IOI CORPORATION BERHAD CGS-CIMB 14th Annual Malaysia Virtual Corporate Day 5-7 January 2022
ConclusionGroup Overview
2
Awards and Achievements
Why Invest in IOI?
Business Segments : Plantation & Resource Based Manufacturing
Group Financial Snapshot
Introduction to IOI1
2
4
6
7
ESG at IOI3
IOI Five-Year Plan (2020-2024)
5
Conclusion1. Introduction to IOI
3
Founded in 1969
Global presence in 8 countries across
4 continents
A leading global integrated & sustainable
palm oil group with upstream
and downstream operations
2nd Most Valuable Plantation
Company on Bursa Malaysia with
market capitalisation of US$5.65bn as
of 30 September 2021
25,000 employees
ConclusionVision, Mission & Core Values
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Committed to sustainable agriculture and innovative products.
Our Mission is to achieve responsible and sustainable
commercial success by addressing the interests of all our
stakeholders, caring for the community and the
environment, and adopting best practices to be globally
competitive.
Our Vision is to be a leading and sustainable Malaysian
business corporation with global presence.
VISION MISSION
ConclusionIntegrated Value Chain
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▪ Fully integrated business model with upstream and downstream operations to mitigate the impact of
commodity price fluctuations.
▪ The downstream business creates a natural hedge against palm oil volatility due to negative correlation of its
earnings with palm oil prices.
Plantation Resource-based manufacturing
Input:
▪ Land
▪ Production
resources
▪ Agriculture
equipment
▪ Workers
Breeding:
▪ Plant breeding
▪ Tissue culture
▪ Seed production
▪ Nursery
Plantation
Palm Wood
(Future
development)
Solar &
Cogeneration
Plant
Oleochemical
Other Oils
Specialty Oils &
Fats(1)
Other Oils
MillsRefinery & Kernel
CrushingSeedlings
Workers’ Housing
& FacilitiesBiomass & Biogas Cogeneration Plant
Public Power Grid
(Future Opportunity)
Fractions Infant Nutrition
Food
Ingredients
Non-Food
Applications
Soap Noodles &
Esters
Fatty Acids &
Glycerine
Specialty
Chemicals
Power
Palm fibres,
POME
Methane
capturePower Power
Power
FFB
CPO,
PK
Trunks
Palm oil,
PKO
EFB,
Fronds,
Trunks
Biomass recycled
Power
Inputs Business activities
Outputs Circular economy
Legends
Note: EFB – Empty Fruit Bunches; FFB – Fresh Fruit Bunches; CPO – Crude Palm Oil; PK – Palm Kernel; PKO – Palm Kernel Oil; POME – Palm Oil Mill Effluent
(1) 30% owned associate company, Bunge Loders Croklaan.
Global Presence
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Global presence in 8 countries across 4 continents with sales diversified to more than 80 countries
Asia, 82.2%
Africa, 3.0%
Europe, 10.9%
North America, 2.6%
South America, 0.9%
Rest of World, 0.4%
Oleochemical - Exports by regions
Commodity(1) - Exports by regions
Asia, 40.2%
Africa, 4.6%
Europe, 42.4%
North America, 12.6%Rest of World, 0.2%
Resource-based manufacturing Sales / procurement / regional officePlantation & mill
Note:
(1) Excludes sales of palm kernel expellers.
64%
36%
63%
35%
2%
47%53%
7
Group Financial Snapshot
Source: Company annual report.
Note: FFB: Fresh fruit bunches. MT: tonnes. Ha: hectares.
(1) Net profit after tax including profit attributable to both owners of parents and non-controlling interests.
(2) Based on segment results as disclosed in segmental information note in audited financial statements.
