Mpact Limited · JSE:MPT
Mpact — H1 2011 Earnings Presentation
27 slides from Mpact's earnings presentation, Aug 11, 2011
Slide 1: Mpact Limited Interim Results presentation
Mpact Limited Interim Results presentation Interim Results for half-year ended 30 June 2011 11 August 2011
Slide 2: Agenda
Agenda • Introduction and Major Events • Highlights for 1st Half Year to 30 June 2011 • Financial Overview • Operational Review • Summary and Outlook • Annexures 2 │ Presentation title │ 00 Month 2011
Slide 3: Introduction & Major Events
Introduction & Major Events No changes from comparative prior period, except for the disposal of 30 June 2011 Paperlink on 31 March 2011. The Company was recapitalised: Additional 140,853,726 ordinary shares were issued for R2,1 billion. R1,8 billion was drawn from new banking facilities. 5 Ju
Slide 4: Agenda
Agenda • Introduction and Major Events • Highlights for 1st Half Year to 30 June 2011 • Financial Overview • Operational Review • Summary and Outlook • Annexures 4 │ Presentation title │ 00 Month 2011
Slide 5: Highlights
Highlights Underlying Operating profit and margin % 350 9.4 % 10 • Sales revenue increase by 5,2% over the 9 300 8 comparable prior year period (ie excluding 250 Paperlink). Margin % 7 6.6% 5.9% 6 R’Million 200 5 150 R310m 4 • Underlying operating profit of R198m is 100 R176m R198m 3 12,5% up the co
Slide 6: Agenda
Agenda • Introduction and Major Events • Highlights for 1st Half Year to 30 June 2011 • Financial Overview • Operational Review • Summary and Outlook • Annexures 6 │ Presentation title │ 00 Month 2011
Slide 7: Basis of preparation
Basis of preparation • Income statement highlights Special items. Special items are adjusted to EBIT to arrive at Underlying operating profit which is the basis of the results presented. • For all earnings per share calculations the number of listed issued ordinary shares of 164,046,476 was used for
Slide 8: Operating Financial Highlights
Operating Financial Highlights % Change % Change R’Millions H1 2010 H2 2010 H1 2011 (vs H1 2010) (vs H2 2010) Group Revenue 2,968 3,290 3,006 1.3% (8.6)% EBITDA1 332 473 356 7.2% (24.7)% EBITDA margin % 11.2% 14,4% 11,8% 5,3% (18,1%) Underlying operating Profit2 176 310 198 12.5% (36.1)% Underlying
Slide 9: Special Items
Special Items H1 2010 H2 2010 H1 2011 • Plastics • Plastics and Paper • Demerger and listing Impairment (R4,8m) Impairment of plant (R1,5m) transaction costs (R5,4m) TOTAL R4,8m cost TOTAL R1,5m cost TOTAL R5,4m cost • An additional R43m demerger and listing transaction costs are expected in the H2
Slide 10: Financial Review
Financial Review % Change % Change R’Million H1 2010 H2 2010 H1 2011 (vs H1 2010) (vs H2 2010) Underlying operating profit1 176 310 198 12,5% (36,1%) Net Finance Costs (199) (188) (185) 7,0% 1,6% Associate net earnings - 4 1 Underlying profit before tax2 (23) 126 14 160,0% (88,9%) Tax before special
Slide 11: Finance charges and net debt
Finance charges and net debt H1 H2 H1 % Change % Change R’Millions 2010 2010 2011 (vs H1 2010) (vs H2 2010) Net debt (3,677) (3,640) (3,697) (0,5%) (1,6%) Interest expense, net of investment 199 188 185 7,0% 1,6% Effective interest rate 10,8% 10,4% 9,9% • Interest cost lower than prior year periods
Slide 12: Taxation and non-controlling interests
Taxation and non-controlling interests Taxation Non-controlling interests H1 H2 H1 H1 H2 H1 R’Millions R’Millions 2010 2010 2011 2010 2010 2011 Non-controlling share Underlying tax charge (2) 50 3 7 7 4 before special items Non-controlling share of Tax on special items (1) (1) - (1) - - special item
Slide 13: Trading Working Capital Management
Trading Working Capital Management1 1020 17.0 970 16.5 16.4% • Price inflation increases nominal Working Capital % of Turnover 920 16.0 values. R’Millions 870 15.5 15.1% 820 R988m 15.0 • Higher stocks and debtors this year 770 R889m 14.5 versus the comparable prior year R897m period. 720 14.2% 14.0
