Bidvest Group Limited · JSE:BVT
Bidvest — H1 FY2024 Earnings Presentation
31 slides from Bidvest's earnings presentation, February 2024
Slide 1: Investor Presentation for the half year ended 31 December 2023
Investor Presentation for the half year ended 31 December 2023 PEOPLE AND PRODUCTS BEHIND A BRIGHTER FUTURE
Slide 2: Introduction, Financial overview, Operational reviews, Strategy & outlook, Appendices
Mpumi Madisa 01 Introduction Mark Steyn 02 Financial overview Mpumi Madisa 03 Operational reviews Mpumi Madisa 04 Strategy & outlook 05 Appendices
Slide 3: 01 Introduction
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Slide 4: CEO Reflections
Reflections by the Bidvest’s offshore profit mix 100% CEO 90% 80% 70% • Pleasing result 60% • Organic growth through new business wins, 50% FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 H1FY23 H1FY24 margin management and cost management • 5 out of 7 divisions reported double digit SA Offshore pr
Slide 5: Highlights
Interim Normalised HEPS (cents) 2 000 Highlights 1 500 1 000 • Revenue growth, active gross margin 500 management and strong expense control • Trading profit R6.5bn, +11.8% 0 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 • Organic +9.3% 1H 2H • SA 78% / offshore 22% DPS (cents) • Cash generated by opera
Slide 6: 02 Financial overview
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Slide 7: Financial Highlights
Financial Highlights R billion Half year ended 30 Dec 2023 Half year ended 30 Dec 2022 Change Revenue 62.2 57.2 8.8% Gross profit margin* 28.9% 29.5% ↓ Expense margin* 18.7% 19.6% ↓ EBITDA 7.4 6.7 11.4% Trading profit 6.5 5.8 11.8% Trading profit margin* 10.5% 10.2% ↑ HEPS (cents) 987.9 938.5 5.3% N
Slide 8: Income Statement Analysis
Income Statement Analysis • Revenue +8.8% (+6.0% organic) • Volume growth in Services SA, Freight, Services International, Branded Products • Price mix under pressure in Commercial Products, Automotive • Gross income +6.6% • Gross margin 28.9% (1HFY2023 29.5%) • Wage inflation, rand weakness and dis
Slide 9: Funding Profile
Interest cover Funding 20 Profile 15 10 • 62% of gross debt offshore; 68% of net debt 9,8 9,4 9,4 9,4 8,4 8,6 • 76% of gross debt is long-term 5 8,2 8,2 7,3 • 56% of gross debt at variable rates, in anticipation of 10,0 19,2 15,8 13,3 15,5 12,0 18,6 18,1 25,9 interest rate cuts 0 1HFY20 FY2020 1HFY2
Slide 10: Good cash generation
Good cash Free cash flow (Rbn) 27% cash Generation 8,3 (4,6) conversion (2,0) (3.8) 2.4 • Cash generated before working capital +10.4% to R8.3bn (1,2) (1,0) (1,6) • Working capital seasonal absorption of R4.6bn Cash Working Capex Cash effects Net Taxation Distributions Cash • Inventory up in Automot
Slide 11: Strong Balance Sheet
Strong Balance Sheet • Capex R2.0bn (1HFY2023 R1.5bn) • Maintained asset base • Invested in rental assets (coolers, coffee machines, garments, vehicles) in Services SA and Financial Services • Commissioned repurposed butane spheres (R175m) • Executing on approved Freight expansion of R0.7bn • Dispos
Slide 12: 03 Operational reviews
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Slide 13: Services International
CEO: Alan Fainman Services International Financial performance Revenue +21.3% • Excellent performance with trading profit equally split between hygiene R19.3bn and facilities management services Trading profit +16.5% • Acquisitions added to pleasing organic growth • Consolidated – added scale to Aus
Slide 14: Freight
CEO: Wiseman Madinane Freight Financial performance Revenue +2.2% • Excellent performance with strong second quarter R4.5bn • Terminal operations handled more volume, benefitted from reasonable rate +16.0% Trading profit increases and a positive product mix • Clearing and forwarding grew profit on h
Slide 15: Commercial Products
CEO: Howard Greenstein Commercial Products Financial performance Revenue +3.0% • Satisfactory performance off high base R8.6bn • Stagnant and very competitive market +2.2% Trading profit • Renewable energy sales steady but margins are under pressure. Order book from industrial customers healthy R741
Slide 16: Services SA
CEO: Akona Matsau Services SA Financial performance Revenue +14.4% • Very good result R5.9bn • All clusters delivered double digit growth despite the unsupportive macro +12.3% Trading profit environment • Healthy travel volumes in all sectors, supporting outstanding growth R621.7m in the Travel Serv
