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INVESTOR PRESENTATIONFOR THE YEAR ENDED 30 SEPTEMBER
2
LEGAL DISCLAIMER AND BASIS OF PREPARATION
• For the purposes of this notice, the presentation (the “Presentation”) shall mean and include the slides that follow, the oral presentation of the slides by Oceana Group Limited (the “Company”) and/or its advisers, any question-and-answer session that follows that oral presentation, hard copies of this document and any materials distributed at, or in connection with, that oral presentation. By attending the meeting at which the Presentation is made, or by reading the Presentation slides, you will be deemed to have (i) agreed to all of the following restrictions and made the following undertakings and (ii) acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the Presentation.
• This Presentation is provided to you solely for information purposes and its contents are confidential and may not be reproduced, redistributed, published or passed on to any person, directly or indirectly, in whole or in part, for any purpose. The maintenance of the absolute secrecy of the information contained in the Presentation is of paramount importance to the Company. If this Presentation has been received in error, it must be returned immediately to the Company.
• Your obligations as set out in this notice will continue in respect of the information contained in the Presentation until such time as, and then only to the extent that, any such information is made available to the public. The Company may not be making the information contained herein public, except to the extent required by law or regulation. If this is not acceptable to you, you should not receive the information contained in the Presentation.
• This Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any action (including registration or licensing) within such jurisdiction for such purpose.
• This Presentation is not an offer of securities for sale in the United States of America ("United States"). The Company’s securities may not be offered or sold in the United States except pursuant to an exemption from, or transaction not subject to, the registration requirements of the United States Securities Act of 1933.
• This Presentation does not constitute an offer to the public for the sale of or subscription for, or an advertisement or the solicitation of an offer to buy and/or subscribe for, securities as defined in the South African Companies Act, 2008 as amended (the "Act") or otherwise, and will not be distributed to any person in South Africa in any manner which could be construed as an offer to the public in terms of the Act. Furthermore, this Presentation does not constitute an advertisement or a prospectus registered and/or issued under the Act.
• This Presentation is directed solely at (i) persons outside the United Kingdom of Great Britain and Northern Ireland, or (ii) persons with professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”), (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within article 49(2)(a) to (d) of the Order and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities of the Company or any member of its group may otherwise lawfully be communicated or caused to be communicated (all such persons in (i)-(iv) above being “relevant persons”). Any investment activity to which this Presentation relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this Presentation.
• This Presentation does not constitute or form part of, and should not be construed as, an advertisement, invitation, solicitation and/or offer to sell, issue, purchase or subscribe for, any shares and/or securities in the Company or any of its subsidiaries in any jurisdiction, or an inducement to enter into investment activity. No part of this Presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with the Presentation.
• The information contained herein has been prepared using information available to the Company at the time of preparation of the Presentation. External or other factors may have impacted on the business of the Company and the content of this Presentation, since its preparation. In addition all relevant information about the Company may not be included in this Presentation. The information in this Presentation has not been independently verified. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the information contained herein and no reliance should be placed on such information. Neither the Company, nor any of its advisers, connected persons or any other person accepts any liability for any loss howsoever arising, directly or indirectly, from this Presentation or its contents.
• This Presentation contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words “targets”, “believes”, “expects”, “aims”, “intends”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Forward-looking statements by their nature involve known and unknown risks, uncertainties, assumptions and other important factors because they relate to events and depend on circumstances that might occur in the future whether or not outside the control of the Company. Such factors may cause the Company’s actual results, performance or achievements to be materially different from future results, performance, developments or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future. Accordingly, no assurance is given that any such forward-looking statements will prove to have been correct. These forward-looking statements speak only as at the date of this Presentation. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based.
