JAPFA LTD Investor Presentation 3Q2019 Financial Results Agenda 1 - PowerPoint PPT Presentation

JAPFA LTD Investor Presentation 3Q2019 Financial Results

Agenda 1 Group Overview 2 Key Highlights 3Q2019 Financial and Operational Analysis 3 4 Other Financial Highlights 5 African Swine Fever in Vietnam Update 6 Appendix: Segment Information and Other Information 1

GROUP OVERVIEW

Group Overview  Established in 1975  5 animal protein businesses in Feeding Emerging Asia 5 countries  Japfa Ltd’s market capitalisation: approx US$607 million 1  FY2018 revenue: US$3.5 billion 3 1 As at 30 September 2019

Leading Pan-Asian Industrialised Agri-Food Company WHY WE DO IT WHAT WE DO WHERE WE ARE 3 billion people living We produce quality We employ over in our target markets protein staples, dairy, 38,000 people across and packaged food that Singapore, Indonesia, More than 40% of the nourish millions of Vietnam, Myanmar, world’s total people India and China population A leading pan-Asian, industrialised agri-food company dedicated to feeding emerging Asia with essential proteins 4

Vertically Integrated Business Across Entire Value Chain Five Proteins | Five Countries ANIMAL PROTEIN – PT JAPFA TBK ANIMAL PROTEIN – OTHER DAIRY Indonesia Vietnam | Myanmar | India China | Indonesia Vertically Integrated Business Model UPSTREAM ANIMAL FEED PRODUCTION Poultry Feed Cattle Feed Aquaculture Feed Poultry Feed Swine Feed Cattle Feed BREEDING FARMS Poultry Breeding Beef Cattle Breeding Aquaculture Breeding Poultry Breeding Swine Breeding Dairy Cattle Breeding MIDSTREAM MILKING & FATTENING Poultry Commercial Beef Feedlots Aquaculture Commercial Poultry Commercial Swine Dairy Milking FARMS Farming Farming Farming Fattening CONSUMER FOOD DOWNSTREAM Indonesia PROCESSING & DISTRIBUTION Branded Consumer Foods Branded Dairy Products Notes: • Five Proteins refers to Poultry, Beef, Aquaculture, Swine and Dairy. 5 • Five Countries refers to Indonesia, Vietnam, Myanmar, India and China.

Japfa’s Core Competencies Industrialized approach to farming and food production CORE COMPETENCIES FEED UPSTREAM Vertically Integrated Business Model Enjoys economies LARGE SCALE ANIMAL FEED of scale and an • Ability to manage mega-scale farming operations; over PRODUCTION established network 38,000 employees across five countries • Scale of the Group’s animal feed business provides stability to group revenue and profitability BREEDING TECHNOLOGY • JVs with leading genetics companies (Aviagen and Hypor) FARMS LIVESTOCK for superior breeds and genetics FARMING • Advanced feed technology Strong livestock • Combined with best farm management practices MIDSTREAM farming experience MILKING & and expertise ANIMAL HEALTH FATTENING • Best in class bio-security using stringent operating FARMS procedures • In-house vaccine production firm PT Vaksindo STANDARDISATION AND REPLICATION BRANDED • Replication of best practices and infrastructure design across CONSUMER DOWNSTREAM FOODS five protein groups and five countries PROCESSING & • Replication of farm design model in dairy farms, DOC DISTRIBUTION Future growth breeding farms, feedmills, etc driver 6

Japfa’s Emerging Asia: Market Growth GDP US$ trillion 25 Europe North America & 1.3% Japfa Emerging Asia Canada US$22.0t 7.0% 20 2.2% US$14.1t US$19.2t 15 Rest of Asia 2.7% South America & US$14.0t Carribean 10 -0.4% Japfa operates in the major high growth markets of US$5.4t Emerging Asia (Indonesia, China, 5 Vietnam, India & Myanmar) Africa Oceania 3.5% High potential for protein 2.7% US$2.4t consumption growth US$1.6t 0 -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% GDP CAGR 2011 – 2017 Circle size is a diagrammatic reflection of 2017 population *”Rest of Asia” refers to Asian countries excluding Japfa’s *All percentages (%) above refers to 2011- 2017 GDP CAGR Emerging Asia countries 7 *GDP US$ trillion in each circle shows the 2017 GDP constant US$ value *Source: World Bank Data