Key financials and operational statistics (financial year ending 30 June)
(RM million) 2019 2020 2021
Revenue 7,386 7,802 11,252
EBIT 1,077 1,138 1,741
Net profit(1) 618 602 1,416
Plantation: FFB production (‘000 MT) 3,399 3,097 2,918
Plantation: Total oil palm area (‘000 Ha) 176 177 177
Oleochemical: Sales volume (‘000 MT) 714 670 648
Refinery: Sales volume (‘000 MT) 1,917 1,974 2,217
Segment result (2)
FY2019 FY2020 FY2021
Plantation Resource-based manufacturing Others
2. Group Financial Snapshot
8
Group Financial Snapshot3. ESG at IOI
IOI is fully committed to sustainable palm oil
Environment Social Governance
✓No Deforestation, No New
Planting on Peat, No Social
Exploitation (“NDPE”) since
2016;
✓Progressively reducing Greenhouse
Gas (“GHG”) emissions (2025
Target : To reduce GHG emissions
by 41% from 2015 levels);
✓Protection of High Conservation
Value (“HCV”) and High Carbon
Stock (“HCS”) areas.
✓Eliminate all forms of illegal,
forced labour or child labour in
our operations or supply chains;
✓Responsible recruitment practices
including “No Recruitment Fee”
policy;
✓Occupational safety & health;
✓Employees’ well-being;
✓Empowerment & inclusion;
✓Community engagement.
✓Robust sustainability governance
structure;
✓Integrity in corporate reporting;
✓Zero-tolerance to bribery and
corruption;
✓Transparent grievance resolution
and communication;
✓Sustainable certifications (RSPO,
MSPO, ISCC and ISPO);
✓Founding member of RSPO.
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Group Financial Snapshot3. ESG at IOI (cont’d)
• Constituent of the FTSE4Good Index
• Awarded the most improved company in Water Security by CDP
• Ranked 17 out of 100 assessed palm oil producers, processors and traders for
Sustainability Policy Transparency Toolkit (SPOTT) by the Zoological Society of
London (2021)
• Leader category in protection of children’s rights with the score of 8.1 by Global
Child Forum Southeast Asia Benchmark(2020)
• Achieved silver rating within 90th percentile by Ecovadis (IOI Oleochemical)
Acknowledgements for our sustainability work
ESG ratings
ESG Score : 25.5 medium risk
(0 to 100)(2)ESG Rating : BBB
(AAA to CCC)
(1) Higher percentile represents higher ESG score
(2) Lower score represents lower ESG risk
ESG Ranking : 71st percentile
(0 to 100)(1)
Plantation 4.1 Plantation
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Key information Key Competitive Strengths
Total planted area(1)
178,105 HaTotal FFB production
2.9m MT
Operating Units
96 estates & 15
mills (Malaysia & Indonesia)
R&D Capabilities
4 R&D centers &
1 Bio-Tech center
(1) Excludes those owned by associate companies
(2) Excluding Serawak concessions, which are 2% of total group planted area
• Strong agronomy capabilities & estate
management practices.
• IOI Palm Biotech is a leading tissue culture
facility producing high-yielding planting material.
• 100% of Malaysian plantations(2) are both RSPO
and MSPO certified.
Holds 32% interest in an associate company, Bumitama Agri Ltd, which has a planted nucleus area of 133,000
ha as at 30 June 2021 (effective interest is approx. 43,000 ha).
Plantation
LOCATION OF PLANTATION OPERATIONS
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Plantation
Sabah
Sarawak
Kalimantan, Indonesia
(21,134 Ha)
East Malaysia
(112,824 Ha)
Pahang
Selangor
Penang
JohorKLIA
IOI HQ
Peninsular Malaysia
(42,968 Ha)
Main port
Main airport
Palm oil mill
Plantation
East coast expressway
North-South expressway
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Plantation – Oil Palm Age Profile
Weighted
average
planting age:
13.5 years
23.0
21.220.8
21.421.8
21.4
2019 2020 2021
FFB Yield per mature ha OER (%)
FFB yields and Oil Extraction Rates (OER)
13
Plantation – Replanting
9,172
10,000
7,100
2019 2020 2021
Accelerated replanting hectarage over the last 3 years
(Average per year is c.8,800 ha or c.5.6% of total Malaysian planted area)
• Utilise elite clonal palms in 50% of our replanting materials
• Replanting is key to our future source of growth
Plantation Plantation
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Progress and highlights
• Completed new planting of about 400 ha of oil palm on last concession area in Kalimantan, Indonesia
during FY2021 while the balance of approximately 500 hectares area will be fully planted by end of 2022.
