Press Release

2020 Performance by Operating Group

Olam Food Ingredients (OFI)¹

A global leader offering sustainable, natural, value-added food ingredients, so consumers can enjoy the healthy and indulgent products they love. 

• Revenue was up 3.3% to S$12.5 billion, mainly driven by volume growth as well as higher average selling prices in the Value-added Food Ingredients & Solutions segment.
• EBIT growth was strong at 43.3% in H2 2020. Although EBIT for 2020 was down 2.8% to S$771.1 million because of the Covid-19 impact in H1 2020 on Cocoa processing and the Australian Almond business, the overall results represent a strong, resilient performance in 2020 considering 2019 was an exceptional year when the Cocoa business had a stellar performance. All other businesses like Coffee, Dairy, Spices and other Nuts delivered better earnings than the prior year. 

Olam Group Executive Director and CEO of OFI¹, A. Shekhar said:  “2020 was an exciting first year for OFI. We bounced back from the impact of Covid-19 in the first half, to deliver very strong earnings growth in second half. Our resilient all-round performance despite the pandemic is very encouraging and the positive trajectory of growth in the second half of the year gives us every reason to be optimistic about 2021 and beyond.

“We are thankful for the strong support from our customers with whom we worked very closely to manage the many supply chain challenges during the year, as well as co-creating innovative and sustainable solutions that enable them to tap into ever-evolving consumer preferences.

“We are making disciplined and deliberate investments to back our refreshed strategy as demonstrated by the recent acquisition of the US-based chilli pepper business, as well substantive greenfield commitments behind a soluble coffee manufacturing plant in Brazil and a Dairy processing plant in New Zealand. These will position us for delivering sustained growth as we look to carve out OFI and plan for an IPO and concurrent de-merger in the first half of 2022.”

Olam Global Agri (OGA)²

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

• Strong operating performance with revenue up 14.1% to S$21.5 billion, mainly driven by higher volumes as well as higher prices in food staples, including Grains, Rice and Edible Oils.
• EBIT was up 40.3% at S$462.4 million on higher contribution from the Food & Feed segments, both its Origination & Merchandising as well as Processing & Value-added segments, particularly in the Grains origination & merchandising, Grains milling, Animal Feed and Rice distribution in Africa, as the Covid-19 outbreak stimulated rising pantry restocking effects and drove greater demand for these food staples.
• Commodity Financial Services business also contributed to OGA’s improved performance in 2020.

Olam International Limited (OIL)³

As parent company of OFI and OGA, OIL plays a key role to unlock the full value of the Olam Group by providing active stewardship to the new operating groups, responsibly divesting the de-prioritised businesses and assets, nurturing gestating businesses to full potential, incubating new engines for future growth, developing key cross cutting initiatives, and providing shared services to the new operating groups. 

• Lower revenue of 12.0% to S$1.8 billion with the closure of the Sugar, Rubber and Fertiliser trading desks, the Fundamental Fund, Wood Products business in Latin America and Olam Tomato Processors in California.
• EBIT was lower by 149.2% with a loss of S$164.0 million due to the closure of these businesses and the impact of Covid-19 on the three Gestating Businesses (OPG, Packaged Foods and the ARISE Infrastructure & Logistics business).

Mr. Verghese, who is also CEO of OGA and OIL said:  “Thanks to the pantry restocking effect for food staples during the pandemic and the increased demand for safe and healthy food, earnings for OGA were boosted with strong performances from Grains, Animal Feed and the Rice businesses, which benefited from the surge in premium rice demand in Africa. These in tandem with our focus on operational efficiency and strong risk management discipline helped OGA maintain the consistent growth trajectory in its performance over the last few years.

“As we continue to diversify our global food, feed and fibre business in emerging markets, we will also progress on our plans to invest in priority assets. We continue to explore the most appropriate avenues to maximise OGA’s value within the Group as we proceed with the carve-out of OGA.”

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¹ Consisting of the Cocoa, Coffee, Nuts, Spices and Dairy businesses, OFI is made up of two segments – Ingredient Sourcing & Supply Chain, and Value-added Food Ingredients & Solutions.

² Consisting of the Grains and Animal Feed & Protein, Edible Oils, Rice, Cotton and Commodity Financial Services businesses, OGA has three segments – Food & Feed - Origination & Merchandising; Food & Feed - Processing & Value-added; and Fibre & Ag Services.

³ Parent company holding OFI and OGA, and consists of De-prioritised/Exiting Assets, Gestating Businesses (Olam Palm Gabon, Packaged Foods, Infrastructure and Logistics business), and Incubating Businesses (Engine 2 growth platforms) segments. OIL financials are standalone financials and do not include the consolidation of OFI and OGA.

Notes to Editors

1. This release should be read and understood only in conjunction with the full text of Olam International Limited’s Second Half and Full Year ended December 31, 2020 Financial Statements and Management Discussion and Analysis, its announcement and news release entitled “Re-organisation of Olam: Unlocking Long Term Value” and “Significant progress in Re-Organisation Plan to unlock long-term shareholder value” lodged respectively on SGXNET on February 26, 2021.
2. Olam will host a webcast on February 26, 2021, at 10.30 am SGT to discuss the financial results and provide a company update. To access the webcast or download the presentation materials, go to www.olamgroup.com.
3. Re-organisation of Olam: Olam Group has been re-organised into two new operating groups Olam Food Ingredients (“OFI”) and Olam Global Agri (“OGA”) with the Company Olam International (“OIL”) as parent holding the two groups. OFI is a global leader offering sustainable, natural, value-added food ingredients, so consumers can enjoy the healthy and indulgent products they love. OGA 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. As parent company of OFI and OGA, OIL plays a key role to unlock the full value of the Olam Group by providing active stewardship to the new operating groups, responsibly divesting the de-prioritised businesses and assets, nurturing gestating businesses to full potential, incubating new engines for future growth, developing key cross cutting initiatives, and providing shared services to the new operating groups.
4. H2 2020 and 2020 Financials for Olam Group Consolidated and Operating Groups