Invest Malaysia Kuala Lumpur 2019 19 20 March 2019 2 Disclaimer - - PowerPoint PPT Presentation

Invest Malaysia Kuala Lumpur 2019

19 – 20 March 2019

SIME DARBY PLANTATION BERHAD

Disclaimer

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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.

S E C T I O N PA G E 1 Company Overview 4 2 Key Investment Highlights 9 3 Business Strategies & Future Plans 25 4 Industry Outlook 39 5 Financial Overview 46 6 Snapshot of Financial Performance in FP December 2018 53 7 Appendix 58

Table of Contents

Company Overview

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 Hectarage as at 31 December 2018 Rubber 14,725 ha of rubber estates Cattle 9,560 ha of grazing pasture Sugarcane 5,613 ha of planted area

Snapshot of Oil Palm Plantation Operational Statistics

6

As at 31 December 2018 unless otherwise stated

Malaysia Indonesia Liberia PNG & SI Total

Total oil palm planted area(ha)

304,731 201,072 10,263 91,080 607,146

Mature area (ha)

248,964 158,791 9,975 79,125 496,855

Palm tree age profile & average tree age (Years) FFB production* (mn MT/year)

5.373 2.892 0.086 1.980 10.331

CPO production* (Total) (mn MT/year)

1.332 0.787 0.020 0.571 2.710

PK production* (Total) (mn MT/year)

0.335 0.178 0.005 0.148 0.665

FFB yield* (MT/ha)

21.9 18.1 8.7 25.1 20.9

OER*

20.8 21.1 21.1 22.4 21.2

KER*

5.2 4.8 5.5 5.8 5.2

Average CPO selling price* (RM/MT)

2,262 1,920 1,989 2,412 2,184

Average PK selling price* (RM/MT)

1,780 1,376 481

• 1,678

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

11.8 yrs 13.6 yrs

13% 24% 45% 13% 5%

5.4 yrs 11.8 yrs

18% 21% 30% 22% 9%

12.3 yrs

* For the January – December 2018 period

18% 22% 35% 16% 9% 21% 13% 17% 38% 11% 3% 97%

Snapshot of Downstream Operations

7

Differentiated Food Bulk Processing

Legend:

* Excluding Industrial Enterprises (IE) Soya in Thailand Note: ▪ Figures as at 31 December 2018 ▪ Names of refineries in brackets refers to the respective proposed new names

11

Refineries

3.8 million MT

Refining Capacity

75%*

Average Refinery Utilisation

Key Products

Refined bulk products produced by the Group’s bulk refineries: RBD Olein, RBD Stearin, CPKO, RBD PKO, etc. Ingredients produced by the Group’s refineries: Bakery fats, specialty oils, confectionery fats, health Non-food products produced by the Group’s biodiesel, oleochemicals and nutrition plants

Downstream – Forging the Pathway to Global Consumers to Establish Lasting Relationships

8

Region Refinery Ingredient Customer End Product

Malaysia Jomalina Europe Unimills South Africa Hudson & Knight Vema 37 Malaysia Biodiesel Europe New Britain Oil Refined Palm Oil

Premium Quality Olein Palm Olein Refined Palm Oil Refined Palm Oil

(SD Oils Langat Refinery) (SD Oils South Africa Pty Limited) (SD Oils Zwijndrecht Refinery B.V) (SD Oils Biodiesel Sdn Bhd) (SD Oils Liverpool Refinery Limited)

Key Investment Highlights

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

Sime Darby Plantation’s Strong Investment Proposition

11

1

21 MT/ha 23 MT/ha

Jan - Dec 2018 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% 46%

As at 30 Jun 2017 As at 31 Dec 2018

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

12

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

2

Note: Figures as at 31 December 2018 unless stated otherwise

1 Estimated based on global planted area of 21.5 mn ha worldwide 2 For the January – December 2018 period 3 Based on global CPO production of 70.46 mn MT in 2017/2018

We are the world’s largest oil palm plantation company by oil palm planted area with total landbank of more than 997,000 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)

3.8 mn MT p.a.

Total Refining Capacity (11 Refineries)

Market Leading R&D

Edison Award 2017 under the Energy and Sustainability category

(Genome Select Oil Palm Project)

250

Estates

71

Mills

11

Crushing Plants

(inclusive of soy crushing plant)

2.71 mn MT

2

Jan-Dec 2018 Total CPO Production (~4% of Global Market Share3)

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

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 on 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

A s a t 3 1 D e c e m b e r 2 0 1 8

Sustainability – Committed to Good Agriculture Practices

2

The charter states

• ur

aspirations across the value chain in achieving prosperity, via enabling high levels of productivity in delivering sustainable development

Innovation & Productivity Charter (IPC)

15

Proactively managing risks and grievances within our global supply chain…

Sustainability – Supply Chain Sustainability

2

OpenPalm - 2016 Our global supply chain is currently 97% traceable to the mill Identify and manage risks throughout our supply chain… … and effectively respond to grievances of our supply chain

OpenPalm Global Mill List of all our refineries publicly available Supply Chain Risk Assessment Supplier Grievances and our actions taken publicly available Satellite monitoring from stakeholder reports

16

Going beyond our boundaries to uplift the practices and livelihoods of our suppliers, communities and the industry

Sustainability – Supply Chain Sustainability

2

• Our outgrowers’: ~40,000 ha of area,

supporting ~25,000 families

• Decent Rural Living Initiative
• Community Fire Prevention program
• 100% RSPO certification: 16,000 smallholder blocks
• SAN Standard by Rainforest Alliance
• Responsible Sourcing Guidelines
• MSPO certification
• Entire Sabah state RSPO certified by 2025
• Nestle and ELEVATE to develop an independent 3rd party

grievance hotline

Examples of some of our efforts within the region

17 Source: Company

Sustainability – Driving Market Demand

2

13.9mn MT

Global CSPO Production Capacity (as of January 2019)

