annual results presentation - astral foods · broiler feed price up 7.7% • net margin 3.4% f2018:...

Annual Results Presentation for the 12 months ended 30 September 2019

2

Business Overview Page 3 / Slide 3

Operational Overview Page 5 / Slide 8

Industry Matters Page 14 / Slide 26

Financial Overview Page 16 / Slide 29

Outlook 2 / Slide 41

Additional Information Page 24 / Slide 45

2

AGENDA

BUSINESS OVERVIEW

Chris Schutte

SALIENT POINTS

Business

Overview

Operational

Overview Industry Matters

Financial

Overview Outlook

4

Feed input costs increased markedly on higher maize prices, due

to a smaller maize crop following poor crop yields for 2019

Poultry production efficiencies were maintained in line with

projections

Poultry selling prices decreased for the period under review,

leading to an under recovery on higher input costs

Extraordinary cost increases associated with; load shedding,

violent industrial action in KwaZulu-Natal, and the newly legislated

national minimum wage

Water supply interruptions to Astral’s processing plant in

Standerton resulted in a significant cost, impacting profitability for

the period under review

KEY FINANCIAL INDICATORS

5

Revenue

Profit before interest and tax

Earnings per share @ 1 659 cps

Headline earnings per share @ 1 674 cps

Total dividend for the year @ 900 cps

55%

55%

55%

56%

4%

Business

Overview

Operational


Financial

Overview Outlook

6

DIVISIONAL OVERVIEW

Poultry

Feeding cost increased

Bird performance improvement

Broiler sales volumes up

Broiler sales realisations down

Extraordinary cost impacts

Feed

Raw material costs up

Less internal feed required

External sales volumes down

Expenses well controlled

Improved Rand per ton margin

Other Africa

Lower profits – weaker performances from Mozambique and Zambia

Business

Overview

Operational


Financial

Overview Outlook

1 942

882

0

500

1 000

1 500

2 000

2 500

PB

IT F

20

18

Raw

ma

teri

al

co

st

Fe

ed

co

nve

rsio

ne

ffic

ien

cy

Bro

iler

sale

sv

olu

mes

Bro

iler

sell

ing

pri

ce

s

Extr

ao

rdin

ary

exp

en

ses

Oth

er

PB

IT F

20

19

7

THE YEAR IN PERSPECTIVE

(R million)

