SIME DARBY PLANTATION Management Roadshow November 2017 Disclaimer - - PowerPoint PPT Presentation

SIME DARBY PLANTATION

Management Roadshow

November 2017

1 Strictly Private & Confidential

Disclaimer

This document is strictly confidential to the recipient. It is being supplied to you solely for your information and may not be reproduced, redistributed or passed

• n, directly or indirectly, to any other person or published, in whole or in part, for any purpose. Upon request, you shall promptly return this document all
• ther information made available in connection with this document, without retaining any copies. The distribution of this document in other jurisdictions may

be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This document does not constitute and is not an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities of any company referred to in this document in any jurisdiction. The companies referred to herein have not registered and do not intend to register any securities under the US Securities Act of 1933, as amended (the “Securities Act”), and any securities may not be offered or sold in the United States absent registration under the Securities Act or an exemption from registration under the Securities Act. By attending the presentation you will be deemed to represent, warrant and agree that to the extent that you purchase any securities in any of the companies referred to in the presentation, you either (i) are a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, or (ii) you will do so in an “offshore transaction” within the meaning of Regulation S under the Securities Act. By attending this presentation and accepting a copy of this document, you represent and warrant that (i) you have read and agreed to comply with the contents of this notice; (ii) you will maintain absolute confidentiality regarding the information contained in this document including information presented

• rally or otherwise in accordance with your confidentiality obligation; and (iii) you are lawfully able to receive this document and attend this presentation

under the laws of other jurisdiction in which you are subjected and other applicable laws. This document is for the purposes of information only and is not intended to form the basis of any investment decision. This presentation may contain forward- looking statements by Sime Darby Plantation that reflect management’s current expectations, beliefs, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are based on various assumptions and made subject to a number of risks, uncertainties and contingencies and accordingly, actual results, performance or achievements may differ materially and significantly from those discussed in the forward-looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the future performance or achievements of Sime Darby Plantation and Sime Darby Plantation assumes no obligation or responsibility to update any such statements. No representation or warranty, express or implied, is given by or on behalf of Sime Darby Plantation or its related corporations (including without limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers) (collectively, the “Parties”) as to the quality, accuracy, reliability, fairness or completeness of the information contained in this presentation or its contents or any oral or written communication in connection with the contents contained in this presentation (collectively, the “Information”), or that reasonable care has been taken in compiling or preparing the Information. None of the Parties shall be liable or responsible for any budget, forecast or forward-looking statements or other projections of any nature or any opinion which may have been expressed or otherwise contained or referred to in the Information. The Information is and shall remain the exclusive property of Sime Darby Plantation and nothing herein shall give, or shall be construed as giving, to any recipient(s) or party any right, title, ownership, interest, license or any other right whatsoever in or to the Information herein. The recipient(s) acknowledges and agrees that this presentation and the Information are confidential and shall be held in complete confidence by the recipient(s). All the images, pictures and photos including design drawings in relation to the company’s property development projects contained in this document are artist impression only and are subject to variation, modifications and substitution as may be recommended by the company’s consultants and/or relevant authorities.

2 Strictly Private & Confidential

Table of Contents

Section Page 1. Sime Darby Pure Play Exercise - Transaction Overview 3 2. Sime Darby Plantation

• Company Overview

9

• Key Investment Highlights

12

• Business Strategies & Future Plans

24

• Industry Outlook

34

• Financial Overview

37

3 Strictly Private & Confidential Strictly Private & Confidential

Sime Darby Pure Play Exercise - Transaction Overview

4 Strictly Private & Confidential

Sime Darby Pure Play Exercise – Transaction Overview

Sime Darby Berhad Property Plantation Trading, Logistics & Others Sime Darby Property Sime Darby Plantation

100% 100%

PNB Other Shareholders EPF KWAP

Conglomerate group structure involved in distinct businesses, i.e. plantation, property, trading, logistics &

• thers

Listed company

Existing Corporate Structure

11.12%* 5.61%^ 6.15%

Sime Darby Property Sime Darby Plantation Trading, Logistics & Others Property Business Plantation Business Sime Darby Berhad

Listed company Listed company Listed company

Corporate Structure Post Proposals

36.33% 40.79%

ASB PNB Other Shareholders EPF KWAP

11.12%* 5.61%^ 6.15% 36.33%

ASB

40.79%

Notes: * Comprising 9.9% direct interest and 1.22% indirect interest (managed by/through Citigroup Nominees (Tempatan) Sdn Bhd for EPF) ^ Comprising 5.22% direct interest and 0.39% indirect interest (managed by KWAP’s fund managers) Source: Shareholding Structure as at 15 Oct’17 as extracted from the Circular

Same set of shareholders will continue to hold the same shareholding in each entity

