Imperial Logistics — FY2013 Earnings Presentation
58 slides from Imperial Logistics's earnings presentation, 2013
Slide 1: Results presentation for the year ended 30 June 2013
Results presentation For the year ended 30 June 2013
Slide 2: Agenda
Agenda Highlights and Summary of Performance Divisional performance Financial review Group prospects and strategy Questions 2
Slide 3: Highlights
Highlights Revenue Operating profit HEPS Increased by 14% to Improved by 8% to Increased by 15% to R92 382 million R6 087million 1 804 cents Core EPS* Dividend per share** ROE Increased by 15% to Full year dividend up 21% to 1 871 cps 820 cps 23% Cash returned * Core EPS excludes once‐off non‐operat
Slide 4: Improving profit trend
Improving profit trend Revenue (LHS) Operating Profit (RHS) Excl. discontinued operations 3.0 3.1 60 2.9 2.6 3 2.4 2.1 40 1.8 45.3 47.1 42.4 2 1.4 38.4 Rbn 1.3 31.4 33.3 20 25.7 27.8 1 23.6 0 0 June 09 Dec 09 June 10 Dec 10 June 11 Dec 11 Jun 12 Dec 12 Jun 13 Core EPS HEPS 999 975 1000 867 839 872 8
Slide 5: Business conditions in key markets
Business conditions in key markets » Trading conditions challenging in SA and Europe » Industrial action in SA and Korea impacted p the ggroup p » Favourable new vehicle market in SA but competitive; Improved used car market » Good credit availability for vehicles » Manufacturing sector in SA under
Slide 6: Performance of the three business pillars
Performance of the three business pillars Logistics Financial Services Revenue = R33,6 bn Revenue = R57,6 bn Revenue = R4,2 bn 21% 11% 6% Operating profit = R1,7 bn Operating profit = R3,6 bn Operating profit profit= R945 m 11% 5% 22% The Three Pillars of Imperial 6
Slide 7: Performance of Imperial
Performance of Imperial » All divisions achieved operating profit growth – resilience of portfolio » Benefitted from a full yyear’s contribution of Lehnkeringg and acquisition q of RTT Medical » Strong growth was achieved in annuity revenue streams generated from after‐sales parts, service and finan
Slide 8: Logistics
IMPERIAL Y FAST MOVING FORWARD THINKING Logistics
Slide 9: Logistics
Logistics Africa International » South Africa » Europe (mainly Germany) » Rest of Africa » Recent entry into chemical logistics Revenue contribution Revenue contribution (incl. inter‐segment revenue) (incl. inter‐segment revenue) R18bn R16bn 9
Slide 10: Africa Logistics (including SA)
Africa Logistics (including SA)
Slide 11: Africa Logistics
Africa Logistics Revenue (Rm) Operating profit (Rm) Operating Margins +9.5% +1% 5.5% 5.6% 18 018 920 5.1% 16 457 910 4.6% 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Excellent performance by the Rest of Africa » Trading conditions in the South African logistics market were challenging » Strong sec
Slide 12: Comprehensive service offering
Comprehensive service offering Revenue by Service Offering Logistics in the rest of Africa » Transport » Warehousing 30% » Distribution 41% » Supply chain planning » Sales and marketing » Brand activation “Get me there” 29% “Sell my product” Freight & Transport “Grow my brand” Warehousing & Distribu
Slide 13: Growth trend in Rest of Africa
Growth trend in Rest of Africa Revenue Operating profit 4 565 224 3 716 154 142 2 455 61 525 2010 2011 2012 2013 2010 2011 2012 2013 More than tripled over a three year period » Rest of Africa expansion p ggainingg momentum;; CIC p performingg well » Transport businesses performed solidly, Namibia i
Slide 14: MDS Logistics
MDS Logistics » Acquired 49% from UACN Nigeria plc for $27m » Solid S lid performance f in i first fi three h Sokoto months Katsina » Leading provider of integrated Gusau Kano Maiduguri supply l chain h i solutions l i Zaria • Warehousing Kaduna Gombe (approx. 50 locations Nigeria) Jos Minna • Distr
Slide 15: Footprint post the recent acquisitions
Footprint post the recent acquisitions Tunisia Morocco Al i Algeria Libya Western Egypt Sahara Cape Verde Mauritania Niger Mali Chad Eritrea Senegal The Gambia‐ Burkina Sudan Guinea‐Bissau‐ Faso ‐Djibouti Guinea Sierra Leone‐ Cote Nigeria Nigeria Ethiopia Benin Central D’Ivoire Ghana Liberia African
Slide 16: International Logistics
