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Annual Results 2009

Your future packaging today. Annual Results 2009. Financial year ended 28 February 2009. AGENDA. Introduction. Financial Analysis. Divisional Analysis. Plastic Packaging Market Outlook. Summary. Introduction. Introduction. RESULTS: KEY INFLUENCING FACTORS. Avg. oil price :.

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Annual Results 2009

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  1. Your future packaging today Annual Results 2009 Financial year ended 28 February 2009

  2. AGENDA Introduction Financial Analysis Divisional Analysis Plastic Packaging Market Outlook Summary Introduction

  3. Introduction

  4. RESULTS: KEY INFLUENCING FACTORS Avg. oil price: Avg. LDPE price: 1. Raw material input prices Rand per Ton Rand F2008 F2009 Feb2001 Feb 2005 Feb 2003 Feb2002 Feb 2004 Feb 2006 Feb 2007 Feb2008 Feb2009 Source: Econometrix, Sasol, Astrapak Introduction

  5. RESULTS: KEY INFLUENCING FACTORS Market conditions: Non-durable real household consumption expenditure 2008 2005 2006 2003 2004 2007 Source: Econometrix Introduction

  6. RESULTS SUMMARY • Flexible Disposal – results presented in terms of IFRS 5 • Loss on disposal of subsidiary - Spuntech • Substantially higher interest bill • Reversal of deferred tax assets • Turnaround in performance since interims Introduction

  7. Financial Analysis

  8. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Continuing operations Revenue2,749,7712,366,10416% % Financial Analysis

  9. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Continuing operations Revenue 2,749,771 2,366,104 16% EBITDA 379,090 330,655 15% • Stable gross margin (22,1% vs. 22,2%); • Operating overheads increased by 17,4%, mainly due to; • Wage increases above inflation • High fuel and electricity costs • One-off costs incurred (± R5m) • Timing of acquisitions Financial Analysis

  10. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Revenue 2,749,771 2,366,104 16% EBITDA 379,090 330,655 15% Profit from operations (before loss on disposal of sub) 250,877 221,230 13% Loss on disposal of subsidiary (13,607) - Profit from operations 237,270 221,230 7% • Spun Technologies: • Resolutive condition in Sale of Shares Agreements fulfilled and sale effectively null and void • Per IAS required to treat as disposal of subsidiary with proceeds deemed to be amount recoverable – assumed R Nil; • Loss made up impairment of goodwill (R6,3m)and loss on disposal of net assets (R7,3m) • Arbitration underway Operating margin: 2009 – 9.1% 2008 – 9.3% Financial Analysis

  11. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Revenue 2,749,771 2,366,104 16% EBITDA 379,090 330,655 15% Profit from operations (before loss on disposal of sub) 250,877 221,230 13% Loss on disposal of subsidiary 13,607 - Profit from operations 237,270 221,230 7% Net interest paid 85,802 66,196 30% • Average interest rate up 13% (170 bps) • Higher average net debt over the period due to capex (R189m) and higher polymer prices over first 3 quarters of financial year Financial Analysis

  12. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Continuing operations Revenue 2,749,771 2,366,104 16% EBITDA 379,090 330,655 15% Profit from operations (before loss on disposal of sub) 250,877 221,230 13% Loss on disposal of subsidiary 13,607 - Profit from operations 237,270 221,230 7% Net interest paid 85,802 66,196 30% Profit before tax 151,468 155,034 -2% Taxation 82,914 42,434 95% • Effective tax rate of 54.7% mainly due to: • Reversal of deferred tax assets R21.7m • Tax losses of R 22.7m against which no deferred tax assets raised • Permanent differences created by impairments • STC of R 2.0m • Sustainable rate into future = 28% Financial Analysis

  13. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Continuing operations Revenue 2,749,771 2,366,104 16% EBITDA 379,090 330,655 15% Profit from operations (before loss on disposal of sub) 250,877 221,230 13% Loss on disposal of subsidiary 13,607 - Profit from operations 237,270 221,230 7% Net interest paid 85,802 66,196 30% Profit before tax 151,468 155,034 -2% Taxation 82,914 42,434 95% Profit after tax from continuing operations 68,554 112,600 -39% Financial Analysis