5 Strictly Private & Confidential

Listing of Pure Plays – Reference Prices

Note: Information regarding reference price is stated in Page 11-19 of the Circular to Shareholders – Part 1 (dated 4 Nov 2017)

Companies Percentage Allocation Range Illustrative Reference Price Based on Percentage Allocation Range Mid-Point Minimum Maximum Share Price (RM) Market Cap (RM’bn) Share Price (RM) Market Cap (RM’bn) Share Price (RM) Market Cap (RM’bn) Sime Darby Plantation 60%-68% 5.79 39.4 5.43 36.9 6.15 41.8 Sime Darby Property 16%-19% 1.58 10.7 1.45 9.9 1.72 11.7 Sime Darby Berhad

• 1.68

11.4 2.17 14.7 1.18 8.0 TOTAL

• 9.05

61.5 9.05 61.5 9.05 61.5

6 Strictly Private & Confidential

Listing of Pure Plays – Justification for Sime Darby Plantation’s Reference Price

Net Earnings Per Share Sime Darby Plantation’s adjusted net EPS of 19.48 sen per share for FY2017. Comparable listed companies for Sime Darby Plantation:

Sime Darby Plantation Mid-Point Minimum Maximum Share Price (RM) 5.79 5.43 6.15 FY2017 PER 29.7x 27.9x 31.6x

The implied PER of Sime Darby Plantation would be between 27.9x to 31.6x, which falls within the PER range of the selected comparable listed companies of between 18.9x to 38.8x.

Companies PER IOI Corp 38.8x KLK 23.1x Genting Plantations 18.9x AVERAGE 27.0x

1 Price-to-Earnings Ratio (PER) 2 Net Assets Sime Darby Plantation’s pro-forma consolidated Net Assets of RM2.00 as at 30 June 2017. 3

7 Strictly Private & Confidential

Listing of Pure Plays – Justification for Sime Darby Plantation’s Reference Price (cont’d)

Sime Darby Plantation’s Competitive Strengths

• The world’s largest oil palm plantation company by oil palm planted areas;
• The world’s largest CSPO producer;
• A wide and diverse geographical reach; and
• Recognised for our sustainability credentials and product quality:
• Innovation and R&D-driven;
• Fully integrated business model that allows us to leverage and diversify along the palm oil

value chain; and

• An experienced and sound Board and management team.

4 5 Sime Darby Plantation’s Strategies and Future Plans

• To drive operational excellence in its upstream business by achieving FFB yield of 25 MT/ha and

OER of 25% by year 2025;

• To serve its customers’ evolving needs in its downstream business; and
• Maximise returns across the palm oil value chain by leveraging on its integrated business model.

Favourable Outlook of the Palm Oil Industry with Expected Higher Demand for Palm Oil 6

8 Strictly Private & Confidential

Milestones Following Actual Listing Submission

26 Oct Thu

• Securities

Commission (SC)’s and SC Equity Compliance Unit’s approvals

• btained

20 Nov Mon

EGM

Target End Nov

4 Nov Sat

• Listing
• Issuance of

Prospectus

• Despatch of

Circular to Sime Darby Berhad’s shareholders 24 Aug Thu

• The approval

from the Board of Sime Darby Berhad

• n the

Proposals including the capitalisation, share split, distribution and listing of the Identified Entities

• btained

3 Nov Fri

• Announcement
• f notice of

Extraordinary General Meeting (“EGM”) Submission of confirmation of registration of Prospectus to the SC

9 Strictly Private & Confidential Strictly Private & Confidential

Company Overview

10 Strictly Private & Confidential

Business Overview

Integrated Plantation Company Involved in the Entire Palm Oil Value Chain

Upstream Downstream Others

Oil palm, rubber & sugarcane estates

• Developing, cultivating and

managing oil palm, rubber and sugarcane plantation estates Milling of FFB and processing & sales

• Milling of FFB into CPO and PK
• Processing and sales of rubber and

sugarcane Others

• Cattle rearing and beef production

Bulk and refined oils & fats

• Production and sales of refined oils

and fats (which includes specialty and end-user oils and fats) Oleochemicals, biodiesel products & derivatives

• Production and sales of
• leochemicals, biodiesel products

and derivatives R&D

• Focused on yield and productivity

improvements, increasing revenue streams and developing sustainable practices while pursuing innovative strategies Renewables business

• Development of green technology

and renewable energy which includes bio-based chemicals, biogas and composting Agribusiness

• Provision of agriculture products and

services

Oil palm estate Mill Refinery Food application High-yielding genome seeds Renewables

Sime Darby Plantation Berhad

11 Strictly Private & Confidential

FY16/17 unless otherwise stated

Malaysia Indonesia PNG & Solomon Islands Liberia Total Total oil palm planted area(1) (ha) 303,367 202,191 86,493 10,401 602,452 Mature area(1) (ha) 251,629 161,621 76,281 9,356 498,887 Palm tree age profile & average tree age (1) (Years) FFB production (mm MT/year) 5.29 2.67 1.79 0.03 9.78 Mill production (mm MT/year)

