Annual Results Presentation for the 12 months ended 30 September - - PowerPoint PPT Presentation

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Annual Results Presentation for the 12 months ended 30 September - - PowerPoint PPT Presentation

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Annual Results Presentation for the 12 months ended 30 September 2019 AGENDA Business Overview Page 3 / Slide 3 Operational Overview Page 5 / Slide 8 Industry Matters Page 14 / Slide 26 Financial Overview Page 16 / Slide 29

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SLIDE 1

Annual Results Presentation

for the 12 months ended 30 September 2019

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SLIDE 2

2

  • Business Overview

Page 3 / Slide 3

  • Operational Overview

Page 5 / Slide 8

  • Industry Matters

Page 14 / Slide 26

  • Financial Overview

Page 16 / Slide 29

  • Outlook

Page 22 / Slide 41

  • Additional Information

Page 24 / Slide 45

2

AGENDA

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SLIDE 3

BUSINESS OVERVIEW

Chris Schutte

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SLIDE 4

SALIENT POINTS

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4

  • Feed input costs increased markedly on higher maize prices, due

to a smaller maize crop following poor crop yields for 2019

  • Poultry production efficiencies were maintained in line with

projections

  • Poultry selling prices decreased for the period under review,

leading to an under recovery on higher input costs

  • Extraordinary cost increases associated with; load shedding,

violent industrial action in KwaZulu-Natal, and the newly legislated national minimum wage

  • Water supply interruptions to Astral’s processing plant in

Standerton resulted in a significant cost, impacting profitability for the period under review

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SLIDE 5

KEY FINANCIAL INDICATORS

5

  • Revenue
  • Profit before interest and tax
  • Earnings per share @ 1 659 cps
  • Headline earnings per share @ 1 674 cps
  • Total dividend for the year @ 900 cps

55%

55% 55%

56%

4%

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SLIDE 6

6

DIVISIONAL OVERVIEW

Poultry

  • Feeding cost increased
  • Bird performance improvement
  • Broiler sales volumes up
  • Broiler sales realisations down
  • Extraordinary cost impacts

Feed

  • Raw material costs up
  • Less internal feed required
  • External sales volumes down
  • Expenses well controlled
  • Improved Rand per ton margin

Other Africa

  • Lower profits – weaker performances from Mozambique and Zambia

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SLIDE 7

1 942 882

500 1 000 1 500 2 000 2 500 PBIT F2018 Raw material cost Feed conversion efficiency Broiler sales volumes Broiler selling prices Extraordinary expenses Other PBIT F2019

7

THE YEAR IN PERSPECTIVE

(R million)

R1 060 million

569 26 258 203 349 223

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SLIDE 8

Andy Crocker

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SLIDE 9

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FEED DIVISION

Operating profit - R million

  • Operating profit up 7.2%
  • Net margin 7.4% F2018: 7.4%
  • Expenses well controlled
  • Rand per ton margin up

Revenue - R million

  • Revenue up 6.1%
  • Raw material costs up
  • Average selling prices up 9.7%
  • Sales volumes down 3.3%

6 198 6 574

  • 1 000

2 000 3 000 4 000 5 000 6 000 7 000 F2018 F2019 457 489

  • 50

100 150 200 250 300 350 400 450 500 F2018 F2019 Busi Busine ness ss Overvi view Ope peration

