Slide 1: Annual Results 2015
Annual Results 2015 November 2015
Slide 2: Forward looking statements
Forward looking statements We may make statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These are forward-looking statements as defined in the U.S. Private Securities Litigation R
Slide 3: Nampak transitionary year
Nampak transitionary year 3 › Portfolio rationalisation › Buy better » Successful sale of Corrugated, » Initial savings from “Buy Better” Tissue, Flexible, Recycling and programme delivered Sacks divisions › Make better » Operations excellence initiatives › Business performance gaining solid tractio
Slide 4: Results summary
Results summary 4 Group revenue from Revenue and trading profit continuing operations from the rest of Africa 13% 43% Rest of Africa now 49% Trading profit from of group trading profit, continuing operations up from 37% in 2014 10% Net profit from Group operating profit continuing operations from co
Slide 5: Financial results
Financial results
Slide 6: Group financial results for year-end
Group financial results for year-end 6 R million 2015 2014 % Revenue up 13% Revenue 17 291 15 306 13 Trading profit up 10%, despite Trading profit 1 820 1 657 10 disappointing first half Abnormal items performance from Glass (loss)/profit (139) 186 Significant adverse change in Operating profit 1 68
Slide 7: Regional segmental
Regional segmental Rest of Africa revenue and trading profit up 43% 7 REVENUE TRADING PROFIT TRADING MARGIN (R million) (R million) (%) 2015 %∆ 2014 2015 %∆ 2014 2015 2014 South Africa 10 599 8 9 798 736 (4) 768 6.9 7.8 Rest of Africa 4 724 43 3 294 884 43 617 18.7 18.7 United Kingdom 1 968 (11) 2 2
Slide 8: Segmental by substrate
Segmental by substrate Trading profit from continuing operations up 10% 8 REVENUE TRADING PROFIT TRADING MARGIN (R million) (R million) (%) 2015 %∆ 2014 2015 %∆ 2014 2015 2014 Metals 9 933 18 8 429 1 254 19 1 050 12.6 12.5 Plastics 5 011 3 4 849 376 16 325 7.5 6.7 Paper 1 470 41 1 044 184 (10) 204 1
Slide 9: Translation of financial instruments impacts abnormal items
Translation of financial instruments impacts abnormal items 9 R million 2015 2014 › R325 million adverse swing in abnormal items Trading profit 1 820 1 657 › R351 million swing in valuation of financial Abnormal items (139) 186 instruments due to naira and kwanza devaluations (Loss)/gain on translat
Slide 10: Discontinued operations: avoiding future losses
Discontinued operations: avoiding future losses 10 R million 2015 2014 After tax operating loss of discontinued operations (167) (206) After tax loss on disposal of operations (228) (16) Loss for the year from discontinued operations (395) (222) › 2014: Sale of Cartons and Labels › 2015: Sale of low
Slide 11: Group corporate services contribution
Group corporate services contribution 11 Group corporate 2015 vs 2014 services includes performance › Head office costs › Trading profit down from R126 million to R82 million › Share based payments » Decline in rentals received as a › Corporate activity costs consequence of divestitures › Group trea
Slide 12: Glass project accounting treatment
Glass project accounting treatment 12 New third glass furnace IFRS capitalisation Impact (F3) commissioning completed by 31 July on results › Performing below contracted › R27 million in additional › R71 million interest costs expectations and investment operating costs incurred to capitalised to fu
Slide 13: Foreign exchange impacts
Foreign exchange impacts 13 CLOSING RATES AVERAGE RATES 2015 %∆ 2014 2015 %∆ 2014 ZAR/USD 13.86 (22.7) 11.30 12.02 (13.6) 10.58 ZAR/GBP 20.97 (14.4) 18.33 18.56 (5.8) 17.54 › Group trading results » Impacted by naira and kwanza devaluation versus the US dollar Liquidity issues led to R141 million
Slide 14: Incentives and lower rates in key markets benefit group tax rate
Incentives and lower rates in key markets benefit group tax rate 14 % 2015 2014 Effective group rate of tax (4.1) 9.1 › Tax rate significantly lower than guidance › Tax benefit from South African Department of Government incentives 9.7 12.1 Trade and Industry Section 12I allowance Prior year adjustm
