Results presentation for the year ended 30 September 2018 AGENDA - - PowerPoint PPT Presentation

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Results presentation for the year ended 30 September 2018 AGENDA - - PowerPoint PPT Presentation

Apr 26, 2023 41 likes •371 views

Results presentation for the year ended 30 September 2018 AGENDA Operational Business Financial Outlook and Overview: Overview: Overview: management focus: H Lourens H Lourens A Muller H Lourens Adel vd Merwe Results presentation

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for the year ended 30 September 2018

Results presentation

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2 Results presentation 2018

AGENDA

Business Overview:

H Lourens

Financial Overview:

A Muller

Operational Overview:

H Lourens Adel vd Merwe

Outlook and management focus:

H Lourens

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3 Results presentation 2018

BUSINESS OVERVIEW: H LOURENS

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4 Results presentation 2018

BUSINESS OVERVIEW

Revenue Operating profit 2% 178% HEPS Cash generated 234% R448m Total dividend 2018 Total dividend 2017 90 c 34c

› Lower raw material input costs › Stable exchange rate › Tailwinds due to lower egg supply › South African economy remains muted › Good recovery in industry dynamics in rest of Africa

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5 Results presentation 2018

FINANCIAL OVERVIEW: A MULLER

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6 Results presentation 2018

STATEMENT OF INCOME

For the year ended 30 September 2018 2018 Rm 2017 Rm % change Revenue 4 121.9 4 051.9 2 Operating profit* 473.3 170.1 178 Income from associates 0.7 1.1 Net finance income 23.8 6.4 Profit before tax 497.8 177.6 Tax (135.6) (50.0) Profit for the period 362.2 127.6 * Operating profit includes capital items 0.9 20.6 Adjusted operating profit 472.4 149.5 216 Adjusted operating margin 11.5% 3.7% EPS

  • cents

164.3 55.7 195 HEPS - cents 163.9 49.0 234

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7 Results presentation 2018

› For 2018

  • Dividend at a HEPS cover of 4 times

41 cents

  • Special dividend due to 2018 cash generation

49 cents

  • Interim dividend paid

(20 cents)

  • Final dividend

70 cents › 11 784 941 shares repurchased in 2018 at average R4.45 per share › Total amount of R244.1 million returned to shareholders › Board intends to continue to repurchase shares

DIVIDENDS AND SHARE REPURCHASES

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8 Results presentation 2018

Total R4 122 million (2017: R4 052 million)

ANIMAL FEEDS 2017: R1 485m | 37% EGGS 2017: R1 052m | 26% FARMING 2017: R1 311m | 32% AFRICA 2017: R204m | 5%

REVENUE ANALYSIS

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9 Results presentation 2018

SEGMENT RESULTS

Adjusted operating profit 2018 Rm 2017 Rm Eggs 286.7 46.5 Farming 98.5 47.3 Animal Feeds 69.4 77.8 Other African countries 31.0 (9.7) Head Office costs (13.2) (12.4) 472.4 149.5

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10 Results presentation 2018

STATEMENT OF FINANCIAL POSITION

At year end 2018 Rm 2017 Rm Non-current assets 1 091.9 1 076.8 Net working capital 574.6 590.4 Non-current liabilities (228.3) (230.8) Cash 422.5 261.5 Total net assets 1 860.6 1 697.9 Borrowings (6.2) (6.3) Equity 1 854.4 1 691.6

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11 Results presentation 2018

STATEMENT OF CASH FLOW

For the year ended 30 September 2018 2018 Rm 2017 Rm Cash operating profit 547.8 200.4 Working capital inflow 12.9 115.2 Change in exchange rate (7.9) 0.7 Cash effect of hedging activities 8.9 3.4 Tax paid (138.0) (61.3) Net finance income 24.4 6.9 Cash generated by operations 448.0 265.3 Shares repurchased (52.4) (28.7) Dividends paid (119.7) (13.8) Treasury shares acquired by subsidiary (2.5)

  • Capital expenditure

(116.0) (73.0) Proceeds from sale of assets 3.8 32.2 Net cash increase 161.0 182.0

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12 Results presentation 2018

CAPITAL EXPENDITURE

2018 R’m Future R’m Maintenance capex – SA 27.9 44.9 – Africa 13.1 15.2 Farms: capacity and efficiency 18.4 1.2 Energy efficiency 5.4 3.1 Hartbeespoort broiler hatchery expansion 6.6 1.2 Zambia feed mill 9.5 0.9 Uganda layer farm expansion 17.3 0.4 Layer hatchery expansion 6.0 6.2 Feed mills expansion 11.4 31.1 Zambia layer farm expansion

  • 27.2

Packstation grader 0.5 13.9 116.0 145.3

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13 Results presentation 2018

