Remgro Limited · JSE:REM
Remgro — FY2007 Earnings Presentation
30 slides from Remgro's earnings presentation, June 2007
Slide 1: Final Results Presentation
Final Results Presentation For the year ended 31 March 2007 1
Slide 2: Financial highlights
Financial highlights 12 Months 12 Months March ‘07 March ‘06 % change Headline earnings (R’m) 6 853 5 084 34.8% HEPS (cents) 1 445.4 1 052.3 37.4% Headline earnings excl non-recurring BEE costs in the prior year (R’m) 6 853 5 464 25.4% HEPS – excl non-recurring BEE costs in the prior year (cents) 1
Slide 3: Investment activities for the year ended March 2007
Investment activities for the year ended March 2007 Share repurchases • Remgro repurchased ¾ 7 174 384 shares at an average price of R143.71 per share for a total amount of R1 031 million ¾ at 31 March 2007, 8 554 019 (1.9%) shares are held as treasury shares (excluding shares held by Remgro Share T
Slide 4: Investment activities for the year ended March 2007
Investment activities for the year ended March 2007 Medi-Clinic • During December 2006 Remgro acquired 140 000 Medi-Clinic shares for a total amount of R3.3 million • On 31 March 2007, Remgro’s interest in Medi-Clinic was 47.6% (2006: 48.0%). The decline was due to the dilutionary effect of Medi-Cli
Slide 5: Subsequent to March 2007
Subsequent to 31 March 2007 Rainbow Chicken • The proposed scheme of arrangement was not approved by the requisite majority of scheme members; • The alternative offer (R16 cash per Rainbow share or 8.1 Remgro ordinary shares for every 100 Rainbow shares held) became effective on 6 June 2007 • The la
Slide 6: Subsequent to March 2007 (cont'd)
Subsequent to 31 March 2007 (cont’d) TSB Sugar • On 31 January 2007 TSB Sugar entered into an agreement to sell certain sugarcane farms in the Nkomazi region to land claimants for an amount of R285 million • The effective date of the transaction is 1 April 2007 Sage • On 8 June 2007 Remgro received
Slide 7: Segmental headline earnings performance
Segmental headline earnings performance (excluding NR BEE costs) Contributions from: • Tobacco 25.1% Financial 6.5% • Industrial 50.9% Mining (46.2)% March 2007 March 2006 Corporate 4.0% Mining Corporate Mining 2.3% 1.7% 5.3% Industrial Tobacco Industrial 28.1% 23.3% 43.3% Tobacco 43.4% Financial Fi
Slide 8: Summary of underlying performance
Summary of underlying performance R’million March ‘07 March ‘06 %change Tobacco interests 2 964 2 369 25.1% Financial services 1 529 1 436 6.5% Industrial interests 1 924 1 275 50.9% Mining interests 155 288 (46.2)% Corporate 281 96 192.7% Headline earnings (excl NR BEE costs) 6 853 5 464 25.4% NR B
Slide 9: Tobacco
Tobacco Headline earnings % Intrinsic value % R’million Mar’07 Mar’06 change Mar’07 Mar’06 change R&R / BAT 2 964 2 369 25.1% 52 229 34 065 53.3% Avg ZAR:£ rate 13.29 11.41 16.5% Highlights • R&R’s contribution to headline earnings, which represents 43.3% (2006: 43.4%) of total headline earnings, in
Slide 10: Tobacco (cont'd)
Tobacco (cont’d) • There was no change in the number of BAT shares held, however, due to the positive effect of BAT’s continuing share buy-back programme, R&R’s interest in BAT increased to 29.4% at 31 March 2007 (2006: 28.9%) • Remgro has an effective 10.4% interest in BAT as at 31 March 2007 10
Slide 11: Tobacco (cont'd)
Tobacco (cont’d) £’million Mar’07 Mar’06 Attributable profit of BAT before capital and non-recurring items 2 077 1 942 R&R’s share of attributable profit of BAT 607 558 R&R’s non-BAT income 9 29 R&R’s income 616 587 Remgro’s 35.46% share of attributable profit of BAT 215 198 Portion of R&R’s non-BAT
Slide 12: Financial
Financial Headline earnings % Intrinsic value % (excl NR BEE costs) R’million Mar’07 Mar’06 change Mar’07 Mar’06 change FirstRand 814 697 16.8% 11 836 9 623 23.0% RMBH 715 616 16.1% 10 111 7 990 26.5% ABSA - 123 - - - - Total 1 529 1 436 6.5% 21 947 17 613 24.6% Highlights • Both FirstRand and RMBH
Slide 13: Industrial
Industrial Headline earnings % Intrinsic value % (excl NR BEE) R’million Mar’07 Mar’06 change Mar’07 Mar’06 change KTI 307 - 1 312 710 84.8% Rainbow 293 250 17.2% 2 778 1 642 69.2% Medi-Clinic 278 200 39.0% 4 295 3 531 21.6% Total SA 246 254 (3.2)% 2 226 1 889 17.8% UBR 210 146 43.8% 3 020 1 984 52.
