Organisational Structure

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1 Introduction Segmentals Financials Group Outlook Organisational Structure Bidfreig ht Bidserv Bidvest Europe Bidvest Australasia Bidfood Bid Auto Bidpaper Plus Bid Industrial & Commercial Products Bid Prop Corporate

description

Organisational Structure. Bidfood. Bidvest Australasia. Bidserv. Bidvest Europe. Bidfreight. Bid Industrial & Commercial Products. Bid Prop. Corporate. Bid Auto. Bidpaper Plus. Historic Performance. 5.2%. 5.2%. 5.2%. 4.9%. 4.9%. 4.9%. 4.8%. 4.8%. 4.8%. 4.7%. 4.7%. 4.5%. - PowerPoint PPT Presentation

Transcript of Organisational Structure

Page 1: Organisational Structure

1Introduction SegmentalsFinancials Group Outlook

Organisational Structure

Bidfreight Bidserv Bidvest Europe Bidvest Australasia

Bidfood

Bid AutoBidpaper Plus

Bid Industrial & Commercial

Products

Bid Prop Corporate

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2Introduction SegmentalsFinancials Group Outlook

Historic Performance

17% CAGR over 5 years

HEPS

215.9 243.2 248.0 302.7368.6

452.4216.9 220.3296.0

353.7436.0

0

200

400

600

800

1000

2002 2003 2004 2005 2006 H12007

cp

s

1H 2H

17% CAGR over 5 years

DPS

90.0 108.0 113.4 133.8162.0

198.0100.0112.0

136.8172.2

207.0

0

100

200

300

400

2002 2003 2004 2005 2006 H12007

cps

1H 2H

Annualised Returns

49 51 53 54

25 2731 32

0

10

20

30

40

50

60

2003 2004 2005 2006

%

ROFE ROE

4.5% 4.4%4.7%

4.4%4.9%

5.2%4.9%

4.8%4.8%

4.9%

Trading profit & margins

0

1000

2000

3000

4000

2003 2004 2005 2006 H1 2007

Rm

1H 2H

4.5% 4.4%4.7%4.9%

5.2%4.9%

4.8%

5.2%

4.3%

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Unaudited ResultsUnaudited Results

For the six months endedDecember 31 2006

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4Introduction SegmentalsFinancials Group Outlook

Agenda

Introduction & Overview

Financial Results

Outlook

Appendices: Appendix 1: Segmental Outlook Appendix 2: Divisional Review

Page 5: Organisational Structure

Introduction & OverviewBrian Joffe

Introduction SegmentalsFinancials Group Outlook

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6Introduction SegmentalsFinancials Group Outlook

H1 2007 Highlights

Introduction

► 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

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7Introduction SegmentalsFinancials Group Outlook

H1 2007 results summary

Introduction

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 45.8% in H1 2007 vs 48.1% in H1 2006

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8Introduction SegmentalsFinancials Group Outlook

Segments at the forefront of performance

Segment H12006 % ch. H1 2007 H1 2006 % ch. H1 2007

Bidserv 2 256,8 +14.3+14.3 2 580,5 260,5 +17,3+17,3 305,6

Bidvest Australasia

3 387,3 +22.0+22.0 4 131,0 108,8 +43.9+43.9 156,5

Bid Industrial and Commercial Products

3 199,5 +30.6+30.6 4 177,2 183,3 +75.7+75.7 322,2

Bid Auto 8 315,1 +15.9+15.9 9 640,2 290,2 +22.3+22.3 355,0

Revenue (Rm) Trading Profit (Rm)

Introduction

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9Introduction SegmentalsFinancials Group Outlook

▶ Bidserv:Bidserv: up 17%, driven by strong results out of TMS, Top Turf, Aviation, Bid Travel and Rennies Bank

▶ Bidvest Australasia:Bidvest Australasia: up 44% in ZAR and 25% in AUD, driven organically (Melbourne & Sydney showing promise)

▶ Bid Industrial and Commercial products:Bid Industrial and Commercial products: up 76%, driven by Voltex and Office Products (marked improvement from Waltons Gauteng)

▶ Bid Auto:Bid Auto: up 22%, driven by a 40% increase in Financial Services and an 18% increase in Motor

Segments at the forefront of trading performance

Introduction

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10Introduction SegmentalsFinancials Group Outlook

Segments holding their own

Segment H12006 % ch. H1 2007 H1 2006 % ch. H1 2007

Bidfreight 7 687,2 +24.4+24.4 9 561, 5 250,0 +11.6+11.6 279,0

Bidvest Europe 10 366,0 +44.9+44.9 15 016,6 286,3 +19.2+19.2 341,2

Bidfood 1 751,1 +18.0+18.0 2 065,6 160,8 +4.2+4.2 167,5

Bidpaper Plus 871,4 +12.0+12.0 975,8 103,5 +10.9+10.9 114,8

Revenue (Rm) Trading Profit (Rm)

Introduction

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11Introduction SegmentalsFinancials Group Outlook

▶ Bidfreight:Bidfreight: up 12%, profit growth below revenue growth due to lower volumes in Bulk, Ports & Distribution

▶ Bidvest Europe:Bidvest Europe: up 19% in ZAR; flat in sterling; MOD impacts but Deli XL and Horeca did commendably well

▶ Bidfood:Bidfood: up 4%, masks some notably good performances but Bidbake suffers sharp margin erosion

▶ Bidpaper Plus:Bidpaper Plus: up 11%, respectable result with Lithotech, Printing & Conversion, and the DRC project worthy of mention

Segments holding their own in trading performance

Introduction

Page 12: Organisational Structure

Financial ResultsDavid Cleasby

Introduction Segmentals Group OutlookFinancials

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13Introduction SegmentalsFinancials Group Outlook

