2 0 1 7 Y O R K RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2017
WHO WE ARE 2 York Timber Holdings Limited (York, York Timbers or 28,89% the Company) is listed on the JSE in the Forestry and 28,73% Paper Index Sector under the share code YRK. York 18,00% was incorporated in 1916 and was first listed in 1946. 13,88% York is an integrated forestry company, operating through its wholly owned 10,51% subsidiaries, York Timbers Proprietary Limited, that owns plantations and processing plants, and Agentimber Proprietary Limited, that runs a wholesale distribution network. York has the largest market share of the South African timber and plywood market. This is a result of York’s sustainable biological assets, technologically advanced forestry operations and close attention to customer needs. Shareholding Revenue: R1 833 million Total asset value: R5 082 million Empowerment Development agencies Number of people employed: 5 253 Other Mutual funds Private companies (includes employees and contractors).
OPERATIONAL FOOTPRINT 3 York has extensive forests – 55 589ha planted with pine, 2 047ha with eucalyptus and 2 834ha is temporarily unplanted – providing raw material to its processing facilities. This is supplemented from external resources. The distribution network can reach the entire Southern African market. 119 300 000ha 646 759ha Sustainable raw material supply underpins the investment in surface area in South Africa planted with pine processing facilities. Sabie and Jessievale sawmills are ideally situated next to timber supply from York as well as from external resources. Distribution 1 268 443ha 454 190ha network is well positioned to service the Southern African market. dedicated to commercial forestry managed for lumber production SOUTH AFRICA Mpumalanga Gauteng Northern Cape Driekop Pretoria 14. Upington 1. 9. Sawmill Warehouse and distribution Warehouse facility facility Nicholson & Mullin 2. North West 10. Roodekop, Johannesburg Sawmill and treatment plant 15. Mahikeng Warehouse, distribution Sabie 3. Warehouse facility and value-added products Sawmill and treatment plant Free State Plywood 4. KwaZulu-Natal 16. Bloemfontein Plywood manufacturer 11. Durban Warehouse and distribution 5. Jessievale Sales office and warehouse facility Sawmill and treatment plant Eastern Cape 6. Malelane* BOTSWANA 12. Port Elizabeth Warehouse facility 17. Gaborone Sales office Limpopo Warehouse facility Western Cape Polokwane 7. 13. Epping, Cape Town MOZAMBIQUE Warehouse and distribution Warehouse, distribution and 18. Maputo* facility treatment facility Warehouse facility Thohoyandou* 8. Warehouse facility * In progress
2017 HIGHLIGHTS 4 NATURAL MANUFACTURED CAPITAL CAPITAL YORK Biological assets Plant availability increased in value by 21% to at 85% R2 828 million (2016: R2 334 million) FINANCIAL 32 different CAPITAL 60 470 plywood products introduced planted hectares Revenue of Forest Stewardship Council certified plantations increased by 3% to Intake increased by 3% R1 833 million (2016: R1 771 million) Earnings per share increased by 59% to 116 cents per share (2016: 73 cents per share) EBITDA per share increased by 5% to 78 cents per share (2016: 75 cents per share)
2017 HIGHLIGHTS 5 INTELLECTUAL HUMAN CAPITAL CAPITAL TIMBERS 124 training BBBEE level 4 maintained with introduction of events Forestry Code SOCIAL Winner 2 562 individuals CAPITAL of Chartered Secretaries Southern Africa trained Integrated Reporting Awards 2016 in the Fledgling/Alt-X category for the second consecutive year R15 million R11 million CSI spend Certifications from employee training and development R8 million CE, TP and IPPC contribution European Conformity, Timber Products enterprise and supplier Inspection, International Plant Protection development contribution Convention 14 403 primary health patients seen
