Remgro Limited · JSE:REM
Remgro — H1 2013 Earnings Presentation
36 slides from Remgro's earnings presentation, February 2013
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION for the six months ended 31 December 2012
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS • Interim dividend per share 15.1% • Headline earnings per share (excluding 18.6% Mediclinic’s refinancing cost) (35.1)% • Headline earnings per share • Intrinsic value per share (since 30 June 2012) 19.6% 2
Slide 3: Salient Features
SALIENT FEATURES % 6 Months 6 Months Change Dec 2012 Dec 2011 Headline earnings (R’million) (35.1) 1 719 2 649 Headline earnings per share (HEPS) (cents) (35.1) 334.4 515.5 HEPS – excl Mediclinic refinancing costs (cents) 1 18.6 611.2 515.5 Interim dividend per share (cents) 15.1 145.0 126.0 31 Dec
Slide 4: Investment Activities: Jun 2012 to Dec 2012
INVESTMENT ACTIVITIES: JUN 2012 TO DEC 2012 Mediclinic • During October 2012 Mediclinic completed the comprehensive refinancing of its Swiss and South African debt • Remgro’s share of the once-off refinancing charges amounted to R1 423 million • Remgro participated in the rights offer of R5.0 billio
Slide 5: Investment Activities (continued)
INVESTMENT ACTIVITIES: JUN 2012 TO DEC 2012 (continued) Pembani Remgro Infrastructure Fund (PRIF) • During November 2012 Remgro invested R500 million in PRIF, a joint initiative between Remgro and Phuthuma Nhleko • The fund focuses on investments in infrastructure companies and projects within Afric
Slide 6: Investment Activities (continued)
INVESTMENT ACTIVITIES: JUN 2012 TO DEC 2012 (continued) Grindrod • During the period under review Remgro acquired a further 9 178 903 Grindrod shares for a total amount of R135.8 million • Remgro’s effective interest increased to 25.0% (24.6% on a fully diluted basis) (30 June 2012: 23.5%) Business
Slide 7: Investment Activities (continued)
INVESTMENT ACTIVITIES: JUN 2012 TO DEC 2012 (continued) Capevin Holdings • During August 2012 Capevin Holdings acquired all the shares in Capevin Investments, not already held, by issuing 21 Capevin Holdings shares for every 1 Capevin Investment share acquired • Remgro’s indirect interest in Distell
Slide 8: Summary of Comparable Headline Earnings
SUMMARY OF COMPARABLE HEADLINE EARNINGS 12 Months 12 Months % % of R’million 31 Dec 2011 31 Dec 2012 Change Total RMBH and FirstRand 821 975 18.8 31.0 RMI Holdings 315 340 7.9 10.8 Mediclinic (excluding once-off costs) 191 314 64.4 10.0 Distell 261 295 13.0 9.4 Unilever 218 277 27.1 8.8 Tsb Sugar 30
Slide 9: Contribution to Headline Earnings
CONTRIBUTION TO HEADLINE EARNINGS (EXCL MEDICLINIC ONCE-OFF COSTS, OTHER INVESTMENTS, TREASURY AND CORPORATE COSTS) 6 Months to 31 December 2012 6 Months to 31 December 2011 1.7% 0.0% 1.1% 1.2% 1.5% 4.2% 43.3% 42.8% 53.9% 50.3% Financial Industrial Media Financial Industrial Media Mining Technology
Slide 10: Summary of Comparable Headline Earnings (continued)
SUMMARY OF COMPARABLE HEADLINE EARNINGS (CONTINUED) 6 Months 6 Months R’million % Change Dec 2012 Dec 2011 Financial services 15.8 1 315 1 136 Industrial interests (excl Mediclinic’s once-off costs) 22.9 1 639 1 334 Media interests 33.3 52 39 Mining interests Nm - 112 Technology interests 6.5 33 31
Slide 11: Financial Services
FINANCIAL SERVICES Headline earnings Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2012 Dec 2011 Change 2012 2012 RMBH 15.5 686 594 16.7 16 053 13 758 FirstRand 27.3 289 227 17.5 6 814 5 801 RMI Holdings 7.9 340 315 18.5 9 254 7 810 Total 15.8 1 315 1 136 17.4 32 121 27 36
Slide 12: Industrial Interests: Listed Investments
