SIME DARBY PLANTATION · Integrated Plantation Company Involved in the Entire Palm Oil Value Chain...

SIME DARBY PLANTATIONManagement RoadshowNovember 2017

1Strictly Private & Confidential

Disclaimer

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This document does not constitute and is not an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities of anycompany referred to in this document in any jurisdiction. The companies referred to herein have not registered and do not intend to register any securitiesunder the US Securities Act of 1933, as amended (the “Securities Act”), and any securities may not be offered or sold in the United States absent registrationunder the Securities Act or an exemption from registration under the Securities Act. By attending the presentation you will be deemed to represent, warrantand agree that to the extent that you purchase any securities in any of the companies referred to in the presentation, you either (i) are a “qualifiedinstitutional buyer” within the meaning of Rule 144A under the Securities Act, or (ii) you will do so in an “offshore transaction” within the meaning ofRegulation S under the Securities Act.

By attending this presentation and accepting a copy of this document, you represent and warrant that (i) you have read and agreed to comply with thecontents of this notice; (ii) you will maintain absolute confidentiality regarding the information contained in this document including information presentedorally or otherwise in accordance with your confidentiality obligation; and (iii) you are lawfully able to receive this document and attend this presentationunder the laws of other jurisdiction in which you are subjected and other applicable laws.

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 andassumptions 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 inthe forward-looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the futureperformance 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 inconnection with the contents contained in this presentation (collectively, the “Information”), or that reasonable care has been taken in compiling or preparingthe Information. None of the Parties shall be liable or responsible for any budget, forecast or forward-looking statements or other projections of any nature orany 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 anyrecipient(s) or party any right, title, ownership, interest, license or any other right whatsoever in or to the Information herein. The recipient(s) acknowledgesand 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 artistimpression only and are subject to variation, modifications and substitution as may be recommended by the company’s consultants and/or relevant authorities.


Table of Contents

Section Page

1. Sime Darby Pure Play Exercise - Transaction Overview 3

2. Sime Darby Plantation

- Company Overview 9

- Key Investment Highlights 12

- Business Strategies & Future Plans 24

- Industry Outlook 34

- Financial Overview 37

3Strictly Private & ConfidentialStrictly Private & Confidential

Sime Darby Pure Play Exercise -

Transaction Overview


Sime Darby Pure Play Exercise – Transaction Overview

Sime Darby Berhad

Property PlantationTrading,

Logistics & Others

Sime Darby Property

Sime Darby Plantation

100% 100%

PNBOther

ShareholdersEPF KWAP

Conglomerate group structure involved in distinct businesses, i.e. plantation, property, trading, logistics &

others

Listed company

Existing Corporate Structure

11.12%* 5.61%^6.15%

Sime Darby Property


Trading, Logistics &

Others

Property Business

Plantation Business

Sime DarbyBerhad

Listed company

Listed company

Listed company

Corporate Structure Post Proposals

36.33%40.79%

ASB PNBOther

ShareholdersEPF KWAP

11.12%* 5.61%^6.15% 36.33%

ASB

40.79%

Notes:* Comprising 9.9% direct interest and 1.22% indirect interest (managed by/through Citigroup Nominees (Tempatan) Sdn Bhd for EPF)^ Comprising 5.22% direct interest and 0.39% indirect interest (managed by KWAP’s fund managers)

Source: Shareholding Structure as at 15 Oct’17 as extracted from the Circular

Same set of shareholders will continue to hold the same

shareholding in each entity


Listing of Pure Plays – Reference Prices

Note: Information regarding reference price is stated in Page 11-19 of the Circular to Shareholders – Part 1 (dated 4 Nov 2017)

CompaniesPercentage Allocation

Range

Illustrative Reference Price Based on Percentage Allocation Range

Mid-Point Minimum Maximum

Share Price (RM)

Market Cap

(RM’bn)

Share Price (RM)

Market Cap

(RM’bn)

Share Price (RM)

Market Cap

(RM’bn)


60%-68% 5.79 39.4 5.43 36.9 6.15 41.8

Sime Darby Property

16%-19% 1.58 10.7 1.45 9.9 1.72 11.7

Sime Darby Berhad

- 1.68 11.4 2.17 14.7 1.18 8.0

TOTAL - 9.05 61.5 9.05 61.5 9.05 61.5


Listing of Pure Plays – Justification for Sime Darby Plantation’s Reference Price

Net Earnings Per Share

Sime Darby Plantation’s adjusted net EPS of 19.48 sen per share for FY2017.

