Earnings Presentation Q3 2017 www.savola.com
DISCLAIMER This presentation contains forward-looking statements which may be identified by the use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Savola Group (Savola or Group), its subsidiaries and its affiliates (the “Companies”) referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements of the Companies, could thus differ materially from those projected in any such forward-looking statements. The Companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. The Q3 2017 numbers are based on interim unaudited financials. 2
GROUP – HIGHLIGHTS • In Q3 2017, the Group reported a net profit of SAR 829 million; with adjusted net profit of SAR 135.1 million after deducting the capital gain of SAR 693.9 million from the sale of 2% of Almarai shares. • Savola’s retail segment recorded a net loss of SAR 218.8 million for the quarter. The turnaround is ongoing; the business has maintained the negative working capital position and cash flow from operations is positive. • Within the food segment, revenues continue to be stable and the segment recorded a net profit of SAR 105.7 million for the quarter. Operationally, Egypt continues to be challenging due to the economic conditions. • Herfy recorded a net income of SAR 56 million for the quarter, a decline of 5.5% compared to the same quarter last year. • Almarai continues to perform well with a profit of SAR 667 million in Q3, translating into SAR 241.4 million net income contribution to the Group. 3
Q3 2017 - SNAPSHOT » Q3 2017 revenue of SAR 5.7 bn (Q3 2016: SAR 6.2 bn) » Q3 2017 net income SAR 829 mn (Q3 2016: SAR 179.5 mn) GROUP » Adjusted net income of SAR 135.1 mn after gain of sale of Almarai shares » Q3 2017 revenue of SAR 2.7 bn (Q3 2016: SAR 3.2 bn) RETAIL » Q3 2017 net loss of SAR 218.8 mn (Q3 2016: Net loss of SAR 142.4 mn) » Q3 2017 revenue of SAR 2.7 bn (Q3 2016: 2.7 bn) FOODS » Q3 2017 net income of SAR 105.7 mn (Q3 2016: SAR 101.2 mn) » Q3 2017 revenue of SAR 311.7 mn (Q3 2016: SAR 315.2 mn) HERFY » Q3 2017 net income of SAR 56 mn (Q3 2016: SAR 59.3 mn) INVESTMENTS » Almarai recorded quarterly net income of SAR 667 mn 4
GROUP – CONSOLIDATED FINANCIAL SNAPSHOT Adjusted Gross Net Revenue EBIT Net Profit Income Income SAR Mn Q3 5,663 1,042 280 829 135.1 2017 -8.0% vs. LY -11.9% vs. LY -20.9% vs. LY +361.8% vs. LY -24.7% vs. LY YTD 18,208 3,222 712 1,063 316 2017 -7.7% vs. LY -15.0% vs. LY -38.2% vs. LY +92.5% vs. LY -44.8% vs. LY 5
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS Growth Margin SAR Mn YoY Sales YTD Sales -8% -8% -6% -9% 19,717 18,208 7,141 6,154 6,711 5,663 6,422 5,833 Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 YoY Gross Profit YTD Gross Profit -15% -14% -12% -18% 3,788 3,222 1,333 1,273 1,183 1,140 1,042 1,040 Q1 2016 Q1 2017 Q2 2016 Q2 2017 YTD 2016 YTD 2017 Q3 2016 Q3 2017 19.8% 17.8% 18.7% 17.0% 19.2% 18.4% 19.2% 17.7% 6 Note: the figures presented in the charts are rounded
GROUP – CONSOLIDATED FINANCIAL HIGHLIGHTS Growth Margin SAR Mn YoY EBITDA YTD EBITDA -24% -36% -35% +5% 1,683 1,284 683 512 512 488 440 332 Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 8.0% 5.7% 9.6% 6.6% 7.9% 9.0% 8.5% 7.1% YoY Net Profit YTD Net Profit +93% +362% -10% -96% 1,063 829 254 552 229 119 5 180 Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 1.9% 0.1% 3.6% 3.4% 2.9% 14.6% 2.8% 5.8% 7 Note: the figures presented in the charts are rounded
GROUP – CONSOLIDATED REVENUE MIX, NET DEBT & CAPEX SAR Bn Revenue by Business Net Debt YTD 2016 YTD 2017 -18% SAR 19.7 Bn SAR 18.2 Bn 4.4% 4.6% 8,035 Foods 43.9% 6,603 47.7% Retail 47.7% 51.8% Food Services Sep/16 Sep/17 Revenue by Geography CAPEX YTD 2017 YTD 2016 -68% SAR 18.2 Bn SAR 19.7 Bn 8.4% 7.5% KSA 9.6% 11.1% 1,132 Egypt 8.7% 8.8% Iran Others 357 73.3% 72.6% YTD 2016 YTD 2017 8
