Omnia Holdings Limited · JSE:OMN
Omnia — FY2010 Earnings Presentation
44 slides from Omnia's earnings presentation, March 2010
Slide 1: Omnia Holdings Ltd Annual Results Presentation
Omnia Holdings Ltd Annual Results Presentation for the year ended 31 March 2010
Slide 2: Group at a Glance
Group at a Glance Omnia Group Chemicals Mining Agriculture
Slide 3: The Omnia Proposition
The Omnia Proposition • Focusing on unique market offerings that create value and, in so doing, earn a premium • Providing specialised solutions to the chemical, mining and agricultural markets • Concentrating on growing its international business • A commitment to meeting international standards fo
Slide 4: A Way of Life
A Way of Life • Opportunities in alternate energy, water scarcity and food security • Invest our considerable expertise in adding value to these resources – ability to provide essential, differentiated offerings that are supported by specialised knowledge and expert advice • Promote sustainable use
Slide 5: Salient Features
Salient Features • Strong cash generation of R 1 billion by operations • First sale of carbon credits • Achieved a Level 5 status with an overall score of 58.42 in terms of the DTI BBBEE Codes of Good Practice • Listed for 30 years on the Johannesburg Stock Exchange • Joint venture formed with Nalco
Slide 6: Overview of Results
Overview of Results 2010 2009 % 2008 Revenue R 8.8 billion R 11 billion (21%) R7.3 billion Net profit R 58 million R 491 million (88%) R 313 million Basic earnings per share 122 cents 1 097.1 cents (89%) 718.2 cents Headline earnings 80.6 cents 1 103.8 cents 724.5 cents Total dividend for the year*
Slide 7: Key Drivers
Key Drivers • Downward valuation of inventory • Negative market impacts • 23% strengthening of the rand since March 2009 USD/ZAR R 10.50 R 10.00 R 9.50 R 9.00 R 8.50 R 8.00 R 7.50 R 7.00 R 6.50 R 6.00 Mar-08 Jun-08 Jul-08 Sep-08 Oct-08 Dec-08 Jan-09 Feb-09 Mar-09 Jun-09 Jul-09 Sep-09 Oct-09 Dec-09 J
Slide 8: Key Drivers
Key Drivers • Unprecedented buoyant market conditions of comparative period • Earnings sensitive to declining commodity prices and strengthening of the rand • Lower levels of economic activity continue • Stock write-down of R 350 million at interim stage • Once-off share based payment of R 30 millio
Slide 9: Operational Overview − Chemicals
Operational Overview − Chemicals
Slide 10: Operational Review − Chemicals
Operational Review − Chemicals 2010 2009 % 2008 Revenue R 3.3 billion R 4.5 billion (26%) R 3.3 billion Operating profit R 152 million R 198 million (23%) R 148 million Operating margin 4.5% 4.4% 4.5% Contribution to Group 54% 23% 25% • Operating margin maintained, however after headline earnings ad
Slide 11: Operational Overview − Mining
Operational Overview − Mining
Slide 12: Operational Review − Mining
Operational Review − Mining 2010 2009 % 2008 Revenue R 1.8 billion R 2.1 billion (16%) R 1.3 billion Operating profit R 212 million R 269 million (21%) R 125 million Operating margin 11.9% 12.7% 9.8% Contribution to Group 76% 31% 21% • Slow but steady rally in commodity prices led by demand for coal
Slide 13: Operational Overview − Agriculture
Operational Overview − Agriculture
Slide 14: Operational Review − Agriculture
Operational Review − Agriculture 2010 2009 % 2008 Revenue R 3.7 billion R 4.5 billion (17%) R 2.7 billion Operating profit R (85) million R 410 million (121%) R 311 million Operating margin (2.3%) 9.2% 11.4% Contribution to Group (30%) 47% 54% • Volumes improved in South Africa by 23% • 35% reductio
Slide 15: Raw Material Fundamentals
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 Mar-96 Sep-96 US cents per kg Mar-97 Sep-97 Mar-98 Sep-98 Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 NH3/kg N Sep-02 Mar-03 Sep-03 Mar-04 Urea/kg N Raw Material Fundamentals Sep-04 NH3 vs Urea FOB Costs /kg N Mar-05 Sep-05 Mar-06 Sep-06 Ma
