SIME DARBY PLANTATION Non-Deal Roadshow in Singapore 5 October 2018 - - PowerPoint PPT Presentation

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SIME DARBY PLANTATION Non-Deal Roadshow in Singapore 5 October 2018 - - PowerPoint PPT Presentation

SIME DARBY PLANTATION Non-Deal Roadshow in Singapore 5 October 2018 2 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


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SIME DARBY PLANTATION Non-Deal Roadshow in Singapore

5 October 2018

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Disclaimer

2 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 other

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

  • f this notice; (ii) you will maintain absolute confidentiality regarding the information contained in this document including information presented orally or
  • therwise in accordance with your confidentiality obligation; and (iii) you are lawfully able to receive this document and attend this presentation under the laws
  • f 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

  • f 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.

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S E C T I O N PA G E 1 Company Overview 4 2 Key Investment Highlights 9 3 Business Strategies & Future Plans 22 4 Industry Outlook 31 5 Financial Overview 34 6 Appendix 42

Table of Contents

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SLIDE 4

Company Overview

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SLIDE 5

Business Overview

Integrated Plantation Company Involved in the Entire Palm Oil Value Chain

5

Upstream Downstream Others

Oil palm, rubber & sugarcane estates

  • Developing, cultivating and managing
  • il 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 biogas and composting Agribusiness

  • Provision of agriculture products and

services

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

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SLIDE 6

Snapshot of Oil Palm Plantation Operational Statistics

6

FY17/18 unless

  • therwise stated

Malaysia Indonesia Liberia PNG & Solomon Islands Total Total oil palm planted area(ha) 301,027 201,220 10,441 87,304 599,992 Mature area (ha) 252,055 158,180 9,701 77,500 497,436 Palm tree age profile & average tree age (Years) FFB production (mn MT/year) 5.822 2.615 0.065 1.731 10.233 CPO production (Total) (mn MT/year) 1.419 0.710 0.016 0.508 2.653 PK production (Total) (mn MT/year) 0.357 0.160 0.003 0.130 0.650 FFB yield (MT/ha) 23.13 16.40 6.78 22.36 20.51 OER 20.40 21.39 20.60 22.41 21.02 KER 5.13 4.80 3.97 5.75 5.15

16% 22% 35% 18% 9%

<3 yrs 4-8 yrs 9-18 yrs 19-22 yrs >22 yrs

21% 12% 19% 38% 10%

12.7 yrs

7% 93%

14.1 yrs

11% 26% 48% 12% 3%

5.4 yrs 11.4 yrs

17% 20% 32% 23% 8%

12.8 yrs

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SLIDE 7

Snapshot of Downstream Operations

7 Note: Figures as at 30 June 2018

UNITED KINGDOM New Britain Oils Ltd. (300,000 MT/year) NETHERLANDS Sime Darby Unimills B.V. (450,000 MT/year) SOUTH AFRICA Sime Darby Hudson & Knight (162,500 MT/year) VIETNAM Golden Hope Nha Be (99,000 MT/year) THAILAND Morakot Industries (379,500 MT/year) Industrial Enterprises (IE) Soya (33,000 MT/year) MALAYSIA Sime Darby Jomalina (429,000 MT/year) Nuri Refinery (660,000 MT/year) Sime Darby Kempas (165,000 MT/year) Sime Darby Austral (330,000 MT/year) INDONESIA PT Golden Hope Nusantara (825,000 MT/year) PAPUA NEW GUINEA Kumbango (140,000 MT/year)

12

Refineries

~4.0 million MT

Refining Capacity

Legend Differentiated Food

KEY PRODUCTS

  • Food: Palm oil products, specialty oils & fats, phytonutrients, refined PKO,

vegetable ghee, shortening & dough fat, industrial margarine, cooking oil, CPKO & PK cake for animal feed, and non-dairy products

  • Non-Food: Oleochemicals (high quality fatty acids, glycerine, fatty alcohols,

triacetin, methyl esters, oilfield chemicals, ozone acids) and biodiesel

Bulk Processing

68%

Average Refinery Utilisation

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SLIDE 8

Downstream – Our renowned brands and winning products are used worldwide

8 * SDFBM & SDEPL is the sales and marketing arm of SDP which sells B2C products manufactured by Malaysian SDP refineries & third parties

Jomalina Nuri Kempas Austral Nusantara Morakot Nha Be Unimills Liverpool H&K Kumbango

Bulk Bulk Bulk Bulk

IE

Bulk B 2 B B 2 C Vema

(no logo)

T OP 3 B RANDS

( I N T E R M S O F R E V E N U E ) SD Food & Beverage Malaysia (SDFBM)* & SD Edible Products Ltd (SDEPL)*

Morakot Nha Be

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SLIDE 9

Key Investment Highlights

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SLIDE 10

Investment Highlights

10

Strong Investment Proposition Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends 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 Innovative & Market Leading R&D Supports Operational Efficiency & Productivity Experienced and Sound Board & Management Team 1 2 3 5 4 6

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SLIDE 11

Sime Darby Plantation’s Strong Investment Proposition

11

1

21 MT/ha 23 MT/ha

FY18 FY23 Target

FFB PRODUCTION GROWTH POTENTIAL STRENGTHENING DOWNSTREAM CONTRIBUTIONS & MARGINS LOWERING COST IMPROVING GEARING & CASH FLOW HIGH DIVIDEND POLICY