• 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

18

Strengthening our position as the world’s #1 producer of certified sustainable palm oil (CSPO)

BEST SUSTAINABLE PALM OIL LEADER

SIME DARBY PLANTATION

Recognises companies in Malaysia which have demonstrated extraordinary performance in the field

• f

sustainability to the long term benefit of the Malaysian society and economy, in line with EU sustainable development values and United Nations Sustainable Development Goals (SDGs)

based on initiatives which have made a positive contribution to the environment, communities and societies during the year

Sustainability

2

Sustainable Business Awards (SBA) Malaysia 2019

SD PLANTATION EMERGED AS ONE OF THE BIGGEST WINNERS WITH 5 AWARDS

The SBA is a regional platform intended to share good sustainability practices across companies in SEA and demonstrate how sustainable business benefits companies, the environment and all stakeholders

• OVERALL WINNER
• OVERALL CHAIN MANAGEMENT
• STRATEGY AND SUSTAINABILITY

MANAGEMENT

• BEST SUSTAINABILITY IN THE

COMMUNITY

• BEST LAND USE AND BIODIVERSITY

19

Upstream Operations

• Presence in 5 countries
• Developing, cultivating and managing oil palm,

rubber & sugarcane plantation estates

• Operates and manages 250 plantation estates

and 71 palm oil mills

• Cattle rearing & beef production

Downstream Operations

• Mainly operating across 7 countries
• Production & sales of bulk & refined oils and fats,
• leochemicals, biodiesel products and derivatives
• Manages and operates 11 refineries with a total

refinery capacity of 4 mn MT per year

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

Source: Frost & Sullivan, company

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

3

MALAYSIA INDONESIA LIBERIA PAPUA NEW GUINEA SOLOMON ISLANDS MALAYSIA INDONESIA THAILAND PAPUA NEW GUINEA UNITED KINGDOM NETHERLANDS SOUTH AFRICA

20

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

3

Sime Darby Plantation is well positioned to tap into the fast growing demand in Asia Pacific

38 48 63 68 71 76 89 101 15 15 17 18 18 18 18 19 10 9 10 10 10 11 11 12 31 38 46 50 52 56 64 74 2005 2010 2015 2017 2018 2020 2025 2030 Asia Europe US RoW 94 111 136 146 151 160 183 205 12 26 37 44 48 54 59 64 2005 2010 2015 2017 2018 2020 2025 2030 Food Non Food

5.9 5.1 6.9 6.7 6.5 2.7 1.7 2.7 2.2 3.7 4.7 5.1 6.6 7.3 6.5 3.1 1.4 2.2 2.9 3.7 4.8 5.3 6.0 7.7 6.3 3.9 1.6 1.7 1.7 3.6 4.8 5.3 5.8 7.7 6.2 3.9 1.6 1.7 1.5 3.6 4.8 5.4 5.6 7.7 6.1 4.1 1.6 1.6 1.4 3.6 Malaysia Indonesia China India Emerging & Developing Asia Sub-Saharan Africa United Kingdom EU U.S. World

2017 2018F 2021F 2022F 2023F

Source: LMC Oilseeds & Oils Report 2018, USDA, IMF October 2018

Given Asia’s population density and the growing income of its populace, additional demand growth from the region will be strong Global Vegetable Oil Consumption is expected to grow at 2.8% by 2030 Vegetable Oil in Food Consumption will be driven by Asia Malaysia and Indonesia represents 85% of global CPO production. SDP has strong presence in these countries Rising personal wealth and consumption are transforming Asia’s economies and markets

2017 – 2030 CAGR Global: 2.8%

106 173 189 199 214 241 270

in mn MT 2017 – 2030 CAGR Asia: 3.1% Europe: 0.5% U.S.: 0.9%

in mil MT

2013 – 2019 CAGR Global: 4.2% as a % of global production

GDP Growth Rates (%) – 2017 - 2023

28.5 30.5 33.0 32.0 36.0 38.5 40.5 19.3 20.2 19.9 17.7 18.919.68320.5 0.5 0.5 0.5 0.6 0.7 0.6 0.6 8.0 8.1 8.3 8.6 9.7 10.5 10.6

12/13 13/14 14/15 15/16 16/17 17/18F 18/19F

Indonesia Malaysia Papua New Guinea RoW

84.8% 85.5% 85.6% 84.4% 84.0% 84.1% 84.4%

136

21

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

1 2 Key Benefits of a Fully Integrated Business Model

With a fully integrated business model, we are able to diversify our earnings risk from volatility of commodity price and leverage on operational synergies

22

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

23

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 Deputy To Managing Director & Chief Operating Officer, Upstream

• Dr. Simon Lord

Chief Sustainability Officer Mohd Haris Mohd Arshad Chief Operating Officer, Downstream

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

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

• 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 John Lou Leong Kok Independent Non- Executive Director Datuk Zaiton Mohd Hassan Senior Independent Non- Executive Director Dato’ Mohamad Nasir

• Ab. Latif

Non-Independent Non- Executive Director

• Dr. Harikrishna

Kulaveerasingam Chief Research & Development Officer Norzilah Megawati Abdul Rahman Group Secretary Gajani Nayagi Seeveneserajah Chief Risk Officer Nik Maziah Nik Mustapha Chief Internal Auditor

Appointment of Mohamad Helmy Othman Basha as Deputy to the Managing Director

24

Mohamad Helmy Othman Basha

Deputy To Managing Director & Chief Operating Officer, Upstream

(with effect from 1 January 2019, until the retirement of Tan Sri Mohd Bakke Salleh as Executive Deputy Chairman & Managing Director in June 2019)

The appointment is part of the Company’s plan to ensure seamless succession of the top leadership, subject to the performance appraisal and final approval from the Board

• f Directors.

