Avi Limited Class Y · JSE:AVI

Avi Limited Class Y — H1 FY2025 Earnings Presentation

67 slides from Avi Limited Class Y's earnings presentation, March 2025

  1. Slide 1: Presentation to shareholders & analysts for the six months ended 31 December 2024

    AVI Limited presentation to shareholders & analysts for the six months ended 31 December 2024

  2. Slide 2: Agenda

    AGENDA  Key features and results history  Group financial results  Performance  Prospects  Questions and answers

  3. Slide 3: Key Features

    KEY FEATURES  Constrained consumer environment – Real incomes per capita have declined over 17 years  Group revenue increased by 1,1%  Fashion retail portfolio challenged by supplier and global supply chain issues  I&J impacted by low abalone demand coupled with lower selling prices  Gross marg

  4. Slide 4: Key Features

    KEY FEATURES  Headline earnings per share up 8,9% to 407,5 cents  Interim dividend of 220 cents per share, up 8,9%  Strong cash generation sustained  Profit after tax of R12,6 million on disposal of squid fishing operation  Capital expenditure of R424,8 million  Return on capital employed of 3

  5. Slide 5: Results History: Operating profit history

    RESULTS HISTORY Operating profit history 2 000 Operating profit history 1 965 1 804 1 800 289 1 541 1 600 1 530 1 456 1 515 322 93 1 408 1 457 1 420 36 1 400 1 302 114 342 265 311 287 247 209 32 1 152 310 1 200 100 102 1 021 306 140 94 110 128 72 764 R million 921 140 126 160 1 000 854 309 124 179 1

  6. Slide 6: Results History: Return on capital employed

    RESULTS HISTORY Return on capital employed 8 000 40% 7 000 35% 6 000 30% 5 000 R million 4 000 25% 3 000 20% 2 000 15% 1 000 0 10% F15 F16 F17 F18 F19 F20 F21 F22 F23 F24 F25* Net operating profit after tax Average capital employed ROCE (%) * F25 represents a rolling 12 month period to 31 December 2

  7. Slide 7: Results History: Cash conversion

    RESULTS HISTORY Cash conversion 4 500 120% 4 000 100% 3 500 3 000 80% 2 500 R million 60% 2 000 1 500 40% 1 000 20% 500 0 0% F15 F16 F17 F18 F19 F20 F21 F22 F23 F24 F25* EBITDA Cash generated by operations Cash to EBITDA (%) * F25 represents a rolling 12 month period to 31 December 2024  Sustained

  8. Slide 8: Results History: Dividend yield

    RESULTS HISTORY Dividend yield (Year end) 14,0% 12,0% 12,0% 10,1% 10,0% 9,2% 7,7% 7,4% 7,1% 8,0% 7,0% 6,4% 6,5% 6,3% 6,2% 5,8% 6,1% 6,2% 6,0% 5,2% 4,9% 4,5% 4,1% 4,5% 4,3% 4,5% 4,4% 4,1% 3,7% 4,0% 4,0% 4,0% 3,8% 2,8% 2,0% 0,0% F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 F18 F19 F20 F21 F22 F

  9. Slide 9: Results History: Returns to shareholders

    RESULTS HISTORY Returns to shareholders 3 500 3 000 2 913 2 500 2 364 938 2 253 2 000 R million 1 704 823 926 1 531 1 606 1 500 1 360 1 322 1 368 1 354 639 1 197 1 000 550 953 870 1 975 789 737 270 621 1 430 1 368 1 354 1 438 1 531 1 606 319 1 197 1 322 500 318 301 227 810 953 1 065 166 229 231 263

  10. Slide 10: Group Financial Results

    Group Financial Results TRINCOME

  11. Slide 11: Income statement

    GROUP FINANCIAL RESULTS Income statement H1 F25 H1 F24 Rm Rm %∆ Revenue 8 470,9 8 378,1 1,1 Cost of sales (4 835,4) (4 903,4) (1,4) Gross profit 3 635,5 3 474,7 4,6 Gross profit margin % 42,9 41,5 3,4 Selling and administrative expenses (1 670,4) (1 670,9) (0,0) Operating profit 1 965,1 1 803,8 8,9

