Santova Limited · JSE:SNV
Santova — FY2014 Earnings Presentation
32 slides from Santova's earnings presentation, May 15, 2014
Slide 1: Analyst Presentation
SANTOVA Analyst Presentation 15th May 2014
Slide 2: Introduction To Santova Group
Santova Introduction To Santova Group Specialist Supply Chain Solutions Performance In The Context of The Logistics Industry Annual Financial Results Analysis 2014 Strategic Initiatives Opportunities And Future Strategy
Slide 3: Statement of Purpose
Statement of Purpose “ Businesses want more authority over operational costs.” The application of an effective supply chain management strategy that targets silo optimization without sacrificing end-to- end visibility and control. Innovative global supply chain solutions that result in clients a
Slide 4: Group Structure
GROUP STRUCTURE Santova Ltd (South Africa) Supply Chain Santova Santova Santova Santova W.M. Shipping Management Advisory Logistics Logistics Logistics Logistics (United Kingdom) Services (Netherlands) (United Kingdom) (Australia) (Hong Kong) (International Division) Rotterdam Schiphol Heathrow Bren
Slide 5: Specialist Supply Chain Solutions
Specialist Supply Chain Solutions
Slide 6: Specialist Supply Chain Solutions
Specialist Supply Chain Solutions TRADITIONAL CLEARING & INTERNATIONAL SUPPLY CHAIN LOGISTICS BUSINESS FORWARDING BUSINESS MODEL Commodity Intelligent Solution “Rate Based” “Solution Based” Freight Quality Warehousing & Freight Forwarding Forwarding Control Distribution Components Customs & Excise I
Slide 7: Supply Chain Management Landscape
Supply Chain Management Landscape Information Flow Performance EDI Transparency Measurement Statistics Reports Real-Time Visibility Process Automation Management Goods Goods Goods Goods Raw Materials Supplier Manufacturer Retailer Consumer Reverse Reverse Logistics Logistics • • Short Shipments • •
Slide 8: Historical Performance
HISTORICAL PERFORMANCE
Slide 9: Performance Over Time
SANTOVA PERFORMANCE OVER TIME Profit Before Tax Diluted Basic Earnings Per Share 50,000 25.00 40,000 20.00 22.12 40,014 Cents Millions 30,000 15.00 18.00 33,809 15.82 20,000 30,063 10.00 12.29 23,216 10,000 5.00 6,853 2.90 0 0.00 2010 - 2014 2010 - 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2
Slide 10: Net Asset Value Per Share and Market Capitalisation
Net Asset Value Per Share 160.00 140.00 120.00 145.00 100.00 80.00 108.20 Cents 60.00 92.12 40.00 73.70 66.00 20.00 61.90 0.00 2009 - 2014 Market Capitalisation 2009 2010 2011 R 241 2012 2013 698 2014 600 vs. Underlying value of offshore subsidiaries United Kingdom Private Company Price Index 3Q 201
Slide 11: Profit After Tax Contribution by Geography
Profit After Tax CONTRIBUTION BY Feb 2014 GEOGRAPHY South Africa 56% Offshore 44% 17087 20000 15000 5 7722 Year on Year Growth Millions 10000 2148 3052 777 Profit After Tax Feb 2013 vs. Feb 2014 5000 25% South Africa 5% Offshore 56% 7% 10% 3% 0 South Africa United Kingdom Hong Kong Europe Australia
Slide 12: Share Trade Volumes
SHARE TRADE VOLUMES Closing Share Price At Year End Liquidity – until 2013 shares were tightly held Limited publicity – low profile Bottom of the growth curve – “Small cap vulnerability” 200 Limited understanding of the Business Model 172 Cents 100 106 81 Management and staff 20,2% 80 30 Total numbe
Slide 13: Santova and the Industry
SANTOVA and THE INDUSTRY Unique characteristics; A non-asset based business ‘favouring’ a variable cost structure; In a relatively short period of time established strategic offices globally; Transformed during a ‘flat’ 6 year economic cycle into sophisticated business model whilst at the same
Slide 14: Financial Results Analysis
FINANCIAL RESULTS ANALYSIS February 2014
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS Operating Margin 22.1% increase in total increased from 23.1% to Billings to R3.221 billion 24.2% 26.9% increase in 40.6% increase in HEPS Operating Income to from 17.62 to 24.77 R51.8 million cents per share 34.2% increase in NAV Final dividend of 3.25 from 108.4 to 145.5 cents
Slide 16: Influencing Factors
INFLUENCING FACTORS Internal/Technical External/Market • No acquisitions or disposals • FOREX - the weakening of the during the year rand • IFRS 10 Deconsolidation of • The Economy in SA and the effect Guardrisk Cell Captive on trade volumes – low GDP • Inclusion of WM Shipping for a growth full 12
Slide 17: Forex Effect
