Remgro Limited · JSE:REM
Remgro — FY2012 Earnings Presentation
34 slides from Remgro's earnings presentation, September 2012
Slide 1: Final Results Presentation
FINAL RESULTS PRESENTATION for the year ended 30 June 2012
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS • Total comparable dividend per share 25.1% • Comparable headline earnings per share 26.1% • Intrinsic value per share (since 30 June 2011) 12.2% • Intrinsic value per share (adjusted for Implats and CGT 16.7% increase) 2
Slide 3: Salient Features
SALIENT FEATURES 12 Months 12 Months 15 Months June 2012 June 2011 June 2011 Headline earnings (R’million) 5 113 4 049 5 555 + 26.3% - 8.0% Headline earnings per share (cents) 994.6 788.8 1 082.4 + 26.1% - 8.1% Earnings per share (cents) 1 805.9 Na 2 112.4 - 14.5% Total gross dividend per share (cen
Slide 4: Investment Activities: Dec 2011 to Jun 2012
INVESTMENT ACTIVITIES: DEC 2011 TO JUN 2012 Dorbyl • During February 2012 Remgro disposed of 11 839 510 shares in Dorbyl for a nominal amount • Remgro’s remaining 6.5% interest (2 218 836 shares) was disposed of during September 2012 Implats • On 25 June 2012, Remgro’s investment in Implats was dist
Slide 5: Contribution to Headline Earnings
CONTRIBUTION TO HEADLINE EARNINGS (EXCL OTHER, TREASURY AND CORPORATE COSTS) 12 Months to 30 June 2012 12 Months to 30 June 2011 2.9% 1.5% 0.8% 2.7% 2.4% 1.9% 49.8% 46.9% 43.9% 47.2% Financial Industrial Media Financial Industrial Media Mining Technology Mining Technology 5
Slide 6: Summary of Headline Earnings
SUMMARY OF HEADLINE EARNINGS 12 Months 12 Months R’million % Change Jun 2012 Jun 2011 Financial services 32.5 2 538 1 915 Industrial interests 15.9 2 236 1 930 Media interests 200.0 93 31 Mining interests 32.1 148 112 Technology interests (20.6) 77 97 Other investments (12.0) 22 25 Central treasury
Slide 7: Financial Services
FINANCIAL SERVICES Headline earnings Intrinsic value % 12 Months 12 Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 RMBH 24.4 1 261 1 014 16.1 13 758 11 846 RMI Holdings 319.7 768 183 22.0 7 810 6 404 FirstRand (29.1) 509 718 33.0 5 801 4 363 Total 32.5 2 538 1 915 21.0 27
Slide 8: Industrial Interests: Listed Investments
INDUSTRIAL INTERESTS: LISTED INVESTMENTS Headline earnings/(loss) Intrinsic value % 12 Months 12 Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 Mediclinic 3.6 491 474 20.8 10 601 8 776 Distell (1.2) 324 328 25.6 5 935 4 725 Rainbow Chicken (10.5) 197 220 (9.1) 3 140 3 455
Slide 9: Industrial Interests: Unlisted Investments
INDUSTRIAL INTERESTS: UNLISTED INVESTMENTS (Industrial interests – continued) Headline earnings Intrinsic value % 12 Months 12 Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 Balance B/F 3.1 1 074 1 042 26.2 21 971 17 413 Unilever SA 17.6 367 312 32.2 7 026 5 313 Tsb Sugar
Slide 10: Unilever SA (25.8% interest)
UNILEVER SA (25.8%interest) (Industrial interests – continued) 12 Months 12 Months % Change R’million Jun 2012 Jun 2011 Revenue 11.0 14 572 13 124 Profit after tax 41.8 1 739 1 226 • The increase in revenue was mainly driven by: • volume and price growth in the Powders category with the launch of ne
Slide 11: TSB Sugar (100% interest)
TSB SUGAR (100% interest) (Industrial interests – continued) 12 Months 15 Months R’million Jun 2012 Jun 2011 Revenue 4 621 4 905 - Sugar (including 13.1% exports) Headline earnings 352 187 2011/2012 Season 2010/2011 Season Sugar production (tons) 615 046 586 239 • Results were positively impacted by