Slide 15: Short term liquidity impacted by repayment of portion of long term debt
Short term liquidity impacted by repayment of portion of long term debt 15 R million 2015 2014 Property, plant and equipment 11 026 9 864 › PPE increased in line with capex programme › Current assets increased 10% Goodwill 3 769 3 166 › 3% due to consolidation of previous associates Other non-curren
Slide 16: Capital expenditure positions Nampak for the future
Capital expenditure positions Nampak for the future 16 CAPEX SPEND 2011 TO 2015 R million 9 000 Full-year 2015 capital expenditure of R2.2 billion, in line with guidance 7 500 › Expansion » Bevcan Angola warehouse and second line 6 000 » Glass third furnace › Replacement » Bevcan SA aluminium 4 500
Slide 17: Cash flow movement
Cash flow movement 17 R million 2015 2014 › Cash generated from operations Operating profit before working capital changes 2 395 2 929 of R1.7 billion Working capital changes (669) (189) › Interest reduced by retiring expensive debt Cash generated from operations 1 726 2 740 › Retirement benefits ou
Slide 18: Net borrowings position
Net borrowings position 18 (%) 45 South Africa UK and Rest 51 49 55 of Africa 2015 2014 › Proportion of United Kingdom and Rest of Africa net borrowings impacted by the significant decline in the rand versus the US dollar and pound during the year › R5.1 billion US dollar based interest bearing
Slide 19: Working capital changes
Working capital changes 19 R million 2015 2014 Increase in inventories (766) (73) › Increases in current assets and liabilities impacted by Increase in trade receivables and other current assets (425) (309) » disposals » full consolidation of Nampak Zimbabwe Limited Increase in trade payables and ot
Slide 20: Headline earnings per share funds attractive dividend per share
Headline earnings per share funds attractive dividend per share 20 HEADLINE EARNINGS PER SHARE (CENTS) DIVIDEND PER SHARE (CENTS) 221.9 208.2 153.0 161.6 129.5 140.0 134.0 141.4 108.0 82.2 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 › HEPS on continuing operations down 6.2% for › Gross dividen
Slide 21: Five-year balance sheet performance
Five-year balance sheet performance 21 RETURN ON EQUITY (%) RETURN ON ASSETS 30 900 24 25 25 750 20 600 19 20 19 15 450 10 300 5 150 27 21 18 15 11 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Return on net assets (%) Depreciation charge › Good return on equity – reflects increase in equity
Slide 22: Five-year balance sheet performance
Five-year balance sheet performance 22 NET DEBT:EBITDA (TIMES) INTEREST COVER (TIMES) 2.2 2.3 18 10 9 0.3 6 6 0.6 0.6 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 › 2014 peak related to Bevcan Nigeria acquisition › Normal interest cover maintained at 6 times › Group continues to perform well wi
Slide 23: Key focus areas
Key focus areas Working capital Capex ¢ management management ¢ Forecasting Leveraging Asset economies ) performance of scale assessment VV Managing RoA liquidity issues V, Balance sheet optimisation Managing %, down gearing ratio
Slide 24: Operational review
ional Nampak Operat review ULL LM LEA WILL eh, Se
Slide 25: Trading profit contribution from the Rest of Africa increases to 49%
Trading profit contribution from the Rest of Africa increases to 49% 25 REVENUE (%) 12 14 South Africa Rest of Africa 27 United Kingdom 22 61 64 2015 2014 TRADING PROFIT (%) 5 8 6 9 South Africa 40 Rest of Africa 46 United Kingdom Corporate Services 49 37 2015 2014
Slide 26: Revenue and trading profit contribution by substrate
Revenue and trading profit contribution by substrate 26 REVENUE (%) 9 7 Metals Glass 32 29 Plastics 57 Paper 55 5 6 2015 2014 TRADING PROFIT (%) 4 7 10 12 Metals Plastics 20 Paper Corporate 19 Services 62 66 2015 2014
Slide 27: Metals
Metals
Slide 28: Metals: Volume growth continues, spoilage improving
