Bidvest Group Limited · JSE:BVT
Bidvest — H1 2012 Earnings Presentation
72 slides from Bidvest's earnings presentation, Dec 31, 2011
Slide 1: Interim financial results
Interim financial results Half year ended December 31 2011 “Bidvest Unusual” PASSION/VITALITY/PRECISION The power of many… www.bidvest.com
Slide 2: Business Unusual agenda
Business Unusual agenda 1 CE’s perspective on the trading period Brian Joffe – Group CE 2 Bidvest strategic approach Brian Joffe – Group CE 3 Concluding remarks Brian Joffe – Group CE 4 FD’s perspectives on the financials David Cleasby – Group FD 5 Comprehensive appendices 2 Results for half year en
Slide 3: Half year ended December 31 2011 - key financial figures
Half year ended December 31 2011 - key financial figures Revenue © 15,1% to R67,35 bn Trading profit © 14,9% to R3,25 bn Constant currency trading profit © 11,6% to R3,15 bn Normalised headline earnings* © 10,1% to R1,89 bn HEPS © 37,5% to 742,3 cps Normalised HEPS* © 13,6% to 613,4 cps DPS © 24,4%
Slide 4: Business Unusual - CE's perspective on the trading period
Business Unusual - CE’s perspective on the trading period Business Unusual financial result • A satisfactory outcome delivered in keeping with our core beliefs of good corporate citizenship • Underpinned by diversity of cash flows, a tradition of financial stability and by good people Business Unusu
Slide 5: Business Unusual - CE on the Bidvest strategic approach
Business Unusual - CE on the Bidvest strategic approach • Demand driven model – the customer drives our focus • The refreshed operating structure, creating autonomous smaller divisions each with devolved decision making management, was timely for Business Unusual and is widely embraced • Outcomes ar
Slide 6: Business Unusual - CE's concluding remarks
Business Unusual - CE’s concluding remarks • Bidvest Group companies benefit from group’s reach and scale • Strategy intact to grow organically and acquisitively in commercial services and foodservice • New complementary activities always under consideration anywhere in the world • We are patient an
Slide 7: Financial perspectives
Financial perspectives David Cleasby – Group FD PASSION
Slide 8: Group Limited - salient financial points
Bidvest Group Limited - salient financial points • Revenue up 15,1% to R67,3bn (constant currency up 9,6% to R64,1bn) • Expenses well controlled - up 11,5% to R10,2bn but up only 6,0% to R9,6bn in constant currency • Trading profits up 14,9% to R3,3bn (up 11,6% in constant currency) • Margin flat at
Slide 9: Group Limited - notable influences on the trading period
Bidvest Group Limited - notable influences on the trading period Exchange rate • ZAR weakened from August 2011 • R1bn movement in foreign currency translation reserve Working capital • R1,6bn (R1,0bn) applied – currency, automotive and Office stocking up, seasonality • Days: stock 34 (33), debtors 3
Slide 10: Group Limited - financial pointers for remainder of year
Bidvest Group Limited - financial pointers for remainder of year • For HEPS calculations the projected number of weighted shares in issue is 309,5m • New 15% shareholders tax becomes effective April 2012 – secondary tax on companies falls away thus reducing effective corporate tax rate; shareholders
Slide 11: Thank you for attending
Thank you for attending Questions VITALITY
Slide 12: Segment trading profits detail
Appendix 1 Half year ended December 31 2011 Segment trading profits detail PRECISION
Slide 13: Group Limited - trading profits detail
Bidvest Group Limited - trading profits detail H1 2011 H1 2010 Trading Margin Share of Trading Margin Share of R’000 profit % Group profit profit % Group profit Bidvest Commercial Group 1,814,321 5.6% 55.2% 1,597,754 5.5% 56.2% Bidvest Automotive 187,142 1.8% 5.7% 108,134 1.2% 3.8% Bidvest Electrica
Slide 14: Segmental results analysis – Bidvest Commercial Division
Appendix 2 Half year ended December 31 2011 Segmental results analysis – Bidvest Commercial Division PASSION
Slide 15: Automotive - stand alone retail
