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NAMPAK LIMITED - Audited Group Results and ordinary dividend announcement for the year ended 30 September 2016

Release Date: 21/11/2016 14:20
Code(s): NPK     PDF:  
Wrap Text
Audited Group Results and ordinary dividend announcement for the year ended 30 September 2016

Nampak Limited
(Registration number 1968/008070/06) 
(Incorporated in the Republic of South Africa) 
Share code: NPK
ISIN: ZAE 000071676

Audited group results and ordinary dividend declaration 
announcement for the year ended 30 September 2016

Group revenue of R19.1 billion, up 11%
Group trading profit of R1.9 billion, up 4%
Trading profit from the rest of Africa of R990 million, up
12%, now 52% of group trading profit
Net gearing at 49%, down from 72% in the previous year
Cash extraction rate in Nigeria and Angola increased to 77% 
from 59% in 2015, R990 million (50%) of cash balances hedged 
R681 million abnormal foreign exchange loss incurred due to
58% devaluation of the naira and 23% devaluation of the kwanza 
Group operating profit of R2.2 billion up 29%, benefiting 
from R1.3 billion capital profit from sale and leaseback
transaction
Glass operation turned around, delivers a trading profit of
R105 million
R1.7 billion raised through a sale and leaseback transaction
EPS up 11%
HEPS down 48% adversely impacted by abnormal foreign exchange 
losses, higher interest costs and a higher tax rate
No final ordinary dividend declared in line with interim
decision and cash conservation strategy

Comments from the CEO, André de Ruyter
In the face of macroeconomic challenges that resulted in demand 
and currency volatility, Nampak delivered improved trading results 
for the 2016 financial year. Total sales for the year of R19.1 
billion increased by 11% and the group trading profit improved 
by 4% from the prior year. The improved performance was due to 
the turnaround at Glass, good trading in Nigeria and Zimbabwe, 
volume increases from new customers and benefits from operational 
improvements. Good progress was made on the group-wide comprehensive 
performance improvement plan with efficiencies and cost savings 
contributing to performance. The organisational structure and focus 
are essentially optimised and Nampak is now building on a solid 
platform for improved long-term sustainable performance.

Glass delivered a trading profit of R105 million compared to a 
restated trading loss of R81 million in 2015. The R76 million 
loss reported in the prior year was restated to include unrealised 
foreign exchange losses on forward exchange contracts previously 
considered and reported as abnormal. This significant turnaround 
resulted from both improved operational efficiencies and improved 
sales in key market segments. Metals reported a 7% increase in 
trading profit. Bevcan SA’s volume decline was more than offset by 
improvements in operational performance, Bevcan Angola’s overall 
volume decline was partially negated by new customer volumes while 
Bevcan Nigeria continued to gain market share. DivFood’s pleasing 
performance in the midst of the implementation of several brownfield 
projects combined with some efficiency and cost saving benefits from 
the business improvement project contributed to better financial and 
operational performance. In Plastics, new customer volumes and 
operations improvement initiatives contributed to performance with 
revenue increasing by 11%, while trading profit was up 8% with margins 
negatively impacted by the disappointing trading profit in Plastics 
Europe. Good progress was made in the Plastics Europe’s turnaround 
project aimed at improving margins, with key management changes made. 
The Rest of Africa overall had a good operating performance; revenue 
was up 26%, while trading profit was up 12% mainly due to market share 
gains on the back of new customer volumes as well as some import 
replacement. Revenue from the region contributed 31% compared with 
27% in 2015 and trading profit contributed 52% (2015: 48%) to total
divisional trading profit.

The economic environment in Angola and Nigeria was very challenging; 
the lack of availability of US dollars (USD) rendered the timing and 
quantum of conversion from in country currencies to USD, uncertain 
and sporadic. In the year to 30 September 2016, the Angolan kwanza 
(kwanza) depreciated by 23% and the Nigerian naira (naira) by 58% 
against the USD. As a result, the translation of the restricted cash 
to the ZAR at the ruling official exchange rate, resulted in the group 
incurring R681 million (2015: R161 million) in foreign exchange losses 
with Nigeria contributing the majority of this loss. Management succeeded, 
in a challenging environment, in minimising the potential for further 
losses with R990 million (50%) of the group’s R2.0 billion (2015: 
R700 million) cash holdings in Nigeria and Angola hedged by year-end.

Significant achievements were made in strengthening the balance sheet 
with R1.7 billion cash raised through the sale and leaseback of fifteen 
South African properties. The restructuring of debt and liabilities, 
the conservation of cash through a stringent cash management system and 
a net R561 million release from working capital compared to a net 
utilisation of R669 million in the prior year, improved Nampak’s 
resilience in the face of challenging conditions. The group’s net 
gearing ratio at 49% is significantly down compared to the 72% at 
the end of the previous year. However, in light of the current 
macroeconomic environment as well as giving consideration to external 
risks, Nampak has decided not to declare a final ordinary dividend, 
rather focusing its efforts on further enhancing its resilience in 
the face of continued macro-economic uncertainty. 

In the short term, the environment in Sub-Saharan Africa is expected 
to be volatile with growth muted. Consumers will continue to be under 
pressure due to the adverse economic conditions associated with slow 
growth, high inflation, drought conditions as well as political 
uncertainty. However, improved and stable commodity prices, prudent 
action by governments in addressing economic vulnerabilities including 
developing new sources of growth and funding are expected to provide 
some relief in the short term. The current challenges do not fundamentally 
change the overall long-term investment rationale in key growth markets 
of Nigeria, Angola and Ethiopia. Demographic growth factors remain 
compelling, underpinning substantial growth in packaging consumption. 
Nampak is uniquely positioned to benefit from these positive dynamics 
in the medium to long term.

Group performance review
Group performance from continuing operations

R million                                  2016     2015    % change
Revenue                                  19 139   17 291          11
Trading profit                            1 905    1 840           4
Abnormal items                              258     (159)   
Operating profit                          2 163    1 681          29
Earnings per share (EPS) (cents)          254.5    228.3          11
Headline earnings per share (HEPS)                         
(cents)                                   107.6    208.2         (48)
Ordinary dividend per share (cents)           —    134.0   
                                                 
2015 trading profit restated for the inclusion of foreign exchange gains 
and losses arising from normal trading activities previously recognised 
as abnormal items.

Group revenue increased by 11% and trading profit by 4%. The group 
benefited from a turnaround in Glass that reported a R105 million 
trading profit, a solid performance in Bevcan Nigeria, improved 
volumes and margins in the Plastics division, as well as a good 
recovery in the Nigerian paper and general metal packaging business. 
Trading margins at 10.0% were slightly down from the margin achieved 
in 2015 primarily due to unrealised foreign exchange losses and project 
costs carried at the corporate level. Total divisional trading margins 
before corporate costs increased from 9.8% (2015) to 10.5% (2016).

Net abnormal gains of R258 million were recorded compared to R159 million 
net abnormal losses in 2015. The net effect of the capital profit from the 
sale and leaseback transaction of R1.3 billion, the R681 million foreign 
exchange losses resulting from the devaluation of the naira and kwanza 
as well as net impairments of R360 million account for the majority of 
the abnormal gain.

