Results lts Presenta entation tion for the year ended 30 - - PowerPoint PPT Presentation

▶
results lts presenta entation tion
SMART_READER_LITE
LIVE PREVIEW

Results lts Presenta entation tion for the year ended 30 - - PowerPoint PPT Presentation

Apr 02, 2023 716 likes •1.04k views

Results lts Presenta entation tion for the year ended 30 September 2019 Agen enda da Business overview H Lourens Financial overview A Muller Operational overview H Lourens Outlook and management focus H Lourens Quantum Foods

slide-1
SLIDE 1

Results lts Presenta entation tion

for the year ended 30 September 2019

slide-2
SLIDE 2

Agen enda da

Business overview

H Lourens

Financial overview

A Muller

Operational overview

H Lourens

Outlook and management focus

H Lourens

Quantum Foods Results Presentation for the year ended 30 September 2019 2

slide-3
SLIDE 3

a

Bu Business siness

  • ver

ervie view

H Lourens

Quantum Foods Results Presentation for the year ended 30 September 2019 3

slide-4
SLIDE 4

Salient ient featur tures es

  • 1. Unfavourable economic environment
  • Slow economic growth
  • Declining discretionary consumer spend
  • ZAR continues to weaken
  • Infrastructure challenges at Eskom
  • 2. Quantum Foods: Overview
  • Good volume growth in most categories
  • Expected margin squeeze in egg business occurred
  • Most operational efficiencies improved

Quantum Foods Results Presentation for the year ended 30 September 2019 4

slide-5
SLIDE 5
  • Revenue

R4.4bn

  • Operating profit

R245m

  • HEPS

92.3 cents

  • Total dividend per share

33 cents

  • Cash generated by operations

R178m

  • Repurchased 18.6m shares

8.8%

HEPS S decreased sed due to down wnturn turn of egg industry dustry

Bus usiness ness overvie view

Quantum Foods Results Presentation for the year ended 30 September 2019 5

slide-6
SLIDE 6

a

Fin inancial ancial

  • ver

ervie view

A Muller

Quantum Foods Results Presentation for the year ended 30 September 2019 6

slide-7
SLIDE 7

Sta tateme tement nt of

  • f inc

ncome

  • me

For the year ended 30 September 2019 Rm 2018 Rm % change Revenue 4 417.7 4 121.9 7 Operating profit* 245.2 473.3 (48) Income from associates 0.2 0.7 Net finance income 11.1 23.8 Profit before tax 256.6 497.8 Tax (67.4) (135.6) Profit for the period 189.2 362.2 * Operating profit includes capital items 0.6 0.9 Adjusted operating profit 244.6 472.4 (48) Adjusted operating margin 5.5% 11.5% EPS − cents 92.6 164.3 (44) HEPS − cents 92.3 163.9 (44)

Quantum Foods Results Presentation for the year ended 30 September 2019 7

slide-8
SLIDE 8

Divide idends nds

For 2019

  • Dividend at a HEPS cover of 4 times

23 cents

  • Special dividend due to 2019 cash position

10 cents

  • Interim dividend paid

(8 cents)

  • Final dividend

25 cents

Quantum Foods Results Presentation for the year ended 30 September 2019 8

slide-9
SLIDE 9

Sha hare e repur purchase hases

  • 10 505 000 shares repurchased and cancelled in 2019 at

an average of R3.35 per share

  • 8 083 426 shares purchased by subsidiary in 2019 at

an average of R3.39 per share

  • R142 million returned to shareholders for 2019
  • Board intends to continue with repurchase of shares

2017 2018 2019 Dividends plus share repurchases as % of HE 93% 68% 75%

Quantum Foods Results Presentation for the year ended 30 September 2019 9

slide-10
SLIDE 10

Reven enue ue ana nalysi sis

Total R4 418 million (2018: R4 122 million)

