INTERIM RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 DECEMBER - - PowerPoint PPT Presentation

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INTERIM RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 DECEMBER - - PowerPoint PPT Presentation

Oct 27, 2023 226 likes •560 views

INTERIM RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2013 INTRODUCTION JAAP DU TOIT CHAIRMAN 2 AGENDA Period under review Divisional highlights Financial performance Outlook 3 KAP INDUSTRIAL

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SLIDE 1

INTERIM RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2013

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SLIDE 2

INTRODUCTION

JAAP DU TOIT CHAIRMAN

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SLIDE 3

AGENDA

  • Period under review
  • Divisional highlights
  • Financial performance
  • Outlook

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SLIDE 4

KAP INDUSTRIAL HOLDINGS

An industrial group focused on:

  • Being the leaders in the markets we serve
  • High barrier to entry industries
  • Sustainable earnings through diversity in business
  • Solid margins by adding value through our specialist skills and assets
  • Strong cash flow generation
  • Leveraging our African base

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SLIDE 5

PERIOD UNDER REVIEW

  • Challenging market in South Africa
  • Good performance in Africa
  • Exit non-core assets
  • Continued investment in state-of-the-art technology and assets

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SLIDE 6

PERIOD UNDER REVIEW

JO GROVÉ CEO

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SLIDE 7

PERIOD UNDER REVIEW

  • Repositioned our business to better serve customer needs
  • Restructuring – improved efficiencies
  • Continual improvement
  • Capitalise and build on existing infrastructure

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SLIDE 8

REVENUE INCREASE BY 9% to R7 832 million

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38% 11% 16% 35%

Supply Chain Solutions Passenger Timber Manufacturing

Revenue 1H14 38% 11% 16% 35% Revenue 1H13 Diversified revenue mix enhances sustainable earnings

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SLIDE 9

Fuel, Agri & Mining Freight & Logistics Passenger Integrated timber business Hosaf Feltex Other Manufacturing

REVENUE INCREASE BY 9% to R7 832 million

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Revenue (Rm) Logistics Manufacturing Timber

Detailed revenue analysis – R624 million increase

11% 5% 9%

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SLIDE 10

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39% 16% 24% 21%

Supply Chain Solutions Passenger Timber Manufacturing

Operating profit 1H14 39% 15% 24% 22% Operating profit 1H13

OPERATING PROFIT INCREASE BY 9% to R710 million

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SLIDE 11

650 710 38 18 4

1H13 Logistics Timber Manufacturing 1H14

FINANCIAL HIGHLIGHTS

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Operating profit (Rm)

11% 12% 3%

Operating profit increases by 9% to R710 million

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SLIDE 12

DIVISIONAL HIGHLIGHTS

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SLIDE 13

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LOGISTICS

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SLIDE 14

PERIOD UNDER REVIEW

LOGISTICS

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Gross revenue increases by 11% to R3 916m

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UNITRANS SUPPLY CHAIN SOLUTIONS (USCS)

  • Restructuring of USCS completed
  • Africa operations continue to perform well
  • Solid performance from Fuel division
  • Freight and logistics negatively affected by FMCG market segment,

while cement industry recovered

  • Combined margin maintained

(1H13: R3 535m) Operating profit increases by 11% to R392m

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(1H13: R354m)

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SLIDE 15

PERIOD UNDER REVIEW

LOGISTICS

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PASSENGER

  • Personnel transport continues to grow, supported by new

contractual business

  • Intercity performs well despite competitiveness in market and

depressed consumer

  • Gautrain feeder services performs on target
  • Tourism: Improved performance
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SLIDE 16

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INTEGRATED TIMBER

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SLIDE 17

PERIOD UNDER REVIEW

INTEGRATED TIMBER

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Gross revenue increases by 5% to R1 231m

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(1H13: R1 177m)

  • Increased revenue as a result of improved product pricing and “value-add” strategy
  • Market conditions remain challenging
  • Commissioning of new medium-density fibre board (MDF) plant successful
  • Ramp up in line with expectation, MDF business performs well despite 8 weeks

disruption due to implementation of new plant

  • Woodchem and other integrated businesses performed well
  • Positive margin impact due to “value add” strategy
  • Restructure benefits support operating profit growth
  • Product and customer rationalisation improves cash flow and margin

Operating profit increases by 12% to R172m

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(1H13: R154m)

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SLIDE 18

MEDIUM-DENSITY FIBRE BOARD PLANT

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  • First phase of plant commissioned in November 2013
  • Plant almost at full production (rated capacity of 300m3/day)
  • Positive market response to the product
  • Planning of second phase (to increase capacity to 380m3/day)
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SLIDE 19

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MANUFACTURING

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MANUFACTURING REVENUE COMPOSITION

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Revenue 1H13 17% 45% 22% 16%

Automotive (Feltex) PET (Hosaf) Furniture and Bedding Footwear

22% 38% 24% 16% Revenue 1H14

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PERIOD UNDER REVIEW

MANUFACTURING

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Gross revenue increases by 9% to R2 799m

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(1H13: R2 558m)

  • PET (Hosaf) market continues to grow
  • Automotive (Feltex) negatively impacted by 7 week closure
  • Some “catch up” expected in 2H14
  • Vitafoam’s completed restructure and increased market share positive

impact on efficiencies

  • Improved results for BCM and DesleeMattex despite continuing

challenging household goods market

  • Challenging retail environment impacts on Jordan and Glodina

Operating profit increases by 3% to R146m

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(1H13: R142m)

