Remgro Limited · JSE:REM
Remgro — H1 2012 Earnings Presentation
31 slides from Remgro's earnings presentation, February 2012
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION for the six months ended 31 December 2011
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS • Interim dividend per share 24.8% • Comparable headline earnings per share 22.6% • Comparable headline earnings 22.8% • Intrinsic value per share (since 30 June 2011) 5.2% 2
Slide 3: Salient Features
SALIENT FEATURES 6 months 6 months 6 months Dec 2011 Dec 2010 Sep 2010 Headline earnings (R’m) 2 649 2 157 2 207 + 22.8% + 20.0% Headline earnings per share (cents) 515.5 420.4 430.2 + 22.6% + 19.8% Earnings per share (cents) 767.5 Na 468.8 + 63.7% Interim dividend per share (cents) 126.0 Na 101.0 N
Slide 4: Contribution to Headline Earnings
CONTRIBUTION TO HEADLINE EARNINGS (EXCL OTHER, TREASURY AND CORPORATE COSTS) Six months to 31 December 2011 Six months to 31 December 2010 4.2% 1.2% 2.1% 1.5% 1.6% 3.3% 42.8% 43.6% 50.3% 49.4% Financial Industrial Media Financial Industrial Media Mining Technology Mining Technology 4
Slide 5: Summary of Headline Earnings
SUMMARY OF HEADLINE EARNINGS 6 months 6 months R’million % Change Dec 2011 Dec 2010 Financial services 20.7 1 136 941 Industrial interests 24.9 1 334 1 068 Media interests 18.2 39 33 Mining interests 55.6 112 72 Technology interests (32.6) 31 46 Other investments 8.3 13 12 Central treasury 66.7 60 3
Slide 6: Investment Activities: July to Dec 2011
INVESTMENT ACTIVITIES: JULY TO DEC 2011 KTI and Tiso Group • KTI and Tiso Group merged effective 1 July 2011 with Remgro’s effective interest in the new Kagiso Tiso Holdings (Pty) Ltd being 25.1% Tracker • During October 2011 the investment in Tracker was sold for a total consideration of R1 226.5 m
Slide 7: Grindrod – The Investment Case
GRINDROD – THE INVESTMENT CASE • Remgro has identified African infrastructure as a desirable investment destination • Presents a profitable and long term investment opportunity with growth potential • Requires significant capital, long term horizons and competent management • Africa requires infrast
Slide 8: Financial Services
FINANCIAL SERVICES Headline earnings Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 RMBH 22.7 594 484 (9.1) 10 768 11 846 RMI Holdings Nm 315 - (5.9) 6 025 6 404 FirstRand (50.3) 227 457 4.5 4 559 4 363 Total 20.7 1 136 941 (5.6) 21 352 22 613
Slide 9: Industrial Interests: Listed Investments
INDUSTRIAL INTERESTS: LISTED INVESTMENTS Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 Mediclinic 12.4 191 170 8.4 9 512 8 776 Distell 24.3 261 210 3.9 4 908 4 725 Rainbow Chicken 13.7 149 131 (3.2) 3 345 3 455 Grindr
Slide 10: Industrial Interests: Unlisted Investments
INDUSTRIAL INTERESTS: UNLISTED INVESTMENTS (Industrial interests – continued) Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 Balance B/F 10.6 605 547 14.7 19 976 17 413 Unilever SA 29.8 218 168 13.6 6 034 5 313 Tsb Sug
Slide 11: Unilever SA (25.8% interest)
UNILEVER SA (25.8%interest) (Industrial interests – continued) % 6 Months 6 Months R’million Change 31 Dec 2011 31 Dec 2010 Revenue 15.1 7 680 6 672 Profit after tax 72.0 1 108 644 Headline earnings 29.8 846 652 • The increase in revenue was mainly driven by: • volume growth in the Powders, Savoury
Slide 12: Tsb Sugar (100% interest)
TSB SUGAR (100% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 31 Dec 2011 31 Dec 2010 Revenue (5.6) 2 441 2 586 - Sugar (including 14.4% exports) Operating profit 31.1 320 244 Headline earnings 79.1 308 172 Sugar production (tons) 5.7 424 863 402 060 • Revenue was
Slide 13: Total SA (24.9% interest)
TOTAL SA (24.9% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 31 Dec 2011 31 Dec 2010 Revenue 38.7 15 378 11 087 Operating profit 100.6 630 314 Headline earnings Nm 471 5 • The good performance is mainly due to: • stock revaluation gains of R300 million (2010: rev
Slide 14: Air Products and Wispeco
AIR PRODUCTS (50% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 30 Sep 2011 30 Sep 2010 Revenue 6.8 787 737 Operating profit 29.0 289 224 Headline earnings 39.1 193 137 • Operating profit positively impacted by mark-to-market profits of R30 million on forex contra
Slide 15: KTH (27.5% interest)
KTH (27.5% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 31 Dec 2011 31 Dec 2010 Headline loss Na (133) - Na: Not available due to the new entity only formed effective 1 July 2011, therefore there are no comparative results • KTH was formed through the merger of K
Slide 16: PGSI (28.5% interest)
