Slide 1: Results Presentation for the year ended 31 December 2021
Results Presentation for the year ended 31 December 2021
Slide 2: 2021 in context
01 2021 in context Financial review Operating review Financial performance Outlook 22
Slide 3: 2021 in context
2021 in context ▪ Pleasing financial performance in complex environment ▪ Robust demand, improved margins, volumes and mix ▪ Significant cost increases ▪ Unprecedented supply chain constraints across all sectors ▪ Increase demand from customers from local sources ▪ Capacity constraint towards end of
Slide 4: Mpact Renewable Energy
Mpact Renewable Energy • Purpose: Sustainable energy generation, security of supply and cost saving In Construction: Capacity • Scope: Installation of solar PV and Location Complete MWp inverters and compatibility with other energy Atlantis 0.6 Capacity backup. Brings total solar PV capacity to Loca
Slide 5: New injection moulding factory Mpact Plastic Containers, Castleview
New injection moulding factory Mpact Plastic Containers, Castleview • Purpose: Expansion of capabilities to meet customer requirements and extend innovative product offering, including food grade production facility and automated warehouse • Scope: Property; setup manufacturing facility and warehous
Slide 6: New recycling facility Mpact Plastic Containers, Brits
New recycling facility Mpact Plastic Containers, Brits • Purpose: Closing the loop by increasing end-of-life buyback arrangements with bin and crate customers and offering increased recycled content in new products • Scope: Acquisition and development of new property. Double recycling capacity of us
Slide 7: Recycling and export handling facility - KZN
Recycling and export handling facility - KZN • Purpose: Closing the loop and reducing costs by increasing collection and processing of recyclables closer to Mpact’s Felixton paper mill; replace facilities currently leased for recycling and handling of the Group’s exports and imports (currently outso
Slide 8: Mpact Foundation Trust bursary scheme transforming lives
Mpact Foundation Trust bursary scheme transforming lives • Purpose: Making a difference in our communities by enabling children of our employees to their aspirations • Scope: Bursaries are awarded for full-time study at any public, accredited higher education institution within South Africa • Invest
Slide 9: Implementation of extended producer responsibility legislation
Implementation of extended producer responsibility legislation 9
Slide 10: Food safety leadership in packaging
Food safety leadership in packaging Packaging in a Circular Economy Raw material risk management in a Food safety compliance Circular Economy verification Sensory research to Analytical service to understand odour and Mpact and their taste deviations as a customers for peace of result of packaging m
Slide 11: WHY is innovation important for Mpact?
WHY is innovation important for Mpact? To build and maintain a system of sustainable competitive advantage based on innovation, research and technical support, so that Mpact and our customers can be successful.
Slide 12: Award winning innovation
Award winning innovation RUSSIN pe
Slide 13: Financial review
02 2021 in context Financial review Operating review Financial performance Outlook 13 13
Slide 14: Financial review
Financial review from continuing operations, excluding Versapak plastic trays & films business¹ Group revenue ▪ Revenue up 12.6% to R11.5bn 12,000 10 258 11 549 ▪ Sales volumes up 8.8% ▪ Price / Mix variance 3.8% 10 221 10,000 8,000 5,497 5,568 6,090 ▪ Gross profit of R4.3bn up 13.5% R million 6,000
Slide 15: Operating review
03 2021 in context Financial review Operating review Financial performance Outlook 15 15
Slide 16: Paper business
Paper business Segment revenue 9 725 10,000 8 733 8 665 ▪ Revenue up 12.2% to R10bn 8,000 5,086 ▪ External sales volumes up 8.7% 4,655 4,659 ▪ Containerboard, cartonboard up 9.8% R million 6,000 4,000 ▪ Paper converting up 5.7% 2,000 4,078 4,006 4,639 ▪ Underlying operating profit up 51.5% to R875m
Slide 17: Plastics business
Plastics business from continuing operations, excluding Versapak plastic trays & films business¹ Segment revenue 2,000 1 861 1 530 1 629 ▪ Revenue up 14.2% to R1.86bn 1,500 1,022 ▪ Good recovery in volumes across most businesses, up R million 930 1,000 863 9.5% ▪ Higher average price up 4.7% 500 839
