• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
AFROX HY 2013 financial results presentation
 

AFROX HY 2013 financial results presentation

on

  • 426 views

AFROX HY 2013 financial results presentation

AFROX HY 2013 financial results presentation

Statistics

Views

Total Views
426
Views on SlideShare
393
Embed Views
33

Actions

Likes
0
Downloads
0
Comments
0

1 Embed 33

http://www.africansens.com 33

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    AFROX HY 2013 financial results presentation AFROX HY 2013 financial results presentation Presentation Transcript

    • AFRICAN OXYGEN LIMITED INTERIM RESULTS PRESENTATION 2013
    • Contents Welcome & Overview Brett Kimber 10mins Financial Performance Nick Thomson 30mins Outlook Brett Kimber 10mins Questions Brett Kimber & Nick Thomson 10mins 2
    • Welcome & Overview Brett Kimber 3
    • ASPIRATION Overview True Number 1 | Leading “We will be the leading gases and welding products company in subSaharan Africa, admired for our people, by any measure.” STRATEGIC LEVERS PROMISE 2012 4 2013 2014 2027 Back to Basics DIFOT ASU Reliability Improved Profitability EBITDA Growth 100 years & Leading Healthcare – Growing affluent population throughout Africa Growth Markets – CO2, consumer, commodities & agriculture Energy / Environment – Natural gas and oil in RAF
    • Financial Performance Nick Thomson 5
    • South Africa Economic environment 2013 • In line with the economy, most Afrox volume segments declined in the first half of the year • The overall growth of 1.5% is well within most companies efficiency objectives and is insufficient to drive Afrox growth • Key Afrox supplier segments in the economy are beginning to “turn” • June and July 2013 were better volume months from Afrox’s perspective Q-O-Q Manufacturing Production Growth (%) OVERALL Food and beverages Petroleum, chemical products, rubber & plastic production Glass & non-metallic mineral products Basic Iron & steel, non-ferrous metal products & machinery Motor vehicles parts & accessories & other transport equip Other manufacturing division 6 Seas.Adj Jan13Jan12-Jun12 Mar13 vs vs Weight Jan13-Jun13 Jun-13 Apr13-Jun13 100 22.1 25.1 4.9 20.3 7.9 3.2 1.5 0.4 3.1 4.2 1.9 -3.9 -0.7 -1.4 1.2 6.4 4.8 -0.1 -9.1 -15.1 3.1 1.6 -1.5 4.3 9.1 10.5 -3.6
    • South Africa Macroeconomic overview/outlook Real GDP and IP development Selected industry Segments‘ Growth (yoy growth in % 2008-2013FC) 2007-2014FC (2007=100) 135 130 15 % GDP % IP 10 125 120 115 110 5 105 0 100 -5 95 90 85 -10 80 75 -15 70 65 -20 08 09 10 11 12 13F C 0 2007 2008 2009 2010 2011 2012 2013F C Food Beverages Source: EIU (June 2013); © 2013 The Economist Intelligence Unit Ltd. All rights reserved. Source: Global Insight, Q3 2013 7 Iron & Steel Non-Ferrous Metals Refined Petroleum Prod. Motor Vehicles Glass 2014F C
    • Volume Performance June YTD – 2010 to 2013 Tonnage (incl. TOP) 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 - Bulk and Industrial Gases -27.4% 2010 2011 2012 134,000 132,000 130,000 128,000 126,000 124,000 122,000 120,000 118,000 116,000 2013 -1.8% 2010 LPG (incl. Megabulk) 2011 2012 2013 Welding 85,000 6,400 80,000 6,300 -5.0% -0.1% 6,200 75,000 6,100 70,000 6,000 65,000 5,900 60,000 5,800 2010 8 2011 2012 2013 2010 2011 2012 2013
    • Results Overview 6 months to June 2012/2013 2013 2012 Revenue R 2 859m Revenue R 2 779m 9% EBITDA R 449m flat EBITDA R 446 m 7% Basic EPS 54.8 cents 5% Basic EPS 57.4 cents Headline EPS 55.1 cents 2% Headline EPS 53.8 cents 2% Gearing 19.2 % 9 3% 7% Gearing 17.9 % 3% 235%
    • EBITDA development 5 year review Rm 500 18% 450 16% 400 14% 350 12% 300 10% 250 8% 150 EBIT margin 6% 200 EBITDA margin 100 4% 50 2% 0 0% 2009 JUNE 10 EBITDA 2010 JUNE 2011 JUNE 2012 JUNE 2013 JUNE
    • Ratios 2013 June 2012 December 2012 June Debt: Equity (%) 42.0 30.7 31.6 Gearing (%) 19.2 15.5 17.9 Current ratio 1.7 1.4 1.7 Quick ratio 1.0 0.8 1.0 17.0 18.8 14.8 ROLTA (excluding retirement benefit assets) Debt = Long-term + Short-term borrowings (excl. cash) 11
    • International trend Afrox 2013 June 6 months International trend 2012 December 12 months 2013 2012 EBITDA margin 15.7 14.4 24.4 23.3 Net interest cover on EBIT (times) 13.5 12.5 10.7 9.0 Gross Debt:Equity (%) 42.0 30.7 84.3 74.6 Gearing 19.2 15.5 40.5 36.1 Return on equity (%) 11.3 9.3 16.3 14.5 Return on assets (%) 15.1 12.7 11.6 9.9 12
