AUDITED GROUP RESULTS for the year ended 30 June 2011 2011
2 Agenda Agenda overview overview financial financial segmental segmental group group of F2011 review review prospects and prospects
overview of F2011
overview 4 Financial Summary F2011 F2011 F2011 F2010 F2009 vs. Audited Audited Audited F2010 -19% 11 338 12 090 Revenue – Rm 9 207 Operating profit – Rm -43% 499 877 797 Before fair value adjustments and impairments
overview 5 Financial Summary F2011 F2011 F2011 F2010 F2009 vs. Audited Audited Audited F2010 -19% 11 338 12 090 Revenue – Rm 9 207 Operating profit – Rm -43% 499 877 797 Before fair value adjustments and impairments Fully diluted HEPS – Rand -44% 3,15 5,61 5,08 Adjusted Fully diluted HEPS Rand Adjusted Fully diluted HEPS – Rand -40% 40% 3 17 3,17 5 24 5,24 5 16 5,16 Excl. pension fund adjustments
overview 6 Financial Summary F2011 F2011 F2011 F2010 F2009 vs. Audited Audited Audited F2010 -19% 11 338 12 090 Revenue – Rm 9 207 Operating profit – Rm -43% 499 877 797 Before fair value adjustments and impairments Fully diluted HEPS – Rand -44% 3,15 5,61 5,08 Adjusted Fully diluted HEPS – Rand Adjusted Fully diluted HEPS Rand -40% 40% 3 17 3,17 5,24 5 24 5,16 5 16 Excl. pension fund adjustments EPS – Rand (loss) / earnings Loss (2,27) 2,80 5,44 Incl. impairment of Construction Materials Adjusted EPS – Rand F2011: excl. pension fund adjustments, impairments, -47% 2,89 5,50 5,44 non cash fair value adjustments F2010: excl. pension fund adjustments, impairments p j , p Dividends per share – cents -47% 72 137 130 F2011 & F2010: 4.0 x covered by Adjusted EPS F2009: 4.2 x covered by EPS
overview 7 Background to the results g Revenue: � F2010 - Large infrastructure contracts set a high base g g � F2011 - Diminished market activity and project delays affected revenue - Pockets of activity: African mining & real estate; transport, power & oil and gas - Strategy of margin over volume was enforced Operating margin � Fiercely competitive markets; negative industry pricing on some projects � H2 impacted by R93m in material costs � Pleasing Construction margins diluted by Materials & Manufacturing Pleasing Construction margins diluted by Materials & Manufacturing � Costs saved but not at expense of capacity Full order book is 95% of that published at interim results p Competition Commission update � Conditional leniency agreement signed 29 July 11, without penalty, pending conclusion of industry investigation di l i f i d t i ti ti � No provision raised
financial review
financial review 9 Income statement F2011 F2011 F2011 F2010 F2009 vs. Rm Audited Audited Audited F2010 Revenue Revenue -19% 19% 9 207 9 207 11 338 11 338 12 090 12 090 Total operating profit * -43% 499 877 797 Core operating profit ** -39% 502 826 809 7.7 7 1 7.1 7.3 6.7 Group total operating margin %* 6.6 6.8 6.9 6.6 Group core operating margin % Group core operating margin %** Construction core operating 5.5 5.8 margin % ** 5 4 5.4 5 2 5.2 F2008 F2009 F2010 F2011 * Excl. fair value adjustments, impairment adjustments and amounts from associates ** Core operating profit and margin adjusts total operating profit and margin by excluding pension fund adjustments, sale of subsidiary and sale of assets
financial review 10 Material costs in H2 affected operating profit Rm Rm Construction Materials: Restructuring and rationalisation costs incurred 9 to realise R28m p.a. savings through 30% capacity reduction p g g p y Construction: Civil Engineering - Middle East 57 • Resources for progressive commercial & financial close of 7 Dubai legacy contracts • Present Value of unchanged certified debt on previously reported • Present Value of unchanged certified debt on previously reported 13 cancelled contract • Costs of successful corrective action on Jordanian pipeline contract Costs of successful corrective action on Jordanian pipeline contract 37 37 Manufacturing: Steel - Provision for possible liquidation* of long-standing 27 customer in BRI JV and excessive Fabrication production costs customer in BRI JV and excessive Fabrication production costs TOTAL 93 * Total group bad debts written off = 0,001% of group revenue; total group bad debt provisions = 0,1% of group revenue