• CPO

1.20 0.72 0.55 0.01 2.48

• PK

0.29 0.16 0.14 0.00 0.58 FFB yield (MT/ha) 20.76 16.03 23.88 4.04 19.44 OER 20.56% 21.30% 23.10% 18.73% 21.29% KER 4.95% 4.67% 5.73% 2.48% 5.02%

20% 9% 25% 39% 7% 12% 24% 47% 12% 5% 10% 90% 17% 20% 37% 18% 8%

Snapshot of Oil Palm Plantation Operational Statistics

Sime Darby Plantation Berhad

Note: (1) As at 30 Sep 2017 <3 yrs 4-8 yrs 9-18 yrs 19-22 yrs >22 yrs

4.7 yrs 12.9 yrs 14.3 yrs 12.6 yrs 11.9 yrs

12 Strictly Private & Confidential Strictly Private & Confidential

Key Investment Highlights

13 Strictly Private & Confidential

INVESTMENT HIGHLIGHTS – PLANTATION

World’s Largest Sustainable Palm Oil Producer

Strong Market Position as the World’s Largest Oil Palm Plantation Company by Oil Palm Planted Area, with Established Reputation as the World’s Largest Producer of Certified Sustainable Palm Oil Fully Integrated Business Model with Diversified Operations Along the Palm Oil Value Chain Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends Innovative & Market Leading R&D Supports Operational Efficiency & Productivity Sound Financial Profile and Resilient Business Model Experienced and Sound Board & Management Team

1 2 3 5 4 6

Sime Darby Plantation Berhad

14 Strictly Private & Confidential

World’s Largest Oil Palm Plantation Company with More Than 600,000 Hectares of Planted Area

We are the world’s largest oil palm plantation company by oil palm planted area with c.2.8% market share(1) and total landbank of more than 983,000 hectares across Malaysia, Indonesia, PNG & Liberia

Notes: (1) Estimated based on global planted area of 21.5 mm ha worldwide (2) Based on 2016 global CPO production of 58.9 mm MT (3) Based on latest financial year end (4) As at 30 Jun 2017 Source: Frost & Sullivan, company

1

Sime Darby Plantation Berhad

20%

Leader in Sustainability - World’s Largest Producer of CSPO

• f Global CSPO

Production Capacity(1)

~600,000 hectares

World’s Largest Oil Palm Plantation Company (by planted area)

4 mn MT p.a.

Total Refining Capacity (12 Refineries)

2.5 mn MT

FY17 CPO Production (~4% of Global Market Share)(2)

Market Leading R&D

Edison Award 2017 under the Energy and Sustainability category

(Genome Select Oil Palm Project)

251

Estates

72

Mills

11

Crushing Plants

(inclusive of soy crushing plant) World’s Largest Oil Palm Plantation Company by Planted Area with c.2.8% Market Share 502 466 258 266 204 208 159 176 148 100 137 116 116 92 83 603 488 341 297 247 242 209 205 179 141 139 136 127 102 95 SD Plantation Golden Agri FGVH Astra Agro Salim Wilmar First Resources KLK IOI GENP Sinar Mas Sampoerna Persero Nusantara LSIP

2.8% 2.3% 1.6% 1.4% 1.2% 1.1% 1.0% 1.0% 0.8% 0.7% 0.6% 0.6% 0.6% 0.5% 0.4% Planted & Mature Area (Ha)(3) % global market share(1)

(4)

15 Strictly Private & Confidential

15

1985

• Introduced

Zero- Burning replanting technique 1996

• EMS-ISO

14001 certification for environmental management systems 1992

• United Nations

Environment Programme’s Global 500 Award for Zero-Burning replanting technique 2002

• Founding

member

• f RSPO

2004

• First

GLOBALG.A.P. certification which recognises efforts for good agricultural practices 2015

• Acquisition of New

Britain Palm Oil Limited, a 100% RSPO certified & traceable palm oil producer in terms of processing identity preserved or fully segregated oil 2016

• Launched the

Responsible Agriculture Charter (RAC) 2014

• Signed the

Sustainable Palm Oil Manifesto

• HCS+

methodology for

• il palm

Our journey to sustainability

SDP Sustainability Brand

Future: “RSPO and Beyond” vision

• To prevent value

erosion in our businesses from unethical behavior

• To maintain established

sustainability credentials and policies

• Global Sustainability

Leadership Award from the World Sustainability Congress 2017

• Edison Awards

(Bronze) under Energy & Sustainability category

1 World’s Largest Oil Palm Plantation Company by Oil Palm Planted Area, with a Wide and Diverse Geographical Reach and the World’s Largest Producer of Certified Sustainable Palm Oil

