METMAR LIMITED JSE Showcase Presentation August 2009 Group Overview and Track Record
Company history Company history February 2008 May 1982 May 2006 May 2006 BEE BEE partners t Metmar Reverse listed acquire 10% of founded Metmar June 2007 June 2008 June 2009 June 2006 13.5c distribution 13 5c distribution 18c distribution 18c distribution 30c distribution 30c distribution 10c distribution 10c distribution J January 2007 2007 November 2007 N b 2007 D December 2008 b 2008 June 2009 J 2009 7% of Kivu 4% of Kalahari Kivu stake increased Further 10% acquired (R5m) Resources acquired to 7.178% in rights interest in Minéro (R20m) issue for $277 741 Zinc (R40m) March 2007 April 2008 April 2009 15.8% of PGR17 (8.9% WAG acquired (R80m Ruuki acquires PGR interest in Mogale with profit warranties) 17, (R248m accruing Alloys) acquired (R36m) y ) q ( ) to Metmar) ) July 2007 October 2008 May 2009 5.2% of PGR17 10% interest in R153m payment (2.9% interest in Minéro Zinc from Ruuki Mogale Alloys) Mogale Alloys) acquired (R40m) acquired (R40m) acquired (R14.8m) Our Business Model Our Business Model Trading g Equity Stakes q y Projects j Delivering full spectrum of Recovering and utlising services associated with Strategic minority investments g y industrial waste and by- i d t i l t d b marketing and trading which secure marketing products from chemical and resource-based bulk agreements metallurgical industries commodities commodities Delmas Coal Samtem Samtem Mogale Mogale Scaw Scaw SNF International Kivu Clay Fusion West African Group Kalahari Gubha Resources Owen Plastics / Tufflex Owen Plastics / Tufflex Minéro Zinc Minéro Zinc ZISCO ZISCO International Projects Annuity revenues A it C Capital appreciation it l i ti A Annuity revenues it
Value creation for shareholders Value creation for shareholders Projects 26 41 Kivu Notwithstanding R131m of internal cash resources invested in Minéro Zinc projects and acquisitions since listing p j q g 207 Kalahari 130 Mogale Sale 400.0 312.0 271.0 Metmar Trading 30.0 13.5 18.0 10.0 -35.5 35.5 -107.0 Listing price Listing price Distribution - Distribution - Distribution Distribution Distribution - Distribution - Distribution Distribution "Effective" Effective Pro Forma Pro Forma Share price Share price Fair value Fair value June 2006 June 2007 June 2008 June 2009 purchase NAV per (31/07/09) estimate price share Solid growth track record Solid growth track record Revenue (Rm) Revenue (Rm) 3 439 2 068 1 634 1 251 2006 2007 2008 2009 Earnings before tax (Rm) 218 99 85 48 2006 2007 2008 2009 Cashflow to debt (%) 34.9 27.3 22.4 11.6 2006 2006 2007 2007 2008 2008 2009 2009
Solid growth track record Solid growth track record C Current ratio (x) i ( ) Quick ratio (x) Q i k i ( ) 1.4 1.3 1.3 1.3 1.2 1.0 0.9 0.9 2006 2007 2008 2009 Gross profit margin (%) 7.5 7.5 6.2 5.0 2006 2007 2008 2009 Return on equity (%) Return on Assets employed (%) 50.2 49.1 45.6 34.9 25 0 25.0 19.3 18.6 16.6 2006 2007 2008 2009 Strategy and Outlook
Strategy Strategy Strategic Strategic Industry network NAV equity stakes Structured St t d trade finance P Projects j Enhanced returns Commodity flows Unlocking shareholder value Metmar Annuity revenue Trading Trading Extending reach in value chain Extending reach in value chain New Structured Finance Division to structure trade and commodity finance arrangements g – Increased differentiation and specialisation in Metmar – Working in partnership with banking partners – Increasing potential commodity partnerships – Supporting key business driver of securing higher commodity flows Metmar Global to take advantage of new EU REACH legislation Metmar Global to take advantage of new EU REACH legislation – Participate in trading opportunities arising from REACH and general trading and banking opportunities in EU market
Investment criteria Investment criteria � Exclusive marketing agreements to secure commodity flow � � Business synergies with existing operations Business synergies with existing operations � Current supply and beneficiation market for proposed commodity � Opportunity for Metmar to apply its intellectual and financial capital � � Hurdle returns and payback period Hurdle returns and payback period Opportunity pipeline Opportunity pipeline 20 Approach from potential partners pp p p Metmar conducts preliminary 7 7 in estigation investigation Due diligence Due diligence 3 3 Meets investment criteria Meets investment criteria 1 1 ? ? Investment concluded Investment concluded
