RESULTS PRESENTATION For the year ended 31 May 2014 26-27 August 2014
Presentation overview Group overview and financial highlights Environment and industry trends Financial performance Prospects 2
GROUP OVERVIEW
Group overview Specialist logistics service provider Individual thinking, collective success 4
Group overview Specialised Logistics 5
Group overview Retail Other Logistics Services 6
Evolution of OneLogix 7
African Footprint 8
The OneLogix Way Well established niche logistics provider Footprint across South Africa and neighbouring countries Strong market position Customer service focused / good staff relations Cash generative Company structure (empowering, entrepreneurial) Structured to assimilate acquisitions Management capabilities Management shareholding 9
FINANCIAL HIGHLIGHTS
Financial highlights Revenue 25% to R1.3 bn Operating profit 44% to R132.9 m Core HEPS (cps) 30% to 33.3 HEPS (cps) 24% to 31.2 Net cash (generated from operating activities) 37% to R133.4 m Uninterrupted growth trajectory United Bulk and DriveRisk included for the full year Madison and new start-up OneLogix Linehaul contributed to earnings 11
Year under review Continued strong organic growth Strong customer retention / new customers gained Margin squeeze experienced Ability to successfully integrate companies (United Bulk, Madison and OneLogix Linehaul) Focus on Specialised Logistics segment Share buy back Izingwe Holdings (Pty) Ltd Andre Niemand acquisition 12
Year under review (cont) Looking to increase revenue from southern Africa Rail issue closely monitored Continued evaluation of acquisition opportunities Corporate actions Repurchase of shares Single biggest transaction in OneLogix history (Umlaas Road property) 13
Umlaas Road transaction Key: OneLogix vehicle storage hub Rust belt Umlaas Road 14 ha R130 million with financing in place Completion due first two weeks in December 2014 Will be used by VDS, CVDS, OneLogix Projex, OneLogix Linehaul and United Bulk Infrastructure bays, workshops, driver facilities, rail line and siding, 180,000l fuel tank storage PPP with Transnet possible with rail line and siding 14
Umlaas Road development 15
Ratios Ratio May 2014 May 2013 Return on equity (ROE) (%) 24.3 23.5 Headline return on equity (%) 21.7 20.3 Core headline return on equity (%) 23.1 20.8 Gearing ratio (excl cash) (%) 43.5 43.4 Interest cover (times) 6.1 7.1 16
Rm Segmental contribution from operations Revenue 1 400 1 200 1 183.2 1 303.9 1 000 800 600 400 200 0 Specialised Logistics 31.9 Retail 88.8 Other (Logistics Services) Total 17
ENVIRONMENT AND INDUSTRY TRENDS
Units Units Car and truck sales Total Sales (Jan-Jul) 390 000 Vehicle market contracting With exception of extraheavy duty trucks 380 000 In line with expectations 370 000 384 435 Extra Heavy Duty Vehicles (Jan-Jul) 7 000 360 000 366 210 6 000 6 198 6 822 350 000 2013 2014 5 000 2013 2014 Source: NAAMSA 19
Africa Africa s time is now Government s are committed to end conflicts, invest in infrastructure and make finance for developing businesses and assets (such as vehicles) more accessible Mining, telecommunications, banking, retail and construction sectors are flourishing Rely on logistics Africa was the world s fastest-growing continent in 2013, at 5.6% GDP in Africa is expected to rise by an average of over 6% a year, 2013 2023 World Bank expects GDP for sub-saharan African to increase more than 7% pa 20
Africa GDP (US$ bn) GDP Growth (y/y '10-'12) GDP Growth (y/y '12-'17) Angola 115 4.2% 5.7% DRC 17.2 7.1% 8.6% Kenya 40.7 4.9% 6.2% Mozambique 14.2 7.3% 8.0% Tanzania 28.2 6.8% 7.0% OneLogix footprint Nigeria 270.2 7.3% 6.8% Ghana 40.4 10.3% 5.9% Algeria 209.3 3.2% 3.6% Egypt 256.7 3.0% 3.4% South Africa 384.3 3.0% 3.0% Source: PWC Transport Report, 2013 21
