Santova Limited · JSE:SNV
Santova — Investor Presentation (May 2016)
32 slides from Santova's investor presentation, May 18, 2016
Slide 1: Santova Investor Presentation
SANTOVA Investor Presentation 18th May 2016 Innovative Solutions. Endless Possibilities
Slide 2: Agenda
AGENDA The year in perspective The logistics industry and the current economic climate Focus on a ‘counter-cyclical’ strategy and business model Internationalising and diversifying Santova Financial highlights Strategic pillars of ongoing development and management Focus and future strategy
Slide 3: To be a recognised brand in global trade solutions
To be a recognised brand in global trade solutions through strategic international offices and leading intellectual capital.
Slide 4: The year in perspective
The year in perspective Ability to mitigate these factors Clear growth Strong execution strategy structure Strategy of ‘Counter- cyclical Industry challenges diversification business model’ • Geographic regions • Growth . Industry faced with flat global economic growth • Currencies • Innovation • In
Slide 5: Effect of global economies on the industry
EFFECT OF GLOBAL Offshore Listed Companies ECONOMIES Movement in share price over the last 5 years on the industry 05.04.2016 Santova share 20.5 19.7 24.5 86.2 R4.01 Transport & Logistics Industry Average price to earning ratio is more than 20 in the 1. Quarter 2016 05.06.2011 Santova share R.80 11.
Slide 6: South African listed companies share price movement
South African Listed Companies Movement in share price over the last 5 years 05.04.2016 Santova share R4.01 11.7 7.9 10.6 9.5 18.6 All share ex resources PE 19 Transport PE 24 05.06.2011 Santova share R.80 11.6 Challenging 5 years for the industry – more so than their offshore counterparts
Slide 7: Global presence and market change
Global Presence Market change and complexity is driving 327 employees 20 offices worldwide opportunity for Santova In response, companies have been forced to: Enter new markets Identify more cost effective sources of supply Manage multiple supply chains Attain a sound understanding of the in
Slide 8: Strategy and business model supporting sustainable growth
Our strategy and business model has supported our drive for sustainable year-on-year growth Revenue R279m 24.3% Net Profit Before Tax R67m Increase In Cash On Hand 29.9% R124m 176% Normalised HEPS 34.28 cents Increase In Reserves And 33.2% Capital R386m 68% Operating Margin 25.4 % 5.39% “A strong fo
Slide 9: 7 years of year-on-year growth
7 years of year-on-year growth Revenue NET PROFIT BEFORE TAX R'000 R'000 66736 278 655 51 386 224 235 201 879 40 014 165 633 33 470 152 115 29 756 132 872 23 216 87 728 6 853 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 NET ASSET VALUE PER SHARE NORMALISED HEPS Cents Cents 3
Slide 10: Internationalising and diversifying Santova
Internationalising and diversifying Santova
Slide 11: Diversification: geographical and currency
DIVERSIFICATION actual Restated including Tradeway Group Geographical and currency R’000 12month period ending 31st March 2016 R'000 Actual Restated Profit before tax by country Profit before tax by country Onshore Onshore Offshore 63% 45% 37% Offshore 55% 45% 37% 34% 23% 30m 30m 28% 28m 23% 15m 19m
Slide 12: Logistic Services geographical segments
Logistic Services Geographical segments Profit after tax R’000 38% 18 271 28% 24% 13 287 11 426 11% 5 092 AFRICA ASIA PACIFIC UNITED KINGDOM EUROPE
Slide 13: Net growth year on year
NET GROWTH YEAR ON YEAR PROFIT BEFORE TAX (R15M) 106% 72% 7.8m 8m 10% Including all SA divisions 70% (16% Logistics only) 2.6m 2.8m 0% -83% -1.4m -1.8m South Africa *1 United Kingdom Holland Australia Germany Hong Kong *2
Slide 14: Top 20 client revenue
TOP 20 CLIENT REVENUE 29 FEBRUARY 2016 GROSS REVENUE COMPANY NAME INDUSTRY DESCRIPTION % 2016 SANTOVA LOGISTICS SA CHEMICALS 12 401 825 4.5% SANTOVA LOGISTICS SA APPAREL 11 784 606 4.2% SANTOVA AUSTRALIA PHARMACEUTICALS 3 311 323 1.2% TRADEWAY SHIPPING TEXTILE RECLAIMERS & PROCESSORS 3 260 183 1.2%
Slide 15: Business model: offshore vs onshore
Business Model: Offshore vs. Onshore Return on capital employed Debtors book Estimate based on what the business requires to function as a % of Groups total debtors book 75% 198% 451m 103% 15% 3% 4% 2% 1% 47% 38% 92m 26% 25m 0% 18m 11m 4m SOUTH AFRICA AUSTRALIA UNITED HOLLAND GERMANY *4 HONG KONG SO
Slide 16: Financial highlights
Financial highlights ee
Slide 17: 2016 financial overview
2016 FINANCIAL OVERVIEW • Continuation of 7 year trend in growth of profit and assets • Strong performance from certain offshore subsidiaries • Solid growth of SA logistics profitability despite economy • Increased operating margins due to efficiencies • Investment in new ‘start up’ territories – Ge
