Super Group Limited · JSE:SPG
Super — FY2015 Earnings Presentation
49 slides from Super's earnings presentation, June 2015
Slide 1: Final Results Presentation 2015
FINAL RESULTS PRESENTATION 2015 FOR THE YEAR ENDED 30 JUNE 2015
Slide 2: Agenda
2 AGENDA ● FINANCIAL HIGHLIGHTS ● ANNUAL REVIEW ● SEGMENTAL ANALYSIS ● DIVISIONAL REVIEW ̵ SUPPLY CHAIN ̵ FLEET SOLUTIONS ̵ DEALERSHIPS ● REVIEWED GROUP FINANCIAL RESULTS ● IN TIME ACQUISITION AND PROPOSED RIGHTS OFFER ● PROSPECTS AND STRATEGY SUPER GROUP Final Results Presentation
Slide 3: Financial Highlights for the Year Ended 30 June 2015
3 FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2015 ● Revenue 39% R19.8 billion ● Operating profit 12% R1.5 billion ● Profit before taxation 10% R1.4 billion ● Headline earnings per share (HEPS) 9% 271 cents ● Core HEPS 11% 289 cents 17% ● NAV per share 1 681 cents SUPER GROUP Final Results Prese
Slide 4: Annual Review
4 ANNUAL REVIEW ● Despite continued challenging economic and trading conditions, Super Group performed well and reported a good set of results for the year to 30 June 2015 ● The financial year was characterised by: ̵ low domestic growth rates ̵ electricity disruptions ̵ high unemployment numbers ̵ i
Slide 5: Segmental Analysis
5 SEGMENTAL ANALYSIS REVENUE – 30 JUNE 2015 REVENUE – 30 JUNE 2014 36% 47% 42% 50% 14% 11% OPERATING PROFIT – 30 JUNE 2015 OPERATING PROFIT – 30 JUNE 2014 11% 17% 37% 39% 50% 46% SUPPLY CHAIN FLEET SOLUTIONS DEALERSHIPS SUPER GROUP Final Results Presentation
Slide 6: Segmental Analysis Continued
6 SEGMENTAL ANALYSIS CONTINUED PROFIT BEFORE TAXATION PROFIT BEFORE TAXATION 30 JUNE 2015 30 JUNE 2014 9% 15% 35% 37% 50% 54% NET OPERATING ASSETS NET OPERATING ASSETS 30 JUNE 2015 30 JUNE 2014 17% 28% 47% 25% 58% 25% SUPPLY CHAIN FLEET SOLUTIONS DEALERSHIPS SUPER GROUP Final Results Presentation
Slide 7: Divisional Reviews
7 DIVISIONAL REVIEWS SUPER GROUP Final Results Presentation
Slide 8: Results of the Divisions
8 RESULTS OF THE DIVISIONS REVENUE (R‟m) OPERATING PROFIT (R‟m) 25 000 1 600 1 400 20 000 252 1 200 139 121 15 000 9 348 1 000 800 650 676 5 150 619 10 000 4 638 2 139 600 1 935 1 817 400 5 000 8 321 532 7 193 200 396 508 5 237 0 0 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2013 JUNE 2014 JUNE 2015 PROFIT B
Slide 9: Net Operating Assets per Division
9 NET OPERATING ASSETS PER DIVISION SUPPLY CHAIN FLEET SOLUTIONS 3 500 2 000 3 000 579 477 1 500 2 500 450 814 2 000 R‟m R‟m 1 000 1 500 2 745 905 2 323 2 446 769 1 000 500 942 500 345 351 0 0 JUN 2013 JUN 2014 JUN 2015 JUN 2013 JUN 2014 JUN 2015 SUPPLY CHAIN SA AFRICAN LOGISTICS FLEETAFRICA SG FLEE
Slide 10: RNOA per Division After Tax
10 RNOA PER DIVISION AFTER TAX Group RNOA is 16.7% (June 2014: 18.6%) Normalised Group RNOA, after tax and excluding the effects of acquisitions and disposals during the period, is 18.1% (June 2014: 19.3%) Supply Chain SA African Logistics FleetAfrica SG Fleet Dealerships SA Dealerships UK * Excludi
Slide 11: Supply Chain
11 SUPPLY CHAIN SUPER GROUP Final Results Presentation
Slide 12: Supply Chain South Africa
12 SUPPLY CHAIN SOUTH AFRICA REVENUE (R‟m) OPERATING PROFIT (R‟m) 9 000 7 697 600 509 8 000 6 525 429 500 7 000 328 4 723 6 000 3 723 400 220 5 000 3 250 194 300 4 000 2 639 174 3 000 200 2 000 3 974 235 289 3 275 100 1 000 2 084 154 0 0 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2013 JUNE 2014 JUNE 2015 PR
Slide 13: Supply Chain South Africa Continued
13 SUPPLY CHAIN SOUTH AFRICA CONTINUED ● The majority of businesses delivered a strong performance with: ̵ Revenue 18.0% ̵ Operating profit 18.6% ̵ Profit before taxation 21.0% ● The logistics landscape continued to be highly competitive ● SG Consumer reported good financial results for the year und