The sale and leaseback transaction of 15 properties in the South African 
property portfolio and an outright sale of one property became effective 
on 1 September 2016. The lease agreements have been accounted for as 
operating leases and the lease payment escalations were provided for 
in the agreements, at inflation-related rates. Rentals payable are 
equivalent to the current rental paid by all divisions to the property 
division with the transaction being HEPS positive. The competitiveness 
of operating divisions was not affected by the transaction. The purchase 
price of R1.7 billion was received in full by the group before year-end. 
The book value of the net assets included in the transaction as at the date 
of disposal was R382 million with the capital profit on disposal of the 
properties recorded at R1.3 billion. Historic capital losses incurred on 
divestitures have provided a tax shield on the capital gain on the sale and 
leaseback. Through the conclusion of this transaction the balance sheet was 
deleveraged, the group’s covenant positions strengthened and capacity for 
future growth created.

At 30 September 2016 restricted naira and kwanza cash balances amounting to 
R2.0 billion, increased from R1.5 billion at 31 March 2016 and R700 million 
at 30 September 2015. The increase in cash balances is due to cash generation 
in the period, exchange rate movements and an increase in loans from the 
Isle of Man (IOM) to fund the liquidity shortfall in Nigeria and Angola. 
Approximately R990 million or 50% of these cash balances held at year-end 
were hedged. Post the unpegging of the naira on 20 June 2016 the currency 
devalued by 58% against the USD, while the kwanza devalued by 23% during 
the reporting period. As a result, upon translation of the cash balances 
in both countries to the ZAR at the ruling official exchange rate, the 
group incurred R681 million (2015: R161 million) in foreign exchange losses 
with Nigeria contributing the majority of this loss.

In line with the requirements of IAS36 — Impairment of Assets, the group 
performed the required impairment testing on the carrying value of goodwill 
and concluded that no impairment of goodwill was required for the year ended 
30 September 2016. Total asset impairment for the period amounted to 
R360 million with the impairment of the Bevcan Angola tinplate beverage 
can line being the main contributor at R278 million.The line was impaired 
in line with the group’s plan to convert the line to aluminium.

Net finance costs for the period increased by 74% from R279 million in 
2015 to R486 million in 2016, as a consequence of increased weighted average 
interest rates, higher than average borrowings resulting from the funding of 
the capital expenditure programme embarked upon in prior years and a
significant reduction in capitalised interest compared to the prior year 
as projects near completion.

The effective tax rate increased from a negative 4.1% in 2015 to 11.9% 
primarily due to reduced government incentives, no tax shield on foreign 
exchange losses in Nigeria and Angola given the respective pioneer and tax 
holiday statuses and certain disallowed expenditure. The taxation rate has 
not been affected by capital gains tax on the profit from the sale and 
leaseback as this capital profit has been shielded by historic capital 
gains tax losses incurred in prior years. The group benefited from lower 
tax rates in tax jurisdictions outside South Africa. The Bevcan Nigeria 
pioneer status expires on 31 December 2017 and the Bevcan Angola tax holiday 
ends on 31 December 2018. The group tax rate is expected to return to the 
previous guidance range of 15% to 20% in 2017.

Group earnings from continuing operations for the period were impacted by the 
factors discussed above and as a result:

Earnings per share (EPS) which includes capital profits and foreign exchange 
losses increased by 11% to 254.5 cents (2015: 228.3 cents).

Headline earnings per share (HEPS) which includes foreign exchange losses but 
excludes the capital profit and impairments, was down 48% to 107.6 cents (2015: 
208.2 cents). The foreign exchange losses adversely impacted HEPS by 86.1 cents.

Pleasing progress was made in working capital management during the year with 
an inflow from inventory and trade receivables of R607 million compared to an 
outflow of R1.2 billion in the prior year. R488 million was released through 
good inventory management compared to an outflow of R766 million in the prior 
year with the investment in trade receivables declining by R119 million versus 
a funding requirement of R425 million in 2015. The R46 million reduction in 
accounts payable versus an inflow of R522 million in the comparative period is 
due to the settlement of capital creditors at 30 September 2015 during the 
current year. Inventory is now at levels more appropriate for each division 
and this will be maintained, or improved upon where possible. Inventory 
management remains a key focus area and forms part of the management incentive 
structure.

Significant improvements were made in strengthening the group’s balance sheet. 
The sale and leaseback transaction increased group equity and reduced interest-
bearing debt and as a consequence the group’s gearing ratio improved to 49% from 
72% in 2015. The proceeds of this transaction were applied to reduce debt as well 
as address the growing post- retirement medical aid (PRMA) liability. Nampak has 
two defined loan covenants. The first is net interest-bearing debt to EBITDA ratio 
of not more than 3 times and the second is to maintain an EBITDA to net interest 
ratio of not less than 4 times. Nampak’s 2016 net debt to EBITDA was 1.7 times 
(2015: 2.3 times) benefiting from the sale and lease back transaction. The EBITDA 
to net interest was 5.4 times (2015: 9.7 times) mainly due to higher interest 
costs resulting from higher levels of debt for a significant portion of 2016 
and higher interest rates in South Africa.

Nigeria and Angola raw material procurement update
Nampak operations in both countries remain adequately funded with raw material 
supply secured through the IOM. During the period inventory levels were 
successfully managed down and to the extent possible, appropriate hedging 
instruments secured thereby mitigating the foreign exchange risks. This together 
with reduced capital expenditure in these countries resulted in a 43% decrease 
in overall supplies secured by the IOM on behalf of Nigeria and Angola.

At 30 September 2016 the equivalent of USD45 million USD indexed kwanza bonds 
were acquired as a hedge, up from the USD25 million at 31 March 2016. For the 
year ended 30 September 2016 repayments amounting to USD40 million were 
received in respect of goods and services procured on behalf of the Angolan 
operation representing liquidity of 95% (2015: 31%) of invoices presented 
for payment in the year, with the IOM funding the shortfall through financing 
facilities.

During the year the equivalent of USD27 million in USD deliverable forward 
contracts were secured as a hedge for the Nigerian operations, with the 
majority maturing during November 2016. In addition, repayments in an 
amount of USD23 million were made to the IOM in respect of goods and 
services procured on behalf of the Nigerian operations representing
liquidity of 57% (2015: 91%) of invoices presented for payment in the 
year. This excludes the aforementioned USD27 million hedged through 
deliverable forward contracts. Again, the IOM funded the shortfall through 
financing facilities.

All foreign currency translations and foreign currency transactions are 
translated using the official exchange rate in line with the requirements 
of International Financial Reporting Standards and foreign exchange 
regulations in individual countries.