16 Strictly Private & Confidential

Sustainability – Committed to Good Agriculture Practices

As at 30 Sep 2017

As a signatory to the Sustainable Palm Oil Manifesto, we are committed to implement leading industry practices around High Conservation Value and HCS in new developments

RSPO Certification Status High Carbon Stock (HCS) Commitment Responsible Agriculture Charter (RAC)

Launched in Sep’16 with SD Plantation’s focused commitments on:

• Human rights & social

development

• The environment
• Corporate integrity

Sime Darby Open Palm Traceability Dashboard provides SD Plantation’s customers with access to source the products purchased from SD Plantation

Open Palm Traceability

Upstream – Mill

Traceable up to plantations

Downstream – Refinery, KCPs & Biodiesel

Traceable up to plantations Traceable up to mills

As at 30 Sep 2017 88.4% Traceable

FFB

96.7% Traceable

CPO Palm Kernel

100% Traceable 80.5% Traceable

CPO Palm Kernel

81.7% Traceable

Sime Darby Plantation Berhad

1

97%

RSPO-certified

100%

MALAYSIA

Sime Darby launched it’s Human Rights Charter to articulate its commitment in respecting human rights in line with the United Nations Guiding Principles on Business and Human Rights

Human Rights Charter

96%

INDONESIA

100%

PNG & SI

As at 30 Sep 2017

17 Strictly Private & Confidential

Sustainability – Driving Market Demand

Other Certified Players 80% Sime Darby Plantation 20%

11.8 mn MT

Global CSPO Production Capacity (as of 31 Jul 2017)

• All of SD Plantation’s refineries are RSPO-

certified

• New Britain Oils’ refinery in Liverpool is a

fully Certified Segregated Refinery

• We have modified and expanded our

milling and refinery capacity to increase production of Premium Quality (PQ) oil

• PQ oil offers low free fatty acid oil blends

660k MT/year

NURI REFINERY (MALAYSIA)

NEW BRITAIN OILS (UK)

Source: Company, Frost & Sullivan

CSPO Production Capacity

Sime Darby Plantation Berhad

1

18 Strictly Private & Confidential

Geographical Breakdown for FY17 Total Revenue Market Reach Extends to the Top 5 Global Palm Oil Consumer(1) Upstream Operations

• Presence in 5 Countries - Malaysia, Indonesia,

PNG & Solomon Islands, Liberia

• Developing, cultivating and managing oil

palm, rubber & sugarcane plantation estates

• Operates and manages 249 plantation estates

and 72 palm oil mills

• Cattle rearing & beef production

Downstream Operations

• Operating across 16 Countries - Malaysia,

Indonesia, Netherlands, Thailand, United Kingdom, PNG, Vietnam & others

• Production & sales of bulk & refined oils and

fats, oleochemicals, biodiesel products and derivatives

• Manages and operates 12 refineries with a

total refinery capacity of 4 mm MT/year

Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (1/2)

FY17 Total Revenue = RM14,779 mm

• c. RM10.8 bn or 73% of FY17 revenue is

derived from the Top 5 Global Palm Oil Consuming Countries/Region

(from Malaysia, Europe, India, Indonesia & China)

2

Our wide & diverse geographical reach of business operations will allow us to leverage on strong industry fundamentals Strong Geographical Presence

Note: (1) The top 5 palm oil consuming countries/regions based on global palm oil consumption in 2016 are India, Indonesia, EU, China and Malaysia, which collectively accounted for c.53% of total consumption in 2016 Source: Frost & Sullivan, company

Sime Darby Plantation Berhad Malaysia, 23% Europe, 22% India, 19% Indonesia, 7% China, 2% South Africa, 5% Other SEA, 13% Others, 9%

19 Strictly Private & Confidential

62.5 63.9 66.9 70.2 73.8 77.7 81.7 795 750 761 771 782 793 804 2016 2017F 2018F 2019F 2020F 2021F 2022F Palm oil consumption (mm MT) CPO Price, CIF Rotterdam (constant USD)

Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (2/2)

Note: (1) Price rationalization expected in 2017 due to recovery of FFB yield and CPO production in Indonesia & Malaysia post El Nino drought. Source: Frost & Sullivan, World Bank

2

Our wide & diverse geographical reach of business operations will allow us to leverage on strong industry fundamentals

Demand for Palm Oil Estimated to Reach 81.7 mn MT by 2022, Providing Support to CPO Prices

Capitalising on strong demand growth for palm oil

Sime Darby Plantation Berhad

52.6 57.9 59.5 60.8 62.5 5.7 6.4 6.5 6.8 6.6 100.5 101.8 107.8 109.5 114.5 158.8 166.1 173.8 177.1 183.6 2012 2013 2014 2015 2016