  12. Slide 12: Business unit financial results

    GROUP FINANCIAL RESULTS Business unit financial results Segmental Segmental Operating Revenue Operating Profit Margin H1 F25 H1 F24 Δ H1 F25 H1 F24 Δ H1 F25 H1 F24 Rm Rm % Rm Rm % % % Food & Beverage brands 6 884,6 6 674,7 3,1 1 594,2 1 373,3 16,1 23,2 20,6 Entyce Beverages 2 616,5 2 420,2 8,1 794,3

  13. Slide 13: Movement in group revenue

    GROUP FINANCIAL RESULTS Movement in group revenue 10 000 9 500 9 000 R million 8 500 8 000 7 500 8 378 800 (707) 8 471 H1 F24 Price/Mix Volume H1 F25  Price increases across the group to recover input cost pressures  I&J sales benefitted from weaker exchange rate but offset by constrained abalone

  14. Slide 14: Gross profit margin

    GROUP FINANCIAL RESULTS Gross profit margin 60% 50% 42,9% 41,5% 41,5% 39,6% 39,6% 39,8% 40% 30% 20% H1 F20 H1 F21 H1 F22 H1 F23 H1 F24 H1 F25  Increase in gross profit margins primarily driven by Entyce  Ongoing focus on cost control and manufacturing efficiency to protect gross profit margin

  15. Slide 15: Operating profit

    GROUP FINANCIAL RESULTS Operating profit 8,9% up 2 100 2 000 1 900 R million 1 800 1 700 1 600 1 500 1 804 242 (26) 4 (22) (33) (4) 1 965 H1 Entyce Snackworks I&J Personal Footwear & Other H1 F24 Care Apparel F25  Entyce: Coffee recovery supported by strong growth in tea and creamer  Snackworks: M

  16. Slide 16: Cash flow, gearing and return on capital

    GROUP FINANCIAL RESULTS Cash flow, gearing and return on capital H1 F25 H1 F24 Rm Rm %∆ Cash generated by operations 2 155,1 1 851,7 16,4 Working capital to revenue % * 24,3 24,7 (1,6) Capital expenditure (424,8) (242,0) 75,5 Cash from investments – proceeds from JV 20,5 - Net debt 2 554,3 1 808,9 4

  17. Slide 17: Capital expenditure

    GROUP FINANCIAL RESULTS Capital expenditure H1 F25 Actual Rm Tea packaging line replacements and upgrades 6 Biscuit line upgrades and improvements 26 I&J vessel dry-docks and upgrades 28 I&J second-hand freezer vessel acquisition 158 Roll-on line capacity and efficiency 11 Water backup and treatment

  18. Slide 18: Investment to address failing municipal infrastructure

    GROUP FINANCIAL RESULTS Investment to address failing municipal infrastructure Investment H1 H2 Total At 1 July 2024 Actual Planned Investment Rm Rm Rm Rm Electricity backup 106 2 4 112 Water backup 58 14 10 82 Security * 65 5 10 80 Total 229 21 24 274 * Includes investment in CCTV, boundary walls,

  19. Slide 19: Performance

    BEVERAGES A DIVISION OF NATIONAL BRANDS L/MITED Performance BLACKSMITH * COFFEE MOVEMENT =

  20. Slide 20: Income statement – Tea

    Income statement H1 F25 H1 F24 %∆ Rm Rm Revenue 2 616,5 2 420,2 8,1 Operating profit 794,3 551,9 43,9 Operating profit margin % 30,4 22,8 33,3  Sound improvement in Tea operating profit  Price increases across black tea and rooibos to ameliorate inflationary cost pressures  Sales volumes pressuri

  21. Slide 21: Income statement – Coffee

    Income statement H1 F25 H1 F24 %∆ Income statement Rm Rm Revenue 2 616,5 2 420,2 8,1 Operating profit 794,3 551,9 43,9 Operating profit margin % 30,4 22,8 33,3  Strong Coffee growth supported by our retail brands  Significant selling price increases to ameliorate continued increase in Robusta and