    • Results Overview (cont.) 6 months to June 2013 Net sales (Rm) R2 859m 1 025 +5% -1% 2013 R 833m R2 779m +3 % 1 834 Net trade working capital (Rm) +24% Non LPG 1 745 LPG 29% % of Sales 25% 1 034 2013 2012 EBITDA margin excl. oil price effect (%) 16.0% R 696m Capex (Rm) +18% 16.9% -5% 2012 0.8% 0.3% EBITDA margin oil price effect 15.7% 2013 13 -2% 16.1% 2012 EBITDA margin per income statement 261 2013 222 2012
    • Income Statement Half-year development 18.0% 500 Rm 450 16.4% 15.7% 16.0% 16.0% 400 14.0% 13.2% 350 12.7% 12.0% 300 10.0% 250 8.0% 200 6.0% 150 100 4.0% 50 2.0% - 0.0% 2011 1st Half 2011 2nd Half EBITDA 14 2012 1st Half EBIT 2012 2nd Half EBITDA margin 2013 1st Half
    • Working Capital Days 100 86 84 76 80 76 64 60 51 53 44 40 48 51 47 69 46 39 31 79 75 85 78 76 68 47 48 38 45 50 43 37 4646 20 2013 June 2012 Dec 2012 Jun Debtors days Creditor days Net trade working capital days to sales 2011 Dec 2011 Jun 2010 Dec Stock days Net working capital days to sales Increased Working Capital requirement due to increased stock levels resulting from Transnet contract, safety stock and increased prices. 15
    • Capital Expenditure June 2013 18% increase 49 30 75 Minor 117 Distribution Major 137 75 2013 June Actual R 261 m 2012 June Actual R 222m Durban property purchased for R111m, of which R7m was paid in 2012 16
    • Group Income Statement June 2013 R'million Revenue EBITDA Impairments Depreciation and amortisation EBIT Net finance expense Income from associates Profit before taxation Income tax expense Profit for the period Non-controlling interest Net profit for the period 2013 June Actual 2 859 449 (178) 271 (20) 251 (75) 176 (7) 169 2012 June Actual* 2 779 446 (154) 292 (30) 2 264 (81) 183 (6) 177 2013 vs. 2012 3% 16% -7% -5% -8% -4% -5% *restated net interest expense in line with the requirements of the revised IAS 19 Employee benefits, from R24 million to R 30 million Basic earnings per share (cents) Headline earnings per share (cents) Interest cover on EBIT (times) 17 54.8 55.1 13.6 57.4 53.8 9.7 -5% 2%
    • Group Statement of Comprehensive Income June 2013 2013 June Actual 176 61 28 24 4 - 2012 June Actual* 183 ( 56) (18) ( 14) ( 6) 2 Items that cannot subsequently be reclassified to the income statement Actuarial gain/(loss) on defined-benefit funds Deferred tax relating to actuarial (gains)/losses 33 46 (13) ( 38) (52) 14 Total comprehensive income for the period Attributable to: Equity holders of the company Non-controlling interests 237 127 226 11 237 127 127 R'million Profit for the period Other comprehensive gain/(loss) after tax Items that can subsequently be reclassified to the income statement Translation differences for foreign operations Translation differences relating to non-controlling interests Changes in fair value of cash flow hedges (net of tax) * restated in line with the requirements of the revised IAS 19 employee benefits 18
    • Group Statement of Financial Position June 2013 R'million ASSETS Property, plant and equipment Other non-current assets Non-current assets Current assets Inventories Trade and other receivables Other current assets Non-current assets held-for-sale Total assets EQUITY AND LIABILITIES Total equity Non-current liabilities Long term borrowings Deferred tax liabilities Current liabilities Trade, other payables and financial liabilities Other current liabilities Non-current liabilities held-for-sale Total equity and liabilities 19 2013 June 2 963 620 3 583 2 442 873 1 061 508 2012 June 2012 December 2 712 709 3 421 1 901 685 981 235 2 854 604 3 458 1 885 685 841 359 112 44 6 025 5 434 5 387 3 018 1 548 1 000 548 1 459 1 143 316 2 942 884 365 519 1 603 994 609 2 831 660 132 528 1 896 1 078 818 - 6 025 5 5 434 5 387
    • Group Statement of Cash Flows June 2013 2013 June R'million Earnings before interest and tax (EBIT) Adjustments for: Depreciation, amortisation and impairments Other Operating cash flows before working capital adjustments Working capital adjustments Cash generated from operations Vested shares purchased on behalf of employees Net finance expenses and tax paid Cash available from operating activities Dividends paid Net cash (outflow)/inflow from operating activities Additions to property, plant and equipment and intangibles Proceeds from disposal of the RECO business Other investing cash flows Net cash outflow from investing activities Increase/(decrease) in borrowings Incentive share scheme shares purchased on behalf of employees Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 20 2012 2012 June December 271 A B C A+B+C 292 439 178 31 480 ( 302) 178 ( 3) ( 124) 51 ( 57) ( 6) ( 261) 21 14 ( 226) 398 398 166 255 421 154 41 487 ( 199) 288 ( 81) 207 ( 76) 131 ( 222) 51 ( 171) ( 20) ( 20) ( 60) 232 172 359 103 901 35 936 ( 150) 786 ( 171) 615 ( 558) 58 ( 500) ( 78) ( 14) ( 92) 23 232 255
