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Appendix 1 Divisional Review. Trading margin Bidfreight – Bracing Appendix 1 2.9% Rm 3.1% Revenue11% Operating profit19% Operating margin3.1% Results.

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Presentation on theme: "Appendix 1 Divisional Review. Trading margin Bidfreight – Bracing Appendix 1 2.9% Rm 3.1% Revenue11% Operating profit19% Operating margin3.1% Results."— Presentation transcript:

1 Appendix 1 Divisional Review

2 Trading margin Bidfreight – Bracing Appendix 1 2.9% Rm 3.1% Revenue11% Operating profit19% Operating margin3.1% Results ► Momentum continued into H1 as investments in capacity and efficiencies realise rewards ► Customer demand for services robust, volumes pleasing ► Safcor Panalpina : billings up 12%, benefiting from a weaker ZAR & interest rates; margin erosion ► Marine : profits well ahead of budget ► IVS: Profits up despite recent fire reducing capacity; Durban & Isando volumes strong and Richards Bay outperformed on new business ► RDS: challenges referred to previously remain but strategic actions to improve profitability in process; Durban terminal delays severely impact turnaround times

3 Bidfreight – Bracing Current contr. to Group Operating Profit 13.5% Appendix 1 ► Bulk Connections: upgraded facilities paying off in higher volumes and new custom ► SABT: profits well ahead of budget; volumes up 38%; railway service shortfalls reduce potential of this business ► SACD Freight: high volumes at depots; margins assisted by cost containment ► BPO: port operations profits up meaningfully; new capacity at Maydon Wharf accommodated increased demand; steel & ferrochrome exports pleasing; forest product exports remain weak ► Manica : challenging regional markets; DRC commodity volumes reduced; Botswana performed well on vigorous clearing activity; severe skills shortage in Malawi and Zambia ops; Zimbabwe trades well on food aid volumes ► Naval : strong metical eroded margins Strategic Imperatives and Prospects ► Agency JV in Marine; 6 new SABT silos; IVS new builds ► No change in status of national ports – major impediment ► Demand for port based services growing ► Real profit growth assured for F2008

4 Trading margin Bidserv – Healthy & Wealthy Results ► Fine results in particular from BidTravel, TMS, BidAir, Industrial Products, Security, TopTurf, Bidvest Bank ► Continuing to gain profitable ground in all markets ► Prestige : Creditable result in face of legislated wage rises that cannot be recovered in full ► TMS : Profits up significantly, growth in new contracts ► Laundries: Increases in key inputs but profits up 14%; new equipment business promising ► Steiner: Cost pressures evident and some difficulties with smaller units but excellent result from flagship Steiner Hygiene ► Security: Strong recovery from industry-wide strike action ► Global Payment Technologies: reasonable result, cash handling good ► Top Turf: Execution of recent offshore contracts boosts profits by 45% but local operations below par 11.8% Rm 12.8% Appendix 1 Revenue19% Operating profit28% Operating margin12.8%

5 Bidserv – Healthy & Wealthy ► Industrial: Substantial rise in profits; competitive strengths cement market position ► My Market: meaningfully profitable as stand-alone; procurement proving its worth ► Office – Konica Minolta & Oce: Konica Minolta performing well, Oce improving from a low base; ► BidAir: Brisk airport activity; super ramp license to serve 12 airlines effective 1 March 2008 – necessary equipment already in place ► BidTravel: Building on management actions last year to improve performance; cost cutting drive underway to further consolidate competitive position Current contr. to Group Operating Profit 15.8% ► Bidvest Bank: 39% rise in profits despite expensing of significant marketing costs; Master Currency business up to expectation ► Hotel Amenities: Performs strongly due to higher hotel occupancies and increased number of hotels Strategic Imperatives and Prospects ► TMS specialist services (petrochemicals) finding favour locally and increasingly abroad ► Bidserv expecting a record year, generating group-leading margins ► Critical mass of this soft services segment unparalleled in South Africa Appendix 1