Africa Ford plans to launch 25 new vehicle model upgrades into Africa and the Middle East African market for new vehicle sales remains very small New vehicle sales - Africa 200 000 1 300 000 Algeria, Egypt, Nigeria, SA Sub-Saharan Africa 22
Transnet update Permit issue resolved Inefficiencies persist (beneficial to OneLogix) Transnet set to invest R312bn over next seven years through their Market Demand Strategy Rapid loading facilities Additional rail links Standardise on four kinds of locomotives 1,400 new locomotives in next four years Aim to become one of world s top five railways by 2020 Committed to Public Private Partnerships 23
Durban harbour Durban harbour continues to be extremely congested R250bn expansion planned in line with NDP Port can accommodate 2.9m containers capacity will increase to more than 20m Ties in with Transnet focus to reduce road and increase rail transportation Aims to align South Africa's shipping logistics costs Currently at an average of 15.9% (India 6.7% and the USA 7.7%) Long-term project to 2040 24
Units SME market 790 000 Employers (SME s) Absa SME Index is at highest level in four years 740 000 690 000 640 000 700 000 737 000 SBP s SME Growth Index Aggregate annual increase in turnover of SME s in 2013 was 13% 48% of SME s interviewed indicated that their staff numbers have remained constant in 2013 590 000 2012 2013 Source: ABSA SME Index Older firms have a greater propensity to take on new staff in larger numbers Red tape remains a concern with 71% of the panel indicating that it is becoming harder to do business Study finds firm growth is happening in spite of a difficult business climate 25
Logistics and transport Logistics costs (Rbn) 480 460 440 420 400 380 360 456 423 393 2012 2013 2014 E End-to-end integration of supply chain functions is next major shift Customer centric and competitive Enablers are key OneLogix is committed to PPP with Transnet Source: 10 th Annual State of Logistics Survey for South Africa, 2013 26
Logistics and transport - Enablers Road infrastructure Rail infrastructure Port infrastructure Public Private Partnerships Pipeline infrastructure Airports 27
FINANCIAL PERFORMANCE
Income statement R m May 2014 May 2013 Change (%) Revenue 1 303.9 1 040.3 25 Trading profit 123.3 92.8 33 Trading profit margin 9.5 8.9 Profit before taxation 116.9 84.3 39 Profit for the year from continuing operations 86.5 70.8 22 29
217.5 333.0 449.8 499.0 665.0 29.6 39.8 48.8 51 67.7 254.1 340.5 22.0 414.3 31.3 541.3 35.6 41.8 638.9 55.6 Income statement (cont) (continuing operations) Revenue (Rm) Trading profit (Rm) and margin (%) 1400.0 140 10.6 11 1200.0 120 10.4 9.8 10 1000.0 100 8.9 9.5 9 800.0 600.0 80 60 8 400.0 40 7 200.0 20 6 0.0 2010 2011 2012 2013 2014 0 2010 2011 2012 2013 2014 5 1 st half 2 nd half 1 st half 2 nd half Margin 30
HEPS 35.0 30.0 25.0 20.0 19.0 HEPS (cents) 22.1 22.5 19.5 25.1 25.6 31.2 33.3 15.0 13.0 14.1 10.0 5.0 0.0 2010 2011 2012 2013 2014 HEPS Core HEPS 31
Cash flow Operating profit Cash flows from operations 140 R m 132.9 140 120 120 100 80 60 51.8 74.1 90.4 92.5 100 80 60 40 40 20 0 65.5 81.7 119.1 97.4 133.4 2010 2011 2012 2013 2014 Cash flow Operating Profit 20 0 32
Cash utilisation No full year dividend declared Prudent cash management due to cash settlement to BEE partner and purchase of Umlaas Road property Cash conversion still remains attractive and at levels acceptable to management Capex Fleet Replacement Expansion Property Development IT Other Total R127.0m R38.7m R88.3m R1.1m R4.0m R4.9m R137.0m 33
