Remgro Limited · JSE:REM
Remgro — FY2013 Earnings Presentation
36 slides from Remgro's earnings presentation, September 2013
Slide 1: Final Results Presentation for the year ended 30 June 2013
FINAL RESULTS PRESENTATION for the year ended 30 June 2013 September 2013
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS Total dividend per share 10.2% Headline earnings per share 11.6% (excluding Mediclinic refinancing costs) (14.1)% Headline earnings per share Intrinsic value per share 34.2% 2
Slide 3: Salient Features
SALIENT FEATURES 12 months 12 months % June 2013 June 2012 change Headline earnings (R’million) 4 387 5 113 (14.2) Headline earnings per share (HEPS) (cents) 854.3 994.6 (14.1) HEPS – excl Mediclinic refinancing costs1 (cents) 1 109.8 994.6 11.6 Total gross dividend per share (cents) 346.0 314.0 10.
Slide 4: Investment Activities: RCL Foods
INVESTMENT ACTIVITIES (for January 2013 to June 2013) RCL Foods (previously Rainbow Chicken) ‣ Early March 2013 RCL Foods concluded a rights offer of R3.9 billion to fund the acquisitions below: ‣ an effective 64.2% interest in Foodcorp for a total consideration of R1 026 million, on 1 May 2013 ‣ an
Slide 5: Investment Activities: DFA and Tax Disputes
INVESTMENT ACTIVITIES (for January 2013 to June 2013) Dark Fibre Africa (DFA) ‣ Remgro invested a further R157.4 million directly into DFA ‣ This increased Remgro’s total direct and indirect interest from 49.6% to 50.8% TAX DISPUTES ‣ Remgro had three unresolved tax disputes with SARS: ‣ two related
Slide 6: Summary of Comparable Headline Earnings
SUMMARY OF COMPARABLE HEADLINE EARNINGS 12 months 12 months % R’million June 2013 June 2012 change RMBH and FirstRand 2 052 1 770 15.9 Mediclinic (excluding once-off costs) 927 491 88.8 RMI Holdings 666 768 (13.3) Unilever SA 426 367 16.1 Distell 363 324 12.0 TSB 311 352 (11.6) Other investments 954
Slide 7: Contribution to Headline Earnings
CONTRIBUTION TO HEADLINE EARNINGS (excluding Mediclinic once-off costs, other investments, treasury and corporate costs) The reporting platforms under which the results of the investee companies are being reported, were changed for the year under review to align Remgro’s internal reporting with the
Slide 8: Summary of Comparable Headline Earnings
SUMMARY OF COMPARABLE HEADLINE EARNINGS 12 months 12 months % R’million June 2013 June 2012 change Food, liquor and home care 1 120 1 240 (9.7) Banking 2 052 1 770 15.9 Healthcare (excl Mediclinic refinancing costs) 927 491 88.8 Insurance 666 768 (13.3) Industrial 661 443 49.2 Infrastructure 196 144
Slide 9: Food, Liquor and Home Care
FOOD, LIQUOR AND HOME CARE Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Unilever SA 426 367 16.1 8 676 7 026 23.5 Distell 363 324 12.0 8 073 5 935 36.0 RCL Foods 20 197 (89.8) 6 759 3 140 115.3 TSB 311 352 (
Slide 10: Unilever SA
UNILEVER SA (25.8% effective interest) 12 months 12 months % R’million June 2013 June 2012 change Revenue 16 010 14 572 9.9 Profit after tax 1 784 1 739 2.6 ‣ The increase in revenue was mainly driven by: ‣ increased volumes in the Home Care, Beauty, Ice Cream and Savoury & Dressings categories; ‣ t
Slide 11: TSB
TSB (100% effective interest) 12 months 12 months R’million June 2013 June 2012 % change Revenue - Sugar 5 022 4 621 8.7 Headline earnings 311 352 (11.6) Apr’12 – Mar’13 2011/2012 Sugar production (tonnes) 560 244 615 046 (8.9) ‣ Revenue increased mainly on the back of higher sugar prices and an inc
Slide 12: Banking
BANKING Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change RMBH 1 444 1 261 14.5 15 541 13 758 13.0 FirstRand 608 509 19.4 6 359 5 801 9.6 Total 2 052 1 770 15.9 21 900 19 559 12.0 ‣ The strong operational perform
