Imperial Logistics — Imperial Holdings — H1 2012 Earnings Presentation
46 slides from Imperial Logistics's earnings presentation, February 2012
Slide 1: Unaudited Interim Results Presentation for the six months ended 31 December 2011
i Major restructuring substantially completed Imperial Holdings Limited ii Significantly Unaudited Interim iResults strengthened Presentation for the balance sheet six months ended 31 December 2011 i Revenue from continuing operations up 3% to R56 billion i Headline earnings per share from continuin
Slide 2: Slide 2
Slide 3: Agenda
Interim results presentation For the six months ended 31 December 2011 µ Notes: ¶ Notes: Agenda Highlights Financial Review Divisional performance and outlook Group prospects and strategy Questions Appendix I – Further Income Statement and Balance Sheet detail 2 1 Imperial Holdings Limit
Slide 4: Highlights
Highlights An excellent overall result with strong revenue and profit growth Divisional performance – Distributorships continued on its strong growth path – Logistics performed well and achieved good growth in both SA and Germany – Automotive Retail produced excellent results – Satisfactory perf
Slide 5: Improving profit trend
Improving profit trend Excl. businesses sold or unbundled Revenue (LHS) Operating Profit (RHS) 2.6 60 2.4 2.1 1.8 40 2 1.3 1.4 Rbn 1.2 38.4 31.4 33.3 20 25.7 27.8 1 28.6 23.6 0 0 Dec 08 June 09 Dec 09 June 10 Dec 10 June 11 Dec 11 Core EPS HEPS 900 725 756 727 653 645 533 581 600 503 472 432 431 cps
Slide 6: Income statement
Financial review µ Notes: ¶ Notes: Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% All divisions showed strong turnover growth Logistics: +28%; both SA and Germany performed well; Acquisitions contributed positively (CIC & smaller bolt-ons) Distributorships: +23%; strong
Slide 7: Income statement
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Operating profit margin 6,8% 6,8% Margins up in Distributorships and Automotive Retail Higher margin revenue streams from parts, service and financial services grew in contribution CIC impac
Slide 8: Income statement
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Amortisation of intangible assets (13) - Foreign exchange (losses) / gains - (40) Business acquisition costs (53) - Exceptional items and recoupments (35) 7 Fair value on Lereko call option - 279
Slide 9: Income statement
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Amortisation of intangible assets (13) - Foreign exchange (losses) / gains - (40) Business acquisition costs (53) - Exceptional items and recoupments (35) 7 Fair value on Lereko call option - 279
Slide 10: Significant minorities' share of earnings; Balance sheet
Significant minorities’ share of earnings H1 F2012 vs H1 F2011 Distributorships (excl. AMH) AMH International Logistics SA Logistics Other Net Minority earnings µ Notes: ¶ Notes: Balance sheet Dec Jun % Dec Rm 2011 2011 change 2010 Property, plant and equipment 6 970 6 550 6% 6 357 Transport fleet 3
Slide 11: Analysis of working capital
Analysis of working capital H1 H1 % Rm F2011 2012 2011 change Increase in working capital# 2 021 895 126% 298 Stock turn (times)* 5,5x 5,5x 5,3x Net working capital turn (times)* 16,7x 19,6x 21,1x Asset turn still good despite increase in working capital: Support of higher revenue in the group – R
Slide 12: Ukhamba dividend
Ukhamba dividend Ukhamba has generated significant value from its investments since inception Shareholding: – Ukhamba Trust 47% – Ukhamba Community Development Trust 6% – Imperial 47% A portion of the value created was liquidated & paid out as a dividend to Ukhamba’s shareholders in Dec 2011 –
Slide 13: Cash flow
Cash flow Rm Dec 2011 Dec 2010 % change Cash flow from operating activities (pre capex) 1 015 1 572 (35%) Proceeds from sale of Imperial Bank - 477 Net acquisition of subs and businesses (77) (930) During the period under review: 74.9% of Dettmar Buik Reederei 70% of Datadot 60% of IJ Snyman T
Slide 14: Cash flow; Gearing
Cash flow Rm Dec 2011 Dec 2010 % change Cash flow from operating activities (pre capex) 1 015 1 572 (35%) Proceeds from sale of Imperial Bank - 477 Net acquisition of subs and businesses (77) (930) Capital expenditure (1 846) (1 242) Net movement in associates and JVs 350 50 Net movement in equities
Slide 15: Improving returns
Improving returns ROE# ROIC vs WACC 22.5 16.5 15.9 24 20.3 20 17.1 10-yr 15 12.2 11.2 11.5 16 avg. of 12.0 11 12 9.4 18.8% 9.6 10.9 10.5 10.1 10.1 8 7 4 0 3 F2008 F2009 F2010 F2011 (annualised) F2008 F2009 F2010 F2011 (annualised) 2012 2012 # based on core earnings Improving ROE over the past 4 ye
Slide 16: Divisional statistics
