Bidvest Group Limited · JSE:BVT
Bidvest — The Bidvest Group — FY2005 Earnings Presentation
52 slides from Bidvest's earnings presentation, Aug 22, 2005
Slide 1: Audited Results for the twelve months ended June 2005
Audited Results For the twelve months ended June 30 2005
Slide 2: Agenda
Agenda Introduction Financial Results Divisional Results Group Matters Outlook
Slide 3: Introduction
PROUDLY BiDVest se te. The BidVest Group Limited Introduction
Slide 4: Results Summary
Results Summary Revenue +22,5% to R62,8bn Trading income +24,4% to R 3,2bn Headline earnings +27,1% to R 2,1bn HEPS +26,2% to 686,6 cps (+29% in H1*; + 23% in H2*) DPS +22,3% to 306,0cps ROFE 51% in 2004 vs 55% in 2005 Note: F2005 accounts not prepared i.t.o. IFRS * H1 includes first time contributi
Slide 5: Financial Results
PROUDLY BiDVest se te. The BidVest Group Limited Financial Results
Slide 6: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 R000’s H1 2005 H2 2005 Total 2005 Revenue 31 447 147 31 364 629 62 811 776 Trading income 1 485 552 1 679 094 3 164 646 (margin) (4,7%) (5,4%) (5,0%) Net finance expense (127 374) (150 306) 277 680 Associate Income 6 573 21 855 28 428 Taxation (3
Slide 7: Segmental Performance
Segmental Performance Segment Trading Income H1 2005 H2 2005 Performance Bidfreight SA +7% +25% Bidcorp R25m turnaround R14m turnaround Bidserv +49% +34% Renfin -9% -23% International Foodservices +12% +21% Caterplus +11% +11% Combined Foods +21% -4% Bidoffice – Office Products -3% +13% Bidoffice –
Slide 8: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Foreign businesses 35% (R22,1bn) vs 41% (R21,1bn) in 2004 (impact
Slide 9: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Trading income 3 164,6 +24,4 2 544,1 3 188,9 +25,3 (margin) (5,0%) E
Slide 10: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Trading income 3 164,6 +24,4 2 544,1 3 188,9 +25,3 (margin) (5,0%) T
Slide 11: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Trading income 3 164,6 +24,4 2 544,1 3 188,9 +25,3 (margin) (5,0%) N
Slide 12: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Trading income 3 164,6 +24,4 2 544,1 3 188,9 +25,3 (margin) (5,0%) (
Slide 13: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Trading income 3 164,6 +24,4 2 544,1 3 188,9 +25,3 (margin) (5,0%) (
Slide 14: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 % ch vs % ch vs Rm’s 2005 2004 2005 2004 2004 Revenue 62 811,8 +22,5 51 262,2 63 603,9 +24,1 Trading income 3 164,6 +24,4 2 544,1 3 188,9 +25,3 (margin) (5,0%) (
Slide 15: Consolidated Income Statement
Consolidated Income Statement Year ended June 30 2005 2005 in constant Actual: Avg Actual: Avg currency: Earnings R/£ 11.53 R/£ 11.94 Avg R/£ 11.94 Rm’s Total foreign headline % ch vs 2005 earnings = 22,7% of Group 2004 (21,3% in % ch vs 2005 2004 2004 F2004) Revenue 62 811,8 +22,5 51 262,2 63 603
Slide 16: Consolidated Balance Sheet
Consolidated Balance Sheet Year ended June 30 Rm’s 2005 2004 4 8 Assets 30 28 Non-current assets 8 159,8 6 478,9 38 No. of Days Current assets 3412 735,2 Stock 11 542,4 Debtors Total assets 20 895,0 18 021,4 Creditors Equity & Liabilities 64 54 Capital & reserves 7 564,4 6368,4 Non-current liabiliti
Slide 17: Consolidated Balance Sheet
Consolidated Balance Sheet Year ended June 30 Net Debt Position (Rm’s) 2005 2004 Liquid funds 1 707,9 2 305,2 Long term interest-bearing (1 471,6) (923,1) liabilities Short term interest-bearing (1 275,3) (2 112,7) liabilities Net (debt)/cash (1 039,2) (730,6) Net debt : equity 14% 12% Net debt : fu