Nampak’s operations are exposed to various exchange rates. Below is a table 
that shows average and closing exchange rate movements for the current year 
compared to the same period in the prior year:

Exchange rate movements

                           Closing              Average
                              %                       %
                   2016  change    2015    2016  change    2015
ZAR/USD           13.72     1.0   13.86   14.79   (23.0)  12.02
ZAR/GBP           17.80    15.1   20.97   21.07   (13.5)  18.56
Naira/USD        315.00    58.3  199.00  229.60    20.1  191.21
Kwanza/USD       171.72    22.6  140.06  161.57    41.1  114.52

Segmental performance review
Segmental report (continuing operations)
     
                                      Trading    Trading margin
                        Revenue       profit*         (%)
R million             2016   2015   2016   2015   2016   2015
Metals              10 510  9 933  1 285  1 203   12.2   12.1
Plastics             5 557  5 011    392    362    7.1    7.2
Paper                1 749  1 470    236    211   13.5   14.4
Glass                1 323    877    105    (81)   7.9  (9.2) 
Total —         
Divisional      
performance         19 139 17 291  2 018  1 695   10.5    9.8
Corporate       
Services                 —      —   (113)   145      —      —
Total           
(continuing     
operations)         19 139 17 291  1 905  1 840   10.0   10.6

* Operating profit before abnormal items. 2015 trading profit restated for 
  the inclusion of foreign exchange gains and losses arising from normal 
  trading activities previously recognised as abnormal items.

Metals
The cluster benefited from strong sales in Nigeria’s beverage can and 
general metal packaging businesses, with revenue up 6%. Trading profit 
was up 7% and the margin at 12.2% was slightly above the previous year’s 
performance. The overall performance of the cluster was impacted by lower 
sales in Bevcan South Africa, Bevcan Angola and Kenya. Contractual USD 
selling prices in Nigeria and Angola continue to protect revenue and 
margins against the full impacts of local currency volatility. Nampak 
was able to source foreign currency in Angola and Nigeria, however like 
other enterprises doing business in these countries the group experienced 
challenges timeously sourcing adequate foreign currency. A change in the 
depreciation estimate to better reflect utilisation of beverage can assets 
has resulted in a reduction of R122 million in the depreciation charge.

Beverage can demand is mainly driven by pack-share dynamics, demand for 
carbonated soft drinks and alcoholic beverages, as well as marketing and 
supply decisions by customers. The interaction between these drivers 
introduces volatility and determines the ultimate demand for beverage 
cans in the market.

Bevcan South Africa experienced good demand in the first few months of the 
financial year due to the higher-than-usual summer temperatures. This was 
followed by an unusually sharp contraction during the late summer and the 
winter months. During the year the business also ceased exporting beverage 
cans to Angola where a new second production line was installed at the end 
of 2015. As a result volumes were down 5.4% year-on-year. Half of the decline 
was due to volatile demand in South Africa and the other half was due to cans 
no longer exported to supplement production in Angola. The effect of the 
volume decline was offset by operational improvements as well as fixed cost 
reductions achieved during the year. Contractual price decreases passed on 
to customers also impacted results. In 2016, an agreement was reached with 
all stakeholders for the closure of the Durban facility. The closure of the 
line is expected to result in R30 million savings in 2017 and R40 million 
from 2018 going forward. Recently commissioned aluminium lines and the 
remaining steel lines are all operating at good operational efficiencies. 
Current long-term (three to six years) sales agreements with major customers, 
a well-established cost-competitive manufacturing footprint and strong market 
positions put the business in the best possible position to defend market share 
and leverage opportunities. Operational leverage of recently installed lines 
will contribute to improved performance and reduced costs in the short to 
medium term.

Bevcan Angola’s sales volumes for the year were only down 3.3% year-on-year 
even though the overall Angolan beverage market was adversely impacted by 
liquidity constraints and high inflation on the back of lower crude oil prices. 
Supply to a newly acquired large local customer (previously reliant on imported 
beverage cans) offset the full impact of the lower market volumes. Management 
has also implemented measures to reduce costs and rationalise business activity 
in order to counter the current slowdown in economic activity. Translation losses 
on kwanza cash balances, due to a 23% devaluation in the kwanza/USD exchange rate, 
impacted operating profit. In the medium term, the local beverage can market is 
expected to benefit from investments already made by customers in additional can 
filling line capacity. Bevcan Angola has installed capacity of 1.7 billion beverage 
cans, enough to supply the whole market and both lines, one tinplate and one 
aluminium, are operating according to expectation. Plans are being put in place 
to convert the tinplate line to aluminium to satisfy customer demand and reduce 
raw material complexity. This project will be funded from existing kwanza cash
balances, subject to the allocation of the required foreign exchange by the Angolan 
authorities.

The Nigerian economy slowed down during the period, in the midst of well-known 
macroeconomic challenges. The slowdown in discretionary consumer spend impacted 
overall beverage can demand but Bevcan Nigeria was protected somewhat from this 
as its market share expanded due to increased volume allocation by customers. The 
operation’s utilisation was at an annualised output rate of 550 – 650 million cans 
per annum. Operating profit was severely impacted by significant translation losses 
on naira cash balances resulting from the devaluation of the naira against the USD 
post the decision by the Central Bank to ease foreign exchange regulation. Market 
growth is expected to remain sluggish in the short term due to high inflation and 
liquidity constraints.

In South Africa, DivFood has made significant progress in the implementation of its 
business improvement project which includes the recapitalisation of old and out-of-
date machines as well as product rationalisation. The pleasing performance
of the underlying business, in the midst of the implementation of several brownfield 
projects, combined with some efficiency and cost saving benefits from the project 
contributed to improved financial and operational performance. The food packaging 
business performed well due to volume growth. Fish volumes benefited from increased 
canning of imported frozen fish in South Africa, fruit volumes grew due to market 
share gains and meat volume growth was ahead of GDP. The vegetable category volumes 
were marginally ahead of prior year. The diversified packaging business performed 
according to expectations. Tinplate aerosol volumes were in line with prior year, 
while monobloc aerosols volumes in the local market grew resulting in reduced exports. 
The paint and general line categories were rationalised substantially and the Epping
plant closed as Phase One of the recapitalisation programme was implemented. Continued 
efficiency improvements are expected to enhance competitiveness and deliver business 
benefit in 2017.

The general metal packaging businesses in the Rest of Africa delivered improved results 
overall driven by a good performance in Nigeria and reduced foreign exchange losses in 
Tanzania. Demand in Nigeria benefitted, particularly in the second half of the year, 
from import substitution of retail products as issues related to the currency crisis 
resulted in competitors not being able to supply the market. The devaluation of the 
naira against the USD significantly impacted operating profit. Kenya’s metal business 
produced a disappointing result, down on prior year, impacted by poor rains and harvests 
(the agricultural sector is a key market for this business), as well as the move to 
in-house manufacture by its key customer.

Plastics
Plastics produced improved revenue and trading profit driven mainly by good results from 
South Africa and Zimbabwe on the back of volume growth, continued improvement in cost 
savings, product diversification and operational improvement. Revenue was up 11%, 
while trading profit was up 8%. Margins were negatively impacted by reduced trading 
profit in Plastics Europe.

