Audited Financial Results for the year ended 30 June 2020 Agenda - - PowerPoint PPT Presentation
Audited Financial Results for the year ended 30 June 2020 Agenda 01 Introduction Lindsay Ralphs 02 Financial review Mark Steyn 03 Operational updates Lindsay Ralphs 04 Strategic overview and outlook Lindsay Ralphs 05 Appendices 2
for the year ended 30 June 2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020 THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
Introduction
Lindsay Ralphs
Financial review
Mark Steyn
Operational updates
Lindsay Ralphs
Strategic overview and outlook
Lindsay Ralphs
Appendices 01 02 03 04 05
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
INTRODUCTION
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
Since mid-March 2020
by securing extra R4.5 billion general banking facilities but did not need to access it
through a R400 million Bidvest fund to assist employees not working; Solidarity Fund donation; national school readiness programme; Woza Matric of 2020 programme; food hampers
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
INTRODUCTION
* Services, Freight, Financial Services divisions and Properties ** Branded Products, Commercial Products, Automotive divisions and Corporate
Sequential improvement since April 2020 trough
March April May June July August FY2019 FY2020
Services* revenue stable and resilient
(March 2019 = 100)
March April May June July August FY2019 FY2020
Trading & Distribution** revenue recovered sharply
(March 2019 = 100)
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
INTRODUCTION
› Hygiene now front-of-house › Scope of cleaning services widening
1 Includes Steiner, Prestige, Noonan and PHS 2 Includes Bidair, Travel cluster, World Currency Card, service contracts with hotel groups as well as Bidvest Car Rental in FY2019
New normal: opportunities and challenges
Cleaning & hygiene1 revenue contribution significant and growing Travel & hospitality2 revenue contribution limited
and lockdown decimated the hospitality sector
› Divested Bidvest Car Rental, Bidair Services › Extensive restructuring to lower cost of doing business in Travel cluster
agility and innovation in Services and Branded Products
0% 5% 10% 15% 20% FY2019 FY2020 0% 2% 4% 6% 8% FY2019 FY2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
INTRODUCTION
28% 22% 8% 15% 4% 23% 38% 25% 21% 7% 6% 3%
Diverse portfolio of well-run businesses
Contribution to revenue
Services Freight Branded Products Commercial Products Automotive Financial Services
Contribution to trading profit
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
FINANCIAL REVIEW
* As % of revenue ** As % of trading profit
#
Interest adjusted for IFRS 16
R billion Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 76.5 76.1 0.6% Gross profit* 30.6% 29.6% ↑ Operating expenses 18.1 16.5 9.6% COVID-19 expenses (included in operating expenses) 1.6 – EBITDA 6.8 8.1 (16.3%) Trading profit (incl. COVID-19 expenses) 5.3 6.7 (19.9%) Trading profit margin (incl. COVID-19 expenses)* 7.0% 8.8% ↓ Normalised HEPS (cents) 1 028.3 1 334.4 (22.9%) HEPS (cents) 553.2 1 366.4 (59.5%) EBITDA interest cover (times)# 8.4x 8.8x ↓ Net debt/EBITDA (times) 2.1x 0.9x ↓ Cash conversion** 135.5% 62.4% ↑ Cash generated from operations 9.2 6.6 ↑ ROFE 23.0% 23.2% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
FINANCIAL REVIEW
Gross income
Revenue
by Adcock consolidation and 2-month contribution from PHS
Expenses
IFRS 16 and COVID-19 charges
Other costs
Will increase with PHS charge in FY2021
Trading profit
Properties and Adcock within Branded Products
Net capital items
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
FINANCIAL REVIEW
Associate losses
impairment of SAA settlement claim
Net finance charges
Taxation
HEPS
Non-controlling interest
Dividend
programmes
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
FINANCIAL REVIEW
but remain undrawn
Moderate gearing well within covenants
Interest cover
9,0 6,3 8,9 7,8 10,0 19,2 7,6 8,0 8,2 8,8 8,2 8,4 5 10 15 20 1HFY2018 FY2018 1HFY2019 FY2019 1HFY2020 FY2020 Net debt (Rbn) EBITDA interest cover (x)
Debt maturity
5 000 10 000 15 000 FY2021 FY2022 FY2023 FY2024 FY2025 Foreign debt (Rbn) Local debt (Rbn)
Cash, net of short-term debt, R4.5 billion
› R4.0 billion from local banks in the process of being raised › R2.5 billion offshore cash earmarked › MIAL proceeds (~R1.0 billion) › Free cash flow › Other capital sources being contemplated
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
FINANCIAL REVIEW
› Adoption of IFRS 16 boosted the conversion but like-for-like conversion also improved to above 100%
› Lower trade receivable balances due to lower activity levels and good collections › Provisions notably higher
Cash generative businesses that are capital light
Free cash flow
(Rbn)
Cash generated vs. working capital
(Rbn)
8,3 0,9 2,0 (1,8) (1,5) (1,4) (1,5) (2,3)
Cash generated from ops pre WC Working capital released Capex Cash effects of investing activities Net finance charges Taxation Distributions Cash effects of financing activities
