Remgro Limited · JSE:REM
Remgro — H1 FY2015 Earnings Presentation
33 slides from Remgro's earnings presentation, March 2015
Slide 1: Interim Results Presentation for the period ended 31 December 2014
I N T E R I M R E S U LT S P R E S E N TAT I O N FOR THE PERIOD ENDED 31 DECEMBER 2014 March 2015
Slide 2: Financial Highlights
F I N AN C I AL H I G H L I G H T S Intrinsic net asset value per share 15.7% (compared to 30 June 2014) Earnings per share 11.5% (0.1%) Headline earnings per share Interim dividend per share 8.3% 2
Slide 3: Salient Features
S AL I E N T F E AT U R E S 6 months 6 months % Dec 2014 Dec 2013 Change Earnings (R’million) 4 310 3 860 11.7 Earnings per share (EPS) (cents) 838.5 752.0 11.5 Headline earnings (R’million) 3 658 3 657 - Headline earnings per share (HEPS) (cents) 711.7 712.5 (0.1) Interim gross dividend per share (
Slide 4: Investment Activities for the Period to December 2014
I N V E S T M E N T AC T I V I T I E S F O R T H E P E R I O D T O D E C E M B E R 2 0 1 4 Community Investments Ventures Holdings (CIVH) Invested R56.6 million in CIVH during the period Equity interest increased marginally from 50.7% (June 2014) to 50.9% (December 2014) Grindrod Acquired a further
Slide 5: Summary of Headline Earnings
S U M M ARY O F H E AD L I N E E AR N I N G S 6 months 6 months % % of Cumulative R’million Dec 2014 Dec 2013 Change Total % of total RMBH and FirstRand 1 347 1 200 12.3 36.8 36.8 Mediclinic 670 622 7.7 18.3 55.1 RMI Holdings 549 426 28.9 15.0 70.1 RCL Foods (incl TSB) 473 202 134.2 12.9 83.0 Distel
Slide 6: Summary of Headline Earnings by Sector
S U M M ARY O F H E AD L I N E E AR N I N G S 6 months 6 months R’million Dec 2014 Dec 2013 % Change Food, liquor and home care 974 839 16.1 Banking 1 347 1 200 12.3 Healthcare 670 622 7.7 Insurance 549 426 28.9 Industrial 7 446 (98.4) Infrastructure 91 69 31.9 Media and sport 11 55 (80.0) Other inv
Slide 7: Contribution to Headline Earnings
C O N T R I B U T I O N TO H E AD L I N E E AR N I N G S (excluding other investments, treasury and corporate costs) 31 December 2014 31 December 2013 3.5% 2.1% 2.5% 0.2% 0.3% 10.0% 20.2% 15.0% 26.7% 12.0% 18.4% 14.8% 37.4% 36.9% Food, liquor and home care Banking Healthcare Insurance Industrial Inf
Slide 8: Food, Liquor and Home Care
F O O D , L I Q U O R AN D H O M E C AR E Headline earnings Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change RCL Foods 473 10 Nm 12 950 10 547 22.8 TSB (2014 only H1) - 192 Nm - - - Distell 306 357 (14.3) 9 192 9 336 (1.5) Unilever SA 195 28
Slide 9: Food, Liquor and Home Care: Unilever SA
F O O D , L I Q U O R AN D H O M E C AR E UNILEVER SA (25.8% effective interest) 6 months 6 months % R’million Dec 2014 Dec 2013 Change Profit after tax 751 1 029 (27.0) ‣ The reasons for the decrease in profits are: ‣ the weak economic environment; ‣ an increase in supply chain costs; and ‣ brand a
Slide 10: Banking
B AN K I N G Headline earnings Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change RMBH 950 846 12.3 25 378 20 743 22.3 FirstRand 397 354 12.1 11 116 8 957 24.1 Total 1 347 1 200 12.3 36 494 29 700 22.9 ‣ RMBH and FirstRand reported good headli
Slide 11: Healthcare and Insurance
