INVESTOR PRESENTATION 2018 WHO WE ARE 2 YORK TIMBER HOLDINGS - PowerPoint PPT Presentation

INVESTOR PRESENTATION 2018

WHO WE ARE 2 YORK TIMBER HOLDINGS LIMITED (YORK, YORK TIMBERS OR THE COMPANY) IS AN INTEGRATED FORESTRY COMPANY LISTED ON THE JSE IN THE FORESTRY AND EMPOWERMENT 29 % 29 PAPER SECTOR WITH SHARE CODE YRK. DEVELOPMENT AGENCIES 29 % 29 YORK WAS INCORPORATED IN 1916 AND WAS FIRST LISTED IN 1946. PRIVATE COMPANIES SHARE HOLDING 23 23 % York operates through its wholly owned subsidiaries: MUTUAL FUNDS 14 % 14 • York Timbers Proprietary Limited owns plantations and processing plants; and OTHER • Agentimber Proprietary Limited operates a wholesale 5 % distribution network. York has a substantial share of the South African timber and plywood markets. York’s This is a result of sustainable biological assets, technologically advanced forestry operations, close attention to customer needs and its ability to deliver quality products.

2018 REVIEW 3 CONTINUAL GROWTH EBITDA per share has grown at a CAGR of 6% over the past eight years IMPROVED QUALITY OF BIOLOGICAL ASSET The continual improvement is reflected in a 6% CAGR since 2011 CASH FLOWS FROM OPERATIONS York continues to deliver positive cash flows from operations, with a 6% CAGR since 2011 DEBT During the year, net debt reduced by R108 million PLYWOOD EXPANSION PROJECT COMPLETED The plant is fully operational and delivering value DEVELOPING EXPORT MARKET During the past year, export revenue accounted for 8% of total revenue INTEGRATED SUPPLY CHAIN SYSTEM IN HIGHVELD RUNNING AT ONE THIRD OF HISTORICAL COSTS

VALUE DISTRIBUTION 4 R1 818 million R1 228 228 million Revenue to suppliers (2017: R1 833 million  1%) (2017: R1 308 million  6%) R1 263 million R76 million - Cost of sales to financiers (2017: R1 335 million  5%) (2017: R77 million  1%) R361 million R396 million - Other operating expense to employees (2017: R374 million  6%) (2017: R347 million  4%) + R71 million R50 million Fair value adjustment to Government (2017: R143 million  65%) (2017: R436 million  84%) - R76 million R139 million Net finance cost retained for future value (2017: R77 million  1%) (2017: R367 million  62%) R50 million - Taxation (2017: R143 million  65%) R139 million = TOTAL VALUE DISTRIBUTED (2017: R367 million  62%)

OUR RESULTS 5  1 % REVENUE  1 % to R1 818 million (2017: R1 833 million)  12 % EBITDA  12 % to R276 million  59 % (2017: R246 million) Core earnings per share  59 %  2 % to 27 cents Total asset value (2017: 17 cents)  2 % to R5 167 million (2017: R5 082 million) OTHER HIGHLIGHTS Number of people employed 4 133 • Debt reduced by R108 million 4 133 • Installation of 48 daylight press • Plywood production increased by 13% • Plywood sales volumes increased by 32% (2017: 4 002) • R65 million invested in property, plant and equipment (2017: R154 million) • Improved forestry management practices

CHANGE IN STRATEGY 6 VISION To deliver shareholder value STRATEGY Focus on cash generation through cost efficiencies and supply chain optimisation DELIVERABLES • Capex normalised ca R70 million • Consolidation of operations • Duplication of costs - Highveld operations • Secure raw material – External purchases

FINANCIAL OVERVIEW 7 BUILDING A SUSTAINABLE COMPANY REQUIRES CONSISTENT PERFORMANCE AND CASH GENERATION OVER TIME GROUP REVENUE GROSS PROFIT EBITDA R’million R’million R’million 2 000 600 300 500 270 1 500 400 240 1 000 300 210 200 180 500 100 150 0 0 120 2018 2018 2018 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 CASH GENERATED FROM OPERATIONS TANGIBLE NET ASSET VALUE (TNAV) UNDERLYING TNAV R’million cents cents 330 1 100 1 100 1 000 1 000 280 900 900 230 800 800 180 700 700 130 600 600 80 500 500 2018 2018 2018 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017

