Sime Darby Berhad Investor Presentation JPM Malaysia Best Ideas Forum 25 April 2017
Agenda Table of Contents A Sime Darby’s Financial Highlights B Key Divisional Highlights 2
Half Year ended 31 Dec 2016 A YoY Comparison (Vs. 1HFY2016) RM millions YOY% 1HFY2017 1HFY2016 2% 22,438 22,002 REVENUE 38% 1,600 1,159 PBIT 66% 1,550 936 PBT 79% 1,087 609 PATAMI 71% 16.8 9.8 BASIC EPS (sen) 3
1HFY17 & 2QFY17 Divisional PBIT A QoQ Comparison (Vs. 1QFY17) 1HFY2017 1 2QFY2017 1 Commentary 1HFY17 2QFY17 FFB 4.87mn MT 2.72mn MT production (-10% YoY) (+5% YoY) RM841mn RM568mn (+82% YoY) (+257% YoY) PLANTATION 1HFY16: 2QFY16: Average CPO RM2,739/MT RM2,835/MT RM461mn RM159mn price realised (+32% YoY) (+37% YoY) Midstream & RM121mn RM83mn Downstream (+18% YoY) (+17% YoY) Lower PBIT from Singapore and China/HK • Higher earnings from Australasia and Malaysia • RM106mn RM55mn Australasia: Better performance in the product support • (-22% YoY) (-24% YoY) INDUSTRIAL business coupled with higher equipment deliveries in Papua 1HFY16: 2QFY16: New Guinea RM135mn RM72mn Malaysia: Improved equipment deliveries and product • support sales driven by the construction sector Higher contributions from Malaysia, China and NZ in 1HFY17 • Malaysian operations +45% YoY supported by Ford and car • RM266mn RM136mn rental businesses (+15% YoY) (-7% YoY) China operations +44% YoY due to the demand to • MOTORS 1HFY16: 2QFY16: purchase super luxury cars before the hike in consumption RM231mn RM146mn tax Lower 2QFY17 PBIT due to weaker contributions from S’pore • and Vietnam of -20% YoY and -71% YoY, respectively 4 1 Excludes corporate expenses
1HFY17 & 2QFY17 Divisional PBIT A QoQ Comparison (Vs. 1QFY17) 1HFY2017 1 2QFY2017 1 Commentary RM309mn RM137mn Recognised its maiden share of profit from the Battersea • (+65% YoY) (+61% YoY) Power Station Project of RM95mn PROPERTY 1HFY16: 2QFY16: Recorded a gain on compulsory acquisition of land for • RM187mn RM85mn Damansara-Shah Alam Elevated Expressway of RM58mn Lower throughput at Jining Ports (-9% YoY) in 2QFY17 as a • result of stiff competition from alternate modes of RM23mn RM11mn transportation (-58% YoY) (-71% YoY) Higher water consumption and higher throughput in Weifang • LOGISTICS 1HFY16: 2QFY16: Port (+16% YoY) in 2QFY17 RM55mn RM38mn 2QFY16 and 1HFY16 results included an income of • RM18.5mn from the recognition of deferred income (government grant) RM24mn RM14mn Driven by higher share of profit from Ramsay Sime Darby • (+380% YoY) (>+100% YoY) OTHERS Health Care of RM18mn in 1HFY17 (+39% YoY) and RM9mn 1HFY16: 2QFY16: in 2QFY17 (+13% YoY) RM5mn RM-1mn 5 1 Excludes corporate expenses
Overview of Borrowings Position A Breakdown of long-term borrowings Breakdown of total borrowings by currencies & short-term borrowings (in RM’mn ) RMB Rupiah EURO RM16.3bn RM15.2bn 1% 2% 3% Others Total borrowings Total borrowings 4% 7% 4,567 3,168 RM RM15.2bn 25% As at 31 Dec’16 11,999 11,679 USD 65% 30 Sep'16 31 Dec'16 As at: Long-term borrowings Short-term borrowings Improved Debt/Equity (D/E ) ratio of 38% as at 31 Dec’16 from D/E ratio of 44% • as at 30 Sep’16 The bank and cash balances totaled to RM3,813mn as at 31 Dec’16 • 6
Credit Ratings A Sime Darby Berhad Baa1 Negative As at 3 rd Mar ‘16 *Currently under Rating Watch Negative BBB+ Stable As at 11 Oct’16 *Currently under Rating Watch Negative AA IS Negative PERPETUAL As at 8 Feb’17 SUKUK MARC-1 DD /AAA ID / As at 8 Feb’17 ICP/IMTN Negative Sime Darby Plantation Baa1 Stable As at 18 Apr’17 BBB+ Stable As at 18 Apr’17 *Expected rating 7
Key Divisional Highlights - Plantation B FFB Production (YoY) Average CPO Price Realised (YoY) 2QFY17 2QFY17 Mn MT RM/MT 5% 2.72 30% 50% 28% 37% 2.60 2,961 2,851 2,835 2,763 2,306 2,196 2,066 0.3% 1,837 1.34 1.34 4% 0.94 0.90 21% 0.44 0.36 Malaysia Indonesia NBPOL Group Malaysia Indonesia NBPOL Group 2QFY16 2QFY17 2QFY16 2QFY17 Higher FFB production and higher average CPO price realised in 2QFY17 • 8
