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The Bidvest Group Limited

The Bidvest Group Limited. Creating value and building strength from diversity. Results for the six months ended December 31 2005. Agenda. Introduction Financial Results Strategy & Prospects. Introduction. Results Summary. Revenue +21.6% to R38,2bn

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The Bidvest Group Limited

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  1. The Bidvest Group Limited Creating value and building strength from diversity Results for the six months ended December 31 2005

  2. Agenda • Introduction • Financial Results • Strategy & Prospects

  3. Introduction

  4. Results Summary • Revenue +21.6% to R38,2bn • Trading income +18.7% to R1,7bn • Headline earnings +20.4% to R1,1bn • HEPS +21.8% to 368,6cps • Cash generated by ops +59.1% to R936m • DPS +21.1% to 162cps Note: IFRS compliant

  5. H1 2006 Trading Features • Pleasing overall performance from group businesses • Strong revenues (volume gains) with trading margins offset, to some extent, by cost of capacity increases as well as fuel price increases • Deli XL acquisition substantially bedded down - adds 5.5cps with effect from 12/9/05 • Substantive progress on underperformers

  6. Segments at the Forefront of Performance Trading income (Rm)

  7. Segments Holding Their Own Trading income

  8. Action on Underperformers • Dart Line exit announced (at considerable profit) • Volume Distribution France exited • BNS sold to BCX • Further actions underway at Lithotech France

  9. Financial Results

  10. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS Note: Bidvest has terminated constant currency comparisons. Should the R/£ exchange rate move materially, constant currency comparisons will be reinstated.

  11. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  12. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS *Offshore margins include a R14m loss from Lithotech France (-R15m in H1 2005)

  13. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  14. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  15. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  16. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  17. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  18. Consolidated Income Statement Six months ended December 31 2005 Avg R/£ 11.56 IFRS Avg R/£ 11.43 Restated ito IFRS

  19. Consolidated Cash Flow Statement • Concerted working capital management across the group; still room for improvement • Cash effect of investment activities includes R1,1bn for the acquisition of Deli XL • Gearing capacity: • Ample room to gear up - current interest cover of 11x • R1bn due from Bidvest options by year-end • R650m received from the sale of Dart Line

  20. International Financial Reporting Standards Adjustments to income attributable to shareholders for IFRS NOTE: IAS17 straight lining of fixed percentage escalation leases adopted in F2005 accounts. Impact for H1 2006 R7,1m (H1 2005 R6,3m).

  21. Strategy & Prospects

  22. South African macro Trends Macro Trends that continue to benefit Bidvest group companies • Increasing spending power from growing middle class • Increasing outside-of-home food consumption • Emphasis on education – growing learner base • Growing new vehicle market - could double in 5 years • Upcycle in infrastructure spend • Aspirational branding • Tourism, leisure and related services • Outsourcing (infrastructure, labour, intellect, services) • Growth in specific commodities and resources

  23. The Bidvest Model

  24. Caterplus (incl. Combined Foods) Bidvest Australasia Bidserv (incl. Renfin & Minolta) Bidvest Europe (incl. Deli XL) Bidfreight Bid Prop Bidindustrial (incl. Office Products) Corporate Bid Automotive Bid Paper Plus • Group reorganised to realise the synergies between product categories as well as group businesses • Bidvest remains committed to decentralisation New Group Structure

  25. Prospects for F2006 • Positive impact of Deli XL • Automotive • Market growth over the next 5 years • Growing car parq boost for ancillary services • Strong volume growth set to continue – contract wins will benefit H2 2006 • Focus on Lithotech France and mediocre performers • Impact of additional capacity in SA and offshore • Ample capacity for further gearing • Group energisation

  26. Prospects for F2006 Earnings are traditionally weighted toward second half Deli XL in for only 3 months of H1 2005 * F2005 restated for IFRS MANAGEMENT IS CONFIDENT OF CONTINUED REAL HEPS GROWTH

  27. Appendix 1:Divisional Results

  28. …% Trading margin Services – Bidfreight Bulking up • Upgrading of bulk facilities - a competitive advantage for the future • BMA profits up 88% despite upgrade construction; MOU on terms has not yet translated to alterations to leases • SABT profits up 8% on better volume • IVS profits up 8% despite higher costs on re-negotiated leases; Rand strength hurts margin on export business • SACD profits up 33%, aided by new Durban capacity and Intermodal volumes • Safcor billings 16% up & profits 24% up mainly on buoyant incoming trade • Overall business increase for Marine • Prospects • focus on organic growth & acquisitions Rm Trading Income Rm Revenue +18% 3.4% 3.4%

