Transcript Appendix 1

Appendix 1
Divisional Review
Bidfreight – Bracing
Results
Revenue
11%
Momentum continued into H1 as investments in
capacity and efficiencies realise rewards
► Customer demand for services robust, volumes
pleasing
► Safcor Panalpina: billings up 12%, benefiting from
a weaker ZAR & interest rates; margin erosion
► Marine: profits well ahead of budget
► IVS: Profits up despite recent fire reducing
capacity; Durban & Isando volumes strong and
Richards Bay outperformed on new business
► RDS: challenges referred to previously remain but
strategic actions to improve profitability in process;
Durban terminal delays severely impact
turnaround times
Operating profit
19%
►
Operating margin
400
3.1%
Rm
331
300
279
200
3.1%
100
2.9%
0
H1 F2008
H1 F2007
Operating profit
Trading margin
Appendix 1
Bidfreight – Bracing
Bulk Connections: upgraded facilities paying off in higher volumes and
new custom
► SABT: profits well ahead of budget; volumes up 38%; railway service
shortfalls reduce potential of this business
► SACD Freight: high volumes at depots; margins assisted by cost
containment
► BPO: port operations profits up meaningfully; new capacity at Maydon
Wharf accommodated increased demand; steel & ferrochrome exports
pleasing; forest product exports remain weak
► Manica: challenging regional markets; DRC commodity volumes
reduced; Botswana performed well on vigorous clearing activity;
severe skills shortage in Malawi and Zambia ops; Zimbabwe
trades well on food aid volumes
► Naval: strong metical eroded margins
►
13.5%
Strategic Imperatives and Prospects
Agency JV in Marine; 6 new SABT silos; IVS new builds
► No change in status of national ports – major impediment
► Demand for port based services growing
► Real profit growth assured for F2008
►
Current contr. to
Group Operating
Profit
Appendix 1
Bidserv – Healthy & Wealthy
Results
►
►
►
►
►
►
►
►
►
Fine results in particular from BidTravel, TMS, BidAir,
Industrial Products, Security, TopTurf, Bidvest Bank
Continuing to gain profitable ground in all markets
Prestige: Creditable result in face of legislated wage
rises that cannot be recovered in full
TMS: Profits up significantly, growth in new contracts
Laundries: Increases in key inputs but profits up 14%;
new equipment business promising
Steiner: Cost pressures evident and some difficulties
with smaller units but excellent result from flagship
Steiner Hygiene
Security: Strong recovery from industry-wide strike
action
Global Payment Technologies: reasonable result, cash
handling good
Top Turf: Execution of recent offshore contracts boosts
profits by 45% but local operations below par
Revenue
19%
Operating profit
28%
Operating margin
500
12.8%
Rm
391
400
306
300
12.8%
200
100
0
11.8%
H1 F2007
H1 F2008
Operating profit
Trading margin
Appendix 1
Bidserv – Healthy & Wealthy
Industrial: Substantial rise in profits; competitive strengths cement market
position
► My Market: meaningfully profitable as stand-alone; procurement proving its
15.8%
worth
► Office – Konica Minolta & Oce: Konica Minolta performing well, Oce
improving from a low base;
► BidAir: Brisk airport activity; super ramp license to serve 12 airlines effective
1 March 2008 – necessary equipment already in place
Current contr. to
► BidTravel: Building on management actions last year to improve
Group Operating
performance; cost cutting drive underway to further consolidate competitive
Profit
position
► Bidvest Bank: 39% rise in profits despite expensing of significant marketing costs; Master Currency
business up to expectation
► Hotel Amenities: Performs strongly due to higher hotel occupancies and increased number of hotels
►
Strategic Imperatives and Prospects
TMS specialist services (petrochemicals) finding favour locally and increasingly abroad
► Bidserv expecting a record year, generating group-leading margins
► Critical mass of this soft services segment unparalleled in South Africa
►
Appendix 1
Bidvest Europe – Tactical Advantage
Results
►
►
►
►
►
Operating profit up 14% to £28m, with UK up 8% to
£23.4m, Netherlands up 30% to £5.6m and Belgium
up from £0.3m to £0.8m. All operations in line with
budget. Sterling average exchange rate €1.45 (€1.48)
3663 benefiting from tactical measures taken last year
to capitalise on market shake-out; strict expense
control
Deli XL Netherlands: €8.15m profit vs. €6.3m; revenue
€355m, up 2%; ROS 2.3% (1.8%); cash generated by
operations €14.6m; inflation in food products
escalating; markets remain difficult with volumes
overall flat
Deli XL Belgium: €1.1m profit on €117.2m revenue;
ROS 0.9% (1.6%); Kruidenier Belgium incorporated;
extraction of efficiencies
Horeca: £52 000 profit, ROS 2.7%. New agency
acquired; one-off impact of Asian games out of the