Slide 14: African Logistics
14 AFRICAN LOGISTICS REVENUE (R‟m) OPERATING PROFIT (R‟m) 668 79 800 624 90 67 700 80 513 600 70 60 35 500 320 306 50 400 50 295 40 23 300 30 200 348 20 44 318 9 100 218 10 17 14 0 0 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2013 JUNE 2014 JUNE 2015 PROFIT BEFORE TAXATION (R‟m) OPERATING PROFIT MARGIN (%)
Slide 15: African Logistics Continued
15 AFRICAN LOGISTICS CONTINUED ● This business reported disappointing results: ̵ Revenue (6.5)% ̵ Operating profit (70.7)% ̵ Profit before taxation (73.0)% ● The reduction in revenue was as a result of an effective 11.9% reduction in transport rates ● Operating profit margin was significantly below
Slide 16: Fleet Solutions
16 FLEET SOLUTIONS SUPER GROUP Final Results Presentation
Slide 17: FleetAfrica
17 FLEETAFRICA REVENUE (R‟m) OPERATING PROFIT (R‟m) 523 125 600 123 116 432 140 500 383 120 400 290 100 54 41 191 300 188 80 71 200 60 241 233 40 71 82 100 195 20 45 0 JUNE 2013 JUNE 2014 JUNE 2015 0 JUNE 2013 JUNE 2014 JUNE 2015 PROFIT BEFORE TAX (R‟m) OPERATING PROFIT MARGIN (%) 32,0% 160 135 29,1
Slide 18: FleetAfrica Continued
18 FLEETAFRICA CONTINUED ● FleetAfrica performed well and met budget expectations: ̵ Revenue 36.5% ̵ Operating profit (5.5)% ̵ Profit before taxation (12.7)% ● FleetAfrica has managed to secure a number of meaningful contracts, including Transnet (77% of the vehicles on this contract were delivered
Slide 19: SG Fleet
19 SG FLEET REVENUE (R‟m) OPERATING PROFIT (R‟m) 1 552 1 617 560 1 800 1 386 528 600 493 1 600 1 400 500 1 200 792 861 400 278 1 000 721 258 313 800 300 600 400 825 200 665 691 282 200 100 235 215 0 JUNE 2013 JUNE 2014 JUNE 2015 0 JUNE 2013 JUNE 2014 JUNE 2015 PROFIT BEFORE TAX (R‟m) OPERATING PROFI
Slide 20: SG Fleet Continued
20 SG FLEET CONTINUED ● SG Fleet reported a solid set of results: ̵ Revenue 4.1% ̵ Operating profit 6.1% ̵ Profit before taxation 7.5% ● The results were attributable to: ̵ further customer wins and deeper penetration within existing customers– fleet size over 90 400 vehicles; ̵ good progress made i
Slide 21: Dealerships
21 DEALERSHIPS SUPER GROUP Final Results Presentation
Slide 22: Dealerships SA
22 DEALERSHIPS SA REVENUE (R‟m) OPERATING PROFIT (Rm) 6 069 177 7 000 200 5 150 180 139 6 000 4 638 160 121 5 000 140 3 004 91 4 000 120 2 532 68 2 427 100 3 000 80 66 2 000 60 2 618 3 065 40 71 86 1 000 2 211 55 20 0 0 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2013 JUNE 2014 JUNE 2015 PROFIT BEFORE TAX (R
Slide 23: Dealerships SA Continued
23 DEALERSHIPS SA CONTINUED ● An exceptional set of results despite challenging market conditions: ̵ Revenue 17.8% ̵ Operating profit 27.6% ̵ Profit before taxation 27.4% ● NAAMSA new vehicle sales for the year to 30 June 2015 declined by 0.7% (2014: 2.1% decline) ● Dealerships performed well and re
Slide 24: Dealerships UK
24 DEALERSHIPS UK ● Super Group acquired 100% of Allen Ford (UK), a franchised motor dealership group, operating 13 Ford dealerships and two Kia dealerships in the UK, acquired on 1 December 2014 ● Allen Ford (UK)‟s results were ahead of expectations and for the seven months to 30 June 2015 reported
Slide 25: Reviewed Group Financial Results
25 REVIEWED GROUP FINANCIAL RESULTS SUPER GROUP Final Results Presentation
Slide 26: Summary of Operating Profit/PBT Movement
