Imperial Logistics Limited

Imperial Logistics — Imperial Holdings — H1 2015 Earnings Presentation

67 slides from Imperial Logistics's earnings presentation, February 2015

  1. Slide 1: Leaders in Mobility: Results Presentation for Six Months Ended 31 December 2014

    LEADERS IN MOBILITY RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2014

  2. Slide 2: Agenda

    AGENDA OPERATIONAL FINANCIAL KEY FEATURES CONTEXT REVIEW REVIEW STRATEGY PROSPECTS 2

  3. Slide 3: Key Features

    KEY FEATURES REVENUE OPERATING PROFIT CORE EPS¹ +9% -­‐9% -­‐14% R56 234 million R2 872 million 803 cps INTERIM DIVIDEND CASH FLOW FROM HEPS PER SHARE² OPERATING ACTIVITIES -­‐9% +73% 759 cps 350 cps R 1 billion > ROIC 11.9% vs WACC of 9.1% (target of 4% above WACC through the cycle) > Net debt:equi

  4. Slide 4: Imperial's Three Lines of Mobility

    IMPERIAL’S THREE LINES OF MOBILITY LOGISTICS VEHICLES FINANCIAL SERVICES REVENUE é +14% é +7% é +6% R22.9 billion R33.0 billion R2.2 billion 39% contribuWon 57% contribuWon 4% contribuWon O P E R A T I N G P R O F I T é +12% ê -­‐25% ê -­‐6% R1.2 billion R1.3 billion R0.5 billion 40% contribuW

  5. Slide 5: Divisional Structure

    DIVISIONAL STRUCTURE Manage & report on five divisions based on strategic drivers, management experRse, business models, intra-­‐divisional value creaRon & geography in three major lines of mobility FINANCIAL LOGISTICS VEHICLES SERVICES VEHICLE IMPORT, VEHICLE RETAIL, LEVERAGE IMPERIAL’S AFRICA (INC.

  6. Slide 6: Summary Performance

    SUMMARY PERFORMANCE > Porjolio performed to expectaWon in deterioraWng trading condiWons > Revenue growth akributable mainly to acquisiWons > Group operaWng profit decline (9% or R294m) comprised: • Divisional operaWng profit increases: – LogisRcs Africa: 23% or R152m up to R802m – Vehicle Retail, Ren

  7. Slide 7: Growth Trend in Foreign Operations

    GROWTH TREND IN FOREIGN OPERATIONS Revenue OperaWng profit (Rm) (Rm) 4 year 4 year 927 CAGR CAGR 856 20 516 =34% =35% 18 410 723 712 16 719 14 849 593 540 13 120 12 288 376 9 231 347 7 938 257 6 399 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 2011 2012 2013 2014 201

  8. Slide 8: Growth Trend in Non Vehicle Operations

    GROWTH TREND IN NON VEHICLE OPERATIONS Revenue OperaWng profit (Rm) (Rm) 4 year 4 year CAGR CAGR 1 717 1 699 25 027 =22% =16% 1 605 23 419 22 060 1 428 19 777 1 224 18 053 1 199 17 400 1 059 959 14 303 937 12 695 11 350 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 20

  9. Slide 9: Agenda

    AGENDA OPERATIONAL FINANCIAL KEY FEATURES CONTEXT REVIEW REVIEW STRATEGY PROSPECTS 9

  10. Slide 10: Context – Challenging Environment

    CONTEXT – CHALLENGING ENVIRONMENT > VUCCA (volaWle, uncertain, complex, chaoWc, ambiguous) environment; various macro-­‐economic, geo-­‐poliWcal & social forces well publicised > South Africa • low economic growth; underperformance of major trading partners (Europe, China) & lower commodity prices &

  11. Slide 11: Agenda

    AGENDA OPERATIONAL FINANCIAL KEY FEATURES CONTEXT REVIEW REVIEW STRATEGY PROSPECTS 11

  12. Slide 12: Divisional Review: Logistics Africa

    DIVISIONAL REVIEW Geographies: Three regional hubs – SADC, East Africa, West Africa LOGISTICS AFRICA South Africa > Market: Developed market & infrastructure > Industry structure: SophisWcated supply chains & formal routes to market > Strategy: Use scale, experWse & technology to provide high value

