Kap Limited · JSE:KAP

Kap — KAP International Holdings — FY2008 Earnings Presentation

32 slides from Kap's earnings presentation, Jun 30, 2008

1. Slide 1: Year End Results 30 June 2008

   KAP International Holdings Ltd Year End Results 30 J une 2008

2. Slide 2: Highlights

   Highlights ƒRevenue growth of 26% ƒHeadline earnings per share of 28,4 cents ƒNet asset value per share increased from R2,75 to R3,01 ƒStrong cash flows from operating activities ƒPET capacity expansion on track ƒDebt equity ratio reduced to below 40% due to good working capital management ƒBrenner

3. Slide 3: Income Statement

   Income Statement 30 June 30 June 2008 2007 12 months 12 months Rm Rm Revenue 4,620.4 3,673.5 EBITDA 256.3 282.1 Operating profit 200.1 239.5 EPS 28.8 36.2 HEPS 28.4 35.5 Dividend declared - 17 Tax rate - 19.7% NAV per share 300.7 274.7 Year End Results June 2008

4. Slide 4: Balance Sheet

   Balance Sheet 30 June 2008 30 June 2007 Rm Rm Assets Property, plant and equipment 828.2 709.1 Other non-current assets* 217.7 206.0 Inventory 929.9 789.8 Accounts receivable 729.5 682.4 Cash and cash equivalent 55.1 2.4 Total assets 2,760.4 2,389.7 Equity and liabilities Equity 1,308.7 1,191.1 Non-

5. Slide 5: Financial Structure

   Financial Structure 30 June 30 June 2008 2007 Net interest bearing debt (RM) 520.0 517.0 Interest bearing debt/equity 39.7% 43.4% Interest cover 2.6 6.6 Current ratio 1.29 1.36 Year End Results June 2008

6. Slide 6: Cash Flow

   Cash Flow 30 June 2008 30 June 2007 Rm Rm 18 months Cash flow generated from operations 256.3 397.2 Net working capital changes 0.8 (177.9) Net finance costs (75.9) (51.1) Taxation paid (10.6) (14.0) Purchase of property plant & equipment (177.4) (182.4) Other investing activities 17.0 17.3 Acquisit

7. Slide 7: Automotive Division

   Automotive Division

8. Slide 8: SA Vehicle Build

   July '07 - Export Local June '08 Sales Sales Passenger vehicles Ford focus 23,500 16,700 6,800 Mazda 4,500 - 4,500 Nissan Tida 10,000 - 10,000 BMW 3 series 50,400 39,400 11,000 Merc C Class 43,200 19,900 23,300 Long term increase in vehicle build Toyota - Corolla 55,900 27,300 28,600 is still intact

9. Slide 9: Industrial Footwear

   Industrial Footwear

10. Slide 10: United Fram & Mossop

    ƒ Turnover up by 9% and operating profit up by 11% ƒ Industrial footwear demand is still strong ƒ Number of pairs sold steady at 2.9 million pairs ƒ New gumboot machine fully operational ƒ Target tender contracts ƒ Further improvement in Mossop results ƒ Rework rate reduced from 5% to 2% ƒ Down-time

11. Slide 11: Hosaf

    Hosaf

12. Slide 12: Strategy 2001 - 2008

    ƒ Reduce Input Costs ƒ Raw material price negotiations for volume ƒ Increased use of recycled material ƒ Captial costs ƒ Overheads cut ƒ Increase Production Flexibility ƒ Move to higher-margin, niche products ƒ Rapid Growth of Volumes ƒ Growth in export markets ƒ Mobilisation of existing, dormant ca

13. Slide 13: Hosaf

    140,000 120,000 100,000 80,000 60,000 40,000 20,000 2001 2002 2003 2004 2005 2007 2008 2009 2010 Fibre PET Strategy ƒto increase total production to achieve a lower fixed cost per ton ƒto convert production from fibre to PET to achieve better margins Hosaf Year End Results June 2008

14. Slide 14: Future Strategy

    PET Fibre r-PET ƒ Expand capacity ƒ Niche product types ƒ Expand capacity ƒ Flame retardant ƒ In house quality sorting ƒ Anti microbial line ƒ Reduce fixed cost per ton ƒ Colour ƒ Waste sorting plant ƒ Short fibre ƒ Speciality products ƒ Bottle to bottle r-PET ƒ Expand sources of r- ƒ Hot fill (Frui