• Implemented mechanisation of FFB Main Line Evacuation to 40% of total estates areas in Malaysia
and Indonesia as at end of FY2021, and expected 100% completion by year 2023.
• Implemented e-wallet payment system to 50% of plantation operating units to automate and simplify
workers’ payroll system as at end of FY2021.
• Full implementation of SAP ERP system and mobile crop monitoring system in all Malaysian
plantations.
Plantation4.2 Resource-Based Manufacturing
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Key information Key Competitive Strengths
• Largest fatty acids producer in Malaysia
• Pioneer and first in the industry to manufacture
palm based oleochemical products.
• Established global partnerships with food,
pharmaceutical and cosmetic MNCs with export
to over 80 countries worldwide.
Oleochemical capacity
780k MT/yearRefining capacity
1.8m MT/year
6 Manufacturing facilities (in Malaysia and Germany)
Specialty oils and fats
capacity
1.1m MT/year
6 Manufacturing facilities (in Malaysia, Netherlands, USA, Canada,
Ghana and China.)
• The resource-based manufacturing business, comprising of refining, oleochemical and specialty oils and fats sub-segments.
• Presence in specialty oils and fats sub-segment is represented by Bunge Loders Croklaan, a 30%-owned associate company.
IOI Oleo GmbH, Germany
Resource Based Manufacturing
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Resource Based Manufacturing
Oleochemical applications
Cosmetics
& Toiletries
Plastic &
additives
Soap &
Detergents
Rubber
& TiresLubricants
& GreasesPharmaceuticals Paint & Ink
Specialty oils & fats applications
CulinaryBakerySpreads Animal NutritionConfectionary FryingInfant nutrition
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
FYE 2019 FYE 2020 FYE 2021
714,131 669,854 648,130
1,917,195
1,973,7922,217,093
Sales Volume in MT
Oleochemical Refinery
Resource Based Manufacturing
Key Operational Highlights
Resource Based Manufacturing
17
Resource Based Manufacturing
MT
Export by Region
0
20
40
60
80
100
FYE 2019 FYE 2020 FYE 2021
82 77 76
6569
63
Manufacturing Performance - Plant Utilisation (%)
Oleochemical Refining
Asia, 82.2%
Africa, 3.0%
Europe, 10.9%
North America, 2.6%
South America, 0.9%
Rest of the World, 0.4%
Oleochemical
Asia, 40.2%
Africa, 4.6%
Europe, 42.4%
North America, 12.6%
Rest of the World, 0.2%
Refinery
• Bunge Loders Croklaan’s launched a premium lipid ingredient
for infant milk formula that mimics the fat composition of
mother’s milk.
• Increased sales of low 3-MCPD and high-end MCT (“medium
chain triglycerides”) use in nutritional and healthcare products.
• New 110,000 MT/year capacity oleochemical plant in Prai,
Penang is slated to complete by Q2 2022.
• New soap noodle plant in Pasir Gudang, Johor to be
completed by Q2 2022.
• Owner of 19 patents for pharmaceutical applications via
IOI Oleo GmbH, Germany.
• Production sites in Witten and Wittenberge completely
switched to 100% green electricity.
• CPO is 100% traceable to mill and 83% to plantation.
• PKO is 100% traceable to mill and 69% to plantation.
