Transcript Slide 1

Appendix 1
Geographic and Segmental
contributions to Revenue
and Trading Profit
1
Geographic Revenue and Trading Profit splits
Appendix 1
F2008
F2007
SA
Revenue
Asia Pacific
UK & Europe
Trading Profit
Africa
Revenue
Contribution:
Foreign operations
SA operations
Note: IFRS compliant
Trading Profit
F2008
F2007
F2008
F2007
46%
43%
31%
29%
54%
57%
69%
71%
2
Segmental contributions to results
Appendix 1
%
Contribution
to Revenue
%
Contribution
to Trading
Profit
Bidfreight
19.4
12.9
Bidserv
5.7
15.7
International Foodservices
42.6
26.8
Bidfood (SA)
3.9
6.8
Bid Industrial & Commercial
8.3
14.8
Bidpaper Plus
1.7
4.2
BidAuto
16.3
13.9
Corporate
2.1
4.9
Segment
3
Appendix 2
Detailed segmental results
4
Bidfreight – Bulk Supplies
Appendix 2
Bidfreight
5
Bidfreight – Bulk Supplies
Appendix2
Results
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•
SABT & Bulk Connections, together with strong
contributions from IVS, Marine and BPO, drive a 16%
rise in profits
Bulk-category Capex on facilities pays off in recognition
by customers, in pricing and in throughputs
Protracted NPA lease negotiations + Transnet
unreliability are prejudicial to BVT & national interest
Manica Namibia excluded as of 1 July 2007 – forms
part of new Bidvest Namibia
Safcor Panalpina: reduced pre-tax profits, mix reduces
margin, higher financing costs
Marine: pre-tax profits, including associates, up 27%
driven by containerised exports and exports of vehicles.
Additional ships agencies being sought from shipping
lines to diversify revenue stream
RDS: a disappointing result but re-focus (disruptive)
during F08 will pay off in future years; a new Pallet
rental segment established
SACD: profits up 10%, assisted by customer win +
additional import volume from quality customers; export
volumes pick up whilst overall imports slow; depot
capacity constrained
Revenue
+17.2%
Trading Profit
+18.0%
Rm Trading Profit
3.1%
3.1%
Trading margin
6
Bidfreight – Bulk Supplies
Appendix 2
•
•
•
•
•
•
IVS: profits up 7% ; new-build of destroyed tanks in progress; maintenance work substantially
increased; liquid bulk storage demand at high level
Bulk Connections: upgrades to world-class norms results in substantially increased volumes and
good customer service levels; profits double; prolonged Ports Authority lease negotiations frustrates
further expansion;
SABT: Maydon Wharf now most efficient terminal of its kind in South Africa and a terminal of first
choice; profits up 116%; poor Transnet Rail services impede optimal efficiencies
BPO: profits up 28% as revenues accelerate ahead of budget; volumes slowed Q4 in products such
as cement, rice, pulp & paper; steel volumes low; bulk expected to increase its contribution in F2009
Naval: profits flat due to low coal, citrus, aluminium volumes; strength of Metical a negative;
termination of a ferrochrome contract will effect F2009 result
Manica: territories now include SA, Botswana, Malawi, Zambia and Zimbabwe. Profits substantially
down, with only Botswana holding its own; region remains variable from a trading point of view
Strategic imperatives & prospects
►Outlooks vary but the consolidated Freight segment is budgeted to produce profit growth in F2009 at a
rate below that of F2008
►Organic growth is immediate focus together with tighter debtor and cash management
►Agreement with Ports on new facilities needed to accommodate higher throughputs/ profitability
►The Bulk businesses depend on unstinting support from Transnet Freight Rail
►Fuel & power costs could place pressure on margin; customer resistance to price increases
►Substantial prior capex will continue to pay off, particularly in Bulk
►Re-built IVS capacity on stream but higher depreciation likely to restrain the operating result
7
Bidserv – High Flier
Appendix 2
8
Bidserv – High Flier
Appendix2
Results
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•
•
•
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•
Record level of profitability
TMS, Industrial Products, Konica-Minolta, BidAir,
Bidvest Bank notable outperformers
Prestige: labour-intensive contract cleaning gross
profits by 13.5% as qualitative advantages enhances
market share