15. Slide 15: PET Expansion Project

    World Demand forecast 25,000 20,000 15,000 tons pa 10,000 5,000 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 North America South America Africa & Middle East Western Europe Eastern Europe Asia Pacific Courtesy: BP PET Expansion Project Year End Results June 2008

16. Slide 16: Preheater & Reactor being installed

    Preheater & Reactor being installed

17. Slide 17: Preheater & Reactor being installed

    Preheater & Reactor being installed

18. Slide 18: Bull Brand Foods

    CSpaghetth & Meatballs S.\g , in Tomato Sawer

19. Slide 19: Bull Brand Foods

    ƒ Margins recovered but still on a low base ƒ Weaner price stable ƒ Strategies include: ƒ Cost saving initiatives ƒ Backgrounding of cattle (preconditioning) ƒ Staff reductions at abattoir ƒ Drive for value added products ƒ Increase cannery sales - Cannery turnover increased by 60% over the last 3 y

20. Slide 20: Weaner & Beef selling price

    25 20 15 10 5 0 M ay M ay M arch M arch Jul Jul Nov Nov July Jan '07 Jan '08 Jun June O ct O ct Apr Apr Aug Aug Dec Dec Sep Feb Sep Feb Landed Price of W eaners R/KG Net selling price R/KG Weaner & Beef selling price Year End Results June 2008

21. Slide 21: Feeding cost per head

    Feeding cost per head 2000 1800 1600 1400 1200 1000 May-07 May-08 Mar-07 Nov-07 Mar-08 Jan-07 Apr-07 Jun-07 Jul-07 Aug-07 Jan-08 Apr-08 Jun-08 Dec-06 Feb-07 Sep-07 Oct-07 Dec-07 Feb-08 Breakdown of Cost Weaners cost 55% Feed cost 33% Admin & Interest 12% Feeding cost per head Year End Results June 2

22. Slide 22: Brenner Mills

    Brenner Mills

23. Slide 23: Brenner Mills

    ƒ Policy of buying only six weeks forward ƒ Better prices for animal feed which is opposite to Bull Brand extra feed cost ƒ Major cost saving initiatives provide the turnaround ƒ Basic foodstuff will always be in demand Brenner Mills Year End Results June 2008

24. Slide 24: Maize Price

    SAFEX White Maize Prices R 2,100 R 2,000 R 1,900 R 1,800 R 1,700 R 1,600 R 1,500 R 1,400 R 1,300 R 1,200 R 1,100 R 1,000 R 900 R 800 R 700 R 600 R 500 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2004 2005 2006 2007 2008 Maize Price Year End Results June 2008

25. Slide 25: Jordan & Co

    BRONX AAAAAASA BAGINX

26. Slide 26: Jordan & Co

    ƒ Turnover up 6% and operating profit declines ƒ Pressure from retailers for price points ƒ Strength of the brands ƒ China not as cheap as it used to be ƒ Strengthening of their currency by approximately 10% ƒ Labour rates becoming more expensive ƒ Local manufacture for long runs (core lines) ƒ Stra

27. Slide 27: Emerging Markets

    Source: www.credit-suisse.com Emerging Markets Year End Results June 2008

28. Slide 28: Sales by Brand

    Pairs 000's June June 2008 2007 Own Manufacture 385 422 Bronx 176 186 Jordan Shoes 73 101 Sports 56 86 Corporate 80 49 Imports 1,869 1,731 Bronx 717 650 Jordan 273 277 Anton Fabi 147 167 Other 118 83 Ladies 128 42 Asics 107 110 Olympic 379 402 Shops 425 350 Other Total 2,679 2,503 Sales by Brand Yea

29. Slide 29: Glodina

    Glodina

30. Slide 30: Glodina

    ƒ Excellent overall performance ƒ Strong brand awareness ƒ Investment of R60M since 2003 ƒ Reduce waste and rejects ƒ Improved distribution ƒ SANS 1600I Aids management system implemented at Glodina. First company to be accredited in South Africa ƒ Strategy ƒ Established world class production facil

31. Slide 31: Prospects

    Prospects ƒ Automotive expect modest recovery in 2009 with a strong improvement when build volumes increase (either export or local) ƒ We expect another strong performance from Industrial Footwear ƒ Hosaf expect a major increase in operating profits (in line with the increase in capacity) from March

32. Slide 32: Thank you for your attendance

    Thank you for your attendance Year End Results June 2008

KAP International Holdings — FY2008 Earnings Presentation on 6ix