Afrimat Limited · JSE:AFT
Afrimat — Shareholder Meeting (August 2016)
35 slides from Afrimat's shareholder meeting presentation, Aug 5, 2016
Slide 1: Annual General Meeting
Annual General Meeting 5 August 2016, 14h00 Feathers Lodge Boutique Hotel 24 Melina Street, Rosendal, Durbanville
Slide 2: Group overview
Group overview A supplier of quality materials sourced from our quarries and open pit mines Strategically diversified through product range, target market and location
Slide 3: What we do
What we do Quarrying : aggregates Open pit mining : industrial minerals Concrete brick and block making Readymix concrete
Slide 4: Quarrying: aggregates
Quarrying: aggregates Products from quarrying Concrete stone Road stone
Slide 5: Open pit mining: industrial minerals
Open pit mining: industrial minerals Products from industrial minerals Lime Metallurgical dolomite Metallurgical quartzite
Slide 6: Lime
Lime Product categories Agricultural lime Quicklime Hydrated lime - Mineral processing pH control - Whitewash / limewash - Iron and steel desulphurisation - Building and plaster lime Mineral fillers - Water treatment - pH - Soil stabilisation - Vinyl floor tiles - Chemical products - PVC and
Slide 7: Concrete brick and block making
Concrete brick and block making Products from brick and block making Bricks and blocks Paving
Slide 8: Readymix concrete
Readymix concrete Products from readymix concrete Readymix concrete Readymix mortar
Slide 9: Afrimat's portfolio
Afrimat’s portfolio … and footprint MINING & AGGREGATES Commercial quarries (23) Sand and gravel mines (5) Dolomite mines (3) Clinker (3) Limestone mine (2) Silica mine (1) Mobile crushing Drilling & blasting CONCRETE BASED PRODUCTS Concrete brick & block factories (9) Readymix batching sites (16) …
Slide 10: Company positioning
Company positioning • Open pit mining • Locally priced commodities • Unique competitive advantage • Geographic location • Unique metallurgy • Structural cost advantage • Highly entrepreneurial
Slide 11: Financial overview
Financial overview Highlights 16,3% contribution HEPS up 15,5% to Final dividend up from operations 156,6 cents 10,8% to 41,0cps margin 32,5% 720 cents Net debt: Return on net NAV per share equity ratio operating assets 3,5%
Slide 12: Revenue and operating profit
Revenue and operating profit Operating profit margin 16,3%
Slide 13: Breakdown of growth
Breakdown of growth Contribution from operations split (%) F2016 F2015 Mining & aggregates 87.6% 80.5% Concrete based products 12.7% 20.1% Contribution from operations margin (%) F2016 F2015 Mining & aggregates 20.0% 15.5% Concrete based products 7.3% 9.6% Overall 16.3% 13.7%
Slide 14: Well diversified contribution from operations
Well diversified contribution from operations Clinker Group 38% Traditional business 32% Mozambique Glen douglas 0% Infrasors 18% 12%
Slide 15: Headline earnings per share – full year
Headline earnings per share – full year 180.0 CAGR of 25.8% 160.0 156.6 2012-2016 135.6 140.0 120.0 Cents per share 109.0 HEPS Year on 100.0 year 80.0 76.9 growth 15.5% 62.6 60.0 40.0 20.0 - 2012 2013 2014 2015 2016
Slide 16: Net cash from operating activities
Net cash from operating activities 350 000 CAGR 320 339 21.64% 300 000 2012-2016 261 646 250 000 243 861 Rands (‘000’s) 200 000 169 764 146 343 150 000 100 000 50 000 0 2012 2013 2014 2015 2016
Slide 17: Statement of financial position - assets
Statement of financial position - assets Reviewed Audited R’000 Feb 2016 Feb 2015 Property, plant and equipment 763 156 724 856 Mining rights and goodwill 149 744 153 339 Inventories 132 702 126 804 Trade and other receivables 295 552 287 976 Cash 117 241 78 124 Other assets / BEE funding 189 311 19
Slide 18: Statement of financial position – equities & liabilities
Statement of financial position – equities & liabilities Reviewed Audited R’000 Feb 2016 Feb 2015 Total equity 1 025 086 949 437 Borrowings 112 885 122 421 Provisions 75 565 67 323 Overdraft 39 878 52 874 Trade and other liabilities 277 832 262 983 Other liabilities / deferred tax 116 460 112 633 1
Slide 19: Capex: maintenance and expansion
Statement of financial position – equities & liabilities Planned F2016 for F2017 H1: R 64 million H1: R 74 million H2: R 67 million H2: R 50 million R131 million R124 million Good balance between maintenance and expansion capex Approximately 25% spent on expansion capex
Slide 20: Dividends
Dividends CAGR of 31.6% 2012-2016 Final dividend 60 Cover of 50 Cents per share 2.75x 40 30 57 50 20 39 28 10 19 0 2012 2013 2014 2015 2016
Slide 21: What makes Afrimat different
What makes Afrimat different Growth through diversification Core business principles Strategic management Our market
Slide 22: Growth through diversification
Growth through diversification Profit history with and without acquisitions 180 160 140 Glen Douglas 120 Clinker 100 80 Infrasors 60 40 20 0 2009 2010 2011 2012 2013 2014 2015 2016 Headline earnings per share Reality without strategic acquisitions
Slide 23: Core business principles
Core business principles • Sticking to the core of the business and leveraging the core • Strong operational efficiency • Operating resources that have unique competitive advantages • The right people in the right position • Leveraging Afrimat’s “combined intellect” through synergistic teamwork • Cu
Slide 24: Strategic management
Strategic management • Fundamental understanding of market • Good understanding of own abilities • Continuous research of business environment • Facing the brutal facts • Companywide understanding of desired future • Financial discipline: making the returns • Focussed value enhancing acquisitions •
Slide 25: Our market
Our market • Indicators are more positive than in the past
Slide 26: Index of construction sector activity (in real terms)
Index of construction sector activity (in real terms) Rands (‘000’s) Source: Ekonostrat
Slide 27: Value of recorded building plans passed in South Africa
Value of recorded building plans passed in South Africa (constant 2010 prices)
Slide 28: Domestic cement sales: 1892 - 2020
Domestic cement sales: 1892 - 2020 Source: Lewellyn Lewis www.strategicforum.co.za
Slide 29: Budget 2016/17: Human Settlements
Budget 2016/17: Human Settlements
Slide 30: Budget 2016/17: Water and Sanitation
Budget 2016/17: Water and Sanitation
Slide 31: Provincial and SANRAL's expenditures on roads trend
Provincial and SANRAL’s expenditures on roads trend
Slide 32: Trends in Afrimat's markets
Trends in Afrimat’s markets • Environmental focus: clean water and clean air • Spending on smaller infrastructure and services projects stronger • Roads a focus for Government and SANRAL • Steel industry remain under pressure • Volume growth in construction materials
Slide 33: Outlook and drivers
Outlook and drivers Afrimat will pursue a conservative growth strategy preserving the integrity of the balance sheet • Short term outlook: ‒ Improved volumes ‒ Glen Douglas, Clinker Group and traditional business will continue to perform ‒ Growth to come from Infrasors and Cape Lime • Momentum drive
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 South Africa Country risk in • Eyes wide open in South Africa South Africa • Credit terms strictly monitored •
Slide 35: Q&A
Q&A Andries van Heerden | 082 804 7514 | andries.vanheerden@afrimat.co.za