1 Audited Results For twelve months ended June 2008 Infinite possibilities when Bidvest people take...

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Audited ResultsFor twelve months ended

June 2008

Infinite possibilities when Bidvest people take on a challenge

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Agenda

► Introduction

► Financial Results

► Group Outlook

► Appendices:• Appendix 1: Geographic and Segmental contributions to Revenue and

Trading Profit

• Appendix 2: Detailed segmental results

• Appendix 3: Effects of economic drivers by segment

• Appendix 4: Historic Performance

• Appendix 5: The Bidvest Business Model

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Introduction and Overview

Brian Joffe

4Note: IFRS compliant

F2008 results summaryIntroductionIntroduction

ROFE from 50% in F2007 to 42% in F2008

DPS 11% to 495cps

HEPS 10% to 1068cps

Revenue earnings 16% to R110,5bn

Gross profit 18% to R21,7bn

Trading profit 17% to R5,3bn

Headline earnings 11% to R3,2bn

Taking trading advantage of price inflation ►Inflation has been turned to profit advantage in foodservice businesses►Cost-push inflation in food and energy did not crimp overall margin

Strength of Australian dollar assisted translation

Commendable performance from the Bidvest team in tough markets►Smart trading and instances of market share gains support result ►Individuals and companies under unrelenting affordability pressure in all markets►Increase in business bad debts in H2

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F2008 – Bidvest people managed their environment

Working capital►Cash applied lower than in F2007 due to sharp improvement in H2►Working capital absorption, excl. McCarthy, reduced by 60%►Inventory up in support of trading strategy - to profit, where feasible, from escalating prices

IntroductionIntroduction

Revenue (Rm) Trading Profit (Rm)

Segment F2007 % ch. F2008 F2007 % ch. F2008 Bidfreight - Strong Bulk result (e.g. agricultural & petro-chemical volumes); weaker consumer imports but evidence of improving exports; bulk-category capex pays off

18 772,4 +17.2 21 992,7 585,6 +18.0 690,8

Bidserv – Critical mass in outsourcing, investment in facilities and assertiveness in tackling competitive markets underpins a record result

5 243,2 +22.5 6 424,5 660,0 +27.1 838,7

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Segments at the forefront of performance IntroductionIntroduction


Segment F2007 % ch. F2008 F2007 % ch. F2008 Bidvest Europe - Strong contribution from Deli XL (+31% in Euros); 3663 flat – solid effort given weakening economy; resistance to selling price increases; reorganisation of sales team yielding results

29 962,5 +12.4 33 683,8 757,5 +16.1 879,8

Bidvest Asia Pacific - R97m full year trading profit from Angliss (well ahead of expectations); market share gains, Australia up 44%, New Zealand up 33% despite weakening economy & drought

8 863,6 +63.2 14 467,4 346,5 +59.1 551,4

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Segments at the forefront of performanceIntroductionIntroduction


Segment F2007 % ch. F2008 F2007 % ch. F2008

Bidfood – Caterplus & Speciality trading profit up 23% despite weakness in chain restaurant market; Bidfood Ingredients trading profit up 47% - management team having an impact & Bakery Ingredients turned around

3 733,2 +18.4 4 418,9 273,1 +31.4 358,8

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Segments at the forefront of performanceIntroductionIntroduction


Segment F2007 % ch. F2008 F2007 % ch. F2008 Bid Industrial and Commercial – Voltex up 7% off high F2007 base - good volume growth and benefits from higher copper price and weaker Rand in H2; stronger H2 from Kolok, good performance from Waltons, especially Gauteng

8 369,1 +12.4 9 403,0 728,3 +8.5 790,1

Bidpaper Plus – Lack of big export projects; slowdown in traditional paper-based solutions; strong growth in electronic billing; Stationery has grown market share; rising cost pressures

1 823,8 +6.2 1 937,4 226,9 -3.0 220,2

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Segments holding their ownIntroductionIntroduction


Segment F2007 % ch. F2008 F2007 % ch. F2008 Bid Auto - Like-for-like profit declined 26%; R204m (excl. funding costs) contribution from Viamax in its first full year exceeded expectations; new vehicles volumes down, but some margin recovery in used vehicles in H2; 6 dealerships and 12 Value Servs closed; higher new “imposed” inventory, used vehicle working capital levels managed down in H2; initial NCA insurance premium impact; consumer spending impact on Yamaha & Budget continues

18 656,3 -1.0 18 467,5 724,5 +2,6 743,0

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Segments holding their ownIntroductionIntroduction

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Financial ResultsDavid Cleasby

