Imperial Logistics — Imperial Holdings — Investor Day (May 2018)
24 slides from Imperial Logistics's investor day presentation, May 10, 2018
Slide 1: Pre Closed Period Update: Leaders in Mobility
PRE CLOSED PERIOD UPDATE Investment Community LEADERS IN MOBILITY 10 May 2018
Slide 2: Agenda
AGENDA GUIDANCE CONTEXT STRATEGY OPERATIONS REVIEW UNBUNDLING & EQUITY STORIES 2
Slide 3: Guidance for 2018 – What has changed?
GUIDANCE FOR 2018 – WHAT HAS CHANGED? We anticipate solid operating & financial results in F2018, subject to stable currencies in the economies in which we operate In the six months to June 2018 for continuing operations, we expect: › Capital efficiency & debt to equity ratio to improve › Imperial L
Slide 4: Agenda
AGENDA GUIDANCE CONTEXT STRATEGY OPERATIONS REVIEW UNBUNDLING & EQUITY STORIES 4
Slide 5: Operating Context – Imperial Specific Factors
OPERATING CONTEXT – IMPERIAL SPECIFIC FACTORS South Africa (54% revenue; 65% operating profit) > Despite the World Bank & S&P revising South Africa’s GDP forecasts for 2018 & 2019 upward, high unemployment & sub-optimal economic growth weigh down on trading conditions > New political leadership: mor
Slide 6: Operating Context – Imperial Specific Factors
OPERATING CONTEXT – IMPERIAL SPECIFIC FACTORS Eurozone, UK & Australia (37% revenue; 20% operating profit) > Economic conditions in Europe are positive but certain sectors are under pressure e.g . steel > Economic growth, Palletways performance & the passenger vehicle market in the United Kingdom de
Slide 7: Agenda
AGENDA GUIDANCE CONTEXT STRATEGY OPERATIONS REVIEW UNBUNDLING & EQUITY STORIES 7
Slide 8: Strategic Progress – Where Are We Now?
STRATEGIC PROGRESS – WHERE ARE WE NOW? Divisional Strategy > Imperial Logistics • Client centric, provider of value-add logistics, supply chain management & route to market solutions in attractive “verticals” & geographies > Motus • Integrated penetration of vehicle value chain in South Africa & sel
Slide 9: Imperial Logistics Current Priorities
IMPERIAL LOGISTICS CURRENT PRIORITIES Strict cash management > Working capital > Capex > Expenses South Africa > Speed up Consumer Products Group consolidation plan > Consolidation of line haul operations > Conclude 30% BEE deal to get an early advantage through new business African Regions > Delive
Slide 10: Motus Current Priorities
MOTUS CURRENT PRIORITIES Import & Distribution > OEM assistance confirmed with competitive products inline with current market demand > Working capital; capex; expenses Retail & Rental > Working capital; capex > Maximise OEM rebates > UK & Australia acquisitions to enhance performance Aftermarket pa
Slide 11: Agenda
AGENDA GUIDANCE CONTEXT STRATEGY OPERATIONS REVIEW UNBUNDLING & EQUITY STORIES 11
Slide 12: Imperial's Divisions – H1 2018
IMPERIAL’S DIVISIONS – H1 2018 REVENUE OPERATING PROFIT REVENUE OPERATING PROFIT 5% 69% foreign 7% 62% foreign 16% 31% foreign 5% 13% foreign R27.0 billion R1.4 billion R39.7 billion R1.7 billion 41% contribution* 45% contribution* 59% contribution* 55% contribution* 3 YEAR CAGR 6% 3 YEAR CA
Slide 13: Imperial Logistics Overview H1 2018
OVERVIEW H1 2018 – A mainly African & European provider of integrated outsourced value-add logistics, supply chain & route-to-market solutions, customised to ensure the relevance & competitiveness of its clients. With established capabilities in transportation, warehousing, distribution & synchronis
Slide 14: Imperial Logistics' Performance for the 10 Months to End April 2018
IMPERIAL LOGISTICS’ PERFORMANCE FOR THE 10 MONTHS TO END APRIL 2018 South Africa > Negatively impacted by lower volumes in consumer products & manufacturing industries; no uptick in volume from the economy in these sectors > Partly offset by strong performance from commodities & fuel & gas businesse
Slide 15: Motus Overview H1 2018
OVERVIEW H1 2018 - Southern Africa’s largest vehicle group, operating across the motor value chain, importing, distributing, retailing & renting vehicles, & distributing & retailing aftermarket parts, supported & augmented by motor related financial services Debt:Equity 62% (H1 2017: 78%) VEHICLE IM
Slide 16: Motus' Performance for the 10 Months to End April 2018
MOTUS’ PERFORMANCE FOR THE 10 MONTHS TO END APRIL 2018 > All sub-divisions recorded growth mainly resulting from an increase in new & pre-owned vehicle sales > Acquisitions of Pentagon (UK) & SWT (Australia) contributed positively > Motus’ new vehicle unit sales in South Africa increased by 7% compa
Slide 17: Agenda
AGENDA GUIDANCE CONTEXT STRATEGY OPERATIONS REVIEW UNBUNDLING & EQUITY STORIES 17
Slide 18: Unbundling Progress
UNBUNDLING PROGRESS The transformation & development of Imperial has been directed at value creation through strategic clarity (portfolio rationalisation), managerial focus (organisation structure) & shareholder insight (disclosure). Progress has exceeded expectations > Progress with the implementat
Slide 19: Gearing
GEARING Net debt to equity > We expect Group net debt: equity of 55% to 65% at the end of FY 2018, excluding proceeds from the BBBEE deal in Logistics South Africa but including proceeds from properties & other asset 98% disposals > The Group’s blended cost of debt = 5.1% (after 79% 76% 73% 71% 71%
Slide 20: Cost of Debt & Equity
COST OF DEBT & EQUITY SOUTH AFRICA AFRICAN REGIONS INTERNATIONAL > Cost of debt: 6.9% (after tax) > Cost of debt: 5.9% (after tax) > Cost of debt: 2.1% (after tax) > Cost of equity: 13.5% > Cost of equity: 17.5% > Cost of equity: 10.1% VEHICLE IMPORT & DISTRIBUTION VEHICLE RETAIL & RENTAL AFTERMARKE
Slide 21: Imperial Logistics: Investment Proposition
IMPERIAL LOGISTICS: INVESTMENT PROPOSITION A 1 Pan-regional champion with a substantial international Multinational Ranked in top 25 global 3PL providers (#15 for land-based revenue) footprint integrated outsourced Presence in 33 countries spread over 5 continents logistics group with over 30 00
Slide 22: Motus Investment Proposition
MOTUS INVESTMENT PROPOSITION Diversified service provider to the Automotive sector (non-manufacturing) with a leading position in South Africa & selected 1 international presence (UK & Australia) Unique fully integrated business model across the Automotive value chain: import & distribution, retail
Slide 23: Thank You
THANK YOU LEADERS IN MOBILITY
Slide 24: Disclaimer
DISCLAIMER Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified by the use of forward-looking terminology such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’ or