Imperial Logistics — Imperial Holdings — FY2009 Earnings Presentation
53 slides from Imperial Logistics's earnings presentation, 2009
Slide 1: Imperial Holdings
Imperial Holdings
Slide 2: Operational features
Operational features • Overall a pleasing performance under tough circumstances • Strategic actions have led to a strong balance sheet • Global economic crisis negatively impacted trading volumes • European logistics was under significant pressure while Southern African operations performed well in
Slide 3: Continuing operations highlights
Continuing operations 13% HEPS 698 cents 43% Cash generated by operations R5 187m 7% Revenue R52 219m 16% Operating profit R2 453m (operating margin 4,7%) 20% EPS 503 cents • Final dividend of 120 cents per share (total 200 cents) • Debt/equity ratio down from 81% to 50% 3
Slide 4: Review of the financial results for the year ended 30 June 2009
REVIEW OF THE FINANCIAL RESULTS For the year ended 30 June 2009
Slide 5: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Decline mainly attributable to Dealerships and Distributorships Revenue from services increased 3% to R21,7 billion Revenue contribution per division 2009 2008 SA Logistics International Logistics 5% 5% Car Re
Slide 6: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Operating margin 4,7% 5,2% Margin decrease mainly in Dealerships and Distributorships - aggregate operating profit contribution down to 31% from 41% Operating profit contrib
Slide 7: Tale of two halves
Tale of two halves Continuing Operations 2009 2009 Halves R millions Full year H2 H1 %Δ Revenue 52 219 23 600 28 619 -17,5% Operating profit 2 453 1 301 1 152 +12,9% Operating margin 4,7% 5,5% 4,0% Revenue down in H2, operating margin up due to rationalisation in Distributorships, better underwritin
Slide 8: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 3921 146 Exceptional items and property recoupments (356)2 70 1. Foreign exchange gains include R394 million (2008:R150 million) o
Slide 9: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 3921 146 Exceptional items and property recoupments (356)2 70 1. Foreign exchange gains include R394 million (2008:R150 million) o
Slide 10: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 392 146 Exceptional items and property recoupments (356) 70 Negative fair value adjustments 0 (496) Net financing costs1 923 807 1
Slide 11: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 392 146 Exceptional items and property recoupments (356) 70 Negative fair value adjustments 0 (496) Net financing costs 923 807 In
Slide 12: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 392 146 Exceptional items and property recoupments (356) 70 Negative fair value adjustments 0 (496) Net financing costs 923 807 In
Slide 13: Income Statement
Income Statement Continuing Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 392 146 Exceptional items and property recoupments (356) 70 Negative fair value adjustments 0 (496) Net financing costs 923 807 In
Slide 14: Income Statement
Income Statement Total Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 392 146 Exceptional items and property recoupments (356) 70 Negative fair value adjustments 0 (496) Net financing costs 923 807 Income
Slide 15: Income Statement
Income Statement Total Operations (Rm) 2009 2008 % Change Revenue 52 219 55 927 -6,6% Operating profit 2 453 2 923 -16,1% Foreign exchange gains & forex derivatives 392 146 Exceptional items and property recoupments (356) 70 Negative fair value adjustments 0 (496) Net financing costs 923 807 Income
Slide 16: Significant minorities' share of earnings
Significant minorities minorities’’ share of earnings Rm European Logistics AMH SA Logistics Regent cell captive Regent other NAC Other (including MCC and Tourvest in 2008) Income Statement minority earnings Increased from June 2008 Decreased from June 2008 Flat compared to June 2008 16
Slide 17: Balance Sheet
Balance Sheet Jun Jun % Rm Dec 2008 2009 2008 change Property, plant and equipment 5 9761 5 681 +5% 6 025 Transport fleet 3 4831 3 465 +1% 3 722 Vehicles for hire 1 6532 1 286 +29% 1 472 1. PPE and Transport fleet reduced by approximately R400m due to currency translation of International logistics
Slide 18: Balance Sheet
Balance Sheet Jun Jun % Rm Dec 2008 2009 2008 change Property, plant and equipment 5 976 5 681 +5% 6 025 Transport fleet 3 483 3 465 +1% 3 722 Vehicles for hire 1 653 1 286 +29% 1 472 Investments in associates & JVs 7901 2 017 -61% 2 388 Other non-current assets 3 0392 4 632 -34% 4 104 1. Decrease i