  • f Net Profit

F F B Y I E L D

61% 40%

As at 30 Jun 2017 As at 30 Jun 2018

G R O S S G E A R I N G

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12

1 Estimated based on global planted area of 21.5 mn ha worldwide 2 Based on global CPO production of 67.9 mn MT in 2017

Note: Figures as at 30 Jun 2018

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

2

We are the world’s largest oil palm plantation company by oil palm planted area with total landbank of more than 987,000 hectares across Malaysia, Indonesia, PNG & Liberia

20%

Leader in Sustainability – World’s Largest Producer of CSPO

  • f Global CSPO

Production Capacity1

~600,000 hectares

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

4 mn MT p.a.

Total Refining Capacity (12 Refineries)

Market Leading R&D

Edison Award 2017 under the Energy and Sustainability category

(Genome Select Oil Palm Project)

248

Estates

72

Mills

11

Crushing Plants

(inclusive of soy crushing plant)

2.65 mn MT

FY18 Total CPO Production (~4% of Global Market Share2)

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SLIDE 13

13

Our Journey to Sustainability

2

1985

  • Introduced

Zero burning 1990

  • Biological

control for IPM 1994

  • EMS-ISO

14001 1992

  • EUNEP Global 500

Roll of Honour for commercialisation of Zero Burning practice 2002

  • Founding

member

  • f RSPO
  • POME

utilisation as compost 2008

  • Achieved first

RSPO certification 2004

  • First Global GAP

certification 2010

  • First

certification

  • f SCCS and

ISCC

  • Pioneered the Zero Burning Policy in 1985
  • One of the founding members of RSPO
  • Largest producer of CSPO: Malaysia 100%, PNG 100% & Indonesia 96% certified
  • No deforestation of primary and virgin forest
  • No new development on peatlands
  • No development of HCS areas, once defined
  • Committed to Environmental and Social Principles – HCV, Human Rights & FPIC

2012

  • Became largest

producer of CSPO globally 2015

  • Acquisition of a fully

RSPO certified & traceable palm oil producer, New Britain Palm Oil 2016

  • Launched the

Responsible Agriculture Charter (RAC)

  • Commitment to

the HCS Convergence Agreement 2017

  • Launch of the

Human Rights Charter (HRC)

  • Commitment to

balanced development

2018

  • nwards

Moving Forward

  • Compliant to the RAC &

HRC

  • 100% RSPO certified
  • Low carbon/carbon neutral

Palm Products

  • 100% Traceability
  • Best-in-class HCV/HCS,

water conservation 2014

  • Founding

member of the HCS Science Study 2013

  • First KKPA

smallholders certified to RSPO in Indonesia

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14

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

C E R T I F I C AT I O N S TAT U S High Carbon Stock (HCS) Commitment Responsible Agriculture Charter (RAC)

Launched in Sep’16, the RAC is a summary of SDP’s commitments surrounding:

  • Human rights & social development
  • The environment
  • Corporate integrity

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

  • n Business and Human Rights

Human Rights Charter (HRC) 96%

INDONESIA

100%

PNG & SI

R S P O M S P O I S P O

100%

MSPO-certified

96%

ISPO-certified Target to be 100% RSPO- certified, pending resolution of PT MAS (Indonesia) issues, which is on-going

A s a t 3 0 J u n e 2 0 1 8 Ta r g e t

Target to be 100% ISPO- certified by end of 2018

Sustainability – Committed to Good Agriculture Practices

2

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15

Sustainability – Traceability

2

As at 30 Jun 2018

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

The dashboard and the list of mills can be found at: http://www.simedarbyplantation.com/sustainability/open-palm-traceability-dashboard

O P E N PA L M T R A C E A B I L I T Y D A S H B O A R D

Upstream – Mill Traceable up to plantations Downstream – Refinery, KCPs & Biodiesel Traceable up to plantations Traceable up to mills 85.7% Traceable CPO Palm Kernel 100% Traceable 77.5% Traceable CPO Palm Kernel FFB 84.0% Traceable

SDP targets for Upstream – Mills to be 100% traceable up to plantations by end of 2020

99.3%

Traceable

100% of SDP’s Downstream is traceable up to mills, with the comprehensive list of mills supplying to SDP available on the Dashboard

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SLIDE 16

16 Source: Company

Sustainability – Driving Market Demand

2

11.8mn MT

Global CSPO Production Capacity (as of August 2018)

  • 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

NURI REFINERY (MALAYSIA)

NEW BRITAIN OILS (UK)

CSPO PRODUCTION CAPACITY

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17

Geographical Breakdown for FY18 Total Revenue Market Reach Extends to the Top 5 Global Palm Oil Consumer 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,
  • leochemicals, biodiesel products and derivatives
  • Manages and operates 12 refineries with a total

refinery capacity of 4 mm MT/year

FY18 Total Revenue = RM14,369 mm

74% of FY18 revenue is derived from the Top 5 Global Palm Oil Consuming Countries/Region