  13. Slide 13: Integrated Supply Chain Partner in RSA

    INTEGRATED SUPPLY CHAIN PARTNER IN RSA FREIGHT & WAREHOUSING DISTRIBUTION DEMAND INTEGRATION TRANSPORT & STORAGE & FULFILMENT MANAGEMENT SERVICES SUPPLY CHAIN OUTSOURCING PARTNER > Ability to reduce client’s costs – consolidaWon of transport & distribuWon faciliWes; economies of scale > Ability to e

  14. Slide 14: Our Key Clients

    OUR KEY CLIENTS IMPERIAL 6) 2 wud aco IA ame How 2 mai LRM a AfriSam ae sal ; wh [=] aspen ASTRAL —_phpbilliton Hop Ci" brandhouse sumescuce commune Consol. piAceO OP nm §=£EESES encen x @ nest __Boranes MASSMART jeCai Mondeléz, WOH (TQ nomen @ PG BISON (P/G{ PeG BicknBay \gionnsnroops Pec @ © e@ROU

  15. Slide 15: Divisional Review: Logistics Africa

    DIVISIONAL REVIEW Geographies: Three regional hubs – SADC, East Africa, West Africa LOGISTICS AFRICA South Africa > Market: Developed market & infrastructure > Industry structure: SophisWcated supply chains & formal routes to market > Strategy: Use scale, experWse & technology to provide high value

  16. Slide 16: Imperial Logistics Africa

    IMPERIAL LOGISTICS AFRICA West Africa > Imperial Health Sciences – pharma logisWcs, supply chain management, warehousing > MDS LogisWcs – transport, distribuWon, warehousing (FMCG, pharma, telecoms) > Eco Health – distribuWon, sales, markeWng of pharma products MALI NIGER NORTH SUDAN > Imres – a who

  17. Slide 17: Acquisitions

    ACQUISITIONS AcquisiRon criteria > Preferably asset light logisWcs > Earnings accreWve > Target ROIC = WACC in first year; WACC + 4% (risk adjusted) in medium to long term AcquisiRons in H1 2015 > R797m invested to control two pharmaceuWcal wholesaling & distribuWon companies, consistent with Imperia

  18. Slide 18: Pharmed Acquisition

    PHARMED ACQUISITION Supplier audits Hospitals ProducWon of & quality control DistribuWon Pharmacies pharmaceuWcals, Sourcing, Buying, warehousing & transport End users generics & inbound logisWcs & stock keeping coordinaWon Dispensing doctors medical products Order picking Other Pharmed acWviWes OVE

  19. Slide 19: Imres Acquisition

    IMRES ACQUISITION Supplier audits NGO outposts ProducWon of & quality control DistribuWon Local traders pharmaceuWcals, Sourcing, Warehousing & transport End users generics & inbound logisWcs & stock keeping coordinaWon Ministries of health medical products Order picking Other Imres acWviWes OVERVIE

  20. Slide 20: Growth Trend Logistics Africa ex RSA

    GROWTH TREND LOGISTICS AFRICA EX RSA Revenue OperaWng profit (Rm) (Rm) 4 year 4 year CAGR CAGR 5 184 294 =58% =51% 3 499 180 2 820 154 2 289 2 276 124 1 867 1 849 100 1 628 85 82 72 57 827 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 > Turnov

  21. Slide 21: 2015 Logistics Africa

    2015 LOGISTICS AFRICA Revenue OperaWng profit OperaWng margins (Rm) (Rm) (%) 13 265 +22% +23% 6,0% 6,0% 802 5,5% 10 895 650 H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H2 2014 H1 2015 > Delivered strong revenue & operaWng profit growth in difficult environment > Subdued & declining volumes in most sectors s

  22. Slide 22: Growth Trend Logistics Africa

    GROWTH TREND LOGISTICS AFRICA Revenue OperaWng profit (Rm) (Rm) 4 year 4 year 13 265 CAGR CAGR =20% =16% 802 11 195 10 895 650 9 341 620 8 677 8 311 8 146 520 513 7 286 436 6 502 400 397 350 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Key or

  23. Slide 23: Divisional Review: Logistics International

    DIVISIONAL REVIEW > Market: €650bn in Imperial InternaWonal sectors LOGISTICS INTERNATIONAL (IPL ranked 8th) > Industry structure: Highly developed infrastructure; Europe: (mainly Germany): Netherlands, fragmented, process & technology driven clients & Sweden, Luxemburg, Belgium, Poland, Austria, co

