Results Presentation
Results Presentation For the financial year ending 31 March 2008
creating customer wealth by leveraging knowledge
Group Structure Omnia Group (Pty) Ltd
Chemicals
Mining
Agriculture
creating customer wealth by leveraging knowledge
Overview of Results Revenue
33% to R 7.3 billion
Net profit
27% to R 313 million
Basic earnings per share
28% to 718.2 cents
Headline earnings per share
30% to 724.5 cents
Total dividend for the year
25% to 200c per share
creating customer wealth by leveraging knowledge
The Omnia Proposition • Leverage intellectual capital and technology to create value for customers • Respond innovatively differentiated products services
with and
• Develop offerings positioned further up the pyramid model to broaden the value added • Committed to continuing improvement in sustainable business practices and Responsible Care principles
creating customer wealth by leveraging knowledge
Balanced Business - Operating Profit 700 600 500 400 Rm 300 200 100 0 2004
2005
2006 Chemicals
Mining
2007
2008
Agriculture
creating customer wealth by leveraging knowledge
Operating Environment • Positive macro environment for Omnia • Strong demand in all three of Group’s major markets • Extraordinary market conditions – Dramatic increase in key input costs – Vital shortages of raw materials – Dramatic changes within agriculture • Rising procurement costs significantly impact on working capital
creating customer wealth by leveraging knowledge
Operational Environment •
Chemicals – Benefited from growth in South African economy – Volumes increased by more than 10% – Acquisition of Zetachem • Mining – Continued volume growth, particularly mining chemicals – Unprecedented increase in cost of raw materials – Renegotiated pricing contracts • Agriculture – Maize price remains above R 1 800 per ton for most of period – Global shortage of raw materials – Price of fertilizer reached record highs – Investment into jatropha agronomics
creating customer wealth by leveraging knowledge
Divisional Review : Chemicals 2008
2007
27% to R 3.3 billion
R 2.6 billion
17% to R 148 million
R 127 million
Operating margin
4.5%
4.8%
Contribution
25%
30%
Revenue Operating profit
• • •
Decrease in operating margin due to product mix, in particular greater polymer volumes Zetachem acquisition will improve margins Reduction in contribution to Group operating profit due to appreciable increase in contribution of Agriculture
creating customer wealth by leveraging knowledge
Commodity Prices - LDDPE USD 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Jan 99
Jan 00
Jan 01
Jan 02
Jan 03
Jan 04
Jan 05
Dec 05
May 06
Nov 06
May 07
Nov 07
May 08
creating customer wealth by leveraging knowledge
Divisional Review : Mining 2008
2007
Revenue
28% to R 1.3 billion
R 1.0 billion
Operating profit
9% to R 125 million
R 138 million
Operating margin
9.8%
13.8%
Contribution
21%
33%
• • •
Decrease in operating margin due to unprecedented rate of increase in the cost of raw materials Contract pricing did not allow for expeditious adjustments Re-negotiated price increases were completed in the last quarter of the year
creating customer wealth by leveraging knowledge
Commodity Pricing - Energy USD 160 140 120 100 80 60 40 20 0 Jan 05 Apr 05 Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Brent Crude
Uranium
Coal
creating customer wealth by leveraging knowledge
Commodity Pricing - Metals USD 2,200
10,000
2,000
9,000
1,800
8,000 7,000
1,400
6,000
1,200 5,000 1,000
Copper
Platinum and Gold
1,600
4,000
800
3,000
600 400
2,000
200
1,000
0 Jan 05 Apr 05 Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Platinum
Gold
0
Copper
creating customer wealth by leveraging knowledge
Divisional Review : Agriculture
“Despite sharply rising input costs, there has never been a better time to be a farmer in South Africa, or any other part of the world” - Johan Willemse Agricultural Economist University of the Free State
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein
creating customer wealth by leveraging knowledge
World per Capita Meat Consumption Kilograms per person per year 50 45 40 35 30 25 20 15 10 5 0 1980
1985
1990
1995
2000
2005
2010F
creating customer wealth by leveraging knowledge
Grain Consumption vs Meat Production Kilograms of Feed Grain to Produce 1 Kilogram of Meat
Beef
Pork
Poultry
0
1
2
3
4
5
6
7
8
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein Climate change – droughts in Australia, flooding in Burma and China Production of Biofuels
creating customer wealth by leveraging knowledge
Biofuel Production per Country 3% 1%
1% 1% 1% 2%
1%
15% 43%
32% USA
Brazil
EU
China
India
Thailand
Oceania
Other North & Central America
Other South America
Other Asia Source: USDA Agricultural projections
creating customer wealth by leveraging knowledge
Ethanol Production
Source: USDA Agricultural projections
creating customer wealth by leveraging knowledge
Biodiesel Production
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein Climate change – droughts in Australia, flooding in Burma and China Production of Biofuels Exponential increase in world population
creating customer wealth by leveraging knowledge
Population Growth
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein Climate change – droughts in Australia, flooding in Burma and China Production of Biofuels Exponential increase in world population Insufficient time for farmers to adapt to new circumstances
Is this a problem or is this an opportunity?