Sime Darby Plantation continues to strive to create more value and deliver sustainable results for our stakeholders. AGE: 51 years old EXPERIENCE: >18 years in the plantation industry QUALIFICATIONS/ASSOCIATION:

• Fellow of the Association of Chartered Certified Accountants (ACCA)
• Member of the Malaysian Institute of Accountants
• President of the Malayan Agricultural Producers Association

CAREER JOURNEY:

• Auditor – Wellers, Accountants, Oxford, UK
• Various roles in Shell Group, Malaysia
• Finance & Administration Manager – Guthrie Property Holdings Sdn Bhd
• Various leadership positions in Kumpulan Guthrie Berhad including Chief Executive

Officer – Highlands & Lowlands Berhad and Guthrie Ropel Berhad (Key member of the Guthrie team that acquired PT Minamas Gemilang Plantation in Indonesia in 2001)

• Head, Upstream Malaysia – Sime Darby Plantation Sdn Bhd (Also headed the

Company’s overseas expansion into Africa)

• Founder – Xcellence Alliance Sdn Bhd and Chemara Palmea Holdings Bhd
• Head, Plantation Services & Special Projects – Sime Darby Plantation Berhad
• Appointed Chief Operating Officer, Upstream in 2017 – Sime Darby Plantation Berhad

6 Ensuring Smooth Leadership Transition

Business Strategies & Future Plans

The Strategy Moving Forward

26

‘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 Group’s 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

Medium to Long Term Targets

27

20.5

FFB Yield (MT/ha)

21.0%

OER

11%

Downstream Contribution1

FY2018

23.5

FFB Yield (MT/ha)

23.1%

OER

>15% reduction2

Cost to customer

15-20%

Downstream Contribution1

FY2023

1 % of Contribution to Group PBIT 2 Reduction in Cost to Customer as compared to FY2018

22.7

FFB Yield (MT/ha)

22.7%

OER

10-15% reduction2

Cost to customer

10-15%

Downstream Contribution1

FY2020

RISE to APEX

Driving performance through culture change

28

Accelerating Performance Excellence Sustaining Performance Excellence Measure: PATAMI Growth Measure: Organisational Health Index (OHI) “How we deliver results” “How we sustain results”

• Value creation initiatives
• Operational excellence
• 6 Winning Mindsets
• Organisational Practices

TRANSFORMATION OFFICE

Disciplined execution and rigour across APEX

PERFORMANCE HEALTH & CULTURE

Value Creation

Establishment of Transformation Office to ensure effective execution of strategies

29

• Unlocking value creation
• Drive execution and de-bottleneck initiatives
• Track progress on value creation initiatives
• Assess and monitor on weekly basis and

ensure accountability

TRANSFORMATION OFFICE

UPSTREAM SPECIAL PROJECTS DIGITAL DOWNSTREAM CASH CONTROL TOWER RESEARCH & DEVELOPMENT ORGANISATION / PEOPLE

work streams

7

FINANCIAL ALIGNMENT

Value creation targets

PROGRAM MANAGEMENT PLATFORM

Improve tracking efficiency & manage value creation progress

30

SDP’s Journey to be the Leading Innovator in the Palm Oil Industry

To protect, sustain and leap the growth of SDP’s value 2019 >2020 EMBEDDING INNOVATION

AWARENESS & PLATFORM

BELIEVE IN INNOVATION

UPSKILL & ENHANCE

ACT WITH INNOVATION

INGRAIN & ENFORCE

2018 LEAD IN INNOVATION

EXEMPLARY ROLE MODEL

2020

Upstream – Driving Operational Excellence

31

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: 4 - 5%

A

REPLANTING

32

Upstream – Replanting with High Yielding Materials

REPLANTING

A

SUPERIOR PLANTING MATERIAL

B

GenomeSelect palms in Diamond Jubilee Estate (DJE) Oil palm bunches on 2 year old GenomeSelect palm New GenomeSelect field in DJE planted in 2018

33

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

34

Upstream – Moving towards a connected, integrated, automated and sustainable plantation

PLANTATION OF THE FUTURE

D

STRATEGIC INNOVATION

Drive innovation culture to monetise internal & external ideas for value creation

DIGITALISATION & INDUSTRY 4.0

Digitally-enabled value chain analytics to be highly efficient, cost effective and sustainable

Normalised Vegetation Index (NDVI)

On-demand aerial analysis (non-exhaustive examples)

Tree Count Census Aerial Monitoring Hotspot Monitoring Dashboard UAV: Unmanned aerial vehicle Value chain analytics Drone Monitoring SD2 System: Two-tier bin system with mechanical buffalo Loose Fruit Collector Powered Exoskeleton

35

Improving Operational Efficiencies

Our strategic initiatives are yielding positive results Replanting with Superior Planting Materials Cost Management

Progress To-date Strategic Priorities Initiatives To Improve Operational Efficiencies

Water Management

10,867 ha irrigated1 1,157 ha irrigated1 3,584 ha irrigated1 2,071 ha irrigated1

FFB Production

2

OER

2

+2% YoY +1% YoY

• SD Premium
• Genome

Select

• Super Family

Dami

• Labour

rationalisation

• Fertiliser cost

reduction via precise application

Cost to Customer

2

• 3% YoY

Crop Quality Improvements

Improving and streamlining processes to enhance crop evacuation

Jul-Dec’18 : 5.56 mn MT Jul-Dec’17 : 5.46 mn MT Jul-Dec’18 : 21.17% Jul-Dec’17 : 20.96%

1 As at 31 December 2018 2 For the six-month financial period ended 31 December 2018 (FP December 2018)

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

36

• Create value by marketing and stronger

branding

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 ?