  22. Slide 22: Income statement – Creamer

    Income statement H1 F25 H1 F24 %∆ Income statement Rm Rm Revenue 2 616,5 2 420,2 8,1 Operating profit 794,3 551,9 43,9 Operating profit margin % 30,4 22,8 33,3  Pleasing Creamer profit growth, notwithstanding strong base  Selling price increases taken in response to rising input cost pressures 

  23. Slide 23: Sales volume and selling prices

    Sales volume and selling prices %Δ H1 F25 vs Comments H1 F24 Tea revenue growth 9,0 Volume (6,8) Decline in black tea and rooibos brands Ave. selling price 17,0 Price increases in April 2024 and August 2024 on both black tea and rooibos brands Coffee revenue growth 15,3 Volume (5,0) Declines in prem

  24. Slide 24: Market shares – 12 months value

    Market shares – 12 months value 60,0% 55,2% 52,4% 50,0% 48,4% 44,1% 40,0% 29,8% 29,0% 30,0% 18,6% 20,0% 16,3% 17,3% 16,9% 10,0% 0,0% Five Roses Freshpak Frisco Ellis Brown Trinco H1 F24 H1 F25  Short term market shares reflect targeted price / volume balance in volatile market  Market share reflec

  25. Slide 25: Raw material costs

    Raw material costs Cost impact of raw materials and commodities consumed in the period (H1 F25 vs H1 F24): 40 33 30 20 12 10 R million 5 1 2 0 (10) (20) (18) (30) Casein Black tea Palm oil Glucose Rooibos Arabica / robusta / chicory  Impact net of hedging

  26. Slide 26: Performance – Snackworks

    s Good Times! Performance Snackworks Me,

  27. Slide 27: Income statement – Biscuits

    Income statement H1 F25 H1 F24 %∆ Rm Rm Revenue 3 069,9 3 101,1 (1,0) Operating profit 763,8 789,6 (3,3) Operating profit margin % 24,9 25,5 (2,4)  Marginally lower Biscuit profit  Selling price increases to recover input cost pressures and protect margins  Sales volumes lower off strong prior ye

  28. Slide 28: Income statement – Snacks

    Income statement H1 F25 H1 F24 %∆ Rm Rm Revenue 3 069,9 3 101,1 (1,0) Operating profit 763,8 789,6 (3,3) Operating profit margin % 24,9 25,5 (2,4)  Decrease in Snacks profit  Maize extrude sales volumes impacted by aggressive regional competition  Potato chip volumes improved supported by flavour

  29. Slide 29: Sales volume and selling prices

    Sales volume and selling prices %Δ H1 F25 vs Comments H1 F24 Biscuits revenue decline (1,5) Volume (7,4) Constrained consumer demand partly offset by benefits of innovation and non-recurrence of Blue Label Marie oven installation last year Ave. selling prices 6,4 Price increases taken to recover cos

  30. Slide 30: Market shares – 12 months value

    Market shares – 12 months value 40,0% 37,9% 36,4% 35,0% 30,0% 25,0% 20,0% 16,2% 15,2% 15,0% 13,7% 12,9% 10,0% 5,0% 0,0% Bakers (Sweet) Bakers (Savoury) Willards H1 F24 H1 F25  Balanced price / volume  Market share reflects formal retail only  Increased contribution from wholesale channels

  31. Slide 31: Raw material costs

    Raw material costs Cost impact of raw materials and commodities consumed in the period (H1 F25 vs H1 F24): 10 9 8 6 6 4 2 2 R million 0 (2) (2) (4) (4) (6) (8) (10) (9) Flour Palm oil Maize Butter Potatoes Sugar  Impact net of hedging

  32. Slide 32: Performance – I&J

    SINCE 1910) ~ J Performance

  33. Slide 33: Income statement – Fishing

    Income statement H1 F25 H1 F24 %∆ Rm Rm Revenue 1 198,2 1 153,4 3,9 Operating profit 36,1 31,8 13,5 Operating profit margin % 3,0 2,8 7,1  Improved fishing profits off a low base  Higher selling prices including benefit of weaker Rand on export sales  Domestic sales volumes impacted by aggressive

