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Audited Results

Audited Results. For twelve months ended June 2008. Infinite possibilities when Bidvest people take on a challenge. Agenda. Introduction Financial Results Group Outlook Appendices: Appendix 1: Geographic and Segmental contributions to Revenue and Trading Profit

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Audited Results

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  1. Audited Results For twelve months ended June 2008 Infinite possibilities when Bidvest people take on a challenge

  2. Agenda • Introduction • Financial Results • Group Outlook • Appendices: • Appendix 1: Geographic and Segmental contributions to Revenue and Trading Profit • Appendix 2: Detailed segmental results • Appendix 3: Effects of economic drivers by segment • Appendix 4: Historic Performance • Appendix 5: The Bidvest Business Model

  3. Introduction and Overview Brian Joffe

  4. F2008 results summary Introduction Revenue earnings 16% to R110,5bn Gross profit 18% to R21,7bn Trading profit 17% to R5,3bn Headline earnings 11% to R3,2bn HEPS 10% to 1068cps DPS 11% to 495cps ROFE from 50% in F2007 to 42% in F2008 Note: IFRS compliant

  5. F2008 – Bidvest people managed their environment Introduction • Commendable performance from the Bidvest team in tough markets • Smart trading and instances of market share gains support result • Individuals and companies under unrelenting affordability pressure in all markets • Increase in business bad debts in H2 • Taking trading advantage of price inflation • Inflation has been turned to profit advantage in foodservice businesses • Cost-push inflation in food and energy did not crimp overall margin • Working capital • Cash applied lower than in F2007 due to sharp improvement in H2 • Working capital absorption, excl. McCarthy, reduced by 60% • Inventory up in support of trading strategy - to profit, where feasible, from escalating prices Strength of Australian dollar assisted translation

  6. Segments at the forefront of performance Introduction

  7. Segments at the forefront of performance Introduction

  8. Segments at the forefront of performance Introduction

  9. Segments holding their own Introduction

  10. Segments holding their own Introduction

  11. Financial Results David Cleasby

  12. Consolidated Income Statement Financials • Organic growth of 13% • 13% growth excluding exchange rate translation • Full year contributions from Angliss (R3bn) and Viamax (R544m)

  13. Consolidated Income Statement Financials Note: 1. EBITDA up 20%: R6,9bn in F2008 vs R5,7bn in F2007 2. 11% organic growth in Trading Profit 3. Foreign businesses = 31% (R1,6bn) contribution to Trading Profit vs 29% (R1,3bn) in F2007

  14. Consolidated Income Statement Financials • H1 = R445m; H2 = R486m • Increase in interest due to funding of increased capex, acquisitions and working capital absorption • Offshore interest of R138,2m vs local interest of R792,8m • Net debt offshore of R0,7bn vs local net debt of R4,8bn

  15. Consolidated Income Statement Financials • Associates: • Tiger Auto (Sold for R212m with effect from March 2008) • Enviroserv(To be sold for R569m with effect from Q2 F2009) • Comair Full year contribution • Other Note: Includes dividends received

  16. Consolidated Income Statement Financials

  17. Consolidated Income Statement Financials • Bidvest Namibia: Namsov - significantly better H2 • Forms part of Bidvest Namibia (mainly comprising Bid Industrial and Manica businesses in Namibia) • Versalec: Slightly down • BidAuto: Slightly up

  18. Consolidated Income Statement Financials • 8% organic growth in earnings

  19. Consolidated Income Statement Financials Diluted HEPS – 308,1m diluted weighted avg shares in issue - sharebuy-back of 5,6m shares from shareholders in May 2008 in lieu of interim distribution

  20. Consolidated Income Statement Financials * Interim distribution effected by pro-rata share buy-back; distribution policy still +/- 2x covered by HEPS

  21. Consolidated Cash Flow Statement – Rm’s Financials Year ended June 30 2007 Year ended June 30 2008 Cash generated from ops Working capital utilised Net Finance charges Taxation Distributions Cash effects of investment act’s Cash effects of financing act’s • Investment activities of R4bn: • R2,7bn in capex vs R1,7bnin F2007, mainly Bidfreight, Bidserv, BidAuto and Bidvest Europe • R1,3bn spent on acquisitions, mainly Viamax (R960m) • In the 4 years to June 2008: • R8,8bn cash generated from operations after working capital, tax and distributions, supported the • R11,6bnspent on acquisitions & investments of businesses for medium term growth • Full benefits still to manifest

