Almarai Company

Interim Results – 3rd Quarter 2018

 Disclaimer
Information contained in this presentation is subject to change without further notice, its accuracy is not
guaranteed and it may not contain all material information concerning the company. Neither we nor our
advisors make any representation regarding, and assume no responsibility or liability for, the accuracy or
completeness of, or any errors or omissions in, to any information contained herein.

In addition, the information contains 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 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 is strictly not to be distributed without the explicit consent of Almarai Company
management under any circumstances.

Almarai Company 2018 Q3 Earnings Presentation 2

Macro Environment
Main Events Q3, 2018
• Growth in the quarter remained relatively flattish compared to the corresponding quarter due to contraction in the overall market
and change in demographics
• Market continues to be impacted by multiple reforms and macroeconomic changes
• Good progress made against the strategic objectives set out in Almarai 2025
• On target for breakeven for infant nutrition segment by end of fiscal year 2018
• On track for 100% importation of alfalfa feed from 4th November 2018
• Continued cost optimization and efficiency projected to achieve SAR 200M savings for 2018 in response to a higher cost
environment
• Notably strong performance in the Poultry Segment
• Positive Free Cash Flow of SAR 425 million, a decrease of SAR 179 million due to feed stock build up to be ready for green fodder
production ban in KSA on 4th November 2018
• Increase in the price of milk by 5% on July 2nd 2018, the first price increase in ten years. Price increases were made to offset higher
costs impact as describe above
• The company continues strong product innovation and significant transformational efforts to offset this downward trending
pressure by introducing a value added brand known as Albashyer which now includes frozen chicken, mozzarella and feta
cheeses. The company will expand this value added category going forward which will serve the food service and retail sectors.
• The company managed to gain and maintain GCC market share in most categories. Within the regions we operate, it’s worth
highlighting, the company has consistent gain in market share in Egypt.

Almarai Company 2018 Q3 Earnings Presentation 4

Almarai Gaining Market Share Despite Declining KSA Dairy and
Food Market
MAT Category Almarai MAT Value Almarai Rank • Almost all of the Dairy and Foods categories are
Growth (Value) % Share Change (Value) declining in KSA in MAT August 2018 compared to
PLAIN REGULAR LABAN -4.6% +0.7 1
MAT August 2017.
PLAIN FRESH MILK -5.0% +0.8 1
FLAVORED FRESH MILK -32.7% +3.7 1
UHT MILK -2.8% +2.4 2 • Despite the categories decline, Almarai gained
ZABADI -4.0% -0.4 1 share in most of the categories in KSA on MAT
FRESH GISHTA -11.2% +2.5 1 basis.
FRUIT JUICE BOTTLES -16.1% +4.7 1
BUTTER +1.8% -1.2 1
CHEESE JARS -2.3% -2.2 1
• Most of the categories, Almarai stands at #1 position
CHEESE SLICES -4.4% +2.6 1
in the KSA market.
CHEESE TRIANGLES -4.6% +6.7 2
FETA CHEESE -7.8% +2.6 1
TOTAL WHIP & COOKG CREAM +13.9% -2.9 1
SLICED BREAD -10.9% -4.5 1
PUFFS -5.7% +1.2 1
CROISSANTS -0.8% +1.8 1
CUP CAKES -4.9% -0.8 1
WHOLE CHICKEN (FRESH) -8.7% -4.1 1

Source: Nielsen Company MAT Aug 18

Almarai Company 2018 Q3 Earnings Presentation 5

Business Highlights
Highlights
Revenue Operating Income
3.80 3.73 1.00 0.76
0.78 0.76
3.60 3.42

SAR in Billion
3.37 0.60
SAR in Billion
3.37 0.48
3.40 3.23
0.50
3.20
3.00
2.80 -

Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018

2013 Last 5 Quarters Last 5 Quarters

SAR 11.2 B +12.4%

Free Cash Flow

0.80 0.70
0.60 0.42

SAR in Billion
0.37
0.40

0.20 0.06 (0.00)

-

(0.20) Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018

Last 5 Quarters

Profit Attributable to Shareholders Employees

0.80
0.67 0.66 0.63 44 43.2 43.0
0.51 42.7
SAR in Billion

0.60 42.6

In Thousand
43
0.34 42.3
0.40 43
0.20 42
- 42
Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018
Last 5 Quarters Last 5 Quarters

Almarai Company 2018 Q3 Earnings Presentation 7

Revenue Breakdown
Revenue Analysis by Product – YTD Q3, 2018
By Product 2017 By Product 2018
-1% +3%

Poultry Poultry
Bakery Bakery +1%
1,072 1,314
1,340 1,262 13%
Cheese, 10% Other Sales Other Sales
13% 12%
Butter & 119 Cheese, 164
Cream 1% Butter & 2%
=
1,497 Cream
14% 1,480
SAR 10,517 14% SAR 10,334