creating customer wealth by leveraging knowledge
Consequences • High crop prices • Global Food shortages/food riots • Stocks to use ratio on coarse grains declined to a new low
creating customer wealth by leveraging knowledge
Jul 06 Wheat
Sep 06
Soybean
creating customer wealth by leveraging knowledge
Nov 06 Jan 07 Mar 07 May 07 Jul 07 Sep 07 Nov 07 Jan 08 Mar 08
Commodity Prices
Maize
May 06
USD
Mar 06
700
Jan 06
600
Nov 05
500
Sep 05
400
Jul 05
300
May 05
200
Mar 05
100
0 Jan 05
Total World Grain & Oilseeds
creating customer wealth by leveraging knowledge
Consequences • • • • • •
High crop prices Global Food shortages/food riots Stocks to use ratio on coarse grains declined to a new low Increase in hectares planted Fertilizer demand has outstripped supply Chinese Export Tax 135% on fertilizer
creating customer wealth by leveraging knowledge
Harsh Reality Ammonia fob Yuz
Urea Gran fob ME
DAP fob US Gulf
Sulphur fob Vancouver
MOP fob NW Europe
Average 2007
269
320
430
113
212
Average 2008
492
439
987
563
457
Current 29th May 2008
434
650
1190
690
705
Increase from 2007 to current
61%
103%
177%
511%
233%
creating customer wealth by leveraging knowledge
Divisional Review : Agriculture Revenue Operating profit Operating margin Contribution • • •
2008
2007
43% to R 2.7 billion
R 1.9 billion
98% to R 311 million
R 157 million
11.4%
8.2%
54%
37%
Maize price remaining at levels above R1 800 per ton Global shortage of fertilizer raw materials Price of fertilizer at record highs
creating customer wealth by leveraging knowledge
Raw Material Fundamentals International cost per ton ammonia vs urea USD 700 600 500 400 300 200 100
Urea (prill)
May 08
Mar 08
Jan 08
Nov 07
Sep 07
Jul 07
May 07
Mar 07
Jan 07
Nov 06
Sep 06
Jul 06
May 06
Mar 06
Jan 06
Nov 05
Sep 05
Jul 05
May 05
Mar 05
Jan 05
0
Ammonia
creating customer wealth by leveraging knowledge
Raw Material Fundamentals Cost per Kg Nitrogen ammonia vs urea USD 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2
Urea
May 08
Mar 08
Jan 08
Nov 07
Sep 07
Jul 07
May 07
Mar 07
Jan 07
Nov 06
Sep 06
Jul 06
May 06
Mar 06
Jan 06
Nov 05
Sep 05
Jul 05
May 05
Mar 05
Jan 05
0
Ammonia
creating customer wealth by leveraging knowledge
Raw Material Fundamentals Rising raw material prices – DAP & MOP USD 1,400
600
1,200
500
1,000 800 300
MOP
DAP
400
600 200 400 100
200 0 Jan-03
0 Jul-03
Jan-04
Jul-04
Jan-05
Jul-05 DAP
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
MOP S
creating customer wealth by leveraging knowledge
Financial Review For the financial year ending 31 March 2008
creating customer wealth by leveraging knowledge
Real Growth : Revenue Indexed 400 350 300 250 200 150 100 50 0 98
99
01
02
03
04
05
06
07
08
creating customer wealth by leveraging knowledge
Income Statement Rm
2008
%
2007
Revenue
7 340
33
5 537
Operating expenses
( 915)
28
( 717)
Operating profit
584
38
422
Net finance cost
( 112)
93
( 58)
Interest paid
( 143)
79
( 80)
25
39
18
6
50
4
472
30
364
(159)
35
( 118)
313
27
246
Interest received Forex gain Profit before taxation Taxation Net profit for the year
creating customer wealth by leveraging knowledge
Segmental Review Rm
2008
%
2007
Chemicals Revenue Operating profit Operating margin
3 334
27
2 624
148
17
127
4.5%
4.8%
Mining Revenue Operating profit Operating margin
1 281
28
1 001
125
( 9)
138
9.8%
13.8%
Agriculture Revenue Operating profit Operating margin
2 725
43
1 912
311
98
157
11.4%
8.2%
creating customer wealth by leveraging knowledge
Export Revenue 1,600 1,400 1,200 1,000 Rm
800 600 400 200 0 2004
2005
2006
2007
2008
creating customer wealth by leveraging knowledge
Balance Sheet Rm
2008
%
2007
Capital and Reserves 188
2
185
Non-distributable reserves
79
464
14
Share-based payment reserve
45
137
19
Stated capital
Other reserves Retained earnings Minority interest Shareholders' equity Debt : Equity ratio
3 1 268
3 23
(2) 1 581 29%
1 027 2
26
1 250 21%
creating customer wealth by leveraging knowledge
Balance Sheet Rm Non-current assets
2008
%
2007
1 520
27
1 199
Property, plant and equipment
965
27
760
Intangible assets
517
19
436
