Transcript Name of Presentation - Bidvest

Audited Results
18
For the twelve months ended
June 30 2006
Agenda
Introduction
Financial Results
Segmental Outlook
Group Outlook
Appendices:
 Appendix 1: Divisional Results
 Appendix 2: Historic Performance
 Appendix 3: Impact of external environment on Bidvest - various
outcomes
Introduction
Financials
Segmentals
Group Outlook
Introduction
Brian Joffe
Introduction
Financials
Segmentals
Group Outlook
We are not hostage to our environment; we shape our
future
Consistent HEPS increase since listing
900
45
800
40
Cents per share
30
600
25
500
20
400
15
300
10
200
5
100
0
BVT Nominal HEPS
'0
6
'0
5
'0
4
'0
3
'0
2
'0
1
00
20
99
98
97
96
95
94
93
92
-5
91
0
BVT Real HEPS growth (%)
Bidvest CAGR over the last 15 years:
+26%
(17% real growth)
Note:
1. All nominal HEPS numbers are present valued to 2006 money
2. HEPS Deflator = avg. 15-year inflation rate of 7,5%
Introduction
Introduction
Financials
Segmentals
Group Outlook
Percentage real growth
35
700
We are not hostage to our environment; we shape our
future
40
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
91
92
93
94
95
96
97
98
99
2000
'01
'02
'03
'04
'05
'06
-5
-5
BVT Real HEPS growth (%)
Total SA GDP (%)
Tertiary sector GDP (%)
Bidvest CAGR over the last 15 years:
+26%
(17% real growth)
Note:
1. All nominal HEPS numbers are present valued to 2006 money
2. HEPS Deflator = avg. 15-year inflation rate of 7,5%
3. 2006 Tertiary GDP and Total GDP numbers are estimates
Introduction
Financials
Segmentals
Introduction
Group Outlook
Percentage real growth
Percentage real growth
Since listing, Bidvest’s REAL HEPS has outperformed GDP by an
average of more than 5 times
45
45
F2006 review
Corrective Action in F2006
Key messages in F2006
20% growth in trading profit (17% organic) Dart Line exited beginning
H2 at £59m – at significant
premium to carrying value
Strong revenues (volume gains); flat
Volume Distribution France
average exchange rate against Sterling
exited beginning H2
Cost pressures
BNS sold to BCX for R17m
in H1
Deli XL acquisition (effective 12/9/05)
Lithotech France sold for €1
contributed 11cps (1,7%)
in H2 (including liabilities)
Potential dilution from Dinatla transaction Group reorganisation
partially addressed through share
buybacks
R1,5bn record capex spent across the
board
Introduction
Introduction
Financials
Segmentals
Group Outlook
Group reorganisation
Board changes:
 Size reduced from 32 to 24 members
 All major business units represented
 Strengthened non-executive
 Strengthened BEE representation
 Appointment of David Cleasby as FD designate
Group reorganised to:
 Realise synergies, cross-selling opportunities and economies of
scale between product and client categories
 Seamless executive succession
Introduction
Introduction
Financials
Segmentals
Group Outlook
Group reorganisation (contd)
Bidfreight
Bid Industrial
& Commercial
Products
Introduction
Introduction
Introduction
Bidserv
(incl. Renfin
& Konica
Minolta)
Bidpaper
Plus
Financials
Financials
Bidvest Europe
Bid Auto
Segmentals
Group
Bidvest
Australasia
Bidfood
(Caterplus &
Combined
Foods)
Bid Prop
Corporate
Group
Outlook
Outlook
BEE update
 Refinancing by Dinatla due by December 2006
 5m share buyback to partially neutralise the effect of
pending 18m options
 Partnership entrenched
 BEE codes
 Lock-ins to be addressed
 Companies to get accreditation
 Bidvest transformation progressing
Introduction
Introduction
Introduction
Financials
Financials
Group
Segmentals
Outlook
Group
Outlook
F2006 results summary
Revenue
+23% to R77,3bn
Trading Profit
+20% to R3,7bn
Headline earnings
+22% to R2,4bn
HEPS
+23% to 804,6cps
DPS
+21% to 369,0cps
ROFE
53% in F2005 vs 54% in F2006
Note: IFRS compliant
Introduction
Introduction
Financials
Segmentals
Group Outlook
Segmental performance
Revenue (Rm)
Segment
F2005
% ch.