Metals Volume growth continues, spoilage improving 28 R million 2015 2014 %∆ Revenue increase due to double digit beverage can volume growth and ramp-up of new lines Revenue 9 933 8 429 18 › Bevcan South Africa Trading profit 1 254 1 050 19 » Increased sales volumes in the local and export markets M
Slide 29: Bevcan: Nampak's strong position
Bevcan Nampak’s strong position 29 › Pack share low by international Contractual Commitments standards Supporting Investment in new lines › Double digit volume growth in SA (3-6 Years) will require the industry to invest in additional capacity › Largest beverage can manufacturer in Africa provides l
Slide 30: Plastics
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Slide 31: Plastics: Improved performance
Plastics Challenging environment, benefits from cost savings and new opportunities 31 R million 2015 2014 %∆ › Improved performance driven by site consolidation, cost management and feedstock benefits Revenue 5 011 4 849 3 › Liquid Packaging: Trading profit 376 325 16 » Performance impacted by lost
Slide 32: Paper
Paper
Slide 33: Paper: Margins holding up, recovering from first half low
Paper Margins holding up, recovering from first half low 33 R million 2015 2014 %∆ › Revenue benefiting from Hunyani consolidation and full acquisition of Bullpak Revenue 1 470 1 044 41 › Trading profit impacted by high inflation and Trading profit 184 204 (10) Hunyani consolidation Margin (%) 12.5
Slide 34: Glass
Glass
Slide 35: Glass: Turning the corner on improved performance
Glass Turning the corner on improved performance 35 R million 2015 2014 %∆ › Sales volume growth following third furnace installation Revenue 877 984 (11) › Challenging start to the year due to disappointing operating performance and late commissioning of Trading profit (76) (48) (58) Furnace 3 Marg
Slide 36: Glass has turned around significant improvement in PTM
Glass has turned around significant improvement in PTM 36 80% › Operational efficiencies improved and now acceptable 70% › Job and process changes at 20 or less per month (plant stable) 60% › Significant improvement in market credibility › >85% capacity contracted 50% 40% › Low-cost producer » Well
Slide 37: Strategy and outlook
Strategy and outlook
Slide 38: Strategy remains unchanged
Strategy remains unchanged 38 Unlock further value Accelerate from base business African growth › Active portfolio management, including › Growth through greenfield investment and possible divestitures acquisitions in metals, glass and plastics › Stringent cost management › Growth at a reasonable an
Slide 39: Our project pipeline
Our project pipeline 39 CONCEPT FEASIBILITY PLANNING EXECUTION DEVELOPMENT › Angola Glass › Nigeria Glass › Cape Town Line › Rosslyn Bevcan FINAL INVESTMENT DECISION (Greenfield) (Greenfield) Conversion Line 2 › Nigeria Bevcan › Ethiopia Glass › Bevcan New Line 2 (Greenfield) Ends Plant › Angola Lin
Slide 40: Outlook and future targets
Outlook 40 › External macroeconomic headwinds in key markets Future Targets expected to continue › Positive earnings growth in the medium term: CAPEX R1.2 – R1.5 billion » continued volume growth in beverage cans per annum next two years » gains from improved performance of the Glass and Bevcan Spri
Slide 41: Thank you
Thank you
Slide 42: Appendix
IX TS = 7) 2. o <x Nampak packaging excellence
Slide 43: Countering the risks and challenges of doing business in Africa
Countering the risks and challenges of doing business in Africa 43 › Political and country risk › Fiscal and monetary risk » Countries in which Nampak does » Nampak business predominantly done business have relatively lower in local currency linked to the US dollar political risk » Brewers import be
Slide 44: Rest of Africa an important market trading profit up 43%
Rest of Africa an important market trading profit up 43% 44 › Recorded sales of R4.7 billion in the › Results impacted by local currency Rest of Africa up from R3.3 billion in depreciation and lack of liquidity, 2014, and recorded operating profit but businesses still very profitable of R884 million