2018: R1 460 | 36% ANIMAL FEED

1 759

EGGS

1 095

FARMING

1 325

AFRICA

239

2018: R1 206 | 29% 2018: R1 233 | 30% 2018: R222 | 5%

Quantum Foods Results Presentation for the year ended 30 September 2019 10

40% 25% 30% 5%

slide-11
SLIDE 11

Segme gment nt results ults

Adjusted operating profit 2019 Rm 2018 Rm Eggs 38.3 286.7 Farming 112.1 98.5 Animal feeds 89.1 69.4 Other African counties 14.2 31.0 Head office costs (9.1) (13.2) Profit for the year 244.6 472.4

Quantum Foods Results Presentation for the year ended 30 September 2019 11

slide-12
SLIDE 12

Sta tateme tement nt of

  • f financ

nancial ial pos

  • sition

ition

At year-end 2019 Rm 2018 Rm Non-current assets 1 181.5 1 091.9 Net working capital 693.2 574.6 Non-current liabilities (250.8) (228.3) Cash 219.6 422.5 Total net assets 1 843.5 1 860.6 Borrowings (6.1) (6.2) Equity 1 837.4 1 854.4

Quantum Foods Results Presentation for the year ended 30 September 2019 12

slide-13
SLIDE 13

Sta tateme tement nt of

  • f cash

h flow

  • w

For the year ended 30 September 2019 Rm 2018 Rm Cash operating profit 329.8 547.8 Working capital (outflow) / inflow (109.2) 12.9 Changes in exchange rates 1.3 (7.9) Cash effect of hedging activities (6.7) 8.9 Tax paid (51.2) (138.0) Net finance income 14.4 24.4 Cash generated by operations 178.4 448.0 Shares repurchased (35.2) (52.4) Dividends paid (162.6) (119.7) Treasury shares acquired by subsidiary (27.4) (2.5) Advance of loan (6.7) − Capital expenditure (152.6) (116.0) Proceeds from sale of assets 3.3 3.8 Net cash (decrease) / increase (202.9) 161.0

Quantum Foods Results Presentation for the year ended 30 September 2019 13

slide-14
SLIDE 14

Capita pital l expenditur enditure

2019 Rm Future Rm RSA Expansion/efficiency 61.0 2.6 – Feed mills 30.3 2.0 – Layer hatchery 5.6 0.6 – Farms 8.3 − – Packing stations 13.7 − – Energy 3.1 − Replacement/compliance 34.4 63.1 Africa Expansion/efficiency 47.7 29.7 – Zambia layer farm 13.8 − – Uganda layer farm and breeders 33.9 29.7 Replacement 9.5 5.2 152.6 100.6

Quantum Foods Results Presentation for the year ended 30 September 2019 14

slide-15
SLIDE 15

Sensiti nsitivities vities: : Eggs gs

Effect of movement in: Rand value EBIT/annum Selling prices Eggs (R/doz) 1% 15c R12m Raw material costs Maize R/ton R100 R7m Soya bean meal R/ton R100 R2m Assumption: Egg volume of 7.0 million dozen per month

Quantum Foods Results Presentation for the year ended 30 September 2019 15

slide-16
SLIDE 16

a Oper

perational ional

  • ver

ervie view

H Lourens

Quantum Foods Results Presentation for the year ended 30 September 2019 16

slide-17
SLIDE 17

Nova a Feeds eeds

  • Relentless focus on raw material procurement had a

positive effect

  • Positive volume growth: CAGR of 3.8% since 2015
  • Margins decreased due to product mix changes and

price lead competition

  • Cost increases per unit remained under control
  • Both Paterson and Pretoria projects completed on

time, within budget

  • Projects increased capacity by 16%

Solid id performan

  • rmance

ce

Quantum Foods Results Presentation for the year ended 30 September 2019 17

slide-18
SLIDE 18
  • Improved financial performance
  • Breeder efficiency declined − expect little

improvement in medium term

  • Broiler efficiency remained excellent
  • Production of day-old chicks increased by 7.2%
  • Change in supply contract to Sovereign Foods
  • Costs per unit throughout business under control
  • New broiler executive to start 1 January 2020

