Interim financial results Half-year ended December 31 2017 - - PowerPoint PPT Presentation

Interim financial results Half-year ended December 31 2017

Presentation to Investors and Analysts February 2018

CREATING OPPORTUNITIES  GROWING PEOPLE  UNLOCKING POTENTIAL

INTRODUCTION AND BUSINESS OVERVIEW

Bidvest Namibia listed on 26 October 2009 on the Namibian Stock Exchange. Our shareholding is split as follows:

Directors 1% The Bidvest Group Limited 52% Companies 8% Individuals 1% Other Pension and Provident Funds 14% Government Institution Pension Funds 11% Ovanhu Investments (Pty) Limited 13%

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MAIN HIGHLIGHTS - 2017

• Majority of divisions experienced a decline in revenue.
• Fishing division sold another vessel: Capital profit of N$48,8 million. Horse Mackerel fleet now

right-sized.

• Freight & Logistics improved trading profit, despite decline in revenue.
• Food & Distribution remains a concern. New management put in place.
• Automotive is also affected in its new vehicle sales by the pressure on the consumer.

Used vehicle sales are making a growing contribution. Improvement in Customer Satisfaction ratings.

• Commercial and Industrial Services and Products improved trading profit despite revenue being

flat.

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BUSINESS OVERVIEW

Bidvest Namibia

Corporate/Properties/IT Bidfish Automotive Food & Distribution Freight & Logistics Commercial & Industrial Services & Products

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FINANCIAL REVIEW

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EPS (cps)

31,3% to 12,6cps

THE KEY 2018 NUMBERS

REVENUE

9,8% to NAD1,8bn

DIVIDEND (cps)

No interim dividend

HEPS (cps)

129,5% to -2.5cps

TRADING PROFIT

79,9% to NAD4,4m

NET TANGIBLE ASSET VALUE (cps)

2,5% to 745cps

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FINANCIALS

• CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

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• Revenue under pressure
• Expenditure was cut but not sufficient for loss in revenue
• Average 1 USD = N$13.45 compared to the prior year rate of N$13.99

Half-year ended December 31 2017 Note: IFRS compliant Unaudited Unaudited % Change NAD000’s 2017 2016 Revenue 1 766 594 1 957 891  9,8% Gross profit 253 389 280 194  9.6% Gross profit margin % 14,3% 14,3% Other income 11 491 6 406  79,4% Trading profit 4 383 21 803  79,9% Trading profit % 0.25% 1.1%

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FINANCIALS

• CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

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Half year ended December 31 2017 Note: IFRS compliant Unaudited Unaudited % Change NAD000’s 2017 2016 Profit before tax 58 972 27 305  116,0% Taxation (13 967) (1 646)  748,5% Profit for the period 45 005 25 659  75,4% Profit attributable to non-controlling interest 18 323 5 237  249,9% Profit attributable to shareholders of the company 26 682 20 422  30,7% Headline earnings (6 060) 20 519  129,5% HEPS (cps) (2.9) 9.7  129,5% Dividends (cps) 0,0 4,0 

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FINANCIALS

• CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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• Current ratio still reflecting strong liquidity

Half year ended December 31 2017 Note: IFRS compliant Unaudited Unaudited % Change NAD000’s 2017 2016 Non-current assets 1 157 198 1 288 586  10,2% Current assets 1 854 667 1 844 731  0,5% Total assets 3 011 865 3 133 317  3,9% Capital and reserves 2 150 625 2 236 054  3,8% Non-current liabilities 156 611 185 734  15,7% Current liabilities 704 629 711 529  0,9% Total equity and liabilities 3 011 865 3 133 317  3,9% Current assets/current liabilities 2,6 2,6

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FINANCIALS

• CONSOLIDATED CASHFLOWS

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20.40 (25.20) (87.60) (46.20) 6.60 (95.90) 65.80 (150.00) (100.00) (50.00)

• 50.00

100.00

2016 N$ million

12.60 33.80 (119.40) (31.60) 1.80 17.70 43.80 (150.00) (100.00) (50.00)