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

37

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

Drive production of differentiated products Drive physical sales vs Green certificates

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% 83% 54% 14% 12% 16% 17% FY14/15 FY15/16 FY16/17 FY17/18 Jan-Dec'18

Physical Certificate

45% 48% 42% 36% 33% 55% 52% 58% 64% 67% Jan-Dec'18 FY17/18 FY16/17 FY15/16 FY14/15

Differentiated Bulk

A B C D

Differentiated vs Bulk Physical Sales vs Green Certificate

Industry Outlook

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

39

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

21.9%

between 2010 and 2018, 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 2018

Palm Oil 535 – 709

Soybean Oil 728 – 871 Coconut Oil 787 – 1,394 Palm Kernel Oil 708 – 1,265 Sunflower Oil 703 – 806 Rapeseed Oil 793 – 854 Groundnut Oil 1,433 – 1,477

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: World Bank, RSPO

Global Vegetable Oil Demand & Supply

40

51.9 45.4 25.3 25.1 16.4 10.9 51.6 47.6 26.0 26.3 16.7 11.1 51.2 48.5 26.6 26.8 16.9 11.1

EU-28 US China Latin America India Africa

Vegetable Oil Demand per Capita (kg)

2016/17 2017/18 2018/19 106 136 173 189 199 214 241 270 111 141 180 190 198 214 242 272 6.5 7.0 7.4 7.6 7.6 7.8 8.2 8.6

0.0 2.0 4.0 6.0 8.0 10.0 50 100 150 200 250 300 350 2005 2010 2015 2017 2018 2020 2025 2030

bn mn MT

Vegetable Oil Demand & Supply vs Population

Demand Supply Population (RHS)

Source: LMC Oilseeds & Oils Report 2018, United Nations, USDA

Demand/Capita (kg) 16.2 19.6 31.5 27.5 25.1 23.4 29.5 26.0 13.4 4.2 3.4 4.1 7.1 6.1 12.9 4.8 3.6 4.3 6.9 6.2 12.6 4.3 3.9 4.3 7.8 6.2

EU-28 US China Latin America India Africa

Palm Oil Demand per Capita (kg)

2016/17 2017/18 2018/19

Population Growth is a Key Driver

Huge Potential for the Palm Oil Industry

41

260 584 290 310 901 667 590 601 614 682 755 1970 1980 1990 2000 2010 2017 2018 2019 2020 2025 2030

CPO Price (1970 - 2030)

Source: LMC Oilseeds & Oils 2018, World Bank October 2018, Bloomberg

Notes: 1) World Bank palm oil price from 1970-2014 - 5% bulk, c.i.f. North West Europe; from 2015 onwards - Palm oil (Malaysia), f.o.b. spot (constant price, adjusted for inflation) 2) Actual historical exchange rates used for conversion of prices from 1970-2017; constant rate of USD1:RM4.00 used for 2018-2030.

788 1,270 784 1,179 2,900 2,869 2,362 2,405 2,457 2,727 3,019

RM/MT

USD/MT 2.7 14.4 23.7 29.6 33.6 38.9 39.8 41.8 0.5 0.8 1.0 1.1 1.2 1.3 1.7 2.1 2005 2010 2015 2017 2018 2020 2025 2030

Vegetable Oil Consumption in Biofuels (mn MT)

Biodiesel Direct Burning

3.2 4.5 5.7 6.0 6.3 6.4 7.5 8.9 3.6 4.2 4.7 5.2 5.4 5.9 7.6 9.6 2005 2010 2015 2017 2018 2020 2025 2030

Vegetable Oil Consumption in Oleochemicals (mn MT)

Lauric Oils Palm Products

Longer Term CPO Price Forecasts

42

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MPOB Palm Oil Prices

MPOB Daily Price World Bank Forecast

Source: World Bank October 2018, Bloomberg

5-Year Average Prices (MPOB) Average World Bank Prices for 2018-2030: RM2,592/MT

Notes: 1) Historical MPOB prices sourced from Bloomberg 2) Forecast prices sourced from World Bank (constant price, adjusted for inflation) 3) Exchange rate of USD1:RM4.00 applies for World Bank CPO price forecasts between 2018 - 2030

CAGR (‘92 – ’95): 17.00% CAGR (‘96 – ’00):

• 4.35%

CAGR (‘01 – ’05): 11.43% CAGR (‘06 – ’10): 16.08% CAGR (‘11 – ’15):

• 9.84%

CAGR (1992 – 2017): 4.55% World Bank CAGR (2018 – 2030): 2.07% Average Price 2018-2030: RM2,592/MT

1,382 2,373 2,619 1,484 1,143 2,582 2,617

5-Year Average Prices (World Bank)

2030: RM3,019/MT 2018: RM2,362/MT

RM/MT

43 Source : MPOB, Reuters, Oil World, RHB

• Demand for palm oil could also be driven by:

 Increasing demand from China (+5% YoY to 5.7 mil MT for 18/19F)  Higher demand from India (+7% YoY to 9.3 mil MT for 18/19F) - due to reduction in import duties  Biodiesel:

• Malaysia’s target to implement B10

from Feb 2019, possibly B20 by 2020

• Indonesia’s implementation of B20 in

2019 could possibly absorb an additional 2.5 million MT of CPO  El Niño  Upcoming festive seasons

0.0 1.0 2.0 3.0 4.0 5.0

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18

CPO production may continue its downtrend due to seasonal cycle

Msia Inv Indo Inv Msia Prod Indo Prod 50 100 150 200 250 100 200 300 400 500 600 700 800 900 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18

Soybean Oil Premium (USD/MT) Price (USD/MT)

Escalating soy oil to palm oil premium

SBO-CPO Premium (RHS) Soybean Oil Price CPO Price Correlation = +0.84

*PSO: Public Service Obligation

Short-Term Industry Outlook

Industry Developments – Potential Impact to SDP

44

Source: CIMB, Downstream

CPO Price (USD/MT) Export Levy (USD/MT) CPO Processed Palm Products <500 500-549 25 5-10 >549 20-50 20-50

Indonesia’s new palm oil export levy structure w.e.f 4 Dec 2018

Implications on Sime Darby Plantation

• The removal of the CPO export levy is positive

for Sime Darby Plantation’s CPO coming out of Sumatera.