Broiler

  • iler far

arming ming

Stron

  • ng

g perf rforman

  • rmance

ce

Quantum Foods Results Presentation for the year ended 30 September 2019 18

slide-19
SLIDE 19
  • Improved financial result
  • Layer breeders continues to perform above breed

standard

  • Production of day-old pullets increased by 12.7%
  • Point-of-lay sales volumes increased by 5.3%
  • Much improved productivity at commercial layer

farms

  • Cost per unit decreased throughout value chain

Layer er far arming ming

Cont ntinued ued improvem emen ent

Quantum Foods Results Presentation for the year ended 30 September 2019 19

slide-20
SLIDE 20
  • All operational efficiencies improved
  • Volumes increased by 5.5%
  • Prices declined by 14.3%
  • Feed prices increased by 16.3%
  • South Africa flock estimated at c.28m layers
  • Capex programme for graders near completion
  • Nulaid remains the egg brand of choice

Nulaid ulaid Eg Eggs gs

Excelle lent nt operati tiona

  • nal

l perform

  • rman

ance ce

Quantum Foods Results Presentation for the year ended 30 September 2019 20

slide-21
SLIDE 21
  • Financial performance under pressure
  • Raw material prices increased in all three countries
  • Egg productivity improved
  • Uganda breeder farm temporarily moved to Masindi
  • Cost affected by devaluation of Kwacha
  • Zambia capital cycle completed
  • Uganda hatchery capacity increased
  • Uganda breeder farm completion by March 2020
  • Zambia breeder business returned to profitability

Africa rica business usiness

Tough gh trading ing cond nditions itions

Quantum Foods Results Presentation for the year ended 30 September 2019 21

slide-22
SLIDE 22

a

Outl tlook

  • ok 20

2020 20

slide-23
SLIDE 23

Out utlook

  • ok 2020

Expectations

  • Challenging macro business

environment

  • Stable raw material costs
  • Weaker egg prices
  • Tough first six months in

African business

Quantum Foods’ response

  • Ensure egg sales in optimal

channels and geographies

  • Leverage investments in

feeds and hatcheries

  • Improve efficiencies

throughout layer value chain

  • Target cost-saving initiatives

Quantum Foods Results Presentation for the year ended 30 September 2019 23

slide-24
SLIDE 24

Quantum Foods Results Presentation for the year ended 30 September 2019 24

slide-25
SLIDE 25

a

App ppendix endix

Quantum Foods Results Presentation for the year ended 30 September 2019 25

slide-26
SLIDE 26

Safex yell llow

  • w ma

maiz ize e Rand nd per r to ton

1 500 2 000 2 500 3 000 3 500 4 000 4 500 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 2 352 2 700 3 016 2 924 1 953 1 770

Quantum Foods Results Presentation for the year ended 30 September 2019 26

slide-27
SLIDE 27

CBOT T USD soya beans ans

250 270 290 310 330 350 370 390 410 430 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 299 309 300 316 309 296

Quantum Foods Results Presentation for the year ended 30 September 2019 27

slide-28
SLIDE 28

Rand nd:US :US dol

  • llar

lar exchang hange e rate te

10 12 14 16 18 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 14.14 15.13 11.28 13.84 13.71 13.55

Quantum Foods Results Presentation for the year ended 30 September 2019 28

slide-29
SLIDE 29

La Layer r producti

  • ductivity

vity ind ndex

95 100 105 110 115 120 125 130 135 140 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Quantum Foods Results Presentation for the year ended 30 September 2019 29

slide-30
SLIDE 30

Broi

  • iler

ler product

  • ductivity

ivity ind ndex

85 90 95 100 105 110 115 120 125 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Quantum Foods Results Presentation for the year ended 30 September 2019 30