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An F&B leader embarking ona transformational growth story
Agthia Group
April 2021
Strictly Confidential 2
Disclaimer
The information provided by Agthia Group PJSC (“we,” “us” or “our”) is for general informational purposes only. All information is provided in good faith; however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information.
Under no circumstance shall we have any liability to you for any loss in business or profits or damage of any kind incurred as a result of the use of such information or reliance on the information provided.
Your usage and reliance on any information is solely at your own risk, and we assume no responsibility of any kind whatsoever, towards the consequences from the usage of such information by you.
Strictly Confidential 3
Today’s Presenters
Alan SmithChief Executive Officer
Ammar Al GhoulChief Financial Officer
Mubarak Al MansooriChief Human Capital &
Corporate Services Officer
Ahmad Yahya
Executive VP – Growth & Categories
Sahar Srour
Investor Relations Manager
Mujtaba Hussain
Senior VP – Mergers & Acquisitions
Today’s Agenda
Agthia Group Today
Agthia’s 2025 Strategy:
Accelerating Growth
Financial Performance
Agthia: A journey to becoming a regional F&B leader by 2025
Strictly Confidential
Agthia Group Today
Strictly Confidential 6
Product mix
1 Including exports 2 Agthia alone (excluding Al Foah & Al Faysal); EBITDA adjusted for one-off provision of AED 82MN
Manufacturing
AED 2.06BN+ 2020
Revenues2
Brands Distribution reach
AED 251MN 2020
EBITDA2
Footprint1 Workforce
12% EBITDA Margin 2020
Profitability2
30+ countries
11 sites
2.3MN Tons
4.2K FTEs
210k+ customers
Water FlourFeed
Juices DairySauces
19 brands
Agthia Group at a glance
Strictly Confidential 7
Our History: Over 40-year establishment built on a proud heritage
Government-owned and managed company Publicly-listed company
1978 1990 2005 2007 2009 2012 2016 2018
1981 2004 2006 2008 2010 2015
2019
2017
HH Sheikh Zayed Bin Sultan Al Nahyan establishes Flour Mills and Animal Feed Company
Animal feed production starts
Al Ain Mineral
Company is established
Privatization of the Company and
establishment of Agthia
Agthia is listed on the ADX
Appointment of new management team
Acquisition of Ice Crystal in the UAE
Acquisition of Al Ain Vegetable
Egypt Tomato Paste & Frozen Vegetables
greenfield operation starts
Production and distribution agreement
with Yoplait
Acquisition of water company (Alpin) in Turkey
Acquisition of Al Bayan and distribution
agreement with Al Foah
Acquisition of Delta Water in KSA,
production of Al Ain in Kuwait and launch of Al
Ain Zero
JV with Anderson Hay in
the UAE
Launch of Al Ain Vitamin D and Bambini, R&D
partnership with Nutreco, and
opening of a water production plant in
Kuwait
Launch of Al Ain Zero
Bromate, Al Ain Bag in
Box and Flour Vit D
2020
Launch of Al Ain Plant Bottle and Yoplait Grass-Fed
Yoghurt, appointment of new Board and leadership team, acquisition of Al Foah (UAE)
and Al Faysal Bakery & Sweets (Kuwait)
2021
Acquisition of Nabil Foods
(Jordan) and Atyab (Egypt)
Strictly Confidential 8
A diversified product portfolio…
Consumer Business Division Agri Business Division
Water & Beverages Food
Leadership position in the region
Diversified product portfolio with high-quality brands
International footprint encompassing 30+ countries
Innovation supporting healthy lifestyles
#1 e-commerce player in the water space
Incumbent brands with market leader position
Commitment to innovation to continuously expand product portfolio
Presence across all channels, inc. B2B and B2C
Flour Animal Feed
Supplier of choice to large commercial farms
Strictly Confidential 9
… and a regional geographic footprint
# of manufacturing facilities
Strictly Confidential 10
71%
29%
Segmental Overview
Consumer Business Division Agri Business Division
Water & Beverages Food Flour Animal Feed
55%
2020 Revenue
2020 EBITDA1
2020 Revenue 2020 EBITDA1 2020 Revenue 2020 EBITDA1 2020 Revenue 2020 EBITDA1 2020 Revenue 2020 EBITDA1
49% 49%51% 51%
2 Adjusted for one-off provisions of AED 82MN
2020 Revenue
45%2020 EBITDA1 50% 50%
91%
9%
Strictly Confidential 11
617
648
Agthia has a solid base to expand upon
1,866
2,061
318
251
Resilient financial performance despite headwinds
Market leadership across all base products
Share, volume %
Rank, by volume1
Bottled water
27%1
Feed 44%1
Flour (B2C)
30%2
Revenues2
AED’MN
Gross profit2,3,4
AED’MN
EBITDA2,4
AED’MN
+1% p.a.
