AvH analyst presentation 25 November 2016 The Connection to the world of Sustainable Tropical Agriculture
Summary SIPEF group Company profile Palm oil in the world SIPEF group Expansion SIPEF group Productions & prices SIPEF group Financial performance Peer review
SIPEF group Company yprofile The Connection to the world of Sustainable Tropical Agriculture Agriculture 1st segmentof the supply chain commodities Tropical Recent industrialised countries Sustainable Audited certifications Connection Publicly l quoted
SIPEF group Company yprofile The Connection to the world of Sustainable Tropical Agriculture Continuous production Continuous crops Diversified in product Palm oil : basic commodity for food (and recently energy) Rubber : cyclic business tire industry Diversified in origin Indonesia : leading producing country within Asian market PNG : export oriented with strong agronomical basics
SIPEF group Company yprofile
SIPEF group Company yprofile Indonesia
SIPEF group Company yprofile Papua New Guinea
SIPEF group Planted hectares summary 30 june 2016 Palm Rubber Tea Bananas Other Total % Group share Indonesia 45471 471 6 201 1 770 53 442 79% 39243 PNG 13 650 13 650 20% 13 650 Ivory coast 690 42 732 1% 732 59 121 6 201 1 770 690 42 67 824 100% 53 625 % 87% 9% 3% 1% 0% 100,0% Group share 46 867 4 429 1 597 690 42 53 625
Summary SIPEF group Company profile Palm oil in the world SIPEF group expansion SIPEF group Productions & prices SIPEF group Financial performance Peer review
Palm oil in the world Population growth In the coming 40 years, mankind will have to produce more food than in the previous 10 000 years put together Population growth will have a huge impact on future food demands Rising middle class is causing diet changes in developing countries Agricultural land is increasingly becoming scarcer
Palm oil in the world Meat consumption Meat consumption per capita is increasing worldwide due to the disposable income growth in developing countries. Kg of grains used to produce 1kg of: Beef Pork Poultry 7kg 4kg 2kg Any change in meat consumption patterns will have a major effect on the demand for meal, grain and corn. Source: Food and agriculture organization of the UN
Palm oil in the world Land input Available land 1,42 14 1,4 1,38 Hectares Bn 1,36 1,34 1,32 13 1,3 1,28 Decline: land desertification, salinization, erosion, road and urban expansion 1,26 1,24 1,22 12 1,2 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Palm oil in the world Land input Increased demand for meat/fat/processed foods Increased demand for biofuel Decreasing Agricultural land per capita Disposable income growth in developing countries
Palm oil in the world Oil and fat consumption
Palm oil in the world Vegetable oils Vegetable oils are oils or fats extracted from a plant. Their texture can be described as liquid, oily and fatty Most vegetable oils can either be used as cooking oil, be used for food and cosmetics or for fuel and diesel production The most common oil types include palm oil soybean oil canola The most common oil types include palm oil, soybean oil, canola (rapeseed) oil and sunflower oil
Palm oil in the world Oil palm plantations Oil palm plantations
Palm oil in the world Fresh fruit bunches Fresh fruit bunches