  34. Slide 34: Income statement – Abalone

    Income statement H1 F25 H1 F24 %∆ Income statement Rm Rm Revenue 1 198,2 1 153,4 3,9 Operating profit 36,1 31,8 13,5 Operating profit margin % 3,0 2,8 7,1  Lower profits from abalone category  Core Asian markets challenged by weaker demand and resulting over supply  Increased discounting partly

  35. Slide 35: Operating profit

    Operating profit 140 120 100 80 R million 60 40 20 - 32 46 22 7 8 (37) (33) (13) 4 36 H1 Pricing/costs Forex Fuel Non-recurring Fishing Abalone fair Abalone Abalone H1 F24 Restructuring performance value pricing & insurance F25 costs volume claim  Fishing performance impacted by utilisation, repair

  36. Slide 36: Profit history

    Profit history 250 200 175 159 160 22 149 150 5 153 154 128 50 35 153 R million 100 114 110 74 14 36 50 60 61 30 10 - 20 (25) (25) H1 F18 H1 F19 H1 F20 H1 F21 H1 F22 H1 F23 H1 F24 H1 F25 (50) Fishing Abalone  Improved fishing profit but well below historical levels  Abalone profits negatively impa

  37. Slide 37: Fishing performance

    Fishing performance 12,0 9,6 9,8 10,0 9,3 9,3 9,1 8,9 8,9 8,5 8,2 8,3 Hake tons per sea day 8,0 7,6 7,2 6,0 4,0 2,0 0,0 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 H1 F21 H1 F22 H1 F23 H1 F24 H1 F25 I&J catch rate Average catch rate H1 F14 - H1 F25  Improvement in wet vessels catch rates partl

  38. Slide 38: Sales volume and selling prices (Hake)

    Sales volume and selling prices (Hake) %Δ H1 F25 vs Comments H1 F24 I&J Domestic revenue growth 1,0 Volume (3,1) Competitor activity and constrained demand negatively impacted food service and retail volumes Ave. selling prices 4,2 Price increases taken to mitigate cost pressure partly offset by unf

  39. Slide 39: Performance – Personal Care

    PrP ere Tee rr rrr rrrrrrrrrrr rere ery] indigo brands YARDLEY LENTHERIC eX‘cla-mation LONDON = LONDON Panis Performance

  40. Slide 40: Income statement – Personal Care

    Income statement H1 F25 H1 F24 %∆ Rm Rm Revenue 506,6 539,3 (6,1) Operating profit 92,5 114,4 (19,1) Operating profit margin % 18,3 21,2 (13,7)  Indigo profit decline due to lower volumes and selling prices in some categories  Aggressive competitor discounting and constrained environment reduced s

  41. Slide 41: Sales volume and selling prices

    Sales volume and selling prices %Δ Comments H1 F25 vs H1 F24 Personal Care revenue decline (6,1) Volume (5,3) Constrained demand and competition pressurised aerosol and fragrance performances partly offset by growth in roll-on Ave. selling price (0,8) Increased levels of discounting in competitive e

  42. Slide 42: Market shares – 12 months value

    Market shares – 12 months value 45,0% 40,7% 40,0% 38,3% 35,0% 32,4% 30,9% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 3,9% 3,9% 0,0% Body sprays - Female Body sprays - Male Roll-on H1 F24 H1 F25  Balanced price / volume in constrained and competitive environment  Decline in Lentheric and the Yardley male a

  43. Slide 43: Footwear and Apparel Performance

    FOOTWEAR AND APPAREL Performance

  44. Slide 44: Income statement – Footwear and Apparel

    Income statement H1 F25 H1 F24 %∆ Rm Rm Revenue 1 079,7 1 164,1 (7,3) Operating profit 289,1 322,3 (10,3) Operating profit margin % 26,8 27,7 (3,2)  Operating profit decline due to lower volumes  Selling prices increased to ameliorate input cost pressures, including higher freight costs, and prote