+2% p.a.
-AED67MN
1 In the UAE only 2 Agthia standalone; adjusted for one-off provisions of AED 82MN 3 2020 gross profit adjusted for one-off inventory provision of AED 7MN 4 Resilience post significant subsidy reduction since 2015 (lost subsidies of AED 246MN)
2015 2020
Innovation leadership and sustainability role-modeling
Agthia’s 2025 Strategy:Accelerating Growth
Strictly Confidential
Strictly Confidential 13
Our Long-Term Ambition
Becoming a regional F&B
leader by 2025
From…
Commoditized portfolio
Stable financial performance
Local organization mindset
UAE centric
To…
Value-add F&B brands
Superior shareholder returns
Consumer-centric& performance-driven
Footprint MENAP & beyond
Strictly Confidential 14
Three strategic pillars to deliver on the vision
Strictly Confidential 14
Growth
Pursue disciplined expansion plan focused on M&A
1Efficiency
Protect the corebusiness and get leaner
2Capability
Ensure our organization is set-up to deliver our strategy
3
Strictly Confidential 15
Invest in growth Targeted & accretive M&A Dividends Disciplined leverage
DEPLOYING CAPITAL FOR PROFITABLE GROWTH RETURNING CAPITAL TO SHAREHOLDERS
• Focus on margin expansion & top-line acceleration
• Increase investments in brand building
• Prudent investment in CAPEX
• Ongoing commitment to robust dividend distribution
• Strong payout vs peers
• Prioritize growth markets and high potential categories
• Focused consistent strategic rationale
• Capture efficiency & scale-up synergies post-integration
• Proactively manage our Net Debt / EBITDA position
• Maintain flexibility for targeted M&A financing
Agthia’s long-term capital allocation principles
01
Growth
Strictly Confidential 16
Strictly Confidential 17
Agthia’s Approach to Disciplined M&A
Expanding into attractive categories & markets….
… to create value by accelerating profitable growth
Geographic Expansion:
• Large MENAP markets for proximity & scale
• Countries with (a) strong macroeconomic fundamentals; (b) growing consumption patterns; and (c) political stability
Category Expansion:
• Branded F&B categories with supporting platforms to gain scale
• Category tailwinds driven by favorable consumer demographics and trends
• World-class category expertise in Agthia’s top team
• Enhance and harmonize performance management to allow for effective oversight and capital allocation
• Inject capital to rapidly scale high ROI businesses
• Reinforce cost discipline to maintain price competitiveness & ability to invest in the market
• Strengthen innovation & RGM capabilities by leveraging category expertise and functional CoE
• Build and acquire master brands that are market leaders in their respective categories
• Capture cost and revenue synergies over time through selective integration, cross-selling and regional brand portfolio
Strictly Confidential 18
A funnel approach to prioritizing the geographic expansion
Some of the geographical filtering criteria include:
Tier 1 countries include:Market Size
Demand & Supply Fundamentals
Availability of Acquisition Targets
Competitive Landscape
Regulatory Framework
Valuations
Strictly Confidential 19
A funnel approach to prioritizing the category expansion
Snacking
Other Convenience FoodsPlant-based Food
Protein
Categories of focus include:
Some of the category filtering criteria include:
Market Size
Growth Potential
Consumer Proposition / Value Added Concept
Master Brand Potential
Size of Opportunity
Competitive Landscape
Replicable Model
Strictly Confidential 20
A clear framework to identify M&A targets
Investment
Criteria
Market Leading (Top 3) Player
Value Accretive for Shareholders
Trusted Brands
Experienced Management Teams
21
Accelerating Agthia’s growth By 2025:
Strengthen our base
❑ Re-energize the water category
❑ Protect Flour and Feed categories
❑ Shift portfolio mix towards higher margin categories
Expand beyond
❑ Disciplined M&A
❑ Focus on MENAP and priority categories
❑ Additional EBITDA margin expansion through scale-up (international, cross-channel)
Upscale priority markets
Expand into value-add categories
Drive EBITDA margin expansion by at least 100bps p.a.
