27 Presentation

African Oxygen Limitedyear end results30 September 2005: 

African Oxygen Limited year end results 30 September 2005 Good growth in an eventful year

Agenda: 

Agenda Welcome and highlights Rick Hogben 2005 year end financial results Cor Van Zyl The business & the future Rick Hogben Questions

Slide4: 

Summary 12 months ago the deal had not been concluded Involvement of MediClinic was souring the deal Netcare and certain doctors were attempting to stop the deal Afrox agreed to step in to replace MediClinic Afrox invested R375 million for 20% Several attempts at interference were seen off Deal was concluded and approved by Tribunal, March 2005 Total proceeds distributed to shareholders equivalent to 607c per share Sale of Afrox Healthcare (Life Healthcare) Afrox retains 20% for the time being Performance continues to be good Total dividend of 607c/share distributed

Slide5: 

Summary Sale of Afrox Healthcare (Life Healthcare) Afrox retains 20% for the time being Performance continues to be good Total dividend of 607c/share distributed Satisfactory performance: ongoing HEPS growing by 16% In a continuing difficult manufacturing economy Local growth in certain sectors Mix of economy changing – dramatically? Negative impact of steel, oil and cheaper imports Afrox, now a focused gas, welding & related products company Continuing to invest in areas where we can add competency, and align to our core businesses Approved capex for future growth Growth Projects to total value of R430m in progress

Slide6: 

Summary Sale of Afrox Healthcare (Life Healthcare) Afrox retains 20% for the time being Performance continues to be good Total dividend of 607c/share distributed Satisfactory performance: ongoing HEPS growing by 16% In a continuing difficult manufacturing economy Local growth in certain sectors Mix of economy changing – dramatically? Negative impact of steel, oil and cheaper imports Afrox, now a focused gas, welding & related products company Continuing to invest in areas where we can add competency, and align to our core businesses Approved capex for future growth Growth Projects to total value of R430m in progress

Slide7: 

Summary Sale of Afrox Healthcare (Life Healthcare) Afrox retains 20% for the time being Performance continues to be good Total dividend of 607c/share distributed Satisfactory performance: ongoing HEPS growing by 16% In a continuing difficult manufacturing economy Local growth in certain sectors Mix of economy changing – dramatically? Negative impact of steel, oil and cheaper imports Afrox, now a focused gas, welding & related products company Continuing to invest in areas where we can add competency, and align to our core businesses Approved capex for future growth Growth Projects to total value of R430m in progress

Slide8: 

Performance Revenue R5,853m Operating profit R987m Net profit R1,366m Exceptional profit R1,051m Headline EPS before STC 195.8cents Earnings per share 408.2cents But this is very superficial, includes partial consolidation of Healthcare, and needs careful analysis GAAP has dictated that we consolidate Afrox Healthcare for six months, but equity account Life Healthcare for second six months therefore no numbers are really comparable

Slide9: 

What was the underlying business performance? Based on 6 months of Life Healthcare equity accounted earning, weighted average shares in issue of 334 m Full year based on 308m shares would be 183.3 c.p.s

Slide10: 

What was the underlying business performance? Based on 6 months of Life Healthcare equity accounted earning, weighted average shares in issue of 334 m Full year based on 308m shares would be 183.3 c.p.s

HEPS – Afrox Industrial normalised (proforma): 

HEPS – Afrox Industrial normalised (proforma)

Slide12: 

Afrox continues to be proud of its safety performance Lost workdays were lowest ever - 3 incidents, or rate of .07 Ongoing areas of particular focus: Behavioural Safety Product Stewardship Safety performance

Slide13: 

African Oxygen Limited 2005 year end results Cor van Zyl

Slide14: 

Economy Most indices consistent but certain sectors continue to struggle: Rand strengthens against £ and US $ Prime rate, 24 year low, at 10.5% Inflation, at 4.8%, year low (February 2005 @ 3.1 %) JSE at all time high But, a difficult year for manufacturing

Published consolidated results as required by GAAP: 

Published consolidated results as required by GAAP Includes: Ongoing business for full year Afrox Healthcare fully consolidated for six months Life Healthcare equity accounted for six months Comparatives include Afrox Healthcare fully consolidated for the year

Slide16: 

Group results, highlights Revenue R5.853 m Profit sale AHL R1,051m Operating profit before finance costs R987m Cash generated from Operations R954,5m

Slide17: 

Group Income Statement

Normalised results on a like-for-like basis: 

Normalised results on a like-for-like basis

Slide19: 

“Industrial business” The interpretation of the results is difficult to follow as a result of the Healthcare sale “Normalised” refers to the industrial business on a like for like basis Normalised 1: industrial “continuing” business includes: gases, welding and related products and the earnings from our 20,1 percent shareholding in Life Healthcare Normalised 2: excluding 20,1 percent Life Healthcare contribution

Slide20: 

12 Summary income statement Normalised 1 Excludes: AHL Exceptional CGT STC Special

Slide21: 

12 Results summary Normalised 1 Excludes: AHL Exceptional CGT STC Special

Slide22: 

Results summary Normalised 2 Ongoing Industrial Operations only

Slide23: 

What was the underlying business performance? Based on 6 months of Life Healthcare equity accounted earning Weighted average shares in issue of 334 m Full year based on 308m shares would be 183.3 c.p.s

HEPS – Afrox Industrial normalised (proforma): 

HEPS – Afrox Industrial normalised (proforma)

Slide25: 

Dividends and share buy back Special distributions: 10% share buy back at R19,27 cents per share Special “healthcare sale” dividend of 415 cents Normal dividends: interim dividend + 21% @ 40 cents final dividend + 29% @ 40 cents total for the year + 25% @ 80 cents Total paid to shareholders 687 cents