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SLIDE 10

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FEED DIVISION

  • SAFEX yellow maize prices increased markedly for the period under

review F2019 avg. R2 638 per ton (F2018: R2 098) up R540 per ton y-o-y

  • Internal feed sales decreased by 3.0% due to improved broiler feed

conversion rates, coupled with broiler production cutbacks

  • External feed sales decreased by 3.7% as livestock sectors came under

pressure from higher feed costs and producers moved for lower feed prices

  • Expenses were well contained to an increase of 5.9% across the division

for the period under review

  • The average net margin increased (on a Rand per ton basis) for the period

under review

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SLIDE 11

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FEED DIVISION – SALES MIX

60% 6% 22% 12% 60% 5% 21% 14% F2018 1 410 283 Tons F2019 1 364 233 Tons

Volume decrease ≈ 3.3%

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SLIDE 12

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SAFEX YELLOW MAIZE PRICE

Source: CJA Strategic Risk Brokers

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SLIDE 13

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DURBAN SOYA MEAL PRICE

Source: CJA Strategic Risk Brokers

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SLIDE 14

Commercial

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SLIDE 15

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POULTRY DIVISION - CONSOLIDATED

Operating profit - R million

  • Operating profit down 74.5%
  • Broiler feed price up 7.7%
  • Net margin 3.4% F2018: 13.7%

Revenue - R million

  • Total revenue up 2.6%
  • Broiler sales volumes up 2.6%
  • Broiler sales realisations down 2.0%
  • Breeder revenue up R237 million

10 604 10 877

  • 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000 F2018 F2019 1 453 371

  • 100

200 300 400 500 600 700 800 900 1 000 1 100 1 200 1 300 1 400 1 500 F2018 F2019 Busi Busine ness ss Overvi view Ope peration

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SLIDE 16

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POULTRY DIVISION - COMMERCIAL

  • Profits for the period under review declined significantly on the comparable

year

  • Broiler selling prices decreased on subdued consumer demand and

deeper promotional activity in the market, leading to an under recovery of higher input costs

  • Broiler slaughter numbers at an average of 5 million birds per week were

marginally down by 0.8% year-on-year

  • Broiler sales volumes up with sales realisations decreasing on the

comparable period

  • Inflationary expense increases were exacerbated by the impact of load

shedding nationally, water supply interruptions in Standerton and the newly legislated minimum wage

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SLIDE 17

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POULTRY DIVISION – PRODUCT MIX

49% 3% 4% 14% 7% 23% F2018 437 506 Tons 51% 3% 5% 12% 7% 22% F2019 448 944 Tons

Volume increase ≈ 2.6%

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SLIDE 18

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BROILER SELLING PRICE

Source: Own Data

80% 90% 100% 110% 120% 130% 140% 150% Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-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 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19

Broiler selling price index Six month average

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Lower brine effect Bird flu impact

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SLIDE 19
  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40%

Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-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 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19

% Change in broiler feed price % Change in broiler selling price 19

CHANGE IN BROILER SELLING PRICE vs. FEED PRICE

Source: Own Data

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SLIDE 20

Agriculture Gary Arnold

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SLIDE 21

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POULTRY DIVISION - AGRICULTURE

  • Sales increased on higher demand for parent stock, hatching eggs and

broiler day-old chicks

  • Feed input costs increased due to higher raw material costs adversely

affecting the live bird production cost

  • Strike action in KwaZulu-Natal at National Chicks and Mountain Valley

impacted profitability during the period under review

  • Parent breeder productions were good, with an improvement in the

number of chicks per hen housed

  • Further improvements in on-farm broiler production efficiencies,

assisted broiler live cost through an improved feed conversion rate

  • Highly pathogenic bird flu still prevalent in wild birds and ostriches,

however no confirmed cases in commercial poultry since May 2018

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SLIDE 22

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BROILER PRODUCTION PERFORMANCE

94% 96% 98% 100% 102% 104% 106% 108% F2015 F2016 F2017 F2018 F2019

Slaughter age Live weight Average daily gain

Key indicators base-lined to 100% in F2015

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SLIDE 23

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BROILER PRODUCTION PERFORMANCE

80% 85% 90% 95% 100% 105% 110% 115% 120% 125% F2015 F2016 F2017 F2018 F2019

Mortality Feed consumption Performance efficiency factor

Key indicators base-lined to 100% in F2015

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SLIDE 24
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SLIDE 25

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OTHER AFRICA DIVISION (Zambia, Mozambique & Swaziland)

