Nampak Limited · JSE:NPK
Nampak — Investor Day (September 2014)
43 slides from Nampak's investor day presentation, Sep 10, 2014
Slide 1: 2014 Investor Day: Bevcan Springs and Glass
2014 Investor Day Bevcan Springs and Glass 10 September 2014
Slide 2: Nampak Strategy
Nampak Strategy Nampak CEO, André de Ruyter
Slide 3: Our strategy has two focus areas
Our strategy has two focus areas UNLOCK FURTHER VALUE ACCELERATE FROM BASE BUSINESS AFRICA GROWTH • Active portfolio management, • Growth through greenfield investment including possible divestitures and acquisitions in metals, glass and • Stringent cost management – plastics CFC increases of below
Slide 4: SA strategy: Buy better, Make better, Sell better
SA strategy Buy better, Make better, Sell better MAINTAIN STRICT COST AND WORKING ASSET AND DIVISIONAL PORTFOLIO CAPITAL DISCIPLINE MANAGEMENT • Streamline procurement process • Operational excellence • Improve energy efficiency • Improve safety performance • Implement business improvement programme
Slide 5: Rest of Africa context: Nampak strongly positioned for growth
Rest of Africa context Nampak strongly positioned for growth • Improving conditions around policy certainty Urban dwelling % of population • Strengthening political commitment to private sector growth and job creation • Increased investment, high GDP growth rates (~5%) and rapid urbanisation • Growt
Slide 6: Rest of Africa strategy: Accelerate growth
Rest of Africa strategy Accelerate growth OVERALL GROWTH • Capture GDP growth in existing markets • Grow organically at 5% above GDP growth • Explore acquisitions – Metals and Glass – Plastics |6
Slide 7: Bevcan
Bevcan Group Executive, Erik Smuts
Slide 8: Beverage can and end manufacturing
Beverage can and end manufacturing |8
Slide 9: Strategic focus areas
Strategic focus areas | 9| 9
Slide 10: Key initiatives to deliver strategy
Key initiatives to deliver strategy • Assets – Recapitalisation – Consolidation – Expansion • Operational excellence • Service focus (internal and external) • Quality of people • CAN DO! Marketing campaign | 10
Slide 11: Aluminium conversion project update
Aluminium conversion project update • sfsegfewgewsegw MOTIVATION STATUS EXPANSION PROJECTS • Customer Completed South Africa • Springs Line 1 (New Line) • Rosslyn preference – Commissioned May ’13 on 330ml – New high speed – Converted to 440ml Mar ’14 aluminium line to • Technological be installed a
Slide 12: Marketing
Marketing • CAN DO! Marketing campaign launched in 2010 to address can volume decline • Target market and approach based on market research conducted • Successful in changing perception towards beverage cans of both consumers and brand owners • Marketing activities/channels include: – Billboards – R
Slide 13: CAN DO! Marketing campaign example
CAN DO! Marketing campaign Example | 13
Slide 14: CAN DO! Marketing campaigns: other examples
CAN DO! Marketing campaigns Other examples | 14
Slide 15: Volume growth South Africa (all sizes)
Volume growth South Africa (all sizes) | 15
Slide 16: Volume growth Value packs 440ml
Volume growth Value packs 440ml | 16
Slide 17: Recycling
Recycling • Collect-a-Can has led the way in beverage packaging recycling since the early ’90s • Current beverage can collection rates are estimated to exceed 70% • The conversion to aluminium is expected to substantially increase Southern African beverage can recycling rates – Recycling rates for a
Slide 18: International awards
International awards RR NEW Pea COLD RUSH. EASY-FLOW TWIST RELEASES THE COLD RUSH OF Fu EXTRA COLD (@) REFRESHMENT e anal
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Slide 20: Nampak Glass
Nampak Glass Group Executive, Rob Morris | 20
Slide 21: Introduction to Nampak Glass
Introduction to Nampak Glass | 21
Slide 22: History of Nampak Glass
History of Nampak Glass • 1984: Commenced glass manufacturing as Metal Box Glass on current site • Oct 2005 to Mar 2012: A joint venture with German glass manufacturer Wiegand Glass • 2012: Nampak Glass re-incorporated back into Nampak Limited • Present: – We continue with a technical agreement with
