Remgro Limited · JSE:REM

Remgro — FY2013 Earnings Presentation

36 slides from Remgro's earnings presentation, September 2013

  1. Slide 1: Final Results Presentation for the year ended 30 June 2013

    FINAL RESULTS PRESENTATION for the year ended 30 June 2013 September 2013

  2. Slide 2: Financial Highlights

    FINANCIAL HIGHLIGHTS Total dividend per share 10.2% Headline earnings per share 11.6% (excluding Mediclinic refinancing costs) (14.1)% Headline earnings per share Intrinsic value per share 34.2% 2

  3. Slide 3: Salient Features

    SALIENT FEATURES 12 months 12 months % June 2013 June 2012 change Headline earnings (R’million) 4 387 5 113 (14.2) Headline earnings per share (HEPS) (cents) 854.3 994.6 (14.1) HEPS – excl Mediclinic refinancing costs1 (cents) 1 109.8 994.6 11.6 Total gross dividend per share (cents) 346.0 314.0 10.

  4. Slide 4: Investment Activities: RCL Foods

    INVESTMENT ACTIVITIES (for January 2013 to June 2013) RCL Foods (previously Rainbow Chicken) ‣ Early March 2013 RCL Foods concluded a rights offer of R3.9 billion to fund the acquisitions below: ‣ an effective 64.2% interest in Foodcorp for a total consideration of R1 026 million, on 1 May 2013 ‣ an

  5. Slide 5: Investment Activities: DFA and Tax Disputes

    INVESTMENT ACTIVITIES (for January 2013 to June 2013) Dark Fibre Africa (DFA) ‣ Remgro invested a further R157.4 million directly into DFA ‣ This increased Remgro’s total direct and indirect interest from 49.6% to 50.8% TAX DISPUTES ‣ Remgro had three unresolved tax disputes with SARS: ‣ two related

  6. Slide 6: Summary of Comparable Headline Earnings

    SUMMARY OF COMPARABLE HEADLINE EARNINGS 12 months 12 months % R’million June 2013 June 2012 change RMBH and FirstRand 2 052 1 770 15.9 Mediclinic (excluding once-off costs) 927 491 88.8 RMI Holdings 666 768 (13.3) Unilever SA 426 367 16.1 Distell 363 324 12.0 TSB 311 352 (11.6) Other investments 954

  7. Slide 7: Contribution to Headline Earnings

    CONTRIBUTION TO HEADLINE EARNINGS (excluding Mediclinic once-off costs, other investments, treasury and corporate costs) The reporting platforms under which the results of the investee companies are being reported, were changed for the year under review to align Remgro’s internal reporting with the

  8. Slide 8: Summary of Comparable Headline Earnings

    SUMMARY OF COMPARABLE HEADLINE EARNINGS 12 months 12 months % R’million June 2013 June 2012 change Food, liquor and home care 1 120 1 240 (9.7) Banking 2 052 1 770 15.9 Healthcare (excl Mediclinic refinancing costs) 927 491 88.8 Insurance 666 768 (13.3) Industrial 661 443 49.2 Infrastructure 196 144

  9. Slide 9: Food, Liquor and Home Care

    FOOD, LIQUOR AND HOME CARE Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Unilever SA 426 367 16.1 8 676 7 026 23.5 Distell 363 324 12.0 8 073 5 935 36.0 RCL Foods 20 197 (89.8) 6 759 3 140 115.3 TSB 311 352 (

  10. Slide 10: Unilever SA

    UNILEVER SA (25.8% effective interest) 12 months 12 months % R’million June 2013 June 2012 change Revenue 16 010 14 572 9.9 Profit after tax 1 784 1 739 2.6 ‣ The increase in revenue was mainly driven by: ‣ increased volumes in the Home Care, Beauty, Ice Cream and Savoury & Dressings categories; ‣ t

  11. Slide 11: TSB

    TSB (100% effective interest) 12 months 12 months R’million June 2013 June 2012 % change Revenue - Sugar 5 022 4 621 8.7 Headline earnings 311 352 (11.6) Apr’12 – Mar’13 2011/2012 Sugar production (tonnes) 560 244 615 046 (8.9) ‣ Revenue increased mainly on the back of higher sugar prices and an inc

