Remgro Limited · JSE:REM
Remgro — H1 2006 Earnings Presentation
30 slides from Remgro's earnings presentation, Nov 25, 2005
Slide 1: Results Presentation
Results Presentation For the six months ended 30 September 2005 25 November 2005
Slide 2: FINANCIAL HIGHLIGHTS SEGMENTAL ANALYSIS UNDERLYING RESULTS
FINANCIAL HIGHLIGHTS SEGMENTAL ANALYSIS UNDERLYING RESULTS INTRINSIC VALUE SHARE INFO QUESTIONS
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 4: Financial Highlights
Financial Highlights Interim Interim Sep % Final Sep ‘05 ’04(1) change Mar ‘05(1) Headline earnings (R’m) 2 809 2 459 14.2 5 006 Headline EPS (cents) 579.4 491.4 17.9 1 006.7 Basic EPS (cents) 1 203.5 786.6 53.0 1 721.1 DPS - Ordinary (cents) 133.0 116.0 14.7 314.0 - Special (cents) 600.0(2) - - Int
Slide 5: Accounting changes
Accounting changes • Remgro applied International Financial Reporting Standards (“IFRS”) for the six months ended 30 September 2005 • Certain associated companies (FirstRand, RMBH and Nampak) were not in a position to provide Remgro with IFRS information due to later reporting periods. These compani
Slide 6: Corporate activity since March 2005
Corporate activity since March 2005 Disposals • ABSA During July 2005, Remgro sold its entire interest in ABSA for a consideration of R5 064 million (after tax gain - R2 570 million) • FirstRand In May 2005 FirstRand announced that its BEE transaction had been implemented and in terms of the scheme,
Slide 7: Corporate activity since March 2005
Corporate activity since March 2005 Acquisitions • Share repurchases Remgro repurchased 5 187 563 shares (1.1% of Remgro’s issued share capital) at an average price of R110.46 per share for a total amount of R573.0 million during the six months ended 30 September 2005. Together with previous years r
Slide 8: KTI transaction
KTI transaction On 29 September 2005, Remgro announced the proposed acquisition of a 37% interest in Kagiso Trust Investments (“KTI”), in equal shares from Liberty Life and Nedbank, for an aggregate consideration of R450 million Rationale • KTI is an established empowered company with a sound invest
Slide 9: Other subsequent events
Other subsequent events • Nampak On 29 September 2005 Nampak shareholders approved its BEE transaction and the operative date of the scheme was 31 October 2005. Remgro sold 10 Nampak shares for every 100 shares held at R15.13 per share. Remgro received R131.3 million on 31 October 2005 and its inter
Slide 10: Application of cash at the centre
Application of cash at the centre • First priority is to invest cash on behalf of shareholders – New investments – Increased exposure to existing investments • Continue the share repurchase programme, combined with • Ongoing real growth in dividends to shareholders; and • Special dividends from time
Slide 11: Segmental Analysis
SEGMENTAL ANALYSIS
Slide 12: Segmental headline earnings performance
Segmental headline earnings performance September 2005 Corporate finance Strong performances from: & other 1% • Tobacco interests +22.5% Mining interests 3% • Financial services +14.4% Industrial interests 19% Tobacco 45% Off-set by: Financial services 32% • Mining interests -6.1% • Industrial inter
Slide 13: Underlying Results
UNDERLYING RESULTS
Slide 14: Summary of underlying performance
Summary of underlying performance R’million Sep ‘05 Sep ’04 %change Tobacco interests 1 264 1 032 22.5 Financial services 903 789 14.4 Industrial interests 535 543 (1.5) Mining interests 77 82 (6.1) Corporate 30 13 130.8 Total 2 809 2 459 14.2 HEPS (cents) 579.4 491.4 17.9 14
Slide 15: Tobacco
Tobacco Headline earnings % Intrinsic value % R’million Sep’05 Sep’04 change Sep’05 Mar’05 change R&R / BAT 1 264 1 032 22.5 30 919 26 276 17.7 Avg ZAR:£ 11.72 11.75 (0.3) rate Highlights • R&R’s contribution to headline earnings increased by 22.5% and was mainly due to Remgro’s higher indirect inte
Slide 16: Tobacco (cont'd)