3
AGENDA
OPERATIONAL OVERVIEW &
OUTLOOKGROUP
OVERVIEWFINANCIAL
PERFORMANCE
STRATEGIC OVERVIEW &
GUIDANCE
4
1998ACQUIRED
LUCKY STAR BRAND
Turnover exceeded R1bn
2006BRIMSTONE AND OCEANA EMPOWERMENT TRUST
Improving our empowerment status
1994FIRST EMPOWERMENT TRANSACTION INITIATED With Real Africa Investments
2003ACQUIRED
DESERT DIAMOND
R60m modification enabling at-sea factory facilities
1947LISTED ON JSE
Remains Africa’s largest fishing company
OCEANA CENTENARY – THE MILESTONES
2015ACQUISITIVE GROWTH
Acquired Foodcorp’s fishing businesses and US based Daybrook
20182 DESALINATION PLANTS COMPLETED Effectively taking these sites off the grid
50%TOP MANAGEMENT BLACK
Level 1 B-BBEE
5
GROUP OVERVIEW
VESSELS PRODUCTION FACILITIES
STORAGE FACILITES
SPOTTER PLANES
12 121555
CUSTOMERS IN 46
COUNTRIES
INTERNATIONAL PROCUREMENT
FROM 6 COUNTRIES
5 255 EMPLOYEES
6
362%416c (2017: 90c)
DIVIDEND PER SHARE
PROFIT BEFORE TAX
32%R883m (2017: R667m)
2018 HIGHLIGHTS
12%8.8m cartons (2017: 7.9m)
CANNED FISH VOLUMES
803m2017: 735m
GULF MENHADEN CAUGHT
13%276 000 tons
(2017: 244 000 tons)
SALES VOLUMES
14%R7.7bn (2017: R6.8bn)
TURNOVER
2.0x2017: 2.4x
LEVERAGE RATIO
86%727.1c (2017: 391.9c)
HEPS
7
• Global fish oil prices
• Angola fish landings
• Namibian horse mackerel catch rates and fish size
• Lobster quota
• CCS underperformance
HEADWINDS
• Gulf Menhaden resource
• Canned fish volumes
• Cannery production efficiencies
• Foreign exchange – forward cover policy
• SA horse mackerel catch rates
• Hake vessel utilisation
• Strong European demand and pricing for hake/squid
• Squid catch rates
• US deferred tax
• Cash flow and headroom
• Working capital – frozen fish strategy
2018 PERFORMANCE SUMMARY
TAILWINDS
8
5 YEAR PERFORMANCE
2 222 2 437 3 465 3 141 3 489
2 548
3 478
4 542
3 667 4 244
2014 2015 2016 2017 2018
5 YEAR REVENUE (Rm)*
First half Second half
CAGR 11.9%
246 221 265 226
362
308 385
548
231
487
2014 2015 2016 2017 2018
5 YEAR HEADLINE EARNINGS (Rm)*
First half Second half
* Excludes Fries
CAGR 11.3%
9
AGENDA
OPERATIONAL OVERVIEW &
OUTLOOKGROUP
OVERVIEWFINANCIAL
PERFORMANCE
STRATEGIC OVERVIEW &
GUIDANCE
10
INCOME STATEMENT
Note : Headline earnings excluding deferred tax adjustment, fair value adjustment and other operating items R 661 871 (HEPS : 567.2 cents)
R'0002018
SEPTEMBER VAR2017
SEPTEMBER
Revenue 7 732 692 14% 6 807 927
Gross profit 2 908 876 19% 2 447 914
GP margin 37.6% 36.0%
Operating profit before forex movement 1 224 973 16% 1 057 766
Foreign exchange gain/(loss) 19 248 (60 940)
Operating profit after forex movement 1 244 221 25% 996 826
Operating profit after forex margin 16.1% 14.6%
Fair value adjustments (39 908) (243)
Share-based payments (9 959) (1 519)
Associate and joint venture (loss)/income (5 447) (186%) 6 364
Operating profit before other operating items 1 188 907 19% 1 001 428
Other operating items (14 091) (262%) 8 701
Operating profit 1 174 816 16% 1 010 129
Operating profit margin 15.2% 14.8%
Net interest (291 765) 15% (343 157)
Profit before taxation 883 051 32% 666 972
Taxation (810) 100% (187 622)
Profit after taxation 882 241 84% 479 350
