San Miguel
4Q 2017 E Earnings Conference Call ll March 9, 2018
San Miguel 4Q 2017 E Earnings Conference Call ll March 9, 2018 - - PowerPoint PPT Presentation
San Miguel 4Q 2017 E Earnings Conference Call ll March 9, 2018 Disclaimer This presentation contains forward looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These
4Q 2017 E Earnings Conference Call ll March 9, 2018
This presentation contains forward looking statements that are based on our current expectations, assumptions, estimates and projections about us and
“expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions. These forward-looking statements may include statements regarding the intent, belief, plans, current expectations or objectives of San Miguel and its management, including statements with respect to San Miguel’s future financial condition, financial, operating and other ratios, results of operations, business strategy, geographic concentration, business concentration, production and marketed volumes, as well as San Miguel’s plans, expectations or
dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future fresh fruit and other prices, processing and commercial margins and exchange rates. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond San Miguel’s control or may be difficult to predict. San Miguel’s actual future financial condition, financial, operating and other ratios, results of operations, business strategy, geographic concentration, business concentration, production and marketed volumes, capital expenditures, investments, expansion and other projects, ownership interests, divestments, cost savings and dividend payout policies, as well as actual future economic and other conditions, such as future fresh fruit and other prices, processing margins and exchange rates, could differ materially from those expressed or implied in any such forward- looking statements. Important factors that could cause such differences include, but are not limited to, fresh lemon, mandarin, orange and other price fluctuations, supply and demand levels, currency fluctuations, production results, success in partnering with third parties, loss of market share, industry competition, environmental risks, physical risks, the risks of doing business in developing countries, legislative, tax, legal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, wars and acts of terrorism, natural disasters, project delays or advancements and lack of approvals. In light of the foregoing, the forward-looking statements included in this document may not occur. The forward looking statements made in this presentation related only to events or information as of the date on which the statements are made in this presentation. San Miguel undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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finance its expansion projects
shares
awarded, which meant 100% of the maximum amount, already increased
new shares, or 211.3% of the shares to be issued
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The Company & Transaction
Grapes)
EBITDA multiple paid between
4x and 5x of 2018
flows Selected Metrics
We expect margins to reach
33% by
2021 Identified Synergies
new categories.
boost production
existing agricultural, operational and SG&A costs Quick wins achievable within
1 year
window
Production
late variety in Spain due to an extraordinary climate event
yields in Argentina, Uruguay and South Africa
strategic producers
Market
commercial window from the northern hemisphere
processing volumes, higher prices and a demand that was stable for oil, increasing in juice and adjusting in peel
Contingencies
by global shipping line Maersk impacted
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Exchange Rate Inflation
Full year rate (%) Average year rate vs. USD
5 40% 8% 7% 3% 25% 4% 5% 1%
Argentina Uruguay South Africa Peru 2016 2017
14,9 30,2 14,7 3,4 16,6 28,5 13,2 3,3
Argentina Uruguay South Africa Peru 2016 2017 11%
Sources: Ámbito Financiero, INE Uruguay, Inflation.eu, Reuters, finanzas.com, BCRP
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+ 148% YoY / + 148% QoQ
Total production includes only our own production and excludes the annual production of Peru (25,122 MT) and from strategic producers
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Volumes Revenues Breakdown
Breakdown by Origin
In ARS Millions / Margin in % Total sales for 2017 exclude intercompany sales for ARS 126 MM. Volumes refer to the total volume of fruit operated in our system, including our own production and the one from strategic producers. For Peru includes volumes from August to December 2017
Breakdown by Origin
In thousand MT
2.863 349 812 4.024 2.551 332 882 224 3.863
Argentina Uruguay South Africa Peru Total 2016 2017
9% n.a.
309 37 65 411 271 36 68 13 388
Argentina Uruguay South Africa Peru Total 2016 2017
5% n.a.
41% 19% 15% 7% 24% 16% 36% 19% 30% Var. Revenues Var. Margin
n.a.
Var. Volume
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Volumes Revenues Breakdown
Breakdown by Origin
In ARS Millions
Breakdown by Variety
In thousand MT
70 66 136 57 66 0,68 124
Lemon Soft Citrus Grape Avocado Total 2016 2017
0% n.a. n.a.
1.334 262 743 2.339 865 296 774 224 2.159
Argentina Uruguay South Africa Peru Total 2016 2017
13% 4% n.a.
Var. Revenues Var. Volume
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Volumes Revenues Breakdown
Breakdown by Product
In US$ Millions
Breakdown by Origin
In thousand of processed MT
213 36 57 306 193 34 68 295
Argentina Uruguay* South Africa* Total 2016 2017
19% 2%
542 648 332 1.522 650 723 292 1.665
Oil Juice Other products Total 2016 2017 20% 12%
9%
Var. Revenues Var. Volume
*Processed volumes in Uruguay and South Africa correspond to operations in which San Miguel participates through Joint Ventures
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Breakdown by Origin
In ARS Millions
EBITDA Evolution
In ARS Millions
EBITDA Breakdown EBITDA Evolution
675 3 128 805 59 47 108 214
100 200 300 400 500 600 700 800 900 Argentina Uruguay y Perú Sudáfrica Total 2016 2017
1590%
418 435 805 214
25% 19% 20% 5% 37% 30% 36% 19%
0% 10% 20% 30% 40% 50% 60% 100 200 300 400 500 600 700 800 900 2014 2015 2016 2017 EBITDA EBITDA Margin Gross Margin
Var. EBITDA
Composition
In ARS Millions
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2017 Debt Evolution
Structural Debt Vs. Working Capital Debt
In ARS Millions
Net Financial debt´s evolution
Net Financial Debt EBITDA
0,9x 1,8x 1,3x 13x
161
687
763 599 981 385 1.145 1.074 2.330 1.112 2.073 2.759
500 1000 1500 2000 2500 3000
jun-13 dic-13 jun-14 dic-14 jun-15 dic-15 jun-16 dic-16 jun-17 dic-17 The Evolution of Debt includes the effects of the acquisition of Agricola Hoja Redonda issolated
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We anticipate that 2018 will present a completely different backdrop: 1. Lemons production growth in Tucuman and South Africa, and in mandarins, avocados and grapes in Peru 2. A longer and more favorable commercial window in the northern hemisphere and the inclusion of the United States market will support lemon prices 3. Improvements in the Processed Foods margins, due to higher processing volumes 4. Important reduction of indebtedness 5. Favorable macroeconomic context in Argentina, neutral in Peru and Uruguay, and slightly adverse in South Africa
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2017 was an extraordinary and challenging year in every aspect of our operation, however:
business plan. We reiterate our commitment to become the leading company of fresh citrus fruit in the Southern Hemisphere and of processed fruit and vegetable products with added value
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