Tobacco (cont’d) £’million Sep’05 Sep’04 Earnings attributable to BAT 1 011 843 (excl non-recurring items) Movement in NPV of preference shares & dividends - (8) 1 011 835 R&R’s share of earnings 290 238 Movement in NPV of preference shares & dividends - 8 Interest income 15 17 R&R’s income 305 263
Slide 17: Tobacco (cont'd)
Tobacco (cont’d) • Remgro’s effective interest in BAT increased from 9.4% in September 2004 to 10.2% mainly as a result of the investment in participation securities issued by R&R Holdings • BAT’s operating profit was 43% lower due to the impact of the £1 392 million gain, in the comparative period
Slide 18: Financial
Financial Headline earnings % Intrinsic value % R’million Sep’05 Sep’04 change Sep’05 Mar’05 change ABSA 123 228 (46.1) - 4 629 nm FirstRand 420 296 41.9 8 155 6 941 17.5 RMBH 360 265 35.8 7 182 5 874 22.3 Other - - - 1 146 nm Total 903 789 14.4 15 338 17 590 (12.8) Highlights • The ABSA stake was s
Slide 19: Industrial
Industrial Headline earnings % Intrinsic value % R’million Sep’05 Sep’04 change Sep’05 Mar’05 change Medi-Clinic 143 125 14.4 3 393 2 732 24.2 Rainbow 95 52 82.7 1 481 1 124 31.8 Total SA 83 105 (21.0) 1 572 1 187 32.4 Distell 57 42 35.7 1 937 1 405 37.9 UBR 53 68 (22.1) 1 709 1 711 (0.1) Nampak 45
Slide 20: Industrial (cont'd)
Industrial (cont’d) Improved performances were mainly due to: • Air Products Due to increased demand for gaseous products in all industries, Air Products reported a substantial increase in headline earnings • TSB Although the national sugar industry production has increased due to better climatic co
Slide 21: Mining
Mining Headline earnings % Intrinsic value % R’million Sep’05 Sep’04 change Sep’05 Mar’05 change Implats 60 53 13.2 2 412 1 751 37.8 Trans Hex 16 28 (42.9) 520 529 (1.7) Gencor 1 1 - 6 6 - Total 77 82 (6.1) 2 938 2 286 28.5 Highlights • The decrease of 6.1% is mainly due to the lower income from Tra
Slide 22: Corporate finance & other
Corporate finance & other Headline earnings R’million Sep’05 Sep’04 Central treasury 53 50 Corporate costs (1) (23) (37) Total 30 13 Intrinsic value R’million Sep’05 Mar’05 Sundry (liabilities) / assets (2) (134) 355 Note: (1) The decrease in corporate costs resulted from reduced share scheme costs
Slide 23: Cash movement at the centre
Cash movement at the centre 8,000 5 782 (1) (965) 7,000 (2 918) 6,000 5,000 R million (561) 4,000 3 005 3,000 919 38 2,000 1,000 710 0 movement buybacks income Investments dividend dividends dividends dividends Ordinary Other Special Share realised BAT Other Cash paid paid (1) Investments realised c
Slide 24: Total cash
Total cash At 30 Sep 2005 R’million Local Offshore Total Per consolidated balance sheet 3 929 1 005 4 934 Less: Cash from other operating subsidiaries (835) - (835) Cash at the centre 3 094 1 005 4 099 Attributable share of R&R’s cash - 2 344 2 344 Available cash 3 094 3 349 6 443 Offshore cash at t
Slide 25: Intrinsic Value
INTRINSIC VALUE
Slide 26: Remgro's intrinsic value
Remgro’s intrinsic value R’million Sep ‘05 March ‘05 %change Tobacco interests in GBP (£’m) 2 761 2 236 23.5 Tobacco interests 30 919 26 276 17.7 Financial services 15 338 17 590 (12.8) Industrial interests 13 852 11 979 15.6 Mining interests 2 938 2 286 28.5 Other interests (134) 355 (137.8) Cash a
Slide 27: Intrinsic value vs share price
Intrinsic value vs share price Discount 31/3/05: 21.8% Discount 30/9/05: 20.9% 14000 22/11/05: 20.1% 11500 Cents 9000 6500 4000 Jun-04 Jun-05 Sep-03 Dec-03 Sep-04 Dec-04 Sep-05 Mar-04 Mar-05 Intrinsic value Remgro share price • Remgro traded at a 20.9% discount as at 30 September 2005 to its intrins
Slide 28: Share Info
Kemgro Limited
Slide 29: Share price performance
Share price performance Remgro's relative share performance (based to 100) 300 250 200 150 100 50 29/06/2001 30/09/2002 31/12/2003 29/09/2000 29/12/2000 30/03/2001 28/09/2001 31/12/2001 28/03/2002 28/06/2002 31/12/2002 31/03/2003 30/06/2003 30/09/2003 31/03/2004 30/06/2004 30/09/2004 31/12/2004 31/0
Slide 30: Questions
Kemgro Limited