IMPERIAL Y FAST MOVING FORWARD THINKING International Logistics
Slide 17: International Logistics (EURO)
International Logistics (EURO) Revenue (€m) Operating profit (€m) Operating Margins +25% +12% 1 363 66 5.4% 5.3% 59 4.8% 1 087 4.3% 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Solid performance despite slowdown in European economy » Slowdown in the European economy presented tough market condition
Slide 18: International Logistics (ZAR)
International Logistics (ZAR) Revenue (Rm) Operating profit (Rm) Operating Margins +39% +27% 15, 574 759 5.4% 5.3% 4.9% 598 4.3% 11, 247 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Exchange rate benefit » 2013 Average R/€: 11.43 vs 2012 Average R/€: 10.38 » Effective currency hedge in group portfo
Slide 19: Growth trend in International Logistics
Growth trend in International Logistics Revenue Operating profit 759 15,574 598 11,247 350 6,848 298 6,378 2010 2011 2012 2013 2010 2011 2012 2013 More than doubled over a three year period » Represents 12% of Group operating profit » Organic growth and excellent acquisitions » Well positioned in at
Slide 20: International expansion
International expansion » Our customers are expanding into new markets » Well positioned to follow them 20
Slide 21: Automotive & Industrial
IMPERIAL Y FAST MOVING FORWARD THINKING Automotive & Industrial
Slide 22: Automotive and Industrial
Automotive and Industrial Distribution, retail and Automotive retail Other segments Allied Services » KIA, Hyundai, Daihatsu, Tata, » Dealership franchisee activities » Car Rental, Auto Pedigree and Mitsubishi, Renault, Kawasaki on behalf of locally based OEMs Panelshops » Goscor » Beekman canopies
Slide 23: Distribution, Retail & Allied Services
Distribution, Retail & Allied Services Revenue (Rm) Operating profit (Rm) Operating Margins +13% +5% 2 228 9 3% 9.3% 2 121 25 682 8.7% 8.8% 22 797 8.5% 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Satisfactory performance under tough trading conditions » Excellent growth in after‐sales after sales
Slide 24: Automotive Retail
Automotive Retail Revenue (Rm) Operating profit (Rm) Operating Margins +16% +14% 22 702 651 3.0% 19 560 2.9% 2.9% 573 2.7% 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Excellent performance » New vehicle sales growth of 10% in SA, ahead of industry growth of 7,6% » Used car volumes continue to impr
Slide 25: Car Rental (excluding Tourism)
Car Rental (excluding Tourism) Revenue (Rm) Operating profit (Rm) Operating Margins +10% +6% 11.7% 3 608 11.2% 11.3% 11.2% 3 282 405 383 2013 2012 2013 0 3 2012 0 2013 2012 H2 2013 H1 2013 Much better H2 » Includes Car Rental,, Auto Pedigree g & Panel shops p – Tourism business beingg disposed p of
Slide 26: Autoparts
Autoparts Revenue (Rm) Operating profit (Rm) Operating Margins +8% +5% 6.6% 6.7% 6.7% 6.4% 4 473 4 134 293 278 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Stable performance » Reported separately for the first time » Midas performed satisfactorily in a sluggish market » Afinta acquisition contribu
Slide 27: Aggregate aftermarket parts and industrial (excluding NAC)
Aggregate aftermarket parts and industrial (excluding NAC) Revenue (Rm) Operating profit (Rm) Operating Margins +19% +14% 505 6 616 8.0% 7.9% 7.6% 7.4% 444 5 549 2013 2012 2013 2012 2013 2012 H2 2013 H1 2013 Strong performance » Pursued strategy gy to add aftermarket vehicle p parts,, components, p
Slide 28: Financial Services
IMPERIAL Y FAST MOVING FORWARD THINKING Financial Services
Slide 29: Financial Services
Financial Services Insurance Other » Short term and life » Maintenance p plans,, service p plans,, warrantees » Motor insurance, value added products and » JV’s with banks goods‐in‐transit cover » Vehicle tracking Revenue contribution Revenue contribution (incl. inter‐segment revenue) (incl. inter‐s
Slide 30: Financial Services
Financial Services Revenue (Rm) Operating profit (Rm) +6% +22% 4 238 945 3 999 775 2013 2012 2013 2012 Operating profit split Net Underwriting Margins Investment income, including fair value adjustments Underwriting result 8.6% Other Financial Services 7.9% 7.8% 945 7.2% 775 251 175 259 244 435 356
Slide 31: Financial Services