Palm Oil Palm Kernel Oil Others Global Edible Vegetable Oil Consumption (mn MT)

Increasing Demand for Palm Oil & Edible Oils Driven by Growing Population & Food Requirements

2012-2016 CAGR Palm oil: +4.4% PKO: +3.7% 1.28 2.49 3.48 4.51 5.35 6.18 5.63 2010 2011 2012 2013 2014 2015 2016

Global Sales of Certified Sustainable Palm Oil (mn MT)

Strong CSPO Sales Growth Globally is a Direct Consequence of the Sustainability Commitments of Various FMCG companies

20 Strictly Private & Confidential

Fully Integrated Business Model with Diversified Operations Along the Palm Oil Value Chain

Mills Plantation Transportation, storage & distribution Sales & marketing Economies of scale & cost synergies Diversification of commodity price volatility Crushing plants & Refineries Upstream Downstream R&D and renewables



Shared use of integrated processing facilities & infrastructure



Extensive sales and distribution network



Flexibility to channel products & resources to markets with greater demand



Ability to convert by-products (palm fibres, sludge oil, palm

• il mill effluent, empty fruit bunches, palm kernel expeller)

into applications such as animal nutrition and tocotrienols



Strengthen our ability to trade around our own assets



Allows diversification of upstream operations which are susceptible to volatile commodity prices



More stable and resilient earnings as volatilities in segment margins are mitigated



Ability to better manage commodity price volatility

• Flexibility to channel CPO to various segments of

downstream process by capitalizing on the different price characteristics and feedstock types in the downstream segment

3

With a fully integrated business model, we are able to diversify our earnings risk from volatility of commodity price and leverage on operational synergies 1 2

We have established a fully integrated business model that operates across the entire spectrum of the palm oil value chain

Key Benefits of a Fully Integrated Business Model

Sime Darby Plantation Berhad

21 Strictly Private & Confidential

Market Leading Research & Development

• Global network of 5 R&D centres in Malaysia, Indonesia & PNG, and

3 innovation centres in Malaysia, the Netherlands and South Africa

• Supports operational efficiency and improvements to upstream

productivity, and we develop sustainable practices while pursuing transformational innovative strategies

• Development of new palm oil breed via a genomic selection and

prediction process

• Malaysia’s first company to win the coveted Edison Award,

which recognised its groundbreaking genome initiative

• Research and production of high yield planting material such as

new Dami seeds progenies which are expected to deliver better oil yield improvements than its predecessors

Market Leading R&D Supports Operational Efficiency & Productivity

4

Sime Darby Plantation Berhad

Adopt best agro-management practices

• Precision agriculture to improve yield
• Efficient water management and irrigation system
• Integrated pest management programmes
• Mechanisation initiatives to improve manpower ratio, cost efficiency

and productivity

• Digitisation initiatives

22 Strictly Private & Confidential

Sound Financial Profile & Resilient Business Model

5

BBB+

(EXP)

Baa1 AAA

We sustain long-term growth whilst maintaining ready access to capital markets and preserve our ability to repay and service debt obligations over time evidenced by our investment grade ratings along with a stable

• utlook
• Vertically

integrated and geographically diversified

• perations
• Ability to better withstand economic downturn and

moderate impact from such volatilities

• Steady

performance throughout the years despite adverse weather conditions and market volatilities

• Committed towards optimising our capital structure in
• rder to ensure a competitive cost of capital
• Implementation of an optimal capital structure by

balancing debt and equity levels by putting in place appropriate dividend and financing policies Sound Financial Profile & Resilient Business Credit Rating of SD Plantation

Resilient business model

1

Disciplined approach in capital allocation and cash flow management

2 Sime Darby Plantation Berhad

23 Strictly Private & Confidential

Experienced and Sound Board & Management Team

6

Renaka Ramachandran Chief Financial Officer Datuk Franki Anthony Dass Chief Advisor and Value Officer Tan Sri Dato’ Abdul Ghani Othman Chairman and Non- Independent Non- Executive Director Tan Sri Dato’ Seri Mohd Bakke Salleh Executive Deputy Chairman and Managing Director Tan Sri Dato’ Seri Mohd Bakke Salleh Executive Deputy Chairman and Managing Director Mohamad Helmy Othman Basha Chief Operating Officer, Upstream

• Dr. Simon Lord

Chief Sustainability Officer Mohd Haris Mohd Arshad Chief Operating Officer, Downstream

• Dr. Harikrishna

Kulaveera- singam Head of R&D

Our Board and management team have the ability to drive our Group through transformation into the next phase