Consolidated Income Statement

Financials

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

Avg

R/£13.75

Avg

R/£ 11.56

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

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Consolidated Income Statement

Financials

NOTE:NOTE: Foreign food businesses = 23.9% (R497,7m) contribution to Trading Income vs 23.2% (R395,1) in H1 2006

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%

Avg

R/£13.75

Avg

R/£ 11.56

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

Trading profit 2 085,7

+22.4+22.4 1 703,8

2063,4 +19.5

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15Introduction SegmentalsFinancials Group Outlook

Consolidated Income Statement

Financials

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

Avg

R/£13.75

Avg

R/£ 11.56

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

Trading profit 2 085,7

+22.4+22.4 1 703,8

2063,4 +19.5

Net finance expense (225,0) +36.9+36.9 (164,4) (221,3) +34.6

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Consolidated Income Statement

Financials

Associates: Tiger Wheels, Enviroserv (+38% HEPS), Compu-clearing & other

Avg

R/£13.75

Avg

R/£ 11.56

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

Trading profit 2 085,7

+22.4+22.4 1 703,8

2063,4 +19.5

Net finance expense (225,0) +36.9+36.9 (164,4) (221,3) +34.6

Associate Income 37,7 +60.4+60.4 23,5 37,7 +60.4

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17Introduction SegmentalsFinancials Group Outlook

Consolidated Income Statement

Financials

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%

Avg

R/£13.75

Avg

R/£ 11.56

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

Trading profit 2 085,7

+22.4+22.4 1 703,8

2063,4 +19.5

Net finance expense (225,0) +36.9+36.9 (164,4) (221,3) +34.6

Associate Income 37,7 +60.4+60.4 23,5 37,7 +60.4

Taxation (519,1) +23.4+23.4 (420,6) (499,4) +19.9

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Consolidated Income Statement

Financials

Namsov ↓ Versalec ↑ BidAuto ↑

Avg

R/£13.75

Avg

R/£ 11.56

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

Trading profit 2 085,7

+22.4+22.4 1 703,8

2063,4 +19.5

Net finance expense (225,0) +36.9+36.9 (164,4) (221,3) +34.6

Associate Income 37,7 +60.4+60.4 23,5 37,7 +60.4

Taxation (519,1) +23.4+23.4 (420,6) (499,4) +19.9

Minority interests (28,3) -3.1-3.1 (29,2) (28,8) -1.4

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Rm’s H1 2007 % ch H1 2006 H1 2007 % ch

Revenue 47 871,9 +25.2+25.2 38 240,1 45 025,2 +17.7+17.7

Trading profit 2 085,7

+22.4+22.4 1 703,8

2063,4 +19.5

Net finance expense (225,0) +36.9+36.9 (164,4) (221,3) +34.6

Associate Income 37,7 +60.4+60.4 23,5 37,7 +60.4

Taxation (519,1) +23.4+23.4 (420,6) (499,4) +19.9

Minority interests (28,3) -3.1-3.1 (29,2) (28,8) -1.4

Headline earnings 1 355,1 +22.7+22.7 1 104,2 1 304,6 +18.2

HEPS (cents) 452,4 +22.7+22.7 368,6 435,5 +18.2

Diluted HEPS (cents) 440,3 +25.8+25.8 350,0

DPS (cents) 198,0 +22.2+22.2 162,0

Consolidated Income Statement

Avg

R/£13.75

Avg

R/£ 11.56

Financials

Six months ended December 31 2006 H1 2007 in constant currency

(R/£ 11.56)

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)

DPSDistribution policy = +/- 2x covered

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84

-746

-1304

-628

-703

-178

-2306

2629

-3500 -2500 -1500 -500 500 1500 2500

Cash generated from operations

Working capital utilised

Net finance charges

Taxation

Distributions

Cash effects of investment activities

Cash effects of financing activities

Currency adjustments

Consolidated Cash Flow Statement – Rm’s

Financials

Six months ended December 31 2006

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

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Bidvest net working capital flows vs cash generated - Rbn

Financials

1.11.4

-1.1

0.9

2.0 2.2 2.2

-1.2

-2.3

-0.7

1.51.8 1.8

2.6

-3

-2

-1

0

1

2

3

4

H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 H1 2007

Net working capital Cash generated by operations

Net working capital cycle peaks in first half (December) each year

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Gearing

Financials

Gearing capacity: Balance sheet progressively being better utilisedInterest cover of 9.3x; room to decrease to 5-6x if requiredGrowth into more activities requiring financing, eg. fleet business

2.4

4.2

1.01.5

3.0

11.6 11.410.3 10.7

9.3

0

1

2

3

4

5

0

2

4

6

8

10

12

14

Net interest-bearing debt (Rbn) Interest cover (x)

Target interest cover range

H1 2005 F2005 H1 2006 F2006 H1 2007

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Group OutlookBrian Joffe

Introduction Financials Group Group Outlook

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24Introduction SegmentalsFinancials 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

Group Outlook

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GDP growth:GDP growth: Expected to remain good in all markets

Relative rand weakness: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: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:Upward phase of interest rate cycle: Experienced in all geographies served; countered by relatively positive operating conditions

Consumer spending:Consumer spending: General confidence levels remain encouraging

Benefit from infrastructure spend: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

Bidvest GroupBidvest Group - sensitivity to anticipated economic variables

Group Segmentals

OVERALL EFFECT: BROADLY POSITIVEOVERALL EFFECT: BROADLY POSITIVE

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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 above-Management confident of delivering above-average returns and growth for F2007average returns and growth for F2007

Group Outlook

Page 27: Organisational Structure