  45. Slide 45: Sales volume and selling prices

    Sales volume and selling prices %Δ H1 F25 vs Comments H1 F24 Spitz and Kurt Geiger Footwear (6,4) revenue decline Volume (17,4) Volume declines due to constrained consumer environment, later delivery of certain summer stock and supplier challenges on core Carvela ranges Ave. selling price 13,3 Price

  46. Slide 46: Performance – International

    AN | International Performance Ic Cappuccino

  47. Slide 47: AVI International

    AVI INTERNATIONAL Operating profit history 180 165 160 148 144 135 139 140 117 120 109 92 94 93 R million 100 82 73 77 80 70 60 40 20 - H1 F12 H1 F13 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 H1 F21 H1 F22 H1 F23 H1 F24 H1 F25  Profit growth from main subsidiary and distributor markets  Pri

  48. Slide 48: AVI International: Non-RSA sales

    AVI INTERNATIONAL Entyce, Snackworks and Indigo – Non RSA sales H1 F25 H1 F24 %∆ Rm Rm International Revenue 663,0 632,8 4,8 % of Grocery and Personal Care brands 10,7 10,4 2,9 International Operating Profit 165,0 148,3 11,3 % of Grocery and Personal Care brands 10,0 10,2 (2,0) % % International Ope

  49. Slide 49: H2 Prospects

    H2 Prospects SLRINCOMEN

  50. Slide 50: Prospects for H2

    AVI GROUP Prospects for H2  Sustain profitability for Entyce, Snackworks and Indigo in challenging trading environment  Constrained consumer demand environment expected to persist  Increased competition in our categories may put pressure on margins  Continued price / volume management essential

  51. Slide 51: Prospects for H2

    AVI GROUP Prospects for H2  Sustain profitability for Entyce, Snackworks and Indigo in challenging trading environment  Commodity input costs, aside from coffee, softening and will continue to be hedged to protect margins  Material part of H2 import requirement covered  Cost management, includin

  52. Slide 52: Prospects for H2

    AVI GROUP Prospects for H2  I&J’s prospects dependent on fishing performance, fuel prices and exchange rates  Acquisition of Umlungisi freezer vessel to increase catching capacity from February 2025  Exchange rates hedged at marginally better rates than achieved in H1  Benefit from 4,2% increase

  53. Slide 53: Prospects for H2

    AVI GROUP Prospects for H2  Footwear and Apparel  Ongoing price / volume management essential through tough demand cycle and ongoing discounts  Currency hedge positions provide some certainty through the second semester and support profitability  Ongoing focus on cost control and improving opera

  54. Slide 54: Prospects for H2

    AVI GROUP Prospects for H2  Capital investment projects to improve capability, product quality and customer service levels H2 F25 F25 Total Planned Planned Rm Rm Tea production and packaging equipment 11 17 Biscuit line upgrades and improvement 23 49 I&J processing plant replacements and upgrades 2

  55. Slide 55: Investor proposition

    AVI GROUP Investor proposition  Ability to adapt to changing macro environment:  Ongoing simplification of business model  Group initiatives – innovation structure, margin management, procurement, cost savings and production efficiencies  Focus on scalable and relevant innovation for constrained

  56. Slide 56: Questions

    Questions

  57. Slide 57: Information Slides: Revenue

    INFORMATION SLIDES Revenue 1,1% up 8 650 8 600 8 550 8 500 R million 8 450 8 400 8 350 8 300 8 250 8 378 196 (31) 45 (33) (84) 8 471 H1 Entyce Snackworks I&J Personal Footwear & H1 F24 Care Apparel F25  Entyce: Growth across all categories driven by higher selling prices partly offset by lower sale

  58. Slide 58: Commodity cost achievement relative to current market prices

    INFORMATION SLIDES Commodity cost achievement relative to current market prices* 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Robusta & Glucose Arabica Casein Tea Palm Oil Sugar Flour Maize Potatoes Butter Chicory Price achieved F25 H1 Market prices at 11 Jan 2025 Average market prices F25 H1 *

