2012...SAAB Grintek R29.7m Natcom R7.1m Sales Corporate action Total R76.8m Manuela Krog, Financial...
Transcript of 2012...SAAB Grintek R29.7m Natcom R7.1m Sales Corporate action Total R76.8m Manuela Krog, Financial...
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for the year ended 30 September 2012
2012 Reunert results
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Dave Rawlinson, Chief Executive
2012 OVERVIEW
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Agenda
Welcome to attendees
Operational performance – Dave Rawlinson, Chief Executive
Financial results – Manuela Krog, Financial Director
CBi-electric – Alan Dickson, Managing Director, CBi-electric
Nashua
Andy Openshaw, Managing Director, Nashua Communications
Mark Taylor, Managing Director, Nashua Mobile (CT)
Executive team focus – Dave Rawlinson, Chief Executive
1
2
3
4
5
JHB
CT
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1.6 1.5
0.0
0.5
1.0
1.5
2.0
01 02 03 04 05 06 07 08 09 10 11 12
Rbn
Revenue 7% up • 2012: R11.7bn
• 2011: R10.9bn
Operating profit 10% up • 2012: R1.5bn
• 2011: R1.4bn
Salient features
10.9 11.7
0 2 4 6 8
10 12 14
01 02 03 04 05 06 07 08 09 10 11 12
Rbn
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1.7x
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1.5
2.0
2.5
0
100
200
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400
500
02 03 04 05 06 07 08 09 10 11 12
Cover Cents
Interim Final Special Dividend cover
Normalised HEPS 9% up • 2012: 644.4c
• 2011: 590.0c
Final dividend 9% up • 2012: 275 cents per share
• 2011: 253 cents per share
Salient features
630.1 644.4
0 100 200 300 400 500 600 700
01 02 03 04 05 06 07 08 09 10 11 12
Cents
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582 681
626
765 736 789
1 263
1 391
1 525
1H10 2H10 1H11 2H11 1H12 2H12 CBi-electric Nashua Reutech Half Year Full Year
Operating profit contribution per segment
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Cash on hand
0.0
0.5
1.0
1.5
2.0
2.5
02 03 04 05 06 07 08 09 10 11 12
Rbn Cash on hand (including internal financing deposited with Quince)
(2.0)
(1.5)
(1.0)
(0.5)
0.0
0.5
1.0
02 03 04 05 06 07 08 09 10 11 12
Rbn
Net cash on hand reduced by Quince borrowings Quince net borrowings
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2012 OPERATIONAL PERFORMANCE
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African Cables • Slower than expected rollout of infrastructure spend • Delays in contract renewals with parastatals
constrained growth • Signing of several long-term contracts with public
sector enterprises provides a revenue base • Power Installations division performing well • Acquisition of Tank Industries provides expanded
product range Low Voltage • Experienced good export demand • Margins supported by a weaker Rand • Local residential and mining markets static • Progress with ITmatic and industrial controls
businesses slow • Activity levels in Australia lower due to slow down in
mining sector Telecom Cables • New high bit rate ADSL cable qualified in 2012 • This secured revenue stream from Telkom • Export market penetration slow
0.6
0%
5%
10%
15%
20%
0.0
0.2
0.4
0.6
0.8
07 08 09 10 11 12
Profit margin
Rbn Operating profit
3.6
0.0
1.0
2.0
3.0
4.0
5.0
07 08 09 10 11 12
Rbn Revenue
Operations – CBi-electric
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Nashua Mobile • Loss of LCR
• Further reduction in ARPU as a result of bundled tariffs affected Nashua Mobile
Nashua Office Automation • Increased unit sales, but margin pressure due to
weakening rand and increased competition
Nashua ECN • Successful integration – migration of targeted LCR
customers
• Merger with Nashua Communications supports a converged telecommunications offering
Nashua Communications • Acquisition of KSS provides Cisco networking
capability
Quince Capital • Solid performance, increase of 11% in the rental
book
0.8
0%
3%
6%
9%
12%
0.0
0.2
0.4
0.6
0.8
1.0
07 08 09 10 11 12
Profit margin
Rbn Operating profit
7.2
0.0
2.0
4.0
6.0
8.0
07 08 09 10 11 12
Rbn Revenue
Operations – Nashua
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Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12
Nashua Mobile revenue analysis
Operations – Nashua Mobile
Airtime (excl. LCR)
Subscriptions (excl. LCR)
Airtime (LCR)
Subscriptions (LCR)
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Overview • Strong performance from all divisions
• Weakening rand increased margins from export sales
• All operations have stable order books
Reutech Communications • Acquisition of Natcom and SAAB Grintek HF
radio business
Reutech Radar Systems • Continued success of mining surveillance radar
Reutech Solutions • 5 year contract for maintenance of defence force
communications networks
Fuchs Electronics • Expedited long awaited export order
0.15
0%
5%
10%
15%
20%
25%
30%
0.0
0.1
0.2
0.3
07 08 09 10 11 12
Profit margin
Rbn Operating profit
0.8
0.0
0.2
0.4
0.6
0.8
1.0
07 08 09 10 11 12
Rbn Revenue
Operations – Reutech
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0
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400
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Rm
Replacement Expansion Investment R&D
Investment in future capacity
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Tank Industries R16.7m