• Sime Darby Plantation’s Downstream unit will

continue to drive sales for both local and export markets, whilst managing inventory and high FFA CPO.

REVISION OF EXPORT LEVY IN INDONESIA IMPORT DUTY FOR EDIBLE OILS IN INDIA

Country of Origin CPO RPO Old New Old New ASEAN 44% 40% 54% 50% Malaysia 54% 45%

India’s new import duty structure for both CPO & refined palm oils (RPO) w.e.f. 1 Jan 2019

• The reduction will lead to higher imports of palm oil by

India in the coming months, narrowing the difference between palm oil and competitor edible oils.

• This could help restore palm oil’s market share of total

edible oil imports in India, providing support to CPO prices.

• Higher demand for RPO is positive for Malaysian

refiners.

Implications on Sime Darby Plantation

• The reduction in duties will be positive for Sime Darby

Plantation’s exports, particularly when India is one of its major markets.

• However, the Group has also other key markets including

4 other top consuming countries (Malaysia, Indonesia, EU and China).

Source: The Star, Hellenic Shipping News, MPOC, Cambridge Dictionary, The Edge

• The removal of the export levy will raise

competitiveness of Indonesia palm oil products. This will help in narrowing Indonesia’s CPO price discount to Malaysia, which has expanded to RM420/MT (USD100/MT) in 3Q18.

Financial Overview

Upstream 86% Downstream 27% Others

• 13%

Revenue and PBIT

2018 Breakdown

46 Upstream 26% Downstream 73% Others 1%

Jan-Dec 2018 Revenue by Segment

Increase was primarily due to the increase in sales of our refined edible

• ils 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 13,286.0

FY2015 FY2016 FY2017 FY2018 Jan-Dec 2018 RM’mn

Increase was primarily due to the increase in the sales

• f our palm oil

products (i.e. our upstream

• perations) and our

refined edible oils and fats (i.e. our downstream

• perations)

Revenue Jan-Dec 2018 PBIT by Segment TOTAL PBIT RECURRING PBIT

Lower revenue was due to lower average CPO and PK prices realised

Upstream 38% Downstream

• 12%

Others 74%

1,031.4 1,002.9 3,551.9 1,885.4 661.0 10.0% 8.4% 24.0% 13.1% 5.0%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 2000 4000 6000 8000 10000

FY2015 FY2016 FY2017 FY2018 Jan-Dec 2018

Expenses, Operating Profit & PAT

Historical Comparison

47

9,185.3 11,130.9 12,991.0 12,741.0 12,521.0

FY2015 FY2016 FY2017 FY2018 Jan-Dec 2018

Increase principally reflects the increase in the production of refined edible

• ils 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

• perations 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 1,156.0 15.2% 10.6% 30.7% 17.9% 8.7%

0.00% 10.00% 20.00% 30.00% 1000 6000 11000

FY2015 FY2016 FY2017 FY2018 Jan-Dec 2018

Lower production costs from Upstream

• perations

Lower overall

• perating margin

is due to lower CPO and PK realised prices

Key Financial Metrics

48

Historical Comparison

Note: FP Dec 2018 refers to the six-month financial period ended 31 December 2018

13.29 6.54 14.37 14.78 11.95 10.30

Jan-Dec 2018 FP Dec 2018 FY18 FY17 FY16 FY15

Revenue (RM'bn)

4.5 4.3 8.5 7.9 4.4 6.7

Jan-Dec 2018 FP Dec 2018 FY18 FY17 FY16 FY15

ROIC %

1,138 559 2,536 4,455 1,259 1,538

Jan-Dec 2018 FP Dec 2018 FY18 FY17 FY16 FY15

PBIT (RM'mn)

523 244 1,727 3,507 967 997

Jan-Dec 2018 FP Dec 2018 FY18 FY17 FY16 FY15

PATAMI (RM'mn)

1 2 1 2

1 FY17’s PBIT and PATAMI includes the non-cash gain on sale of MVV land to SD Berhad 2 FY18’s PBIT and PATAMI includes the non-cash gain on sale of land to SD Property and reversal of accrual for donation

Snapshot of Capital and Debt

49

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 0.46

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 As at 31 Dec 2018 Days RM’mn (x) (x)

Working Capital Turnover Period Indebtedness by Maturity (as at 31 Dec 2018) Current Ratio Gross Gearing Ratio1

0.5 1.3 1.1 1.2 1.5 1.6 1.6 1.2

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 As at 31 Dec 2018

1,804.3 3,660.0 1,311.7 520.9 Within 1 year 1-2 years 2-5 years More than 5 years 52 44 38 40 40 78 85 71 75 81 46 39 34 35 34 As at 30 Jun 2015 As at 30 Jun 2016 As at 30 Jun 2017 As at 30 Jun 2018 As at 31 Dec 2018 Receivables Inventory Payables

Historical Comparison

Credit Ratings

50

Rating agencies affirmed SD Plantation’s credit ratings – A testament to its financial stability

AAA , Stable

Affirmed on 14 Sep’18 “The affirmed corporate credit rating is driven by SD Plantation’s sizeable and geographically diversified oil palm plantations that support a strong cash flow generating ability to provide a healthy buffer against its financial obligations” “SD Plantation's rating reflects its position as the world's largest palm-oil producer by planted area, diversified plantation locations and