  22. Net Working Capital Days Financials 2 -3 9 8 14 10 Net days Debtors days Stock days Creditors days • Some lengthening in working capital cycle, although H2 was proportionately better • Inventory – increased strategic buying & ‘imposed’ stock • Debtors - quality of debtors book is sound • Creditors - impact of importing stock with shorter credit lines • Banking assets are up R219m (increased lending achieved) vs banking liabilities up R153m

  23. Working capital movements Financials • 60% reduction in working capital, excl. McCarthy where ‘imposed’ new vehicle over-stocking occurred • Additional working capital invested in Chinese vehicles (R310m)

  24. Net working capital flows vs cash generated - Rbn Financials Year ended June 30 2008 • Upward trend in cash generated – cash positive international businesses • Net working capital typically better in 2nd half

  25. Gearing Financials Target interest cover range • Interest cover of 5.7x vs target of 5-6x; EBITDA interest cover of 7.3x • R1,8bn increase in debt vs F2007: • Acquisition R1,3bn • Net capex of R2,8bn • Net working capital of R0,7bn

  26. Group Outlook Brian Joffe

  27. Operational Prospects – F2009 Group Outlook Bidfreight • Substantial prior capex will continue to pay dividends, particularly in Bulk • Organic growth is immediate focus together with tighter debtor and cash management • Agricultural volume potential (maize exports vs wheat imports) • Liquid bulk upgrades on hold until agreement can be reached with Ports authorities • Port services demand buoyant • Higher pricing necessary to compensate for capacity shortage Bidserv • Airports Company “super license” a step-change for BidAir • TMS • Continued strong profit performance together with foreign expansion potential • Bidvest Bank – new foreign exchange products • Critical mass in soft services plus market reach will enable Bidserv to once again grow profits – particularly in tourism, aviation and mining

  28. Operational Prospects – F2009 Group Outlook • Foodservice • Asian potential barely exploited - excellent local trading skills and facilities positions Bidvest strongly; expansion remains on the agenda • Cost pressures in Australia, New Zealand and SA could impinge on margin but management actions/market strength will ensure growth continues • Contract wins, bolt-ons, and tighter cost control will benefit Deli Netherlands & Belgium; focus on cost controls and improved efficiencies • 3663 is strongly positioned to weather competitive stresses and will benefit from industry consolidation but short term customer price resistance should not be underestimated and profit growth will be difficult to achieve

  29. Operational Prospects – F2009 Group Outlook Bid Industrial & Commercial Products • Electrical Wholesaling: • Challenge: declining residential/commercial market • Opportunity: civil engineering investment on a broad front, energy efficiency initiatives, accommodation investments ahead of World Cup 2010, political imperative of low-cost housing • Kolok: upward momentum in H2 continues into H1 F2009 • Waltons: Improving earnings to continue, led by Gauteng market and promotional gifts • Vulcan to capitalise on modernized facilities and new products Bidpaper Plus • Newer technology e-business opportunities are being vigorously exploited, supported by cash generated from traditional ex-growth activities • Retail exposure to remain tough

  30. Operational Prospects – F2009 Group Outlook Bid Auto • Management is striving to maintain profitability in what is the most difficult vehicle market for five years • New vehicle volumes to fall further • Rationalisation where necessary, selective additions (e.g. Suzuki) • Positive used market volume momentum to continue • Parts and service revenues will grow • Focus on Chery profitability through Value Centres and independents • Viamax provides good profitability and return, with renewals augmenting contract run-outs • Addition of Viamax provides scale economies and synergy savings for newly named McCarthy Fleet Solutions • Yellow metal distribution orientated toward price conscious/owner operated market 30

  31. Group Prospects – F2009 Group Outlook • Group • Bidvest has a diversity of drivers to profit from good times and bad • Management and staff well incentivised to stretch the performance envelope • Competitor weaknesses will be exploited • Scanning for keenly priced acquisitions: vendor aspirations are more realistic • Equity is now more attractive relative to the servicing cost of debt; Bidvest will continue to re-assess the most attractive means of optimising its WACC and funding • Difficult times bring opportunity for a group with an opportunistic culture • Bidvest will not disappoint in F2009 Management is therefore budgeting for earnings growth in F2009

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