Transcript Name of Presentation

Organisational Structure
Bidfreight
Bid Industrial
& Commercial
Products
Introduction
Bidserv
Bidpaper
Plus
Financials
Bidvest Europe
Bid Auto
Segmentals
Bidfood
Bidvest
Australasia
Bid Prop
Corporate
Group Outlook
1
Historic Performance
Annualised Returns
Trading profit & margins
4000
2000
1000
0
5.2%
5.2%
4.9%
4.9%
5.2%
4.9%
%
Rm
3000
4.8%
4.8%
4.8%
4.9%
4.9%
4.4%
4.7%
4.7%
4.5%
4.5%
4.4%
4.4%
4.3%
2003
2004
2005
2006
H1 2007
1H
60
50
40
30
20
10
0
25
2003
ROFE
HEPS
2006
ROE
400
353.7
216.9
220.3
215.9
243.2
2002
2003
296.0
302.7
248.0
368.6
452.4
2005
1H
2006
100
H1
2007
2H
Financials
100.0
112.0
136.8
108.0
113.4
133.8
90.0
2002
2003
2004
2005
1H
17% CAGR over 5 years
Introduction
172.2
200
0
2004
207.0
300
436.0
cps
cps
2005
32
DPS
1000
800
600
400
200
0
31
27
2004
2H
54
53
51
49
162.0
2006
198.0
H1
2007
2H
17% CAGR over 5 years
Segmentals
Group Outlook
2
Unaudited Results
For the six months ended
December 31 2006
Agenda
Introduction & Overview
Financial Results
Outlook
Appendices:
 Appendix 1: Segmental Outlook
 Appendix 2: Divisional Review
Introduction
Financials
Segmentals
Group Outlook
4
Introduction & Overview
Brian Joffe
Introduction
Financials
Segmentals
Group Outlook
H1 2007 Highlights
►
Slightly disappointing result relative to Bidvest expectation
►23%
growth in operating profit (21% organic)
►Flat
margin despite contribution mix (Deli XL contributed 7cps for the
full 6 months vs 3cps for 3 months in the previous period)
►19%
►
avg exchange rate depreciation (Sterling)
26% increase in Diluted HEPS, assisted by R1,4bn Dinatla buyback as
indicated in September 2006
►Benefits
from F2006 group re-organisation:
Businesses re-energised under new management, eg. Travel
Realignment of group competencies, eg. paper conversion companies
in Bidpaper Plus
Introduction
Introduction
Financials
Segmentals
Group Outlook
6
H1 2007 results summary
Revenue
+25% to R47,9bn
Operating Profit
+23% to R2,1bn
Headline earnings
+23% to R1,4bn
HEPS
+23% to 452,4cps
Diluted HEPS
+26% to 440,3cps
DPS
+22% to 198,0cps
ROFE
Introduction
Introduction
45.8% in H1 2007 vs 48.1% in H1 2006
Financials
Segmentals
Group Outlook
7
Segments at the forefront of performance
Revenue (Rm)
Segment
H12006
% ch.
Bidserv
2 256,8
+14.3
2 580,5
Bidvest
Australasia
3 387,3
+22.0
Bid Industrial and
Commercial
Products
3 199,5
Bid Auto
8 315,1
Introduction
Introduction
Financials
Trading Profit (Rm)
H1 2007 H1 2006
% ch.
H1 2007
260,5
+17,3
305,6
4 131,0
108,8
+43.9
156,5
+30.6
4 177,2
183,3
+75.7
322,2
+15.9
9 640,2
290,2
+22.3
355,0
Segmentals
Group Outlook
8
Segments at the forefront of trading performance
▶ Bidserv: up 17%, driven by strong results out of TMS, Top Turf,
Aviation, Bid Travel and Rennies Bank
▶ Bidvest Australasia: up 44% in ZAR and 25% in AUD, driven
organically (Melbourne & Sydney showing promise)
▶ Bid Industrial and Commercial products: up 76%, driven by
Voltex and Office Products (marked improvement from Waltons
Gauteng)
▶ Bid Auto: up 22%, driven by a 40% increase in Financial Services
and an 18% increase in Motor
Introduction
Introduction
Financials
Segmentals
Group Outlook
9
Segments holding their own
Revenue (Rm)
Trading Profit (Rm)
Segment
H12006
% ch.
Bidfreight
7 687,2
+24.4
9 561, 5
10 366,0
+44.9
1 751,1
871,4
Bidvest Europe
Bidfood
Bidpaper Plus
Introduction
Introduction
Financials
H1 2007 H1 2006
% ch.