Operating profit - R million

  • Operating profit down 31.3%
  • Net margin 4.6% F2018: 7.8%
  • Mozambique provision for

non-recovery of various taxes Revenue - R million

  • Revenue up 16.8%
  • Sales volumes up 8.3%
  • Average selling prices up 7.8%

411 480

  • 50

100 150 200 250 300 350 400 450 500 F2018 F2019 32 22

  • 5

10 15 20 25 30 35 F2018 F2019 Busi Busine ness ss Overvi view Ope peration

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SLIDE 26

INDUSTRY MATTERS

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SLIDE 27

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POULTRY IMPORTS PER MONTH

Tons

Source: South African Poultry Association

5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 55000 60000 65000 70000 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-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 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19

Total poultry imports 6 per. Mov. Avg. (Total poultry imports)

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SLIDE 28

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  • SAPA was restructured last year and is working effectively, and membership of

the broiler organisation is approximately 73% (of local weekly broiler production numbers)

  • Based on industry statistics current broiler slaughter numbers are an average
  • f 19.3 million birds per week
  • For the period under review the industry has remained stable with no

consolidation or divestment

  • Imports during the period averaged 44 882 tons per month (F2018: 48 305

tons), equalling approximately 30% of total consumption

  • The industry awaits a decision on the application for an increase in the ad

valorem import tariff on bone-in and boneless cuts of chicken

  • Engagement with both the DTI and DAFF at a Ministerial level has improved

markedly, with recent talks leading to the finalisation of the Poultry Sector Master Plan (Slide 62 / Page 32)

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INDUSTRY OVERVIEW

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SLIDE 29

FINANCIAL OVERVIEW

Daan Ferreira

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SLIDE 30

30 Year ended 30 September 2019 R million 2018 R million Revenue 13 485 12 979 Operating profit 882 1 942 Operating profit margin 6.5% 15.0% Net finance income 30 52 Profit before tax 913 1 994 Tax (265) (560) Profit for the period 648 1 434 Headline earnings 650 1 439 EPS – Cents 1 659 3 691 HEPS – Cents 1 674 3 712 4% 55% 55% 55% 55% 55% % change 54%

INCOME STATEMENT

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SLIDE 31

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GROUP ANNUAL REVENUE

(R billion)

1,3 1,7 2,2 2,3 3,3 3,6 4,4 4,6 5,1 5,0 5,3 5,8 6,0 7,0 8,7 9,1 9,9 10,6 10,9 2,0 2,7 2,7 2,7 2,5 2,7 3,5 5,1 4,0 3,6 3,5 4,3 4,9 5,5 6,2 7,2 6,6 6,2 6,6 2,8 3,7 3,9 4,1 4,8 5,2 6,3 6,9 7,4 7,0 7,2 8,2 8,5 9,6 11,3 12,0 12,4 13,0 13,5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Poultry Feed Other Africa External revenue

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SLIDE 32

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GROUP ANNUAL OPERATING PROFIT

(R million)

124 90 174 238 383 494 476 163 282 262 353 137

  • 112

104 661 59 638 1453 371 79 130 153 151 214 272 333 385 261 281 282 289 329 354 423 485 391 457 489 203 220 328 389 597 766 809 548 581 585 674 477 262 493 1101 549 1086 1942 882

7,3% 5,9% 8,3% 9,6% 12,3% 14,8% 12,8% 6,7% 6,6% 8,4% 9,3% 5,8% 3,1% 5,1% 9,8% 4,6% 8,7% 15,0% 6,5% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Poultry Feed Other Africa Profit on Sale of Investment

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SLIDE 33

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GROUP SIX MONTHLY OPERATING PROFIT

(R million)

140

  • 3
  • 117

5 45 59 351 310 194

  • 135

22 616 836 617 258 113 154 135 156 173 157 197 186 237 233 252 184 207 191 266 239 250 324 153 59 203 213 280 550 551 429 120 212 875 1044 898 503 379 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19