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

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

Strong Geographical Presence

Source: Frost & Sullivan, company

Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends

3

Malaysia 23% Europe 22% India 19% Other SEA 11% Indonesia 7% Other Countries 7% South Africa 5% China 3% PNG & SI 3% Liberia 0.2%

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SLIDE 18

52.6 57.9 59.5 60.8 62.7 65.5 5.7 6.4 6.5 6.8 6.6 7.0 100.5 101.8 107.8 109.5 112.1 115.4 2012 2013 2014 2015 2016 2017 Palm Oil Palm Kernel Oil Others 62.7 65.5 66.9 70.2 73.8 77.7 81.7 795 735 761 771 782 793 804

30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0 130.0 600 650 700 750 800 850

2016 2017 2018F 2019F 2020F 2021F 2022F Palm Oil Consumption (mn MT) CPO Price, CIF Rotterdam (constant USD) 1.28 2.49 3.48 4.55 5.36 6.26 5.63 6.16 2010 2011 2012 2013 2014 2015 2016 2017

18

Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (cont’d)

3

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

Note: (1) Price rationalization in 2017 due to recovery of FFB yield and CPO production in Indonesia & Malaysia post El Nino drought. Source: Frost & Sullivan, World Bank, Oil World 2018, RSPO, LMC Oilseeds & Oils 2017

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

Global Edible Vegetable Oil Consumption (mn MT)

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

2012-2017 CAGR Palm oil: +4.5% PKO: +4.3%

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

158.8 166.1 173.8 177.1 181.4 187.9

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SLIDE 19

19

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

4

Economies of scale & cost synergies Diversification of commodity price volatility

 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 oil 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

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 Key Benefits of a Fully Integrated Business Model

Upstream Downstream

Seed Production Oil Palm Nursery Estate Management Mills – CPO & PK Production Bulk Refineries/ Facilities Specialty Food Refineries Non- Food Bulk Sales Rubber/Sugar Cane/Cattle Products Smallholders Aggregation Trading & Aggregation of CPO Oleo- chemicals Biodiesel Compost Gasification/Biogas Animal Feed Tocotrienol Biodiesel Palm Oil Products

  • Cooking Oil
  • Specialty Oils &

Fats

  • Refined PKO
  • Spreads
  • Shortenings
  • Infant Formula
  • Dairy Fat

Replacers WASTE TO WEALTH By-Product Frond Palm Fibres, Sludge Oil, POME, EFB, PKE PFAD

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SLIDE 20

20

Market Leading R&D Supports Operational Efficiency and Productivity

5

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

  • il yield improvements than its predecessors

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
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SLIDE 21

21

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

Kulaveerasingam Chief Research & Development Officer

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

  • f experience

in the plantation industry

21

  • Dr. Shariman

Alwani Chief Strategy & Innovation Officer Eliza Mohamed Chief Communications Officer Lee Ai Leng Group General Counsel

Experienced and Sound Board & Management Team

6

Zulkifli Zainal Abidin Chief Human Resources Officer Norzilah Megawati Abdul Rahman Group Secretary John Lou Leong Kok Independent Non- Executive Director

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SLIDE 22

Business Strategies & Future Plans

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SLIDE 23

The Strategy Moving Forward – What is Different?

23

‘The Leading Integrated Global Palm Oil Player’

The global brand for plantation sustainability VISION GROWTH STRATEGY TARGETS BY 2023

U P S T R EA M

DRIVING OPERATIONAL EXCELLENCE VIA DIGITISATION

D OW N S T R EA M I N T EG R AT I O N 1 2 3

Towards Mission 23:23

Achieving FFB yields of 23 MT/ha & OER of 23% by 2023

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

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SLIDE 24
  • Drive execution and de-bottleneck key initiatives
  • Track progress on value creation initiatives
  • Assess and monitor on weekly basis and ensure

accountability across all stakeholders

PROGRAM

MANAGEMENT

PLATFORM

IMPROVE TRACKING EFFICIENCY & MANAGE VALUE CREATION PROGRESS

REGULAR RHYTHM & PROCESSES

SUSTAINED WEEKLY MEETINGS TO DRIVE EXECUTION

VALUE CREATION TARGETS

GRANULAR BREAKDOWN OF TARGETS ACROSS WORK STREAMS

FINANCIAL ALIGNMENT

GREATER CLARITY & ALIGNMENT ON BUDGETING GAPS TOWARDS FY2022

PROGRESS TO DATE

TRANSFORMATION OFFICE

Value Creation

Establishment of the Transformation Office to intensify value creation

24

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SLIDE 25

Upstream – Driving Operational Excellence

25

ELEVATING YIELD PERFORMANCE

  • High yielding

planting material

(e.g. Genome, Dami)

B

SUPERIOR PLANTING MATERIAL

  • Effective water

management & conservation practices

C

WATER MANAGEMENT

  • Enhancing

automation and digitisation

  • Advanced milling

and latest extraction technologies

D

PLANTATION OF THE FUTURE

  • Group: 5-7%

A

ACCELERATED REPLANTING

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SLIDE 26

Upstream – Replanting with High Yielding Materials

26 Note: As at 30 Sep 2017 (as per the Prospectus)

Replanting Rate

5-7%

Genome Select can deliver up to 15% oil yield improvement as compared to our current commercial offering, Calix 600