H1 2007
250,0
+11.6
279,0
15 016,6
286,3
+19.2
341,2
+18.0
2 065,6
160,8
+4.2
167,5
+12.0
975,8
103,5
+10.9
114,8
Segmentals
Group Outlook
10
Segments holding their own in trading performance
▶ Bidfreight: up 12%, profit growth below revenue growth due
to lower volumes in Bulk, Ports & Distribution
▶ Bidvest Europe: up 19% in ZAR; flat in sterling; MOD
impacts but Deli XL and Horeca did commendably well
▶ Bidfood: up 4%, masks some notably good performances but
Bidbake suffers sharp margin erosion
▶ Bidpaper Plus: up 11%, respectable result with Lithotech,
Printing & Conversion, and the DRC project worthy of mention
Introduction
Introduction
Financials
Segmentals
Group Outlook
11
Financial Results
David Cleasby
Introduction
Financials
Segmentals
Group Outlook
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
 Real price and volume increases
 Includes full 6-month contribution of R4,2bn from Deli XL
vs 3 months in previous period (R2,2bn)
 18% excluding exchange translation
Introduction
Financials
Financials
Segmentals
Group Outlook
13
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
2 085,7
+22.4
1 703,8
2063,4
+19.5
Trading profit
Trading
margins
H1 2007
H1 2006
Local
5.3%
5.3%
BidFreight (Safcor) and Bidfood (BidBake) lower
Offshore
2.6%
2.9%
Deli XL’s contribution at lower innate margins;
pressure on 3663 CD and loss of MOD in UK
Group
4.3%
4.4%
NOTE: Foreign food businesses = 23.9% (R497,7m) contribution to Trading Income vs
23.2% (R395,1) in H1 2006
Introduction
Financials
Financials
Segmentals
Group Outlook
14
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
Trading profit
2 085,7
+22.4
1 703,8
2063,4
+19.5
Net finance expense
(225,0)
+36.9
(164,4)
(221,3)
+34.6
 Offshore interest of R28,2m vs local interest of R196,8m
 Zero net debt offshore vs local net debt of R4,2bn
 Strong cash flows have enabled offshore debt repayment,
therefore proportionately more debt in SA vs offshore
 200 b.p. prime rate increase
Introduction
Financials
Financials
Segmentals
Group Outlook
15
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
Trading profit
2 085,7
+22.4
1 703,8
2063,4
+19.5
Net finance expense
(225,0)
+36.9
(164,4)
(221,3)
+34.6
37,7
+60.4
23,5
37,7
+60.4
Associate Income
Associates: Tiger Wheels, Enviroserv (+38% HEPS), Compu-clearing
& other
Introduction
Financials
Financials
Segmentals
Group Outlook
16
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
Trading profit
2 085,7
+22.4
1 703,8
2063,4
+19.5
Net finance expense
(225,0)
+36.9
(164,4)
(221,3)
+34.6
37,7
+60.4
23,5
37,7
+60.4
(519,1)
+23.4
(420,6)
(499,4)
+19.9
Associate Income
Taxation
Effective tax
rates
H1
2007
H1
2006
Local
28.3%
28.4%
No material change
Offshore
26.5%
24.6%
F2006 low due to credits from Dartline
sale
Group
27.8%
27.3%
Introduction
Financials
Financials
Segmentals
Group Outlook
17
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
Trading profit
2 085,7
+22.4
1 703,8
2063,4
+19.5
Net finance expense
(225,0)
+36.9
(164,4)
(221,3)
+34.6
37,7
+60.4
23,5
37,7
+60.4
(519,1)
+23.4
(420,6)
(499,4)
+19.9
(28,3)
-3.1
(29,2)
(28,8)
-1.4
Associate Income
Taxation
Minority interests
Namsov ↓
Introduction
Financials
Financials
Versalec ↑
Segmentals
BidAuto ↑
Group Outlook
18
Consolidated Income Statement
Six months ended December 31 2006
Avg
R/£13.75
Avg
R/£ 11.56
H1 2007 in constant
currency
(R/£ 11.56)
Rm’s
H1 2007
% ch
H1 2006
H1 2007
% ch
Revenue
47 871,9
+25.2
38 240,1
45 025,2
+17.7
Trading profit
2 085,7
+22.4
1 703,8
2063,4
+19.5
Net finance expense
(225,0)
+36.9
(164,4)
(221,3)
+34.6
37,7
+60.4
23,5
37,7
+60.4
(519,1)
+23.4
(420,6)
(499,4)
+19.9
Minority interests
(28,3)
-3.1
(29,2)
(28,8)
-1.4
Headline earnings
1 355,1
+22.7
1 104,2
1 304,6
+18.2
HEPS (cents)
452,4
+22.7