Slide 19: Balance Sheet
Balance Sheet Jun Jun % Rm Dec 2008 2009 2008 change Property, plant and equipment 5 976 5 681 +5% 6 025 Transport fleet 3 483 3 465 +1% 3 722 Vehicles for hire 1 653 1 286 +29% 1 472 Investments in associates & JVs 790 2 017 -61% 2 388 Other non-current assets 3 039 4 632 -34% 4 104 Net working cap
Slide 20: Balance Sheet
Balance Sheet Jun Jun % Rm Dec 2008 2009 2008 change Property, plant and equipment 5 976 5 681 +5% 6 025 Transport fleet 3 483 3 465 +1% 3 722 Vehicles for hire 1 653 1 286 +29% 1 472 Investments in associates & JVs 790 2 017 -61% 2 388 Other non-current assets 3 039 4 632 -34% 4 104 Net working cap
Slide 21: Balance Sheet
Balance Sheet Jun Jun % Rm Dec 2008 2009 2008 change Property, plant and equipment 5 976 5 681 +5% 6 025 Transport fleet 3 483 3 465 +1% 3 722 Vehicles for hire 1 653 1 286 +29% 1 472 Investments in associates & JVs 790 2 017 -61% 2 388 Other non-current assets 3 039 4 632 -34% 4 104 Net working cap
Slide 22: Changes in total shareholders' interest
Changes in total shareholders shareholders’’ interest Description June 2009 Total shareholders’ interest on 30 June 2008 10 416 Net profit attributable to Imperial shareholders 1 518 Dividends paid to Imperial shareholders (689) Net decrease in minorities (224) Movement in foreign currency translati
Slide 23: Interest bearing debt
Interest bearing debt Rm Jun 2009 Jun 2008 % change Corporate bonds 7 301 7 686 -5% Commercial paper 1 336 1 618 -17% Overdrafts and overnight funding 173 912 -81% Other ¹ 984 1 383 -29% Gross debt 2 9 794 11 599 -16% Cash and cash equivalents 4 655 3 148 +48% Net Debt 5 139 8 451 -39% 1. Secured an
Slide 24: Gearing
Gearing Net debt to equity (%) Jun 2009 Dec 2008 Jun 2008 Target range 60 - 80 60-80 80 - 100 Net debt/equity ratio 50 76 81 Short term debt as a % of gross debt 22 24 30 24
Slide 25: Balanced capital management
Balanced capital management • Shareholders capital managed with great care • Switching to higher return industries and a lighter asset orientation • Pursuing decreased risk and cyclicality of operational earnings • Notwithstanding major restructuring that was required and tough market conditions sin
Slide 26: Cash Flow
Cash Flow Rm 2009 2008 % change Cash generated by operations 5 753 5 689 +1% Continuing operations 5 187 3 633 +43% Discontinued operations 566 2 056 Tax and finance costs paid (1 700) (2 822) -40% Net cash flow from operating activities 4 053 2 867 +41% Proceeds/(expenditure) on discontinued assets
Slide 27: Divisional overview
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Slide 28: Operating income (Rm) - geographical segmentation
Operating income (Rm) Geographical segmentation: Continuing operations South Africa Rest of Africa 2008 2009 Rest of the world 423 457 (17%) (16%) 141 186 (5%) (8%) 1 844 2 325 (75%) (79%) 28
Slide 29: Divisional statistics
Divisional statistics Revenue Operating profit International Logistics 5% 15% 13% 13% SA Logistics Car Rental Distributorships 11% Dealerships 31% Insurance 19% 29% 20% 5% 25% 14% Margins 12,8% 11,1% 7,5% 4,0% 3,7% 1,7% International SA Logistics Car Rental Distributorships Dealerships Insurance Log
Slide 30: Logistics
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Slide 31: International Logistics (ZAR)
International Logistics (ZAR) Revenue (Rm) Operating profit (Rm) -3% -21% 8 046 8 253 403 320 2009 H1 4 686 202 28% 41% 2009 H2 3 360 118 2009 2008 2009 2008 Operating margins 4,9% 4,3% 4,0% 3,5% H2 H1 2009 2008 31
Slide 32: International Logistics (EURO)
International Logistics (EURO) Revenue (Euro millions) Operating profit (Euro millions) -15% -32% 768 38 651 26 2009 H1 378 17 28% 47% 2009 H2 273 9 2009 2008 2009 2008 Operating margins 4,5% 5,0% 4,0% R/€ exchange rates 3,3% • 30 June 2009 : R10.88 • 2009 average : R12.35 • 2008 average : R10.75 H2
Slide 33: International Logistics
International Logistics • Business remained profitable under severe H2 conditions • Decline in international demand for steel, industrial chemicals and automotive products impacted negatively on business volumes. We responded by implementing aggressive cost cutting measures • Container facilities an
Slide 34: Southern African Logistics
Southern African Logistics Revenue (Rm) Operating profit (Rm) +1% +5% 9 831 9 733 738 700 2009 H1 5 308 411 2009 H2 4 523 15% 20% 327 2009 2008 2009 2008 Operating margins 7,2% 7,7% 7,5% 7,2% H2 H1 2009 2008 34