Headline earnings 849 057 86% 457 309
HEPS (cents) 727.1 86% 391.9
11
FOREIGN EXCHANGE
11
12
13
14
15
16
Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18
AVERAGE FEC RATES
Current USD Rate 6 Month Ave FEC Rate
11
12
13
14
15
16
2017 2018
R/USD EXCHANGE RATE
Oct-16 Dec-16 Feb-17 Apri-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Sep-18
12
REVENUE
ACTUAL VS PRIOR YEAR (R’m)
8 007
9
834
374
6 808
213
697
15
7 733
6 000
6 200
6 400
6 600
6 800
7 000
7 200
7 400
7 600
7 800
8 000
8 200
September2016
Price Volumeeffect
Exchangerate
September2017
Price Volumeeffect
Exchangerate
September2018
Decrease Increase
13
OPERATING PROFIT
ACTUAL VS PRIOR YEAR (R’m)
997
201
20
59 5 27
1 244
600
700
800
900
1 000
1 100
1 200
1 300
September2017
Lucky Star Daybrook Horse mackerel andHake
Lobster andSquid
Commercial ColdStorage and
Logistics
September2018
Decrease Increase
14
FINANCIAL POSITION (KEY ITEMS)
R'0002018
SEPTEMBER2017
SEPTEMBER
Property, plant and equipment 1 586 626 1 604 099
Intangible assets 4 617 278 4 434 878
Other assets 481 223 454,617
Current assets 2 999 295 2 327 591
Net cash 769 060* 1 222 040
Total assets 10 453 482 10 043 225
Shareholders interest 4 625 348 3 664 692
Non-controlling interest 96 621 91 937
Long term loan 3 339 750 3 209 875
Other liabilities 2 391 763* 3 076 721
Total equity and liabilities 10 453 482 10 043 225
* Excludes R246 million restricted cash held in relation to BP oil settlement
Note: Closing exchange rate USD/ZAR R14.26 (2017: R13.58)
Decrease driven by: • R237m release of Daybrook deferred tax, due to a decline in US tax rate• Settlement of Westbank put option • Reclassification of short term loan post refinance
R210m exchange gain recognised on conversion of Daybrook intangibles
2018 2017
Africa R455m R473m
US $22m $55m
15
WORKING CAPITAL
8186
99
3934 38
45 48
38
75
72
99
-
20
40
60
80
100
120
-
10
20
30
40
50
60
70
80
90
100
2016 2017 2018
Inventory days Debtors days Creditors days Net working capital days
16
LONG TERM DEBT
• Refinanced R1.42bn SA debt and achieved improved pricing margins
• Hedged 100% of US debt
• Policy to hedge minimum 50% debt
• Average interest rate 7.2% (2017: 7.3%)‒ SA average interest rate 8.9% (2017:9.6%)
‒ US average interest rate 4.7% (2017: 4.1%)
44%
5%
51%
FIXED VS FLOATING
Fixed Caps Floating
56%
44%
SA VS US
SA USA
17
DIVIDEND
106 106 11290
112
271 259
357
304
0
50
100
150
200
250
300
350
400
450
500
2014 2015 2016 2017 2018
Interim Dividend Final Dividend
DIVIDEND PER SHARE (CENTS)
18
AGENDA
OPERATIONAL OVERVIEW &
OUTLOOKGROUP
OVERVIEWFINANCIAL
PERFORMANCE
STRATEGIC OVERVIEW &
GUIDANCE
19
CANNED FISH AND FISHMEAL AFRICA
20
CANNED FISH SALES2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
Volumes sold 16% 12%
Trended net realisation (R/ctn) 6% 1%
Margin improvement 4.2% 2.4%
Total cost per carton 11% 7%
2018 PERFORMANCE – CANNED FISH SALES
CANNED FISH AND FISHMEAL FINANCIAL OVERVIEW (R’000)
2017 SEPTEMBER
2018 SEPTEMBER VAR
Revenue 3 768 707 4 054 601 8%
Operating profit 282 497 483 645 71%
Operating profit margin 7% 12%
21
SALES VOLUMES
-
2 000
4 000
6 000
8 000
10 000