Slide 13: Healthcare and Insurance
HEALTHCARE Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Mediclinic 927 491 88.8 24 640 10 601 132.4 ‣ Mediclinic’s contribution to headline earnings was a loss of R385 million, including Remgro’s portion of
Slide 14: Industrial
INDUSTRIAL Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Air Products 180 181 (0.6) 3 126 2 774 12.7 KTH 149 93 60.2 2 425 1 667 45.5 Total SA 258 124 108.1 1 275 1 217 4.8 PGSI 10 1 900.0 571 585 (2.4) Wispe
Slide 15: Air Products and KTH
AIR PRODUCTS (50% effective interest) 12 months 12 months R’million March 2013 March 2012 % change Revenue 1 682 1 549 8.6 Operating profit 525 543 (3.3) ‣ Demand for large tonnage industrial gasses has shown little sign of recovery as steel output and resources demand remain mute ‣ Operating profit
Slide 16: Total SA
TOTAL SA (24.9% effective interest) 12 months 12 months % R’million June 2013 June 2012 change Revenue 37 767 34 396 9.8 Operating profit 1 049 810 29.5 Headline earnings 1 037 497 108.7 ‣ The improved results are mainly due to stock revaluation gains of R355 million (2012: stock revaluation losses
Slide 17: PGSI and Wispeco
PGSI (28.5% effective interest) 12 months 12 months R’million June 2013 June 2012 % change Revenue 3 398 3 138 8.3 Operating profit 100 86 16.3 ‣ The operating profit increase was driven by: ‣ an improvement in the economic climate, both domestically and internationally; and ‣ the weakening of the R
Slide 18: Infrastructure
INFRASTRUCTURE Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Grindrod 144 88 63.6 3 103 1 871 65.8 CIV Group 59 85 (30.6) 2 305 1 550 48.7 SEACOM - (27) 100.0 1 069 926 15.4 Other (7) (2) (250.0) 776 200 288.
Slide 19: CIV Group
CIV GROUP (43.8% effective interest) DFA (effective interest 50.8%) 12 months 12 months % R’million March 2013 March 2012 change Revenue 683 549 24.4 Operating profit 222 243 (8.6) Headline earnings contribution 25 22 13.6 ‣ As a consequence of the decision to focus on the telecommunications infrast
Slide 20: Media and Sport
MEDIA AND SPORT Headline earnings Intrinsic value 12 mnths 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Sabido 148 129 14.7 2 279 1 768 28.9 Other (29) (36) 19.4 605 330 83.3 Total 119 93 28.0 2 884 2 098 37.5 ‣ The “Other” interests consist primaril
Slide 21: Sabido
SABIDO (31.9% effective interest) 12 months 12 months % R’million March 2013 March 2012 change Revenue 2 118 1 884 12.4 Operating profit 739 706 4.7 Headline earnings (before amortisation) 502 441 13.8 Headline earnings (after amortisation) 468 407 15.0 ‣ Free-to-air service (e.tv) reported a signif
Slide 22: Other Investments, Treasury and Corporate Costs
OTHER INVESTMENTS, TREASURY AND CORPORATE COSTS Headline earnings/(loss) Intrinsic value 12 months 12 mnths % 12 mnths 12 mnths % R’million June 2013 June 2012 change June 2013 June 2012 change Other investments 57 17 235.3 2 204 1 329 65.8 Central treasury 3 140 (97.9) 2 733 8 327 (67.2) Other net
Slide 23: Summary of Intrinsic Value
SUMMARY OF INTRINSIC VALUE % % of R’million June 2013 June 2012 change Total Mediclinic 24 640 10 601 132.4 22.4 RMBH and FirstRand 21 900 19 559 12.0 20.0 RMI Holdings 11 331 7 810 45.1 10.3 Unilever SA 8 676 7 026 23.5 7.9 Distell 8 073 5 935 36.0 7.4 Other investments 35 124 30 882 13.7 32.0 Net
Slide 24: Contribution to Intrinsic Value
CONTRIBUTION TO INTRINSIC VALUE (excluding other investments, treasury, corporate costs and potential CGT) 30 June 2013 30 June 2012 2.8% 3.0% 6.4% 7.0% 9.3% 27.6% 7.6% 26.6% 11.0% 11.0% 15.0% 27.7% 21.2% 23.8% Food, liquor and home care Banking Healthcare Insurance Industrial Infrastructure Media a