Consolidated Income StatementFinancialsFinancials

►Organic growth of 13%►13% growth excluding exchange rate translation►Full year contributions from Angliss (R3bn) and Viamax (R544m)

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Year ended June 30 2008Avg

R/£14.64Avg

R/£ 13.95F2008 in constant currency R/£13.95

Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13


R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16


Trading Margins F2008 F2007

Local 6.2% 6.0% Bidserv & Bidfood compensated for Voltex & Bidpaper Plus margins

Offshore 3.2% 3.1% Full year contribution from Angliss (lower inherent margins due to trading nature of the business) vs improvement in Deli XL & Australian margins

Group 4.8% 4.7%Note: 1. EBITDA up 20%: R6,9bn in F2008 vs R5,7bn in F2007 2. 11% organic growth in Trading Profit 3. Foreign businesses = 31% (R1,6bn) contribution to Trading Profit vs 29% (R1,3bn) in F2007

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► H1 = R445m; H2 = R486m ► Increase in interest due to funding of increased capex, acquisitions and working

capital absorption ► Offshore interest of R138,2m vs local interest of R792,8m ► Net debt offshore of R0,7bn vs local net debt of R4,8bn

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R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16

Net finance expense (931,0) +64 (566,2) (924,6) +63


Associates: Tiger Auto (Sold for R212m with effect from March 2008) Enviroserv (To be sold for R569m with effect from Q2 F2009) Comair Full year contribution Other

Note: Note: Includes dividends received

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R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16


Associate Income 122,0 +78 68,4 122,0 +78


R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16



Taxation (1 200,0) +16 (1 033,2) (1 184,5) +15


Effective tax rates

F2008 F2007

Local 26.5% 27.4% Reduction in corporate tax rate to 28%; F2007 benefitted from utilisation of assessed tax losses

Offshore 26.3% 23.6% Corporate rate reductions in UK & Netherlands; Angliss lower sovereign tax rate; no benefit on tax losses in Belgium

Group 26.5% 27.1% Sustainable rate of +/- 27%16


R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16



Taxation (1 200,0) +16 (1 033,2) (1 184,5) +15

Minority interests (82,0) -6 (87,1) (82,0) -6


Bidvest Namibia: Namsov - significantly better H2► Forms part of Bidvest Namibia (mainly comprising Bid Industrial and Manica

businesses in Namibia) Versalec: Slightly downBidAuto: Slightly up

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►8% organic growth in earnings

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R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16



Taxation (1 200,0) +16 (1 033,2) (1 184,5) +15


Headline earnings 3 237,8 +11 2 912,0 3 195,1 +10


R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16



Taxation (1 200,0) +16 (1 033,2) (1 184,5) +15



HEPS (cents) 1 068,0 +10 970,0 1 053,5 +9

Diluted HEPS (cents) 1051,0 +11 947,2 1 037,1 +9


Diluted HEPS – 308,1m diluted weighted avg shares in issue - share buy-back of 5,6m shares from shareholders in May 2008 in lieu of interim distribution

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R/£14.64Avg


Rm’s 2008 % ch 2007 2008 % ch

Revenue 110 477,6 +16 95 655,5 108 132,7 +13

Trading profit 5 334,9 +17 4 546,8 5 269,4 +16



Taxation (1 200,0) +16 (1 033,2) (1 184,5) +15



HEPS (cents) 1 068,0 +10 970,0 1 053,5 +9

Diluted HEPS (cents) 1051,0 +11 947,2 1 037,1 +9

Distribution 495,0* +11 446,4 495,0 +11


* Interim distribution effected by pro-rata share buy-back; distribution policy still +/- 2x covered by HEPS20

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Consolidated Cash Flow Statement – Rm’s

►Investment activities of R4bn:•R2,7bn in capex vs R1,7bn in F2007, mainly Bidfreight, Bidserv, BidAuto and Bidvest Europe•R1,3bn spent on acquisitions, mainly Viamax (R960m)►In the 4 years to June 2008: •R8,8bn cash generated from operations after working capital, tax and distributions, supported the •R11,6bn spent on acquisitions & investments of businesses for medium term growth•Full benefits still to manifest

Cash generated from ops

Working capital utilised

Net Finance charges

Taxation

Distributions

Cash effects of investment act’s

Cash effects of financing act’s

Year ended June 30 2008

FinancialsFinancials


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Some lengthening in working capital cycle, although H2 was proportionately better►Inventory – increased strategic buying & ‘imposed’ stock►Debtors - quality of debtors book is sound►Creditors - impact of importing stock with shorter credit lines►Banking assets are up R219m (increased lending achieved) vs banking liabilities up R153m

