Audited Financial Results Year ended 30 June 2011 PASSION/VITALITY/PRECISION The power of many… The Monarch butterfly (Danaus Plexippus) is considered by many to be the most beautiful of all butterflies, perhaps even the ‘king’ of the order Lepidoptera, hence the name. It is also know for its evolutionary ingenuity, perseverance and value to man. www.bidvest.com
Agenda 2011 in perspective Brian Joffe – Group CE 1 Financial, Bidvest Namibia David Cleasby – Group FD 2 Bidvest South Africa Lindsay Ralphs – Divisional CE 3 Bidvest Foodservice Bernard Berson – Divisional CE 4 The future Brian Joffe – Group CE 5 Comprehensive appendices per division and segment 6 2 Audited results for the year ended June 30 2011
2011 in perspective Brian Joffe – Group CE PASSION/VITALITY/PRECISION The power of many… www.bidvest.com
Bidvest Group Limited – 2011 in perspective • A reasonable result with a real increase in profits in what remains a soft market overall • Refreshed operating structure implemented quickly, without a hitch and enthusiastically embraced • Made possible because of the flexibility and lack of complication that is a Bidvest hallmark • Autonomous smaller divisions each with devolved decision making management • Increased opportunities for individuals – continuity, succession and personal growth • Promotes incentive to do proportionately meaningful smaller deals – within the Bidvest big tent • Strategic leadership and growth focus role for Group CE – strong executive support • Unsolicited proposals for the Foodservice assets – significant value ascribed • Immediate gratification of cash in hand at odds with the Bidvest philosophy of critical mass and financial strength and motivated people and good citizenship for sustainable success • Foodservice is a key ingredient in the evolution and growth of Bidvest Audited results for the year ended June 30 2011
PASSION Financial, Bidvest Namibia David Cleasby – Group FD
The key F2011 numbers � Revenue 7.9% to R118.5bn � Trading profit 9.1% to R6.1bn � Headline earnings 9.6% to R3.7bn � HEPS 8.2% to 1157.4cps � 12.1% Adjusted HEPS* to 1199.0cps � 11.1% DPS to 480.0cps � Cash generated from operations (after WC) 2.5% to R8.2bn Net debt R5.0bn (27% of equity) *adjusted for STC charge Note : IFRS compliant 6 Audited results for the year ended June 30 2011
Bidvest Group Limited – salient financial points • Revenue up 7.9% to R118.5bn (constant currency up 10.4% to R121.2bn) - Safcor Panalpina & Automotive up 23% and 17% respectively • Good cost control (expenses up 5.9%) despite escalating utility tariffs and wages in South Africa - constant currency up 7.8% • Trading margin up slightly to 5.12% (5.06%) - changing mix, lower margin Automotive and Safcor Panalpina offset in aggregate by better margin in other businesses • Offshore operations 36% of trading profit (35%) - largely due to increase in Namibia • Customary strong cash flow - cash generated 135% of trading profit • Interest paid declined 15.1% to R644.0m • Tax rate higher at 28.8% (32.5% in SA, 24.3% offshore) due to STC paid on 2010 final dividend and 2011 interim dividend - anticipating a clean overall rate of 27% in future • Associate earnings up 140% to R98m - mainly due to two new Freight JVs previously accounted in trading income • Minorities up 136% to R235.4m - predominantly Bidvest Namibia • One off capital items of include a £13.3m impairment of intangibles associated with the 3663 Wholesale IT expenditure • Headline earnings up 9.6% to R3.7bn, assisted by a 15% decline in net finance costs to R644.0m • HEPS up 8.2% to 1157.4 cents with normalised HEPS adjusted for STC up 12.1% to 1199.0 cents • Weighted shares in issue 1% higher at 318.7m • Final dividend of 255.0 cents (up 13.3%), annual cover in line with stated objective of 2.4x 7 Audited results for the year ended June 30 2011
Bidvest Group Limited – influences on the trading period Exchange rate : • ZAR relatively strong versus Euro and Sterling, slightly weaker against the Australian dollar • Impact 1.3% on HEPS versus 2.3% in F2010 Working capital • R405.7m retained from working capital • R1.1bn taken out of working capital in past two years • Net working capital – 8 days versus 9 days in 2010 Gearing • Net debt at R5bn (F2010 R3.8bn, H1 F2011 R4.6bn) • Remains satisfactory in view of R1.6bn expenditure on Dinatla BEE share buyback late in the year • Finance costs reflect lower interest rates across geographies together with better asset management • Debt to equity 27% (22%) with target at 40% • Interest cover 9.1x, target minimum of 5-6x Capital expenditure • Net capex on PPE and intangibles R2.8bn versus R2.5bn • Significant step up in investment into Financial Services (R768.0m), freight (R314.6m), Foodservice Europe (337.8m) and foodservice Asia Pacific (R317.5m) • Continue to finesse funding mix, pricing, maturities Financial position • Cash generation good, continued financial disciplines to improve asset management and hence returns • Balance sheet strong and well capitalised • Credit ratings maintained, outlook positive 8 Audited results for the year ended June 30 2011
