Remgro Limited · JSE:REM
Remgro — FY2008 Earnings Presentation
33 slides from Remgro's earnings presentation, June 2008
Slide 1: Final Results Presentation
Final Results Presentation For the year ended 31 March 2008 1
Slide 2: Financial highlights
Financial highlights 12 Months 12 Months March ‘08 March ‘07 % change Headline earnings (R’m) 7 991 6 892 15.9% - excl non-recurring BEE costs (R’m) 8 028 6 892 16.5% Headline earnings per share (cents) 1 692.8 1 453.6 16.5% - excl non-recurring BEE costs (cents) 1 700.7 1 453.6 17.0% Earnings per s
Slide 3: Financial highlights (cont'd)
Financial highlights (cont’d) 12 Months 12 Months March ‘08 March ‘07 % change Dividend per share (cents) 510.0 434.0 17.5% - interim 180.0 153.0 17.6% - final 330.0 281.0 17.4% As at 31 March 2008 2007 Intrinsic NAV (Rand) – after CGT 253.67 221.00 14.8% Closing share price (Rand) 195.93 181.00 8.2
Slide 4: Prior year adjustments
Prior year adjustments Change in accounting policy for joint ventures • Effective 1 April 2007 the Group changed its accounting policy for the accounting treatment of jointly controlled ventures from proportionate consolidation to the equity method • The effect thereof was immaterial Restatement of
Slide 5: Investment activities for the year ended March 2008
Investment activities for the year ended March 2008 Share repurchases • The company did not repurchase any shares during the year ¾ At 31 March 2008, 8 554 019 (1.9%) shares were held as treasury shares • The Remgro Share Trust ¾ purchased 150 566 shares at an average price of R189.19 per share for
Slide 6: Investment activities for the year ended March 2008
Investment activities for the year ended March 2008 Rainbow Chicken (Rainbow) Offer to minority shareholders • During March 2007 Remgro made an offer to acquire the entire issued share capital of Rainbow not owned by Remgro • In terms of the above offer, Remgro acquired 30 236 876 shares of which: ¾
Slide 7: Investment activities for the year ended March 2008
Investment activities for the year ended March 2008 PG Group (PGSI) • With effect from 31 July 2007 Remgro acquired a 24.5% interest in PGSI for R719.5 million • PGSI is the foreign holding company of the Plate Glass Group • PGSI, which has a December year end, has been equity accounted for the five
Slide 8: Investment activities for the year ended March 2008
Investment activities for the year ended March 2008 Medi-Clinic • Remgro took up 86 217 868 Medi-Clinic shares at R22.65 per share for a total amount of R1 952.8 million as part of the rights offer undertaken by Medi-Clinic for the acquisition of Hirslanden AG, the largest Swiss private hospital gro
Slide 9: Investment activities for the year ended March 2008
Investment activities for the year ended March 2008 Tsb Sugar Land claims • Effective 1 April 2007, Tsb Sugar concluded the Tenbosch land claim whereby it disposed of 4 800ha of irrigated sugar cane land in the Nkomazi region for an amount of R285 million • The second phase is the sale of 3 162ha su
Slide 10: Investment activities for the year ended March 2008
Investment activities for the year ended March 2008 Xiocom Wireless (Xiocom) • During the year under review, Remgro acquired a 37.5% interest, on a fully diluted basis, in Xiocom, a newly established USA company that specialises in the deployment and operation of wireless broadband networks • Remgro
Slide 11: Segmental headline earnings performance
Segmental headline earnings performance (excluding NR BEE costs) Contributions from: • Tobacco 20.7% Industrial 0.4% • Financial 35.2% Mining 70.3% March 2008 March 2007 11
Slide 12: Summary of underlying performance
Summary of underlying performance R’million March ‘08 March ‘07 %change Tobacco interests 3 579 2 964 20.7% Financial services 2 120 1 568 35.2% Industrial interests 1 932 1 924 0.4% Mining interests 264 155 70.3% Corporate and other 133 281 (52.7)% Headline earnings (excl NR BEE costs) 8 028 6 892
Slide 13: Quality of headline earnings statement
Quality of headline earnings statement R’million March ‘08 March ‘07 %change Headline earnings 7 991 6 892 15.9% Non-recurring BEE costs 37 - Headline earnings excl BEE costs 8 028 6 892 16.5% Pension fund surplus recognition - (70) Favourable exchange rate gain on intergroup loan - (65) Comparable
Slide 14: Tobacco
Tobacco Headline earnings % Intrinsic value % R’million Mar’08 Mar’07 change Mar’08 Mar’07 change R&R / BAT 3 579 2 964 20.7% 69 018 52 229 32.1% Avg ZAR:£ rate 14.29 13.29 7.5% Highlights • R&R’s contribution to headline earnings, which represents 44.6% (2007: 43.0%) of total headline earnings, inc
Slide 15: Tobacco (cont'd)
Tobacco (cont’d) £’million Mar’08 Mar’07 % Change Attributable profit of BAT before capital and non-recurring items 2 275 2 077 9.5% R&R’s share of attributable profit of BAT 679 607 11.9% R&R’s non-BAT income 12 9 33.3% R&R’s income 691 616 12.2% Remgro’s 35.46% share of attributable profit of BAT
Slide 16: Financial