NEW PLANTING MATERIALS

High Yielding Materials Average Age 10 years by 2025

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net Impact of Replanting on PBIT (RM mn)

Financial Year

Oil Palm Replanting (‘000 ha) Total Area Coming into Maturity1 (‘000 ha)

291,900 ha

BY FY2022

201,600 ha

BY FY2022

POSITIVE RETURNS

FY2017 ONWARDS

10.8 8.8 12.3 15.5 20.9 20.6 22.9 30.0 28.4 31.4 31.2 30.3 28.8

  • GENOME SELECT
  • SUPER FAMILY DAMI

11 MT/ha 9 MT/ha

ACCELERATED REPLANTING

A

SUPERIOR PLANTING MATERIAL

B

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SLIDE 27

27

Upstream – Innovative Watering Initiatives

WATER MANAGEMENT

C MALAYSIA INDONESIA LIBERIA PAPUA NEW GUINEA & SOLOMON ISLAND

  • 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

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SLIDE 28

28

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

PLANTATION OF THE FUTURE

D

SIME DARBY DIGITAL SUPERVISION (SDDS) Among the first in the Malaysian oil palm industry to digitally connect upstream operations (from estate

  • ffice 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

ENHANCING OER AND MILL EFFICIENCY SIME DARBY DRONE MONITORING RESEARCH & DEVELOPMENT

  • Scale up of Genome Select oil

palm plantings (>1,000 ha to be planted)

  • Testing of new palm traits
  • Scale up of enzymatic

extraction process to increase OER in mills

  • Lower manpower requirement

and increase productivity

  • Recently rolled out in Indonesia

and Liberia Exploring other innovative initiatives to improve processes, efficiency & productivity INNOVATION INITIATIVES MECHANISATION INITIATIVES

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SLIDE 29

Downstream – To Become The Preferred Sustainable Palm Oil & Fats Specialist & Customer Solutions Provider

29

  • 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 ?

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SLIDE 30

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

30

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

  • f CSPO

Physical Sales vs. Green Certificate

Drive production of differentiated products Drive physical sales vs Green certificates

Commodity vs. Differentiated

Functional RM1,800/MT Infant formula RM700/MT Frying RM300/MT Dairy fat replacer RM200/MT

1) Industry Average Contribution Margin: 2) SD Nutrition Leveraging on Waste to Wealth 2) Working Towards Fully Segregated & Traceable Refineries

Nuri Refinery SD Unimills New Britain Oils

1) Aggregation & Growth Partnership Model

(collaboration with smallholders)

46% 86% 88% 84% 54% 14% 12% 16% FY14/15 FY15/16 FY16/17 FY17/18

Physical Certificate

48% 42% 36% 33% 52% 58% 64% 67% FY17/18 FY16/17 FY15/16 FY14/15

Differentiated Commodity

A B C D

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SLIDE 31

Industry Outlook

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SLIDE 32

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

32

Competitive Pricing

  • f Palm Oil and

Price Affordability

  • f 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

25.2%

between 2010 and 2017, 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 2017

Palm Oil 689 – 735

Soybean Oil 716 – 846 Coconut Oil 1,603 Palm Kernel Oil 1,278 Corn Oil 825 – 943 Rapeseed Oil 870 Groundnut Oil 1,484

The physical and chemical characteristics

  • f 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 oil 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 Source: Oil World 2017/2018

slide-33
SLIDE 33

Outlook of the Global Palm Oil and Edible Oils Market

33 Source: IMR Report prepared by Frost & Sullivan, Oil World 2018, LMC Oilseeds & Oils 2017

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

Increase 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)

Global CPO Production and Consumption Forecast Demand for Vegetable Oils Expected to Remain Strong in the Future Global Consumption of Vegetable 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. beginning 18 June 2018 is likely to

drive demand for vegetable oil alternatives from hydrogenated

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

181.4 187.9 195.5 208.3 230.7 255.7 2016 2017 2018F 2020F 2025F 2030F 62.7 65.5 66.9 70.2 73.8 77.7 81.7 59.2 67.9 69.6 71.8 74.2 76.6 78.9 2016 2017 2018F 2019F 2020F 2021F 2022F Global Palm Oil Consumption Global CPO Production

slide-34
SLIDE 34

Financial Overview

slide-35
SLIDE 35

35

51.6

in RM’mn

FY2017 14,779 4,455

2,227 2,228

4,031 3,507

1,279 2,228

Revenue PBIT PBT

Recurring PBIT Non-Recurring PBIT Recurring PATAMI Non-Recurring PATAMI

PATAMI

Attributable to owners of the Company

Basic EPS

1

(RM’sen)

18.8 32.8

Recurring EPS Non-Recurring EPS

1 Based on weighted average number of ordinary shares post-listing of SD Plantation

25.4 FY2018 14,369 2,536

2,019 517

2,377 1,727

1,236 491 18.2 7.2

YoY %

  • 3%
  • 43%
  • 9%
  • 77%
  • 41%
  • 51%
  • 3%
  • 78%
  • 51%
  • 3%
  • 78%

