INVESTOR PRESENTATION: APPENDICES 4 MARCH 2019 RESULTS FOR THE SIX MONTHS ENDED DECEMBER 2018
INVESTOR PRESENTATION APPENDICES RCL FOODS IN CONTEXT FOOD, LIQUOR INSURANCE BANKING HEALTHCARE INDUSTRIAL INFRASTRUCTURE MEDIA & SPORT & HOME CARE 2
INVESTOR PRESENTATION APPENDICES 3
INVESTOR PRESENTATION APPENDICES 4
INVESTOR PRESENTATION APPENDICES Guided by our passion and underpinned by our values , we strive to create value for our stakeholders through the manufacture and distribution of a wide range of branded and private label food products. In line with our business model , our business activities centre on growing our revenue and profit across both our core and added- value categories , through the effective and balanced use of our capitals. 5
INVESTOR PRESENTATION APPENDICES MATERIAL FINANCIAL IMPACTS Profit on sale of dormant farms in the Chicken business unit of R105.0m , stemming from the decision to reduce commodity chicken volumes in February 2017 An IFRS 9 fair value gain of R34.1m in the Grocery business unit (December 2017: R8.8m gain), with the improvement over the prior period mainly attributable to gains on sunflower positions 6
INVESTOR PRESENTATION APPENDICES PERFORMANCE REVENUE (Rbn) EBITDA (Rm) 2 224.0 25.0 25.0 2 046.0 24.4 23.4 1 762.4 1 747.6 19.5 1 206.1 1 201.0 1 152.2 1 122.2 13.3 13.1 12.9 12.8 1 082.2 12.0 900.4 8.7 688.3 108.2 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 INTERIM FULL YEAR INTERIM FULL YEAR OVER AROUND MORE THAN 150 TONS 550 000 TONS 1 500 700 000 20 000 OF MAYONNAISE OF FLOUR AND MAIZE DELIVERY TONS OF SUGAR EMPLOYEES SOLD DAILY MILLED PER YEAR VEHICLES PER YEAR 20 MILLION 1.2 MILLION 750 000 MORE THAN 20 300 000 CHICKENS ON THE TONS OF ANIMAL LOAVES OF WELL KNOWN & PIES PER DAY GROUND AT ANY TIME FEED PER YEAR MUCH LOVED BRANDS BREAD PER DAY 7
INVESTOR PRESENTATION APPENDICES OUR BRANDS A few of South Africa’s much loved brands produced by RCL FOODS 7 BRANDS OVER R1bn 2 BRANDS OVER R500m 5 BRANDS OVER R300m 8 BRANDS OVER R100m 8 BRANDS UNDER R100m 8 Relative sales (12 Months to December 2018)
INVESTOR PRESENTATION APPENDICES MARKET SHARE VOLUME SHARE % FOR THE PERIOD 6MM DEC 18 12MM DEC 18 12MM DEC 17 SOURCE Dogfoods (RCL FOODS Brands) 28.8 29.1 27.4 Aztec* Catfoods (RCL FOODS Brands) 27.6 27.5 23.2 Aztec 34.1 32.9 30.3 Aztec Yum Yum Peanut Butter Nola Mayonnaise 50.9 49.3 41.9 Aztec 29.2 28.5 29.4 Aztec Sorghum (RCL FOODS Brands) Ouma Rusks 46.5 47.9 46.6 Aztec Mageu 69.8 69.9 71.2 Aztec 31.5 30.7 37.7 Aztec Freezer to Fryer Polony (RCL FOODS Brands) 7.4 6.1 10.0 Aztec 0.0 4.7 20.4 Aztec Viennas (RCL FOODS Brands) Selati 25.5 26.7 26.8 Aztec Pies and Rolls (RCL FOODS Brands) 4.3 5.1 8.3 Aztec 13.5 13.3 13.7 Internal estimates – share of AFMA** EPOL Molatek 4.8 4.8 4.4 Internal estimates – share of AFMA Supreme Flour 12.5 12.5 12.6 SAGIS*** 8.5 8.6 8.8 SAGIS Sunbake *Aztec is a provider of market measurement and related services for consumer packaged goods **AFMA refers to the Animal Feed Manufacturers Associations, which represents approximately 60-65% of the total feed market. Shares are for the period to October. *** SAGIS is a South African grain information service that supplies market information to the grain and oil seeds industry 9
