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Provides a Strategy Update at the 2015 Investor Day
NAMPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number ISIN: ZAE 000071676
1968/008070/06)
Share code: NPK
Share code: NPKP ISIN: ZAE 000004958
Share code: NPP1 ISIN: ZAE 000004966
Nampak Provides a Strategy Update at the 2015 Investor Day
Johannesburg, 17 September, 2015 – Nampak, Africa’s leading manufacturer of beverage, food
and non-perishable packaging, provides a comprehensive update on the group’s strategy and
progress on key operational initiatives across all divisions.
At an Investor Day briefing for investors and analysts, Nampak Chief Executive André de Ruyter
and newly appointed Chief Financial Officer, Glenn Fullerton, along with Nampak’s divisional
executive team will highlight the key strategies for each division and address the business
improvement and growth initiatives underway.
“Nampak continues to navigate volatile macroeconomic conditions prevailing in a number of our
key markets in this financial year,” says De Ruyter. “In South Africa we have experienced
operational difficulties at our Glass and Bevcan Springs factories that we are addressing
through targeted operational excellence initiatives. We have made solid progress on stabilising
and improving the performance at Glass and addressing the spoilage issue at our Bevcan
Springs site. We anticipate the benefits to translate into strong financial performance in 2016 off
the 2015 base, based on currently known factors. We have taken decisive steps to strengthen
our leadership team, re-focus our portfolio, improve operational efficiencies, tighten cost and
capex controls, improve project management, and invest in operational leverage. This strategy
is in advanced stages of implementation, the benefits of which are expected to flow through to
the bottom line in 2016”.
Nampak aims to return to core excellence as a high-performance manufacturer, by focusing on
operational leverage across divisions. Key initiatives underway are operations excellence,
safety improvement, cost management, working capital management and sales and marketing
excellence. “2015 has been a challenging year for Nampak. However, following a period of
restructuring, significant investment in Africa and in capital equipment a more focused group
has emerged that is well positioned to capitalise on investments made to date with
improvements expected in 2016. Tightening of fiscal disciplines in order to optimise capital
allocations and profitability will be key focus areas,” comments Glenn Fullerton.
The rest of Africa businesses continue to operate in a challenging macroeconomic environment
and contractual pass through mechanisms are in place to protect the businesses from currency
fluctuation where possible. Forex liquidity is a concern in Nigeria and Angola and will impact
2015 results. “Despite the current significant challenges in the region caused by the decline in
commodity prices, our expansion into attractive sub-Saharan African markets will continue. With
the region’s economy still growing above global rates, and a growing, young and rapidly
urbanising population, we along with key customer partners, continue to invest to meet rising
consumer demand in these higher-margin markets. The demographic case for further growth in
African consumer markets remains compelling and Nampak is uniquely positioned to capture
these opportunities. High-value growth in Africa through greenfield investment and acquisitions
in metals, glass and rigid plastics and organic expansion with a strong focus on Ethiopia, Angola
and Nigeria,” says De Ruyter.
Explaining the company’s strategic vision, De Ruyter says, “the focus is on reshaping the
Nampak business to focus on the basics of a leading, high-performance packaging
manufacturer and driving the two-pronged strategy: to unlock further value from base business
(including investing to enhance our competiveness) and to accelerate our growth in the rest of
Africa.”
Putting forward the operational philosophy of “buy better, make better and sell better,” Nampak
will outline the following:
* Buy better: by unlocking efficiencies, such as the reduction of transport service providers
by 92%, Nampak’s procurement will achieve significant annual savings;
* Make better: Nampak is committed to reducing complexity in all divisions and to only
produce profitable products. Progress has been made by enhancing operating leverage,
reducing the number of SKUs (Stock Key Units) by up to 30%, strengthening the
leadership team, and prioritising high-value investments; and
* Sell better: building on strong relationships with customers to secure long-term contracts
and build partnerships to exchange best practice on initiatives in new markets is key.
“By focusing on efficiencies we are removing unproductive costs from the system, as illustrated
by our new head office which has reduced its office space by 75% and its headcount by 48%.
We have introduced a new discipline to capital allocation to enforce clear hurdle rates for new
projects and a group-wide project management system to ensure alignment and discipline.”
Nampak expects to deliver improved financial performance in 2016 based on current market
conditions:
* Nampak Glass is expected to be profitable from the start of the new financial year and is
already delivering benchmark productivity ratios. Following replacement of key components
on its R1,2bn Third Furnace, this facility is now delivering promising results.
* DivFood is streamlining its business and reducing complexity. The business has made
considerable progress driving attractive returns in each business unit since the launch of a
new strategy and business focus in 2014, with an investment being made in new high-
efficiency equipment to drive productivity.
* Nampak Plastics will continue to reduce costs and consolidating businesses to optimise
operations efficiencies, leveraging good customer relationships and geographic footprint.
* Bevcan will continue to deliver good volume growth; with a focus on operations excellence
and ramping up new aluminium beverage can lines. Spoilage rates at new aluminium
beverage can lines, commissioned in Angola and the Rosslyn site in South Africa in 2015,
are at global levels shortly after commissioning.
“We are driving cultural change at Nampak to create a more supportive, collaborative and
internally aligned operating company that performs as a single unit that can make better, buy
better and sell better. We have strengthened the leadership team with the addition of a highly
experienced new CFO, Glenn Fullerton and new senior management in the Glass, DivFood,
and Plastics divisions. I’m confident this is the right team to execute our strategy in a
challenging environment and to deliver substantially improved results during the coming
financial year,” adds De Ruyter.
Nampak’s Investor Day briefing will take place from 08:00 CAT to 12:15 CAT, followed by a
factory site visit to the Glass operation in Roodekop, South Africa. Presenters include:
* André de Ruyter, Chief Executive Officer
* Glenn Fullerton, Chief Financial Officer
* Erik Smuts, Group Executive, Bevcan South Africa and the Rest of Africa
* Christiaan Burmeister, Group Executive, DivFood and R&D
* Rob Morris, Group Executive, Africa and Glass
* Pieter van den Berg, Managing Director, Glass
Shareholders and interested parties are advised that copies of the presentation made to
investors and analysts are available on the Nampak website at
http://www.nampak.com/Investor-Presentations-Library.aspx.
For further information please contact
Zanele Salman
Nampak Investor Relations and Corporate Communications
Tel: 011 719 6300
Email: zanele.salman@nampak.com
Media enquiries and interviews:
Anne Dunn 082 448 2684
Timothy Schultz 082 309 2496
NOTES TO EDITORS
About Nampak
Nampak is Africa’s largest diversified packaging manufacturer by volume and revenue. We leverage the
skills of our 6 700 people and capitalise on our substantial investment in state-of-the-art facilities to
produce world-class metal, glass and rigid plastics packaging from facilities in 11 countries across Africa,
and in the United Kingdom. Our customers – many of them large fast-moving consumer goods
companies – benefit from our extensive research and development services, which provide them with
innovative solutions that promote their own products while keeping their impact on the environment in
check.
Sandton
17 September 2015
Sponsor: UBS South Africa (Pty) Ltd
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