system
Revenue
7%
Operating profit
20%
Operating margin
2.6%
500
Rm
410
450
400
350
341
300
250
200
2.6%
150
100
2.3%
50
0
H1 2008
H1 2007
Operating profit
Trading margin
Appendix 1
Bidvest Europe – Tactical Advantage
►
3663: sales 1% up at £801m (8% like-for-like excluding MOD); profits up
8% to £23.4m; ROS 2.9% vs. 2.7; cash generated by ops £33.7m; capex
£11m vs. £10m
Good working capital management and overhead cost control
Wholesale successfully reorganised, efficiencies gained
Food price inflation being passed on, with benefits for margin
Multi-temp sales and profits up 15%, well ahead of market
CD profits up sharply on efficiencies
Frozen, Fresh & Chill profits stable, helped by cost savings; Fresh under
strategic review for optimal positioning
• New management structure at Barton – benefits H2
•
•
•
•
•
•
16.6%
Current contr. to
Group Operating
Profit
Strategic imperatives & prospects
►
►
►
2007 UK GDP growth 3.1% and hotel & catering growth 3.6% - unlikely to
be maintained at this strong rate; interest rates have eased; 3663 well
placed to turn competitor stress to own advantage
DeliXL wins Starbucks contract in Netherlands ; acquisitive options open
Strong year in prospect for Bidvest Europe
Appendix 1
Bidvest Asia Pacific – True blue tucker
Results
Revenue
59%
Every Australian business unit now profitable
► New Zealand market share gains
► Angliss has settled in well
► Australia: sales up 16% (5% acquisitive) to
$711m with profits rising 23% to $27m; ROS
3.8% vs. 3.6%; GDP growth running at 4%;
food inflation up to 6%
► Foodservice sales up 12%, profits up 36%;
Melbourne & Sydney sustainably profitable;
upgrades underway to cope with growth
► Hospitality remains in development phase,
promising
► QSR sales up 27% and profits up 75%,
assisted by transfer of Subway business;
margin exceeds 1%; organic growth 6%
Operating profit
61%
Operating margin
3.8%
►
300
Rm
251
250
200
157
150
100
3.8%
3.8%
H1 2007
H1 2008
50
0
Operating profit
Trading margin
Appendix 1
Bidvest Asia Pacific – True blue tucker
New Zealand: sales up 18% to NZ$186.9m and profits up 21% to
NZ$8.8m; ROS 4.7%; 15% real growth from new customers, new
products
► Fresh profits up 31%; new acquisition to lead growth
► Foodservice profits up 14%; infrastructure investment
► Angliss: R46m profit; Singapore and Hong Kong operating
performance highly satisfactory, region strong, underscores merits of
purchase
►
10.2%
Current contr. to
Group Operating
Profit
Strategic imperatives & prospects
Australia: targeting >4% margin; double-digit profit growth for 2008
► New Zealand: further acquisitions, outperform industry
► Singapore: margins approaching 4%, economy buoyant
► Hong Kong/China: margins in the 3% to 4% range, robust markets,
Beijing Olympics a positive
►
Appendix 1
Bidfood – The right ingredients
Results
Pleasing execution of strategic re-alignment
► Record levels of profitability; food inflation
benefit
► Ingredients delivers on promise to improve
returns
► Caterplus: net revenue up 21% and profits up
24%; national accounts, “street” trade, and
industrial catering revenues outperform; higher
average basket values and average spend
► Speciality: Patleys grew revenue by 24% and
profits by 34%; promotions pay off; price
increases successfully passed through; top LSM
customer focus shields from squeeze
►
Revenue
15%
Operating profit
25%
Operating margin
8.5%
200
191
Rm
154
150
100
8.5%
50
7.9%
0
H1 2007
H1 2008
Operating profit
Trading margin
Appendix 1
Bidfood – The right ingredients
►
Ingredients: modest increase in revenue translates to 19% rise in
profits; Crown National profits up substantially with all regions
trading well; Bidbake performance encouraging; exports growing
strongly off a very small base
7.8%
Strategic imperatives & prospects
Increasing cooperation across businesses to grow market share,
grow basket, and grow average spend per customer
► Investments made in people, facilities, and equipment will continue
to enhance returns
► QSR restaurant trade showing stress, buy-down trends evident
► Stock holdings will be managed to profit from inflation
► Further gains expected in H2, leading to a good overall 2008 result
►
Current contr. to
Group Operating
Profit
Appendix 1
BidIndustrial & Commercial Products
– Cooling off
Results
►Revenue growth not out of line with guidance;
profit growth stalled, but at an exceptionally high
level
►Voltex, Office, Packaging & Vulcan profits broadly
flat
►Voltex: revenue up 12% but trading progressively
tighter, particularly in contracting; copper price fall
in Q2 reduced profits (estimated 20% impact);
working capital is receiving vigorous attention
►Stationery & Furniture: profits flat overall
• Waltons profits grew by 19%; expanded
