2008 Results Presentation - Nampak
Transcript of 2008 Results Presentation - Nampak
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2008 Results Presentation
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Agenda
The year in review
Operational features
Summarised income statement
Financial results
Segmental performance
Strategy
Prospects
Changes in directorate
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The Year in Review
2008 very challenging
Raw material cost increases
Severity
frequency
Margin decline
Slowdown in economic activity
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Operational Features
Revised strategic review
Major capex projects
Packaging Excellence
Completion of ERP project
Tax issues resolved
Restructured debt
Fire at Thorpe
Management changes
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Summarised Income Statement
Rm 2008 2007 %
Revenue 18 458 17 014 8
Cost of Sales 10 559 9 326 13
Gross Profit 7 899 7 688 3
GP % 42.8% 45.2%
Operating expenses 6 362 5 937 7
Trading income 1 537 1 781 -14
Trading margin 8.3% 10.5%
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One-Off Items
Rm
Zimbabwe -32
Nigeria Metals -20
Power cuts (estimate) -15
Carbon dioxide shortage (estimate) -20
-87
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Group Income Statement
Rm 2008 2007 %Revenue 18 458 17 014 8Trading income before abnormal items 1 537 1 781 -14Abnormal items -588 -160Profit from operations 949 1 621 -41Net finance costs -265 -191Income from investments 5 7Share of profit from associates 9 5Profit before tax 698 1 442 -52Tax -203 -386Profit after tax 495 1 056 -53HEPS 177.3c 184.6c -4
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Abnormal Items
Rm
Net impairment losses on goodwill, plant & equipment 602
Retrenchment and restructuring costs 94
Provision for onerous leases 65
Loss of assets resulting from Thorpe fire 51
Insurance proceed from Thorpe fire -161
Financial instruments fair value gain -26
Net profit on disposal of property -19
Share-based payment reversal -13
Net profit on disposal of businesses -5
588
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Tax Rate
RmProfit before tax 698Tax 203Tax rate recon %Effective tax rate 29.0SARS settlement, release of provisions & prior yr adjust 14.8Tax rate reduction 2.5Impairment of goodwill -23.6Other 5.3
Standard tax rate 28.0
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Group Condensed Cash FlowRm
Operating profit before working capital 2 303
Working capital -160
Cash generated from operations 2 143
Net interest paid -325
Tax paid -559
Cash distribution paid -645
Capex -1 449
Retirement benefit contributions 251
Other 13
Net cash outflow -571
Net debt 2 584
Net debt : equity 43%
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Net Working Capital
Rm Net Working Capital
September 2007 2 471
Translation and other non-cash items 77
Fair value of financial instruments 27
Inventory 206
Receivables 441
Payables -487 160
September 2008 2 735
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Dividends per Share
0
20
40
60
80
100
120
2005 2006 2007 2008
Interim Final
cents
27.0c 30.0c 33.0c
56.6c
66.1c
82.3c83.6c
96.1c
115.3c
28.0c
100.0c
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Geographical Performance
Rm Trading income Margin %
2008 2007 % 2008 2007
South Africa 1 222 1 329 -8% 9.9 11.6
Rest of Africa 71 140 -49% 6.7 14.1
Europe 244 312 -22% 4.4 6.4
TOTAL 1 537 1 781 -14% 8.3 10.5
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Africasegmental
Rm Revenue Trading income Margin %
2008 2007 2008 2007 2008 2007
Metals & Glass 5 061 4 728 751 805 14.8 17.0
Paper 5 121 4 818 253 337 4.9 7.0
Plastics 3 165 2 910 161 247 5.1 8.5
13 347 12 456 1 165 1 389 8.7 11.2
Services 128 79
TOTAL 13 347 12 456 1 293 1 468 9.7 11.8
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South Africametals & glass volumes
-15 -10 -5 0 5 10 15 20 25
Glass bottles
Food cans
Aerosol cans
Beverage cans
%
Growth in exports
Operational problems /imports
Fish, fruit down
Furnace rebuild
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South Africabeverage can volumes
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2007 2008
Local Filled exports Empty exports
Cans 000’s
1 712 1 579
2 782 2 827
931 1 129
-8%
+21%
+2%
WeatherCO2
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South Africapaper volumes
-10 -5 0 5 10 15
Cartons & Labels
Sacks
Corrugated
Tissue
%
Good demand
Cigarette packagingdetergent cartons, exports
Cement, sugar
Agric up, commercial down
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South Africaplastics volumes
-15 -10 -5 0 5 10 15 20
Closures
PET bottles
Milk/Juice
Flexibles
Tubes & tubs
Crates & drums
%
Regained crates market share
Toothpaste
Snack food flat, pouches, bag-in-box up, films down
Fresh milk down
Weather, CO2, market share
Loss of beverage closure
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Rest of Africa
Zimbabwe not consolidated as from 1 June 2007 – R32m
Good performances from Malawi and Zambia
Nigeria cartons – de-stocking by BAT Nigeria
Nigeria metals affected by irregularities
Trading income Margin %
2008 2007 % 2008 2007
71 140 -49% 6.7 14.1
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Europe
Cartons affected by tenders
Decision to close Crewkerne
Fire at Thorpe Healthcare factory
Higher polymer prices affected Plastics
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Europesegmental
₤m Revenue Trading income Margin %
2008 2007 2008 2007 2008 2007
Paper 225.2 214.8 2.8 7.9 1.2 3.7
Plastics 120.3 110.0 11.5 11.1 9.6 10.1
345.5 324.8 14.3 19.0 4.1 5.8
Services 24.4 19.8 2.6 3.0
TOTAL 369.9 344.6 16.9 22.0 4.6 6.4
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Strategy
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Summary of 3 year Plan
Improved demand for packaging
Further improvement in competitive position
Major investment in growth projects
Stronger focus on cash management
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Revised Strategic Plankey features
Detailed portfolio review
Reassessment of capital expenditure
Enhanced focus on cash management
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Revised Strategic Planportfolio review
Fix
Potential divestment
Hold
• sustainable returns• high entry barriers• competitive advantages
• potential but..• underperforming
non-core or underperforming
55%20%
25%
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Revised Strategic PlanInvestment programme
Committed
Glass rebuild
Corrugated paper mill
Angola beverage can line
Being Considered
3rd Glass furnace
Tissue mill
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Revised Strategic Planimproving operational performance
Packaging Excellence initiative
Customer service
Process excellence
People growth
To develop and enhance a positive Nampak experience which drives
customer loyalty and business growth
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A more focused packaging group
Turnaround underperformers
Divestments
Increased earnings from investment programme
Operational improvements
Trading income growth above rate of SA inflation
RONA of 20% within 3 years
Improvement in the quality of earnings
Revised Strategic Planoutcome
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Economic Outlook and Prospects
Credit crisis limits cash for investment
Slowdown in consumer spending
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Consumer Spending
-15
-10
-5
0
5
10
15
20
25
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Non-durables
Semi-durables
Durables
%
Source: Econometrix
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Prospects
Improvement in trading income expected but will be negated
by a higher interest cost and tax charge
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Focus for 2009
Operational performance – Packaging Excellence
Recovery of cost increases
Cash management
Optimising benefits of capex projects
Successful completion of projects underway
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Changes in Directorate
Robbie Williams retired 21 November 2008
Roy Andersen and Phinda Madi appointed non-executive
directors 21 November 2008
Andrew Marshall appointed director and CEO 1 March 2009
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Andrew Marshallbrief cv
53 years old
B Com (marketing) (hons), Diploma in Packaging,
Strategic management course
CEO of Oceana for last 10 years
Previously MD of Petpak
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Thank You