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The following pages contain information relating to an initial public offering and a listing of securities issued by Fourth Milling Company (the "Company"). This information may not be accessed by residents of certain countries based on applicable securities law regulations.
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, OUTSIDE OF SAUDI ARABIA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE PROHIBITED BY APPLICABLE LAW.
The following pages include information pertaining to an initial public offering and a listing of securities issued by the Company.
The Company has not registered, and does not intend to register, any portion of the offering outside of Saudi Arabia, and does not intend to conduct a public offering of securities outside of Saudi Arabia. Copies of this announcement are not being, and should not be, distributed in or sent into countries outside of Saudi Arabia. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted.
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INITIAL PUBLIC OFFERING
Fourth Milling Company (the “Company” or the “Issuer”) is pleased to announce its intention to offer 30% of its share capital to the public through an Initial Public Offering (“IPO”) and listing its shares on the Main Market of the Saudi Exchange (“Tadawul”). Institutional and retail investors will be allowed the opportunity to acquire shares and participate in the long-term growth plans of the Company and the Saudi milling industry.
Established in 2017 as part of the privatization of the Saudi milling industry, our company boasts a rich heritage spanning over 40 years. Originating from GFSA's wheat mills group, we have evolved into a leading producer of flour, wheat derivatives, and animal feed products. Our dedication to resilience, growth-oriented operations, and unwavering commitment to excellence ensures a significant contribution to KSA’s food security.
Our journey began in 1972 under GFSA and transformed significantly with the National Privatization Program in 2017. By 2020, ownership transferred from PIF to the National Center of Privatization, and in 2021, our current shareholders took the helm
Strategically headquartered in Dammam, our production facilities span Dammam, Madinah, and Al-Kharj, covering more than 80% of the kingdom population and boasting a combined flour milling capacity of 3,150 tons per day and a feed plant capacity of 450 tons per day. As one of the leading flour producers in the Kingdom, we hold an 18.3% market share in the flour market and dominate the consumer segment with our top-selling local flour brand, FOOM, achieving a 31.1% market share by volume – the highest among all flour brands.
Quality is the cornerstone of our operations. Our comprehensive quality management systems have earned us multiple certifications, including the prestigious ISO 17025 accreditation in 2023, making us the first milling company in the industry to achieve this standard. This recognition underscores our commitment to setting the industry benchmark for quality.
Fourth Milling Company (the “Company” or the “Issuer”) is pleased to announce its intention to offer 30% of its share capital to the public through an Initial Public Offering (“IPO”) and listing its shares on the Main Market of the Saudi Exchange (“Tadawul”). Institutional and retail investors will be allowed the opportunity to acquire shares and participate in the long-term growth plans of the Company and the Saudi milling industry.
Established in 2017 as part of the privatization of the Saudi milling industry, our company boasts a rich heritage spanning over 40 years. Originating from GFSA's wheat mills group, we have evolved into a leading producer of flour, wheat derivatives, and animal feed products. Our dedication to resilience, growth-oriented operations, and unwavering commitment to excellence ensures a significant contribution to KSA’s food security.
Our journey began in 1972 under GFSA and transformed significantly with the National Privatization Program in 2017. By 2020, ownership transferred from PIF to the National Center of Privatization, and in 2021, our current shareholders took the helm
Strategically headquartered in Dammam, our production facilities span Dammam, Madinah, and Al-Kharj, covering more than 80% of the kingdom population and boasting a combined flour milling capacity of 3,150 tons per day and a feed plant capacity of 450 tons per day. As one of the leading flour producers in the Kingdom, we hold an 18.3% market share in the flour market and dominate the consumer segment with our top-selling local flour brand, FOOM, achieving a 31.1% market share by volume – the highest among all flour brands.
Quality is the cornerstone of our operations. Our comprehensive quality management systems have earned us multiple certifications, including the prestigious ISO 17025 accreditation in 2023, making us the first milling company in the industry to achieve this standard. This recognition underscores our commitment to setting the industry benchmark for quality.
Message from the Chairman
The Fourth Milling Company is proud to be a leading force in the Saudi milling industry. With over 40 years of experience and a commitment to quality, we have played a crucial role in transforming the industry and meeting the needs of the Saudi market. As we continue to witness rapid economic growth and increased demand for high-quality flour and animal feed products, we are well-prepared for our next phase of growth through our innovative and sustainable approach.
