Nampak Limited · JSE:NPK
Nampak — FY2007 Earnings Presentation
34 slides from Nampak's earnings presentation, 2007
Slide 1: 2007 Results Presentation
2007 Results Presentation Nampak packaging excellence
Slide 2: Salient Features
Salient Features Group revenue up 12% 4% volume growth in South Africa 18% improvement in Group trading income Group margin improved to 10.5% from 9.9% Effective tax rate 26.8% HEPS up 22% HEPS up 39% before fair value adjustment
Slide 3: Group Income Statement
Group Income Statement Rm 2007 2006 % Revenue 17 014 15 262 12 Trading income before abnormal items 1 781 1 509 18 Abnormal items -160 29 Profit from operations 1 621 1 538 5 Net finance costs -191 -123 Income from investments 7 5 Share of profit from associates 5 - Profit before tax 1 442 1 420 2 T
Slide 4: Tax Rate
Tax Rate Rm Profit before tax 1 442 Tax 386 Tax rate recon % Effective tax rate 26.8 Government incentives 2.5 UK tax rate reduction 1.1 Prior year adjustments 0.8 Europe review costs -1.0 Share-based payment expense -0.6 STC and withholding tax -0.4 Other -0.2 Standard tax rate 29.0
Slide 5: Geographical Performance
Geographical Performance Rm Trading income Margin % 2007 2006 % 2007 2006 South Africa 1 329 1 129 +18% 11.6 10.8 Rest of Africa 140 108 +30% 14.1 12.1 Europe 312 272 +15% 6.4 6.5 TOTAL 1 781 1 509 +18% 10.5 9.9
Slide 6: Group Trading Income/Margin
Group Trading Income/Margin Rm % 2,000 +18% 12 +15% 10 1,600 +18% +15% 8 1,200 6 800 4 400 2 0 0 2005 2006 2007 Trading income Margin
Slide 7: Group Condensed Cash Flow
Group Condensed Cash Flow Rm Operating profit before working capital 2 460 Working capital -415 Cash generated from operations 2 045 Net interest paid -202 Tax paid -379 Dividends/cash distribution paid -579 Capex -1 231 Other -160 Net cash outflow -506 Net debt 1 925 Net debt : equity 33%
Slide 8: Dividends per Share
Dividends per Share cents 120 +20% 100 +15% 80 83.6c 96.1c 115.3c 60 40 20 0 2005 2006 2007
Slide 9: Africa
Nampak packaging excellence
Slide 10: Africa segmental
Africa segmental Rm Revenue Trading income Margin % 2007 2006 2007 2006 2007 2006 Metals & Glass 4 728 4 206 805 634 17.0 15.1 Paper 4 819 4 415 337 305 7.0 6.9 Plastics 2 910 2 781 247 241 8.5 8.7 12 457 11 402 1 389 1 180 11.2 10.3 Services -9 79 57 TOTAL 12 457 11 393 1 468 1 237 11.8 10.9
Slide 11: South Africa metals & glass volumes
South Africa metals & glass volumes Food cans Aerosol cans Beverage cans Glass bottles 0 5 10 15 20 25 30 %
Slide 12: South Africa beverage can volumes
South Africa beverage can volumes Cans mil +2% +6% 3,000 2 577 2 619 2 782 2,500 2,000 1,500 +1% +8% 1,000 1 563 1 583 1 712 500 0 2005 2006 2007 Local Filled exports Empty exports
Slide 13: South Africa paper volumes
South Africa paper volumes Sacks Tissue Cartons & labels Corrugated -2 -1 0 1 2 3 4 5 %
Slide 14: South Africa plastics volumes
South Africa plastics volumes Liquid Packaging Closures Tubes & tubs Petpak High value flexibles Crates & drums -15 -10 -5 0 5 10 15 20 %
Slide 15: Rest of Africa
Rest of Africa Zimbabwe deconsolidated as from 1 June 2007 Good performances from Mocambique, Nigeria, Tanzania and Zambia Kenya lost market share to imports and product substitution Malawi affected by cost of imported raw material
Slide 16: Europe
Nampak packaging excellence
Slide 17: Europe segmental
Europe segmental ₤m Revenue Trading income Margin % 2007 2006 2007 2006 2007 2006 Paper 215.0 220.7 7.9 7.5 3.7 3.4 Plastics 110.0 108.7 11.1 12.5 10.1 11.5 325.0 329.4 19.0 20.0 5.8 6.1 Services 19.8 21.2 3.0 2.5 TOTAL 344.8 350.6 22.0 22.5 6.4 6.5
Slide 18: 2007 Group Results summary