  29. Services – Bidcorp Floating off • Strategic re-appraisal reaps substantial gains • Dart Line sold effective 1January to Cobelfret for £58,9m; buyer repays overdraft of £5m. Total gross realisation in past year of £75m (incl. prior sale of 2 ships £11m) • Volume Distribution continues to disappoint • Ontime steady – but loss in France • Car park business lost to NCP • Prospects • SVTV volume distribution in France exited • UK Volume Distribution gains Volvo & Toyota as well as renewal from Land Rover & Mini Rm Trading Income Rm Revenue +1% 0.9% 0.9% …% Trading margin

  30. …% Trading margin Services – Bidserv Cleaning up Expense management boosts margin Cleaning and Laundries exceptional profits Cleaning: up 21% - Sasol & Eskom H2 Laundries: up 27%, ROFE 25% - leveraging off capital programme Steiner: up 12%; beats off competition Security: up 15%, substantial IPS orders Greens: Top Turf disappoints, orders good for H2 Bidair: above budget, lack of a ground handling license impedes progress Industrial Products: G Fox benefits, new Johannesburg facility to be beneficial Prospects: new contracts, real growth in garment rental, stronger H2 Rm Trading Income Rm Revenue +11% 9.9% 9.3%

  31. …% Trading margin Services – Renfin Travel comes up trumps • Travel trading income recovery (+56%): • Despite continued flat ticket prices and severe industry competition • Volumes down but profitability up post introduction of fee-based revenue in May ’05 • Banking trading income (-21%) • Retail forex margins down 100 bp; stable Rand; costs incurred to develop infrastructure; high excesses for cash-in-transit thefts • Late launch of Debit Card products • Prospects • Continued cost containment • Fees and commissions in the Bank are increasing Rm Trading Income Rm Revenue +15% 20.4% 19.2%

  32. Foodservice Product – Bidvest Europe (3663) Britannia cools its way • 3663 revenue up 8% to £709,4 and profits up 4% to £21,9m*, despite: • GDP growth decelerates; London bombs; wage, fuel, utility cost pressures; • Lower margin CD sales up 32% due to new KFC contract (high £15 unit values) • Multi-temp Like-for-like margin up • Barton meat contains losses • MOD profit down - reduced military activity • £16m capex – 3 new depots complete • JV signed with Compass - non-food • Horeca Dubai small; 3663 to assist with growth initiatives • Prospects • Joint purchasing with Deli XL; new MOD contract decision due 1 May * 26 weeks in H1 06 versus 27 weeks in H1 05 Rm Trading Income Rm Revenue +6% 3.2% 3.1% …% Trading margin

  33. Foodservice Product – Deli XL Deli set to excel • Deli XL combined = €4,3m (£2,9m) in profits (12/9/05 – 31/12/05) • Deli XL Netherlands • strong cash generation • Institutional benefits from new Compass sales; early signs of positive market growth emerging • Hospitality running at a loss • Deli XL Belgium • Management changes • Profits static, but sales up 8.6% due to Quick and Pizza Hut • Cash flows pleasing • Prospects: on track to deliver on BVT expectations; margins of 2-3% expected over 2-3 years * 26 weeks in H1 06 versus 27 weeks in H1 05 Rm Trading Income Rm Revenue Revenue: R2,15bn R32,4m 1.5% …% Trading margin

  34. …% Trading margin Foodservice Product - Bidvest Australasia A lot of lolly in lucky country * 26 weeks in H1 06 versus 27 weeks in H1 05 AUSTRALIA (A$): Revenue up 10% to $566,7m & profits up 20% to $17,3m*; margin expands to 3,1% from 2,8% (foodservice margin 3,4%) Organic revenue up 8%, profits up 16% Gold Coast shines but losses in Sydney & Melbourne battling with cost structure Hospitality focuses on expanding footprint QSR profits up 4x; Yum! (80% of volume) 5-year contract on favourable terms Prospects – “street” focus; national market share of 20% = untapped potential New Zealand (NZ$) Revenue $132m, profits up 21% to $5,7m – Fresh now 10% of profits Prospects: well prepared for capacity and infrastructure constraints, as well as lower GDP growth Rm Trading Income Rm Revenue +28% 3.2% 3.0%