  14. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Discontinued operations Revenue 513,318 454,773 13% EBITDA 41,709 17,855 34% Loss on fair value of assets 28,523 - Profit from operations 4,759 8,264 -42% Net interest paid (5,348) (8,513) Profit before tax (589) (249) -137% Taxation (3,033) (1,020) -197% Profit after tax from continuing operations (3,622) (1,269) -185% • Discontinued operations: • Flexible disposal group: Astraflex, Astra Repro, Astrapak Flexible, DLC, Tamperpak, Std Labels (Mauritius) and Whitehouse Properties Paarl • Accounted for in terms of IFRS 5 – Discontinued operations; • Loss on fair value of assets represent impairment of goodwill (R 13,1m) and write down in net realisable value of PPE (R 15.4m) Financial Analysis

  15. ABRIDGED INCOME STATEMENT R 000's 2009 2008 % Change Continuing operations Revenue 2,749,771 2,366,104 16% EBITDA 379,090 330,655 15% Profit from operations (before loss on disposal of sub) 250,877 221,230 13% Loss on disposal of subsidiary 13,607 - Profit from operations 237,270 221,230 7% Net interest paid 85,802 66,196 30% Profit before tax 151,468 155,034 -2% Taxation 82,914 42,434 95% Profit after tax from continuing operations 68,554 112,600 -39% Discontinued operations Loss on discontinued operations 3,622 1,269 -185% Profit for the year 64,932 111,331 -42% Financial Analysis

  16. ABRIDGED INCOME STATEMENT Profit for the year 64,932 111,331 -42% Attributable to minorities 4,811 7,598 -37% Attributable to pref. shareholders 18,125 16,160 12% Attributable to ord. shareholders 41,996 87,573 -52% Headline income 85,065 81,073 5% Weighted Average no of shares 118,037 117,524 Weighted average no of shares (fully diluted) 121,669 123,361 EPS (cents) 35.5 76.3 -53% HEPS (cents) 72.1 69.0 5% Fully diluted HEPS 69.9 65.7 6% R 000's 2009 2008 % Change Financial Analysis

  17. BALANCE SHEETNET INTEREST BEARING DEBT R 000's 2009 2008 % Change Cash resources 110,110 56,649 Long term interest-bearing debt (341,052) (376,947) Short term interest-bearing debt (150,096) (241,908) Liabilities relating directly to assets held for sale (60,887) Net interest-bearing debt (441,925) (562,206) -21% Net debt : equity ratio 53% 72% Financial Analysis

  18. BALANCE SHEETNET DEBT MOVEMENT Financial Analysis

  19. BALANCE SHEETGEARING % Rm Net interest - bearing debt (Rm) 120 700 103% 72% D:E ratio 600 100 562 500 80 53% 57% 400 34% 60 300 31% 288 40 200 18% 255 190 20 442 100 152 122 0 0 2003 2004 F2005 F2006 F2007 2008 • Reduction in net interest-bearing debt mainly due to improvement in working capital management and increased cash generation by operations • Target gearing: 30-40% Financial Analysis

  20. BALANCE SHEETNET WORKING CAPITAL R 000's 2009 2008 % Change Inventories 317,340 372,476 -15% Debtors (Trade & other) 503,249 524,358 - 4% Creditors (Trade & other) 491,431 489,855 0% Net working capital 329,158 406,979 - 19% The 2009 stated number includes those working capital items reflected in the balance sheet under “Assets classified as held for sale” and “Liabilities relating directly to assets held for sale” Financial Analysis

  21. BALANCE SHEETNET WORKING CAPITAL - DAYS Target 35 days Days Days Net days 36.8 34.2 56.2 50.4 34.7 34.0 53.2 43.9 52.6 Financial Analysis

  22. ABRIDGED BALANCE SHEET R 000’s 2009 2008 % Change Non-current assets 1,033,186 1,151,470 Current assets 728,328 953,483 Assets classified held for sale 317,529 - Total assets 2,079,043 2,104,953 -1% Shareholders funds 697,520 639,307 9% Preference share capital 142,590 142,590 Minorities’ interest 29,372 35,877 Non-current liabilities 499,812 548,081 Current liabilities 556,668 739,098 Liabilities relating assets 153,081 - classified as held for sale Total equity and liabilities 2,079,043 2,104,953 -1% Financial Analysis

  23. ABRIDGED CASH FLOW R 000’s 2009 2008 % Change Cash generated by operations 467,673 319,377 46% Decrease/(increase) working capital 81,399 (65,531) Non-cash transactions (41,775) 5,958 Net financing costs and tax (140,994) (101,975) Debenture interest & dividend distributions (35,289) (50,122) Cash inflow operating activities 331,014 107,707 207% Capital expenditure (188,717) (262,531) Acquisition of minorities’ interests (29,147) (66,390) Proceeds on disposal of PPE 9,151 12,277 Cash outflow investing activities (208,713) (316,644) -34% Cash inflow from financing activities 29,554 141,136 -79% Net increase/(decrease) cash and cash equivalents 151,855 (67,801) 324% Financial Analysis