Comparable listed companies for Sime Darby Plantation:

Sime Darby Plantation Mid-Point Minimum Maximum

Share Price (RM) 5.79 5.43 6.15

FY2017 PER 29.7x 27.9x 31.6x

The implied PER of Sime Darby Plantation would be between 27.9x to 31.6x, which falls within the PER range of the selected comparable listed companies of between 18.9x to 38.8x.

Companies PER

IOI Corp 38.8x

KLK 23.1x

Genting Plantations 18.9x

AVERAGE 27.0x

1

Price-to-Earnings Ratio (PER)2

Net Assets

Sime Darby Plantation’s pro-forma consolidated Net Assets of RM2.00 as at 30 June 2017.

3


Listing of Pure Plays – Justification for Sime Darby Plantation’s Reference Price (cont’d)

Sime Darby Plantation’s Competitive Strengths

• The world’s largest oil palm plantation company by oil palm planted areas;

• The world’s largest CSPO producer;

• A wide and diverse geographical reach; and

• Recognised for our sustainability credentials and product quality:

o Innovation and R&D-driven;

o Fully integrated business model that allows us to leverage and diversify along the palm oil value chain; and

o An experienced and sound Board and management team.

4

5 Sime Darby Plantation’s Strategies and Future Plans

• To drive operational excellence in its upstream business by achieving FFB yield of 25 MT/ha and OER of 25% by year 2025;

• To serve its customers’ evolving needs in its downstream business; and

• Maximise returns across the palm oil value chain by leveraging on its integrated business model.

Favourable Outlook of the Palm Oil Industry with Expected Higher Demand for Palm Oil6


Milestones Following Actual Listing Submission

26 OctThu

• Securities Commission (SC)’s and SC Equity Compliance Unit’s approvals obtained

20 NovMon

EGM

Target End Nov

4 NovSat

• Listing

• Issuance of Prospectus

• Despatch of Circular to Sime Darby Berhad’sshareholders

24 AugThu

• The approval from the Board of Sime Darby Berhad on the Proposals including the capitalisation, share split, distribution and listing of the Identified Entities obtained

3 NovFri

• Announcement of notice of Extraordinary General Meeting (“EGM”)

Submission of confirmation of registration of Prospectus to the SC


Company Overview


Business OverviewIntegrated Plantation Company Involved in the Entire Palm Oil Value Chain

Upstream Downstream Others

Oil palm, rubber & sugarcane estates

Developing, cultivating and managing oil 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 oleochemicals, 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 bio-based chemicals, biogas and composting

Agribusiness

Provision of agriculture products and services

Oil palm estate Mill Refinery Food application High-yielding genome seeds

Renewables

Sime Darby Plantation Berhad


FY16/17 unless otherwise stated Malaysia Indonesia

PNG & Solomon Islands Liberia Total

Total oil palmplanted area(1) (ha)

303,367 202,191 86,493 10,401 602,452

Mature area(1) (ha) 251,629 161,621 76,281 9,356 498,887

Palm tree age profile & average tree age (1)

(Years)

FFB production (mm MT/year)

5.29 2.67 1.79 0.03 9.78

Mill production (mm MT/year)

CPO 1.20 0.72 0.55 0.01 2.48

PK 0.29 0.16 0.14 0.00 0.58

FFB yield (MT/ha) 20.76 16.03 23.88 4.04 19.44

OER 20.56% 21.30% 23.10% 18.73% 21.29%

KER 4.95% 4.67% 5.73% 2.48% 5.02%

20%

9%

25%

39%

7% 12%

24%

47%

12%

5% 10%

90%

17%

20%

37%

18%

8%

Snapshot of Oil Palm Plantation Operational Statistics


Note:(1) As at 30 Sep 2017

<3 yrs 4-8 yrs 9-18 yrs

19-22 yrs >22 yrs

4.7 yrs 12.9 yrs14.3 yrs12.6 yrs 11.9 yrs


Key Investment Highlights


INVESTMENT HIGHLIGHTS – PLANTATION World’s Largest Sustainable Palm Oil Producer

Strong Market Position as 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

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

Innovative & Market Leading R&D Supports Operational Efficiency & Productivity

Sound Financial Profile and Resilient Business Model

Experienced and Sound Board & Management Team

1

2

3

5

4

6



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

We are the world’s largest oil palm plantation company by oil palm planted area with c.2.8% market share(1)