Slide 18: Group profitability
GROUP PROFITABILITY 2016 2015 R'000 R'000 % Gross Billings 3,797,890 3,462,792 10% South Africa 2,717,174 2,838,582 -4% Impact of economy on freight volumes in SA Foreign 987,880 624,210 58% Tradeway 92,836 - 100% Tradeway included for 3 months Revenue 278,655 224,235 24% South Africa 140,326 132,43
Slide 19: Source of profitability
SOURCE OF PROFITABILITY 2016 R'000 % Source of Growth in profit for the year Organic growth 11,553 75% Currency depreciation 2,085 14% Contribution from acquisitions 1,712 11% Tradeway for 3 months net of transaction and financing costs Total growth in profit for the year 15,350 100% Regional source
Slide 20: Voluntary income statement reclassification
VOLUNTARY INCOME STATEMENT RECLASSIFICATION Reclassification of net interest and fee income and expense from client financing activities to revenue Client financing activities considered a principal revenue-producing activity Consistent with change in cash flow accounting policy in 2015 Consistent w
Slide 21: Total assets
TOTAL ASSETS 2016 2,015 Move R'000 R'000 % Property Plant and Equipment 25,086 7,933 216% R15.9 million acquired with Tradeway, including 2 unencumbered commercial properties the UK Intangible Assets Opening Balance 122,264 123,927 Goodwill of Tradeway acquisition 75,854 - GBP 3.6 million of goodwil
Slide 22: Trade receivables
TRADE RECEIVABLES 2016 2015 R'000 R'000 % Total Trade Receivables 609,136 507,198 20% Before provisions South Africa 447,302 430,323 4% - Percentage 73% 85% Offshore 161,833 76,875 111% R48.4 mil due to inclusion of Tradeway - Percentage 27% 15% Debtor Days 56.7 52.2 4.5 South Africa 56.7 52.7 4.0 P
Slide 23: Cash flow and cash on hand
CASH FLOW AND CASH ON HAND 2016 2015 Move % R'000 R'000 % Cash on Hand South Africa 14% 17,657 7,495 Group 14,765 3,586 312% R9.6 million paid to sellers of Tradeway in March 16 Financial Services 572 2,334 -76% Logistics 2,321 1,575 47% - ZAR Offshore 86% 106,000 37,394 Held in: Netherlands 33,476
Slide 24: Equity and liabilities
EQUITY AND LIABILITIES 2016 2015 Move R'000 R'000 % Capital and Reserves Opening balance 230,289 198,510 General issue of shares for cash 51,282 - Profit for the year 49,913 39,220 Exchange gain on translation of foreign operations 42,796 -4,144 R21 million on Goodwill and remainder on net assets Ve
Slide 25: Santova group structure
SANTOVA GROUP STRUCTURE SANTOVA LIMITED (SOUTH AFRICA) (Listed on the JSE) 100% 100% 100% 100% SANTOVA SANTOVA SANTOVA FINANCIAL SANTOVA LOGISTICS EXPRESS SERVICES INTERNATIONAL (SOUTH AFRICA) (SOUTH AFRICA) (SOUTH AFRICA) HOLDINGS (SOUTH AFRICA) 100% 100% 100% 100% 100% 75% 100% 100% SANTOVA SANTOV
Slide 26: Conclusion: financial dashboard and outlook for 2017
FINANCIAL DASHBOARD CONCLUSION INVESTMENT CASE 2016 2015 % FINANCIAL OUTLOOK FOR 2017 R' million R' million Change 1 Revenue Continued strong contribution from offshore operations Billings R 3,798 R 3,463 10% - In particular with the inclusion of Tradeway for a full 12 months Revenue R 279 R 224 25%
Slide 27: Strategic focus
Strategic Focus Current and Future 3 Strategic pillars of development and management Growth Innovation Efficiency-Effectiveness
Slide 28: Growth
Growth “Grass roots” initiatives (‘hands-on’ management) 3 strategic pillars Low in cost structure, pose fewer cultural and adaptation-integration challenges – low risk Constitute exciting strategic opportunities for future earnings growth Jet Freight (Mauritius) . SADC (Southern African Devel
Slide 29: Innovation
Unlocking information, Innovation enabling strategic logistics and ‘smart’ decision 4 dimensions to our innovation ICT making Next generation communication and technology New Advanced markets Cultural technologies integration APPLICATION Age of change End-to-end supply chain Consultative BUSINESS MO
Slide 30: Efficiency and effectiveness
Efficiency and effectiveness Four drivers – starts with asking the right questions? Take cognisance of control, Faster processing of files, standardised procedures, access to information, quicker decision making, reduction or elimination of customer service and the errors ICT elimination of duplicat
Slide 31: Consolidate and grow
Focus and future strategy Focus on the 3 strategic pillars of continuous development and management High operating margins Increase profitability Consolidate and Grow INNOVATION GROWTH Contain expenses Simultaneously ICT Organic Culture EFFICIENCY – Increase productivity Strategic acquisitions Peopl
Slide 32: Thank you
Thank you