Nampak Limited · JSE:NPK
Nampak — H1 2024 Earnings Presentation
47 slides from Nampak's earnings presentation, June 2024
Slide 1: Interim Results for the half year ended 31 March 2024
Interim Results For the half year ended 31 March 2024 June 2024
Slide 2: Nampak Interim Results For the half year ended 31 March 2024
Nampak Interim Results For the half year ended 31 March 2024 1
Slide 3: Forward-looking statement
Forward-looking statement Forward-looking statements: This announcement contains statements about Nampak that are or may be forward-looking statements. All statements, other than statements of historical fact, are or may be deemed to be, forward-looking statements. These forward-looking statements a
Slide 4: Nampak Interim Results For the half year ended 31 March 2024
Nampak Interim Results For the half year ended 31 March 2024 3
Slide 5: Highlights from our transformation initiatives
Highlights from our transformation initiatives Nampak Interim Results For the half year ended 31 March 2024 4
Slide 6: Early observations May 2023
Early observations May 2023 Getting busy, getting smart Nampak Interim Results For the half year ended 31 March 2024 5
Slide 7: Macroeconomic vagaries
Macroeconomic vagaries South Africa Nigeria Angola › Constrained › Currency devalues 40% › Oil price strengthens bodes consumer spending over the period well for economic growth › GPD ex-growth › Inflation peaks at 33% › Forex liquidity constraints › Persistent high › Stagnant GDP growth › Exchange
Slide 8: Nampak value creation
Nampak value creation Nampak Interim Results For the half year ended 31 March 2024 7
Slide 9: Critical milestones achieved
Critical milestones achieved Nampak Interim Results For the half year ended 31 March 2024 8
Slide 10: Diversified performance improvement
Diversified performance improvement Restructuring interventions Nampak Interim Results For the half year ended 31 March 2024 9
Slide 11: Performance inhibitors
Performance inhibitors Challenging trading conditions Nampak Interim Results For the half year ended 31 March 2024 10
Slide 12: Asset disposal programme
Asset disposal programme On course to meet lender obligations Nampak Interim Results For the half year ended 31 March 2024 11
Slide 13: 1H24 Performance overview
1H24 Performance overview Nampak Interim Results For the half year ended 31 March 2024 12
Slide 14: Performance overview
Performance overview Nampak Interim Results For the half year ended 31 March 2024 13
Slide 15: Financial highlights
Financial highlights Nampak Interim Results For the half year ended 31 March 2024 14
Slide 16: Financial overview
Financial overview Continuing operations Group revenue of Operating profit before net Operating profit of R992m R6.2bn impairments of (1H23: operating loss of R558m) from R5.8bn up 7% R1.0bn up 328% › DivFood turnaround: R186m positive swing › Bevcan step-change in profitability up 62% › R159m lower
Slide 17: Financial overview
Financial overview Asset disposal plan progressing well Net debt (excluding capitalised leases) Cash generated from operations before R2.2bn working capital changes of down R1.3bn R905m up 53% › Assets held for sale to R4.6bn from R591m in 1H23 › Loss of R530m from discontinued › Net proceeds from r
Slide 18: Profitability improved due to Bevcan SA, DivFood performance and PRMA gain
Profitability improved due to Bevcan SA, DivFood performance and PRMA gain Abridged statement of comprehensive income Continuing operations Continuing operations Total operations R million *1H24 *1H23 *%∆ › Revenue growth › Loss for the period from Revenue 6 166 5 782 7 » Encouraging growth boosted
Slide 19: Segmental information – continuing operations
Segmental information – continuing operations Step change in Metals margins Revenue (%) Consistent contribution YOY Operating profit before net impairments (R’m) Operating profit before net impairments (R’m) By substrate By substrate By geography g Metals 1 100 1 005 1 005 6 1 100 g Plastic 8 900 70
Slide 20: Pleasing DivFood turnaround, Bevcan SA performance improvement
Pleasing DivFood turnaround, Bevcan SA performance improvement Metals — continuing operations CONTRIBUTION TO GROUP R million 1H24 1H23 %∆ Revenue Operating profit before net impairments Revenue 5 288 4 982 6 Trading profit 717 325 121 Trading margin (%) 13.6 6.5 Operating profit before net impairme
Slide 21: Metals SA performance overview
Metals SA performance overview Revenue (R’m) Operating profit before net impairments (R’m) 4 747 583 4 403 444 3 284 274 2 887 227 139 1 463 1 516 (47) Bevcan SA DivFood Total Bevcan SA DivFood Total 1H24 1H23 1H24 1H23 Operating profit bridge Operating profit bridge Operating margin (%) 186 583 13.