Bidfreight
13 268,3
Trading Profit (Rm)
F2005
% ch.
F2006
+17,6
15 601,9 455,9
+17,8
536,9
4 172,3
+10,0
4 587,8 466,9
+18,8
544,7
14 836,5
+49,2
22 132,0 532,8
+22,2
651,2
Bidvest Australasia
5 691,1
+14,3
6 505,8 163,8
+33,9
219,4
Bidfood
3 254,6
+12,7
3 666,4 316,2
-5,2
299,8
Bid Industrial and
Commercial Products
5 643,2
+19,1
6 722,2 383,3
+26,1
483,3
Bidpaper Plus
1 333,8
+31,0
1 747,7 176,9
+14,2
202,0
13 629,0
+18,8
16 197,1 474,7
+30,9
621,3
Bidserv
Bidvest Europe
Bid Auto
F2006
Due to time delays caused by IFRS changes, segmental comparisons pre-reorganisation will be
posted on the Bidvest website
Financials
Group Outlook
Segmentals
Introduction
Introduction
Financial Results
David Cleasby
Introduction
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Revenue
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
 Includes 1st time contribution of R5,6bn by Deli XL (9,5
months)
 Like-for-like revenue growth of 15%
NOTE : Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Revenue
Trading profit
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
3 677,3
+20,1
3 062,6
Trading
margins*
2006
2005
Local
5,8%
5,9%
Increased contribution from McCarthy, lower
contribution from Bidfood
Offshore
3,3%
3,2%
Deli XL’s contribution at lower margins; increased
margin from Australasia
Group
4,8%
5,0%
*Trading profit and margin from continuing businesses
NOTE: Foreign businesses = 27,8% (R1016,1m) contribution to Trading Income vs 24,2% (R738,3m) in
F2005
NOTE : Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
Trading profit
3 677,3
+20,1
3 062,6
Net finance expense
(342,4)
+20,1
(285,1)
Revenue
 Offshore interest of R76,2m vs local interest of R266,1m
 Net debt offshore of R0,1bn vs local net debt of R1,4bn
 Largely funding of capex, Deli XL and share buybacks
NOTE : Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
Trading profit
3 677,3
+20,1
3 062,6
Net finance expense
(342,4)
+20,1
(285,1)
48,9
+25,7
38,9
Revenue
Associate Income
 Associates:Tiger Wheels, Enviroserv, Compu-clearing
 Increased profit largely due to Enviroserv and first full
year of Tiger Wheels
NOTE : Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
Trading profit
3 677,3
+20,1
3 062,6
Net finance expense
(342,4)
+20,1
(285,1)
48,9
+25,7
38,9
(933,4)
+17,0
(797,8)
Revenue
Associate Income
Taxation
Effective tax
rates
F2006
F2005
Local
26,3%
29,1%
Lower STC and utilisation of assessed tax
losses
Offshore
30,3%
28,7%
Higher tax rates in Benelux countries
NOTE
:
Group
27,5% 28,8%
1. Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
NOTE
: Constant
currency in
comparison
unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
2. H1:H2
split available
appendices
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
Trading profit
3 677,3
+20,1
3 062,6
Net finance expense
(342,4)
+20,1
(285,1)
48,9
+25,7
38,9
(933,4)
+17,0
(797,8)
Revenue
Associate Income
Taxation
Minority interests
(75,8)
(11,1)
Improved performance from Namsov
NOTE : Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
Trading profit
3 677,3
+20,1
3 062,6
Net finance expense
(342,4)
+20,1
(285,1)
48,9
+25,7
38,9
(933,4)
+17,0
(797,8)
Revenue
Associate Income
Taxation
Minority interests
(75,8)
Headline earnings
2 413,5
(11,1)
+21,5
1 987,0
Earnings
 Total foreign headline earnings = 27% of Group (23% in F2005)
NOTE : Constant currency comparison unnecesary due to immaterial currency movement from F2005 to F2006 (0.8%)
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Avg
R/£ 11.43
Year ended June 30 2006
Rm’s
Avg
R/£ 11.53
2006
% ch vs 2005
2005
77 276,5