  24. Slide 24: Logistics International Geographies

    LOGISTICS INTERNATIONAL GEOGRAPHIES Presence in Europe > Germany is the base > Strategy to follow customers/products to new markets > Recently entered the South American inland shipping market • profitable 10 year contract • 4 convoys (4 push boats and 48 barges) operaWng on Rio Parana, transporWng i

  25. Slide 25: Logistics International Sub-Divisions

    LOGISTICS INTERNATIONAL SUB-­‐DIVISIONS INLAND PANOPA LEHNKERING NESKA SHIPPING > Leading inland shipping > Contract LogisWcs > LogisWcs services & contract > Leading player in inland company in Europe • automoWve manufacturing (synthesis/ terminal operaWons > Transport iron ore, coal, • machinery &

  26. Slide 26: 2015 Logistics International (Euro)

    2015 LOGISTICS INTERNATIONAL (EURO) Revenue OperaWng profit OperaWng margins (€m) (€m) (%) 5,5% +0.4% -­‐13% 678 675 31 4,6% 27 4,0% H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H2 2014 H1 2015 > Profitability declined with muted acWvity levels in most sectors of European logisWcs > German inland shipping

  27. Slide 27: 2015 Logistics International (ZAR)

    2015 LOGISTICS INTERNATIONAL (ZAR) Revenue OperaWng profit OperaWng margins (Rm) (Rm) (%) 5,5% +5% -­‐6% 9 595 9 110 412 386 4,5% 4,0% H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H2 2014 H1 2015 > TranslaWon effect of average weaker Rand to Euro assisted growth in Rands > 2015 six months average R/€: 14.1

  28. Slide 28: Growth Trend Logistics International

    GROWTH TREND LOGISTICS INTERNATIONAL Revenue OperaWng profit (Rm) (Rm) 4 year 4 year N o t e H 2 s e a s o n a l i t y CAGR CAGR 10 139 =31% =25% 9 595 9 110 559 8 363 7 211 7 088 454 412 396 386 308 4 159 3 639 3 209 202 194 156 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 20

  29. Slide 29: Imperial Logistics (Africa & Int.)

    IMPERIAL LOGISTICS (AFRICA & INT.) Revenue OperaWng profit (Rm) (Rm) 4 year 4 year CAGR CAGR 1 188 1 179 =24% =19% 22 860 1 062 21 334 974 20 005 17 704 793 15 888 715 15 234 708 592 12 470 544 10 925 9 711 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 2011 2012 2013

  30. Slide 30: Divisional Review: Vehicle Import, Distribution & Dealerships

    DIVISIONAL REVIEW VEHICLE IMPORT, DISTRIBUTION > Market: South African new passenger & commercial vehicles; tracks economic & consumpWon growth; & DEALERSHIPS 4% up in 2014; esWmated ~600k vehicles in 2015 > Industry structure: dominated by mulW naWonal original equipment manufacturers & manufacture

  31. Slide 31: Vehicle Import, Distribution & Dealerships

    VEHICLE IMPORT, DISTRIBUTION & DEALERSHIPS Revenue OperaWng profit (excl. F/S) OperaWng margins (excl. F/S) (Rm) (Rm) (%) 934 14 278 +7% -­‐51% 7,0% 13 378 4,3% 461 3,2% H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H2 2014 H1 2015 > Revenue growth mainly akributable to Renault (only included for 1 month i

  32. Slide 32: Car Parc of Imperial Imported Brands

    CAR PARC OF IMPERIAL IMPORTED BRANDS 956 666 865 636 769 295 669 785 576 155 487 701 192 334 431 580 107 363 373 473 60 227 290 550 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 > Car parc doubled over past 5 years > Provides an underpin to earnings > H1 2015 benefits of growing car par

  33. Slide 33: Imperial Imports vs Competitors

    IMPERIAL IMPORTS VS COMPETITORS Market share* (%) 19,6% 19,3% 14,7% 14,5% 14,2% 13,8% 11,4% 9,3% 7,4% 7,1% 3,8% 4,7% Dec 13 Dec 14 Dec 13 Dec 14 Dec 13 Dec 14 Dec 13 Dec 14 Dec 13 Dec 14 Dec 13 Dec 14 Imperial Mercedes Ford Toyota Vokswagen Nissan > Imperial’s market share increased ~1% compared to

