IMPERIAL Logistics Africa Investors Presentation Investors Presentation September 2013
IMPERIAL Logistics AfricaInvestors PresentationInvestors PresentationSeptember 2013
Agenda
IMPERIAL & Africa Logistics Structures
Transport and Warehousing
Current Footprint
G th T d & D iGrowth Trends & Drivers
Service Offering
Strategic Clients
Managing Complexity & Lessons LearntManaging Complexity & Lessons Learnt
Three Years Forward
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Africa Logistics Structure
Dougie TruterCEO
George de BeerGeorge de BeerCFO
Iain BartonMD IHS
Nieks BezuidenhoutDistributor Executive
Fil MorkelLogistics ExecutiveExecutive
Focusing on Healthcare supply chain and growth
Focusing on transport, warehousing and
Focusing on distributorships SADC and growthchain and growth
in this arena infrastructure developmentxx
SADC and growth in balanced basket
3
IMPERIAL Structure
IMPERIALIMPERIAL Holdings
IMPERIAL Logistics
Revenue contribution(incl. inter‐segment revenue)
R16bn
Revenue contribution(incl. inter‐segment revenue)
R13 453bn
South Africa International
R16bn R13,453bn
Rest of Revenue contribution(incl inter segment revenue) Africa(incl. inter‐segment revenue)
R4,565bn
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Transport and Warehousing
» Infrastructure Development
SADEC W h i• SADEC Warehousingo Sappi
o PG
o Distell
• Kenya Development
• Mozambique Developmentq p
• Nigeria Network
» Grainovation Mozambique
• Agricultural commodities
» Mining commodities
• Trafigura
• Glencore
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Current Footprint
Al i
TunisiaMorocco
Imperial Logistics
CIC warehouse operations
LibyaAlgeria
Mauritania
WesternSahara
Egypt
CapeVerde
Mali NigerMali Niger
IHS warehouse operations
Countries serviced by IHS Agents
CoteD’Ivoire
Sierra Leone‐Ghana
Chad
Nigeria
Senegal
LiberiaCentral
African Republic
Eritrea
The Gambia‐ Burkina FasoGuinea‐Bissau‐
Sudan
EthiopiaGuinea
‐Djibouti
BeninGhana
NigeriaNigeria
‐Djibouti
CoteD’Ivoire
Guinea‐Bissau‐Sudan
EthiopiaEthiopiaGuinea
Benin
Kenya
Somalia
Tanzania
Equatorial Guinea
Rep. of the Congo‐
Gabon
p
Sao Tome& Principe
Seychelles
DemocraticRepublic ofThe Congo
Uganda
Togo
RwandaBurundi
KenyaKenya
TanzaniaBurundiBurundi
DemocraticRepublic ofThe Congo
Togo
UgandaUganda
Seychelles
Current African footprint consisting of a range of services
Infrastructure and owned
Zambia‐
ComorosAngola
MalawiZambia‐
Malawi
AngolaComoros
Infrastructure and owned representation in 12 countries in Africa
Cross border transportation into 18 countries
NamibiaZimbabwe Mauritius
Swaziland
L thL th
BotswanaNamibia
Zimbabwe
BotswanaBotswana
Mauritius
Swaziland
L thL th
In excess of 75 regional, local and general freight and distributor warehouses strategically located throughout the continent
SouthAfrica
LesothoLesothoSouthAfrica
LesothoLesothog 720 vehicles with necessary cross
border permits6
Growth Trend ‐ Rest of Africa
4 565 224
Operating profitRevenue
2 455
3 716
142154
2 455
61
525
2010 2011 2012 2013 2010 2011 2012 2013
» Rest of Africa expansion gaining momentum; CIC performing well
More than tripled over a three year period
p g g ; p g» Transport businesses performed solidly, Namibia improved» Revenue up 23%; operating profit up 45% in F2013» Acquired 100% of RTT Medical effective Jan 2013 – opportunities for further expansion across continent » Acquired 49% of MDS Logistics Nigeria effective 26 April 2013 – excellent platform for further growth
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Key Growth Drivers African Consumer
» McKinsey identified Africa’s consumer goods and services as the leader in Africa’s foremost industry
opportunities
• FMCG will make up 50% of spend
• SSA consumer spending grew to $600bn in 2010 and is expected to break the $1.3tn mark by 2020!