+23,0
62 811,8
Trading profit
3 677,3
+20,1
3 062,6
Net finance expense
(342,4)
+20,1
(285,1)
48,9
+25,7
38,9
(933,4)
+17,0
(797,8)
Revenue
Associate Income
Taxation
Minority interests
(75,8)
(11,1)
Headline earnings
2 413,5
+21,5
1 987,0
HEPS (cents)
804,6
+22,6
656,4
Diluted HEPS (cents)
769,1
+20,1
640,6
DPS (cents)
369,0
+20,6
306,0
HEPS
 Share buybacks: 5m shares at avg price of R100,50 ( ’05=7,5m shares at avg price of R70,55)
NOTE
NOTE
DPS ::
1.
1. Constant
Constant currency
currency comparison
comparison unnecesary
unnecesary due
due to
to immaterial
immaterial currency
currency movement
movement from
from F2005
F2005 to
to F2006
F2006 (0.8%)
(0.8%)

Distribution
policy
=
+/2x
covered
2. H1:H2 split available in appendices
Introduction
Financials
Financials
Segmentals
Group Outlook
Consolidated Cash Flow Statement
Rm’s
F2006
F2005
EBITDA (clean)
4 632,2
3 895,2
Working capital: (cash applied)/retained
(161,0)
344,5
Cash generated by operations
4 490,3
4 200,5
(2 368,4)
(2 223,7)
Cash effects of investment activities
Working capital investments consistent with growth rates in McCarthy
& Voltex
Positive working capital in Bidvest Europe (especially Deli XL)
Material cashflow events:
€140m
£59m
paid for the acquisition of Deli XL in September 2005
received from the sale of Dart Line
Gearing capacity:
Ample
R1bn
room to gear up - current interest cover of 11x (16% gearing)
from Bidvest options due on 6th December
Introduction
Financials
Financials
Segmentals
Group Outlook
Segmental Outlook:
Anthony Dawe
Lindsay Ralphs
Fred Barnes
Myron Berzack
Brand Pretorius
Introduction
Financials
Segmentals
Group Outlook
Bidfreight- sensitivity to anticipated economic
variables
+ effect of reduced, but still strong, GDP growth:
Growing GDP = growing Bidfreight volumes
+ effect of relative Rand weakness:
Increased value per unit handled in Clearing & Forwarding
Mild Rand weakness assist export volumes, without a corresponding
reduction in import volumes (depending on PCE buoyancy)
+ effect of rising interest rates:
Interest earnings in Clearing & Forwarding and Marine
Sharp reduction in PCE growth could hurt
+ effect of rising fixed investment:
Volume benefits from fixed investments in SA infrastructure, especially
ports and rail
OVERALL EFFECT: POSITIVE
Introduction
Financials
Segmentals
Segmentals
Group Outlook
Bidserv – sensitivity to anticipated economic
variables
+ effect of GDP:
Rising GDP benefits office automation spend and corporate travel
Bidserv inured to slower GDP due to annuity-nature of income and built-in
balance of businesses
- effect of relative Rand weakness:
Impact on corporate SA
+ effect of mild inflation:
Easier acceptance of price increases
+ effect of rising fixed investment
New office and retail developments
Industry specific factors
+ effect of labour unrest
- effect of HIV/AIDS
- effect of move to appointing SMME contractors
OVERALL EFFECT: MODERATELY POSITIVE
Introduction
Financials
Segmentals
Segmentals
Group Outlook
Bidvest Food Interests – sensitivity to anticipated
economic variables
General influencing factors:
+ effect of mild inflation worldwide for food traders (currently occurring across the board)
+ effect of low interest rate environment worldwide, despite recent increases
+ effect of GDP growth in general
+ effect of out-of-home food consumption
Benelux:
Now out of deep recession – very positive outlook
UK:
Mature, benign GDP environment – less volatile, enabling strategic planning and efficiencies
Niches of significant expansionary growth potential
Australasia:
Fuel price and general inflationary increases affects operational costs and consumer spending patterns
Business mix cushions vulnerability to discretionary spend
South Africa:
+ effect of mild inflation & uptick ahead of 2010
Maximising customer spend
Multi-temperature distribution opportunities
OVERALL EFFECT: POSITIVE
Introduction
Financials
Segmentals
Segmentals
Group Outlook
Bid Industrial – sensitivity to anticipated economic
variables
Fixed investment spend supports demand for electrical products and
furniture
 Gautrain,
2010
•Electrical and furniture spend
•Office developments, hotels, apartments, hospitals, retail nodes
 General
infrastructure spend
•Golf estates, hotels, shopping centres, prisons
•Investment in mining infrastructure
•Industrial spend
Effect of relative Rand weakness:
 Copper
prices are crucial
 + effect due to stock holding policy
 Negative effect on fixed price contracts
Interest rates
Retail expansion off a low base
Rising inflation is good for most trading businesses
Growth from national energy saving initiatives and the mining industry
OVERALL EFFECT: VERY POSITIVE
Introduction
Financials
Segmentals
Segmentals
Group Outlook
Bid Auto – sensitivity to anticipated economic
variables
General economy
- effect of slower GDP growth:
Business and consumer confidence impacts purchases more than GDP
Annuity financial services income cushions downturns
Replacement cycle pushed out, but service income boosted
- effect of rising interest rates:
Undermines affordability, but exposure to entry level (<R150 000; more than 25% of
sales and growing)
Relative attraction of used vs new cars + financial services income
- effect of slower growth in PCE:
Mitigated by entry-level/used car demand – black purchasing power
+ effect of rising fixed investment:
Increase in commercial vehicle sales to continue
+ effect of relative Rand weakness:
Stimulates automotive exports; export credits assist consumer affordability in turn
Positive industry-specific trends
Increased competition
Growth in vehicle population
OVERALL EFFECT: POSITIVE
Introduction
Financials
Segmentals
Group
Segmentals
Group Outlook
Group Outlook
Brian Joffe
Introduction
Financials
Group
Group Outlook
Outlook for F2007
 Corrective action taken will have recurring benefits:
 Problem children now largely dealt with
 Bidfood action
 Management is happy with the way the group looks now
 Focus on organic and acquisitive growth
 Within Africa: exploit diverse opportunities
 Internationally: food services business expansion
 Indian opportunities
 Continued judicious utilisation of balance sheet
 Benefits still to come from >R3bn invested in capex over the last
3 years
 Renewed energy in Bidvest ; focus on management
performance & returns
MANAGEMENT IS BUDGETING FOR REAL
HEPS GROWTH IN F2007
Introduction
Financials
Segmentals
Group Outlook
Group
Outlook
18
Appendix 1:
Divisional Results
Bidfreight
Capitalising on capex
Results
Pleasing momentum maintained in H2
Upgrades reinforce competitive advantage –
capex R227m
18% overall increase in profits combined with
good cash generation
Rm Trading Profit
550
500
450
400
350
Seamless executive succession
300
BEE board representation meets target
Safcor Panalpina: cargo mix reduces margin
but billings rise 19%; excellent cash flows; new
facilities at Johannesburg Airport attract
business enquiries
Marine: Rennies Ships Agency profits up10%;
freight rate pressure offset by higher volumes in
liner operations and cost control
250
200
150
Rm Revenue
16000
15000
14000
13000
12000
+18%
11000
10000
9000
8000
7000