Slide 18: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Rm’s 2005 2004 Cash flow from operating activities 2 200,5 2 294,5 Cash effect of investment activities (2 052,3) (3 136,5) Cash effects of financing activities (797,7) 818,2 Net cash and cash equivalents 1 497,7 2 101,0 Positive working capital swing in H2: R200m
Slide 19: Divisional Results
PROUDLY BiDVest se te. The BidVest Group Limited Divisional Results
Slide 20: Services – Bidfreight
Services – Bidfreight Lasting leases Renegotiation & signing of port leases secures tenure for extended periods Rm Trading Income Rm Revenue 550 16000 Higher imports benefit Safcor Panalpina 15000 Terminals: 450 +16% 14000 23% drop in BMA volumes as rand and high 13000 Spoornet charges deter coal
Slide 21: Services - Bidfreight: Strategic imperatives & prospects
Services - Bidfreight Strategic imperatives & prospects NPA leases renegotiated – rental increases set against security of tenure over an extensive period NPA negotiations to handle wider range of product (BMA) PPP opportunities with NPA & Transnet slow to materialise Confidence to proceed with cape
Slide 22: Services – Bidcorp
Services – Bidcorp Ships ahoy! Rm Trading Income Rm Revenue Shipping achieved small profit 15 780 Dunkirk route closed, business 10 760 right-sized, 2 ships sold (capital 740 items) 5 1.7% 720 0.8% Automotive in a cut-throat arena 0 700 Rescue & Recovery and -5 1H04 2H04 1H05 2H05 680 Specialise
Slide 23: Services – Bidcorp: Strategic imperatives & prospects
Services – Bidcorp Strategic imperatives & prospects Intrinsic net asset value well exceeds book value (ships & property) Shipping strategy and prospects: Zeebrugge/Dartford route performing well Fuel prices a negative New materials handling equipment enhances efficiencies Automotive strategy
Slide 24: Services – Bidserv
Services – Bidserv Acquisitive achievements 41% growth in trading income (23% Rm Trading Income Rm Revenue organic, 18% acquisitive) 300 3000 280 Strong results from profit mainstays 260 2500 Cleaning and Hygiene 240 Laundry leadership position & 220 +41% 2000 profitability enhanced by timely capex
Slide 25: Services - Bidserv: Strategic imperatives & prospects
Services - Bidserv Strategic imperatives & prospects New Top Turf golf course construction unit – promising potential Laundry world-class plant capability to underpin organic growth Security, third largest profit contributor Guarding on a firmer management and technology footing IPS positioned to
Slide 26: Services – Renfin
Services – Renfin Zero is the new hero Travel trading income (-27%) Rm Trading Income Rm Revenue 700 Zero commission 1 May 2005 for 150 650 SAA, other carriers phasing in -15% 600 Dust yet to settle - yields have 19.4% 550 improved but knee jerk price cutting 100 500 and direct bookings are init
Slide 27: Services - Renfin: Strategic imperatives & prospects
Services - Renfin Strategic imperatives & prospects Rennies a strong advocate of zero commission - positioning to take advantage of “fee for service” model Industry turmoil will create opportunities for consolidation Focus on collections, risk management, elimination of duplication Budgeting for r
Slide 28: Foodservice Products – International (UK)
Foodservice Products – International (UK) Britannia way cool Profits up 14% to £45.7m; record 3.6% Rm Trading Income Rm Revenue margin despite moderating GDP growth 600 17000 and tougher trading 550 15000 Multi-temp: scale economies, cost control 500 +16% 13000 450 FFC: gross margins up sharply 400
Slide 29: Foodservice Products – International (Australasia)
Foodservice Products – International (Australasia) a sweet song from down under AUSTRALIA: Rm Trading Income Rm Revenue Trading income up 16% to A$26.5m; up 21% 170 6500 after disposal of Alice Springs +20% 6000 Organic foodservice revenue growth 9.5% 150 Melbourne delivering but losses in Sydney 55
