WILMAR INTERNATIONAL LIMITED 4Q2010 RESULTS BRIEFING 1 23 FEBRUARY 2011
IMPORTANT NOTICE Information in this presentation may contain projections and forward looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected. This presentation does not constitute or form part of any opinion on any advice to sell, or any solicitation of any offer to purchase or subscribe for, any shares nor shall it or any part of it nor the fact of its presentation form the basis of, or be relied upon in connection with, any contract or investment decision. 2
PRESENTATION OVERVIEW • 4Q10 Financial Performance • Risk Management • Business Update • Questions & Answers 3
Results Overview 4Q10 vs 4Q09 � US$m Revenue 9,089 31% Net profit 319 -28% Earnings per share in US cents 4.9 -25% (fully diluted) FY10 vs FY09 � US$m Revenue 30,378 27% Net profit 1,324 -30% Earnings per share in US cents 20.7 -25% (fully diluted) 4
Revenue Revenue Volume ‘million MT US$’million 39.1 • Strong revenue 35,000 40.0 growth 34.7 - revenue up 31% for 35.0 30,000 4Q10 and up 27% 30,378 for FY10 on 30.0 increased sales 25,000 volume and higher 23,885 25.0 commodities prices 20,000 - Volume growth for all business 20.0 segments 15,000 15.0 10.5 10,000 9.8 10.0 9,089 6,916 5,000 5.0 0 0.0 4Q09 4Q10 FY09 FY10 Volume 5
Net Profit US$’million • 4Q10 vs 4Q09 2,000 - Net profit down 28% 1,882.0 - Lower profit due to loss in Oilseeds & Grains 1,600 - 4Q10 benefited from biological assets revaluation gains of 1,324.0 1,200 US$251m • FY10 vs FY09 - Net profit down 30% 800 - weaker margins for most business segments - FY10 benefited from 400 442.0 biological assets 318.6 revaluation gains while FY09 benefited from 0 exceptional gains from sale of new shares in 4Q09 4Q10 FY09 FY10 Wilmar China Ltd 6
Profit Before Tax by Business Segment ∆ ∆ US$' million 4Q10 4Q09 FY10 FY09 Merchandising & Processing (14.1) 293.3 n.m. 704.6 1,299.7 -46% Palm & laurics 159.1 147.5 8% 587.1 692.8 -15% Oilseeds & grains (173.2) 145.8 n.m. 117.5 606.9 -81% Consumer Products 37.5 56.3 -33% 149.8 225.3 -33% Plantations & Palm Oil Mills 380.6 122.2 212% 635.8 396.9 60% Others 60.4 20.4 196% 188.5 84.0 125% Associates (21.1) 14.0 n.m. 38.1 46.2 -18% Unallocated income/(expenses) (14.4) 11.0 n.m. (72.7) 242.3 n.m. -17% -28% Total 428.8 517.1 1,644.2 2,294.4 • Merchandising & Processing – Palm & • Plantation & Palm Oil Mills – 4Q10 included fair Laurics saw higher sales volume in 4Q10 value gains from biological assets. Excluding the and respectable margins due to timely gains, 4Q10 profit increased 23% over 4Q09 due to purchases of raw materials and more higher realised prices contribution from value-added products. • Others – Higher shipping profits and higher income Oilseeds and Grains registered losses in from other investments 4Q10, despite strong volume growth, due to • Associates – Weaker performance in 4Q10 due to challenging operating environment losses generated by associates in China • Consumer Products – Higher sales volume • Unallocated income/(expenses) – 4Q10 recorded a in 4Q10 but margins lower due to rising fair value loss of US$0.7m on CBs compared to a feedstock prices and price increase gain of US$18.0m in 4Q09. Share restriction subsequent to a selling price option expenses increased increase in mid-Oct 2010 US$5.9m to US$10.5m in 4Q10 7
Pretax Profit Breakdown by Business Segment 4Q10 4Q09 FY10 FY09 Merchandising & Processing -3.2% 58.0% 41.1% 63.4% Palm & laurics 35.9% 29.2% 34.2% 33.8% Oilseeds & grains -39.1% 28.8% 6.9% 29.6% Consumer Products 8.4% 11.1% 8.7% 11.0% Plantations & Palm Oil Mills 85.9% 24.1% 37.0% 19.3% Others 13.6% 4.0% 11.0% 4.1% Associates -4.7% 2.8% 2.2% 2.2% Total 100.0% 100.0% 100.0% 100.0% * Excluding unallocated income/expenses 8