INDUSTRIAL INTERESTS: LISTED INVESTMENTS Comparable headline Intrinsic value earnings/(loss) % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2012 Dec 2011 Change 2012 2012 Mediclinic – excl 64.4 314 191 85.7 19 684 10 601 once-off costs Distell 13.0 295 261 19.4 7 086 5 935 Rainbow Chicken
Slide 13: Industrial Interests: Unlisted Investments
INDUSTRIAL INTERESTS: UNLISTED INVESTMENTS (Industrial interests – continued) Comparable headline Intrinsic value earnings/(loss) % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2012 Dec 2011 Change 2012 2012 Balance B/F 16.5 705 605 51.3 33 237 21 971 Unilever SA 27.1 277 218 16.5 8 187 7
Slide 14: Unilever SA (25.8% interest)
UNILEVER SA (25.8%interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million Dec 2012 Dec 2011 Revenue 11.5 8 563 7 680 Profit after tax (3.9) 1 063 1 106 • The increase in revenue was mainly driven by: • increased volumes in the Home Care, Beauty, Ice Cream and Savory & Dress
Slide 15: Tsb Sugar (100% interest)
TSB SUGAR (100% interest) (Industrial interests – continued) % 6 Months 6 Months R’million Change Dec 2012 Dec 2011 Revenue 13.1 2 761 2 441 - Sugar (including 15.4% exports) Headline earnings (16.2) 258 308 Sugar production (tons) (20.0) 339 975 424 863 • Revenue was positively impacted by increase
Slide 16: Total SA (24.9% interest)
TOTAL SA (24.9% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 31 Dec 2012 31 Dec 2011 Revenue 12.9 17 365 15 378 Operating profit 23.8 780 630 Headline earnings 24.8 586 470 • The improved results are mainly due to stock revaluation gains of R463 million (2011: R3
Slide 17: Air Products and Wispeco
AIR PRODUCTS (50% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 30 Sep 2012 30 Sep 2011 Revenue 11.2 875 787 Operating profit (4.2) 277 289 Headline earnings (5.2) 182 192 • Demand for large tonnage industrial gases has shown little sign of recovery • Operating pr
Slide 18: KTH and PGSI
KTH (32.3% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 31 Dec 2012 31 Dec 2011 Headline profit/(loss) Nm 373 (132) • In excess of R15 billion in assets and a net asset value of R9 billion • Headline profit increased as a result of positive fair value adjustments
Slide 19: Media Interests
MEDIA INTERESTS Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2012 Dec 2011 Change 2012 2012 Sabido 8.3 78 72 12.4 1 987 1 768 MARC Nm - 1 32.1 222 168 Other interests 23.5 (26) (34) 151.8 141 56 Total 33.3 52 39 18.0 2 350 1 992 • The sale of MARC
Slide 20: Sabido (31.6% interest)
SABIDO (31.6% interest) (Media interests – continued) 6 Months 6 Months % Change R’million 30 Sep 2012 30 Sep 2011 Revenue 11.6 1 038 930 Operating profit 5.4 386 366 Headline earnings (before amortisation) 6.5 262 246 Headline earnings (after amortisation) 6.9 245 229 • Free-to-air services (e.tv)
Slide 21: Technology Interests
TECHNOLOGY INTERESTS Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2012 Dec 2011 Change 2012 2012 CIV Group (8.1) 34 37 5.1 1 629 1 550 SEACOM 63.2 (7) (19) 2.2 946 926 Other (53.8) 6 13 (31.9) 154 226 Total 6.5 33 31 1.0 2 729 2 702 SEACOM (25.0%
Slide 22: CIV Group
CIV GROUP (Technology interests – continued) DFA (effective interest 49.6%) 6 Months 6 Months % Change R’million 30 Sep 2012 30 Sep 2011 Revenue 41.1 302 214 Operating profit 76.1 81 46 Headline earnings contribution 11.1 10 9 • As a consequence of the decision to focus on the telecommunications inf
Slide 23: Other Investments, Treasury and Corporate Costs