Slide 23: Capital investments the past 10 years
Capital investments the past 10 years Date Project Cost 2005 – 2007 Cold End investment – Furnace 1 and 2 R450 million 2008 Rebuild of Furnace 1 R300 million 2010 Cullet Plant built R160 million 2012 Rebuild, expansion and upgrade of Furnace 2 R420 million 2014 Furnace 3 R1.2 billion TOTAL INVESTMEN
Slide 24: Nampak Glass, Roodekop
Nampak Glass, Roodekop Additional site 251 000m2 Warehouse Current site 254 000m2 Cullet Plant F3 F2 F1 | 24
Slide 25: The South African glass market sectors
The South African glass market sectors ▃▃▃ 38% Beer ▃▃▃ 19% Flavoured alcoholic beverages ▃▃▃ 15% Wine ▃▃▃ 9% Food ▃▃▃ 7% Spirits ▃▃▃ 6% Soft drinks/juice ▃▃▃ 3% Cosmetics and pharmaceutical ▃▃▃ 3% Tableware | 25
Slide 26: The South African glass market (tons)
The South African glass market (tons) (Nampak estimation) | 26
Slide 27: Market share
Market share (Nampak estimation) SABMiller volumes excluded | 27
Slide 28: Our major customers
Our major customers Heineken | Namibia Breweries | Distell | Coca Cola System | E Snell | KWV | Diageo | Tiger Brands | Halewood | 28
Slide 29: Overview of the glass process
Overview of the glass process | 29
Slide 30: The glass production process flow from raw materials to dispatch
The glass production process flow from raw materials to dispatch Batch plant Forming Melting Annealing Packaging Palletising and Inspection warehousing | 30
Slide 31: Packaging, palletising and warehousing
Packaging, palletising and warehousing | 31
Slide 32: Inside a glass furnace
Inside a glass furnace . e eZ LIF s74 wae ae - ~ > 132 Nampak
Slide 33: Furnace 3 project update
Furnace 3 project update | 33
Slide 34: Furnace 3 project overview
Furnace 3 project overview Expenditure R1 205 000 000 Construction commenced October 2013 First glass 28 July 2014 Original time line 24 months Actual time line 17 months Capacity increase 56% • Tax allowance incentive from the South African Department of Trade and Industry (DTI) received in financi
Slide 35: Benefits of Furnace 3
Benefits of Furnace 3 Improved efficiency and cost (colour changes and overhead utilisation) Increased Reduced supply flexibility risk Increased capacity and critical mass | 35
Slide 36: Sustainability
Sustainability | 36
Slide 37: Light weighting and innovation
Light weighting and innovation LIGHT WEIGHTING INNOVATION Woolworths brand – 15% weight reduction Peanut Vodka – flat combined with round, a very unique design • 2013: lightweight initiatives saved 5 275 tons glass reducing the number • reduced storage capacity and avoided of truck loads by 176 roll
Slide 38: Glass recycling
Glass recycling THE CULLET SORTING FACILITY • Cost of the plant was R160 million, 2010 • Facility sorts third party cullet and cullet collected by Nampak Recycling • Currently, cullet replaces up to 55% of virgin raw material requirement in Nampak Glass – Reduces energy consumption and associated ca
Slide 39: Key business strategic issues
Key business strategic issues | 39
Slide 40: Key market issues
Key market issues • Alternative packaging remains a strong competitor to glass • South Africa’s modest economic growth • Changing consumer spending patterns, e.g. convenience and environmental awareness • Returnable versus one way glass • Bulk wine exports • Availability of skilled labour | 40
Slide 41: Our competitive position
Our competitive position • Product mix: we have a more balanced product mix across market sectors, providing an opportunity to manage margin and market sector changes • Lower cost base: Furnace 3 benefits enables us to lower our cost base • Customer base: opportunities exist for further growth • Cus
Slide 42: Key current focus areas for competitiveness and growth
Key current focus areas for competitiveness and growth • Continue to challenge cost and efficiencies (specifically energy and labour) • Stabilise and optimise Furnace 3 • Continue to reduce inherent risks and grow with customer base • Maintain our partner status with customers • Attract key skills,
Slide 43: Thank you
Thank you | 43