3.4%
3.4%
6000
5000
2005
Trading profit
…% Trading margin
Manica: profits up 74% in the face of regional
instability
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
2006
Revenue
Bidfreight
Capitalising on capex
Terminals:

IVS: profits up 16%; high tank occupancy, margin
maintenance, capacity expansion
14.5%

RDS: profits flat on margin pressure by major customers

Bulk Connections: profits rise 51%; Spoornet reliability a
challenge; negotiations with NPA for increased lease terms and
additional handling rights; terminal upgraded to world-class norms

SABT: difficult H2 with lower maize exports; profits off slightly

SACD: profits up 20%, with import volumes up but exports down; assisted by new
capacity in Durban

BPO: profits up 14%; export volumes weak; stevedoring did well, focusing on bulk
cargoes and overhead containment
Strategic imperatives & prospects
Ongoing capex spend in F2007
Expansion pursued by IVS on increased demand for tankerage
Continuing capacity enhancement to improve profitability
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Current contr. to
Group Trading Profit
Bidserv
A shiner
Results
Margin pressure, but increased market share
Revenue up 10% and profits up 19%
Noteworthy performances from TMS, Minolco &
Ocè, and Bid Travel
Rm Trading Profit
600
550
4500
500
Cleaning: Prestige profits up slightly off a high
base; TMS comes of age with profits up 5 fold
as investments in technology and assets secure 450
market leadership
400
Laundries profits up 16%
Steiner Hygiene revenue up 12% and profits up
16% - strong rental sales a feature
350
4000
+19%
12.1%
2005
IPS orders up
Trading Profit
Appendix
1
Introduction
Financials
Segmentals
3500
11.2
300
Bid Risk: integrated into single business;
breakeven on impact of security guard strike but
Provicon up 25%
Industrial Products (Janitorial): G Fox acquisition
exceeds expectations
Rm Revenue
5000
3000
…% Trading margin
Group Outlook
2006
Revenue
Bidserv
A shiner
Greens: Top Turf disappoints, but good orders going forward
Office Automation (Minolta & Ocè): profits up 36% off an already high base; grasps
opportunity provided by digital office demand
Bidair: profits flat, but pleasing, ground handling licence still being sought
Travel: profits up off depressed base; fee-based model from 1 May 2005 results in
higher profitability; profitable before overrides; management appointments
Rennies Bank: new MD; retail enjoys better H2 despite stable ZAR; Treasury down on
competitive pressures and lower wholesale turnover; debit card products undershoot
expectation
Strategic imperatives & prospects
New contracts in Cleaning & Hygiene, IPS & Top Turf orders
Security strike action prompts strategic re-think towards
integrated security solutions (electronics, surveillance, etc)
Travel growth to continue; cost containment
Further margin improvement
Asset management and risk management are focal points
Appendix
1
Introduction
Financials
Segmentals
15.0%
Current contr. to
Group Trading
Profit
Group Outlook
Bidvest Foodservice Europe
Delicious
Results
Rm Trading Profit
Rm Revenue
700
23000
Deli XL
22000
650
21000
 Deli XL acquired effective 12/9/05 – combined
600
20000
€8.5m (£5.9m) profit after amortisation of
550
19000
intangibles
18000
500
 Deli XL Netherlands: ROFE 19% (vs 3% at
17000
acquisition), strong cash flow, increased sales 450
+22%
16000
to caterers and hospitality, institutional margin 400
15000
challenge
14000
350
13000
 Deli XL Belgium: management changes;
3.6%
300
12000
strong cash flow, profits off marginally but
2.9%
250
11000