Poultry Feed Other Africa Change in feed price Change in broiler selling price

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SLIDE 34

34 September 2019 R million September 2018 R million % change Non-current assets 2 658 2 409 Net working capital 1 288 1 189 Current assets (excl. cash) 2 982 2 943 Current liabilities (excl. borrowings) (1 694) (1 754) Non-current liabilities (excl. borrowings) (705) (650) Net assets 3 241 2 948 Net (surplus cash) (555) (789) Equity 3 796 3 737 Total 3 241 2 948

BALANCE SHEET

8% 1% 3% 8% 10% 10% 2% 10% 30%

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SLIDE 35

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CAPITAL EXPENDITURE

Year ended 30 September 2019 R million 2018 R million Depreciation and amortization 176 152 Total capex spend and capitalised 432 356 Festive expansion 185 Standerton silo complex 41 Other capex 206 Advance capex payments net 225 2 657 358 Outstanding commitments 537 Festive expansion 435 Standerton silo complex 11 Goldi RO water treatment plant 50 Other capex 41 Total spend and committed 1 194 358

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SLIDE 36

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CAPITAL EXPENDITURE - F2019

R million Festive expansion (including advance payments) 440 Meadow Standerton silo upgrade 41 Processing plant equipment upgrades 36 Broiler farm refurbishments 50 HPAI mitigation 8 Listeria mitigation 5 Major replacements 37 Other: normal on-going capex 40 Total 657

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SLIDE 37

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WORKING CAPITAL

September 2019 R million September 2018 R million Variance R million Current assets 2 982 2 943 39 Biological assets 759 770 (11) Inventory - Poultry 337 532 (195)

  • Feed

291 255 36

  • Other Africa

63 50 13 Trade receivables 1 152 1 204 (52) Receivables – investment sold 16 16

  • Advance capex payments

256 31 225 Other receivables 108 85 23 Current liabilities (1 694) (1 754) 60 Trade payables (1 349) (1 324) (25) Other payables (345) (430) 85 Net working capital 1 288 1 189 99

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SLIDE 38

38

STATEMENT OF CASH FLOWS

For the twelve months ended 30 September 2019 R million 2018 R million Cash operating profit 936 2 156 Working capital movement 257 (425) 1 193 1 731 Tax paid (214) (516) Net interest received 36 58 Capital expenditure (657) (358) 358 915 Dividends paid (594) (729) Other cash flow items 4 45 Movement in cash equivalents (232) 231 Effect of exchange rate changes (2) 6 Opening balance 789 552 Closing balance 555 789

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SLIDE 39

39

HEADLINE EARNINGS & DIVIDEND PER SHARE

272 326 487 631 958 1 286 1 381 840 890 960 1 148 787 434 864 2 016 965 1 914 3 712 1 674 90 108 168 230 380 585 700 700 700 760 810 656 222 440 1 150 490 1 055 2 050 900 F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017 F2018 F2019

Headline earnings per share Dividend per share

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SLIDE 40

40

  • Group profits down (-55%)
  • Net cash outflow (R232 million)
  • High final F2018 dividend paid
  • F2018 incentives paid
  • Increased capital expenditure
  • Surplus cash at F2019 year end (R555 million)
  • Still in good position to fund committed outflows
  • Geared balance sheet not foreseen

IN SUMMARY

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SLIDE 41

OUTLOOK

Chris Schutte

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SLIDE 42

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POTENTIAL NEGATIVE INFLUENCES

  • Raw material prices will remain high, and continue to impact Astral’s largest

input cost into 1H2020, namely feed making up 66% of broiler live cost

  • Continued record level of unemployment, poor levels of economic growth and

the weak purchasing power of the consumer, will continue to place pressure on poultry selling prices