26 SUMMARY OF OPERATING PROFIT/PBT MOVEMENT R’million Operating profit PBT June 2014 (prior year) 1 345 1 242 Increases/(decreases): Supply Chain South Africa 80 76 Dealerships UK 74 52 SG Fleet 32 38 Dealerships SA 38 31 Services (incl Mauritius and Emerald) (5) (4) FleetAfrica (7) (17) African Log
Slide 27: Statement of Comprehensive Income
27 STATEMENT OF COMPREHENSIVE INCOME 30 June 30 June Change R’million 2015 2014 % Reviewed Audited Revenue 19 817,9 14 296,8 38.6 Operating profit 1 501,1 1 344,5 11.6 Net finance charges (138,6) (102,2) 35.7 Profit before taxation 1 362,5 1 242,3 9.7 Income tax expense (322,3) (304,6) 5.8 Profit fo
Slide 28: Statement of Comprehensive Income Continued
28 STATEMENT OF COMPREHENSIVE INCOME CONTINUED 30 June 30 June Change R’million 2015 2014 % Reviewed Audited Non-controlling interests 233,5 208,5 12.0 Basic HEPS (cents) 271,1 248,7 9.0 Core HEPS (cents) 289,1 260,0 11.2 ● Core HEPS adds back material non-operational items: ̵ Acquisition costs of R
Slide 29: Statement of Financial Position
29 STATEMENT OF FINANCIAL POSITION 30 June 30 June ASSETS Change 2015 2014 R’million % Reviewed Audited Property, plant and equipment 3 313,3 2 865,5 15.6 PP&E movements (R’million) June 2015 June 2014 Depreciation 429,1 383,1 Acquisition of business 96,3 18,8 Net capex 718,0 765,0 - Land and buildi
Slide 30: Statement of Financial Position Continued
30 STATEMENT OF FINANCIAL POSITION CONTINUED 30 June 30 June ASSETS Change 2015 2014 R’million % Reviewed Audited Property, plant and equipment 3 313,3 2 865,5 15.6 Investment property 139,2 120,4 15.6 Full maintenance lease assets 1 065,7 554,7 92.1 Goodwill and intangible assets 2 696,4 2 087,5 29
Slide 31: Statement of Financial Position Continued
31 STATEMENT OF FINANCIAL POSITION CONTINUED 30 June 30 June ASSETS Change 2015 2014 R’million % Reviewed Audited Current assets 7 600,7 6 127,4 24.0 Assets held-for-sale 48,1 60,0 (19.9) Inventories 2 458,2 1 367,8 79.7 Trade and sundry receivables 2 971,5 2 659,4 11.7 Cash and cash equivalents 2 1
Slide 32: Statement of Financial Position Continued
32 STATEMENT OF FINANCIAL POSITION CONTINUED 30 June 30 June EQUITY Change 2015 2014 R’million % Reviewed Audited Shareholders‟ equity 5 022,0 4 268,8 17.6 Non-controlling interests 910,7 952,7 (4.4) Total equity 5 932,7 5 221,5 13.6 Shares in issue („000) 298 839 297 039 0.6 Net asset value per sha
Slide 33: Statement of Financial Position Continued
33 STATEMENT OF FINANCIAL POSITION CONTINUED 30 June 30 June LIABILITIES Change 2015 2014 R’million % Reviewed Audited Fund reserves and provisions 684,5 814,7 (16.0) Deferred tax liabilities 230,2 232,7 (1.0) Total borrowings 3 118,4 2 131,2 46.3 Non-controlling interest put options and other liabi
Slide 34: Net Borrowings
34 NET BORROWINGS 30 June 30 June Change R’million 2015 2014 % Reviewed Audited Property and other borrowings V 386 184 109.3 Corporate bond V 477 477 0.1 Asset-based borrowings V/P 921 926 (0.5) Acquisition borrowings V 452 - - SG Fleet borrowings F 302 333 (9.4) Total borrowings (excl FML) 2 538 1
Slide 35: Debt Maturity Profile
35 DEBT MATURITY PROFILE 900 780 800 9 688 26 670 700 573 600 149 149 15 500 407 297 400 58 745 312 300 524 200 349 276 100 209 0 Year 1 Year 2 Year 3 Year 4 Year 5 < SOUTH AFRICA AUSTRALIA UK SUPER GROUP Final Results Presentation
Slide 36: Cash Flow Movement
36 CASH FLOW MOVEMENT 4 500 2 123 Investing R2 330 million 4 000 for the future (102) (145) 3 500 (249) (136) 3 000 (395) R’million 2 500 (358) 371 2 123 2 040 2 000 (737) 590 (39) 1 500 1 000 (838) 74 (76) 500 - SUPER GROUP Final Results Presentation
Slide 37: Other Key Financial Data
