Slide 1: Annual financial results, year ended June 30 2010
Our people are our universe... Annual financial results year ended June 30 2010 1
Slide 2: Agenda
Agenda 1 Financial Highlights David Cleasby – Group FD 2 Operational Review Brian Joffe – Group CEO 3 The Future Brian Joffe – Group CEO Appendix 1 4 Financial Results Appendix 2 5 Segmental results analysis and strategic imperatives and prospects Appendix 3 6 Historic performance 2
Slide 3: Financial Results
Our people are our universe... Financial Results David Cleasby - Group FD 3
Slide 4: David Cleasby – financial highlights
Financials David Cleasby – financial highlights • Revenue down 2,3% (on constant currency up 4,2%) – benefits of Nowaco offsets Safcor decline, currency impact Trading Profit Rand Earnings • Two contrasting halves for rate of growth in trading profit (1H10 flat, 2H10 16,5% up) & HEPS (1H10 9,0% up,
Slide 5: Notable financial influences on the result
Financials David Cleasby – notable financial influences on the result • Rand strength – exchange rate continued to strengthen during 2H, 4,2% Debt to equity vs. EBITDA interest cover negative translation impact on HEPS – ZAR on average up 17% vs. GBP, 14% vs. EUR, flat vs. AUD 35% • Working capital
Slide 6: Financial pointers for F2011
Financials David Cleasby – financial pointers for F2011 • Cash absorption in working capital is highly likely again as growth resumes • Cash generation anticipated to be positive, gearing % should reduce further unless there is corporate activity • Financial position (Balance sheet) strong and good
Slide 7: 2010 in perspective
Our people are our universe... 2010 in perspective Brian Joffe – Group CEO 7
Slide 8: Brian Joffe on the F2010 trading year
CEO Review Brian Joffe on the F2010 trading year • P&L is key to Bidvest: People & Lives are a function of Profit & Loss, if we get our People right the financials fall into place - in 2010 a record high number of employees • We had a few hiccups but Bidvest people delivered a good result and South
Slide 9: 2010 FIFA World Cup
CEO Review Brian Joffe on the F2010 trading year 2010 FIFA World CupTM Bidvest’s 2010 FIFA World CupTM committee identified, coordinated and facilitated opportunities • Minority interest in MATCH Hospitality AG confers preferred supplier status – including Brazil in 2014 • Many Bidvest business in S
Slide 10: Bidvest Foodservice structure
CEO Review Brian Joffe on the refreshed divisional structures Bidvest Foodservice • Bidvest Foodservice incorporates all food businesses worldwide • Reporting to a global Bidvest Foodservice Chief Executive • 3663 in UK split into 3663 Wholesale and Bidvest Logistics each with an MD – focus, efficie
Slide 11: Automotive and Industrial & Commercial Products structures
CEO Review Brian Joffe on the refreshed divisional structures Automotive • New divisional structure: Retail, Financial services, Budget Car & Van Rental, Yamaha Distribution; exiting yellow metal business • Fleet Solutions incorporated within Bidvest Bank and reports as part of Bidvest Services • Su
Slide 12: Bidvest Freight
CEO Review Brian Joffe on Bidvest Freight Revenue R15,9bn, down 15% on reduced Safcor Panalpina billings Profit R794,3m, up 3% assisted by a strong bulk terminals result • A very acceptable result with profits at a record despite a challenging economy • Transnet strike – costly chain reaction throug
Slide 13: Bidvest Services
CEO Review Brian Joffe on Bidvest Services Revenue R7,9bn, down 2% but flat ex Bank and Fleet Solutions Profit R1,1bn, down 5% and also broadly flat ex Bank and Fleet Solutions • Discretionary spend businesses impacted by recession but “soft service” portfolio resilient • Significant H2 improvement
Slide 14: Bidvest Foodservice - Europe
CEO Review Brian Joffe on Bidvest Foodservice - Europe Revenue R35,5bn, largely stable in all local currencies in a difficult environment Profit R897,8m, up 17% • Eastern Europe 31% of operating profits (ex acquisition expenses), £24,5m/€30m • Nowaco/Farutex meet expectations, smooth and enthusiasti
Slide 15: Bidvest Foodservice – Asia Pacific
