PROVISIONAL AUDITED YEAR-END FINANCIAL RESULTS PRESENTATION FOR - - PowerPoint PPT Presentation

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PROVISIONAL AUDITED YEAR-END FINANCIAL RESULTS PRESENTATION FOR - - PowerPoint PPT Presentation

PROVISIONAL AUDITED YEAR-END FINANCIAL RESULTS PRESENTATION FOR THE TWELVE MONTHS PERIOD ENDED 31 MARCH 2015 26 June 2015 0 EXPLORATION, DEVELOPMENT, INCOME , GROWTH www.sephakuholdings.com DIS DISCLAIM CLAIMER ER This presentation


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26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

PROVISIONAL AUDITED YEAR-END FINANCIAL RESULTS PRESENTATION

FOR THE TWELVE MONTHS PERIOD ENDED 31 MARCH 2015

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1 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

This presentation includes certain forward-looking information. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: Sephaku Holdings’ strategy; the economic outlook for the industry; production; cash costs and other operating results; growth prospects and outlook for Sephaku Holdings’ operations, individually or in the aggregate; liquidity and capital resources and expenditure; and the outcome and consequences of any pending litigation proceedings. These forward-looking statements are not based on historical facts, but rather reflect Sephaku Holdings’ current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”, “estimated”, “potential” or similar words and phrases. Similarly, statements concerning Sephaku Holdings’ objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may affect Sephaku Holdings’ actual results, performance or achievements expressed or implied by these forward-looking statements. Although Sephaku Holdings believes that the expectations reflected in these forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

DIS DISCLAIM CLAIMER ER

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2 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

□ Group highlights Dr Lelau Mohuba □ Operational performance overview Dr Lelau Mohuba

  • Sephaku Cement (SepCem)
  • Métier Mixed Concrete (Métier)

□ Financial performance overview Neil Crafford-Lazarus

  • Statement of Comprehensive Income
  • Statement of Financial Position
  • Statement of Cash Flows

□ Outlook Neil Crafford-Lazarus

  • Métier
  • SepCem
  • Investment case

□ Questions

AGEND GENDA

Chief executive officer Financial director

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3 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

□ Group revenues increased due to Métier’s performance

  • Métier increased its footprint in Gauteng resulting in a total of 11 plants
  • High value concretes enable Métier to maintain margins

□ SepCem progressed from development stage into a fully operational cement producer

  • Delmas milling plant commenced cement production in January 2014
  • Aganang integrated plant commenced clinker and cement production in August and

October 2014 respectively

  • SepCem reaches steady state production and continues to grow revenue in post-period¹

KEY KEY HIGHL HIGHLIGHTS IGHTS FOR FOR THE THE PE PERIOD RIOD

¹SepCem has a December year-end as a subsidiary of Dangote Cement Plc

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4 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

OPE OPERA RATI TION ONAL L PE PERFOMANC RFOMANCE

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5 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

SE SEPCE PCEM M INCREASES INCREASES SALE SALES REVE S REVENUE NUE

Sales revenue of R919 million and EBITDA of 26% by end of December 2014 □ SepCem brand in all inland markets and competing successfully at all strengths □ Delmas milling plant operating at steady state at the end of fourth quarter

  • SepCem’s operational efficiencies due to modern plant technology providing

significant competitive advantage □ Good consistent quality cement and exceptional service ensuring entry into high demand inland markets including Gauteng, Limpopo and Mpumalanga

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6 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

SE SEPCE PCEM M RAMP RAMPS S UP UP TO O ST STEAD EADY Y ST STATE TE

□ Sales volume growth

  • f 58% in the second

half of the year □ Total volume sold of 780 000 tonnes for the year ended December 2014 Post – period □ SepCem Q1 revenue

  • f R521 million a

quarterly increase of 29% □ EBITDA for Q1 at 23% due to maintenance downtime at Aganang

(35) (2) 15 26 55 000 206 000 515 000 919 000

  • 50
  • 40
  • 30
  • 20
  • 10

10 20 30 40 50 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1 000 000 Q1 2014 Q2 2014 Q3 2014 Q4 2014 EBITDA % Sales (R000) Cumulative revenue Quarterly EBITDA

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7 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

CEME CEMENT NT ST STRENGTH RENGTH PE PERF RFORMAN ORMANCE E – CONCRE CONCRETE TE COMP COMPAR ARATI TIVE VE

Source: Sephaku Cement research – 2014.

10 20 30 40 50

32,5 Sephaku 32,5 Producer A 32,5 Producer B 42,5 Sephaku 42,5 Producer B 42,5 Producer A 42,5R Producer A 42,5 Producer C 42,5R Producer C

Megapascal 1 day 3 days 7 days 28 days

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8 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

□ Métier sales growth in-spite of highly competitive environment

  • Fleet increased by 23% and pumping capacity by 20%

□ Métier has a strong order book with new contracts secured in the post-period as of April 2015

  • Contracts to continue for an 18-month period
  • Good quality consistent products and reliable service offering

□ Métier profitable and well positioned to retain market share

MÉ MÉTIE TIER R GR GROWS WS SALE SALES S REV REVENUE ENUE

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9 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