H E ALT H C AR E Headline earnings Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change Mediclinic 670 622 7.7 36 120 29 316 23.2 ‣ Mediclinic’s comparative period included a once-off past service cost credit of R172 million – excluding this, Me
Slide 12: Industrial
I N D U S T R I AL Headline earnings/(loss) Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change Air Products 108 114 (5.3) 3 839 3 610 6.3 KTH (62) 93 (166.7) 2 640 2 481 6.4 Total SA (112) 123 (191.1) 1 657 1 596 3.8 Wispeco 48 53 (9.4) 862 77
Slide 13: Industrial: Air Products and KTH
I N D U S T R I AL AIR PRODUCTS (50% effective interest) 6 months 6 months % R’million Sep 2014 Sep 2013 Change Revenue 1 043 987 5.7 Operating profit 321 321 - ‣ The results were negatively impacted mainly by: ‣ a claims settlement of R10 million in the chemicals business; and ‣ the non-recovery of
Slide 14: Industrial: Total SA
I N D U S T R I AL TOTAL SA (24.9% effective interest) 6 mnths 6 mnths % R’million Dec 2014 Dec 2013 Change Revenue 25 292 23 213 9.0 Operating (loss)/profit (669) 641 (204.4) Headline (loss)/earnings (450) 493 (191.3) ‣ Revenue increased mainly due to a marketing strategy to increase volumes to the
Slide 15: Industrial: PGSI and Wispeco
I N D U S T R I AL PGSI (37.7% effective interest) 6 mnths 6 mnths % R’million Dec 2014 Dec 2013 Change Revenue 1 974 1 793 10.1 Operating profit 225 239 (5.9) ‣ The results were negatively impacted by: ‣ a weaker performance in the automotive sector; ‣ lacklustre demand from OEM markets offset by i
Slide 16: Infrastructure
I N F R AS T R U C T U R E Headline earnings/(loss) Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change Grindrod 76 45 68.9 3 807 4 513 (15.6) CIV group 5 28 (82.1) 2 576 2 282 12.9 SEACOM 8 (8) 200.0 1 049 991 5.9 Other 2 4 (50.0) 869 829 4.8
Slide 17: Infrastructure: CIV Holdings
I N F R AS T R U C T U R E CIV HOLDINGS (50.9% effective interest) DFA 6 months 6 months R’million Sep 2014 Sep 2013 % Change Revenue 468 409 14.4 Operating profit 134 133 0.8 Headline earnings contribution 4 14 (71.4) ‣ The salient features of the results were: ‣ Solid growth in annuity income of 3
Slide 18: Media and Sport
M E D I A AN D S P O R T Headline earnings/(loss) Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change Sabido 44 79 (44.3) 3 259 2 528 28.9 Other (33) (24) (37.5) 417 533 (21.8) Total 11 55 (80.0) 3 676 3 061 20.1 18
Slide 19: Media and Sport: Sabido
M E D I A AN D S P O R T SABIDO (31.9% effective interest) 6 months 6 months % R’million Sep 2014 Sep 2013 Change Revenue 1 201 1 140 5.4 Operating profit 246 390 (36.9) Headline earnings (before amortisation) 49 84 (41.7) Headline earnings (after amortisation) 44 79 (44.3) ‣ The decrease in Sabido’
Slide 20: Other Investments, Treasury and Corporate Costs
O T H E R I N V E S T M E N T S , T R E AS U RY AN D C O R P O R AT E COSTS Headline earnings/(loss) Intrinsic value 6 mnths 6 mnths % At 31 Dec At 30 Jun % R’million Dec 2014 Dec 2013 Change 2014 2014 Change Other investments 39 35 11.4 3 040 2 767 9.9 Central treasury 57 36 58.3 2 924 3 264 (10.4)
Slide 21: Summary of Intrinsic Value
S U M M ARY O F I N T R I N S I C VAL U E % R’million 31 Dec 2014 30 Jun 2014 Change % of Total RMBH and FirstRand 36 494 29 700 22.9 24.0 Mediclinic 36 120 29 316 23.2 23.8 RMI Holdings 18 372 14 739 24.6 12.1 RCL Foods 12 950 10 547 22.8 8.5 Distell 9 192 9 336 (1.5) 6.1 Other investments 38 736 3