3,9 4,4 4,1 3,8 5,5 2,8 (0,6) 2,2 (3,1) 1,8 (1,8) 2,7
51% 113% (18%) 62% 52% 136%
1H2018 FY2018 1H2019 FY2019 1H2020 FY2020 Cash generated from ops pre wc Net wc Cash conversion 136% cash conversion
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
and cost control. Future Cleaning struggled
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 22 091 20 648 7.0% Trading profit 2 134 2 201 (3.1%) Trading margin 9.7% 10.7% ↓ EBITDA 2 669 2 710 (1.5%) Average Funds Employed 2 550 2 515 1.4% ROFE 85.0% 87.2% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
OTC was good while Prescription volumes declined
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 17 327 11 858 46.1% Trading profit 1 404 941 49.2% Trading margin 8.1% 7.9% ↑ EBITDA 1 658 1 091 51.9% Average Funds Employed 6 476 2 846 127.5% ROFE 23.2% 33.1% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 6 308 6 698 (5.8%) Trading profit 1 161 1 386 (16.3%) Trading margin 18.4% 20.7% ↓ EBITDA 1 385 1 668 (17.0%) Average Funds Employed 4 000 3 437 16.4% ROFE 29.0% 40.2% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 11 943 12 851 (7.1%) Trading profit 393 736 (46.6%) Trading margin 3.3% 5.7% ↓ EBITDA 500 884 (43.4%) Average Funds Employed 4 151 4 157 (0.1%) ROFE 9.5% 17.7% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
the new business take-on slower than expected; IFRS9 ECL provision increased substantially
by acquisition costs and broker commissions
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 2 650 2 701 (1.9%) Trading profit 304 585 (47.9%) Trading margin 11.5% 21.6% ↓ EBITDA 533 836 (36.2%) Average Funds Employed 3 704 3 558 4.1% ROFE 8.2% 16.4% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 18 263 22 848 (20.1%) Trading profit 178 532 (66.6%) Trading margin 1.0% 2.3% ↓ EBITDA 215 609 (64.6%) Average Funds Employed 2 579 4 106 (37.2%) ROFE 7.0% 13.0% ↓
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
OPERATIONAL UPDATES
Vacancies increased slightly but remain well below industry norm
initiatives and broader humanitarian efforts (school readiness project, Woza Matric of 2020 campaign, food hampers)
R million Year ended 30 June 2020 Year ended 30 June 2019 Change Revenue 2 139 2 447 (12.6%) Trading profit (234) 287 (181.3%) Trading margin nm 11.7% ↓
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
STRATEGIC OVERVIEW AND OUTLOOK
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Macro and operational outlook
and prosperity undeniable
relevant and have sufficient scale
with an innovative and value-adding mindset
participate in these
Maintain strong financial position
bridge funding
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
STRATEGIC OVERVIEW AND OUTLOOK
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Allocate capital
to further niche expansion
Stewardship
Most businesses look set to maintain their ratings
fund, comprehensive Group-wide wellness programme and various other initiatives
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
STRATEGIC OVERVIEW AND OUTLOOK
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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Investment case
A leading B-2-B services, wholesale and distribution group operating in the areas
products, electrical products, financial services, freight management, office and print solutions, outsourced hard and soft services and automotive retailing
› Services – 65% of trading profit › Trading and distribution – 35% of trading profit
supported by a small corporate office
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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culminating in excellent margin
a good result despite the loss of a sizeable
effectively stop trading as cinemas and pubs were closed. Cash collection was excellent
in line with forecasts. New business sales was strong. Synergies are being explored
comprehensive FM contract was mobilised in
related products and services, shifting the business mix somewhat. Increased credit notes were issued for closed businesses. The catering offering was elevated with the acquisition of Mastrantonio catering
Outlook for FY21
are being pursued
will be capitalised on
and adapt service offering accordingly
related activities depend on when international borders are opened
and offering will be pursued
result, primarily due to Protea Coin and UDS
quickly to cargo flow changes. The lounges performed well up to March but then shut-down completely since. The ground handling services are being divested
Trading was already under pressure before the lockdown as corporate travel
reduced and operations streamlined. Niche inbound activities are a focus area
hospitality demand in Q4 and lower corporate demand. Pureau’s residential customers provided good base demand
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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influenced demand in various units differently although demand in the pharmaceutical market was generally slow from March 2020. Margin under some pressure due to FX and COVID-19 related costs
