WILMAR INTERNATIONAL LIMITED ACQUISITION OF SUCROGEN 6 JULY 2010

Transcription

1 WILMAR INTERNATIONAL LIMITED ACQUISITION OF SUCROGEN 6 JULY 2010

2 IMPORTANT NOTICE Information in this presentation may contain projections and forward looking statements that reflect the Company s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company s assumptions are correct. Actual results may differ materially from those projected. This presentation does not constitute or form part of any opinion on any advice to sell, or any solicitation of any offer to purchase or subscribe for, any shares nor shall it or any part of it nor the fact of its presentation form the basis of, or be relied upon in connection with, any contract or investment decision.

3 Transaction Overview Transaction Purchase Consideration Expected Completion Acquisition of 100% of the shares of CSR Limited s ( CSR ) sugar and renewable energy business, ( Sucrogen ) Sucrogen is Australia s premier sugar company, operating across the full sugar value chain including milling, refining, cogeneration and bioethanol operations in Australia and New Zealand World s 2 nd largest exporter of raw sugar via QSL, primarily to Asia A$1,750m enterprise value (excluding minorities) comprises A$1,347m of equity value and A$403m of net debt at 31 March Debt funded by CSR, interest-free to Sucrogen, until completion Purchase consideration represents EV/EBITDA of 9.3x and P/E of 17.0x on Sucrogen s FY March 2010 financials and Price/NTA of 2.3x All cash transaction fully funded through internal sources and debt 30 September 2010 or shortly thereafter, subject to regulatory approvals Conditions The transaction is conditional upon the following standard approvals: the Foreign Investment Review Board of Australia ( FIRB ) the Overseas Investment Office of New Zealand ( OIO )

4 Acquisition will be earnings and value accretive Earnings Per Share Fully Diluted EV / EBITDA % EPS Increase x High value accretion EPS (US cents) EV/EBITDA (x) x Pre-Acquisition EPS Post Acquisition EPS 8.0 Wilmar Sucrogen Source: Wilmar and Sucrogen Financial Statements Note: 1) Proforma EPS after the acquisition is based on Wilmar s net profit for the financial year ended 31 Dec 09, Sucrogen s net profit for the financial year ended 31 Mar 10 and imputed after tax interest expense incurred in funding the transaction. Source: Wilmar and Sucrogen Financial Statements Note: 1) EV/EBITDA as of 2 July 10 based on financial year ended 31 Dec 09 for Wilmar. 2) EV/EBITDA based on financial year ended 31 Mar 10 for Sucrogen. 3) EV for Sucrogen includes minority interests of A$79m.

5 Financial impact of acquisition Wilmar International Ltd Pre-Acquisition Post-Acquisition % Increase Net Profit (US$m) 1 1,882 1, % Earnings per Share Fully Diluted (US$) % Net Tangible Assets ( NTA ) (US$m) 2 6,903 6,257 (9.4)% NTA per Share (US$) (9.4)% Net Debt to Equity 0.41x 0.54x 0.13x Note: 1) Proforma NTA after the Acquisition is based on Wilmar s NTA as at 31 December 2009 less goodwill from the acquisition calculated using Sucrogen s unadjusted carrying value of identifiable assets and liabilities as at 31 March On Completion, it is anticipated that Sucrogen will undertake an asset revaluation to reflect the fair market value of certain fixed assets that are presently recorded at their carrying value. 2) Proforma Net Profit after the acquisition is based on Wilmar s net profit for the financial year ended 31 December 2009, Sucrogen s net profit for the financial year ended 31 March 2010 and imputed after tax interest expense incurred in funding the Acquisition. EPS accretion of 1.8% Sucrogen anticipates undertaking a substantial asset revaluation to reflect prevailing market values of certain fixed assets that are currently recorded at carrying value Increase in net debt to equity but will remain at a conservative level of 0.54x post acquisition

