Bidvest Group Limited · JSE:BVT
Bidvest — The Bidvest Group — H1 2021 Earnings Presentation
31 slides from Bidvest's earnings presentation, 2021
Slide 1: Investor presentation for the half-year ended 31 December 2020
Investor presentation for the half-year ended 31 December 2020 #EmergingStronger
Slide 2: Agenda
Agenda 01 Introduction Mpumi Madisa 02 Financial review Mark Steyn 03 Operational updates Mpumi Madisa 04 Strategy and outlook Mpumi Madisa 05 Appendices #EmergingStronger THE BIDVEST GROUP LIMITED Unaudited results for the half-year ended 31 December 2020 2
Slide 3: Introduction
01 Introduction Mpumi Madisa Chief executive THE BIDVEST GROUP LIMITED Unaudited results for the half-year ended 31 December 2020 3
Slide 4: Bidvest – strength in diversity and decentralisation
INTRODUCTION Introduction Bidvest – strength in diversity and decentralisation • In April 2020, 75% of our employees were not working • Today, 95% is back at work • Disbursed R171 million in support to employees not working (Bidvest COVID-19 Fund) • Governments are commended for the TERS and furloug
Slide 5: Highlights for the period
INTRODUCTION Highlights for the period A good result in all aspects • Trading profit up 3.5% to R4.1 billion Monthly revenue recovery (R000s) › Excellent performance from Services and Commercial Products › Automotive and Freight performed well. Branded Products 8 000 delivered a resilient result. Fi
Slide 6: The Bidvest journey
INTRODUCTION The Bidvest journey Building a focused, resilient business that is #EmergingStronger Geographic mix • A diverse but focused group that is cash generative 100% and capital-light 80% • Diversify geographic exposure by pursuing niche opportunities internationally 60% • Growing defensive Se
Slide 7: Financial review
02 Financial review Mark Steyn CFO THE BIDVEST GROUP LIMITED Unaudited results for the half-year ended 31 December 2020 7
Slide 8: Financial highlights (continuing operations)
FINANCIAL REVIEW Financial highlights (continuing operations) R billion Interim ended 31 December 2020 Interim ended 31 December 2019 Change Revenue 44.4 43.0 3.4% Gross profit * 30.2% 30.3% ↓ Expense * 20.9% 21.4% ↓ EBITDA 4.9 4.7 5.7% Trading profit 4.1 3.9 3.5% Trading profit margin * 9.2% 9.1% ↑
Slide 9: Income statement analysis
FINANCIAL REVIEW Income statement analysis Revenue Trading profit • Revenue +3.4% • Excellent results from Commercial Products and PHS • Consolidation of PHS for 6 months; Adcock one additional month • Automotive, Freight and Noonan delivered good results • Organic revenue growth reported by Commerc
Slide 10: Income statement analysis
FINANCIAL REVIEW Income statement analysis Net finance charges Non-controlling interest • 3.6% higher (incl IFRS16) • Predominantly Adcock on consolidation • Additional funding for PHS acquisition resulted in 5.5% greater finance charges • Capital expenditure continued • Cost of debt 4.6% pre-tax (H
Slide 11: Debt and funding: Modest gearing and strong liquidity
FINANCIAL REVIEW Debt and funding: Modest gearing and strong liquidity • Net debt R15.8 billion (down R3.5 billion from June 2020) • £330 million paid down on PHS bridge facility: • EBITDA interest cover strong at 8.6x › £234 million settled via local debt • Net debt/EBITDA 1.7x (FY2020 2.1x) › £96
Slide 12: Cash flow: Excellent cash generation
FINANCIAL REVIEW Cash flow: Excellent cash generation Free cash flow Cash generated vs. working capital (Rbn) (Rbn) 5,9 0,3 (1,1) 5,5 5,9 136% (0,2) (0,7) 4,1 124% 3,7 3,9 3,9 3,8 (0,6) 3,5 (0,1) (3,3) 106% 2,8 2,7 2,6 124% cash 80% 1,8 1,5 conversion 62% 60% 51% 0,3 21% financing activities Distrib
Slide 13: Operational updates
03 Operational updates Mpumi Madisa Chief executive THE BIDVEST GROUP LIMITED Unaudited results for the half-year ended 31 December 2020 13
Slide 14: Services – Alan Fainman
OPERATIONAL UPDATES Services – Alan Fainman • PHS delivered as expected ▲ 28% ▲ 38% ▲ 90bps › Revenue GBP148 million; GBP24 million trading profit R14bn R1.7bn 12.0% • Noonan’s trading profit grew modestly • SA trading profit lower Revenue Trading profit Trading margin › ~R250 million yoy swing in p
Slide 15: Branded Products – Kevin Wakeford
OPERATIONAL UPDATES Branded Products – Kevin Wakeford • Hard hit by work-from-home, disrupted education and no flu season ▼ 5% ▼ 19% ▼ 160bps • Gross margin pressure at Adcock › Unfavourable exchange rate and product mix R8.9bn R0.8bn 9.1% › But good cost control › Consumer division performed well R
Slide 16: Freight – Wiseman Madinane
OPERATIONAL UPDATES Freight – Wiseman Madinane • Yellow maize volumes quadrupled ▼ 13% Flat ▲ 250bps › Lower wheat volumes › Strong maize season expected with export slots booked R3.4bn R0.6bn 19.0% from end-April • Chrome and manganese volumes increase Revenue Trading profit Trading margin › Benefi
