Sephaku Holdings Limited · JSE:SEP
Sephaku — Investor Presentation (February 2015)
26 slides from Sephaku's investor presentation, Feb 27, 2015
Slide 1: Investor Presentation: Investec Wealth, 27 February - Johannesburg
Investor Presentation : Investec Wealth 27 February - Johannesburg EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 1
Slide 2: Disclaimer
DISCLAIMER This presentation includes certain forward-looking information. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: Sephaku Holdings’ strategy; the economic outlook for the indust
Slide 3: Agenda
AGENDA Sephaku Holdings H1FY15 - Neil (FD) Interim performance Share price performance Operational overview - Lelau (CEO) Sephaku Cement (SepCem) Métier Mixed Concrete (Métier) Investment case - Lelau (CEO) Questions EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2
Slide 4: Key highlights for the interim period
KEY HIGHLIGHTS FOR THE INTERIM PERIOD Revenue essentially from Métier with SepCem equity accounted Métier added another plant to the Gauteng footprint in September 2014 Revenue by 34% to R404,2 million (2013: R301,6 million) EBITDA by 41% to R77,5 million (2013: R55,1 million) EBIT by 43%
Slide 5: Increasing group earnings
INCREASING GROUP EARNINGS Group net loss of R3,7 million: SepHold accounted for a non-cash once off contingent consideration loss of R22,2 million for the outstanding R100 million share based Métier acquisition payment – SepHold comprehensive loss of R31,6 million SepHold operating loss of R5,
Slide 6: Lucrative Métier acquisition settled
LUCRATIVE MÉTIER ACQUISITION SETTLED Equity Total purchase consideration of R365 million: Initial settlement on 28 February 2013 – Cash payment of R110 million and issuance of 5 million shares at R6 per share amounting to R30 million – Second tranche of 11.1 million shares at R9 per share amount
Slide 7: Positive operating cash flows
POSITIVE OPERATING CASH FLOWS Net operating cash flow of R34,8 million (2013: R17,7 million) improved by cash generated of R58,1 million Net investing cash outflow increased due to R23,4 million expended on: acquisition of trucks additions to plants Cash outflow from financing activities o
Slide 8: Share price on an upward trend
SHARE PRICE ON AN UPWARD TREND Share ticker: JSE (MAIN) SEP Sector Construction and Materials Listing 2009 Issued shares 201 149 508 Closing price as at 25 February 2015 869cents Average value traded per week 13 193 729 Average volume traded per week 1 558 416 Market capitalisation 1 747 989 224 250
Slide 9: Operational overview: SepCem
OPERATIONAL OVERVIEW : SEPCEM Above: Aganang integrated plant Below: Delmas milling plant EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 9
Slide 10: Key parameters indicating recovery
KEY PARAMETERS INDICATING RECOVERY Cement demand growth in developing countries typically increases at a multiplier of 1.5 to GDP • Sephaku Cement long term demand growth projection at 4.5% ¹UBS research projects cement demand at 2% and 4% for 2014/2015 respectively ²BofAML‘s cement sales grow
Slide 11: Industry capacity based on clinker – 2014
INDUSTRY CAPACITY BASED ON CLINKER – 2014 Number of operating Average operating kiln Estimated cement tonnes kiln(s) age (years) per annum (000') Producer A 3 27 3,200 Producer B 3 37 3,900 Producer C 9 38 5,600 Producer D 2 19 1,800 TOTAL 17 37 14,500 SepCem 1 0.6 2,500 Cement production capacity
Slide 12: SepCem's competitive edge
SEPCEM’S COMPETITIVE EDGE High energy efficiency Logistical advantage • Guaranteed 95kWh utilisation • Delmas plant proximity to Gauteng • Return load cost advantages between the two plants Inland market focus Minimal maintenance • Coastal prices being impacted • Low costs due to brand new plants by
Slide 13: Interim performance: SepCem successfully penetrates inland markets
¹INTERIM PERFORMANCE SEPCEM SUCCESSFULLY PENETRATES INLAND MARKETS SepCem brand in Gauteng, Limpopo, Mpumalanga, Free State and North West Prices were under pressure in isolated provinces, however average pricing at the prevailing industry level SepCem’s operational efficiencies providing sign
Slide 14: SepCem increases presence in the inland markets
SEPCEM INCREASES PRESENCE IN THE INLAND MARKETS Highly competent sales and marketing team headed by seasoned industry executives Sephaku Cement’s revenue profile for the 9 months ended September 2014 600 000 Cumulative revenue (R000) 515 000 400 000 206 000 200 000 55 000 0 Q1 2014 Q2 2014 Q3 2014 E
Slide 15: Our products always get to the market
OUR PRODUCTS ALWAYS GET TO THE MARKET Production Production of of 32.5 32.5 R R cement cement at at Delmas Delmas plant plant EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 15
Slide 16: Operational review: Métier plant
OPERATIONAL REVIEW : MÉTIER PLANT EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 16
Slide 17: Métier expansion successful
MÉTIER EXPANSION SUCCESSFUL In line with the expansion plans to increase plant footprint and gain market share in the Gauteng province: Métier commenced production at a fourth plant with a capacity of 70m³/hour in September 2014 Métier has a complement of 11 plants including 7 in KwaZulu-Natal p
Slide 18: Investment case
INVESTMENT CASE New technologically advanced production plants with higher cost efficiencies enhance competitiveness Profitable concrete operations with distinctive technical skills providing solid earnings and positive net operating cash flows Strategic focus on the building materials sector
Slide 19: Questions??
QUESTIONS ?? EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 19
Slide 20: Appendices
APPENDICES EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 20
Slide 21: The Sephaku Holdings structure
THE SEPHAKU HOLDINGS STRUCTURE EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 21
Slide 22: Overview - location of assets
OVERVIEW - LOCATION OF ASSETS Pretoria Johannesburg Durban Aganang integrated plant Delmas milling plant Sephaku Ash plant Cape Town Dwaalboom project Métier plant Note: Project locations not actual but indicative for illustrative purposes EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.co
Slide 23: Complementary SepCem operations
COMPLEMENTARY SEPCEM OPERATIONS Limestone mine (North West) • Situated adjacent to the Aganang plant and with an expected life of mine at 30 years • Limestone is mined opencast at a rate of 1.6 million tonnes for 1.0 million tonnes of clinker • Extensive quality control in conducted on the drillin
Slide 24: Board of directors
BOARD OF DIRECTORS BRENT WILLIAMS PAUL MPHO MAKWANA NEIL ROBUS CRAFFORD-LAZARUS Chairman – independent non-executive Independent non-executive director Financial director – executive director director BAdmin (University of Zululand), BAdmin (Hons) BCompt (UFS), BCompt (Hons), CA(SA) BA (UCT), BProc
Slide 25: Board of directors
BOARD OF DIRECTORS PIETER FREDERICK FOURIE KENNETH CAPES Non-executive director Non-executive director CEO – Sephaku Cement Kenneth has extensive experience in the BCom (Accounting), Executive Development ready-mixed concrete and aggregates industry. Programme (PRISM) for Global Leaders Kenneth spen
Slide 26: Contact
CONTACT Sakhile Ndlovu Investor relations officer Tel: + 27 12 612 0210 Email: sakhile@sepman.co.za Website: www.sephakuholdings.com EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 27 February 2015 26
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