FIN FINANCIAL ANCIAL PE PERFORMAN RFORMANCE

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10 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

□ Métier stellar performance persists

  • Revenue by 36% from R571,5 million to R775,4 million
  • Gross profit by 35% from R252,4 million to R340,9 million
  • EBITDA by 39% from R100,0 million to R139,1 million
  • Operating profit by 44% from R75,5 million to R108,9 million
  • Profit after tax by 57% from R41,3 million to R64,7 million

□ ¹SepCem successful penetration of the market demonstrated by exceptional growth

  • Revenue of R919 million achieved in a 12-month period
  • Gross profit from R14,9million to R188,7 million
  • EBITDA from (35%) in Q1 to 26% in Q4
  • Loss before taxation from R52,3 million to R48,4 million

KEY KEY HIGHL HIGHLIGHTS IGHTS FOR FOR THE THE PE PERIOD RIOD

¹ SepCem has a December year-end as a subsidiary of Dangote Cement Plc

▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

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11 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

ST STATE TEME MENT T OF COMP OF COMPREH REHEN ENSIVE SIVE INCOME INCOME (R’000)

Summarised statement

  • f comprehensive income

31 March 2015 31 March 2014 Revenue 775 425 571 545 Cost of sales (434 431) (319 156) Gross profit 340 995 252 389 Other income 9 999 13 945 Operating expenses (291 706) (215 181) Operating profit 59 288 51 153 Investment income 2 168 2 693 Equity-accounted investments (loss)/profit 35 924 (14 746) Finance costs (25 321) (25 676) Profit before taxation 72 060 13 425 Taxation (24 898) (16 242) Total comprehensive income (loss)/profit 47 161 (2 818)

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12 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

ST STATE TEME MENT T OF COMP OF COMPREH REHEN ENSIVE SIVE INCOME INCOME

 Basic earnings increased per share by 25,92 cents per share to 24,43 cents (2014: 1,49 cents basic loss per share)  Headline earnings per share increased by 26,79 cents per share to 24,43 cents (2014: 2,36 cents headline loss per share)  Normalised headline earnings per share of 10,48 cents, excluding the following

  • nce-off non-cash items:
  • equity earnings of R55,4 million resulting from a movement in SepCem’s

deferred tax asset. Total deferred tax asset movement amounted to R154 million, with SepHold’s share being 36%.

  • contingent consideration loss of R28,5 million resulting from the issue of 4 429

196 SepHold shares to the previous owners of Métier with regard to the additional consideration, due to the 60-day VWAP share price of SepHold being below R9 at 1 December 2014

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13 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

ST STATE TEME MENT T OF FIN OF FINANCIA ANCIAL L POS POSITION ITION (R’000)

□ Net reduction of R10,1 million in financial liabilities

  • Métier acquisition

debt of R117 million financed through the subsidiary □ Net asset value increased by 6,6% to 419,79 cents per share □ Tangible net asset value at 304,86cents representing an increase of 12,6%

1 015 419 204 070 1 129 489 844 720 265 831 108 938 1 129 489 990 253 116 560 1 106 812 747 724 159 350 199 738 1 106 812 200 000 400 000 600 000 800 000 1 000 000 Non-current assets Current assets Total assets Shareholder equity Non-current liabilities Current liabilities Total equity and liabilities 31 March 2014 - Audited 31 March 2015 - Audited

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14 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

ST STATE TEME MENT T OF CASH OF CASH FL FLOWS WS (R’000)

□ Increased cash generated from

  • perations of

R114,2 million □ Finance costs at R19,6 million □ Taxation at R25,8 million □ PPE at R 30,4 million mainly for trucks and machinery at Métier

26 001 70 925 (26 777) 765 70 914 22 338 40 385 (27 253) (9 919) 26 001 (30 000) (15 000) 15 000 30 000 45 000 60 000 75 000 Cash as at beginning of period Net cash flow from operating activities Net cash flow from investing activities Net cash flow from financing activities Cash as at end of period 31 March 2015 - Audited 31 March 2014 - Audited

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15 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

OUTL OUTLOOK OOK

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16 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

INCREASE INCREASE FREE FREE CAS CASH H FL FLOW

SepCem □ Increase sales focus to gain market share □ Ensure sufficient and optimised logistics between plants and market □ Further increase production efficiency to optimise operating costs Métier □ Exploring further expansion opportunities to grow earnings and market share □ Short-term strategy to:

  • generate positive earnings
  • reduce gearing
  • increase operating cash flows
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17 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

□ Strategic focus on the building materials sector offering increasing earnings and growth opportunities □ New technologically advanced production plants with higher cost efficiencies enhance competitiveness □ Geographically well located cement operations targeting the inland markets □ Profitable concrete operations with distinctive technical skills providing solid earnings and positive net operating cash flows □ Key operational management with approximately 250 years combined experience in cement manufacturing and over 80 years in mixed concrete technology

INVES INVESTM TMEN ENT T CAS CASE

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18 26 June 2015

EXPLORATION, DEVELOPMENT, INCOME, GROWTH www.sephakuholdings.com

CONTACT

Sakhile Ndlovu Investor relations officer Tel: + 27 12 612 0210 Email: sakhile@sepman.co.za Website: www.sephakuholdings.com