    • Segmental Reporting June 2013 2013 June Actual Revenue Atmospheric gases LPG Hardgoods Rest of Africa Gross profit after distribution (GPADE) Atmospheric gases LPG Hardgoods Rest of Africa Reconciliation of GPADE to EBIT GPADE for business segments 2012 June 2013 Actual vs. 2012 2 859 861 1 025 523 450 2 779 914 1 034 418 413 -6% -1% 25% 9% 818 303 159 201 155 819 315 197 126 181 -4% -19% 60% -14% 818 ( 527) 292 16% 30% 36% 2012 June revenue 15% 33% Other operating expenses Earnings before interest and taxation (EBIT) Margins per segment: Atmospheric gases LPG Hardgoods Rest of Africa 21 4% 15% 37% 35% 15% 38% 34% 34% 19% 30% 44% Atmospheric gases LPG Hardgoods Rest of Africa 18% 819 ( 547) 271 2013 June revenue Atmospheric gases LPG Hardgoods Rest of Africa
    • Borrowings June 2013 Borrowings Committed Facilities Limit Total Facility (per covenants) Rm 2600 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 R'million Cash and cash equivalents (incl. overdraft) Total borrowings Long-term borrowings Short-term borrowings Net borrowings 22 2013 June Actual 2012 June Actual 2012 December Actual 420 172 255 ( 1 269) ( 1 000) ( 269) ( 929) ( 365) ( 564) ( 870) ( 132) ( 738) ( 849) ( 757) ( 615)
    • Borrowings June 2013 (cont.) 2013 June Actual Interest rate Rm % Revolving credit ( 300) N/A 3 year term loan ( 500) N/A Fixed loan ( 308) 9.7 Variable loan ( 292) 8.1 Fixed loan ( 200) 10.5 Variable loan ( 200) 8.1 Syndicated facility 5 year term loan: 7 year term loan: Total facilities in place 23 ( 1 800)
    • Progress on Key Service Level Measures DIFOT customer service level, in percent Run out efficiency (Bulk Gases & LPG), Number of runouts per thousand deliveries Industrial gases at 92 (2012: 92) Hard goods at 78 (2012: 84) Improvement noted in 2012 sustained Increased reliance on LPG imports Bulk Gases 90 89 -0.2 5.5 5.3 LPG -0.3 1.9 Dec 2012 Jun 2013 ASU reliability, in percent 98 Dec 2012 24 99 Jun 2013 Dec 2012 Jun 2013 1.6 Dec 2012 Jun 2013
    • SHEQ Significant improvement in both our safety performance and our reporting mechanisms Afrox & 3rd Party Fatalities MIRs Total Recordable First Aid and Near Misses MIR – Major Incident Report, includes transport incidents 25 *Includes managed countries 3 5 21 415 6 22 61 201
    • Review of Performance Against Objectives What we said we would do What we have done IMPROVE ACCOUNTABILITY Increase P&L responsibility New integrated lines of business introduced Managers were arranged on a functional basis Heads of new lines of business: • Dave Shaw MPG • Lerato Mosiah Healthcare • Mark Radford LPG • Nazmi Adams Hard Goods and Exports • Donal Mackinnon Tonnage • Willie Coetzee REA • Stephen Moran SHEQ 26 Status
    • Review of Performance Against Objectives (cont.) What we said we would do What we have done ASSETS Increase focus on preventative maintenance and ROC of ASU’s to improve reliability • Make strategic investments to protect market share • • • 27 • • Preventative maintenance regime well implemented and managed directly by Tonnage business unit ASU reliability increased to 99% ROC of all ASU’s now completed, including Pretoria ASU PE ASU approved and will be operational by 2015 Durban land purchased MPG filling plants will be in place by end of 2015 Status
    • Review of Performance Against Objectives (cont.) What we said we would do What we have done LOW ASSET UTILISATION Focus on improving asset utilisation • • Volume decline continuing to adversely affect ratios. Investments continuing to enhance customer service and address bottlenecks. Correct process in place to challenge need for investments Cylinder management program instituted under a senior manager CUSTOMER SERVICE Improve customer service levels • • 28 Customer service levels are at acceptable levels for all business units except for Hard Goods. DIFOT is now measured at plant level and is reflecting improvement in customer service levels Status
