Energy Passion Focus Performance

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Energy - Passion Focus - Performance

• Interim Results - June 2002

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FINANCIAL HIGHLIGHTS
Key performance indicators to investors in Iliad.

• 27 increase in turnover
• 59 increase in trading profit
• 48 increase in trading margin
• 74 increase in earnings
• 127 increase in HEPS

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BUSINESS OVERVIEW
- Driving Force- Core Competencies- Philosophy
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DRIVING FORCE
.

• Our strategy is to meet the product needs of the
  building industry through
• focussed sourcing and
• redistribution of goods
• into each segment of the market

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CORE COMPETENCIES
.

• To survive and prosper we must excel at
• Market intelligence/information
• Procurement
• Trading skills

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PHILOSOPHY
.

• Owner Manager ethos with strong incentives for
  performance
• Decentralized operating divisions
• Tight centralized financial controls
• Focus on niche markets without dominating any one
  segment
• Operate one platform business in each segment
• Geographically roll out or acquire satellite
  business, leveraging the expertise of the
  platform operation
• Leveraging common expertise between divisions

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ILIAD AFRICA TRADING
General building materials
Ceramic tiles, sanitaryware finishes
Boards
Ironmongery

• Ferreiras Buildware
• Honeydew
• Ferreiras Wholesale
• Honeydew
• Ferreiras Buildware
• Express
• - Lyttleton
• Ferreiras Roof Trusses
• Honeydew
• Rietpan Hardware

• Ferreiras Decor World
• Northriding Umhlanga
• Ferreiras Wholesale
• Northriding
• Ferreiras Architectural
• Just Tiles
• Kwa-Zulu Natal
• Cape Town
• Port Elizabeth
• Tile Depot
• Northriding, Cape Town, Alberton

• Citiwood
• Denver
• Pretoria
• Vereeniging
• Cape Town
• Kwa-Zulu Natal

• Knob Knocker Retail
• Northcliff
• Woodmead
• Menlyn
• Umhlanga
• Cape Town
• Knob Knocker Wholesale
• Gauteng
• KZN
• Southern Cape

Turnover 37 (HY 2001 38) Profit 34
(HY 2001 38)
Turnover 37 (HY 2001 37) Profit 40
(HY 2001 38)
Turnover 21 (HY 2001 20) Profit 20
(HY 2001 14)
Turnover 5 (HY 2001 5) Profit 6
(HY 2001 10)
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Investors in JSE Securities Exchange listed ILA
73 820 000 shares
SHAREHOLDING SPREAD
Directors
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FINANCIAL STATEMENTS
- Income Statement- Balance Sheet- Abridged
Cash Flow Statement
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INCOME STATEMENT
89
1 599
1 592
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BALANCE SHEET
Unaudited 30 June 2001
Unaudited 30 June 2002
R million
12 361 4 973 13 981 194 986
13 445 3 423 14 171 223 973
ASSETS Non-Current assets Tangible
assets Financial assets Deferred
taxation Current assets
226 301
255 012
Total assets
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BALANCE SHEET
Unaudited 30 June 2001
Unaudited 30 June 2002
R million
80 510 956 31 812 113 023
98 835 897 11 034 144 246
EQUITIES AND LIABILITIES Capital
reserves Interest-bearing non-current
liabilities Interest-bearing current
liabilities Non-interest bearing current
liabilities
226 301
255 012
Total equity liabilities
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ABRIDGED CASH FLOW STATEMENT

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OVERALL PERFORMANCE
-Trading environment- Building industry- Share
count- Earnings - Headline earnings per share
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TRADING ENVIRONMENT

• Stronger growth in residential starts, additions
  and renovations market
• Decline of 4 in non-residential investment
  (commercial)
• Higher sales levels continue across all divisions
  despite increases in bank lending rates
• Material supply shortages from some local
  companies
• Price increases in July of 10 15 eg. steel
  products / cement / plastic
• Potential 1 lending rate increase may slow
  demand slightly

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BUILDING INDUSTRY

• Operating in a mature, predictable industry
• Retail consumer spending is improving
• R39bn market, split equally between labour and
  material
• 60 of R19.5bn requirement supplied through
  distribution network
• As retailers the Group operates in a market
  valued at R12bn
• Residential investment vs non-residential
  investment 50/50 share of market

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RESIDENTIAL INVESTMENT
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NON-RESIDENTIAL INVESTMENT
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SHARE COUNT

