RCL Foods Limited · JSE:RCL

RCL Foods — H1 2008 Earnings Presentation

18 slides from RCL Foods's earnings presentation, November 2007

  1. Slide 1: Interim Results 6 months ended 30 September 2007

    Interim Results 6 months ended 30 September 2007

  2. Slide 2: Market perspective

    Interim results 6 months ended Market perspective 30 Sep 2007 ƒ Economy grew by 5% - Increasing inflation and interest rates - Significantly higher maize and soya prices - Food inflation impacted by higher maize and fuel costs - Import volumes high but lower than last year ƒ AI SA status - Local ind

  3. Slide 3: Market perspective

    Interim results 6 months ended Market perspective 30 Sep 2007 ƒ Poultry consumption has been Imports growing strongly since the early R1,5bn Volume decline 1990s, driven by: Chicken shops at higher R0,9bn realisation Retail R4,5bn - Greater health awareness Ongoing expansion Continued high - Conveni

  4. Slide 4: Market perspective

    Interim results 6 months ended Market perspective 30 Sep 2007 288 ƒ Chicken imports down Total poultry imports (‘000 tons) 84 24% on last year but still at historical highs 225 ƒ Imported Chicken mostly 69 impacts on channels that 198 are not a strategic focus 60 35 area for Rainbow ƒ High red meat

  5. Slide 5: Market perspective

    Interim results 6 months ended Market perspective 30 Sep 2007 SAFEX yellow maize spot prices R / ton Year ended March 2006 Year ended March 2007 6m ended Sep 2007 1,900 , 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S

  6. Slide 6: Highlights

    Interim results 6 months ended Highlights 30 Sep 2007 Revenue (Rm) + 31,9% Operating profit (Rm) + 22,9% 2871 4 2871,4 315,7 315 7 2177,8 256,9 1978,3 1915,2 214,2 118,8 2004 2005 2006 2007 2004 2005 2006 2007 Headline earnings (Rm) + 20,8% Interim dividend per share (cents) + 20,0% 208,3 24,0 172,4

  7. Slide 7: Financial review

    Interim results 6 months ended Financial review 30 Sep 2007 30 Sep 30 Sep % 2006 2007 change g Trading Days 124 129 + 4,0 Revenue Rm 2 177,8 2 871,4 + 31,9 Headline EBITDA Rm 314,3 378,7 + 20,5 Operating profit Rm 256,9 315,7 + 22,9 Effective tax rate % 36 1 36,1 36 0 36.0 - 01 0,1 Attributable earn

  8. Slide 8: Financial review

    Interim results 6 months ended Financial review 30 Sep 2007 Revenue (Rm) + 31,9% 2871,4 654,1 External sales (Cobb, Epol Epol,, Vector) + 45,2% 2177,8 1978,3 2217 3 2217,3 450,4 ƒ Increase of external volumes within Epol 392,3 1915,2 and Vector 370,2 ƒ Epol revenue driven by higher raw material 1727

  9. Slide 9: Financial review

    Interim results 6 months ended Financial review 30 Sep 2007 Headline EBITDA + 20,5% Profit after tax (Rm) + 23,1% 14,4% Effective Headline 13,2% tax rate EBITDA 12,2% % 36,1% 36,0% Margin 35,1% % 30,3% 6,5% 378,7 210,5 314,3 314 3 171,0 171 0 265,5 149,2 Headline Profit EBITDA after tax Rm Rm 90,5 1

  10. Slide 10: Financial review

    Interim results 6 months ended Financial review 30 Sep 2007 Earnings / Growths Interim dividend per share + 20,0% 68,0 Rm Cents 48,0 57,0 40,0 23,1% 20,8% 210,5 208,3 Total 30,5 172 4 172,4 18 1% 18,1% Final 21 0 21,0 171,0 24,0 71,1 60,2 20,0 17,0 17 0 9,5 2006 2007 2006 2007 2006 2007 Interim PAT

  11. Slide 11: Financial review

    Interim results 6 months ended Financial review 30 Sep 2007 Capex spend + 17,2% Cash generated by ops (Rm) + 18,0% 65,2 56,0 Depreciation & 48,9 Amortisation Rm 35,5 252,2 248,7 141,1 210,7 Capex 116,4 Spend 99,3 Rm 76,4 128,7 65,9 2004 2005 2006 2007 2004 2005 2006 2007 ƒ 2005 includes R64,7m spent

  12. Slide 12: Impact of IAS39

    Interim results 6 months ended Impact of IAS39 30 Sep 2007 ƒ Reporting the financial effects of only certain procurement instruments in terms 13,4 of IAS39 introduces volatility y to statutory y 12 0 12,0 results ƒ Underlying (Pre IAS39) profitability 11,3 continues to improve and acceptable 11,9 ma

  13. Slide 13: Strategy

    Interim results 6 months ended Strategy 30 Sep 2007 Maximised Key Performance Indicators in Agriculture 1 Improved processing yields Fixed the Enhanced animal husbandryy p practices and bio-securityy basics Managed costs out of the business Yielded improved earnings but the business was still at ris

  14. Slide 14: Strategy

    Interim results 6 months ended Strategy 30 Sep 2007 Vision Rainbow at the heart of every meal Key Driver Consistent, profitable, sustainable demand through brands Strategic Initiatives 3 Consumers Customers Supply Chain Sustainability Culture Redefined our broader business strategy within a framewor

  15. Slide 15: 'Strategy into Action' update

    Interim results 6 months ended ‘Strategy into Action’ update 30 Sep 2007 Rainbow Chicken sales contribution by channel and tons per day (TPD) growth ƒ Strong growth in Foodservice TPD growth TPD growth +9% +6% and Retail channels ƒ Foodservice channel growth areas Retail Foodservice 30% 36% - Quick

  16. Slide 16: 'Strategy into Action' update

    Interim results 6 months ended ‘Strategy into Action’ update 30 Sep 2007 Tons per day Operating Volume Profit 14,1% 13,8% , Growth Margin % % 5,2% 7,9% , 7 8% 7,8% 2,6% 3 767,2 654,1 654 1 -0,8% 3 335,1 5,8% 577,8 3 281,0 3 109,0 7,4% 315,3 303,2 315,7 2 217,3 , + 4,3% + 5,5% + 1,6% + 13,0% + 28,4%

  17. Slide 17: 'Strategy into Action' update

    Interim results 6 months ended ‘Strategy into Action’ update 30 Sep 2007 • Initial learning and successes from further processed range translate into imminent new launches • Discontinuation of Bonny Bird brand • E t Extension i off Vector’s V t ’ service i model d l to t include i l d primary i tran

  18. Slide 18: Prospects

    Interim results 6 months ended Prospects 30 Sep 2007 ƒ Consumer spending is expected to soften over the next six months as a consequence of the higher inflation and interest rate environment although the impact on chicken consumption is likely to be limited. ƒ Maize and soya prices are likely to rem

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