• f growth which is to innovate, execute and create value

Datuk Zaiton Mohd Hassan Senior Independent Non-Executive Director Dato’ Che Abdullah @ Rashidi Che Omar Independent Non- Executive Director Dato’ Mohamad Nasir Ab. Latif Non-Independent Non-Executive Director Dato’ Mohd Nizam Zainordin Non-Independent Non-Executive Director Tan Sri Datuk Dr. Yusof Basiran Independent Non- Executive Director Zainal Abidin Jamal Non-Independent Non-Executive Director Muhammad Lutfi Independent Non- Executive Director Tan Ting Min Independent Non- Executive Director Board of Directors Management Team

Board members have held prominent

positions and directorships in

areas such as plantation, banking and finance sectors and in governmental, regulatory and professional bodies Experienced management team with an average of about 15 years of

experience in the

plantation industry

Sime Darby Plantation Berhad

24 Strictly Private & Confidential Strictly Private & Confidential

Business Strategies & Future Plans

25 Strictly Private & Confidential

The Strategy Moving Forward – What is Different?

‘The Leading Global Integrated Palm Oil Player’

The global brand for plantation sustainability VISION GROWTH STRATEGY TARGETS BY 2025

U P S T R E A M

DRIVING OPERATIONAL EXCELLENCE VIA DIGITISATION

D O W N S T R E A M I N T E G R A T I O N 1 2 3

Towards Mission 25:25

Achieving FFB yields of 25 MT/Ha & OER of 25% by 2025

Higher Downstream PBIT contribution

20% of PBIT within the next 5 years

Integrated economics across the value chain SERVING THE CUSTOMERS OF THE FUTURE MAXIMISING RETURNS ACROSS THE PALM OIL VALUE CHAIN

Relentless Focus on Execution to Drive Value Creation

Sime Darby Plantation Berhad

26 Strictly Private & Confidential

Medium to Long Term Targets

19

FFB Yield (MT/ha)

21.3%

OER

5.2%

Downstream Contribution1

FY2017

25

FFB Yield (MT/ha)

25%

OER

Lower

Cost to customer

Higher

Downstream Contribution1

FY2025

CURRENT LONG-TERM

1 % of Contribution to Plantation PBIT , Source: Company Presentation

Sime Darby Plantation Berhad

27 Strictly Private & Confidential

Upstream –Driving Operational Excellence

20.7 21.5 20.5 21.5 20.4 20.4 18.8 19.4

10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0

21.9 21.5 21.8 21.8 21.9 21.7 21.9 21.3 22.1 22.5 22.8 23.2 23.2 25.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2025

FFB Yield (MT/ha) Oil Extraction Rate (%) FY

ACCELERATED REPLANTING

• Group : 5%

(Indonesia : 7% staggered)

A

SUPERIOR PLANTING MATERIAL

• High yielding

planting material (e.g.

Genome, Dami)

B

WATER MANAGEMENT

• Effective water

management & conservation practices

C

MECHANISATION

• Enhancing automation

& digitisation

• Advanced milling &

latest extraction technologies

D

ELEVATING YIELD PERFORMANCE THROUGH ON- GOING PROCESS ENHANCEMENTS

Source: Company

25

MT/ha

25%

Sime Darby Plantation Berhad

28 Strictly Private & Confidential

20% 9% 25% 39% 7% 10% 90% 12% 24% 47% 12% 5% 17% 20% 37% 18% 8%

Upstream – Replanting with High Yielding Materials

Average Age Profile(1) (years) Replanting Rate

5-7%

Genome Select can deliver higher oil yield as compared to our current commercial offering, Calix 600

SUPER FAMILY DAMI GENOME SELECT

NEW PLANTING MATERIALS

Note: (1) As at 30 Sep 2017 Source: Company

<3 years 4-8 Years 9-18 Years 19-22 Years >22 Years

Avg age: 4.7 yrs Avg age: 12.6 yrs Avg age: 14.3 yrs Avg age: 11.9 yrs Malaysia Indonesia PNG & SI Liberia

High Yielding Materials Average Age

10 yrs

By 2025

ACCELERATED REPLANTING

A

SUPERIOR PLANTING MATERIAL

B

Sime Darby Plantation Berhad

29 Strictly Private & Confidential

Upstream – Innovative Watering Initiatives

WATER MANAGEMENT

C MALAYSIA INDONESIA LIBERIA PAPUA NEW GUINEA & SI

• Installing mobile pumping equipment at our plantations
• Building permanent water pumps with engines at rivers and water

bodies at some of our plantations

• Irrigation system for drier, inland soils and water management for

coastal areas and areas with high water table

Innovative and cost effective irrigation techniques to ensure that

• ur estates and mills maintain adequate and consistent water

supply during prolonged dry months

Sime Darby Plantation Berhad

30 Strictly Private & Confidential

M E C H A N I S A T I O N T R A N S F O R M A T I V E R E S T R U C T U R I N G

• Enhanced processes, new technologies

and automation to drive better OER

• Increase manpower ratio per ha
• Continuous implementation of Lean Six Sigma

across the entire value chain

• Undertaking robust overheads and capital

expenditure reviews

• Productivity improvement
• Outsourcing of services
• Streamlining of operations

C O S T R E D U C T I O N

• Ongoing cost synergy initiatives

HOW ?

