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Investment Reviews REPORTS TO SHAREHOLDERS INVESTMENT REVIEWS CIV HOLDINGS INVESTMENT REVIEWS / REPORTS TO SHAREHOLDERS INVESTING IN INDUSTRIES THAT HAVE A SOLID TRACK RECORD REPORTS TO SHAREHOLDERS / INVESTMENT REVIEWS FOOD, LIQUOR 30 June 30 June 2016 2015 AND HOME CONTRIBUTION TO HEADLINE EARNINGS R million R million CARE Unilever 461 331 Distell 499 445 RCL Foods 658 755 1 618 1 531 25.8% MAJOR GEOGRAPHIC PRESENCE effective interest AFRICA: South Africa, Lesotho, Swaziland, Botswana, Namibia PROFILE Unilever manufactures and markets an extensive range of food and home and personal care products, while enjoying market leadership in most of its major categories. Well-known brands include Robertsons, Rama, Flora, Lipton, Joko, Sunlight, Omo, Surf, Vaseline and Lux. CORPORATE INFORMATION FINANCIAL HIGHLIGHTS SUSTAINABILITY MEASURES Equity valuation at 30 June 2016 Unilever is a private company and CSI/Training spend R41 358 million its detailed financial information is R14.64 million not disclosed due to restrictions Number of employees Unlisted on disclosure as agreed among its 3 313 shareholders. Chief Executive Officer BBBEE status P Cowan Non-compliant Remgro nominated directors Environmental aspect W E Bührmann, J J du Toit Scope 1 and 2 emissions of 147 000 tonnes CO e Website 2 www.unilever.co.za UNILEVER SOUTH AFRICA HOLDINGS PROPRIETARY Unilever’s restructuring costs for the 12 months under review LIMITED (UNILEVER) amounted to R83 million (2015: R288 million) driven by Unilever has a 31 December year-end, but its results for the investments for the Food Solutions factory resulting in 12 months to 30 June 2016 have been equity accounted in streamlining of operations and improved efficiencies. Remgro’s results for the year under review. Unilever’s contribution to Remgro’s headline earnings for the year under review Unilever’s net profit for the 12 months to 30 June 2016 increased to R461 million (2015: R331 million). increased to R1 780 million (2015: R1 246 million). 34 WWW.REMGRO.COM INVESTMENT REVIEWS / REPORTS TO SHAREHOLDERS 30.9% MAJOR GEOGRAPHIC PRESENCE AFRICA: South Africa, Angola, Kenya, Ghana, Nigeria, Mozambique, Zambia effective interest OTHER: UK/Europe, Taiwan, China, Brazil PROFILE Distell produces and markets fine wines, spirits and flavoured alcoholic beverages in South Africa and internationally. CORPORATE INFORMATION FINANCIAL HIGHLIGHTS SUSTAINABILITY MEASURES Market cap at 30 June 2016 Year ended CSI/Training spend R35 468 million 30 June 2016 R17.3 million Listed on the JSE Limited R million % Number of employees 5 476 Chief Executive Officer Revenue 21 470 +10 R M Rushton Operating profit 2 352 +10 BBBEE status Level 8 Remgro nominated director Headline earnings 1 611 +12 J J Durand Environmental aspect Scope 1 and 2 emissions Website of 160 573 tonnes CO e www.distell.co.za 2 DISTELL GROUP LIMITED (DISTELL) South Africa, delivered mixed results as revenue declined by Distell has a June year-end and therefore its results for the 3.2% on a sales volume decline of 14.3%, mainly due to the 12 months ended 30 June 2016 have been included challenging macroeconomic conditions in Angola. The region in Remgro’s results for the year under review. Distell’s contributed 46.7% to foreign revenue. Revenue derived from contribution to Remgro’s headline earnings for the year under international markets beyond Africa increased by 13.1%, mainly review, which includes Remgro’s indirect interest in Distell due to the weaker rand and an improved sales mix. Volumes held through Capevin Holdings Limited, increased by 12% declined by 12.5% given the continuing tough trading conditions to R499 million (2015: R445 million). in many of the markets where Distell operates. Distell reported for its year ended 30 June 2016 that turnover Distell’s reported headline earnings for its year ended 30 June 2016 increased by 9.6% to R21 470 million (2015: R19 589 million). Sales increased by 12.3% to R1 611 million (2015: R1 435 million) as a volume in the South African market increased by 8.8%, while result of the growth in revenue and efficiency improvement revenue increased by 12.1% despite a slowdown in real consumer across the business, as well as a weaker rand. spending growth. Sub-Saharan African markets, excluding 35 REMGRO LIMITED | INTEGRATED ANNUAL REPORT 2016 REPORTS TO SHAREHOLDERS / INVESTMENT REVIEWS 77.3% MAJOR GEOGRAPHIC PRESENCE effective interest AFRICA: South Africa, Swaziland, Namibia, Botswana, Zambia PROFILE RCL Foods is a holding company with diversified interests that focus on three segments: Consumer (Chicken, Grocery, Pies, Beverages and Food Solutions), Sugar & Milling (Sugar, Animal Feed and Millbake business units) and Logistics. CORPORATE INFORMATION FINANCIAL HIGHLIGHTS SUSTAINABILITY MEASURES Market cap at 30 June 2016 Year ended CSI/Training spend R12 005 million 30 June 2016 R10 million Listed on the JSE Limited R million % Number of employees 21 072 Chief Executive Officer Revenue 25 025 +7 M Dally Operating profit 378 -74 BBBEE status Level 4 Remgro nominated directors Headline earnings 850 -12.6 H J Carse, J J