Strictly Confidential 21
Strictly Confidential 22
Delivering on our disciplined M&A strategy
Announcement Oct 2020 Dec 2020 Jan 2021 April 2021
CategoriesDates & derivatives,
confectionary
Bakery snacking Frozen & chilled processed
Protein products
Frozen & chilled processed
Protein products
FootprintInternational with strong focus on GCC & Asia
Kuwait mainly Jordan 50%, GCC 33%, Other exports 17%
Egypt
Revenues ~AED 440MN ~AED 90MN ~AED 360MN ~AED 425MN
Profitability ~16% EBITDA margin ~24% EBITDA margin ~17% EBITDA margin ~19% EBITDA margin
RationaleScale, category (superfood), brands
Brand, market scale New category, Brand, Scale Scale, Brands
Value creationSynergies, premiumization, diversification
Synergies, capabilities, wider customer base
Synergies, diversification, route to market
Synergies, diversification, growing market share, institutionalization
Strictly Confidential 2323
Higher EBITDA1
margin categories:- Bakery (Al Faysal): 24%
- Protein (Atyab): 19%
- Protein (Nabil): 17%
- Dates (Al Foah): 16%
Benchmark: >15%
Lower EBITDA1
margin categories:- Existing businesses: 12%
Benchmark: <15%
TODAY AMBITION
1 2020 EBITDA, adjusted for one-off debt provision of AED82MN 2 Including announced acquisitions: Al Foah, Al Faysal, Nabil and Atyab
Transition to consumer value-add portfolio
28%72%
PROFORMA(including acquisitions2)
<25%
>75%
Larger & more diversified
revenue base
Shifting towards higher-margin categories
Strictly Confidential 23
55%Narrower
legacy revenue
base
45%
02
Efficiency
Strictly Confidential 24
Y-o-Y cost savings, AED’MN
Agthia has a proven track record of cost optimization
SG&A reduction
Design to Value optimization
Distribution efficiency
Cost reduction programs 2015-2020
1 Excluding DME
X % of SG&A1
22
259
27
48
81
41
40
2015 2016 2017 2018 2019 2020 Total
7% 8%7% 11% 18% 8%
Strictly Confidential 25
7% 7% 11% 18% 8% 8%
Our efficiency effort focus going forward:
− Existing businesses
− Acquired businesses
ii. Business Simplification
i. Synergies Extraction
• Commercial excellence (channel ubiquity, e-com, home delivery)
• World-class procurement, manufacturing and supply chain
• Working Capital excellence
• Strategic partnerships (distribution, manufacturing)
• Operational optimization
• Rationalize non-strategic/loss making SKUs
• Streamline suppliers & specifications
• Divest non-scalable assets
Expected impact
TARGET OF AED 200MN PRODUCTIVITY IMPROVEMENT BY 2025
Strictly Confidential 26
+
Capability
03
Strictly Confidential 27
Strictly Confidential 28
Leveraging capability to define our competitive advantage
People
• Blending senior leadership experience (over 150 years in FMCG) with a strong brand portfolio
• Targeted talent acquisition with a clear focus on category management expertise
• Strengthened employee proposition, making Agthia an employer of choice
Organization
• BU led, with empowered accountable leaders
• Right sized organization, with central functional and CoE leadership
• Standardised and digitalizedperformance management system for effective oversight and capital allocation
• Transformation Office to drive change
Culture & know-how
• Distinctive in RGM embedded locally through CoE’s and leveraged across markets (e.g. regional master brands)
• Leading the way on Innovation andSustainability to meet or exceed rapidly changing consumer expectations
• Cost conscious, allowing re-investment in growth
• E-commerce and direct to consumer expertise ahead of peers
Strictly Confidential 29
Experienced Board of Directors
Current role
Other notable experience
Khamis Bu HarounBoard Member
Gil AdoteviBoard Member
Salmeen Obaid AlameriVice Chairman
Khalifah Al SuwaidiChairman of the Board
Group Chief Investment Officer -ADQ
Chief Executive Officer –Al Dahra UAE Division
Investment Director -ADQ
Chairman –Abu Dhabi National Takaful Co.