sales up 15% due to Quick, Pizza Hut &
Compass
200
10000
Consolidated profits up 26% to £56m
2005
3663


3663 profits up 13% to £51.5m on a 12% rise
in sales to £1.45bn – despite a 55% fall in
MOD profits to £2.3m (declining fee income)
Trading Profit
…% Trading margin
Cost pressures, but overall UK economy
robust
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
2006
Revenue
Bidvest Foodservice Europe
Delicious
Capex £34m (5 depots complete, Edinburgh on schedule)
Lower margin CD sales up 39% (KFC, Pizza Hut) – higher unit values; new Lichfield
depot opened in January; focus on operating efficiencies
Multi-temp record high margin; profits up 10%
Frozen, Fresh & Chill profits up 24%; Swithenbank makes solid progress
Barton losses reduced; state-of-the-art Manchester depot attractive for national
account customers
Minimal impact from acquisition of 80% stake in Horeca, Dubai (Sep ’05)
Strategic imperatives & prospects
Roll out of Compass non-food service contract January 2007
MOD contract terminated 30 September 2006 - active measures to make up shortfall
should minimise overall impact
3663 capacity-build boosts efficiency
17.7%
Joint procurement 3663/Deli XL
Managerial and strategic initiatives at Deli XL
Non commodity wholesale focus at Horeca;
systems alignment
Appendix
1
Introduction
Financials
Segmentals
Current contr. to
Group Trading
Profit
Group Outlook
Bidvest Foodservice Australasia
Upping the run rate
Results
Rm Trading Profit
Australia (A$)
Record 3% margin - profits up 28% to $33.5m
off a 10% rise in sales to $1.1bn (8% organic),
Foodservice profits up 25% (margin 3.4%)
Rm Revenue
7000
230
6000
“Street” focus at higher margin, cost control,
housebrand initiatives
Foodservice: Gold Coast shines, Melbourne
profitable and ahead of budget, Sydney loss still
contained at modest level
Hospitality: profits up 63%; national expansion
(Darwin, Cairns); Melbourne remains lossmaking
QSR: profits up 250% - close to optimal
profitability; Yum! contract guarantees volumes
& a revenue increase formula
Appendix
1
Introduction
Financials
Segmentals
5000
180
+34%
4000
2.9%
3.4%
130
3000
2005
Trading Profit
…% Trading margin
Group Outlook
2006
Revenue
Bidvest Australasia
Upping the run rate
New Zealand (NZ$)
Sales up 26% to $273m (organic growth 19%), profits up 13% to $11.7m; Fresh
initiative - profits up 225%
Coping well with adverse economic variables
Strategic imperatives & prospects
Australia
Upgrade capex in Australia largely complete – enhanced cash generation
Access available market – Bidvest market share only 20%
Growth momentum to continue through F2007
New Zealand
Growing pains – skills, infrastructure, expenses
E-commerce – now 15% of sales (up 100%)
Fresh acquisitions
Logistics business in Auckland fully operational December 2006
National distribution infrastructure objective
Double digit growth budget
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
6.0%
Current contr. to
Group Trading
Profit
Bidfood
Gruel(ing)
Results
Profits decline 5%, sales up 13%: margin
squeeze continues, aggressive competition
Caterplus: increased market penetration; sales
up 12%, high distribution costs; marginal profit
improvement
BidBake: poor; yeast imports, relocation costs
Crown: flat profits due to imports, poultry
disease challenge
Speciality: 22% rise in profits, opitimising range
of brands and mix
Rm Trading Profit
500
400
3000
300
200
-5%
9.7%
8.2%
0
1000
2005
Lufil: branded products emphasis, infrastructure
being scaled up
Trading Profit
Appendix
1
Introduction
Financials
…% Trading margin
Segmentals
