Summarised audited results
for the 12 months ended 30 June 2021

2021
Imperial is your 'Gateway to Africa'
Imperial is your 'Gateway to Africa'

Divisional performance

Logistics International encompasses road freight, contract logistics, and air/ocean activities outside Africa - most notably our contract logistics and freight businesses in Europe and the UK.

 
Logistics International
Logistics International

Operating context

Despite the significant overhang of COVID-19, economic activity, growth forecasts and employment rates in Europe and the UK are steadily improving due to additional fiscal support in certain countries and swift progress in the roll-out of COVID-19 vaccines. Most of the European countries have eased their lockdown measures due to decreasing numbers of infected people. In Germany, certain lockdown restrictions remain in place but gradually eased towards the latter part of F2021. However, the automotive sector continues to be negatively impacted by the global shortage of semi-conductors.

The heightened impact of Brexit has resulted in slower imports into and exports from the UK and a shortage of drivers in the UK, negatively impacting our road freight businesses.

The low water levels in Paraguay negatively impacted the shipping business in South America, the sale of which was concluded in April 2021.

Operating performance (continuing operations)

Pro forma Logistics International segment results

Half year 1   Half year 2* Full year
LOGISTICS INTERNATIONAL 2021 2020 %change 2021 2020 %change F2021 F2020 %change
Revenue (Rm)^  10 714  8 755  22       10 444  9 359  12      21 158  18 114  17 
EBITDA (Rm)^  1 079  951  13       911  505  80      1 990  1 456  37 
Operating profit (Rm)^  356  347       186  (360) >100      542  (13) >100 
Operating margin (%)^  3,3  4,0       1,8  (3,8)     2,6  (0,1)
Return on invested capital (%)^  0,2  4,9           5,7  0,1 
Weighted average cost of capital (%)^  6,1  5,7           6,5  5,5 
Net debt including lease obligations (Rm) 4 698  6 784  (31)          3 619  8 211  (56)
Lease obligations included above (Rm) 3 213  3 080           3 195  3 751  (15)
Net debt (Rm) 1 485  3 704  (60)          424  4 460  (90)
Net working capital (Rm) (630) 711  (189)          (483) (395) 22 
^ Excluding businesses held for sale.
* Half year 2 numbers are unaudited and derived from deducting the half year 1 results from the full year published results of 30 June 2021.

Note: Continuing operations.

Half year 1 Half year 2* Full year
LOGISTICS INTERNATIONAL 2021 2020 %
change
2021 2020 %
change
F2021 F2020 %
change
Revenue (€m)^  558  537        598  518  15       1 156  1 055  10 
EBITDA (€m)^  57  59  (3)       52  29  79       109  88  24 
Operating profit (€m)^  18  22  (18)       12  (19) >100       30  900 
Operating margin (%)^  3,2  4,1           2,0  (3,7)      2,6  0,3 
Return on invested capital (%)^  0,4  3,9             4,6  1,0 
Weighted average cost of capital (%)^  5,7  5,9             5,9  5,5 
Net debt including lease obligations (€m) 261  432  (40)            214  421  (49)
Lease obligations included above (€m) 179  196  (9)            189  192  (2)
Net debt (€m) 82  236  (65)            25  229  (89)
Net working capital (€m) (35) 45  (178)            (29) (20) 45 
^ Excluding businesses held for sale.
* Half year 2 numbers are unaudited and derived from deducting the half year 1 results from the full year published results of 30 June 2021.

Note: Continuing operations.

Half year 1   Half year 2* Full year
LOGISTICS INTERNATIONAL 2021 2020 %
change
2021 2020 %
change
F2021 F2020 %
change
Freight          
Revenue (Rm)^  6 643  5 080  31     6 183  5 599  10     12 826  10 679  20 
EBITDA (Rm)^  525  583  (10)    473  143  231     998  726  37 
Operating profit (Rm)^  208  303  (31)    166  (296) >100     374  >100 
Operating margin (%)^  3,1  6,0        2,7  (5,3)    2,9  0,1 
Contract Logistics       
Revenue (Rm)^  4 071  3 675  11     4 261  3 760  13     8 332  7 435  12 
EBITDA (Rm)^  554  368  51     438  362  21     992  730  36 
Operating profit (Rm)^  148  44  236     20  (64) >100     168  (20) >100 
Operating margin (%)^  3,6  1,2        0,5  (1,7)    2,0  (0,3)
^ Excluding businesses held for sale.
* Half year 2 numbers are unaudited and derived from deducting the half year 1 results from the full year published results of 30 June 2021.

Note: Continuing operations.

While our Logistics International business was the most impacted by the COVID-19 pandemic in F2020, this business recorded significant improvement in trading activity on the back of the easing COVID-19 restrictions and economic recovery over the past 12 months. All businesses are currently operational and are demonstrating significantly improved performance. As a result, Logistics International achieved strong revenue and operating profit growth in Euros of 10% and in excess of 100% respectively, and, in Rand terms, revenue from Logistics International rose 17% while operating profit increased by over 100% compared to the previous year.

Results were supported by new contract gains, effective cost management and volume recovery in key industries of operation as production ramped up. Logistics International's contract renewal rate on existing contracts remains strong at c.87%, with an encouraging pipeline of new opportunities. New business revenue of c.R2,2 billion was secured on a rolling 12-month basis to the end of June 2021.

Revenue generated from the freight business increased by 20% in Rands, supported by a good performance from our express palletised distribution business (Palletways) due to higher volumes in a COVID-19 environment, and a higher contribution from the air and ocean freight business. Operating profit increased by over 100% due to the growth in revenue supported by the improvement in operating margins.

Contract logistics increased revenue and operating profit in Rands by 12% and over 100% respectively as automotive production started to ramp-up again post COVID-19 lockdowns on the back of a recovery in vehicle sales. This, despite the automotive sector being negatively impacted by the global shortage of semi-conductors. Volumes in our chemicals-related businesses were less impacted by COVID-19 and further supported by new business gains.

The South American shipping business was disposed of in April 2021. During the year, it was significantly impacted by record low water levels, which impacted both volumes and margins. More details are included in the 'Disposals' section of this report.

Net capital expenditure from continuing operations excluding businesses held for sale (excluding IFRS 16) of R193 million was incurred during the year mainly for replacement capex for transport fleet. ROIC improved to 5,7% but is lower than WACC.