Results lts Presenta entation tion for the six months ended 31 - - PowerPoint PPT Presentation

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Results lts Presenta entation tion for the six months ended 31 - - PowerPoint PPT Presentation

Nov 26, 2023 105 likes •383 views

Results lts Presenta entation tion for the six months ended 31 March 2020 Agen enda da Business overview H Lourens Financial overview A Muller Operational overview H Lourens Outlook H Lourens Appendix Quantum Foods Results

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SLIDE 1

Results lts Presenta entation tion

for the six months ended 31 March 2020

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SLIDE 2

Agen enda da

Business overview

H Lourens

Financial overview

A Muller

Operational overview

H Lourens

Outlook

H Lourens

Appendix

2 Quantum Foods Results Presentation for the six months ended 31 March 2020

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SLIDE 3

Busin siness ess

  • ver

ervie view

H Lourens

3 Quantum Foods Results Presentation for the six months ended 31 March 2020

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SLIDE 4
  • Revenue

16%

  • Operating profit

25%

  • HEPS

24%

  • Cash generated

R62m

  • Interim dividend per share 2020

6 cents

  • Interim dividend per share 2019

8 cents

HEPS S de decreased sed du due to contin ntinued ued do downt wnturn rn of egg g industry dustry

Bus usine iness ss overvie view

4 Quantum Foods Results Presentation for the six months ended 31 March 2020

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SLIDE 5

Bus usine iness ss overvie view w

  • 1. Higher raw material prices
  • SAFEX yellow maize

5.4%

  • Landed soybean meal prices

10.3%

  • Bran prices

17.2%

  • Hominy chop prices

9.7%

  • ZAR weakened by

6.2%

  • 2. Lower egg prices
  • SA layer stock

Sept 2019 28.1m March 2020 29.4m

  • 3. Outbreak of COVID-19 at end of March 2020

5 Quantum Foods Results Presentation for the six months ended 31 March 2020

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SLIDE 6

Fin inanci ancial al

  • ver

ervie view

A Muller

6 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Sta tateme tement nt of

  • f in

income

  • me

For the six months ended 31 March 2020 Rm 2019 Rm % change Revenue 2 439.1 2 103.3 16 Operating profit* 91.4 120.6 (24) Income from associates 1.2 0.5 Net finance (cost)/income (0.8) 10.1 Profit before tax 91.8 131.2 Tax (25.2) (36.1) Profit for the period 66.6 95.1 * Operating profit includes capital items 0.1 (0.5) Adjusted operating profit 91.3 121.2 (25) Adjusted operating margin 3.7% 5.8% EPS − cents 34.5 45.2 (24) HEPS − cents 34.5 45.4 (24)

7 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Reven enue ue ana naly lysis sis

Total R2 439 million (2019: R2 103 million)

2019: R785m | 37% ANIMAL FEEDS

R1 085m

EGGS

R578m

FARMING

R647m

AFRICA

R129m

2019: R537m | 26% 2019: R671m | 32% 2019: R110m | 5%

8

44% 24% 27% 5%

Quantum Foods Results Presentation for the six months ended 31 March 2020

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SLIDE 9

Segme gment nt results sults

Adjusted operating profit for the six months ended 31 March 2020 Rm 2019 Rm Eggs (19.5) 27.3 Farming 67.8 52.0 Animal feeds 48.1 40.3 Other African counties 0.6 6.7 Head office costs (5.7) (5.0) 91.3 121.2

9 Quantum Foods Results Presentation for the six months ended 31 March 2020

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IF IFRS 16 – Le Leases es im impac act

Impact of day 1 adoption 1 October 2019 IFRS 16 impact Rm Assets – increase 62.0 Liabilities – increase 71.9 Equity – decrease 9.9

10 Quantum Foods Results Presentation for the six months ended 31 March 2020

For the six months ended 31 March 2020 IFRS 16 impact Operating profit – increase – Rm 4.5 Earnings per share – increase – cents 0.2

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SLIDE 11

Sta tateme tement nt of

  • f fina

inancia ncial l pos

  • sition

ition

31 Mar 2020 Rm 30 Sep 2019 Rm Non-current assets 1 259.2 1 181.5 Net working capital 758.9 693.2 Non-current liabilities (260.7) (250.8) Cash 174.3 219.6 Total net assets 1 931.7 1 843.5 Borrowings – IFRS 16 (74.2) (6.1) Equity 1 857.5 1 837.4

11 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Sta tateme tement nt of

  • f cash

sh flow low

For the six months ended 31 March 2020 Rm 2019 Rm Cash operating profit 144.5 165.5 Working capital outflow (73.1) (84.4) Change in exchange rate 0.1 1.1 Cash effect of hedging activities 13.5 (10.3) Tax paid (11.2) (20.0) Net finance income (1.1) 10.1 Principal lease payments (10.7) (0.0) Cash generated by operations 62.1 62.1 Dividends paid (48.2) (147.1) Treasury shares acquired by subsidiary (4.3) (2.3) Capital expenditure (55.2) (90.9) Proceeds from sale of assets 0.2 0.9 Net cash decrease (45.3) (177.4)