R1 060 million

569

26 258 203

349

223

Business

Overview

Operational


Financial

Overview Outlook

An

dy

Cro

cke

r

9

FEED DIVISION

Operating profit - R million

Operating profit up 7.2%

• Net margin 7.4% F2018: 7.4%

• Expenses well controlled

• Rand per ton margin up

Revenue - R million

Revenue up 6.1%

• Raw material costs up

• Average selling prices up 9.7%

• Sales volumes down 3.3%

6 198 6 574

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

F2018 F2019

457

489

-

50

100

150

200

250

300

350

400

450

500

F2018 F2019

Business

Overview

Operational


Financial

Overview Outlook

10

FEED DIVISION

SAFEX yellow maize prices increased markedly for the period under

review F2019 avg. R2 638 per ton (F2018: R2 098) up R540 per ton y-o-y

Internal feed sales decreased by 3.0% due to improved broiler feed

conversion rates, coupled with broiler production cutbacks

External feed sales decreased by 3.7% as livestock sectors came under

pressure from higher feed costs and producers moved for lower feed prices

Expenses were well contained to an increase of 5.9% across the division

for the period under review

The average net margin increased (on a Rand per ton basis) for the period

under review

Business

Overview

Operational


Financial

Overview Outlook

11

FEED DIVISION – SALES MIX

60%

6%

22%

12%

60%

5%

21%

14%

F2018

1 410 283 Tons F2019

1 364 233 Tons Volume decrease ≈ 3.3%

Business

Overview

Operational


Financial

Overview Outlook

12

SAFEX YELLOW MAIZE PRICE

Source: CJA Strategic Risk Brokers

Business

Overview

Operational


Financial

Overview Outlook

13

DURBAN SOYA MEAL PRICE


Business

Overview

Operational


Financial

Overview Outlook

Commercial

15

POULTRY DIVISION - CONSOLIDATED


Operating profit down 74.5%

• Broiler feed price up 7.7%

• Net margin 3.4% F2018: 13.7%

Revenue - R million

Total revenue up 2.6%

• Broiler sales volumes up 2.6%

• Broiler sales realisations down 2.0%

• Breeder revenue up R237 million

10 604 10 877

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

F2018 F2019

1 453

371

-

100

200

300

400

500

600

700

800

900

1 000

1 100

1 200

1 300

1 400

1 500

F2018 F2019

Business

Overview

Operational


Financial

Overview Outlook

16

POULTRY DIVISION - COMMERCIAL

Profits for the period under review declined significantly on the comparable

year

Broiler selling prices decreased on subdued consumer demand and

deeper promotional activity in the market, leading to an under recovery of

higher input costs

Broiler slaughter numbers at an average of 5 million birds per week were

marginally down by 0.8% year-on-year

Broiler sales volumes up with sales realisations decreasing on the

comparable period

Inflationary expense increases were exacerbated by the impact of load

shedding nationally, water supply interruptions in Standerton and the newly

legislated minimum wage

Business

Overview

Operational


Financial

Overview Outlook

17

POULTRY DIVISION – PRODUCT MIX

49%

3%

4%

14%

7%

23%

F2018

437 506 Tons

51%

3% 5%

12%

7%

22%

F2019

448 944 Tons Volume increase ≈ 2.6%

Business

Overview

Operational


Financial

Overview Outlook

18

BROILER SELLING PRICE

Source: Own Data

80%

90%

100%

110%

120%

130%

140%

150%

Oct-

14

Dec-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

Ap

r-18

Ju

n-1

8

Au

g-1

8

Oct-

18

Dec-1

8

Fe

b-1

9

Ap

r-19

Ju

n-1

9

Au

g-1

9

Broiler selling price index Six month average

Business

Overview

Operational


Financial

Overview Outlook

Lower brine effect

Bird flu impact

-30%

-20%

-10%

0%

10%

20%

30%

40%

Oc

t-1

4

De

c-1

4

Feb

-15

Ap

r-1

5

Ju

n-1

5

Au

g-1

5

Oc

t-1

5

De

c-1

5

Feb

-16

Ap

r-1

6

Ju

n-1

6

Au

g-1

6

Oc

t-1

6

De

c-1

6

Feb

-17

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oc

t-1

7

De

c-1

7

Feb

-18

Ap

r-1

8

Ju

n-1

8

Au

g-1

8

Oc

t-1

8

De

c-1

8

Feb

-19

Ap

r-1

9

Ju

n-1

9

Au

g-1

9

% Change in broiler feed price % Change in broiler selling price

19

CHANGE IN BROILER SELLING PRICE vs. FEED PRICE

Source: Own Data

Business

Overview

Operational


Financial

Overview Outlook

Agriculture

Gar

y A

rno

ld

21

POULTRY DIVISION - AGRICULTURE

Sales increased on higher demand for parent stock, hatching eggs and

broiler day-old chicks

Feed input costs increased due to higher raw material costs adversely

affecting the live bird production cost

Strike action in KwaZulu-Natal at National Chicks and Mountain Valley

impacted profitability during the period under review

Parent breeder productions were good, with an improvement in the

number of chicks per hen housed

Further improvements in on-farm broiler production efficiencies,

assisted broiler live cost through an improved feed conversion rate

Highly pathogenic bird flu still prevalent in wild birds and ostriches,

however no confirmed cases in commercial poultry since May 2018

Business

Overview

Operational


Financial

Overview Outlook

22

BROILER PRODUCTION PERFORMANCE

94%

96%

98%

100%

102%

104%

106%

108%

F2015 F2016 F2017 F2018 F2019

Slaughter age Live weight Average daily gain

Key indicators base-lined to 100% in F2015

Business

Overview

Operational


Financial

Overview Outlook

23

BROILER PRODUCTION PERFORMANCE

80%

85%

90%

95%

100%

105%

110%

115%

120%

125%

F2015 F2016 F2017 F2018 F2019

Mortality Feed consumption Performance efficiency factor

Key indicators base-lined to 100% in F2015

Business

Overview

Operational


Financial

Overview Outlook

25

OTHER AFRICA DIVISION (Zambia, Mozambique & Swaziland)


