Slide 1: Unbundle and list Hulett Aluminium and introduce BEE equity participation
Unbundle and list Hulett Aluminium and introduce BEE equity participation in Tongaat-Hulett and Hulett Aluminium 1 Two Substantial, Focused, Attractive Listed Entities Market Capitalisation (Rbillion) Rank Datatec 3.4 50 53 57 60 65 67 70 71 73 74 81 84 87 88 92 96 97 Unitrans 3.6 Astral 3.7 Consol
Slide 2: 2005 Financial Results
2005 Financial Results 3 Year to 31 December 2005 • Revenue of R6,9 billion (2004: R6,3 billion) • Increase of 9,5% • Operating profit R730 million (2004: R358 million) • Increase of 104% • Headline earnings of R466 million (2004: R206 million) • Increase of 126% • Annual dividend of 400 cents per s
Slide 3: IFRS – Key Issues
IFRS – Key Issues • Reporting in terms of IFRS in 2005 • Triangle Sugar Zimbabwe • Continue to dividend account • Share based payments – income statement charges • 2005: R13 million after tax (2004: R8 million) • Goodwill: R2 million income statement effect • Classifications within equity 5 Operatin
Slide 4: African Products; Tongaat-Hulett Sugar
African Products 2005 2004 Operating profit (Rm) 112 61 • Domestic prime product volume growth: 3,9% • Import competition and lower selling prices • Low co-product prices • Maize price lower than 2004 • Maize price at import parity late in 2005 • Back-to-back maize procurement/product pricing model
Slide 5: Moreland; Hulett Aluminium
Moreland 2005 2004 Operating profit (Rm) 231 181 • Strong contribution from all portfolios • Major contributions: Zimbali, La Lucia Ridge Executive Village, RiverHorse Valley Business Estate and Umhlanga Ridge New Town Centre • Progress towards approvals on several key developments for launch in 200
Slide 6: Other Income Statement Items; Cash Flow and Balance Sheet
Other Income Statement Items • Finance costs • R60 million in 2005 (2004:R93 million) • Tax • Associate company • Xinavane in Mozambique 11 Cash Flow and Balance Sheet • Cash flow before dividends of R454 million • Balance sheet 2004/2005 • ROCE doubled to 11% 12 6
Slide 7: Earnings Drivers
Earnings Drivers 13 Earnings Drivers • Maize procurement and product pricing • Volume growth • Organisational restructuring • Performance of the plants • Reducing the cost base 14 7
Slide 8: Earnings Drivers; Upward Pressure on World Market Price
Earnings Drivers 2005 Annualised impact of • World price – 8,98 US c/lb (SA) • 19 US c/lb R192m • SA production – 753 000 tons • 953 000 tons R149m • Moz production – 115 000 tons • 156 000 tons plus > R54m • Refining value chain initiatives • Benefits to be realised > R30m • Lower overhead/milling
Slide 9: Milling Capacity Utilisation and Cane Supply Initiatives
Milling Capacity Utilisation and Cane Supply Initiatives THS South Africa Future Further Tons Rainfall Installed Actual Actual Actual loss of cane sugar effect capacity 2003 2004 2005 cane supply (000) on 2005 land initiatives 953 000 tons S.A. 974 652 723 753 134 (28) 94 % 100% 67% 74% 77% 14% (3%)
Slide 10: Capitalising on Land Holdings
Capitalising on Land Holdings • Tongaat-Hulett owns 11 600 hectares of prime land • Under urban expansion and tourism development demand over an estimated 25 year+ period • Once developed by Moreland is valued in excess of R3 billion • Tongaat-Hulett has the expertise and competence to use the land
Slide 11: Umhlanga Triangle; Umhlanga Ridge New Town Centre
Umhlanga Triangle Umhlanga Ridge New Town Centre La Lucia Ridge 21 Izinga Ridge 22 11
Slide 12: Sibaya; Zimbali
Sibaya 23 Zimbali 24 12
Slide 13: Capitalising on the Growth Platform: Sugar, Starch and Glucose
Capitalising on the Growth Platform 25 Sugar, Starch and Glucose • Tongaat-Hulett produces almost half of South Africa’s refined carbohydrates • Significant market sectors where it manufactures complementary and substitute products • Considerable expertise and skills base in adding value to carbohyd
Slide 14: Well positioned to benefit from a new world sugar regime
Well positioned to benefit from a new world sugar regime and take advantage of changing global sugar fundamentals • EU deregulation • WTO Doha Development Round • Fairer trade in agricultural products • World price • Renewable energy • Bio fuels/ethanol • Electricity co-generation 27 Leveraging Tech
Slide 15: Xinavane Mozambique
Xinavane Mozambique Year Tons 2001 2 000 2003 40 000 2005 61 000 2006 72 000 ? 230 000 29 30 15
Slide 16: Hulamin: Sustained Growth in Rolled Products Sales and Mix
