Bidvest Group Limited · JSE:BVT
Bidvest — FY2017 Earnings Presentation
40 slides from Bidvest's earnings presentation, Aug 25, 2017
Slide 1: Going Beyond: Audited Financial Results for the year ended 30 June 2017
Going Beyond Audited Financial Results for the year ended 30 June 2017
Slide 2: Agenda
Agenda 01 Introduction Lindsay Ralphs 02 Financial review Peter Meijer 03 Operational updates Lindsay Ralphs 04 Strategic overview and outlook Lindsay Ralphs 05 Appendices Audited Financial Results for the year ended June 2017 2
Slide 3: Introduction
Going Beyond Lindsay Ralphs CE Introduction
Slide 4: We are Bidvest
1988 R71 bn R8 bn R58 bn R7 bn Established Revenue EBITDA Market cap Cash generated R28 bn Funds Employed WE ARE BIDVEST Proudly yesterday, proudly tomorrow 117 000 Employees 4
Slide 5: We are Bidvest
We are Bidvest A leading South African services, wholesale and distribution group operating in the areas of commercial and industrial products, electrical products, financial services, freight management, office and print solutions, Introduction outsourced hard and soft services and automotive retai
Slide 6: Our strategy and progress
Our strategy and progress Maximise diverse Maintain strong Going beyond Stewardship portfolio via innovation financial position Introduction Bolt-on acquisitions: +6.4% SA trading profit Tight asset management Acquired Brandcorp (R2bn), Energy-saving projects despite recession various insurance rela
Slide 7: Diversified portfolio
Diversified portfolio Contribution to revenue Contribution to trading profit Introduction 5% 2% 1% 5% 17% Services 6% 8% Freight 26% Financial Review 5% Commercial Products 10% 7% Automotive Office & Print 13% Operational Updates Financial Services 11% 11% Electrical 18% Namibia 11%
Slide 8: Highlights for the year
Highlights for the year HEPS increased by 5.1% to 1108 cents, EPS final DPS declared of 264 cents Introduction 1 430 Cents per share Revenue grew by 4.0% to R71 billion 693 Financial Review Trading profit up 4.6% to R6 billion FY2016 FY2017 Good results from Commercial Products, Electrical, Freight,
Slide 9: Financial review
Going Beyond Peter Meijer CFO Financial review
Slide 10: Financial highlights
Financial highlights R billion Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 71.0 68.2 4.0% Gross profit %* 29.1% 29.2% ↓ Expenses %* 21.3% 21.4% ↓ EBITDA 7.7 7.3 4.3% Financial Review Trading profit 6.0 5.8 4.6% Trading margin %* 8.5% 8.4% ↑ Headline earnings 3.7 3.5 6
Slide 11: Income statement analysis
Income statement analysis • Revenue increased by 4.0% or R71 billion, 3.5% organic growth Revenue • South African operations grew revenue by 3.5%, Bidvest Namibia declined by 1.7% and Bidvest Properties up by 18.7% • Significant increase in Commercial Products and Financial Services revenue Introduc
Slide 12: Income statement analysis (continued)
Income statement analysis (continued) Associate • Share of attributable income net of capital items, increased by R229 million, or 152.8% income • Sold 19.5% Cullinan stake Introduction • Clean Group tax rate 28.2% versus 27.6% Taxation • Higher non-deductible interest expense and lower non-taxable
Slide 13: Debt and funding – a conservative approach to gearing
Debt and funding – a conservative approach to gearing Interest Cover Net debt of R5.6 billion 9 EBITDA interest cover of 7.2 times vs. 8.0 times in 2016 8 7.9 8.0 7 7.2 29% of total debt fixed-term (33% in 2016) 7.0 6 Ample headroom to fund organic or acquisitive expansion 5 4 8.4 7.8 3 5.6
Slide 14: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Year ended June 30 2017 Cash generated vs working capital R bn R bn 4 100% Introduction 7.2 80% cash 3 80% 80% -0.4 conversion 75% 0.3 2 60% 3.4 3.7 3.5 3.3 -1.9 1 2.3 40% 1.5 Financial Review -1.0 0 21% 20% -2.0 -1.4 -1 -1.9 0% -2 -20% -20% -1.7 -0.0 Operational Upd
Slide 15: Operational updates
Going Beyond Lindsay Ralphs CE Operational updates
Slide 16: South Africa | Overview
Bidvest South Africa | Overview R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 69 680 67 298 3.5% Trading profit 5 632 5 295 6.4% Trading margin 8.1% 7.9% +20bps Financial Review EBITDA 7 124 6 713 6.1% Average Funds Employed 17 562 16 025 9.6% Average R.O.F.E
Slide 17: Services
Bidvest Services | CEO: Alan Fainman R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 13 138 12 421 5.8% Trading profit 1 577 1 531 3.0% Trading margin 12.0% 12.3% -30bps Financial Review EBITDA 2 000 1 933 3.5% Average Funds Employed 2 060 1 894 8.8% Average R.