Statement of financial position - assets R m May 2014 May 2013 Change (%) Non-current assets 665.3 555.3 20 Property, plant and equipment 532.7 446.4 19 Intangible assets 77.3 66.3 17 Investment in associate 38.1 33.9 12 Loans and receivables 15.0 7.2 >100 Deferred taxation 2.2 1.5 46 Current assets 260.9 219.4 19 Inventories 10.4 10.1 3 Trade and other receivables 179.4 149.0 20 Taxation 0.8 5.5 (85) Cash resources 70.3 54.8 28 Total assets 926.2 774.7 20 34
Statement of financial position equity and liabilities R m May 2014 May 2013 Change (%) Total equity 371.6 309.5 20 Interest bearing borrowings (non-current) 168.2 149.7 12 Deferred tax 66.6 51.6 29 Trade and other payables 182.9 156.1 17 Interest-bearing borrowing (current) 90.1 74.1 22 Vendor liability 9.0 9.0 - Non-controlling interest put option - 16.2 <100 Taxation 1.4 1.6 (9) Bank overdrafts 36.4 6.9 >100 Total equities and liabilities 926.2 774.7 20 35
Segmental breakdown Revenue Trading profit 2% 7% 9% 5% 91% 86% Specialised Logistics Retail Other Specialised Logistics Retail Other 36
R m % R m Specialised Logistics Constituents: Vehicle Delivery Services Commercial Vehicle Delivery Services OneLogix Projex Madison Onelogix Linehaul United Bulk OneLogix Projex Cargo Solutions 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 150.0 130.0 110.0 90.0 70.0 50.0 30.0 10.0 Revenue 1183.2 937.0 2013 2014 Trading Profit 132.2 19.0% 99.7 17.0% 15.0% 13.0% 10.6% 11.2% 11.0% 9.0% 2013 2014 37
Logistics supply chain Strategic positioning Strive to strategically interact through the entire supply chain 1 2 Strategic Supply chain design and optimisation Opportunity 3 Tactical Advanced planning and scheduling Operational Execution VDS CVDS OLP Madison OLH UBulk OPCS 38
VDS 39
VDS - customers 40
VDS fleet information Age Number % of total Trucks 0 2 yrs 44 18 3 4 yrs 94 38 > 4 yrs 108 44 Total 246 100 Age Number % of total Trailers 3-4 car carriers 14 6 5-6 car carriers 92 37 7-8 car carriers 26 11 9-11 car carriers 114 46 Total 246 100 41
VDS Storage 42
VDS Storage 43
CVDS 44
CVDS 45
CVDS - customers 46
OneLogix Projex 47
OneLogix Projex - customers 48
OneLogix Projex - fleet Trailers 0 2 yrs 3 4 yrs > 4 yrs Extendable 5 Flatdeck 5 6 Lowbed 3 2 Skeltel 4 Stepdeck 2 12 8 Superdeck 2 2 Superlink 4 Total 2 22 31 Trucks No % 0-2 years 11 20 3 4 years 26 47 > 4 years 18 33 Total 55 100 49
United Bulk 50
United Bulk fleet information Age Trucks % of total Tankers % of total 0 2 yrs 27 21 31 18 3 4 yrs 22 17 18 10 > 4 yrs 78 62 128 72 Total 127 100 177 100 51
Madison 52
Madison fleet information Fleet < 4 yrs > 4 yrs Trucks * 1 32 * Four with winches; two with cranes Fleet - Trailers < 4 yrs > 4 yrs Lowbed 1 5 Semi with crane 0 1 Stepdecks 0 3 Triaxels 1 8 Superlinks 0 15 Rigid crane trucks 0 7 Extendables 0 3 Total 2 42 53
OneLogix Linehaul Transportation of general freight into southern Africa as well as intra southern African logistics 35 trucks plus 30 flat deck Inter-Links and 5 flat Triaxels 54
OneLogix Projex Cargo Solutions 55
R m % R m Retail Constituent PostNet 32.5 32.0 31.5 31.0 30.5 30.0 29.5 29.0 15.0 14.0 13.0 12.0 11.0 Revenue 31.9 30.2 2013 2014 Trading Profit 46.0% 44.8% 44.0% 14.3 42.0% 40.1% 40.0% 38.0% 12.1 36.0% 34.0% 2013 2014 56
PostNet 57
PostNet - customers 58
R m % R m Other Logistics Services 100.0 80.0 Revenue 73.1 88.8 Constituents: Atlas 360 Commercial Vehicle Services QSA DriveRisk (equity accounted) 60.0 40.0 20.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 0.0 2013 2014 Trading Profit 7.3 9.5% 4.6 8.2% 8.5% 7.5% 6.3% 6.5% 5.5% 2013 2014 59
Atlas 360 60
Atlas 360 - customers 61
DriveRisk 62
DriveRisk 63
QSA 64
PROSPECTS
Prospects Continued organic growth Focus on regional growth (opportunity for all group companies) Continue to investigate acquisitions Risks Rail Margin squeeze Dependency on vehicle market Labour relations Normal operational risks 66
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