Bidvest Group Limited · JSE:BVT
Bidvest — The Bidvest Group — H1 2015 Earnings Presentation
50 slides from Bidvest's earnings presentation, Mar 14, 2015
Slide 1: Appendix 1: Bidvest segment profits detail
The Bidvest Group Limited Appendix 1 Bidvest segment profits detail www.bidvest.com
Slide 2: Segment profits detail – half-year ended December 31
Segment profits detail – half-year ended December 31 2014 Trading Share 2013 Trading Share ZAR’000 Profit Margin of Group Change Profit Margin of Group Bidvest South Africa 2 528 934 5.8% 54.7% 5.2% 2 404 981 6.1% 56.7% Automotive 328 210 2.8% 7.1% (1.3%) 332 666 3.0% 7.8% Consumer Products 47 900 7
Slide 3: Appendix 2: Segmental results analysis – Bidvest South Africa
The Bidvest Group Limited Appendix 2 Segmental results analysis – Bidvest South Africa www.bidvest.com
Slide 4: Automotive – consolidating
Automotive – consolidating Features of the past six months • Difficult trading environment characterised by increasing vehicle pricing, reduced disposable income and contracting credit allocation • Return on sales acceptable but below December 2013 • McCarthy Motor Group new vehicle sales of 20 696
Slide 5: Consumer Products – weak consumer market
Consumer Products – weak consumer market Features of the past six months • Tough trading environment due to consumer financial constraints • Main factors affecting performance were: – Significant impact from strikes and liquidations – Increased emphasis on private label products by certain retailers
Slide 6: Electrical – energising
Electrical – energising Features of the past six months • Voltex group delivered a good result, but attention still required on asset management • The conversion of Atlas Cables into Atlas Group will facilitate a degree of centralised purchasing for group cable and wire products • The revamps and re
Slide 7: Electrical – energising
Electrical – energising Objectives for the next six months • Further acquisitions to bolster earnings • Opening in Botswana in April 2015 and potentially further north of our borders • Becoming more active in the alternate energy markets such as solar, specialised control gear, power factor correcti
Slide 8: Financial Services – diversifying income streams
Financial Services – diversifying income streams Features of the past six months • Moody’s published an unchanged credit rating (A3/P-2) with a stable outlook • Grindrod discussions discontinued • Product and Alliance Banking showing good growth: – Alliance strategy beginning to pay dividends. Vodac
Slide 9: Financial Services – diversifying income streams
Financial Services – diversifying income streams Objectives for the next six months Bank • Aggressively pursuing new FML opportunities • Continued focus on Strategic Alliance growth to nurture new revenue streams • Launching a comprehensive Business Banking offering • Continue to grow Trade Finance
Slide 10: Freight – maximising investments
Freight – maximising investments Features of the past six months • Maize export volumes (1st quarter) and bulk liquid chemical volumes were up; all other volumes were under pressure • Bidvest Freight had a 7% growth in billings, but cost pressures caused margin squeeze • Low commodity prices put pre
Slide 11: Freight – maximising investments
Freight – maximising investments Trading results • Bidvest Tank Terminals: Very good trading result delivered from increased chemical volumes in Richards Bay and additional capacity added in Durban • South African Bulk Terminals: Very good maize exports. Wheat imports, rice and sunflower seed volume
Slide 12: Industrial – excellent offering
Industrial – excellent offering Features of the past six months • Academy Brushware solid performance with market share gains and increase in manufacturing capacity approved • Yamaha continuation of market share gains and launch of exciting new products • Vulcan outperformed the market with all sect
Slide 13: Office – furnishing declines
Office – furnishing declines Features of the past six months • Overall weak consumer and corporate market • Technology cluster produced good results • Konica Minolta increased its market share despite contraction of the overall market • Océ commissioned three high volume printing lines • Develop fur
Slide 14: Paperplus – transforming
Paperplus – transforming Features of the past six months • Industrial action in general impacted trading but the extended strike by postal workers had the most significant direct impact • Volatile exchange rates continue to challenge distribution of imported goods but this has been well managed in a