Slide 16: Raw Material Fundamentals
Raw Material Fundamentals MOP and DAP $ 1 400 $ 1 000 $ 900 $ 1 200 $ 800 $ 1 000 $ 700 $ 600 $ 800 $ 500 $ 600 $ 400 $ 400 $ 300 $ 200 $ 200 $ 100 $0 $0 Mar 02 Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 DAP fob US Gulf MOP fob NW
Slide 17: Financial Overview
Financial Overview
Slide 18: The History in Perspective
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 Mar-96 Sep-96 US cents per kg Mar-97 Sep-97 Mar-98 Sep-98 Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 NH3/kg N Sep-02 Mar-03 The History in Perspective Sep-03 Mar-04 Urea/kg N Sep-04 NH3 vs Urea FOB Costs /kg N Mar-05 Sep-05 Mar-06 Sep-06 M
Slide 19: The History in Perspective
The History in Perspective Imported Potash prices p/ton R/$ $1,000 11 $900 10 $800 9 $700 8 $600 7 $500 6 $400 $300 5 Jun 09 Sep 09 Dec 09 Mar 09 MOP fob NW Europe Exchange Rate
Slide 20: Income Statement
Income Statement Rm 2010 % 2009 2008 Continuing operations Revenue 8 827 (21) 11 111 7 340 Cost of sales (7 438) (18) (9 045) (5 841) Gross profit 1 389 (33) 2 066 1 499 Other operating income 77 157 30 14 Administrative expenses (487) (11) (546) (394) Distribution expenses (674) 5 (639) (522) Other
Slide 21: Tax Rate Reconciliation
Tax Rate Reconciliation Rm 2010 2009 Tax calculated at 28% 31 201 - Share-based payments 11 9 - Zetachem interest 3 - - Non-deductible expenses 4 7 - STC 4 3 - CER sale (14) - Other 12 7 51 227
Slide 22: Segmental Review
Segmental Review 2010 2009 2008 Rm 1st half 2nd half Total 1st half 2nd half Total 1st half 2nd half Total Chemicals Revenue 1 844 1 496 3 340 2 294 2 234 4 528 1 509 1 825 3 334 Operating Profit 59 93 152 156 42 198 60 88 148 Operating Margin 3.20% 6.20% 4.60% 6.80% 1.90% 4.40% 4.00% 4.80% 4.40% Mi
Slide 23: Chemicals Operating Profit History
Chemicals Operating Profit History 350 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 300 250 200 150 100 50 0 2008 2009 2010
Slide 24: Mining Operating Profit History
Mining Operating Profit History 350 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 300 250 200 150 100 50 0 2008 2009 2010
Slide 25: Agriculture Operating Profit History
Agriculture Operating Profit History 350 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 250 150 50 -50 -150 -250 2008 2009 2010
Slide 26: Segmental Review − Ratios
Segmental Review − Ratios 2010 2009 2008 Chemicals ROAM 7.80% 9.60% 7.80% ROS 4.40% 4.40% 4.50% ATO 1.8 2.2 1.8 Mining ROAM 15.10% 32.50% 20.20% ROS 9.80% 12.70% 9.70% ATO 1.5 2.6 2.1 Agriculture ROAM 12.60% 14.40% 16.30% ROS 11.40% 9.20% 11.40% ATO 1.1 1.6 1.4
Slide 27: Balance Sheet
Balance Sheet Rm 2010 2009 2008 Capital and Reserves Stated capital 310 190 188 Non-distributable reserves (22) 206 79 Opening balance 206 79 14 Movement (228) 127 65 Share-based payment reserve 81 77 45 Other reserves (5) 3 3 Retained earnings 1 609 1 663 1 268 Minority interest (2) (2) (2) Shareho
Slide 28: Balance Sheet
Balance Sheet Rm 2010 % 2009 2008 Intangible assets 537 517 517 Goodwill 332 325 324 Trademarks, trade secrets and patents 138 141 155 Distribution contracts 26 23 27 Software 41 28 11 NON-CURRENT ASSETS 1 407 20 1 169 1 006 NET WORKING CAPITAL 514 1 542 696 Inventories 1 315 (45) 2 391 1 380 Trade
Slide 29: Cashflow
Cashflow Rm 2010 % 2009 2008 Operating profit 279 (68) 877 584 Depreciation and amortisation 142 16 122 92 Adjustment for non-cash items 101 54 13 Net interest paid (173) 2 (169) (118) Taxation paid (111) (61) (283) (134) Generated/(utilised) by working capital 805 (744) (138) 1 043 (143) 299
Slide 30: Cashflow