-
200
400
600
800
1 000
1 200
1 400
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2017 Monthly 2018 Monthly 2017 Cumulative 2018 Cumulative
SOUTH AFRICA SALES (CTNS’000)
22
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
2016 2017 2018
TOTAL CANNED FISH SALES VOLUMES - NORMALISED(CTNS’000)
4.9%
TOTAL SALES VOLUMES
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
2016 2017 2018
TOTAL CANNED FISH SALES VOLUMES(CTNS’000)
-16.1%
11.5%-5.8%
23
PROMOTIONAL AND MERCHANDISING SHIFT
• PROMOTIONAL FOCUS: COMBOS & MULTI-BUYS
• IN-STORE FOCUS: CROSS-MERCHANDISING
FORWARD SHARE
24
-10%
-5%
0%
5%
10%
15%
Oct
-20
17
No
v-2
01
7
De
c-2
01
7
Jan
-20
18
Feb
-20
18
Mar
-20
18
Ap
r-2
01
8
May
-20
18
Jun
-20
18
Jul-
20
18
Au
g-2
01
8
Sep
-20
18
12MM ROLLING PERCENTAGE VOLUME GROWTH LUCKY STAR VS BASKET
Lucky Star Total Growth Total Basket Total Growth
STRONG PERFORMANCE VS TOTAL FOOD
Copyright © 2018 ask'd cc Confidential and Proprietary
Lucky Star year end volume growth at 12.3% against a very sluggish food basket of 3.7%
25
2018 PERFORMANCE – CANNED FISH SUPPLY
CANNED FISH SUPPLY2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
Cartons produced 14% 14%
Daily throughput cartons/day 21% 10%
Man hours/carton 10% 13%
26
CANNED FISH SUPPLY
34%
11%12%
37%
55%
40%
29%
34%
48%
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
2016 2017 2018
Fresh and locally canned Frozen and locally canned Frozen canned internationally
SUPPLY (CTNS’000)
27
OUTLOOK - DEMAND
• Volume drivers
‒ Secure unconstrained pilchard supply
‒ Elevate brand and category status in protein segment
‒ Deliver consistent affordability
• Optimise portfolio – sardines
• New products
28
25 300
8 646
15 322
2 404
-
5 000
10 000
15 000
20 000
25 000
30 000
01
-Oct
08
-Oct
15
-Oct
22
-Oct
29
-Oct
05
-No
v
12
-No
v
19
-No
v
26
-No
v
03
-De
c
10
-De
c
17
-De
c
24
-De
c
31
-De
c
07
-Jan
14
-Jan
21
-Jan
28
-Jan
04
-Fe
b
11
-Fe
b
18
-Fe
b
25
-Fe
b
04
-Mar
11
-Mar
18
-Mar
25
-Mar
2016 2017 2018 2019
OUTLOOK - SUPPLY
SA LANDINGS
• Pilchard TAC 65 000 tons; industry catch expected to be 50% - 60% of the TAC
29
OUTLOOK - SUPPLY
CANNERY EFFICIENCIES
• Increase throughput by 20%
‒ Additional thawing capacity
‒ Onsite cold store to increase processing efficiency and reduce logistics costs
2017 2018 2019E
Fresh and locally canned Frozen and locally canned Frozen canned internationally
30
2018 PERFORMANCE – FMO (AFRICA)
FISHMEAL AND FISH OIL (AFRICA)2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
Volumes sold (tons) 11% 19%
Price (USD/mt) -9% 15%
Average fishmeal price vs Peru Index 4% 3%
Average Fish oil pricing vs Peru Index 10% 6%
31
148 523
180 709
135 861
-
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
200 000
FISH LANDINGS - AFRICA (TONS)
2016 2017 2018
Oct - Mar Jun Sep
FISHMEAL AND FISH OIL - AFRICA
SEP 16 SEP 17 SEP 18
Meal yield 24.1% 23.1% 22.3%
Oil yield 2.9% 4.9% 3.2%
Fishmeal sales (tons)
37,689 46,505 39,292
Fish oil (tons)
3,750 9,158 6,293
32
FISHMEAL AND FISH OIL PRICE - AFRICA
900
1 000
1 100
1 200
1 300
1 400
1 500
1 600
1 700
1 800
1 900
Oct
-16
No
v-1
6
De
c-1
6