  34. Slide 34: Currency, Market Share & Operating Margins

    CURRENCY, MARKET SHARE & OPERATING MARGINS Market share* OperaWng margin** (%) (%) 12,7% 13,6% 14,7% 13,8% 14,5% 15,4% 14,3% 11,8% 13,5% 12,8% 11,8% 6,6% 9,4% 9,2% 9,4% 8,8% 8,5% 3,8% 7,4% 7,0% 4,3% 3,2% Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 09 10 11

  35. Slide 35: South African New Vehicle Prices

    SOUTH AFRICAN NEW VEHICLE PRICES Vehicle price increases Exchange rate impact (yoy growth) New & Pre owned on imported brands (%) (%) 1,81 1,79 1,67 1,53 1,25 1,6 1,4 0,8 0,6 5,6 6,6 7,0 7,8 7,2 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec New vehicle price inc

  36. Slide 36: Contextualising Division's Performance

    CONTEXTUALISING DIVISION’S PERFORMANCE > Hyundai / Kia worldwide established on disrupWve entry level pricing > Hyundai / Kia grown off a low base in RSA > Beneficiary of “democracy dividend”: rapid growth of Black middle class; expansion of government employment; above inflaWon wage increases; NCA fue

  37. Slide 37: Looking Forward: Motor Vehicle Environment

    LOOKING FORWARD Motor Vehicle Environment > Slower global growth > Recovering but subdued consumer confidence & expenditure in RSA > NaWonal motor vehicle sales negaWve or very low growth for at least 2-­‐3 years > Consumers trading down > Limited growth of dealerships > CompeWWveness & profitability

  38. Slide 38: Divisional Review: Vehicle Retail, Rental & Aftermarket Parts

    DIVISIONAL REVIEW > Markets: South African new passenger & commercial VEHICLE RETAIL, RENTAL vehicles; tracks economic & consumpWon growth; & AFTERMARKET PARTS 4% up in 2014; esWmated ~600k vehicles in 2015 / Car rental mature, highly compeWWve & price sensiWve / Agermarket Parts industry mature but

  39. Slide 39: Divisions Major Assets

    DIVISIONS MAJOR ASSETS AFTERMARKET VEHICLE RETAIL RENTAL PARTS > 86 passenger vehicle > Car Rental (Europcar & > Distributor, wholesaler dealerships -­‐ 16 locally based Tempest) & retailer through OEMs > 65 dedicated Pre-­‐owned approximately 450 owned > Extensive dealer footprint retail outlets (A

  40. Slide 40: Acquisitions: S&B Commercials

    ACQUISITIONS S&B Commercials > Acquired 1 September 2014 > Purchase price – R167m (£9m) for 100% shareholding > UK based commercial vehicle dealership > Specialises in Mercedes Benz (Commercial and Van) & Fuso > Further diversifies Imperial’s brand representaWon & extends its geographic footprint in

  41. Slide 41: Vehicle Retail, Rental & Aftermarket Parts

    VEHICLE RETAIL, RENTAL & AFTERMARKET PARTS Revenue OperaWng profit OperaWng margins (Rm) (Rm) (%) +7% +7% 18 726 5,0% 17 519 791 740 4,2% 4,2% H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H2 2014 H1 2015 > Good growth of revenue & operaWng margin despite subdued passenger vehicle volumes > Commercial vehi

  42. Slide 42: Imperial Group Revenue Capture

    IMPERIAL GROUP REVENUE CAPTURE 6. Pre Owned vehicle sales 1. Vehicle import & distribuRon > ±70 000 units p.a. > Represent 16 exclusive AutomoWve & Industrial brands > Strong ager sales & service capability 2. Vehicle retail 5. AZermarket Parts > Most major local & imported brands > Extensive dealer

  43. Slide 43: Growth Imperial Group: Vehicles

    GROWTH IMPERIAL GROUP VEHICLES Revenue OperaWng profit (Rm) (Rm) 4 year 4 year CAGR CAGR 33 004 =14% =5% 1 986 30 897 30 200 28 884 1 798 28 693 1 780 28 212 1 674 23 467 1 423 1 403 1 308 1 252 19 565 19 532 1 033 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 2011 20

