Interim financial results Half year ended December 31 2011 “Bidvest Unusual” PASSION/VITALITY/PRECISION The power of many… www.bidvest.com
Business Unusual agenda CE’s perspective on the trading period Brian Joffe – Group CE 1 Bidvest strategic approach Brian Joffe – Group CE 2 Concluding remarks Brian Joffe – Group CE 3 FD’s perspectives on the financials David Cleasby – Group FD 4 Comprehensive appendices 5 2 Results for half year ended December 31 2011
Half year ended December 31 2011 - key financial figures � 15,1% Revenue to R67,35 bn � 14,9% Trading profit to R3,25 bn Constant currency trading profit � 11,6% to R3,15 bn � 10,1% Normalised headline earnings* to R1,89 bn � 37,5% HEPS to 742,3 cps � 13,6% Normalised HEPS* to 613,4 cps � 24,4% DPS to 280,0 cps Special dividend^ 80,0 cps � Cash generated from operations (pre WC) 9,7% to R4,0 bn Net debt R5,6 bn (R4,6 bn) 27% of equity * Excluding ZAR399m profit on disposal of half of the economic interest in Mumbai International Airport ^ Special dividend funded from proceeds of Mumbai sale 3 Results for half year ended December 31 2011
Business Unusual - CE’s perspective on the trading period Business Unusual financial result • A satisfactory outcome delivered in keeping with our core beliefs of good corporate citizenship • Underpinned by diversity of cash flows, a tradition of financial stability and by good people Business Unusual trading conditions • Customers are demanding, price conscious and cautious – sentiment is variable, resources limited • Social media and similar democratising tools is having a powerful impact • Sustainable success requires balance in the value chain, hard work and thrift • The markets we serve are profitable and remain attractive - provided we continue to move with the times and anticipate change Results for half year ended December 31 2011
Business Unusual - CE on the Bidvest strategic approach • Demand driven model – the customer drives our focus • The refreshed operating structure, creating autonomous smaller divisions each with devolved decision making management, was timely for Business Unusual and is widely embraced • Outcomes are shaped by our thinking, state of mind and our behaviour as Bidvest staff members • We think Bidvest Centric – governance, strategic direction, financial strength, capital allocation • We think Bidvest Operations – customer facing, specific business focus, deliver service and results • We think co-branding – Bidvest’s collective clout behind individual trading names • We try and capture as many linkages in the service value chain as possible • Our internal journey is one of continuous assessment and improvement • Effective leadership means motivating our people to approach their tasks with enthusiasm and skill and receiving appropriate recognition and reward • Small things count – fixing the broken window analogy Results for half year ended December 31 2011
Business Unusual - CE’s concluding remarks • Bidvest Group companies benefit from group’s reach and scale • Strategy intact to grow organically and acquisitively in commercial services and foodservice • New complementary activities always under consideration anywhere in the world • We are patient and we seek good value • Real growth in earnings is anticipated for the full year • Bidvest is in its 24 th year and we shall continue to deliver with vigour for many more • It is business unusual – but then so are we Results for half year ended December 31 2011
PASSION Financial perspectives David Cleasby – Group FD
Bidvest Group Limited - salient financial points • Revenue up 15,1% to R67,3bn (constant currency up 9,6% to R64,1bn) • Expenses well controlled - up 11,5% to R10,2bn but up only 6,0% to R9,6bn in constant currency • Trading profits up 14,9% to R3,3bn (up 11,6% in constant currency) • Margin flat at 4,8% - despite change in mix of contribution - low margin Automotive (5,7% share of Group profit vs. 3,8%) and also Bidvest Panalpina Logistics (considerable offsetting disbursements against billings) • Non-South Africa 36% of profit (35%) with Namibia (NAD pegged to ZAR) contributing 9,6% (7,8%) • Typical seasonality to cash flow cycle – net w/c days improved though • Tax rate (excluding STC on 2011 final dividend and MIAL profits) 26,7% vs. 26,6% • Minorities up 49% to R151,6m – mainly Bidvest Namibia • Net capital items of R101m includes a R97m IFRS impairment charge for associate Comair • Profit on disposal of 50% interest in Mumbai International Airport of R399,1m - included in headline • Headline earnings up 33,3% to R2,3bn, normalised (ex Mumbai) up 10,1% to R1,9bn; weaker ZAR: 3,7% on normalised HEPS • HEPS up 37,5% to 742,3 cents, normalised HEPS up 13,6% to 613,4 cents (constant currency HEPS up 9,9%) • ROFE improves from 33,3% to 35,9% • Weighted shares in issue down 3% to 309,5m – effect of Dinatla shares bought back in May 2011 • Interim dividend of 280,0 cents per share (up 24,4%), gross cover of 2,25x • Special dividend of 80,0 cents per share Results for half year ended December 31 2011