FOREX EFFECT 2013 2014 Move % USD IMPACT Closing 8.84 10.79 1.95 22% Average 8.36 9.97 1.61 19% Opposing Effects on Revenue GBP 2013 2014 Closing 13.37 17.98 4.61 34% • In SA majority on revenue is invoiced in Rands but Average 13.26 15.74 2.48 19% underlying calculation is based on the imported 19
Slide 18: Revenue Analysis
REVENUE ANALYSIS SOUTH AFRICA OFFSHORE TOTAL Fin Serv HO Logistics HK UK Neth Aus Rand BILLINGS 86% 14% 2013 8,658 1,680 2,395,175 28,015 98,077 85,634 123,241 2,637,920 2014 8,967 2,635 2,757,269 29,048 203,981 179,668 115,969 3,221,519 4% 57% 15% 4% 108% 110% -6% 22% REVENUE/BILLINGS MARGIN 2013 1
Slide 19: Operating Margin Analysis
OPERATING MARGIN ANALYSIS SOUTH AFRICA OFFSHORE TOTAL Fin Serv HO Logistics HK UK Neth Aus Rand OTHER INCOME 2013 924 1,675 4,773 320 377 685 542 9,296 2014 74 5,211 6,399 702 535 1,756 441 15,118 -92% 211% 34% 119% 42% 156% -19% 63% ADMIN EXPENSES 2013 6,396 19,670 80,635 3,399 10,951 11,340 11,568
Slide 20: Earnings Reconciliation
EARNINGS RECONCILIATION 2014 2013 % Cents Cents Reported - Basic earnings per share 22.42 18.06 24.1% Reported - Headline earnings per share 24.76 17.62 40.5% Approximate - Normalised Headline earnings per share 22.85 17.07 33.9% 2014 2013 Earnings Reconciliation R'000 R'000 Reported – Basic Earning
Slide 21: Financial Position - Key Movements
FINANCIAL POSITION - Key movements Influencing Factors Results • 22.1% Increase in Billings • 30% or R111.8 mil increase in Trade Receivables from R369 mil to R481 mil • Funded by: – 11% Increase in Trade Payables – 51% increase in Short Term Borrowings • 34% or R4.61 increase in closing • R14 mil i
Slide 22: Correlation
CORRELATION Cash flow inverse relationship Billing/Debtors/Borrowing/Cash Flow Billings Debtors Borrowings Cash Flow 2014 2013 2012 2011 2010 2009 2008
Slide 23: Cash Flow and Funding
CASH FLOW AND FUNDING Cash on hand increased 31% from R28.1 million to R36.8 million at year end of which 75% is held offshore – trend will continue/offshore operations are cash generators. Cash utilised in operating activities totalled R27 million versus net cash generated of R29.1 million in t
Slide 24: Credit Quality
CREDIT QUALITY Credit Collection remains a core competency of the Group Centrally managed at Head Office and South African Book is 85%-90% insured via credit underwriters SANTOVA LOGISTICS (SOUTH AFRICA) TRADE AND OTHER RECEIVABLES 2014 2013 2012 2011 2010 2009 Avg Trade receivables 434,600 326,
Slide 25: Financing Revenue
FINANCING REVENUE 2014 2014 2014 2013 2012 TOTAL Financing % Financing Financing Revenue 214,357 21,232 36% 15,560 15,121 Other income 15,118 Depn & Amort (3,476) Admin Exps (174,228) Operating profit 51,771 21,232 15,560 15,121 Interest received 4,559 4,257 166% 1,599 899 Finance costs (16,316) (12
Slide 26: Value Added
VALUE ADDED VALUE ADDED STATEMENT 2014 2014 for the year ended 28 February 2014 Billings Basis Revenue Basis R'000 % R'000 % Billings to Clients 3,242,212 Revenue from Clients 236,026 Paid to Suppliers and Agents 868,145 49,762 Value Created 2,374,067 186,264 Value Distributed Employees 110,311 5% 1
Slide 27: Strategic Initiatives
Strategic Initiatives
Slide 28: End-To-End Global Supply Chain Management Solutions
End-To-End Global Supply Chain Management Solutions We have a presence across multiple geographies and cultures, assembling, integrating and managing activities into key supply chain processes rather than managing individual functions. Information Technology We have intelligent supply chain software
Slide 29: Market Opportunities - Future Strategy
MARKET OPPORTUNITIES FUTURE STRATEGY
Slide 30: It's not simply about moving goods from one point to another
It’s not simply about moving goods from one point to another, its now about a high degree of know- how and comprehensive logistics resources The world is moving from regional economies (‘clusters’) to a networked and digital economy (globalised). New global business models Innovative e-commerce
Slide 31: Proximity And Specialised Services; Internationalisation
Proximity And Specialised Services: international foot print a necessity Decentralisation is becoming a common strategy for locating resources closer to demand and supply – kitting, global direct-ship, pack for store, built-to-order, merge in transit and cross docking solutions are growing. Internat
Slide 32: Thank You
Thank You