Cashflow Rm 2010 2009 2008 Generated/(utilised) by operations 1 043 (143) 299 Net cash outflow from investing activities (464) (257) (413) Purchase of property, plant and equipment (309) (236) (225) Purchase of intangible assets (19) (21) (8) Acquisition of businesses (66) - (150) Acquisition of ava
Slide 31: Four Year Key Statistics
Four Year Key Statistics Rm 2010 2009 2008 2007 Operating Margin 3.2% 7.9% 8.0% 7.6% Headline earnings 57 494 319 245 Headline earnings per share (cents) 124.2 1 103.8 715.7 554.2 Fully diluted headline earnings per share (cents) 123.8 1 059.1 681.5 549.4 Number of shares in issue 46 491 44 809 44 7
Slide 32: Prospects
Prospects
Slide 33: Group Outlook − Chemicals
Group Outlook − Chemicals • Commodity prices have settled • Upturn in manufacturing – 14 month negative manufacturing output ended July 2009 • Petroleum Fine Products – first full year • Joint venture agreement with Nalco Company
Slide 34: Group Outlook − Mining
Group Outlook − Mining • Stands to benefit from the increased activity within the mining sector • Increasing demand for key commodities such as coal and platinum • Developing market within deep-level mines as they adopt shocktube technology • Successful testing of BME’s new generation electronic del
Slide 35: Commodity Prices − Energy
Commodity Prices − Energy 225 200 175 150 125 100 75 50 25 0 Apr 06 Oct 06 Apr 07 Oct 07 Apr 08 Oct 08 Apr 09 Oct 09 Apr 10 Brent Crude $/Barrel Uranium ($/LB) Coal (S/ton)
Slide 36: Commodity Prices − Metals
Commodity Prices − Metals 2 500 10 000 2 250 9 000 2 000 8 000 1 750 7 000 1 500 6 000 1 250 5 000 1 000 4 000 750 3 000 500 2 000 250 1 000 0 0 Apr 06 Apr 07 Apr 08 Apr 09 Apr 10 Oct 06 Oct 07 Oct 08 Oct 09 Platinum ($/oz) Gold ($/oz) Copper ($/ton)
Slide 37: Group Outlook − Agriculture
Group Outlook − Agriculture • Impact of current season excellent yields likely to result in a reduced planting in the coming season • Major restructuring of fertilizer industry in South Africa with the break-up of Yara • Outlook for fertilizer raw material prices likely to remain flat in the short t
Slide 38: Commodity Prices − Crops
Commodity Prices − Crops 450 600 400 500 350 Maize and Wheat 300 400 Soybean 250 300 200 150 200 100 100 50 0 0 Apr 06 Apr 07 Apr 08 Apr 09 Apr 10 Oct 06 Oct 07 Oct 08 Oct 09 Maize ($/ton) Wheat ($/ton) Soybean ($/ton)
Slide 39: Group Outlook Long Term
Group Outlook Long Term • Water availability • Renewable energy • Mining of scarce resources – Energy – Minerals and metals • Food supply – Population – Changing diets – Reduction in arable land – Climate change
Slide 40: Nitric Acid Complex
Nitric Acid Complex • Milestone investment for the Group • Investment of R 1.4 billion for completion in 2012 • R 1 billion equity raising • Omnia’s biggest investment to date in South Africa • Clear demonstration of Group’s commitment to SA’s mining and agriculture sectors • Major step to ensuring
Slide 41: Thank you
Thank you www.omnia.co.za
Slide 42: Finance Cost
Finance Cost Rm 2010 % 2009 2008 Interest paid 185 (12) 210 143 Forex loss/(gain) on foreign bank accounts and forward cover costs 32 (5) (6) 217 6 205 137
Slide 43: Stated Capital
Stated Capital Number Stated Number Treasury Total of shares Capital of shares Shares shares Total '000 Rm '000 Rm '000 Rm At 1 April 45 177 201 (807) (11) 44 370 190 Capitalisation award 439 26 439 26 Ordinary shares issued in respect to third partnership with management scheme 1 634 91 1 634 91 Tr
Slide 44: Cashflow – Non−cash Items
Cashflow – Non−cash Items Rm 2010 2009 2008 Movement in share-based payment reserve 49 32 26 Movement in foreign currency translation reserve (228) 127 65 Reclassification of foreign currency movements in working capital and non-current assets and liabilities 246 (105) (61) Reclassification of forei