Bidvest Automotive - stand alone retail 5,7% of Bidvest trading profit • >100 dealerships incorporating the following brands: • Motor cars: Alfa Romeo/Fiat, BMW/Mini, General Motors, Land Rover/Volvo, Revenue +13,7% to R10,4bn Mercedes-Benz/Smart, Chrysler/Jeep/Dodge, Mitsubishi, Nissan, Renault, Pr
Slide 16: Automotive - salient features of the period
Bidvest Automotive - stand alone retail Salient features of the period under review • Automotive a focused vehicle retailer – excludes ancillary financial services and Yamaha • New vehicle unit sales up 16% to 20 212 – a broadly flat pricing environment, relative real pricing advantages for customer
Slide 17: Automotive - strategic imperatives and prospects
Bidvest Automotive - stand alone retail Strategic imperatives and prospects • New McCarthy Managing Director announced • Stable pricing and low interest rates assists customer affordability in the face of intensifying consumer and business cost pressures but represents a challenge for margin if sale
Slide 18: Financial Services - robust
Bidvest Financial Services - robust 10,0% of Bidvest trading profit Retail foreign exchange and corporate banking Travel and corporate foreign exchange Revenue -1,5% to R815,8bn Trade services Profit -5,9% to R328,3m Lending and deposit-taking 400 Fleet and asset financing 380 Short term insurance L
Slide 19: Financial Services - salient features of the period
Bidvest Financial Services - robust Salient features of the period under review • Bank - ROA 8%, ROE 22%, CAR 17,4%, cost to income 52,6% (expenses up only 4,7%) • World Currency cards launched in Chinese Yuan, Indian rupee, Israeli shekel • Bidvest Bank current account launched • 680 000 banking cu
Slide 20: Financial Services - strategic imperatives and prospects
Bidvest Financial Services - robust Strategic imperatives and prospects • Three banking pillars: Branch Banking (was Retail), Global Trading & Investments (was Corporate Foreign Exchange), Lending (was Leasing) • Decentralised hubs in Johannesburg, Durban, Cape Town • Marketing the World Currency Ca
Slide 21: Electrical - rising to a challenge
Bidvest Electrical - rising to a challenge 2,1% of Bidvest trading profit Distributor of electrical products and services Voltex (umbrella brand) Revenue +6,4% to R2,1bn Profit +16,8% to R70,0m Versalec Cables Atlas Cables 80 WACO Industries Cabstrut reticulation management 70 R70,0m Sanlic Security
Slide 22: Electrical - salient features of the period
Bidvest Electrical - rising to a challenge Salient features of the period under review • Sharpened focus within the new Bidvest South Africa structure • Right-sized for a subdued market, strong emphasis on consolidated branding • Voltex result considered very acceptable in prevailing conditions • So
Slide 23: Electrical - strategic imperatives and prospects
Bidvest Electrical - rising to a challenge Strategic imperatives and prospects • Voltex strategy is to trade successfully regardless of the state of the market • No signs of the construction market improving anytime soon but unlikely to deteriorate further • The prevailing market opens up opportunit
Slide 24: Freight - bulk upgrades
Bidvest Freight - bulk upgrades 13,4% of Bidvest trading profit Bulk Connections South African Bulk Terminals Revenue +9,1% to R10,5bn Island View Storage Naval Profit +10,1% to R439,6m Bidfreight Port Operations Bidvest Panalpina Logistics (BPL) 450 SACD Freight Manica R439,6m Key points for first
Slide 25: Freight - salient features of the period
Bidvest Freight - bulk upgrades Salient features of the period under review • Island View Storage: slightly improved result, volumes eased off in Durban and Johannesburg but were up in Richards Bay on chemicals business • South African Bulk Terminals: continued strong volumes (maize exports especial
Slide 26: Freight - Port Operations, Naval, Manica and prospects
Bidvest Freight - bulk upgrades • Bidfreight Port Operations: after a solid 2011 customer volumes through Durban were lower in the half, including the loss of Sappi volumes; stevedoring result continued to benefit from more appointments and service delivery; ships agency performed to expectation • N
Slide 27: Industrial - a disappointing half