6 Bidvest Europe – Tactical Advantage Results ► Operating profit up 14% to £28m, with UK up 8% to £23.4m, Netherlands up 30% to £5.6m and Belgium up from £0.3m to £0.8m. All operations in line with budget. Sterling average exchange rate €1.45 (€1.48) ► 3663 benefiting from tactical measures taken last year to capitalise on market shake-out; strict expense control ► Deli XL Netherlands : €8.15m profit vs. €6.3m; revenue €355m, up 2%; ROS 2.3% (1.8%); cash generated by operations €14.6m; inflation in food products escalating; markets remain difficult with volumes overall flat ► Deli XL Belgium: €1.1m profit on €117.2m revenue; ROS 0.9% (1.6%); Kruidenier Belgium incorporated; extraction of efficiencies ► Horeca: £52 000 profit, ROS 2.7%. New agency acquired; one-off impact of Asian games out of the system Appendix 1 2.3% Rm 2.6% Revenue7% Operating profit20% Operating margin2.6% Trading margin

7 Bidvest Europe – Tactical Advantage ► 3663 : sales 1% up at £801m (8% like-for-like excluding MOD); profits up 8% to £23.4m; ROS 2.9% vs. 2.7; cash generated by ops £33.7m; capex £11m vs. £10m Good working capital management and overhead cost control Wholesale successfully reorganised, efficiencies gained Food price inflation being passed on, with benefits for margin Multi-temp sales and profits up 15%, well ahead of market CD profits up sharply on efficiencies Frozen, Fresh & Chill profits stable, helped by cost savings; Fresh under strategic review for optimal positioning New management structure at Barton – benefits H2 Strategic imperatives & prospects ► 2007 UK GDP growth 3.1% and hotel & catering growth 3.6% - unlikely to be maintained at this strong rate; interest rates have eased; 3663 well placed to turn competitor stress to own advantage ► DeliXL wins Starbucks contract in Netherlands ; acquisitive options open ► Strong year in prospect for Bidvest Europe Current contr. to Group Operating Profit 16.6% Appendix 1

8 Revenue59% Operating profit61% Operating margin3.8% Bidvest Asia Pacific – True blue tucker Results ► Every Australian business unit now profitable ► New Zealand market share gains ► Angliss has settled in well ► Australia: sales up 16% (5% acquisitive) to $711m with profits rising 23% to $27m; ROS 3.8% vs. 3.6%; GDP growth running at 4%; food inflation up to 6% ► Foodservice sales up 12%, profits up 36%; Melbourne & Sydney sustainably profitable; upgrades underway to cope with growth ► Hospitality remains in development phase, promising ► QSR sales up 27% and profits up 75%, assisted by transfer of Subway business; margin exceeds 1%; organic growth 6% Appendix 1 Rm 3.8% Trading margin

9 Bidvest Asia Pacific – True blue tucker ► New Zealand: sales up 18% to NZ$186.9m and profits up 21% to NZ$8.8m; ROS 4.7%; 15% real growth from new customers, new products ► Fresh profits up 31%; new acquisition to lead growth ► Foodservice profits up 14%; infrastructure investment ► Angliss: R46m profit; Singapore and Hong Kong operating performance highly satisfactory, region strong, underscores merits of purchase Strategic imperatives & prospects ► Australia: targeting >4% margin; double-digit profit growth for 2008 ► New Zealand: further acquisitions, outperform industry ► Singapore: margins approaching 4%, economy buoyant ► Hong Kong/China: margins in the 3% to 4% range, robust markets, Beijing Olympics a positive Current contr. to Group Operating Profit 10.2% Appendix 1

10 Bidfood – The right ingredients Results ► Pleasing execution of strategic re-alignment ► Record levels of profitability; food inflation benefit ► Ingredients delivers on promise to improve returns ► Caterplus : net revenue up 21% and profits up 24%; national accounts, “street” trade, and industrial catering revenues outperform; higher average basket values and average spend ► Speciality : Patleys grew revenue by 24% and profits by 34%; promotions pay off; price increases successfully passed through; top LSM customer focus shields from squeeze Appendix 1 7.9% Rm 8.5% Trading margin Revenue15% Operating profit25% Operating margin8.5%

11 Bidfood – The right ingredients ► Ingredients : modest increase in revenue translates to 19% rise in profits; Crown National profits up substantially with all regions trading well; Bidbake performance encouraging; exports growing strongly off a very small base Strategic imperatives & prospects ► Increasing cooperation across businesses to grow market share, grow basket, and grow average spend per customer ► Investments made in people, facilities, and equipment will continue to enhance returns ► QSR restaurant trade showing stress, buy-down trends evident ► Stock holdings will be managed to profit from inflation ► Further gains expected in H2, leading to a good overall 2008 result Current contr. to Group Operating Profit 7.8% Appendix 1