Financial Highlights

Weaker performance due to lower non-recurring net gains, partially mitigated by lower finance costs

slide-36
SLIDE 36

36

Upstream Operations – Group Total

FY2018

20.5

FFB Yield (MT/ha) +6%

YoY %

FY2017

21.0

OER (%)

  • 1%

5.1

KER (%) +2%

4.3

Oil Yield (MT/ha) +5%

1.1

PK Yield (MT/ha) +10%

10.23

FFB Production (mn MT) +5%

2.65

CPO Production (mn MT) +7%

0.65

PK Production (mn MT) +11%

2,546

CPO Price (RM/MT)

  • 11%

2,146

PK Price (RM/MT)

  • 13%

1,707

Cost to Customer (RM/MT pp)

  • 11%

10,052

Cost to Customer (RM/mature ha)

  • 5%

19.4 21.3 5.0 4.1 1.0 9.78 2.48 0.58 2,848 2,469 1,915 10,542

Production Statistics

slide-37
SLIDE 37

37

FY2018

Return on Invested Capital (ROIC) - Recurring

YoY %

FY2017

15.2

Upstream Malaysia

+1%

15.1 13.2

Upstream Indonesia

  • 14%

15.4 3.0

Upstream PNG/SI

  • 39%

4.9 7.2

Downstream

  • 9%

7.9 10.2

SDP Group (including non-recurring)

  • 41%

17.2 8.5

SDP Group – Recurring

+10%

7.7 12.9

SDP Group – Recurring (excluding NBPOL)

+28%

10.1

Return on Equity (ROE)

11.5

SDP Group (including non-recurring)

  • 51%

23.5 9.0

SDP Group – Recurring

+1%

8.9

Return on Invested Capital & Equity

slide-38
SLIDE 38

38

Borrowings & Cash Flow

As at 30 June 2018

55%

8,815

61%

9,300

44%

7,214

Gross Gearing1 Borrowings (in RM’mn)

48% 57% 39%

Net Gearing2

39%

6,452

35%

  • Gearing as at 30 June 2018 declined

compared to the same period last year.

  • Lower finance costs at RM183mn in

FY2018 (FY2017: RM472mn) given lower average interest rates on borrowings of 2.84% in FY2018 (FY2017: 3.54%) and lower borrowings by 30% YoY at RM6,489mn in FY2018 (FY2017: RM9,300mn).

As at 30 Jun 2017 As at 30 Sep 2017 As at 31 Dec 2017 As at 31 Mar 2018 As at 30 Jun 2018 Long Term Debt Short Term Debt Intercompany Loans

70% 14% 16% 69% 19% 12% 80% 20% 82% 18% 83% 17%

40%

6,489

38% RM2,675mn

NET CASH GENERATED FROM OPERATING ACTIVITIES

30 June 2017: RM3,292mn (-19% YoY)

RM-884mn

NET CASH USED IN INVESTING ACTIVITIES

30 June 2017: RM-1,578mn (-44% YoY)

RM-2,091mn

NET CASH USED IN FINANCING ACTIVITIES

30 June 2017: RM-1,673mn (+25% YoY)

1 Gross Gearing is based on Total Borrowings (including intercompany loans) divided by Total Equity 2 Net Gearing is based on Total Borrowings (including intercompany loans) less Bank Balances, Deposits & Cash divided by Total Equity

slide-39
SLIDE 39

Dividend Policy

39

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 or 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 owners of our Company under MFRS, beginning 1 July 2017

slide-40
SLIDE 40

Proposed Dividend Reinvestment Plan (DRP)

40

The Company proposed to establish a DRP, which is subject to the relevant regulatory approvals and shareholders’ approval being obtained at an Extraordinary General Meeting, and if approved, may be applied to any future cash dividends which includes any interim, final, special or other types of cash dividends Electable Portion For every implementation of the Proposed DRP, SD Plantation Board will determine whether the Proposed DRP will apply in whole or in part to the declared dividend Issue Price of DRP Shares The issue price to be determined (“Issue Price”) will be based on a volume weighted adjusted price (“VWAP”) for the five (5) market days up to a day immediately preceding the price-fixing date, after adjusting for the following:  Gross dividend adjustment (“Ex-dividend VWAP”); and  A discount of not more than 10% to the Ex-dividend VWAP Odd Lots Shareholders participating in the Proposed DRP may be allotted new shares in odd lots (not rounded down to the nearest Board Lot, i.e. multiple of 100 shares) depending on their entitlement

PROPOSED DRP SCHEME, TERMS & STRUCTURE

Prudent financial and cashflow management Increase goodwill with shareholders

STRATEGIC RATIONALE

slide-41
SLIDE 41

Proposed Dividend Reinvestment Plan (DRP)

41

All shareholders are eligible to participate in the Proposed DRP. However, it will only be offered for subscription in Malaysia. Overseas shareholders wishing to participate in the Proposed DRP will have to provide a Malaysian address to the share registrar. The Proposed DRP will be tabled to the shareholders for approval on 21 November 2018 at SD Plantation’s Extraordinary General Meeting (EGM) which will convene immediately after SD Plantation’s Annual General Meting (AGM). The allotment of new shares and payment of dividend will tentatively take place in January 2019 as shareholders will need adequate time to make their election.

