Remgro Limited · JSE:REM

Remgro — H1 2011 Earnings Presentation

33 slides from Remgro's earnings presentation, November 2010

  1. Slide 1: Results Presentation for the six months ended 30 September 2010

    Results Presentation for the six months ended 30 September 2010

  2. Slide 2: Salient Features

    SALIENT FEATURES Six months ended 30 September Change 2010 2009 Headline earnings (R’m) 70.0% 2 207 1 298 Headline earnings per share (cents) 56.3% 430.2 275.3 Earnings per share (cents) 88.7% 468.8 248.4 Interim dividend per share (cents) 20.2% 101.0 84.0 Increase in headline earnings per share is

  3. Slide 3: Investment Activities During the Six Months

    INVESTMENT ACTIVITIES DURING THE SIX MONTHS Nampak  During August 2010, the 13.3% interest in Nampak was sold for R1 358.9 million  Nampak was equity accounted for 4 months to 31 July 2010 Trans Hex  On 13 September 2010 the 28.49% stake in Trans Hex was unbundled  Investment was classified as “

  4. Slide 4: Investment Activities During the Six Months (continued)

    INVESTMENT ACTIVITIES DURING THE SIX MONTHS (continued) Kagiso Infrastructure Empowerment Fund (KIEF)  A further R101.1 million was invested during the six months under review  By 30 September 2010, R195.3 million of the R350 million committed, was invested Dark Fibre Africa  During May 2010 inve

  5. Slide 5: Summary of Headline Earnings

    SUMMARY OF HEADLINE EARNINGS Change Interim Interim R’million % 30 Sep 2010 30 Sep 2009 Financial services 79.9 930 517 Industrial interests 49.2 1 110 744 Media interests - 45 - Mining interests 28.6 72 56 Technology interests - 59 - Other investments 138.7 12 (31) Central treasury (14.7) 29 34 Oth

  6. Slide 6: Contribution to Headline Earnings

    CONTRIBUTION TO HEADLINE EARNINGS (excl other, treasury & corporate costs) 30 September 2010 30 September 2009 Mining Mining Technology 3.2% 4.2% 2.7% Media 2.0% Financial Financial 39.3% 42.0% Industrial 50.1% Industrial 56.5% Results presentation for the six months ended 30 September 2010 6

  7. Slide 7: Financial Services

    Headline earnings Sep 2010 NAV Sep 2010 FINANCIAL SERVICES FSR FSR 49% 47% RMH RMH 51% 53% Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 RMBH 60.5 475 296 17.2 11 472 9 785 FirstRand 105.9 455 221 6.2 10 325 9 719 Total 79.9 930 517 11.

  8. Slide 8: Industrial Interests – Listed Investments

    Headline earnings Sep 2010 NAV Sep 2010 INDUSTRIAL INTERESTS – LISTED INVESTMENTS Non JSE JSE 38% Non JSE JSE 55% 45% 62% Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 Medi-Clinic 11.8 170 152 8.1 7 513 6 948 Distell 10.5 105 95 2.8 4 5

  9. Slide 9: Industrial Interests – Unlisted Investments

    INDUSTRIAL INTERESTS – UNLISTED INVESTMENTS Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 Balance b/f 14.1 422 370 (3.6) 15 950 16 539 Unilever SA 10.0 132 120 8.4 4 711 4 346 Tsb Sugar 15.7 177 153 6.8 2 677 2 506 Air Products 30.2 69

  10. Slide 10: Unilever SA (25.8% interest)

    UNILEVER SA (25.8% interest) Change Interim Interim R’million % 30 Sep 2010 30 Sep 2009 Revenue 1.7 6 190 6 084 Operating profit 9.8 803 731 Finance charges/(income) Nm (46) 82 Earnings 8.9 514 472 Headline earnings 10.0 513 467 Overview  Increase in revenue driven by 10.2% volume growth, offset by

  11. Slide 11: Tsb Sugar (100% interest)

    TSB SUGAR (100% interest) Change Interim Interim R’million % 30 Sep 2010 30 Sep 2009 Revenue (including 22.6% exports) 27.5 2 274 1 784 - Sugar (including 20.7% exports) 30.3 2 183 1 675 Operating profit 35.9 193 142 Finance charges 26.3 24 19 Headline earnings 15.7 177 153 Sugar production (tons) 1

