Bidvest Group Limited · JSE:BVT
Bidvest — The Bidvest Group — H1 FY2022 Earnings Presentation
35 slides from Bidvest's earnings presentation, 2022
Slide 1: Investor Presentation for the six months ended 31 December 2021
INVESTOR PRESENTATION for the six months ended 31 December 2021
Slide 2: Introduction
01 Introduction Mpumi Madisa THE BIDVEST GROUP LIMITED Unaudited results for the half year ended 31 December 2021 2
Slide 3: Introduction: People and Products behind a Brighter Future
Introduction Bidvest - People and Products behind a Brighter Future • Excellent half-year performance under current environment • Bidvest remains agile with strong financial muscle • All divisions reported double digit trading profit growth • Investment in working capital indicative of demand recove
Slide 4: A remarkable result
A remarkable result ▲ 13% ▲ 25% ▲ 901bps ▲31% ▲31% R50.2bn R5.1bn 40% 852.9 cents 380 cents Revenue Trading profit ROFE ^ Normalised HEPS Interim dividend • Trading profit up 25% to R5.1bn › Like-for-like Services, Branded Products, Freight, Commercial Products and Automotive trading profit higher t
Slide 5: Growth strategy - International
Growth strategy - International Bolstering capacity • Scale growing International expansion focus on › PHS (No1 UK, Spain; Top 3 Ireland) • Hygiene services › Noonan (No1 RoI; Top 10 UK) • Facilities management services • Envisaged doubling of addressable market post Noonan FY21 acquisitions materia
Slide 6: Financial review
02 Financial review Mark Steyn CFO THE BIDVEST GROUP LIMITED Unaudited results for the half year ended 31 December 2021 6
Slide 7: Financial highlights (continuing operations)
Financial highlights (continuing operations) Rbn Interim ended 31 Dec 2021 Interim ended 31 Dec 2020 Change % Revenue 50.2 44.4 12.9 Gross profit * 29.6% 30.2% ↓ Expense * 19.8% 20.9% ↓ EBITDA 5.9 4.9 19.6 Trading profit 5.1 4.1 24.8 Trading profit margin * 10.1% 9.2% ↑ Headline earnings 2.8 2.0 35.
Slide 8: Income statement analysis
Income statement analysis Revenue Trading profit • Group revenue +12.9% • Exceptional growth from all trading divisions • Double digit growth posted by Services, Freight and Automotive • Freight’s results aided by strong maize export volumes, enhanced commodity • Branded Products benefitted from str
Slide 9: Income statement analysis (continued)
Income statement analysis (continued…) Net capital items Non-controlling interest • Loss of R5m (1HFY2021 R134.0m loss) • Predominantly Adcock with a good attributable profit performance • Prior year included disposal of Ontime Automotive (UK) Net finance charges HEPS • Net financing charges 7.7% hi
Slide 10: Debt and funding: Strong liquidity and capacity for expansion
Debt and funding: Strong liquidity and capacity for expansion • Net debt R15.5bn, up R2.2bn from Jun 2021 Interest cover • EBITDA interest cover in line with Jun 2021 at 9.4x (Dec 2021 8.6x) • Consistent net debt/EBITDA at 1.8x (Jun 2021 1.8x; Dec 2021 1.7x) • 82.8% of gross debt long term 8.8 8.4 8
Slide 11: Cash flow: Positive cash generation
Cash flow: Positive cash generation Free cash flow Cash generated vs working capital (Rbn) (Rbn) 6.6 (2.6) 51% cash 6.6 5.5 5.9 conversion 5.4 (1.3) 3.4 4.1 3.8 (0.6) (0.8) 2.8 2.7 (0.7) 2.1 (1.1) 1.8 133% 123% 143% 62% 60% 51% (18%) 0.3 Distributions Cash generated Working capital charges Taxation
Slide 12: Operational updates
03 Operational updates Mpumi Madisa Chief executive THE BIDVEST GROUP LIMITED Unaudited results for the half year ended 31 December 2021 12
Slide 13: Services
Services Alan Fainman • Strong overall result with trading profit in SA and offshore +11% and +28%, respectively ▲ 26% ▲ 19% ▼ 60bps • International operations delivered outstanding result › Strong contract wins support organic growth R17.6bn R2.0bn 11.4% › Successful integration of acquisitions and
Slide 14: Branded Products
Branded Products Kevin Wakeford • Excellent performance from Adcock (best ever six-month result) › New products launched and improved demand for OTC and consumer ▲ 8% ▲ 24% ▲ 130bps healthcare products › Gross margin improvement supported by favourable sales mix, higher R9.6bn R1.0bn 10% factory rec
Slide 15: Freight
Freight Wiseman Madinane • Terminal operations performed well › SABT benefited from record export maize volumes. Outlook remains ▲ 16% ▲ 29% ▲ 220bps positive › BTT handled strong LPG volumes while vegetable oil volumes declined R3.9bn R0.8bn 21.2% › BC handled less manganese volumes offset by iron-
Slide 16: Commercial Products
Commercial Products Howard Greenstein • Excellent operating leverage › Trading profit up 25% ▲ 3% ▲ 25% ▲ 150bps › Gross margin improves to 31% from 29% › Overall good expense control R7.2bn R0.6bn 8.6% • Limited revenue growth as difficult economic and operating environment continued Revenue Tradin
Slide 17: Automotive
Automotive Steve Keys • Good trading profit growth despite unpredictable supply chain and socio-political disruptions ▲ 10% ▲ 15% ▲ 20bps • New vehicle unit sales grew, at double industry growth in SA, but sold fewer used cars R11.7bn R0.4bn 3.2% • • GP margins improved on both new and used sales Af
Slide 18: Financial Services
Financial Services Hannah Sadiki • Bidvest Bank’s trading profit lower › Roll-off in FML and loan books (-9%) ▼ 6% ▲ 20% ▲ 350bps › Increased impairments › Pleasing corporate forex products and services growth R1.2bn R0.2bn 16.2% • • Deposits stable and liquidity strong Bidvest Insurance gross writt
