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• Illovo Group – Strategic Intent

  
  

  • Leading sugar and downstream products operation / increasing global player / world class
  • Low cost producer
  • Optimise return on every stick of cane by adding value to its core commodity products – fibre, sugar and molasses / focus on core business and develops material niche operations
  • Market leader
  • Increase profits in real terms on a sustainable basis / maximise return on capital
  • Moral, performance focussed
  • Welcomed in communities in which it operates
  • Cognisant of the rural locations of the group’s operations and the impact that it has on job creation and poverty alleviation in such areas

• Ownership of Operations

  
  

  • 100% of Illovo Sugar (South Africa) Limited
    o 3 sugar cane estates
    o 4 sugar factories
    o 1 managed operation
    o 1 refinery
    o 3 downstream operations
    o Corporate centre of the group

   

  • 76% of Illovo Sugar (Malawi) Limited
    o Sugar cane estates
    o 2 sugar factories
    o 2 refineries
    o Interests in ethyl alcohol production

   

  • 82% of Zambia Sugar in Zambia
    o Sugar cane estates
    o 1 sugar factory
    o 1 refinery
    o Domestic sugar fortified with Vitamin A

   

  • 60% of Ubombo Sugar Limited in Swaziland
    o Sugar cane estates
    o 1 sugar factory
    o 1 refinery

   

  • 55% of Kilombero Sugar Company in Tanzania
    o Sugar cane estates
    o 2 sugar factories
    o 1 refinery

   

  • 90% of Maragra Açúcar SA in Mozambique
    o Sugar cane estates
    o 1 sugar factory

• Major Group Strengths

  
  

  • Core focus on the production of low-cost, high-quality sugar and downstream products
  • African sugar producer with African expertise in sugar cane agriculture, sugar manufacturing and the production of high-value downstream products
  • Wide geographic and climatic spread of core interests with good access to secure water supplies for irrigation
  • Sugar markets:
    • 83% of sugar production by volume is sold into domestic or premium-priced export markets;
    • 12% of production is sold into regional markets where premiums to the world price are earned;
    • Balance sold on the world free market.
  • Good people

• Production statistics 2011

  
  

  • Sugar cane (‘000 tons):
    
    

    Country	2011	2010
    South Africa	267	361
    Malawi	2 133	2 136
    Zambia	1 974	1 705
    Swaziland	724	804
    Tanzania	708	614
    Mozambique	454	488
    Total	6 260	6 108

  • Sugar (‘000 tons)
    
    

    Country	2011	2010
    South Africa *	578	663
    Malawi *	282	295
    Zambia *	385	315
    Swaziland *	198	211
    Tanzania *	127	120
    Mozambique *	69	81
    Total	1 639	1 685

    
    * - Sugar cane supplied by the group’s own agricultural operations and private growers

  • Downstream production (see Marketing products/Downstream products)
    
    o Furfural
    o Furfuryl alcohol
    o Agriguard
    o 2,3 Pentanedione
    o Ethyl alcohol
    o Lactulose

• Financial statistics (March year-end)

  
  

  Year ended 31 March						%
  		2011		2010		Change
  Results (Rm)
  Revenue		8 107.9		8 467.9		(4)
  Operating profit		1 029.3		1 498.6		(31)
  Net financing costs		95.5		139.0		(31)
  Headline earnings		516.1		702.5		(27)
  Share performance (cents per share)
  Headline earnings		112.2		171.2		(35)
  Dividend (interim - paid; final - declared)		56.0		86.0		(35)
  Year-end market price		2 685		2 970
  Balance sheet and cash flow (Rm)
  Total assets		9 805.7		9 647.9
  Ordinary shareholders' funds		5 191.2		5 502.6
  Net borrowings		512		(213.2)
  Cash generated from operations		1 279.2		1 259.9
  Financial ratios
  Operating margin (%)		12.7		17.7
  Interest cover (times)		10.8		10.8
  Net debt : equity ratio		8.6		(3.4)
  Return on net assets (%)		13.8		21.9
  Net asset value per share (cents)		1 299.6		1 378.3
  Price : headline earnings ratio		23.9		17.3