2011 Annual Results. November 2011

Transcription

1 2011 Annual Results November

2 Agenda Highlights Group results Operational review Strategic review 2

3 Highlights HEPS from continuing operations up 21% Dividend increased by 30% to 108 cents per share Operating profit from continuing operations up 22% Trading margin improved from 9.1% to 9.8% Net debt reduced from R1.7bn to R0.6bn (March 09 R3.4bn) Gearing reduced to 10% (March 09 58%) Corrugated returned to profit RONA increased from 19% to 20% Dividend yield 5.0% 3

4 4 GROUP RESULTS

5 Group Income Statement Continuing operations Rm % Revenue Operating profit Net finance costs Income from investments Profit before tax Taxation Profit for the period from continuing operations Discontinued operations Profit for the period HEPS continuing 172.4c 142.3c 21 HEPS continuing and discontinued 176.0c 149.7c 18 5

6 Abnormal Items Rm 2011 Impairment of goodwill, plant, property & investments 105 Retrenchment and restructuring 50 Net loss on disposal of businesses 5 Fair value of financial instruments 71 Net profit on disposal of properties 41 TOTAL 48 6

7 Tax Rate (continuing) Rm 2011 Profit before tax Tax 456 Effective tax rate 32.8 Tax rate differential 3.0 Exempt income 2.0 Government incentives 1.2 Deferred tax 0.5 Disallowable expenses and impairments 5.2 Secondary tax on companies 4.1 Prior year adjustment 1.2 Withholding taxes 0.7 Share-based payment expense 0.3 Standard tax rate

8 HEPS/Dividends per Share cents % % 172.4c c 142.3c +98% 83c +30% 108c c 0 HEPS Dividends per share

9 Abridged Balance Sheet Rm Non-current assets Bank balances, deposits and cash Current assets TOTAL ASSETS Total equity Loans and borrowings Retirement benefit obligations Current liabilities Other TOTAL EQUITY AND LIABILITIES

10 Group Condensed Cash Flow Rm Cash generated from operations before working capital Working capital changes 548 Cash generated from operations Net interest paid 163 Tax paid 188 Dividends paid 543 Capex 676 Disposal of businesses and properties 930 Other 85 Cash inflow before financing activities Net borrowings repaid and other 591 Net cash inflow

11 Working Capital Movement Rm Inventories 641 Receivables 330 Payables 423 Total increase in working capital

12 Net Debt : Equity 60% 50% 40% 30% 20% 10% 0% Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 12

13 Key Ratios RONA % ROE % Interest Cover X Trading Margin %

14 14 OPERATIONAL REVIEW

15 15 Rm Revenue Metals & Glass H1 H South Africa Rest of Africa Rm Trading profit Margin % H1 H South Africa Rest of Africa Good performance from diversified canning business SA beverage can volumes similar to last year Food can volumes down Lower exports of bottled wine Kenya and Nigeria performed well Trading loss of R48m in Angola

16 Acquisition of Wiegand s 50% Core business and growth market Good margin and returns Price based on a sustainable EBITDA Multiple of 6 X EBITDA Nampak >7 X EBITDA Earnings accretive 16

17 Paper & Flexibles Rm Revenue H1 H South Africa Rest of Africa Rm Trading profit Margin % H1 H South Africa Rest of Africa Corrugated improved performance Excellent result from flexible Weak demand for folding cartons and sacks Kenya, Nigeria and Zambia all performed well Operational issues with commercial business in Nigeria 17

18 18 Plastics Rm Revenue H1 H South Africa Europe Rm Trading profit Margin % H1 H South Africa Europe Good performance by all businesses Tubs sold loss of R46m last year Break-even in Tubes Europe integration costs

19 Tissue Rm Revenue H1 H South Africa Rm Trading profit Margin % H1 H South Africa ply market down 2-ply volumes improved Gained market share in diapers Selling prices and margins under pressure 19

20 Geographical Segmentation Rm Revenue H1 H South Africa Rest of Africa Europe

21 Geographical Segmentation Rm Trading profit Margin % H1 H South Africa Rest of Africa Europe Other

22 Summary of Results HEPS up 21% Dividend up 30% Trading margin improved Debt and gearing both well down Further improvement in returns 22

23 23 STRATEGIC REVIEW

24 Underperforming Operations 20% of Nampak operations were loss-making or earning returns less than hurdle rates, had been in this position for a number of years and had no sustainable competitive advantages Need to fix/sell/close these operations 24

25 Closed or Sold Europe Cartons & Healthcare Foam Flexpak Redibox Disaki Carmoc Mozambique L & CP Containers Tubs Interpak Books 25