TMS: profits up 58% as R70m capital investments
reinforce specialist cleaning offering for major
industrial customers
Laundries: profits up 14% in a price-sensitive market
Steiner: expenses associated with infrastructure
improvements resulted in profits easing by 7%
Security: return to profit following strikes but below
budget
Global Payment Technologies: in line with prior
year. Profits typically cyclical, aligned with banking
customer projects
Top Turf: 18% growth in profits masks pockets of
underperformance but revived management team set
on improving profitability
Revenue
+22.5%
Trading Profit
+27.1%
Rm Trading Profit
13.1%
12.6%
Trading margin
9
Bidserv – High Flier
Appendix 2
•
•
•
•
•
•
•
Industrial: exceptional result with profits up 40%; facilities strengthen competitiveness
My Market: e-procurement solutions, cutting edge travel engine, and group-wide procurement
savings make this erstwhile greenfield business comfortably profitable
Office – Konica Minolta & Oce: 45% rise in profits, market position in office automation
strengthened in a tightening economy
BidAir: profits +45%, with lounges and cargo performance pleasing. ACSA license effective 1
March 2008
BidTravel: profits +20% as business responds to prior management actions to right-size for new
realities; brands rationalised; manual processes now automated
Bidvest Bank: 41% rise in bank profits assisted by new forex products; Master Currency exceeds
expectations
Hotel Amenities: profits +16% on the back of improved hotel occupancies and new customers
Strategic Imperatives and Prospects
► Critical mass in soft services plus market reach will enable Bidserv to once again grow profits in a
less favourable economic climate
► BidAir to focus on realising return on capex spent gearing up for ACSA license
► TMS expected to substantially increase profits and returns
► Hotel Amenities contract win from a major hotel group opens up Africa potential
► Further upside expected in BidTravel following right-sizing and productivity initiatives
10
Bidvest Europe – Thirst for Foodprofits
Appendix 2
11
Bidvest Europe – Thirst for Foodprofits
Appendix 2
Results
Total profits up 8% to £59.1m. UK trading profit
flat at £46.7m, Netherlands +31% to €16.9m
(£12.4m), Belgium +32% to €4.1m (£3m), and
Horeca UAE +51% to AED1.5m (£0.2m).
Sterling average exchange rate €1.36 (€1.48).
Deli XL combined now over quarter of total
profits
► Accelerating price inflation a feature across all
markets; food and fuel inflation well above CPI
• Deli XL Netherlands: +31% (€16.9m profit vs.
€12.9m); revenue €730.5m (+6%); ROS 2.3%
(1.9%); cash generated by operations €25.4m;
labour market tight (wage pressures);
intensified institutional competition but market
share gained in hospitality; small bolt-on’s
• Deli XL Belgium: +32% profit (€4.1m) on
€239.8m revenue (+14%); ROS 1.7% (1.5%);
Kruidenier & Sodexo add to volumes
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Revenue
+12.4%
Trading Profit
+16.1%
Rm Trading Profit
1050
950
850
750
650
550
450
350
2.6%
2.5%
250
150
2007
2008
Trading profit
Trading margin
12
Bidvest Europe – Thirst for Foodprofits
Appendix 2
•
•
Horeca: £0.2m profit; ROS 2.6%. Sales in local currency rise 64%; oil induced boom fuels
inflation; cost efficiencies & stricter credit policy pays off
3663: sales 3% up at £1.586bn (6.8% like-for-like excluding MOD); profits flat at £46.7m; ROS
2.9% ; cash generated by ops £63m; capex £31m vs. £25m; overhead 2% below F2007 – tight
controls
― Multi-Temp grows profits 16%; CD now profitable (£1.1m)
― Positive MOD exit
― Field sales re-organisation realises substantial cost savings
― Pass-thru of inflation + profitable pre-emptive buying will also flow into F2009
― Frozen Fresh & Chilled & Multi Temp combined in single Wholesale business.
― Barton Meat under review, with alternatives being explored
Strategic imperatives & prospects
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GDP growth in all markets decelerating, whilst CPI increases;
Margin to be preserved wherever possible
Balance sheet capacity to profit from inflation
3663 likely to benefit from customer consolidating their suppliers to reduce costs.