CEO Review Brian Joffe on Bidvest Foodservice – Asia Pacific Revenue R17,5bn, up 3%, all territories well ahead in local currency Profit R729,2m, up 21%, all territories perform exceptionally well • Asia Pacific 31% up in constant currency ex adjustments • In Australia H2 weaker but margin overall a
Slide 16: Bidvest Foodservice – Southern Africa
CEO Review Brian Joffe on Bidvest Foodservice – Southern Africa Revenue R5,4bn, up 9%, sharp reduction in price inflation Profit R418,9m, up 9%, margins under pressure • Bidvest Foodservice SA (formerly Caterplus): flat revenue and profit for the year but much improved H2 , 2010 FIFA World CupTM foc
Slide 17: Bidvest Industrial & Commercial Products
CEO Review Brian Joffe on Bidvest Industrial & Commercial Products Revenue R8,6bn, down 7% on weak demand Profit R421,3m down 29%, intense competitive pressure, deflationary forces • Electrical and Office Furniture severely impacted by recession • Voltex weak on declining construction business • Wal
Slide 18: Bidvest Paperplus
CEO Review Brian Joffe on Bidvest Paperplus Revenue R2,1bn, up 8%, management action counteracts a weak market Profit R248,3m, 11% rise does not do justice to some spectacular gains in growth businesses • Result assisted by 2010 FIFA World CupTM contracts secured • Traditional print & conversion wea
Slide 19: Bidvest Automotive
CEO Review Brian Joffe on Bidvest Automotive Revenue R17,3bn, up 11% as motor retail market turns for the better Profit R424,1m, up 60% on right-sizing benefits and dealership turnarounds • Slightly better H2 on sales, particularly new cars, fleet far better than private market • Overall sales volum
Slide 20: Bidvest Namibia
CEO Review Brian Joffe on Bidvest Namibia Revenue R1,9bn, up 20% in first year as a listed company with a unique identity Profit R367,9m, up 25% as fishing result outperforms • A combination of Commercial and Fishing interests appropriate for its home market • A mixed result from BidCom but on whole
Slide 21: The future
Our people are our universe... The future Brian Joffe – Group CEO 21
Slide 22: Brian Joffe on culture and leadership
CEO Review Brian Joffe on culture and leadership • Bidvest is a dynamic organisation, it reinvents itself daily through its culture, seeds are planted every day (innovation and entrepreneurship), when they germinate they need to be given a life of their own (decentralisation) – this is not new and w
Slide 23: Brian Joffe on the year ahead
CEO Review Brian Joffe on the year ahead • Impact of rand if remains strong – local margin pressure, translation of overseas profits • Economic landscape tricky to predict with any degree of confidence • Economic recession has shaken out competitors in a number of areas • Bidvest companies will bene
Slide 24: Thank you
Our people are our universe... Thank you 24
Slide 25: Appendix – Financial Results
Our people are our universe... Appendix 1 Financial Results 25
Slide 26: Consolidated income statement – revenue
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% • R7,4bn adverse exchange rate impact on revenue just in translation • R2,8bn reduction in Safcor Panalpina billings, a 18%
Slide 27: Consolidated income statement – trading profit
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Trading margins 2010 2009 Comment Local 6,5% 6,1% Foreign 3,7% 3,1% Nowa
Slide 28: Consolidated income statement – net finance expense
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% • R270,7m re
Slide 29: Consolidated income statement – associate income
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate In
Slide 30: Consolidated income statement – taxation
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate In
Slide 31: Consolidated income statement – minority interests
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate In
Slide 32: Consolidated income statement – headline earnings
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate In
Slide 33: Consolidated income statement – HEPS
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate In
Slide 34: Consolidated income statement – diluted HEPS
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate In