Slide 15: Paperplus – transforming
Paperplus – transforming Objectives for the next six months • Productive capacity will be adjusted continually to suit demand in the declining segment • Heavy operational focus on delivering the delayed export projects out of Lithotech • Further African trade opportunities will be sought to compleme
Slide 16: Rental and Products – solid gains
Rental and Products – solid gains Features of the past six months • Real revenue growth in the bigger businesses • Margins maintained through innovative management • Double digit profit growth in many areas due to market share growth • Asset management continues to remain a positive feature of the d
Slide 17: Rental and Products – solid gains
Rental and Products – solid gains Trading results • Steiner - Remains the market leader in washroom hygiene with strong organic growth in both hygiene and pest control services. Positive trading profit growth across all regions • Industrial Products - An improved trading result on the back of a more
Slide 18: Services – leveraging the managed solution
Services – leveraging the managed solution Features of the past six months • Revenue streams impacted by price sensitivity in the market • Current economic volatility hinders clients’ capital projects decision making • Margins were under pressure, due to direct costs absorption (labour) • Good tradi
Slide 19: Travel and Aviation – innovation continues
Travel and Aviation –innovation continues Features of the past six months • Continued down trading by Bidtravel customers puts trading results under pressure • Improved rate management in Budget-Rent-a-Car offsets a decline in volume while maintaining market share • Bidair Services deliver acceptabl
Slide 20: Appendix 3: Segmental results analysis – Bidvest Foodservice
The Bidvest Group Limited Appendix 3 Segmental results analysis – Bidvest Foodservice www.bidvest.com
Slide 21: United Kingdom – expansion focus
United Kingdom – expansion focus Features of the past six months • Bidvest 3663 Foodservice management change and shift in focus • Bidvest Logistics acquires PCL Logistics and diversifies its activities • Bidvest Fresh strengthens its Seafood, Produce, Meat and Gourmet capability • UK economy bounce
Slide 22: United Kingdom – expansion focus
United Kingdom – expansion focus Trading results • Bidvest 3663 Foodservice – Strong growth during period of change – Sales up 7%, strong gains in “Street” segment, National contract wins as well – Expenses well controlled despite investment in enhanced infrastructure – Focus on procurement helps to
Slide 23: Europe – progress in a tough environment
Europe – progress in a tough environment Features of the past six months • 60% of DAC Italy acquired in July 2014 • Netherlands and Belgium stable but tough markets • Czech/Slovakia – continued foodservice growth and range expansion • Poland growth continues as we grow into our infrastructure • Balt
Slide 24: Europe – progress in a tough environment
Europe – progress in a tough environment Trading results • Bidvest DeliXL Netherlands – Flat sales, flat trading profits • Bidvest Belgium – Solid HORECA sales growth offset by declining Institutional market. Overall sales slightly down, profits slightly down impacted by abnormal one-offs from movin
Slide 25: Australasia – ongoing excellence
Australasia – ongoing excellence Features of the past six months • Australian economy is flat as resources boom goes bust • Continued growth in Produce and Meat • Planned exit of QSR and low margin / high volume contracts • New Zealand economy is buoyant and mood is optimistic • Core foodservice bus
Slide 26: Australasia – ongoing excellence
Australasia – ongoing excellence Trading results • Bidvest Australia – Sales growth of 4%, after exiting contracts. Organic growth of approximately 7% – Trading profit growth in excess of 10% – EBIT margins improve, focus on efficiency and procurement • Bidvest New Zealand – 10% sales growth, 12% EB
Slide 27: Emerging Markets – broadly pleasing
Emerging Markets – broadly pleasing Features of the past six months • Disruption to Hong Kong trading during Occupy Central protests • China slowdown didn’t impact our business • Singapore continues to reinvent itself • Chile settled down its acquisition, now number 2 player in fragmented market • B
Slide 28: Emerging Markets – broadly pleasing
Emerging Markets – broadly pleasing Trading results • Bidvest Greater China – 18% sales increase, trading profit growth less as cost base expanded to cater for business growth • Bidvest Singapore – Sales down substantially but trading profits up significantly • Bidvest Chile – Still small but delive