513 IMPLICATIONS OF EXCEPTIONAL ITEMS YTD 2016 SAR Mn reported NI 39 IFRS Adjustment 552 YTD 2016 IFRS Adjusted YTD 2016 Net Income adjusted NI Share of 20 associate ’ s liability 91 SFC FX impact 134 USD sourcing SFC Pandati store 24 closures cost 7 Panda Egypt losses Panda inventory 36 adjustments 865 YTD 2016 Adjusted NI 1,063 YTD 2017 reported NI Adjusted YTD 2017 Net Income 25 Dilution Gain on USCE -63% Capital Gain on Sale 62 of Hyper Panda UAE Share of impairment 34 loss from an associate 694 Gain on Sale of Marai Shares 316 YTD 2017 Adjusted NI 9
PANDA RETAIL COMPANY
RETAIL – HIGHLIGHTS • The transformation exercise initiated last year is ongoing with several initiatives running concurrently. • Six Pandati stores and three supermarkets closed in Q3 2017. Total retail selling space decreased by -0.06% in Q3 2017 from Dec 2016 • LFL sales dropped owing mainly to a reduction in basket size across both hypermarket and supermarket formats. This is mainly attributable to a consumer preference to buy promotional items. • Reported net loss for Q3 2017 for Retail was SAR 219 million, compared to SAR 142 million last year. 11
RETAIL - SNAPSHOT Gross Adjusted Selling Revenue Net Loss Profit Net Loss Space SAR m Q3 2,708 558 (219) (219) Reduced by 2017 6,791 m 2 -14.7% vs. LY -15.0% vs. LY Q3 2016 : (142) Q3 2016 : (142) YTD 8,818 1,673 (608) (670) Total Space 752,303 m 2 2017 -14.6% vs. LY -21.6% vs. LY YTD 2016: (268) YTD 2016: (268) 12
RETAIL – FINANCIAL HIGHLIGHTS Growth Margin SAR Mn YoY Sales YTD Sales -15% -13% -17% -15% 10,320 8,818 3,874 3,389 3,271 3,175 2,708 2,721 Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 YoY Gross Profit YTD Gross Profit -22% -29% -20% -15% 2,133 741 735 1,673 656 586 558 529 Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 22.7% 19.5% 19.0% 17.3% 20.7% 20.6% 20.7% 19.0% 13 Note: the figures presented in the charts are rounded
RETAIL – FINANCIAL HIGHLIGHTS Margin SAR Mn YoY EBITDA YTD EBITDA 115 99 40 (18) (84) (75) (106) (245) Q3 2016 Q3 2017 Q1 2016 Q1 2017 Q2 2016 Q2 2017 YTD 2016 YTD 2017 3.0% -3.1% 1.0% -3.1% -0.6% -2.8% 1.1% -2.8% YoY Net Profit YTD Net Profit (32) (94) (268) (142) (160) (219) (230) (608) Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 -1.0% -8.4% -2.4% -4.7% -4.5% -8.1% -2.6% -6.9% 14 Note: the figures presented in the charts are rounded
RETAIL – NUMBER OF STORES BY QUARTER Hyper Super Hyper 4 in 1 KSA Egypt 1 Egypt KSA Egypt UAE 163 162 Hyper Hyper Hyper 2 (3) 66 67 1 (1) 1 Dec Q1 Q2 Q3 Closures YTD Dec Q1 Q2 Q3 Closures YTD ’ 17 ’17 ’17 ’17 ’17 ’17 ’17 ’17 2016 2016 Total Pandati Total Selling Area Selling Area 752,784 m 2 752,303 m 2 (YTD Decline: -0.1%) 410 404 181 175 2 3 1 (7) (11) Dec Q1 Q2 Q3 Closures YTD Dec Q1 Q2 Q3 Closures YTD ’ 17 ’17 ’17 ’ 17 ’17 ’ 17 ’17 ’17 2016 2016 15
SAVOLA FOODS
FOODS – HIGHLIGHTS • Q3 2017 total revenue of SAR 2.71 billion is 0.2% below Q3 2016 revenue of SAR 2.72 billion while YTD September 2017 revenue was 8.8 billion vs. YTD September 2016 revenue of 8.7 billion (+0.8%) • Total volume of 2,535 k MT 0.8% below September YTD 2016 attributed to the following: • Oil volumes increased by 1.9% • Sugar volumes decreased by 3.1% • Pasta volumes decreased by 3.1% • Reported net income for Q3 2017 for Food was SAR 106 million. 17
FOODS - SNAPSHOT Adjusted Gross Net Revenue EBIT Net Profit Income Income SAR m Q3 188 106 2,712 397 106 2017 -0.2% vs. LY -8.0% vs. LY -8.5% vs. LY +4.5% vs. LY +4.5% vs. LY YTD 8,812 1,303 641 409 393 2017 +0.8% vs. LY -7.0% vs. LY -9.0% vs. LY +16.6% vs. LY +12.2% vs. LY 18
FOODS – FINANCIAL HIGHLIGHTS Growth Margin SAR Mn YoY Sales YTD Sales +1% +1% +1% -0.2% 8,745 8,812 3,146 3,103 2,925 2,954 2,717 2,712 Q2 2016 Q2 2017 Q1 2016 Q1 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 YoY Gross Profit YTD Gross Profit -7% -8% -5% -8% 1,401 1,303 523 481 447 425 432 397 Q1 2016 Q1 2017 Q2 2016 Q2 2017 Q3 2016 Q3 2017 YTD 2016 YTD 2017 15.3% 14.4% 16.9% 15.3% 15.9% 14.6% 16.0% 14.8% 19 Note: the figures presented in the charts are rounded
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