ONDERSTEPOORT BIOLOGICAL PRODUCTS LTD
description
Transcript of ONDERSTEPOORT BIOLOGICAL PRODUCTS LTD
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ONDERSTEPOORT BIOLOGICAL PRODUCTS LTD
PRESENTATION TO THE PORTFOLIO COMMITTEE:
2 NOVEMBER 2004
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PRESENTATION OUTLINE:
1. Introduction (Mr S C Makama – Board Chairperson)
2. Governance Report (Mr S C Makama – Board Chairperson)
3. Company Performance for 2003/04 (Dr L Makuleni – Managing Director)
4. Human Resource Report (Ms S A Bokwe)5. Financial Performance 2003/04 (Mr M P van
Jaarsveld – General Manager: Finance)6. Conclusion (Dr L Makuleni)
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INTRODUCTION
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VISION:
“To be a centre of excellence in developing, producing and marketing biological products – Serving Africa…Serving the world.”
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MISSION :
“To translate science into biological products, knowledge and technology - resulting in improved animal health, food security and safety for all our stakeholders”
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VALUES:
OBP will conduct business in such a way to ensure: A high level of integrity; High ethical standards; The highest standards of quality;
and Excellence in everything that we do.
We accept that: People are our major assets; As a State owned entity we have the
responsibility to provide for Public Good;
We have a responsibility to our society and the environment
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VALUES:
As a Company we will strive to promote: Respect for all people; Animal welfare; Development of our employees;
and Customer care and satisfaction.
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CORPORATE GOVERNANCE:
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CORPORATE GOVERNANCE –
FUNCTIONING OF BOARD The Board retains full and effective
control of the Company To this end, the Board met quarterly, and
also scheduled 6 additional meetings The Board is committed towards Good
Corporate Governance: Induction Director Development Programme
Agreed to assessment of Board and Board Committees
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CORPORATE GOVERNANCE – FUNCTIONING OF BOARD
COMMITTEES
COM MEMBERS NO. OF MEETINGS
ACHIEVE-MENTS
Audit Com
Mr H QanguleMr S C MakamaMs K R HlaleleMD & GM: Finance attends by invitation
5 Meetings to deal
with 2004/05 matters
Developed Policies:Dividend MaterialityFraud ManGoing Concern AFS & AR
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CORPORATE GOVERNANCE – FUNCTIONING OF BOARD
COMMITTEESCOM MEMBERS NO. OF
MEETINGSACHIEVEMENTS
Rem-Co
Mr S C MakamaDr M M DyasiMs M S KhozaDr P J PullingerMs M D NogeMD, GM:HR &
GM Finance attends by invitation
5 Meetings to deal
with 2004/05 matters
Director RemRem Policy
for CompanyRevision of
Conditions of Service
Impl of market related rem
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CORPORATE GOVERNANCE – FUNCTIONING OF BOARD
COMMITTEES
COM MEMBERS NO. OF MEETINGS
ACHIEVEMENTS
Risk Man Com
Dr L MakuleniMs K R HlaleleMr M P v Jaarsveld (GM: Fin)Dr B Dungu (GM: Ops, R&D)EMU Manager attends by invitation
3 Meetings to deal
with 2004/05 matters
Risk AssessmentRisk Man PlanAddressing
risks of facility & equipment
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CORPORATE GOVERNANCE – FUNCTIONING OF BOARD
COMMITTEES
COM MEMBERS NO. OF MEETINGS
ACHIEVEMENTS
R & D Com
Dr M M DyasiDr M MadikizelaDr L MakuleniDr B Dungu (GM: Ops, R&D)National Sales
Man. attends by invitation
2 Meetings to deal
with 2004/05 matters
Development of R & D Strategy
R & D Needs Analysis
Prioritizing & assessing R & D Projects
Man. of IP
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CORPORATE GOVERNANCE – FUNCTIONING OF BOARD
COMMITTEES
COM MEMBERS NO. OF MEETINGS
ACHIEVEMENTS
OSH Action Com
Ms S Burger (CS)Mr P M Pieterson (GM: TQM)Mr T Msibi (LR)
Monthly Meetings
Assessment of Compli-ance
Institute actions required Monitoring
implementa-tion of
actions
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COMPANY PERFORMANCE FOR 2003/04
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HIGHLIGHTS:
Onderstepoort Biological Products Ltd has become a respected leader in its niche
market: the production and sale of animal vaccines and related biological products.