• 50.00

100.00

2017 N$ million

Cash generated by operations before working capital changes Working capital utilised Net finance income Taxation paid Distributions Cash flows of investment activities Cash flows from financing activities

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FINANCIALS

• SEGMENT REVENUE

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20% 27% 7% 33% 12% 1%

REVENUE 2016

Automotive Fishing Freight and Logistics Food and Distribution Commercial and Industrial Services and Products Corporate Services and Properties 18% 26% 7% 34% 14% 1%

REVENUE 2017

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• SEGMENT TRADING PROFIT

FINANCIALS

4,255 (8,452) 7,981 (15,975) 11,073 5,501 16,493 (9,214) 3,878 (2,134) 9,233 3,547 (20,000) (15,000) (10,000) (5,000)

• 5,000

10,000 15,000 20,000

Automotive Fishing Freight and Logistics Food and Distribution Commercial and Industrial Services and Products Corporate Services and Properties Trading Profit 2017 Trading Profit 2016

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HISTORIC PERFORMANCE

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15 18 23 23 24 22 20 4 15 21 36 36 46 39 34 18 6

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Dividends per share

H1 H2

36 42.1 49.6 69.5 54.2 55.4 49.6 44.2 9.7

• 2.9

43 45.3 70.4 70.8 75.3 60.6 53.6 42 12.7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Headline earnings per share

H1 H2

AUTOMOTIVE

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AUTOMOTIVE

Decline in new vehicle sales

• Lowest automotive industry rolling 12 month vehicle sales performance for the past 5 years
• Net Revenue from combined new vehicle sales dropped by 32% compared to same period in

the previous financial year

• Halt on Government spending
• Slowdown in consumer spending due to current economic climate
• Tighter credit conditions (Credit Act amendments) and indebted customers
• Depressed business and consumer confidence
• Ford Finance offerings in joint venture with Standard Bank Namibia introduced close to the

end of the six month period

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AUTOMOTIVE

Improved Used vehicle retail sales volumes (49.65%) compared to the same six months of the previous financial year Focus on after sales

• Improved work hours
• Improved productivity
• Improved efficiency
• Maintain and further improve healthy Customer Satisfaction ratings

Focus on improved finance and insurance income opportunities and accessory sales through the fitment centre Focus on the cost absorption model to be less reliant on the contribution from new vehicle sales

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AUTOMOTIVE OUTLOOK

Novel Motor Company

Take on the Automotive business

• New satellite showroom opened in the southern part of Windhoek

and the Ford Finance offerings

• Used vehicle focus

− A shift in the market from new to used

• Aftersales

− Focus on customer satisfaction − Improved activity at the service centres as consumers increase spend on parts and servicing to extend the life of vehicles

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BIDFISH

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BUSINESS OVERVIEW

• BIDFISH

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25% 27.82%

Namsov Fishing Enterprises (Horse mackerel)

69.55%

Namibia Sea Products (Pelagic)

69.55%

Tetelestai (Aquaculture)

69.55%

Pesca Fresca (Pelagic – Angola)

34.08%

Carapau (Horse Mackerel)

17.38%

Industria Alimentar Carnes De Mocambique

27.82%

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BIDFISH

Horse mackerel

• Vessels were sold to right size extraction capacity in line with the current and expected future

quota allocations;

• Quota allocations remain a constraint; purchase of available quota is expensive and feasibility is

considered prior to purchases;

• Catch rates and size mixes have deteriorated year on year;
• Market prices are under severe pressure, consumers with restricted purchase capacity lean to

cheaper fish and other protein products Angola

• Local sardinella market remains stable;
• Repatriation of profits remain challenging;
• Strong fishmeal sales return;
• Currency fluctuations and the devaluation of the Kwanza have impacted profitability;
• Vessel breakdowns negatively affected catch volumes

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BIDFISH

Pilchards

• Catches remained poor due to bad weather and weak resource;
• Cannery remained closed