Net Working Capital Days

Debtors days

Stock days

Creditors days

H1 2006 F2006 H1 2007 F2007 H1 2008 F2008

9-32 8 14 Net days


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Working capital movements

► 60% reduction in working capital, excl. McCarthy where ‘imposed’ new vehicle over-stocking occurred

► Additional working capital invested in Chinese vehicles (R310m)


Rm’s F2008 % ch F2007

Group working capital 730 47% 1 367

McCarthy working capital (338) 14% (392)

Group working capital movement, Group working capital movement, excl. McCarthyexcl. McCarthy 392392 60%60% 975975

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Net working capital flows vs cash generated - Rbn

► Upward trend in cash generated – cash positive international businesses ► Net working capital typically better in 2nd half

H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008



Target interest cover range

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Gearing

H1 2006 F2006 H1 2007 F2007 H1 2008 F2008

► Interest cover of 5.7x vs target of 5-6x; EBITDA interest cover of 7.3x► R1,8bn increase in debt vs F2007:

• Acquisition R1,3bn• Net capex of R2,8bn• Net working capital of R0,7bn


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Group OutlookBrian Joffe

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Bidfreight Bidfreight ► Substantial prior capex will continue to pay dividends, particularly in Bulk► Organic growth is immediate focus together with tighter debtor and cash

management ► Agricultural volume potential (maize exports vs wheat imports) ► Liquid bulk upgrades on hold until agreement can be reached with Ports

authorities• Port services demand buoyant• Higher pricing necessary to compensate for capacity shortage

Bidserv Bidserv

► Airports Company “super license” a step-change for BidAir ► TMS

• Continued strong profit performance together with foreign expansion potential ► Bidvest Bank – new foreign exchange products► Critical mass in soft services plus market reach will enable Bidserv to once

again grow profits – particularly in tourism, aviation and mining

Operational Prospects – F2009Group OutlookGroup Outlook

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Operational Prospects – F2009

Foodservice Foodservice ► Asian potential barely exploited - excellent local trading skills and

facilities positions Bidvest strongly; expansion remains on the agenda ► Cost pressures in Australia, New Zealand and SA could impinge on

margin but management actions/market strength will ensure growth continues

► Contract wins, bolt-ons, and tighter cost control will benefit Deli Netherlands & Belgium; focus on cost controls and improved efficiencies

► 3663 is strongly positioned to weather competitive stresses and will benefit from industry consolidation but short term customer price resistance should not be underestimated and profit growth will be difficult to achieve

Group OutlookGroup Outlook

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Operational Prospects – F2009

Bid Industrial & Commercial Products Bid Industrial & Commercial Products ► Electrical Wholesaling:

• Challenge: declining residential/commercial market • Opportunity: civil engineering investment on a broad front, energy efficiency

initiatives, accommodation investments ahead of World Cup 2010, political imperative of low-cost housing

► Kolok: upward momentum in H2 continues into H1 F2009 ► Waltons: Improving earnings to continue, led by Gauteng market and

promotional gifts► Vulcan to capitalise on modernized facilities and new products

Bidpaper PlusBidpaper Plus► Newer technology e-business opportunities are being vigorously

exploited, supported by cash generated from traditional ex-growth activities

► Retail exposure to remain tough


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Operational Prospects – F2009Group OutlookGroup Outlook

Bid Auto Bid Auto ► Management is striving to maintain profitability in what is the most

difficult vehicle market for five years • New vehicle volumes to fall further • Rationalisation where necessary, selective additions (e.g. Suzuki)• Positive used market volume momentum to continue• Parts and service revenues will grow • Focus on Chery profitability through Value Centres and independents• Viamax provides good profitability and return, with renewals augmenting

contract run-outs • Addition of Viamax provides scale economies and synergy savings for

newly named McCarthy Fleet Solutions ► Yellow metal distribution orientated toward price conscious/owner

operated market

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Group Prospects – F2009

GroupGroup► Bidvest has a diversity of drivers to profit from good times and bad► Management and staff well incentivised to stretch the performance

envelope ► Competitor weaknesses will be exploited ► Scanning for keenly priced acquisitions: vendor aspirations are more

realistic► Equity is now more attractive relative to the servicing cost of debt;

Bidvest will continue to re-assess the most attractive means of optimising its WACC and funding

► Difficult times bring opportunity for a group with an opportunistic culture ► Bidvest will not disappoint in F2009


1 Audited Results For twelve months ended June 2008 Infinite possibilities when Bidvest people take...

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