• 73 820 000 shares in issue as at 30 June 2002
• 7 358 879 shares held in treasury, average
  purchase price 108 cents
• Shares to be held for future use and not
  cancelled
• With retail consumer spending improving, and a
  postive cash flow the company has re-embarked on
  its acquisitive growth strategy
• Will be used to fund acquisitions
• To serve as share incentives to existing and new
  management

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CASH FROM OPERATIONS

• Working capital-to-sales ratio improved by nearly
  2 (June 2002 vs June 2001)
• Normal trend for working capital-to-sales ratio
  to increase by 2 from December to June the
  following year
• Change in mix of ceramic imports from Europe (120
  day account) to Indonesia (30 day account).
  Expected to be short term
• Second six months will generate in excess of R20
  m cash
• Borrowings decreased from R22 m to R10 m year on
  year
• Purchased 7 million shares on open market

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WORKING CAPITAL / SALES
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ATTRIBUTABLE PROFIT
HY
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HEADLINE EARNINGS PER SHARE
HY
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OPERATIONAL HIGHLIGHTS
- General building materials- Ceramic tiles,
sanitaryware and finishes- Boards- Ironmongery
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OPERATIONAL HIGHLIGHTS

• General Building Materials
• Purchased the assets of GM Building Supplies in
  Lyttleton. First move into the Pretoria region
• Operate as Ferreiras Buildware Express and
  should deliver return on capital in excess of 30
  within twelve months
• Supplied from Ferreiras Honeydew targeting
  mid-size contractors
• May grow into stand-alone store
• Withdrew from most RDP work and focussed energy
  on bonded building starts

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OPERATIONAL HIGHLIGHTS

• Ceramics Tiles
• Ferreira Décor World upgrade has been a
  phenominal success
• A further R1 million invested on showroom display
  and bathroom furniture, a market which represents
  strong growth
• Ferreiras Architectural increased volumes despite
  a 4 decrease in non-residential (commercial)
  market
• Checkers / Hypermarket upgrades
• Southgate shopping centre upgrade
• MTN offices
• Closure of Just Tiles PE plumbing arm stabilised
  the business
• Tile Depot produced a 5 trading profit margin
  for first time

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OPERATIONAL HIGHLIGHTS

• Boards
• Cape operation produced a profit for the first
  time since inception on the back of new
  management
• PG Bison strategy change led to gain in market
  share
• Declining commercial market, but improved profits
• Solid business practice vs opposition who is now
  faltering

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OPERATIONAL HIGHLIGHTS

• Ironmongery
• Pain of growth required infrastructure to be
  remodelled
• Split business into two focussed units
• Retail
• Wholesale
• Franchise possibilities investigated
• New computer system installed
• KZN wholesale unit opened in June
• Umhlanga retail store turned profitable in sixth
  month of operation

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PROSPECTS
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SUSTAINING MOMENTUM

• Group operating off a sound base, building up
  cash reserves
• Initial investments are geared up for sector
  growth, with earnings envisaged to flow through
  2003 onwards
• Residential investment activity anticipated to
  remain at present levels to the end of 2003
  (subject to no lending rate increase)
• Commercial investment expected to reverse
  downward trend and stabilise
• Improve operational contols and systems
• Computerised upgrade of Knob Knocker expected
  to improve working capital management
• Computerisation and upgrade of Rietpan in
  progress
• Focus Knob Knocker into retail and wholesale
• Replicate blueprint and success of new Ferreiras
  Express brand

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ACCELERATING MOMENTUM

• Now generating the cash resources to invest in
  future growth leveraging brand recognition
• Enough room in the market to grow in terms of
  product segments and geographic presence
• R10m earmarked for one or more of the following
  opportunities
• General Building Materials standalone satellite
• Three Ferreiras Buildware Express stores
• Just Tiles KZN to be relocated, upgraded and
  rebranded Ferreiras Décor World. New site at
  Lion Match Park (opposite Wetherleys) will boast
  a 1200 sq metre showroom and 2 700 sq metre
  warehouse (R2 million)
• Add 3 new Citiwood stores
• 3-4 wholly owned Knob Knocker retail outlets

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THANK YOU
For investor enquiries, please contactTel
[phone]Fax [phone]E-mail
iliad_at_netactive.co.zaWeb www.iliadafrica.co.za
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DIVISIONAL BACKGROUND