Available-for-sale financial assets Deferred income tax assets
30
-
8
3
696
52
457
Inventories
1 380
52
905
Trade and other receivables
1 457
50
969
82
64
50
4 439
42
3 123
Net working capital
Cash and cash equivalents Total Assets
creating customer wealth by leveraging knowledge
Balance Sheet Rm Non-Current Liabilities Deferred income tax liabilities Provisions Interest-bearing borrowings Current Liabilities Trade and other payables
2008
2007
392
238%
116
104
83
1
9
287
24
2,466
40%
1,757
2,141
51%
1,417
Current portion of interest-bearing borrowings
61
7
Current income tax liabilities
79
49
185
284
Bank overdrafts Total Liabilities
2,858
53%
1,873
creating customer wealth by leveraging knowledge
Cash Flow Statement Rm Operating profit
2008
%
2007
584
38
422
Depreciation and amortisation
92
16
79
Adjustment for non-cash items
13
(6)
Utilised by working capital
(138)
130
(60)
Net interest paid
(118)
90
(62)
Taxation paid
(134)
34
(100)
299
10
273
Cash generated before dividends
creating customer wealth by leveraging knowledge
Cash Flow Statement Rm
2008
%
2007
Cash generated before dividends
299
10
273
Dividends paid
(76)
12
(68)
Generated by operations
223
9
205
(413)
136
(175)
Net cash outflow from investing activities Plant and equipment
(234)
(175)
Acquisitions (Zetachem)
(150)
-
Investment in jatropha agronomics
(29)
-
Net cash inflow from financing activities
323
8
Increase in funds available
133
250
38
creating customer wealth by leveraging knowledge
Salient Financial Features 2008
2007
2006
2005
Operating margin
8.0%
7.6%
6.7%
9.3%
Headline earnings
319
245
154
217
Headline earnings per share (cents)
724.5
558.2
354.3
507.7
Fully diluted headline earnings per share (cents)
687.9
553.2
347.0
478.5
Number of shares in issue
44 263
43 943
43 607
43 424
Net asset value per share
35.7
28.4
23.4
21.2
20.1%
19.6%
15.1%
23.5%
Return on shareholders equity
creating customer wealth by leveraging knowledge
Debt Equity 2,000
100% 80%
1,500 60% 40%
1,000 Rm
20% 500
0% -20%
0 2001
2002
2003
2004
2005
2006
-500
2007
2008
-40% -60%
Equity
Debt
Debt/Equity
creating customer wealth by leveraging knowledge
Earnings and Dividends per Share 800
250
200 600 500
150
400 100
300
Dividends - cents
Basic earnings - cents
700
200 50 100 0
0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 Basic earnings per share
Dividends per share
creating customer wealth by leveraging knowledge
Return on Shareholders Equity 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 Nominal
Real
creating customer wealth by leveraging knowledge
Prospects
creating customer wealth by leveraging knowledge
Environment • South African economy will continue to slow down – However, weakening rand enables the manufacturing sector to become internationally more competitive • Higher cost of funding will impact negatively • Inflationary pressures on expenses • Ongoing strong growth in world metal, mineral and energy demands • Golden age for agriculture
creating customer wealth by leveraging knowledge
Group Outlook : Chemicals • Weaker rand driving industrial chemical sales • EcoGypsumTM to reach full production • Zetachem acquisition to enhance chemical margins • Sasol turbo project to provide higher polymer volumes for African Polymers
creating customer wealth by leveraging knowledge
Group Outlook : Mining • Coal and uranium mining set to expand • Mining chemicals set to benefit from increased uranium mining • Re-negotiated explosives contracts will result in improved margins • Shocktube plant in process of commissioning
creating customer wealth by leveraging knowledge
Group Outlook : Agriculture • The landscape has fundamentally changed • High food prices will drive increased planting – World Bank – “food prices will remain high until at least 2015” • Agronomic conditions excellent • Fertilizer margins will remain strong but working capital will increase substantially • Omnia Fertilizer to benefit from reduction in raw material cost with phased implementation of Nitrophosphate process • Omnia Fertilizer studying jatropha agronomics
creating customer wealth by leveraging knowledge