EIGHT YEAR FINANCIAL REVIEW 8 CAGR % % 2011-2018 2018 change 2017 2016 2015 2014 2013 2012 2011 R’000 Group revenue 9,6 1 817 609 (1) 1 832 805 1 771 049 1 543 149 1 323 976 1 131 994 1 112 843 959 143 R’000 Gross profit 4,0 554 151 11 497 502 500 566 404 415 377 945 410 298 421 519 420 912 Gross profit margin % (5,1) 30,5 12 27,1 28,3 26,2 28,5 36,2 37,9 43,9 R’000 Operating profit 2,7 195 566 29 151 369 182 933 144 021 116 811 161 365 166 068 161 897 Operating margin % (6,2) 10,8 30 8,3 10,3 9,3 8,8 14,3 14,9 16,9 R’000 EBITDA 5,1 276 225 12 246 101 240 048 199 390 156 262 187 153 194 726 195 060 EBITDA to revenue % (4,1) 15,2 13 13,4 13,6 12,9 11,8 16,5 17,5 20,3 R’000 Net profit before finance costs 7,3 271 792 (55) 599 038 390 032 196 272 123 531 192 834 303 395 165 676 R’000 Finance costs (2,9) 81 800 (8) 88 595 56 632 58 385 56 440 54 672 87 308 100 370 R’000 Cash flow from operations 6,3 286 420 69 169 979 284 963 182 574 151 461 106 486 197 088 187 239 6,0 R’000 Biological assets 2 918 550 3 2 828 518 2 334 327 2 140 067 2 103 092 2 100 870 2 070 222 1 936 398 R’000 Interest-bearing borrowings 3,9 804 595 (12) 912 302 894 145 743 360 562 616 597 173 558 400 614 225 Investment in property, (58) R’000 plant and equipment 19,2 64 680 154 258 283 241 203 288 66 169 51 958 36 340 18 887 R’000 Net working capital 10,7 231 565 (6) 245 991 162 685 219 485 213 182 180 446 119 372 113 460

EIGHT YEAR FINANCIAL REVIEW 9 CAGR % % 2011-2018 2018 change 2017 2016 2015 2014 2013 2012 2011 R’000 Basic earnings 20,3% 139 734 (62) 367 286 238 212 101 468 50 994 106 864 137 818 38 317 Weighted average number of shares number (0,6%) 316 874 - 317 209 325 286 331 032 331 241 331 241 331 241 331 241 Earnings per share cents 21,1% 44 (62) 116 73 31 15 32 42 12 Core earnings per share cents 17,9% 27 59 17 31 21 16 26 13 8 Headline earnings per share Cents 16,7% 46 (60) 116 73 29 14 33 42 16 EBITDA per share cents 5,7% 87 12 78 74 60 47 57 59 59 Net asset value per share cents 7,1% 989 5 943 809 731 703 688 655 612 Tangible net asset value per share cents 9,1% 810 6 765 635 559 531 516 484 440 Underlying TNAV* cents 8,5% 1 063 6 1007 834 739 708 692 657 602 Return on equity % 13,0% 4,5 (64) 12,3 9,0 4,2 2,2 4,7 6,4 1,9 R’000 Total cost 10,7% 1 622 043 (4) 1 681 436 1 588 116 1 399 128 1 207 165 970 629 946 775 797 246 R’000 External log purchases 30,3% 201 723 (25) 269 982 140 887 210 886 182 086 146 305 122 203 31 671 R’000 Cost excluding log purchases 9,2% 1 420 320 1 1 411 454 1 447 229 1 188 242 1 025 079 824 324 824 572 765 575 Cost as % of revenue % (0,3) 78,1 1 77,0 81,7 77,0 77,4 72,8 74,1 79,8 * Underlying TNAV represents the tangible net asset value (TNAV) adjusted for the deferred tax related to the biological asset, which will only become payable after York seizes re-establishment or sale of plantations.

BALANCE SHEET 10 Statement of financial position 2018 % 2017 R’000 R’000 change as at 30 June 2018 The net increase in biological assets is the result of an increase in growth and price, and a Assets decrease from operating costs and discount rate. Non-current assets 4 036 314 3 3 932 641 Purchased plantations of R71,8 million are included in the biological assets. Biological assets 2 498 082 4 2 392 979 Investment property 26 731 - 26 731 Property, plant and equipment 901 202 (1) 911 532 Goodwill 565 442 - 565 442 Intangible assets 463 (49) 908 Other financial assets 39 707 24 31 965 Deferred tax 4 687 52 3 084 Current assets 1 131 108 (2) 1 149 310 Inventories decreased as production levels were Biological assets 420 468 (3) 435 539 adjusted to sales volumes, and prior year export stock dispatched. Inventories 296 619 (13) 339 693 Trade and other receivables over year-end Trade and other receivables 258 619 25 206 982 increased due to late settlement of a significant Current tax payable 3 363 (57) 7 749 customer at its reporting date, and a receivable raised for timber invoiced by supplier not yet Cash and cash equivalents 152 039 (5) 159 347 received. Total assets 5 167 422 2 5 081 951