3663 Genesis IT project to roll-out fully F2009
1 July 2008 Dutch smoking ban in public places – impact indeterminate
Bidvest Europe budgets to once again grow profits in F2009
13
Bidvest Asia Pacific – Bonzer Wicket
Appendix 2
14
Bidvest Asia Pacific – Bonzer Wicket
Appendix 2
Results
Revenue
+63.2%
Largely organic growth in Australia, record returns –
3.5x increase in profits since F2002
► New Zealand performs well in a slackening economy
► Angliss (HK & Singapore) proves its worth – first full
year contribution exceeds expectation
• Australia: sales up 17.5% to A$1,429bn (real growth
10% after food inflation), profits up 25% to A$55,7m;
ROS 3.9% vs. 3.7%; GDP growth slows sharply,
labour market remains tight, cost pressures
― Foodservice sales up 13.5%, profits up 36%; all
branches comfortably profitable; facilities and
people investment continues; full national coverage
attained
― Despite its developmental status, Hospitality is a
net contributor and enhances overall offering
― QSR profits up 50%, assisted by transfer of
Subway business; high service levels underpin
sustainability in a slowing market
Trading Profit
+59.1%
►
Rm Trading Profit
600
550
500
450
400
350
300
3.9%
3.8%
250
200
150
2007
2008
Trading profit
Trading margin
15
Bidvest Asia Pacific – Bonzer Wicket
Appendix 2
New Zealand: sales up 18% (organic) to NZ$384m (real growth 10%), profits up 17% to
NZ$16,8m; ROS 4.4%; independent trade sales growth exceeds national accounts growth;
NZ$17m spent on capital assets; rising food prices help neutralise higher operating costs in a
moribund economy
― Fresh sales grow 40%, profits up marginally – management continues to finesse this business for
optimum effectiveness
― Foodservice profits up 14%; substantial market share gain as total market declines; value-add +
service + delivery size focus
― Logistics profits double in first full year; valuable complement
• Angliss: First time annual trading profit of R97m
― Singapore: Sales of S$31,6m, profits of S$10,7m, ROS of 3.3% (incl. forex gains)
― Hong Kong & China: Sales of HK$1,4bn, profits of HK$45,5m, ROS of 3.3%
•
Strategic imperatives & prospects
All markets share similar cost challenges
► Australia: small bolt-ons to contribute to F09; cost pressures will impinge on margin but real
growth budgeted
► New Zealand: strongly positioned in a difficult economy, real growth budgeted
► Angliss: bolt-ons; Malaysia foodservice unit start-up; growth opportunities being pursued in Macau
and Mainland China
►
16
Bidfood – Inflating times
Appendix 2
17
Bidfood – Inflating times
Appendix2
Results
Ingredients copes well with the twin forces of
escalating food price rises and raw material
shortages
• Chipkins Bakery Supplies improves profitability
substantially; strong performance from Crown
National Group; encouraging result out of NCP
Yeast
• Divisional restructure successful
• Excellent expense control
► Caterplus: net revenue up 17% and trading profits
up 19%; strict credit policy has reduced volumes but
pays off in substantially reduced trading risk and
reduced debtors book; restaurant bankruptcies
escalate; higher average basket values/spend with
good customers
• Increased symmetry between buying & sales
• Higher gross margin due to buying in ahead of price
rises or stock shortages
• Theft of inventory is a headache, requiring vigilance
►
Revenue
+18.4%
Trading Profit
+31.4%
Rm Trading Profit
400
350
300
250
7.3%
8.1%
200
150
2007
2008
Trading profit
Trading margin
18
Bidfood – Inflating times
Appendix 2
►Speciality:
Patleys grew revenue by 22% and trading profits by 28% but diminishing disposable
incomes placed increasing strain on trading as the year progressed; price increases pushed through
but agency volumes fall as a consequence; own-brand Goldcrest makes excellent progress as do
sales to leading retailers; approaching the market with vigor through promotions, stock availability,
customer awareness
Strategic imperatives & prospects
►Deflation (outright reduction in prices) is a possibility after a rapid run up in food inflation.
►Deliberate policy to reduce volume in Caterplus rather than risk bad debts may impact rebates
►Bidfood will emerge from these taxing trading times far stronger than competitors and fully expects to
achieve yet another record result in F2009
19
Bid Industrial and Commercial Products – Levelling Out
Appendix 2
20
Bid Industrial and Commercial Products – Levelling Out
Appendix2
Results
Profits at record high but rate of growth moderates
after a stellar run
• Voltex: profits up 5% in a tougher trading
environment; copper price recovery in Q4 enabled a
partial clawback of opportunity costs in H1; debtor
collection drive; both existing and new electricity
savings initiatives and products are a focal point
• Stationery & Furniture: a better Q4 enabled profits
for the year to grow by 7%; cash generation
particularly pleasing
― Waltons profits up 16%, with Gauteng particularly
strong; “back-to-school” sales improved;
refurbishments assist growth
― Kolok’s trading results improved in H2 with the
result that the profit decline for the year was limited
to 19%; focus on eliminating low-margin business;
expenses contained despite costs of store repositioning;
― Furniture achieved pleasing overall profit growth.