Envinox Clean Air Plant • Plant commissioned in the second half of the 2008 financial year • Omnia Fertilizer will generate approximately 500,000 Certified Emission Reduction (CER) units per annum • CER units are traded internationally as commodities • Potentially earn approximately R 60 million per annum in revenue over 5 year period • Mail and Guardian – Omnia Group (Pty) Ltd awarded “Greening the Future” award
creating customer wealth by leveraging knowledge
Group Outlook : Long Term • Macro environment in mining and agriculture expected to be positive for the next decade • Group driving a new Business Process system which will lead to substantial improvements in business information, logistics and productivity
creating customer wealth by leveraging knowledge
Group Management • Management on track to achieve its 5 year cumulative earnings target set by shareholders of 10% real growth in earnings • Target set at R 1.237bn for the 5 years • On cumulative target of R 909m after 4 years • Ranked 59th in Top 100 Companies – Overall compound growth of 42.7% over 5 years • Ranked 54th in Empowerdex survey
creating customer wealth by leveraging knowledge
Thank you www.omnia.co.za
creating customer wealth by leveraging knowledge
creating customer wealth by leveraging knowledge
Group Structure Omnia Group (Pty) Ltd
Chemicals
Mining
Agriculture
creating customer wealth by leveraging knowledge
Overview of Results Revenue
33% to R 7.3 billion
Net profit
27% to R 313 million
Basic earnings per share
28% to 718.2 cents
Headline earnings per share
30% to 724.5 cents
Total dividend for the year
25% to 200c per share
creating customer wealth by leveraging knowledge
The Omnia Proposition • Leverage intellectual capital and technology to create value for customers • Respond innovatively differentiated products services
with and
• Develop offerings positioned further up the pyramid model to broaden the value added • Committed to continuing improvement in sustainable business practices and Responsible Care principles
creating customer wealth by leveraging knowledge
Balanced Business - Operating Profit 700 600 500 400 Rm 300 200 100 0 2004
2005
2006 Chemicals
Mining
2007
2008
Agriculture
creating customer wealth by leveraging knowledge
Operating Environment • Positive macro environment for Omnia • Strong demand in all three of Group’s major markets • Extraordinary market conditions – Dramatic increase in key input costs – Vital shortages of raw materials – Dramatic changes within agriculture • Rising procurement costs significantly impact on working capital
creating customer wealth by leveraging knowledge
Operational Environment •
Chemicals – Benefited from growth in South African economy – Volumes increased by more than 10% – Acquisition of Zetachem • Mining – Continued volume growth, particularly mining chemicals – Unprecedented increase in cost of raw materials – Renegotiated pricing contracts • Agriculture – Maize price remains above R 1 800 per ton for most of period – Global shortage of raw materials – Price of fertilizer reached record highs – Investment into jatropha agronomics
creating customer wealth by leveraging knowledge
Divisional Review : Chemicals 2008
2007
27% to R 3.3 billion
R 2.6 billion
17% to R 148 million
R 127 million
Operating margin
4.5%
4.8%
Contribution
25%
30%
Revenue Operating profit
• • •
Decrease in operating margin due to product mix, in particular greater polymer volumes Zetachem acquisition will improve margins Reduction in contribution to Group operating profit due to appreciable increase in contribution of Agriculture
creating customer wealth by leveraging knowledge
Commodity Prices - LDDPE USD 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Jan 99
Jan 00
Jan 01
Jan 02
Jan 03
Jan 04
Jan 05
Dec 05
May 06
Nov 06
May 07
Nov 07
May 08
creating customer wealth by leveraging knowledge
Divisional Review : Mining 2008
2007
Revenue
28% to R 1.3 billion
R 1.0 billion
Operating profit
9% to R 125 million
R 138 million
Operating margin
9.8%
13.8%
Contribution
21%
33%
• • •
