Kernel S A : FY2021 Results and Company Presentation

Kernel Holding S.A.

FY2021 results and company presentation

October 2021

Disclaimer

The information in this document has not been independently verified and no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company (as defined below) or any of its affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document. Unless otherwise stated, the data in this presentation has been provided by the Company (as defined below) and its fairness, accuracy or completeness has not been verified by or sourced from any third party.

This presentation may not be reproduced, retransmitted or further distributed to the press or any other person or published, in whole or in part, for any purpose. Failure to comply with this restriction may constitute a violation of applicable securities laws.

This presentation does not constitute or form part of any offer or invitation to sell or purchase, or any solicitation of any offer to sell or purchase any shares or securities in Kernel Holding S.A. (the "Company"). It is not intended to form the basis upon which any investment decision or any decision to purchase any interest in the Company is made. Information in this document relating to the price at which investments have been bought or sold in the past or the yield on investments cannot be relied upon as a guide to future performance.

Certain statements in this document are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this document regarding past trends or activities or future projections should not be taken as a representation that such trends or activities will continue or happen in the future. Except as required by law, the Company is under no obligation to update or keep current the forward-looking statements contained in this document or to correct any inaccuracies that may become apparent in such forward-looking statements.

This presentation is intended only for persons having professional experience in matters relating to investments.

Neither the presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. The presentation is not an offer of securities for sale in the United States.

This presentation is made to and is directed only at persons in the United Kingdom having professional experience in matters relating to investments who fall within the definition of 'investment professionals' in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 and to those persons in any other jurisdictions to whom it can otherwise lawfully be distributed (such persons being referred to as "relevant persons").

Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

www.kernel.ua

Company presentation October 2021

1

Content

1. FY2021 results and outlook
2. Kernel today
3. Balanced growth strategy
4. Financials

Appendices

FY2021 results				Balanced
and outlook		Kernel today		growth strategy		Financials

1.1 FY2021 highlights

• Revenue  38% y-o-y to US$ 5,647m reflecting the growth in global grain and sunflower oil prices, as well as active physical trade operations of Avere
• EBITDA  2.1x y-o-y to US$ 929m
• • Oilseed Processing EBITDA  63% y-o-y to US$ 56m
  • • Decline in sales volume y-o-y, and…
    • …EBITDA margin at historic low US$ 41 per ton of oil sold, due to reduction of sunflower seed harvest in Ukraine;
  • Infrastructure and Trading EBITDA of US$ 496m EBITDA, up 2.3x y-o-y
  • • Avere trading results providing US$ 385m EBITDA
    • Lower y-o-y EBITDA from trading and infrastructure businesses in Ukraine due to the margin decline given the low grain harvest in Ukraine in FY2021;
  • Farming EBITDA of US$ 461m in FY2021,  3.4x y-o-y
  • • Growth fueled by rally seen in global grain and oilseeds prices, albeit…
    • …negative impact from lower yields this season for all our key crops.
    • US$ 133 million net gain from revaluation of biological assets, reflecting a positive sentiment towards the earnings attributable to 2021 harvest
• Net profit attributable to shareholders of US$ 513m
• Operating profit before W/C changes of US$ 786m,  86% y-o-y,reflecting the growth in the Group's EBITDA.
• Strong leverage profile as of 30 June 2021:
• • Debt liabilities  4% y-o-y to US$ 1,410m on the back of higher utilization of long-term facility provided by EIB to finance our CapEx program.
  • Net debt  15% y-o-y to US$ 836m
  • Improvement of key leverage metrics:
  • • 0.9x Net debt / EBITDA - the lowest for last 5 years
    • 0.6x Adjusted net debt / EBITDA
    • 6.6x EBITDA / interest coverage - the highest for last 10 years

