Annual Results for the year ended 30 June 2010 Annual Financial Results ended 30 June 2010
AGENDA Introduction and Highlights Paul Schouten CEO Financial performance p John Haveman CFO Focus on automotive market Ugo Frigerio MD, Automotive Divisional performance Divisional performance Paul Schouten Paul Schouten CEO CEO Prospects Paul Schouten CEO Annual Results 1 30 June 2010
HIGHLIGHTS Financial Strong operating cash flows Debt/equity ratio 23.9% HEPS of 21.2 cents (previous year 11.4 cents) Net asset value per share R3.13 Cash Flow Operating margins improved from 3.4% to 4.9% Lower interest charge Lower net working capital Limited capex =R190 million free cash flow Operations Hosaf plant operating well p p g Recovery in automotive vehicle build Annual Results 2 30 June 2010
A Annual Financial Results l Fi i l R lt for the year ended 30 June 2010 Annual Financial Results ended 30 June 2010
INCOME STATEMENT • Headline earnings growth from loss of 3.2 cents to profit of 21 cents • Finance costs down due to improved borrowings and lower rates • Tax rate high due to permanent differences on pension fund surplus • Earnings growth from loss of 8 8 cents to profit of 20 6 cents • Earnings growth from loss of 8.8 cents to profit of 20.6 cents June 2010 June 2009 Rm Rm Continuing operations Revenue 3 970.5 3 839.0 Operating profit before restructuring costs 198.2 152.5 Restructuring costs (3.7) (19.9) Net finance costs Net finance costs (52 7) (52.7) (63 4) (63.4) Joint ventures 3.0 2.7 Profit before taxation 144.8 71.9 Taxation (48.7) (20.5) Profit after taxation 96.1 51.4 Net loss from discontinued operations (2.4) (84.1) Minorities (6.3) ( ) (4.6) ( ) Net profit/(loss) 87.4 (37.3) HEPS 21.0 (3.2) EPS EPS 20 6 20.6 (8 8) (8.8) Annual Results 4 30 June 2010
BALANCE SHEET – ASSETS 2010 2009 • Balance sheet strengthening • Properties valued at R591m, book value R213m • Net asset value per share (cents) 313 292 • Net tangible asset value per share (cents) 297 276 June 2010 June 2009 Rm Rm Assets Fixed assets 945.7 939.9 Goodwill 66.7 66.7 Pension fund surplus 25.1 30.4 Deferred taxation assets 68.3 107.3 Joint ventures 22.7 22.1 Non-current assets 1 128.5 1 166.4 Inventories 646.3 675.8 Accounts receivable 621.1 547.9 Cash and equivalents 101.8 58.5 Assets held for sale 12.5 60.0 Current assets 1 381.7 1 342.2 Total assets 2 510.2 2 508.6 Annual Results 5 30 June 2010
FIXED ASSETS MOVEMENT June 2010 June 2009 Rm Rm Opening balance p g 939.9 828.2 Capital expenditure 63.3 257.4 Disposals (2.6) (17.2) Depreciation (70.8) (59.3) Impairments (0.3) (19.4) Transfers from/(to) held for sale 16.2 (49.8) Closing balance 945.7 939.9 By category Land and buildings 193.6 192.3 Investment property 19.4 5.5 Plant and machinery 687.8 701.3 Other assets 44.9 40.8 Total 945.7 939.9 Annual Results 6 30 June 2010
CAPITAL EXPENDITURE • Restricted to less than depreciation charge • Capital cycle of last five years complete • R13 million capex incurred in Automotive to acquire Dura assets • No major capex planned for 2011 • No major capex planned for 2011 June 2010 June 2009 Capex Depreciation Capex Industrial segment 39.7 56.0 233.5 Automotive 21.3 26.5 15.4 Industrial footwear Industrial footwear 2 7 2.7 6 4 6.4 19 7 19.7 Hosaf 15.7 23.1 198.4 Consumer segment Consumer segment 23.6 23.6 14.8 14.8 23.9 23.9 Bull Brand 8.8 3.8 8.9 Brenner 4.4 4.0 4.4 Jordan 2.4 2.7 5.6 Glodina 8.0 4.3 5.0 TOTAL 63.3 70.8 257.4 Annual Results 7 30 June 2010
BALANCE SHEET – EQUITY AND LIABILITIES • Liabilities reducing and gearing improving June 2010 June 2009 Rm Rm Equity q y 1 364.7 1 272.1 Interest-bearing borrowings 30.5 29.6 Deferred taxation liabilities 20.6 23.8 Retirement benefit obligations 10.6 11.3 Long-term liabilities 61.7 64.7 Accounts payable and provisions 686.9 628.0 Short-term loans and bank overdrafts 396.9 535.5 Liabilities held for sale - 8.3 Current liabilities 1 083.8 1 171.8 Total equity and liabilities 2 510.2 2 508.6 Annual Results 8 30 June 2010
