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Unaudited Results

Unaudited Results. For the six months ended December 31 2007. Agenda. Introduction and Overview Financial Results Outlook Appendices: Appendix 1: Divisional Review Appendix 2: Historic performance. Introduction and Overview. Brian Joffe. H1 2008 Results Summary. Revenue.

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Unaudited Results

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  1. Unaudited Results For the six months ended December 31 2007

  2. Agenda • Introduction and Overview • Financial Results • Outlook • Appendices: • Appendix 1: Divisional Review • Appendix 2: Historic performance

  3. Introduction and Overview Brian Joffe

  4. H1 2008 Results Summary Revenue 13% to R53,9bn 18% to R2,5bn Operating Profit 11% to R1,5bn Headline earnings 10% to 498c HEPS 11% to 220c Distribution* ROFE to 37.6% from 44.6% Despite challenging conditions in certain sectors, most businesses were well managed and produced positive results • Excl. Bid Auto, local and offshore operations grew operating profit by 21% Introduction * Effectedby pro-rata share buy-back

  5. Segments at the forefront of performance Revenue (Rm) Operating Profit (Rm) Introduction

  6. Segments at the forefront of performance (contd) Revenue (Rm) Operating Profit (Rm) Introduction

  7. Segments performing below expectations Revenue (Rm) Operating Profit (Rm) Introduction

  8. Segments holding their own Revenue (Rm) Operating Profit (Rm) Introduction

  9. Financial Results David Cleasby

  10. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 • Organic growth of 9.3% • 11.2% growth excluding exchange rate translation • First time contributions from Angliss (R1.3bn) & Viamax (R300m) Results

  11. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 • Note: • 1. 9% organic growth in Operating Profit • 2. Foreign businesses = 30% (R744m) contribution to Operating Profit vs 27% (R599m) in H1 2007 Results

  12. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 • Offshore interest of R55,5m vs local interest of R390,0m • Net debt offshore of R647,4m vs local net debt of R6,7bn • R104m interest increase over H2 2007 – rate increases, increased capex, acquisitions and working capital absorption Results

  13. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 Associates: Tiger Auto Enviroserv ComairFirst time contribution Other Note: Includes dividends received Results

  14. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 Results

  15. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 Namsov: Materially down Versalec: Slightly down Bid Auto: Slightly down Results

  16. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 • 8.3% organic growth in headline earnings • 20.0% growth excl. McCarthy (bought 4 years ago for R0,7bn net and earned R2bn operating profit to date) Results

  17. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 Diluted weighted avg. shares in issue of 310,195m (+ 0.8%); issue of shares for outstanding options in Dec ‘06 as part of Dinatla transaction + buy back from Dinatla Results

  18. Consolidated Income Statement H1 F2008 in constant currency R/£ 13.74 * Effected by pro-rata share buy-back; +/- same cost as dividend, but earnings accretive and of benefit to all shareholders; still the equivalent of +/-2x covered dividend Results

  19. Consolidated Cash Flow Statement – Rm’s Half-year ended December 31 2006 Half-year ended December 31 2007 2630 3179 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 R2,322bn: • R1,280bn in capex; mainly Bidfreight, Bidserv, Bid Auto and Bidvest Europe • R1,042bn spent on acquisitions, mainly Viamax (R960m) • In the 3,5 years to December 2007: • R6,8bn cash generated from operations after working capital, tax & distributions supported • R9,8bn spent on acquisitions & investments to position businesses for medium term growth • Full benefits still to manifest Results

  20. Net working capital flows vs cash generated - Rbn Half-year ended December 31 2007 • Upward trend in cash generated • Net working capital typically better in 2nd half Results

  21. Working capital analysis • 13% reduction in working capital, excl. McCarthy where “imposed” over-stocking occurred • Additional new project working capital invested in Chinese vehicles and Value Centreswill only start generating returns from H2 2008 Results

  22. Net Working Capital Days 1 2 -3 9 5 14 Net days Debtors days Stock days Creditors days • Some changes in working capital cycle, evidenced through increased imports in a number of businesses, are reflected in stock days; very little creditor funding • However, elements of the group are still strategically over-stocked and paying close attention to trading out of this position whilst protecting margin • The quality of the debtors book is satisfactory; provisioning has increased • Banking assets are up R200m (increased lending achieved) vs banking liabilities up R80m Results

  23. Target interest cover range Gearing • Interest cover of 5.5x; target of 5-6x • R3.6bn increase in debt from H2 2007: • Acquisition R1bn • Net capex of R1,3bn • Net working capital of R2,5bn Results

  24. Outlook Brian Joffe

  25. Operational Prospects – 2nd half F2008 Bidfreight • Further benefits from recent capex on higher volume utilisation • Demand for port-based services to continue • Increased capacity to yield further returns Bidserv • Benefits from contracts won in F2007 • Security recovery to continue • Super licence to scale up BidAir • TMS • Strong performance to continue • International expansion potential (petro-chemical industry expertise) • Positive momentum expected to continue as outsourcing continues to grow Outlook

  26. Operational Prospects – 2nd half F2008 • Bidvest foodservice • First full year contribution from Angliss • Continued strong performance from Australasia • Contract wins and geographic expansion will benefit Deli XL • Further benefits from UK wholesale restructure • Food inflation offers opportunity to make trading gains and improve market position • Bidvest foodservice is a strong strategic investment: • 3rd largest foodservice business in the world • The trend towards eating outside of the home continues • The ability to grow our international footprint to extend reach • Big opportunity for improved returns in the recently acquired businesses as they begin to conform to Bidvest performance standards Outlook

  27. Operational Prospects – 2nd half F2008 Bid Industrial & Commercial Products • Benefit from copper price increases and weaker Rand • Positive & negative effects of the electricity crisis: • Voltex geared to distribute large-scale alternate power sources and power saving as well as participate in accelerating infrastructure spend, but • Commercial & Industrial building activity, as well as mining activity, may be further dampened • Weaker currency will assist Kolok • Improved earnings trend at Waltons set to continue, especially Gauteng Bidpaper Plus • Laser and Mail, Electronic Products, and Labels and Packaging are growing as traditional print products continue to contract • Positioned to regain previously lost market share in stationery production and distribution, but at lower margins Outlook

  28. Operational Prospects – 2nd half F2008 Bid Auto • Positioned for somewhat improved performance in H2 2008: • No further deterioration in new and used car volumes expected, but margins still being eroded • Trading out of over-stocked position whilst protecting margin • Positive contribution from Viamax for the full year • Extract synergies with McCarthy Fleet Services, achieve scale • A fundamentally good business, selling strong brands – has paid for itself almost 3x over since acquisition Outlook

  29. Group Prospects - H2 2008 Management initiatives • R10bn invested over last 3,5 years is bolstering competitive advantage at an important time • Absolute profit growth targets have been stretched • 2nd half earnings are usually stronger • Historically contribute +/-55% • Focus on working capital: • Usually better in 2nd half; aggressive targets set • Credit squeeze has opened up a window of opportunity for corporates with strong balance sheets seeking keenly priced deals Management is therefore budgeting for a higher rate of earnings growth in H2 F2008 than H1 F2008 Outlook

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