Imperial Logistics — Investor Day (June 2019)
30 slides from Imperial Logistics's investor day presentation, Jun 3, 2019
Slide 1: Investor Day
Investor Day 3 June 2019 Imperial’ customise ® collaborate * compete logistics
Slide 2: Our path since unbundling
Our path since unbundling The strategic rationale for the unbundling was to achieve the following: • Imperial Logistics would be a focussed business • Deliver a clear, coherent strategy • Effectively capitalised to deliver on a clearly defined growth path • Unlock value for shareholders Since the un
Slide 3: Key management priorities in FY 2019 "Unlocking value"
Key management priorities in FY 2019 “Unlocking value” • Intensified efforts to further rationalise, reduce costs and restructure the business • rationalisation of the Consumer Packaged Goods (‘CPG’) business in South Africa • rationalisation of South African (excluding CPG) and International divisi
Slide 4: Portfolio restructuring, rationalisation and cost-cutting
Portfolio restructuring, rationalisation and cost-cutting 4
Slide 5: Significant fixed overhead cost reduction
Significant fixed overhead cost reduction • International: Significant restructuring and removing fixed overhead costs • extracted c. €15m (R245m) p.a of fixed overhead costs • required post recent disposals of Neska/Schirm • more competitive; gain contracts; improve margin and performance • once-of
Slide 6: Further rationalisation of CPG business in South Africa
Further rationalisation of CPG business in South Africa • Despite numerous turnaround initiatives, the CPG business continues to be loss-making (currently 20% of SA revenue; 5% of Group revenue) • The current multi-principal distribution capability has become unviable due to: • disintermediation (ce
Slide 7: Further rationalisation of CPG business in South Africa
Further rationalisation of CPG business in South Africa • This decision does not represent our exit from the consumer industry vertical in South Africa • The rationalisation of CPG will result in an impairment of between R1.0bn and R1.4bn post tax (including retrenchments and exit of leases) • CPG w
Slide 8: Strategy update
Strategy update Imperial’ customise ® collaborate * compete logistics
Slide 9: Simplifying our strategic positioning
Simplifying our strategic positioning Core strategic focus: • Leveraging competitive advantages through growing and expanding African Regions • Leveraging capabilities - mainly in healthcare, consumer, chemicals, industrial and automotive - in other emerging and selected developed markets • driven b
Slide 10: Key strategic priorities
Key strategic priorities 1. Continue to grow in Africa, adding new capabilities, entering new industry verticals and serving more countries/regions 2. Expand our distributor capability geographically and add other existing and new capabilities to that market over time which will create cross-selling
Slide 11: 1. Continue to grow in Africa
1. Continue to grow in Africa - adding new capabilities, entering new industry verticals, serving more countries/regions • African Regions division has grown into a USD1bn revenue business in 9 years (23% operating profit 4 year CAGR and ROIC of c.18%) • Key differentiators • ability and success in
Slide 12: 1. Continue to grow in Africa - strategic initiatives
1. Continue to grow in Africa - adding new capabilities, entering new industry verticals, serving more countries/regions The strategic initiatives that will support our objectives to position Imperial Logistics as a strategic partner, providing a ‘gateway to Africa’ to companies seeking to access fa
Slide 13: In-country operations and partnership network
Netherlands UK Poland Germany Belgium Czech Republic France Switzerland Italy Bulgaria Spain Turkey Syria China Iraq Iran Morocco Jordan Pakistan Algeria Libya Egypt Western Sahara Saudi Arabia UAE Oman India Mauritania Mali Niger Yemen Senekal Chad Sudan Burkina Faso Guinea Benin Cȏte Nigeria Ethio
Slide 14: 2. Expand our distributor capability geographically
2. Expand our distributor capability geographically and add other existing and new capabilities to the distributor network over time which will create cross-selling and up-selling opportunities • Obtain local experience, preference for acquisitions rather than greenfields or brownfields development;
Slide 15: 3. Invest in capabilities in select new emerging and developed markets
3. Invest in capabilities in select new emerging and developed markets - support the growth of target industry verticals in Africa mainly healthcare, consumer, chemicals, industrial and automotive • Develop specialised contract logistics and freight management capabilities that provide legitimacy wi
Slide 16: 3a. Industry vertical approach: our key differentiators
3a. Industry vertical approach: our key differentiators Our current positioning is focused on the following industry verticals to deliver client-centric solutions, build credibility among clients and prove industry expertise, which leverages our capabilities across regions 1. Healthcare (c. 17% grou
Slide 17: 3a. Industry vertical approach: our key differentiators
3a. Industry vertical approach: our key differentiators 3. Chemicals (c.17% group revenue; multiple regions) • differentiated by our specialised capabilities to handle, move and store hazardous products through integrated contract logistics and freight management • enabling our clients to maximise c
Slide 18: End-to-end value chain
End-to-end value chain Retail services 6a demand generation Air & ocean 7a Consumer Raw materials 1a Exports 5a Formal retail Air & ocean; sourcing & procurement 4 2 Manufacturing 3a Warehousing Distributors Air & ocean; Informal retail 5b sourcing & procurement 6b Retail services Packaging 1b Impor
Slide 19: 4. Acquire, partner and/or build air and ocean IFM capability
4. Acquire, partner and/or build air and ocean IFM capability as a basis for global coverage to support in and out of Africa flows in air and ocean solutions • Basis for global coverage to support in and out of Africa flows in air and ocean solutions • Acquire existing global IFM network with presen
Slide 20: Simplifying disclosure
ai} WN ATS Simplifying disclosure Imperial’ customise ® collaborate * compete logistics
Slide 21: Our capabilities
Our capabilities We will provide secondary segmental disclosure in FY 2019 results which will be categorised according to our capabilities below: 1. Freight management (c.49% group revenue) • the movement of goods between specified sources and destinations • using different transportation modes (roa
Slide 22: Operational performance and context
Operational performance and context 22
Slide 23: Group performance for the 9 months to 31 March 2019
Group performance for the 9 months to 31 March 2019 • Imperial Logistics delivered an unsatisfactory performance, primarily in our South African and International divisions (excluding Motus and CPG) • Continuing revenue increased • Continuing operating profit declined (impacted negatively by once-of
Slide 24: South Africa
South Africa • South African division will generate approximately 30% of Group revenue in FY 2019 • High unemployment, low economic growth, tax rate increases, static household income and load shedding continue to weigh down on trading conditions • Delivered an unsatisfactory performance • revenue a
Slide 25: African Regions
African Regions • African Regions division will generate approximately 23% of Group revenue in FY 2019 • Delivered an excellent performance, despite variation in macro-economic challenges across markets • revenue and operating profit increased • good results in the healthcare and consumer businesses
Slide 26: International
International • Operations outside Africa will generate approximately 49% of Group revenue • Economic activity in Europe and Germany continued to slow in the second half, with volumes in key sectors under pressure • In the United Kingdom ongoing Brexit uncertainties are depressing consumer demand an
Slide 27: Guidance and outlook
Guidance and outlook Imperial’ customise ® collaborate * compete logistics
Slide 28: Guidance and outlook
Guidance and outlook For the financial year to 30 June 2019, subject to stable currencies in the economies in which we operate, we expect Imperial Logistics continuing operations (excluding Motus and CPG as discontinued), to deliver: • Higher revenue than the prior year • Lower operating profit than
Slide 29: Thank you
Thank you Imperial’ customise ® collaborate * compete logistics
Slide 30: Disclaimer
Disclaimer Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified by the use of forward-looking terminology such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’ or