Slide 12: Total SA (24.9% interest)
TOTAL SA (24.9% interest) (Industrial interests – continued) 12 Months 12 Months % Change R’million 30 Jun 2012 30 Jun 2011 Revenue 23.2 31 373 25 464 Operating profit (36.4) 785 1 234 Headline earnings (34.8) 497 762 • The weaker results are mainly as a result of the stock revaluation losses of R11
Slide 13: Air Products and Wispeco
AIR PRODUCTS (50% interest) (Industrial interests – continued) 12 Months 12 Months % Change R’million 31 March 2012 31 March 2011 Revenue 10.1 1 549 1 407 Operating profit 21.2 543 448 • Operating profit positively impacted by mark-to-market profits of R30 million on forex contracts • Modest sales v
Slide 14: KTH and PGSI
KTH (27.5% interest) (Industrial interests – continued) 12 Months R’million 30 Jun 2012 Headline profit (KTH only formed 1 July 2011) 338 • In excess of R14 billion in assets and a net asset value of R9.3 billion • The headline profit mainly due to positive fair value adjustments on the investments
Slide 15: Media Interests
MEDIA INTERESTS Headline earnings/(loss) Intrinsic value % 12 Months 12 Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 Sabido 11.2 129 116 25.8 1 768 1 405 MARC 165.7 11 (17) - 168 168 Other interests 30.9 (47) (68) 250.0 56 16 Total 200.0 93 31 25.4 1 992 1 589 • MARC’s
Slide 16: Sabido (31.6% interest)
SABIDO (31.6% interest) (Media interests – continued) 12 Months 12 Months % Change R’million 31 March 2012 31 March 2011 Revenue 16.5 1 884 1 617 Operating profit 21.5 706 581 Headline earnings (before amortisation) 10.0 441 401 • Sabido has a range of media interests, the most significant being e.t
Slide 17: Mining Interests
MINING INTERESTS Headline earnings Intrinsic value % 12 Months 12 Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 Implats 32.1 148 112 Nm - 4 862 • Dividend received from Implats • Unbundled to Remgro shareholders during June 2012 17
Slide 18: Technology Interests
TECHNOLOGY INTERESTS Headline earnings/(loss) Intrinsic value % 12 Months 12 Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 CIV group (4.5) 85 89 25.4 1 550 1 236 SEACOM 10.0 (27) (30) (12.4) 926 1 057 Other 26.7 19 15 (18.7) 226 278 Tracker Nm - 23 Nm - 1 196 Total (20.6
Slide 19: CIV Group
CIV GROUP (Technology interests – continued) CIV FNS (incl DFA) 12 Months 12 Months % Change (43.8% interest) R’million 31 March 2012 31 March 2011 Revenue 9.6 549 501 Operating profit (2.5) 232 238 Headline earnings (70.4) 29 98 • Dark Fibre Africa’s (DFA’s) headline earnings decreased by 35% to R7
Slide 20: SEACOM (25% Interest)
SEACOM (25% INTEREST) (Technology interests – continued) • In terms of the agreement between the shareholders of SEACOM, limited financial disclosure is allowed • SEACOM launched the first terabit undersea fibre-optic cable to connect Southern and Eastern Africa with Europe and Asia in July 2009 • T
Slide 21: Other Investments, Treasury and Corporate Costs
OTHER INVESTMENTS, TREASURY AND CORPORATE COSTS Headline earnings/(loss) Intrinsic value 12 12 % Months Months % 30 Jun 30 Jun R’million Change Jun 2012 Jun 2011 Change 2012 2011 Other investments (12.0) 22 25 32.3 839 634 Central treasury 84.2 140 76 42.3 8 327 5 852 Other net corporate costs (2.9)
Slide 22: Summary of Intrinsic Value