37 OTHER KEY FINANCIAL DATA % 30 June 30 June Change 2015 2014 Return on Equity 17.4% 18.7% Total gearing 16.8% 1.7% Net interest cover 15.5x 18.8x USD close 14.3 R12.15 R10.63 USD average 10.3 R11.45 R10.38 AUD close (6.6) R9.36 R10.02 AUD average 0.3 R9.54 R9.51 GBP close 5.2 R19.12 R18.18 GBP ave
Slide 38: IN tIME Acquisition and Proposed Rights Offer
38 IN tIME ACQUISITION AND PROPOSED RIGHTS OFFER SUPER GROUP Final Results Presentation
Slide 39: IN tIME Acquisition
39 IN tIME ACQUISITION ● Super Group to acquire a 75% equity interest in IN tIME, via Telo Zwei Vermögensverwaltung GmbH (holding company), from Equistone Partners ● Investment to be held in SG IN tIME Holdings, a subsidiary of Bluefin ● IN tIME management will retain a 25% interest alongside Super
Slide 40: IN tIME Acquisition Continued
40 IN tIME ACQUISITION CONTINUED IN tIME provides time-critical delivery services in predominantly Germany and CEE Business overview Customers by industry (2014) IN tIME operates in the niche logistics sector of time-critical delivery services (“TDS”) 4% 2% 1% 4% – TDS are emergency shipments util
Slide 41: IN tIME Acquisition Continued
41 IN tIME ACQUISITION CONTINUED ● Super Group‟s investment will be funded via: ̵ existing cash on hand within Super Group; and ̵ a proposed fully underwritten renounceable Rights Offer of approximately R900 million ● Effective return on equity (including shareholder loans) is 11.9% and was based on
Slide 42: Proposed Rights Offer
42 PROPOSED RIGHTS OFFER ● Proposed Rights Offer is for approximately R900 million ● Fully underwritten by Investec Bank Limited ● General meeting to be held to allow the unissued shares to be placed under the control of directors ● Important dates: Event Date Circular posted to shareholders 4 Augus
Slide 43: Prospects and Strategy
43 PROSPECTS AND STRATEGY SUPER GROUP Final Results Presentation
Slide 44: Prospects
44 PROSPECTS ● South African economy is expected to remain under severe pressure over the short to medium term ● Operational challenges include: ̵ increased competitive pricing compressions across all sectors; ̵ a weak Rand currency, interest rate hike and fuel price increases; ̵ inflationary pressu
Slide 45: Prospects Continued: South African Operations
45 PROSPECTS CONTINUED SOUTH AFRICAN OPERATIONS ● Supply Chain South Africa ̵ Focus remains in line with its stated strategy of pursuing selected opportunities in higher growth niche markets ̵ The Group will focus strongly on increasing customer penetration and its client- base in the consumer and i
Slide 46: Prospects Continued: International Operations
46 PROSPECTS CONTINUED INTERNATIONAL OPERATIONS ● African Logistics ̵ Competitive environment set to continue with lower rates and kilometers expected ● SG Fleet ̵ Increased penetration of existing customers ̵ Product innovation and differentiated service propositions ̵ United Kingdom and New Zealan
Slide 47: Strategy
47 STRATEGY • Regeneration of African Logistics business Immediate • Improve the FleetAfrica profit performance • Delivering a competitive and sustainable RNOA • International expansion of the core businesses through strategic 1-3 years and niche acquisitions • Secure long-term contracts to support
Slide 48: Thank You
48 THANK YOU Further information available on www.supergroup.co.za SUPER GROUP Final Results Presentation
Slide 49: ADR Information
49 ADR INFORMATION Ticker SSGPY ISIN US86802E2072 CUSIP 86802E207 Structure Sponsored Level 1 ADR Exchange OTC Ratio (ADR:ORD) 1:5 ADR contact information Deutsche Bank Trust Company Americas c/o American Stock Transfer & Trust Company Peck Slip Station P.O. Box 2050 New York, NY 10272-2050 Email: D