Plastics South Africa’s revenue, operating profit and margins were ahead of prior 
year as a result of greater efficiencies. Liquid Packaging performed well, driven 
by healthy demand in carbonated soft drinks (CSD), juice and water as well as new 
sales to the oil lubricant market. Milk volumes were flat and sorghum beer carton 
sales were lower due to changing market dynamics. Closures performed according to 
expectations. The growth in wine metal closures and plastic closures for bottled 
water and CSD contributed positively to profits. Tubes had a challenging year as 
sales to a major customer were reduced and replaced with filled product imports. 
The plant remains adequately loaded with capacity available to support growth of 
existing customers in the Rest of Africa. The Drums business was impacted by 
reduced bulk alcohol sales into the Rest of Africa as a result of unfavourable 
macroeconomic conditions. Volumes picked up towards the end of the financial year. 
Crates performed well benefiting from the recent business turnaround that improved 
efficiencies and waste reduction. In the short term, the South African plastics 
business will continue to focus on aligning organisational structures; embedding 
operational excellence and driving unit cost down to further improve margins.

Plastics Europe continued to benefit from new long-term contracts that replaced 
some of the previously lost volumes with revenue increasing by 13% to R2.2 billion. 
However, margins at 3.9% were much lower as a result of a margin sacrifice to 
regain market share. The average ZAR/GBP rate for the period was lower at R21.07 
from R18.56 in 2015 which further impacted results. The business, under new 
leadership, is evaluating several projects aimed at improving operational performance 
and capturing opportunities outside the milk industry to grow volume.

The Zimbabwe plastics businesses performed well generating improved results 
year-on-year. CMB’s continued growth in fruit juice and Mahewu bottle demand 
boosted results while Megapak’s performance benefited from improved sales of 
preforms on the back of capacity expansion and increased demand. Megapak Zimbabwe 
was fully consolidated from 1 December 2014. The business was previously equity-
accounted as an associate. The increasing shortage of cash in circulation in the 
Zimbabwean economy remains a concern.

Paper
The paper segment consists of the paper and board operations in the Rest of Africa. 
Revenue and trading profit for 2016 were up 19% and 12%, respectively compared to 2015, 
benefiting from improved performances in Nigeria Cartons, Hunyani in Zimbabwe and Malawi. 
Trading margins at 13.5% are slightly down from the 14.4% achieved in prior year mainly 
due to the poor performance of the Zambian business that was impacted negatively by 
lower volumes in sorghum beer cartons and local currency devaluation.

Nigeria Cartons revenue and trading profit were ahead of the prior year due to a recovery 
in demand in the second half of the year. Similar to the metals operations, the performance 
was impacted by macroeconomic factors including the devaluation of the naira which had a 
material negative impact on the operation's profitability. Volumes are expected to remain 
buoyant in the short term as both import restrictions and the lack of foreign currency are 
anticipated to continue encouraging local sourcing of packaged retail goods. The liquidity 
issues and currency volatility remain a concern going forward.

In Zimbabwe, Hunyani volumes were under pressure largely due to a smaller tobacco crop and 
ongoing liquidity issues experienced by customers. Increased duties on imported packaging 
have, however, driven increased local demand for packaging and this together with the 
benefits from cost containment initiatives contributed to a good performance in the year.

In Zambia, sorghum beer carton sales volumes were significantly down due to lower demand 
and product substitution in the market. The volatility of the Zambian kwacha against hard 
currencies also impacted trading profit negatively.

Malawi’s sales performance benefited from stronger sorghum beer carton demand as well as 
improved tobacco carton sales driven by a higher tobacco crop.

Kenya Bullpak’s performance was marginally lower than the prior year on generally flat 
demand for self-opening bags in the milling industry and the entry of new market entrants.

Glass
The division delivered a trading profit of R105 million compared to a trading loss of 
R81 million in 2015. Adjusting for the revenue of R251 million generated in the prior 
year during the testing phase, revenue increased by 18% from R1.1 billion in 2015 to 
R1.3 billion in the current year. This significant turnaround resulted from better 
aligned structures, improved operational efficiencies, improved sales in the beer 
category and good demand for flavoured alcoholic beverages (FABS). The spirit, food 
and CSD markets were subdued. Good market share growth has been recorded in the
wine industry. The overall beverage market in South Africa has been quite volatile as 
consumers came under pressure and customers adjusted their marketing activities. 
Production volumes were 16% up on the previous year. All furnaces showed improved 
performance and production is now stable and reliable. The initiatives to reduce 
complexity as well as the introduction of improved tools for enhancing forecasting 
and planning are now showing dividends. Technical and operational optimisation 
initiatives on all furnaces will continue. The division recorded a trading margin 
of 7.9 %, which offers room for further improvement opportunities as internal 
efficiencies improve.

Corporate Services
Group Corporate Services include group research and development services, treasury 
services and other corporate activity costs. The trading profit declined due to the 
loss of corporate charges previously recovered from disposed operations, the loss 
of property rentals linked to divestitures, unrealised foreign exchange losses on 
open forward cover contracts held at the corporate level compared to an unrealised 
gain in the prior year as well as an increase in project-related consultant fees.

Geographical update (continuing operations)
     
                                         Trading    Trading margin
                            Revenue       profit*         (%)
R million                 2016   2015   2016   2015   2016   2015
South Africa            10 959 10 599    942    695    8.6    6.6
Rest of Africa           5 950  4 724    990    883   16.6   18.7
Europe                   2 230  1 968     86    117    3.9    5.9
Total — Divisional     
performance             19 139 17 291  2 018  1 695   10.5    9.8
Corporate              
Services                     —      —   (113)   145      —      — 
Total                   19 139 17 291  1 905  1 840   10.0   10.6

* Operating profit before abnormal items. 2015 trading profit restated for the 
  inclusion of foreign exchange gains and losses arising from normal trading 
  activities previously recognised as abnormal items.

South Africa, like most emerging markets, experienced volatile exchange rates 
and an outflow of capital coupled with low commodity prices and political uncertainty 
during the year. Consumer demand was under pressure for some products and
demand in the beverage market segment was volatile and difficult to predict. 
However, a solid recovery by Glass and a good performance by Plastics contributed 
positively to performance with revenue and trading profit up 3% and 36%, respectively. 
The region’s contribution to trading profit increased to 49% (2015: 38%).

The Rest of Africa recorded sales of R5.9 billion up by 26% on prior year with an 
increase in trading profit of 12%. A good performance partly offset by foreign 
exchange translation losses. The impact of the sharp decline in commodity prices, 
including the oil price led to overall slow growth and high inflation. Liquidity 
constraints were experienced in Angola and Nigeria which affected the time it took 
to source adequate foreign currency. Bevcan Nigeria recorded a strong performance, 
gaining market share, while the rest of the businesses reported a generally good 
operating performance. The Rest of Africa now contributes 52% (2015: 48%) to trading 
profit. The current challenges do not change the overall investment rationale in key 
markets where consumption of, in particular, packaged beer and carbonated soft 
drinks is driven by sustainable demographic trends.

The United Kingdom economy continues to show slow GDP growth while the dairy market 
faces pricing and industry pressures. In ZAR terms the trading profit decreased by 
26% compensated for by a weaker average ZAR/GBP rate which declined from R18.56 (2015) 
to R21.07 (2016). The division’s contribution to group trading profit for the period 
declined to 5% (2015: 6%).