Slide 14: Cash Flow
Cash Flow % Change % Change R’Million H1 2010 H2 2010 H1 2011 (vs H1 2010) (vs H2 2010) EBITDA 332 473 356 7.1% (24.8)% Working Capital movements (55) (92) (91) 65.1% (1.1)% Other Operating Cashflows 4 17 (32) Cash generated from Operations 281 398 233 (17.1)% (41.5)% Taxes Paid (23) (7) (5) Net cas
Slide 15: Dividends
Dividends • No interim dividend is proposed. • Our dividend policy targets a dividend cover of two to three times based on underlying earnings on average over the cycle. 15 15
Slide 16: Net debt and facilities
Net debt and facilities As at 30 As at R’Million June 2011 11 July 2011 Net debt 3,697 1,718 Undrawn amount (bank facilities) 78 292 Gearing (net debt/trading capital 96% 45% employed) Net debt/12 months rolling EBITDA 4.5 times 2.1 times • Net debt reduces by R1,979 million between 30 June 2011 and
Slide 17: Agenda
Agenda • Introduction and Major Events • Highlights for 1st Half Year to 30 June 2011 • Financial Overview • Operational Review • Summary and Outlook • Annexures 17 │ Presentation title │ 00 Month 2011
Slide 18: Paper underlying operating profit and margin
Paper underlying operating profit and margin % 300 16.0 13.4% 280 14.0 • Revenue is 2,2% up. 260 240 11.3% 220 10.2 % 12.0 • Underlying operating profit is 12,9% up. 200 10.0 R’Million 180 Margin % 160 310 8.0 • Higher average selling prices and cost 140 120 245 savings offset by lower volumes vs H1
Slide 19: Plastics underlying operating profit and margin
Plastics underlying operating profit and margin % 70 10.0 8.8% 9.0 • Revenue is 15,5% up on back of higher 60 8.0 average selling prices and increased 50 7.0 volumes. Margin % 40 6.0 R’Million 5.0 • Underlying operating profit is on par with 4.2% 30 4.9 % 61 4.0 the comparable prior year period. 20
Slide 20: Agenda
Agenda • Introduction and Major Events • Highlights for 1st Half Year to 30 June 2011 • Financial Overview • Operational Review • Summary and Outlook • Annexures 20 │ Presentation title │ 00 Month 2011
Slide 21: Summary
Summary • Good operating performance in difficult trading environment – ROCE of 13,1% and operating profit up 12,5%. • Successful listing and demerger from Mondi. • Net debt reduced by R2 billion to R1,7 billion in July, following recapitalisation. • Business well positioned. 21 21
Slide 22: Outlook
Outlook • Net earnings in H2 are expected to be enhanced by debt reduction on July 5th. • Due to seasonality trading in H2 is typically better than H1. • Concern about demand in H2 – consumer uncertainty, economic weakness, rand strength. • Net effects of industrial action in July not yet certain. •
Slide 23: Thank You
THANK YOU mpact.”
Slide 24: Agenda
Agenda • Introduction and Major Events • Highlights for 1st Half Year to 30 June 2011 • Financial Overview • Operational Review • Summary and Outlook • Annexures 24 │ Presentation title │ 00 Month 2011
Slide 25: Mpact business overview
Mpact business overview Mpact Paper Plastics Primary product categories Primary product categories Recovered paper collection PET bottles and preforms, hot fill bottles, PET jars and Packaging and industrial papers such as cartonboard and closures containerboard Large injection moulded conta
Slide 26: Our strategy...
Our strategy... Develop and selectively grow our leading market positions in rigid plastics, paper-based packaging and Leading market packaging papers in sub-Saharan Africa positions o Growth where we are able to extract value through business and operational management expertise as well as produc
Slide 27: Disclaimer
Disclaimer This document including, without limitation, those statements concerning the demand outlook, expansion projects and its capital resources and expenditure, contain certain forward-looking views. By their nature, forward-looking statements involve risk and uncertainty and although Mpact bel