Resource Based Manufacturing
Progress and highlights
Resource Based Manufacturing
18
Resource Based Manufacturing
Refinery
Specialty oils &
fats (associate)
Oleochemical
5. Why invest in IOI
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LEADING INTEGRATED PALM OIL GROUP WITH GLOBAL PRESENCE
EFFICIENT PALM OIL PRODUCER
WELL-ESTABLISHED AND INNOVATIVE OLEOCHEMICAL SEGMENT
RESPONSIBLE AND SUSTAINABLE PRACTICES
GOOD DIVIDEND TRACK RECORD
• A fully integrated business model with upstream and downstream operations to mitigate impact of commodity
price fluctuations
• Global presence in 8 countries across 4 continents
• Sales are diversified to more than 80 countries to mitigate our exposure to localised risks in any particular market
• Proven track record as one of the most efficient major palm oil producers
• IOI Palm Biotech is a leading tissue culture facility producing superior high-yielding oil palm clonal planting
materials
• Earliest and largest fatty acids producer in Malaysia
• Owner of 19 patents for pharmaceutical applications via IOI Oleo GmbH, Germany
• CARE Studio in Germany developed 40 formulations for personal care and cosmetic applications
• 100% of Malaysian plantations are RSPO & MSPO certified
• A member of the FTSE4Good Malaysia Index, 71st percentile in the assessment for Dow Jones Sustainability
Index (“DJSI”) and 90th percentile on the EcoVadis Rating
• Committed to the No Deforestation, No Peat and No Exploitation (“NDPE”) policy since 2016 and a
member of High Carbon Stock Approach (“HCSA”) Group
• Policy of declaring at least 50% of normalised profit after tax and minority interest (“PATAMI”) as dividend
20
Increase
yield
▪ Target: Increase plantation oil yields by 15% by 2024
▪ Utilise elite clonal palms in 50% of our replanting materials
▪ Ensure proper fertiliser application to increase target yields
Optimize
workforce
▪ Target: Reduce workforce by more than 25% by 2024 and
increase plantation worker productivity by 3% every year
▪ Implemented Mechanised FFB Main Line Evacuation System in
40% of estates.
▪ Implemented SAP ERP and mobile crop monitoring in Malaysian
plantations
▪ Employing mechanical fertiliser spreaders and chemical sprayers
with GPS
Diversify
crops
▪ Target: Diversify planting of crops away from full reliance
on oil palm
▪ Plant 5,000 hectares of coconut, 300 hectares of kenaf and 200
hectares of durian equivalent to 4% of our Malaysian plantations
▪ Plant three types of fast growing and high value fruit crops as
intercrop with coconut and oil palm.
IOI five-year plan (2020-2024)
1
2
3
6. IOI Five-Year Plan (2020-2024)
• Progress from a cost competitive palm oil producer to a high value-added diversified palm-based products producer, to increase resilience and competitiveness for the future
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• Progress from a cost competitive palm oil producer to a high value-added diversified palm-based products producer, to increase resilience and competitiveness for the future (cont’d)
Increase the
non-CPO
segment
▪ Target: Convert oil palm by-products and processing
waste into value-added products at a competitive cost (circular economy)
▪ Build IOI Palm Wood factory and commence high performance palm wood boards and panels production in Q4
2022.
▪ Installed methane gas capture facilities in 12 mills, out of
which 9 produce power in addition to biogas for steam boiler.
▪ Explore other new conversion technologies for our bio-mass.
Grow the
oleo-
chemical
segment
▪ Target: Increase oleochemical segment’s sales volume
by 15% and profitability by 25%;
▪ Constructing new 110,000 MT/year capacity oleochemical
plant in Prai, Penang which is slated to complete by the second quarter of 2022.
▪ Constructing a new soap noodle plant in Pasir Gudang, Johor.
▪ A new pilot plant for pharmaceutical excipients and active
ingredients has commenced operations in Germany.
IOI five-year plan (2020-2024)
4
5
6. IOI Five-Year Plan (2020-2024)