Update on key projects
Total capital expenditure (including replacement and expansion
projects) for the period was R1.4 billion compared to R2.2 billion spent during the 
same period in 2015. R952 million was spent on expansion projects, while R476 million 
was spent on replacement projects. Future capital expenditure will be prudently 
evaluated and will be limited to key projects. Capital expenditure for 2017 is 
expected to be between R0.9 and R1.1 billion.

Rosslyn line 2 commissioned and running according to expectation
In South Africa, the Bevcan recapitalisation programme was completed. The second 
aluminium line at the Rosslyn site was commissioned on time and below budget in the 
second half of 2016. The line is running according to expectation.

Bevcan Springs’ beverage can ends facility expansion
In August 2016 the project, expected to add four billion ends per annum to the existing 
beverage can ends manufacturing facility in Springs, was commissioned. The operational 
performance of the facility is in accordance with expectations. The new volumes are 
primarily destined for customers in South Africa, Angola and Nigeria. 

DivFood recapitalisation and product rationalisation project The R450 million project 
which includes site consolidation, complexity reduction and replacement of ageing 
equipment with energy efficient and technologically advanced machinery is progressing 
as planned. Completion is scheduled for 2017.

Rest of Africa glass projects
In view of current volatile and uncertain macroeconomic conditions in key growth 
markets in the Rest of Africa, Nampak is being circumspect regarding further capital 
investment in the region. Further capital investments in Angola were delayed. The value 
and benefit of the Nigeria and Ethiopia glass opportunities to Nampak’s long-term growth 
strategy is still regarded as positive, and these projects are being evaluated and 
considered, but with the necessary prudence.

Special project: Reducing our post-retirement medical aid liability
In recent years, Nampak’s post-retirement medical aid liability has grown sharply as 
longevity of pensioners increased and medical costs expanded faster than inflation. 
The liability amounted to R1.5 billion at 30 September 2015. By offering pensioners 
alternatives to the post-retirement medical aid subsidy, the liability was reduced by 
R393 million to R1.1 billion, continuing to fulfil the promise made to pensioners without 
Nampak carrying the risk on the group’s balance sheet. The effect of the acceptance at year 
end of the annuity option offered and accepted by pensioners, will be a pay-out of 
R406 million and a curtailment benefit of R84 million.

Active portfolio management
An agreement for the sale of Nampak’s 50% shareholding in, and loans to, Sancella SA 
(Pty) Ltd was entered into on 21 July 2015, with the transaction being effective 
1 December 2015. The proceeds from the sale were applied to settle the outstanding 
loan balances.

Outlook
The 2016 financial year was characterised by a confluence of external macro-economic 
challenges in key markets. The macro- economic challenges are expected to prevail in 
the short term. Pressure on consumer spending is expected to limit growth in volumes. 
During this time, Nampak will continue to focus on ensuring the risks are adequately 
managed by utilising measures at its disposal, where possible, to minimise exposure, 
but it cannot rule out foreign exchange losses going forward. The group will also 
continue to work to reduce costs and focus on improving cash generation through 
stringent working capital management.

A key driver for Nampak’s investment decisions has been to improve competitiveness 
and to ensure sustainable profitability thus enabling the divisions to defend markets
and leverage opportunities. Following the substantial investments made over the past 
five years, the vast majority of facilities now operate the latest-generation machinery. 
In markets where Nampak operates, capital investments, strong customer relationships, 
recently signed long-term customer contracts, and a well-established footprint with 
in-depth knowledge of local market dynamics sustain its competitive advantage. Efficiency 
gains are expected to contribute to improved performance in challenging and uncertain times.

Policy and political uncertainty remains a key concern and developments will be monitored 
very closely to minimise impact on performance. Despite the continued volatility and 
uncertainty in key markets, Nampak remains optimistic about the long-term outlook. Should 
macro-economic factors stabilise, Nampak is in a good position to gain from substantial 
pent-up demand growth. The focus of all divisions in the short term is on achieving greater 
plant efficiencies and making bottles and cans profitably, while leveraging good partnerships. 
Nampak will continue adjusting to the changing trading environment, while building for the 
future. The organisation has undergone significant restructuring and is now optimised, 
with most plants operating efficiently and at world-class benchmark rates.

Nampak has a great team of committed, resilient and hardworking employees that contribute 
to the organisation’s success. These are the same individuals that the company is relying 
on to take the organisation to greater heights in the years ahead.

Ordinary dividend
After many years of applying a constant dividend policy of
1.55 times cover with a pay-out ratio of 64.5% of HEPS, driven primarily by corporate 
action rather than cash generation, in 2016 the board made the difficult decision to 
suspend the payment of both the interim and full year dividend. The decision was part of 
the group’s balance sheet restructuring programme given the high historic gearing levels 
that arose from aggressive capital expenditure and corporate finance activities over the 
preceding five years and liquidity issues in Nigeria and Angola. Future dividends, 
which will be resumed, if appropriate, from the 2017 financial year, will be linked to 
cash generated in non-cash restricted countries and will be based on a 40% pay-out ratio 
taking into account capital expenditure requirements.

On behalf of the board

TT Mboweni    AM de Ruyter             GR Fullerton
Chairman      Chief executive officer  Chief financial officer

21 November 2016

Summarised consolidated statement of comprehensive income

                                                               Restated
R million                              Notes         2016          2015
Continuing operations                                         
Revenue                                          19 138.9      17 291.3
Operating profit                           3      2 162.8       1 681.4
Finance costs                                      (527.5)       (316.6) 
Finance income                                       42.0          37.6
Share of profit/(loss) of joint                               
ventures and associates                               0.1          (3.8) 
Profit before tax                                 1 677.4       1 398.6
Tax (expense)/benefit                              (199.1)         57.5
Profit for the year from continuing                           
operations                                        1 478.3       1 456.1
Discontinued operations                                       
Loss for the year from discontinued                           
operations                                 6            —        (394.8) 
Profit for the year                               1 478.3       1 061.3
Other comprehensive                                           
(expense)/income, net of tax                                  
Items that will not be reclassified                           
to profit or loss                                             
Net actuarial loss from retirement                            
benefit obligations                                (491.0)         (9.6)
Items that may be reclassified                                
subsequently to profit or loss                                
Exchange differences on translation                           
of foreign operations                              (509.4)        774.6 
(Loss)/gain on cash flow hedges                     (34.3)         56.8
Other comprehensive (expense)/income                          
for the year, net of tax                         (1 034.7)        821.8
Total comprehensive income for the                            
year                                                443.6       1 883.1
Profit/(loss) attributable to:                                
Owners of Nampak Ltd                              1 610.4       1 043.2
Non-controlling interest in                                   
subsidiaries                                       (132.1)         18.1
                                                  1 478.3       1 061.3
Total comprehensive income/(expense)                          
attributable to:                                              
Owners of Nampak Ltd                                572.6       1 794.0
Non-controlling interest in                                   
subsidiaries                                       (129.0)         89.1
                                                    443.6       1 883.1
Continuing operations                                         
Basic earnings per share (cents)                    254.5         228.3
Diluted earnings per share (cents)                  253.9         225.6
Headline earnings per share (cents)                 107.6         208.2
Diluted headline earnings per share                           
(cents)                                             107.3         205.7
Continuing and discontinued operations                        
Basic earnings per share (cents)                    254.5         165.6
Diluted earnings per share (cents)                  253.9         163.7
Headline earnings per share (cents)                 107.6         182.1
Diluted headline earnings per share                           
(cents)                                             107.3         179.9
Dividend per share (cents)                              -         134.0