ELIGIBILITY TIMELINE

The SD Plantation Board has determined that the Proposed DRP will be applicable to the final and special final dividend for the financial year ended 30 June 2018, subject to the necessary approvals.

APPLICATION TO THE FYE JUNE 2018 DIVIDENDS

The Company proposed to establish a DRP, which is subject to the relevant regulatory approvals and shareholders’ approval being obtained at an Extraordinary General Meeting, and if approved, may be applied to any future cash dividends which includes any interim, final, special or other types of cash dividends

slide-42
SLIDE 42

Dividend for the Year Ended 30 June

42

1 The Proposed DRP will be applicable to the final and special final dividend for the financial year ended 30 June 2018, subject to the necessary approvals

FY2018 FY2017

Net Per Share (sen) Total Net Dividend (RM’mn) Net Per Share (sen) Total Net Dividend (RM’mn)

First Interim Dividend 3.5 238 50.0 300 Second Interim Dividend

  • 100.0

600 Final Dividend1 8.0 544

  • 11.5

782 150.0 900

As part of SD Plantation’s dividend policy, the Group targets a dividend payout ratio of not less than 50% of the consolidated profit attributable to the owners of the Company (PATAMI)

Payout Ratio

(out of recurring PATAMI)

63% 70%

The Group reported net non-recurring PATAMI of RM491 million in FY2018. The following special dividends have also been declared and proposed :

FY2018 Net Per Share (sen) Total Net Dividend (RM’mn) Special Interim Dividend 3.0 204 Special Final Dividend1 3.0 204 6.0 408

TOTAL ELIGIBLE FOR DRP

11.0 sen

Net Per Share

RM748mn

Total Net Dividend

slide-43
SLIDE 43

Appendix

slide-44
SLIDE 44

Revenue and PBIT

FY2018 Breakdown

44

Upstream 26% Downstream 73% Others 1%

FY18 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

  • perations), mainly as

a result of the full year consolidation of NBPOL Group’s financial result.

10,304.0 11,946.5 14,779.4 14,369.0 FY2015 FY2016 FY2017 FY2018

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

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

Revenue FY18 Revenue by Geography FY18 PBIT by Segment

Upstream 83%

Downstream 13% Others 4% Malaysia 23% Europe 22% India 19% Other SEA 11% Indonesia 7% Other Countries 7% South Africa 5% China 3% PNG & SI 3% Liberia 0.2%

Upstream 94%

Downstream 11% Others 5%

TOTAL PBIT RECURRING PBIT

Lower revenue was due to lower average CPO and PK prices realised mitigated by the higher FFB production

slide-45
SLIDE 45

1,031.4 1,002.9 3,551.9 1,885.4 10.0% 8.4% 24.0% 13.1% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 2000 4000 6000 8000 10000 FY2015 FY2016 FY2017 FY2018

Expenses, Operating Profit & PAT

FY2015 – FY2018

45

9,185.3 11,130.9 12,991.0 12,741.0 FY2015 FY2016 FY2017 FY2018

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. 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

  • perations

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

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

1,570.9 1,268.0 4,537.9 2,572.8 15.2% 10.6% 30.7% 17.9% 0.00% 10.00% 20.00% 30.00% 1000 6000 11000 FY2015 FY2016 FY2017 FY2018

Lower production costs from Upstream

  • perations
slide-46
SLIDE 46

Key Financial Metrics

FY2015 – FY2018

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

12.85 14.37 14.78 11.95 10.30 4-year average FY18 FY17 FY16 FY15

Revenue (RM'bn)

7 9 8 4 7 4-year average FY18 FY17 FY16 FY15

ROIC %

2,447 2,536 4,455 1,259 1,538 4-year average FY18 FY17 FY16 FY15

PBIT (RM'mn)

1,800 1,727 3,507 967 997 4-year average FY18 FY17 FY16 FY15

PATAMI (RM'mn)

slide-47
SLIDE 47

Snapshot of Capital and Debt

47 Note: (1) Based on Total Borrowings (including intercompany loans) divided by Total Equity 1.37 1.29 0.61 0.55 0.44 0.39 0.40

As at 30 Jun 2015 As at 30 Jun 2016 As at 30 Jun 2017 As at 30 Sep 2017 As at 31 Dec 2017 As at 31 Mar 2018 As at 30 Jun 2018

Days RM’mn (x) (x)

Working Capital Turnover Period Indebtedness by Maturity (as at 30 Jun 2018) Current Ratio Gross Gearing Ratio (1)

0.5 1.3 1.1 1.2 1.5 1.6 1.6

As at 30 Jun 2015 As at 30 Jun 2016 As at 30 Jun 2017 As at 30 Sep 2017 As at 31 Dec 2017 As at 31 Mar 2018 As at 30 Jun 2018

1,094.2 3,506.7 1,409.7 0.5 Within 1 year 1-2 years 2-5 years More than 5 years 52 44 38 40 78 85 71 75 46 39 34 35 As at 30 Jun 2015 As at 30 Jun 2016 As at 30 Jun 2017 As at 30 Jun 2018 Receivables Inventory Payables

slide-48
SLIDE 48

Financial Highlights

Weaker performance due to lower non-recurring net gains, partially mitigated by lower finance costs