SENSITIVITIES: EGGS

Effect of movement in: Rand value EBIT/annum Selling prices Eggs (R/doz) 1% 17c R13m Raw material costs Maize R/ton R100 R6m Soya bean meal R/ton R100 R2m Assumption: Egg volume of 6.4 million dozen per month

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14 Results presentation 2018

OPERATIONAL OVERVIEW: H LOURENS / ADEL VD MERWE

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15 Results presentation 2018

EGGS

› Realisation increased by 24%

  • AI outbreak
  • Improved product mix

 Less Liquid Egg  Increased sales of Higher Value Eggs

› Volumes declined by 7%

NULAID EGGS

Good utilisation of supply dynamics supported by excellent operational performance

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16 Results presentation 2018

NULAID EGGS

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17 Results presentation 2018

80.00 90.00 100.00 110.00 120.00 130.00 140.00 150.00

Index Month

Realisation Movement

Normal cycle AI Effect Flock replacement

NULAID EGGS

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18 Results presentation 2018

› Strengthened management team › Successful cost control

  • Nominal Increase of 3.5%
  • Additional AI Costs
  • Per unit increase higher due to lower volumes

› Operational efficiency improvements

  • Returns
  • Stock Variances
  • Equipment Efficiency

NULAID EGGS

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19 Results presentation 2018

› Progress with 3rd party distribution model

  • Nominal decrease of 0.5%
  • Per unit increase higher

› Successful execution of direct farm sales strategy › Successful execution of retail customer service

  • Nulaid awarded best Egg Brand for sixth consecutive year
  • Nulaid won the 2018 Shoprite Perishable supplier of the year award

› Successful implementation of 18-egg carton

NULAID EGGS

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20 Results presentation 2018

› Expected Higher Feed Costs › Increased National Egg Supply › Increased Nulaid volume due to placements › Continued equipment efficiency improvements › Continued investment in Green projects

NULAID EGGS EXPECTATIONS

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21 Results presentation 2018

› Continued external volume growth › Margin declined due to competitive dynamics › Excellent feed performance across all species › Cost push well managed › AI effect

  • Loss of internal volumes and contribution
  • Additional bio-security costs

› Approved investments for

  • Future growth
  • Improved efficiencies

NOVA FEEDS

ANIMAL FEED

Stable performance in difficult conditions

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22 Results presentation 2018

FARMING

FARMING OPERATIONS

LAYER FARMING › Satisfactory breeder performance › Commercial farm performance continue to improve › AI effect

  • Increased day old pullet sales
  • Decline in point of lay sales
  • Sharp increase in unit cost of production

› Successful mitigation of flock decline due to AI

  • Flock decrease

19%

  • Production decrease

7% › Capex programme to upgrade layer houses commenced › Layer productivity index developed

Continued improvement in challenging industry conditions

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23 Results presentation 2018

FARMING

Positive momentum continues

BROILER FARMING › Day old chick volumes now exceed that of old model › Increased hatchery capacity projects completed › Day old chick volumes increased by 6% › Decline of 1.2% in live bird weight sold › Record performance on commercial broiler level › Broiler breeders less productive › AI effect

  • No volume impact
  • Additional bio-security costs

Genetic impact

FARMING OPERATIONS

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24 Results presentation 2018

AFRICA

OTHER AFRICA SEGMENT

ZAMBIA › Disease challenges on breeder farm › Very good commercial layer farm performance › Prices and volumes increased in all sales categories › New feed mill commissioned UGANDA › Excellent maize crop › Very good commercial layer performance › Strong demand for day old broilers and layers › Disease challenges at breeder farms › Volume and price increase in egg segment › Capacity increase of 65% for egg farm approved MOZAMBIQUE › Egg industry dynamics similar to South Africa › Improved layer farm performances but › Farm efficiencies remain unsatisfactory

Good economic recovery in all three countries Pleasing profit growth from

  • ther Africa segment
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25 Results presentation 2018

OUTLOOK AND MANAGEMENT FOCUS: H LOURENS

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26 Results presentation 2018

PROSPECTS 2019

Expectations Quantum Foods response

  • Significant drop in egg prices
  • Increase in raw material costs
  • Increased competition in feed sector
  • Opportunities in day old chick market
  • Low level of GDP growth
  • Judicious customer and channel

management

  • Continued focus on efficiencies through all
  • ur segments
  • Review of hatchery capacity
  • Cost containment initiatives implemented
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27 Results presentation 2018

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28 Results presentation 2018

APPENDIX

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29 Results presentation 2018

SAFEX YELLOW MAIZE RAND PER 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 2 352 3 016 2 924 1 953 1 770

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30 Results presentation 2018

CBOT USD SOYA BEANS

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 18 299 309 300 316 309

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31 Results presentation 2018

RAND VS US$

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

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32 Results presentation 2018

LAYER PRODUCTIVITY INDEX

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

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33 Results presentation 2018

BROILER PRODUCTIVITY INDEX

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