Petra foods limited presentation

PETRA FOODS LIMITED

COMPANY BACKGROUND

Founded in 1984HQ in SingaporeManufactures and markets cocoa ingredients Manufactures and markets consumer confectionsHolds investment holdings

OPERATIONSOperates following three divisions:Manufactures confections under various brandsDistributes food and consumer productsPrivate label and own branded products

GEOGRAPHYOperates in South East Asia with over 50% market shareOwn brands represent 60% of revenues and private label 40%

CAPACITY2010 Revenues $1.5 billion USD2012 Revenues decreased to $477 million USDAnnual capacity of 100,000 metric tons.

RECENT EVENTSIn 2012 divested its cocoa ingredients division accounting for $1 billion in annual revenues.Selling price for cocoa ingredients division was $950 million

IMPACT OF DIVESTITURELeaner operationsImproved profitabilityFocus on core business

P&L FOLLOWING DIVESTITURERevenues $477 million, compared to $1.5 billionEBIT $54 million, compared to $58 millionNI $60 million, compared to $44 millionNI margin 14.43%, compared to 2.84%

BALANCE SHEET POSITION FOLLOWING DIVESTITUREEquity $328 million, compared to $296 millionTotal assets include $941 million assets held for sale and $373 million associated liabilitiesDebt reduced by approximately 92% = lower leverage

WHAT DOES ALL THIS MEAN?Lower leverage and stronger balance sheetAlthough lower top-end volume, improved profitabilityGreater focus on core businessImproved liquidity

DANGER ASSOCIATED WITH SMALLER SIZE

Compromises competitivenessLess resources and mass to absorb large projects, particularly high-cost technology projectsPotential loss of tacit knowledge and skilled labor

FINANCIAL HIGHLIGHTS FYE 12/31/2012 - P&LRevenues $477.7 millionGross profit/margin $152 million/31.91%EBIT profit/margin $75.7 million/15.84%EBITDA profit/margin $98 million/20.52%NI profit/margin $25.9 million/5.43%Lower NI due to 28.6 million non-recurring item

FINANCIAL HIGHLIGHTS FYE 12/31/2012 – BALANCE SHEETWorking capital (323.8) million due to $373 million liabilities associated with divestiture classified as current. Debt ratio 0.35, compared to 0.50Debt to equity 1.32, compared to 1.76

PROFITABILITY MEASURESROA 2.22% post divestiture, compared to 4.61%ROE 8.75% post divestiture, compared to 21.41%

BUSINESS RISKSSmaller base may compromise competitivenessSmaller base results in less resourcesLess resources committed to process improvement and innovationLower volume makes it difficult to absorb large projects and costly technology solutions

BUSINESS OPPORTUNITIESFocus on core businessWell developed soft and hard supply chain infrastructure – good ports, rail, roads, airport and soft support available in SingaporeFrom a P&L perspective, improved marginsImproved operating cash flow – post divestitureDeleveraged balance sheet result in lower interest expense and greater investment back to the business.

OUTLOOKThe recent divestiture changed the character of this company, thus transforming it into a new company with a third of its original size. Integrator role – with its focus on core business, there is an opportunity for integrator specialized services to a variety of companies around the globe.

RECENT EVENTS• Nestle – The world’s largest food company

files lawsuit against Petra and Delfi for patent infringement

• Lawsuit filed in Singapore and in the Philippines

• Petra filed a counter-action aiming to cancel Nestle’s registration of KitKat

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