Slide 22: Contribution to Intrinsic Value
C O N T R I B U T I O N TO I N T R I N S I C VAL U E (excluding other investments, treasury, corporate costs and potential CGT) 31 December 2014 30 June 2014 2.5% 2.5% 7.0% 5.8% 7.5% 23.4% 6.8% 21.6% 11.9% 12.8% 24.0% 23.7% 25.4% 25.1% Food, liquor and home care Banking Healthcare Insurance Industri
Slide 23: Intrinsic Value
I N T R I N S I C VAL U E December 2014 June 2014 % Change Discount to Intrinsic value 10.7% 6.5% Intrinsic value – after CGT (Rand) 284.48 245.96 15.7 Closing share price - (Rand) 253.99 230.00 10.4 23
Slide 24: Total Cash at the Centre
TO TAL C AS H AT T H E C E N T R E As at 31 December 2014 R’million Local Offshore Total Per Statement of Financial Position 3 079 549 3 628 Investment in money market funds 322 460 782 Less: Cash at operating subsidiaries (1 472) (14) (1 486) Cash at the centre 1 929 995 2 924 Cash held in the foll
Slide 25: Cash at the Centre Movement
C AS H AT T H E C E N T R E M O V E M E N T 2 000 72 145 1 497 1 500 1 000 (842) 500 (1 198) - (7) (7) (340) -500 Dividends received Investments sold Exchange rate Dividends paid Investments made Taxation paid Other Net cash and loans repaid * revaluation of and loans granted ** movement offshore ca
Slide 26: Cash Dividend
C AS H D I V I D E N D 450 389 400 346 350 300 233 Cents 250 201 8.3% Final Dividend 200 Interim Dividend 150 100 145 156 169 50 0 30 Jun 2013 30 Jun 2014 30 Jun 2015 ‣ The interim dividend of 169 cents represents an increase of 8.3% from the December 2013 dividend ‣ Remgro and its wholly-owned subs
Slide 27: Thank You
THANK YOU FOR MORE INFORMATION VISIT OUR WEBSITE www.remgro.com
Slide 28: Strategy
S T R AT E G Y Criteria Descriptions Geography • South Africa and other African countries through investee companies Investment size • Make a meaningful impact Investment stake • Sufficient to exercise influence (>20%) Listed vs. unlisted • Unlisted is preferable Disposals • Ex cash flow growth busi
Slide 29: Valuation of Unlisted Investments
VAL U AT I O N O F U N L I S T E D I N V E S T M E N T S 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 fl
Slide 30: Information on Unlisted Investments
I N F O R M AT I O N O N U N L I S T E D I N V E S T M E N T S 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
Slide 31: Information on Unlisted Investments
I N F O R M AT I O N O N U N L I S T E D I N V E S T M E N T S 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, power, financial services, healthcare, property and information t
Slide 32: Information on Unlisted Investments
I N F O R M AT I O N O N U N L I S T E D I N V E S T M E N T S Business Profile Media and sport Sabido Sabido has a range of media interests, which includes e.tv, eNews Channel Africa (eNCA), Gauteng-based radio station, Yfm and various studio and facilities businesses. It also launched its free-to-
Slide 33: Information on Unlisted Investments
I N F O R M AT I O N O N U N L I S T E D I N V E S T M E N T S Business Profile Other investments Business Business Partners is a specialist investment company providing risk Partners finance, mentorship, property accommodation, as well as management services to small and medium enterprises mainly i