Decrease in operating margin due to unprecedented rate of increase in the cost of raw materials Contract pricing did not allow for expeditious adjustments Re-negotiated price increases were completed in the last quarter of the year
creating customer wealth by leveraging knowledge
Commodity Pricing - Energy USD 160 140 120 100 80 60 40 20 0 Jan 05 Apr 05 Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Brent Crude
Uranium
Coal
creating customer wealth by leveraging knowledge
Commodity Pricing - Metals USD 2,200
10,000
2,000
9,000
1,800
8,000 7,000
1,400
6,000
1,200 5,000 1,000
Copper
Platinum and Gold
1,600
4,000
800
3,000
600 400
2,000
200
1,000
0 Jan 05 Apr 05 Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Platinum
Gold
0
Copper
creating customer wealth by leveraging knowledge
Divisional Review : Agriculture
“Despite sharply rising input costs, there has never been a better time to be a farmer in South Africa, or any other part of the world” - Johan Willemse Agricultural Economist University of the Free State
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein
creating customer wealth by leveraging knowledge
World per Capita Meat Consumption Kilograms per person per year 50 45 40 35 30 25 20 15 10 5 0 1980
1985
1990
1995
2000
2005
2010F
creating customer wealth by leveraging knowledge
Grain Consumption vs Meat Production Kilograms of Feed Grain to Produce 1 Kilogram of Meat
Beef
Pork
Poultry
0
1
2
3
4
5
6
7
8
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein Climate change – droughts in Australia, flooding in Burma and China Production of Biofuels
creating customer wealth by leveraging knowledge
Biofuel Production per Country 3% 1%
1% 1% 1% 2%
1%
15% 43%
32% USA
Brazil
EU
China
India
Thailand
Oceania
Other North & Central America
Other South America
Other Asia Source: USDA Agricultural projections
creating customer wealth by leveraging knowledge
Ethanol Production
Source: USDA Agricultural projections
creating customer wealth by leveraging knowledge
Biodiesel Production
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein Climate change – droughts in Australia, flooding in Burma and China Production of Biofuels Exponential increase in world population
creating customer wealth by leveraging knowledge
Population Growth
creating customer wealth by leveraging knowledge
Drivers of Food Prices • • • • • • • • •
Arable land to urbanisation Increasing lack of water for agriculture Resistance to full scale implementation of GM crops Insufficient research on regionalised crop yields Change of diets from staple grains to higher protein Climate change – droughts in Australia, flooding in Burma and China Production of Biofuels Exponential increase in world population Insufficient time for farmers to adapt to new circumstances
Is this a problem or is this an opportunity?
creating customer wealth by leveraging knowledge
Consequences • High crop prices • Global Food shortages/food riots • Stocks to use ratio on coarse grains declined to a new low
creating customer wealth by leveraging knowledge
Jul 06 Wheat
Sep 06
Soybean
creating customer wealth by leveraging knowledge
Nov 06 Jan 07 Mar 07 May 07 Jul 07 Sep 07 Nov 07 Jan 08 Mar 08
Commodity Prices
Maize
May 06
USD
Mar 06
700
Jan 06
600
Nov 05
500
Sep 05
400
Jul 05
300
May 05
200
Mar 05
100
0 Jan 05
Total World Grain & Oilseeds
creating customer wealth by leveraging knowledge
Consequences • • • • • •
High crop prices Global Food shortages/food riots Stocks to use ratio on coarse grains declined to a new low Increase in hectares planted Fertilizer demand has outstripped supply Chinese Export Tax 135% on fertilizer
creating customer wealth by leveraging knowledge
Harsh Reality Ammonia fob Yuz
Urea Gran fob ME
DAP fob US Gulf
Sulphur fob Vancouver
MOP fob NW Europe
Average 2007
269
320
430
113
212
Average 2008
492
439
987
563
457
Current 29th May 2008
434
650
1190
690
705
Increase from 2007 to current
61%
103%
177%
511%
233%
creating customer wealth by leveraging knowledge
Divisional Review : Agriculture Revenue Operating profit Operating margin Contribution • • •
