investor presentation: appendices 26 … presentation: appendices 26 february 2018 results for the...

INVESTOR PRESENTATION:

APPENDICES

26 FEBRUARY 2018

RESULTS FOR THE SIX MONTHS

ENDED DECEMBER 2017

INVESTOR PRESENTATION APPENDICES

2

RCL FOODS IN CONTEXT

FOOD, LIQUOR& HOME CARE

BANKING HEALTHCARE INSURANCE INDUSTRIAL INFRASTRUCTURE MEDIA & SPORT


3

AREAS OF BUSINESS


4


5


6


OUR BUSINESS MODEL

7

OUR STRATEGIC THRUSTSOur business model is delivered through our six strategic thrusts


2014 2015 2016 2017 2018

INTERIM FULL YEAR

EBITDA (Rm)

PERFORMANCE

400 000PIES PER DAY

24 MILLIONCHICKENS ON THE GROUND AT ANY TIME

OF FLOUR AND MAIZE MILLED PER YEAR

1,2 MILLIONTONS OF ANIMALFEED PER YEAR

500 000LOAVES OF BREAD PER DAY

100 TONSOF MAYONNAISESOLD DAILY

MORE THAN 20WELL KNOWN &MUCH LOVED BRANDS

1 500MORE THAN

DELIVERYVEHICLES

OVER20 000EMPLOYEES

700 000AROUND

TONS OF SUGARPER YEAR

500 000 TONS

8

900.4

2014 2015 2016 2017 2018

INTERIM FULL YEAR

REVENUE (Rbn)25.0

19.5

10.1

4.5

12.012.9 13.1

8.7

25.0

2 224.0

1 762.4

196

688.3

1 206.11 152.2

1 747.6

23.4

12.81 122.2

1 201.0


OUR BRANDSRELATIVE SALES (12 Months to December 2017)

BRANDS UNDER R100m10

BRANDS OVER R1bn6

BRANDS OVER R500m4

BRANDS OVER R100m10

9


Supreme Flour 12.7 11.6 SAGIS***

Sunbake 10.6 10.2 SAGIS

MARKET SHARE

13

6MM Dec 17 12MM Dec 1612MM Dec 17VOLUME SHARE % FOR THE PERIOD SOURCE

*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

10

Dogfoods (RCL Brands) 28.3 27.4 26.9 Aztec*

Catfoods (RCL Brands) 25.4 23.1 18.8 Aztec

Yum Yum Peanut Butter 29.6 30.3 31.1 Aztec

Nola Mayonnaise 40.9 41.9 41.9 Aztec

Sorghum (RCL Brands) 28.5 29.4 27.0 Aztec

Ouma Rusks 48.2 47.7 47.9 Aztec

Mageu 71.7 71.2 72.1 Aztec

Freezer to Fryer 35.8 37.8 26.0 Aztec

Polony (RCL Brands) 10.1 10.0 9.3 Aztec

Viennas (RCL Brands) 20.2 20.4 18.8 Aztec

Selati 26.6 26.8 29.7 Aztec

Pies and Rolls (RCL Brands) 8.7 8.4 5.6 Aztec

EPOL 12.7 13.3 15.2 Internal estimates – share of AFMA**

Molatek 4.8 4.5 4.8 Internal estimates – share of AFMA

Dec 17 Dec 16VOLUME SHARE % AT SOURCE


COMMODITY PRICES

11

CME SOYA PRICE ($/Ton)SAFEX WHEAT PRICE (R/Ton) SAFEX SUNFLOWER PRICE (R/Ton)

RAND/USDYELLOW MAIZE PRICE (R/Ton)