CASH FLOW STATEMENT • Cash flow continues to improve • 2009 cash flow included Bull Brand and Hosaf effects • Cash taxation paid in Feltex Fehrer JV • Group assessed losses R633 million • Group assessed losses R633 million June 2010 June 2009 Rm Rm EBITDA 269.0 125.1 Non-cash items (0.4) 11.2 Decrease in working capital 28.4 231.8 Decrease in inventories 44.1 223.9 (Increase)/decrease in accounts receivable (73.7) 181.9 Decrease/(increase) in accounts payable 58.0 (174.0) Operating cash flows 297.0 368.1 Net finance costs (54.2) (77.5) Cash taxation paid p ( (8.9) ) (14.2) ( ) Capital expenditure (63.3) (257.4) Disposal of PPE 18.4 19.8 Free cash flow 189.0 38.8 Other investing activities g 2.4 7.1 Dividends paid (2.1) (3.6) Repayment of loans (128.2) (141.0) Change in cash and equivalents 61.1 (98.7) Free cash flow per share (cents) 44.5 9.1 Annual Results 9 30 June 2010
REVENUE • Growth in consumer business challenging • Change in profile following Hosaf expansion and Bull Brand fresh meat closure • Hosaf now the largest division Hosaf now the largest division June % June % 2010 2009 Rm Rm Industrial segment 2 495 62% 2 242 48% Automotive 752 19% 782 17% Automotive - discontinued 28 1% 58 1% Industrial footwear I d t i l f t 342 342 9% 9% 349 349 7% 7% Hosaf 1 373 34% 1 053 23% Consumer segment Consumer segment 1 505 1 505 38% 38% 2 322 2 322 52% 52% Bull Brand 285 7% 278 6% Bull Brand - discontinued - - 668 16% Brenner Brenner 680 680 17% 17% 831 831 18% 18% Jordan 342 9% 351 8% Glodina 198 5% 194 4% TOTAL 4 000 100% 4 564 100% Annual Results 10 30 June 2010
OPERATING PROFIT BEFORE RESTRUCTURING • 45% improvement on 2009 • Hosaf now 37% of the total following expansion • Automotive improvement Automotive improvement June 2010 June 2009 Rm Rm Industrial segment g 142.4 73.5 Automotive 35.4 5.2 Automotive - discontinued 0.5 (8.5) Industrial footwear 31.3 30.0 Hosaf 75.2 46.8 Consumer segment 56.3 64.7 Bull Brand 7.5 8.8 Bull Brand - discontinued - (6.8) Brenner 28.7 44.1 Jordan 11.1 2.4 Glodina 9.0 16.2 TOTAL 198.7 138.2 Annual Results 11 30 June 2010
DEBT REDUCTION PROCEEDING TO PLAN • Goal of continuous improvement • Reached target net debt/equity ratio of < 30% • EBITDA interest cover 5 times • Some divisions still receiving attention • Sale of under-utilised properties to continue • Risks to the downside: • Exchange rate • Activity levels • Commodity prices y p Annual Results 12 30 June 2010
DEBT HISTORY Interest-bearing debt/equity % 50% 45% 40% 40% 35% 30% 25% 43% 43% 43% 40% 20% 40% 34% 15% 27% 22% 24% 23% 22% 20% 10% 5% 0% Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Annual Results 13 30 June 2010
CAPITAL DISTRIBUTION • Reinstated following good cash flows in 2009 and 2010 • Final cash distribution of 7 cents per share proposed • Cover of 3 times headline earnings Cover of 3 times headline earnings • Cover of 6.4 times free cash flow Final distribution June 2010 June 2009 Headline earnings (cents per share) 21.0 (3.2) Free cash flow (cents per share) 44.5 9.1 Distribution per share (cents per share) 7.0 - Total distribution proposed (R million) 29.7 - Cover (times - headline earnings) 3.0 - Cover (times - free cash flow) 6.4 - Annual Results 14 30 June 2010
I d Industrial Segment t i l S t Annual Financial Results ended 30 June 2010
Annual Financial Results ended 30 June 2010 16 AUTOMOTIVE DIVISION
REVENUE AND OPERATING PROFIT Rm Dec June June June June 2005 2007 2008 2009 2010 R Revenue 818 818 934 934 1063 1063 840 840 780 780 Operating Profit/(loss) 84 100 32 (3) 36 Operating Margin 10.3% 10.7% 3.0% (0.4%) 4.6% Revenue Operating profit 1 200 120 0 1 063 1 000 100 100 934 800 840 80 818 84 780 780 600 60 400 40 36 36 32 200 20 (3) 0 0 2005 2007 2008 2009 2010 2005 2005 2007 2007 2008 2008 2009 2009 2010 2010 Annual Results 30 June 2010
TOTAL PASSENGER AND LCV SALES 2006 TO 2010 TOTAL PASSENGER AND LCV SALES 2006 TO 2010 75 000 70 000 70 000 65 000 60 000 55 000 50 000 45 000 40 000 35 000 30 000 J F M A M J J A S O N D 2006 2006 54 817 54 817 62 231 62 231 69 746 69 746 57 987 57 987 63 710 63 710 66 942 66 942 71 824 71 824 71 872 71 872 69 655 69 655 71 855 71 855 70 612 70 612 61 505 61 505 58 539 66 361 69 455 54 100 63 153 59 630 64 559 70 147 55 574 67 965 61 162 55 538 2007 56 122 63 623 67 170 61 438 59 698 60 841 67 300 64 317 65 437 63 359 58 082 49 949 2008 39 596 42 216 49 522 34 103 37 957 40 181 40 109 37 109 44 036 50 919 51 420 41 773 2009 41 941 46 598 57 287 46 352 55 367 52 339 2010 Source of Data: NAAMSA Annual Results 18 30 June 2010
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