With the IPO, we embark on an exciting new chapter. Over the coming years we aim to further strengthen our market position, expand our product portfolio and continue to invest in infrastructure, people and processes. Our dedication to excellence and innovation will drive us forward as we pursue these ambitious goals
Our ambition and commitment to realizing Vision 2030 by supporting the Kingdom’s growth and development grow even stronger with the opportunities we see ahead. We are determined to deliver exceptional performance for our shareholders, ensuring both capital growth and attractive returns. As a market-leading and well-respected business, backed by strong macro fundamentals and dynamic growth prospects, the entire Fourth Milling Company team is eager to embrace the opportunities that lie ahead.
Message from the CEO
This IPO is a celebration of our achievements to date and a significant milestone for everyone who has been part of our journey since establishment. We take pride in our rich history, which spans over 40 years in the milling industry.
Since the privatisation in 2021G, Fourth Milling Company has been on a path of significant transformation. Our focus has been on enhancing operations, fortifying our market position, and driving revenue growth while adopting leading governance practices. I am proud to announce that we achieved a 31.1% share (volume share) in the consumer market, representing the highest among all flour brands. Moreover, our revenue saw a compound annual growth rate of 29.7% from 2021 to 2023. With the continued support of our Board and shareholders, we have successfully established policies and processes to sustain our growth and operational excellence.
With our strong market position and excellent growth prospects, we are excited about the future and the continuing role we can play in the growth and development of the Kingdom’s food security. This IPO is an opportunity for us to further grow our shareholder base as we continue our journey and welcome investors seeking a meaningful and rewarding investment proposition.
INVESTMENT HIGHLIGHTS
The milling industry is vital to Saudi Arabia's food security, ensuring the availability of flour, a staple in the Saudi diet, through processing wheat supplied by GFSA. This aligns with the nation's economic diversification and sustainability goals. As one of the four companies in the Kingdom's flour milling industry, we are a market leader in our operating regions.
Saudi Arabia's wheat market grew at a CAGR of 6.7%, from 2018 to 2022 reaching 3.4 million tons in 2022. Flour consumption, is projected to grow at a CAGR of 3.2%, reaching 4.1 million tons by 2028. driven by increasing population, tourism, and consumption of value-added products.
Our production facilities are strategically located in the Kingdom's fastest-growing population areas. The Al-Kharj facility with daily flour milling capacity of 600 tons is a strategic asset due to its proximity to Riyadh, the Kingdom's capital and the fastest growing region. The Dammam facility serves as a critical distribution hub for the eastern regions with a daily flour milling capacity of 1,350 tons and feed capacity of 450 tons per day. The Madinah facility, with a daily flour milling capacity of 1,200 tons and a storage capacity of 66,000 tons, is pivotal for serving the western regions of KSA.
Through our ownership of the top-selling local flour brand, FOOM, we hold a leading consumer volume market share of average 31.1% for the previous twelve months (as of July 2024) the highest amongst all flour brands. This ownership enhances market presence, customer loyalty, diversified revenue, and strategic growth opportunities, driving success and sustainability in the milling industry.
We have developed an effective and efficient sales infrastructure with dedicated sales teams, a logistics network, and robust customer relationship management, including after-sales support. This investment enhances operational efficiency, market reach, and provides a strong foundation for growth and customer satisfaction. Our sales channels cover the complete spectrum of customers, with dedicated teams for industrial, wholesale, and modern trade clients.
Each production facility boasts a long operating track record. Since being acquired in November 2021, we have implemented strategic programs to enhance manufacturing efficiency. We improved milling processes, increasing capacity, and upgraded the feed mill in Dammam with new technology. The Company has reduced unplanned downtime and improved Overall Equipment Efficiency (OEE) to best-in-class standards through advanced maintenance strategies. Investment in SAP ERP systems support a wide range of business processes, enabling real-time data flow and enhanced decision-making.
The Company is led by a highly experienced management team specializing in milling and food and beverage sectors, evidenced by key initiatives enhancing efficiency, product quality, and value-added offerings. The Company also benefits from its network of shareholders and international partners, including Allana International Company, Abdullah AlOthaim Markets Company, and United Feed Manufacturing Company, who provide expertise in flour business, retail segments, and grains sourcing, respectively.
