Almarai Company Interim results – Quarter ended 31 March 2016

Almarai Annual Report 2015 - Digital

Disclaimer

Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, to any information contained herein.

In addition, the information contains 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 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 is strictly not to be distributed without the explicit consent of Almarai Company management under any circumstances.

Almarai Company 2016 Q1 Earnings Presentation 2

Business Highlights

Highlights – Q1, 2016

2016 Q1 Earnings Presentation

2013

SAR 11.2 B +12.4%

EBITDA 2016

SAR 0.7 B

2015

SAR 0.6 B +8.0%

Net Sales 2016

SAR 3.5 B

2015

SAR 3.0 B +13.6%

Net Income 2016

SAR 0.3 B

2015

SAR 0.3 B +0.7%

Operating Cash Flow 2016

SAR 0.4 B

2015

SAR 0.9 B -58.7%

4 Almarai Company

Capital Expenditure 2016

SAR 1.3 B

2015

SAR 0.9 B +48.7%

Free Cash Flow 2016

-1.0 B

2015

-0.0 B

-4,840%

Employees 2016

43 K

2015

39 k +9.9%

New Products • Dairy – Stable

• Food – Stable

• Bakery - Higher

• Poultry - Lower

Market Share

• 4 New products in 1st Quarter

of 2016

Innovation pipeline for Q1, 2016

Almarai Company 2016 Q1 Earnings Presentation 5

Sales Highlights

2016 Q1 Earnings Presentation 7 Almarai Company

Sales Analysis by Segment by Product

Note: All Amount in Million Saudi Riyals

Total

Net Sales

+13.6%

Net Sales

By Segment

Bakery

455 (13%)

(+100)

Poultry

330 (10%)

(+21)

Others

23 (1%)

(+4)

+28.0% +6.8% +20.9%

Fresh Dairy

1,358 (39%)

(+164)

Long-Life Dairy

384 (11%)

(+44)

Fruit Juice

425 (12%)

(+34)

Cheese & Butter

474 (14%)

(+46)

Bakery

455 (13%)

(+100)

Poultry

330 (10%)

(+21)

Other Sales

23 (1%)

(+4)

+13.8% +12.8% +8.7% +10.8% +28.0% +6.8% +20.9%

Net

Sales

By Product

3,450(+413)

Dairy & Juice

2,642 (77%)

(+ 288)

+12.2%

2016 Q1 Earnings Presentation 8 Almarai Company

Sales Analysis by Region by Country

Note: All Amount in Million Saudi Riyals

Total

Net Sales

Net

Sales

By Region

KSA

2,196 (64%)

(+259)

+13.3%

KSA

2,196 (64%)

(+259)

UAE

352 (10%)

(+49)

Oman

172 (5%)

(+22)

Qatar

175 (5%)

(+23)

Kuwait

157 (5%)

(+14)

Bahrain

71 (2%)

(+8)

Egypt

209 (6%)

(+22)

Jordan

60 (2%)

(+2)

Others

59 (2%)

(+15)

+13.3% +16.1% +14.5% +15.4% +9.6% +12.0% +11.8% +4.0% 33.3%

Net

Sales

By Country

3,450(+413)

+13.6%

Other GCC Countries

927 (27%)

(+115)

Other Countries

328 (9%)

(+39)

+14.2% +13.5%

Statement of Income

2016 Q1 Earnings Presentation 9 Almarai Company

SAR million 2015 2016 Change

Sales 3,037 3,450 13.6%

Cost of sales (1,927) (2,226) 15.5%

Gross Profit 1,110 1,224 10.2%

Selling and Distribution Expenses (623) (697) 11.9%

General and Administration Expenses (109) (124) 13.1%

Operating Income 378 403 6.6%

Share of Results of Associates 0 1 51.1%

Other (Expense) / Income (7) (11) 63.4%

Funding Costs (62) (73) 18.0%

Exchange and Currency Gains/(Losses) 16 (1) (107.2%)

Income from Main Operations 326 318 (2.3%)

Zakat and Foreign IncomeTax (10) (13) 39.8%

Income before Non Controlling Interest 316 305 (3.5%)

Non Controlling Interest (10) 4 (137.2%)

Net Income 306 309 0.7%

Earnings Per Share (Basic) 0.49 0.50 0.7%

Net Income % 10.1% 8.9%

1st Quarter

% to Sales

Q1 2016 Results

Operating Performance

2016 Q1 Earnings Presentation 10 Almarai Company

36.6% 35.5% 12.4% 11.7% 10.1% 8.9%

1,110

1,224

Q1, 2015 Q1, 2016

in million SAR

Gross Profit

+114378

403

Q1, 2015 Q1, 2016

in million SAR

Operating Income

+25

306 309

Q1, 2015 Q1, 2016

in million SAR

Net Income

+3

Q1 2016 Results

Net Income by segment:

2016 Q1 Earnings Presentation 11 Almarai Company

Net Income %

Basic EPS (SAR) 0.49 0.50

10.1% 8.9%

309 306 1 36 43

10

Q1, 2015 Dairy Bakery Poultry Other Q1, 2016

SAR Million

-0.4% +184.3% -68.9% +25.2%

Segment Reporting

2016 Q1 Earnings Presentation 12 Almarai Company

SAR Million Dairy & Juice Bakery PoultryOther

Activities

Almarai

Consolidated

Q1 2016

Net Sales 2,642 455 330 23 3,450

Depreciation (271) (42) (83) (22) (418)

Net Income 386 56 (104) (29) 309

Net Income % to Net Sales 14.6% 12.3% (31.6%) (123.9%) 8.9%

Total Assets 16,574 2,274 5,589 3,536 27,972

Growth versus Q1 2015

- Net Sales 12.2% 28.0% 6.8% 20.9% 13.6%

- Net Income (0.4%) 184.3% 68.9% (25.2%) 0.7%

Q1 2015

Net Sales 2,353 356 309 19 3,037

Depreciation (242) (38) (68) (20) (368)

Net income 387 20 (62) (39) 306

Net Income % to Net Sales 16.5% 5.5% (20.0%) (200.3%) 10.1%

Cash Flow Bridge – Rolling 12 Months

2016 Q1 Earnings Presentation 13 Almarai Company

732

4,375

1,719 (4,858)

(599)

(300)1,069

Cash at 31

Mar 2015

Operating Cash Flow

Capex / Biological

Assets DividendOthers

Cash at 31

Mar 2016SAR 337 M

Loans Issues /

Payments /

Charges

• Manufacturing and Farming spent Capex of ~0.8 B SAR for various capacity expansion projects.

• Replacement and other capex including IDJ and US land development, accounted for another ~0.2 B SAR.

• Sales depot and logistics expansion accounted for ~0.2 B SAR.

• Poultry capex spend for the quarter reached ~ 0.1 B SAR.

Sales growth was funded by continued investment in key

categories

2016 Q1 Earnings Presentation 14 Almarai Company

Manufacturing

Sales Depot Cold Store

Sales Depot (Bahrain)

Capex spend for the 1st quarter of 2016 was 1.3 B SAR which is in line

with our annual capex run rate.

Butler Valley Farm (USA)

Net Debt

2016 Q1 Earnings Presentation 15 Almarai Company

3,869 4,606 6,653 8,237 8,053 8,762 9,344 10,496

72% 74%

98% 101%

75% 69% 74% 82%

2.3x 2.2x

2.8x

3.1x 3.0x

2.8x 2.7x

2.9x

0%

50%

100%

150%

200%

250%

300%

350%

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 2012 2013 2014 2015 Last 12

Months

Net Debt Net Debt / Equity Ratio Net Debt / EBITDA

SA

R m

illi

on

Quarterly Performance – Net Income

2016 Q1 Earnings Presentation 16 Almarai Company

* Capital gain of SAR 47m in 2012

197

23

4

23

5

24

2

255

27

4

30

6 30

9

28

7 34

3

34

9

38

0

39

8

43

3

530

36

3 4

25

43

0

450

47

6 53

9 59

5

24

9

28

4

28

6 3

69

37

3 42

8

48

4

0

100

200

300

400

500

600

SA

R M

illi

on

2016 versus 2015

Q 1 = 0.7%

*

EBIT and EBITDA margins are starting to improve……

Revenue, EBITDA and EBIT Evolution

2016 Q1 Earnings Presentation 17 Almarai Company

5,869

6,931

7,951

9,883

11,21912,606

13,795

14,208

21.8%21.1%

19.1%

16.9%16.0% 15.8% 16.4% 16.1%

26.7% 27.2%

25.6%

24.2% 24.4%23.9%

24.2% 23.8%

2009 2010 2011 2012 2013 2014 2015 Last 12 Months

SA

R M

illio

n

Revenues

EBIT % to Revenues

EBITDA % to Revenues

CAGR 2009 – 2016: 14.7% (w/o impact of acquisitions 10.7%)

Key Share Data

2016 Q1 Earnings Presentation 18 Almarai Company

Share Price (SAR) 69.78

Current P/E Ratio (ttm) 21.61

Earnings Per Share (SAR) (ttm) 3.19

Market Cap (M SAR) 41,334

Shares Outstanding (M) 600

Dividend Indicated Gross Yield 1.66%

Key Statistics for Almarai (31 March 2016)

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