Operating profit down 31.3%

• Net margin 4.6% F2018: 7.8%

• Mozambique provision for

non-recovery of various taxes

Revenue - R million

Revenue up 16.8%

• Sales volumes up 8.3%

• Average selling prices up 7.8%

411

480

-

50

100

150

200

250

300

350

400

450

500

F2018 F2019

32

22

-

5

10

15

20

25

30

35

F2018 F2019

Business

Overview

Operational


Financial

Overview Outlook

INDUSTRY MATTERS

27

POULTRY IMPORTS PER MONTH

Tons

Source: South African Poultry Association

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

55000

60000

65000

70000

Oct-

14

Dec-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

Ap

r-18

Ju

n-1

8

Au

g-1

8

Oct-

18

De

c-1

8

Fe

b-1

9

Ap

r-19

Ju

n-1

9

Au

g-1

9

Total poultry imports 6 per. Mov. Avg. (Total poultry imports)

Business

Overview

Operational


Financial

Overview Outlook

28

SAPA was restructured last year and is working effectively, and membership of

the broiler organisation is approximately 73% (of local weekly broiler production

numbers)

Based on industry statistics current broiler slaughter numbers are an average

of 19.3 million birds per week

For the period under review the industry has remained stable with no

consolidation or divestment

Imports during the period averaged 44 882 tons per month (F2018: 48 305

tons), equalling approximately 30% of total consumption

The industry awaits a decision on the application for an increase in the ad

valorem import tariff on bone-in and boneless cuts of chicken

Engagement with both the DTI and DAFF at a Ministerial level has improved

markedly, with recent talks leading to the finalisation of the Poultry Sector

Master Plan (Slide 62 / Page 32)

Business

Overview

Operational


Financial

Overview Outlook

INDUSTRY OVERVIEW

FINANCIAL OVERVIEW

Daan Ferreira

30

Year ended 30 September

2019

R million

2018

R million

Revenue 13 485 12 979

Operating profit 882 1 942

Operating profit margin 6.5% 15.0%

Net finance income 30 52

Profit before tax 913 1 994

Tax (265) (560)

Profit for the period 648 1 434

Headline earnings 650 1 439

EPS – Cents 1 659 3 691

HEPS – Cents 1 674 3 712

4%

55%

55%

55%

55%

55%

% change

54%

INCOME STATEMENT

Business

Overview

Operational


Financial

Overview Outlook

31

GROUP ANNUAL REVENUE

(R billion)

1,3 1,7 2,2 2,3 3,3 3,6

4,4 4,6 5,1 5,0 5,3 5,8 6,0 7,0

8,7 9,1 9,9

10,6 10,9

2,0 2,7

2,7 2,7

2,5 2,7 3,5 5,1

4,0 3,6 3,5 4,3 4,9

5,5

6,2 7,2

6,6 6,2 6,6

2,8

3,7 3,9 4,1

4,8 5,2

6,3 6,9

7,4 7,0 7,2

8,2 8,5

9,6

11,3 12,0

12,4 13,0

13,5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Poultry Feed Other Africa External revenue

Business

Overview

Operational


Financial

Overview Outlook

32

GROUP ANNUAL OPERATING PROFIT

(R million)

124 90 174 238 383 494 476 163 282 262 353 137

-112

104 661 59 638 1453 371

79 130

153 151

214

272 333

385

261 281

282

289

329

354

423

485

391

457

489

203 220

328 389

597

766 809

548 581 585

674

477

262

493

1101

549

1086

1942

882 7,3%

5,9%

8,3%

9,6%

12,3%

14,8%

12,8%

6,7%

6,6%

8,4%

9,3%

5,8%

3,1%

5,1%

9,8%

4,6%

8,7%

15,0%

6,5%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Poultry Feed Other Africa Profit on Sale of Investment

Business

Overview

Operational


Financial

Overview Outlook

33

GROUP SIX MONTHLY OPERATING PROFIT

(R million)

140

-3 -117 5

45 59 351 310 194

-135

22 616 836 617 258 113

154

135 156 173 157 197

186 237

233

252 184

207

191

266

239

250

324

153

59

203 213 280

550 551

429

120

212

875

1044

898

503

379

1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19

Poultry Feed Other Africa Change in feed price Change in broiler selling price

Business

Overview

Operational


Financial

Overview Outlook

34

September 2019

R million

September 2018

R million

% change

Non-current assets 2 658 2 409

Net working capital 1 288 1 189

Current assets (excl. cash) 2 982 2 943

Current liabilities (excl. borrowings) (1 694) (1 754)