Source: Company Presentation

Sime Darby Plantation Berhad

Upstream – Focusing on Cost Reduction

MECHANISATION

D

31 Strictly Private & Confidential

Upstream – Moving Towards a Connected, Integrated, Automated and Sustainable Plantation

ENHANCING OER AND MILL EFFICIENCY INNOVATIVE WATERING SIME DARBY DIGITAL SUPERVISION (SDDS) Among the first in the Malaysian

• il palm industry to digitally

connect upstream operations (from estate office to field and from mill office to factory floor) (SEMUA 2.0 app)

• Deployment of unmanned aerial

vehicles for Estate mapping

• Analysis of conditions for

speedy intervention

• Monitoring and supervision

Also includes advanced milling and latest extraction technologies through

• continuous processing, integrated

processing complex

• minimum GHG emissions
• zero discharge
• Lower manpower requirement
• Increase in productivity

SD Plantation has embarked on commercial scale water conservation and irrigation

Micro Sprinkler Water Reservoirs

SIME DARBY DRONE MONITORING MECHANISATION INITAITIVE

Source: Sime Darby Plantation’s Presentation for Perpetual Sukuk Programme MECHANISATION

D

Sime Darby Plantation Berhad

32 Strictly Private & Confidential

Downstream – To become the preferred sustainable palm oil & fats specialist and customer solutions provider

• Create value by marketing and

strengthening the “Sime Darby” brand

Through achieving sustainability, quality and food safety requirements

• Explore & expand opportunities to increase
• ur presence in key geographical markets

Such as India, Southeast Asia, the United States, Europe, Africa, the Middle East and China

• Focus on differentiated, sustainable and

traceable high value products

HOW DO WE DELIVER VALUE ?

Sime Darby Plantation Berhad

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Downstream – Shifting Into High Margin Specialty Products & Deriving Full Value from CSPO

Emphasis on Physical CSPO Sales PQ Oil as the Gateway to Niche and High Value Food Segments Differentiated vs Commodity Supply Chain Optimisation to Maximise Value of CSPO

Drive production of differentiated products Drive physical CSPO sales Segregated & traceable refineries Increase production of PQ oil

A B C D

Sime Darby Plantation Berhad

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Industry Outlook

35 Strictly Private & Confidential

Demand Drivers of the Global Oil Palm Plantation and Edible Oils Industry

Competitive Pricing of Palm Oil and Price Affordability of Edible Palm Oil Increased consumer awareness on food sustainability Wide Range of Uses for Palm Oil, Palm Kernel Oil and their Related Products Growing Demand for Food due to Increase in Population Increased in Biodiesel Demand

CSPO sales grew at a CAGR of

28.0%

between 2010 and 2016, driven by a direct consequence of the sustainability commitments of FMCG companies By 2020, CSPO sales is estimated to reach

• c. 11.0 mm MT

To increase by

60%

By 2050 to meet

increase in energy intake demand (from 2005 – 2007) Average daily energy supply expected to increase by 11% during the same period

Type of Oil Price (USD/MT) in 2016

Palm Oil 718 – 751

Soybean Oil 736 – 851 Coconut Oil 1,621 Palm Kernel Oil 1,436 Corn Oil 886 – 999 Rapeseed Oil 883 Groundnut Oil 1,544

The physical and chemical characteristics of oil palm products and their derivatives allow them to be applied in a wide variety of

both food and non-food end-user industries Lower oil reserves and increased in

• il extraction cost

has driven the global demand for palm oil for the production of biodiesel By 2052, it is estimated that oil reserves may no longer be able to support the global economy Sime Darby Plantation Berhad

36 Strictly Private & Confidential

Outlook of the Global Palm Oil and Edible Oils Market

Global CPO production, palm oil consumption, demand for CSPO and CPO prices expected to increase

Increased in CPO production largely backed by technological advancements, including:

• Usage of high yield oilseeds
• Usage of mechanisation in the harvesting process

Factors driving demand for palm oil:

• Increase in global population & food requirements
• Ongoing efforts in developing biodiesel programs by

nations (e.g. the EU, the U.S., Brazil and Indonesia)

62.5 63.9 66.9 70.2 73.8 77.7 81.7 58.9 65.4 69.6 71.8 74.2 76.6 78.9 2016 2017F 2018F 2019F 2020F 2021F 2022F Global Palm Oil Consumption Global CPO Production