Slide 18: Freight
Bidvest Freight | CEO: Anthony Dawe R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 4 987 6 014 -17.1% Trading profit 1 070 1 020 4.9% Trading margin 21.5% 17.0% +450bps Financial Review EBITDA 1 344 1 296 3.7% Average Funds Employed 2 068 1 753 18.0% Average R
Slide 19: Commercial Products
Bidvest Commercial Products | CEO: Howard Greenstein R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 8 025 6 013 33.5% Trading profit 689 464 48.5% Trading margin 8.6% 7.7% +90bps Financial Review EBITDA 769 518 48.5% Average Funds Employed 2 251 1 438 56.5% Av
Slide 20: Automotive
Bidvest Automotive | CEO: Steve Keys R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 24 182 24 063 0.5% Trading profit 663 675 -1.7% Trading margin 2.7% 2.8% -10bps Financial Review EBITDA 956 880 8.7% Average Funds Employed 3 845 3 864 -0.5% Average R.O.F.E. 1
Slide 21: Office and Print
Bidvest Office and Print | CEO: Kevin Wakeford R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 9 671 10 076 -4.0% Trading profit 658 706 -6.9% Trading margin 6.8% 7.0% -20bps Financial Review EBITDA 786 856 -8.2% Average Funds Employed 2 354 2 527 -6.8% Average
Slide 22: Financial Services
Bidvest Financial Services | CEO: Japie van Niekerk R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 4 009 3 336 20.2% Trading profit 625 582 7.4% Trading margin 15.6% 17.5% -190bps Financial Review EBITDA 872 876 -0.4% Average funds employed 3 191 2 977 7.2% Av
Slide 23: Electrical
Bidvest Electrical | CEO: Stanley Green R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 5 667 5 375 5.4% Trading profit 350 317 10.3% Trading margin 6.2% 5.9% +30bps Financial Review EBITDA 395 354 11.7% Average Funds Employed 1 792 1 572 14.0% Average R.O.F.E.