368,6
435,5
+18.2
Diluted HEPS (cents)
440,3
+25.8
350,0
DPS (cents)
198,0
+22.2
162,0
Associate Income
Taxation
HEPS - Total weighted avg shares in issue
of 299 566: Purchased 18m shares from
Dinatla on 12/12/06 at avg price of R79,38 (vs
R60,00 received on 18m options)
Introduction
Financials
Financials
DPS
Distribution policy = +/- 2x covered
Segmentals
Group Outlook
19
Consolidated Cash Flow Statement – Rm’s
Six months ended December 31 2006
Cash generated from operations
2629
Working capital utilised
-2306
Net finance charges
-178
Taxation
-703
-628
Distributions
Cash effects of investment activities
-1304
-746
Cash effects of financing activities
84
Currency adjustments
-3500 -2500 -1500
-500
500
1500
2500
Working capital:
 Working capital investment required to fund growth, mainly McCarthy, Voltex & Office
 Additional working capital invested not generating additional returns yet
 General seasonality
 OEM cycle
 New vehicle registrations
 Builders’ annual shutdown
Introduction
Financials
Financials
Segmentals
Group Outlook
20
Bidvest net working capital flows vs cash generated - Rbn
4
2.6
3
2
1.1
1.5
2.2
2.0
1.8
1.8
2.2
1.4
0.9
1
0
H1 2004
-1
-0.7
H2 2004
H1 2005
H2 2005
H1 2006
H2 2006
H1 2007
-1.1
-1.2
-2
-2.3
-3
Net working capital
Cash generated by operations
Net working capital cycle peaks in first half (December)
each year
Introduction
Financials
Financials
Segmentals
Group Outlook
21
Gearing
14
5
4
Target interest cover range
11.6
11.4
10.3
10.7
12
4.2
9.3
3
10
8
3.0
6
2
2.4
4
1
1.5
2
1.0
0
H1 2005
F2005
H1 2006
Net interest-bearing debt (Rbn)
F2006
H1 2007
0
Interest cover (x)
 Gearing capacity:
Balance
sheet progressively being better utilised
Interest
cover of 9.3x; room to decrease to 5-6x if required
Growth
into more activities requiring financing, eg. fleet business
Introduction
Financials
Financials
Segmentals
Group Outlook
22
Group Outlook
Brian Joffe
Introduction
Financials
Group
Group Outlook
Other matters
 BEE
Dinatla refinancing
Alignment with new BBBEE codes
Ongoing operational focus on transformation
 Strategic Investments
Opportunistic & Strategic – build entrepreneurial, strategic stakes
from time to time in companies with activities aligned to Bidvest’s
activities
Introduction
Financials
Segmentals
Group Outlook
Group
Outlook
24
Bidvest Group - sensitivity to anticipated economic
variables
 GDP growth: Expected to remain good in all markets
 Relative rand weakness: (vs GBP and AUD in H1 2007) is positive on
translation (quarter of earnings) and overall neutral to positive for South
African trading business in medium term
 Mild price inflation: Apparent across all markets; upward pressure on wage
and distribution costs and intense competition reinforces efforts to avert
margin squeeze
 Upward phase of interest rate cycle: Experienced in all geographies
served; countered by relatively positive operating conditions
 Consumer spending: General confidence levels remain encouraging
 Benefit from infrastructure spend: (incl. multiplier benefits) should not be
underestimated
 SA has experienced none of the extreme economic volatility apparent in
earlier times and we see a relatively settled trading outlook
OVERALL EFFECT: BROADLY POSITIVE
Introduction
Financials
Segmentals
Group
Segmentals
Group Outlook
25
Prospects
 Ongoing review of low-return assets
 Bidvest Namibia almost born
 Benefits of group-wide capex yet to be fully realised
 Value extract through group procurement
 Focus on organic and acquisitive growth

Within Africa: exploit diverse opportunities

Internationally: food services business expansion
Management confident of delivering aboveaverage returns and growth for F2007
Introduction
Financials
Segmentals
Group Outlook
Group
Outlook
26