48

30

4QFY17: 2,628 (-99%)

25.4

FY17: 51.6 (-51%)

0.4

4QFY17: 38.6 (-99%)

in RM’mn (YoY %)

4QFY2018 FY2018

472

  • 283

313

  • 283

3,084

4QFY17: 3,686 (-16%)

14,369

FY17: 14,779 (-3%)

189

4QFY17: 2,834 (-93%)

2,536

FY17: 4,455 (-43%)

2,019 517

149

4QFY17: 2,722 (-95%)

2,377

FY17: 4,031 (-41%)

1,727

FY17: 3,507 (-51%)

1,236 491

Revenue PBIT PBT

Recurring PBIT Non-Recurring PBIT Recurring PATAMI Non-Recurring PATAMI

4QFY17: 606 (-22%) 4QFY17: 2,228 (>-100%) FY17: 2,227 (-9%) FY17: 2,228 (-77%)

PATAMI

Attributable to owners of the Company 4QFY17: 400 (-22%) FY17: 1,279 (-3%) 4QFY17: 2,228 (<-100%) FY17: 2,228 (-78%)

Basic EPS

1

(RM’sen)

4.6

  • 4.2

18.2 7.2

Recurring EPS Non-Recurring EPS

4QFY17: 5.8 (-22%) FY17: 18.8 (-3%) 4QFY17: 32.8 (<-100%) FY17: 32.8 (-78%)

1 Based on weighted average number of ordinary shares post-listing of SD Plantation

slide-49
SLIDE 49

Financial Performance by Segment

A decline in recurring PBIT due to lower profit contribution from the Upstream

  • perations, partially mitigated by better earnings from the Downstream operations

49

Recurring PBIT in RM’mn (YoY %)

4QFY2018 FY2018

1 Others refers to Sime Darby Agri-Bio Sdn Bhd, Sime Darby Research Sdn Bhd, Sime Darby Technology Sdn Bhd, Sime Darby Biotech Lab Sdn Bhd,

Sime Darby Seeds Sdn Bhd, as well as investment holding companies, associates and joint ventures

403

4QFY17: 620 (-35%)

1,699

FY17: 2,011 (-16%)

1

4QFY17: -21 (>+100%)

53

FY17: -16 (>+100%)

68

4QFY17: 7 (>+100%)

267

FY17: 232 (+15%)

243

4QFY17: 380 (-36%)

92

4QFY17: 47 (+96%)

77

4QFY17: 219 (-65%)

  • 9

4QFY17: -26 (+65%)

1,214

FY17: 1,199 (+1%)

364

FY17: 503 (-28%)

192

FY17: 429 (-55%)

  • 71

FY17: -120 (+41%)

Upstream

Upstream Malaysia

Downstream Others

1

Upstream Indonesia Upstream PNG/SI Upstream Liberia

slide-50
SLIDE 50

Operational Performance – Upstream

FFB production in FY2018 grew 5% YoY due to the achievement of the strongest yield performance in Malaysia in the last 5 years

50

FFB PRODUCTION

in ‘000 MT (YoY %)

  • FFB production in Malaysia

grew 10% YoY in FY2018 on the back of sustained yield improvement efforts coupled with young mature palms entering their peak production

  • In Indonesia, FFB

production was marginally lower in FY2018 as a result

  • f accelerated replanting,
  • n the back of lower

average mature ha of 159,436 in FY2018 (FY2017: 166,659 mature ha)

  • FFB production in PNG/SI

in FY2018 was affected by weather abnormalities during the period, such as:

  • Extremely high rainfall

in West New Britain and very dry period in Ramu

slide-51
SLIDE 51

Operational Performance – Upstream

Marginally lower overall OER in FY2018 in Malaysia and PNG/SI

51

  • OER in Malaysia

was weaker by 1% YoY in FY2018 as a result of the increase in young mature area with low oil to bunch ratio

  • OER in PNG/SI was

weaker by 3% YoY in FY2018 on the back

  • f weather related

issues such as extended intervals, crop quality and delay in crop evacuation, among contributing factors

CPO EXTRACTION RATE (OER)

in % (YoY %)

slide-52
SLIDE 52

Operational Performance – Upstream

Lower average CPO price realised due to weaker market sentiment

52

AVERAGE CPO PRICE REALISED

in RM/MT (YoY %)

slide-53
SLIDE 53

Financial Performance – Downstream

Higher PBIT in FY2018 driven by better earnings from the differentiated products business

53

30 56

FY17 FY18

7 16

4QFY17 4QFY18

7 68

4QFY17 4QFY18

232 267

FY17 FY18

in RM’mn

>+100% YoY +15% YoY

DOWNSTREAM PBIT PBIT BY SEGMENT

  • Downstream PBIT strengthened in FY2018

driven by better earnings from:

  • The differentiated products business

due to higher sales volume, improved contribution margin, and higher capacity utilisation

  • The trading business taking advantage
  • f the CPO price volatility
  • This was offset by lower contribution from

the bulk business due to higher negative cost

  • f oil cycle

76 153

FY17 FY18

  • 14

51

4QFY17 4QFY18

>+100% YoY >+100% YoY

DIFFERENTIATED

126 58

FY17 FY18

14 1

4QFY17 4QFY18

  • 93% YoY
  • 54% YoY

BULK

>+100% YoY +87% YoY

TRADING

slide-54
SLIDE 54

Operational Performance – Downstream

Continuous efforts to drive various operational initiatives to manage cost and improve margins