World export sales are steady and firm; trade with the continent is being stimulated and is
increasing while domestic market sales continue to be encouraging.
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HIGHLIGHTS:
FINANCIAL
Sales Growth
Domestic
Export
Operational Profits
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-
10
20
30
40
50
60
70
80
Total Local Export
R'm
HIGHLIGHTS:
Sales History
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0%
26%
69%79%
01020304050607080
2001 2002 2003 2004
0%10%20%30%40%50%60%70%80%90%
Sales Value Annual growth %
HIGHLIGHTS
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HIGHLIGHTS:
Cumulative Sales Income 2003/04
0
10
20
30
40
50
60
70
80
Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar
This Year Budget Last Year
R'm
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HIGHLIGHTS:
Cumulative Operating Profit2003/04
-5
0
5
10
15
20
25
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
This Year Budget Last Year
R'm
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HIGHLIGHTS:
Our strengthened Research and Development capacity has resulted in
OBP having identified and initiated research projects that have led to a number of products in the pipeline.
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HIGHLIGHTS:
RESEARCH AND DEVELOPMENT
Broaden Research and Development Partners:
International Local – Academic
Institutions
3 Research and Development Projects on Trans-Boundary Diseases
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HIGHLIGHTS:
RESEARCH AND DEVELOPMENT
Establish and Strengthen Research and Development Capacity
3 Functional Departments
Increase Number of Scientists
Increase R & D Expenditure (5% of sales)
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HIGHLIGHTS
SCIENTISTS EQUITY STATUS REPORT
2000 2004
20%
60%
20%
AMWMWF
24%
13%
25%
25%
13%AMWMAFWFCM
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HIGHLIGHTS:
The streamlining of production processes has had the effect of improving our
production success rate to 90%, as well as improving our production quality, our
product availability and thereby ensuring increased customer
satisfaction
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HIGLIGHTS:
OPERATIONS Production Success Rate: 75% to 90% Facility Upgrade
Physical Infrastructure Audit
Facility Upgrade Plan Streamlining Production Processes Production Planning Processes
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Repair & maintenance since 2001
1.9
4.4
8.6
12.1
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2001 2002 2003 2004
x R1
000
000
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HIGHLIGHTS:
The new state-of-the-art small animal holding facility that has been erected is important for facilitating experimental work requiring controlled environment
and bio-containment. It will also provide much needed opportunities for
international researchers to form partnerships with OBP (Ltd).
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EXPERIMENTAL ANIMAL FACILITY:
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HIGHLIGHTS:
TOTAL QUALITY MANAGEMENT
Regulatory Affairs
Dossiers submitted
Local
International
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HIGHLIGHTS: TOTAL QUALITY
MANAGEMENT
Two new products submitted, and registered
Quality System
Experimental Animal Facility
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HUMAN RESOURCE REPORT: 2003/04
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HIGHLIGHTS:
Our Human Resource Management and Development Policies have
enabled OBP to effect a successful restructuring and transformation in terms of representivity and gender especially within the management
and decision making cadres.
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HIGHLIGHTS: HUMAN RESOURCE
Staff Compliment – 187 Human Resource Development
Skills Development ABET Bursaries Multi-skilling In-House Training Management Development programme
System and Process in place
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COMPANY PERFORMANCE:
EQUITY REPORT:
Executive: 50% Designated group, 40% female) Management: 69% Designated group, 32 % female) Scientist: 75%Designated group, 50% female)
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7%
66%
27%
AM
WM
WF
EQUITY STATUS REPORTMANAGEMENT LEVEL (2000 vs.