• perating

integration, which allows

• ptimum

profit retention” “Malaysian

• il

palm planters, particularly companies which comply with tighter sustainability standards of the RSPO, will have better support in their credit ratings. Among Moody’s rated

• il

palm planter issuers, SD Plantation is best positioned for sustainable practices as it is the largest producer globally of certified sustainable palm oil”

BBB+, Stable

Affirmed on 15 Nov’18

Baa1, Stable

Affirmed on 18 Oct’18

Dividend Policy

51

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

Snapshot of Financial Performance in FP December 2018

Segmental Performance in FP Dec 2018

Impact of the lower average CPO and PK prices realised partially mitigated by improvements in operational efficiencies and Downstream earnings

53

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

385

1H Dec 2017: 1,013 (-62% YoY)

UPSTREAM 301

1H Dec 2017: 718 (-58% YoY)

146

1H Dec 2017: 134 (+9% YoY)

DOWNSTREAM

Recurring PBIT in RM’mn

14

1H Dec 2017: 38 (-63% YoY)

OTHERS

1

68

1H Dec 2017: 261 (-74% YoY)

• 41

1H Dec 2017: -43 (+5% YoY)

57

1H Dec 2017: 77 (-26% YoY)

Lower recurring profits wholly due to lower CPO and PK realised prices – PBT

54

Net positive impact on PBT

1,104

in RM’mn

Dec 2017 Recurring PBT Dec 2018 PBT 443 14

457

Recurring PBT Non- recurring PBT

37 72 19 175 12 43

• 12

1,450

Recurring PBT before the impact

• f CPO/PK prices
• 1,007

Higher FFB production Higher sales volume Higher OER Lower cost to customer Higher Downstream results Others Higher interest expense Lower CPO & PK prices realised

358

Lower recurring profits wholly due to lower CPO and PK realised prices – PATAMI

55

699

in RM’mn

Dec 2017 Recurring PATAMI Dec 2018 PATAMI 230 14

244

Recurring PATAMI Non- recurring PATAMI

20 55 16 139 9 58

• 9

987

Recurring PATAMI before the impact

• f CPO/PK prices
• 757

Higher FFB production Higher sales volume Higher OER Lower cost to customer Higher Downstream results Others Higher interest expense Lower CPO & PK prices realised

Net positive impact on PATAMI

297

Dividend for FP Dec 2018

56

FP Dec 2018 FY2018 Net Per Share (sen) Total Net Dividend (RM’mn) Net Per Share (sen) Total Net Dividend (RM’mn) Final Cash Dividend 1.7 117 11.5 782 Special Dividend

• 6.0

408 Total Dividend 1.7 117 17.5 1,190

SD Plantation declares and maintains a dividend payout ratio of not less than 50% of the consolidated profit attributable to the owners of the Company

Payout ratio

(Based on recurring PATAMI)

~51% ~63%

Appendix

58

Financial Highlights

Performance affected by lower Upstream profits, mitigated by improved Downstream earnings

245

2Q Dec 2017: 637 (-62%)

300

2Q Dec 2017: 673 (-55%)

in RM’mn (YoY %)

1 SD Plantation revised its financial year end from 30 June to 31 December w.e.f. the close of the financial year ended 30 June 2018 2 Based on weighted average number of ordinary shares post-listing of SD Plantation

129

2Q Dec 2017: 429 (-70%)

3.6

1H Dec 2017: 21.3 (-83%)

1.9

2Q Dec 2017: 6.3 (-70%)

286 14 115 14

3,504

2Q Dec 2017: 4,085 (-14%)

6,543

1H Dec 2017: 7,626 (-14%)

559

1H Dec 2017: 1,957 (-71%)

545 14

457

1H Dec 2017: 1,876 (-76%)

244

1H Dec 2017: 1,448 (-83%)

230 14

Revenue PBIT PBT

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

2Q Dec 2017: 673 (-58%) 2Q Dec 2017: 0 1H Dec 2017: 1,185 (-54%) 1H Dec 2017: 772 (-98%)

PATAMI

Attributable to owners of the Company

2Q Dec 2017: 429 (-73%) 1H Dec 2017: 699 (-67%) 2Q Dec 2017: 0 1H Dec 2017: 749 (-98%)

Basic EPS

2

(RM’sen)

1.7 0.2 3.4 0.2

Recurring EPS Non-Recurring EPS

2Q Dec 2017: 6.3 (-73%) 1H Dec 2017: 10.3 (-67%) 2Q Dec 2017: 0 1H Dec 2017: 11.0 (-98%)

2Q DEC 2018 FP DEC 2018

1

59

Non-Recurring Profits

Lower non-recurring profits largely due to the gain on sale of land recorded in the corresponding period of the previous year

in RM’mn

14

Non-Recurring PBIT

Gain on sale of 51% equity stake in Golden Hope Nha-be, Vietnam

14

Non-Recurring PATAMI

Impairment on assets in Liberia Others Gain on sale of land to Sime Darby Property

30

• 14

14

30

772 749

• 677
• 98%
• 98%

YoY

2Q DEC 2018

• 15
• 15
• 1
• 1

Reversal of accrual for donation to Yayasan Sime Darby

• 95

2Q DEC 2017 FP DEC 2018 1H DEC 2017

60

Borrowings & Cash Flow

Increased borrowings from RM6.5bn (30 Jun 2018) to RM7.3bn due to the acquisition of MFCL, higher working capital funding and higher borrowings amid appreciation of foreign currencies

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

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

Borrowings as at 31 Dec 2018 increased by RM808mn compared to 30 Jun 2018 attributable to:

• New

loan drawdown for the acquisition

• f Markham Farming Company (MFCL) of RM245mn
• Working

capital funding, given higher inventory balances

• Borrowings increased due to the appreciation of USD

and EUR against RM by 3% and 2%, respectively resulting in an impact of RM179mn

• RM919mn

NET CASH USED IN INVESTING ACTIVITIES

Gross Gearing1 Borrowings (in RM’mn) Net Gearing2

RM175mn

NET CASH FROM FINANCING ACTIVITIES

75% 25% 77% 23% 83% 17% 82% 18% 80% 20%

44%

7,214

39%

6,452

39% 35% 40%

6,489

38% 43%

7,159

40% 46%

7,297

43%

RM902mn

NET CASH GENERATED FROM OPERATING ACTIVITIES Internal inventory volume (in ‘000 MT) 31 Dec 2018 30 Jun 2018 QoQ Upstream – CPO 117 77 +52% Upstream – PK 24 21 +14% Downstream – Refined products 214 205 +4% Total 355 303 +17%

Financial Performance by Segment

Impact of the lower average CPO & PK prices realised partially mitigated by improvements in operational efficiencies and Downstream earnings

61

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

Recurring PBIT in RM’mn (YoY %)

Upstream

Upstream Malaysia

Downstream Others

1

Upstream Indonesia Upstream PNG/SI Upstream Liberia

185

2Q Dec 2017: 577 (-68%)

385

1H Dec 2017: 1,013 (-62%)

3

2Q Dec 2017: 32 (-91%)

14

1H Dec 2017: 38 (-63%)

98

2Q Dec 2017: 64 (+53%)

146

1H Dec 2017: 134 (+9%)

176

2Q Dec 2017: 414 (-57%)

5

2Q Dec 2017: 144 (-97%)

27

2Q Dec 2017: 39 (-31%)

• 23

2Q Dec 2017: -20 (-15%)

301

1H Dec 2017: 718 (-58%)

68

1H Dec 2017: 261 (-74%)

57

1H Dec 2017: 77 (-26%)

• 41

1H Dec 2017: -43 (+5%)

2Q DEC 2018 FP DEC 2018

Operational Performance – Upstream

Significant improvement in Indonesia and PNG/SI compensating the lower output from Malaysia

62

• Malaysia: Lower

production YoY attributable to the bumper harvest experienced in the previous year

• Indonesia: In line with

high crop production in Indonesia and driven by our continuous

• perational

improvements (fertiliser application, water management &

• ther agro

management practices) gave rise to higher crop production

• PNG/SI: Boost in FFB
• utput as it recovers

from a low harvest in the previous year and due to increased maturity of planted area

FFB PRODUCTION

in ‘000 MT (YoY %)

Operational Performance – Upstream

Strong recovery of OER in Malaysia offset lower OER in Indonesia and PNG/SI

63

• Malaysia & Liberia:

Higher OER as a result of crop quality improvements with better agriculture management

• Indonesia: Crop

quality was affected slow turnaround of barges transporting the crop

• PNG/SI: OER

declined by 1% YoY in FP Dec 2018 due to higher rainfall especially in West New Britain affecting timely crop evacuation

CPO EXTRACTION RATE (OER)

in % (YoY %)

Operational Performance – Upstream

Weaker average CPO prices realised for the last six months but has since rebounded

64

AVERAGE CPO PRICE REALISED

in RM/MT (YoY %)

TOTAL UPSTREAM MALAYSIA INDONESIA PNG/SI LIBERIA

• 28%
• 30%
• 34%
• 26%
• 24%
• 34%
• 21%
• 19%
• 18%
• 16%

2Q Dec 2017 2Q Dec 2018

2,654 1,870

2Q Dec 2017 2Q Dec 2018

2,706 1,939

2Q Dec 2017 2Q Dec 2018

2,533 1,663

2Q Dec 2017 2Q Dec 2018

2,713 2,155

2Q Dec 2017 2Q Dec 2018

2,275 1,840

1H Dec 2017 FP Dec 2018

2,672 1,974

1H Dec 2017 FP Dec 2018

2,717 2,072

1H Dec 2017 FP Dec 2018

2,580 1,712

1H Dec 2017 FP Dec 2018

2,701 2,213

1H Dec 2017 FP Dec 2018

2,243 1,874

Impact of lower average CPO and PK prices realised on our profits

For FP Dec 2018

65

MALAYSIA INDONESIA PNG/SI

2,072

in RM’mn

• 24%

2,717 1,591

• 35%

2,435

CPO* PK*

1,712

• 34%

2,580 1,222

• 43%

2,128

CPO* PK*

2,213

• 18%

2,701

CPO*

Note: * Average selling price realised (in RM/MT palm product)

355 270 141 107 328 246 57 43 117 82

IMPACT ON PBIT IMPACT ON PATAMI FP DEC 2018 1H DEC 2017 YoY %

545 230 1,185 699 Recurring PBIT Recurring PATAMI

• 54%
• 67%

1,007 757

IMPACT OF LOWER AVERAGE CPO & PK PRICES REALISED

640 469

LIBERIA

1,874

• 16%

2,243

CPO* 9 9

Impact of lower average CPO and PK prices realised on our profits

For 2Q Dec 2018

66

MALAYSIA INDONESIA PNG/SI

1,939

in RM’mn

• 28%

2,706 1,434

• 47%

2,694

CPO* PK*

1,663

• 34%

2,533 1,140

• 51%

2,344

CPO* PK*

2,155

• 21%

2,713

CPO*

Note: * Average selling price realised (in RM/MT palm product)

