Reunert Limited · JSE:RLO
Reunert — H1 2020 Earnings Presentation
22 slides from Reunert's earnings presentation, Jun 18, 2020
Slide 1: Reunert 1H2020 Results Presentation
REUNERT 1H2020 RESULTS PRESENTATION For the six months ended 31 March 2020
Slide 2: Agenda
AGENDA 01 Salient features 02 Covid-19 update 03 Financial performance 04 Segmental performance 05 Business outlook 2 2
Slide 3: Salient Features | Operational Performance
SALIENT FEATURES| OPERATIONAL PERFORMANCE Good strategy execution supported a positive Significant challenges Interim results impacted Positive cash generation financial performance experienced at cable by cable performance remained in line with in ICT and companies and level 5 lockdown historic nor
Slide 4: Salient Features | Post Covid Adjustments
SALIENT FEATURES| POST COVID ADJUSTMENTS IFRS forward-looking Abnormal item Interim results statements at Quince • Impairment of goodwill and • Whistle blower identified activities • Loss after tax of property, plant and at an external, arms-length R277 million equipment at the cable company • Headl
Slide 5: Covid-19 Impact
REUNERT REUNERT LIMITED COVID-19 IMPACT
Slide 6: Our Responses to Covid-19
6 OUR RESPONSES TO COVID-19 Increased our resilience Partnering with in preparation for Adapting quickly as stakeholders to ensure predicted economic circumstances evolve our sustainability conditions • Rigorous return to work and business • Salary reduction across all white collar • Increased debt
Slide 7: Financial Performance
FINANCIAL PERFORMANCE _ inh - - ua 7 5 am tl ' . “5 . 5 oa ae a eo
Slide 8: Group Statement of Profit or Loss
GROUP STATEMENT OF PROFIT OR LOSS Six months ended 31 March % R million 2020 2019 change (Unaudited) (Unaudited) Revenue 4 144 5 288 (22) EBITDA* 493 698 (29) Depreciation and amortisation (119) (83) 43 Operating profit 374 615 (39) Net interest expense (19) (4) 375 Impairment of financial assets Ex
Slide 9: Summarised Financial Position
SUMMARISED FINANCIAL POSITION As at 31 March As at R million 2020 2019 30 Sep 2019 (Unaudited) (Unaudited) (Audited) Property, plant and equipment, investment property and intangible assets 1 256 1 270 1 292 Right-of-use assets 200 - - Goodwill 924 991 999 Investments and loans 65 55 60 Investments
Slide 10: Cash Flow | As at 31 March 2020
CASH FLOW| AS AT 31 MARCH 2020 1H2020 OB CB Rm EBITDA 493 Cash and cash equivalents 939 793 DBP settlement (22) Bank overdrafts (323) (721) Non-cash items 100 Total 616 72 Cash generated from operations 571 10
Slide 11: Cash Flow Movements
CASH FLOW MOVEMENTS Investing activities (Rm) 1H2020 Movement in rentals and finance leases (169) Other 4 (165) Financing activities (Rm) 1H2020 Settlement of 2015 CSP scheme (54) IFRS 16 lease payment (26) Other 1 (79) 11
Slide 12: Capital Expenditure
CAPITAL EXPENDITURE ► Capital expenditure amounted to R66 million CAPITAL EXPENDITURE (Rm) (1H2019: R59 million) divided between: +12% ● replacement capital R10 million (1H2019: R23 million) ● expansion capital R56 million (1H2019: R36 million) +9% 66 59 8 ► All capital expenditure was funded from i
Slide 13: Segmental Performance
REUNERT REUNERT LIMITED
Slide 14: ICT
ICT ► Office Automation OPERATING PROFIT (Rm) +6% ● Good sales performance despite tough economic conditions ● Hardware market share increase supported the positive results 371 351 317 ● Acceleration of Complementary product and service revenues 278 continued with additions of new offering ● Launch
Slide 15: ICT
ICT ► Key strategic focus areas ● Further cross-sell and addition of Complementary products and COMPLEMENTARY REVENUES TO END CUSTOMERS services, to support the Total Workspace Provider Strategy, to 180 address the evolving market demands 160 ● Office Automation addressing the B2B work-from-home 140
Slide 16: Applied Electronics
16 Applied Electronics ► Operational performance ● Both Reutech Radar and Reutech Communications REVENUE (Rm) performed significantly better than in the previous year due to strong local and export order execution +4% ● Fuchs, as expected, contributed lower earnings year-on- year as we await the new
Slide 17: Applied Electronics
APPLIED ELECTRONICS COMPOUND ANNUAL ► Segment’s order book EXPORT REVENUE GROWTH ● Nanoteq and Omnigo have secured multi-year export order books (Rm) 24% with execution commencing in 2H2020 ● Fuchs secured various production orders in new markets for execution in 2H2020 and beyond ● The segment is p
Slide 18: Electrical Engineering
18 ELECTRICAL ENGINEERING REVENUE (Rm) Operational performance -37% Cables operations 2 775 2 381 2 431 ► Zambia 1 738 ● Removal of input VAT on copper cathode on 1 January 2020 ● Collection of government receivables remained slow, resulting in inflated hard currency borrowings 1H2017 1H2018 1H2019
Slide 19: Electrical Engineering
ELECTRICAL ENGINEERING 1600 1520 EXPORT ORDERS OF MILLIONS OF POLES 1400 ► Key strategic focus areas 1200 ● Circuit breakers will continue to expand into new 1000 884 export markets 800 ● Raising factory efficiencies and improve cost controls 600 522 throughout the segment 400 ● Maintaining a safe w
Slide 20: Business Outlook
BUSINESS OUTLOOK
Slide 21: Targeting Our Actions to Optimise Opportunities
TARGETING OUR ACTIONS TO OPTIMISE OPPORTUNITIES ► Challenging to provide guidance on prospects due to economic uncertainty ► Reunert’s higher growth companies exhibit good structural growth and opportunities • Strong export capability - Fuzes, tactical communication systems and radars - Circuit brea
Slide 22: Q&A Key Upcoming Dates
► Please type your questions on the webcast portal ► Kindly email Karen Smith at Q&A investor@reunert.co.za should you wish to have a one-on-one call with the management team ► Financial year end 30 September KEY UPCOMING DATES ► Full year results 24 November ► Integrated Report 17 December 22