Press Release

Olam Group Financial Performance

Olam Group, a global food and agri-business, today reported its strongest full year Reported and Operational PATMI since inception as it moved forward with its Re-organisation Plan.

H2 2021

• Revenue increased 29.0% year-on year (YoY).
• EBIT grew 20.9% to S$781.0 million with both ofi and Olam Agri contributing to the growth.
• PATMI swung to a positive S$264.9 million, while Operational PATMI was up 10.3%to S$524.5 million.

2021

• Revenue increased 31.2% to reach S$47.0 billion on higher prices across most products and commodities in 2021. Olam Agri contributed 66.5% of total Group revenue, ofi 31.1% and OIL 2.4% respectively.
• EBIT rose by 33.0% to S$1.4 billion on strong growth at both ofi and Olam Agri. ofi contributed 61.5% of total Group EBIT, Olam Agri contributed 52.9%, and OIL -14.4%.
• PATMI nearly tripled to S$686.4 million on strong operating profit growth and significantly lower exceptional losses compared to the year before.
• Excluding non-recurring exceptional items, Group Operational PATMI grew by 41.8% to a new record of S$961.1 million in 2021.
• FCFE was negative at S$1.0 billion, reflecting the investments in strategic acquisitions completed in 2021, including the Olde Thompson acquisition.
• Net gearing remained unchanged at 1.72 times compared to a year ago.
   

2021 Performance by Operating Group

ofi⁴

A global leader at the forefront of food and beverage consumer trends, ofi delivers sustainable, natural, and plant-based ingredients and solutions and serves large, attractive and high growth end-use categories. 

• Revenue increased 18.8% to S$14.6 billion, driven by growth from the Ingredients & Solutions segment.
• EBIT grew strongly at 16.8% to S$875.3 million, demonstrating a strong recovery from the impact that Covid-19 had on some of its businesses in 2020, with both its segments performing well.
   

CEO of ofi, A. Shekhar said:  “I am very proud of the strong growth and strategic progress we are delivering as we continue to accelerate our focus to provide natural and on-trend ingredients and solutions to our established and diverse customer base across the global food and beverages industry. The strength and breadth of our sustainable ingredients portfolio and the determination of our people behind our purpose to ‘Be the Change for Good Food and a Healthy Future’ have been key drivers of our performance in 2021 and helped in our resilient recovery from the COVID-19 impact in 2020.  

“2021 was an important year for ofi, and we made substantial investments in expanding the portfolio as well as in developing our talent pool and capabilities to support our future growth ambitions. We are excited by the opportunities and well positioned with a robust, resilient business model and a strong organization to navigate the ongoing market uncertainties and continue on our exciting growth journey.” 

Olam Agri⁵

Olam Agri is a market leading and differentiated global food, feed and fibre agri-business focused on high-growth emerging markets with a proven track record and delivering high returns. 

• 2021 was a record year for Olam Agri as it continued to deliver a strong growth trajectory in its Food & Feed segments and its non-food segment, now known as Fibre, Agri-industrials & Ag Services, bounced back strongly from the adverse impacts from
• Revenue grew 39.6% to S$31.3 billion, with all three segments contributing to growth.
• EBIT surged by 51.5% to S$752.9 million on higher contribution from all segments, including a sharp turnaround from Fibre, Agri-industrials & Ag Services that was impacted by Covid-19 in 2020.

Mr Verghese, who is CEO of Olam Agri and OIL, said:  “The record performance by Olam Agri in 2021 is testament to its differentiated ability to capture high returns from high-growth emerging markets. Over the past 12 months, Olam Agri continued to support customers in addressing their growing needs, building on its proven track record, deep supply chain expertise in origination, trading and merchandising, logistics, operational excellence and risk management, embedding sustainability and digitalising its business.  

“We are particularly pleased with the broad-based contribution of all the businesses that make up Olam Agri to deliver this record performance. The Grains & Oilseeds, Integrated Feed & Proteins have once again delivered significant growth and maintained its track record of consistent performance over the years. The sharp turnaround of the Food Fibre, Agri-industrials & Ag Services segment in rebounding from the worst impacts of Covid-19 is particularly noteworthy.” 

Olam International (OIL)⁶

As parent company of ofi and Olam Agri, OIL plays a key role to unlock the full value of the Olam Group by providing interim stewardship to the new operating groups until the IPOs and demergers are completed, responsibly divesting de-prioritised businesses and assets, nurture gestating businesses to full potential and partially or fully monetising these businesses over time, incubating new engines for future growth, and providing shared services to the new operating groups. 

• Revenue was marginally lower at S$1.1 billion, as higher prices helped to offset lower volumes post divestments and closures of de-prioritised assets.
• EBIT losses increased to S$205.6 million from a loss of S$177.0 million in 2020. It continued to invest in developing Gestating Assets to maturity and incubating new Engine 2 initiatives.

Outlook and Prospects 

The Group is closely monitoring the situation in the Black Sea region and its overriding priority continues to be the safety of its people and their families in Ukraine. The overall region is not a material contributor to the Group’s revenues and assets.  

Overall, barring unforeseen circumstances, including adverse impacts of the Ukraine-Russia crisis on the markets, new Covid-19 variants of concern and consequent hard lockdowns across the world, the economic outlook and prospects for the Group for 2022 remain positive, with the industry continuing to see strong demand and tight commodity supplies amid supply chain disruptions. 

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¹ Operational PATMI is Net Profit After Tax and Minority Interest excluding exceptional items, which are one-off and non-recurring

² Previously Olam Global Agri 

³ Olam Food Ingredients 

⁴ Consisting of the Cocoa, Coffee, Dairy, Nuts and Spices businesses, ofi is made up of two segments – Global Sourcing and Ingredients & Solutions.  

⁵ Consisting of Grains & Oilseeds, Integrated Feed & Proteins, Edible Oils, Rice, Specialty Grains & Seeds, Cotton, Rubber, Wood Products and Commodity Financial Services businesses. Olam Agri has three segments – Food & Feed - Origination & Merchandising; Food & Feed - Processing & Value-added; and Fibre, Agri-industrials & Ag Services. 

⁶ As parent company holding ofi and Olam Agri until the IPOs and demergers, OIL consists of De-prioritised/Exiting Assets, Gestating Businesses (Olam Palm Gabon, Packaged Foods, Infrastructure and Logistics business), Incubating Businesses (Olam Ventures – Engine 2 businesses) and the shared services business (Olam Technology and Business Services). OIL financials are standalone financials and do not include the consolidation of ofi and Olam Agri. 
 

Notes to Editors

Re-organisation of Olam 

Olam Group has been re-organised into new operating groups ofi, Olam Agri with the Company Olam International (“OIL”) as parent holding the two groups until the IPOs and demergers are completed.  

ofi is a global leader at the forefront of food and beverage consumer trends, delivering sustainable, natural, and plant-based ingredients and solutions and serving large, attractive and high growth end-use categories.  

Olam Agri is a market leading and differentiated global food, feed and fibre agri-business with a particular focus in high-growth emerging markets with proven expertise, processing capabilities and a global origination footprint.  

OIL plays a key role to unlock the full value of the Olam Group. OIL provides interim stewardship to the operating groups until the IPOs and demergers are completed. In addition, it will responsibly divest the de-prioritised businesses and assets ear-marked for exit, nurture gestating businesses to full potential and partially or fully monetising these businesses over time, incubate new engines for future growth and provide shared services to the new operating groups.  

H2 2021 and 2021 Financials for Olam Group Consolidated and Operating Groups