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27 November 2007
BSI (SA) LIMITEDInvestors presentation – interim results
• Introduction
• Brief history
• Nature of the business
• Business risk assessment
• Financial review – for 6 months ending 30 Sept 2007
• Market overview and prospects
Contents
Directors
William Battershill - 47
Chief Executive Officer and
Chairperson
Nigel Payne - 47
Non-Executive Director
Grant MacKenzie - 42
Chief Operating Officer
Ethan Dube - 47
Non-Executive Director
James Waller – 43
Group Financial Director
• Other senior execs
• Ross Teichmann – CE Garrison steel
• Craig Parry – CE Discount Steel Trading
• Plus 10 other Divisional Directors
• 320 employees, including an experienced middle management team
Trading structure
BSI (SA) Limited
STOCKISTS BULK SALES EXPORTS
• Selling of stockholding
40% 2008 turnover
• Buying and selling of steel
30% 2008 turnover
• Sales outside SA
30%2008 turnover
Processing
• Cut to length line processes approx 60,000 tons per annum
• De-coiling steel from coils producing sheets and blanks
Stockists
• Average stock holding of group in excess of R130 million
• Average stock holding of group in excess of R130 million
Trading
• Group sales forecast Approx 200,000 tons for this fiscal (2008)
Our value add
• Stockholding – JIT delivery, diverse range
• Processing – Sheets, blanks, slit strip
• Distribution – outbound transport
• Finance – 30,60 & 90 days
• Broad based service package
FLAT PRODUCT ORIGIN 79% OF TONNAGE
Hot Rolled
Coil
Tube Makers Shearcut Processing
Sheets Blanks Slit Strip
TubePlate As Rolled
Cold Rolled
Coil
Galvanised
Coil
Electro/Galv Coil
PRODUCERS
Arcelor Mittal Van der Bijl
Highveld – Plate only
Duferco – Limited Exports
Imports -Adhoc
PRODUCTS SUPPLY CHAIN
LONG PRODUCT ORIGIN
21% OF TONNAGE
PRODUCERS
Arcelor Mittal Newcastle
Scaw
Cape Gate
Cisco
Highveld
PRODUCTS SUPPLY CHAIN
PRODUCTS
Angles, Flat Bar, Round Bar, Channels, Re-Bar, Beams and
Columns
Risk assessment
Risk• Price decrease
• Bad debts
• Fluctuating Rand
Strategy• Monitor international
market, preempt – reduce stock – import.
• Insure, monitor closely. Upfront payments Zimbabwe.
• Cover forward – imports. Sell in Rand where possible – exports. Pay weekly – DRC. Covert to Rand - Zambia
Interim Results
4.8c6.4cHEPS diluted
8.5%10.3%PBIT Margin
R34,5mR66.2mPBIT
R406.0mR636.9mRevenue
20062007
Financial Highlights - Interims
57%
92%
21%
33%
Unaudited 6 months
30 September 2007
R’000
Unaudited 6 months
30 September 2006
R’000
Audited 12 months31 March
2007R’000
Revenue 636 903 406 018 876 903Gross Profit 105 791 55 653 118 918Other income 274 489 3 286Other costs (37 999) (20 686) (64 605)Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) 68 066 35 456 57 599Depreciation (1 904) (909) (1 636)Profit before interest and taxation 66 162 34 547 55 963(Loss)/Profit on disposal of assets (120) - 1 903Fair value adjustment on Investment property - - 1 688Interest received 402 202 1 194Interest paid (12 650) (4 265) (12 979)Profit before taxation 53 794 30 484 47 769Taxation (14 320) (8 406) (14 239)Profit after taxation 39 474 22 078 33 530Minority interests - (5 310) (8 491)
Earnings attributable to ordinary shareholders 39 474 16 768 25 039
Reconciliation of headline earnings:Earnings attributable to ordinary shareholders
39 474 16 768 25 039Loss/(Profit) on disposal of assets 120 - (1 903)Fair value adjustment on Investment property - - (1 688)Headline earnings attributable to ordinary shareholders 39 594 16 768 21 448
Abridged income statements
Unaudited30 September
2007R’000
Unaudited30 September
2006 R’000
Audited31 March
2007R’000
ASSETS
Non current assets
Property, plant and equipment 69 712 28 420 39 099
Goodwill 12 305 3 773 3 773
Deferred taxation 3 289 4 685 3 114
Current assets 471 019 298 709 308 458