Gianluca FabbriBoard Member
Saifuddin RupawalaBoard Member
Khalaf Al HammadiBoard Member
Current role
Other notable experience
Group Chief Financial Officer -Al Dahra
Chief Executive Officer -Lulu Group International
General Director of AD Retirement Pensions and Benefits Fund
Strictly Confidential 30
Leadership Team
Previous notable experience
Current role
Alan SmithChief Executive Officer
Ammar Al-GhoulChief Financial Officer
Mubarak Al MansooriChief Human Capital and Corporate Services Officer
Ramy MerdanChief Operating Officer
Dr. Rabih KamlehChief R&D and QA Officer
Ahmad YahyaExecutive VP – Growth &
Categories
Previous notable experience
Current role
Declan BennettExecutive VP – Food and
Feed
Mohamed ItaniExecutive VP – International
Business
Mujtaba HussainSenior VP – Mergers &
Acquisitions
Khalid MansourSenior VP – B2C Commercial
UAE (Sales)
Fabio CattaneoSenior VP – Transformation
Total experience
Total experience
27 Years 22 Years 20 Years 28 Years 22 Years 28 Years
32 Years 24 Years 11 Years 31 Years 20 Years
Strictly Confidential 31
Sustainability & innovation at the forefront of our strategy
Sustainability agenda that adopts ESG standards across all operations
Achieved AED100MN in cost savings over the last 5 years
35% of our packaging is made from recycled materials
99% of our packaging is recyclable
Reduced our usage by 1,500 tons of paper per year and 1,200 tons of plastic
1
2
Increased SKUs in flour from 3 to 26 which protected us post-subsidy
Product innovation in line with UAE’s health and wellness agenda (e.g., Al Ain zero sodium water, lactose free yogurt, Vita D water, etc.)
❑ Moving from a linear economy to a circular economy
❑ Continuously optimizing the packaging design to reduce CO2
footprint and create value for shareholders
❑ Significant cost savings achieved
❑ Evolving in line with changing consumer trends towards health and wellness
❑ Partnering with innovation labs UAEU, AUB, Nutreco, and house of patents in Europe
Product innovation is accelerating our topline growth
99%
100%
Strictly Confidential
Financial Performance
Strictly Confidential 33
Historical financial performanceRevenueAED’MN
Agthia standalone Pro-forma (incl. Al Foah, Al Faysal, Nabil Foods and Atyab)
64%Growth vs. standalone 92%Growth vs. standalone
1 Adjusted for one-offs 2 Calculated as (Free Cash Flow / EBITDA)
Margin
100%Growth vs. standalone Margin 109%Growth vs. standalone EBITDA Conversion2
Net Income1
AED’MN
EBITDA1
AED’MN
Free Cash Flow1
AED’MN
1,866 2,012 2,048 2,001 2,039 2,061
2015 2016 2017 2018 2019 2020
2.0%
318 356
313 316 285
251
2015 2016 2017 2018 2019 2020
17% 18% 15% 16% 14% 12%
231 254
206 210
160
117
2015 2016 2017 2018 2019 2020
12% 13% 10% 11% 8% 6%
(18)
318
(131)
389
199
123
2015 2016 2017 2018 2019 2020
n.m. 89% n.m. 123% 70% 49%
3,371
2020
481
2020
14%
234
2020
7%
257
2020
53%
Strictly Confidential 34
Strong balance sheet provides support to fuel growth
2020 reported cash balance
AED776MN
Solid balance sheet2020 Net Debt / (Net Cash) position over EBITDA
2020 reported net cash position
AED239MN
Average cost of debt funding
~1.5%(1.0x)
1.0x
2.4x
Agthia Agthia (Pro-forma)* Median of Peers