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7
May
-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
De
c-1
7
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
FISHMEAL AND FISH OIL COMPARISON (USD/TON)
Fishmeal - Africa Fish oil - Africa
Reinstatement of Peru volumes
Increased supply created as a result of reduced grading of
human oil traded as feed grade oil
33
OUTLOOK
SOUTH AFRICA
• Landings in October positive and well ahead of prior periods
ANGOLA
• Concern about ability to catch volumes in the short term, resulting from
‒ Later start to the fishing season; current fishing has yielded negative results
‒ Unfavourable environmental/oceanographic conditions
• Likely that we will stop fishing for this season
34
OUTLOOK
PRODUCTION
• Continued focus on improving throughput and reducing bottlenecks (SHB 25% increase,
AP 33% increase)
• Changes in anti-oxidant requirements in EU will influence geographic sales strategy
• Continued to pursue cost efficiencies, particularly targeting 30% cost improvements on
supply chain
35
FISHMEAL AND FISH OIL US
36
2018 PERFORMANCE – FMO (US)
FISHMEAL AND FISH OIL (US)FINANCIAL OVERVIEW (R’000)
2017 SEPTEMBER
2018 SEPTEMBER VAR
Revenue 1 438 606 1 789 118 24%
Operating profit 376 921 396 499 5%
Operating profit margin 26% 22%
FISHMEAL AND FISH OIL (US)2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
Volume sold (MT) 11% 26%
Price - fishmeal (USD/MT) 4% 1%
Price - fish oil (USD/MT) 13% 8%
Volume caught and processed (season) 6% 9%
Average meal price vs Peru Index 1% 0%
Average oil price vs Peru Index 9% 3%
Plant downtime % 1% 0%
Plant throughput (MT/hour) 4% 7%
37
0%
5%
10%
15%
20%
25%
30%
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
2008 2009 2010 2011* 2012* 2013 2014 2015 2016 2017 2018
LANDINGS (‘000 FISH), FISHMEAL AND FISH OIL YIELD - 10 YEAR HISTORY
Landings Fishmeal Fish oil
FMO (US)
Ave 24.97%
Ave 11.09%
*BP oil spill
38
FMO (US)
900
1 000
1 100
1 200
1 300
1 400
1 500
1 600
1 700
1 800
1 900
Oct
-16
No
v-1
6
De
c-1
6
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7
May
-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
De
c-1
7
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
Fishmeal Fish oil
Increased supply created as a result of reduced grading of
human oil traded as feed grade oil
Reinstatement of Peru volumes
FISHMEAL AND FISH OIL COMPARISON (USD/TON)
39
OUTLOOK - FMO
BIOMASS/LANDINGS
• Early assessment of biomass indicates a healthy resource
• Westbank will target at a minimum similar landings to 2018
• Additional vessel being considered
MARKET PLACE
• Stock volumes lower than expectation due to poor catches in October 2018 (weather)
• Contracted market prices will contribute positively to H1 results compared to 2018
OPERATIONS
• Closed season period - focus is on capex and major maintenance– Expected to improve plant throughput and reduction in downtime
40
-
1 000
2 000
3 000
4 000
5 000
6 000
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
E
20
19
E
Other China,PR Peru
GLOBAL OUTLOOK – FMO SUPPLY
*IFFO Rome Oct 2018
-
200
400
600
800
1 000
1 200