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SLIDE 22

FINANCIAL PERFORMANCE

JOHN HAVEMAN CFO

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SLIDE 23

FINANCIAL HIGHLIGHTS

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1H14 1H13 % increase FY13

Revenue* (Rm) 7 832 7 208 9% 14 320 from continuing operations Operating profit before capital items (Rm) 710 650 9% 1 324 from continuing operations Cash generated from operations before working capital (Rm) 1 070 989 8% 2 021 Headline earnings per share (cents) 16.0 13.8 16% 28.5 from continuing operations

* Reclassification of R136 million was done between revenue and cost of sales in the Logistics segment to bring prior period disclosure in line with current year disclosure. This change had a nil impact on operating profit.

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INCOME STATEMENT

FROM CONTINUING OPERATIONS

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Rand million 1H14 1H13 % increase FY13

Revenue 7 832 7 208 9 14 320 Operating profit before capital items 710 650 9 1 324 Net finance costs (174) (187) (7) (368) Associate companies and joint ventures 4 5 14 Taxation (excluding taxation on capital items) (149) (129) (268) Minorities (16) (15) (34) Headline earnings 375 324 16 668 Weighted average number of ordinary shares (m) 2 346 2 338 2 342 Headline earnings per share (cents) 16.0 13.8 16 28.5

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CONSOLIDATED BALANCE SHEET

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Rand million Dec 2013 Dec 2012 Jun 2013

Property, plant, equipment & investment properties 6 496 6 269 6 394 Intangible assets and goodwill 1 302 1 332 1 311 Biological assets 1 811 1 706 1 761 Net working capital 1 040 1 070 339 Other assets 245 210 231 Held for sale

  • 351

Assets 10 894 10 587 10 387 Total equity 6 497 5 933 6 301 Net interest-bearing borrowings 3 404 3 832 3 090 Interest-bearing borrowings 4 700 4 916 4 410 Cash and cash equivalents (1 296) (1 084) (1 320) Other liabilities 993 822 996 Equity and liabilities 10 894 10 587 10 387 Net asset value per share (cents) 271 248 263

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SLIDE 26

CONSOLIDATED CASH FLOW

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Rand million 1H14 1H13

EBITDA 1 097 1 026 Plantation revaluation (50) (50) Other non-cash items 23 13 Cash generated before working capital changes 1 070 989 Working capital changes (702) (344) Inventory (113) (84) Accounts receivable (209) (177) Accounts payable (380) (83) Cash generated from operations 368 645 Interest (174) (189) Taxation (61) (67) Dividends (196) (154) Net cash inflow from operating activities (63) 235

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SLIDE 27

CONSOLIDATED CASH FLOW

CONTINUED

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Rand million 1H14 1H13

Cash inflow from operating activities (63) 235 Investing activities (257) (513) Capex (513) (471) Proceeds on food assets 265

  • Other investing activities

(9) (42) Cash flow after investing activities (320) (278) Financing activities 294 34 External debt raised 1 695 187 Shareholder loan repaid (1 401) (153) Movement in cash and cash equivalents (26) (244)

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51% 18% 23% 8%

USCS Passenger Integrated timber Manufacturing

SEGMENTAL CAPITAL EXPENDITURE

EXPANSION AND REPLACEMENT CAPEX*

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1H13 1H14 50% 41% 5% 4%

*Net ¡of ¡proceeds ¡and ¡government ¡grants ¡received

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SLIDE 29

CAPITAL STRUCTURE

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Dec 2013 Dec 2012 Jun 2013

Total equity (Rm) 6 497 5 933 6 301 Ordinary shareholders’ funds (Rm) 6 355 5 813 6 166 Minority interests (Rm) 142 120 135 Net interest-bearing debt (Rm) 3 404 3 832 3 090 Net debt to equity (%) 54% 66% 50% Net debt to EBITDA (times) annualised 1.6 1.9 1.5 EBITDA interest cover (times) for the period 6.3 5.5 5.6

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SLIDE 30

NET INTEREST-BEARING DEBT

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Rand million Dec 2013 Dec 2012 Jun 2013

Net interest-bearing debt 3 404 3 832 3 090 Steinhoff 1 840 3 494 3 241 Other 1 564 338 (151) Movement in net debt Opening balance 3 090 3 552 3 552 Repayment of Steinhoff loan (1 401) (153) (406) Net movement in external debt 1 715 433 (56) Closing balance 3 404 3 832 3 090

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SLIDE 31

OUTLOOK

JO GROVÉ CEO

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SLIDE 32

OUTLOOK

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LOGISTICS

  • Cost structure now enables USCS to be more competitive in current

economic climate

  • Existing contract renewals
  • Promising new contracts

INTEGRATED TIMBER

  • Revenue growth and cost efficiencies
  • MDF (medium-density fibreboard) upgrade completed in Nov 2013
  • Weak Rand: more competitive vs imports

MANUFACTURING

  • PET (Hosaf): Strong PET market demand expected to continue
  • Automotive (Feltex): Volumes expected to grow

NEW OPPORTUNITIES

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SLIDE 33

THANK YOU

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