Opportunity pipeline Opportunity pipeline Sector Description Investment Payback Coal Coal mining assets R200m to R400m Three to four years Vanadium waste stockpiles to extract Vanadium waste stockpiles to extract Pig Iron vanadium, produce pig iron and sell $30m Maximum six years power into grid Tin Mining and beneficiation $5m to $10m Three years Chrome Chrome Ore Mine R11m Two years Ch Chrome Ch Chrome source in Zimbabwe i Zi b b R50 R50m T Two years Prospects Prospects IMF predicts that 2009 global output will shrink by 1,3% Economic indicators from different parts of the world notably China showing signs Economic indicators from different parts of the world, notably China, showing signs of economic improvement South Africa and Metmar positioned to benefit early from eventual upswing in global economy y Will result in increased demand for numerous commodities traded or produced by M t Metmar Metmar continues business but in smaller volumes and at lower prices than normal In current circumstances it is unlikely that 2010 financial results will equate to record results achieved for 2009 d lt hi d f 2009
Questions? Questions? Presentation can be downloaded from www.metmar.co.za This presentation contains forward-looking statements about the company’s operations, strategic investments and financial conditions. They are based on Metmar Limited’s best estimates and information at the time of writing. They are nonetheless subject to significant uncertainties and contingencies many of which are beyond the control of the company. Unanticipated events will occur and actual future events may differ materially from current expectations due to explorations results new events will occur and actual future events may differ materially from current expectations due to explorations results, new business opportunities, changes in priorities by the company or its joint ventures as well as other factors. Any of these factors may materially affect the company’s future business activities and its ongoing financial results. Additional information
Metmar Trading: Value chain Metmar Trading: Value chain plier mer cer / Supp ial consu Quality Funding Shipping Delivery on Source and Control and execution time and procurement p and hedging hedging and logistics and logistics in spec in spec Produc Industri warehousing Metmar Trading: Trading segments Non-ferrous metals Ferro-alloys and ore Noble alloys Carbons Chemicals • Ferro manganese • Aluminium • Silico manganese • Copper • Ferro chrome • Anthracite • Lead L d • Stainless steel alloys St i l t l ll • Molybdenum M l bd • Char • Chemicals • Nickel • Manganese ore • Titanium • Coal • Food additives • Tin • Magnetite • Vanadium • Metallurgical coke • Zinc • Iron ores o o es • Copper ore • Chrome ore • Chrome concentrates Plastics Minor metals Rubber and rubber chemicals • PVC LDPE • HDPE LLDPE • Natural rubber • Metallocene Plastomers • Synthetic rubber • Speciality polyethylene • Cobalt • Carbon black • High impact styrene • Tantalite • Process aids for rubber industry • General purpose styrene • Tungsten • Rubber chemicals Fill f bb i d t • Calcium carbonate fillers C l i b t fill • Magnesium M i • Fillers for rubber industry • PIB EVA • Mould release agents • PP PET • Tackifiers • ABS Colour Masterbatches
Metmar Trading: Acquisition of West African Group (WAG) Metmar Trading: Acquisition of West African Group (WAG) Acquired in April 2008 for R80 million based on profit warranties – Payback anticipated within four years Payback anticipated within four years 27 employees working from Durban, Boksburg and Cape Town Market leader in natural rubber and polystyrene – Long standing supplier to blue chip client base g g pp p Technical knowledge to design and innovate products for clients – Solid relationships with top rubber and plastic packaging companies – Representing Exxon Mobil Chemical in South Africa with polyethylene products Unlocking synergies with SNF plastics division – Expansion into Zambian market E i i t Z bi k t West African Group West African Group
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