  12. Slide 12: Banking

    BANKING Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change RMBH 1 444 1 261 14.5 15 541 13 758 13.0 FirstRand 608 509 19.4 6 359 5 801 9.6 Total 2 052 1 770 15.9 21 900 19 559 12.0 ‣ The strong operational perform

  13. Slide 13: Healthcare and Insurance

    HEALTHCARE Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Mediclinic 927 491 88.8 24 640 10 601 132.4 ‣ Mediclinic’s contribution to headline earnings was a loss of R385 million, including Remgro’s portion of

  14. Slide 14: Industrial

    INDUSTRIAL Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Air Products 180 181 (0.6) 3 126 2 774 12.7 KTH 149 93 60.2 2 425 1 667 45.5 Total SA 258 124 108.1 1 275 1 217 4.8 PGSI 10 1 900.0 571 585 (2.4) Wispe

  15. Slide 15: Air Products and KTH

    AIR PRODUCTS (50% effective interest) 12 months 12 months R’million March 2013 March 2012 % change Revenue 1 682 1 549 8.6 Operating profit 525 543 (3.3) ‣ Demand for large tonnage industrial gasses has shown little sign of recovery as steel output and resources demand remain mute ‣ Operating profit

  16. Slide 16: Total SA

    TOTAL SA (24.9% effective interest) 12 months 12 months % R’million June 2013 June 2012 change Revenue 37 767 34 396 9.8 Operating profit 1 049 810 29.5 Headline earnings 1 037 497 108.7 ‣ The improved results are mainly due to stock revaluation gains of R355 million (2012: stock revaluation losses

  17. Slide 17: PGSI and Wispeco

    PGSI (28.5% effective interest) 12 months 12 months R’million June 2013 June 2012 % change Revenue 3 398 3 138 8.3 Operating profit 100 86 16.3 ‣ The operating profit increase was driven by: ‣ an improvement in the economic climate, both domestically and internationally; and ‣ the weakening of the R

  18. Slide 18: Infrastructure

    INFRASTRUCTURE Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Grindrod 144 88 63.6 3 103 1 871 65.8 CIV Group 59 85 (30.6) 2 305 1 550 48.7 SEACOM - (27) 100.0 1 069 926 15.4 Other (7) (2) (250.0) 776 200 288.

  19. Slide 19: CIV Group

    CIV GROUP (43.8% effective interest) DFA (effective interest 50.8%) 12 months 12 months % R’million March 2013 March 2012 change Revenue 683 549 24.4 Operating profit 222 243 (8.6) Headline earnings contribution 25 22 13.6 ‣ As a consequence of the decision to focus on the telecommunications infrast

  20. Slide 20: Media and Sport

    MEDIA AND SPORT Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Sabido 148 129 14.7 2 279 1 768 28.9 Other (29) (36) 19.4 605 330 83.3 Total 119 93 28.0 2 884 2 098 37.5 ‣ The “Other” interests consist primaril

  21. Slide 21: Sabido

    SABIDO (31.9% effective interest) 12 months 12 months % R’million March 2013 March 2012 change Revenue 2 118 1 884 12.4 Operating profit 739 706 4.7 Headline earnings (before amortisation) 502 441 13.8 Headline earnings (after amortisation) 468 407 15.0 ‣ Free-to-air service (e.tv) reported a signif

  22. Slide 22: Other Investments, Treasury and Corporate Costs

    OTHER INVESTMENTS, TREASURY AND CORPORATE COSTS Headline earnings/(loss) Intrinsic value 12 months 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Other investments 57 17 235.3 2 204 1 329 65.8 Central treasury 3 140 (97.9) 2 733 8 327 (67.2) Other net

  23. Slide 23: Summary of Intrinsic Value

    SUMMARY OF INTRINSIC VALUE % % of R’million June 2013 June 2012 change Total Mediclinic 24 640 10 601 132.4 22.4 RMBH and FirstRand 21 900 19 559 12.0 20.0 RMI Holdings 11 331 7 810 45.1 10.3 Unilever SA 8 676 7 026 23.5 7.9 Distell 8 073 5 935 36.0 7.4 Other investments 35 124 30 882 13.7 32.0 Net