Non-current liabilities (excl. borrowings) (705) (650)

Net assets 3 241 2 948

Net (surplus cash) (555) (789)

Equity 3 796 3 737

Total 3 241 2 948

BALANCE SHEET

8%

1%

3%

8%

10%

10%

2%

10%

30%

Business

Overview

Operational


Financial

Overview Outlook

35

CAPITAL EXPENDITURE

Year ended 30 September 2019

R million

2018

R million

Depreciation and amortization 176 152

Total capex spend and capitalised 432 356

Festive expansion 185

Standerton silo complex 41

Other capex 206

Advance capex payments net 225 2

657 358

Outstanding commitments 537

Festive expansion 435

Standerton silo complex 11

Goldi RO water treatment plant 50

Other capex 41

Total spend and committed 1 194 358

Business

Overview

Operational


Financial

Overview Outlook

36

CAPITAL EXPENDITURE - F2019

R million

Festive expansion (including advance payments) 440

Meadow Standerton silo upgrade 41

Processing plant equipment upgrades 36

Broiler farm refurbishments 50

HPAI mitigation 8

Listeria mitigation 5

Major replacements 37

Other: normal on-going capex 40

Total 657

Business

Overview

Operational


Financial

Overview Outlook

37

WORKING CAPITAL

September 2019

R million

September 2018

R million

Variance

R million

Current assets 2 982 2 943 39

Biological assets 759 770 (11)

Inventory - Poultry 337 532 (195)

- Feed 291 255 36

- Other Africa 63 50 13

Trade receivables 1 152 1 204 (52)

Receivables – investment sold 16 16 -

Advance capex payments 256 31 225

Other receivables 108 85 23

Current liabilities (1 694) (1 754) 60

Trade payables (1 349) (1 324) (25)

Other payables (345) (430) 85

Net working capital 1 288 1 189 99

Business

Overview

Operational


Financial

Overview Outlook

38

STATEMENT OF CASH FLOWS

For the twelve months ended 30 September 2019

R million

2018

R million

Cash operating profit 936 2 156

Working capital movement 257 (425)

1 193 1 731

Tax paid (214) (516)

Net interest received 36 58

Capital expenditure (657) (358)

358 915

Dividends paid (594) (729)

Other cash flow items 4 45

Movement in cash equivalents (232) 231

Effect of exchange rate changes (2) 6

Opening balance 789 552

Closing balance 555 789

Business

Overview

Operational


Financial

Overview Outlook

39

HEADLINE EARNINGS & DIVIDEND PER SHARE

272 326 487

631

958

1 286 1 381

840 890 960

1 148

787

434

864

2 016

965

1 914

3 712

1 674

90 108 168 230 380 585 700 700 700 760 810 656 222 440 1 150 490 1 055 2 050 900

F2

00

1

F2

00

2

F2

00

3

F2

00

4

F2

00

5

F2

00

6

F2

00

7

F2

00

8

F2

00

9

F2

01

0

F2

01

1

F2

01

2

F2

01

3

F2

01

4

F2

01

5

F2

01

6

F2

01

7

F2

01

8

F2

01

9

Headline earnings per share Dividend per share

Business

Overview

Operational


Financial

Overview Outlook

40

Group profits down (-55%)

Net cash outflow (R232 million)

High final F2018 dividend paid

F2018 incentives paid

Increased capital expenditure

Surplus cash at F2019 year end (R555 million)

Still in good position to fund committed outflows

Geared balance sheet not foreseen

IN SUMMARY

Business

Overview

Operational


Financial

Overview Outlook

OUTLOOK

Chris Schutte

42

POTENTIAL NEGATIVE INFLUENCES

Raw material prices will remain high, and continue to impact Astral’s largest

input cost into 1H2020, namely feed making up 66% of broiler live cost

Continued record level of unemployment, poor levels of economic growth and

the weak purchasing power of the consumer, will continue to place pressure on

poultry selling prices

High levels of poultry imports from Brazil and the USA are expected to

continue in the absence of adequate tariff measures

Infrastructure deterioration and its impact on Astral’s operations continues to

add a cost burden to the business

The on-going risk of bird flu is continuously monitored, and prevention

strategies are in place to manage this threat

Business

Overview

Operational


Financial

Overview Outlook

43

POTENTIAL POSITIVE INFLUENCES

Higher planting intentions for maize acreage, together with improved

prospects for seasonal rainfall could see an above average crop for the

2020 harvest season

Proactive engagement from the new Ministers of DTI and DAFF with the

poultry industry, is expected in line with the Poultry Sector Master Plan

Progressive genetic improvement of the Ross broiler breed will continue to

support the group’s best cost strategy

The expansion in Astral’s poultry production capacity (an estimated 16%

increase in current production levels) over the next two to five years at a total