Bidvest Group Limited – F2012 pointers • Dinatla 12m shares bought back in May 2011 – full impact in F2012 • Number of shares in issue June 30 2011 is 309m versus 319m (3%) • STC in the base for F2012 and shareholders tax will become effective April 2012 • Exchange rate volatility – unpredictable but a perennial feature of Bidvest planning and management • Working capital will grow as the group expands and will continue to reflect typical pattern of first half absorption and second half generation • Adequate funding capacity to promote organic and acquisitive growth • Prudent and responsible financial management will continue • Dividend cover to be maintained at 2.4x • Interest rates will likely remain at current cycle lows for sometime to come given the economic situation locally and internationally 9 Audited results for the year ended June 30 2011
Bidvest Namibia (8.8% of group profit) Key points Revenue +9.5% to R2.13bn • Firm US dollar aligned fishing revenue underpinned the result Profit +46.8% to R540.1m • Stronger Namibian dollar – N$6.98 vs. N$7.61 on average 600 • A healthy marine resource 550 R540.1m • BidCom underperformed - competitive market, internal shortcomings 500 450 The year ahead 400 • Fishing conditions remain very favourable 350 R367.9m Margin 300 • Investing in training and managerial capacity 25.3% 250 • Alert to complementary acquisitive opportunities Margin 200 18.9% 150 100 F2010 F2011 * Refer appendix for further detail 10 Audited results for the year ended June 30 2011
VITALITY Operating review – Bidvest South Africa Lindsay Ralphs – Divisional CE
Bidvest South Africa - Business conditions Activity levels • Business cycle upturn is hesitant and the mood of business and households is patchy • Competing demands/pressures on the consumer wallet • Credit extension flat to negative, strict credit granting criteria • Business investment has yet to show a recovery • Disruptive worker militancy + wage demands unrelated to productivity in a declining labour market Bidvest approach • 10 autonomously managed operating segments each with a unifying business theme • Relatively young revised structure but already we can see competitiveness benefits • Achieving a quality result despite tough markets 12 Audited results for the year ended June 30 2011
Bidvest Automotive (4.2% of group profit) Key points Revenue +17.4% to R18.6bn • Automotive is now a focused vehicle retailer Profit +10.7% to R255.4m • Results driven by new vehicle demand 260 • Margins overall remain under pressure R255.4m 240 R230.8m 220 The year ahead 200 • Attracting new blood • Realigning the cost base in line with slimmed down division 180 Margin Margin 1.46% • Increasing return on sales 160 1.37% • Rate of growth in new vehicles slowing 140 120 100 F2010 F2011 * Refer appendix for further detail 13 Audited results for the year ended June 30 2011
Bidvest Financial Services (10.5% of group profit) Key points Revenue +13.7% to R1.67bn • All financial services and fleet activity now housed under one roof Profit +15.1% to R641.6m • Total assets R3.6bn 700 • Robust liquidity and risk metrics 650 R641.6m • Growth across all activities 600 550 R571.6m The year ahead 500 • Strategically very well placed at key sites 450 400 • Increasing market penetration Margin Margin 38.8% 350 38.3% • Yamaha Financial Services roll-out 300 250 200 F2010 F2011 * Refer appendix for further detail 14 Audited results for the year ended June 30 2011
Bidvest Electrical (3.0% of group profit) Key points Revenue +3.1% to R4.1bn • Sharp downturn in construction Profit -6.2% to R181.8m • Strict cost control 190 • Now right-sized for a depressed market R193.9m R181.8m 170 The year ahead 150 • Construction to remain weak Margin Margin 4.7% 130 • Alert to opportunity 4.4% 110 90 70 50 F2010 F2011 * Refer appendix for further detail 15 Audited results for the year ended June 30 2011
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