Slide 29: Appendix 4: Segmental results analysis – Bidvest Namibia
The Bidvest Group Limited Appendix 4 Segmental results analysis – Bidvest Namibia www.bidvest.com
Slide 30: Namibia – fishing quotas down
Namibia – fishing quotas down Features of the past six months • Main contributor of trading profit decrease is the fishing division • Fishing division’s trading profit down by 23.1% • Horse mackerel tonnage caught decreased by 35%, due to lower quota allocations and availability to purchase quota •
Slide 31: Namibia – fishing quotas down
Namibia – fishing quotas down Objectives for the next six months • Fishing division continues to face challenges regarding horse mackerel quotas, obtaining access to additional quota, price pressure and managing vessel idle time • New joint venture, Carapau, formed with rightholders • Process of imp
Slide 32: Appendix 5: Segmental results analysis – Bidvest Corporate
The Bidvest Group Limited Appendix 5 Segmental results analysis – Bidvest Corporate www.bidvest.com
Slide 33: Bidvest Corporate – corporate opportunities explored
Bidvest Corporate – corporate opportunities explored Features of the past year • Bidvest Properties continued the development and refurbishment of premises for divisional operations. Ongoing property developments for internal purposes but strictly at arms length • Investment and ongoing promotion of
Slide 34: Appendix 6: Bidvest Financial Analysis
The Bidvest Group Limited Appendix 6 Bidvest Financial Analysis www.bidvest.com
Slide 35: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% • R4,0bn exchange rate impact on Turnover on translation • Major translation impacts arise in Bidvest Europe, Bidvest UK and
Slide 36: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Dec 31 Dec 31 Trading margins Comment 2014 2013 Improvements in Electrical,
Slide 37: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% • Exposure to the r
Slide 38: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 39: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 40: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 41: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 42: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 43: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 44: Consolidated Income Statement
Consolidated Income Statement Half-year ended December 31 2014 Rm 2014 2013 Constant Currency @ R/£ 17,89 R/£ 15,98 R/£ 15,98 Turnover 104 436,5 16.5% 89 641,6 100 368,3 12.0% Trading profit 4 621,4 8.9% 4 244,7 4 518,1 6.4% Net finance expense (578,8) 16.4% (497,3) (575,5) 15.7% Associate Income 12
Slide 45: Consolidated cash flow statement
Consolidated cash flow statement Half-year ended Dec 31 2014 Half-year ended Dec 31 2013 R bn R bn 6.0 Cash generated from ops pre wc 5.2 -2.4 Working capital utilised -2.2 -0.6 Net Finance charges -0.5 -1.1 Taxation -1.0 -0.5 Distributions -1.4 -3.9 Cash effects of investment act’s -3.6 0.0 Cash ef
Slide 46: Net working capital days
Net working capital days 8 15 12 16 11 14 Net days 32 32 33 34 34 33 Debtors days 35 33 35 35 33 38 Stock days Creditors days -59 -50 -56 -53 -56 -57 2012 H1 2013 2013 H1 2014 2014 H1 2015 Net working capital days, 2 days lower than H1 2014 • Inventory - higher than prior year - strategic stocking a
Slide 47: Net working capital flows vs cash generated
Net working capital flows vs cash generated Net working capital Cash generated by operations 7.0 6,0 6.0 5,2 5,5 4,8 4.9 5.0 4,4 4.0 3.0 Rbn 1,8 1,7 2.0 1.0 0,7 0.0 -1.0 -2.0 -3.0 -2,5 -2,2 -2,4 2012 H1 2013 2013 H1 2014 2014 H1 2015 • Working capital continuing a well established cycle, impacted by
Slide 48: Gearing
Gearing Net interest-bearing debt (Rbn) Interest cover (x) 12.0 10.0 10.0 10.0 8.9 9.0 10.0 8.5 8.5 8.0 8.0 8.0 7.0 Target interest cover range 6.0 6.0 10,4 5.0 4.0 8,2 7,9 6,2 4.0 2.0 4,5 3,6 3.0 0.0 2.0 2012 H1 2013 2013 H1 2014 2014 H1 2015 • A conservative approach to gearing with trading profit
Slide 49: Appendix 7: Bidvest Historical Results
The Bidvest Group Limited Appendix 7 Bidvest Historical Results www.bidvest.com
Slide 50: Historic Performance – to December 31 2014
Historic Performance – to December 31 2014 Trading Profit and Trading Margin Returns (annual) 10 000 40 35 8 000 5.0% 30 34 5.3% 25 30 Rm 6 000 % 5.6% 28 5.3% 20 25 25 4 000 5.0% 22 15 4.6% 17 17 2 000 4.9% 4.7% 4.4% 10 4.7% 4.9% 5 0 0 2010 2011 2012 2013 2014 2015 2012 2013 2014 H1 2015 H1 H2 ROFE