  44. Slide 44: Divisional Review: Financial Services

    DIVISIONAL REVIEW > Market: dominated by major banks & insurers FINANCIAL SERVICES > Industry structure: highly regulated mainly very large parWcipants > Strategy: build on Imperial’s capabiliWes in vehicle distribuWon & retail through Liquid Capital (unregulated products) & Regent (regulated produc

  45. Slide 45: Financial Services: Regent and Motor Related Financial Services

    FINANCIAL SERVICES Regent > Short term Insurance underwriWng profit +20% – improved motor underwriWng against the comparable period – focussing on core markets and distribuWon channels > Regent Life performed as expected; underwriWng up 7% > Lower investment returns – equity markets less favourable >

  46. Slide 46: Financial Services

    FINANCIAL SERVICES Revenue OperaWng profit (Rm) (Rm) 543 +6% -­‐6% 2 167 511 2 055 H1 2014 H1 2015 H1 2014 H1 2015 OperaWng profit split Net underwriWng margin (Rm) (%) 543 511 12,8% 168 87 11,0% 9,2% 166 138 237 258 H1 2014 H1 2015 H1 2014 H2 2014 H1 2015 Investment income, including fair value adjus

  47. Slide 47: Imperial's Approach to Motor Related Financial Services

    IMPERIAL’S APPROACH TO MOTOR RELATED FINANCIAL SERVICES Insurance & motor related financial products & services Finance > Extensive retail network Insurance provides scale & points of sale Maintenance and for the group’s financial service plans services business WarranWes > Market intelligence & a bas

  48. Slide 48: Growth Imperial Group: Financial Services

    GROWTH IMPERIAL GROUP FINANCIAL SERVICES Revenue OperaWng profit (Rm) (Rm) 4 year 4 year CAGR CAGR =7% =10% 543 538 2 167 2 166 2 165 511 2 085 2 073 2 055 491 454 1 833 431 1 770 415 1 639 345 344 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

  49. Slide 49: Agenda

    AGENDA OPERATIONAL FINANCIAL KEY FEATURES CONTEXT REVIEW REVIEW STRATEGY PROSPECTS 49

  50. Slide 50: Income Statement

    INCOME STATEMENT H1 2014 H1 2015 Rm Rm % change Revenue 51 357 56 234 9% LOGISTICS +14% new contract gains, strong growth in Rest of Africa, acquisiWons & REVENUE CONTRIBUTION PER weak currency 4 4 21 DIVISION 23 (%) 33 32 VEHICLES +7% H1 2014 H1 2015 17 16 price increases in new vehicles; growth in

  51. Slide 51: Income Statement

    INCOME STATEMENT H1 2014 H1 2015 Rm Rm % change Revenue 51 357 56 234 9% OperaWng profit 3 166 2 872 (9%) OperaWng profit margin 6.2% 5.1% OPERATING PROFIT LOGISTICS +12% CONTRIBUTION PER contract gains, acquisiWons & 17 20 DIVISION 17 27 currency weakness (%) 23 H1 2014 12 H1 2015 27 VEHICLES -­‐25%

  52. Slide 52: Divisional Statistics

    DIVISIONAL STATISTICS OperaWng margin 26,4% (%) 23,6% 7,0% 6,0% 6,0% 4,5% 4,2% 4,2% 4,0% 3,2% LogisWcs Africa LogisWcs InternaWonal Vehicle import, distribuWon Vehicle retail, rental Financial Services & dealerships & agermarket parts H1 2014 H1 2015 Return on invested capital 31,4% (%) 28,9% 20,3%

  53. Slide 53: Income Statement

    INCOME STATEMENT H1 2014 H1 2015 Rm Rm % change Revenue 51 357 56 234 9% OperaWng profit 3 166 2 872 (9%) Recoupments from disposal of properWes 39 12 AmorWsaWon of intangible assets (147) (205) 39% Foreign exchange (losses)/gains on foreign currency monetary items (16) 117 Loss on remeasurement of p

  54. Slide 54: Income Statement

    INCOME STATEMENT H1 2014 H1 2015 Rm Rm % change Net financing costs (420) (598) 42% Income from associates 18 12 (33%) Tax (689) (562) Net profit for the period 1 931 1 594 (17%) Akributable to Imperial shareholders 1 734 1 426 (18%) Akributable to minoriWes 197 168 (15%) > Net finance costs increased