MAPPING YORK’S BUSINESS 6 FOREST RESIDUE BY PRODUCT Biomass Remanufacturing Wholesale Retail 1 2 3 4A 4B 5 Truss Nursery Forests External log Processing Biomass/ Warehouse and Customer base plants York’s sustainable purchases facilities Co-generation distribution The nursery Customers are Corporate and plant facilities develops high- forests are supplied directly The shortfall in York has four independent yielding tree maintained from the mill or via supply from own sawmills, Prunings, thinnings, 13 distribution retailers species, including according to the warehouse. plantations is remanufacturing bark and pulp warehouses are hybrids, to allow industry-leading They include: sourced from plant, timber recycled to able to meet Remanufacturers optimal site and silviculture various sustainable treatment facilities generate energy customer needs species matching practices. external sources and one plywood for own use and Typically, 1 100 to plant Seedlings and resale Furniture 1 333 trees are cuttings are manufacturers planted per hectare dispatched to x = LOGISTICS and pruned at three, plantations after Construction The thread that brings each of the components together five and seven five to eight months contractors years. The least YORK BUSINESS MODEL = performing trees are ( ) 1 2 3 4A 4B 5 (thinning) at ages 8 to 10 and 10 to 15, x x x x x x prior to harvesting YORK’S VISION IS TO BECOME THE LEADING INTEGRATED TIMBER PROCESSOR IN SOUTHERN AFRICA, PROFICIENTLY DELIVERING PRODUCTS AND SERVICES OF THE HIGHEST QUALITY
7 FINANCIAL OVERVIEW
FINANCIAL HIGHLIGHTS 8 Building a sustainable company requires consistent performance and cash generation over time Group revenue EBITDA Cash flow from operations (R’000) (R’000) (R’000) 2 000 000 250 000 300 000 250 000 200 000 1 500 000 200 000 150 000 1 000 000 150 000 100 000 100 000 500 000 50 000 50 000 0 0 0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Gross profit TNAV Biological asset value (R’000) (Thousands) (cents) 600 000 3 000 1 000 900 450 000 2 000 800 300 000 700 1 000 150 000 600 0 0 500 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
FINANCIAL SUMMARY 9 Revenue EBITDA per share Biological assets Earnings per share increased by increased by increased in value by increased by 3% to 5% to 21% to 59% to R1 833 78 cents R2 828 116 cents million million per share per share 2016: R1 771million 2016: R2 334million 2016: 73 cents per share 2016: 74 cents per share Cash generated from Gross profit Core earnings per share Tangible net operations increased increased by decreased by asset value (TNAV) -40% to -1% to -46% to per share up 20% to R170 R498 17 cents 765 cents million million per share per share 2016: R285 million 2016: R501 million 2016: 31 cents per share due to increased depreciation 2016: 635 cents per share and interest paid on plywood plant
SEVEN-YEAR FINANCIAL REVIEW 10 YORK HAS GROWN REVENUE BY 11.4% CAGR SINCE 2011 CAGR % Audited % Audited Audited Audited Audited Audited Audited 2011-2017 2017 change 2016 2015 2014 2013 2012 2011 R’000 Group revenue 11 1 832 805 3 1 771 049 1 543 149 1 323 976 1 131 994 1 112 843 959 143 R’000 Gross profit 3 497 502 (1) 500 566 404 415 377 945 410 298 421 519 420 912 Gross profit margin % (1) 27 (4) 28 26 29 36 38 44 R’000 Operating profit (1) 151 369 (17) 182 933 144 021 116 811 161 365 166 068 161 897 Operating margin % (11) 8 (20) 10 9 9 14 15 17 R’000 EBITDA* 4 246 101 3 240 048 199 390 156 262 187 153 194 726 195 060 EBITDA to revenue % (6,7) 13,4 (1) 13,6 12,9 11,8 16,5 17,5 20 R’000 Net profit before finance costs 24 599 038 54 390 032 196 272 123 531 192 834 303 395 165 676 R’000 Finance costs (2) 88 595 56 56 632 58 385 56 440 54 672 87 308 100 370 R’000 Cash flow from operations (2) 169 979 (40) 284 963 182 574 151 461 106 486 197 088 187 239 R’000 Biological assets 7 2 828 518 21 2 334 327 2 140 067 2 103 092 2 100 870 2 070 222 1 936 398 R’000 Interest-bearing borrowings 7 912 302 2 894 145 743 360 562 616 597 173 558 400 614 225 R’000 Investment in property, plant and equipment 42 154 258 (46) 283 241 203 288 66 169 51 958 36 340 18 887 R’000 Net working capital 14 245 991 51 162 685 219 485 213 182 180 446 119 372 113 460 INVESTMENT IN EBITDA-GENERATING CAPABILITY: 41,9% CAGR SINCE 2011 * EBITDA directly impacted by the purchase of external logs
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