company profile engro corporation · for engro foods 2016 commissions pakistan’s first lng...

1 www.engro.com EngroCorp Engro.Corporation

company profileEngro Corporation


THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OR ANY INVESTMENT.

This presentation has been prepared by Engro Corporation Limited (“Engro”) solely for information purposes. No representation or warranty express or implied is made thereto,

and no reliance should be placed on, the fairness, accuracy, sufficiency, completeness or correctness of the information or any opinion contained herein or any opinion

rendered thereto. The information contained in this presentation should be considered in the context of the circumstances prevailing at the time and will not be updated to

reflect any developments that may occur after the date of the presentation. Neither Engro nor any of its respective subsidiaries, affiliates, officials, advisors, associates,

employees or any person working for, under or on behalf, shall have any responsibility and/or liability of any nature whatsoever (in contract or otherwise) for any loss

whatsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

This presentation does not constitute or form part of a prospectus, offering circular or offering memorandum or an offer, solicitation, invitation or recommendation to purchase

or subscribe for any securities and no part of it shall form the basis of, or be relied upon in connection with, or act as any inducement to enter into any arrangement, agreement,

contract, commitment or investment decision in relation to any securities. This presentation shall not at all be intended to provide any disclosure upon which an investment

decision could be made. No money, securities or other consideration is being solicited, and, if sent in response to this presentation or the information contained herein, will not

be accepted.

The presentation may contain statements that reflect Engro’s own beliefs and expectations about the future. These forward-looking statements are based on a number of

assumptions about the future, which are beyond Engro’s control. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not

be viewed as the most likely or standard scenario. Such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ

materially from those contemplated by the relevant forward-looking statements. Engro does not undertake any obligation to update any forward-looking statements to reflect

events that occur or circumstances that arise after the date of this presentation and it does not make any representation, warranty (whether express or implied) or prediction

that the results anticipated by such forward-looking statements will be achieved. In addition, past performance should not be taken as an indication or guarantee of future

results.

Certain data in this presentation was obtained from various external data sources that Engro believes to its knowledge, information and belief to be reliable, but Engro has not

verified such data with independent sources and there can be no assurance, representation or warranty as to the accuracy, sufficiency, correctness or completeness of the

included data. Accordingly, Engro makes no assurance, representation or warranty as to the accuracy, sufficiency, correctness or completeness of that data, and such data

involves risks and uncertainties and is subject to change based on various factors.

You agree to keep the contents of this presentation strictly confidential. All or any part of this presentation may not be taken away, reproduced, copied, redistributed,

retransmitted or disclosed in any manner or form and for any purpose whatsoever.

By attending this presentation, you are agreeing to be bound by the foregoing limitations.

Important Disclaimer


our visionto be the premier Pakistani enterprise

with a global reach passionately

pursuing value creation for all

stakeholders


Engro In A Snapshot

Revenue

$1,219 million

Market Cap of

$1,277 million with 4

Listed Entities

Pioneer in Thar Coal

Mining & Power

Generation

First LNG Terminal in

Pakistan

Sole Manufacturer of

PVC in Pakistan

Connects with 12

Million Customers

Pakistan’s premier

business conglomerate

Operating in Fertilizers, Power Generation,

Petrochemicals, Mining, Dairy,

LNG and Chemical Storage

Import Substitution

~$850 Mn per year


Our Footprint In Pakistan

USD 400million

contribution to national

exchequer

3,500employees

18,000indirect

employees

Rice Mill

Dairy Processing Plant

Qadirpur Gas-fired Power Plant

Fertilizer Complex

Dairy Farm

Dairy Processing Plant

Karachi Head Office

Thar Block II Coal Mining

Chemical storage/

PVC manufacturing/

Terminal


Journey Through Time

1957

Mari Gas field discovered by Esso Mobil joint venture

Esso Pakistan Fertilizer Company incorporated

Exxon divests its Equity. Company renamed

Engro Chemical Pakistan Limited

1965 1991 1995

Engro enters chemical storage & handling business in JV with

Royal Vopak of Netherlands

Engro enters petrochemical business

and becomes sole manufacturer of PVC in

Pakistan in JV with Mitsubishi & Asahi Glass

Dawood Hercules Corporation becomes

Engro’s patron shareholder

1997 2002

2003

Engro enters commodities trading,

automation, & acquires stake in Avanceon

Engro enters energy business and begins work on a 220 MW

power plant based on flared gas

Engro enters food business and sets up milk processing plant

at Sukkur

2005 2006 2007

Engro commences 1.3mt Enven expansion project; largest industrial

investment of $1.1 Bn

Engro Chemical Pakistan demerges into diversified conglomerate with EngroCorp as the holding co

2009 2010

Back-Integration of Engro Polymer

completed;BOD approves entry into Rice business

Engro enters into a power project in Nigeria; Engro Ferts conducts an IPO oversubscribed by