Source: Reuters 3500 3700 3900 4100 4300 4500 4700 4900 COMMODITY PRICES Jan-17 Feb-17 Mar-17 SAFEX WHEAT PRICE (R/Ton) Apr-17 May-17 INVESTOR PRESENTATION APPENDICES Jun-17 Jul-17 Aug-17 R4 226.0 AVG Price H1 F18 Sep-17 (6m) Oct-17 Nov-17 Dec-17 Jan-18 1500 1700 1900 2100 2300 2500 2700 2900 3100 3300 3500 Feb-18 Mar-18 1.3% Jan-17 Apr-18 Feb-17 May-18 Mar-17 Jun-18 YELLOW MAIZE PRICE (R/Ton) Apr-17 Jul-18 May-17 Aug-18 R4 279.7 AVG Price H1 F19 Jun-17 Sep-18 (6m) Jul-17 Oct-18 Aug-17 Nov-18 R1 980.1 AVG Price H1 F18 Sep-17 (6m) Dec-18 Oct-17 Nov-17 Dec-17 200.0 250.0 300.0 350.0 400.0 450.0 Jan-18 Feb-18 20.1% Mar-18 Jan-17 Apr-18 Feb-17 May-18 Mar-17 Jun-18 Apr-17 Jul-18 May-17 CME SOYA PRICE ($/Ton) Aug-18 Jun-17 R2 377.8 AVG Price H1 F19 Jul-17 Sep-18 (6m) Oct-18 Aug-17 AVG Price H1 F18 $313.5 Nov-18 Sep-17 (6m) Oct-17 Dec-18 Nov-17 Dec-17 Jan-18 Feb-18 10 11 12 13 14 15 16 17 Mar-18 0.6% Jan-17 Apr-18 Feb-17 May-18 Mar-17 Jun-18 Apr-17 Jul-18 May-17 Aug-18 AVG Price H1 F19 $315.3 Jun-17 Sep-18 (6m) Jul-17 Oct-18 Aug-17 Nov-18 AVG Price H1 F18 R13.40 Sep-17 (6m) Dec-18 RAND/USD Oct-17 Nov-17 Dec-17 Jan-18 3 500.0 4 000.0 4 500.0 5 000.0 5 500.0 6 000.0 Feb-18 Mar-18 5.8% Apr-18 Jan-17 May-18 Feb-17 SAFEX SUNFLOWER PRICE (R/Ton) Jun-18 Mar-17 Jul-18 Apr-17 May-17 Aug-18 AVG Price H1 F19 R14.18 Jun-17 Sep-18 (6m) Jul-17 Oct-18 Aug-17 Nov-18 R4 637.6 AVG Price H1 F18 Sep-17 (6m) Dec-18 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 9.5% Apr-18 May-18 Jun-18 Jul-18 Aug-18 R5 078.8 AVG Price H1 F19 Sep-18 (6m) Oct-18 Nov-18 Dec-18 10
INVESTOR PRESENTATION APPENDICES CONSUMER: CHICKEN INTEGRATED SUPPLY CHAIN FROM “FARM TO FORK” GP OPERATION AGRICULTURE PROCESSING BROILER GRANDPARENT GRANDPARENT FARMS PARENT FARMS FARMS CHICKS PROCESSING REARING LAYING HATCHING REARING LAYING HATCHING GROWING BROILER 21 WEEKS 40 WEEKS 3 WEEKS 21 WEEKS 40 WEEKS 3 WEEKS 34 DAYS 3 PLANTS & 2 FP PLANTS World’s oldest pedigree broiler breed • Located in Carolina and East London to ensure optimal bio-security • 3 broad agricultural regions: Northern, KZN, W Cape • FEED SUPPLY 5 feed mills producing 1.2 million tons pa CONSUMERS BRANDS CUSTOMERS DISTRIBUTION Grade A Quality, Grade A Taste The consumer is They taste so at the heart of good ‘cos they our business eat so good The Chicken Experts 11
INVESTOR PRESENTATION APPENDICES CONSUMER: CHICKEN Limpopo Province The Chicken business unit produces a wide range of chicken products under 3 well established brands; Rainbow, Simply Chicken and Farmer Brown. Botswana Rustenburg Mpumalanga North Windhoek West Gauteng 180 rearing, laying and broiler farms and hatcheries Carolina 20m birds on the ground Namibia KwaZulu Natal Wolwehoek 3 primary processing plants Free State Northern Cape Hammarsdale Lesotho 2 further processing plants Durban Eastern Cape Western Cape East London Worcester Cape Town 12