Slide 24: Corporate
Bidvest Corporate R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 1 592 1 726 -7.8% Trading profit 298 161 84.6% Trading margin 18.7% 9.4% +930bps Financial Review Corporate comprises Bidvest Properties, material associates and other investments The Bidvest
Slide 25: Namibia | Overview
Bidvest Namibia | Overview R’millions Year ended June 30 2017 Year ended June 30 2016 Change Introduction Revenue 3 795 3 859 -1.7% Trading profit 86 297 -70.9% Trading margin 2.3% 7.7% -540bps Financial Review EBITDA 172 378 -54.5% Average Funds Employed 1 722 1 751 -1.6% Average R.O.F.E. 5.6% 17.8
Slide 26: Strategic overview
Going Beyond Lindsay Ralphs CE Strategic overview
Slide 27: Noonan acquisition – 1st step in international ambition
Noonan acquisition – 1st step in international ambition 100% of Noonan (integrated facilities management) for EUR175mn Enterprise Value Funded with 3-year, variable rate EUR debt at attractive rate Introduction Operates in Republic of Ireland (60% of revenue) and the UK (40% of revenue) Simi
Slide 28: Strategy and prospects
Strategy and prospects • Marginal GDP growth expected in 2017 Economic • Rand more stable Introduction outlook • Remain confident of South Africa in the medium-term • Seven core well managed businesses Financial Review Maximise diverse • Cash generative portfolio • Broadening and innovating our prod
Slide 29: Appendix
ao Ee Bidvest Going Beyond Appendix 1
Slide 30: Services | CEO: Alan Fainman
Bidvest Services | CEO: Alan Fainman Most bigger businesses performed admirably Protea Coin had a particularly good year with a strong contribution from the Reaction Unit Appendix 1 Steiner and Prestige delivered steady annuity income Bidvest Facilities Management secured two significant con
Slide 31: Freight | CEO: Anthony Dawe
Bidvest Freight | CEO: Anthony Dawe BTT had a strong year with fuel and LPG volumes up. BTT invested R330 million in new fuel tanks Imported maize volumes fell well short of industry expectations. SA Bulk Terminals had a reasonable year within a very volatile Appendix 1 volume environment Chro
Slide 32: Commercial Products | CEO: Howard Greenstein
Bidvest Commercial Products | CEO: Howard Greenstein Solid trading results from the Industrial Division while the Consumer Division held its own in a tough consumer environment Brandcorp bedded down, performance in line with expectations. Post acquisition, focus has been on overhauling the sales
Slide 33: Automotive | CEO: Steve Keys
Bidvest Automotive | CEO: Steve Keys Total dealer market down 8% – McCarthy holding share steady despite disposals A shift in the SA vehicle market from new to used vehicles Appendix 1 New margins shrinking further. Used margins improved Expense base being adjusted to the new activity levels
Slide 34: Office and Print | CEO: Kevin Wakeford
Bidvest Office and Print | CEO: Kevin Wakeford Revenue comparisons distorted by Tanzanian voter registration project in the prior year and Kolok Mozambique disposal Waltons remains the clear market leader. The plan to simplify the business is on track. Trading conditions were tough Appendix 1
Slide 35: Financial Services | CEO: Japie van Niekerk
Bidvest Financial Services | CEO: Japie van Niekerk Banking Continued solid balance sheet growth. Leased assets +15% to R1.7 billion, Corporate advances +27% to R2.1 billion and Appendix 1 deposits +17% to R2.9 billion Expansion into card acquiring (card processing) via partnership with First Da
Slide 36: Electrical | CEO: Stanley Green
Bidvest Electrical | CEO: Stanley Green Building industry characterised by subdued demand, constrained cash flows and product price deflation Acquisitions – Technilamp specialises in infra-red and ultra-violet products. Eagle Lighting supplies lighting and accessories for Appendix 1 domestic and
Slide 37: Namibia | CEO: Sebby Kankondi
Bidvest Namibia | CEO: Sebby Kankondi Stable fishing quota but quota cost increased significantly and catch sizes were under pressure. Horse-mackerel market prices plummeted Appendix 1 Freight experienced low levels of activity. Insignificant project work Lower volumes and stock inefficiencies
Slide 38: Appendix
ao Ee Bidvest Going Beyond Appendix 2
Slide 39: Shareholders
Shareholders Investment management shareholdings Geographic spread of investment managers Appendix 1 Investment manager Shareholding % 11% PlC 49 732 297 14,8 5% Lazard Asset Management LLC 23 437 542 7,0 Appendix 2 J.P. Morgan Asset Management 19 435 889 5,8 10% 44% BlackRock Advisors LLC 13 545 88
Slide 40: Group structure
Group structure LP Ralphs Chief Executive P Meijer Group Financial Officer Executive team comprising Appendix 1 M Madisa Executive Director G McMahon Executive Director Bidvest Industrial Bidvest Namibia Bidvest Properties Material Associates Other Investments Appendix 2 Services Automotive Properti