Afrimat Limited · JSE:AFT
Afrimat — Shareholder Meeting (August 2015)
35 slides from Afrimat's shareholder meeting presentation, Aug 5, 2015
Slide 1: Business update
Business update presented at the Annual General Meeting 5 August 2015
Slide 2: Presentation coverage
Presentation coverage 1 Financial performance 2 Afrimat business update 3 What differentiates us 4 Our market 5 Prospects 2
Slide 3: 1. Financial performance
1. Financial performance Growth through diversification Consistent delivery Robust cash flow Strong balance sheet 3
Slide 4: Financial reminder (as at February 2015)
Financial reminder (as at February 2015) Revenue Profit after tax HEPS R 2.0 billion R 200 million 135.6 cps 5.1% 22.9% 24.4% Net debt: equity ratio 10.2% Cash from operating activities RONA R261.6 million 29% 7.3% Total dividend 50 cps (Final = 37 cps) 4
Slide 5: Contributing factors to performance
Contributing factors to performance Diversification strategy Strong performance from Clinker operations Reduced raw material costs in Concrete Based Products Improvement in traditional aggregates business 5
Slide 6: Statement of comprehensive income (continued)
Statement of comprehensive income (continued) Revenue (R’000) Contribution from operations (R’000) 300 000 280 000 260 000 240 000 220 000 141 315 200 000 119 362 180 000 160 000 140 000 76 860 120 000 62 334 100 000 41 771 45 868 80 000 127 349 108 909 60 000 75 623 65 952 61 906 61 747 40 000 20 0
Slide 7: Headline earnings per share – full year
Headline earnings per share – full year Cents per share 7
Slide 8: Net cash from operating activities
Net cash from operating activities Rands 8
Slide 9: Statement of financial position - assets
Statement of financial position - assets R’000 Audited Audited Feb 2015 Feb 2014 Property, plant and equipment 724 856 662 306 Mining rights and goodwill 153 339 155 901 Inventories 126 804 112 965 Trade and other receivables 287 976 305 967 Cash 78 124 92 328 Other assets / BEE funding 196 572 149
Slide 10: Statement of financial position – equities & liabilities
Statement of financial position – equities & liabilities R’000 Audited Audited Feb 2015 Feb 2014 Total equity 949 437 837 963 Borrowings 122 421 171 038 Provisions 67 323 55 860 Overdraft 52 874 51 451 Trade and other liabilities 262 983 265 743 Other liabilities / deferred tax 112 633 97 362 1 567
Slide 11: Capital expenditures
Capital expenditures Planned F2015 for F2016 H1: R 91 million H1: R110 million H2: R 72 million H2: R 72 million R163 million R182 million Good balance between maintenance and expansion capex Approximately 25% spent on expansion capex 11
Slide 12: Dividends
Dividends Dividends (cents per share) 60 Cover of 2.75x 50 40 30 50 20 39 28 10 16 17 19 0 2010 2011 2012 2013 2014 2015 12
Slide 13: 2. Afrimat business update
2. Afrimat business update Clinker excel Recovery of traditional businesses All-round good results 13
Slide 14: Segmental contribution from operations
Segmental contribution from operations 14
Slide 15: Summary of growth
Summary of growth Improvement in contribution from traditional business - KwaZulu-Natal - Western Cape Traditional business contributed approximately 36% of PBIT - 36% year on year growth Another good contribution from Glen Douglas Strong performance from Clinker Group Infrasors turnaround progressi
Slide 16: 3. What differentiates us
3. What differentiates us Group diversification Pre-empt market changes Ability to adapt 16
Slide 17: Growth through diversification
Strategy Growth through diversification 50 years of management experience in the industry with knowledge to pre-empt changes in order to protect growth Concrete Based Mining & Aggregates Products Industrial Concrete Aggregates Clinker Readymix Minerals Products 17
Slide 18: Strategic management
Strategic management Fundamental understanding Dedicated of market business development Good team understanding of own abilities Focussed value enhancing Strategic Continuous acquisitions management research of business environment Financial discipline: making the Facing the returns brutal facts Com