Nashua franchises R3.5m
KSS Technologies R19.8m
SAAB Grintek R29.7m
Natcom R7.1m
Sales
Corporate action
Total R76.8m
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Manuela Krog, Financial Director
2012 FINANCIAL RESULTS
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16 For the year ended 30 September
Group income statement
Rm 2012 2011 % ∆ Revenue 11 662 10 923 7
EBITDA 1 661 1 513 10
EBITDA % 14.2 13.9
Operating profit (before interest and dividends) 1 525 1 391 10
Operating profit % 13.1 12.7
Effective tax rate (before abnormal item in 2011) % 30.9 29.7
Headline earnings per share (cents) 658.3 598.3 10
Normalised headline EPS (cents) 644.4 590.0 9
Dividend yield 5.4 5.6
Price earnings ratio 10.7 10.0 7
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• Reutech has the greatest export revenue proportion, with exports comprising 55% of segment revenue
• Export revenue for CBi-electric amounted to 12% of segment revenue
21%
20%
7%
41%
8% 3%
Europe
Asia
North America
Africa
Australasia
South America
Exports
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18 As at 30 September
Group balance sheet
Rm 2012 2011 Total non-current assets 2 578 2 401 Current assets 4 010 3 705 Total assets 6 588 6 106 Shareholders’ equity 4 442 3 880 Non-controlling interests 56 55 Non-current liabilities 153 100 Current liabilities 1 937 2 070 Total equity and liabilities 6 588 6 106
Total liabilities to shareholders’ funds % 43.6 52.6 Current ratio (times) 2.1 1.8 Normalised return on ordinary shareholders’ funds % 25.1 23.5
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Cash flow (Rm)
565 621
495
(85)
(105)
(291)
42
Opening balance Cashflow from operating activities inlcuding traditional
working capital
Increase in asset rental book
Increase in handset
subsidies
Investing activies Financing activities
Closing balance Increase in Quince asset rental book
Increase in device finance
(Nashua Mobile)
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31%
62%
7%
2012
CBI-electric Nashua Reutech
30%
64%
6%
2011
Segmental revenues
2012
R11 662m
2011
R10 906m
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21 For the year ended 30 September
Segmental analysis – operating profit
Operating profit - Rm 2012 % ∑ % ∆ 2011 % ∑ CBi-electric 593 39 - 592 43
Nashua 839 55 6 794 58
Reutech 151 10 209 49 3
Other (57) (4) 5 (61) (4)
Total operations 1 525 100 14 1375 100
NSN - 17
Operating profit as reported 1 525 1 391
1 391
1 525 1 44
102
3 (17)
2011 CBI-electric Nashua Reutech Other NSN 2012
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Operations – research and development
2012 Total R&D Rm Self-funded 2012 2011 2010 2009
CBi-electric 2.2 2.2 3.5 3.4 2.8
Nashua 3.2 3.2
Reutech 25.1 58.8 48.2 64.4 55.1
Total 30.5 64.2 51.7 67.8 57.9
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JHB: Andy Openshaw, Managing Director, Nashua Communications CT: Mark Taylor, Managing Director, Nashua Mobile
2012
Nashua
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• Successful integration • Exceeded profit targets • LCR migration targets exceeded
• Interconnect rates continue to drop › Efficiency and volume support sustainability
and boost margins › Lower interconnect rates benefit new entrants
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Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12
Nashua ECN Monthly Minutes, Nov '09 - Oct '12
Mobile Local National Inbound Special International On-Net
ECN post acquisition
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New Nashua Communications
Creating a strategic platform for future growth
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Focus for 2013
Creating a strategic platform for future growth
CARRIER / CLOUD SOLUTIONS
NETWORK SOLUTIONS
DATA CENTRE SOLUTIONS
COLLABORATION SOLUTIONS
SOLUTION ENGINEERING
TECHNOLOGY MANAGEMENT
TRAINING
SERVICE DELIVERY
Customers
DIRECT SALES
INDIRECT SALES
ADMINISTRATION AND SUPPORT
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• Cisco Gold Partner certification achieved in November 2012
• Cisco Big Bet backing in the corporate data centre space
• Siemens Openscape platform deployed in the ECN cloud
• ECN Hosted PBX and Mobile Voice applications launch in the new year
• Successful cross selling achieved for combined PBX and voice offerings through the Nashua OA channel
Key milestones achieved
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• To support growth initiatives the business has been restructured into:
› Consumer and Enterprise
› Customer Operations to provide support
• Create efficiencies
• Focus on margin growth
• New network agreements will be concluded soon
Nashua Mobile – key focus points for 2013
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• Refresh hardware technologies
• Update and redo the retail stores
• Address technology in the stores to have the same POS and Accounting system
• Automated credit collection system
• Revamp the front-end systems
• Grow retail footprint by partnering with stores
› In-store concept
› Cost effective
› Adding 100 new Nashua Mobile touch points
Nashua Mobile Retail
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• Focus on SME and SMME