during lockdown negatively impacted gross profit. Operating expenses were very well controlled
revenue reduction and to improve efficiencies
labels sold to essential service providers was good. Packaging activities delivered a solid result as the contraction in fast food volumes were compensated for by e-commerce demand. Data saw an accelerated trend of communications moving to electronic
Outlook for FY21
in the short term
to persist
maintained GP margin. Konica Minolta bedded down the Treasury contract well. Kolok’s experienced a decline in cartridge volumes but returns were well managed. Waltons implemented a new warehouse management system and improved their on-line
WFH and safety product ranges
Products was impacted by the
available on various on-line platforms gained more traction. The Croxley brand continues to go from strength to strength
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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were lower, particularly chemicals, but excess throughput charges and recoveries assisted. Capacity is being actively managed
maize exports only started in June but record wheat volumes were imported
increased 1% in BC. Engagements are
increase rail capacity and consistency
Outlook for FY21
and another good local crop could result in 2H volume as well. Wheat imports will likely be lower due to indication of a good 2020 SA wheat crop
remain good. The handling of higher-value product is being pursued
logistics and international cargo movement activities are showing a positive trend, albeit slow
platform and rightsize operations accordingly
a general decline in volumes and the change in international partner. The impact of the extended lockdown affected local logistics activities and movement of international cargo. The Sebenza integration has progressed well
customers redirected exports to alternative corridors
materially
while OnTime, and the broader automotive industry, was impacted by Brexit uncertainty and the pandemic
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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business confidence, exacerbated by trade restrictions
the Plumblink branch completely restructured after further losses were incurred
profit contributor in the division. Product innovation and contract wins resulted in an excellent result
to shift away from contract sales to the insurance sector and trade sales. Rebates declined. Its footprint and product range continue to stand it in good stead
Outlook for FY21
availability and competitors floundering
focus areas, particularly given currency volatility
at Electrical. The traditional wholesale activities and Versalec experienced tough trading conditions. The specialist businesses fared better, particularly Cabstrut, Electech and MVLV
margin improved and operating costs declined
despite a challenging capital equipment market on the back of good margin management and a larger rental fleet
by lower demand, poor factory recoveries and lower margins
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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related activities (Master Currency, Western Union, global currency card and treasury outsource services) decimated as borders closed. Capital paydowns on old fleets continued. Transnet HCV contract slower than expected to roll-out. Opex increased
to R7.3 billion, loans & advances 17% to R3.1 billion and leased assets declined 13% to R1.4 billion
Bank under the SARB guarantee scheme
granted payment deferral
Outlook for FY21
platform to cut cost of doing business
as well as healthy deposit base
to grow book
targets
with enhanced functionality
lower vehicle sales. Direct channel sales held
in Q3 and Q4
by 18%. Higher customer acquisition cost and broker commissions resulted in bigger losses
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
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new vehicles (industry -19%) and 22% fewer used vehicles. Luxury sales continue to decline disproportionately
Nissan/Renault franchises were profitable
Outlook for FY21
and asset base
disposable income expected to weigh on demand
a credible performance
and will take time to work down. Provisions increased
a very weak Q4
in select shared service functions
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THE BIDVEST GROUP LIMITED Audited Financial Results for the year ended June 2020
APPENDICES
Investment manager (30 June 2020) Shareholding % PlC 56 960 973 16.7 Westwood Global Investments LLC 16 665 799 4.9 Old Mutual Plc 14 182 865 4.2 Lazard Asset Management LLC 13 817 505 4.1 The Vanguard Group Inc 12 981 098 3.8 BlackRock Inc 11 597 027 3.4 Fidelity Management and Research Company 11 579 812 3.4 J.P. Morgan Asset Management 10 485 903 3.1 54% 32% 6% 3% 5% South Africa United States United Kingdom Singapore Rest of the World
Investment management shareholding Geographic spread of shareholders