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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

   

  • 74% 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:
    • 78% of sugar production by volume is sold into domestic or premium-priced export markets;
    • 8% 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 2010

  
  

  • Sugar cane (‘000 tons):
    
    

    Country	2010	2009
    South Africa	361	464
    Malawi	2 136	2 122
    Zambia	1 705	722
    Swaziland	804	741
    Tanzania	614	555
    Mozambique	488	450
    Total	6 108	5 054

  • Sugar (‘000 tons)
    
    

    Country	2010	2009
    South Africa*	663^	922
    Malawi*	295	304
    Zambia*	315	194
    Swaziland*	211	210
    Tanzania*	120	118
    Mozambique	81	76
    Total	1 685	1 824

    
    * - Sugar cane supplied by the group’s own agricultural operations and private growers
    ^ - Excludes Pongola and Umfolzi - sold

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

• Financial statistics (March year-end)

  
  

  Year ended 31 March						%
  		2010		2009		Change
  Results (Rm)
  Revenue		8 467.9		8 601.7		(2)
  Operating profit		1 498.6		1 386.2		8
  Net financing costs		139.0		185.4		(25)
  Headline earnings		702.5		741.8		(5)
  Share performance (cents per share)
  Headline earnings		171.2		211.6		(19)
  Dividend (interim - paid; final - declared)		86.0		106.0		(19)
  Year-end market price		2 970		2 849
  Balance sheet and cash flow (Rm)
  Total assets		9 647.9		8 920.0
  Ordinary shareholders' funds		5 502.6		2 773.8
  Net borrowings		213.2		(2 411.1)
  Cash generated from operations		1 259.9		1 569.7
  Financial ratios
  Operating margin (%)		17.7		16.1
  Interest cover (times)		10.8		7.5
  Effective tax rate (%)		30.2		19.9
  Net debt : equity ratio		(3.4)		70.0
  Return on net assets (%)		21.9		22.0
  Net asset value per share (cents)		1 378.3		981.7
  Dividend cover (times)		2.0		2.0
  Price : headline earnings ratio		17.3		13.5