Summarised consolidated statement of financial position

                                            30 September   30 September
                                                   2016            2015
R million                      Notes
Assets
Non-current assets
Property, plant and equipment
and investment property                        10 573.4        11 025.7
Goodwill and other intangible
assets                                          4 043.4         4 118.6
Joint ventures, associates
and other investments                              27.7            44.1
Deferred tax assets                                70.6           145.3
Other non-current assets                           56.4            33.0
                                               14 771.5        15 366.7
Current assets
Inventories                                     3 376.7         3 890.6
Trade receivables and other
current assets                                  3 109.0         3 404.4
Tax assets                                         11.2            12.0
Bank balances, deposits and
cash equivalents                    8           2 835.4         1 587.4
                                                9 332.3         8 894.4
Assets classified as held for  
sale                                                  —           146.4
Total assets                                   24 103.8        24 407.5
Equity and Liabilities 
Capital and reserves
Share capital                                      35.4            36.1
Capital reserves                                 (121.4)         (405.0) 
Other reserves                                     51.0         1 061.7
Retained earnings                               9 238.5         8 109.6
Shareholders' equity                            9 203.5         8 802.4
Non-controlling interest                          241.0           370.0
Total equity                                    9 444.5         9 172.4
Non-current liabilities
Loans and borrowings                            6 202.1         4 212.0
Retirement benefit obligation                   1 855.7         2 008.4
Deferred tax liabilities                          230.1           329.2
Other non-current liabilities                      37.0            61.6
                                                8 324.9         6 611.2
Current liabilities
Trade payables, provisions
and other current liabilities                   4 937.7         4 418.6
Bank overdrafts                    8              993.4         3 672.3
Loans and borrowings                              329.4           446.8
Tax liabilities                                    73.9            86.2
                                                6 334.4         8 623.9
Total equity and liabilities                   24 103.8        24 407.5

Summarised consolidated statement of cash flows

R million                              Notes       2016           2015                       
Cash generated from operations before         
working capital changes                         2 264.0        2 395.1                                            
Working capital changes                           561.3         (668.6) 
Cash generated from operations                  2 825.3        1 726.5
Net interest paid                               (521.4)         (376.4) 
Income from investments                               —            7.4
Retirement benefits, contributions and          (161.0)         (364.9) 
settlements                                   
Tax paid                                        (201.3)         (151.6)
Replacement capital expenditure                 (475.7)       (1 352.6) 
Cash flows from operations                      1 465.9         (511.6) 
Dividends paid                                  (575.5)         (946.2)
Net cash generated from/(utilised in)         
operating activities                              890.4       (1 457.8) 
Expansion capital expenditure                   (951.7)         (771.0) 
Proceeds on disposal of businesses         6         —         1 982.7
Proceeds from sale and leaseback              
transaction                                     1 701.1             —
Other investing activities                        142.0         124.7
Net cash generated/(utilised) before          
financing activities                            1 781.8        (121.4)
Net cash raised from/(repaid in)              
financing activities                            2 380.7      (1 413.8)
Net increase/(decrease) in cash and           
cash equivalents                                4 162.5      (1 535.2) 
Net overdraft at beginning of year         8  (2 084.9)        (681.0)
Cash acquired on consolidation of             
Zimbabwe associates                                   —          44.1
Translation of cash in foreign                
subsidiaries                                    (235.6)          87.2
Cash and cash equivalents/(net                
overdraft) at end of year                  8   1 842.0       (2 084.9)
                                              
Summarised consolidated statement of changes in equity

R million                                         2016           2015
Opening balance                                9 172.4        7 883.1
Net shares issued during the year                 28.9           74.9
Share-based payment expense/(income)              13.9           (2.6) 
Share grants exercised                           (28.8)         (75.0)
Share of movement in associate's and joint                    
venture's non-distributable reserve                0.9            0.6
Non-controlling interest realised on                          
disposal of subsidiary                               —            2.6
Shares repurchased and cancelled                  (0.8)             — 
Treasury shares disposed                         384.2              —
Transfer from hedging reserve to related                      
assets                                               —           (4.9)
Increase in non-controlling interest on                       
consolidation of Zimbabwe associates                 —          356.8
Total comprehensive income for the year          443.6        1 883.1
Dividends paid                                  (569.8)        (946.2) 
Closing balance                                9 444.5        9 172.4
Comprising:                                                   
Share capital                                     35.4           36.1
Capital reserves                                (121.4)        (405.0) 
Share premium                                    250.7          221.9
Treasury shares                                 (557.9)        (827.6)
Share-based payments reserve                     185.8          200.7
Other reserves                                    51.0        1 061.7
Foreign currency translation reserve           1 494.9        2 017.8
Financial instruments hedging reserve             18.8           53.1
Recognised actuarial losses                   (1 466.6)        (975.6) 
Share of non-distributable reserves in                        
associates and joint ventures                      3.7            4.5
Available-for-sale financial assets                           
revaluation reserve                                  —          (38.3)
Other                                              0.2            0.2
Retained earnings                              9 238.5        8 109.6
Shareholders’ equity                           9 203.5        8 802.4
Non-controlling interest                         241.0          370.0
Total equity                                   9 444.5        9 172.4

Notes
1. Basis of preparation
The summarised consolidated financial statements are prepared
in accordance with the requirements of the JSE Limited Listings Requirements 
for preliminary reports, and the requirements of the Companies Act of South Africa 
applicable to summarised financial statements. The Listings Requirements require 
preliminary reports to be prepared in accordance with the framework concepts and 
the measurement and recognition requirements of International Financial Reporting 
Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting 
Practices Committee and the Financial Pronouncements as issued by the Financial 
Reporting Standards Council, and to also, as a minimum, contain the information 
required by IAS 34, Interim Financial Reporting.

The summarised consolidated financial statements have been prepared under the 
supervision of the chief financial officer, G Fullerton CA(SA).

2. Accounting policies and restated comparatives
The accounting policies applied in the preparation of the
consolidated financial statements for 2016, from which the summarised financial 
statements were derived, are in terms of IFRS and are consistent with the accounting 
policies adopted and methods of computation used in the preparation of the previous 
year’s consolidated financial statements except for the depreciation method applied 
to plant in the Bevcan operations and the remeasurement of trading profit as 
defined (note 3).

Change in accounting estimate
As of 1 October 2015, the group changed its method of depreciating plant at its 
Bevcan operations from the straight-line method to the units of production method, 
as it was felt that the latter method reflects more appropriately the pattern of the 
consumption of the future economic benefits embodied in the assets concerned. In 
accordance with IAS 16 Property, Plant and Equipment, this change is an accounting 
estimate and is therefore applied prospectively in terms of IAS 8 Accounting Policies, 
Changes in Accounting Estimates and Errors. The impact of the change in depreciation 
method for the year ended 30 September 2016 is a decrease in the depreciation expense 
of R122.0 million.