SUMMARY OF INTRINSIC VALUE As at As at R’million 30 Jun 2011 30 Jun 2012 % Change % of Total RMBH and FirstRand 16 209 19 559 20.7 23.9 Mediclinic 8 776 10 601 20.8 13.0 RMI Holdings 6 404 7 810 22.0 9.5 Unilever 5 313 7 026 32.2 8.6 Distell 4 725 5 935 25.6 7.3 Other investments 30 387 30 882 1.6 3
Slide 23: 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 24: Intrinsic Value
INTRINSIC VALUE As at As at 30 Jun 2012 30 Jun 2011 % Change Discount to NAV 13.8% 17.9% - Intrinsic value – after CGT (Rand) 152.61 135.97 12.2 - Closing share price (Rand) 131.49 111.60 17.8 24
Slide 25: Unlocking Shareholder Value
UNLOCKING SHAREHOLDER VALUE Capevin Holdings - restructure Capevin Holdings’ discount to its intrinsic value decreased from 850 26.1% to 14.5%, benefitting its shareholders with R332 million 800 753 Value of 750 Capevin 42 700 interest 650 Remgro in % 600 R’million interest Distell Discount 550 Prio
Slide 26: Unlocking Shareholder Value (continued)
UNLOCKING SHAREHOLDER VALUE (continued) Implats unbundling 4 500 Value unlocked R’million 3 861 4 000 Implats market value 3 861 3 500 CGT liability associated with investment (219) 937 3 000 Remgro’s discount to NAV (718) Implats value accounted for in share price 2 924 R’million 2 500 Tax expense
Slide 27: Total Cash at the Centre
TOTAL CASH AT THE CENTRE As at 30 Jun 2012 R’million Local Offshore Total Per Statement of financial position 4 515 1 969 6 484 Investment money market funds - 2 344 2 344 Cash at operating subsidiaries (494) (7) (501) Cash at the centre 4 021 4 306 8 327 Cash held in the following currencies % of t
Slide 28: Cash at the Centre Movement
CASH AT THE CENTRE MOVEMENT 8 000 588 (3 049) 7 000 3 363 6 000 5 000 (1 753) 4 000 3 442 3 000 (215) 2 475 99 2 000 1 000 - Investments Dividends Forex Investments Dividends Taxation paid Other Net cash sold and loans received movement made and paid movement repaid (1) loans granted (2) 1. The majo
Slide 29: Cash Dividend
CASH DIVIDEND 350 314 314 300 63 250 25.1% 209 Dividend due to year end 188 change Cents 200 150 Final Dividend 150 125 100 Interim Dividend 50 101 126 84 0 31 March 2010 30 June 2011 30 June 2012 • 314 cents equates to a dividend cover of 3.2 times, based on HEPS • The total dividend for the 12 mon
Slide 30: Events After June 2012
EVENTS AFTER 30 JUNE 2012 Capevin Investments • The effective date of the Capevin Investments restructure was 13 August 2012 • The transaction did not affect Remgro’s direct interest in Distell MARC • During September 2012, Remgro received an offer from Kagiso Media to acquire the entire capital of
Slide 31: Events After June 2012 (continued)
EVENTS AFTER 30 JUNE 2012 (continued) Mediclinic • On 1 August 2012 Mediclinic announced a comprehensive refinancing of its Swiss and South African debt • Mediclinic had a R5 billion rights offer, underwritten by Remgro to the amount of R5 billion (R2 billion was sub-underwritten by a third party on
Slide 32: 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
Slide 33: Strategy (continued)
STRATEGY (continued) • Cleaning up of the Remgro portfolio • Strengthening existing investments • Share buy-backs if no meaningful acquisitions or investments can be made To ensure shareholder value is unlocked 33
Slide 34: For More Information Visit Our Website
FOR MORE INFORMATION VISIT OUR WEBSITE WWW.REMGRO.COM