Nampak Limited · JSE:NPK
Nampak — H1 2014 Earnings Presentation
40 slides from Nampak's earnings presentation, May 2014
Slide 1: Nampak 2014 Interim Results
Nampak 2014 Interim Results May 2014
Slide 2: Disclaimer
Disclaimer We may make statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These are forward- looking statements as defined in the U.S. Private Securities Litigation Reform Act of 19
Slide 3: Key first half messages
Key first half messages • Pleasing results – trading profit up 10% • CEO transition completed • Strategy confirmed • Accelerate Africa • Optimise South Africa • Alucan acquisition confirms African intent • Investment case remains solid |3
Slide 4: Our strategy has two focus areas
Our strategy has two focus areas Unlock further value from Accelerate Africa growth base business • Active portfolio management, • Growth through greenfield including possible divestments investment and acquisitions • Continue to grow metals, glass • Partner with major multinational and plastics cus
Slide 5: Management structure
Management structure André de Ruyter Chief Executive Officer Gareth Fezekile Griffiths Tshiqi Chief Financial Group HR Officer Director Christiaan Erik Ephraim Neill Rob Philip Burmeister Smuts Msane O’Brien Morris de Weerdt Group Legal Insurance Bevcan Paper South Africa Secretarial Africa and Glas
Slide 6: Summary of Results
Summary of Results • HEPS up 9% • Trading profit up 10% • Trading profit in the rest of Africa up 23% • Acquisition of Alucan Packaging for R3.3bn • Capital expenditure of R1.0bn • Dividend up 10% to 46.0 cents per share |6
Slide 7: Group Results
Group Results
Slide 8: Group Income Statement
Group Income Statement Rm 2014 2013 % Revenue 9 795 8 725 12 Operating profit 1 065 1 086 2 Net finance costs 173 102 - Income from JV’s investments and associates 10 23 - Profit before tax 902 1 007 11 Taxation 150 211 - Profit for the period from continuing operations 752 796 6 Discontinued operat
Slide 9: Geographical Revenue and Trading Profit
Geographical Revenue and Trading Profit 12% Revenue 11% 14% 15% South Africa 73% Rest Africa 75% UK Corporate Trading Profit 12% 7% 11% 6% 24% 57% 22% 61% |9 2014 2013
Slide 10: Operating and Trading Profit
Operating and Trading Profit Rm 2014 2013 TRADING PROFIT 1 076 975 Retrenchment and restructuring 11 - Gain on revaluation of joint venture - 23 Gain on reconsolidation of Zimbabwe - 88 OPERATING PROFIT 1 065 1 086 | 10
Slide 11: Tax Rate
Tax Rate Rm 2014 2013 Profit before tax 902 1 007 Tax 150 211 Effective tax rate 16.6% 21.0% Government incentive 10.3% 1.4% Foreign tax rate differential 3.2% 2.9% Withholding taxes paid 1.4% 0.8% Capital items - 4.5% Other 0.7% 1.0% Standard tax rate 28.0% 28.0% | 11
Slide 12: Headline Earnings per Share
Headline Earnings per Share 140 121.4 120 111.8 106.0 100 93.5 80 72.8 cents 60 40 20 0 2010 2011 2012 2013 2014 | 12
Slide 13: Dividends per Share
Dividends per Share 50 46 45 42 40.5 40 35 34 30 25 cents 25 20 15 10 5 0 2010 2011 2012 2013 2014 | 13
Slide 14: Group Financial Position
Group Financial Position Rm 2014 2013 Non-current assets 12 382 8 220 Bank balances, deposits and cash 1 013 2 080 Other current assets 7 214 6 109 Assets held for sale 524 - TOTAL ASSETS 21 133 16 409 Total equity 7 273 6 743 Loans and borrowings 7 197 4 182 Retirement benefit obligations 2 264 1 6
Slide 15: Group Cash Flow
Group Cash Flow Rm 2014 2013 Operating profit before working capital changes 1 537 1 325 Working capital changes 1 216 744 Cash generated from operations 321 581 Net interest paid 161 103 Tax paid 56 165 Dividends /cash distributions paid 585 528 Capex 1 012 609 Acquisition of business 3 337 110 Oth
Slide 16: Working Capital Movement
Working Capital Movement Rm 2014 2013 Inventories 446 40 Receivables 184 211 Payables 586 573 Total increase in working capital 1 216 744 | 16
Slide 17: Capex
Capex Rm 1200 1000 800 600 400 200 0 2010 2011 2012 2013 2014 Expansion Replacement | 17
Slide 18: Major Capexes: Interim 2014
Major Capexes : Interim 2014 Rm Growth Capex Glass 3rd furnace 458 Plastics – water/oil 36 Angola warehouse and 2nd line 27 Maintenance Capex Bevcan aluminium conversion 182 Zambia - printer 27 | 18
Slide 19: Net Debt : EBITDA