2000
100
Vulcan: reduced exports but market buoyant
Hotel Amenities: new contract wins
Rm Revenue
4000
Group Outlook
2006
Revenue
Bidfood
Gruel(ing)
Strategic imperatives & prospects
Catering and Frozen have been merged under a single management team
Rising to the challenge of improving market share and pursuing new growth
sectors
Overhead cost containment
Launch of BidBros cash and carry concept; national roll-out plan
Purchase of Steri Pic - flow-wrap packaging for fast food outlets
Crown National and BidBake new world-class production facilities to create
efficiencies
Increase basket of products to existing customers
8.2%
Current contr. to
Group Trading Profit
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Bid Industrial & Commercial Products
Copper Tone
Results:
Profits rise 26% off an 19% rise in revenue –
electrical wholesale (EWD) profits up 67%
EWD
Versalec Cables acquired 1 March ’06 – earnings
enhancing
Infrastructure market strong
Rm Trading Profit
500
450
400
Smart buying of copper, surging prices
350
Project & tender focus reaps rewards
300
6000
+26%
5000
Stationery & furniture:
Profits rise 19% off an 11% rise in revenue
250
Waltons profits up 18% - regions did well overall
200
Kolok: price war unabated, but good volume growth
Rm Revenue
7000
6.8%
7.2%
4000
2005
2006
Afcom GE Hudson
Trading Profit
Profits fall 23% - focus on optimising local
production with a mix of selective imports
…% Trading margin
Buffalo: Profits off 13%, move into DIY market
gains acceptance
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Revenue
Bid Industrial & Commercial Products
Copper Tone
Strategic imperatives & prospects
Continuing growth off a high base
Infrastructure momentum favours electrical wholesaling
Refreshing of stationery store formats
Waltons Transnet stationery tender – BEE credentials accepted
Good management of gross margin in a deflationary/low inflation economy
Good growth in furniture to continue
Acquisition opportunity for Afcom; re-balancing benefits
13.1%
Current contr. to
Group Trading Profit
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Bidpaper Plus
Pushing the envelope
Rm Trading Profit
Results
Profits up a commendable 14%, led by
Lithotech
200
180
Silveray Statmark
Pushing up the quality curve; exciting product 160
initiatives
140
Lithotech
Decline in traditional business forms strongly
offset by laser and mail offering
E-solutions contributed positively
100
2005
Lithotech France
Trading Profit
Exit strategy: sold to consortium, including
management
Appendix
1
Introduction
120
Rm Revenue
2000
1900
1800
1700
+14%
1600
1500
1400
1300
13.3%
1200
11.6%
1100
1000
Financials
Segmentals
…% Trading margin
Group Outlook
2006
Revenue
Bidpaper Plus
Pushing the envelope
Strategic imperatives & prospects
Lithotech capex focused on envelope, filing, label, print to post, stationery and ebilling
Silveray Statmark re-establishing itself as the superior alternative in the retail
stationery market
Re-launch of Croxley – new and redesigned product ranges
5.5%
Current contr. to
Group Trading Profit
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Bid Auto
Ama good good
Results
Profits up 31% on a 19% rise in revenue – entirely
organic
Rm Trading Profit
650
Financial services profits up 42%; 50 000 accounts
600
16000
Best new vehicle market ever – volumes
550
compensates for ongoing low dealer new car margins
500
Record 49 679 new units, up 20% on 41 556 (10.7%
share of dealer market)
450
Record 34 714 used units sold, up 12% on 31 047
6 new dealerships (replacements)
14000
10000