• General building materialsCeramics,
  sanitaryware, finishesBoardsIronmongery

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Sourcing, distributing and retailing of a
comprehensive range of building materials.
GENERAL BUILDING MATERIALS

• Target market
• Bakkie-builders, small - medium building
  contractors, small property developers, and D-I-Y
• Mozambique, Angola, Madagascar and other African
  countries
• Outlets
• 4 in Gauteng
• Brands
• Ferreiras Buildware
• Ferreiras Buildware Express
• Rietpan Hardware
• Supply partners
• Lafarge Cement, Macsteel, BPB Gypsum, Everite,
  Plascon, Corobrick

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Sourcing, distributing and retailing of a
comprehensive range of building materials.
GENERAL BUILDING MATERIALS

• Product offering
• locally manufactured building products
• catering for a wide range of requirements from
  foundation-to-roof namely building hardware,
  timber, plumbing, sanitaryware, paint and roof
  trusses
• Market positioning
• Offers a one-stop-shop experience
• point-of-sale cash registers
• ensured product availability
• speedy delivery
• competitive prices
• Custom-designs and manufactures roof trusses
  according to floor plan

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CERAMICS, SANITARYWARE FINISHES Sourcing,
distributing and retailing of ceramics,
sanitaryware and finishes.

• Target market
• Ranges from new home owners and renovators to
  architects contractors, developers and interior
  designers
• Outlets
• 5 in Gauteng, 2 in KZN, 2 in southern Cape and 1
  in eastern Cape
• Brands
• Ferreiras Decor World
• Just Tiles
• Tile Depot
• Supply partners
• Tau, Emile, Imola, Ceramic Industries, Johnsons
  Tile

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CERAMICS, SANITARYWARE FINISHES Sourcing,
distributing and retailing of ceramics,
sanitaryware and finishes.

• Product offering
• New look Ferreiras Decor World showrooms
  showcase an even greater selection of
  sanitaryware, fittings, tiles and related
  accessories representing quality, sophisticated
  appeal and customer-friendly service
• Just Tiles stores focus on more affordable
  product ranges
• Tile Depot stores are price-driven cash-and-carry
  stores, catering for the cost-conscious buyer
  working on a tight budget
• Market positioning
• Ferreiras Décor World Lifestyle retailing for
  discerning clients providing wide product choice,
  differentiation, quality and fasion. Destination
  store.
• Tile Depot Practical quality for cash-and-carry
  cost-conscious buyers. Services 25km radius
  around store
• Architectural Project-related quality, fashion
  and ongoing backup

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BOARDS
Trading under Citiwood, this division sources,
distributes and retails wood products.

• Target market
• Shopfitters, kitchen manufacturers, joiners and
  the D-I-Y market.
• Outlets
• 3 in Gauteng, 1 in southern Cape and 1 in KZN
• Brands
• Citiwood
• Supply partners
• Strong relationship with PG Bison, Sonae
  Novoboard, Masonite Africa and Magnaboard

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BOARDS
Trading under Citiwood, this division sources,
distributes and retails wood products.

• Product offering
• Broad range comprising mainly chipboard, melamine
  boards, plywoods, hardwoods and accessories
• Market positioning
• Well trained sales force with sound technical
  know-how and years of professional experience to
  assist the divisions more than 3 000 regular
  customers
• Procurement expertise
• Stock full range of product
• Customers are offered a choice of trading terms
  cash, COD or credit

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IRONMONGERY
Sourcing and distribution of ironmongery such as
handles, locks and hinges as well as cabinet
fittings.

• Target market
• Wholesale Hardware stores, furniture and kitchen
  manufacturers, developers
• Retail Home owners, renovators, architects and
  interior designers
• Outlets
• Wholesale 1 in Gauteng, 1 in KZN and 1 in
  southern Cape
• Retail 2 in Gauteng, 1 in KZN and 1 in southern
  Cape
• Brands
• Knob Knocker
• Supply partners
• Martineli, Solid Manufacturing

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IRONMONGERY
Sourcing and distribution of ironmongery such as
handles, locks and hinges as well as cabinet
fittings.

• Product offering
• Stocks over 7 000 different finishes where 70
  are imported from Italy, Spain, Australia, China
  and Hong Kong
• Numerous authentic sole agency lines guarantees
  exclusivity on leading brand names
• Market positioning
• Retail Follows European building trends.
  Differentiation through exclusive lines. Breadth
  of holding. One-stop-shop.
• Wholesale Cost-effective fast moving lines.

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