PGSI (28.5% interest) (Industrial interests – continued) 6 Months 6 Months % Change R’million 31 Dec 2011 31 Dec 2010 Revenue 2.1 1 617 1 584 Operating profit (48.8) 43 84 Headline earnings/(loss) 228.6 9 (7) • The reduction in operating profit was primarily due to: • a much weaker domestic market,
Slide 17: Media Interests
MEDIA INTERESTS Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 Sabido 33.3 72 54 31.0 1 841 1 405 MARC (50.0) 1 2 - 168 168 Other interests (47.8) (34) (23) Nm - 16 Total 18.2 39 33 26.4 2 009 1 589 • MARC’s lower earn
Slide 18: Sabido (31.5% interest)
SABIDO (31.5% interest) (Media interests – continued) % 6 Months 6 Months R’million Change 30 Sep 2011 30 Sep 2010 Revenue 21.6 930 765 Operating profit 40.2 366 261 Headline earnings (after amortisation) 33.9 229 171 • Sabido has a range of media interests, the most significant being e.tv and eNews
Slide 19: Mining Interests
MINING INTERESTS Headline earnings Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 Implats 55.6 112 72 (8.1) 4 466 4 862 19
Slide 20: Technology Interests
TECHNOLOGY INTERESTS Headline earnings/(loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 CIV group (9.8) 37 41 (5.6) 1 167 1 236 SEACOM 5.0 (19) (20) 0.9 1 067 1 057 Other Nm 13 2 (6.1) 261 278 Tracker - - 23 Na - 1 196 Total (32.6) 31 46
Slide 21: CIV Group
CIV GROUP (Technology interests – continued) CIV FNS (incl DFA) (43.8% interest) 6 Months 6 Months % Change R’million 30 Sep 2011 30 Sep 2010 Revenue 10.9 214 193 Operating profit (47.7) 45 86 Headline earnings (55.9) 26 59 • Active in the power, telecommunication and information technology sectors
Slide 22: SEACOM (25% Interest)
SEACOM (25% INTEREST) (Technology interests – continued) • In terms of the agreement between the shareholders of SEACOM, no financial disclosure is allowed • SEACOM launched the first terabit undersea fibre-optic cable to connect Southern and Eastern Africa with Europe and Asia in July 2009 • The ca
Slide 23: Other Investments, Treasury and Corporate Costs
OTHER INVESTMENTS, TREASURY AND CORPORATE COSTS Headline earnings / (loss) Intrinsic value % 6 Months 6 Months % 31 Dec 30 Jun R’million Change Dec 2011 Dec 2010 Change 2011 2011 Other investments 8.3 13 12 18.8 753 634 Central treasury 66.7 60 36 40.8 8 242 5 852 Other net corporate costs (49.0) (7
Slide 24: Summary of Intrinsic Value
SUMMARY OF INTRINSIC VALUE As at As at R’million 31 Dec 2011 30 Jun 2011 % Change % of Total RMBH and FirstRand 15 327 16 209 (5.4) 20.3 Mediclinic 9 512 8 776 8.4 12.6 Unilever 6 034 5 313 13.6 8.0 RMI Holdings 6 025 6 404 (5.9) 7.9 Distell 4 908 4 725 3.9 6.5 Other investments 33 820 30 387 11.3 4
Slide 25: Valuation of Unlisted Investments
VALUATION OF UNLISTED INVESTMENTS Factors taken into consideration in determining the directors’ valuation: • Growth potential and risk; • Underlying NAV; • Profit history; and • Cash flow projections Unlisted investment Valuation method Discount Unilever SA Discounted cash flow No Total SA Historic
Slide 26: Intrinsic Value
INTRINSIC VALUE As at As at 31 Dec 2011 30 Jun 2011 % Change Discount to NAV 17.0% 17.9% - Intrinsic value – after CGT (Rand) 142.99 135.97 5.2 - Closing share price (Rand) 118.62 111.60 6.3 26
Slide 27: Total Cash at the Centre
TOTAL CASH AT THE CENTRE As at 31 Dec 2011 R’million Local Offshore Total Per Statement of financial position 3 273 2 094 5 367 Investment money market funds - 2 335 2 335 Cash at operating subsidiaries 564 (24) 540 Cash at the centre 3 837 4 405 8 242 Cash held in the following currencies % of tota
Slide 28: Cash at the Centre Movement
CASH AT THE CENTRE MOVEMENT 7 000 6 000 565 (2 120) 1 878 5 000 4 000 (1 095) 3 382 3 000 (109) (108) (3) 2 390 2 000 1 000 - Investments Dividends Forex Investments Dividends Assets Taxation Other Net cash sold and received movement made and paid purchased paid movement loans repaid loans (1) grant
Slide 29: Dividend Information
DIVIDEND INFORMATION 350 314 300 63 250 209 200 Final Dividend 150 150 Interim Dividend 125 100 50 101 126 84 0 31 March 2010 30 June 2011 31 December 2011 • The interim dividend of 126 cents represents a 24.8% period-on-period increase • The total dividend for the 15 months was increased by 63 cent
Slide 30: Events After December 2011
EVENTS AFTER 31 DECEMBER 2011 Dark Fibre Africa • Since 31 December 2011 Remgro invested a further R150.0 million of the committed capital amount of R248.0 million directly into Dark Fibre Africa • Remgro’s effective interest will increase to 49.6% (31 December 2011: 46.5%) Dorbyl • During February
Slide 31: For More Information Visit Our Website
FOR MORE INFORMATION VISIT OUR WEBSITE WWW.REMGRO.COM