Slide 22: Profitability improvement of R1 273 million
Profitability improvement of R1 273 million Strong Bevcan SA performance, DivFood turnaround and PRMA gain from continued operations 1 000 R1 273 million 800 32 y 780 ilit (28) 600 b if ta DivFood turnaround o 395 400 pr Angola (308) in stabilisation 200 ge h an c (R'm) 0 ep 357 St (200) Includes R2
Slide 23: Net interest paid down 7% despite higher interest rates
Net interest paid down 7% despite higher interest rates › Impacted by: Net finance costs (R’m) » Higher interest rate environment 1 400 ─ SARB repo rate increases 1 215 1 200 » Higher interest rates associated with Sep ’23 refinancing 102 › Partially offset by: 1 000 335 » Net rights issue proceeds
Slide 24: Asset disposal progressing well
Asset disposal progressing well Lower net debt and good short-term liquidity Abridged statement of financial position R million 1H24* 1H23* %∆ Property, plant, equipment and investment property 3 732 5 130 (27) › Comparatives impacted by IFRS5 assets held for sale Goodwill and other intangible asset
Slide 25: Net debt stabilised since Sep '23 despite capex spend and interest payments
Net debt stabilised since Sep ’23 despite capex spend and interest payments Strong cash generation absorbed by interest and tax payments Net debt movement Net debt movement (R’m) Increase Decrease Total R’m % Cash generated from operations 905 4 800 Net working capital changes (27) 4 639 222 222 44
Slide 26: Potential Debt Reduction Profile
Potential Debt Reduction Profile Composition of net debt per covenants (R’m) Debt per Balance Sheet - Debt reduction profile (R’m) 4 597 5 243 4 839* 4 639 2 898 247 546 (1 699) 2 137 Net debt as at 31 March 2024 Expected net proceeds from asset sales Debt post disposals 4 392 4 293 Expected net pro
Slide 27: Capital expenditure remained tightly controlled
Capital expenditure remained tightly controlled Expansion capital allocated to Springs Line 2 Capital expenditure and depreciation (R’m) › Asset base remains well-capitalised and well maintained 800 735 › Bevcan Springs Line 2 upgrade 700 666 » Critical for growth capacity in 500ml can market 218 60
Slide 28: Improved profitability and asset disposals improve cash balances
Improved profitability and asset disposals improve cash balances Abridged statement of cash flows R million 1H24 1H23 %∆ › Cash generated from operations before working capital changes Cash generated from operations before working capital changes 905 591 53 positively impacted by: Net working capita
Slide 29: Working capital management remains a focus area
Working capital management remains a focus area Changes in working capital (pre-discontinued operations reclassification) Working capital days R million 1H24 1H23 Days 1H24 1H23 Decrease in inventories 355 16 Inventory 115 121 Increase in trade and other receivables (602) (445) Trade and other recei
Slide 30: Positive Triangulation
Positive Triangulation Nampak Interim Results For the half year ended 31 March 2024 29
Slide 31: Reflections and looking to the future
Reflections and looking to the future Historic capital Decisive action Initiatives in place to Renewed allocation choices taken on disposals continue trajectory confidence given placed cash flows to reduce debt with to a highly focused turnaround in under pressure lower and sustainable sustainable c
Slide 32: Outlook
Outlook Nampak Interim Results For the half year ended 31 March 2024 31
Slide 33: Outlook
Outlook We “Can Do” however we must do as we say Nampak Interim Results For the half year ended 31 March 2024 32
Slide 34: Embedding Leadership Principles