Slide26: 

12 Group balance sheet & cash flow 10% buy back of shares R665m Cash generated from Industrial operations increase by 30% to R829m Gearing remained low at 16.1% Cash generated from Industrial operations 127% of operating profit

Slide27: 

Capex and Investments

Slide28: 

Normalised 1 segmental, geographic revenue (R’m) +14% +17%

Slide29: 

(R’m) + 11% + 13% Normalised 1 segmental, geographic Operating profit before finance cost

Slide30: 

Review of the Industrial business Rick Hogben

Slide31: 

Industrial businesses Industrial & Special Products (ISP) Industrial products – Cutting & Welding Medical gases Hospitality Scientific gases, packaged chemicals, helium and refrigerated services Handigas - mega bulk, industrial, retail and Autogas Manufacturing and exports Afrox Safety (new) Process Gas Solutions (PGS) On site supply schemes Merchant Customer Engineering Services (CES) CryoStar

Past year in review – Growth Agenda: 

Past year in review – Growth Agenda Many successes Acquired Twinco Formed Afrox Safety Gas & Gear roll out rolling Electrogas acquisition Chemoxy merged into Malawi CO2 into Nigeria Namox The UK Gas Equipment export business In progress Lots of new PGS projects Low income housing Entry in Angola Filling plant in DRC Customer Wins The State Homecare contract The State gas & welding contract Laser Gases Automotive Industry New or improved Customers: Sasol Welding BHP Transwerk Toyota Unitor Reclamation Xstrata

Initiatives underway: 

Initiatives underway CustomerFirst Brand enhancement Gas & Gear roll out GOC upgrade Welding Consumables expansion Afrox Safety

So, what is Afrox?: 

So, what is Afrox?

Mission & Vision Statement: 

Mission & Vision Statement We are passionate about our business and our Brand, we are dedicated to customer service and believe in the quality of our people. We shall be the leaders in the businesses we operate, activities we undertake and services we provide while operating within a value system that supports the highest standards of ethics and integrity. We will achieve this by being: # 1 at Safety, Health, Environmental Management and Quality # 1 at delivering superior customer service # 1 at providing consistent growth and superior shareholder value # 1 at identifying and commercialising innovative growth opportunities # 1 at attracting and retaining high performing people # 1 at operational excellence # 1 at nation building commitments and social responsibility

Business and customer definition: 

Business and customer definition Business Afrox is a customer centric vertically and horizontally integrated supplier of Gas, Welding and related products and services, operating in Africa. We maintain a superior position in these businesses. We provide solutions and service to meet the needs of customers, and package Product Service Offerings to targeted market segments. We segment our business into 2 lines of business – Process Gas Solutions (PGS) and Industrial & Special Products (ISP). Customer Our primary customer is the end user of our product and services.

Slide37: 

Infrastructure Afrox’s large infrastructure is a key competitive advantage Market capitalisation R8 billion Operational in South Africa and 15 African countries Branches in South Africa 92 Branches in Africa 25 Vehicles +500 Products 3 000 Staff 3 500

Review of individual businesses: 

Review of individual businesses

Slide39: 

PGS: Merchant, onsite and tonnage New contracts and capacity Scaw Mondi PMB Liquefier Three new projects in pipeline R325 million capex for all six projects Will expand liquid capacity

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Industrial products Significant increase demand for: Welding consumables Specialised consumables Laser gases New PSO launched as we focus on smaller customers 11 Gas and Gear centres opened

Slide41: 

Medical Renewed State gas supply contract and won homecare contract Launch of medical integrated valve Maintained significant market position Home care products showing excellent growth

Slide42: 

Hospitality Sound growth after renewal of PSO Added Handigas revenue and profit to business Signed 15 new shopping centre contracts

Slide43: 

LPG (Handigas) Managed volatility of oil prices well Major bulk contracts Continued to grow volume on the back of market share gains

Slide44: 

Manufacturing and exports Exports performing well New European orders increase GEF factory output by 30% PortaPac exported to Australia/New Zealand New drive to export welding consumables

Slide45: 

Packaged chemicals Launched fire protection business Grew refrigeration gases significantly

Slide46: 

Scientific gases Significant investment in gravimetric filling to support the petrochemical industry Launched scientific regulator

Slide47: 

Afrox Safety Established Afrox Safety as a separate business Acquired Twinco 100 000th AfroxPac made Excluding Twinco, sales grew by 98 percent

Slide48: 

Africa Malawi and Zambia performed exceptionally well Low risk expansion through hub operations Business manager appointed for West Africa New branches in Luanda, Lubumbashi and Dar-es-Salaam Acquired competitive business in Malawi Increased PSO’s in several countries Exited Seychelles and Madagascar Strong drive to grow welding products in Africa

Slide49: 

Future perspective Afrox will achieve growth by: defending market share improving customer service expanding product service offering (PSO’s) growing products and geography within defined strategic parameters finding new step out opportunities

Slide50: 

Significant recognition SRI index for second year GRC credit rating - AA- long term (up from A+) - A1+ short term (up from A1) Awards finalist in Deloitte Good Governance awards - board effectiveness - ethics and integrity Mail and Guardian Investing in the Future awards - finalist

Slide51: 

In conclusion LPG new sectors/countries Africa expansion, operations and products Gas and Gear, 40 operational by end 2007 New exports, mainly Europe Safety business has major promise CustomerFirst forms integral part of strategic plan Protecting the brand R453m in growth Capex

Slide52: 

THANK YOU QUESTIONS

Slide53: 

Addendum

Slide54: 

Group balance sheet

Slide55: 

Group Ratios FY05

Slide56: 

Group cash flow