RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016 INVESTOR PRESENTATION APPENDICES 24 FEBRUARY 2017

Transcription

1 RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016 INVESTOR PRESENTATION APPENDICES 24 FEBRUARY 2017

2 RCL FOODS IN CONTEXT FOOD, LIQUOR & HOME CARE BANKING HEALTHCARE INSURANCE INDUSTRIAL INFRASTRUCTURE MEDIA & SPORT

3 AREAS OF BUSINESS

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7 OUR BUSINESS MODEL

8 STRATEGIC THRUSTS STRATEGIC THRUSTS STRATEGIC GOALS F16-F20 GROW THROUGH STRONG BRANDS Invest behind brands, grow key markets and our shares Accelerate added value, maximise core categories in South Africa PARTNER WITH STRATEGIC CUSTOMERS Partner with strategic customers, driving common growth & profit ambitions EXTEND OUR LEADING VALUE CHAIN Optimise resources and costs Leverage our unique route to market capability through our Logistics division Drive synergies and opportunities through implementation of integrated IT systems EXPAND INTO AFRICA Build core and added value categories (priority 2) in rest of Africa INSPIRE GREAT PEOPLE Build RCL FOODS corporate brand Build leaders and develop talent to enable our growth ambition Drive performance culture and accountability to ensure delivery of results DRIVE SUSTAINABLE BUSINESS Drive responsible consumption and production Build brands that matter

9 PLATFORM FOR GROWTH REVENUE (Rbn) EBITDA (Rm) * * ** INTERIM FULL YEAR INTERIM FULL YEAR *Pro-forma **Restated OVER EMPLOYEES AROUND TONS OF SUGAR PER YEAR 100 TONS OF MAYONNAISE PRODUCED DAILY MORE THAN DELIVERY VEHICLES TONS OF FLOUR AND MAIZE MILLED PER YEAR PIES PER DAY 1.4 MILLION TONS OF ANIMAL FEED PER YEAR MORE THAN 20 WELL KNOWN & MUCH LOVED BRANDS LOAVES OF BREAD PER DAY 30 MILLION CHICKENS ON THE GROUND AT ANY TIME

10 INTEGRATED ORGANISATION CONSUMER DIVISION SUGAR & MILLING DIVISION LOGISTICS DIVISION BUSINESS UNITS BUSINESS UNITS BUSINESS UNITS Chicken, Speciality, Grocery, Sugar, Millbake, Animal Feed Logistics business responsible for Pies, Beverages Group-wide route-to-market Sales Solutions Supply Chain Intelligence Warehousing Distribution

11 OUR BRANDS RELATIVE SALES (12 Months to December 2016) 6 BRANDS OVER R1bn 5 BRANDS OVER R500m 10 BRANDS OVER R100m 8 BRANDS UNDER R100m

12 MARKET SHARE VOLUME SHARE % FOR THE PERIOD 6MM Dec16 12MM Dec16 12MM Dec15 SOURCE Catfoods (RCL Brands) Aztec* Dogfoods (RCL Brands) Aztec Yum Yum Peanut Butter Aztec Nola Mayonnaise Aztec Freezer to Fryer Aztec Sorghum (RCL Brands) Aztec Ouma Rusks Aztec Mageu Aztec Polony (RCL Brands) Aztec Viennas (RCL Brands) Aztec Selati Aztec VOLUME SHARE % FOR THE PERIOD 6MM Dec16 6MM Dec15 SOURCE EPOL Internal estimates share of AFMA** Molatek Internal estimates share of AFMA VOLUME SHARE % AT Dec16 Dec15 SOURCE Sunbake SAGIS*** 13 *Aztec is a provider of market measurement and related services for consumer packaged goods **AFMA refers to the Animal Feed Manufacturers Associations, which represents approximately 60-65% of the total feed market *** SAGIS is a South African grain information service that supplies market information to the grain and oil seeds industry