and total landbank of more than 983,000 hectares across Malaysia, Indonesia, PNG & Liberia

Notes:(1) Estimated based on global planted area of 21.5 mm ha worldwide(2) Based on 2016 global CPO production of 58.9 mm MT(3) Based on latest financial year end(4) As at 30 Jun 2017Source: Frost & Sullivan, company

1


20%Leader in Sustainability - World’s Largest Producer of CSPO

of Global CSPO Production Capacity(1)

~600,000 hectaresWorld’s Largest Oil Palm Plantation Company (by planted area)

4 mn MT p.a.Total Refining Capacity (12 Refineries)

2.5 mn MT FY17 CPO Production (~4% of Global Market Share)(2)

Market Leading R&DEdison Award 2017 under the Energy and Sustainability category (Genome Select Oil Palm Project)

251Estates

72 Mills

11 Crushing Plants (inclusive of soy crushing plant)

World’s Largest Oil Palm Plantation Company by Planted Area with c.2.8% Market Share

502

466

258

266

204

208

159

176

148

100

137

116

116

92

83

603

488

341

297

247

242

209

205

179

141

139

136

127

102

95

SD Plantation

Golden Agri

FGVH

Astra Agro

Salim

Wilmar

First Resources

KLK

IOI

GENP

Sinar Mas

Sampoerna

Persero

Nusantara

LSIP

2.8%

2.3%

1.6%

1.4%

1.2%

1.1%

1.0%

1.0%

0.8%

0.7%

0.6%

0.6%

0.6%

0.5%

0.4%

Planted & Mature Area (Ha)(3)

% global market share(1)

(4)


15

1985 • Introduced

Zero-Burning replanting technique

1996• EMS-ISO

14001 certification for environmental management systems

1992• United Nations

Environment Programme’sGlobal 500 Award for Zero-Burningreplanting technique

2002• Founding

member of RSPO

2004 • First

GLOBALG.A.P. certification which recognisesefforts for good agricultural practices

2015• Acquisition of New

Britain Palm Oil Limited, a 100% RSPO certified & traceable palm oil producer in terms of processing identity preserved or fully segregated oil

2016• Launched the

Responsible Agriculture Charter (RAC)

2014• Signed the

Sustainable Palm Oil Manifesto

• HCS+ methodology for oil palm

Our journey to sustainability

SDP Sustainability

Brand

Future: “RSPO and Beyond” vision • To prevent value

erosion in our businesses from unethical behavior

• To maintain established sustainability credentials and policies

• Global Sustainability Leadership Award from the World Sustainability Congress

2017• Edison Awards

(Bronze) under Energy & Sustainability category

1World’s Largest Oil Palm Plantation Company by Oil Palm Planted Area, with a Wide and Diverse Geographical Reach and the World’s Largest Producer of Certified Sustainable Palm Oil


Sustainability – Committed to Good Agriculture Practices

As at 30 Sep 2017

As a signatory to the Sustainable Palm Oil Manifesto, we are committed to implement leading industry practices around High Conservation Value and HCS in new developments

RSPO Certification Status

High Carbon Stock (HCS) Commitment

Responsible Agriculture Charter (RAC)

Launched in Sep’16 with SD Plantation’s focused commitments on:

• Human rights & social development

• The environment• Corporate integrity

Sime Darby Open Palm Traceability Dashboard

provides SD Plantation’s customers with access to source the products

purchased from SD Plantation

Open Palm Traceability

Upstream – Mill

Traceable up to plantations

Downstream – Refinery, KCPs & Biodiesel

Traceable up to plantations Traceable up to mills

As at 30 Sep 2017

88.4% Traceable

FFB

96.7% Traceable

CPO Palm Kernel

100% Traceable

80.5% Traceable

CPO Palm Kernel

81.7% Traceable


1

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

96%INDONESIA

100%PNG & SI

As at 30 Sep 2017


Sustainability – Driving Market Demand

Other

Certified Players

80%

Sime Darby

Plantation20%

11.8 mn MT

Global CSPO Production Capacity

(as of 31 Jul 2017)

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

660k MT/yearNURI REFINERY (MALAYSIA)

NEW BRITAIN OILS (UK)

Source: Company, Frost & Sullivan

CSPO Production Capacity


1


Geographical Breakdown

for FY17 Total Revenue

Market Reach Extends to the Top 5

Global Palm Oil

Consumer(1)

Upstream Operations

Presence in 5 Countries - Malaysia, Indonesia, PNG & Solomon Islands, Liberia

Developing, cultivating and managing oil palm, rubber & sugarcane plantation estates

Operates and manages 249 plantation estates and 72 palm oil mills

Cattle rearing & beef production

Downstream Operations

Operating across 16 Countries - Malaysia, Indonesia, Netherlands, Thailand, United Kingdom, PNG, Vietnam & others

Production & sales of bulk & refined oils and fats, oleochemicals, biodiesel products and derivatives

Manages and operates 12 refineries with a total refinery capacity of 4 mm MT/year

Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (1/2)

FY17 Total Revenue = RM14,779 mm

c. RM10.8 bn or 73% of FY17 revenue is derived from the Top 5 Global Palm Oil Consuming Countries/Region

(from Malaysia, Europe, India, Indonesia & China)

2

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

Strong Geographical Presence

Note:(1) The top 5 palm oil consuming countries/regions based on global palm oil consumption in 2016 are India, Indonesia, EU, China and Malaysia, which collectively accounted for c.53% of total consumption in 2016 Source: Frost & Sullivan, company


Malaysia,

23%

Europe,

22%India,

19%Indonesia,

7%

China, 2%

South Africa,

5%

Other SEA, 13%

Others, 9%


62.5 63.966.9

70.273.8

77.781.7

795

750761

771782

793804

2016 2017F 2018F 2019F 2020F 2021F 2022F

Palm oil consumption (mm MT)

CPO Price, CIF Rotterdam (constant USD)

Well Positioned to Benefit from Sound Industry Fundamentals & Strong Demand Growth Trends (2/2)

Note:(1) Price rationalization expected in 2017 due to recovery of FFB yield and CPO production in Indonesia & Malaysia post El Nino drought.Source: Frost & Sullivan, World Bank

2

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

Demand for Palm Oil Estimated to Reach 81.7 mnMT by 2022, Providing Support to CPO Prices

Capitalising on strong demand growth for palm oil


52.6 57.9 59.5 60.8 62.5

5.7 6.4 6.5 6.8 6.6

100.5 101.8 107.8 109.5 114.5

158.8 166.1 173.8 177.1 183.6

2012 2013 2014 2015 2016

Palm Oil Palm Kernel Oil Others

Global Edible Vegetable Oil Consumption (mn MT)

Increasing Demand for Palm Oil & Edible Oils Driven by Growing Population & Food Requirements

2012-2016 CAGRPalm oil: +4.4%PKO: +3.7%

1.282.49

3.484.51

5.356.18 5.63

2010 2011 2012 2013 2014 2015 2016

Global Sales of Certified Sustainable Palm Oil (mn MT)

Strong CSPO Sales Growth Globally is a Direct Consequence of the Sustainability Commitments of Various FMCG companies


Fully Integrated Business Model with Diversified Operations Along the Palm Oil Value Chain

MillsPlantation

Transportation, storage &

distribution

Sales & marketing

Economies of scale & cost synergies Diversification of commodity price volatility

Crushing plants &

Refineries

Upstream Downstream

R&D and renewables

Shared use of integrated processing facilities & infrastructure

Extensive sales and distribution network

Flexibility to channel products & resources to markets withgreater demand

Ability to convert by-products (palm fibres, sludge oil, palmoil 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 aresusceptible to volatile commodity prices