Bidvest Industrial - a disappointing half 1,5% of Bidvest trading profit Yamaha Distributors Afcom packaging and fastening products Revenue +0,2% to R775,2m Profit -20,9% to R49,2m Buffalo self-adhesive tape 80 Vulcan Industrial Catering Equipment Materials Handling (Nissan forklift trucks) 70 Berza
Slide 28: Industrial - salient features of the period
Bidvest Industrial - a disappointing half Salient features of the period under review • Afcom: a difficult manufacturing environment with strong resistance to price rises; strike action resulted in lost volumes and costs; operating structure is being re-evaluated • Berzack: revenue and profits both
Slide 29: Office - strengthening
Bidvest Office - strengthening 4,3% of Bidvest trading profit Konica Minolta Océ Revenue +13,3% to R2,1bn Waltons Stationery Profit +41,7% to R141,2m Cecil Nurse Business Furniture 160 Dauphin seating solutions 140 Seating chair manufacturing R141,2m Global Payment Technologies 120 Key points for fi
Slide 30: Office - salient features of the period
Bidvest Office - strengthening Salient features of the period under review Technology: • Konica Minolta produced a 20% growth in turnover and a significantly enhanced profit off an already good base driven by its in-demand IT intelligence solutions; expanded offering into medical radiology • Océ, no
Slide 31: Paperplus - a lean operation
Bidvest Paperplus - a lean operation 5,7% of Bidvest trading profit Printing and conversion Personalisation and Mail Revenue +3,6% to R2,0bn Sales and Distribution Alternative Products Profit +7,8% to R186,2m Wholesale Stationery Computer consumables Labeling and Packaging products 190 R186,2m Key p
Slide 32: Paperplus - salient features of the period
Bidvest Paperplus - a lean operation Salient features of the period under review Print Sales & Distribution • Reducing demand ongoing and thus need to keep trimming costs; export project work contributed Personalisation and Mail • Pleasing growth in profits with new projects assisting; second high s
Slide 33: Rental & Products - enhanced return
Bidvest Rental & Products - enhanced return 5,2% of Bidvest trading profit Products and services to enhance the working and hospitality environment through hygiene rental equipment, consumables, laundry, indoor plants, Revenue +17,8% to R989,4m drinking water and coolers, specialised clothing, hotel
Slide 34: Rental & Products - salient features of the period
Bidvest Rental & Products - enhanced return Salient features of the period under review • Steiner Hygiene: a strong performance at better margin, assisted by a refreshed management team, improved rental revenue, and tight expense control • Laundries: a reduced result on lower hotel occupancies, mode
Slide 35: Services - guarding the way
Bidvest Services - guarding the way 2,9% of Bidvest trading profit Outsourced services including industrial and commercial cleaning, guarding & security, vehicle tracking & recovery, commercial landscaping Revenue +2,9% to R1,5bn Prestige Cleaning, Magnum Security, TMS industrial cleaning, Top Turf
Slide 36: Services - salient features of the period
Bidvest Services - guarding the way Salient features of the period under review • Prestige: good cost management resulted in a real rise in profits off a modest increase in turnover; business remains the largest of its kind in South Africa and continues to deliver pleasing returns • Security: strong
Slide 37: Travel & Aviation - good Budget(ing)
Bidvest Travel & Aviation - good Budget(ing) 4,5% of Bidvest trading profit Travel management, aviation services and car rental Revenue +20,2% to R1,0bn BidTravel Profit +39,1 to R146,8m Budget Rent a Car 160 BidAir 140 R146,8m Key points for first half • An excellent result delivered 120 • Reduced
Slide 38: Travel & Aviation - salient features of the period
Bidvest Travel & Aviation - good Budget(ing) Salient features of the period under review • BidTravel: volumes via the Galileo platform 7% up; growth in supplier revenue; successful retention of top corporate accounts on tender; procurement, online booking, and travel management technology solutions
Slide 39: Segmental results analysis – Bidvest Food Division