The Seating business continues to increase its mix
of imported component to remain competitive;
market exposure ramped up for all operations
►
Revenue
+12.4%
Trading Profit
+8.5%
Rm Trading Profit
950
850
750
650
550
450
350
8.7%
8.4%
250
150
2007
Trading profit
2008
Trading margin
21
Bid Industrial and Commercial Products – Levelling Out
Appendix 2
•
Packaging:
― Afcom GE Hudson profits up 19%. Higher market share due to new products on
offer; factory consolidation continued; strategy to import is bearing fruit
― Buffalo Executape profits up 7% despite raw material price pressures - smart
purchasing has limited full effects and retained customer loyalty
― Vulcan: a broadly flat result, with pressures coming from raw material costs,
imported competition, and lately a buoyant used market for catering equipment
Strategic imperatives & prospects
►Voltex has both challenge and opportunity: challenge in the form of a declining
residential/commercial market and opportunity in the form of infrastructure investment on a
broad front, together with a number of energy efficiency initiatives
►Office products are facing a pressure in a weakening retail market
►Vulcan will capitalise on modernized facilities and new products
►Overall growth expected to be modest in the short term
22
Bidpaper Plus – You win some, you lose some
Appendix 2
23
Bidpaper Plus – You win some, you lose some
Appendix2
Results
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Broadly flat results due to absence of profitable
Lithotech ad-hoc export project business in the
period
Business remains solidly cash generating
Laser & Mail continues to offer profitable
opportunity
Lufil and Rotolabel integrated into Labeling &
Packaging
Croxley re-branding completed, growing
market acceptance
Input cost pressures a constant throughout
E-mail connection business has a fabulous
year
Revenue
+6.2%
Trading Profit
-3.0%
Rm Trading Profit
350
330
310
290
270
250
230
210
190
12.4%
11.4%
170
150
2007
2008
Trading profit
Trading margin
24
Bidpaper Plus – You win some, you lose some
Appendix 2
Strategic imperatives & prospects
►Lithotech will continue to generate cash and provide necessary
expansion funds for e-
products
►Laser & Mail has enjoyed new contract wins
►Expansion of Labels & Packaging range
►Stationary expected to yield higher returns following recapitalisation of Siveray/Statmark
►Intensified push to secure more export business
►Confederation Cup & 2010 World Cup – proactively seeking print opportunities
25
BidAuto – Diversification Dividend
Appendix 2
26
BidAuto – Diversification Dividend
Appendix2
Results
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Considered strategy to diversify away from car
retailing bolsters result as boom turns to abrupt
bust
Full-year contribution from fleet management
acquisition Viamax, heavy equipment and truck
sales, used cars, and exposure to leading OEM
brands for parts and service business partly
supported profits but like-for-like profit declined
26%
Total vehicle sales down 3% to 86 616 units, with
used vehicle sales up 10% to 42 182 units and new
unit sales down 12% to 44 434 units
National Credit Act, higher finance charges, and
worsening affordability resulted in substantial
market weakening as the year progressed – and
likely to worsen into F2009
Disconnect between OEM aspirations and
immediacy of harsh dealer economic realities
R300m in capex + staff retention and training focus
underscores BidAuto’s intention of remaining a
leading and sustainable player
Revenue
-1.0%
Trading Profit
+2.6%
Rm Trading Profit
750
650
550
3.9%
4.0%
2007
2008
450
350
250
150
Trading profit
Trading margin
27
BidAuto – Diversification Dividend
Appendix 2
►New and used car price differentials widen, with used car prices little different over five years
►Burchmores auction volumes and bargain-retail a major success
►Chinese mini-bus and pick-up sales disappointing but exclusive Chery arrangement off to a promising
start
►Budget Car Rental secures third place in the market, boosted by innovations