26 Cost Reduction High overhead costs Streamlined group executive structure Reduced head office costs Closed freight forwarding & clearing department Outsourced internal audit IT outsourced effective in

27 Debt High debt levels Reduced debt and gearing Rm 0-1,000-2,000-3,000-4,000-5,000 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Total Debt Net Debt 27

28 Grow Core Businesses 80% of Nampak operations are profitable and have sustainable competitive advantages in markets in which they operate Need to grow these core businesses 28

29 Bevcan Potential conversion to aluminium cans New slimline/sleek beverage cans Temperature sensitive cans 29

30 DivFood 2 piece food cans Additional aerosol capacity Printing modernisation Ends manufacturing 30

31 31 2-Piece Food Can Expansion

32 32 2 Piece Food Cans

33 33 Aerosol Can Manufacturing Line

34 Print Modernisation

35 END O MAT Line

36 Glass Rebuild of furnace #2 Capacity expansion Acquisition of Wiegand s 50% shareholding R938m 36

37 Acquisition of Wiegand s 50% Glass is a core business and a growth market High barriers to entry both capex and technology Opportunity to grow in South Africa o Market growth o Pack share growth o 3 rd furnace Rest of Africa Environmentally-friendly Financial capability to expand 37

38 Paper & Flexibles Improvement in performance of corrugated o 2009 loss of R242m o 2010 loss of R62m o 2011 return to profitability Rationalisation of production facilities in Cartons & Labels Additional capacity in Flexibles 38

39 Rosslyn Paper Mill : Improved Efficiencies 24% increase in production Proven capability for high performance fluting production 24% 37% reduction in water consumption 33% reduction in starch and chemical consumption 48% 3 rd party maintenance agreement

40 40 Flexibles Pouch Equipment

41 41 Flexibles 7 Layer Co-Extruder

42 Coffee Pouches

43 Plastics New products in Liquid Packaging/Petpak o Bottles o Cartons Wine closure expansion Super Shorty beverage closure New intermediate bulk container at Megapak 43

44 44 New Bottles for Heinz

45 45 PET Bottle Growth

46 46 New Liquid Cartons for Clover

47 47 New Liquid Cartons for Clover

48 48 New Wine Closures Equipment

49 49 New Wine Closures

50 50 Super Shorty Beverage Closure

51 51 Intermediate Bulk Container

52 Tissue 2 ply tissue expansion Diaper expansion Refreshed brands and packaging 52

53 53 2-ply Tissue Expansion

54 54 Diaper Expansion

55 55 THE REST OF AFRICA

56 GDP Growth Rates Country Angola Kenya Malawi Nigeria Tanzania Zambia

57 Nigeria Zambia Kenya Angola Malawi Tanzania Revenue in Major Countries Rm

58 West Africa: Well Established Metals factory in Lagos-acquired 57% in 2002 Acquired minority interest in 2011 Cigarette cartons factory in Ibadan established in 2007 Label line installed in 2010 Expanded into commercial market in

59 West Africa Growth Projects Aerosol can line New paint line Cans for milk products Plastic bottles Sorghum beer cartons in Ghana and Nigeria 59

60 60 Angola

61 East Africa Acquired 49% of Bullpak (Kenya) in 1998 Acquired Crown Cork Kenya and Tanzania in 2002 Also 25% of Ethiopia Crown Cork in 2002 Invested in additional sack capacity Expanded into oil can products 61

62 East Africa Growth Projects Crates Closures for CSD and water Metal drums Sorghum beer cartons in Uganda and Tanzania 62

63 Zambia Invested in Zambia in early 1990 s Increased presence with the acquisition of Crown Cork in 2002 Several expansion projects in recent years 63

64 Zambia Growth Projects New PET jar and can for Sugar bags Sorghum beer fillers and printing 64

65 Europe Successful business model Strong cash flows Mega dairy tender unsuccessful Continue to invest in appropriate growth opportunities 65

66 66 NAMPAK PERFORMANCE

67 Nampak vs Alsi to 2009 index ALSI Nampak

68 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Nampak vs ALSI 2009 to date Nampak ALSI

69 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Nampak Share Price

70 RONA %

71 Trading Margin %

72 Headline Earnings per Share cents % 142.3c +21% 172.4c c

73 Dividends per Share cents % 83c +30% 108c c

74 Net Debt Rm ,000-1,500-2,000-2,500-3,000 Sep 09 Sep 10 Sep 11 74

75 75 OUTLOOK

76 Outlook Nampak is now: o More focused o With low gearing and strong cash generation, and is therefore... Able to invest in growth opportunities Grow with the South African economy and customers Increase the contribution from the rest of Africa 76

77 77 THANK YOU