Fruit Juice Million Million

1,234 Fruit Juice Fresh Dairy
Fresh Dairy 3,957
12% 1,176
4,364 38%
Long-Life 11% Long-Life
42% -1% -4%
Dairy Dairy
889 982
8% 10%

+2%

Almarai Company 2018 Q3 Earnings Presentation 9

Revenue Analysis by Product – YTD Q3, 2018 Growth Co nt rib ut io n o f
Net Sales in SAR Million SAR in Million To t al % Gro wt h
2018 vs 2017

10,517 10,334 Fresh Dairy (407) (4%)

( YoY -9.3%)

Cheese, Butter & Cream (18) (0%)

( YoY -1.2%)

42% 38%
Bakery (78) (1%)
( YoY -5.8%)

Poultry 242 2%
14% ( YoY +22.5%)

14%
Fruit Juice (59) (1%)
12% ( YoY -4.7%)
13%
13% Long Life Dairy 93 1%
10% ( YoY +10.4%)

12% 11%
Other Sales 45 0%
( YoY +37.3%)
8% 10%
1% 2% Total (183) (2%)
YTD Q3 2017 YTD Q3 2018 ( YoY-1.7%)

Almarai Company 2018 Q3 Earnings Presentation 10

Revenue Analysis by Country – YTD Q3, 2018
By Geography 2017 By Geography 2018
Jordan
218 Bahrain = = +1%
Bahrain
Kuwait Jordan 250
Egypt 2% 233
Oman 530 Qatar Oman Egypt 209
554 5% 326
467 2% Export / = 555
Kuwait 577 2%
2% Export /
Others
5% 3%
5% Others
163 UAE
5%
509 6% == = 192
UAE 2%
2% 1,039 5%
1,039
10%
10%

SAR 10,517 SAR 10,334

Million Million

KSA KSA
6,987 7,003
66% 68%
+2%

Almarai Company 2018 Q3 Earnings Presentation 11

Revenue Analysis by Country – YTD Q3, 2018 Growth Co nt rib ut io n o f

Net Sales in SAR Million SAR in Million 2018 vs 2017 To t al % Gro wt h

KSA 16 0%
10,517 10,334 ( YoY +0.2%)

UAE 0 0%
( YoY +0.0%)

Oman 2 0%
( YoY +0.3%)

Kuwait (20) (0%)

66% 68% ( YoY -3.9%)

Egypt 110 1%
( YoY +23.5%)

Qatar (326) (3%)

( YoY -100%)

Bahrain 17 0%
10% 10% ( Yoy +7.1%)

5% 5% Jordan (9) (0%)

5% 5% ( YoY -4.2%)

5% 6%
3% 2% Others 28 0%
2% 2% 2%
2% 2% ( YoY +17.3%)

YTD Q3 2017 YTD Q3 2018 Total (183) (2%)

( YoY -1.7%)

