Trellidor Holdings Ltd. · JSE:TRL
Trellidor — H1 2019 Earnings Presentation
28 slides from Trellidor's earnings presentation, December 2018
Slide 1: Unaudited Condensed Consolidated Interim Financial Results
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018
Slide 2: Salient Points
SALIENT POINTS 29.8c Headline earnings per share (2018: 35.2c) 9.1c Interim dividend declared per share (2018: 11.0c) R56m EBITDA for the six months (2018: R65m) R25m Cash from operations for the six months (2018: R24m) 20% Return on Invested Capital (2018: 25%) Slide 2
Slide 3: Salient Points
SALIENT POINTS • New Group CFO appointed effective 1 March 2019 to increase capacity for efficient execution of group strategies – Group • Taylor product sales through Trellidor franchises have gone up c.150% – Group • Implemented factory efficiency project and cost savings are ahead of target – Tre
Slide 4: Group Growth Strategies
GROUP GROWTH STRATEGIES • Acquisitive growth – Assessment of quality acquisition potential is ongoing through FY 2019 • Diversified product offering – New external roller-blind range will be launched March 2019 • International growth – focus on Africa – Franchisees signed in Kinshasa (DRC) and Ivory
Slide 5: Group Overview
GROUP OVERVIEW • Trellidor • Taylor – Trellidor is the market leading manufacturer – Taylor is a major manufacturer and of custom-made barrier security products distributor of a range of custom-made blinds, and a range of decorative and – Distribution through dedicated and skilled security shutters
Slide 6: New External Roller-Blind
NEW EXTERNAL ROLLER-BLIND Slide 6
Slide 7: Group Financial Overview
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Slide 8: Group Financial Performance
GROUP FINANCIAL PERFORMANCE HY 19 vs Group financial performance (R'm) FY 2017 HY 2018 FY 2018 HY 2019 HY 18 Revenue 525.4 297.4 539.0 286.2 -4% Gross Profit 250.5 137.2 245.9 128.9 -6% EBITDA 113.9 65.0 103.5 55.7 -14% Profit after tax 66.0 39.1 59.6 32.6 -17% Dividends paid 28.5 21.1 32.9 17.4 -17
Slide 9: Group Financial Performance
GROUP FINANCIAL PERFORMANCE • H1 2019 trading reflects the continued tough economy • The sharp decline in the Western Cape economy in 2018 calendar year in particular has had an impact on relative performance • This reinforces our strategy to continue on the geographical expansion of the Taylor prod
Slide 10: Group Financial Performance
GROUP FINANCIAL PERFORMANCE • EBITDA declined due to: – Lower volumes in tough economic conditions – Tighter margins across the product range – Inflationary impact on input costs • Mitigating factors: – Improved factory efficiencies in Trellidor – Tighter cost controls across the Group • Future inte
Slide 11: Group Balance Sheet
GROUP BALANCE SHEET • Debt/Equity ratio of 39% (2018: 47%) • Interest bearing debt of R89.8m at 31 December 2018 • R6.1m interest bearing debt repaid during the period Ratios FY 2017 HY 2018 FY 2018 HY 2019 Debt/Equity 55% 47% 43% 39% Interest Cover 8.4x 11.7x 9.6x 10.7x Debt/EBITDA 0.9x 0.9x Slide
Slide 12: Group Net Working Capital
GROUP NET WORKING CAPITAL • Working capital investment increased mainly due to increased stock levels as a result of decreased demand • Accounts receivable are in-line with trading although slightly higher due to an extra week of trading in December 2018 for Taylor Net investment in working capital
Slide 13: Capital Allocation
CAPITAL ALLOCATION • Capex of R8.2m of which R6.0m was for the efficiency project at Trellidor • Debt Servicing – Paydown interest bearing liabilities - R6.1m – Net interest - R4.1m • Return to shareholders – Dividend final 2018 - R17.5m – Share buy-backs - R3.0m • 642,705 shares repurchased during
Slide 14: Segments
SEGMENTS
Slide 15: Trellidor – Sales Analysis
TRELLIDOR – SALES ANALYSIS • Overall revenue has declined 1.5% across the Trellidor markets • International revenue growth of 9% driven by excellent growth in the UK • Sales into Africa declined driven mainly by reduced activity in Namibia, Botswana and Swaziland • East and West Africa regions show
Slide 16: Trellidor – Sales Analysis
TRELLIDOR – SALES ANALYSIS • Diversified product range spans income groups which mitigates weak middle and upper middle class economy • As a result of the diversification the decline in sales was held to 1.5% Product Type HY 2018 FY 2018 HY 2019 Traditional Trellidor 68% 68% 69% Clear Guard 12% 13%
Slide 17: Trellidor – Trading Margin
TRELLIDOR – TRADING MARGIN • Improved trading margin despite muted sales • Impact of shift efficiency project: ₋ Benefits have already bore fruit in H1 despite including the implementation costs ₋ Savings anticipated to accelerate through H2 • Under recovery of wages and semi- variable costs due to
Slide 18: Segments
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Slide 19: Taylor – Sales Analysis
TAYLOR – SALES ANALYSIS • The concentration of sales in the Western and Southern Cape regions, which are experiencing a marked slowdown in economy, has had an impact and as a result revenue is down 7% • Johannesburg was flat on the prior period which, given the trading environment, is a solid result
Slide 20: Taylor – Sales Analysis
TAYLOR – SALES ANALYSIS • Turnover well spread by product • Constant innovation and development to keep up with trends • Launching of external roller-blind in March 2019 Product Type HY 2018 FY 2018 HY 2019 • All products custom designed and Aluminium shutters 45% 43% 45% PVC Shutters 12% 14% 11% ma
Slide 21: Taylor – Trading Margin
TAYLOR – TRADING MARGIN • Under recovery of wages and semi-variable costs due to decrease in volumes • Increased input costs, primarily due to R/$ fluctuations, only partially mitigated by selling price increase • Strategy to implement group buying power with suppliers who have synergy ₋ Key objecti
Slide 22: Prospects
TRELLIDOR HOLDINGS LIMITED TRELLID@R J ‘THE ULTIMATE CRIME BARRIER
Slide 23: Prospects
PROSPECTS • The weak economic environment in Southern Africa is anticipated to continue • Improved market conditions in West and East Africa • Further traction from projects in the UK is expected • Focus on margin improvement and tight cost control will be enhanced • Projects focused on material sup
Slide 24: Additional Information
ADDITIONAL INFORMATION TRELLID@R } TRELLIDOR HOLDINGS LIMITED
Slide 25: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW Group summarised cash flow (R'm) FY 2016 HY 2017 FY 2017 HY 2018 FY 2018 HY 2019 EBITDA 81.5 63.5 113.9 65.0 103.5 55.7 Movement in non cash items (incl provisions) (5.9) 1.7 4.2 0.9 3.4 1.1 Net working capital movement (3.3) (19.9) (13.4) (18.8) 0.1 (16.0) Inventory (9.4)
Slide 26: Summarised Cash Flow
GROUP SUMMARISED CASH FLOW Slide 26
Slide 27: Group Summarised Balance Sheet
GROUP SUMMARISED BALANCE SHEET Summarised balance sheet (R'm) FY 2016 HY 2017 FY 2017 HY 2018 FY 2018 HY 2019 Non current assets Property, plant and equipment 42.6 50.7 51.5 54.7 61.2 66.1 Goodwill and other intangibles 4.0 122.7 121.1 118.8 116.8 116.4 Deferred Tax 3.7 2.1 3.7 2.8 3.4 2.6 Other fin
Slide 28: Thank You
THANK YOU