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
E
Other China,PR Peru
WORLD FISHMEAL PRODUCTION X 1 000 TONS
WORLD FISH OIL PRODUCTION X 1 000 TONS
41
GLOBAL OUTLOOK – FMO SUPPLY
FISHMEALPERU
• Approximately 7% lower output expected for 2019
• 2nd Season quota 2018 anticipated between 2.0 to 2.5m MT (LY 1.4 million MT, 600 000 MT)
EU
• Scandinavian TAC’s for 2019 projected lower compared to 2018
CHINA AND ASIA
• Expected marginal increase in local supply for 2019 from Chinese fishmeal plants
• Increased output of trimming meal form Vietnam and Thailand expected
US
• Similar to 2018 levels
FISH OILPERU
• Further clarity required regarding EU regulatory requirements for fish oil processed for human
consumption will influence the pricing and amount of feed grade oil in the market
US
• Yield uptick expected
42
GLOBAL OUTLOOK – FMO DEMAND
FISHMEAL CHINA
• China expects 1.4m MT imports - similar to 2018 levels
• 27% Tariffs on USA imports to continue for 2019, more US product directed to other geographies
• Reduced demand from hog feed industry as a result of African swine fever (consumes 33% of imports)
• Anticipated increase in demand from aquaculture (consumes 58 % of imports)
ASIA
• Continued growth in shrimp industry for lower grade fishmeal
EU
• Anticipated increase demand with lower Scandinavian supply expected due to lower TAC’s
• Increase in demand for salmon feed in Scandinavia
US
• Continued increase for pet food
FISH OIL• Increase in demand due to lower forecasted supply
43
HORSE MACKEREL AND HAKE
44
2018 PERFORMANCE – HORSE MACKEREL AND HAKE
HORSE MACKEREL AND HAKEFINANCIAL OVERVIEW (R’000)
2017 SEPTEMBER
2018 SEPTEMBER VAR
Revenue 1 054 152 1 287 067 22%
Operating profit 199 979 259 394 30%
Operating profit margin 19% 20%
HORSE MACKEREL 2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
Volumes sold - SA 92% 33%
Volumes sold - Namibia 31% 14%
Fleet catch costs -SA 19% 17%
Fleet catch costs -Namibia 12% 5%
Sales price - SA 9% 20%
Sales price – Namibia 13% 4%
45
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
HORSE MACKEREL
SOUTH AFRICA LANDINGS (TONS)
2014 2015 2016 2017 2018
NAMIBIA LANDINGS (TONS)
46
HORSE MACKEREL
0%
-20%
-66%
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
-
10 000
20 000
30 000
40 000
50 000
60 000
2016 2017 2018
Own quota Contracted quota Quota usage fees price index
NAMIBIAN HORSE MACKEREL QUOTA (TONS)
47
OUTLOOK – HORSE MACKEREL
SOUTH AFRICA
• Positive landings continue
• Demand remains strong for larger SA horse mackerel in traditional west African countries
• Appeals on DAFF quota allocations still pending
NAMIBIA
• Sales prices are strong due to poor supply of horse mackerel by the entire Namibian sector
• New rights holders looking to contract 2nd allocations
• Awaiting results of the 2018 rights renewal process – originally expected end December
48
2018 PERFORMANCE – HAKE
HAKE 2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
Volumes sold (tons) 6% 5%
Sales price (Euro per kg) 9% 1%
Fleet catch costs (per kg) 6% 3%
Fleet utilisation (%) 1% 7%
49
PRICING - HAKE
RAND AND EURO PRICING (PER KG)O
ct-1
6
No
v-1
6
De