Palm oil in the world Vegetable oils 2014/15: 201,7 million tonnes 1994/95: 93,1 million tonnes 21% 30% 16% 5% 37% 8% 21% 13% 23% 6% 9% 11% Palm oil Rapeoil Palm kernel and coconut oil Soya oil Sunflower oil Other oils/animal fats Palm oil Rape oil Palm kernel and coconut oil Soya oil Sunflower oil Other oils/animal fats Source: oilworld.de, May 2015
Palm oil in the world Palm oil production 2014/15 Palm oil world production Palm oil production is primarily done in Asia: 1% 6% 1% 4% 3% Indonesia and Malaysia represent 85% of the world s palm oil production 32% 53% Oceania includes our subsidiary bidi Hargy Pl Palm Oils Ltd Total Sipef production represents 0,44% of the world production. Indonesia Malaysia Thailand Africa Oceania South America Oth countries Source: oilworld.de, May 2015
Palm oil in the world Palm oil consumption 2014/15 World consumption Asia and the Middle east consists mainly of China, India, Indonesia, 0% 11% Malaysia and Pakistan 14% 2% 2% 6% Africa consists mainly of Nigeria, Egypt, Ghana and Kenya Very limited CPO consumption in North and South America 65% Europe Russia North America South America Asia and the middle east Africa Oceania Source: oilworld.de, May 2015
Palm oil in the world Advantages of Palm oil Pl Palm oil has many advantages: Highest yielding ih ildi vegetable oil crop: less than a third of the land required compared to other crops Usable in a wide range of products, from margarine and chocolate to ice cream, soaps, cosmetics and fuel India, China, Indonesia and Europe are the main consumers, while Indonesia and Ml Malaysia are the main producers > relatively close to the consumer market
Palm oil in the world Comparison to other oils Resources used per vegetable tbl oil:
Palm oil in the world Sustainable palm oil
Summary SIPEF group Company profile Palm oil in the world SIPEF group Expansion SIPEF group Productions & prices SIPEF group Financial performance Peer review
SIPEF group Strategy and expansion SIPEF group= 100.000 Ha planted (group share) Focus on core business ess Palmoil Rubber Bananas Tea Indonesia Papua New Guinea Focus on Sustainable Agriculture (RSPO) Expansion of existing activities Acquisition of new investments Balanced leverage
SIPEF group Expansion Indonesia Beneficial interest from 38 359 Ha (dec 2015) to 66 793 Ha Future expansion of 18 475 Ha Musi Rawas and South Sumatra expansion Further increase participation interests in existing subsidiaries Both in oil palm and rubber PNG Beneficial interest from 16 899 (dec 2015) to 15 102 Ha Finalize palm oil expansion with an additional 1 544Ha In area where we are operating Sale of our 3 341 Ha rubber plantation in PNG Ivory Coast Beneficial interest from 672 (dec 2015) to 924 Ha Additional bananas development of 252Ha
SIPEF group Future expansion 80.000000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 2005 2008 2015 2020 2025 North Sum North Sum expansion Bengkulu Bengkulu expansion PNG PNG expansion Musi Rawas Ivory Coast Ivory Coast expansion
SIPEF group Umbul Mas Wisesa Toton Usaha Mandiri 2007 2015 Development of PT Umbul Mas Wisesa and PT Toton Usaha Mandiri
SIPEF group Umbul Mas Wisesa Toton Usaha Mandiri Historical timeline Location Planting started (Previous owner) 1996 to 2005 Land license Jul 2006 HGU applied Feb b2008 Land acquired Nov 2011 Planting completed Dec 2011 Building started Sep 2009 Mill completed Aug 2014 HGU acquired Feb 2015 RSPO certified Mar 2015 First RSPO certification on peat soil!