More stable and resilient earnings as volatilities insegment margins are mitigated

Ability to better manage commodity price volatility

Flexibility to channel CPO to various segments ofdownstream process by capitalizing on the differentprice characteristics and feedstock types in thedownstream segment

3

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

1 2

We have established a fully integrated business model that operates across the entire spectrum of the palm oil value chain

Key Benefits of a Fully Integrated Business Model



Market Leading Research & Development

• Global network of 5 R&D centres in Malaysia, Indonesia & PNG, and3 innovation centres in Malaysia, the Netherlands and South Africa

• Supports operational efficiency and improvements to upstreamproductivity, and we develop sustainable practices while pursuingtransformational innovative strategies

• Development of new palm oil breed via a genomic selection andprediction 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 asnew Dami seeds progenies which are expected to deliver better oilyield improvements than its predecessors

Market Leading R&D Supports Operational Efficiency & Productivity

4


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 efficiencyand productivity

• Digitisation initiatives


Sound Financial Profile & Resilient Business Model5

BBB+(EXP)

Baa1

AAA

We sustain long-term growth whilst maintaining ready access to capital markets and preserve our ability to repay and service debt obligations over time evidenced by our investment grade ratings along with a stable

outlook

Vertically integrated and geographically diversifiedoperations

Ability to better withstand economic downturn andmoderate impact from such volatilities

Steady performance throughout the years despiteadverse weather conditions and market volatilities

Committed towards optimising our capital structure inorder to ensure a competitive cost of capital

Implementation of an optimal capital structure bybalancing debt and equity levels by putting in placeappropriate dividend and financing policies

Sound Financial Profile & Resilient Business Credit Rating of SD Plantation

Resilient business model1

Disciplined approach in capital allocationand cash flow management

2



Experienced and Sound Board & Management Team6

RenakaRamachandran

Chief Financial Officer

Datuk FrankiAnthony 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 HelmyOthman Basha

Chief Operating Officer, Upstream

Dr. Simon Lord

Chief Sustainability Officer

Mohd Haris Mohd Arshad

Chief Operating Officer,

Downstream

Dr. HarikrishnaKulaveera-

singam

Head of R&D

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

Datuk ZaitonMohd Hassan

Senior Independent Non-Executive

Director

Dato’ Che Abdullah @ Rashidi Che

Omar

Independent Non-Executive Director

Dato’ Mohamad Nasir Ab. Latif

Non-Independent Non-Executive

Director

Dato’ Mohd Nizam Zainordin


Director

Tan Sri Datuk Dr.Yusof Basiran


Zainal Abidin Jamal


Director

Muhammad Lutfi


Tan Ting Min


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 of experience in the

plantation industry



Business Strategies & Future Plans


The Strategy Moving Forward – What is Different?

‘The Leading Global Integrated Palm Oil Player’The global brand for plantation sustainability

VIS

IO

NG

RO

WTH

S

TR

ATEG

YTA

RG

ETS

B

Y 2

02

5

U P S T R E A M

DRIVING OPERATIONAL EXCELLENCE VIA DIGITISATION

D O W N S T R E A M I N T E G R A T I O N1 2 3

Towards Mission 25:25

Achieving FFB yields of 25 MT/Ha & OER of 25% by 2025

Higher Downstream PBIT contribution

20% of 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

19FFB Yield(MT/ha)

21.3%OER

5.2%DownstreamContribution1

FY2017 25FFB Yield(MT/ha)

25%OER

LowerCost to customer

HigherDownstreamContribution1

FY2025CURRENT

LONG-TERM

1 % of Contribution to Plantation PBIT , Source: Company Presentation



Upstream –Driving Operational Excellence

20.721.5

20.521.5

20.4 20.4

18.819.4

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

21.9 21.5 21.8 21.8 21.9 21.7 21.921.3

22.1 22.5 22.8 23.2 23.2

25.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2025

FFB Yield(MT/ha)

Oil Extraction

Rate(%)

FY

ACCELERATED REPLANTING

•Group : 5%(Indonesia : 7% staggered)

A SUPERIOR PLANTING MATERIAL

•High yielding planting material (e.g.