Financial Services » Excellent performance; improved underwriting performance in H2 » Adcover, Paintech and Warranties performed well and showed good growth » Insurance underwriting conditions in motor comprehensive were challenging » Regent g exited certain non‐performing p g classes of insurance »
Slide 32: Growth trend in Financial Services
Growth trend in Financial Services Revenue Operating profit 4 238 945 3 999 3 409 760 775 3 263 696 2010 2011 2012 2013 2010 2011 2012 2013 Excellent growth – almost R1bn contribution to Group operating profit » Central to our strategy of optimising our position in the vehicle sales value chain » Le
Slide 33: Imperial underpinned by strong annuity and diversified revenue streams
Imperial underpinned by strong annuity and diversified revenue streams Financial Services Service Revenues R4 2bn revenue R4.2bn (16% contribution to group operating profit) R3.8bn b revenue » Short term and Life Insurance = R3bn premium » Automotive Retail and Distribution, Retail income ((incl. VA
Slide 34: Cumulative sales of vehicle brands distributed
Cumulative sales of vehicle brands distributed 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 JULY Note: Includes AMH, Chery, Foton, Mitsubishi, Renault and Tata – PC and LCV 34
Slide 35: Financial Review
IMPERIAL Y FAST MOVING FORWARD THINKING Financial Review a! SS —_ — - ——_ —— SS ——_ —_—=
Slide 36: Income statement
Income statement Rm 2013 2012 % Change Revenue 92 382 80 830 14% » Logistics: +21%; Positive contribution from acquisitions and growth in Rest of Africa +11%; Growth in new and used vehicle sales; strong growth in annuity revenues » Automotive & Industrial: from parts and service +6%; current auto c
Slide 37: Income statement
Income statement Rm 2013 2012 % Change Revenue 92 382 80 830 14% Operating profit 6 087 5 638 8% Operating profit margin 6,6% 7% » The transport strike in SA and tougher trading conditions in Germany had an adverse impact on Logistics margins; » Operating profit benefited from acquisitions but also
Slide 38: Divisional statistics
Divisional statistics Revenue Operating profit Africa Logistics 5% 4% 15% 15% 4% 19% International Logistics 5% Distribution Retail & Distribution,Retail Allied Services 12% 7% 24% Automotive Retail 17% Car rental 10% Autoparts 36% 27% Financial Services 38
Slide 39: Divisional statistics
Divisional statistics Operating margin % 22.3% 19.4% 2013 2012 11.2% 11.7% 8.7% 9.3% 6.6% 6.7% 5.1% 5.5% 4.9% 5.3% 2 9% 2.9% 2.9% 2 9% Africa Logistics International Distribution, Automotive Retail Car Rental Autoparts Financial Services Logistics Retail & Allied Services Return On Invested Capital
Slide 40: Income statement
Income statement Rm 2013 2012 % Change Revenue 92 382 80 830 14% O Operating ti profit fit 6 087 5 638 8% Amortisation of intangible assets (254) (128) Foreign exchange gains/(losses) 24 (10) Business acquisition costs (15) (51) Recoupments/(impairments) from sale of properties 8 (32) Realised gain
Slide 41: Income statement
Income statement Rm 2013 2012 % Change Revenue 92 382 80 830 14% O Operating ti profit fit 6 087 5 638 8% Amortisation of intangible assets (254) (128) Foreign exchange gains/(losses) 24 (10) Business acquisition costs (15) (51) Recoupments/(impairments) from sale of properties 8 (32) Realised gain
Slide 42: Income statement
Income statement Rm 2013 2012 % Change Revenue 92 382 80 830 14% O Operating ti profit fit 6 087 5 638 8% Amortisation of intangible assets (254) (128) Foreign exchange gains/(losses) 24 (10) Business acquisition costs (15) (51) Recoupments/(impairments) from sale of properties 8 (32) Realised gain
Slide 43: Income statement
Income statement Rm 2013 2012 % Change Revenue 92 382 80 830 14% O Operating ti profit fit 6 087 5 638 8% Amortisation of intangible assets (254) (128) Foreign exchange gains/(losses) 24 (10) Business acquisition costs (15) (51) Recoupments/(impairments) from sale of properties 8 (32) Realised gain
Slide 44: Balance sheet
Balance sheet Rm 2013 2012 % Change Property, plant and equipment 9 257 8 080 T Transport t fleet fl t 4 626 4 336 Vehicles for hire 2 465 2 321 Intangible assets 5 206 4 234 23% Investments and loans 3 218 2 433 32% Other assets 3 091 2 256 37% » Intangible assets increased mainly due to the acquis