  24. Divisional Analysis

  25. FLEXIBLES: HISTORIC PERFORMANCE(includes both continuing and discontinued operations) Rm % Divisional Analysis

  26. FLEXIBLES: 2009 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth: 12.6% price & -1.2% volume • Very tough market conditions remain: • Raw material prices • Competitive markets • Operating margins improved on back of price increases • Smaller companies Saflite &Tamperpak performed well • Larger businesses still under severe pressure • Under performing entities: Alex White & Co (Jhb) & Knilam • Recapitalisation of plant required in short-term Divisional Analysis

  27. FILMS: HISTORIC PERFORMANCE Rm % Divisional Analysis

  28. FILMS: 2009 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth: 15,1% price & 0,8% volume • Mixed performance • Much improved performances at ERP & Packaging Consultants • Underperformance at Barrier Films & Peninsula Packaging • Margins still under pressure: • Input price increases vs. selling price resistance • Competitive market • Sasol project has commenced at lower volumes • - some compensation received Divisional Analysis

  29. RIGIDS: HISTORIC PERFORMANCE Rm % Divisional Analysis

  30. RIGIDS: 2009 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth: 14% price & 2.2% volume • Resistance to selling price increases • Margins under pressure • High end packaging under pressure • Milk shortages impacted on Marcom & Plastform • Improved performances from Denver , Plastop KZN • & Bronkhorstspruit operations Divisional Analysis

  31. INDUSTRIAL: HISTORIC PERFORMANCE Rm % Divisional Analysis

  32. INDUSTRIAL: 2009 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth: 15% price & 28,9% volume • Geotex / Plusnet - significant capital investment during 2009 (R15m) • Volumes under pressure at ITT – loss of SANS business Divisional Analysis

  33. Plastic Packaging Market Outlook Raw material input costs

  34. RAW MATERIAL INPUT COSTS Avg. oil price: Avg. LDPE price: Rand per Ton Rand F2008 F2009 Feb2001 Feb 2005 Feb 2003 Feb2002 Feb 2004 Feb 2006 Feb 2007 Feb2008 Feb2009 Source: Econometrix, Sasol, Astrapak Plastic Packaging Market Outlook

  35. INPUT COSTS Raw materials: • New polymer capacity put on hold due to current economic climate • R/$ exchange rate – import price parity • In short-term supply and demand will continue to determine price Other inputs: • Electricity and distribution costs • Labour Plastic Packaging Market Outlook

  36. Plastic Packaging Market Outlook Raw material input costs Consumer Demand

  37. CONSUMER DMEAND Non-durable real household consumption expenditure 2008 2005 2006 2003 2004 2007 Source: Econometrix Plastic Packaging Market Outlook

  38. MARKETS SUPPLIED BY ASTRAPAK(Year on year comparison) Industry Rm turnover Plastic Packaging Market Outlook

  39. Summary

  40. Review of current operations / group strategy Dispose of underperforming assets Acquire within chosen core competencies Implement turnaround strategies Improve margins Continue to drive selling price increases to adequately recover in an increasing cost environment Improve manufacturing efficiencies (WCM & SYSPRO) by reducing: Scrap Output & cycle times Labour & overheads Further reduce working capital Stock & debtors Astrapak Plan of Action Summary

  41. Increase market share and volumes Product substitution Investment in new projects Innovation Turnover synergies between divisions International alignment Enhanced Financial Disciplines Improved capital allocation Obsessed with a least cost philosophy 5 point cost reduction plan Astrapak Plan of Action Summary

  42. Negative factors State of economy worldwide Consumer spending to remain under pressure for most of the 2010 financial year Positive factors: Improved stability in polymer prices Better demand/supply balance in world polymer market Strong underlying demand Consumer demand set to recover from end calendar 2009, particularly in 2010 Resumption of emerging market demand growth and growth in value-added purchases Significant project growth Preferred supplier to blue chip customers Focused on core competencies Professionalised business – world class systems, operations and people Incentivised management team – interest aligned with shareholders Reduced gearing – capacity to expand and invest Competitive advantages Continued product substitution from other packaging materialsto plastics and successful product innovation will win Astrapak more market share FY 2010 onwards Summary

  43. Your future packaging today

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