Financial Headline earnings % Intrinsic value % R’million Mar’08 Mar’07 change Mar’08 Mar’07 change FirstRand 1 090 836 30.4% 7 698 11 836 (35.0)% RMBH 1 030 732 40.7% 7 406 10 111 (26.8)% Total 2 120 1 568 35.2% 15 104 21 947 (31.2)% Highlights • The increase of 35.2% can be attributed mainly to go
Slide 17: Industrial
Industrial Headline earnings % Intrinsic value % (excl NR BEE costs) R’million Mar’08 Mar’07 change Mar’08 Mar’07 change Rainbow 414 293 41.3% 3 133 2 778 12.8% Medi-Clinic 285 278 2.5% 5 070 4 295 18.0% Distell 261 210 24.3% 2 992 3 054 (2.0)% Unilever SA 229 210 9.0% 3 663 3 020 21.3% Total SA 207
Slide 18: Industrial (cont'd)
Industrial (cont’d) Rainbow • Earnings growth by Rainbow as well as Remgro’s increased shareholding resulted in the 41.3% increase in Rainbow’s earnings contribution to headline earnings Unilever SA • The combined turnover grew by 12% for the year ended 31 March 2008, predominantly through pricing s
Slide 19: Industrial (cont'd)
Industrial (cont’d) Total SA (cont’d) • Natref was shut down for 6 weeks from May 2007 for planned maintenance, followed by a number of unplanned shut downs • The reduced gross profit contribution from refining was compensated for by an increased marketing margin • Headline earnings was impacted by
Slide 20: Industrial (cont'd)
Industrial (cont’d) Air Products • Turnover grew by 15.3% to R1.0 billion, while Remgro’s share in its headline earnings increased by 30.5% to R94 million • Approximately 40% of the current year’s growth in headline earnings is a direct result of the favourable impact of a change in accounting stand
Slide 21: Industrial (cont'd)
Industrial (cont’d) Wispeco • Turnover increased by 14% and sales volumes increased by 8%. Headline earnings remained flat at R64 million • Headline earnings was influenced by tight margins and volatility in aluminium prices • Since completing plant expansions, the company focuses on maximising effe
Slide 22: Mining
Mining Headline earnings % Intrinsic value % R’million Mar’08 Mar’07 change Mar’08 Mar’07 change Implats 267 147 81.6% 8 353 6 085 37.3% Trans Hex (3) 8 (137.5)% 317 438 (27.6)% Total 264 155 70.3% 8 670 6 523 32.9% Highlights • The dividend received from Implats amounted to R267 million (2007: R147
Slide 23: Corporate finance & other
Corporate finance & other Headline earnings R’million Mar ‘08 Mar ‘07 Treasury (1) 180 266 Business Partners 46 5 Xiocom (37) 0 Pension fund surplus recognition - 70 Other corporate costs (56) (60) Total 133 281 Notes (1) The central treasury division’s contribution decrease mainly as a result of lo
Slide 24: Investments differences
R million -1,100 -600 -100 400 900 1,400 1,900 2,400 2,900 3,400 3,900 4,400 BAT 1 893 dividend Other 1 870 dividends Investments 517 & loans realised Exchange rate 260 differences Shares 37 issued Other 15 income Investments acquired (3 477) Ordinary dividends Cash movement at the centre paid (2 17
Slide 25: Total cash
Total cash At 31 March 2008 R’million Local Offshore Total Per consolidated balance sheet 1 280 2 654 3 934 Less: Cash of other operating subsidiaries (661) - (661) Cash at the centre 619 2 654 3 273 Attributable share of R&R’s cash - 2 433 2 433 Available cash 619 5 087 5 706 On 31 March 2008, £309
Slide 26: Remgro's intrinsic value
Remgro’s intrinsic value R’million March ‘08 March ‘07 %change Tobacco interests in GBP (£’m) 4 306 3 641 18.3% Tobacco interests 69 018 52 229 32.1% Financial interests 15 104 21 947 (31.2)% Industrial interests 25 271 22 072 14.5% Mining interests 8 670 6 523 32.9% Other interests 785 726 8.1% Def
Slide 27: Intrinsic value vs share price
Intrinsic value vs share price • Remgro traded at a 22.8% discount as at 31 March 2008 to its intrinsic value (after CGT) (31 March 2007: 18.1%) • The discount to the intrinsic value (after CGT) as at 17 June 2008 is 14.1% • Remgro’s 5 year compounded annual growth rate of its intrinsic value (after
Slide 28: Share price performance
Share price performance • Remgro’s share price as at 31 March 2008, based to September 2000, outperformed the ALSI by 26.5% and the FINDI by 115.2% over the period • Remgro’s share price as at 17 June 2008, based to September 2000, outperformed the ALSI by 26.3% and the FINDI by 127.4% over the peri
Slide 29: One year share price performance
One year share price performance • From 1 April 2007 to 31 March 2008, Remgro increased by 7.3% and the ALSI and Top 40 index increased by 7.9% and 10.9%, respectively. The FINDI decreased by 5.3% over the same period • From 1 April 2007 to 17 June 2008, Remgro increased by 13.9% and the ALSI and To
Slide 30: Dividend distribution
700 + 600 + 500 + 400 + Cents 300 + 200 + 100 + 2004 Dividend distributi 600 2005 = Ordinary dividend 2006 510 434 0 2007 2008 = Special dividend 30
Slide 31: Dividend cover
1,800 1,600 1,400 1,200 1,000 Cents 800 600 400 200 Dividend cover 2004 2005 mmm HEPS mmm Cash EPS 2006 —+*— Dividend cover 2007 —*— Cash cover 1,693 r 4.0x + 3.5x + 3.0x r 2.5x r 2.0x Times r 1.5x + 1.0x + 0.5x 2008 31
Slide 32: General
General • Group restructuring ¾ See separate announcement • STC credits 32
Slide 33: Questions
Questions 33