Remeasurement of trading profit
During the year, the group reassessed its disclosure of gains
and losses arising from the translation of financial instruments. Previously, all gains 
and losses arising from the translation of financial instruments were regarded as not
being part of the normal trading activities of the group and therefore recognised as 
“abnormal” gains and losses ie outside of trading profit as defined below (note 3). 
Following this reassessment, only losses on the translation of financial instruments 
arising from the illiquidity in Angola and Nigeria were regarded as “abnormal” and have 
been disclosed as such, while other translation gains and losses were now regarded as 
being part of the group’s normal trading activities and have therefore been recognised 
as being part of trading profit . Consequently, trading profit from continuing operations 
for the comparative period has been restated to R1 839.6 million from R1 820.5 million, 
with the trading profit for all segments for segmental reporting purposes being impacted.

3. Included in operating profit are:
R million                                              2016           2015
Depreciation                                          863.1          758.7
Amortisation                                           48.6           43.6
Reconciliation of operating profit and                            
trading profit*                                                   
Operating profit                                    2 162.8        1 681.4
Net abnormal (gain)/loss**                           (257.7)         158.2
Profit on disposal of property subject to                         
sale and leaseback                                 (1 318.9)             —
Profit on disposal of other property                  (15.2)        (102.5) 
Profit on disposal of investments                      (3.5)             —
Devaluation loss arising from Angolan and                         
Nigerian illiquidity                                  681.0          160.5
Net impairment losses on property, plant,                         
equipment, intangible assets, investments                         
and shareholder loans                                 360.4          121.4
Retrenchment and restructuring costs                   34.1           77.3
Gain on revaluation and consolidation of                          
Zimbabwe associates                                       —         (124.2) 
Business acquisition-related costs                      4.4           25.7
Trading profit                                      1 905.1        1 839.6

*  Trading profit is the main measure of profitability used for segmental 
   reporting purposes.
** Abnormal (gains)/losses are defined as (gains)/losses which
   do not arise from normal trading activities or are of such size, 
   nature or incidence that their disclosure is relevant to explain the 
   performance for the year.

4. Sale and leaseback transaction
The group entered into a sale and leaseback transaction for
the sale and leaseback of fifteen of its industrial properties in South Africa 
effective 1 September 2016.

The selling prices of the properties were determined by an independent valuer 
and confirmed through a comprehensive market review. The future lease payments 
are similar to past rentals paid by the operations to the corporate services 
segment of the group. Overall the transaction is positive for headline earnings 
per share (HEPS).

Fourteen of the properties were leased for a period of fifteen years with an 
option to renew the lease agreements for one additional period of ten years, 
and an option to repurchase the properties at market related prices on 
termination of the lease agreements. One property was leased for a period of 
three years. Escalation of lease payments is provided for in the agreements at 
inflation-related rates.

In terms of the lease agreements, the group remains responsible for all maintenance, 
insurance, rates and taxes (“triple net” lease).

R million                                               2016    2015
Disposal of properties subject to the transaction
Net proceeds on disposal of properties*              1 701.1       — 
Net carrying value of properties disposed             (382.2)      — 
Profit on disposal of properties                     1 318.9       —
Future minimum lease payments
2017                                                   145.9       —
2018 – 2021                                            681.1       —
2022 onwards                                         2 709.5       — 
Total                                                3 536.5       —

* Transaction proceeds were R1 744.0 million which included one property sold 
  outright for R12.0 million; transaction costs incurred were R30.9 million.

5. Business combinations
In the previous financial year, the group consolidated Hunyani Holdings Ltd 
(“Hunyani”) and Megapak Zimbabwe (Pvt) Ltd (“Megapak”) with effect from 1 December 
2014. These entities, situated in Zimbabwe, were previously recognised as associates 
and equity accounted as such. The revaluation of the group’s original interest in 
Hunyani and Megapak resulted in gains of R14.2 million and R9.3 million respectively.

As part of this process, the group restructured its subsidiary, CarnaudMetalbox 
Zimbabwe Ltd, and Megapak under Hunyani, and Hunyani was renamed Nampak Zimbabwe 
Ltd. The transaction also involved the group increasing its effective interest in 
the Nampak Zimbabwe Ltd group to 51.43%.

R million                                        2016          2015
Fair value of previously held interests             —         184.9
Plus: non-controlling interests recognised          —         356.8
Less: fair value of identifiable net assets
acquired                                            —        (642.4) 
Gain arising on consolidation                       —        (100.7)

6. Disposal of operations
An agreement for the sale of Nampak’s 50% shareholding in, and loans to, 
Sancella SA (Pty) Ltd was entered into on 21 July 2015, with the transaction 
being effective 1 December 2015. 

The proceeds from the sale were applied to settle the outstanding loan balances.

The loans had been impaired to the amount expected to be recovered in terms of the 
transaction as at 30 September 2015 and no further loss was recognised on the recovery 
of the net carrying values of these loans on the effective date of the transaction.

During the previous year, the group disposed of the following businesses:
Nampak Corrugated and Nampak Tissue businesses effective 1 April 2015;
Nampak Flexibles and Nampak Recycling businesses effective 1 July 2015;
Nampak Sacks business effective 29 September 2015.

The above disposals are consistent with the group’s strategy of exiting its non-core 
and underperforming businesses.

The results of the discontinued operations included in the statement of comprehensive 
income are set out below:

R million                                      2016         2015
Results of the discontinued operations 
for the year
Revenue                                           —      3 385.7
Expenses                                          —     (3 560.7) 
Loss before tax                                   —       (175.0) 
Attributable income tax benefit                   —          8.1
                                                  —       (166.9) 
Loss on disposal of operations                    —       (350.2) 
Attributable income tax benefit                   —        122.3
                                                  —       (227.9)
Loss for the year from discontinued
operations                                        —       (394.8)
Proceeds on disposal of the discontinued 
operations
Fair value of net assets disposed                 —      2 331.3
Non-controlling interest released                 —          2.6
Goodwill disposed                                 —         34.0
Loss on disposal of operations                    —       (350.2) 
Total disposal consideration                      —      2 017.7
Less: deferred sales proceeds                     —        (35.0) 
Net inflow on disposal                            —      1 982.7

7. Determination of headline earnings
R million                                         2016      2015
Continuing operations
Profit attributable to equity holders of
the company for the year                       1 610.4   1 438.0
Less: preference dividend                         (0.1)     (0.1) 
Basic earnings                                 1 610.3   1 437.9
Adjusted for:
Net impairment losses on property, plant, 
equipment, intangible assets and
investments                                      360.8     121.4
Net profit on disposal of investments             (3.5)        — 
Gain on revaluation and consolidation of
Zimbabwe associates                                  —    (124.2)
Profit on disposal of property subject to
sale and leaseback                            (1 318.9)        —
Net loss/(profit) on disposal of other 
property, plant, equipment and intangible
assets                                             6.8    (102.8) 
Tax effects and non-controlling interests         25.4     (21.2) 
Headline earnings for the year                   680.9   1 311.1
Continuing and discontinued operations
Profit attributable to equity holders of
the company for the year                       1 610.4   1 043.2
Less: preference dividend                         (0.1)     (0.1) 
Basic earnings                                 1 610.3   1 043.1
Adjusted for:
Net impairment losses on property, plant, 
equipment, intangible assets and
investments                                      360.8     121.4
Net profit on disposal of investments and
businesses                                        (3.5)    350.2
Gain on revaluation and consolidation of
Zimbabwe associates                                  —    (124.2)
Profit on disposal of property subject to
sale and leaseback                            (1 318.9)        —
Net loss/(profit) on disposal of other 
property, plant, equipment and intangible
assets                                             6.8     (99.2) 
Tax effects and non-controlling interests         25.4    (144.4) 
Headline earnings for the year                   680.9   1 146.9