    • Review of Performance Against Objectives (cont.) What we said we would do What we have done EMPLOYEES Reduce job duplication in structures and improve accountability • • • Improve consistency in performance management criteria • Address high cost of • service identified as a key obstacle to improving • profitability • 29 “People streamline” project launched to address structure Critical vacancies and redundancies have been identified. Headcount reduction is in progress – staff compliment likely to reduce by approximately 300 people by year end through natural attrition and VSP with minimal actual redundancies Significant proportion of all score cards now aligned with key turn around metrics Project streamline launched Key metrics benchmarked against other Linde global best practice. IBL Heads tasked to identify gap closure opportunities Next step is structural review Status
    • Review of Performance Against Objectives (cont.) What we said we would do What we have done FOCUS ON PROFITABILITY AND STRATEGIC INITIATIVES Develop clear strategy to address opportunities into Africa • Address the many legacy issues at play • • Strategy developed and in process of being approved by Afrox Board and Linde Board Implementation to commence in 2014 Good progress on addressing some but not all of the legacy issues FUNDING Address inappropriate funding structure • • New syndicated loan facility negotiated and in place Appropriate allocation between fixed and floating rates now in place STAKEHOLDER ENGAGEMENT Address stakeholder • complaints that executive management is not • approachable 30 More regular and comprehensive stakeholder communication. Effort being made to be more available within constraints of price sensitive information Status
    • Other Developments • Supply agreement to ArcerlorMittal Disposal of Reco Columbus 31 • Since July 2012 invoiced as per the take or pay contract with no settlement and no revenue recognition Arbitration still expected to take place 4th quarter 2013/1st quarter 2014 • • Sale completed in Feb 2013 R21m received in March 2013, remaining R13.5 m to be received in 2 tranches: R500 k in August 2013 and R13 m in February 2014 • Negotiations ongoing, good progress being made
    • Dividend declared Dividend Declared R'million 2013 June 2012 June Basic and diluted earnings per share - cents Headline earnings per share - cents 54.8 55.1 57.4 53.8 Gross dividend per share 27.0 27.0 2.0 2.0 Dividend cover on headlines earnings The salient dates for the declaration and payment of the final dividend are as follows: Last day to trade ordinary shares “cum” dividend Ordinary shares trade “ex” the dividend Record date / last date to register Payment date 32 Friday, 4 October 2013 Monday, 7 October 2013 Friday, 11 October 2013 Monday, 14 October 2013
    • Outlook Brett Kimber 33
    • Interim Outlook Economic conditions are expected to remain challenging for the foreseeable future • Atmospheric Gases • Expansion investments progression in Durban and Port Elizabeth • Mining, steel and manufacturing sectors still challenging • Continue to supply 5 of 9 provinces after state tender awarded (gained Limpopo, lost KZN) • LPG • More focus on the complete supply chain from importing, storage to distribution • Improving control of our cylinders • Growth in hospitality • Hard Goods • Refocus the product portfolio and manufacture thereof • Developing products for global markets • Rest of Africa • Strengthening core operations • Clear expansion plans using modular filling plants in target areas • Afrox Group • SHEQ improvement • Social, ethics and transformation committee • New organisational structure in place; starting to see the benefits • Sustainable improvement in operating performance 34
    • EBITDA (R’m) versus FTE (AOL excl. Manco) 35
    • Q&A 36
    • Forward looking statements disclaimer: This interim results review contains statements related to our future business and financial performance and future events or developments involving Afrox that may constitute forward-looking statements. Such statements are based on current expectations and certain assumptions of Afrox’s management are therefore subject to certain risks and uncertainties. A variety of factors, many of which are beyond Afrox’s control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Afrox to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends. 37