Slide 35: Consolidated income statement – distribution
Appendix 1 Consolidated income statement Avg Avg 2010 in constant currency Year ended June 30 2010 R/£12,05 R/£14,47 R/£ 14,47 Revenue 109 789,2 -2,3% 112 427,8 117 144,4 4,2% Trading profit 5 554,7 +8,1% 5 136,6 5 746,8 +11,,9% Net finance expense (758,5) -26,3% (1 029,2) (778,9) -24,3% Associate I
Slide 36: Consolidated cash flow statement
Appendix 1 Consolidated cash flow statement – Rbn’s Year ended June 30 2010 Year ended June 30 2009 7,3 6,9 Cash generated from ops pre wc 0,7 -0,1 Working capital generated (utilised) -0,7 -1,0 Net Finance charges -1,2 -1,2 Taxation -1,3 -1,1 Distributions -1,9 -4,9 Cash effects of investment act’s
Slide 37: Net working capital days
Appendix 1 Net working capital days Year ended June 30 2010 17 9 16 8 11 9 Net days 33 33 30 30 Debtors days 36 31 33 34 33 30 32 34 Stock days Creditors days -49 -61 -50 -53 -51 -55 H1 2008 F2008 H1 2009 F2009 H1 2010 F 2010 Some improvement in working capital management: • Inventory - increased bu
Slide 38: Net working capital flows vs cash generated
Appendix 1 Net working capital flows vs cash generated Year ended June 30 2010 Net working capital Cash generated by operations 5 4 3,6 3,8 3,3 3,5 3,5 3,2 3 2,3 2 1,8 1,1 1 0 -1 -0,4 -2 -3 -2,5 -2,4 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 • Upward trend in half on half cash generated • Over
Slide 39: Net interest-bearing debt and interest cover
Appendix 1 Net working capital flows vs cash generated Year ended June 30 2010 Net interest-bearing debt (Rbn) Interest cover (x) 9 8 8 7,2 7 7,9 6,8 7 Target interest cover range 7,3 6 5,5 5,7 6 4,8 5,9 5 5 5,5 4,7 4 4 4,1 3,3 3 3 2 2 1 1 0 0 H1 2008 F 2008 H1 2009 F 2009 H1 2010 F 2010 • Clean EBI
Slide 40: Appendix – Segmental results analysis and strategic imperatives and prospects
Our people are our universe... Appendix 2 Segmental results analysis and strategic imperatives and prospects 40
Slide 41: Revenue & Profit by geography
Appendix 2 Revenue & Profit by geography Southern Africa, Asia Pacific, Europe F2010 F2009 51% 51% 33% 34% Revenue 16% SA 15% Asia Pacific 22% 19% UK & Europe 65% Trading Profit 69% 13% 12% Revenue Trading Profit Contribution F2010 F2009 F2010 F2009 Foreign Foodservice 47% 47% 29% 27% Southern Afric
Slide 42: Segmental contributions to results
Appendix 2 Segmental contributions to results % Contribution % Contribution Segment to to Revenue Trading Profit Bidvest Freight 14,2 14,1 Bidvest Services 7,0 20,0 Bidvest Foodservice 51,8 36,3 Bidvest Industrial & Commercial 7,7 7,5 Products Bidvest Paperplus 1,9 4,4 Bidvest Automotive 15,4 7,5 Bi
Slide 43: Freight – it’s a bulk connection
Appendix 2 Bidvest Freight – it’s a bulk connection • Bulk Connections • Island View Storage • Bidfreight Port Operations • Rennies Distribution Services • SACD Freight • South African Bulk Terminals • Naval • Safcor Panalpina Current contribution to Group Trading Profit • Marine • Manica 14,1% 43
Slide 44: Bidvest Freight results
Appendix 2 Bidvest Freight – it’s a bulk connection Results Revenue -14,5% • Performances of bulk businesses buoy result on recovering export Trading Profit +3,1% trade • Import volumes weak - depressed consumer goods demand Trading Profit Trading Margin • Attention to debtors during a difficult per
Slide 45: Freight – business unit review
Appendix 2 Bidvest Freight – it’s a bulk connection • Bulk Connections: volumes up over 30%, in part due to a doubling of manganese exports; profitability at a record; Durban lease extended by 25 years at additional cost but will be compensated for by extra volumes; new capex planned on this strateg
Slide 46: Services – recessionary resilience
Appendix 2 Bidvest Services – recessionary resilience Full range of outsourced services including: • Cleaning • Laundry • Hygiene • Security • Interior and exterior landscaping • Aviation services • Industrial workwear Current contribution to Group Trading Profit • Travel • Banking and foreign excha
Slide 47: Bidvest Services results