Slide 17: Commercial Products – Howard Greenstein
OPERATIONAL UPDATES Commercial Products – Howard Greenstein • Business benefited from market share gains ▲ 7% ▲ 44% ▲ 180bps • Gross margin uplift R6.9bn R0.5bn 7.1% • Solid cost control • Excellent results from Voltex, Plumblink, Academy Brushware, Revenue Trading profit Trading margin Afcom, Vulca
Slide 18: Automotive – Steve Keys
OPERATIONAL UPDATES Automotive – Steve Keys • Bidvest McCarthy sold fewer new and used vehicles ▼ 7% ▲ 6% ▲ 30bps › Entire retail market under pressure › Sales to fleet customers were depressed R10.6bn R0.3bn 3.0% • Aftermarket activity impacted by lower mileage Revenue Trading profit Trading margin
Slide 19: Financial Services – Hannah Sadiki
OPERATIONAL UPDATES Financial Services – Hannah Sadiki • New CEO with 30 years banking experience started 1 Oct 2020 ▼ 5% ▼ 39% ▼ 710bps • Bidvest Bank’s profit declined on decimated foreign exchange demand R1.3bn R0.2bn 12.7% › Net fleet roll-off and lower net interest margin › Extensive branch res
Slide 20: Corporate & Properties
OPERATIONAL UPDATES Corporate & Properties • Corporate comprises Bidvest Properties, corporate functions and other investments • Bidvest Properties performed well considering the market conditions › Trading profit -6.6% › All rentals were repriced to reflect current market conditions › Vacancies are
Slide 21: Strategy and outlook
04 Strategy and outlook Mpumi Madisa Chief executive THE BIDVEST GROUP LIMITED Unaudited results for the half-year ended 31 December 2020 21
Slide 22: Bidvest blueprint
STRATEGY AND OUTLOOK Bidvest blueprint Entrepreneurial leadership Leadership Excellent management, experts in their field Diverse executive leadership team (45% women and 45% black) contributing unique insights Maximising a diverse asset portfolio by continuously broadening the service and product b
Slide 23: Outlook
STRATEGY AND OUTLOOK Outlook • Economic downturn likely to persist. Timing of recovery uncertain • Bidvest took action › Optimised cost base, improved efficiencies, embraced future-fit and scalable operating models “Cognisant of the constrained operating › Aligned product and services mix to evolvin
Slide 24: Appendices
05 Appendices THE BIDVEST GROUP LIMITED Unaudited results for the half-year ended 31 December 2020 24
Slide 25: We are Bidvest
APPENDICES We are Bidvest Six operating divisions Business Services Trading & Distribution Services Freight Financial Services Branded Products Commercial Products Automotive Operating across multiple Offers leading private sector Specialists in fleet management Offers leading branded Manufacturing,
Slide 26: Services
APPENDICES Services • PHS maiden contribution met our • Security & Aviation cluster delivered Outlook for FY2021 expectations. Trading margin a strong result. Excellent performance from compares favourably with major peer. Protea Coin, Bidair Cargo, Bidtrack and GPT • Targeted new customer and reven
Slide 27: Branded Products
APPENDICES Branded Products • Constrained demand across the division. • Konica Minolta revenue decreased Outlook for FY2021 Businesses focused on enhancing on-line given very few people in offices offerings, streamlining distribution and at educational institutions. • Focus on simplifying the busine
Slide 28: Freight
APPENDICES Freight • Annuity income represents almost half • Trading conditions remain tough for BIL, Outlook for FY2021 of divisional profit mainly due to depressed consumer spending and lower activity in Automotive and • Maize export slots from end-April onwards • BTT reported a slight contraction
Slide 29: Commercial Products
APPENDICES Commercial Products • Restructured and refocused Electrical • G Fox recorded good sales growth but Outlook for FY2021 businesses performed very strongly, the financial performance was spoiled particularly the Voltex branches. GP by some stock write-downs • Product availability to remain c
Slide 30: Automotive
APPENDICES Automotive • Bidvest McCarthy sold 21% fewer • Gross margin remained flat while Outlook for FY2021 new vehicles (industry -13%) and 13% cost containment and improved efficiencies fewer used vehicles resulted in higher profit contribution • Targeting a more balanced motor retail business •
Slide 31: Financial Services
APPENDICES Financial Services • Bidvest Bank’s foreign exchange • Automotive related policy sales were lower Outlook for FY2021 activities decimated due to but Bidvest Insurance recorded increased international travel restrictions. Fleet sales in the direct channel. Costs were well • Meaningful flee