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Results Presentation For the six months ended 30 September 2005 25 November 2005.

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Presentation on theme: "Results Presentation For the six months ended 30 September 2005 25 November 2005."— Presentation transcript:

1 Results Presentation For the six months ended 30 September 2005 25 November 2005



4 4 Financial Highlights Interim Sep 05 Interim Sep 04 (1) % change Final Mar 05 (1) Headline earnings (Rm)2 8092 45914.25 006 Headline EPS (cents)579.4491.417.91 006.7 Basic EPS (cents)1 203.5786.653.01 721.1 DPS - Ordinary (cents)133.0116.014.7314.0 - Special (cents)600.0 (2) -- Intrinsic NAV (R) – after CGT136.36107.7713.7 (3) 119.97 Closing share price (R)109.9582.1033.993.80 (1)The final and interim figures for March 2005 and September 2004 have been adjusted to be IFRS compliant, with the exception of FirstRand, RMBH and Nampak, which are reported in terms of SA GAAP (see slide 5) (2)The special dividend of 600 cents has been declared and paid (3)The change in the intrinsic value from 31 March 2005 to 30 September 2005

5 5 Accounting changes Remgro applied International Financial Reporting Standards (IFRS) for the six months ended 30 September 2005 Certain associated companies (FirstRand, RMBH and Nampak) were not in a position to provide Remgro with IFRS information due to later reporting periods. These companies were included on a SA GAAP basis, as approved by the JSE IFRS adjustments to earnings: –31 March 2005: R253 million (negative) –30 September 2004: R305 million (positive) IFRS adjustments to headline earnings: –31 March 2005: R19 million (positive) –30 September 2004: R12 million (negative) Other positive prior year adjustments amounted to R5 million for 31 March 2005 and R9 million for the six months ended 30 September 2004 for both earnings and headline earnings. These adjustments related to a restatement of Transvaal Sugars inventory and revenue figure (R4 million) and FirstRand and RMB restated their figures to comply with AC 501 (STC)

6 6 Corporate activity since March 2005 Disposals ABSA During July 2005, Remgro sold its entire interest in ABSA for a consideration of R5 064 million (after tax gain - R2 570 million) FirstRand In May 2005 FirstRand announced that its BEE transaction had been implemented and in terms of the scheme, all shareholders sold 7.6 shares for each 100 shares held for R12.28 per share. Remgro received R486 million (after tax gain – R123 million) on 16 May 2005. Remgros interest in FirstRand (incl its indirect interest through RMBH) is 16.7% Sage During September 2005 Remgro sold its 17.9% interest in Sage for R114 million. An initial payment of R92 million was received and the subsequent payment of R22 million is still subject to certain potential tax liabilities being resolved. An after tax gain of R10 million was realised

7 7 Corporate activity since March 2005 Acquisitions Share repurchases Remgro repurchased 5 187 563 shares (1.1% of Remgros issued share capital) at an average price of R110.46 per share for a total amount of R573.0 million during the six months ended 30 September 2005. Together with previous years repurchases, a total of 35 709 404 (7.3%) shares are held as treasury shares No further shares were purchased by The Remgro Share Trust

8 8 KTI transaction On 29 September 2005, Remgro announced the proposed acquisition of a 37% interest in Kagiso Trust Investments (KTI), in equal shares from Liberty Life and Nedbank, for an aggregate consideration of R450 million Rationale KTI is an established empowered company with a sound investment record; KTIs investment strategy is complimentary to that of Remgro; With their combined industry expertise, KTI and Remgro can jointly pursue future investment opportunities Further details will be announced once the acquisition becomes unconditional

9 9 Other subsequent events Nampak On 29 September 2005 Nampak shareholders approved its BEE transaction and the operative date of the scheme was 31 October 2005. Remgro sold 10 Nampak shares for every 100 shares held at R15.13 per share. Remgro received R131.3 million on 31 October 2005 and its interest in Nampak diluted to approximately 13.5% RMBH RMBH announced, with the release of their final results at 30 June 2005, a capital reduction of R1.00 per share. Remgro received R274 million on 7 November 2005 Distell On 21 September 2005 Distell announced the introduction of a BEE partner. Distell will dispose of 15% of its operating company for approximately R869.4 million Medi-Clinic On 4 October 2005 Medi-Clinic announced its BEE initiative and capital restructuring. The operative date of the scheme is 19 December 2005 and Medi-Clinic will buy back 4.25 shares for each 100 shares held at a proposed price of R18.40 per share. Remgro will consequently receive R139.5 million. Remgros interest will dilute to 43.4% (after a share issue)

10 10 Application of cash at the centre First priority is to invest cash on behalf of shareholders –New investments –Increased exposure to existing investments Continue the share repurchase programme, combined with Ongoing real growth in dividends to shareholders; and Special dividends from time to time as in the past (STC implications)


12 12 Segmental headline earnings performance Strong performances from: Tobacco interests +22.5% Financial services +14.4% Off-set by: Mining interests -6.1% Industrial interests -1.5% September 2005 September 2004


14 14 Summary of underlying performance RmillionSep 05Sep 04%change Tobacco interests1 2641 03222.5 Financial services90378914.4 Industrial interests535543(1.5) Mining interests7782(6.1) Corporate3013130.8 Total2 8092 45914.2 HEPS (cents)579.4491.417.9

15 15 Tobacco Highlights R&Rs contribution to headline earnings increased by 22.5% and was mainly due to Remgros higher indirect interest in BAT as well as BATs strong results BATs attributable profit increased by 21.1% in sterling as a result of good organic growth and strong performances by all regions The rand was also stable and only appreciated by 0.3% Headline earnings%Intrinsic value% RmillionSep05Sep04changeSep05Mar05change R&R / BAT1 2641 03222.530 91926 27617.7 Avg ZAR:£ rate 11.7211.75(0.3)