Current tax receivable 581 - 286
Inventories 154 024 55 129 90 533
Non-current assets held for resale - 1 000 3 000
Derivative financial instruments 2 478 50 516 5 726
Trade and other receivables 303 681 170 772 185 755
Cash and cash equivalents 10 255 21 292 23 158
Total assets 556 325 335 587 354 444
Abridged balance sheet
Unaudited30 September 2007
R’000
Unaudited30 September 2006
R’000
Audited31 March
2007R’000
EQUITY AND LIABILITIES
Equity
Share capital 1 1 1
Reserves 1 474 2 375 1 474
Retained income 99 995 51 067 60 522Liability for the purchase of minorities 24 860 - -
Foreign currency translation reserve (960) - -
Total ordinary shareholders’ equity 125 370 53 443 61 997Minority interests - 14 691 18 622
Total shareholders’ equity 125 370 68 134 80 619
Liabilities
Non-current liabilities
Borrowings 21 510 18 486 15 143
Deferred tax 2 696 2 595 -
Current liabilities 406 749 246 372 258 682
Loans from shareholders 1 584 9 125 8 358
Current tax payable 18 382 10 670 9 619
Borrowings 1 722 818 1 458
Derivative financial instruments 2 552 45 839 5 759
Trade and other payables 165 641 76 546 105 009Vendors 36 253 - -Bank overdraft 180 615 103 374 128 479Total equity and liabilities 556 325 335 587 354 444
Number of shares in issue 616 854 996 616 854 996 616 854 996Net asset value per share (cents) 20.3 8.6 10.1Net tangible asset value per share (cents) 18.3 8.1 9.4
Abridged balance sheet (cont.)
Unaudited30 September
2007R’000
Unaudited 30 September
2006 R’000
Audited31 March
2007R’000
Balance at beginning of period 61 996 37 694 37 694
Total earnings after minorities 39 474 16 768 25 039
Revaluation - (313) 380
Dividends - (705) (1 117)
Liability for minority purchase 24 860 - -
Currency translation differences (960) - -
Balance at end of period 125 370 53 444 61 996
Abridged statements of changes in equity
Unaudited30 September 2007
R’000
Unaudited30 September 2006
R’000
Audited31 March
2007R’000
Cash flows from operating activities (51 571) (3 346) (13 986)
Cash flows from operations 47 576 26 723 38 606
Changes in working capital (99 147) (30 069) (52 592)
Cash flow from investing activities (15 729) (14 320) (22 957)
Cash flow from financing activities (576) 5 327 1 364
Net increase in cash and cash equivalents (67 876) (12 339) (35 579)
Cash and cash equivalents at beginning of period (105 322) (69 743) (69 743)
Cash and cash equivalents at end of period (173 198) (82 082) (105 322)
Abridged cash flow statements
Unaudited30 September 2007
R’000
Unaudited30 September 2006
R’000
Audited31 March
2007R’000
Gross revenue
Stockists 250 047 135 386 299 302
Bulk Sales 189 311 161 074 334 556
Exporting 190 535 109 093 237 707
Other 6 432 465 5 338
636 325 406 018 876 903
Profit before interest and taxation
Stockists 24 186 11 503 23 303
Bulk Sales 15 373 13 311 23 127
Exporting 28 172 6 847 10 624
Other (1 689) 2 886 6 650
66 042 34 547 63 704
Abridged segment report
General market overview
1. INFRASTRUCTAL SPEND
• SA Government committed to spend R400 billion on public infrastructure over next 3 years
• Eskom , Transnet and Spoornet committed to address back log on infrastructure, ports, pipelines and rail
• Significant capex by mines, both in SA and Copperbelt
2. ONGOING ORGANIC GROWTH IN EXISTING SECTORS
3. GENERALLY STRONG DEMAND EXPECTED 5-7 YEARS
Growth strategy
• Sustainability is underpins our strategy
• RSA Growth sectors:
• Construction, mining & automotive
• Geographical growth
• Exports : Zimbabwe, Mozambique, Botswana, Namibia & Malawi
• Others SA Centers will be considered
• New products – plate & structural steel
• Acquisitions
• Explore BEE opportunities – Govt. Tenders etc
• NOTE – BSI HAS 2.3% OF THE SA MARKET
Turnover 1986 to 2008
Thank- you for your participation
For further queries please contact our Head office on +27 (0) 33 8462227