Dairy 38.4 72.1 122.5 79% Consumer food 228.8 239.4 227.6 n.m. Total Revenue 2,029.8 2,321.8 2,697.3 15% Gross profit margin 2011 2012 2013 Avg. Animal protein 17.4% 19.3% 17.7% 18.1% Dairy 30.3% 34.0% 41.8% 35.4% Consumer food 21.1% 15.1% 14.7% 17.0% Overall 18.1% 19.3% 18.5% 18.6% 1,762.5 2,010.3 2,347.2 228.8 239.4 227.6 0 500 1,000 1,500 2,000 2,500 3,000 2011 2012 2013 Revenue (US$ m) Animal protein Dairy Consumer food The Groups business is organized into 3 operating segments: 1. animal protein production of poultry, swine, beef, aquaculture, and animal feed. 2. diary - production of raw milk and downstream milk products such as UHT milk and cheeses. 3. consumer foods production of downstream food products using in-house animal protein products.
The revenue and gross profit margin of the operating segments for FY2011 to FY2013 are presented below. 17.4% 19.3% 17.7% 30.3% 34.0% 41.8% 21.1% 15.1% 14.7% 10% 15% 20% 25% 30% 35% 40% 45% 2011 2012 2013 Gross Profit Margin Animal protein Dairy Consumer food 1,960.0 254.2 79.7 20.0 33.1 83.2 93.5 54.6 145.9 42.7 0 500 1,000 1,500 2,000 FY13 Segment Revenue Contribution* Animal protein Poultry & feed = PF Swine = SW Beef = BF
Dairy = DRY
Consumer food = CF
*Figures include revenue from internal & external sales
Strategies to drive growth:
1. Expand dairy operations in China [customers = dairy companies in China] Groups dairy business has been profitable highest profit margins amongst segments Quality of product (raw milk) evidenced by high average selling prices and passing of audit process from Starbucks China Standardized business model that is highly industrialized, efficient and easily replicable poised to capture continued growth in demand of quality raw milk and structural supply shortage in China (supported by plans in place for second five-farm hub by 2018)
2. Enhance profitability of poultry business in Indonesia [customers = consumers in Indonesia] Poultry operations in Indonesia a core part of the business (FY13 revenue US$1,960 million). 71% of Groups FY13 total revenue (including both internal and external sales) Full integration across value chain + established significant market shares poised to capture continued growth from rise of Indonesias per capita income, especially from growing middle- and lower-income consumer classes and due to the affordability of chicken as a source of protein
3. Expand other animal protein business and consumer foods business in targeted markets Swine in Vietnam Poultry in Myanmar Beef in China
Group is making further investments in the emerging markets that they have established operations in to capture growth in these markets. While the core poultry business in Indonesia will continue to provide a stable source of revenue, the Group recognizes growth potential in its high-margin dairy business in China, as well as the other animal protein business in Vietnam, Myanmar, and China. With established operational expertise across the agri-food value chain that is based on quality and safety, we are confident that the Group will be able to capture the growth in their targeted markets and reap significant topline growth in the next 5 years.