Appendix 2 Bidvest Services – recessionary resilience Results Revenue -2,2% • Soft services, ex Bank & Fleet, withstand worst of the recession Trading Profit -4,7% turning a 17% fall in H1 profits into a 16% increase in H2 profits • 2010 FIFA World CupTM only marginally beneficial in total Trading P
Slide 48: Bidvest Services – business unit review
Appendix 2 Bidvest Services – recessionary resilience • Prestige: an excellent result; new MD, selective reorganisation; 2010 FIFA World CupTM benefits hospitality cleaning and lavatory hire • Office – Konica Minolta & Oce: ended the year on a strong note with profits well up despite recessionary fo
Slide 49: Foodservice Europe – expanding as belts tighten
Appendix 2 Bidvest Foodservice Europe – expanding as belts tighten • 3663 Wholesale and Bidvest Logistics: UK • Deli XL: Netherlands • Deli XL: Belgium • Horeca: Middle East • Nowaco: Czech and Slovakia • Farutex: Poland Current contribution to Group Trading Profit 15,9% 49
Slide 50: Bidvest Foodservice Europe results
Appendix 2 Bidvest Foodservice Europe – expanding as belts tighten Results Revenue -4,1% • Group strengths place it in prime position to secure Trading Profit +16,5% attractively priced expansion into Eastern Europe at a time of fiscal and economic difficulty – boosts divisional profits by Trading P
Slide 51: Foodservice Europe – 3663, Nowaco, Farutex
Appendix 2 Bidvest Foodservice Europe – expanding as belts tighten • 3663: sales flat at £1 687,2bn; gross margin down slightly but a 3% reduction in expenses (£10m); profits at £33,9m pre exceptionals; margin 2,0% • Significant improvement in cash generation + asset management; alert to bad debt ri
Slide 52: Foodservice Asia Pacific – a joint effort
Appendix 2 Bidvest Foodservice Asia Pacific – a joint effort • Bidvest Australia • Bidvest New Zealand • Angliss Singapore • Angliss greater China Current contribution to Group Trading Profit 12,9% 52
Slide 53: Bidvest Foodservice Asia Pacific results
Appendix 2 Bidvest Foodservice Asia Pacific – a joint effort Results Revenue +2,8% • Record contributions from all operations Trading Profit +21,1% • Greater China and Singapore contribute 16% of result • Australia (two-thirds of profits) largely shielded from GFC – Trading Profit Trading Margin Chi
Slide 54: Foodservice Asia Pacific – New Zealand and greater China
Appendix 2 Bidvest Foodservice Asia Pacific – a joint effort • New Zealand: sales up 11% to NZ$475,1m, profits up 15% to NZ$22,6, margin 4,8% (4,6%); New Zealand has had a prolonged recession but despite this the business continued to prosper due entirely to a sound strategy, a strong team and consi
Slide 55: Foodservice Southern Africa
Appendix 2 Bidvest Foodservice Southern Africa - closing off the year on a high note • Bidvest Foodservice SA (formerly Caterplus) • Bidfood Ingredients • Speciality Current contribution to Group Trading Profit 7,4% 55
Slide 56: Bidvest Foodservice Southern Africa results
Appendix 2 Bidvest Foodservice Southern Africa - closing off the year on a high note Results Revenue +8,7% • Despite a deflationary and shrinking marketplace 2010 profits at Trading Profit +8,5% a record level, with Ingredients & Speciality particularly strong • H1 profits down by a relatively respe
Slide 57: Foodservice Southern Africa – ingredients and prospects
Appendix 2 Bidvest Foodservice Southern Africa - closing off the year on a high note • Ingredients: revenue down slightly but profits up 19% despite deflationary pressures; 2010 FIFA World CupTM had minimal impact on result; Crown Trading result was down due to weak sales and deflation in key inputs
Slide 58: Industrial & Commercial Products – bottomed out
Appendix 2 Bidvest Industrial & Commercial Products – bottomed out • Electrical Wholesaling • Stationery • Office Furniture • Packaging Closures • Industrial Catering Equipment • Materials Handling (Nissan forklift trucks) Current contribution to Group Trading Profit 7,5% 58
Slide 59: Industrial & Commercial Products results
Appendix 2 Bidvest Industrial & Commercial Products – bottomed out Results Revenue -7,0% • Rate of decrease in profits slowed sharply in H2 and by Q4 there Trading Profit -29,4% was evidence that the worst was over; asset management was tightened and expenses increased by only 2%, well below budget;