Aquaculture

• One vessel was sold resulting in decreased operational cost;
• Downsized and streamlined business to sustainable size;
• Moved from open ocean farming to salt pans to reduce the environmental threat to

biological assets Glenryck

• Volumes are picking up

Mozambique

• Currency fluctuations have impacted profitability

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BIDFISH OUTLOOK

Namsov , Carapau (Horse Mackerel) Namsea (Pilchards) Twafika (Monk) Comet / Pesca Fresca (Angola) Tetelestai (Oysters) Downstream Distribution Mozambique JV

Take on the individual fishing businesses

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BIDFISH OUTLOOK

Equity

• Bidvest Namibia is evaluating all fishing assets and has entered into negotiations to sell some of

its fishing interests. Horse mackerel

• Increases to quota levies, observer fees and the introduction of an export levy by government

place continuous pressure on profitability; Angola

• Currency issues and repatriation of profits remains challenging;
• Maintain infrastructure and vessels to ensure optimal profitability
• Pursuing options to disinvest in Angola

Pilchards

• MFMR placed a 3-year moratorium on pilchard catches (2018 – 2020)
• Sell purse seine vessels, property and buildings

Tetelestai

• Expected to be stable in the future due to downscaling to controllable size
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BIDFISH OUTLOOK

Mozambique

• Pursuing options to disinvest in Mozambique

Glenryck

• Transfer ownership of Glenryck brand and trading company to Bidvest Namibia Limited
• Profits are expected to flow from this venture in the future

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COMMERCIAL AND INDUSTRIAL SERVICES AND PRODUCTS

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CISP

COMMERCIAL AND INDUSTRIAL SERVICES AND PRODUCTS

Cecil Nurse had a fair year-to-date Kolok showed a slight improvement from last year Minolco performed extremely well copy-clicks on the rise and increased business from internal rentals rather than outright sales Plumblink has expanded by opening a branch in Swakopmund Rennies Travel performed in line with prior year despite some overrides still outstanding Steiner has done well in line with prior year with a growing hygiene rental customer base and the added pest control services Voltex continues to struggle in a very competitive market. The construction industry has come to a halt and has had a negative impact on the turnaround efforts. However, losses are being reduced. Waltons has had a stable year given the downward spending of consumers Prestige Bidvest Namibia has taken over Prestige, a leading cleaning agency with contracts in all industries, with > 500 employees

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CREATING OPPORTUNITIES  GROWING PEOPLE  UNLOCKING POTENTIAL Cecil Nurse Kolok Minolco Plumblink Rennies Travel Steiner Voltex Waltons Prestige

CISP OUTLOOK

Take on the Commercial businesses

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CISP OUTLOOK

• The economy is suffering and its affecting all commercial entities
• Consumer and Government spending has been down and is expected to remain so

for the ensuing year

• Growth is therefore not to be expected in the current entities, unless it is of an acquisitive
• r expanding nature
• The aim is to remain competitive and to be the preferred supplier to the nation

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FOOD & DISTRIBUTION

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FOOD AND DISTRIBUTION

Taeuber & Corssen

• A slowdown in consumer spending
• Distribution agreement with Parmalat ended end of August 2017
• Inefficiencies not yet resolved
• New management in place – busy restructuring business and processes
• Major initiative is to enhance the information technology environment

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CREATING OPPORTUNITIES  GROWING PEOPLE  UNLOCKING POTENTIAL Taeuber & Corssen

FOOD AND DISTRIBUTION OUTLOOK

Take on the Food and Distribution businesses

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• Attention is being given to the inefficiencies.

− Fleet management system – to improve efficiencies on trucking and the utilisation of available trucks. Less trucks have been put onto the roads, reducing fleeting costs to a minimum − Stock management system

FREIGHT AND LOGISTICS

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FREIGHT AND LOGISTICS

• Continued low levels of project activity
• Project activity in Luderitz lead to additional profit in period under review
• Ongoing cost saving measures remain in place
• Continue to pursue Oil & Gas opportunities

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FREIGHT AND LOGISTICS OUTLOOK

Manica Group Namibia

Take on the Freight and Logistics businesses

• Focus remains on containing costs and to compact the business
• Simultaneously a drive to secure projects is underway

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CONCLUSION