c-1
6
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7
May
-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
De
c-1
7
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Rand Euro
50
OUTLOOK - HAKE
• Improved size mix
• European and local demand remains strong with a general shortage of white fish in the market
51
LOBSTER AND SQUID
52
2018 PERFORMANCE – LOBSTER AND SQUID
LOBSTER AND SQUIDFINANCIAL OVERVIEW (R’000)
2017 SEPTEMBER
2018 SEPTEMBER VAR
Revenue 144 907 180 510 24%
Operating profit 38 160 32 871 5%
Operating profit margin 26% 18%
LOBSTER AND SQUID 2018 KEY PERFORMANCE INDICATORS
2017 SEPTEMBER
2018 SEPTEMBER
LOBSTER
Volume sold (tons) 0% 10%
Price (USD/kg) 7% 24%
SQUID
Volume sold (tons) 5% 22%
Price (Euro/kg) 18% 3%
53
OUTLOOK – LOBSTER AND SQUID
SQUID
• Supply outlook remains positive, demand strong
LOBSTER
• TAC 2018/2019 reduced by 43%
• Rationalisation programme and alternatives being considered
54
COMMERCIAL COLD STORAGE
55
2018 PERFORMANCE - CCS
COMMERCIAL COLD STORAGEFINANCIAL OVERVIEW (R’000)
2017 SEPTEMBER
2018 SEPTEMBER VAR
Revenue 401 554 421 396 5%
Operating profit 99 269 71 813 -28%
Operating profit margin 25% 17%
2018 KEY PERFORMANCE INDICATORS2017
SEPTEMBER2018
SEPTEMBER
Revenue occupancy 24% 3%
Total overheads per pallet 18% 10%
56
COMMERCIAL COLD STORAGE
-
20 000
40 000
60 000
80 000
100 000
September2017
Frozen fish Coastal Inland September2018
Increase Decrease
OPERATING PROFT (R’000)
Midrand 1 vacant and
loss of City Deep customer
57
OUTLOOK - COMMERCIAL COLD STORAGE
GAUTENG• Capacity reduction negotiation ongoing
COASTAL• Evaluating expansion at flagship site
• Demand strong
ANGOLA / NAMIBIA• Challenging fishing conditions and increased competition in Walvis Bay impacting on occupancy
levels
• Lease expires in November 2018 - tender process delayed
• Expect to deliver on continued high occupancy levels in Angola
LEADERSHIP TEAM• Executive Director Operations commenced September 2018
• New Finance Director commences role 1 December 2018
58
AGENDA
OPERATIONAL OVERVIEW &
OUTLOOKGROUP
OVERVIEWFINANCIAL
PERFORMANCE
STRATEGIC OVERVIEW &
GUIDANCE
59
• Exchange rate - import frozen fish
• Lobster TAC
• Hake and horse mackerel refits
• Angola fishmeal
HEADWINDS
• Exchange rate - exports
• Canned fish - volumes
– 1 December price increase (talls)
• Cannery efficiencies
• US and South African fishmeal volumes
• Firm pricing for hake, horse mackerel and squid
• Overheads well managed
• Working capital
GUIDANCE H1
TAILWINDS
Note: Awaiting outcome of 2018 Namibian horse mackerel rights renewal process
60
HEADLINE EARNINGS
269
226 202
161
-
50
100
150
200
250
300
350
400
H1: 2016 H1: 2017 H1: 2018
Headline earnings Deferred tax and other
Targeting improvement on
normalised earnings
61
STRATEGIC DRIVERS
• Protecting and optimising the group’s existing African quota businesses
• Delivering organic growth, by further growing the company’s core businesses
• Increasing geographic and species diversification through acquisition
• Energising the Oceana workforce, and developing the depth and breadth of the
leadership team
62
THANK YOU