Slide 30: Foodservice Products - International: Strategic imperatives & prospects
Foodservice Products - International Strategic imperatives & prospects 3663 Terrorist threat to UK Improved volumes ameliorate cost pressures KFC £150m p.a; contract extension with Compass to 2011 Substantial improvement in Barton Meat budgeted Australia Opportunities to expand into WA (Pe
Slide 31: Foodservice Products – Caterplus (SA)
Foodservice Products – Caterplus (SA): Slender 11% revenue growth Rm Trading Income Rm Revenue 200 2300 Strong consumer spending not 180 2100 translating into margin 160 1900 +11% 140 1700 Catering Supplies: Improved H2 120 1500 Frozen 14% down: Contract logistics 100 1300 shed; successes in street
Slide 32: Foodservice Products – Caterplus (SA): Strategic imperatives & prospects
Foodservice Products – Caterplus (SA) Strategic imperatives & prospects Adaptation to deflation largely achieved Emergent middle class – increasing leisure spend Continued adaptation of focus: Frozen move to more independent business Leverage benefits of multi temperature concept (3663) New ma
Slide 33: Foodservice Products – Combined Foods (SA)
Foodservice Products – Combined Foods (SA) Kneading some dough Pricing pressure due to strong Rand, Rm Trading Income Rm Revenue i.e. yeast imports 130 1300 120 +8% Crown trading income up 25%, despite 1100 110 deflation and export sales 26% down 100 900 Spice ingredient volumes 23% up 90 700 80 12.
Slide 34: Foodservice Products – Combined Foods (SA): Strategic imperatives
Foodservice Products – Combined Foods (SA) Strategic imperatives & prospects Bidbake: New facility to open up efficiency opportunities Yeast strategy to be finalised Internal focus on extracting synergies and efficiencies Leverage customers over scope of product range Crown well positioned to
Slide 35: Bidoffice - Office Products
Bidoffice - Office Products Mighty Minolco 38% profit increase at Automation Rm Trading Income Rm Revenue 280 3900 Minolco: securing annuity income 260 +5% streams & new contracts 3400 240 Pressure from deflation in Stationery; 220 2900 undercutting by competitors 200 Stationery: 2400 180 Walton
Slide 36: Bidoffice - Office Products: Strategic imperatives & prospects
Bidoffice - Office Products Strategic imperatives & prospects Stationery and related improving mix & margin though complementary promotional gifts and computer peripherals Improvement in Waltons Southern Gauteng New site for Kolok to capitalise on anticipated growth Minolta large contract wins in a
Slide 37: Bidoffice - Printing & Paper Conversion
Bidoffice - Printing & Paper Conversion Sacré bleu Lithotech France returns to profitability: Rm Trading Income Rm Revenue 190 2600 F2004: -R16,9m -4% 170 H1 2005: -R15,0m 150 2100 H2 2005: + R4,5m 130 1600 Capacity mismatch successfully 110 addressed, but requires intense focus 90 8.9% 7.6%
Slide 38: Bidoffice - Printing & Paper Conversion: Strategic imperatives
Bidoffice - Printing & Paper Conversion Strategic imperatives & prospects Lithotech SA Dynamic business model adapts to changing technologies and customer preferences Investment in labels to grow market share Laser, mailing and electronic bill presentment enjoy significant success Refocused Si
Slide 39: Bid Industrial Products
Bid Industrial Products Luminary Voltex Rm Trading Income Rm Revenue 300 3500 24% increase in trading income on a 15% rise in sales; margin 6,7% (6,3%) 3000 250 Stock building for strategic reasons 2500 Energy efficient luminaries for Eskom a 200 +18% positive impact 2000 Afcom 150 1500 Trad