  • High levels of poultry imports from Brazil and the USA are expected to

continue in the absence of adequate tariff measures

  • Infrastructure deterioration and its impact on Astral’s operations continues to

add a cost burden to the business

  • The on-going risk of bird flu is continuously monitored, and prevention

strategies are in place to manage this threat

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SLIDE 43

43

POTENTIAL POSITIVE INFLUENCES

  • Higher planting intentions for maize acreage, together with improved

prospects for seasonal rainfall could see an above average crop for the 2020 harvest season

  • Proactive engagement from the new Ministers of DTI and DAFF with the

poultry industry, is expected in line with the Poultry Sector Master Plan

  • Progressive genetic improvement of the Ross broiler breed will continue to

support the group’s best cost strategy

  • The expansion in Astral’s poultry production capacity (an estimated 16%

increase in current production levels) over the next two to five years at a total approved capital expenditure of R0.9 billion

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SLIDE 44

“ ”

Confirmed August 2019

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SLIDE 45

ADDITIONAL INFORMATION

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SLIDE 46

46

KEY FINANCIAL RATIOS

37 36 48 48 51 65 55 31 31 30 34 23 12 20 41 19 36 61 24 31 33 39 39 46 49 45 25 26 26 29 21 13 19 36 16 28 42 17 8,9 7,5 10,0 11,4 13,9 16,5 14,5 9,3 9,3 9,9 11,0 7,4 4,5 6,5 11,1 5,8 9,9 16,1 7,8 7,3 5,9 8,3 9,6 12,3 14,8 12,8 8,0 7,8 8,4 9,3 5,8 3,1 5,1 9,8 4,6 8,7 15,0 6,5 5,5 5,5 6,1 4,7 4,1 4,4 4,3 4,7 4,8 3,6 3,7 4,0 3,8 3,9 4,2 4,1 4,1 4,1 3,7

5 10 15 20 25 30 10 20 30 40 50 60 70 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19

RONA ROE EBITDA margin PBIT margin Asset turn

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SLIDE 47

47

KEY FINANCIAL INDICATORS

8,53 10,79 14,34 17,36 23,83 28,28 33,47 34,24 35,38 37,43 41,36 41,65 44,16 49,95 61,05 61,07 78,00 96,06 97,45 23 20 21 29 17 9 19 12 15 11 10 16 21 18 24 34 24 34 27 26 22 21 12 14 14 9 3 7 15 9 2 10

10 20 30 40 50 60 70 80 90 100 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19

NAV share Working capital days Net Debt / Equity

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SLIDE 48

48

SAFEX YELLOW MAIZE PRICE vs. CBOT IN RAND TERMS

Source: CJA Strategic Risk Brokers

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SLIDE 49

49

WORLD CORN ENDING STOCKS

Million Tons

19,82% 25,00% 27,80% 26,22% 27,79% 23,52% 23,38% 23,00%

10% 15% 20% 25% 30% 25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 2014 2015 2016 2017 2018 2019 2020E 2021F

End Stock Maize stock to use ratio

Source: CJA Strategic Risk Brokers

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SLIDE 50

50

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20E 2020/21F Actual Actual Actual Actual Actual Estimate Forecast Carry In (1 May) 589 2 074 2 471 1 093 3 689 2 662 1 744 Crop Estimate 14 250 9 955 7 779 16 820 12 510 11 081 13 785 Retentions 433 163 309 1 191 495 526 640 Sagis Delivery 13 817 9 794 7 469 15 629 11 984 10 555 13 144 Minus early deliveries 450 Imports 65 1 964 2 237 172 400 Total Supply 14 471 13 831 11 727 16 722 15 845 13 617 14 888 Domestic Usage Food 4 840 4 698 4 808 4 993 5 161 5 396 5 260 Domestic Usage Feed 5 041 5 520 5 004 5 276 5 508 5 410 5 600 Gristing, withdrawn & released 376 293 278 313 239 186 216 Total Domestic Usage 10 257 10 512 10 090 10 583 10 907 10 993 11 076 Exports & Sundries 2 153 848 993 2 451 2 276 880 1 900 Plus early deliveries 450 Carry Out (30 Apr) 2 062 2 471 1 093 3 689 2 662 1 744 1 912 No of days usage 73 86 40 127 89 58 63 STU 16,62% 21,75% 9,87% 28.31% 20,19% 14,69% 14,73%

