investor presentation year end 06 f
TRANSCRIPT
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Investor Presentation19 December 2006
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Organisational Structure
Coffee Estates
New Year's Gift
Chinyika
Petrunella
Tingamira EPZ
Avontuur
Helvetia
Outgrowers
Tea Estates
Ratelshoek, Avontuur
Jersey, Helvetia
Zona
Agriculture
Director
Tanganda Estates
Corporate
Commercial Director
Finance Director
Group Human Resources Manager
Packaging Plant
Mutare
Marketing and Distribution
Mutare, Harare
Gweru
Bulawayo
Beverage Division
General Manager
Board of Directors
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Operating Environment
Macro-economics Exchange rate rigidity for prolonged period Inflation of over 1000% and rising Interest rates
Estates Weather uncertainty Labour
Beverage
Weak demand Shortage of packaging material Complementary products
Financial Working capital management
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Highlights (Historical)
Beverage Division volumes down 29% butrevenue up 1 276%
Tea production up 2% at 8 500 tonnes(2005: 8373 tonnes)
Turnover up 1029% to $2 541 million
Export revenue up 727% to $992 million
Operating Profit up 1261% to $1 388 million Earnings per share up 1099% at $8.63
(2005: $0.72)
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Where the profit came from
Operating Costs upAgriculture 996%
Beverage 900%
Corporate 1352% Total : 1002%Turnover up
Exports 727%
Local 1375% Total : 1029%
Annual inflation 1070%Average inflation 997%
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Turnover in 2003 & 2006
2003
Agriculture
82%
Beverage
18%
2006
Beverage64%
Agriculture36%
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2003
Operating Profit in 2003 and
2006
Beverage30%
Agriculture
70%
2006
Beverage57%
Agriculture43%
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Working Capital Management$ Million 2006 2005 Change Inc.%
Stocks
Finished product
Domestic $ 222 $ 32 $ 200 883%
Export $ 190 $ 33 $ 157 474%
Stores $ 690 $ 42 $ 656 1718%
$1 115 $ 107 $ 1 007 1077%
Debtors
Domestic $ 379 $ 21 $ 358 1700%
Export $ 127 $ 25 $ 102 400%
Other $ 239 $ 16 $ 223 1400%
$ 745 $ 63 $ 682 1082%
Creditors $ 500 $ 49 ($ 451) 920%
Total increase in working capital $1 240
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Operations Agricultural Division
Volume strategy
Quality strategy
Mechanical Harvesters
Costs
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Operations Beverage Division
Margin maintenance
New Products
Tinga Mira waterCash collection
Costs
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Operating Costs
Fertilizer
Power
Fuel Plucking Labour
Maintenance
Packaging Material
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International Average Tea
Yield Per Hectare
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Zimbab
we
Tangan
da
Malawi
K
enya
India
SriL
anka
Bangla
desh
Indone
sia
2005
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Regional Production
0
50
100
150
200
250
300
350
2002 2004 2006
Tanganda
Zimbabwe
Kenya
Malawi
Tanzania
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World Tea Supply and
consumption (000 tonnes)
2700
2800
2900
3000
3100
3200
33003400
3500
3600
2001 2002 2003 2004 2005
Production
Consumption
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World Price of Tea Ex-Auction
1986 2005
0
50
100
150
200
250
300
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
IN US $ CTS. PER KG
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Black Tea Prices
0
20
40
60
80100
120
140
160
Nov-04
Nov-05
Oct-0
6
Tanganda
Mombasa
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Tanganda Prices
0
50
100
150
200
250
300
Nov-04
Nov-05
Oct-0
6
TangandaMombasa
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Outlook
Short-term
Late start to the rainy season Concentration on increasing yields(farming)
and quality (practices)
Some expansion
Further development of out-growers New products in Beverage Division
Devaluation?
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OutlookMedium-term
350 ha of immature tea coming to maturity overnext 5 years
300ha available for further development Out-growers
Macadamias- 150 ha in the ground, 2 tonnes/ha@ US$1.30/kg
Coffee reduction New products in Beverage
Add value to our core product - tea
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Thank you for coming!
Snack Time
There are many members ofmanagement present, so please
feel free to ask them aboutthe year.