» Expectations are that by 2030, half of Africa’s population will live in cities, with the ratio strengthening to
two thirds by 2050
• This is positive for FMCG manufacturers from a RTM point of view
» Route to market surrounding FMCG goods is seen as one of the key challenges facing manufacturers,
wholesalers, distributors, principals and retailers alike, in fact this challenge rates higher than the “standard”
Africa business challenges
» Key Principals/Brands such as Diageo, Unilever and Nestle already indicated that its imperative that the
bottom of the pyramid and informal markets should be addressed
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The Rising African Consumer Tide
» The single largest source of future demand for FMCG in Africa is the growth of the economically
active population
• Between 2010 and 2050, this group is forecast to grow from 56% to 66%
» Africa’s market for consumer goods is growing and is doing so in real terms
• The strong population growth, estimated at 2.2% per annum, coupled by a notable decline in
poverty levels, are a living testimony to this argument (below to above the poverty line)
» The BRICS have for a long time been the obvious destination, but events of the past decade have
clearly demonstrated what the brave can reap by daring to invest in frontier markets
The time for Africa, serving the consumer, is
!NOW!9
The Current Day Conversation
G h ll d bli h dGet me there Sell my Product Establish my Brand
KEY REQUIREMENT
“logistics” “route to market” “consumer conversion”
CRITICAL SUCCESS FACTORS
• Minimal touch points• Efficiency and Competency• Consistent service delivery
• Reach/Universe• Seamless flow• Strategic future fit
• Quality• Distribution• Value• Quality of Infrastructure
• Network reach• Visibility through systems and processes
• Market Intel/understanding• Resource/Asset productivity• Order to cash
Value• Price• Promotion• Presence
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End‐to‐end Value Chain Services
Building brands and creating the demand Building IPg gDriving FMCG growth Consumer conversionValue proposition (stakeholders)
gReporting and Point of SalePartners in profitProactive route to marketValue proposition (stakeholders)
Unique selling proposition (customers) Proactive route to marketIntelligence from bottom‐of‐the‐pyramid
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Integration as a Differentiator
Logistics
» Integrated end‐to‐end solution
LogisticsGet me there
ConsumerRTM
Sell my Product
Consumer ConversionEstablish my
BrandBrand
» How do we achieve this
Leverage Partner Acquire
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Managing Complexity through Clustering
Algeria
TunisiaMorocco
LibyaAlgeria
MaliMauritania
Niger
WesternSahara
Egypt
CoteD’Ivoire
Sierra Leone‐
Mali
Ghana
Sudan
Niger
Ethiopia
Chad
GuineaNigeria
‐Djibouti
Senegal
bCentral
Benin
Eritrea
Burkina Faso
West Africa
D Ivoire
KenyaDemocraticRepublic
of the Congo
Somalia
Ghana
UgandaEquatorial Guinea
BurundiR f th C
Rwanda‐
Togo
Gabon
Liberia African Republic
Sao Tome& Principe
SeychellesWest Africa
French West AfricaAngola
Zambia
TanzaniaRep. of the Congo‐
Malawi
Comoros
y
East Africa
Southern Africa
Madagascar
Botswana
Mozambique
Zambia
NamibiaZimbabwe Mauritius
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SouthAfrica
Swaziland
Sample of our Strategic Clients
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Lessons Learnt
» No ‘1‐size fits all’ (55 shades of grey)
D dili l iti» Due diligence complexities
» Related party arrangements
» Complex entrepreneurial structures» Complex entrepreneurial structures
» Land ownership in African countries
» Limited pipeline of qualified quality people
» Over‐reliance on the Sellers as Managers
» Centralisation of Accounting and Reporting
» Sellers made use of external Consultant who was obstructive
» Start‐up Businesses very difficult, costly and time sensitive and thus not part of our d l hi h i f d i i imodel, which is focussed on acquisitions
» Employ Experts (eg Frans Joubert)
» Good Governance Focus» Good Governance Focus
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Imperial Logistics Africa 3 Years Forward
TunisiaMorocco
• Africanisation
• Country consolidation
Z bi d bli h dLibyaAlgeria
Mauritaniai
Egypt• Zambia node established
• Pull dominant over push (CPM partnership)
• Unique selling proposition
CoteD’Ivoire
Mali
Ghana
Sudan
Niger
Ethiopia
Chad
GuineaNigeria
CentralAfrican Republic
Benin
Burkina Faso
SouthSudan
• Integrated value proposition
• Customer one answer in Africa
• 50% less reliance on South AfricaSouthSudanD Ivoire
KenyaDRC
Somalia
Ghana
Uganda
Gabon
African Republic Sudan %
• Competitive “Africa” fleet of trucks
• Africa manufacturers’ preferred partners
A t li ht i ff i 4PL (S b B )
Sudan
P ibl P
Direct Footprint AngolaZambia
Tanzania
MalawiAngola
• Asset light service offering 4PL (Sub Base)
• Partner with global, local and SA retailers &
manufacturersPossible Presence
BotswanaNamibiaZimbabwe
Swazi‐land
• Create China/Africa partnership to assist with
• Projects
• Product and principal developmentSouthAfrica
p p p
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QuestionsQuestions
Inbound Industrial Supply
» Resolve and The Beijing Axis
Planning
ItemMasterProcurement
Item MasterInventory planning
Sourcing contracts
Inbound Logistics
InternationalStorage
End userDemand managementCapacity
Off shore sourcingProcure to
International logisticsTransport management
Warehouse configurationR i i &
End user distribution
Site logisticsplanning pay
managementExpediting
Receiving & put‐away5S process
AssemblyKitting
Stock management
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Walvis Bay Development
» A 50/50 joint venture partnership has been developed with Savino Del Bene to provide cargo owners with a floor‐to‐door global service offering using the Walvis Bay gateway t l t d SSA t ito selected SSA countries
» A logistics facility is required in order to provide auxiliary services related to an end‐to‐end solution
Why Savino Del Bene?» Existing customer base in NamibiaNamibia
» Extensive global footprint (37 countries), especially in A i h bAsia where cargo can be converted at source
» FY2012 revenue = €1 billion (P i t l d)(Privately owned)
»Good cultural fit » HOA signed in 2012
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