approved capital expenditure of R0.9 billion

Business

Overview

Operational


Financial

Overview Outlook

“

” Confirmed August 2019

ADDITIONAL INFORMATION

46

KEY FINANCIAL RATIOS

37 36

48 48

51

65

55

31 31 30

34

23

12

20

41

19

36

61

24

31 33

39 39

46

49

45

25 26 26

29

21 13 19

36

16

28

42

17

8,9

7,5

10,0

11,4

13,9

16,5

14,5

9,3 9,3 9,9

11,0

7,4

4,5 6,5

11,1

5,8

9,9

16,1

7,8

7,3 5,9 8,3

9,6

12,3

14,8

12,8

8,0 7,8 8,4

9,3

5,8 3,1 5,1

9,8

4,6

8,7

15,0

6,5 5,5

5,5

6,1

4,7 4,1 4,4 4,3 4,7 4,8

3,6 3,7 4,0 3,8 3,9 4,2 4,1 4,1 4,1 3,7

0

5

10

15

20

25

30

0

10

20

30

40

50

60

70S

ep

-01

Sep

-02

Sep

-03

Sep

-04

Sep

-05

Sep

-06

Sep

-07

Sep

-08

Sep

-09

Sep

-10

Sep

-11

Sep

-12

Sep

-13

Sep

-14

Sep

-15

Sep

-16

Sep

-17

Sep

-18

Sep

-19

RONA ROE EBITDA margin PBIT margin Asset turn

47

KEY FINANCIAL INDICATORS

8,53 10,79

14,34 17,36

23,83

28,28

33,47 34,24 35,38 37,43

41,36 41,65 44,16

49,95

61,05 61,07

78,00

96,06

97,45

23 20

21

29

17

9

19

12

15

11 10

16

21 18

24

34

24

34

27 26

22 21

12

14

14

9

3

7

15

9 2 10

0

10

20

30

40

50

60

70

80

90

100S

ep

-01

Sep

-02

Sep

-03

Sep

-04

Sep

-05

Sep

-06

Sep

-07

Sep

-08

Sep

-09

Sep

-10

Sep

-11

Sep

-12

Sep

-13

Sep

-14

Sep

-15

Sep

-16

Sep

-17

Sep

-18

Sep

-19

NAV share Working capital days Net Debt / Equity

48

SAFEX YELLOW MAIZE PRICE vs. CBOT IN RAND TERMS


49

WORLD CORN ENDING STOCKS

Million Tons

19,82%

25,00%

27,80% 26,22% 27,79%

23,52%

23,38% 23,00%

10%

15%

20%

25%

30%

0

25

50

75

100

125

150

175

200

225

250

275

300

325

350

375

2014 2015 2016 2017 2018 2019 2020E 2021F

End Stock Maize stock to use ratio


50

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20E 2020/21F

Actual Actual Actual Actual Actual Estimate Forecast

Carry In (1 May) 589 2 074 2 471 1 093 3 689 2 662 1 744

Crop Estimate 14 250 9 955 7 779 16 820 12 510 11 081 13 785

Retentions 433 163 309 1 191 495 526 640

Sagis Delivery 13 817 9 794 7 469 15 629 11 984 10 555 13 144

Minus early deliveries 0 0 450 0 0 0 0

Imports 65 1 964 2 237 0 172 400 0

Total Supply 14 471 13 831 11 727 16 722 15 845 13 617 14 888

Domestic Usage Food 4 840 4 698 4 808 4 993 5 161 5 396 5 260

Domestic Usage Feed 5 041 5 520 5 004 5 276 5 508 5 410 5 600

Gristing, withdrawn & released 376 293 278 313 239 186 216

Total Domestic Usage 10 257 10 512 10 090 10 583 10 907 10 993 11 076

Exports & Sundries 2 153 848 993 2 451 2 276 880 1 900

Plus early deliveries 0 0 450 0 0 0 0

Carry Out (30 Apr) 2 062 2 471 1 093 3 689 2 662 1 744 1 912

No of days usage 73 86 40 127 89 58 63

STU 16,62% 21,75% 9,87% 28.31% 20,19% 14,69% 14,73%

Marketing year (May to April)