Slide 17: Branded Products
CEO: Gail Solomon Branded Products Financial performance Revenue +10.6% • Stellar result, notwithstanding the conclusion of acquisitions R6.7bn • Trading remains tough with price reduction pressure a common theme. +23.1% Trading profit Delays at the ports have impacted business operations over the b
Slide 18: Automotive
CEO: Carla Seppings Automotive Financial performance Revenue +2.2% • Difficult trading environment exacerbated by inventory oversupply R12.9bn and discounting, manifesting in gross profit margin pressure Trading profit -11.4% • Consumers experiencing considerable disposable income strain • McCarthy’
Slide 19: Financial Services
CEO: Hannah Sadiki Financial Services Financial performance Revenue +0.6% • The turnaround to an improved performing continued R1.3bn • Core trading profit up 24% to R215m. Investment income R8m lower +15.7% Trading profit • Bidvest Bank and FinGlobal delivered standout performances - capital ratios
Slide 20: Adcock Ingram
CEO: Andy Hall Adcock Ingram Financial performance Revenue +1.4% • Bidvest shareholding 63% R4.7bn • Revenue → mix +2%; price +4%; organic volumes -5% Trading profit +0.8% • Gross margin decline mainly FX driven R622.4m • Operating expenses well controlled -7bps Trading margin • Interim DPS 125 cent
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Slide 22: Bidvest Value Proposition
Bidvest Value Proposition • People → Our most valuable asset and enabler of our business • Grow employment and enhance livelihoods • Unlock potential through diversity • Planet → preserve and protect for future generations • Reduce our and customers’ environmental footprint • Purpose → build a susta
Slide 23: The Outlook
The Outlook • Product, service and geographic diversity remain a key strength in a competitive global market • 2H pressures → seasonal trading trends in bulk commodity movement; non-repeat of frenetic renewables product sales; weak vehicle demand • We remain optimistic about ongoing growth trajector
Slide 24: 04 Strategy & outlook
Slide 25: Services International Looking ahead
Services International Looking ahead A strong performance overall with new contract wins, aligned cost bases, innovation • Adding new territories and synergy opportunities being extracted and growing existing market International operations share through new offerings • Excellent result from PHS wit
Slide 26: Freight Looking ahead
Freight Looking ahead Bidvest Tank Terminals • Demand in key commodities • +8% volumes → + gasses, fuels; - chemicals, oils flattened out • Annual rate increases and repurposed butane spheres commissioned Oct • Maize and soybean prices South African Bulk Terminals below export parity reduce • +5% vo
Slide 27: Commercial Products Looking ahead
Commercial Products Looking ahead Trade • The turmoil in energy sector • Renewable demand frenzy abated but persistent in industrial and commercial. Order book healthy will continue to benefit • Basic electrical product demand in Voltex under pressure but niche operations performing well • Plumbing
Slide 28: Services South Africa Looking ahead
Services South Africa Looking ahead Security and Aviation Services • Competitive SA environment • Excellent result from Protea Coin on good new business achieved and a healthy pipeline. Margin pressure in new business • Innovative sales initiatives • Bidtrack, ClickOn, SACO performed well. GPT and U
Slide 29: Branded Products Looking ahead
Branded Products Looking ahead Data, Print and Packaging • Focus on long-term sustainable • Good results from Lithotech, S&N Labels, Sprint Packaging and Aluminum Foil Converters new business • Pleasing result from Bidvest Mobility, with Roan acquisition adding complementary product • Green Home Pro
Slide 30: Automotive Looking ahead
Automotive Looking ahead • Severe market pressure continues. Overstocked position slowly retreating from untenable peak • Focus on asset turn • Focus on fleet sales continued, including delivering aftermarket services as demand contracts • Diversification into other brands underway as there is a cle
Slide 31: Financial Services Looking ahead
Financial Services Looking ahead • Disciplined cost management across the division (only +2% YoY) • Good progress in strategic technology upgrades and migrations to enhance operational efficiency, security, • Cross selling of products and and system integration services to new and existing Bidvest B