Bidvest Group Limited · JSE:BVT
Bidvest — FY2023 Earnings Presentation
31 slides from Bidvest's earnings presentation, 2023
Slide 1: Investor Presentation for the year ended 30 June 2023
Investor Presentation for the year ended 30 June 2023 PEOPLE AND PRODUCTS BEHIND A BRIGHTER FUTURE
Slide 2: Introduction, Financial overview, Operational reviews, Strategy & outlook, Appendices
Mpumi Madisa 01 Introduction Mark Steyn 02 Financial overview Mpumi Madisa 03 Operational reviews Mpumi Madisa 04 Strategy & outlook 05 Appendices
Slide 3: 01 Introduction
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Slide 4: Reflections by the CEO
Reflections by the 12 Bidvest’s offshore profit contribution (Rbn) CEO 10 8 • Scale, innovation and strategic expansion culminated 6 in a fantastic result 4 • 7 divisions reported double-digit trading profit growth; FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 (Covid adj) 4 delivered >R1
Slide 5: Year's Highlights
Year’s Normalised HEPS (cents) 2 000 Highlights 1 500 1 000 • Trading profit up 17.6% to R11.4 billion 500 • Strong organic performance • Revenue +12.7% 0 FY2019 FY2020 FY2021 FY2022 FY2023 • Trading profit +14.1% 1H 2H • Margin management good despite higher input cost, DPS (cents) energy and wage
Slide 6: 02 Financial overview
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Slide 7: Financial Highlights
Financial Highlights R billion Year ended 30 June 2023 Year ended 30 June 2022 Change Revenue 114.9 99.9 15.0% Gross profit margin 29.0% 30.0% ↓ Expense margin 19.5% 20.5% ↓ EBITDA 13.2 11.4 16.2% Trading profit 11.4 9.7 17.6% Trading profit margin 10.0% 9.7% ↑ HEPS (cents) 1 794.8 1 442.0 24.5% Nor
Slide 8: Income Statement Analysis
Income Statement Analysis • Revenue +15.0% (+12.7% organic) • Acquisitions added 230bps to growth • Growth in Services SA, Freight and Commercial Products led by activity growth, elsewhere mainly price driven • Gross income +11.3% • Gross margin decline 100bps to 29.0% • Input price pressure, distri
Slide 9: Debt Profile
Long-dated funding Interest cover 20 Profile 15 10 9,4 9,4 9,8 9,4 8,6 • 65% of gross debt offshore; 80% of net debt 5 8,2 8,4 8,2 • 81% of gross debt is long-term 10,0 19,2 15,8 13,3 15,5 12,0 18,6 18,1 • 56% of gross debt at fixed rates 0 1HFY2020 FY2020 1HFY2021 FY2021 1HFY2022 FY2022 1HFY2023 FY
Slide 10: Good Cash Generation
Free cash flow (Rbn) Good cash 14,8 (2,6) Generation (3,4) (2,5) (1,8) (2,4) (2.9) 2.5 • Cash generated before working capital increased 13.3% to R14.8 billion • Working capital seasonal release of R2.9 billion to end Cash generated Working capital Capex Cash effects of investing Net finance Taxatio
Slide 11: Strong Balance Sheet
Strong Balance Sheet • Capex R3.4 billion (FY2022 R3.0 billion) • Increased capacity in packaging lines, UDS • Maintenance capex includes fleet renewal, statutory tank upgrades • Two new warehouse distribution centers • Executing on approved Freight expansion of R910 million • Disposal group held fo
Slide 12: 03 Operational reviews
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Slide 13: Services International
CEO: Alan Fainman Services International Financial performance Revenue +20.9% • Superb 2H secured YoY growth off extraordinary FY22 base R33.2bn • Almost equal contributions from hygiene and facilities management Trading profit +9.8% services clusters R3.4bn • Record wage inflation in all territorie
Slide 14: Freight
CEO: Wiseman Madinane Freight Financial performance Revenue +12.7% • Exceptional performance as team worked around impaired rail R8.4bn infrastructure challenges Trading profit +22.5% • Terminal and related operations in SA handled broadly stable R2.2bn volumes at a higher price mix Trading margin +
Slide 15: Commercial Products
CEO: Howard Greenstein Commercial Products Financial performance Revenue +32.2% • Excellent result driven by exponential growth in renewable energy R19.9bn sales, 10x increase YoY Trading profit +21.4% • High input cost pressure, loadshedding, intense competition and R1.4bn negative price mix constr
Slide 16: Services SA
CEO: Akona Matsau Services SA Financial performance Revenue +26.9% • Great performance as underlying drivers of travel rebound, corporate R10.4bn occupancies and market share gains accelerated Trading profit +21.4% • Impressive operating leverage in Travel Services as higher volumes R1.1bn were serv