OTHER INVESTMENTS, TREASURY AND CORPORATE COSTS Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2012 Dec 2011 Change 2012 2012 Other investments 30.8 17 13 21.7 1 021 839 Central treasury 100.0 120 60 (37.4) 5 212 8 327 Other net corporate costs 55.3
Slide 24: Summary of Intrinsic Value
SUMMARY OF INTRINSIC VALUE As at As at R’million 30 Jun 2012 31 Dec 2012 % Change % of Total RMBH and FirstRand 19 559 22 867 16.9 23.4 Mediclinic 10 601 19 684 85.7 20.2 RMI Holdings 7 810 9 254 18.5 9.5 Unilever 7 026 8 187 16.5 8.4 Distell 5 935 7 086 19.4 7.2 Other investments 30 882 30 543 (1.1
Slide 25: Intrinsic Value
INTRINSIC VALUE As at As at 31 Dec 2012 30 Jun 2012 % Change Discount to NAV 12.8% 13.8% - Intrinsic value – after CGT (Rand) 182.54 152.61 19.6 - Closing share price (Rand) 159.20 131.49 21.1 25
Slide 26: Total Cash at the Centre
TOTAL CASH AT THE CENTRE As at 31 December 2012 R’million Local Offshore Total Per Statement of financial position 947 1 820 2 767 Investment money market funds - 2 448 2 448 Cash/(debt) at operating subsidiaries 10 (13) (3) Cash at the centre 957 4 255 5 212 Cash held in the following currencies %
Slide 27: Cash at the Centre Movement
CASH AT THE CENTRE MOVEMENT 3 000 185 50 2 000 1 803 1 000 - -1 000 -2 000 (3 774) -3 000 (968) 70 (405) (14) (62) (3 115) -4 000 Dividends Forex Investments Investments Dividends Treasury Taxation Remuneration Other Net cash received movement sold and made and paid shares movement loans repaid loan
Slide 28: Cash Dividend
CASH DIVIDEND 350 314 314 300 63 250 Dividend due to year end 188 change Cents 200 150 15.1% Final Dividend 150 100 Interim Dividend 126 145 50 101 0 30 Jun 2011 30 Jun 2012 31 Dec 2012 • 145 cents equates to a dividend cover of 2.3 times, based on HEPS (including Mediclinic’s once-off refinancing c
Slide 29: Events After 31 December 2012; Unresolved Tax Disputes
EVENTS AFTER 31 DECEMBER 2012 Rainbow Chicken • On 4 February 2013 Rainbow further announced that it concluded an agreement to purchase a 49.0% shareholding in Zam Chick for $14.25 million from Zambeef plc in Zambia • Rainbow will fund the purchase considerations of both the Foodcorp and Zam Chick a
Slide 30: For More Information Visit Our Website
FOR MORE INFORMATION VISIT OUR WEBSITE WWW.REMGRO.COM
Slide 31: Valuation of Unlisted Investments
VALUATION OF UNLISTED INVESTMENTS Factors taken into consideration in determining the directors’ valuation: • Growth potential and risk; • Underlying NAV; • Profit history; and • Cash flow projections Unlisted investment Valuation method Discount Unilever SA Discounted cash flow No Total SA Historic
Slide 32: Information on Unlisted Investments
INFORMATION ON UNLISTED INVESTMENTS Business Profile Industrial interests 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, Flora,
Slide 33: Information on Unlisted Investments (continued)
INFORMATION ON UNLISTED INVESTMENTS (continued) Business Profile Industrial interests (continued) 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 t
Slide 34: Information on Unlisted Investments (continued)
INFORMATION ON UNLISTED INVESTMENTS (continued) Business Profile Technology interests 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
Slide 35: Information on Unlisted Investments (continued)
INFORMATION ON UNLISTED INVESTMENTS (continued) 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 Afri
Slide 36: Strategy
STRATEGY Criteria Descriptions Geography • Southern Africa (particularly sub-Saharan Africa) Sector focus • FMCG • Infrastructure • Healthcare • Media and advertising Investment size • Make a meaningful impact Investment stake • Sufficient to exercise influence (>20%) Listed vs unlisted • Unlisted i