Appendix 3 Half year ended December 31 2011 Segmental results analysis – Bidvest Food Division VITALITY
Slide 40: Food Asia Pacific - plenty of opportunity
Bidvest Food Asia Pacific - plenty of opportunity 15,1% of Bidvest trading profit Australia Singapore Revenue +22,5% to R11,7bn New Zealand Greater China Profit +23,7% to R495,4m Key points for first half 550 • Australia – Foodservice outperformed sluggish market, customers 500 margin conscious R495
Slide 41: Food Asia Pacific - salient features of the period
Bidvest Food Asia Pacific - plenty of opportunity Salient features of the period under review • Remained most buoyant Food territory but reported number flattered by ZAR weakness • Constant currency revenue: up 6,6% to R10,2bn and profits up 7,6% to R833,1m • Profit in reporting currencies: Australi
Slide 42: Food Asia Pacific - New Zealand, Greater China, Singapore
Bidvest Food Asia Pacific - plenty of opportunity • New Zealand: sales up 16% to NZ$308,7m, profits up 11,1% to NZ$14,3m margin at 4,6%; asset management remained good; economy remained fragile; continued investment and new facilities and equipment benefitting service levels; national accounts growt
Slide 43: Food Europe - light amid gloom
Bidvest Food Europe - light amid gloom 11,5% of Bidvest trading profit 3663 Wholesale (UK) Horeca Trade (Middle East) Bidvest Logistics (UK) Nowaco (Czech and Slovakia) Revenue +19,3% to R20,3bn Profit +2,4% to R379,0m Seafood Holdings (UK) Farutex (Poland) Deli XL (Netherlands) Nowaco Baltics – Lit
Slide 44: Food Europe - salient features of the period
Bidvest Food Europe - light amid gloom Salient features of the period under review • 3663 Wholesale: revamped livery and customer offering and positive back-to-basics attitude to business showing good results; one less trading week in the half compared with an extra week in the comparative; adjusted
Slide 45: Food Europe - Nowaco, Farutex and prospects
Bidvest Food Europe - light amid gloom • Nowaco: sales flat at CZK3,8bn, profits of CZK269,1m (-14%), margin of 7,0% (8,0%); poor weather again affected high margin ice cream sales; recent weakening of Crown will have an effect on pricing at a time of price consciousness in Retail; Horeca trade was
Slide 46: Food Southern Africa - upping its game
Bidvest Food Southern Africa - upping its game 5,8% of Bidvest trading profit Bidvest Foodservice South Africa Speciality (Patleys) Revenue +13,3% to R3,0bn Bidfood Ingredients Profit +2,4% to R189,9m Key points for first half 200 • Foodservice modernisation and alignment with international model 18
Slide 47: Food Southern Africa - salient features of the period
Bidvest Food Southern Africa - upping its game Salient features of the period under review • Bidvest Foodservice South Africa: real growth ahead of the market seen in all three key categories of Independent, National, and Industrial Catering; quality business sought with credit control a priority; W
Slide 48: Food Southern Africa - Ingredients and prospects
Bidvest Food Southern Africa - upping its game • Ingredients: revenue up 12,6%, assisted by good growth in own manufactured products, but margins were adverse due to higher input cost of yeast; rising prices prompted a strategic decision to hold additional stock of key inputs; in the prior year defl
Slide 49: Segmental results analysis – Bidvest Namibia
Appendix 4 Half year ended December 31 2011 Segmental results analysis – Bidvest Namibia PASSION
Slide 50: Namibia - the sea's bounty
Bidvest Namibia - the sea’s bounty 9,6% of Bidvest trading profit Fishing and canning Office solutions Revenue +35,9% to R1,25bn Stationery and office furniture Printer consumables Profit +42,5% to R314,4m Electrical supplies Freight management services 350 Foodservice Travel Key points for first ha
Slide 51: Namibia - salient features of the period
Bidvest Namibia - the sea’s bounty Salient features of the period under review Fishing • Revenue increased 40% to NAD724,8m and trading profit by 50,5% to NAD273,5m • Horse mackerel: healthy biomass, good catches, mix of product and increased selling prices • Exchange rate to the USD averaged NAD7,6