KEY HIGHLIGHTS

Key Highlights for 3Q2019 • Revenue improved y-o-y on the back of higher animal feed sales volumes in main geographies • Operating profit supported by steady contribution of the Dairy segment counterbalancing the impact of low Average Selling Prices (ASPs) for both Indonesia Poultry and Vietnam Swine • Despite challenging market conditions in two core business segments, Japfa delivered a robust EBITDA as a result of its diversified and vertically-integrated business model Operating Profit Margin Revenue Operating Profit 5.1% US$952.2 million US$48.1 million -4.3ppt y-o-y +8.5% y-o-y -41.7% y-o-y Core PATMI w/o Forex EBITDA PATMI US$87.8 million US$9.6 million US$11.8 million -22.0% y-o-y -32.5% y-o-y -58.8% y-o-y Animal feed Imbalance in Vietnam impacted Dairy profitability business broiler demand by lower ASPs driven by higher remains a and supply in due to African raw milk prices stable pillar of Indonesia Swine Fever in China (“ASF”) profitability affected profitability • We define “ EBITDA ” as profit before tax from continuing operations, excluding interest income, finance costs, depreciation and amortisation expenses, and also excluding changes in fair value of biological assets and derivatives, which relate to foreign exchange hedging and foreign exchange adjustment gains/(losses). • We derived “Core PATMI” from “Profit Attributable to Owners of the Parent, Net of Tax” by excluding changes in fair value of biological assets (net of tax) and derivatives, and by excluding extraordinary items 9 attributable to owners of the parent. • “Core PATMI w/o Forex” is an estimate derived from Core PATMI by excluding foreign exchange gains/losses (before tax) attributable to the owners of the parent. We have not made an estimate of the tax impact on foreign exchange gains/losses. This is because the majority of the gains/losses are unrealised and arise from the translation of USD bonds in PT Japfa Tbk and USD loans in Dairy, which have no tax implication

3Q2019 Group Financials Revenue Operating Profit EBITDA PATMI Core PATMI w/o Forex US$ million US$ million US$ million US$ million US$ million +8.5% y-o-y 952.2 877.4 -41.7% y-o-y -22.0% y-o-y -32.5% y-o-y -58.8% y-o-y 112.6 87.8 82.4 28.6 48.1 14.3 11.8 9.6 3Q2018 3Q2019 3Q2018 3Q2019 3Q2018 3Q2019 3Q2018 3Q2019 3Q2018 3Q2019 Revenue improved year-on-year but profitability weakened mainly due to Animal Protein – PT Japfa Tbk (“PT Japfa Tbk ”) and Animal Protein – Other (“APO”) segments  Revenue increase driven by volume growth in poultry feed and swine feed in Animal Protein segments and higher sales volumes in Dairy segment  Profitability impacted by weaker performance of two core pillars in challenging market conditions, which was partly offset by the strong contribution of Dairy pillar o PT Japfa Tbk: Profitability dropped mainly due to low broiler ASPs as oversupply persists o APO : Profitability dropped mainly due to low swine fattening ASPs in Vietnam o Dairy : Profitability improved mainly attributed to the higher raw milk prices in China  Despite lower profitability, the Group still recorded a healthy EBITDA of US$87.8 million for the quarter 10

CORE PATMI w/o FOREX ROLLING BASIS

Rolling Core PATMI w/o Forex For The Group Rolling Core PATMI w/o Forex (US$ million) 148.0 133.8 130.2 121.9 116.8 112.5 99.6 91.0 88.3 88.2 74.2 71.7 68.5 68.3 58.2 57.4 54.3 4Q2018 38.4 36.7 1Q2019 51.9 15.7 2Q2019 42.0 38.4 33.4 27.9 28.3 28.6 26.6 20.7 17.6 18.9 16.9 15.6 13.6 3Q2019 12.1 11.8 9.4 7.3 3.4 -7.1 Dec'14 Mar'15 Jun'15 Sept'15 Dec'15 Mar'16 Jun'16 Sept'16 Dec'16 Mar'17 Jun'17 Sept'17 Dec'17 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 Note: The bar chart shown above comprises the Group’s segments (PT Japfa Tbk, Animal Protein Other, Dairy and Consumer Food) plus its 12 central purchasing subsidiary, headquarter costs and elimination adjustments between segments.

Rolling Core PATMI w/o Forex For The Core Pillars 1 2 2 2,3 4 17.0 16.4 15.8 5.6 58.1 26.7 56.4 17.2 26.7 24.7 9.7 51.2 28.2 15.0 55.4 41.0 13.8 23.1 36.7 14.2 45.8 16.6 37.6 33.3 23.4 21.5 16.7 17.4 15.6 6.8 61.4 12.3 19.3 22.2 74.2 38.4 13.7 27.3 22.7 19.9 27.1 25.7 28.8 31.2 22.2 32.1 30.1 7.1 85.0 80.0 78.0 77.4 74.2 36.1 72.7 72.1 70.4 29.1 28.5 59.0 57.0 53.1 38.9 46.2 43.2 42.5 34.5 35.2 19.3 19.7 18.4 3.7 -5.1 -10.5 -22.7 -30.3 -34.4 Dec'14 Mar'15 Jun'15 Sept'15 Dec'15 Mar'16 Jun'16 Sept'16 Dec'16 Mar'17 Jun'17 Sept'17 Dec'17 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 1 Japfa Ltd (Rolling 12M) line chart shown above comprises the Group’s segments (PT Japfa Tbk, Animal Protein Other, Dairy and Consumer Food) plus its central purchasing subsidiary, headquarter costs and elimination adjustments between segments. 2 The Three Core Pillars (PT Japfa Tbk, Animal Protein Other and Dairy) bar chart shown above excludes the Consumer Food segment, the Group’s central purchasing subsidiary, headquarter costs and elimination 13 adjustments between segments. 3 Dairy in darker colour represents Core PATMI w/o Forex of 62% attributable to Japfa Ltd. With effect from 1 Jan 2018, Japfa Ltd consolidates100% of Dairy. 4 Dairy as a whole (darker and lighter colour) represents 100% Core PATMI w/o Forex.

3Q2019 FINANCIAL AND OPERATIONAL ANALYSIS