Slide 17: Branded Products
CEO: Gail Solomon Branded Products Financial performance Revenue +13.0% • Another very pleasing result R11.7bn • 2 out of the 3 clusters delivered double digit profit growth Trading profit +15.5% • Material input cost increases and loadshedding impacts neutralised R0.9bn by excellent expense control
Slide 18: Automotive
CEO: Carla Seppings Automotive Financial performance Revenue +5.2% • An impressive result given the incremental build in discretionary R24.9bn spend pressure during the year Trading profit +11.7% • Noticeable shifts in the market → brands, pricing, new vs used, R0.9bn operating models Trading margin
Slide 19: Financial Services
CEO: Hannah Sadiki Financial Services Financial performance Revenue +12.2% • Excellent turnaround result → 4x increase YoY; +40% on FY21 R2.7bn • Core trading profit up to R329 million and investment Trading profit +441.5% income +R117 million R0.5bn • Bidvest Bank accelerated capital deployment wit
Slide 20: Adcock Ingram
CEO: Andy Hall Adcock Ingram Financial performance Revenue +4.9% • Bidvest shareholding: 62.3% R9.1bn • Revenue → Mix +4.2%; price +3.4% Trading profit +4.0% • Gross margin declined marginally (35.1% to 34.9%) R1.2bn • Operating expenses up only 3.1% Trading margin -10bps • Funds employed increased
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Slide 22: Bidvest Value Proposition
Bidvest Value Proposition People 6 335 jobs created Planet Diversity, empowerment and impact of our Reduced emission and water intensity by 32% leadership and employees and 38%, respectively R760 million invested in skills development 3% of electricity used from green sources. Investment in employee
Slide 23: The Outlook
The Outlook • Group portfolio and strategy aims to • deliver a resilient recurring base; and • capitalise on structural growth themes, locally and internationally • Product, service and geographic diversity remain a key strength as multiple social and economic shifts play out • Expect robust demand
Slide 24: 04 Strategy & outlook
Slide 25: 05 Appendices
Services International Looking ahead • Record high wage inflation in all territories, compounded by full employment in our international territories • Adding new territories and • COVID work and sanitiser sales disappeared growing existing market share • Technology being leveraged across all operati
Slide 26: Services International Looking ahead
Freight Looking ahead Bidvest Tank Terminals • Flat volumes → + gasses, fuels; - chemicals, vegetable oils • Demand in key commodities • Improved storage capacity let stabilised, opportunities in other Bidvest International Logistics • Several new potential projects • Strong organic growth, automoti
Slide 27: Freight Looking ahead
Commercial Products Looking ahead Trade • The turmoil in energy sector • Electrical businesses delivered superb results, even excl renewable sales. Cabstrut faced pricing pressures will continue to benefit • Merger between Professional Lighting and Eagle is proving successful • Another solid result
Slide 28: Commercial Products Looking ahead
Services South Africa Looking ahead Security and Aviation • Competitive SA environment • Positive growth from Bidvest Protea Coin reflects pleasing new business. UDS and Bidtrack delivered strong results • Innovative sales initiatives • The non-repeat of COVID work and shifts away from more expensiv
Slide 29: Services South Africa Looking ahead
Branded Products Looking ahead Data, Print and Packaging • Product realignment and • Strong result across almost all businesses expansion considered in • Significant input costs had to be navigated along with excellent expense management certain areas Office Products • Back to Work and School • Exce
Slide 30: Branded Products Looking ahead
Automotive Looking ahead • McCarthy new vehicle market share slightly lower at 6.4% • Focus on asset turn as demand • New imported vehicle brands disrupting the market softens while supply rises • Supply from traditional volume brands remained erratic • Increasing brand • The division's used car ret
Slide 31: Automotive Looking ahead
Financial Services Looking ahead Bidvest Bank • Cross selling of products and • Capital payouts up 114% to R2.3 billion services to new and existing • Leased assets R1.7 billion; Loans and advances R3.4 billion • Deposit base +7% to R8.0 billion clients gaining momentum • Credit Loss Ratio 1.0% (FY2