Slide 14: Industrial (cont'd)
Industrial (cont’d) KTI and KIEF • KTI’s two largests investments are in Metropolitan and Kagiso Media • KTI’s profit was favourably impacted by fair value adjustments of the conversion right attached to its holding in Metropolitan preference shares as well as a non-recurring profit realised on the
Slide 15: Industrial (cont'd)
Industrial (cont’d) Total SA • Total SA again reported good results mainly resulting from increased market share and improved refining margins. Its market share of the main fuel market stands at 14.7% (2006: 14.6%) • However, the launch of Clean Fuel 1 caused lower output at the Natref refinery and
Slide 16: Industrial (cont'd)
Industrial (cont’d) UBR • In South Africa, volume growth grew in line with targets and market share increased in most categories • The general economic climate in Israel is healthy with GDP increasing by ±5% , interest rates are at historically low levels and the shekel is strengthening against fore
Slide 17: Industrial (cont'd)
Industrial (cont’d) Air Products • The company has increased its market share as well as expanded its product range • Planned capital expenditure includes, amongst others, the major expansion of the air separation units at Mittal Steel Wispeco • Sales volumes increased. Higher selling prices were dr
Slide 18: Mining
Mining Headline earnings % Intrinsic value % R’million Mar’07 Mar’06 change Mar’07 Mar’06 change Implats 147 277 (46.9)% 6 085 3 886 56.6% Trans Hex 8 10 (20.0)% 438 363 20.7% Gencor - 1 nm - 8 nm Total 155 288 (46.2)% 6 523 4 257 53.2% Highlights • The Implats decrease is mainly due to the special
Slide 19: Corporate finance & other
Corporate finance & other Headline earnings (excl NR BEE) R’million Mar’07 Mar’06 Treasury (1) 266 146 Pension fund asset realised 70 - Other corporate costs (55) (50) Total 281 96 Intrinsic value R’million Mar’07 Mar’06 Sundry liabilities and other (12) (400) Notes (1) The increase can mainly be at
Slide 20: Analysis of comparable HEPS
Analysis of comparable HEPS Cents Change 2007 2006 HEPS (excluding NR BEE costs) as reported 27.8% 1 445.4 1 130.9 Foreign currency (profit)/loss re intergroup balances (13.7) 5.0 Pension fund surplus (14.8) - 24.7% 1 416.9 1 135.9 KTI – fair value adjustments and FirstRand Empowerment Trust (41.6)
Slide 21: Cash movement at the centre
R million -1,500 -500 500 1,500 2,500 3,500 BAT/R&R dividend 1 405 Other dividends 1 410 Exchange rate 698 differences Investments 354 realised Investments (249) acquired Ordinary dividends (1 816) paid Special dividends (1 932) paid Share Cash movement at the centre buybacks (1 203) Other (105) Net
Slide 22: Total cash
Total cash At 31 March 2007 R’million Local Offshore Total Per consolidated balance sheet 1 867 3 137 5 004 Less: Cash of other operating subsidiaries (647) - (647) Cash at the centre 1 220 3 137 4 357 Attributable share of R&R’s cash - 2 151 2 151 Available cash 1 220 5 288 6 508 Offshore cash at t
Slide 23: Remgro's intrinsic value
Remgro’s intrinsic value R’million March ‘07 March ‘06 %change Tobacco interests in GBP (£’m) 3 641 3 201 13.8% Tobacco interests 52 229 34 065 53.3% Financial interests 21 947 17 613 24.6% Industrial interests 22 072 15 986 38.1% Mining interests 6 523 4 257 53.2% Other interests 726 17 Deferred CG
Slide 24: Intrinsic value vs share price
• • • Cents per share 10000 12000 14000 16000 18000 20000 22000 24000 2006: 14.3%) 31/03/2006 9/04/2006 18/04/2006 27/04/2006 6/05/2006 15/05/2006 24/05/2006 2/06/2006 11/06/2006 to 31 March 2007 is 19.8% 20/06/2006 29/06/2006 8/07/2006 17/07/2006 26/07/2006 4/08/2006 13/08/2006 22/08/2006 31/08/200
Slide 25: Share price performance
• • 50 100 150 200 250 300 350 400 450 500 29/09/2000 30/11/2000 31/01/2001 30/03/2001 31/05/2001 31/07/2001 28/09/2001 30/11/2001 31/01/2002 28/03/2002 31/05/2002 31/07/2002 30/09/2002 29/11/2002 31/01/2003 31/03/2003 30/05/2003 31/07/2003 Remgro 30/09/2003 28/11/2003 30/01/2004 ALSI 31/03/2004 31/
Slide 26: One year share price performance
• • 11000 12000 13000 14000 15000 16000 17000 18000 19000 20000 31/03/2006 10/04/2006 20/04/2006 02/05/2006 10/05/2006 18/05/2006 26/05/2006 05/06/2006 13/06/2006 22/06/2006 30/06/2006 10/07/2006 18/07/2006 26/07/2006 03/08/2006 14/08/2006 22/08/2006 30/08/2006 07/09/2006 15/09/2006 26/09/2006 04/10
Slide 27: Ordinary dividends
Ordinary dividends 1600 3.8x 4.0x 1445 1400 3.3x 3.5x 3.2x 3.1x 3.3x 1200 3.0x 1131 2.8x 1005 1000 940 2.5x 2.2x 931 1008 1.9x Times Cents 800 772 2.0x 1.6x 1.8x 600 543 1.5x 608 463 400 1.0x 200 0.5x 0 0.0x 2003 2004 2005 2006 2007 HEPS Cash EPS Dividend cover Cash cover 27
Slide 28: Dividend distribution
Dividend distribution 700 600 600 500 434 400 400 361 Cents 314 285 300 248 200 200 100 0 0 0 2003 2004 2005 2006 2007 Ordinary dividend Special dividend 28
Slide 29: General
General • R&R structure • Secondary Tax on Companies (STC) STC credits which could be offset against future dividend payements: 31 March 31 March R’million 2007 2006 - The company 172 596 - Subsidiary companies 1 356 1 223 Unutilised STC credits 1 528 1 819 A foreign wholly-owned subsidiary company
Slide 30: Questions
Ee Fe Questions 30