'000 tons


SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND

2 062

2 471

1 093

3 689

2 662

1 744 1 912

16,62%

21,75%

9,87%

28,31%

20,19%

14,69% 14,73%

0%

5%

10%

15%

20%

25%

30%

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20E 2020/21F

Carry out Maize stock to use ratio

51 Source: CJA Strategic Risk Brokers

SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND

‘000 Tons

52 Source: International Research Institute for Climate and Society (IRI) – Columbia University

EL NIÑO SOUTHERN OSCILLATION - FORECAST

53 Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI)

VHI of previous year VHI of current year

SOUTHERN AFRICA - VEGETATIVE HEALTH INDEX

54

BROILER FEED – INGREDIENT INCLUSION & COST CONTRIBUTION

Source: Own Data

65,0 45,7 63,3 43,6 61,4 39,6 61,1 38,0 55,6 29,8 54,3 26,7 53,4 28,6 54,1 31,0

11,4

14,9

15,6

20,3

16,8

22,3

14,0

18,6

14,0

17,9

13,2

17,9

13,8

18,4

15,5

18,6

9,1

8,6

6,4

5,6

6,9

5,4

6,2

4,0

6,1

3,3

5,7

4,1

4,9

4,2

4,6

4,0

6,4

14,9

6,7

14,0

7,3

17,2

7,8

18,8

8,6

21,5

9,1

21,3

8,6

20,1

8,2

17,4

0,2

0,9

0,4

1,2

0,5

1,7 0,4

1,5

0,5

1,7

0,7

2,3

0,7

2,2

0,7

2,3

7,5

10,3

7,3

10,3

6,6

9,1

9,9

13,8

14,6

19,8

16,6

22,2

18,2

23,4

16,6

21,2

0,3

4,7

0,3

5,0

0,4

4,7

0,5

5,4

0,5

6,0

0,4

5,4

0,4 3,0

0,3

5,3

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1H16Incl.

1H16Contr.

2H16Incl.

2H16Contr.

1H17Incl.

1H17Contr.

2H17Incl.

2H17Contr.

1H18Incl.

1H18Contr.

2H18Incl.

2H18Contr.

1H19Incl.

1H19Contr.

2H19Incl.

2H19Contr.

Maize Soybean Meal Sunflower Meal Other Fish Meal F/Fat and Extr Soy Vitamins, Minerals and Medication.

55

BROILER PRICE vs. FOOD PRICE INFLATION

Source: Own Data & CJA Strategic Risk Brokers

90%

100%

110%

120%

130%

140%

150%

90%

100%

110%

120%

130%

140%

150%O

ct-

14

Dec-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

Ap

r-18

Ju

n-1

8

Au

g-1

8

Oct-

18

Dec-1

8

Fe

b-1

9

Ap

r-19

Ju

n-1

9

Au

g-1

9

Broiler selling price index SA food price index

56 Source: SAPA, FNB, Red Meat Industry Forum

SOUTH AFRICAN PROTEIN PRICE COMPARISON

Chicken Pork Beef Mutton

Feed Conversion Rate 1.5 2.2 5.5 5.0

Per Capita Consumption 39,5 kg 5,1 kg 17,0 kg 3,0 kg

cents / kg

1000

2000

3000

4000

5000

6000

7000

8000

9000

Jan

-14

Ma

r-14

Ma

y-1

4

Ju

l-14

Sep

-14

No

v-1

4

Jan

-15

Ma

r-15

Ma

y-1

5

Ju

l-15

Sep

-15

No

v-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Ju

l-16

Sep

-16

No

v-1

6

Jan

-17

Ma

r-17

Ma

y-1

7

Ju

l-17

Sep

-17

No

v-1

7

Jan

-18

Ma

r-18

Ma

y-1

8

Ju

l-18

Sep

-18

No

v-1

8

Jan

-19

Ma

r-19

Ma

y-1

9

Ju

l-19

Sep

-19

57 Source: Own Estimates

LOCAL BROILER PRODUCTION & MARKET SHARE

Local broiler production ≈ 19.3 million birds per week

26%

20%

8%

7%

8%

5%

5%

21%

Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other

58 Source: Own Estimates

LOCAL BROILER PRODUCTION & MARKET SHARE

18%

14%

6%

5%

6% 4% 3%

15%

29%

Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Imports

Avg. poultry imports ≈ 8 million birds per week

(12 months ending September 2019)

