INTERIM RESULTS for the six months ended March 2016 PRESENTATION - - PowerPoint PPT Presentation

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INTERIM RESULTS for the six months ended March 2016 PRESENTATION - - PowerPoint PPT Presentation

Jul 13, 2023 233 likes •618 views

INTERIM RESULTS for the six months ended March 2016 PRESENTATION OUTLINE 1 REVIEW OF THE SIX MONTHS 2 FINANCIAL PERFORMANCE 3 TRADING PERFORMANCE 4 OUTLOOK 5 QUESTIONS 2 RHODES FOOD GROUP INTERIM RESULTS 2016 REVIEW OF THE SIX MONTHS

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INTERIM RESULTS

for the six months ended March 2016

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RHODES FOOD GROUP – INTERIM RESULTS 2016

PRESENTATION OUTLINE

1 REVIEW OF THE SIX MONTHS 2 FINANCIAL PERFORMANCE 3 TRADING PERFORMANCE 4 OUTLOOK 5 QUESTIONS

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REVIEW OF THE SIX MONTHS

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RHODES FOOD GROUP – INTERIM RESULTS 2016

TRADING ENVIRONMENT AND PERFORMANCE

  • Strong organic growth
  • Market share gains across key product categories
  • Resilience of higher income consumers beneficial in

current constrained spending environment

  • Drought had limited impact on volumes and costs to date
  • International benefited from Rand depreciation
  • Significant investment in sales and marketing
  • Acquisitions contributed turnover of R484 million
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RHODES FOOD GROUP – INTERIM RESULTS 2016

INTEGRATION OF ACQUISITIONS

  • All FY2015 acquisitions stable and performing well
  • FY2016 acquisitions successfully integrated

– Deemster; General Mills and Alibaba Foods

  • Initial margin dilution, especially FY2016 acquisitions
  • Acquisitions post listing enabled entry into new product

categories:

– Fruit juice – Baby food – Bottled salads and pickles – Bakery products

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RHODES FOOD GROUP – INTERIM RESULTS 2016

CAPITAL INVESTMENT

  • Ongoing investment in production capacity and efficiency
  • R104 million capex in H1 2016 (H1 2015: R90 million)

Investment programme 2016 Capex Status Upgrading meat production facility R30m

Ph 2: H2 2016 Ph 3: H1 2017

Increasing production capacity at fruit juice facility R45m

Ph 1: Complete Ph 2: H2 2016

Increasing production capacity at pie facility R12m

H2 2016

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FINANCIAL PERFORMANCE

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RHODES FOOD GROUP – INTERIM RESULTS 2016

FINANCIAL PERFORMANCE

  • Turnover +53.5% to R2.0 billion
  • Gross profit margin +60 bps to 28.2%
  • Normalised operating margin 30 bps lower at 9.4%
  • Normalised profit after tax +37.6%
  • Diluted HEPS +87.2% to 48.1 cps
  • Normalised HEPS +36.9% to 50.1 cps

Normalised metrics exclude once-off listing costs of R21.8 million in FY2015

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RHODES FOOD GROUP – INTERIM RESULTS 2016

INCOME STATEMENT

R’m March 2016 March 2015 % change Turnover 1 988 1 295 54 Cost of goods sold (1 427) (938) 52 Gross profit 561 357 57 Gross profit margin 28.2% 27.6% Other income 13 16 (19) Operating costs (386) (269) 43 Operating profit 188 104 81 Net interest paid (38) (15) 153 Profit before tax 150 89 69 Tax (40) (31) 29 Profit after tax 110 58 89 Normalised HEPS Normalised diluted HEPS 50.1 48.1 36.6 35.1 36.9 37.0

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RHODES FOOD GROUP – INTERIM RESULTS 2016

GROUP TURNOVER

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RHODES FOOD GROUP – INTERIM RESULTS 2016

COMPONENTS OF TURNOVER GROWTH

R'm 1 295 +6.7% +3.0% +6.4% 1 988 800 1 000 1 200 1 400 1 600 1 800 2 000 H1 2015 revenue Volume growth Price increase Forex impact Acqui- sitions H1 2016 revenue +37.4%

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RHODES FOOD GROUP – INTERIM RESULTS 2016

SEGMENTAL TURNOVER

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RHODES FOOD GROUP – INTERIM RESULTS 2016