8. Cash and cash equivalents/(net overdraft) 
at end of year
R million                                         2016      2015
Bank balances, deposits and cash
equivalents*                                   2 835.4   1 587.4
Bank overdrafts                                 (993.4) (3 672.3)
                                               1 842.0  (2 084.9)

* Cash equivalents include US dollar indexed Angolan kwanza bonds of 
  R617.4 million (2015: nil).

9. Carrying amounts of financial instruments
The carrying amounts of financial instruments as presented in
the statement of financial position are measured as follows:
R million                                       2016        2015
At fair value — level 2
Financial assets                                   —       178.2
— derivative financial assets                      —       178.2
Financial liabilities                           40.7        75.3
— derivative financial liabilities              40.7        75.3
At cost
Financial assets                                   —        12.7
— investments                                      —        12.7
At amortised cost
Financial assets                             5 789.7     4 608.4
— non-current financial assets                  56.4        33.0
— trade receivables and other current
assets (excluding prepayments)               2 897.9     2 865.8
— bank balances, deposits and cash
equivalents                                  2 835.4     1 587.4
— assets classified as held for sale?*             —       122.2
Financial liabilities                       12 152.9    12 433.4
— non-current loans and borrowings           6 202.1     4 212.0
— trade payables and other current
liabilities (excluding provisions)           4 628.0     4 102.3
— bank overdrafts and current loans          1 322.8     4 119.1

* Current portion of loan to Sancella SA (Pty) Ltd.

10. Supplementary information
R million                                      2016         2015
Capital expenditure                         1 443.6      2 195.2
— expansion                                   951.7        771.0
— replacement                                 475.7      1 352.6
— intangibles                                  16.2         71.6
Capital commitments                           454.4      1 500.1
— contracted                                  276.3        727.2
— approved not contracted                     178.1        772.9
Lease commitments (including sale and
leaseback transaction)                      3 759.5        175.6
— land and buildings                        3 732.2        150.6
— other                                        27.3         25.0
Contingent liabilities                         83.6         64.2
— customer claims and guarantees                6.7         14.8
— tax contingent liabilities                   76.9         49.4

11. Share statistics
                                                2016        2015
Ordinary shares in issue (000)               688 668     702 497
Ordinary shares in issue — net of treasury
shares (000)                                 639 884     630 057
Weighted average number of ordinary shares 
on which basic earnings and headline
earnings per share are based (000)           632 667     629 726
Weighted average number of ordinary shares 
on which diluted earnings and diluted 
headline earnings per share are based
(000)                                        634 335     637 369

12. Additional disclosures
                                                2016        2015
Net gearing (%)                                   49          72
Net debt: EBITDA (covenants) (times)*            1.7         2.3
EBITDA: Interest cover (covenants) (times)*      5.4         9.7
Return on equity — continuing operations (%)      18          19
Return on net assets — continuing 
operations (%)                                    11          11
Net worth per ordinary share (cents)**         1 476       1 456

Tangible net worth per ordinary share
(cents)**                                        844         802

*  Calculated in accordance with the provisions of the loan agreements 
   to which they pertain.
** Calculated on ordinary shares in issue — net of treasury
   shares.

13. Translation reserve movement
Due to the strengthening of the rand towards the end of the financial 
year, a translation loss of R509.4 million (2015:R774.6 million gain) was 
recognised for the year. The key closing exchange rates at 30 September
were $1:R13.72 (2015: $1:R13.86) and £1:R17.80 (2015: £1:R20.97).

14. Related party transactions
Group companies, in the ordinary course of business, entered
into various purchase and sale transactions with associates, joint 
ventures and other related parties. The effect of these transactions is 
included in the financial performance and results of the group.

15. Independent auditor’s opinion
The consolidated annual financial statements from which the summarised 
consolidated financial statements have been extracted have been audited 
by the company's auditors, Deloitte & Touche and are consistent in all 
material respects with the consolidated annual financial statements. The 
audit of the summarised consolidated financial statements was performed in 
accordance with ISA 810, 'Engagement to Report on Summary Financial Statements'. 
The auditor's report does not necessarily report on all the information 
contained in this announcement. Shareholders are therefore advised that, 
in order to obtain a full understanding of the nature of the auditors' 
engagement, they should obtain a copy of the auditor's report together with 
the accompanying financial information from the company's registered office. 
Their unmodified report on the consolidated annual financial statements and 
the summarised consolidated financial statements are available for inspection 
at the company's registered office, together with the financial statements 
identified in the respective auditor's reports. Any reference to future 
financial performance, included in this announcement, has not been reviewed 
or reported on by the company's auditors.

Administration
Nampak Limited
(Registration number 1968/008070/06)
(Incorporated in the Republic of South Africa) 
Share code: NPK ISIN: ZAE 000071676

Independent non-executive directors
TT Mboweni (Chairman), RC Andersen, E Ikazoboh, NV Lila, PM Madi, IN Mkhari, 
RJ Khoza, CWN Molope, DC Moephuli, PM Surgey. 

Executive directors
AM de Ruyter (Chief executive officer), GR Fullerton (Chief financial officer), 
FV Tshiqi (Group human resources director).

Secretary
NP O’Brien

Registered office
Nampak House, Hampton Office Park, 20 Georgian Crescent East,
Bryanston, Sandton, 2191, South Africa
(PO Box 69983, Sandton, 2021, South Africa) 
Telephone +27 11 719 6300

Share registrar
Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg 2001, South Africa
(PO Box 61051, Marshalltown, 2107, South Africa) 
Telephone +27 11 370 5000

Sponsor
UBS South Africa (Pty) Limited

Website www.nampak.com

Disclaimer
We may make statements that are not historical facts and
relate to analyses and other information based on forecasts of future results and 
estimates of amounts not yet determinable. These are forward-looking statements as 
defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such
as believe, anticipate, expect, intend, seek, will, plan, could, may, endeavour and 
project and similar expressions are intended to identify such forward-looking statements,
but are not the exclusive means of identifying such statements. By their very nature, 
forward-looking statements involve inherent risks and uncertainties, both general and 
specific, and there are risks that predictions, forecasts, projections and other 
forward-looking statements will not be achieved.

If one or more of these risks materialise, or should underlying assumptions prove 
incorrect, actual results may be very different from those anticipated. The factors 
that could cause our actual results to differ materially from the plans, objectives, 
expectations, estimates and intentions in such forward-looking statements are discussed 
in each year’s annual report. Forward-looking statements apply only as of the date
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