  59. Slide 59: Gross profit

    INFORMATION SLIDES Gross profit 4,6% up 3 800 3 750 3 700 3 650 3 600 R million 3 550 3 500 3 450 3 400 3 350 3 300 3 475 269 (14) (16) (28) (50) 3 636 H1 Entyce Snackworks I&J Personal Footwear & H1 F24 Care Apparel F25  Entyce: Revenue growth with improved margins supported by factory efficiencie

  60. Slide 60: Marketing expenditure

    INFORMATION SLIDES Marketing expenditure 16,0% 14,2% 13,7% 14,0% 12,0% 10,0% % of revenue 7,8% 7,5% 7,8% 8,0% 7,0% 5,4% 5,6% 5,9% 5,4% 5,8% 6,0% 5,1% 4,4% 3,9% 4,0% 1,6% 2,1% 2,0% 0,0% H1 F24 H1 F25  Total expenditure for H1 F25 of R447,9 million compared to R433,9 million in H1 F24  Increase in t

  61. Slide 61: Capital expenditure and depreciation

    INFORMATION SLIDES Capital expenditure and depreciation (excl. depreciation on right-of-use assets) 1 000 882 900 800 700 650 600 322 546 500 473 482 477 R million 420 408 411 225 424 394 388 377 388 388 390 374 400 347 262 316 183 300 236 235 203 241 181 200 227 182 206 190 186 190 195 177 220 200

  62. Slide 62: Cash flows

    INFORMATION SLIDES Cash flows 4 000 3 500 3 000 2 500 R million 2 000 1 500 1 000 500 - 2 146 1 165 13 21 (493) (425) (5) (76) (108) (1 300) ( 938) Cash from Increase in Working Proceeds Taxation Capital Intangible Lease Net interest Ordinary Special operations net debt capital and from JV expenditu

  63. Slide 63: Foreign exchange hedges

    INFORMATION SLIDES Foreign exchange hedges February 2025 to July 2025 to June 2025 December 2025 % Cover % Cover USD imports 72% 24% EUR imports 76% 21% USD exports 67% 53% EUR exports 62% 40%  Consistent hedging philosophy provides stability to manage gross profit margins

  64. Slide 64: I&J period end fair value adjustments

    INFORMATION SLIDES I&J period end fair value adjustments H1 F25 H1 F24 Actual Actual ∆ Rm Rm Rm Fuel hedge unrealised loss / (gain) 0,5 (10,3) 10,8 Opening mark-to-market asset / (liability) 0,3 (12,8) Closing mark-to-market liability (0,2) (2,5) Abalone – decrease / (increase) in unrealised 27,6 (5

  65. Slide 65: I&J fishing quota

    INFORMATION SLIDES I&J fishing quota CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 Quota (tons) South African Total Allowable 133 120 146 430 146 430 139 119 132 163 138 772 145 698 151 739 Catch (TAC) % change in (5,0) 10,0 - (5,0) (5,0) 5,0 5,0 4,2 TAC I&J 36 013 39 517 39 517 37 543 34 143 35 850 37 36

  66. Slide 66: Trading space and trading density

    INFORMATION SLIDES Trading space and trading density Footwear and apparel H1 F25 H1 F24 Number of stores 110 115 Turnover (Rm) 1 079,7 1 164,1 Average m2 22 928 23 703 Trading Density (R/m2) 47 091 49 112 Closing m2 23 295 23 734 Like-for-like metrics* H1 F25 H1 F24 Number of stores 105 105 Turnover

  67. Slide 67: Trading density – Footwear and apparel stores

    INFORMATION SLIDES Trading density – Footwear and apparel stores 50 000 35 000 45 000 30 000 40 000 35 000 25 000 30 000 20 000 R/m2 25 000 m2 15 000 20 000 15 000 10 000 10 000 5 000 5 000 - 0 H1 F17 H1 F18 H1 F19 H1 F20 H1 F21 H1 F22 H1 F23 H1 F24 H1 F25 Trading density (R/m2) Average trading spac

AVI — H1 FY2025 Earnings Presentation on 6ix