3x

Work commences onThar coal project

Block-II

2013 2014 2015

Engro celebrates 50 years since inception

Engro enters into strategic partnership with Royal FrieslandCampina

for Engro Foods

2015 2016

Commissions Pakistan’s first LNG importing Terminal in

record time

2017

Engro forms strategic partnership with General Electric for Engro Digital


Engro Today

Financial

Highlights

Scale

People &

Impact

Import Substitution

$2bn

Growth

8X*Credit Rating

AA+

Employees

4K

Revenue

$1.4Bn

Tax

Contribution

$330Mn

Market Cap

$1.3Bn

Farmer Connect

12Mn

Engro is Pakistan’s premium conglomerate and voted 27 times among the top 25 organizations in Pakistan

*Over the last decade

Market Cap as of December 31st, 2018.


Current Business Portfolio

Fertilizerstop 50 fertilizer

manufacturers in the world;

5 decades of operations as

a world class business

Energyoperating Pakistan’s first 217

MW power plant on permeate

gas; constructing a 2x330 MW

mine-mouth coal power plant

Dairy12 million consumer base;

market leader in Pakistan’s UHT

market and number 2 dairy

dessert brand

Miningin a JV with the Government of

Sindh and CMEC, developing

Pakistan’s first open-pit coal

mine; to become operational in

2019

Petrochemicalsthe only fully integrated chlor-

vinyl chemical complex in

Pakistan producing PVC and

other chlorine byproducts

Chemical storage & handlingPakistan’s first LNG receiving

terminal, and a integrated bulk

liquid chemical & LPG terminal


Corporate Structure

Engro Corporation

Engro

Fertilizer

(56%)

Elengy

Terminal

(56%)

Engro

Polymer

(56%)

Engro

Foods

(40%)

Engro

Vopak

(50%)

Engro Eximp

Agriproducts

(100%)

Engro

Energy

(100%)

Engro

Powergen Thar

(51%)

Sindh Engro Coal

Mining

(12%)

Engro

Powergen Qadirpur

(69%)

Listed

Entities

Unlisted

Entities


Engro’s PartnersLong-standing collaborations with global companies

Strong relationships with multilaterals.

Consistently able to develop world-class bankable projects

Equity Partners

Leading Partners

Development Partners


Shareholder Return

77%28%

206%

138%

24%

26%

283%

138%

52%26%

ECorp KSE All Share Index ECorp KSE All Share Index

5 Years 3 Years

Total Shareholder Return ECorp vs PSX 100

Dividend Yield Capital Gains Yield

-20%

0%

20%

40%

60%

80%

Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18

ECorp vs. PSX 100 Percentage Change in Price

PSX 100 Engro


ECorp Consolidated – Revenue FY 2018

Revenue (USD Millions)

Revenue grew by 33% (excluding Engro Foods)

▪ Higher Urea sales volume and prices

▪ Higher PVC production and sales as a result of

successful debottlenecking of PVC / VCM plant

Segment-wise Revenue (USD Millions)

Business 2018 2017 Growth

Fertilizers 889 628 42% ▲

Polymer and

Chemicals287 226 27% ▲

Energy 97 95 3% ▲

Terminals 129 111 16% ▲

Foods 285 296 (4%) ▼

33% ▲

1,396

1,046

FY 2018 FY 2017


ECorp Consolidated – Profit After Tax FY 2018

Profit After Tax (USD Millions)

Standalone Profit After Tax increased by 12%:

▪ Higher profitability due to gain on sale of Elengy in

2018 offset by lower dividend from EFoods & Elengy

Consolidated Profit After Tax increased by 45%:

▪ Significant improvement in profitability due to Fertilizer

and Petrochemicals businesses performance

Segment-wise Profit (USD Millions)

Business 2018 2017 Growth

Standalone 104 93 12%▲

Fertilizers 142 91 56% ▲

Polymer and

Chemicals40 17 140% ▲

Energy 13 14 (7)% ▼

Terminals 31 34 (7)% ▼

Foods 3 1 302% ▲

Consolidated* 192 133 45% ▲

45% ▲

*excludes EFoods

192

133

FY 2018 FY 2017


ECorp Consolidated – Debt Profile

Long-term Borrowings (USD Millions)

Credit Rating - PACRA

CompanyLong-term

Rating

Short-term

Rating

Engro Corporation AA+ A1+

Engro Fertilizers AA- A1+

Engro Polymer and Chemicals A+ A1+

Engro Powergen Thar A A1

Engro Elengy Terminal A+ A1

▪ Consolidated LT borrowings increased primarily due to

drawdowns for Thar coal power project

V/S

Healthy balance sheet allowing the Company to increase leverage for future growth opportunities!