(A) Plantations & Palm Oil Mills ∆ ∆ US$ million 4Q10 4Q09 FY10 FY09 52% 33% Revenue 497.4 326.3 1,485.2 1,119.0 212% 60% Profit before tax 380.6 122.2 635.8 396.9 4% 4% Planted area (ha) 244,965 235,799 244,965 235,799 17% 17% Mature area harvested (ha) 186,688 159,464 186,688 159,464 FFB production (MT) 967,140 949,091 2% 3,348,891 3,213,360 4% -13% -11% FFB Yield (MT/ha) 5.2 6.0 17.9 20.2 Mill Production Crude Palm Oil (MT) 467,978 455,296 3% 1,597,890 1,575,534 1% 1% 1% Palm Kernel (MT) 106,744 105,691 371,626 367,894 Extraction Rate Crude Palm Oil 20.7% 21.2% -2% 20.7% 20.9% -1% -4% -2% Palm Kernel 4.7% 4.9% 4.8% 4.9% • 4Q10 and FY10 pretax profit included US$251m fair value gains from biological assets • Excluding the gains, 4Q10 pretax profit was 23% higher compared to 4Q09 due to higher realised prices, partially offset by higher unit production costs resulting from lower yield. FY10 pretax profit was only marginally higher than FY09 as FY09 realised prices benefited from forward sales and FY10 unit production costs increased due to lower yield • Yield dropped in 4Q10 and FY10 due to lower yield of newly matured hectarage. Wet weather in most parts of Sumatera in 1H10 also contributed to the lower yield in FY10 9
Plantation Age Profile in hectares Average Age of Palm 31 Dec 2010 0 to 3 yrs 4-6 yrs 7 - 14 yrs 15 - 18 yrs >18 yrs Total Indonesia 41,558 68,160 38,838 18,711 16,167 183,434 Malaysia 1,926 7,292 22,398 17,107 12,808 61,531 Total planted area 43,484 75,452 61,236 35,818 28,975 244,965 % of total planted area 17.8% 30.8% 25.0% 14.6% 11.8% 100.0% Included YTD new plantings of : 5,132 Plasma Programme 121 1,812 16,748 7,708 7,741 34,130 % of planted area 0.3% 5.3% 49.1% 22.6% 22.7% 100.0% 31 Dec 2009 Indonesia 65,751 38,840 37,366 19,847 11,562 173,366 Malaysia 2,848 8,085 25,687 17,906 7,907 62,433 Total planted area 68,599 46,925 63,053 37,753 19,469 235,799 % of total planted area 29.1% 19.9% 26.7% 16.0% 8.3% 100.0% Included FY09 new plantings of : 13,380 Plasma Programme 1,047 1,624 18,131 9,484 3,461 33,747 % of planted area 3.1% 4.8% 53.7% 28.1% 10.3% 100.0% • Weighted average age of our plantations is approximately 9 years. 10
(B) Merchandising & Processing – Palm & Laurics ∆ ∆ Palm & Laurics 4Q10 4Q09 FY10 FY09 Revenue (US$ million) 5,156 3,550 16,821 12,627 33% 45% Sales volume (‘000 MT) 5,783 5,286 9% 20,820 19,070 9% Profit before tax 159.1 147.5 8% 587.1 692.8 -15% (US$ million) Profit before tax per MT 27.5 27.9 -1% 28.2 36.3 -22% (US$/MT) • Volume was up 9% in both 4Q10 and FY10 due to consumption growth as well as the Group’s extensive distribution network and expanded capacities in Indonesia and Europe • Despite the challenging operating environment, margins for 4Q10 held up due to the timely purchases of raw materials and improved contributions from high value- added products like specialty fats, oleochemicals and biodiesel • Margins in FY10 were affected by tighter CPO supply and the uncompetitive pricing of palm relative to other edible oils 11
(C) Merchandising & Processing – Oilseeds & Grains ∆ ∆ Oilseeds & Grains 4Q10 4Q09 FY10 FY09 Revenue (US$ million) 2,975 2,567 10,172 8,156 25% 16% Sales volume (‘000 MT) 4,740 4,547 4% 18,281 15,608 17% Profit before tax -173.2 145.8 n.m. 117.5 606.9 -81% (US$ million) Profit before tax per MT -36.5 32.1 n.m. 6.4 38.9 -84% (US$/MT) • Sales volume in 4Q10 and FY10 increased due to expanded capacities in oilseeds crushing, flour and rice milling • But poor crush margins from excessive imports of soybeans by the industry and the Group’s less timely purchases of raw materials resulted in a pretax loss of US$173.2m in 4Q10 • FY10 pretax profit was down 81% on lower margins 12
(D) Consumer Products ∆ ∆ 4Q10 4Q09 FY10 FY09 Revenue (US$ million) 1,413 1,093 4,697 3,898 21% 29% Sales volume (‘000 MT) 1,035 909 14% 3,679 3,191 15% Profit before tax 37.5 56.3 -33% 149.8 225.3 -33% (US$ million) Profit before tax per MT 36.2 61.9 -42% 40.7 70.6 -42% (US$/MT) • Volume growth for 4Q10 and FY10 was due to consumption growth in China, the sale of new consumer products and increased market share in Indonesia and Vietnam • Pretax profit for 4Q10 fell 33% as margins were affected by rising prices of edible oils feedstock and price increase restriction subsequent to an increase in selling prices in mid-October 2010 • Pretax profit for FY10 fell 33% as margins weakened from the exceptional levels achieved in 1H09, which benefited from low feedstock prices during the global financial crisis. The rising prices of feedstock since mid-FY10 further contributed to the weakness 13
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