1 After accounting for Debt portion raised to acquire Al Faysal, Nabil and Atyab
Strictly Confidential 35
We have already made big strides toward achieving our targets2020 RevenueAED’MN
2020 Net Income1
AED’MN
2020 EBITDA1
AED’MN
61% 13% 3% 11%
` % contribution
52% 14% 4% 13%
50% 18% 4% 11% Normalization adjustments AED'MN
One-off IFRS bad debt provisions2 58.1
Capri Sun inventory & machinery write-off3 9.5
CSD accounting adjustment 7.7
Net inventory provisions 7.2
Total adjustments 82.5
1 Al Foah, Al Faysal Bakery and Nabil Foods figures normalized for non-recurring items 2 Customer-wise evaluation in compliance with IFRS and Company policy, such customers (long overdue balances) were deemed impaired hence the need to be provided for 3 Write-offs related to the discontinuance of Capri Sun production
13% 16%
16%
Strictly Confidential 36
Shareholder returns at the core of our decision-making…Dividends per Share1
AED
Dividend payout ratio2
Dividend Yield%
2020 Total Shareholder Returns1,3
1 2020 DPS recommended by the Board on 8th of March 2021; subject to shareholder’s approval 2 Based on normalized EPS 3Calculated as (share price on 31-Dec-2020 – share price on 01-Jan-2020 + DPS distributed in 2021) / share price on 01-Jan-2020
22.6%+23%
0.125
0.15 0.15 0.15 0.15 0.165
2015 2016 2017 2018 2019 2020
32% 35% 44% 43% 66% 102%
1.6%
2.1%
3.1% 3.0%
4.2%3.9%
2015 2016 2017 2018 2019 2020
Dividend distribution policy for the year 2021 onward to be on a semi-annual basis
Strictly Confidential 37
0
1
2
3
4
5
6
7
8
Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21
AE
D/s
ha
re
Daily Volume (mn) Agthia Price
… and are expected to continue increasing in light of recent share price performance
Appointment of new Board & new
CFO
Appointment of new CEO
Announcement of acquisition with Al
Foah
Announcement of acquisition of Al
Faysal Bakery
Announcement of acquisition of Nabil Foods
1 As of 12-April-2021
AED 0.6MN
Average daily traded value (AED’MN)
+2,343%
AED 15.2MN
+89%
Announcement of acquisition of
Atyab
Strictly Confidential 38
Financial framework and targets
Enhance profitability through emphasis on higher margin product categories & high growth geographies
Continued focus on maximizing cost efficiencies and capturing synergies
Increase cash flow generation
Optimize capital structure
Place shareholder returns at the forefront of our decision-making
High Growth
Leverage
Dividends
• Continue with acquisitive strategy across geographies and product categories
• Maintain sustainable leverage levels and a solid balance sheet
• Continue regular distribution of dividends
Guidance
Strictly Confidential
Agthia:A journey to becoming a
regional F&B leader by 2025
Strictly Confidential 40
Agthia: A journey to becoming a regional F&B leader by 2025
Optimize our product portfolio mix
Build market leadership positions and master brands across the region
Adopt a best-in-class ESG framework
Deliver shareholder returns in line with global standards
Maintain a principled capital allocation framework
For all inquiries and questions concerning investor relations, please contact:
Sahar Srour, CFAInvestor Relations ManagerT: +971 2 596 0672E : [email protected]
Thank You