SIPEF group Umbul Mas Wisesa Toton Usaha Mandiri Area Statement 30 June 2016 Total invested amount Planted 8 216 Ha Emplacement, roads, mill,... 514 Ha Total area 8 730 Ha approx 12 000 USD/ha 30 25 20 15 10 5 Realised expected production/ha (in tonnes)* Mill construction finished August 2014 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 FFB CPO * New mill oil extraction rate is expected to be 24%
Musi Rawas Expansion: Area Map Sumatra
SIPEF group Musi Rawas progress October 2016 Description PT AKL PT ARU PT AMR TOTAL Izin lokasi Ha 10.500 9.000 12.309 31.809 Izin lokasi Ha revised 7.568 5.712 12.309 25.589 OWN Compensated Oct 2016 3.344 2.385 3.629 9.358 61% Identified Ha 1.152 835 4.078 6.065 39% Potantial Ha 4.496 3.220 7.707 15.423 100% PLASMA Incorporated June 2016 412 155 612 1.179 38% Identified Ha 487 489 929 1.905 62% Potantial Ha 899 644 1.541 3.084 100% TOTAL HA 5.395 3.864 9.248 18.507 (at IDR/USD 11.660) Compensation Oct/Ha USD 1.723 1.283 981 1.323 Potential comp/ha USD 2.183 2.906 2.347 2.381 Total average cost/ha USD 1.841 1.704 1.704 1.739 Own planted Oct 2.718 815 1.105 4.638 Own cleared Oct 12 180 298 490 Plasma planted 184 46 41 271 Total cleared/planted Oct 2.914 1.041 1.444 5.399
Musi Rawas progress 2016 Compensation Ha Cleared/Planted Ha Area YTD 2015 Oct/16 TOTAL YTD 2015 Oct/16 cleared TOTAL Planted/ compensated AKL 2.896 448 3.344 1.818 901 12 2.730 82% ARU 2.194 192 2.385 549 266 180 996 42% AMR 2.707 922 3.629 156 949 298 1.402 39% Plasma 103 168 271 TOTAL 7.797 1.562 9.359 2.626 2.283 489 5.399 58%
Musi Rawas Compensated area up to October 2016 Cumulative Compensated Area (Ha). AKL ARU AMR 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 okt 11 dec 11 feb 12 apr 12 jun 12 aug 12 okt 12 dec 12 feb 13 apr 13 jun 13 aug 13 okt 13 dec 13 feb 14 apr 14 jun 14 aug 14 okt 14 dec 14 feb 15 apr 15 jun 15 aug 15 okt 15 dec 15 feb 16 apr 16 jun 16 aug 16 okt 16 dec 16
Musi Rawas Planted area up to October 2016 6000 Cumulative Planted Area (Ha) AKL ARU AMR 5000 4000 Hectares 3000 2000 1000 0
SIPEF group MUSI RAWAS New milestone First bunches harvested din AKL in August t2016 Loading of the first fruit
Summary SIPEF group Company profile Palm oil in the world SIPEF group Expansion SIPEF group Productions & prices SIPEF group Financial performance Peer review
SIPEF group September production In Tonnes: Sept 2016 Sept 2015 YoY% Palm oil own Tolan Tiga Group 46 004 52 101 11,7% UMW/TUM Group 27 957 19 920 +40,4% PT Agro Muko 55 728 57 204 2,6% Hargy Oil Palms 45 827 45 942 0,3% Ttl Total palm oil own 175 516 175 167 +0,2% 02% Total palm oil outgrowers 35 406 38 433 7,9% Total palm oil 210 922 213 600 1,3% In Tonnes: Sept 2016 Sept 2015 YoY% Total rubber 7 090 7 853 9,7% Total tea 2 261 2 019 +12,0% Total bananas 18 719 18 681 +0,2%
SIPEF group CPO price CIF Rotterdam USD CPO prices 1 000 950 2014 900 850 800 2015 750 700 650 2016 600 550 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
SIPEF group Rubber price FOB Malaysia USD 2 400 Rubber prices 2 200 2014 2 000 1 800 1 600 2015 1 400 1 200 2016 1 000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
SIPEF group Tea prices FOB Indonesia USD 3 300 Tea prices 3 100 2 900 2014 2 700 2 500 2 300 2015 2 100 1 900 2016 1 700 1 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Summary Sipef group Company profile Palm oil in the world The El Niño phenomenon SIPEF group Productions & prices SIPEF group Financial performance Peer review
SIPEF group Sales Gross margin Total consolidated turnover (including corporate) June 2016: 117 353 KUSD June 2015: 117 944 KUSD 120 000 100 000 93 898 98 076 80 000 60 000 40 000 20 000 0 23,9% 24,1% 10 922 6 955 7 848 7 311 6% 3 991 4 009 0,3% 18% 9% 24% 13% Palm Rubber Tea Bananas 20 000 2015 2015 2016 2016
