Nampak’s performance under Andre de Ruyter – here are the numbers
Andre de Ruyter said the significant Nampak share price decline when he was CEO was not his fault as there were mitigating factors.
When De Ruyter was appointed Eskom CEO, many critics highlighted that he was not the right man for the job because of his performance as Nampak chief executive.
When De Ruyter was appointed Nampak CEO in March 2014, the share price traded at R37 a share with a market cap of R29 billion.
When he left the company at the end of 2019, the share price had plummeted to well below R7 a share with a market cap of R5 billion.
In his book, Truth to Power, De Ruyter said questions were raised about the performance of Nampak under his leadership.
“Although it was true that Nampak’s share price had performed poorly under my watch, there were mitigating factors,” he said.
He explained that, before his time as CEO, Nampak purchased the Nigerian beverage can manufacturer Alucan Investment.
Nampak had also been expanding aggressively in Angola, leaving the company up to its eyeballs in debt.
The company became highly exposed to two companies dependent on oil. “I was abruptly thrust back into the world of oil when prices collapsed,” he said.
Nampak’s earnings in Nigeria and Angola nosedived, leading him to implement cost-cutting measures.
De Ruyter cut the dividend for the first time in Nampak’s history, causing dividend funds to sell off their holdings.
“The Nampak share price plummeted and, with that, the reputation of its management,” De Ruyter wrote in his book.
Nampak’s share price under Andre de Ruyter
De Ruyter said in the court of public opinion he stood no chance to explain why the Nampak share price performed so poorly.
“The involved explanation about Nampak’s exposure to the international oil price stood no chance against the seemingly incontrovertible and easy-to-understand counter-evidence: a chart showing a precipitous decline in the share price,” he said.
De Ruyter said his extensive explanation was like lining up a peashooter against a bazooka.
“The chart was paraded on social media to show that Eskom was now in the hands of someone who had run a listed company into the ground – and the narrative was set.”
Andre de Ruyter’s performance as Nampak CEO
De Ruyter said he used the “Nampak lemon to make lemonade” in his maiden speech to Eskom staff at Megawatt Park.
“I acknowledged one of the major points of criticism following my appointment, the poor performance of Nampak under my leadership, and tried to explain it as best I could,” he said.
“Using the Nampak lemon to make lemonade, I used its overburdened balance sheet to demonstrate that I had the experience to deal with the overwhelming debt burden at Eskom.”
It raises the question of how Nampak performed under De Ruyter’s leadership, especially regarding the company’s balance sheet.
Daily Investor analysed Nampak’s performance over De Ruyter’s tenure, which shows a stable balance sheet but a big decline in net income.
The table and charts below (De Ruyter’s tenure in red) gives an overview of Nampak’s performance between 2014 and 2019 when De Ruyter was CEO.
| Measure (R millions) | Start | End | % change |
| Revenue | R15,305.60 | R14,642.40 | -4% |
| Operating profit | R1,842.80 | R253.80 | -86% |
| Net income | R1,567.70 | -R851.60 | -154% |
| Total assets | R21,891.10 | R22,459.60 | +3% |
| Total equity | R7,883.10 | R8,209.90 | +4% |
| Share price | R39.20 | R6.83 | -83% |
Nampak revenue
Nampak net income
Nampak operating profit
Nampak equity
Comments