Source: Reuters

3 500.0

3 700.0

3 900.0

4 100.0

4 300.0

4 500.0

4 700.0

4 900.0

5 100.0

5 300.0

Jan-1

6

Feb-1

6

Mar-

16

Apr-

16

May-1

6

Jun-1

6

Jul-

16

Aug-1

6

Sep-1

6

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-

17

Aug-1

7

Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

H1 F17AVG Price

(6m)R4 135.9

H1 F18AVG Price

(6m)R4 231.9

2.3%

200.0

250.0

300.0

350.0

400.0

450.0

Jan-1

6

Feb-1

6

Mar-

16

Apr-

16

May-1

6

Jun-1

6

Jul-

16

Aug-1

6

Sep-1

6

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-

17

Aug-1

7

Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

3 500.0

4 000.0

4 500.0

5 000.0

5 500.0

6 000.0

6 500.0

7 000.0

7 500.0

8 000.0

8 500.0

Jan-1

6

Feb-1

6

Mar-

16

Apr-

16

May-1

6

Jun-1

6

Jul-

16

Aug-1

6

Sep-1

6

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-

17

Aug-1

7

Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

H1 F17AVG Price

(6m)$323.1

2.9%

H1 F18AVG Price

(6m)$313.6

H1 F17AVG Price

(6m)R6 063.0

23.5%

H1 F18AVG Price

(6m)R4 639.9

1 500.0

2 000.0

2 500.0

3 000.0

3 500.0

4 000.0

4 500.0

Jan-1

6

Feb-1

6

Mar-

16

Apr-

16

May-1

6

Jun-1

6

Jul-

16

Aug-1

6

Sep-1

6

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-

17

Aug-1

7

Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

H1 F17AVG Price

(6m)R3 198.4

38.1%

H1 F18AVG Price

(6m)R1 981.2

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

Jan-1

6

Feb-1

6

Mar-

16

Apr-

16

May-1

6

Jun-1

6

Jul-

16

Aug-1

6

Sep-1

6

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-

17

Aug-1

7

Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

H1 F17AVG Price

(6m)R13.98

4.1%

H1 F18AVG Price

(6m)R 13.40


CONSUMER: CHICKENINTEGRATED SUPPLY CHAIN FROM “FARM TO FORK”

GP OPERATION AGRICULTURE PROCESSING

GRANDPARENT CHICKS

GRANDPARENT FARMS PARENT FARMSBROILER FARMS

REARING 21 WEEKS

LAYING40 WEEKS

HATCHING3 WEEKS

GROWING34 DAYS

BROILER

PROCESSING

3 PLANTS & 2 FP PLANTS

REARING 21 WEEKS

LAYING40 WEEKS

HATCHING3 WEEKS

• World’s oldest pedigree broiler breed• Located in Carolina and East London to ensure optimal bio-security• 3 broad agricultural regions: Northern, KZN, W Cape

FEED SUPPLY 5 feed mills producing 875 000 tons pa

12

CONSUMERS

The consumer is at the heart of our business

BRANDS

Grade A Quality, Grade A Taste

They taste so good ‘cos they eat so good

The Chicken Experts

CUSTOMERS DISTRIBUTION


CONSUMER: CHICKEN LimpopoProvince

Windhoek

Namibia

Northern Cape

Cape Town

Western Cape

Worcester

Botswana

NorthWest

Rustenburg

Wolwehoek

Free State

Lesotho

Eastern Cape

East London

Mpumalanga

Carolina

KwaZulu Natal

Gauteng

Hammarsdale

Durban

The Chicken business unit produces a wide range of chicken products under 3 well established brands; Rainbow, Simply Chicken and Farmer Brown.

187 rearing, laying and broiler farms and hatcheries24m birds on the ground

3 primary processing plants

2 further processing plants

13


CONSUMER: GROCERIES

Limpopo

Northern Cape

Western Cape

Botswana

NorthWest

Free State

Lesotho

Eastern Cape

Mpumalanga

KwaZuluNatal

Molteno

Gauteng

Randfontein

Limpopo

Northern Cape

Western Cape

Botswana

NorthWest

Free State

Lesotho

Eastern Cape

Mpumalanga

KwaZuluNatal

Krugersdorp

Gauteng

GROCERY PIES

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.

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.

14


Limpopo

Northern Cape

Western Cape

Botswana

NorthWest

Free State

Lesotho

Mpumalanga

KwaZuluNatal

Limpopo

Northern Cape

Western Cape

Botswana

NorthWest

Free State

Lesotho

Eastern Cape

Mpumalanga

KwaZuluNatal

Centurion

GautengGauteng

Pretoria x2

Spartan

Worcester

Eastern Cape

Bronkhorstspruit

CONSUMER: GROCERIES

BEVERAGES SPECIALITY

The Beverages business unit produces a maize-based drink under the Mageu No 1, Smooth and Mnandi brands.

The Speciality business unit produces a range of superior ready to eat products, including speciality breads, mainly for Woolworths.

15


SUGAR & MILLING: SUGAR

3 Sugar Mills based in Malelane, Komati and Pongola, were established in 1968, 1993 and 1954 respectively produce approximately 700 000 tons of sugar per year.

The Sugar business unit produces a range of sugar products under the leading sugar brand Selati.