35:65Gearing Ratio in FY

2017

41:59Gearing Ratio in FY

2018

Credit Rating improved in 2018

1,069 738

FY 2018 FY 2017


Recognized Globally & Locally

▪ ACCA WWF-PERA Award for becoming the first organization in Pakistan to adopt the

integrated reporting model in their Annual Report 2013

▪ Investor Relations Awards by CFA Society Pakistan in 2013 and 2014

▪ Best Corporate Report Award in its category and the Best Sustainability Report Award by joint

committee of ICAP and ICMAP in 2014

▪ Best Corporate Governance in Pakistan Award by World Finance in 2014

▪ Won the ‘Most Preferred Graduate Employer 2017 ‘ award by Pakistan Society of

HRM.

▪ Recognized as the most gender diverse company in Pakistan in the ‘Gender and

Diversity Conference 2016’ organized by HR Metrics

▪ Engro Vopak completed 19 years of safe operations without any lost work injury in 2016

▪ Engro Vopak secured 98% score in 2016 in THA (Terminal Health Audit) which is currently highest

score globally in the VOPAK World

▪ DuPont Safety and Sustainability Award won by Engro Fertilizers in the category of “Stakeholder

Engagement for Sustainability” in 2013

▪ Fire Safety Award by National Forum for Environment & Health in 2013

Safety Awards

Employer Awards

Governance Awards


Engro’sNext Big Project


Thar ProjectsEngro’s flagship project under construction

With Investment of USD 2 Bn it is the largest private sector investment in CPEC

1.57 Billion tons of exploitable coal reserves (Block II) on 97.7 sq. kilometers land that

can produce 5,000 MW for 50 years!

▪ 3.8 Mtpa Open Cast Mine

▪ Project cost ~ USD 845 Mn

▪ 75:25 Debt to Equity Ratio

▪ 51% of the workforce hired from within locals

▪ 2x330 MW Mine Mouth Power Plants

▪ Project cost ~ USD 1.1 Bn

▪ 75:25 Debt to Equity Ratio

▪ 40% of the workforce hired from the local area

.

.

.

China

Machinery

Engineering

CorporationGovernment

of Sindh


Strategic Direction


Our Pillars

Agri –

Solutions

Engro Corporation creates long-term shareholder value by developing platforms of growth for our current

portfolio and identifying new growth opportunities that provide superior returns

ConsumerEnergy

InfrastructurePetrochemicals

TECHNOLOGY


Demographics of Pakistan

Average

Household

7 People

50% Male

50%

Female

Nominal GDP

2015: USD

270 Bn

2021: USD

487 Bn

Life

Expectancy

2015: 66.4

Years

2030: 68.8

Years

65% below

30 years

(10th most

populous

country)

GDP Per

Capita

2015: USD

5,000

2021: USD

6,648

6th Most Populous

Country

1/2 of the population to live

in urban centers by 2025

133 Mn Population

under the age of 30

2 in 5 of the Labor force

Employed in Agriculture


Opportunities: Agri-solutions sector

There is an opportunity for a tech enabled platform to significantly improve the economic output of this sector

farmer

farm

advisory

cold storage &

warehousing

transportation

crop grading and

selection mechanisms

assistance with formal

sector lending

enabling mechanization

through rentals and leases

high-quality and

customized inputs as

per soil and crop


Opportunities: Consumer

Increased

population

with middle

class

gaining

critical mass

Continued

focus on

essential

items with an

aspiration for

a better life

Including the informal economy, Pakistan is

already within the spending

sweet spot

Increased

urbanization

driving real

estate

prices

upwards

Emerging countries ahead of Pakistan

exhibit strong consumer trends that enable a

better lifestyle

Prices of

aspirational

durable

goods

dropping on

an inflation

adjusted

basis


Opportunities: Energy Infrastructure

Thar Coal IPP’s

Wind and Solar

Additional Thar mines

Greenfield Hydro

Transmission Lines LNG Infrastructure


Opportunities: Petrochemicals

Operational &

Reliability Efficiencies

PVC resin

& PVC downstream

Chlorine & Hydrogen

derivatives

Caustic Soda

& flakesEthylene Cracker


Opportunities: Technology as an Enabler

Agri –

SolutionsConsumer Energy Infrastructure Petrochemicals

Technology can provide

the tools necessary to

integrate the complete

agri value chain (from

farmer to consumer) in

a manner that

maximizes value

creation for all

stakeholders

In the big data and

analytics era,

technology can enable

smarter, data-driven

and targeted decision

making

Savings from PEPI

implementation

improved project

IRR by c. 0.8%

We are committed to

utilizing technology in

order to improve

efficiencies across

various business

dimensions (energy

consumption, process

productivity etc.) and

the product value chain

(procurement,

distribution, etc.)

Asset Performance

Management initiative

(in collaboration with

GE) utilizes a

combination of

hardware and software

to record, manage and

compare vital metrics in

order to diagnose

machine health and

reliability

company profile engro corporation · for engro foods 2016 commissions pakistan’s first lng...

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