Key Divisional Highlights - Industrial B M A L A Y S I A RM1.4bn Order book as at • The construction industry is driven by the government’s mega infrastructure projects and an improvement in the domestic 31 Dec’16 economy A U S T R A L I A 30:70 Breakdown of • The mining industry has seen an increase in activity recently PADE by new due to coal price recovery equipment sales – Expect better demand for product support sales and after-sales in C H I N A 1HFY17 1 • Better demand for small and medium equipment in the construction and mining sectors QoQ Improvement RM55mn RM51mn S I N G A P O R E 8% • Overall weak market sentiment in the oil & gas and offshore & marine shipyard sectors 1QFY17 2QFY17 9 1 PADE = Profit After Direct Expenses. Aggregate breakdown of PADE
Key Divisional Highlights - Motors B 42,612 (+1% YoY) Total Units Sold 1HFY17 Zhonghe (New Taipei City) 1S BMW Shenzhen Bao’an facility in Taiwan Showroom in China New showrooms and models launched in 2QFY17 22,399 (-2% YoY) Total Units Sold 2QFY17 KIA Morning Facelift in Taiwan Hyundai Ioniq in Malaysia 10
Key Divisional Highlights - Property B RM831 million UPCOMING LAUNCHES IN 2HFY2017 Gross Sales Value as at 31 Dec’16 vs RM300mn as at 31 Dec’15 RM1.5 billion Unbilled sales as at 31 Dec’16 vs RM1.2bn as at 31 Dec’15 Phase BA4A, Bandar Ainsdale Phase G3B, Elmina East 50% 45 units of DSLH 67 units of DSLH • • Estimated GDV of RM 30mn Estimated GDV of RM76mn • • Take- up rate as at 31 Dec’16 vs 50% as at 31 Dec’15 742 units Total units launched in 1HFY17 vs 538 units launched in 1HFY16 Rumah Selangorku, Phase NU3A3, Nilai Impian 865 units Bukit Jelutong 138 units of DSLH • 944 units of apartments • Estimated GDV of RM63mn • Total units sold in 1HFY17 Estimated GDV of RM178mn • vs 501 units sold in 1HFY16 11 DSLH = Double-Storey Link Houses
APPENDICES 1. Group 2. Plantation 3. Industrial 4. Motors 5. Property 6. Logistics 12
Broad Mix of Strong and Reputable Shareholders Employees Provident Fund – Malaysia’s RM9.28 largest pension fund EPF Share Price 9.4% As at 18 th Apr 2017 RM63.11 billion Shareholding Others 38.9% Structure Market Capitalisation As at 31 st Mar 2017 As at 18 th Apr 2017 PNB 51.7% 14.82% Foreign Shareholding As at 31 st Mar 2017 Malaysia’s biggest fund management company 13
FY2017 Headline KPI Targets Key Parameters RM2.2bn Average CPO price of RM2,650/MT NET EARNINGS TARGET Subdued demand for engines from the oil & gas, marine and shipyard sectors 6.4% Weaker Ringgit Malaysia RETURN ON AVERAGE resulting in higher cost of SHAREHOLDERS’ EQUITY imported inputs TARGET Strict lending policies and cautious consumer sentiment 14
Second Quarter ended 31 Dec 2016 YoY Comparison (Vs. 2QFY2016) RM millions YOY% 2QFY2017 2QFY2016 4% 12,339 11,829 REVENUE 68% 927 552 PBIT 94% 921 475 PBT 126% 644 285 PATAMI 111% 9.7 4.6 BASIC EPS (sen) 15
Second Quarter ended 31 Dec 2016 QoQ Comparison (Vs. 1QFY2017) RM millions QoQ% 2QFY2017 1QFY2017 22% 12,339 10,099 REVENUE 38% 927 673 PBIT 46% 921 629 PBT 45% 644 443 PATAMI 39% 9.7 7.0 BASIC EPS (sen) 16
Breakdown of External Revenue In RM’mn 1HFY17 1HFY16 % 2QFY17 2QFY16 % Plantation Upstream & Others 2,757 2,587 7% 1,640 1,355 21% Midstream & Downstream 3,944 3,455 14% 2,270 2,027 12% 6,701 6,042 11% 3,910 3,382 16% Industrial Malaysia 644 473 36% 322 219 47% SE Asia ex Malaysia 253 605 -58% 124 335 -63% China/HK 1,127 1,199 -6% 641 656 -2% Australasia 2,494 2,566 -3% 1,267 1,247 2% 4,518 4,844 -7% 2,354 2,458 -4% Motors Malaysia 1,623 1,594 2% 902 847 7% SE Asia ex Malaysia 2,513 2,293 10% 1,307 1,280 2% China/HK 4,380 4,257 3% 2,492 2,435 2% Australasia/NZ 1,672 1,603 4% 858 774 11% 10,188 9,747 5% 5,559 5,336 4% Property Property Development 777 1,060 -27% 383 486 -21% Property Investment 78 120 -35% 38 63 -39% 855 1,180 -28% 421 548 -23% Logistics Ports 114 120 -5% 59 63 -6% Water 31 28 11% 16 14 14% 145 148 -2% 75 77 -3% Others 27 38 -29% 18 26 -31% 4 3 2 1 Elimination/Corporate Expenses TOTAL 22,438 22,002 2% 12,339 11,829 4% 17
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