  55. Slide 55: Balance Sheet

    BALANCE SHEET June 2014 H1 2015 Rm Rm % change Property, plant and equipment 10 469 10 746 3% Transport fleet 5 322 5 513 4% Vehicles for hire 2 303 2 793 Goodwill and intangible assets 6 766 7 397 9% Associates, investments and loans 3 886 4 494 16% Other assets 1 516 1 848 Net working capital 8 675

  56. Slide 56: Balance Sheet

    BALANCE SHEET June 2014 H1 2015 Rm Rm % change Total shareholders’ interest 18 109 18 262 Net interest bearing borrowings 11 441 15 109 32% Other liabiliWes 9 387 10 404 11% Equity and liabiliWes 38 937 43 775 > Shareholder interest impacted by: • akributable earnings of R1 426m • put opWon liabilit

  57. Slide 57: Cash Flow – Operating Activities

    CASH FLOW – OPERATING ACTIVITIES H1 2014 H1 2015 Rm Rm % change Cash generated by operaWons 4 328 4 257 Net working capital movements (2 244) (1 405) Cash generated by operaWons 2 084 2 852 37% Net finance costs and tax paid (945) (1 031) Cash flow from operaWng acWviWes before rental assets capex 1 1

  58. Slide 58: Cash Flow – Investing Activities

    CASH FLOW – INVESTING ACTIVITIES H1 2014 H1 2015 Rm Rm % change Net acquisiWon and disposals of subsidiaries and businesses 148 (905) Capital expenditure (1 662) (1 417) (15%) Expansion (1 015) (806) Replacement (647) (611) Net movement in associates and JVs (75) 25 Net movement in investments, loan

  59. Slide 59: Cash Flow – Summary

    CASH FLOW – SUMMARY H1 2014 H1 2015 Rm Rm % change Cash flow from operaWng acWviWes 587 1 013 73% Total invesWng acWviWes (1 718) (3 294) 87% Financing acWviWes Dividends paid (1 050) (917) Other financing acWviWes (201) (206) Increase in net borrowings (2 382) (3 404) Free cash flow -­‐ total operaWon

  60. Slide 60: Gearing

    GEARING Net debt to equity (%) > Higher net debt to fund: • acquisiWons • higher working capital 83% • expansion capex 63% > Net debt:equity impacted by 62% 77% R1.4bn reducRon in equity due 52% 50% to a put opRon liability -­‐ minority 48% 60% 39% 39% shareholdings in Eco Health and 31% Imres > Cap

  61. Slide 61: Returns

    RETURNS ROE ROIC vs WACC (%) (%) 16,5 16,3 16,2 22 22 21 13,0 19 19 12,2 11,9 17 10,5 10,1 9,7 9,1 9,1 8,8 F2010 F2011 F2012 F2013 F2014 H1 2015 * F2010 F2011 F2012 F2013 F2014 H1 2015 * Based on a rolling twelve months ROIC WACC ROE is good Objec&ve: average ROIC > than WACC + 4% through the cycles

  62. Slide 62: Agenda

    AGENDA OPERATIONAL FINANCIAL KEY FEATURES CONTEXT REVIEW REVIEW STRATEGY PROSPECTS 62

  63. Slide 63: Strategy

    STRATEGY > The environment & the size & complexity of Imperial demands strategic clarity at two levels: • Corporate strategy as a Group – more expansive & precise as to the value added & the parenWng advantage created by Imperial Holdings – clarify precisely how Holdings should influence & relate to

  64. Slide 64: Parenting Role – 4 Strategic Thrusts

    PARENTING ROLE – 4 STRATEGIC THRUSTS > Develop the Group – acquire, merge, integrate, drive the profitability of companies & assets involved in mobility, & dispose non-­‐core, strategically misaligned assets > Raise, Allocate & Control Capital for Sustainable Value AccreRon – funding the Group’s debt

  65. Slide 65: Agenda

    AGENDA OPERATIONAL FINANCIAL KEY FEATURES CONTEXT REVIEW REVIEW & STRATEGY PROSPECTS ACQUISITIONS 65

  66. Slide 66: Prospects

    PROSPECTS > The factors most relevant to the fortunes of Imperial are: • the weakening of the Rand against the currencies in which we import new vehicles • the poor state of the South African economy • a much slower than expected recovery of the German economy • the impact of poliWcal uncertainty an

  67. Slide 67: Thank You

    LEADERS IN MOBILITY THANK YOU

Imperial Holdings — H1 2015 Earnings Presentation on 6ix