrivalled Technology Platform Optimising the Production Yields and Minimising Cost Superior fertiliser cost management through operational control and R&D Fertiliser program developed with CIRAD 1 Accurate fertiliser plan to optimize benefit especially with more volatile climate conditions Application and dosage based on cost/benefit analysis using leaf sampling ( blood test ), analysing condition of each plantation GAR utilises GPS-guided aerial manuring to cover expansive plantation hectarage With this advanced aerial manuring, GAR can tighten its cost of production compared to manual application Note: 1 CIRAD = Centre de cooperation Internationale en Recherche Agronomique pour le Développement (French Agricultural Research Centre for International Development) 13

15 Strong Commitment to the Environment and Community for Sustainable Palm Oil Sustainable Practices for Existing Plantations Zero waste policy by recycling of mill wastes (Empty Fruit Bunch and Palm Oil Mill Effluent) Precise dosage in fertiliser application plan to minimise risk of pollution Integrated pest management by deploying biological controls to minimise and mitigate the impact of chemical pesticides Enhanced Planting Procedures No deforestation footprint in our palm oil operations by not developing on: High carbon stock (HCS) forests High conservation value (HCV) forest areas Peat lands of any depth Continuous yield improvement in nucleus and plasma plantations managed by the Company Zero burning policy in land clearing Ensure free, prior and informed consent for indigenous and local communities Comply with all relevant laws and National Interpretation of RSPO Principles and Criteria 14

16 Holistic Approach to Sustainability Progress update on sustainability In Sep 2012, we have 1 mill and 3 estates receiving Roundtable on Sustainable Palm Oil (RSPO) certification, bringing total RSPO-certified units of 8 mills and 67,514 ha of estates To date, GAR has received International Sustainability and Carbon Certification (ISCC) covering 99,527 ha of plantations (including smallholder estates of 32,873 ha), 9 mills and 3 bulking stations Continue to engage our stakeholders by sharing our sustainability journey including our sustainability policy in several events such as RSPO 10 th Annual Roundtable Meeting in Singapore and 7 th Annual Sustainable Supply Chain Summit organized by Ethical Corporation in London in Oct 2012 Next steps on High Carbon Stock Forest Study The Team (GAR, SMART, The Forest Trust and Greenpeace) Presenting the findings Holding wider discussions Gathering feedback on study and outcomes Upon gathering the required input and feedback from all stakeholdes, GAR intends to develop its action plans for how it will proceed further with this methodology and will announce this in due course To be successful, all stakeholders must work together Local communities Multi-stakeholder collaboration to find solutions to convince local communities on value of conservation Government Support to establish and implement land swap process Industry Support of key industry players 15

17 Section 3 Growth Strategy 16

18 Strategic Priorities Build on core competitive strengths to maximize long-term shareholder returns Leverage operating scale and relentless focus on operational excellence Upstream Downstream Sustain growth through expansion of planted area by way of green field and acquisition Sustain cost leadership through operational efficiencies Continuous improvement of our elite seeds to enhance long-term yields Increase downstream capability to shift product mix to higher value-added products of cooking oils, margarine & fats Strategically strengthen position in oleochemicals through innovation and customer solutions Develop destination business by extending distribution reach to key countries Sustained Growth and Profitability Continued strong commitment to environmental and social responsibility 17

19 Downstream Indonesia Operations 1400 Consistent expansion of downstream capacity to focus on higher valueadded products Capacity ( 000 tpa) Sales volume ( 000 MT) 100 Our Brands Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q Kernel crushing capacity Refinery capacity Branded sales volume YTD Sep 2012 branded sales volume increased by 28% year-on-year Our prominent cooking oil brands, Filma and Kunci Mas, are among the leaders in Indonesia Nation-wide coverage with hundreds of distributors and thousands of retailers Growing foothold in international markets with bulk cooking oil 18

20 Downstream China Operations China remains one of the largest and fastest growing edible oils consumers despite current challenging environment GAR will strategically strenghten its presence in China by: l l l l Developing distribution channels to enter new areas in China Enhance relationships with end customers by providing additional services Actively manage flexible production to optimise profits Pursuing value-added products such as specialty fats Facilities Dec 2011 Sep 2012 Refinery 380,000 MT 776,000 MT Crushing 1.0 million MT 2.3 million MT Noodle Manufacturing 5 billion packets 5 billion packets Note: Annual capacity 19

21 Section 4 Financial Performance

22 Financial Performance (in US$ million) YTD Sep 2012 YTD Sep Revenue 4,533 4,625 5,953 3,505 2,294 Gross Profit 1,250 1,450 1, Gross Profit Margin 28% 31% 31% 27% 22% Operating Profit ,700 1, Tax 1 (132) (155) (428) (482) 21 Core Net Profit Addition: - Net gain from changes in fair value of biological assets (net of tax and non-controlling interests) , Foreign exchange gain/(loss) (net of non-controlling interests) (12) (1) - Exceptional items, net (6) (1) Net Profit attributable to owners of the Company ,268 1, EPS (in US$ cent) EBITDA EBITDA margin 14% 16% 16% 19% 17% Notes: 1. Full Year figures include deferred tax provided on net gain from changes in fair value of biological assets 2. Net profit attributable to owners of the Company, excluding effect of net gain from changes in fair value of biological assets, foreign exchange gain/(loss) and exceptional items 3. Based on weighted average numbers of shares 21

23 Revenue by Product YTD Sep 2012 revenue of US$4.5 billion mainly from CPO and refined palm oil based products By Product By Country Soybean Oil 4% Soybean Meal 7% Branded Products 8% Others 6% Unbranded Refined Palm Products 30% PK 1% CPO 44% China Local 21% Indonesia Local 11% Indonesia Export 68% 22

24 Financial Position Strong financial position with low gearing (in US$ million) 30-Sep Dec-11 Change Total Assets 12,641 11,837 7% Cash and Short-Term Investments % Trade Receivables and Inventories 1, % Fixed Assets 1 9,759 9,565 2% Total Liabilities 2 4,047 3,725 9% Interest Bearing Debts 1,372 1,086 26% Total Equity Attributable to Owners of the Company 8,503 8,025 6% Net Debt 3 /Equity 4 Ratio 0.10x 0.09x Net Debt 3 /Total Assets 0.07x 0.06x Net Debt 3 /EBITDA x 0.73x EBITDA/Interest 11.91x 14.70x Notes: 1. Includes Biological Assets, Property, Plant and Equipment, and Investment Property 2. Include Deferred Tax Liabilities of US$1.88 billion per 30 Sep 2012 and 31 Dec 2011, respectively which mainly arising from the accumulated gain of the revaluation of biological assets 3. Interest bearing debts less cash and short-term investments 4. Equity attributable to owners of the Company Sep 2012 ratio is based on annualised EBITDA 23

25 Thank You 24