Marketing year (May to April) '000 tons

Source: CJA Strategic Risk Brokers

SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND

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SLIDE 51

2 062 2 471 1 093 3 689 2 662 1 744 1 912 16,62% 21,75% 9,87% 28,31% 20,19% 14,69% 14,73%

0% 5% 10% 15% 20% 25% 30% 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20E 2020/21F

Carry out Maize stock to use ratio 51

Source: CJA Strategic Risk Brokers

SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND

‘000 Tons

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SLIDE 52

52

Source: International Research Institute for Climate and Society (IRI) – Columbia University

EL NIÑO SOUTHERN OSCILLATION - FORECAST

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SLIDE 53

53

Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI)

VHI of previous year VHI of current year SOUTHERN AFRICA - VEGETATIVE HEALTH INDEX

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SLIDE 54

54

BROILER FEED – INGREDIENT INCLUSION & COST CONTRIBUTION

Source: Own Data

65,0 45,7 63,3 43,6 61,4 39,6 61,1 38,0 55,6 29,8 54,3 26,7 53,4 28,6 54,1 31,0

11,4 14,9 15,6 20,3 16,8 22,3 14,0 18,6 14,0 17,9 13,2 17,9 13,8 18,4 15,5 18,6 9,1 8,6 6,4 5,6 6,9 5,4 6,2 4,0 6,1 3,3 5,7 4,1 4,9 4,2 4,6 4,0 6,4 14,9 6,7 14,0 7,3 17,2 7,8 18,8 8,6 21,5 9,1 21,3 8,6 20,1 8,2 17,4 0,2 0,9 0,4 1,2 0,5 1,7 0,4 1,5 0,5 1,7 0,7 2,3 0,7 2,2 0,7 2,3

7,5 10,3 7,3 10,3 6,6 9,1 9,9 13,8 14,6 19,8 16,6 22,2 18,2 23,4 16,6 21,2

0,3 4,7 0,3 5,0 0,4 4,7 0,5 5,4 0,5 6,0 0,4 5,4 0,4 3,0 0,3 5,3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1H16 Incl. 1H16 Contr. 2H16 Incl. 2H16 Contr. 1H17 Incl. 1H17 Contr. 2H17 Incl. 2H17 Contr. 1H18 Incl. 1H18 Contr. 2H18 Incl. 2H18 Contr. 1H19 Incl. 1H19 Contr. 2H19 Incl. 2H19 Contr.

Maize Soybean Meal Sunflower Meal Other Fish Meal F/Fat and Extr Soy Vitamins, Minerals and Medication.

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BROILER PRICE vs. FOOD PRICE INFLATION

Source: Own Data & CJA Strategic Risk Brokers

90% 100% 110% 120% 130% 140% 150% 90% 100% 110% 120% 130% 140% 150% Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-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 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19

Broiler selling price index SA food price index

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Source: SAPA, FNB, Red Meat Industry Forum

SOUTH AFRICAN PROTEIN PRICE COMPARISON

Chicken Pork Beef Mutton Feed Conversion Rate 1.5 2.2 5.5 5.0 Per Capita Consumption 39,5 kg 5,1 kg 17,0 kg 3,0 kg

cents / kg

1000 2000 3000 4000 5000 6000 7000 8000 9000 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19

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Source: Own Estimates

LOCAL BROILER PRODUCTION & MARKET SHARE

Local broiler production ≈ 19.3 million birds per week

26% 20% 8% 7% 8% 5% 5% 21% Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other