Slide 18: Financial performance
04 2021 in context Financial review Operating review Financial performance Outlook 18 18
Slide 19: Variable cost of sales
Variable cost of sales from continuing operations, excluding Versapak plastic trays & films business +12% Benchmark recovered paper prices (OCC) 300 8,000 (December 2019 = 100) 7 286 250 7,000 6 175 6 503 839 11% 200 Index 756 888 11% 6,000 782 150 801 844 22% 5,000 764 100 693 690 951 R million 27%
Slide 20: Fixed costs
Fixed costs from continuing operations, excluding Versapak plastic trays & films business +5% 3,500 3 115 3 316 3 149 3,000 500 7% 618 538 ▪ Personnel costs up 7.7% on comparative basis 2,500 978 8% ▪ 4.5% related to salary and wage increases 903 ▪ Increase in man-hours 942 2,000 ▪ Covid-19 interven
Slide 21: Financial review
Financial review from continuing operations, excluding Versapak plastic trays & films business R million 2021 2020 change Underlying profit before tax 816 447 82.6% Tax charge before special items (233) (87) (>100%) Non-controlling interests (54) (45) (22.2%) Underlying earnings 529 315 68.1% Specia
Slide 22: ROCE and net debt
ROCE and net debt from continuing operations, excluding Versapak plastic trays & films business Return on Capital Employed (ROCE)¹ 20% ▪ Strong improvement in ROCE to 17.8% (December 17.8% 2020: 11.4%) ▪ Increase in underlying EBIT % 15% 12.7% 11.4% 10% 5% 2019 2020 2021 Net debt 2,300 2,292 ▪ Net d
Slide 23: Net finance costs
Net finance costs R million 2021 2020 change Net debt – close 1,756 1,408 24.8% ▪ Net finance costs reduced by 17.7% Net debt – average 1,714 2,074 (17.4%) ▪ Lower average net debt and reduced interest rates Net finance cost 140 170 (17.7%) ▪ Interest cover improved to 6.8 times (December 2020: 3.6
Slide 24: Trade working capital
Trade working capital from continuing operations, excluding Versapak plastic trays & films business Trade working capital % of revenue 2,500 ▪ Trade working capital percentage to revenue 2,000 normalised to 17.9% 21.7% ▪ Higher receivables due to 1,500 ▪ Increased sales volumes and price 2,237 R mil
Slide 25: Movement in net debt
Movement in net debt from continuing operations, excluding Versapak plastic trays & films business 2,000 1,431 1,500 1,000 500 R million 0 (144) (115) (114) (257) -500 (462) (687) -1,000 -1,500 (1,408) (1 756) -2,000 Net debt at Cash generated Working capital Capital expenditure Interest paid Income
Slide 26: Debt facility maturing profile
Debt facility maturing profile 1000 900 850 850 ▪ Facility headroom including general banking facilities in 800 excess of R1bn ▪ R900m of facilities mature August 2022 R million ▪ Commenced refinancing discussion with lenders 600 ▪ Well within debt covenants 400 August 2022 1 - 2 years 2 - 3 years B
Slide 27: Taxation
Taxation from continuing operations, excluding Versapak plastic trays & films business and before special items R million 2021 2020 change Taxation charge 233 87 >100% Effective tax rate 28.5% 19.4% 9.1 Tax paid 115 71 60.0% ▪ Tax rate approximates statutory corporate tax rate of 28% ▪ S12I and S12L
Slide 28: Capital expenditure cash flows
Capital expenditure cash flows 800 687 700 569 ▪ Investments of over R700m approved in 600 171 518 growth, innovation and sustainability projects 500 130 R million 400 214 ▪ Corporate capital expenditure 252 175 comprises of mainly property 300 acquisitions for Group operations 81 200 264 264 100 22
Slide 29: Dividends and share buyback
Dividends and share buyback Returns to shareholders – dividend and share buybacks 400 331 300 Average R million price Shares Number of Value Rand per repurchased shares Rm share 200 257 2020 9,716,002 88 9.01 100 2021 15,413,152 257 16.68 104 88 74 Total 25,129,154 345 13.71 0 2019 2020 2021 Cash di
Slide 30: Outlook
05 2021 in context Financial review Operating review Financial performance Outlook 30 30
Slide 31: THANK YOU
06 THANK YOU 31 31
Slide 32: Versapak plastic trays and films – Discontinued operation
Versapak plastic trays and films – Discontinued operation R million 2021 2020 change Revenue 920 839 9.7% Underlying EBIT 2 24 (91%) Net asset value 301 217 38.7% Total net working capital 190 150 26.8% ▪ Disclosed separately in the Annual Financial Statements for the year ended 31 December 2021, wi