54

  • Product ratio continues

to move towards higher contribution from the differentiated segment in FY2018

  • As a result, capacity

utilisation and sales volume increased in FY2018

  • n

better contribution by specialty refineries

  • LSS savings grew by 19%

YoY in FY2018 due to 174 projects harvested during the period

1 LSS – Lean Six Sigma

slide-55
SLIDE 55

The acquisition of 100% Equity Interest in Markham Farming Company Limited (MFCL)

55

STRATEGIC RATIONALE

MFCL is a private limited company incorporated in PNG which owns:

  • 6,110 ha of agriculture land in Markham Valley,

PNG, comprising 2 estates – Munum (1,733 ha) and Erap (4,377 ha).

  • Average age profile of the oil palm trees is

~18 months.

  • 2 copra mills in Buka and Madang, PNG with a

total combined copra throughput capacity of 55,000 MT per annum.

  • The
  • il

palm plantation is strategically located close to Lae, PNG’s largest port, and has the ability to integrate with SD Plantation/NBPOL’s existing supply chain.

  • MFCL is the largest coconut oil

exporter in PNG and the acquisition enables SD Plantation/NBPOL to expand its lauric oils business into coconut oil production, captive for its refining blends in Europe.

slide-56
SLIDE 56

The acquisition of 100% Equity Interest in Markham Farming Company Limited (MFCL) (cont’d)

56

Note: USD 1 = RM4.0989

KEY VALUATION METRICS

OIL PALM COPRA

Total Enterpris e Valu e (EV ) = USD63. 6mn (RM260. 7mn) EV = USD36.5mn (RM149.6mn)

Madang Copra Mill Buka Copra Mill Year Commissioned 2012 2013 Processing Capacity 20,000 MT 35,000 MT EV/EBITDA

(based on Jan-Dec 2017)

3.6x

EV = USD27.1mn (RM111.1mn)

Land in Use Area (ha) EV/ha in USD in RM Total Planted Area (1) 4,018 9,084 37,234 Remaining Plantable Area (2) 1,695

  • Total Plantable Area (1)+(2)

5,713 6,389 26,188 Non-Plantable Area (3) 397

  • Total Land Bank (1)+(2)+(3)

6,110 5,974 24,487

slide-57
SLIDE 57

Memorandum of Understanding between SD Plantation and COFCO

The collaboration is set to create greater demand for certified sustainable palm oil and increase trade volume between the two companies

57

SD Plantation has signed a Memorandum of Understanding with COFCO Group Co. Ltd., a leading agri- product merchandiser and food production company in China, to collaborate on a number of palm oil related ventures, such as:

  • Joint research and development

for specialty

  • ils

& fats and healthy palm oil products

  • Enhance

sales and marketing efforts for specialty oils & fats and healthy palm oil products

  • Joint

efforts in developing demand for sustainable palm oil in China

  • Increase trade volume of palm

products

“This collaboration reflects our aspiration to be the leader in promoting the health benefits of palm oil and to produce certified-sustainable, high value palm oil products for the global market”

slide-58
SLIDE 58

58

Summary of Operational Statistics

As at 30 June 2018

slide-59
SLIDE 59

Upstream Geographical Coverage

As at 30 June 2018

59

Kalimantan Planted : 128,211 ha Landbank : 174,719 ha Sarawak Planted : 38,894 ha Landbank : 47,296 ha Sulawesi Planted : 3,950 ha Landbank : 4,712 ha Sabah Planted : 46,375 ha Landbank : 53,780 ha Peninsular Malaysia Planted : 228,432 ha Landbank : 247,527 ha Sumatera Planted : 70,983 ha Landbank : 98,874 ha Liberia Planted : 10,548 ha Landbank : 220,000 ha Papua New Guinea(PNG) & Solomon Islands (SI) Planted : 101,873 ha Landbank : 140,370 ha As at 30 Jun’18 Malaysia Indonesia Liberia PNG Solomon Islands Group Land bank (ha) 348,603 278,306 220,000 132,055 8,315 987,279

Oil Palm Planted Area (ha) 301,027 201,220 10,441 80,539 6,765 599,992 Rubber Planted Area (ha) 12,674 1,924 107

  • 14,705

Sugarcane Planted Area (ha)

  • 5,613
  • 5,613

Grazing Pastures Area (ha)

  • 8,956
  • 8,956
slide-60
SLIDE 60

Oil Palm Age Profile

As at 30 June 2018

60

slide-61
SLIDE 61

Credit Ratings

61

Baa1, Stable

As at 26 May’17

BBB+, Stable

As at 22 Nov’17

AAAIS , Stable

PERPETUAL SUKUK

As at 14 Sep’18

RATING AGENCY RATING & OUTLOOK RATING DATE

slide-62
SLIDE 62

THANK YOU

SIME DARBY PLANTATION INVESTOR RELATIONS

investor.relations@simedarbyplantation.com +(603) 7848 4000 http://www.simedarbyplantation.com/investor-relations