Slide 40: Bid Industrial Products: Strategic imperatives & prospects
Bid Industrial Products Strategic imperatives & prospects Significant new contracts for electrical wholesale Operational objectives on track “Building automation” gathers momentum Eskom Demand Side Management in tandem with national energy saving programme a plus Infrastructure pipeline substantial
Slide 41: Automotive - McCarthy
Automotive - McCarthy Awesome automotive 14% rise in revenue to R13.6bn, profits up 22% to R500m on like for like basis Rm Trading Income Rm Revenue 300 7500 Slight easing in dealership profits countered by stellar Yamaha and Financial 6500 250 Services result 5500 Automotive dealerships: 200 19%
Slide 42: Automotive - McCarthy: Strategic imperatives & prospects
Automotive - McCarthy Strategic imperatives & prospects Socio-economic factors favour strongest automotive market in 25 years Possibility of market doubling over 5 years Mood of confidence; nominal interest rates at a quarter century low; increased affordability Previously disadvantaged indivi
Slide 43: Corporate Services
Corporate Services Rm Trading Income 80 70 BNS a loss of R6m – conditional -3% sale 60 Leases with fixed determinable 50 escalation clauses now expensed 40 on a straight line basis thru 30 Investment & Other Income line 20 mymarket.com annual transaction 10 R6bn; breakeven on a cash basis 2004 2005
Slide 44: Group Matters
PROUDLY BiDVest se te. The BidVest Group Limited Group Matters
Slide 45: Group Matters: BEE update
Group Matters BEE update Bidvest share price increase assists funding prospects Relationship with Dinatla continues to develop and evolve Negation of dilution from 18m options issued at the time of the Dinatla deal through share repurchases Group capital will increase by R1bn in December 2006 due
Slide 46: Acquisition of Deli XL
Acquisition of Deli XL Deli XL fits Bidvest’s stated model of: Market-leadership within a new geographic distribution channel Extracting synergies between businesses Purchase price: Є140m (R1,1bn) in debt, including Є57m (R450m) in goodwill Tangible NAV reduced by +/- R450m, but total NAV rises
Slide 47: Acquisition of Deli XL: Rationale
Acquisition of Deli XL Rationale for the acquisition: Objective: to internationalise Bidvest’s foodservice interests Deli XL delivers: Geographic diversification into Continental Europe Market shares : 13% of overall Dutch market segment but 46% of Institutional segment 4% of overall Belgium mar
Slide 48: Acquisition of Deli XL: Turnaround strategy
Acquisition of Deli XL Deli XL turnaround strategy (improve margins from 1% to 2-3% 3663 OPERATING PERFORMANCE SINCE in 3 years): ACQUISITION Optimisation of existing state-of- 60 0.1 the-art infrastructure 50 45.7 0.1 Renegotiation of unprofitable 39.8 contracts; optimisation of client 40 31.9 0.
Slide 49: Outlook
PROUDLY BiDVest se te. The BidVest Group Limited Outlook
Slide 50: Key growth drivers
Key growth drivers Internationally: Increased efficiencies, market share gains, product expansion and profit-enhancing new territories in International Foodservice South Africa: Freight services aligned with trade growth ahead of GDP Continuation of trend to outsourcing Cost base adapting to prevail
Slide 51: Prospects for F2006
Prospects for F2006 Positive impact of Deli XL Benefits derived from recent capex Reduction in deflationary price pressure Correction of underperformers Ample capacity for further gearing MANAGEMENT IS BUDGETING FOR REAL HEPS GROWTH IN F2006 Our job is to manage our businesses for above-average grow
Slide 52: PROUDLY Bidvest
PROUDLY BiDVest se te. The BidVest Group Limited