Bidvest Group Limited - notable influences on the trading period Exchange rate • ZAR weakened from August 2011 • R1bn movement in foreign currency translation reserve Working capital • R1,6bn (R1,0bn) applied – currency, automotive and Office stocking up, seasonality • Days: stock 34 (33), debtors 31 (30), creditors 52 (48), net days better at 13 (15) • Net trade w/c at cyclical peak in H1 F2008 R5,5bn – 9,1% of revenue • Net trade w/c in H1 F0212 R5,2bn – 7,7% of revenue • R320m reduction in net trade w/c in three years vs. a 35% increase in headline HEPS (normalised) Capital management and cash flow • Net debt at R5,6bn (R5,0bn @ June 2011, R4,6bn @ December 2010) • Debt to equity stable at 27% (target of 40%) • EBITDA interest cover 11,5x, operating interest cover 8,9x (target of 5x - 6x) • Net capex on PPE and intangibles R1,4bn (R1,3bn) • Notable capex items: BRAC (R320m), Freight (R238m) • Funding appropriately termed, 70% of borrowings & overdrafts at local subsidiaries in ZAR; not out of line with profit contribution (64%), new internal dividend model • Balance sheet strongly capitalised, substantial capacity for growth • Fitch upgraded Bidvest’s South African long-term rating to 'AA- from 'A+ and short-term rating to 'F1+ from 'F1. Long-term rating has a stable outlook with “a steady through-the-cycle credit profile.” Results for half year ended December 31 2011
Bidvest Group Limited - financial pointers for remainder of year • For HEPS calculations the projected number of weighted shares in issue is 309,5m • New 15% shareholders tax becomes effective April 2012 – secondary tax on companies falls away thus reducing effective corporate tax rate; shareholders to be compensated to the extend of the STC impacts, dividend payout ratio to be raised to approximately 44% of headline earnings (previously 40%) • Exchange rate is anyone’s guess but the ups and downs will be managed appropriately • No change of consequence expected to the typical fiscal working capital cycle • Interest rates unlikely to deviate from prevailing levels • Capacity to use various funding permutations if the need arises on corporate action • Capital markets to be accessed to optimise interest costs and liquidity profile • Asset management and cost efficiency remain critical focus areas • Restructure of Bidvest Commercial Division has allowed new financial blood into Group, bolstering internal audit skills as well Results for half year ended December 31 2011
VITALITY Thank you for attending Questions
PRECISION Half year ended December 31 2011 Appendix 1 Segment trading profits detail
Bidvest Group Limited - trading profits detail H1 2011 H1 2010 Trading Margin Share of Trading Margin Share of R’000 profit % Group profit profit % Group profit Bidvest Commercial Group 1,814,321 5.6% 55.2% 1,597,754 5.5% 56.2% Bidvest Automotive 187,142 1.8% 5.7% 108,134 1.2% 3.8% Bidvest Electrical 69,957 3.3% 2.1% 59,916 3.0% 2.1% Bidvest Financial Services 328,291 40.2% 10.0% 348,740 42.1% 12.3% Bidvest Freight 439,619 4.2% 13.4% 399,360 4.2% 14.1% Bidvest Industrial 49,232 6.4% 1.5% 62,223 8.0% 2.2% Bidvest Office 141,150 6.7% 4.3% 99,641 5.4% 3.5% Bidvest Paperplus 186,213 9.4% 5.7% 172,776 9.0% 6.1% Bidvest Rental and Products 171,596 17.3% 5.2% 146,397 17.4% 5.2% Bidvest Services 94,311 6.1% 2.9% 95,038 6.3% 3.3% Bidvest Travel and Aviation 146,810 14.3% 4.5% 105,529 12.4% 3.7% Bidvest Food Group 1,064,283 3.0% 32.4% 956,244 3.3% 33.7% Asia Pacific 495,371 4.2% 15.1% 400,361 4.2% 14.1% Europe 378,987 1.9% 11.5% 370,440 2.2% 13.0% Southern Africa 189,925 6.4% 5.8% 185,443 7.1% 6.5% Bidvest Namibia 314,401 25.1% 9.6% 220,603 23.9% 7.8% Bidvest Corporate 95,375 26.2% 2.9% 66,788 19.4% 2.4% Bidvest Group 3,288,380 4.8% 100.0% 2,841,389 4.8% 100.0% 13 Results for half year ended December 31 2011
Appendix 2 Half year ended December 31 2011 Segmental results analysis – Bidvest Commercial Division PASSION
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