  12. Slide 12: Total SA (24.9% interest)

    TOTAL SA (24.9% interest) Change Interim Interim R’million % 30 June 2010 30 June 2009 Revenue 16.6 10 474 8 981 Operating profit / (loss) Nm 444 (42) Finance charges (17.8) 60 73 Headline earnings / (loss) Nm 312 (44) Overview  Improved results mainly due to:  Stock revaluation gains of R163 mill

  13. Slide 13: Other Unlisted Industrial Interests

    OTHER UNLISTED INDUSTRIAL INTERESTS Air Products (50% interest) Change Final Final R’million % 30 Sep 2010 30 Sep 2009 Revenue 18.5 1 357 1 142 Operating profit 15.5 424 367 Headline earnings 64.2 261 159  Modest volume growth due to increased activity in all segments of the business Wispeco (100%

  14. Slide 14: Other Unlisted Industrial Interests (continued) – KTI

    OTHER UNLISTED INDUSTRIAL INTERESTS (continued) Kagiso Trust Investments (KTI) (42.5% interest) Change Final Final R’million % 30 June 2010 30 June 2009 Revenue 208.3 888 288 Operating profit (25.8) 1 152 1 552 Headline earnings 138.5 632 265  Revenue increased mainly due to the consolidation of Ka

  15. Slide 15: Other Unlisted Industrial Interests (continued) – PGSI

    OTHER UNLISTED INDUSTRIAL INTERESTS (continued) PGSI (25.2% undiluted interest) Change Interim Interim R’million % 30 June 2010 30 June 2009 Revenue 4.4 1 320 1 264 Operating profit / (loss) 320.0 11 (5) Headline loss 33.3 (36) (54)  Growth was subdued and off a low base  Building construction ind

  16. Slide 16: Media Interests

    Headline earnings Sep 2010 NAV Sep 2010 MEDIA INTERESTS MARC 5% MARC Other 12% 2% Sabido 95% Sabido 86% Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 Sabido - 54 - 22.6 1 489 1 215 MARC - 3 - (2.4) 206 211 Other investments - (12) - (54

  17. Slide 17: Sabido (31.6% interest)

    SABIDO (31.6% interest) Change Interim Interim R’million % 30 Sep 2010 30 Sep 2009 Revenue 11.7 766 686 Operating profit - 261 261 Headline earnings (2.1) 186 190 Overview  Sabido has a range of media interests, the most significant being e.tv and eNews channel  e.tv remains the largest English-me

  18. Slide 18: MARC Group (33.7% interest)

    MARC GROUP (33.7% interest) Change Interim Interim R’million % 30 June 2010 30 June 2009 Revenue 2.4 255 249 Operating profit Nm 17 3 Headline earnings/(loss) Nm 13 (2) Overview  MARC Group (previously SAIL Group) is an investment company in:  the sport and entertainment industry in South Africa;

  19. Slide 19: Mining Interests

    MINING INTERESTS Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 Implats dividend 35.8 72 53 (15.9) 4 804 5 711 Trans Hex - - 3 - - 106 Total 28.6 72 56 (17.4) 4 804 5 817 Results presentation for the six months ended 30 September 2010 19

  20. Slide 20: Technology Interests

    NAV Sep 2010 TECHNOLOGY INTERESTS Other 12% SEACOM 33% CIV 24% Tracker 31% Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 SEACOM - (20) - (4.6) 1 068 1 120 Tracker - 34 - 8.9 992 911 CIV Group - 39 - 42.9 770 539 Other - 6 - (21.1) 378 4

  21. Slide 21: SEACOM (25.0% interest)

    SEACOM (25.0% interest) Overview  SEACOM launched the first terabit undersea fibre-optic cable to connect Southern and Eastern Africa with Europe and Asia in July 2009  The cable connects South Africa, Mozambique, Tanzania, Kenya and Djibouti and onwards with the world via landing points in France

  22. Slide 22: Tracker (31.0% interest)

    TRACKER (31.0% interest) Change Interim Interim R’million % 30 Sep 2010 30 Sep 2009 Revenue 13.5 606 534 Operating profit 17.9 204 173 Headline earnings 16.5 148 127 Total subscribers 4.5 615 995 589 469 Overview  Tracker’s core business is the sale and installation of vehicle tracking systems for