financial review 11 Income statement F2011 F2011 F2011 F2010 F2009 vs. Rm Audited Audited Audited F2010 Revenue Revenue -19% 19% 9 207 9 207 11 338 11 338 12 090 12 090 Total operating profit -43% 499 877 797 Impairment of property, plant and (551) (551) (326) (326) - equipment and goodwill^ i t d d ill^ Construction Materials quarries are all Gauteng based Construction Materials quarries are all Gauteng based Impairment necessitated by worst market in decades and weaker forecasts Year-end assessment resulted in no further write-downs Markets stabilised but the recorded impairment was still warranted ^ As announced at interim results
financial review 12 Income statement F2011 F2011 F2011 F2010 F2009 vs. Rm Audited Audited Audited F2010 Revenue Revenue -19% 19% 9 207 9 207 11 338 11 338 12 090 12 090 Total operating profit -43% 499 877 797 Impairment of property, plant and (551) (551) (326) (326) - equipment and goodwill^ i t d d ill^ Rm at Rm after R877m in impairments Carrying value of Construction Materials acquisition acquisition (R326m 30/6/10 & R551m 31/12/10) (R326m 30/6/10 & R551m 31/12/10) Property, plant & equipment 208 288 Intangibles (undeveloped mining resources) 1 052 285 Goodwill 25 - Cash 14 16 Net (liability) Net (liability) (256) (256) (109) (109) Net purchase price/carrying value 1 043 480 Cash (14) - Purchase price/carrying value P h i / i l 1 029 1 029 573 * 573 * ^ As announced at interim results * Includes contract crushing services
financial review 13 Income statement F2011 F2011 F2010 F2010 F2009 F2009 Rm Audited Audited Audited Revenue 9 207 11 338 12 090 Operating profit * 499 877 797 Operating margin% * 5.4% 7.7% 6.6% Impairment of property, plant & equipment I i t f t l t & i t (551) (326) - and goodwill Other income – net 50 15 16 (Loss) / profit before interest and taxation (2) 566 813 28 (31) Finance income / (costs) – net 18 Profit before taxation 16 594 782 Effective tax rate % - 43% 29% (Loss) / profit from continuing operations (142) 336 557 Loss from discontinued operations (17) (22) (23) Net (loss) / income N t (l ) / i (159) (159) 314 314 534 534 * Excluding fair value adjustments, impairment adjustments and amounts from associates
financial review 14 Cash flow F2011 F2011 F2010 F2010 F2009 F2009 Rm Audited Audited Audited Operating cash 756 1 133 1 125 Working capital changes (1 238) 58 685 Trade and other payables Trade and other payables ( 1 754) ( 1 754) (328) (328) Trade and other receivables 273 254 Contracts in progress 219 (21) Inventories 24 153 Total change (1 238) 58 Working capital Working capital unwind as expected g p p � Advanced payments, excess billings & contracts-in-progress The majority of the unwind is as a result of contract completion and close out and finalisation of creditor accounts and finalisation of creditor accounts However, no deterioration of working capital management
financial review 15 Cash flow F2011 F2011 F2010 F2010 F2009 F2009 Rm Audited Audited Audited Operating cash 756 1 133 1 125 Working capital changes (1 238) 58 685 1 191 1 810 Cash (utilised) / generated from operations (482) Fi Finance income / (costs) – (net) i / ( t ) ( t) 18 18 28 28 (31) (31) Tax and dividends paid (376) (284) (222) Net cash (utilised) / generated from operating Net cash (utilised) / generated from operating (839) (839) 935 935 1 557 1 557 activities Fixed assets – (net) (49) (125) (213) Investments and financing – (net) I t t d fi i ( t) 25 25 (445) (445) (411) (411) Cash generated from discontinued operations - - 32 Effect of exchange rates on cash Effect of exchange rates on cash (8) (8) (37) (37) (10) (10) Movement in cash (871) 327 955 Cash and cash equivalents on hand 2 235 2 235 3 106 3 106 2 778 2 778 at end of year t d f
financial review 16 Cash flow Rm Cash (utilised)/generated - net Net cash balance on hand at year-end 3500 3106 2778 2778 2500 2235 1824 1500 1500 1195 1195 956 629 569 391 327 500 178 111 79 67 60 27 27 40 40 -52 -87 -500 -871 871 -1500 Financial 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Predominance of large contracts edo a ce o a ge co t acts Predominance of small to medium contracts Predominance of small to medium contracts Cash on hand is healthy in current environment Excess cash will be applied to future equity investments cess cas be app ed to utu e equ ty est e ts Cash on hand (before investments) unlikely to improve in F2012
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