Zimplow Limited interim analyst presentation 2010

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Zimplow Limited analyst briefing presentation in respect of the half year ended 30 June 2010 held at the Royal Golf Club, Harare, on 13 August 2010.

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Zimplow Limited interim analyst presentation 2010

  1. 1. INTRODUCTION WELCOME. The team today comprises of:‐ Z. Kumwenda (CEO) F. Rwakonda (CFO) B. Mitchell (MD Fasteners) G. Westland (GM Tassburg). The keys executives not present are: Mrs. D Mkonto (Company & CD) Mrs. S Vital (FD Fasteners) 1
  2. 2. MISSION AND VISION MISSION “To avail quality affordable and reliable steel products on time every time to the mining, farming, construction and manufacturing sectors” Vision: “To be a market leader in the Design, Sourcing and Distribution of at least one of our products in 18 countries south of the Sahara by 2020” 2
  3. 3. ZIMPLOW VALUES Integrity - Being absolutely truthful and accepting responsibility for our actions Quality - Being professional and quality oriented in everything we do. Teamwork - Working together to achieve the common goal. Dependability - Our customers, employees and suppliers must be able to count on us. Fun- Embracing a positive attitude and spontaneity. 3
  4. 4. GENERAL BACKGROUND The group comprises of 3 divisions: Mealie Brand, CT Bolts and Tassburg 1. Mealie Brand is the largest of the 3 divisions and is involved in the manufacture and export of animal drawn implements and hoes. The factory is based in Bulawayo. 2. CT Bolts is a distributor of mild steel bolts and nuts, nails and a wide range of other fasteners. The division also manufactures specialised fasteners at its Bulawayo factory. 3. Tassburg is a manufacturer of Wood screws, Veranda Bolts and High tensile bolts. The factory is based in Harare 4. The 3 divisions employ about 500 employees amongst themselves. 4
  5. 5. FINANCIAL RESULTS RESULTS 5
  6. 6. STATEMENT OF COMPREHENSIVE INCOME 30 June 30 June 2009 2010 CHANGE % TURNOVER 3 477 902 72% 2 018 539 DOMESTIC 2 628 998 111% 1 244 467 EXPORT 848 904 10% 774 072 PROFIT BEFORE INTEREST AND TAX 369 216 54% 239 919 INTEREST INCOME/(EXPENSE 54 233 (20 980) PROFIT BEFORE TAX 423 449 93% 219 823 TAX ATION (110 985) (122 366) ATTRIBUTABLE INCOME 312 464 221% 97 457 6
  7. 7. STATEMENT OF FINANCIAL POSITION 30 JUNE 2010 30 June 2010 31 December 2009 NON CURRENT ASSETS 2 821 825 2 848 660 CURRENT ASSETS 8 343 439 8 124 392 TOTAL ASSETS 11 165 264 10 973 052 SHAREHOLDERS FUNDS 9 294 798 8 999 945 NON CURRENT LIABILITIES 601 323 618 860 CURRENT LIABILITIES 1 269 143 1 354 247 TOTAL EQUITIES/LIABILITIES 11 165 264 10 973 052 7
  8. 8. STATEMENT OF CASH FLOWS 30 June 2010 CHANGE % 30 June 2009 Operating income before Working Capital changes 487 946 412 041 Working Capital (617 424) 40 543 movement Net Cash Flow (469 072) 305 074 Financing /Investing (56 682) (52 407) 8 Net Cash flows (469 072) 305 074
  9. 9. SEGMENT INFORMATION Total Mealie CT Bolts Tassburg Brand Turnover 3 477 902 2 440 731 742 520 294 651 %AGE 100% 70% 22% 8% Segment Profit 350 220 283 298 110 792 (40 959) %AGE 80% 32% (12%) Assets 8 959 916 1 029 824 1 188 600 Liabilities 914 366 268 291 86 487 9
  10. 10. MAJOR COST DRIVERS Steel prices increased by an average of 19% Employment costs driven mainly by the labour rate increased by 80% from last year. Further increases are more likely to be inflation related rather than regional alignments. Rand factor has been significant as it moved from as high as ZAR10.00 to a USD to around ZAR 7.5 end of June. This did not only add to raw material cost but other costs that includes general consumable, repairs and maintenance costs etc. 10
  11. 11. MEALIE-BRAND OPERATIONS TURNOVER. Mealie Brand Total Implements sales in units up by 33% from the prior year. Local implements sales in units up by 43%. Exports increased by 23% from prior year. Spares were up by 14%. Production up by 67% to 1 710 tons OEE is around 35% of installed capacity Actual OEE based on machines planned for use was 65%. 11
  12. 12. CT BOLTS OPERATIONS CT BOLTS Turnover Mild Steel bolts and nails in Kgs, up by 209% Other Fasteners in units up by 276%. Thread rolling Machines now installed at CT Bolts. 12
  13. 13. TASSBURG OPERATIONS Still building up on production and volume statistics However, volumes are ahead of last year although margins are “tight”. Production for the 6 months has been 22.8 tons. Capacity utilisation has averaged 15 to 20% Employee numbers are 30 compared to 29 last year. Bolt plant has been re‐located and we may see some savings on rental costs. 13
  14. 14. CT BOLTS OPERATIONS 30 JUNE 30 JUNE INCREASE/ 2010 2009 (DECREASE) MILD STEEL BOLTS kgs 31 O15 8 711 257% NAILS kgs. 8 521 4 098 108% TOTAL KGS 39 536 12 809 209% MILD STEEL UNITS 1 225 701 369 654 232% HT BOLTS 479 291 173 959 176% SCREWS 6 637 419 1 398 451 375% MISCELLENEOUS 426 324 299 409 42% FACTORY STOCK 324 351 174 281 86% TOTAL UNITS 9 093 086 2 415 754 276% 14
  15. 15. MEALIE BRAND OPERATIONS 30 JUNE Propor 30 JUNE 2009 INCREASE/ 2010 tion (DECREASE) LOCAL UNITS 10 007 53% 7 018 43% EXPORT(UNITS) 8 789 47% 7 171 23% TOTAL 18 796 14 189 33% SPARES(Total) 109 702 96 464 14% HOES(UNITS) 36 948 4 400 740% 15
  16. 16. Trading update Turnover to for July USD1 035 260.00 After tax profit of USD235 000. Good Turnover from CT Bolts, up 19% on June. Pleasing Turnover number from Tassburg up 60% on June. We are yet to establish on whether this is a trend. Mealie-Brand implements volumes for the Month of July were however down by 44% compared to July last year. 16
  17. 17. Going forward Expect August to be depressed, but sales should start picking up around September. The strengthening of the Rand is pushing steel prices and hence adding to the margin “squeeze” Will have a clearer picture of the year end out- turn by the end of the third quarter. Business should be able to self finance if everything goes according to plan. Regional expansion will continue to be a focus for management. 17
  18. 18. CONCLUSION THANK YOU AND GOD BLESS 18
  19. 19. CONCLUSION QUESTIONS? 19

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