Net Debt : EBITDA times 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2010 2011 2012 2013 2014.1 | 19
Slide 20: Net Debt : Equity
Net Debt : Equity 100% 80% 60% 40% 20% 0% 2010 2011 2012 2013 2014.1 | 20
Slide 21: RONA
RONA 24% 20% 16% 12% 8% 4% 0% 2010 2011 2012 2013 2014.1 | 21
Slide 22: ROE
ROE 25% 20% 15% 10% 5% 0% 2010 2011 2012 2013 2014.1 | 22
Slide 23: Interest Cover
Interest Cover times 14 12 10 8 6 4 2 0 2010 2011 2012 2013 2014.1 | 23
Slide 24: Acquisitions past 5 years
Acquisitions past 5 years Rm 3500 3000 2500 2000 1500 1000 500 0 Alucan Wiegand Elopak Africa 442 UK Glass Minorities | 24
Slide 25: Operational Review
Operational Review
Slide 26: Geographical Revenue
Geographical Revenue 12% 11% 15% South Africa 14% Rest of Africa UK 73% 75% 2014 2013 | 26
Slide 27: Trading Profit and Margin
Trading Profit and Margin Solid performance of Africa business Trading Profit Margin Rm % 2014 2013 2014 2013 South Africa 609 596 8.5 9.1 Rest of Africa 261 212 17.3 17.4 UK 72 61 6.3 6.5 Corporate Services 134 106 Group 1 076 975 11.0 11.2 | 27
Slide 28: South Africa: Metals & Glass
South Africa : Metals & Glass Metals performed well while glass was under pressure Rm Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 3 669 3 152 413 347 11.3% 11.0% • Good demand for 440ml beverage cans • Aluminium conversion on track • Fish, vegetable and meat cans up but fruit cans do
Slide 29: South Africa: Paper & Flexibles
South Africa : Paper & Flexibles Challenging market conditions impact profit Rm Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 1 524 1 487 37 40 2.4% 2.7% • Gained market share in corrugated commercial sector • Agricultural market affected by poor weather in Western Cape • Demand for fl
Slide 30: South Africa: Plastics
South Africa : Plastics Margins satisfactory on a normalized basis Rm Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 1 247 1 220 113 162 9.1% 13.3% • Lower demand for milk and juice bottles – some market share loss • 2013 included R25m profit on sale of PET in-plant equipment • Wine bot
Slide 31: South Africa: Tissue
South Africa : Tissue Some volume growth as selling prices remain under pressure Rm Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 697 710 46 47 6.6% 6.6% • Some volume growth but selling prices remained under pressure • Sancella now accounted for as an associate o Volumes and margin un
Slide 32: Rest of Africa: Metals & Glass
Rest of Africa: Metals & Glass Alucan acquisition profitable from Day One Rm Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 1 010 809 167 123 16.5% 15.2% • Ongoing good demand in Angola • Import duties will improve demand from local fillers • 2nd line on order for December 2014 commissi
Slide 33: Angola 2nd Line Factory Building
Angolata 2nd Line Factory Building | 33
Slide 34: Alucan Factory
Alucan Factory 134 i? Nampak
Slide 35: Alucan Beverage Equipment
Alucan Beverage Equipment | 35
Slide 36: Rest of Africa: Paper & Flexibles
Rest of Africa: Paper & Flexibles Strong demand supports improved profit Rm Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 499 406 94 89 18.8% 21.9% • Strong demand for cigarette cartons in Nigeria • Good growth in non-cigarette cartons • Sorghum beer carton sales in Zambia lower • Mala
Slide 37: United Kingdom: Plastics
United Kingdom: Plastics Continued solid performance £m Revenue Trading Profit Margin 2014 2013 2014 2013 2014 2013 66.9 66.6 3.6 4.2 5.4% 6.3% • Sales volumes increased • Adoption of revised IAS 19 accounting standard - £0.5m • Over 500m Infini lightweight bottles sold since launch | 37
Slide 38: Nampak investment proposition
Nampak investment proposition Solid foundation business Compelling Africa growth story Strong cash flow from base business Africa’s largest packaging company with operations in South Africa and 12 Offers packaging solutions across the countries in the rest of Africa major packaging substrates (metal
Slide 39: Solid outlook
Solid outlook • South Africa trading conditions expected to remain challenging • BevCan aluminium conversion fully complete by July 2015, energy and labour cost saving combined with volume gains expected • Third glass furnace comes on stream in July, efficiency and volume gains expected • Angolan im
Slide 40: Thank You
Thank You