3.5%
Fleet Services growing rapidly; HP debtors book
Trading Profit
GAZ taxi sales 414 from 66 in F2005
Segmentals
2006
Revenue
…% Trading margin
Budget significant growth; Van Rental launched
Financials
8000
6000
2005
Appendix
1
Introduction
3.8%
300
Floor plan funded thru Bidvest – 1% rate saving
Yamaha diversifies portfolio, stiff competition
12000
+31%
400
350
Working capital and facilities investment on strong
demand – 500 new jobs, active recruitment
Rm Revenue
18000
Group Outlook
Bid Auto
Ama good good
Strategic imperatives & prospects
Market likely to slow from 20%+ to high single digits with McCarthy aiming for 13% growth affordable, entry level cars driving sales – total sales target 98 000 (60/40 new used)
Anticipated upturn in used vehicle market
16.9%
First time buyers will continue to support growth
3-5% price increases expected over the next year
Current contr. to Group
Trading Profit
Growing universe of vehicles provides recurring parts and
service income – 800 000 units targeted for servicing in F’07 (vs 700 000 in F’06)
Market density does not support unfettered growth in dealerships
New dealership strategy – McCarthy Value Centres (Auto China, Value Serv, Call-A Car
direct)
McCarthy On-Line name change to Eliance reflects growth outside of group
Used car market presence to be strengthened
Additional McCarthy/Bidvest synergies for Burchmore’s Car Auctions
2x Renault dealers 1 July 2006; Mahindra H2 ‘07; Ford Mazda Pretoria H2 ’07
New SEAT offering through McCarthy VW (Durban); launch of VW trucks
Stand-alone Lexus dealerships
McCarthy Fleet Services actively pursuing expansion opportunities
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Corporate Services
Results
Bidprop up 18%
Namsov profit up from R12.5m to R75.9m
Ontime Automotive now profitable (R7.3m)
Significantly lower investment income
3.1%
Rm Trading Income
120
110
100
90
80
70
60
+18%
50
40
30
20
10
0
2005
Trading Profit
Rm Revenue
10500
8500
6500
4500
2500
500
2006
Revenue
…% Trading margin
Current contr. to
Group Trading Profit
Appendix
1
Introduction
Financials
Segmentals
Group Outlook
Appendix 2:
Historic Performance
Historic performance
Annualised Returns
Operating profit & margins
60
50
40
4000
2000
1000
0
5.2%
4.9%
4.8%
4.4%
2002
4.9%
4.8%
4.9%
4.7%
4.5%
4.4%
2003
2004
2005
2006
1H
%
Rm
3000
30
20
2003
2004
2H
ROFE
2006
ROE
400
800
600
353.7
400
183.6
216.9
181.6
215.9
2001
2002
296.0
220.3
248.0
243.2
302.7
368.6
207.0
300
436.0
cps
cps
2005
DPS
1000
0
32
10
0
HEPS
200
31
27
25
54
53
51
49
172.2
200
100
100.0
88.2
112.0
136.8
81.0
90.0
108.0
113.4
2001
2002
2003
2004
133.8
2005
162.0
0
2003
2004
1H
2005
2006
2H
1H
17% CAGR over 5 years
Appendix
3
Introduction
Financials
2H
17% CAGR over 5 years
Segmentals
Group Outlook
2006
Appendix 3:
Impact of external influences
on Bidvest – various
outcomes
Economic environment influences – various outcomes
Freight
Bidserv
Europe
Aus/NZ
Bid
Food
Bid
Industrial
Paper
Plus
Bid
Auto
Rand (fiscal yr):
Rel. Strength
Rel. Weakness
1&5
2&5
2&5
1&5
4
4
4
4
2&5
1&5
3&5
1&5
3
3
2
1
Interest rates:
Rising
Declining
1&5
2&5
2&5
1&5
2 &5
1&5
2&5
1&5
2&5
1&5
3&5
1&5
3&5
3&5
2
1
Mild inflation
Mild deflation
1&5
2&5
1&5
3&5
1
2
1
2
1
2
1
2
1
2
2
1
Fixed investment:
Rising
Declining
1&5
2&5
1&5
2&5
3&5
3&5
3&5
3&5
3&5
3&5
1
2
3&5
3&5
1
2
PCE:
Buoyant
Reduced growth
1&5
2&5
1&5
2&5
1
2
1
2
1
2
1&5
3&5
1&5
2&5
1
2
Variables
Legend 1 Positive leverage
2 Negative leverage
4
Translation impact
5
Indirect impacts/multipliers
3 Neutral
Appendix
Introduction
Financials
Segmentals
Group Outlook