12 Operating margin7.2% Revenue9% Operating profit0% BidIndustrial & Commercial Products – Cooling off Results ►Revenue growth not out of line with guidance; profit growth stalled, but at an exceptionally high level ►Voltex, Office, Packaging & Vulcan profits broadly flat ► Voltex : revenue up 12% but trading progressively tighter, particularly in contracting; copper price fall in Q2 reduced profits (estimated 20% impact); working capital is receiving vigorous attention ► Stationery & Furniture : profits flat overall Waltons profits grew by 19%; expanded footprint with refurbished and new stores Kolok suffered a setback as a result of cut- throat competition among distributors; emphasis on store positioning continued and overall expense control was good Furniture achieved growth overall Appendix 1 7.8% Rm 7.2% Trading margin

13 BidIndustrial & Commercial Products – Cooling off ► Packaging : Afcom GE Hudson grew market share as a result of an expanded offering Buffalo Executape’s DIY range made further inroads ► Vulcan : catering equipment margins came under some pressure Strategic imperatives & prospects ►Voltex is capitalising vigorously on energy crisis opportunity ►But, a slowdown in contracting is being experienced and sustained power shortages are likely to curtail developments, impact mining ►2 nd half looking more promising; copper price recovery and weaker Rand Current contr. to Group Operating Profit 13.7% Appendix 1

14 Bidpaper Plus – Consolidating, for the Future Results ► Strategy of optimising cash generation from mature products whilst building presence in electronic solutions gathers pace ► Lufil packaging integrated into Labeling & packaging sub-division ► Complementary acquisitions on the table ► Siveray/Statmark re-capitalisation completed and will materially improve productivity ► Croxley brand continues to benefit from earlier re- vamp Appendix 1 11.8% Rm 12.4% Trading margin Revenue5% Operating profit10% Operating margin12.4%

15 Bidpaper Plus – Consolidating, for the Future Strategic imperatives & prospects ► Traditional print expected to contract and mature whilst e-products expand ► Management focused on optimally managing two contrasting business cycles; reinvesting for future returns ► Modest growth expected for 2008 Current contr. to Group Operating Profit 5.2% Appendix 1

16 Operating profit1% Operating margin3.6% Bid Auto – Balancing the load Results ► Like-for-like profit declined 27% but timely fleet management diversification resulted in flat earnings ► Viamax acquisition (R960m); results accounted effective 1 July 2007 ► Total vehicle sales down 4% to 44 448 units, with used vehicle sales up 8% to 21 051 units and new unit sales down 12% to 23 397 ► Motor retail, Distribution and Finance & Insurance profits declined but Viamax acquisition contributed positively in its 1 st half; Car & Van Rental was flat; Burchmores auction business performed well ► Heavy Equipment has had a promising start ► Working capital inflated by traditional seasonal factors, rental vehicle turnbacks and impact of OEM-imposed stocking ► No significant used vehicle stock over-valuations Appendix 1 3.7% Rm 3.6% Trading margin Revenue4%

17 Bid Auto – Balancing the load Strategic imperatives & prospects ► Motor retail at the sharp end of reducing consumer spending ► Market for passenger vehicles remains weak compared to the prior year with continuing margin pressure ► Quality control on imports will take precedence over pushing volume; Chery launch timely ► Three new Value Centres opening ► Dealership profit improvement programme to continue ► Budget Car and Van Rental expanding geographic footprint ► Diversification has resulted in motor retailing component reducing to less than 40% ► Negatives will be offset by positives for the remainder of the fiscal year Current contr. to Group Operating Profit 14.6% Appendix 1

18 Corporate – Bricks & Mortar Results ► Bidvest Properties continues to make a meaningful contribution to group ► Namsov affected by poor weather and catches ► All Namibian assets folded into Bidvest Namibia, to be managed by Namibians. ► Bidvest Namibia due for listing before the end of calendar 2008 ► On-Time Automotive continues to struggle Appendix 1 Rm Operating profit42% Operating marginN/A Revenue20% Current contr. to Group Operating Profit 2.6%

19 Appendix 2 Historic Performance

20 17.5% CAGR over 5 years 4.5% 4.7% 5.2% 4.9% 5.2% 4.4% Appendix 2 Historic Performance 18,6% CAGR over 5 years 5.1% 4.6% Impact of Viamax & Angliss Distribution


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