2004)
2000 2004
23%35%
18% 14%
5%5%
AM
WM
AF
WF
CM
IM
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SKILLS PROFILE:2002/03
PG = Post GraduatePG
6%Degree
and Diploma
20%
Grade 1242%
Below grade 1232%
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SKILLS PROFILE:2003/04
PG = Post GraduatePG6%Degree
and Diploma
25%
Grade 1241%
Below grade 1229%
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Financial results ofOnderstepoort Biological Products
Ltd2003/04
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Index
• Sales• Production• Cost Analysis• Profit• Capital expenditure• Cash position• Balance Sheet
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Sales in doses
• Budget 95m• Actual 100m• Variance 5m• Percentage +5%
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Sales in Rand
• Budget R61m• Actual R70m• Variance R9m• Percentage +14%
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0%
26%
69%79%
01020304050607080
2001 2002 2003 2004
0%10%20%30%40%50%60%70%80%90%
Sales Value Annual growth %
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Local Sales in Rand
• Budget R40m• Actual R36m• Variance R4m• Percentage -4%
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Export Sales in Rand
• Budget R21m• Actual R34m• Variance R13m• Percentage +59%
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0
10
20
30
40
50
60
70
80
2001 2002 2003 2004
R'0
00Domestic sales Export sales
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Expense analyses
Other
4%
Marketing
5%
Depreciation
6%
R&D
6%Production
26%
Salaries
45%
Maintenance
8%
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Expenses
• Budget R44m• Actual R36m• Variance R8m• Percentage +19%
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Total expenses
3034
3236
0
5
10
15
20
25
30
35
40
2001 2002 2003 2004
x R
1000
000
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Operating profit
• Budget R7m• Actual R20m• Variance R13m• Percentage +185%
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Operating Profit
R 6.6 R 7.5
R 19.5R 20.2
29%30%
15%17%
0.0
5.0
10.0
15.0
20.0
25.0
2001 2002 2003 2004
0%
10%
20%
30%
40%
Profit Profit margin
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Capital expenditure
0.2
2.51.2
17.1
0.02.04.06.08.0
10.012.014.016.018.0
2001 2002 2003 2004
x R
1000
000
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Cash position
29.9
57.6
66.9 69.7
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2001 2002 2003 2004
x R
1000
000
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Cash on hand vs. Capital expenditure
0102030405060708090
100
2001 2002 2003 2004
R'0
00 0
00
Cash Capex
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Assets
• 2003: R11.4m• 2004: R24.9m• Difference: R13.5m
Increase due to: • Building of a Small Animal Holding
Facility (R15m)• Other equipment (R1.1m) • Less Depreciation of (R2.6m)
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Inventories
• 2003: R14.7m• 2004: R20.7m• Difference: R 6.0m
Increase due to: • Blue Tongue vaccines for export order
to Italy
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Trade & other receivables
• 2003: R6.0m• 2004: R3.7m• Difference: R2.3m
Decrease due to: • Payment for Italy export-order was
invoiced and due in 2003, but not in 2004.
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Foreign exchange assets
• 2003: R -• 2004: R0.9m• Difference: R0.9m
Increase due to: • New Accounting standard (AC133)
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Cash
• 2003: R66.9m• 2004: R69.7m• Difference: R 2.8m
Increase due to: • Operational profits• Less Capital expenditure
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Trade & other payables
• 2003: R3.1m• 2004: R4.6m• Difference: R1.5m
Increase due to: • Outstanding payments on the Small
Animal Holding Facility
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Embedded derivatives
• 2003: R -• 2004: R3.3m• Difference: R3.3m
Increase due to: • New Accounting standard (AC 133)
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Provisions
• 2003: R15.5m• 2004: R13.8m• Difference: R 1.7m
Decrease due to: • 2003 Provision for product recall was
cancelled in 2004
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Liquidity Ratio
• 2003: 4.0 times• 2004: 3.7 times• Difference: 0.3 times
Industry standard: 2 times
Decrease due to: • Higher payables in 2004
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Return on Assets Ratio
• 2003: 24%• 2004: 21%• Difference: 3%
Industry standard: +15%
Decrease due to: • Higher asset value in 2004
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Return on Equity
• 2003: 43%• 2004: 38%• Difference: 5%
Industry standard: Must be better than Reserve Bank
ratesDecrease due to: • Provision for new accounting std
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CONCLUSION:
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CONCLUSION:
VALUE OF OBP TO SA Ensure domestic competencies in
vaccine products Farming community able to
respond swiftly to disease outbreaks Establish economic viable vaccine
business Develop and retain skills and
expertise in vaccinology Establish strong Research and
Development capability in vaccinology