INVESTOR PRESENTATION APPENDICES CONSUMER: GROCERIES GROCERY PIES The Grocery business unit consists of a portfolio of leading South The Pies business unit produces a range of high quality pies African brands spanning staples to top end offerings across a range under the Pieman’s brand in frozen unbaked, frozen baked and of food and animal product categories . chilled baked formats. Limpopo Limpopo Botswana Botswana Randfontein Mpumalanga Mpumalanga Krugersdorp Gauteng North North Gauteng West West Free KwaZulu Free KwaZulu State Natal State Natal Northern Northern Lesotho Lesotho Cape Cape Molteno Eastern Eastern Cape Cape Western Western Cape Cape 13
INVESTOR PRESENTATION APPENDICES CONSUMER: GROCERIES BEVERAGES SPECIALITY The Beverages business unit produces a maize-based drink under The Speciality business unit produces a range of ready to eat the Mageu No 1, Smooth and Mnandi brands . products across speciality bread, ambient cake and chilled cakes & desserts , mainly for Woolworths. Limpopo Limpopo Botswana Botswana Centurion Bronkhorstspruit Pretoria x2 Mpumalanga Mpumalanga Gauteng Gauteng North North Spartan West West Free KwaZulu Free KwaZulu State Natal State Natal Northern Northern Lesotho Lesotho Cape Cape Eastern Eastern Cape Cape Western Cape Western Cape Worcester 14
INVESTOR PRESENTATION APPENDICES SUGAR & MILLING: SUGAR Limpopo Province The Sugar business unit produces a range of sugar products under the leading sugar brand Selati . Tzaneen Botswana Pretoria Malelane North Komati Windhoek Nelspruit West Gauteng Mpumalanga Namibia Pongola KwaZulu Natal Free State Northern Cape Bloemfontein Lesotho 3 Sugar Mills based in Malelane, Komati and Durban Pongola, were established in 1968, 1993 and 1954 respectively produce approximately 700 000 tons of sugar per year. Eastern Cape Western Cape East London Cape Town Port Elizabeth 15
INVESTOR PRESENTATION APPENDICES SUGAR IMPORTS AND DUTIES 400 000 5 000 4 500 350 000 Cumulative tons imported from 1 • 4 000 CUMULATIVE TONS IMPORTED (SOUTH AFRICA) April 2017 and 2018 (start of 300 000 industry year) 3 500 A total of 63 899 tons have been • imported for the six months ended 250 000 3 000 December 2018, down 71.4% DUTIES (R/ton) (Dec 2017: 223 573 tons) 200 000 2 500 Duty free periods in August and • September 2017 resulted in record high imports being reported 2 000 150 000 Revised tariff of R4 195/ton • 1 500 implemented in August 2018, which substantially reduced 100 000 imports 1 000 Despite the revised tariff, the • 50 000 overhang of high levels of 500 imported sugar is still impacting the local market 0 0 April 17/18 May 17/18 Jun 17/18 Jul 17/18 Aug 17/18 Sept 17/18 Oct 17/18 Nov 17/18 Dec 17/18 17 (Tons) 18 (Tons) 17 (Duties) 18 (Duties) 16 Source: Import duty is published by Customs in the Government Gazette | Source: Import data is obtained by SASA
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