Divisional statistics Revenue Operating Profit SA logistics 4% 13% 21% 20% International Logistics 25% 10% Car Rental and Tourism 7% 11% Distributorships 8% 5% Automotive Retail 34% 43% Financial Services Operating Margin 25 20 15 10.8 11.9 8.6 7.4 9.0 * 7.9 10 6.2 6.7 4.9 4.9 5 2.6 2.5 0 SA Logisti
Slide 17: Southern Africa logistics
Southern Africa logistics Revenue (Rm) Operating profit (Rm) Operating Margins 6.7% +28% +18% 6.2% 513 8 311 4.8% 437 6 502 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H2 2011 Good growth, with acquisitions contributing well 29 µ Notes: ¶ Notes: Southern Africa logistics Revenue by activity H1 F
Slide 18: Southern Africa logistics
Southern Africa logistics Significant improvement from H2 F2011 – Cold Chain operation stabilised Operating margin impacted by: – Various strikes at customers in July – CIC included for a full six months Transport and warehousing – Good performance despite inconsistent volumes and route imbala
Slide 19: International logistics (EURO)
International logistics 33 µ Notes: ¶ Notes: International logistics (EURO) Revenue (€m) Operating profit (€m) Operating Margins 5.8% 5.0% +17% +25% 4.7% 397 339 20 16 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H2 2011 Results exceeded expectations 34 17 Imperial Holdings Limited ii Unaudited I
Slide 20: International logistics (ZAR)
International logistics (ZAR) Revenue (Rm) Operating profit (Rm) Operating Margins 5.3% 4.9% 4.9% +30% +30% 4 159 203 3 209 156 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H2 2011 Exchange rate benefit R/€ exchange rates: H1 F2012 average: R10.78 vs H1 F2011 average: R9.06 35 µ Notes: ¶ Notes: I
Slide 21: International logistics
International logistics German economy performed solidly – especially in sectors where we operate Revenue growth experienced across all major businesses New contracts gained and low water levels contributed positively to revenue Imperial Reederei – Benefited from strong volumes, especially i
Slide 22: Lehnkering acquisition
Lehnkering acquisition 2 700 employees Shipping Road Distribution Chemical Manufacturing Logistics & Services Logistics & Services Logistics & Services Services 2010 Revenue: 2010 EBITDA: Enterprise value: EV/EBITDA ROIC €506m €44m €270m multiple: 6.1x (incl. goodwill): 7.3% Materially earnings enha
Slide 23: Car Rental and Tourism
Car rental and Tourism 41 µ Notes: ¶ Notes: Car Rental and Tourism Revenue (Rm) Operating profit (Rm) Operating Margins 11.9% +16% +6% 10.8% 9.3% 210 198 1 939 1 667 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H2 2011 Difficult trading conditions but satisfactory result 42 21 Imperial Holdings L
Slide 24: Car Rental and Tourism
Car Rental and Tourism Prior year boosted by 2010 FIFA World Cup Car Rental revenue days up 11% – Utilisation good at 70% – Revenue per day up 1% Average fleet size up 11% - higher rental days Sales volumes & margins at Auto Pedigree significantly lower Fleet size has been normalised but a
Slide 25: Distributorships
Distributorships 45 µ Notes: ¶ Notes: Distributorships Revenue (Rm) Operating profit (Rm) Operating Margins 9.4% 8.6% +23% +42% 7.4% 13 590 1 162 11 043 816 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H2 2011 Strong growth continues 46 23 Imperial Holdings Limited ii Unaudited Interim Results Pr
Slide 26: Distributorships
Distributorships New vehicle sales in SA improved by 13% vs market growth of 16% – Despite initial stock shortages Inventory levels and mix representative of exciting new product ranges After sales parts and service becoming much more significant Midas and engine parts businesses slightly up
Slide 27: Automotive parts and industrial products
Automotive parts and industrial products The group pursued a strategy to add aftermarket vehicle parts, components, industrial equipment and new areas of distribution to its portfolio Recent acquisitions of Midas, Turbo Exchange, Goscor, E-Z-GO, Datadot and Segway are part of this strategy In
Slide 28: Automotive Retail
Automotive Retail Revenue (Rm) Operating profit (Rm) Operating Margins 3.2% 2.6% +16% +20% 2.5% 9 877 261 8 522 217 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H2 2011 Good growth in operating profit 51 µ Notes: ¶ Notes: Automotive Retail New passenger car sales rose 21%, ahead of 16% market g
Slide 29: Automotive Retail; Financial Services
Automotive Retail Prospects Rate of growth in new vehicle market likely to moderate Streamlined network of dealerships & well-balanced portfolio Well positioned to take advantage of any growth opportunities presented Growing annuity-type income will compensate to some extent Strategic object
Slide 30: Financial Services