Slide 45: Balance sheet
Balance sheet Rm 2013 2012 % Change Property, plant and equipment 9 257 8 080 T Transport t fleet fl t 4 626 4 336 Vehicles for hire 2 465 2 321 Intangible assets 5 206 4 234 23% Investments and loans 3 218 2 433 32% Other assets 3 091 2 256 37% Net working capital 6 158 4 607 34% Cash resources 1 8
Slide 46: Balance sheet
Balance sheet Rm 2013 2012 % Change Total shareholders’ interest 17 713 15 889 11% I t Interest t bearing b i borrowings b i 10 568 9 747 8% Other liabilities 7 584 6 176 Equity and liabilities 35 865 31 812 » Equity Impacted by: • Higher retained income • Gains arising on translation of foreign ope
Slide 47: Gearing
Gearing Net debt : equity (excl. prefs) » Net D:E below target ratio of 60% ‐ 80% % » Moody’s Ratings: 60 50 49 • Domestic short term credit rating P P‐1.za 1 za 39 39 • Domestic long term credit rating A2.za 40 • International scale rating Baa3 31 20 0 F2009 F2010 F2011 F2012 F2013 » Euro bond of €
Slide 48: Returns
Returns ROE# ROIC vs WACC 23.4 23.0 16.3 16.2 24 16.5 20.3 15 20 17.1 12.2 11.5 16 11 12 10.9 10.5 10.1 9.4 9.7 8 8.8 7 4 3 0 F2009 F2010 F2011 F2012 F2013 F2009 F2010 F2011 F2012 F2013 ROIC WACC # based on core earnings » ROE is healthy » Objective: Obj ti A Average ROIC > th than WACC + 4% • More
Slide 49: Cash flow – operating activities
Cash flow – operating activities Rm 2013 2012 % Change Cash generated by operations 8 795 8 198 7% Net working capital movements (1 604) (758) 112% Cash generated by operations pre‐capital expenditure 7 191 7 440 Net finance costs and tax p paid ((2 138)) ((2 203)) Cash flow from operating activitie
Slide 50: Cash flow – investing activities
Cash flow – investing activities Rm 2013 2012 % Change Net disposal/(acquisition)of subs and businesses (539) (1 868) Capital expenditure (2 161) (1 735) 25% Expansion (1 350) (773) Replacement p ((811)) ((962)) Dividend received from Ukhamba ‐ 387 Net movement in associates and JVs (321) (94) Net m
Slide 51: Cash flow – summary
Cash flow – summary Rm 2013 2012 Cash flow from operating activities (pre capex) 5 053 5 237 Net acquisition of subsidiaries and businesses (539) (1 868) Capital expenditure (3 077) (2 592) Dividend received from Ukhamba ‐ 387 Net movement in associates and JV’s (321) (94) Net movement in equities,
Slide 52: Strategy
IMPERIAL Y FAST MOVING FORWARD THINKING Strategy
Slide 53: Strategy
Strategy » Focused on generating higher returns on capital » Seeking growth opportunities in and adjacent to existing industries and geographies » Focused on expanding our footprint in logistics industry in Africa and abroad • Specific focus on consumer logistics in Africa • Europe to expand around
Slide 54: Key acquisitions and disposals over the last five years
Key acquisitions and disposals over the last five years Logistics Automotive & Industrial » Lehnkering – major chemicals logistics player in » Midas – expanding into aftermarket parts Europe » Goscor » CIC – expansion of African distribution network » Datadot » RTT Health Sciences ‐ pharmaceutical d
Slide 55: Complementary business units
Complementary business units Auto and Financial services Logistics Cash Enrich value chain Expansion, Growth, Expansion Growth Generate cash flow Acquisitions Excess cash: Healthy dividends; Share buy backs Shareholders 55
Slide 56: Growth strategy
Growth strategy Revenue by geography (Rbn) Operating profit by geography (Rm) 22.4 863 16.9 Rest of Africa 671 Rest of 11.2 world 10.5 376 397 365 298 5.6 239 4.7 182 31 3.1 1.1 2010 2011 2012 2013 2010 2011 2012 2013 Revenue and Operating Profit ex SA has more than doubled over three year period »
Slide 57: Prospects
Prospects » Logistics industry to remain challenging in SA • underwent strategic consolidation • expectt benefits b fit to t be b realised li d in i 2014 » Prospects for the Rest of Africa remain good • ideal platform for growth » International Logistics – positive about its ability to grow • Throug
Slide 58: Questions
IMPERIAL Y FAST MOVING FORWARD THINKING Questions