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

2

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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