2007 Group Results summary Rm 2007 2006 2005 +18% Revenue 17 014 15 262 15 114 +15% +18% Trading income 1 781 1 509 1 311 +15% Trading margin 10.5% 9.9% 8.7% ROE 18% 15% 12% Net gearing 33% 28% 11% Permanent employees 13 721 14 376 15 204
Slide 19: 3 year plan
3 year plan Nampak packaging excellence
Slide 20: Current Strategic Position
Current Strategic Position Nampak is a diversified packaging company The significant action undertaken over the past few years provides a platform to pursue a growth strategy
Slide 21: Current Strategic Position
Current Strategic Position More competitive BEE credentials enhanced Restored earnings growth Strategy and structure in place for future growth
Slide 22: Packaging Excellence
Packaging Excellence Strong strategic position + = Successful business operating effectiveness Faster, smarter, more effective interactions internally and externally Packaging excellence in everything that we do drives operating effectiveness
Slide 23: Packaging Excellence
Packaging Excellence Customer Process People Focus Excellence Growth • World-class • Customer champions • Work ethic manufacturing • Industry leadership • Development • Supply chain • On-time, in-full service • Building diversity management • Innovation • Cost effectiveness “C a n d o” a t t i t u d
Slide 24: Packaging Excellence overarching objective
Packaging Excellence overarching objective To develop and enhance a positive Nampak experience which drives customer loyalty and business growth
Slide 25: Economic Forecasts
Economic Forecasts 2008 2009 2010 South Africa non-durables 3.5% 5.1% 5.5% Nigeria GDP 6.0% 6.8% 7.0% United Kingdom GDP 2.9% 2.7% 2.7% Eurozone GDP 1.9% 1.9% 1.9%
Slide 26: South Africa growth initiatives
South Africa growth initiatives 3 – 4% volume growth Major investments Corrugated paper mill – R550m commissioning 2nd half 2008 3rd glass furnace – R660m commissioning 2nd half 2009 100 000t additional capacity At existing Roodekop site
Slide 27: South Africa performance initiatives
South Africa performance initiatives Customer focus Cost leadership Operational performance Improve quality of business portfolio Transformational competitiveness
Slide 28: Rest of Africa growth initiatives
Rest of Africa growth initiatives Leverage existing footprint Follow customers Nigeria folding cartons expansion Expand product range Invest in high growth countries Angola beverage can line – R600m
Slide 29: Europe growth and performance initiatives
Europe growth and performance initiatives Plastics Recycling investment Grow through in-plant opportunities Healthcare Grow market share Acquire businesses to strengthen pan-European position Folding Cartons Improve performance – sales, mix and price Further growth opportunities to be co
Slide 30: Other Regions opportunities
Other Regions opportunities Follow customers Consider other high-growth regions
Slide 31: Group and Corporate Finance strategies
Group and Corporate Finance strategies Capital allocation Portfolio review - acquisitions and disposals BEE enhancement Working capital focus RONA target 23% and ROE target 21% Aligning reward systems to strategy achievement
Slide 32: Summary of 3 year Plan
Summary of 3 year Plan Improved demand for packaging Further improvement in competitive position Major investment in growth projects Stronger focus on cash management
Slide 33: Expected Outcome
Expected Outcome 2008 - 2010 3 year trading performance well above SA rate of inflation Earnings increase in 2008 will be moderated by: Deconsolidation of Zimbabwe Loss of folding carton business Rand strength
Slide 34: Thank You
Thank You Nampak packaging excellence