►Yamaha product acceptance remains healthy and despite reduced profits returns were highly
satisfactory
►Working capital management improved during H2 from earlier inflated levels
Strategic imperatives & prospects
►Motor retail market likely to bottom out 25% below 2006 peak
►Retail cost bases out of line with reduced volumes – margin pressure
►Affordable, fuel-efficient and quality used product holds promise
►Fleet Solutions contribution to grow, good returns, fleet renewals
►Parts and service revenues a partial compensation for lower new volumes
►Crime is a pressing and costly concern
►Selected openings of new dealerships will continue (e.g. Suzuki’s return to SA plus additional
Ford/Mazda outlets)
►Franchise potential for Chinese brands
►BidAuto will hold profits at F2008 levels in F2009
28
Corporate Services – Bricks & Mortar
Appendix 2
29
Corporate Services – Bricks & Mortar
Appendix2
Results
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Strategic property holdings worth significantly more
than stated book value
New property developments for BidAuto, Bidpaper
Plus, and Bidfood
Namsov reversed H1 losses on better catches and
pricing
All Namibian assets folded into Bidvest Namibia with
a view to listing later in calendar 2008
Ontime Automotive hit by restructuring, fuel price
increases, and termination of loss-making volume
distribution contracts; Parking Solutions secured a
major tender; Prestige Vehicle Distribution traded
better than budgeted
Ontime will nevertheless show a sharp reversal of
losses in F2009
2010 World Cup commercialisation plans in full
swing and a minority interest was acquired in
MATCH Hospitality AG, a FIFA appointed hospitality
services business
Revenue
+8.2%
Trading Profit
+7.3%
Rm Trading Profit
11.1%
11.1%
Trading margin
30
Appendix 3
Effects of economic drivers by
segment
31
Economic influencers – various outcomes
Appendix 3
Bidvest
Asia
Pacific
Bid
food
Bid
Ind. &
Comm.
Bidpaper
Plus
Bid
Auto
Bidfreight
Bidserv
Bidvest
Europe
Rand*
Rel. Strength
Rel. Weakness
1&5
1&5
3&5
3&5
4
4
4
4
3&5
3&5
2&5
1&5
2
1
1
2
Interest rates
Upcycle
Downcycle
3&5
3&5
3&5
3&5
2
1
2
1
3&5
3&5
2&5
1&5
3&5
3&5
2
1
Mild inflation
Mild deflation
1&5
2&5
1
2
1
2
1
2
1
2
1
2
1
2
2
1
Fixed
investment:
Rising
Subsiding
1&5
2&5
3&5
3&5
3&5
3&5
3&5
3&5
3&5
3&5
1
2
3&5
3&5
1
2
Variables
PCE
Buoyant
Legend:
Stagnant 1 Positive
1&5
1&5
1
2 Negative 2&5 3 Neutral 2
2&5
1
1
4 Translation
2
2
1
3&5
1
5 Indirect
effect 3&5
or multipliers2
2
* Bidvest is indifferent to any particular ZAR rate of exchange - relative stability is far preferable
though to the extremes in valuation that have eventuated periodically
32
Appendix 4
Historic Performance
33
Historic Performance - Year to June
Appendix 4
4.9%
4.7%
5.2%
4.5%
4.5%
5.2%
5.2%
4.4%
4.4%
5.1%
5.1%
4.3%
4.3%
18% CAGR over 5 years
5.1%
4.6%
18% CAGR over 5 years
34
Appendix 5
The Bidvest Business Model
35
The Bidvest Business Model
Appendix 5
An operationally active investment holding company whose core competence is the
management of a balance of cash generative and growth businesses
Market-leading service, trading & distribution businesses
Strategy
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►
►
►
Implementation
Own the cash flows
Control distribution channels
A balance of mature & growth businesses
Funds allocated across asset base according to
proven return criteria
Vigorous capital management - cash used from
mature businesses to fund growth businesses and
acquisitions
Identifying acquisitive value
►
►
►
Businesses actively & successfully managed
Decentralised, focused business units
Market leaders in distribution channels:
• Critical mass for sourcing & funding
• Reaching common customers
• Tying the customer in
Management Focus
► A team of operationally strong, entrepreneurial owner-managers:
Financial disciplines (working capital, managing sustainable returns)
• Corporate office frees up businesses to perform
► Financial integrity
► Proven ability to correct underperformance (incl .organic growth record from acquisitions)
► Proven ability to create value in businesses
•
36