16

LimpopoProvince

Tzaneen

Windhoek

Namibia

Northern Cape

Cape Town

Western Cape

Botswana

NorthWest

Free State

Lesotho

Eastern Cape

East London

Port Elizabeth

Bloemfontein

KwaZulu Natal

Durban

Pongola

Pretoria

Malelane

Nelspruit

Komati

Mpumalanga

Gauteng


SUGAR IMPORTS AND DUTIES

• Cumulative tons imported from 1 April 2016 and 2017 (start of industry year)

• A total of 223 425 tons have been imported for the six months ended December 2017, up 113.3% (H1 2017: 104 724 tons)

• Imports have risen following the decrease in duties. Duty free periods in August and September 2017, resulted in record high imports being reported

• Duty of R2,131/ton implemented in September 2017, following which imports have decreased

• Despite the tariff, global sugar surpluses and rand strength means imports remain a significant threat

Source: Import duty is published by Customs in the Government Gazette | Source: Import data is obtained by SASA

DU

TIE

S

17

CU

MU

LATIV

E T

ON

S I

MPO

RTED

(SO

UTH

AFRIC

A)

0

500

1 000

1 500

2 000

2 500

3 000

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

April 16/17 May 16/17 Jun 16/17 Jul 16/17 Aug 16/17 Sept 16/17 Oct 16/17 Nov 16/17 Dec 16/17

16 (Tons) 17 (Tons) 16 (Duties) 17 (Duties)


SUGAR & MILLING: MILLBAKE

Northern Cape

Western Cape

Botswana

NorthWest

Free State

Lesotho

Mpumalanga

KwaZuluNatal

Limpopo

Northern Cape

Western Cape

Botswana

NorthWest

Free State

Lesotho

Eastern Cape

Mpumalanga

KwaZuluNatal

GautengGauteng

Pretoria

Tzaneen

Benoni

Polokwane

Pretoria

Eastern Cape

Nelspruit

Limpopo

BushbuckridgeRustenburg

BAKING MILLING

The Baking operations produce a range of bread products under the Sunbake brand - the fourth largest bread brand nationally.

The Milling operation produces flour and a range of maize meal products at its flour mill - the largest single site flour mill in Southern Africa.

18


SUGAR & MILLING: ANIMAL FEED

2 molasses based feed mills producing almost 300 000 tons per year

5 grain based feed mills producing almost 875 000 tons per year

LimpopoProvince

Windhoek

Namibia

Northern Cape

Cape Town

Western Cape

Worcester

Botswana

NorthWest

Rustenburg

Free State

Lesotho

Eastern Cape

East London

Port Elizabeth

Bloemfontein

George

Malelane

KwaZulu Natal

Durban

Pongola

Pretoria

Mpumalanga

Nelspruit

Pietermaritzburg

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.

19

Gauteng


CUSTOMER OVERVIEW: LOGISTICS

20

Vector is contracted by the customer to deliver their full basket of products directly to the outlets

Vector is contracted by the principal to deliver to all retailers, wholesalers and general trade

CUSTOMER SECONDARY DISTRIBUTION (CSD) PRINCIPAL SECONDARY DISTRIBUTION (PSD)

http://www.brandsoftheworld.com/download/brand/148269.html


NETWORK OVERVIEW: LOGISTICS

Plant-based cold stores

Distribution sites

National footprint including Namibia and

Botswana

• 4 plant-based cold stores

• 14 distribution sites

• Capacity 100 608 pallets

• Over 3900 employees

• Customer drop points over 8 121

• Over 216 000 cases delivered daily (58m cases pa)

• Tonnage more than 560 000 tons pa

• Fleet of 330 vehicles (primary 80 / secondary 250)

• ISO 22000(Food safety management system)

accreditation for all Warehouses

• ISO 14001(Environmental management standards)

and OHSAS 18001 across Midrand, Thekwini,

Peninsula and Roodepoort

21

LimpopoProvince

Polokwane

Namibia

Northern Cape

Cape Town

Western Cape

Worcester

Botswana

NorthWest

Roodepoort

Rustenburg

Wolwehoek

Free State

Lesotho

Eastern Cape

East London

Port Elizabeth

Bloemfontein

George

NelspruitMidrand

KwaZulu Natal

Newcastle

Hammarsdale

Durban

Pretoria

Mpumalanga

Dartprops

Pietermaritzburg

Gaborone

Windhoek

investor presentation: appendices 26 … presentation: appendices 26 february 2018 results for the...

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