Remgro Limited · JSE:REM
Remgro — H1 2005 Earnings Presentation
21 slides from Remgro's earnings presentation, Nov 29, 2004
Slide 1: Interim results presentation
Interim results presentation For the six months ended 30 September 2004 29 November 2004 1
Slide 2: Financial highlights
Financial highlights Interim Interim % Full year 09/2004 09/2003 Change 03/2004 Headline earnings (Rm) 2,462 2,415 1.9% 4,719 Headline EPS (cents) 492.0 477.8 3.0% 937.6 Basic EPS (cents) 723.9 353.0 105.1% 722.7 DPS - Ordinary (cents) 116.0 101.0 14.9% 285.0 Intrinsic NAV (Rand) 107.77 81.57 32.1%
Slide 3: Changes and adjustments
Changes and adjustments • Change in accounting policy (AC 140/IFRS 3): Business Combinations: – Effective 1 April 2004 – Goodwill arising from business combinations on or after 31 March 2004 is not amortised – Carried at cost less accumulated impairment losses – Impairment during period immaterial (
Slide 4: Segmental headline earnings performance
Segmental headline earnings performance Interim 2004 Corporate • Strong performances from: 1% Mining 3% – Industrial +22.8% Industrial 22% Tobacco – Financial +16.6% 42% • Off-set by Financial 32% – Mining interests -33.8% Interim 2003 Corporate 0% – Tobacco interests -11.0% Mining 5% Industrial (No
Slide 5: Underlying headline earnings performance
Underlying headline earnings performance Interim Interim % R million 09/2004 09/2003 Change Tobacco interests 1,040 1,169 -11.0% Financial interests 788 676 16.6% Industrial interests 538 438 22.8% Mining interests 81 122 -33.8% Corporate 15 10 50.0% Total 2,462 2,415 1.9% HEPS (cents) 492.0 477.8 3
Slide 6: Tobacco interests
Tobacco interests Headline earnings Intrinsic value 1,200 12.30 1,169 12.20 23,600 1,150 R12.22 (11.0)% 12.10 23,400 (3.7)% ZAR:£ rate 12.00 23,200 R million 1,100 3.9% R million 11.90 23,000 23,517 1,040 1,050 11.80 22,800 11.70 22,600 22,656 1,000 R11.75 11.60 22,400 22,200 950 11.50 03/2004 09/20
Slide 7: Tobacco earnings
Tobacco earnings £ million 09/2004 09/2003 % Change Earnings attributable to BAT (6 months) 848 828 2.4% (excl amortisation and exceptional items) Movement in NPV of pref shares & dividends (8) (20) 840 808 R&R's share: 29.6% of earnings (1/4/2004 to 31/5/2004) 76 - 28.1% of earnings (1/6/2004 to 30
Slide 8: Tobacco highlights
Tobacco highlights • In May 2004, option holders exercised the call warrants issued by R&R in January 2003 i.r.o. the BAT preference shares • Preference shares converted into ordinary BAT shares • R&R’s interest in BAT declined from 29.4% (31 March 2004) to 28.1% after the effect of the conversion o
Slide 9: Financial interests
Financial interests Headline earnings Intrinsic value 800 231 15,000 3,996 199 R million 600 2,863 R million 264 10,000 5,151 223 4,087 400 5,000 5,113 6,311 200 256 293 0 0 03/2004 09/2004 09/2003 09/2004 FirstRand RMBH ABSA FirstRand RMBH ABSA Highlights • FirstRand’s and RMBH’s contributions to h
Slide 10: Industrial interests
Industrial interests Headline earnings % Intrinsic value % R million 09/2004 09/2003 Change 09/2004 03/2004 Change Medi-Clinic Corporation 125 112 11.9% 2,323 2,143 8.4% Total SA 105 4 ++ 1,217 933 30.4% UBR 70 94 -25.5% 1,864 1,754 6.3% Nampak 58 63 -8.3% 1,224 1,150 6.4% Rainbow 52 37 43.2% 1,054
Slide 11: Industrial highlights
Industrial highlights • Improved performances were mainly due to: – Rainbow – chicken revenue increased by 9.7% to R1.6 billion (2003: R1.4 billion) on the back of an 8.1% improvement in price realisations, mainly due to improved product mix, as well as volume growth of 1.6% – Distell – good sales v
Slide 12: Industrial highlights (cont'd)
Industrial highlights (cont’d) • Lower results were reported by: – Transvaal Sugar – results adversely affected by lower sugar production, drought and stronger rand on export prices – Unilever Bestfoods Robertsons – despite volume growth, increased levels of discounting was utilised to offset the ef
Slide 13: Mining interests
Mining interests Headline earnings Intrinsic value 150 5 6 3,000 1 823 671 R million R million 100 72 2,000 26 50 53 1,720 1,731 47 1,000 0 0 09/2003 09/2004 03/2004 09/2004 Implats Trans Hex Gencor Implats Trans Hex Gencor Highlights • Lower income reported by Trans Hex (contribution to headline ea
Slide 14: Corporate finance & other
Corporate finance & other Headline earnings R million 09/2004 09/2003 Central treasury 50 48 Corporate costs (35) (38) Total 15 10 Intrinsic value R million 09/2004 03/2004 Sundry net assets Total 218 170 14
Slide 15: Cash movement at the centre
Cash movement at the centre 2,000 94 17 (918) 413 1,500 1,087 1,000 (1,007) R million 500 0 -500 -1,000 (429) (743) -1,500 ordinary buybacks Interest and Net cash special Investments dividend dividends Div - Share Div - BAT realised Other other • Cash at the centre decreased by R743m from 31 March 2
Slide 16: Total cash
Total cash R million 09/2004 Cash and cash equivalents 2,362 Less: Cash at operational subsidiaries (955) Cash at the centre 1,407 • Cash in R&R (associated company) attributable to Remgro as at 30 September 2004 was £320 million 16
Slide 17: Remgro's intrinsic value
Remgro’s intrinsic value Interim Final R million 09/2004 03/2004 Tobacco interests in GBP (£ million) 1,934 2,028 Tobacco interests 22,656 23,517 Financial interests 15,580 12,185 Industrial interests 11,212 10,181 Mining interests 2,408 2,548 Other interests 218 170 Cash at the centre 1,407 2,150 T
Slide 18: Share price performance
Share price performance Remgro performance (based to 100) • Remgro’s share price as at 30 250 September 2004 outperformed the ALSI by 33% and the FINDI by 200 89% 150 100 • As at 24 November 2004 Remgro 50 outperformed the ALSI and FINDI by 34% and 80%, respectively 0 29/09/2000 30/11/2000 31/01/200
Slide 19: Upside potential
Upside potential 12000 10000 21.9% Cents 8000 6000 4000 Apr-02 Jul-02 Oct-02 Apr-03 Jul-03 Oct-03 Apr-04 Jul-04 Oct-04 Jan-03 Jan-04 Intrinsic value Remgro share price • Remgro traded at a 23.8% and 21.9% discount as at 30 September 2004 and 24 November 2004, respectively, to its intrinsic value • O
Slide 20: Corporate actions
Corporate actions • Share repurchase – Acquired a further 5.3m ordinary shares (1.1% of issued share capital) at an average price of R77.89 for a total amount of R415.1m – Total of 4.5% shares are held as treasury shares • Financial interests – FirstRand’s proposed BEE deal will result in Remgro’s s
Slide 21: Questions
Questions Remgro — Limited 21