Slide 35: Southern African Logistics
Southern African Logistics • Revenue and operating profit up • Tough trading since October 2008 due to slowdown in manufacturing, mining, fuel, commodities, construction and imports and exports • Distribution of FMCG also declined in the second half • The 9 day national strike in April 2009 negative
Slide 36: Car Rental and Tourism
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Slide 37: Car Rental and Tourism
Car Rental and Tourism Revenue (Rm) Operating profit (Rm) -3% -8% 2 618 2 712 336 365 2009 H1 1 337 163 2009 H2 1 281 4% 173 6% 2009 2008 2009 2008 Operating margins 13,5% 12,2% 12,8% 13,5% Average fleet 15 608 (2008: 15 319) H2 H1 2009 2008 37
Slide 38: Car Rental and Tourism
Car Rental and Tourism • Decline in international inbound volumes • Europcar rebranding successful • Tempest low cost positioning is working • U-Drive acquisition contributed positively to the results • Autopedigree was under significant pressure • Unchanged contribution from Tourism businesses assi
Slide 39: Distributorships
Distributorships
Slide 40: Distributorships
Distributorships Revenue (Rm) Operating profit (Rm) -13% -34% 15 056 744 13 112 491 2009 H1 7 061 182 14% 70% 2009 H2 6 051 309 2009 2008 2009 2008 Operating margins 5,1% 4,9% • 17 outlets closed 3,7% • Rationalisation cost R30 million 2,6% • Total Imperial Group sold 53 241 new and 47 925 used cars
Slide 41: Distributorships
Distributorships • Excellent performance in H2 despite tough market conditions • Rationalisation will yield R100m annualised saving • Stronger Rand increasing our competitiveness • Increased contribution from parts and service • Australian dealerships profitable before R25m VAT recovery • Good perfo
Slide 42: Dealerships
Dealerships
Slide 43: Dealerships
Dealerships Revenue (Rm) Operating profit (Rm) -13% -34% 19 181 423 16 691 279 2009 H1 9 496 151 24% 15% 2009 H2 7 195 128 2009 2008 2009 2008 Operating margins 2,2% 1,8% 1,6% 1,7% 23 unprofitable outlets closed H2 H1 2009 2008 43
Slide 44: Dealerships
Dealerships • Operating margin of 1,7% achieved under tough circumstances • Total market decline of 23% in H2 vs H1. Lagged market in passenger and light commercials due to dealership closures • Our medium and heavy commercial vehicles sales outperformed the market • Stricter lending criteria by ban
Slide 45: Regent group
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Slide 46: Regent group
Regent group Revenue (Rm) Operating profit (Rm) +10% +39% 2 847 2 594 315 77 227 2009 H1 1 454 238 2009 H2 1 393 4% 209% 2009 2008 2009 2008 Operating profit split 315 238 227 140 133 77 182 7 175 105 70 45 H2 H1 2009 2008 Investment income Underwriting result 46
Slide 47: Regent group
Regent group • Underlying business starting to show strength • Gross premium increased 10% - good performance in Botswana and commercial vehicles • Underwriting result in motor comprehensive remained weak • Merger contributes R35m annualised savings • Steady build-up in monthly premium credit life b
Slide 48: People development and social investment
People development and social investment • Leadership skills and technical training are key drivers • Management programmes also important to achieve our transformation goals • R24m invested in second state-of-the-art technical training centre • Capacity of more than 800 apprentices per year • Imper
Slide 49: Strategy and prospects
Strategy and prospects
Slide 50: Strategic intent
Strategic intent • Restructuring resulted in strong balance sheet • Steps taken to right-size motor operations in line with demand expectation • Expansion of logistics, tourism and financial services will follow, enhancing the balance of our portfolio • Internationally, expansion will be aligned to
Slide 51: Imperial Bank
Imperial Bank • In-principle agreement reached with Nedbank • sale of our 49,9% share for R1 775m • cooperation to promote vehicle finance through Imperial dealerships • Financial services synergies will be maintained • Group relieved of future funding obligations enhancing our cash flows • Financin
Slide 52: Prospects
Prospects • Business conditions to remain tough despite early signs of recovery in global economies • SA and European logistics conditions will remain difficult • Vehicle sales will remain weak • Dealerships and Distributorships to benefit from rationalisation and cost cutting • Good performance in
Slide 53: Thank you
Thank you