Slide 19: Growth through diversification
Growth through diversification Glen Douglas Clinker Infrasors 19
Slide 20: 4. Our market
4. Our market Indicators are more positive than in the past 20
Slide 21: Condition of provincial roads
Condition of provincial roads Very Poor (VP) Poor (P) 60% 50% 40% 30% 20% 10% 0% Source: Provincial Budgets and Expenditures Review, Dec. 2014. P.118, 122 21
Slide 22: Density of vehicles per km
Density of vehicles per km 1200 1000 800 600 400 200 0 KZN W Cape Mpumalanga Gauteng Limpopo Free State E Cape North West N Cape Source: Provincial Budgets and Expenditures Review, Dec. 2014, P.118, 122 22
Slide 23: Provincial roads
Provincial roads Km Paved Budget R mill. 8000 R 8 000 7000 R 7 000 6000 R 6 000 5000 R 5 000 4000 R 4 000 3000 R 3 000 2000 R 2 000 1000 R 1 000 0 R0 Source: Provincial Budgets and Expenditures Review, Dec. 2014, P.118, 120 23
Slide 24: National and provincial road expenditure and estimates
National and provincial road expenditure and estimates (R million) 50000 44799 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2006 7 8 9 10 11 12 13 14 15 16 17 Source: SABITA, Aug. 2014. p.10 24
Slide 25: Informal dwellings
Informal dwellings 700000 Total number of informal dwellings Plan to build during 2016/2017 600000 500000 400000 300000 200000 100000 0 Source: Provincial Budgets and Expenditures Review, Dec. 2014, P.118, 122 25
Slide 26: Building and construction: demand for cement in tons (2014)
Building and construction: demand for cement in tons (2014) Source: BMI, Lewis, July 2015, P.15 26
Slide 27: Demand for cement in all provinces (tons)
Demand for cement in all provinces (tons) 3000000 2500000 2000000 1500000 1000000 500000 0 2015 2016 2017 2018 2019 2020 Source: BMI, Lewis, July 2015, P.24 27
Slide 28: Building plans passed: office and banking
Building plans passed YTD (2015): YTD (2014) Office and banking m2(%) Rand(%) 0.00% -10.00% -20.00% -30.00% -40.00% -50.00% -60.00% -70.00% -80.00% Source: BMI, Lewis, July 2015, P.41 28
Slide 29: Residential: building plans passed
Residential: building plans passed YTD (July 2015): YTD (July 2014) 60.00% 50.00% 40.00% 30.00% Dwelling houses>80m2 Flats and Townhouses 20.00% 10.00% 0.00% m2 (%) Rand (%) Source: BMI, Lewis, July 2015, P.41 29
Slide 30: Non-residential: building plans passed
Non-residential: building plans passed YTD (2015): YTD (2014) 40.00% 35.00% 30.00% Shopping 25.00% Industrial & warehouse 20.00% 15.00% 10.00% 5.00% 0.00% m2 (%) Rand (%) Source: BMI, Lewis, July 2015, P.41 30
Slide 31: Trends in Afrimat’s markets
Trends in Afrimat’s markets Local environment Macro environment Spending on smaller infrastructure Weak commodity markets and services projects remain strong Rand under pressure Roads remain focus for Slower growth in China impacting Government and SANRAL South Africa Building still strong World mar
Slide 32: 5. Prospects
5. Prospects Acquisitions delivering Strategy execution underpins sustained performance 32
Slide 33: Outlook and drivers
Outlook and drivers Short term outlook: - Glen Douglas, Clinker Group and traditional business will continue to perform - Infrasors set to add greater diversity to group • Circular detailing intention of Afrimat to purchase remaining Infrasors shares not yet owned • Price R1,35 through Scheme of Arr
Slide 34: Risk mitigation
Risk mitigation • Finding alternative markets for our products Steel industry • No single dominant debtor under pressure • Strict efficient credit control • Seeking opportunities outside of SA Country risk in • Eyes wide open in South Africa South Africa • Credit terms strictly monitored • Commenced
Slide 35: Q & A Thank you
Q&A Thank you for your attendance and participation www.afrimat.co.za For any further Investor Relations questions please contact: Andries van Heerden (CEO): 021 917 8840 or Vanessa Rech (Keyter Rech Investor Solutions): 087 351 3814 35