Slide 52: Bidvest Corporate
Appendix 5 Half year ended December 31 2011 Bidvest Corporate PASSION
Slide 53: Corporate - a real estate
Bidvest Corporate - a real estate 2,9% of Bidvest trading profit Corporate office Bidvest Properties Ontime Automotive • Bidvest’s strategic property holdings contributed R121,2m in income (R98,2m) • Investment, other income, corporate costs and Ontime Automotive negative R25,9m (-R31,4m) • Ongoing
Slide 54: Financial analysis
Appendix 6 Half year ended December 31 2011 Financial analysis PRECISION
Slide 55: Managing for financial sustainability
Managing for financial sustainability Financial • A decentralised operating model that encourages entrepreneurship but with strict financial disciplines and controls Currency risk • Our businesses are managed for local conditions and local currency • Currency is but one variable among numerous exter
Slide 56: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% • R3,3bn adverse exchange rate impact on revenue just in translation • 51/49 split between Food and Rest of the Group •
Slide 57: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Trading margins 2011 2010 Comment Increase in mix of lower margin
Slide 58: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% • Benefi
Slide 59: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 60: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 61: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 62: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 63: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 64: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 65: Consolidated Income Statement
Consolidated Income Statement 2011 2010 H1 2012 Half year ended December 31 Avg Avg in constant currency R/£12,13 R/£11,18 R/£ 11,18 Revenue 67 344,9 +15,1% 58 492,5 64 082,9 +9,6% Trading profit 3 246,6 +14,9% 2 824,6 3 151,5 +11,6% Net finance expense (368,5) +19,5% (308,5) (359,7) +16,6% Associat
Slide 66: Consolidated cash flow statement
Consolidated cash flow statement - Rm’s Six months ended December 31 2011 Six months ended December 31 2010 3971 Cash generated from ops pre wc 3621 -1637 Working capital utilised -1006 -366 Net Finance charges -307 -736 Taxation -751 -871 Distributions -783 -1044 Cash effects of investment act’s -1
Slide 67: Net working capital days
Net working capital days 8 11 9 15 8 13 Net days 31 30 30 30 31 31 Debtors days 30 32 34 33 34 34 Stock days Creditors days -53 -51 -55 -48 -57 -52 F 2009 H1 2010 F 2010 H1 2011 F 2011 H1 2012 Working capital position typically spikes in H1 but improves in H2 • Inventory - slightly up over prior yea
Slide 68: Net working capital flows vs cash generated
Net working capital flows vs cash generated Net working capital Cash generated by operations 5 4,2 3,8 3,9 4 3,5 3,5 3,6 3 2,3 Rbn 2 1,4 1,1 1 0 -0,4 -1 -1,0 -2 -1,6 F 2009 H1 2010 F 2010 H1 2011 F 2011 H1 2012 • Seasonal absorption of working capital • H1 cash generation by operations before WC 9,7
Slide 69: Gearing
Gearing Net interest-bearing debt (Rbn) Interest cover (x) 7.0 10.0 9,2 9,1 9.0 6.0 8,8 5,9 8.0 5.0 7,2 5,6 Target interest 7.0 6,6 5,0 cover range 4.0 4,6 6.0 4,1 4,8 3,9 5.0 3.0 4.0 2.0 3.0 2.0 1.0 1.0 0.0 0.0 F 2009 H1 2010 F 2010 H1 2011 F 2011 H1 2012 • Net interest cover of 8.8 exceeds Group b
Slide 70: Historic profits, margins, returns, earnings and dividends
Appendix 6 Half year ended December 31 2011 Historic profits, margins, returns, earnings and dividends VITALITY
Slide 71: Historic Performance - year to June
Historic Performance - year to June Trading Profit and Trading Margin Returns (annual) 60 8000 50 6000 50 49 40 5.1% Rm 5,4% 39 % 5,2% 5,1% 30 36 38 4000 5.2% 31 5,2% 30 4,9% 20 24 2000 4.4% 4.3% 4,4% 4,7% 4,8% 21 21 4,4% 10 4,7% 4,5% 0 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 H1 H2
Slide 72: Interim financial results
Interim financial results Half year ended December 31 2011 “Bidvest Unusual” PASSION/VITALITY/PRECISION The power of many… The Monarch butterfly (Danaus Plexippus) is considered by many to be the most beautiful of all butterflies, perhaps even the ‘king’ of the order Lepidoptera, hence the name. It