2008
2007
43% to R 2.7 billion
R 1.9 billion
98% to R 311 million
R 157 million
11.4%
8.2%
54%
37%
Maize price remaining at levels above R1 800 per ton Global shortage of fertilizer raw materials Price of fertilizer at record highs
creating customer wealth by leveraging knowledge
Raw Material Fundamentals International cost per ton ammonia vs urea USD 700 600 500 400 300 200 100
Urea (prill)
May 08
Mar 08
Jan 08
Nov 07
Sep 07
Jul 07
May 07
Mar 07
Jan 07
Nov 06
Sep 06
Jul 06
May 06
Mar 06
Jan 06
Nov 05
Sep 05
Jul 05
May 05
Mar 05
Jan 05
0
Ammonia
creating customer wealth by leveraging knowledge
Raw Material Fundamentals Cost per Kg Nitrogen ammonia vs urea USD 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2
Urea
May 08
Mar 08
Jan 08
Nov 07
Sep 07
Jul 07
May 07
Mar 07
Jan 07
Nov 06
Sep 06
Jul 06
May 06
Mar 06
Jan 06
Nov 05
Sep 05
Jul 05
May 05
Mar 05
Jan 05
0
Ammonia
creating customer wealth by leveraging knowledge
Raw Material Fundamentals Rising raw material prices – DAP & MOP USD 1,400
600
1,200
500
1,000 800 300
MOP
DAP
400
600 200 400 100
200 0 Jan-03
0 Jul-03
Jan-04
Jul-04
Jan-05
Jul-05 DAP
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
MOP S
creating customer wealth by leveraging knowledge
Financial Review For the financial year ending 31 March 2008
creating customer wealth by leveraging knowledge
Real Growth : Revenue Indexed 400 350 300 250 200 150 100 50 0 98
99
01
02
03
04
05
06
07
08
creating customer wealth by leveraging knowledge
Income Statement Rm
2008
%
2007
Revenue
7 340
33
5 537
Operating expenses
( 915)
28
( 717)
Operating profit
584
38
422
Net finance cost
( 112)
93
( 58)
Interest paid
( 143)
79
( 80)
25
39
18
6
50
4
472
30
364
(159)
35
( 118)
313
27
246
Interest received Forex gain Profit before taxation Taxation Net profit for the year
creating customer wealth by leveraging knowledge
Segmental Review Rm
2008
%
2007
Chemicals Revenue Operating profit Operating margin
3 334
27
2 624
148
17
127
4.5%
4.8%
Mining Revenue Operating profit Operating margin
1 281
28
1 001
125
( 9)
138
9.8%
13.8%
Agriculture Revenue Operating profit Operating margin
2 725
43
1 912
311
98
157
11.4%
8.2%
creating customer wealth by leveraging knowledge
Export Revenue 1,600 1,400 1,200 1,000 Rm
800 600 400 200 0 2004
2005
2006
2007
2008
creating customer wealth by leveraging knowledge
Balance Sheet Rm
2008
%
2007
Capital and Reserves 188
2
185
Non-distributable reserves
79
464
14
Share-based payment reserve
45
137
19
Stated capital
Other reserves Retained earnings Minority interest Shareholders' equity Debt : Equity ratio
3 1 268
3 23
(2) 1 581 29%
1 027 2
26
1 250 21%
creating customer wealth by leveraging knowledge
Balance Sheet Rm Non-current assets
2008
%
2007
1 520
27
1 199
Property, plant and equipment
965
27
760
Intangible assets
517
19
436
Available-for-sale financial assets Deferred income tax assets
30
-
8
3
696
52
457
Inventories
1 380
52
905
Trade and other receivables
1 457
50
969
82
64
50
4 439
42
3 123
Net working capital
Cash and cash equivalents Total Assets
creating customer wealth by leveraging knowledge
Balance Sheet Rm Non-Current Liabilities Deferred income tax liabilities Provisions Interest-bearing borrowings Current Liabilities Trade and other payables
2008
2007
392
238%
116
104
83
1
9
287
24
2,466
40%
1,757
2,141
51%
1,417
Current portion of interest-bearing borrowings
61
7
Current income tax liabilities
79
49
185
284
Bank overdrafts Total Liabilities
2,858
53%
1,873
creating customer wealth by leveraging knowledge
Cash Flow Statement Rm Operating profit
2008
%
2007
584
38
422
Depreciation and amortisation
92
16
79
Adjustment for non-cash items
13
(6)
Utilised by working capital
(138)
130
(60)
Net interest paid
(118)
90
(62)
Taxation paid
(134)
34
(100)
299
10
273
Cash generated before dividends
creating customer wealth by leveraging knowledge
Cash Flow Statement Rm
2008
%
2007
Cash generated before dividends
299
10
273
Dividends paid
(76)
12
(68)
Generated by operations
223
9
205
(413)
136
(175)
Net cash outflow from investing activities Plant and equipment
(234)
(175)