6 Investment Rationale

7 Wilmar is Asia s leading Agribusiness Leading share in current operations #1 player in China Indonesia India Eastern Europe Africa World s largest processor and merchandiser of palm & lauric oils Largest in edibles oils refining and fractionation Largest in consumer packaged oil, fatty acids, specialty fats & palm biodiesel 30% global market share in oil palm processing Largest oilseeds crusher, edible oils processor and specialty fats and oleochemicals manufacturer Top merchandiser of consumer pack oils Nationwide distribution network covering more than 2,560 cities, municipalities, counties and districts One of the largest flour and rice millers A leading producer of branded consumer pack oils, as well as leading oilseed crusher and refiner Leader in branded consumer pack oils, oilseed crusher and refiner Largest table margarine and mayonnaise producer in Russia Largest edible oil refiner in Ukraine Leading importer of edible oils into East Africa Further expansion of plantations and processing facilities

8 Wilmar is expanding into sugar to continue the growth it has achieved through the years Wilmar has grown significantly Expansion rationale Net P ro fit (US $m ) 2,000 1,800 1,600 1,400 1,200 1, ,531 1, Sources: Wilmar financial statements. Note: From FY2007 onwards Results include IPT Assets and KG Acquisition, FY2006 Results restated to include IPT Assets, FY2005 Pre-merger results only Wilmar s current operations have grown to significant scale over the last few years Even though significant growth opportunities still exists in current operations: - Expansion in plantations, oilseed crushing and refining - Expansion in rice & flour milling - Oleochemicals expansion - Other growth opportunities we continue to seek major expansion to maintain the high growth rate we have achieved in the past

9 Strong fundamentals driving demand for sugar in key markets where Wilmar has a leading presence Sugar consumption grows with rising affluence Large potential for increased demand for sugar in high-growth markets 65 Singapore Switzerland 60 High Consumption Countries: 58.2 kg / capita Australia 55 NZ 50 Sugar Consumed (kg) per capita India Mexico Malaysia Canada Russia Thailand Taiwan EU 27 U.S. Hong Kong Indonesia South Korea Japan China Sugar Consumed (kg) per capita Taiwan and Hong Kong: 27.9kg / capita 5 1,000 10, ,000 GDP per Capita (USD) 0 Forecast Real GDP Growth ( ) China India Indonesia 9.7% 8.1% 6.7% Sources: ANZ Economics & Market Research, IMF World Economic Outlook Note: High Consumption Countries include Singapore, Switzerland, Australia and New Zealand.

10 Structural deficit of sugar in Asia Key markets in Asia suffer from a sugar deficit of 30% of total annual consumption compared to global deficit of 5% Figures in kt Production Consumption Deficit India 19,850 23,000 3,150 Indonesia 2,800 4,725 1,925 China 11,650 15,500 3,850 Japan 935 2,295 1,360 Malaysia 35 1,325 1,290 South Korea - 1,190 1,190 Vietnam 1,100 1, Singapore Hong Kong Sub-total 36,370 49,950 13,580 Global 158, ,701 8,512 Source: International Sugar Organization May 2010 Report 2009/10 World Sugar Balance

11 Sucrogen will allow Wilmar to build a leading position in sugar, starting with Indonesia Sucrogen is the platform to jump-start Wilmar s sugar aspirations World-class sugar business Excellent management team Upside in the current business - Raise production by increasing area under cane in growing regions - Benefit from increasing sugar prices due to increased consumption from developing countries, especially in Asia - Growth potential in renewable energy Potential to expand operations to China and India where Wilmar has significant manufacturing and distribution facilities Brings Wilmar into the big league in sugar In particular, it will help develop a largescale integrated operation in Indonesia Structural sugar deficit exists in the Indonesian market resulting in high domestic sugar prices vs. global - Sub-scale domestic production - Growing domestic demand Availability of land for large scale development - Wilmar has been offered a ~200k Ha land concession in Irian Jaya for sugar cultivation Wilmar has plantation, manufacturing and distribution capabilities Sucrogen s operations base in Townsville, Queensland, provides ideal base for staff to develop our Irian project (~2.5 hrs flight)

12 Townsville is an ideal base for our sugar project ~ 2.5 hrs