footprint with refurbished and new stores
• Kolok suffered a setback as a result of cutthroat competition among distributors;
emphasis on store positioning continued and
overall expense control was good
• Furniture achieved growth overall
Revenue
9%
Operating profit
0%
Operating margin
400
350
7.2%
Rm
337
336
300
250
200
7.8%
150
7.2%
100
50
0
H1 2007
H1 2008
Operating profit
Trading margin
Appendix 1
BidIndustrial & Commercial Products
– Cooling off
►Packaging:
• Afcom GE Hudson grew market share as a result of an
expanded offering
• Buffalo Executape’s DIY range made further inroads
►Vulcan: catering equipment margins came under some pressure
Strategic imperatives & prospects
►Voltex is capitalising vigorously on energy crisis opportunity
►But, a slowdown in contracting is being experienced
and sustained power shortages are likely to curtail
developments, impact mining
►2nd half looking more promising; copper price recovery
and weaker Rand
13.7%
Current contr. to
Group Operating
Profit
Appendix 1
Bidpaper Plus – Consolidating, for the Future
Results
Strategy of optimising cash generation from
mature products whilst building presence in
electronic solutions gathers pace
► Lufil packaging integrated into Labeling &
packaging sub-division
► Complementary acquisitions on the table
► Siveray/Statmark re-capitalisation completed and
will materially improve productivity
► Croxley brand continues to benefit from earlier revamp
►
Revenue
5%
Operating profit
10%
Operating margin
150
12.4%
Rm
127
125
115
100
75
12.4%
50
11.8%
25
0
H1 2007
H1 2008
Operating profit
Trading margin
Appendix 1
Bidpaper Plus – Consolidating, for the Future
Strategic imperatives & prospects
Traditional print expected to contract and mature whilst e-products
expand
► Management focused on optimally managing two contrasting
business cycles; reinvesting for future returns
► Modest growth expected for 2008
►
5.2%
Current contr. to
Group Operating
Profit
Appendix 1
Bid Auto – Balancing the load
Results
Like-for-like profit declined 27% but timely fleet
management diversification resulted in flat
earnings
► Viamax acquisition (R960m); results accounted
effective 1 July 2007
► Total vehicle sales down 4% to 44 448 units, with
used vehicle sales up 8% to 21 051 units and new
unit sales down 12% to 23 397
► Motor retail, Distribution and Finance & Insurance
profits declined but Viamax acquisition contributed
positively in its 1st half; Car & Van Rental was flat;
Burchmores auction business performed well
► Heavy Equipment has had a promising start
► Working capital inflated by traditional seasonal
factors, rental vehicle turnbacks and impact of
OEM-imposed stocking
► No significant used vehicle stock over-valuations
►
Revenue
4%
Operating profit
1%
Operating margin
400
Rm
3.6%
355
358
3.7%
3.6%
350
300
250
200
150
100
50
0
H1 2007
H1 2008
Operating profit
Trading margin
Appendix 1
Bid Auto – Balancing the load
Strategic imperatives & prospects
Motor retail at the sharp end of reducing consumer spending
► Market for passenger vehicles remains weak compared to the prior
year with continuing margin pressure
► Quality control on imports will take precedence over pushing
volume; Chery launch timely
► Three new Value Centres opening
► Dealership profit improvement programme to continue
► Budget Car and Van Rental expanding geographic footprint
► Diversification has resulted in motor retailing component
reducing to less than 40%
► Negatives will be offset by positives for the remainder of the
fiscal year
►
14.6%
Current contr. to
Group Operating
Profit
Appendix 1
Corporate – Bricks & Mortar
Results
►
Bidvest Properties continues to make a
meaningful contribution to group
►
Namsov affected by poor weather and catches
►
All Namibian assets folded into Bidvest
Namibia, to be managed by Namibians.
►
Bidvest Namibia due for listing before the end
of calendar 2008
►
Revenue
20%
Operating profit
42%
Operating margin
N/A
100
75
63
On-Time Automotive continues to struggle
50
2.6%
Rm
44
25
0
H1 2008
H1 2007
Current contr. to Group
Operating Profit
Operating profit
Appendix 1
Appendix 2
Historic Performance
Historic Performance
Annualised Returns
Operating Profit and Margins
5000
3000
2000
1000
0
5.2%
4.9%
5.2%
4.7%
4.5%
4.4%
2005
2006
2004
5.1%
1H
4.4%
4.6%
2007
H1 2008
%
Rm
4000
60
50
40
30
20
10
0
54
53
51
31
32
30
2005
2006
2007
27
2004
2H
ROFE
38
27
H1 2008
Impact of
Viamax &
Angliss
ROE
DPS
500
400
517.6
436.0
296.0
cps
cps
HEPS
1200
1000
800
600
400
200
0
50
353.7
248.0
302.7
2004
2005
452.4
368.6
498.1
248.4
207.0
300
200
100
136.8
172.2
113.4
133.8
2004
2005
162.0
198.0
220.0
2007
H1 2008
0
2006
1H
2007
2H
17.5% CAGR over 5 years
H1 2008
2006
1H
2H
Distribution
18,6% CAGR over 5 years
Appendix 2