Global CPO Production and Consumption Forecast

Source: IMR Report prepared by Frost & Sullivan

Demand for Edible Oils Expected to Remain Strong Over the Next 5 Years

182.2 186.2 191.4 196.0 201.1 206.1 212.1 2016 2017 F 2018 F 2019 F 2020 F 2021 F 2022 F

Global Consumption of Selected Edible Oils

(mn MT) (mn MT)

Factors driving demand for edible oils:

• Growing population and increasing food consumption and

usage of non-food applications of edible oils (e.g. soap and detergents)

• Ban on trans-fats in the U.S. by June 2018 likely to drive

demand for vegetable oil alternatives from hydrogenated

• ils
• Wide range of uses of edible oils & fats

Sime Darby Plantation Berhad

37 Strictly Private & Confidential Strictly Private & Confidential

Financial Overview

38 Strictly Private & Confidential

Key Financial Metrics

12.34 14.78 11.95 10.30 3-year average FY17 FY16 FY15

Revenue (RM'bn)

Note: FY17’s PBIT and PATAMI excluded the gain from the divestment of land to Kumpulan Sime Darby Berhad

6 8 4 7 3-year average FY17 FY16 FY15

ROIC %

1,595 1,987 1,259 1,538 3-year average FY17 FY16 FY15

PBIT (RM'mn)

1,001 1,038 967 997 3-year average FY17 FY16 FY15

PATAMI (RM'mn)

39 Strictly Private & Confidential

Upstream 25% Downstream 75% Others 0.4%

FY17 Revenue by Segment

Increase was primarily due to the increase in sales of our refined edible oils and fats (downstream

• perations), sugar and beef

(upstream operations), mainly as a result of the full year consolidation of NBPOL Group’s financial result.

10,304.0 11,946.5 14,779.4 2015 2016 2017

Revenue and PBIT

RM’mn Increase was primarily due to the increase in the sales of our palm

• il products (i.e. our upstream
• perations) and our refined edible
• ils and fats (i.e. our downstream
• perations).

Revenue

Sime Darby Plantation Berhad

Malaysia 23% Europe 22% India 19% Other SEA 13% Indonesia 7% Other countries 7% South Africa 5% PNG & SI 2% China 2% Liberia 0%

FY17 Revenue by Geography FY17 PBIT by Segment

Upstream 94% Downstream 5% Others

• 1%

40 Strictly Private & Confidential

9,185.3 11,130.9 12,991.0 2015 2016 2017

Increase principally reflects the increase in the production of refined edible oils and fats at our downstream operations where the purchase of edible oil and consumables for such production was higher, coupled with higher plantation operating costs and depreciation and amortisation from our upstream operations.

Expenses, Operating Profit & PAT

RM’mn RM’mn Increase is mainly due to increased expenses from our upstream operations as well as an increase in edibles and consumables expenses from our downstream operations

1,570.9 1,268.0 4,537.9 15.2% 10.6% 30.7%

2015 2016 2017

Increase due to the higher revenue and gain from the sale of the parcel of lands to KSDB The lower overall operating profit margin is a result of lower FFB

• yield. However, this was partially
• ffset by the improvement of the
• perating profit margin in our

downstream operations. RM’mn

1,031.4 1,002.9 3,551.9 10.0% 8.4% 24.0%

2015 2016 2017

Operating Expenses Operating Profit & Operating Profit Margin PAT & PAT Margin

Sime Darby Plantation Berhad

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52 44 38 78 85 71 46 39 34 2015 2016 2017 Receivables Inventory Payables 0.5 1.3 1.1 2015 2016 2017

Working Capital & Capitalisation and Indebtedness

Days RM’mn (x) (x)

1,325.4 685.0 4,690.5 1,037.0 Within 1 year 1-2 years 2-5 years More than 5 years 0.5 0.6 0.6 2015 2016 2017

Note: (1) Based on bank borrowings

Working Capital Turnover Period Indebtedness by Maturity Current Ratio Gearing Ratio(1)

Sime Darby Plantation Berhad

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Dividend Policy

The declaration of interim and final dividends is subject to the discretion of our Board. However, our ability to pay dividends or make other distributions to our shareholders will depend upon a number of factors, including:

• the level of our cash, gearing, return on equity and retained earnings;
• our expected financial performance;
• our projected levels of capital expenditure and other investment plans;
• our working capital requirements; and
• our existing and future debt obligations.

No inference should be made from any of the foregoing statements as to our actual future profitability

• r our ability to pay dividends in the future.

We propose to pay dividends out of cash generated from our operations after setting aside necessary funding for capital expenditure and working capital requirements. As part of this policy, our Company targets a dividend payout ratio of not less than 50.0% of our consolidated profit attributable to the

• wners of our Company under MFRS, beginning 1 July 2017

Sime Darby Plantation Berhad

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Thank You