Genome, Dami)

B WATER MANAGEMENT

•Effective water management &conservation practices

C MECHANISATION

•Enhancing automation & digitisation

•Advanced milling & latest extraction technologies

D

ELEVATING YIELD PERFORMANCE THROUGH ON-GOING PROCESS ENHANCEMENTS

Source: Company

25 MT/ha

25%



20%

9%

25%

39%

7% 10%

90%

12%

24%

47%

12%

5%17%

20%

37%

18%

8%

Upstream – Replanting with High Yielding Materials

Average Age

Profile(1)

(years)

Replanting Rate 5-7%

Genome Select can deliver higher oil yield as compared to our current commercial offering, Calix 600

SUPER FAMILY DAMI

GENOME SELECT

NEW PLANTING MATERIALS

Note: (1) As at 30 Sep 2017Source: Company

<3 years 4-8 Years 9-18 Years 19-22 Years >22 Years

Avg age:4.7 yrs

Avg age:12.6 yrs

Avg age:14.3 yrs

Avg age:11.9 yrs

Malaysia Indonesia PNG & SI Liberia

High Yielding Materials

Average Age

10 yrsBy 2025

ACCELERATED REPLANTINGA SUPERIOR PLANTING MATERIALB



Upstream – Innovative Watering Initiatives

WATER MANAGEMENTC

MALAYSIA INDONESIA LIBERIAPAPUA NEW GUINEA

& SI

• 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 our estates and mills maintain adequate and consistent water

supply during prolonged dry months



M E C H A N I S A T I O N

T R A N S F O R M A T I V E R E S T R U C T U R I N G

Enhanced processes, new technologies and automation to drive better OER

Increase manpower ratio per ha

Continuous implementation of Lean Six Sigma across the entire value chain

Undertaking robust overheads and capital expenditure reviews

Productivity improvement

Outsourcing of services

Streamlining of operations

C O S T R E D U C T I O N

Ongoing cost synergy initiatives

HOW ?

Source: Company Presentation


Upstream – Focusing on Cost Reduction

MECHANISATIOND


Upstream – Moving Towards a Connected, Integrated, Automated and Sustainable Plantation

ENHANCING OER AND MILL EFFICIENCY

INNOVATIVE WATERING

SIME DARBY DIGITAL SUPERVISION (SDDS)

Among the first in the Malaysian oil palm industry to digitally connect upstream operations (from estate office to field and from mill office to factory floor)

(SEMUA 2.0 app)

Deployment of unmanned aerial vehicles for Estate mapping

Analysis of conditions for speedy intervention

Monitoring and supervision

Also includes advanced milling and latest extraction technologies through

continuous processing, integrated processing complex

minimum GHG emissions

zero discharge

Lower manpower requirement Increase in productivity

SD Plantation has embarked on commercial scale water conservation and irrigation

Micro Sprinkler Water Reservoirs

SIME DARBY DRONE MONITORING

MECHANISATION INITAITIVE

Source: Sime Darby Plantation’s Presentation for Perpetual Sukuk Programme

MECHANISATIOND



Downstream – To become the preferred sustainable palm oil & fats specialist and customer solutions provider

• Create value by marketing and strengthening the “Sime Darby” brandThrough achieving sustainability, quality and food safety requirements

• Explore & expand opportunities to increase our 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

Emphasis on Physical CSPO Sales

PQ Oil as the Gateway to Niche and High Value Food Segments

Differentiated vs Commodity

Supply Chain Optimisation to Maximise Value of CSPO

Drive production of differentiated productsDrive physical CSPO sales

Segregated & traceable refineriesIncrease production of PQ oil

A B

C D



Industry Outlook


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

Competitive Pricing of Palm

Oil and Price Affordability of 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

28.0% between 2010 and 2016, 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 OilPrice

(USD/MT) in 2016

Palm Oil 718 – 751

Soybean Oil 736 – 851

Coconut Oil 1,621

Palm Kernel Oil 1,436

Corn Oil 886 – 999

Rapeseed Oil 883

Groundnut Oil 1,544

The physical and chemical

characteristics of 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



Outlook of the Global Palm Oil and Edible Oils Market

Global CPO production, palm oil consumption, demand for CSPO and CPO prices expected to increase