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Source: Own Estimates

LOCAL BROILER PRODUCTION & MARKET SHARE

18% 14% 6% 5% 6% 4% 3% 15% 29%

Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Imports

  • Avg. poultry imports ≈ 8 million birds per week

(12 months ending September 2019)

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Source: SAPA

TOTAL POULTRY IMPORTS (CHICKEN, MDM, TURKEY)

F2018 46 348 45 875 48 600 47 242 40 230 52 807 46 651 47 085 37 800 48 816 61 751 56 456 F2019 45 061 44 571 37 739 35 174 42 094 45 987 51 672 51 728 54 587 46 436 47 237 36 299 % Var

  • 2,8
  • 2,8
  • 22,3
  • 25,6

4,6

  • 12,9

10,8 9,9 44,4

  • 4,9
  • 23,5
  • 35,7

bpw* 8,0 7,9 6,7 6,2 7,5 8,2 9,2 9,2 9,7 8,2 8,4 6,4

*bpw ≈ million birds per week

Tons

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep F2016 37 789 83 258 126 866 165 602 200 461 258 134 306 385 360 899 414 947 460 098 502 138 551 209 F2017 50 324 101 279 135 812 173 187 212 399 278 057 319 933 367 106 409 557 453 981 499 952 551 867 F2018 46 348 92 223 140 823 188 065 228 295 281 102 327 753 374 838 412 638 461 454 523 205 579 661 F2019 45 061 89 632 127 371 162 545 204 639 250 626 302 298 354 026 408 613 455 049 502 286 538 585

100 000 200 000 300 000 400 000 500 000 600 000 F2016 F2017 F2018 F2019

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Source: SAPA

TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN

Brazil 61,5% EU 12,6% Argentina 5,9% US 16,1% Other 3,9%

Country of origin for poultry imports - 2018

566 210 tons 411 235 tons

Brazil 50,0% EU 23,3% US 16,4% Argentina 6,5% Thailand 1,9% Other 1,9%

Country of origin for poultry imports - 2019 YTD (Sept)

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Source: SAPA

TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN

Country Imports (tons) 2017 2018 2019 YTD Brazil 337 476 348 155 205 820 United States Poland 87 059 72 91 374 13 463 67 388 39 241 Argentina 32 816 33 278 26 833 Ireland 24 746 26 328 23 146 Denmark 16 884 25 672 19 591 Spain 11 138 4 932 13 228 Thailand 4 019 9 011 7 709 Canada 14 431 7 305 4 909 Chile 1 770 4 362 1 948 Australia 984 553 761 Germany 134 222 230 United Kingdom 1 366 231 224 Uruguay 50 359 52 Netherlands 112 323 48 Belgium 23 451 23 27 Swaziland 24 482 23 Other 344 137 58 Grand Total 556 877 566 210 411 235

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POULTRY SECTOR MASTER PLAN

  • The master plan sets a number of targets to be met by 2023 and was signed by

all relevant stakeholders on 6 November 2019

  • Investment pledges (future and underway) topping R1.5 billion in expanding

processing capacity, with a further R1.7 billion in expanding broiler production capacity on farm have been tabled by the industry

  • The 5 pillars of the master plan set out actions which cover the following;
  • The expansion of local industry capacity and ensuring that that locally produced

product makes up an increasingly larger proportion of consumption over time

  • The containment of imports and trade measures to protect the local industry from

unfair trade

  • Stimulating an increase in the consumption of locally produced chicken meat
  • Driving the export of raw and cooked chicken products
  • Enhancing the regulatory framework and ensuring compliance for imported

poultry, and

  • Transformation initiatives across the industry value chain
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SLIDE 63

Chris Schutte Chief Executive Officer Tel : +27 (0) 12 667 5468 Fax : +27 (0) 86 504 2002 email: Chris.Schutte@astralfoods.com

www.astralfoods.com

Daan Ferreira Chief Financial Officer Tel : +27 (0) 12 667 5468 Fax : +27 (0) 86 504 1602 email: Daan.Ferreira@astralfoods.com