US$ million except EPS		FY2020	FY2021	y-o-y
Income statement highlights
Revenue		4,107	5,647	38%
EBITDA 1		443	929	+2.1x
Net profit attributable to equity holders		118	513	+4.3x
EBITDA margin		10.8%	16.4%	5.7pp
Net margin		2.9%	9.1%	6.2pp
EPS 2, US$		1.42	6.10	+4.3x
Cash flow highlights
Operating profit before working capital changes		422	786	86%
Change in working capital		(10)	(181)	+17.9x
Finance costs paid, net		(135)	(127)	(5%)
Income tax paid		(8)	(18)	+2.2x
Net cash generated by operating activities		269	460	71%
Net cash used in investing activities		(203)	(205)	1%
Financial year ends 30 June
Note 1 Hereinafter, EBITDA is calculated as the sum of the profit from operating activities plus amortization and depreciation.
Note 2 EPS is measured in US$ per share based on 84.0m shares for FY2021 and 83.0m shares for FY2020
Credit metrics
US$ million, except ratios	30 June 2020	30 June 2021	y-o-y
Short-term debt	73		51	(31%)
Long-term debt	172		228	32%
Lease liabilities	310		324	5%
Eurobond	794		806	2%
Debt liabilities	1,350		1,410	4%
Cash and cash equivalents	369		574	56%
Net debt	980		836	(15%)
Readily marketable inventories 3	252		285	13%
of which sunflower oil and meal	96		205	+2.1x
Sunflower seeds	121		43	(65%)
Grains and other RMIs	34		38	11%
Adjusted net debt	729		551	(24%)
Shareholders' equity	1,493		1,946	30%
Net debt / EBITDA 4	2.2x		0.9x	-0.6x
Adjusted net debt / EBITDA 4	1.6x		0.6x	-0.6x
EBITDA / Interest 5	3.0x		6.6x	+1.2x

Note 3 Commodity-type inventories that could easily be converted into cash.

Note 4 Calculated based on 12-month trailing EBITDA.

Note 5 Calculated based on 12-month trailing EBITDA and net finance costs.

www.kernel.ua

Company presentation October 2021

3

FY2021 results				Balanced
and outlook		Kernel today		growth strategy		Financials

1.2 Segment results

	Segment volumes, m tons			EBITDA margin				EBITDA, US$ m
				3.4		US$ / t of oil sold							152
Oilseed	3.0	3.1	3.2	3.2				100
Processing					83				100		109
						67
										77
							54
			1.6	1.5					41				56
	1.2	1.4	1.4
	FY2017	FY2018	FY2019	FY2020	FY2021	FY2017	FY2018	FY2019	FY2020	FY2021	FY2017	FY2018	FY2019	FY2020	FY2021
	Oilseeds processed
	Sunflower oil sales

US$ / t of grain exported from Ukraine

496

				7.9	8.28.0
Infrastructure		6.1	6.7
& Trading
	4.6
4.55.1	4.14.0	4.2	3.8
3.3	4.3
3.3
	FY2017	FY2018	FY2019	FY2020	FY2021

total

62

excl. Avere

22	26	17	27
22	21	21	23	14
FY2017	FY2018	FY2019	FY2020	FY2021

Avere contribution

216 385

110 101 106

111

FY2017 FY2018 FY2019 FY2020 FY2021

Inland silos in-take volumes

Export terminal throughput (Ukraine) Kernel grain export volumes (ex. Avere)

Farming	2.1	2.5
596
	385

3.3	3.1		US$ / ha	920
	2.9
				793
529	513	501	378	344
				262

		461
			63
146	182	134

						149
								163
FY2017	FY2018	FY2019	FY2020	FY2021	FY2017	FY2018	FY2019	FY2020	FY2021
Acreage harvested, k ha			incl. IFRS16 effect

Key crops productions, m tons	excl. IFRS16 effect

	89					397
				51
				83
FY2017	FY2018	FY2019	FY2020	FY2021
IFRS16 effect

www.kernel.ua

Company presentation October 2021

4