  35. …% Trading margin Foodservice Product – Caterplus (SA) Dietary disciplines Top line up 14%, profits up 5% Minimal food inflation vs overhead cost increases Hospitality flat, slow down in leisure, but continued growth in fast food Home entertainment a growing reality Catering Supplies: procurement disciplines Frozen: market share gains, flat profits Speciality: capitalises on home entertainment Vulcan: profits down, export off Hotel Amenities: profits up despite customer losses Lufil Packaging: good growth; branded fast foods Prospects: differentiation, aggressive responses Rm Trading Income Rm Revenue +5% 9.1% 8.3%

  36. …% Trading margin Foodservice Products – Combined Foods (SA) Dough (n’t) despair Rm Trading Income Rm Revenue • Relocation to new Longmeadow premises temporarily disruptive • Crown increases profits despite import prices and poultry disease challenge • Sourcing initiatives in place • BidBake deflated by import threats, relocation of yeast production to Johannesburg • Crown/Bidbake synergies • Prospects • efficiency gains from world class facilities • discount reductions at Bidbake • procurement benefits 0% 12.7% 12.2%

  37. …% Trading margin Commercial Products - Bidoffice Warmth out of Walton Waltons profits rise 23% despite continuing underperformance in Southern Gauteng – significant expense savings achieved Growth in furniture and promotional gifts Furniture: profits up 7% - strategic realignment and move up the value chain Kolok suffers ongoing margin squeeze; cheap, grey & counterfeit imports plus price wars continue to feature Automation: outperformance continues, with Minolta profits up 19% off a high base Prospects: solutions based model at Kolok & state of the art premises, sales focus at Waltons Rm Trading Income Rm Revenue +8% 6.5% 6.3%

  38. …% Trading margin Commercial Products – Bid Paper Plus* Paper isn’t Board Toughest trading ever experienced Commendable 23% rise in continuing profits Lithotech SA: market decline in business forms being offset by mailing & laser (revenue up 15%, profits up 26%); R41m capex Lithotech France: H2 ’05 profit turns to H1 loss despite restructuring Silveray: aggressive pricing, margin pressure Prospects: Lithotech France exit strategy, continued focus on shifting out of commodity products by Lithotech, modernisation of Silveray factory processes & redesign of Croxley products, tough market to keep management on its toes Rm Trading Income Rm Revenue +4% 7.9% 7.5% *Was Printing & Paper Conversion

  39. …% Trading margin Commercial Products - Bid Industrial Products Electric Avenue • Voltex • Profits up 57% off a 21% rise in revenue • Electrical Wholesale boosted by building • Smart buying of copper – strategic stocking • Organic growth benefits from focus on tenders, projects & industry • Luminary initiatives evolving well • Afcom • Profits down 19% off a 3% rise in revenue • Deflation, import penetration • Balancing - selective imports, rationalising manufacturing capability • Buffalo Executape • Modest drop in profits; DIY market penetrations • Prospects: overall upward momentum continues Rm Trading Income Rm Revenue +26% 6.8% 6.4%

  40. …% Trading margin Automotive Products - McCarthy Moving motivation Profits up 29% off a 20% rise in revenue Access to BVT group treasury yields sizeable funding benefit New vehicle units of 31 131 (up 25%); used units of 27 458 (up 14%) but ongoing margin squeeze Toyota & VW/Audi star contributors Trend to volume-orientated market Budget: volumes up 23%, profits pleasing Yamaha leverages full offering in a strong consumer environment Financial profits up 35%, market gains Growing HP debtors book & leasing fleet GAZ taxi sales 258 units (up from 66) Prospects: agreement with Auto China (FAW product); favourable auto market over medium term; Rm Trading Income Rm Revenue +29% 3.5% 3.2%

  41. Corporate Services Rm Trading Income BNS sale to BCX mymarket.com continues to grow customer base Property rental income up 11,4% Corporate costs net of investment income (–R12m); decrease in investment income Sharp recovery at Namsov to R42,3m (R13,1m attributable to Bidvest) due to improved selling prices, catch and fish sizes

  42. Appendix 2:Macro Trends that benefit Bidvest companies

  43. Assessment of International Macro Trends

  44. Assessment of South African Macro Trends

  45. Appendix 3:Historic performance

  46. Historic Performance (F2005 restated for IFRS) 5.2% 4.9% 4.9% 5.1% 4.8% 4.5% 4.4% 4.7% 4.9% 17% CAGR over 4 years 16% CAGR over 4 years

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