Bidvest Group Limited · JSE:BVT
Bidvest — The Bidvest Group — H1 FY2023 Earnings Presentation
29 slides from Bidvest's earnings presentation, 2023
Slide 1: Investor presentation
Investor presentation People and products behind a brighter future for the half year ended 31 December 2022
Slide 2: Agenda
Agenda 01 Introduction Mpumi Madisa 02 Financial overview Mark Steyn 03 Operational reviews Mpumi Madisa 04 Strategy and outlook Mpumi Madisa 05 Appendices THE BIDVEST GROUP LIMITED Unaudited financial results for the half year ended 31 December 2022 2
Slide 3: Introduction
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Slide 4: Reflections by the CEO
Reflections by the CEO • Excellent H1 performance • Capitalised well on growth nodes › Agriculture, mining, renewable energy and tourism. No infrastructure spend yet › Demand for renewable energy products grew exponentially › Travel rebound to 85-90% pre-Covid • Covid normalisation in hygiene & FM o
Slide 5: Interim highlights
Interim highlights Strong result Normalised HEPS 938.4 cents +15% • Trading profit up 14.5% to R5.8 billion 1 800 › Very strong operational result: Excellent performances from 1 200 Services SA, Freight on higher activity; strong growth by Branded Products and Commercial Products off high bases; 600
Slide 6: Financial Overview
Financial Overview
Slide 7: Financial highlights
Financial highlights R billion 6 months ended 31 Dec 2022 6 months ended 31 Dec 2021 Change Revenue 57.2 50.2 14.0% Gross profit margin 29.4% 29.6% ↓ Expense margin 19.3% 19.8% ↓ Adjusted EBITDA 6.7 5.9 13.2% Trading profit 5.8 5.1 14.5% Trading profit margin 10.2% 10.1% ↑ HEPS (cents) 938.5 813.8 1
Slide 8: Income statement analysis
Income statement analysis Revenue Other income declined due to lower investment Other costs • Group revenue 14.0% to R57.2 billion income in Financial Services • Acquisition costs increased on higher corporate • Acquisitions added 250bps to growth action activity • Growth in Services SA, Freight led
Slide 9: Strong funding profile
Strong funding profile • 59% of gross debt offshore; 70% of net debt Interest cover › Gross debt R25.8 billion; net debt R18.6 billion • Covenant net debt / EBITDA 1.9x (1HFY2022 1.8x) › Offshore 5x with strong cash generation 9,8 9,4 8,8 8,2 8,4 8,6 9,4 9,4 • 79% of gross debt is long-term 8,2 • 49
Slide 10: Solid cash generation
Solid cash generation R7.3 billion cash generated by operations Free cash flow (Rbn) 7,3 5,5 • Higher seasonal absorption with R5.5 billion invested 4% cash conversion in working capital as activity increased (1,5) › Inventory: Just-in-case buying; product price increases; normalisation of Automotiv
Slide 11: Operational reviews
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Slide 12: Services International
Services International Alan Fainman Revenue • Stable trading profit as the division recalibrates • Facilities management services post Covid profits in FY22 › Strong new contract wins, particularly in Ireland, 14.5% R15.9bn • Unprecedented wage and cost pressure added Australia and SA to challengi
Slide 13: Branded Products
Branded Products Kevin Wakeford Revenue • First-class result • Adcock delivered excellent result • Large element of input cost increase recovery › Diverse and affordable product range 12.1% R10.7bn in revenue growth › New product launches and strong sales execution • Excellent cost control • Anoth
Slide 14: Freight
Freight Wiseman Madinane Revenue • Another outstanding result • Terminal operations performed well • All but one business grew profits & returns › Volumes handled increased; shifts between 28.7% R5.1bn › Higher bulk mineral and LPG volumes handled different minerals, agricultural product, liquids
Slide 15: Commercial Products
Commercial Products Howard Greenstein Revenue • Excellent results following 2 years of strong • A² acquisition performing well; broadened product performance offering, incl lithium iron batteries 17.0% R8.4bn • Exponential growth in renewable energy sales • Demand from textile and automotive indus
Slide 16: Services South Africa
Services South Africa Akona Matsau Revenue • A phenomenal performance, capitalising on • Technology investment and consolidation of › Rebound in travel and hospitality-related services support functions in Travel yielding outstanding 22.4% R4.5bn › Improvement in corporate occupancies value › Mark
Slide 17: Automotive
Automotive Steve Keys Revenue • An impressive performance off a high base • Fleet sales starting to recover • Margin pleasing given normalising supply • Used volumes lower and GP margin normalising 7.7% R12.7bn and economic pressure • Aftermarket ~ back at pre-Covid level, • New vehicle sales +2.5
Slide 18: Financial Services
Financial Services Hannah Sadiki Revenue • Anticipated turnaround in progress • Insurance activities › Commendable core trading profit +92% › Short-term growing book, mainly in automotive 7.5% R1.3bn › Investment income more than halved to R42m value chain • Cross-selling opportunities being pursu
Slide 19: Strategy and outlook
. Strategy and outlook ©
Slide 20: Bidvest value proposition
Bidvest value proposition People Planet • Significant business opportunities in renewable energy • Diversity & inclusion remain focus areas • Phased plan to retrofit Bidvest properties with solar • Emphasis on reskilling and retention & alternative water solutions being explored. Two- • Retirement a
Slide 21: Outlook
Outlook • Healthy activity in renewable energy, mining, agricultural, tourism and hospitality-related sectors expected to remain • Investments to mitigate impact of SA electricity crisis • Consumer disposable income pressure to intensify • Focus on differentiated product/service, margin and cost man
Slide 22: Appendices
Appendices
Slide 23: Services International
Services International • Navigating considerable headwinds across all territories › Unprecedented inflation (particularly in UK) › Full employment, cost of living crisis and high wage inflation Looking ahead › Peak fuel and energy prices • New business opportunities › Covid-work disappeared (service
Slide 24: Branded Products
Branded Products • Adcock – another superb performance › Double digit trading profit growth off single digit revenue is excellent › Consumer sales up, OTC and Prescription delivered exceptional performances, Looking ahead Critical Care down (post-COVID treatments declining and supply chain issues) ›
Slide 25: Freight
Freight • Bidvest Tank Terminals › Improved tank capacity let › Gas and fuel volume growth neutralised by lower chemical volumes Looking ahead › Investment in tank capacity in progress • Trading in H2 seasonally lower • South African Bulk Terminals • LPG demand expected to increase over winter › Whe
Slide 26: Commercial Products
Commercial Products • Entry into the renewable sector, specifically solar panels, inverters and batteries has been a resounding success • Severe energy interruptions have disrupted efficiencies and trading, Looking ahead and supply chain improvements have resulted in high stock levels • Operating en
Slide 27: Services South Africa
Services South Africa • Costs in line with higher revenue and being managed well • Security & Aviation Looking ahead › Protea Coin gained market share across various sectors of industry › Bidtrack’s impressive growth trajectory continued as the business diversified • Travel volumes continue to incre
Slide 28: Automotive
Automotive • McCarthy new vehicles +2.5% vs industry +14.9% › Loss in market share is due to brand representation/mix › Supply of new vehicles remains sporadic across certain brands and models Looking ahead › Dealership representation skewed to volume brands • Pressure on affordability building • Us
Slide 29: Financial Services
Financial Services • Improved divisional cross selling synergies • Optimising processes and interdivision co-operation: Distribution, IT, Compliance Looking ahead • Costs remain well controlled across all units • Accelerate the deployment of available Bank • Bidvest Bank capital › Leased assets up t