OPERATING PROFIT

* Normalised operating profit and margin

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RHODES FOOD GROUP – INTERIM RESULTS 2016

FOREIGN CURRENCY MANAGEMENT

  • Rand depreciated 24% against trading basket of currencies in H1 2016
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RHODES FOOD GROUP – INTERIM RESULTS 2016

WORKING CAPITAL MANAGEMENT

March 2016 March 2015 Net working capital days* 115 152 Inventory 128 154 Accounts receivable 50 59 Accounts payable (58) (61)

  • Acquisitions increased working capital by R26 million on acquisition
  • Working capital in line with seasonality cycle and increase in trading

activity

* Normalised for the effect of acquisitions

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RHODES FOOD GROUP – INTERIM RESULTS 2016

CASH MANAGEMENT

R'm

(100) 226 (98) (65) 119 (57) (58) (123)

Operating cashflows before working capital changes Working capital changes Net interest and tax paid Dividends paid Loans raised Loans repaid Purchase and disposal

  • f PPE

Acquisitions

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RHODES FOOD GROUP – INTERIM RESULTS 2016

IMPACT OF ACQUISITIONS

Company Deemster General Mills Alibaba Foods Effective date 1 Oct 2015 30 Nov 2015 1 Feb 2016 Purchase price (R’m) 25 58 42 H1 turnover (R’m) 32.5 16.7 6.3 H1 EBIT (R’m) (1.3) 0.2 (0.5) H2 2016 impact

  • Turnover
  • EBIT
  • Interest cost

        

Comment Fully integrated Fully integrated Fully integrated

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RHODES FOOD GROUP – INTERIM RESULTS 2016

FINANCIAL GUIDANCE AND TARGETS

  • Focus on volume growth and maintaining margins in

current inflationary environment

  • Continue foreign exchange hedging strategy
  • Capital expenditure of R150 million in H2 2016
  • Capacity to raise debt to fund capex
  • Effective tax rate to be in line with corporate tax rate
  • Committed to achieving medium-term targets

– Gross profit margin over 30% – Operating margin over 10%

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TRADING PERFORMANCE

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RHODES FOOD GROUP – INTERIM RESULTS 2016

SEGMENTAL TURNOVER

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RHODES FOOD GROUP – INTERIM RESULTS 2016

INNOVATION

  • Rhodes branded fruit juice range
  • Rhodes Squish baby food range
  • Jam range upgraded
  • Jam in cups range extended
  • 3kg catering range launched
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RHODES FOOD GROUP – INTERIM RESULTS 2016

INNOVATION

  • Ongoing ready meals

innovation

  • Value pie range
  • Snacking
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RHODES FOOD GROUP – INTERIM RESULTS 2016

TRADING PERFORMANCE: REGIONAL

  • Volume growth 10%; price inflation 3%; acquisitions 44%
  • Sustained increase in demand for canned foods
  • Rhodes branded fruit juice sales performing well
  • Continued strong growth in pie category
  • Operating margin impacted by initial dilutionary impact of acquisitions and

higher sales and marketing expenses, including approx R10m once-off costs R’m March 2016 March 2015 % change Revenue 1 488 950 56.6 Long Life 949 503 88.7 Fresh 539 447 20.5 Operating profit 119 105 13.3 Operating profit margin 8.0% 11.1%

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REGIONAL: LONG LIFE FOODS

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RHODES FOOD GROUP – INTERIM RESULTS 2016

REGIONAL: LONG LIFE FOODS

  • Growth of 87% in sales in Sub-Saharan Africa driven by

canned meat and juice products

  • Improved brand share in Bull Brand; final phase of

factory upgrade underway

  • Strengthened sales structures, with specific attention on

dedicated channel management

  • First TV advertising campaign for Rhodes brand
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RHODES FOOD GROUP – INTERIM RESULTS 2016

REGIONAL: LONG LIFE FOODS – MARKET SHARE

Market shares* (%) March 2013 March 2014 March 2015 March 2016 Position Jams 35.5 38.0 39.6 43.5 2 Canned fruit 33.3 34.8 37.4 43.5 1 Canned vegetables 11.7 14.5 14.2 16.8 2 Canned meats 54.6 58.6 59.7 63.5 1 Long life fruit juice

  • 9.2

13.2 2 Infant food meals

  • 4.3

5.0 2

* Moving annual total. Retailer scanning data processed by Iri Aztec (market shares in the defined retail channel, in retail prices)