16 16 Tobacco (contd) £millionSep05Sep04 Earnings attributable to BAT1 011843 (excl non-recurring items) Movement in NPV of preference shares & dividends-(8) 1 011835 R&Rs share of earnings290238 Movement in NPV of preference shares & dividends-8 Interest income1517 R&Rs income305263 Remgros share thereof10888 ZAR:£ translation rate11.7211.75 Remgros tobacco headline earnings (Rmillion)1 2641 032

17 17 Tobacco (contd) Remgros effective interest in BAT increased from 9.4% in September 2004 to 10.2% mainly as a result of the investment in participation securities issued by R&R Holdings BATs operating profit was 43% lower due to the impact of the £1 392 million gain, in the comparative period as a result of the merger of BATs North American operations with those of RJ Reynolds in July 2004. If non-recurring items are excluded, profit from operations are 9% higher (6% at constant exchange rates)

18 18 Financial Headline earnings%Intrinsic value% RmillionSep05Sep04changeSep05Mar05change ABSA123228(46.1)-4 629nm FirstRand42029641.98 1556 94117.5 RMBH36026535.87 1825 87422.3 Other---1146nm Total90378914.415 33817 590(12.8) Highlights The ABSA stake was sold to Barclays effective 27July 2005. Dividends amounting to R123 million have been included in income during the period under review. ABSA was equity accounted in 2004 FirstRand and RMBH returned strong earnings growth for the six months ended June 05

19 19 Industrial Headline earnings%Intrinsic value% RmillionSep05Sep04changeSep05Mar05change Medi-Clinic14312514.43 3932 73224.2 Rainbow955282.71 4811 12431.8 Total SA83105(21.0)1 5721 18732.4 Distell574235.71 9371 40537.9 UBR5368(22.1)1 7091 711(0.1) Nampak4558(22.4)1 3791 3710.6 Air Products322433.367060610.6 Wispeco292611.53073041.0 Dorbyl(28)23nm179422(57.6) TSB231827.81 1161 0288.6 Henkel / Tylon02nm--- Caxton30nm1098922.5 Total535543(1.5)13 85211 97915.6

20 20 Industrial (contd) Improved performances were mainly due to: Air Products Due to increased demand for gaseous products in all industries, Air Products reported a substantial increase in headline earnings TSB Although the national sugar industry production has increased due to better climatic conditions, TSB has not recovered to the same extent. The strengthening in the export sugar price however has lead to increased income. TSBs results have been negatively affected by lower income of the citrus business due to lower prices in Japan Lower results were reported by: Total SA The lower contribution was mainly due to STC payable on dividends declared and slightly lower gross profit margins. Reduced refining margins were offset by higher marketing margins UBR The decrease is mainly due to tax payable on dividends declared. Israel reported improved results, but South Africa reported lower results due to the impact of brand disposals and discontinuances

21 21 Mining Headline earnings%Intrinsic value% RmillionSep05Sep04changeSep05Mar05change Implats605313.22 4121 75137.8 Trans Hex1628(42.9)520529(1.7) Gencor11-66- Total7782(6.1)2 9382 28628.5 Highlights The decrease of 6.1% is mainly due to the lower income from Trans Hex as a result of an increase in cost of sales, exploration costs and asset impairments

22 22 Corporate finance & other Headline earnings RmillionSep05Sep04 Central treasury5350 Corporate costs (1) (23)(37) Total3013 Intrinsic value RmillionSep05Mar05 Sundry (liabilities) / assets (2) (134)355 Note: (1)The decrease in corporate costs resulted from reduced share scheme costs as a result of implementing IFRS2 (2)The movement is mainly due to an increase in deferred tax liability and tax payable

23 23 Cash movement at the centre (1)Investments realised consists of the sale of ABSA to Barclays (R5 064m), the proceeds received on the FirstRand BEE scheme (R486m), the Sage disposal (R92m), loan repayments received (R132m) and other investments realised (R8m)

24 24 Total cash At 30 Sep 2005 RmillionLocalOffshoreTotal Per consolidated balance sheet3 9291 0054 934 Less: Cash at other operating subsidiaries(835)- Cash at the centre3 0941 0054 099 Attributable share of R&Rs cash-2 344 Available cash3 0943 3496 443 Offshore cash at the centre (on balance sheet) was £89.7 million and the attributable share of R&Rs cash (off balance sheet) was £209.3 million


26 26 Remgros intrinsic value RmillionSep 05March 05%change Tobacco interests in GBP (£m)2 7612 23623.5 Tobacco interests30 91926 27617.7 Financial services15 33817 590(12.8) Industrial interests13 85211 97915.6 Mining interests2 9382 28628.5 Other interests(134)355(137.8) Cash at the centre4 0991 094274.7 Total67 01259 58012.5 Shares in issue (million)481.9487.1 Intrinsic NAV per share (R) – before CGT139.06122.3213.7 Intrinsic NAV per share (R) – after CGT136.36119.9713.7

27 27 Discount 30/9/05: 19.4% Intrinsic value vs share price Remgro traded at a 19.4% discount as at 30 September 2005 to its intrinsic value (after CGT) (31 March 2005: 21.8%) Discount 31/3/05: 21.8%


29 29 Share price performance Remgros share price as at 30 September 2005 outperformed the ALSI by 24.5% and the FINDI by 76.7% Remgros share price as at 22 November 2005 outperformed the ALSI by 27.1% and the FINDI by 82.2%


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