RCL Foods Limited · JSE:RCL
RCL Foods — H1 2008 Earnings Presentation
18 slides from RCL Foods's earnings presentation, November 2007
Slide 1: Interim Results 6 months ended 30 September 2007
Interim Results 6 months ended 30 September 2007
Slide 2: Market perspective
Interim results 6 months ended Market perspective 30 Sep 2007 Economy grew by 5% - Increasing inflation and interest rates - Significantly higher maize and soya prices - Food inflation impacted by higher maize and fuel costs - Import volumes high but lower than last year AI SA status - Local ind
Slide 3: Market perspective
Interim results 6 months ended Market perspective 30 Sep 2007 Poultry consumption has been Imports growing strongly since the early R1,5bn Volume decline 1990s, driven by: Chicken shops at higher R0,9bn realisation Retail R4,5bn - Greater health awareness Ongoing expansion Continued high - Conveni
Slide 4: Market perspective
Interim results 6 months ended Market perspective 30 Sep 2007 288 Chicken imports down Total poultry imports (‘000 tons) 84 24% on last year but still at historical highs 225 Imported Chicken mostly 69 impacts on channels that 198 are not a strategic focus 60 35 area for Rainbow High red meat
Slide 5: Market perspective
Interim results 6 months ended Market perspective 30 Sep 2007 SAFEX yellow maize spot prices R / ton Year ended March 2006 Year ended March 2007 6m ended Sep 2007 1,900 , 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S
Slide 6: Highlights
Interim results 6 months ended Highlights 30 Sep 2007 Revenue (Rm) + 31,9% Operating profit (Rm) + 22,9% 2871 4 2871,4 315,7 315 7 2177,8 256,9 1978,3 1915,2 214,2 118,8 2004 2005 2006 2007 2004 2005 2006 2007 Headline earnings (Rm) + 20,8% Interim dividend per share (cents) + 20,0% 208,3 24,0 172,4
Slide 7: Financial review
Interim results 6 months ended Financial review 30 Sep 2007 30 Sep 30 Sep % 2006 2007 change g Trading Days 124 129 + 4,0 Revenue Rm 2 177,8 2 871,4 + 31,9 Headline EBITDA Rm 314,3 378,7 + 20,5 Operating profit Rm 256,9 315,7 + 22,9 Effective tax rate % 36 1 36,1 36 0 36.0 - 01 0,1 Attributable earn
Slide 8: Financial review
Interim results 6 months ended Financial review 30 Sep 2007 Revenue (Rm) + 31,9% 2871,4 654,1 External sales (Cobb, Epol Epol,, Vector) + 45,2% 2177,8 1978,3 2217 3 2217,3 450,4 Increase of external volumes within Epol 392,3 1915,2 and Vector 370,2 Epol revenue driven by higher raw material 1727
Slide 9: Financial review
Interim results 6 months ended Financial review 30 Sep 2007 Headline EBITDA + 20,5% Profit after tax (Rm) + 23,1% 14,4% Effective Headline 13,2% tax rate EBITDA 12,2% % 36,1% 36,0% Margin 35,1% % 30,3% 6,5% 378,7 210,5 314,3 314 3 171,0 171 0 265,5 149,2 Headline Profit EBITDA after tax Rm Rm 90,5 1
Slide 10: Financial review
Interim results 6 months ended Financial review 30 Sep 2007 Earnings / Growths Interim dividend per share + 20,0% 68,0 Rm Cents 48,0 57,0 40,0 23,1% 20,8% 210,5 208,3 Total 30,5 172 4 172,4 18 1% 18,1% Final 21 0 21,0 171,0 24,0 71,1 60,2 20,0 17,0 17 0 9,5 2006 2007 2006 2007 2006 2007 Interim PAT
Slide 11: Financial review
Interim results 6 months ended Financial review 30 Sep 2007 Capex spend + 17,2% Cash generated by ops (Rm) + 18,0% 65,2 56,0 Depreciation & 48,9 Amortisation Rm 35,5 252,2 248,7 141,1 210,7 Capex 116,4 Spend 99,3 Rm 76,4 128,7 65,9 2004 2005 2006 2007 2004 2005 2006 2007 2005 includes R64,7m spent
Slide 12: Impact of IAS39
Interim results 6 months ended Impact of IAS39 30 Sep 2007 Reporting the financial effects of only certain procurement instruments in terms 13,4 of IAS39 introduces volatility y to statutory y 12 0 12,0 results Underlying (Pre IAS39) profitability 11,3 continues to improve and acceptable 11,9 ma
Slide 13: Strategy
Interim results 6 months ended Strategy 30 Sep 2007 Maximised Key Performance Indicators in Agriculture 1 Improved processing yields Fixed the Enhanced animal husbandryy p practices and bio-securityy basics Managed costs out of the business Yielded improved earnings but the business was still at ris
Slide 14: Strategy
Interim results 6 months ended Strategy 30 Sep 2007 Vision Rainbow at the heart of every meal Key Driver Consistent, profitable, sustainable demand through brands Strategic Initiatives 3 Consumers Customers Supply Chain Sustainability Culture Redefined our broader business strategy within a framewor
Slide 15: 'Strategy into Action' update
Interim results 6 months ended ‘Strategy into Action’ update 30 Sep 2007 Rainbow Chicken sales contribution by channel and tons per day (TPD) growth Strong growth in Foodservice TPD growth TPD growth +9% +6% and Retail channels Foodservice channel growth areas Retail Foodservice 30% 36% - Quick
Slide 16: 'Strategy into Action' update
Interim results 6 months ended ‘Strategy into Action’ update 30 Sep 2007 Tons per day Operating Volume Profit 14,1% 13,8% , Growth Margin % % 5,2% 7,9% , 7 8% 7,8% 2,6% 3 767,2 654,1 654 1 -0,8% 3 335,1 5,8% 577,8 3 281,0 3 109,0 7,4% 315,3 303,2 315,7 2 217,3 , + 4,3% + 5,5% + 1,6% + 13,0% + 28,4%
Slide 17: 'Strategy into Action' update
Interim results 6 months ended ‘Strategy into Action’ update 30 Sep 2007 • Initial learning and successes from further processed range translate into imminent new launches • Discontinuation of Bonny Bird brand • E t Extension i off Vector’s V t ’ service i model d l to t include i l d primary i tran
Slide 18: Prospects
Interim results 6 months ended Prospects 30 Sep 2007 Consumer spending is expected to soften over the next six months as a consequence of the higher inflation and interest rate environment although the impact on chicken consumption is likely to be limited. Maize and soya prices are likely to rem