SIPEF group Gross margin per product (based on internal management reporting) Gross margin (June YTD) In KUSD 2016 in % 2015 in % Palm 26 951 87,0% 25 516 80,8% Rubber 41 0,1% 674 21% 2,1% Tea 335 1,1% 648 2,1% Bananas 873 2,8% 1 898 6,0% Corporate 2 873 9,3% 2 833 9,0% Total 30 991 100,0% 31 569 100,0%
SIPEF group Profit and loss statement (based on internal management reporting) Profit and loss (June YTD) In KUSD 2016 2015 Gross Margin 30 991 31 569 Services and administration 14 515 13 951 Other operating income/(charges) 85 149 Financial income/charges 404 278 Exchange result 55 168 Result before tax 16 102 17 321 Tax 5 126 4 247 Insurance 119 524 Result after tax 10 857 13 598 Effect of the IAS 41 restatement 0 145 Result after tax after IAS 41 restatement 10 857 13 743
SIPEF group Prospects Result 800 Given the improving production outlook for the second half of the year and the sales already achieved, we are in the meantime more positive about the 2016 recurring result, which should surpass that of last year. Palm oil prices 750 700 2015 650 600 2016 550 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
SIPEF group Consolidated balance sheet Balance sheet In KUSD June 2016 Dec 2015 Biological assets bearer plants 173 100 163 505 Other fixed assets 302 687 302 492 Net assets held for sale 0 6 943 Net current assets, net of cash 39 167 40 419 Nt Net cash position 44 520 50 521 Total net assets 470 434 462 838 Shareholders equity, y,group share 418791 413862 Non controlling interest 24 036 23 312 Provisions and deferred tax liabilities 27 607 25 664 Total net liabilities 470 434 462 838
SIPEF group Historical evolution 600,00 500,00 Turnover 400,00 300,00 Equity USD In MUSD 200,00 Net financial 100,00 position USD 0,00 100,00 Result, share of the Group 200,00 2013* restatement PT Agro Muko (decrease in turnover) 2014** restatement IAS 41R (decrease in equity & result)
Summary Sipef group Company profile Palm oil in the world SIPEF group expansion SIPEF group Productions & prices SIPEF group Financial performance Peer review
Peer review Disclaimer The information contained in this section is provided for your general information only and is not designed nor intended to offer anything more than information only. The information with respect to the companies included in the Peer Review was retrieved from publicly available information being annual reports and company websites on the one hand and from analyst reports we received on the other hand. In some cases we had to give our own interpretation to the available information in order to get comparable indicators. As a consequence of using different sources combined with giving our own interpretation to the available information, the information may not always be correct and SIPEF does not accept any liability for loss and damage that may arise from relying upon this information.
Peer review Owned Planted Oil Palm Hectares in KHa (2015) 2014 * 2015 Var % Total 3.406 3.474 2,0% Sipef 55,69 58,32 4,7% * Restated (mainly taking into account the acquisition of NBPOL by Sime Darby)
Peer review Age Profile : Average Age Planted Hectares (2015) 2014 2015 Var % Average 11,7 12,1 3,6% Sipef 9,9 9,8 1,1%
Peer review FFB Yields MT/ha (2015) 2014 2015 Var % Average 19,5 19,4 0,6% Sipef 22,2 22,6 1,8%
Peer review Extraction Rate from FFB to CPO (2015) 2014 2015 Var % Average 22,3% 22,2% 0,4% Sipef 22,6% 22,9% 1,4%
Peer review CPO Yields MT/ha (2015) 2014 2015 Var % Average 4,35 4,31 1,0% Sipef 5,01 5,17 3,2%
Peer review Market Cap in MUSD (July 2016) 2014 2015 Var % Total 3.186 2.750 13,7%, Sipef 466 493 5,7%
Peer review Market Cap Evolution 2012 2016 (Average)
Peer review Market Cap Evolution 2012 2016 (Plantations)
Peer review Dividend Yields (Based on Average Market Cap 2015) * No dividend pay-out
Peer review Price Earnings Ratio (Based on Average Market Cap 2015) * Not included as irrelevant (profit close to break-even or loss for the year)
Peer review Net financial debt/equity Ratio (2015) * Preferential shares with fixed cumulative dividend are excluded