Financial Services Revenue (Rm) Performed Operating profit (Rm) satisfactorily 1 833 +12% 0% 1 639 344 345 H1 2012 H1 2011 H1 2012 H1 2011 Operating profit split Net Underwriting Margins Investment income, including fair value adjustments Underwriting result 14.6% Other Financial Services 63 80 9.0%
Slide 31: Financial Services; I-Pledge
Financial Services Prospects Whilst underwriting conditions are unpredictable, earnings in Financial Services should be robust in H2 Investment portfolio continues to be conservatively managed Maintenance & service plans written during the strong new vehicle market provide valuable annuity und
Slide 32: Strategic intentions
Strategy and prospects µ Notes: ¶ Notes: Strategic intentions Emphasis on businesses which generate higher returns and have annuity income streams In pursuit of this strategy, the majority of expansion capital will be applied to: – Expanding logistics business into Africa – Growing European & so
Slide 33: Current footprint and potential future markets
Current footprint and potential future markets Tunisia Morocco Algeria Libya Western Egypt Sahara Cape Verde Mauritania Mali Niger Chad Eritrea Senegal The Gambia- Burkina Sudan Guinea-Bissau- Faso -Djibouti Guinea Benin Nigeria Tanzania Sierra Leone- Cote Central Liberia D’Ivoire Ghana African Repu
Slide 34: Motor vehicle penetration rates
Vehicle Penetration in SA 5 USA Motor vehicle penetration rates Italy France Canada Spain Portugal Japan Norway Netherlands Czech Republic Hungary Poland Denmark Portugal South Korea Malaysia UK Mexico Russia Taiwan South Africa Brazil India china GDP per capita ppp adjusted Source: UBS GDP per capi
Slide 35: Appendix: Further financial disclosure
Thank you µ Notes: ¶ Notes: Appendix 1 Further financial disclosure 33 Imperial Holdings Limited ii Unaudited Interim Results Presentation for the six months ended 31 December 2011
Slide 36: Income statement
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Amortisation of intangible assets (13) - Relates largely to the CIC acquisition- portion of the purchase price relating to Intangible Assets amortised in terms of IAS 38 – Intangible Assets 67 µ N
Slide 37: Income statement
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Amortisation of intangible assets (13) - Foreign exchange (losses) / gains - (40) Business acquisition costs (53) - Relates mainly to acquisition costs on the Lehnkering transaction which was effe
Slide 38: Income statement
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Amortisation of intangible assets (13) - Foreign exchange (losses) / gains - (40) Business acquisition costs (53) - Exceptional items and recoupments (35) 7 Fair value on Lereko call option - 279
Slide 39: Income statement; Balance sheet
Income statement Rm H1 2012 H1 2011 % Change Revenue 38 385 31 360 22% Operating profit 2 621 2 126 23% Amortisation of intangible assets (13) - Foreign exchange (losses) / gains - (40) Business acquisition costs (53) - Exceptional items and recoupments (35) 7 Fair value on Lereko call option - 279
Slide 40: Balance sheet
Balance sheet Rm Dec Jun % Dec 2011 2011 change 2010 Property, plant and equipment 6 970 6 550 6% 6 357 Transport fleet 3 999 3 627 10% 3 626 Vehicles for hire 2 587 2 057 26% 2 558 Intangible assets 1 1 921 1 823 5% 1 741 Other non-current assets2 4 580 4 226 8% 4 311 1. Intangibles increased due t
Slide 41: Interest bearing debt; Gearing
Interest bearing debt Rm Dec 2011 Jun 2011 % change Corporate bonds 6 637 6 477 Overdrafts and overnight funding 145 27 Other1 1 317 1 004 Gross debt2 8 099 7 508 8% Cash resources (2 203) (3 531) Net debt 5 896 3 977 48% 1. Secured and unsecured loans, floor plans, capitalised finance leases, insta
Slide 42: Disclaimer
Disclaimer Certain statements in this presentation may be defined as forward looking statements within the meaning of the United States Securities legislation. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual result
Slide 43: Notes
Notes: 41 Imperial Holdings Limited ii Unaudited Interim Results Presentation for the six months ended 31 December 2011
Slide 44: Notes
Notes: 42 Imperial Holdings Limited ii Unaudited Interim Results Presentation for the six months ended 31 December 2011
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Slide 46: The results announcement is available on the Imperial website
The results announcement is available on the Imperial website: www.imperial.co.za Imperial Holdings Limited Registration number: 1946/021048/06 Ordinary share code: IPL ISIN: ZAE000067211 Preference share code: IPLP ISIN:ZAE000088076 Non-executive directors: TS Gcabashe (Chairman), SL Botha, T Dinga