› Better margins and growth opportunities
• Augment our product suite to help drive more services into this base
• There is pressure for more discounts in the corporate space
• Refresh and revamp the technology
› Self-serve
› Account executives can serve customers at their offices in real time
Nashua Mobile Enterprise
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Strategy to follow a two-pronged approach for 2013
• Maintain and grow current hardware and service model
› Grow production printing
› Improve penetration into strategic accounts
› Continuous training, motivation and support via our existing franchise channel
• Transform into a services-led organisation
- Focus more on solutions than pure product
› Managed print service solutions
› Managed document service solutions
- Provide document tracking, archiving, indexing or business process optimisation
Nashua Office Automation
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Nashua companies working together
• Customers continue to look for a consolidated product offering
› Our businesses will continue to work and move closer together
› Each bringing their expertise, solutions and routes to market
› Into a converged product environment
• Cross selling across and between our customer bases is yielding good returns and adding to our brand strength
• Collaboration on consolidated product offerings to key clients
Working together on the evolution of unified communications and cloud driven services across the product ranges
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Alan Dickson, Managing Director, CBi-electric CBi-electric
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Generation build (IRP 2010) 1a
YEAR Coal, Pumped Storage & Eskom Wind (MW)
2013 1 455
2014 1 721
2015 1 444
2016 722
2017 2 168
Total generation build 7 510
Market conditions
Market conditions are predominantly driven by state infrastructure projects
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Market conditions
Transmission Assets New assets expected in 2013 - 2017
HVDC 0
765kV Lines (km) 1 890
400kV Lines (km) 5 668
275kV Lines (km) 52
Total kms of line 7 610
Transmission expansion (TDP) 1b
Market conditions are predominantly driven by state infrastructure projects
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Window 1 (MW)
Window 2 (MW)
Remaining by 2016
(MW)
Solar PV 632 417 401
Solar CSP 150 50 -
Wind 634 562 653
1 416 1 029 1 054
Market conditions
Renewable energy 2
Market conditions are predominantly driven by state infrastructure projects
• R18bn local content in Window 1 and will grow in subsequent Windows
• Window 2 financial closure in March 2013
• An additional 3 200MW between 2017 - 2020
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Market conditions
Residential 3
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 0.0
1.0
2.0
3.0
4.0
5.0
6.0 Buildings reported as completed
Constant 2005 prices
ZAR (m)
• Stable
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Welcome to attendees 1
Market conditions
Commercial 4
Mining 5
• Chance of improved conditions
• Operational mining expected to continue at pre-unrest levels
• Deep level mining capital to be significantly reduced
• Iron ore and coal are primary drivers of capital expenditure
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• Mining uncertainty on project roll out
• Rising cost base (electricity and labour)
• Increasing competition and margin pressure
• State infrastructure execution risks
Head winds
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• Strong local corporate responsibility
› Level 2 BBBEE
› Product designation
› Local manufacture investment
• Reduced component exposure by expanding in Value Added Services business
› IT Matic
› Power Installations
› Tank Acquisition
• Export 12% of CBi-electric group revenue across the world
› Rand hedge
Positioning
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• Proven track record on operating efficiencies
• Well positioned within the electrical sector which has strong demand and long term fixed investment
› Eskom
› Renewable Energy
› Transnet
Positioning
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Dave Rawlinson, Chief Executive Executive team focus
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Team focus 2013 – CBi-electric
Local supplier of choice for R18 billion local spend on renewable energy roll-out 1
Increase export activity in Europe, USA and Africa 2
Participate actively in Eskom and Transnet expansion 3
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Team focus 2013 – Nashua
Grow customer base and minutes on voice network 1
Market penetration in converged voice and data network space 2
Roll-out recently developed products for 3
Hosted PBX
Grow mobile customer base 4
Mobile voice Data storage
Accelerate roll-out of office solutions 5
Increase outlets in retail space Automate customer processes Service excellence
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Team focus 2013 – Reutech
Integrate Saab Grintek and Natcom acquisition into Reutech Communications 1
Increase MSR market penetration 2
Secure further orders for concentrated photovoltaic tracker solution 3
Obtain and execute set-top box order 4
Secure further export orders for Fuchs 5