223 170 116 88 227 170 45 34 87 61

IMPACT ON PBIT IMPACT ON PATAMI 2Q DEC 2018 2Q DEC 2017 YoY %

286 115 673 429 Recurring PBIT Recurring PATAMI

• 58%
• 73%

707 532

IMPACT OF LOWER AVERAGE CPO & PK PRICES REALISED

387 314

LIBERIA

1,840

• 19%

2,275

CPO* 9 9

Corporate Developments – The Challenging Landscape in Liberia

67

EXISTING OPERATIONS

As at FP Dec 2018 Total Planted Area

10,383 ha

Oil Palm: 10,263 ha, Rubber: 120 ha

Average Age Profile

5.4 years

FFB Production

51,154 MT

FFB Yield

5.13 MT/ha

OER

21.06%

Average CPO Price Realised

Despite improvements in operational efficiencies in Liberia for FP Dec 2018, assets were impaired by USD3.5mn (RM15mn) attributable to lower future CPO price projections. World Bank, in Oct 2018, had reduced their long term CPO price projections by a range of USD62/MT (8% from USD806/MT) to USD106/MT (15% from USD721/MT) between 2020 to 2025

1H Dec 2017: 29,336 MT 1H Dec 2017: 3.12 MT/ha 1H Dec 2017: 20.82%

+76% YoY +64% YoY +1% YoY

RM1,874/MT

1H Dec 2017: RM2,243/MT

• 16%

YoY

Financial Performance – Downstream

Improved earnings as a result of higher sales volume & better margins, especially from its APAC operations

68

Recurring PBIT in RM’mn (YoY %)

TOTAL DOWNSTREAM

DIFFERENTIATED

BULK TRADING

+53% +9%

+210% +59% +143% +55%

2Q Dec 2017 2Q Dec 2018

64 98

1H Dec 2017 FP Dec 2018

134 146

2Q Dec 2017 2Q Dec 2018

14 34

1H Dec 2017 FP Dec 2018

29 45

2Q Dec 2017 2Q Dec 2018

10 31

1H Dec 2017 FP Dec 2018

39 62

APAC – Asia Pacific EMEA – Europe, the Middle East and Africa 2Q Dec 2017 2Q Dec 2018

40 33

• 15%
• 40%

1H Dec 2017 FP Dec 2018

66 39

• The

Asia Pacific

• perations

reported stronger performance mainly attributable to higher sales volume and better margins from both the bulk and differentiated products businesses

• The

differentiated products business was however impacted by lower demand from Europe, the Middle East and Africa

• Stronger

trading & bulk performance was largely due to:

• Increased margins in Indonesia

primarily due to the supply glut situation in Indonesia resulting in lower feedstock prices from aggregated oil

• Higher aggregation in Indonesia

(Volume increased by 35% YoY from 66,000 MT to 89,000 MT in 2Q Dec 2018 and 51% YoY from 141,000 MT to 213,000 MT in FP Dec 2018)

Operational Performance – Downstream

Higher sales volume and better margins in FP Dec 2018

69

CAPACITY UTILISATION

• Bulk products business, particularly for

the

• perations

in Asia Pacific, has registered better performance amid high inventory levels in Indonesia

SALES VOLUME

• Sales volume was 12% higher compared

to 1H Dec 2017 attributable to the bulk products business, particularly in Asia Pacific

• Capacity utilisation was supported by

reasonable demand for

• ur

palm products originating from Indonesia

PRODUCT RATIO

2Q Dec 2017 2Q Dec 2018 893 1,037

+16%

in ‘000 MT (YoY %) in % in %

+12%

1H Dec 2017 FP Dec 2018

77 77

2Q Dec 2017 2Q Dec 2018 77 74 1H Dec 2017 FP Dec 2018 1,729 1,928 2Q Dec 2017 2Q Dec 2018 47 39 53 61 1H Dec 2017 FP Dec 2018 47 41 53 59 Differentiated Bulk

Strategic Corporate Exercises in FP Dec 2018

70

Disposal of 51% equity stake

• GHNB is Vietnam-based and principally engaged in processing

and refining vegetable oils for sales mainly in the domestic Vietnamese market and export in both B2B and B2C segments since its incorporation in 1992

• The rationale for the disposal is due to the competitive businesss

landscape and lack of strategic value to the Group with new joint venture partnership dominating the local vegetable oil market

• The disposal of its entire 51% equity interest was completed in

December 2018 to Kido Group, generating a gain on sale of RM30mn

• Post-divestment, the Group will focus more on the B2B segment
• f multinational customers in Vietnam and employ an asset light

strategy, leveraging on its existing Downstream assets in Malaysia

MARKHAM FARMI NG CO. LI MI T ED (MFCL) GO L DEN HO PE N HA-B E EDI B L E O I L S CO. LT D (GHN B )

Acquisition

• 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

• The acquisition included:
• 6,110 ha of agricultural land in Markham Valley (2

estates)

• Oil palm trees with average age of ~18 months
• 2 copra mills with total capacity of 55,000 MT per annum
• The oil palm plantation is strategically located close to Lae,

PNG’s largest port, and has the ability to integrate with Sime Darby Plantation/NBPOL’s existing supply chain

SD Plantation and SALCRA Sign MoU For Proposed Collaboration Within Palm Oil Value Chain

71

“The collaboration is intended to uplift Sarawak’s palm oil industry standards in terms

• f
• perational

efficiency and productivity through best agronomic practices and to inculcate and enhance sustainability awareness for higher operational performance and bottom-line achievement”

To combine their resources and expertise to jointly collaborate, evaluate and research on matters relating to:

• agricultural materials
• il

palm plantation development, cultivation and processing, as well as best practices

• planning and development of palm oil mills, waste

management, refinery, kernel crushing plant,

• leo

chemical and other related downstream activities

• laboratory analytical services
• any other activities (e.g. logistics, rubber plantation and
• ther agricultural businesses)

DETAILS OF THE COLLABORATION

72

Summary of Operational Statistics

For FP Dec 2018

Oil Palm Age Profile

As at 31 December 2018

73

THANK YOU

SIME DARBY PLANTATION INVESTOR RELATIONS

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