Hulamin 31 Earnings Drivers Sustained Growth In Rolled Products Sales and Mix R319m R750m 240 000 210 000 180 000 150 000 < $900 Tons 120 000 $900 - $1,000 90 000 $1,000 - $1,500 60 000 30 000 > $1,600 - 2002 2003 2004 2005 2006 (F) 2007 (F) 2008 (F) Year 32 16
Slide 17: Can End Stock to Asia; Clad Products
Can End Stock to Asia Busan Nanjing Shanghai Asian Can End Sales (2002 sales = 100) Guangzhou 600 Haikou Kaohsiung Bangkok Ho Chi Minh 500 Kuala Lumpur 400 Singapore 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 (F) 33 Clad Products Automotive Clad Products Growth (2003 Sales = 100) 1 600 1 400 1
Slide 18: Heat Treated Plate; Rolled Products Manufacturing Costs
Heat Treated Plate Growth in Heat Treated Plate Sales 25000 20000 15000 10000 5000 0 2000 2001 2002 2003 2004 2005 2006 (F) 2007 (F) 35 Rolled Products Manufacturing Costs (2002 Rands) 1 500 6 000 Rand per Ton 1 400 5 500 1 300 5 000 1 200 4 500 1 100 R'millions R'millions 1 000 4 000 R per ton 900
Slide 19: Hulamin: Building on the Growth Platform
Building on the Growth Platform R319m R750m R1 150m 270 000 240 000 210 000 < $900 180 000 $900 - $1,000 150 000 Tons $1,000 - $1,500 120 000 90 000 Capex < R700m 60 000 > $1,600 30 000 - 2005 2006 (F) 2007 (F) 2008 (F) 2009 (F) 2010 (F) 2011 (F) Year 37 Hulamin 38 19
Slide 20: Broad Based Black Economic Empowerment
39 Broad Based Black Economic Empowerment 40 20
Slide 21: Information Pack
Information Pack 41 42 21
Slide 22: Financial Data
• Africa’s largest manufacturer of starch and glucose • Strong Southern African market position • Starch is one of nature’s most versatile raw materials • Leads to new product development opportunities 43 Financial Data Rmillions 2005 2004 Revenue: 1 293 1 344 Domestic 988 980 Exports 126 126 Co-Pro
Slide 23: Volume Data; Co-Product Pricing
Volume Data Volume (tons) 2005 2004 Local Starch 85 311 83 705 Local Glucose 303 761 290 881 Total Local 389 072 374 586 Export Starch 33 003 35 116 Export Glucose 22 739 17 806 Total Exports 55 742 52 922 Co-Products 150 235 148 428 Total 595 049 575 936 45 Co-Product Pricing Price movement Co-prod
Slide 24: Maize Procurement; Cost Management; Volume Growth Initiatives
Maize Procurement • Maize and prime product pricing on one of three back-to-back approaches: • “Toll” basis, where price is based on a longer term conversion margin • Contracts up to 1 year, where product price, volume and maize price are set in tandem • Small-end volumes, where maize is priced for
Slide 25: Sugar operations overview
49 • Powerful Huletts and other leading SADC sugar brands • World leader in process design and technology • Installed capacity for 1,5 million tons raw sugar production • Year round refining and packing capability of 726 000 tons p.a. • Well positioned value-added animal feeds business 50 25
Slide 26: Sugar Production
Sugar Production Installed Tons ‘000 2000 2001 2002 2003 2004 2005 capacity South Africa 969 755 860 652 723 753 974 Mozambique 39 36 71 82 85 115 156 Swaziland 41 45 50 54 50 56 55 RSE Zimbabwe 282 264 296 264 222 236 315 Total 1 331 1 100 1 277 1 052 1 080 1 160 1 500 % of Capacity 89% 73% 85% 70%
Slide 27: Total Volumes THS (SA); Domestic Volumes THS (SA)
Total Volumes THS (SA) Tons sugar FY 2005 FY 2004 Opening stock 333 361 276 598 Production 752 881 723 686 Prior season adjustment (540) (455) Sugar purchased in 58 121 89 819 Sales (861 263) (756 287) Closing stock 282 560 333 361 53 Domestic Volumes THS (SA) Tons sugar FY 2005 FY 2004 Opening stoc
Slide 28: Export Volumes THS (SA); Raw Sugar Export Realisations
Export Volumes THS (SA) Tons sugar FY 2005 FY 2004 Opening stock 138 780 100 991 Production 373 176 328 707 Prior season adjustment 1 470 1 004 Sales (386 876) (291 922) Closing stock 126 550 138 780 55 Raw Sugar Export Realisations South Africa FY FY Raw Sugar 2005 2004 Price in US c/lb* 8,98 7,27
Slide 29: EU Sugar Reform; World Price Sensitivity
World Price Sensitivity (example) South Africa Total SA sugar production (tons) 2,5m Domestic and preferential sales (tons) 1,28m Balance exported (tons) 1,22m Effect of 1 US c/lb world price increase R143/ton (1 US c/lb x 22.0462 conversion to US$/ton x R/US$ 6.5) Additional industry revenue R174m
Slide 30: Progress in Mozambique
Progress in Mozambique 2001 2005 Future Turnover R 155m R 380m R 600m Sugar Production – tons (installed 35 996 115 318 156 000* capacity) Domestic market volumes – total industry 35 211 122 544 192 000 Preferential market volumes - tons (SACU, 13 504 53 723 114 000 USA, EU/ACP and EU/EBA) – total i
Slide 31: Value-adding activities