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RHODES FOOD GROUP – INTERIM RESULTS 2016

REGIONAL: LONG LIFE FOODS – BRAND SHARE

* Moving annual total. Retailer scanning data processed by Iri Aztec (market shares in the defined retail channel, in retail prices)

Brand shares* (%) March 2013 March 2014 March 2015 March 2016 Position Jams 14.2 16.7 18.5 24.1 2 Jam in glass 8.6 15.8 17.8 21.4 1 Canned fruit 20.4 22.4 25.7 25.5 2 Canned pineapple 48.5 49.0 57.9 57.7 1 Canned vegetables 12.3 15.1 15.5 14.5 2 Canned tomato 17.6 22.5 20.5 24.4 2 Tomato paste 19.6 32.8 30.9 31.5 1 Corned meat 37.1 38.7 41.8 48.2 1

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RHODES FOOD GROUP – INTERIM RESULTS 2016

REGIONAL: FRESH FOODS

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RHODES FOOD GROUP – INTERIM RESULTS 2016

REGIONAL: FRESH FOODS

  • Good volume growth
  • Outstanding performance in pie category
  • Investment in capacity and efficiencies at pie factory
  • General Mills and Alibaba integrated into operations
  • Dedicated ‘out of home’ sales channel established
  • Offer comprehensive range of bakery products
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INTERNATIONAL SEGMENT

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RHODES FOOD GROUP – INTERIM RESULTS 2016

INTERNATIONAL: PERFORMANCE

  • Weaker currency significantly enhancing results, although partially
  • ffset by internal hedge and FECs
  • Some of the benefits of the weaker Rand offset by lower foreign

prices, particularly in Russia, China and South East Asia

  • Segment includes international sales from Boland Pulp (acquired in

FY2015)

  • International managed on a 12 month cycle owing to seasonality of
  • rders and shipping

R’m March 2016 March 2015 % change Revenue 500 345 45.1 Operating profit 71 24 194.3 Operating profit margin 14.2% 7.0%

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RHODES FOOD GROUP – INTERIM RESULTS 2016

INTERNATIONAL

  • Core range of canned fruit performing well
  • Complemented by range of industrial

products ex Boland Pulp

  • Value added fruit cups showing good

growth

  • Strong, stable customer base with long-

term relationships

  • Traditional markets such as UK currently

performing better than Asian markets

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OUTLOOK

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RHODES FOOD GROUP – INTERIM RESULTS 2016

OUTLOOK

  • Organic growth through market share gains,

particularly in new categories

  • Ongoing focus on private label ranges for retailers
  • Maintain growth momentum in Sub-Saharan Africa
  • Drought could impact H2 production costs and volumes
  • Expect increased contribution from acquisitions in H2
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THANK YOU QUESTIONS

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RHODES FOOD GROUP – INTERIM RESULTS 2016

DISCLAIMER

Rhodes Food Group Holdings Limited (“RFG” or “the company”) has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements' within the meaning of United States securities legislation. Forward-looking statements may be identified by words such as 'believe', 'anticipate', 'expect', 'plan', 'estimate', 'intend', 'project', 'target', 'predict' and 'hope'. Forward-looking statements are not statements of fact, but statements by the management of RFG based on its current estimates, projections, expectations, beliefs and assumptions regarding the group's future performance. No assurance can be given that forward-looking statements will prove to be correct and undue reliance should not be placed on such statements. The risks and uncertainties inherent in the forward-looking statements contained in this presentation include, but are not limited to: changes to IFRS and the interpretations, applications and practices subject thereto as they apply to past, present and future periods; domestic and international business and market conditions; changes in the regulatory and legislative environments; changes to operational, social, economic and political risks; and the effects of both current and future litigation. RFG does not undertake to update any forward-looking statements contained in this presentation and does not assume responsibility for any loss or damage whatsoever and howsoever arising as a result of the reliance by any party thereon, including, but not limited to, loss of earnings, profits,

  • r consequential loss or damage.
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RHODES FOOD GROUP – INTERIM RESULTS 2016

CONTACT DETAILS

Bruce Henderson CEO hendersonb@rhodesfoodgroup.com Tiaan Schoombie CFO schoombiet@rhodesfoodgroup.com Graeme Lillie IR graeme@tier1ir.co.za

www.rhodesfoodgroup.com