Afrimat Limited · JSE:AFT
Afrimat — FY2011 Earnings Presentation
26 slides from Afrimat's earnings presentation, May 12, 2011
Slide 1: Final results for the year ended February 2011
Final results for the year ended February 2011 12 May 2011
Slide 2: Group overview
Group overview A leading black empowered materials supplier Specialist in open cast mining, industrial minerals and beneficiated products Resources, industrial minerals, mining, road, rail and construction Footprint across Southern Africa
Slide 3: Diversified portfolio and footprint
Diversified … portfolio … and footprint MINING & AGGREGATES Commercial quarries (25) Sand mines (6) Dolomite mine (1) CONTRACTING Mobile Crushing Drilling and Blasting CONCRETE PRODUCTS Concrete brick & block factories (8) READYMIX Batching sites (18) … which generates a balanced consistent income s
Slide 4: What differentiates us?
What differentiates us? Operating margin 12.9% vs industry average 7% Margins remain strong despite economic climate Wide spread geographic footprint across sub-continent Nimble, astute operator Flexible Good market intelligence and expertise Now one of the largest suppliers of aggregates in South A
Slide 5: Aggregates and Readymix industry overview
Aggregates and Readymix industry overview 3-5 Years ago – Industry consolidation, exorbitant valuations Now – Serious impairments – Section 311 protection – Sale of non-core and under performing asset – Worries about “going concern” status – Afrimat healthy Future – “Right sizing” and industry de-co
Slide 6: Construction industry overview
Construction industry overview Large scale projects tapering off – Gautrain, GFIP, World Cup stadia Increased tender activity Increased private commercial spending Serious infrastructure backlog – Roads (SANRAL, provinces) – Medupi & Kusile – Water – Housing (R16.3 billion budget) – Renewable energy
Slide 7: Our view of the environment
Our view of the environment Positives Negatives Move away from large scale projects More complex (Mining Charter, legislative environment) Spread over wider geographic area Rising fuel prices Increased number of opportunities Talks of nationalisation Increased non-government spending Royalties to th
Slide 8: Financial overview
FINANCIAL OVERVIEW
Slide 9: Financial overview
Financial overview “Mining & Aggregates” showing further growth All quarries & mines contributing positively to profits “Readymix” is extremely small contributor Gross profit margins contained Revenue 9.8% Headline earnings 4.9% Net asset value 9.1% to 430 cps (NTAV 350 cps) Net debt : equity ratio
Slide 10: Statement of comprehensive income
Statement of comprehensive income 12 months 12 months % R’000 Feb 2011 Feb 2010 change Revenue 854 496 778 016 9.8% Gross profit 205 964 182 164 13.1% Gross profit margin 24.1% 23.4% Operating profit 109 826 108 924 0.8% Operating profit margin 12.9% 14.0% Revenue Operating profit 120,000 800,000 10
Slide 11: Statement of comprehensive income (continued)
Statement of comprehensive income (continued) 12 months 12 months % change R’000 Feb 2011 Feb 2010 Revenue 854 496 778 016 9.8% Gross profit 205 964 182 164 13.1% Gross profit margin 24.1% 23.4% Operating profit 109 826 108 924 0.8% Operating profit margin 12.9% 14.0% Profit before taxation 108 324
Slide 12: Headline earnings per share
Headline earnings per share 80 70.4 70 58.5 Cents per share 60 53.3 51.3 50 40.5 40 30 20 10 0 2007 2008 2009 2010 2011
Slide 13: Mining & Aggregates
Mining & Aggregates Operating profit 12 months 12 months % R’000 Feb 2011 Feb 2010 change External revenue 581 878 487 387 19.4% Operating profit 98 968 83 633 18.3% R110m Operating profit margin 17.0% 17.2% 90% Performance: Mining & Aggregates Volumes increased Solid contracting activities Glen Dou
Slide 14: Concrete Products
Concrete Products Operating profit 12 months 12 months % R’000 Feb 2011 Feb 2010 change 10% External revenue 105 630 102 334 3.2% Operating profit 11 003 12 347 (10.9)% R110m Operating profit margin 10.4% 12.1% 90% Performance: Volumes increased Mining & Aggregates Operational efficiencies improved
Slide 15: Readymix
Readymix Operating profit 2% 12 months 12 months % 10% R’000 Feb 2011 Feb 2010 change External revenue 166 988 188 295 (11.3)% R110m Operating profit 2 428 11 736 (79.3)% Operating profit margin 1.5% 6.2% 90% Performance: Mining & Aggregates Weak volumes - frail market conditions Concrete Products A
Slide 16: Statement of financial position - Assets
Statement of financial position - Assets R’000 Feb 2011 Feb 2010 % change Property, plant and equipment 403 980 385 261 4.9 % Mining licenses and goodwill 114 662 115 811 (1.0)% Inventories 75 548 68 862 9.7 % Trade and other receivables 157 121 130 956 19.9 % Cash 87 316 52 914 65.0 % Other assets
Slide 17: Statement of financial position - Equity & liabilities
Statement of financial position - Equity & liabilities R’000 Feb 2011 Feb 2010 % change Total equity 616 326 564 499 9.2% Borrowings 90 887 91 870 (1.1)% Mine rehabilitation / dismantling 28 777 13 160 118.7% Overdraft 28 181 20 784 35.6% Trade and other liabilities 188 710 152 973 23.4% 952 881 843
Slide 18: Net cash from operating activities
Net cash from operating activities 160,000 140,000 134,757 130,580 120,000 100,000 80,000 71,423 72,587 65,745 Rands 60,000 40,000 20,000 0 2007 2008 2009 2010 2011 2011 2010 Capex spend 45 977 38 086
Slide 19: Dividends
Dividends Total dividend (cents per share) 25 23 20 17 Cents per share 16 Group dividend remains at 15 13 3x cover 10 Afrimat remains intent on maintaining this policy 5 0 2008 2009 2010 2011
Slide 20: Share repurchase update
Share repurchase update Number of shares Repurchased F2009 627 500 Repurchased F2010 2 542 451 Repurchased F2011 1 751 230 Total repurchased to February 2011 4 921 181 Afrimat continues repurchase programme with all necessary approvals in place Repurchased F2012 YTD May: 653 128 shares
Slide 21: What lies ahead?
WHAT LIES AHEAD?
Slide 22: Glen Douglas
Glen Douglas Glen Douglas was an immediate contributor Head office and other unnecessary cost eliminations contributed to operating profit Continued mentality and operational change from big mine to quarry Site visit: 3 June 2011
Slide 23: Update: Current & future sales
Update: Current & future sales Winelands - Adjudication behind schedule, but successful bidders expected on site next year Medupi and Kusile - continue to supply and projects are going well Afrimat revenue stream Specific project Secured through project activity by more than 4,000 customers tenders
Slide 24: Prospects
Prospects Industrial minerals Infrastructure – N1/N2 Winelands – Power stations – Housing – Roads – SANRAL, provinces and renewal energy Commodity boom Afrimat will continue to undertake initiatives to expand volume and reduce costs across existing operations and diversify product offering such as t
Slide 25: Our achievements
Our achievements What we told you the last Our focus areas Notes Current view time Focus on Government Medupi, Kusile, roads, Remain important for Continue to monitor as spend spending housing foreseeable future is slower Increased performance Business development Further growth expected Experiencin
Slide 26: Thank you for your attendance and participation
Q&A Thank you for your attendance and participation www.afrimat.co.za For any further Investor Relations questions please contact: Andries van Heerden (CEO): 021-917-8840 or Vanessa Rech (Keyter Rech Investor Solutions): 011-447-8656