Durand, P R Louw Environmental aspect Scope 1 and 2 emissions Website of 1 074 529 tonnes CO e www.rclfoods.com 2 RCL FOODS LIMITED (RCL FOODS) limited by strategic initiatives that RCL Foods implemented over For the year ended 30 June 2016, RCL Foods reported headline the past three years. These initiatives have also positioned the earnings from continuing operations amounting to R849.7 million business for sustainable future growth. (2015: R972.2 million). During the financial year, the results of RCL Foods were materially impacted by the following RCL Foods’ total revenue for the year under review increased by significant events: 6.8% to R25.0 billion (2015: R23.4 billion). • An impairment loss of R642.8 million relating to the Milling The consumer division’s revenue increased by 10.1% to operation in the Sugar and Milling division due to a competitive R13.3 billion (2015: R12.1 billion). The Chicken business unit’s trading environment and an increase in the discount rate; operating profit before interest, taxation, depreciation and • The release of a R163.3 million provision for uncertain amortisation (EBITDA) declined by 62.0% to R158.1 million tax disputes that were finalised with the South African and negated the performance of Groceries (EBITDA increased by Revenue Service; 19.9% to R543.6 million). • Recognition of R67.7 million profit after tax (headline earnings impact of R118.9 million) following the exercise of put options Revenue from the Sugar and Milling division increased by 5.6% to relating to Zam Chick and Zamhatch; and R14.9 billion (2015: R14.1 billion), while EBITDA decreased by 20.7% to R830.1 million. The Sugar business was affected by the drought • A loss of R80.6 million (2015: R106.2 million profit) due to the and the cane crop decreased by 1 175 352 tonnes, leading appreciating rand on long foreign exchange positions entered to 152 980 tonnes less sugar produced. Significant synergies into in terms of the Groups’ raw material procurement strategy. resulted from merging Epol and Molatek into one Feed business Remgro’s share of the headline earnings of RCL Foods amounted by increasing the sales footprint and product offering, as well to R658 million (2015: R755 million) for the year under review. as by utilising Millbake by-products (such as bran). Operational challenges and a competitive trading environment The pervasive drought affected almost all aspects of RCL Foods’ resulted in EBITDA from Milling to decline to R272.3 million businesses and had a significant impact on its results. The increase (2015: R303.8 million). in commodity prices was exacerbated by the substantial deterioration in the rand since the beginning of the financial year, Revenue from the Logistics Division increased by 5.5% while food inflation impacted an already weak consumer to R1 987 million (2015: R1 884 million), while EBITDA increased environment. The negative impact by these factors were effectively to R260.7 million (2015: R206.2 million). 36 WWW.REMGRO.COM INVESTMENT REVIEWS / REPORTS TO SHAREHOLDERS BANKING 30 June 30 June 2016 2015 CONTRIBUTION TO HEADLINE EARNINGS R million R million RMBH 2 112 2 005 FirstRand 877 840 2 989 2 845 28.2% MAJOR GEOGRAPHIC PRESENCE AFRICA: South Africa (directly) effective interest Refer to FirstRand for indirect exposure PROFILE RMBH is a focused investment company, holding a 34.1% interest in FirstRand, Southern Africa’s pre-eminent banking group. In 2016 RMBH announced the extension of its investment strategy to include a property investment business. CORPORATE INFORMATION FINANCIAL HIGHLIGHTS SUSTAINABILITY MEASURES Market cap at 30 June 2016 Year ended Refer to FirstRand as RMBH is only R79 408 million 30 June 2016 an investment holding company. Listed on the JSE Limited R million % Chief Executive Officer Headline earnings 7 503 +5 H L Bosman Normalised headline Remgro nominated director earnings 7 659 +7 F Knoetze Website www.rmh-online.co.za RMB HOLDINGS LIMITED (RMBH) The contribution of RMBH to Remgro’s headline earnings for the The main asset of RMBH is a fully diluted interest of 34.1% in year under review increased to R2 112 million (2015: R2 005 million) FirstRand Limited, and its performance is therefore primarily due to good operational performances of all three of the main related to that of FirstRand Limited. In July 2016, RMBH FirstRand brands (FNB, RMB and WesBank). concluded its first acquisition, a 27.5% interest in Atterbury Property Holdings Proprietary Limited (Atterbury), and is in the process of finalising the acquisition of a 34% interest in Propertuity, an urban renewal business. 37 REMGRO LIMITED | INTEGRATED ANNUAL REPORT 2016 REPORTS TO SHAREHOLDERS / INVESTMENT REVIEWS 3.9% effective MAJOR GEOGRAPHIC PRESENCE direct interest AFRICA: South Africa, Tanzania, Zambia, Mozambique, BLNS countries, Nigeria (total effective interest: 13.5%) OTHER: China, United Kingdom, India PROFILE FirstRand provides banking and insurance, as well as investment products and services, to retail, commercial, corporate and public sector customers in South Africa and several other African countries.
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