13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 CHICKEN BONE-IN IMPORTS TONS PER MONTH 35,000 30,000 25,000 Import levels remain high at an average of tons per month over the last 12 months 20,000 15,000 10,000 5,000 - Source: SAPA

14 CONSUMER: CHICKEN INTEGRATED SUPPLY CHAIN FROM FARM TO FORK GP OPERATION AGRICULTURE PROCESSING GRANDPARENT CHICKS GRANDPARENT FARMS PARENT FARMS BROILER FARMS REARING 21 WEEKS LAYING 40 WEEKS HATCHING 3 WEEKS REARING 21 WEEKS LAYING 40 WEEKS HATCHING 3 WEEKS GROWING 34 DAYS BROILER PROCESSING 4 PLANTS + 2FP PLANTS World s oldest pedigree broiler breed Located in Carolina East London to ensure optimal bio-security 3 broad agricultural regions: Northern, KZN, W FEED SUPPLY 5 feed mills producing 1,1m tons pa Around 70% of production to Rainbow CONSUMERS BRANDS CUSTOMERS DISTRIBUTION Grade A Quality, Grade A Taste The consumer is at the heart of our business They taste so good cos they eat so good The Chicken Experts

15 CONSUMER: CHICKEN The Chicken business unit produces a wide range of chicken products under 3 well established brands; Rainbow, Simply Chicken and Farmer Brown. Limpopo Province Tzaneen Windhoek North West Botswana Rustenburg Mpumalanga Carolina Namibia Northern Free State Wolwehoek Lesotho KwaZulu Natal Hammarsdale Durban 209 rearing, laying and broiler farms and hatcheries 27m birds on the ground 4 primary processing plants nearly 250m birds per year Eastern 2 further processed plants 27,000 tons per year Western Worcester East London Town

16 CONSUMER: GROCERIES GROCERY The Grocery business unit consists of a portfolio of leading South African brands spanning staples to top end offerings across a range of food and animal product categories. PIES The Pies business unit produces a range of high quality pies under the Pieman s brand in frozen unbaked, frozen baked and chilled baked formats. Botswana Limpopo Botswana Limpopo One mega site which includes 6 operations North West Randfontein Gauteng Mpumalanga North West Centurion Krugersdorp Gauteng Mpumalanga Free State KwaZulu Natal Free State KwaZulu Natal Northern Lesotho Northern Lesotho Molteno Eastern OUMA RUSKS Eastern Western Western

17 CONSUMER: GROCERIES BEVERAGES The Beverages business unit produces a maize-based drink under the Mageu No 1, Smooth and Mnandi brands. SPECIALITY The Speciality business unit produces a range of superior ready to eat products, including speciality breads, mainly for Woolworths. Botswana Limpopo Botswana Limpopo Centurion Pretoria x2 Mpumalanga Bronkhorstspruit Mpumalanga North West Gauteng North West Gauteng Spartan Free State KwaZulu Natal Free State KwaZulu Natal Northern Lesotho Northern Lesotho Eastern Eastern Western Western Worcester

18 TONS SUGAR IMPORTS AND DUTIES 120, , Cumulative tons imported from 1 April 2015 and 2016 (start of industry year). 80, A total of 108, 943 tons have been imported for the 9 months ended 31 December 2016 (Dec 15: 55,007 tons) 60, DUTIES Duties decreased from R2 395 to R319 per ton from July to December ,000 Imports have risen following the decrease in duties , April 15/16 May 15/16 Jun 15/16 Jul 15/16 Aug 15/16 Sept 15/16 Oct 15/16 Nov 15/16 Dec 15/16 15 (Tons) 16 (Tons) 15 (Duties) 16 (Duties) 0 Source: Import duty is published by Customs in the Government Gazette Source: Import data is obtained by SASA