Embedding Leadership Principles Govern behaviour and cultural outcome Nampak Interim Results For the half year ended 31 March 2024 33
Slide 35: Brand architecture – Trusted brands belong in our cans
Brand architecture – Trusted brands belong in our cans Nampak Interim Results For the half year ended 31 March 2024 34
Slide 36: Nampak Interim Results For the half year ended 31 March 2024
Nampak Interim Results For the half year ended 31 March 2024 35
Slide 37: Thank You
Thank You Nampak Interim Results For the half year ended 31 March 2024 36
Slide 38: Investor Relations
Investor Relations Teboho Lempe Email: [email protected] Telephone +27 11 719 6300 www.nampak.com Nampak Interim Results For the half year ended 31 March 2024 37
Slide 39: Appendices
Appendices Nampak Interim Results For the half year ended 31 March 2024 38
Slide 40: Segmental information
Segmental information Continuing operations Revenue by substrate Operating profit before net impairments by substrate 1H24 % 1H23 % 1H24 % 1H23 R million 1H24 1H23 %∆ Contr. Contr. R million 1H24 1H23 %∆ Contr. % Contr. Metals 5 288 4 982 6 86 86 Metals 706 284 149 70 121 Plastic 465 425 9 8 7 Plast
Slide 41: Tough trading conditions with margin compression
Tough trading conditions with margin compression Plastic CONTRIBUTION TO GROUP R million 1H24 1H23 %∆ Revenue Operating profit before net impairments Revenue 465 425 9 Trading profit 74 81 (9) Trading margin (%) 15.9 19.1 Operating profit before net impairment losses 22 87 (75) 8% 2% Operating margi
Slide 42: Profitability impacted by ZWL devaluation in Zimbabwe
Profitability impacted by ZWL devaluation in Zimbabwe Paper CONTRIBUTION TO GROUP R million 1H24 1H23 %∆ Revenue Operating profit before net impairments Revenue 413 375 10 Trading profit 23 84 (73) Trading margin (%) 5.6 22.4 — Operating profit before net impairment losses 26 71 (63) 6% 2% Operating
Slide 43: Weaker rand and kwanza, Zimbabwean dollar continues to devalue
Weaker rand and kwanza, Zimbabwean dollar continues to devalue Major foreign exchange rates ZWL:US$ devaluation Average rates Closing rates Currency 1H24 1H23 %∆ 1H24 1H23 %∆ ZAR/EUR 20.33 18.52 (10) 20.44 19.29 (6) 25 000 (>100%) ZAR/US$ 18.81 17.69 (6) 18.94 17.80 (6) NGN/US$ 1 085.39 452.87 (>100
Slide 44: Cash transfers from Angola and Nigeria
Cash transfers from Angola and Nigeria Reduced exposure to Naira and Kwanza cash balances 31 March 2024 R million Angola Nigeria Total Opening cash on hand – 30 September 2024 46 192 238 Cash on hand – 31 March 2024 67 25 92 Net cash movement – 1H24 21 (167) (146) Cash transferred 337 368 705 31 Mar
Slide 45: Reconciliation of operating profit before net impairment losses to trading profit
Reconciliation of operating profit before net impairment losses to trading profit R million 1H24 1H23 FY23 Operating profit before net impairment losses 1 005.1 235.1 500.8 Adjusted for capital² and other items³ (excluding net impairment losses separately disclosed) (235.3) 95.1 363.1 Capital items
Slide 46: Tax rate reconciliation
Tax rate reconciliation Reconciliation of statutory to effective tax rate % 1H24 1H23 FY23 Statutory group tax rate 27.0 27.0 27.0 Increase in tax rate due to: 39.3 (10.8) (35.0) Hyperinflation adjustment 19.6 (0.4) (6.1) Disallowed interest charges 9.0 (0.7) (0.9) Other disallowable expenses 6.8 (0
Slide 47: Reconciliation of basic earnings to headline earnings
Reconciliation of basic earnings to headline earnings Continuing operations R million 1H24 1H23 FY23 Loss attributable to equity holders of the company for the period (93.0) (2 490.1) (4 032.8) Loss for the period from discontinued operations 530.1 1 568.5 1 975.8 Less: Preference dividend – – (0.1)