Slide 19: Corporate & Properties
Corporate & Properties • Corporate comprises Bidvest Properties, corporate functions and other investments • Bidvest Properties held its own in a difficult environment › Vacancies increased and rental escalations were muted › Good cost and portfolio management › 130 properties with an unchanged R8.1
Slide 20: Strategy and outlook
04 Strategy and outlook Mpumi Madisa Chief executive THE BIDVEST GROUP LIMITED Unaudited results for the half year ended 31 December 2021 20
Slide 21: Group growth strategy
Group growth strategy Bidvest aims to expand & grow its portfolio while maintaining business objectives Portfolio selection criteria Business objectives: • Blend of defensive, cyclical and growth assets • Maximising a diverse asset › Asset light businesses that are highly cash generative portfolio b
Slide 22: Outlook
Outlook • Demand and economic recovery gathering momentum › Return to offices, albeit off low base › Tender activity and building plans passed › Renewable and alternative energy demand › Bulk commodity demand to remain robust › Record maize season with strong exports • Optimised cost base and active
Slide 23: Appendices
05 Appendices THE BIDVEST GROUP LIMITED Unaudited results for the half year ended 31 December 2021 23
Slide 24: Services
Services • Generally, the UK economy is returning • Solid trading result from Facilities Outlook for remainder of FY2022 strongly and resumption of work in London Management cluster has commenced, albeit slowly • Focus on sales teams, which have all been › Mobilised sizeable new contract and extende
Slide 25: Services - operational snapshot
Services - operational snapshot Business description Divisional strategy for growth • Diverse mix of outsourcing services to clients in South Africa, Ireland and the United Kingdom • Target expansion in niche services areas internationally and via bolt-ons to augment • Unique platform for an integra
Slide 26: Branded Products
Branded Products • Adcock • Office Products Outlook for remainder of FY2022 › Excellent trading profit growth › Tough start at Waltons from the July unrest, but normal back-to-school season and growth • Focus on revenue growth post significant › Good gross margin as a result of a more restructuring
Slide 27: Branded Products - operational snapshot
Branded Products - operational snapshot Business description Divisional strategy for growth • Trading in and distribution of every-day household and pharmaceutical products • Focus on business simplification and efficiencies representing local and global brands • Product innovation and range extensi
Slide 28: Freight
Freight • BTT • BPO Outlook for remainder of FY2022 › Good growth mainly due to rate and › Excellent result volume growth. Tank capacity let improved • Record grain volumes expected. Maize export › Benefiting from high commodity demand, slots booked to September › Isando LPG project approved (R0.5bn
Slide 29: Freight - operational snapshot
Freight - operational snapshot Business description Divisional strategy for growth • A leading private sector freight management group in sub-Saharan Africa, drawing on more than 150 years of portside experience • Commissioned R1bn LPG terminal in October 2020 • Offers bulk liquid, dry bulk and mult
Slide 30: Commercial Products
Commercial Products • Trade cluster • Industrial cluster Outlook for remainder of FY2022 › Bidvest Electrical continues to impress with good › Bidvest Materials Handling revenue remains gross margin management, especially at Voltex, under pressure, but expenses very well • Definite signs of market g
Slide 31: Commercial Products - operational snapshot
Commercial Products - operational snapshot Business description Divisional strategy for growth • Manufacturing and trading businesses in South Africa, representing global brands • Investments were made into manufacturing and distribution facilities and initiatives across a diverse range of basic ess
Slide 32: Automotive
Automotive • New vehicles units +10%. Used vehicle units -11% Outlook for remainder of FY2022 • Shift away from luxury vehicles to volumes brands continue. Toyota franchise major beneficiary • Portfolio diversifications strategies • Strong performances from Toyota, Nissan/Renault/Isuzu and Mercedes
Slide 33: Automotive - operational snapshot
Automotive - operational snapshot Business description Divisional strategy for growth • One of South Africa's largest motor retailers • Target a more balanced motor retail business - new vs used sales; passenger cars vs commercial vehicles representing 24 brands over past 100 years • Greater adoptio
Slide 34: Financial Services
Financial Services • Bidvest Bank loan book under pressure • Solid result from Compendium, as focus Outlook for remainder of FY2022 › Loans and advances -13%; R2.6bn on customer retention paid off. Acquired a small KZN regional broker • Increase in client growth across distribution › Leased assets f
Slide 35: Financial Services - operational snapshot
Financial Services - operational snapshot Business description Divisional strategy for growth • Bidvest Bank is a leading second tier bank. It offers niche foreign exchange and asset-based • Establishing Bidvest Bank as the largest FML and asset leasing player in SA finance solutions to a largely co