Almarai Company 2018 Q3 Earnings Presentation 12

Innovation Pipeline Q3, 2018

Almarai Company 2018 Q3 Earnings Presentation 13

Financial Highlights
Operating Performance – YTD Q3, 2018

Gross Profit Operating Income Profit Attributable to

Shareholders
% to Sales 40.4% 40.7% 0.3 pp 18.9% 19.3% 0.4 pp 15.9% 15.9% 0.0 pp

SAR Million SAR Million

SAR Million
4,248 4,211
1,985 1,995
1,669 1,639
-38 +11
-0.9% +0.5% -30
-1.8%

YTD Q3, 2017 YTD Q3, 2018 YTD Q3, 2017 YTD Q3, 2018 YTD Q3, 2017 YTD Q3, 2018

Almarai Company 2018 Q3 Earnings Presentation 15

Statement of Income – 9 months and Q3, 2018
3rd Quarter YTD 3rd Quarter
SAR million
2017 2018 Change 2017 2018 Change
Revenue 3,373 10 0 .0 % 3,371 10 0 .0 % (0.1%) 10,517 10 0 .0 % 10,334 10 0 .0 % (1.7%)
Cost of sales (1,857) (55.1%) (1,919) (56.9%) (3.3%) (6,268) (59.6%) (6,123) (59.3%) 2.3%
Gross Profit 1,516 4 4 .9 % 1,452 4 3.1% (4.2%) 4,248 4 0 .4 % 4,211 4 0 .7% (0.9%)
Selling and Distribution Expenses (600) (17.8%) (596) (17.7%) 0.8% (1,810) (17.2%) (1,813) (17.5%) (0.1%)
General and Administration Expenses (81) (2.4%) (79) (2.4%) 2.5% (304) (2.9%) (275) (2.7%) 9.6%
Other Expense, net (40) (1.2%) (46) (1.4%) (14.1%) (123) (1.2%) (124) (1.2%) (1.2%)
Impairment (Reversal) / Loss on Financial Assets (18) (0.5%) 24 0.7% n.a (26) (0.3%) (3) (0.0%) 88.2%
Operating Income 776 23.0 % 755 22.4 % (2.6%) 1,985 18 .9 % 1,995 19 .3% 0.5%
Exchange Gain / (Loss) (1) (0.0%) (5) (0.1%) (466.2%) 11 0.1% 2 0.0% (76.8%)
Finance Costs - net (97) (2.9%) (94) (2.8%) 3.1% (296) (2.8%) (284) (2.7%) 4.0%
Share of Results of Associates and Joint Ventures 6 0.2% 1 0.0% (81.2%) 4 0.0% (6) (0.1%) n.a
Profit Before Zakat and Income Tax 683 20 .3% 657 19 .5% (3.8%) 1,703 16 .2% 1,707 16 .5% 0.3%
Zakat and Foreign IncomeTax (18) (0.5%) (16) (0.5%) 9.4% (51) (0.5%) (65) (0.6%) (25.9%)
Profit for the Period 665 19 .7% 641 19 .0 % (3.7%) 1,652 15.7% 1,643 15.9 % (0.5%)
Profit Attributable to Non Controlling Interest 2 0.1% (6) (0.2%) n.a 18 0.2% (4) (0.0%) n.a
Profit Attributable to Shareholders 667 19 .8 % 634 18 .8 % (4.9%) 1,669 15.9 % 1,639 15.9 % (1.8%)

Earnings Per Share (Basic) 0.66 0.62 (5.2%) 1.63 1.60 (1.9%)

Profit Attributable to Shareholders % 19.8% 18.8% 15.9% 15.9%

Almarai Company 2018 Q3 Earnings Presentation 16

Segment Reporting – 9 months and Q3, 2018
Almarai
SAR Million Dairy & Juice Bakery Poultry Other Activities
Consolidated

Q3 YTD 2018
Revenue 7,594 1,262 1,314 164 10,334
Depreciation and Amortisation (948) (189) (267) (142) (1,546)
Profit Attributable to Shareholders 1,352 146 144 (2) 1,639
Percent to Revenue of Profit Attributable to Shareholders 17.8% 11.6% 10.9% (1.3%) 15.9%
Total Assets 20,449 2,440 5,574 3,416 31,880
Growth versus YTD Q3, 2017
- Revenue - 2017 7,985 1,340 1,072 119 10,517
- Revenue Growth (4.9%) (5.8%) 22.5% 37.3% (1.7%)
- Profit Attributable to Shareholders - 2017 1,551 221 (42) (60) 1,669
- Profit Attributable to Shareholders Growth (12.8%) (33.9%) n.a 96.4% (1.8%)
Q3 2018
Revenue 2,431 435 457 49 3,371
Profit Attributable to Shareholders 525 59 52 (1) 634
Percent to Revenue of Profit Attributable to Shareholders 21.6% 13.6% 11.3% (1.2%) 18.8%
Growth versus Q3, 2017
- Revenue - 2017 2,570 437 328 38 3,373
- Revenue Growth (5.4%) (0.5%) 39.1% 28.9% (0.1%)
- Profit Attributable to Shareholders - 2017 613 68 (7) (8) 667
- Profit Attributable to Shareholders Growth (14.5%) (13.8%) n.a 92.6% (4.9%)

Almarai Company 2018 Q3 Earnings Presentation 17

Net Income by Segment (9 Months)
Basic EPS* (SAR) 1.63 1.60
1,800
1,669 (199)
58 1,639
186
1,600
SAR Million (75)

1,400

1,200

1,000
YTD Q3, 2017 Dairy & Juice Bakery Poultry Other YTD Q3, 2018

Revenue Growth (4.9%) (5.8%) 22.5% 37.3% (1.7%)

Net Income Growth (12.8%) (33.9%) n.a. 96.4% (1.8%)

Net Income % 17.8% 11.6% 10.9% (1.3%) 15.9%

Q1 Net Income 328 (62) (27) 55 50 344 +16

Q2 Net Income 674 (48) (38) 73 (0) 661 (14)

Q3 Net Income 667 (89) (9) 58 7 634 (33)

*EPS – Earnings Per Share

Almarai Company 2018 Q3 Earnings Presentation 18

Investing Cash Flows continue the downward trend in line with
revised 5 year Business Plan
 CAPEX spend for the 3rd Quarter Year to Date 2018 was SAR 1.4 Billion.
• Manufacturing and Farming spent CAPEX of SAR ~0.6 Billion for various capacity expansion projects.
• Sales Depot, Poultry and Logistics expansion accounted for SAR ~0.4 Billion.
• Replacement and other CAPEX including IDJ accounted for another SAR ~0.4 Billion.