Acquisitions (Zetachem)
(150)
-
Investment in jatropha agronomics
(29)
-
Net cash inflow from financing activities
323
8
Increase in funds available
133
250
38
creating customer wealth by leveraging knowledge
Salient Financial Features 2008
2007
2006
2005
Operating margin
8.0%
7.6%
6.7%
9.3%
Headline earnings
319
245
154
217
Headline earnings per share (cents)
724.5
558.2
354.3
507.7
Fully diluted headline earnings per share (cents)
687.9
553.2
347.0
478.5
Number of shares in issue
44 263
43 943
43 607
43 424
Net asset value per share
35.7
28.4
23.4
21.2
20.1%
19.6%
15.1%
23.5%
Return on shareholders equity
creating customer wealth by leveraging knowledge
Debt Equity 2,000
100% 80%
1,500 60% 40%
1,000 Rm
20% 500
0% -20%
0 2001
2002
2003
2004
2005
2006
-500
2007
2008
-40% -60%
Equity
Debt
Debt/Equity
creating customer wealth by leveraging knowledge
Earnings and Dividends per Share 800
250
200 600 500
150
400 100
300
Dividends - cents
Basic earnings - cents
700
200 50 100 0
0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 Basic earnings per share
Dividends per share
creating customer wealth by leveraging knowledge
Return on Shareholders Equity 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 Nominal
Real
creating customer wealth by leveraging knowledge
Prospects
creating customer wealth by leveraging knowledge
Environment • South African economy will continue to slow down – However, weakening rand enables the manufacturing sector to become internationally more competitive • Higher cost of funding will impact negatively • Inflationary pressures on expenses • Ongoing strong growth in world metal, mineral and energy demands • Golden age for agriculture
creating customer wealth by leveraging knowledge
Group Outlook : Chemicals • Weaker rand driving industrial chemical sales • EcoGypsumTM to reach full production • Zetachem acquisition to enhance chemical margins • Sasol turbo project to provide higher polymer volumes for African Polymers
creating customer wealth by leveraging knowledge
Group Outlook : Mining • Coal and uranium mining set to expand • Mining chemicals set to benefit from increased uranium mining • Re-negotiated explosives contracts will result in improved margins • Shocktube plant in process of commissioning
creating customer wealth by leveraging knowledge
Group Outlook : Agriculture • The landscape has fundamentally changed • High food prices will drive increased planting – World Bank – “food prices will remain high until at least 2015” • Agronomic conditions excellent • Fertilizer margins will remain strong but working capital will increase substantially • Omnia Fertilizer to benefit from reduction in raw material cost with phased implementation of Nitrophosphate process • Omnia Fertilizer studying jatropha agronomics
creating customer wealth by leveraging knowledge
Envinox Clean Air Plant • Plant commissioned in the second half of the 2008 financial year • Omnia Fertilizer will generate approximately 500,000 Certified Emission Reduction (CER) units per annum • CER units are traded internationally as commodities • Potentially earn approximately R 60 million per annum in revenue over 5 year period • Mail and Guardian – Omnia Group (Pty) Ltd awarded “Greening the Future” award
creating customer wealth by leveraging knowledge
Group Outlook : Long Term • Macro environment in mining and agriculture expected to be positive for the next decade • Group driving a new Business Process system which will lead to substantial improvements in business information, logistics and productivity
creating customer wealth by leveraging knowledge
Group Management • Management on track to achieve its 5 year cumulative earnings target set by shareholders of 10% real growth in earnings • Target set at R 1.237bn for the 5 years • On cumulative target of R 909m after 4 years • Ranked 59th in Top 100 Companies – Overall compound growth of 42.7% over 5 years • Ranked 54th in Empowerdex survey
creating customer wealth by leveraging knowledge
Thank you www.omnia.co.za
creating customer wealth by leveraging knowledge