Value-adding activities • Animal Feeds in South Africa and Zimbabwe • Retail packing operations in South Africa, Mozambique, Zimbabwe, Namibia and Botswana • Refined and direct consumption raw sugar exports from South Africa and Zimbabwe • Speciality sugars and high intensity sweeteners in South Afr
Slide 32: Moreland: 2005 Performance
• Capitalising on the solid platform of globally benchmarked developments in strong property market • Critical mass with co-ordinated planning, quality developments and marketing benefits • Good track record of delivery, including partnerships • Niche and world-class projects • Sustainable property
Slide 33: Property Market; Developing Vision into Value
Property Market • Continuing market strength • Low interest rates • Strong performance forecast for KZN/Durban market • Growth exceeds other centres • Durban/KZN increasing in popularity as holiday destination • Increasing SA government infrastructural spend – 2010 World Cup 65 Developing Vision int
Slide 34: Zimbali; Sibaya
• Zimbali Country Club, Lodge, Tom Weiskopf golf course and 300 homes built: totalling R1,5 billion • Partnership with IFA • Approximately 400 ha unsold • M4 realignment complete: unlocking value and Zimbali Lakes development in 2007 • IFA’s 200 room, 5-star Fairmont Hotel and 2nd golf course at Zim
Slide 35: Umhlanga Ridge New Town Centre; Umhlanga Triangle
Umhlanga Ridge New Town Centre • Total development rights: 633 000 m2 / Sandton extent • Total buildings completed: 350 000 m2 - R1,75bn • Gateway catalyst • New urban concept • Customers constructing 100 000m2 bulk – includes further Gateway expansion and 1 000+ apartments • Northward expansion in
Slide 36: Izinga Ridge; Cornubia: Tying the urban knot
Izinga Ridge - Umhlanga • 405 hectares (gross) • 2 000+ residential units • 44 units sold to date: R37m revenue • New phases being launched in 2006 71 Cornubia: Tying the urban knot • 1 200 hectares • N2 freeway / Mount Edgecombe highway access • Mixed use • 10 000+ residential units, including affo
Slide 37: Kindlewood at Mount Edgecombe South; RiverHorse Valley Business Estate
Kindlewood at Mount Edgecombe South • 600 unit Gated Estate without golf • Environmental sensitivity • 24 hour manned security / latest technology • Single residential / cluster housing mix • Launch 2006 73 RiverHorse Valley Business Estate • ± 300 ha gross area / 110 ha developable • Environmental
Slide 38: Shongweni; Tinley Manor
Shongweni • 2 000 hectares • North & South of N3 Shongweni interchange • Benefit from government N3 infrastructure investment plans • 1st phase planning approvals - development launch late 2006 / 2007 • 480 000m2 Commercial – retail / offices / business park • Residential - niche/special theme estat
Slide 39: Zinkwazi/Thukela (4+ years)
Zinkwazi/Thukela (4+ years) • 2 050ha • Between Nonoti and Thukela Rivers • Coastal fronting • Future opportunities 4+ years 77 78 39
Slide 40: Hulamin
Hulamin 79 • Operating profit growth reflects progress being made in growing volumes, improving the sales mix and reducing costs • Increased demand favours Hulett Aluminum - independent from the multinational producers with strong product range • Optimum allocation of capacity to excess sales opport
Slide 41: Industry Climate; Financial Data
Industry Climate • Rolling margins under pressure as a result of the high LME Aluminium price • European market stable • Competitor dynamics • Multi-national rolling businesses showing poor ROCE performance • Chinese demand and production continuing to grow in global importance 81 Financial Data FY
Slide 42: Rolled Products Sales Growth; Enhanced Sales Mix
Rolled Products Sales Growth Sales Volumes Tons (‘000) % Increase 2000 85 7 2001 91 7 2002 105 15 2003 130 24 2004 144 10 2005 173 20 All products developed for specific customers and applications 83 Enhanced Sales Mix • Increased value-added exports by customers contributed to local market sales gr
Slide 43: Can End Stock; Heat Treated Plate
Can End Stock • 25 year local market experience • Rolling margins above US$1 400 per ton • Seven producers worldwide • Sales • 2001 22 000 tons • 2000 25 000 tons • 2005 34 000 tons • 2007 50 000 tons + 85 Heat Treated Plate • Plant commissioned November 1998 • Rolling margin > US$2 000 per ton • Ex
Slide 44: Reduced Conversion Costs; Impact of Achieving Targets
Reduced Conversion Costs • Conversion costs per ton reduced by 8% as output grows. • Major impact of energy costs in 2005 • Other focus areas include melt losses, third party services and paints and lacquers 87 Impact of Achieving Targets At R6,60/US$ and current market conditions • Achieving full c