6,000
45%
50 %

39%
40 %

5,000 29% 32% 33%

31% 32%
30%
33% 25%
30 %

4,900 24%
29% 4,409 19%
4,000
20 %

SAR in Millions
3,575
3,000 3,284 3,302 3,312 10 %

3,115

2,567 0%

2,000
2,189
1,711
-10%

1,488 1,572
1,000
-20 %

824

- -30 %

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Last 12
Months
Net Cash Used in Investing Activities Investment as a % of Net Sales

Almarai Company 2018 Q3 Earnings Presentation 19

Cash Flow Bridge – Rolling 12 Months
YTD Q3,2018 Free Cash Flow = SAR 425M (SAR179M lower than 2017)
3,678 (771)

(2,567)
Loans Issues /
Payments /
Charges

(746)
660
CAPEX / Biological 248
(5)
Assets
Operating Cash Flow
Dividend
Cash at 30
Others
Cash at 30
Sept 2017 (SAR 412 Million) Sept 2018

Almarai Company 2018 Q3 Earnings Presentation 20

Key Trends
Net Debt

14,000 350%
3.1x 3.1x
3.0x
12,000 2.8x 2.8x 2.7x 2.8x 300%
2.7x 2.7x
10,000 250%

8,000 200%
SAR Million

6,000 150%

98% 101% 95%

4,000 75% 75% 74% 81% 81% 73% 100%

2,000 50%

6,653 8,237 8,053 8,762 9,344 10,889 10,883 10,910 13,275

0 0%

2011 2012 2013 2014 2015 2016 2016 2017 Last 12

Months
SOCPA IFRS
Net Debt Net Debt / Equity Ratio Net Debt / EBITDA

Almarai Company 2018 Q3 Earnings Presentation 22

Quarterly Performance – Net Income Trend Analysis
2018 versus 2017

800

Q2 = (2.0%)
Q3 = (4.9%)
700 674 661
664 667
658 # 634
#
600 595 655
629
530 539
536 513
500 476 484 #
450 489
433
SAR Million

Q1 = 4.8% 430 428

398
400 380 369 373
344 349
328
306 309 *
300 274 # 284 286
255
235 242
289
200

100

# IFRS revaluation adjustments * Capital gain of SAR 47m in 2012

Please note that 2016 and subsequent years are based on IFRS however earlier years are based on SOCPA accounting standards

Almarai Company 2018 Q3 Earnings Presentation 23

EBIT and EBITDA margins are starting to improve…
Revenue, EBITDA and EBIT Evolution

CAGR 2011 – 2018: 8.5% (w/o impact of acquisitions 4.4%)

Net Sales
EBIT % to Net Sales
14,699 14,339
EBITDA % to Net Sales 13,795 13,936 13,753
24.4% 12,606 29.3%
28.1%
SAR Million

25.6% 11,219 25.3% 26.0%

24.2% 23.9% 24.2%
9,883
19.1% 18.9%
17.3% 18.5%
16.9% 16.0% 16.4% 17.6%
7,951 15.8%

2011 2012 2013 2014 2015 2016 2016 2017 Last 12 Months

SOCPA IFRS

Almarai Company 2018 Q3 Earnings Presentation 24

Key Share Data
Key Statistics for Almarai (30 September 2018) Year to date total shareholder's
30% return since listing
Share Price (SAR) 49.90 Savola
25%

Current P/E Ratio (ttm) 31.19 20% 16%

25%
Earnings Per Share (SAR) (ttm) 1.95 HHPrince 15%
35%
Market Cap (SAR Million) 49,900 Sultan bin 10%
Mohammed

Dec-11

Dec-12
Dec-07

Dec-08

Dec-10
Dec-09

Dec-13

Dec-14

Dec-15

Dec-17
Dec-16

Sep-18
Shares Outstanding (Million) 1,000 PIF
Dividend Yield 1.50%
450%
16%
Others
24%
400%

350%

300%

250%

200%

150%

100%

50%

0%

Jan-17
Sep-16

May-17
Jan-09
Jan-06

Jan-07

Sep-10

Sep-11

Sep-12

Sep-13

Sep-14

Sep-15

Sep-17

Sep-18
May-06

May-07

Jan-08

May-08

May-09
Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Jan-10

May-10

Jan-11

May-11

Jan-12

May-12

Jan-13

Jan-14
May-13

May-14

Jan-15

May-15

Jan-16

May-16

Jan-18

May-18
Almarai TASI

Almarai Company 2018 Q3 Earnings Presentation 25

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investor.relations@almarai.com

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