  23. Slide 23: CIV Group (incl Dark Fibre Africa)

    CIV GROUP (INCL DARK FIBRE AFRICA) CIV FNS (35.6% effective interest) Change Interim Interim R’million % 30 Sep 2010 30 Sep 2009 Revenue 138.3 193 81 Operating profit 91.1 86 45 Headline earnings 126.9 59 26 Overview  Active in the power, telecommunication and information technology sectors  Dark

  24. Slide 24: Other Investments, Treasury & Corporate

    OTHER INVESTMENTS, TREASURY & CORPORATE Headline earnings Intrinsic value Change 30 Sep 30 Sep Change 30 Sep 31 Mar R’million % 2010 2009 % 2010 2010 Other investments 138.7 12 (31) 24.1 495 399 Central treasury (14.7) 29 34 9.0 5 082 4 662 Other net corporate (127.3) (50) (22) (23.0) 613 796 costs

  25. Slide 25: Total Cash at the Centre

    TOTAL CASH AT THE CENTRE At 30 September 2010 Local Offshore Total R’million Per Statement of financial position 1 035 2 357 3 392 Investment in government bonds / T-bills (> 3 months) - 1 739 1 739 Less: Cash of operating subsidiaries - (49) (49) Cash at the centre 1 035 4 047 5 082 Cash held in th

  26. Slide 26: Cash at the Centre Movement

    CASH AT THE CENTRE MOVEMENT 900 (971) 2,200 1,980 1,760 1,540 1 319 (641) R million 1,320 1,100 880 (161) 660 (26) 420 440 220 0 Forex movements Other Dividends received Investments made & loans Cash movement for the Investments realised & loans Dividends paid advanced (2) period repaid (1) 1. The m

  27. Slide 27: Summary of Intrinsic Value

    SUMMARY OF INTRINSIC VALUE Change As at As at R’million % 30 Sep 2010 31 Mar 2010 Financial services 11.8 21 797 19 504 Industrial interests 1.6 28 864 28 401 Media interests 15.4 1 727 1 497 Mining interests (17.4) 4 804 5 817 Technology interests 5.2 3 208 3 049 Other investments, central treasury

  28. Slide 28: Intrinsic Value

    INTRINSIC VALUE Change As at As at % 30 September 2010 31 March 2010 Discount to NAV 13.4% 19.4% - Intrinsic value – after CGT (Rand) 3.5 125.95 121.64 - Closing share price (Rand) 11.0 109.08 98.00 Results presentation for the six months ended 30 September 2010 28

  29. Slide 29: Valuation of Unlisted Investments

    VALUATION OF UNLISTED INVESTMENTS Factors taken into consideration in determining the directors’ valuation: • Growth potential and risk; • Underlying NAV; • Profit history; and • Cash flow projections Unlisted investment Valuation method Discount Unilever SA Discounted cash flow 10% Total SA Forward

  30. Slide 30: Investment Strategy

    INVESTMENT STRATEGY  Investments that will make a material contribution to Remgro’s earnings  Aim to acquire significant influence and Board representation  Expected IRR > Remgro’s WACC  Preference to unlisted investments  Investment in listed entities where Remgro can identify value over the l

  31. Slide 31: Events After Interim Period

    EVENTS AFTER INTERIM PERIOD FirstRand and RMBH  During November 2010 all suspensive conditions were met for the proposed merger of Metropolitan and Momentum, as well as the subsequent unbundling by FirstRand of its entire shareholding in the merged entity (MMI)  RMBH is also exploring a number of

  32. Slide 32: Dividend Information

    DIVIDEND INFORMATION 250 209 190 200 150 125 110 Final dividend 100 Interim dividend 50 84 101 80 0 Y/E 2009 Y/E 2010 Y/E 2011  This equates to a dividend cover of 4.3 times, based on HEPS  On 30 Sep 2010, Remgro and its wholly-owned subsidiaries had STC credits of R6 488 million, which can be ful

  33. Slide 33: For more information www.remgro.com

    For more information www.remgro.com

Remgro — H1 2011 Earnings Presentation on 6ix