Increased in CPO production largely backed by technological advancements, including:

Usage of high yield oilseeds

Usage of mechanisation in the harvesting process

Factors driving demand for palm oil:

Increase in global population & food requirements

Ongoing efforts in developing biodiesel programs by nations (e.g. the EU, the U.S., Brazil and Indonesia)

62.5 63.9 66.9 70.2 73.8 77.7 81.7

58.9

65.4

69.671.8

74.276.6

78.9

2016 2017F 2018F 2019F 2020F 2021F 2022F

Global Palm Oil Consumption Global CPO Production

Global CPO Production and Consumption Forecast

Source: IMR Report prepared by Frost & Sullivan

Demand for Edible Oils Expected to Remain Strong Over the Next 5 Years

182.2186.2

191.4196.0

201.1206.1

212.1

2016 2017 F 2018 F 2019 F 2020 F 2021 F 2022 F

Global Consumption of Selected Edible Oils

(mn MT)(mn MT)

Factors driving demand for edible oils:

Growing population and increasing food consumption and usage of non-food applications of edible oils (e.g. soap and detergents)

Ban on trans-fats in the U.S. by June 2018 likely to drive demand for vegetable oil alternatives from hydrogenated oils

Wide range of uses of edible oils & fats



Financial Overview


Key Financial Metrics

12.34

14.78

11.95

10.30

3-year average

FY17

FY16

FY15

Revenue (RM'bn)

Note: FY17’s PBIT and PATAMI excluded the gain from the divestment of land to Kumpulan Sime Darby Berhad

6

8

4

7

3-year average

FY17

FY16

FY15

ROIC %

1,595

1,987

1,259

1,538

3-year average

FY17

FY16

FY15

PBIT (RM'mn)

1,001

1,038

967

997

3-year average

FY17

FY16

FY15

PATAMI (RM'mn)


Upstream

25%

Downstream

75%

Others

0.4%

FY17 Revenueby Segment

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

edible oils and fats (downstream operations), sugar and beef

(upstream operations), mainly as a result of the full year

consolidation of NBPOL Group’s financial result.

10,304.0

11,946.5

14,779.4

2015 2016 2017

Revenue and PBIT

RM’mn

Increase was primarily due to the increase in the sales of our palm oil products (i.e. our upstream

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

operations).

Revenue


Malaysia

23%

Europe

22%India

19%

Other SEA

13%

Indonesia

7%

Other

countries7%

South

Africa5%

PNG

& SI2%

China

2%Liberia

0%

FY17 Revenueby Geography

FY17 PBIT by Segment

Upstream

94%

Downstream

5%

Others

-1%


9,185.3

11,130.9

12,991.0

2015 2016 2017

Increase principally reflects the increase in the production of

refined edible oils 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 amortisationfrom our upstream operations.

Expenses, Operating Profit & PAT

RM’mn RM’mn

Increase is mainly due to increased expenses from our

upstream operations as well as an increase in edibles and

consumables expenses from our downstream operations

1,570.9 1,268.0

4,537.9

15.2%10.6%

30.7%

2015 2016 2017

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 offset by the improvement of the

operating profit margin in our downstream operations.

RM’mn

1,031.4 1,002.9

3,551.9

10.0%8.4%

24.0%

2015 2016 2017

Operating Expenses Operating Profit & Operating Profit Margin

PAT & PAT Margin



5244

38

7885

71

4639

34

2015 2016 2017

Receivables Inventory Payables

0.5

1.3

1.1

2015 2016 2017

Working Capital & Capitalisation and Indebtedness

Days RM’mn

(x) (x)

1,325.4

685.0

4,690.5

1,037.0

Within 1 year 1-2 years 2-5 years More than 5

years

0.5

0.6 0.6

2015 2016 2017

Note: (1) Based on bank borrowings

Working Capital Turnover Period Indebtedness by Maturity

Current Ratio Gearing Ratio(1)



Dividend Policy

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



Thank You

SIME DARBY PLANTATION · Integrated Plantation Company Involved in the Entire Palm Oil Value Chain...

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Transcript of SIME DARBY PLANTATION · Integrated Plantation Company Involved in the Entire Palm Oil Value Chain...