12 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Capita pital l exp xpenditur enditure

YTD Mar 2020 Rm Future cash flow Rm RSA Expansion/efficiency 11.4 28.9 – Feed mills 4.3 18.4 – Layer hatchery 0.4 0.1 – Farms 0.6 2.3 – Packing stations 5.4 2.1 – Energy 0.7 6.0 Replacement/compliance 24.1 38.8 Africa Expansion/efficiency 16.7 14.8 – Uganda layer farm and breeders 16.7 14.8 Replacement 3.0 3.2 55.2 85.8

13 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Oper peration tional al

  • ver

ervie view

H Lourens

14 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Nova a Feeds eeds

  • Volumes increased by 18%
  • Load shedding had a negative financial

impact

  • Margins improved by 2%
  • Costs per unit well managed and remained

under control

  • Product performance remains at a very

high level

Ex Expansi ansion

  • n su

success cessful ful

15 Quantum Foods Results Presentation for the six months ended 31 March 2020

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  • Breeder performance stable – above Lohmann standards
  • Production of day-old pullets and point-of-lay hens

increased

  • Day-old pullet sales decreased but point-of-lay sales

increased

  • Commercial rearing performance above target
  • Commercial layer performance now at acceptable levels
  • Cost increases in breeder business above inflation but in

commercial layer business cost per dozen decreased

  • Decline in layer livestock demand from February 2020

Layer er far arming ming

Producti

  • ductivity

vity impr provem ement ent conti ntinues es

16 Quantum Foods Results Presentation for the six months ended 31 March 2020

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  • Breeder performance slowly improving
  • Hatchability not yet at an acceptable level
  • Broiler performance at very high levels
  • Overhead cost decreases in both day-old chicks

and live broilers

  • Production of day-old chicks increased by 4.1%

Broiler

  • iler far

arming ming

Pl Pleasi asing ng financial ancial perf rforma

  • rmance

nce

Quantum Foods Results Presentation for the six months ended 31 March 2020 17

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  • Egg volumes increased by 16.3%
  • Egg price decreased by 7.4%
  • Operational efficiencies remained at high levels
  • R/dozen overhead costs declined
  • Margin pressure exacerbated by feed cost

increase

  • Initial indications that demand for eggs is

improving

Nulaid ulaid Eg Eggs gs

Supply pply and d de demand d not t in ba balanc ance

18 Quantum Foods Results Presentation for the six months ended 31 March 2020

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  • Difficult industry conditions in all three countries
  • Raw material prices increased, creating subdued

demand for products

  • Record maize prices in Zambia coupled with decline

in productivity levels

  • Breeder farm in Uganda ready for placement at end
  • f March
  • Mozambique business performed well in current

conditions

  • Positive contribution to bottom line from all three

countries

Ot Othe her r Afri rica ca segme gment nt

Indu dust stry ry cond nditi itions s remain n di difficul cult

19 Quantum Foods Results Presentation for the six months ended 31 March 2020

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Outl tlook

  • ok

Quantum Foods Results Presentation for the six months ended 31 March 2020

H Lourens

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Out utlook look 2020

Challenges

  • COVID-19 makes any

forward view dangerous BUT

Quantum Foods’ response

  • Raw material prices expected to

increase due to exchange rate

  • Egg price direction too uncertain

to call

  • Feed and broiler livestock

volumes should stabilise

  • Demand for layer livestock

should decrease

  • Zambian business should start

improving

21 Quantum Foods Results Presentation for the six months ended 31 March 2020

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22 Quantum Foods Results Presentation for the six months ended 31 March 2020

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App ppendix endix

23 Quantum Foods Results Presentation for the six months ended 31 March 2020

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SAFE FEX X yell llow

  • w ma

maiz ize e Rand nd per r to ton

24 Quantum Foods Results Presentation for the six months ended 31 March 2020

1 500 2 000 2 500 3 000 3 500 4 000 4 500 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 2 634 2 707 2 460 3 351 2 099 2 367

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CBOT T US$ so soyb ybea ean n me meal

25 Quantum Foods Results Presentation for the six months ended 31 March 2020

250 270 290 310 330 350 370 390 410 430 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 342 332 312 316 306 300

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Rand nd:US$ :US$ exchang hange e rate te

26 Quantum Foods Results Presentation for the six months ended 31 March 2020

Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 14.34 15.03 12.01 14.77 13.37 13.07 18.5 16.5 14.5 12.5 10.5

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Flock replacement 90.00 100.00 110.00 120.00 130.00 140.00

Egg g realisa lisation tion mo movement ment

27 Quantum Foods Results Presentation for the six months ended 31 March 2020

Normal cycle AI effect Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Index