19 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 COMMODITY PRICES SAFEX WHEAT PRICE SAFEX SUNFLOWER SEED PRICE H1 F16 AVG Price (6m) R % H1 F17 AVG Price (6m) R SAFEX Sunflower Seed Price H1 F16 AVG Price (6m) R % H1 F17 AVG Price (6m) R6 063 YELLOW MAIZE PRICE RAND/USD CME SOYABEAN MEAL PRICE H1 F16 AVG Price (6m) R % H1 F17 AVG Price (6m) R H1 F16 AVG Price (6m) R % H1 F17 AVG Price (6m) R CME Soyabean Meal Price H1 F16 AVG Price (6m) $313 H1 F17 3.1% AVG Price (6m) $323 Source: Reuters

20 SUGAR & MILLING: SUGAR The Sugar business unit produces a range of sugar products under the leading sugar brand Selati. Limpopo Province Windhoek North West Botswana Tzaneen Malelane Komati Pretoria Mpumalanga Nelspruit Pongola Namibia KwaZulu Natal Free State Northern Bloemfontein Lesotho Eastern Durban 3 Sugar Mills based in Malelane, Komati and Pongola, were established in 1968, 1993 and 1954 respectively and produce approximately tons of sugar per year. Western East London Town Port Elizabeth

21 SUGAR & MILLING: MILLBAKE BAKING The Baking operations produce a range of bread products under the Sunbake brand - the fourth largest bread brand nationally. MILLING The Milling operations produces flour and a range of maize meal products at its flour mill - the largest single site flour mill in Southern Africa. Botswana North West Rustenburg Pretoria Gauteng Benoni Tzaneen Limpopo Polokwane Bushbuckridge Mpumalanga Nelspruit Botswana North West Limpopo Pretoria Mpumalanga Gauteng Free State KwaZulu Natal Free State KwaZulu Natal Northern Lesotho Northern Lesotho Eastern Eastern Western Western

22 SUGAR & MILLING: ANIMAL FEED The Animal Feed business unit produces grain and molasses based feeds for a range of species including game, dairy, poultry, horse, pigs and ruminants, under the leading brands of Epol and Molatek. Limpopo Province Botswana Rustenburg Pretoria Malelane Mpumalanga Windhoek North West Nelspruit Pongola Namibia Northern Bloemfontein Free State Lesotho KwaZulu Natal Pietermaritzburg 2 molasses based feed mills producing almost tons per year Durban Eastern 5 grain based feed mills producing almost 1.1m tons per year Western Worcester East London Town George Port Elizabeth

23 OPERATIONAL REVIEW: LOGISTICS Vector Logistics offers a fully integrated and cost effective outbound supply chain to customers and principals. The business is balanced and diversified with service offerings covering the full outbound supply chain. PLANT BASED COLD STORES (PBCS) VECTOR COLD STORAGE (VCS) VECTOR PRIMARY TRANSPORT (VPT) PRINCIPAL SECONDARY DISTRIBUTION (PSD) FOOD SERVICE CUSTOMER SECONDARY DISTRIBUTION (CSD) SALES & MERCHANDISING INCLUDING CALL CENTRE CREDIT & INFORMATION MANAGEMENT CUSTOMER SECONDARY DISTRIBUTION (CSD) Vector is contracted by the customer to deliver their full basket of products directly to the outlets PRINCIPAL SECONDARY DISTRIBUTION (PSD) Vector is contracted by the principal to deliver to all retailers, wholesalers and general trade 71

24 OPERATIONAL REVIEW: LOGISTICS Limpopo Province Polokwane Tzaneen Windhoek Namibia Northern North West Botswana Bloemfontein Rustenburg Roodepoort Free State Dartprops Wolwehoek Lesotho Pretoria Midrand Mpumalanga Nelspruit KwaZulu Natal Newcastle Pietermaritzburg Hammarsdale Durban National footprint including Windhoek: 5 plant-based cold stores 13 distribution sites Capacity pallets Employees Customer drop points cases delivered daily (58m cases pa) Tonnage tons pa Fleet of 372 vehicles (primary 80/secondary 292) ISO accreditation for all Warehouses ISO and OHSAS across Midrand, Thekwini and Roodepoort Eastern Western Plant-based cold stores Worcester East London Town George Port Elizabeth Distribution sites