Slide 25: Intrinsic Value
INTRINSIC VALUE June 2013 June 2012 % change Discount to Intrinsic value 7.3% 13.8% Intrinsic value – after CGT (Rand) 204.83 152.61 34.2 Closing share price - (Rand) 189.95 131.49 44.5 25
Slide 26: Total Cash at the Centre
TOTAL CASH AT THE CENTRE As at 30 June 2013 R’million Local Offshore Total Per Statement of Financial Position 3 581 640 4 221 Investment in money market funds 450 690 1 140 Less: Cash at operating subsidiaries (2 563) (65) (2 628) Cash at the centre 1 468 1 265 2 733 Cash held in the following curr
Slide 27: Cash at the Centre Movement
CASH AT THE CENTRE MOVEMENT 6 000 157 136 486 4 000 3 347 2 000 - -2 000 (7 438) -4 000 (1 712) -6 000 (405) (118) (47) (5 594) -8 000 Dividends Forex Interest and Investments Investments Dividends paid Treasury Remuneration Taxation Net cash received movement other sold and loans made and shares mo
Slide 28: Cash Dividend
CASH DIVIDEND 400 346 350 314 314 300 10.2% 63 Dividend due to year end 250 201 change Cents 188 200 Final Dividend 150 150 Interim Dividend 100 126 145 50 101 0 30 Jun 2011 30 Jun 2012 30 Jun 2013 ‣ 346 cents equates to a dividend cover of 2.5 times, based on HEPS (including Mediclinic’s once-off r
Slide 29: Strategy
STRATEGY Criteria Descriptions Geography • Southern Africa (particularly sub-Saharan Africa) Investment size • Make a meaningful impact Investment stake • Sufficient to exercise influence (>20%) Listed vs. unlisted • Unlisted is preferable Disposals • Ex cash flow growth business • No value to be ad
Slide 30: Thank You
THANK YOU FOR MORE INFORMATION VISIT OUR WEBSITE www.remgro.com 30
Slide 31: Changes to Reporting Platforms
CHANGES TO REPORTING PLATFORMS New reporting platforms Previous reporting platforms Food, liquor and home care Unilever, Distell, RCL Foods and TSB Healthcare Mediclinic Industrial Industrial Air Products, KTH, Total SA, PGSI, Wispeco Infrastructure Grindrod CIV Group, SEACOM, other Technology Media
Slide 32: Valuation of Unlisted Investments
VALUATION OF UNLISTED INVESTMENTS Factors taken into consideration in determining the directors’ valuation: ‣ Growth potential and risk; ‣ Profit history; and ‣ Underlying NAV; ‣ Cash flow projections Unlisted investment Valuation method Discount Unilever SA Discounted cash flow No Total SA Historic
Slide 33: Information on Unlisted Investments
INFORMATION ON UNLISTED INVESTMENTS Business Profile Food, liquor and home care Unilever SA Unilever manufactures and markets an extensive range of food and home and personal care products, while enjoying market leadership in most of its major categories. Well-known brands include Robertsons, Rama,
Slide 34: Information on Unlisted Investments
INFORMATION ON UNLISTED INVESTMENTS Business Profile Industrial KTH KTH is a leading black-owned investment company and has a strong and diversified asset portfolio covering the resources, industrial, media, financial services, healthcare, property and information technology sectors. Largest investm
Slide 35: Information on Unlisted Investments
INFORMATION ON UNLISTED INVESTMENTS Business Profile Media and sport Sabido Sabido has a range of media interests, which includes South Africa’s only private free-to-air television channel, e.tv, its sister news service, eNews Channel Africa (eNCA), Gauteng-based radio station, Yfm and various studi
Slide 36: Information on Unlisted Investments
INFORMATION ON UNLISTED INVESTMENTS Business Profile Other investments Business Business Partners is a specialist investment company providing Partners customised and integrated investments, mentorship and property management services for small and medium enterprises (SMEs) in South Africa. PRIF An