The Company has achieved significant sales growth, with revenues grew from SAR 336 million in FY2021 to SAR 566 million in FY2023, representing 29.7% CAGR. The revenue is diversified geographically and across customer segments, minimizing concentration risk. The Company has also seen improved EBITDA margins, increasing from 32.1% in FY2021 to 38.0% in FY2023, driven by higher-margin products and cost efficiencies. The adjusted EBITDA margin for 2023 is 40.0% after adjusting non-recurring items. The business is cash generative with low capital expenditure and efficient working capital management, leading to a rise in operating free cash flow from SAR 37 million in FY2021 to SAR 163 million in FY2023.
As of 31 December 2023, the Company had no outstanding debt, providing significant financial stability and flexibility. This debt-free status allows the Company to reinvest in growth opportunities, improve operational efficiencies, and enhances attractiveness to investors and partners, ensuring resilience in volatile markets.
IPO Timeline 2024
Intention to Float
Price Range Announcement and institutional Book Building
Final price announcement
Retail subscription period
Announcement of the final allocation of the Offer Shares
Refund of excess subscription amounts
Listing day
How to Subscribe
Ensure you have an active current account with one of the receiving banks listed here
Visit Fourth Milling Company’s IPO webpage to get all the required information about the company and its public offering through the ITF and Prospectus.
Make an investment decision after reviewing the Prospectus and discussing the details with your financial advisor.
Subscribe to the offering, at the offering price, by applying online via the receiving banks' website or via their digital application.
Once shares are allocated, you may or may not receive full allocation for your order. Any excess will be refunded to you.
The Company will list on the Saudi Exchange and changes in share price can be monitored on the Exchange
Ensure you have an active current account with one of the receiving banks listed here
Visit Fourth Milling Company’s IPO webpage to get all the required information about the company and its public offering through the ITF and Prospectus.
Make an investment decision after reviewing the Prospectus and discussing the details with your financial advisor.
Subscribe to the offering, at the offering price, by applying online via the receiving banks' website or via their digital application.
Once shares are allocated, you may or may not receive full allocation for your order. Any excess will be refunded to you.
The Company will list on the Saudi Exchange and changes in share price can be monitored on the Exchange
Frequently Asked Questions
The shares will be listed on the Main Market of the Saudi Exchange.
The Offering shall be restricted to the following two groups of investors:
Tranche (A): Participating Parties:
This tranche comprises the parties eligible to participate in the book-building process in accordance with the Book-Building Instructions. The number of Offer Shares to be initially allocated to Participating Parties is one hundred and sixty-two million (162,000,000) shares of the Offer Shares representing one hundred percent (100%) of the total Offer Shares. In the event there is sufficient demand by Individual Subscribers for the Offer Shares, then the Lead Manager has the right to reduce the number of Shares initially allocated to Participating Parties to one hundred and twenty-nine million six hundred thousand (129,600,000) shares, representing eighty percent (80%) of the total Offer Shares. The number and percentage of Offer Shares to be allocated to Participating Parties shall be determined as deemed fit by the Financial Advisor, in coordination with the Company, by using the optional allocation mechanism. It is possible not to allocate any shares to some Participating Parties as deemed fit by the Financial Advisor and the Company.
Tranche (B): Individual Subscribers:
This tranche includes natural Saudi nationals, including any Saudi female divorcee or widow with minor children from a marriage to a non-Saudi person who can subscribe for her own benefit in her name or in the names of her minor children, on the condition that she provides proof that she is a divorcee or widow and the mother of her minor children, in addition to any natural non-Saudi national who is a resident and any GCC national who has a bank account with a Receiving Agent and having the right to open an investment account with a Capital Market Institution. Subscription by a person in the name of his divorcee shall be deemed invalid, and if a transaction of this nature has been proved to have occurred, then the regulations shall be enforced against such person. If a duplicate subscription is made, one subscription will be considered void and only one subscription will be accepted. A maximum of thirty-two million four hundred thousand (32,400,000) Offer Shares representing twenty percent (20%) of the Offer Shares shall be allocated to Individual Subscribers. In the event that Individual Subscribers do not subscribe in full for the Offer Shares allocated thereto, the Lead Manager may reduce the number of Offer Shares allocated to Individual Subscribers in proportion to the number of Offer Shares subscribed for by them.
The final price of the share will be set after the institutional book-building process is complete.
There will be no implementation of a lock-up period or restriction on the sale of shares following the listing.
Receiving Banks
Eastern Ring Road - Al Shuhada District
Kingdom of Saudi Arabia; Zip Code: 11614
P.O. Box: 22622
Tel :+966 114013030
National Address 7317 King Faisal Rd. Al Murabba
Riyadh 11564, Kingdom of Saudi Arabia
Tel :+966 (11) 4029000