59 Source: SAPA

TOTAL POULTRY IMPORTS (CHICKEN, MDM, TURKEY)

F2018 46 348 45 875 48 600 47 242 40 230 52 807 46 651 47 085 37 800 48 816 61 751 56 456

F2019 45 061 44 571 37 739 35 174 42 094 45 987 51 672 51 728 54 587 46 436 47 237 36 299

% Var -2,8 -2,8 -22,3 -25,6 4,6 -12,9 10,8 9,9 44,4 -4,9 -23,5 -35,7

bpw* 8,0 7,9 6,7 6,2 7,5 8,2 9,2 9,2 9,7 8,2 8,4 6,4

*bpw ≈ million birds per week

Tons

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

F2016 37 789 83 258 126 866 165 602 200 461 258 134 306 385 360 899 414 947 460 098 502 138 551 209

F2017 50 324 101 279 135 812 173 187 212 399 278 057 319 933 367 106 409 557 453 981 499 952 551 867

F2018 46 348 92 223 140 823 188 065 228 295 281 102 327 753 374 838 412 638 461 454 523 205 579 661

F2019 45 061 89 632 127 371 162 545 204 639 250 626 302 298 354 026 408 613 455 049 502 286 538 585

0

100 000

200 000

300 000

400 000

500 000

600 000

F2016 F2017 F2018 F2019

60 Source: SAPA

TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN

Brazil 61,5%

EU 12,6%

Argentina 5,9%

US 16,1%

Other 3,9%

Country of origin for poultry imports - 2018

566 210 tons 411 235 tons

Brazil 50,0%

EU 23,3%

US 16,4%

Argentina 6,5%

Thailand 1,9%

Other 1,9%

Country of origin for poultry imports - 2019 YTD (Sept)

61 Source: SAPA

TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN

Country Imports (tons)

2017 2018 2019 YTD

Brazil 337 476 348 155 205 820

United States

Poland

87 059

72

91 374

13 463

67 388

39 241

Argentina 32 816 33 278 26 833

Ireland 24 746 26 328 23 146

Denmark 16 884 25 672 19 591

Spain 11 138 4 932 13 228

Thailand 4 019 9 011 7 709

Canada 14 431 7 305 4 909

Chile 1 770 4 362 1 948

Australia 984 553 761

Germany 134 222 230

United Kingdom 1 366 231 224

Uruguay 50 359 52

Netherlands 112 323 48

Belgium 23 451 23 27

Swaziland 24 482 23

Other 344 137 58

Grand Total 556 877 566 210 411 235

62

POULTRY SECTOR MASTER PLAN

The master plan sets a number of targets to be met by 2023 and was signed by

all relevant stakeholders on 6 November 2019

Investment pledges (future and underway) topping R1.5 billion in expanding

processing capacity, with a further R1.7 billion in expanding broiler

production capacity on farm have been tabled by the industry

The 5 pillars of the master plan set out actions which cover the following;

The expansion of local industry capacity and ensuring that that locally produced

product makes up an increasingly larger proportion of consumption over time

The containment of imports and trade measures to protect the local industry from

unfair trade

Stimulating an increase in the consumption of locally produced chicken meat

Driving the export of raw and cooked chicken products

Enhancing the regulatory framework and ensuring compliance for imported

poultry, and

Transformation initiatives across the industry value chain

Chris Schutte

Chief Executive Officer

Tel : +27 (0) 12 667 5468

Fax : +27 (0) 86 504 2002

email: [email protected]

www.astralfoods.com

Daan Ferreira

Chief Financial Officer

Tel : +27 (0) 12 667 5468

Fax : +27 (0) 86 504 1602

email: [email protected]

annual results presentation - astral foods · broiler feed price up 7.7% • net margin 3.4% f2018:...

Documents