Slide 60: Industrial & Commercial Products – furniture, Kolok, packaging
Appendix 2 Bidvest Industrial & Commercial Products – bottomed out • Furniture: Corporate customers reduced, cancelled or deferred capex; a dreadful result in sympathy with the tight business environment with all three brands in loss; rationalisation has taken place • Kolok: a generally pleasing res
Slide 61: Paperplus – a good score
Appendix 2 Bidvest Paperplus – a good score • Printing and conversion • Sales & Distribution • Wholesale Stationery • Labeling and Packaging products • Personalisation and Mail • Alternative Products Current contribution to Group Trading Profit 4,4% 61
Slide 62: Bidvest Paperplus results
Appendix 2 Bidvest Paperplus – a good score Results Revenue +8,2% • Improved H2, revenue 25% higher (3% decline in H1), lifted by Trading Profit +10,8% 2010 FIFA World CupTM business such as hospitality packs, food packaging, and supplementary print runs Trading Profit Trading Margin • Strong cash g
Slide 63: Automotive – stabilising
Appendix 2 Bidvest Automotive – stabilising • Motor retail – 116 outlets • BMW/Mini, General Motors, Land Rover/Volvo, Mercedes- Benz, Chrysler/Jeep/Dodge/Mitsubishi, Nissan/Fiat/Alfa/ Renault, Peugeot/ Citroen, Toyota/Lexus/Hino, Volkswagen/Audi, Suzuki, Ford/Mazda, Chery, Foton, Mahindra • McCarth
Slide 64: Bidvest Automotive results
Appendix 2 Bidvest Automotive – stabilising Results Revenue +10,7% • Motor Retail Trading Profit +60,4% • Profits up 85% on a 12% rise in revenue as franchises stage a dramatic turnaround; operating margin remains inadequate at Trading Profit Trading Margin 1,4%; ROFE improved to 22% • 20% reduction
Slide 65: Automotive – rental, Yamaha and prospects
Appendix 2 Bidvest Automotive – stabilising • Budget Car & Van Rental: result disappointing in a cut-throat market; fleet utilisation slipped on poor 2010 FIFA World CupTM related demand; average daily revenue increased marginally • Yamaha Distributors: retains a strong product line-up but leisure m
Slide 66: Namibia – the ocean’s bounty
Appendix 2 Bidvest Namibia – the ocean’s bounty BidFish • Fishing and canning BidCom • Stationery and office furniture • Electrical supplies • Foodservice • Automotive services Current contribution to Group Trading Profit • Office solutions • Printer consumables 6,5% • Freight management services an
Slide 67: Bidvest Namibia results
Appendix 2 Bidvest Namibia – the ocean’s bounty Results Revenue +20,6% • Revenue up 20,6% to R1,95bn, profits up 25% to R367,9m driven Trading Profit +25,0% predominantly by Fishing (78% of profits) and a strong result out of Freight (9%). Services (4%) and Foodservice (2%) were broadly Trading Prof
Slide 68: Namibia – BidFish and prospects
Appendix 2 Bidvest Namibia – the ocean’s bounty • Industrial & Commercial Products: decline in contract business in office furniture, reduced furniture sales to companies, a disruptive computer accessories market, a weaker construction environment and generally tighter margins BidFish • Good catches
Slide 69: Corporate – a real estate
Appendix 2 Bidvest Corporate – a real estate • Corporate office • Bidvest Properties • Ontime Automotive Current contribution to Group Trading Profit 3,7% 69
Slide 70: Corporate results
Appendix 2 Bidvest Corporate – a real estate Results Trading Profit • Bidvest’s strategic property holdings contributed a substantial R176,6m in income, up 22% • Ontime Automotive loss reduced from R50m to R16m as a result of rationalisation 250 • Investment and other income and corporate costs made
Slide 71: Appendix – Historic performance
Our people are our universe... Appendix 3 Historic performance 71
Slide 72: Historic Performance – year to June
Appendix 3 Historic Performance – year to June Trading Profit Margins Returns 6000 60 5000 50 54 5,1% 5,1% 50 4000 5,5% 40 5,2% 42 3000 5,2% 30 39 Rm 36 % 4,9% 32 30 31 2000 4,6% 4,7% 20 24 4,3% 21 1000 4,5% 4,4% 10 4,7% 0 0 2005 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 H1 H2 ROFE ROE HEPS