  24. Slide 24: Contribution to Intrinsic Value

    CONTRIBUTION TO INTRINSIC VALUE (excluding other investments, treasury, corporate costs and potential CGT) 30 June 2013 30 June 2012 2.8% 3.0% 6.4% 7.0% 9.3% 27.6% 7.6% 26.6% 11.0% 11.0% 15.0% 27.7% 21.2% 23.8% Food, liquor and home care Banking Healthcare Insurance Industrial Infrastructure Media a

  25. Slide 25: Intrinsic Value

    INTRINSIC VALUE June 2013 June 2012 % change Discount to Intrinsic value 7.3% 13.8% Intrinsic value – after CGT (Rand) 204.83 152.61 34.2 Closing share price - (Rand) 189.95 131.49 44.5 25

  26. Slide 26: Total Cash at the Centre

    TOTAL CASH AT THE CENTRE As at 30 June 2013 R’million Local Offshore Total Per Statement of Financial Position 3 581 640 4 221 Investment in money market funds 450 690 1 140 Less: Cash at operating subsidiaries (2 563) (65) (2 628) Cash at the centre 1 468 1 265 2 733 Cash held in the following curr

  27. Slide 27: Cash at the Centre Movement

    CASH AT THE CENTRE MOVEMENT 6 000 157 136 486 4 000 3 347 2 000 - -2 000 (7 438) -4 000 (1 712) -6 000 (405) (118) (47) (5 594) -8 000 Dividends Forex Interest and Investments Investments Dividends paid Treasury Remuneration Taxation Net cash received movement other sold and loans made and shares mo

  28. Slide 28: Cash Dividend

    CASH DIVIDEND 400 346 350 314 314 300 10.2% 63 Dividend due to year end 250 201 change Cents 188 200 Final Dividend 150 150 Interim Dividend 100 126 145 50 101 0 30 Jun 2011 30 Jun 2012 30 Jun 2013 ‣ 346 cents equates to a dividend cover of 2.5 times, based on HEPS (including Mediclinic’s once-off r

  29. Slide 29: Strategy

    STRATEGY Criteria Descriptions Geography • Southern Africa (particularly sub-Saharan Africa) Investment size • Make a meaningful impact Investment stake • Sufficient to exercise influence (>20%) Listed vs. unlisted • Unlisted is preferable Disposals • Ex cash flow growth business • No value to be ad

  30. Slide 30: Thank You

    THANK YOU FOR MORE INFORMATION VISIT OUR WEBSITE www.remgro.com 30

  31. Slide 31: Changes to Reporting Platforms

    CHANGES TO REPORTING PLATFORMS New reporting platforms Previous reporting platforms Food, liquor and home care Unilever, Distell, RCL Foods and TSB Healthcare Mediclinic Industrial Industrial Air Products, KTH, Total SA, PGSI, Wispeco Infrastructure Grindrod CIV Group, SEACOM, other Technology Media

  32. Slide 32: Valuation of Unlisted Investments

    VALUATION OF UNLISTED INVESTMENTS Factors taken into consideration in determining the directors’ valuation: ‣ Growth potential and risk; ‣ Profit history; and ‣ Underlying NAV; ‣ Cash flow projections Unlisted investment Valuation method Discount Unilever SA Discounted cash flow No Total SA Historic

  33. Slide 33: Information on Unlisted Investments

    INFORMATION ON UNLISTED INVESTMENTS Business Profile Food, liquor and home care Unilever SA Unilever manufactures and markets an extensive range of food and home and personal care products, while enjoying market leadership in most of its major categories. Well-known brands include Robertsons, Rama,

  34. Slide 34: Information on Unlisted Investments

    INFORMATION ON UNLISTED INVESTMENTS Business Profile Industrial KTH KTH is a leading black-owned investment company and has a strong and diversified asset portfolio covering the resources, industrial, media, financial services, healthcare, property and information technology sectors. Largest investm

  35. Slide 35: Information on Unlisted Investments

    INFORMATION ON UNLISTED INVESTMENTS Business Profile Media and sport Sabido Sabido has a range of media interests, which includes South Africa’s only private free-to-air television channel, e.tv, its sister news service, eNews Channel Africa (eNCA), Gauteng-based radio station, Yfm and various studi

  36. Slide 36: Information on Unlisted Investments

    INFORMATION ON UNLISTED INVESTMENTS Business Profile Other investments Business Business Partners is a specialist investment company providing Partners customised and integrated investments, mentorship and property management services for small and medium enterprises (SMEs) in South Africa. PRIF An

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