Trellidor Holdings Ltd. · JSE:TRL
Trellidor — FY2020 Earnings Presentation
34 slides from Trellidor's earnings presentation, September 2020
Slide 1: Trellidor Holdings Limited Annual Results Ending 30 June 2020
TRELLIDOR HOLDINGS LIMITED ANNUAL RESULTS ENDING 30 JUNE 2020
Slide 2: Impact of National Lockdown
IMPACT OF NATIONAL LOCKDOWN As at 31 March 2020, 4 days after national lockdown, Group cash resources stood at R25.6m The Group was unable to trade in April, was severely restricted in May and conditions TERRY DENNISON improved through June 2020 at Level 3 GROUP CEO Based on deficit to forecast as a
Slide 3: Impact of National Lockdown
IMPACT OF NATIONAL LOCKDOWN In order to mitigate this significantly reduced performance, a cash conservation strategy was successfully implemented. The interim dividend declared in March 2020 was postponed TERRY DENNISON As at 30 June 2020, Group cash resources closed on R16.1m and these have increa
Slide 4: Strategic Objectives for 2020
STRATEGIC OBJECTIVES FOR 2020 As reported in the 2019 year ended results, key strategic objectives set for the Group were as follows: TERRY DENNISON Continue with the share-buy buy program GROUP CEO Optimising our balance sheet by increasing gearing to finance long-term organic growth Ongoing focus
Slide 5: Strategic Objectives for 2020
STRATEGIC OBJECTIVES FOR 2020 Given the National Lockdown, the Group prioritised its strategies through H2 to focus on: Cash preservation and generation Reducing costs in the short and medium terms in reaction to the Lockdown and in anticipation of future TERRY DENNISON GROUP CEO weak economic condi
Slide 6: Strategic Objectives Update
STRATEGIC OBJECTIVES UPDATE Reducing costs in the short and medium terms in anticipation of weak economic conditions: TERRY DENNISON Operating costs were reduced by 8,4% year on year GROUP CEO The Group has implemented a retrenchment program which is planned for completion in H1 FY21 Introduction of
Slide 7: Strategic Objectives Update
STRATEGIC OBJECTIVES UPDATE Strategic investment in selling capacity in response to changing consumer behavior both locally and abroad TERRY DENNISON Sale and purchase agreements to acquire 3 franchises in the eThekwini Metro area were concluded in H2 GROUP CEO FY20 and the sales performance from Ju
Slide 8: Prospects
PROSPECTS Dividend The FY20 interim dividend will be paid and no final dividend has been declared TERRY DENNISON Share-buy back program GROUP CEO The current share price continues to undervalue the business and once we are comfortable that cash generation has stabalised we will continue to apply exc
Slide 9: Prospects
PROSPECTS Improving operational efficiencies and active cost management within the Group Completion of the retrenchment program to lower the operating cost base The weak economic environment is anticipated to continue and as result the tight control of operational TERRY DENNISON GROUP CEO overheads
Slide 10: Prospects
PROSPECTS Trading in July and August has surprised on the upside: Trellidor sales have exceeded prior year by 7% Taylor is trading on par with the prior year TERRY DENNISON GROUP CEO Cash generation has been strong with cash resources growing by R15.2m over the two months
Slide 11: Prospects
PROSPECTS The Group remains focused on its core growth strategies of which the Board believes will position it to benefit from any improving economic conditions: Brand leadership TERRY DENNISON GROUP CEO Diversifying its product range Distribution enhancement Growth in South Africa, Africa and the U
Slide 12: Group Financial Overview
GROUP FINANCIAL OVERVIEW TRELLID@R BARC dG nmnc eee THE! TER BLINDS & SHUTTERS Est.1959 THE @XSER Le) GROUP
Slide 13: Group Financial Performance
GROUP FINANCIAL PERFORMANCE FY 20 vs Group financial performance (R'm) FY 2017 HY 2018 FY 2018 HY 2019 FY 2019 HY 2020 FY 2020 FY 19 CAGR Revenue 525.4 297.4 539.0 286.2 514.9 274.8 421.5 -18% -5% Gross profit 250.5 137.2 245.9 128.9 231.9 122.5 175.5 -24% -9% EBITDA 113.9 65.0 103.5 55.7 81.2 49.1
Slide 14: Group Financial Performance
GROUP FINANCIAL PERFORMANCE Forecasted impact of Covid-19 on R'm Revenue 600.0 H2 - Taylor revenue is R72m 525.4 539.0 514.9 H2 - Trellidor 500.0 H1 - Taylor 421.8 H1 - Trellidor DAMIAN JUDGE 400.0 As a result the Group revenue is down GROUP CFO 18% year-on-year 300.0 282.8 297.4 286.2 274.9 200.0 T
Slide 15: Group Financial Performance
GROUP FINANCIAL PERFORMANCE EBITDA declined due to: EBITDA R'm H2 - Taylor Lower volumes in tough economic conditions 140.0 H2 - Trellidor 120.0 113.9 H1 - Taylor Includes R37.4m impairment of Goodwill 100.0 H2 103.5 H2 H1 - Trellidor 81.2 DAMIAN JUDGE Mitigating factors: 80.0 H2 63.6 H2 65.0 H2 H2
Slide 16: Group Balance Sheet
GROUP BALANCE SHEET Invested capital and interest cover Debt/Equity ratio of 61% (2019: 35%) – 350.0 35.0x change driven by a 26% increase in debt 300.0 30.0x year-on-year and a 29% decrease in 250.0 25.0x DAMIAN JUDGE equity as a result of the current year Interest cover 200.0 20.0x GROUP CFO loss
Slide 17: Group Net Working Capital
GROUP NET WORKING CAPITAL Net working capital Reduction in inventory is in line with a 200.0 strategic objective to reduce stock 150.0 107.1 106.4 110.6 93.1 holding in Taylor in particular 100.0 93.1 Decrease in Receivables in line with 50.0 65.1 64.8 62.4 57.2 56.5 reduced trading through Q4 FY20
Slide 18: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW Cash conversion (R'm) 80.0 66.0 68.2 62.4 63.5 59.6 58.5 60.0 43.0 43.5 44.9 39.1 40.4 40.0 32.6 31.8 31.8 37.0 DAMIAN JUDGE 26.8 24.3 20.5 25.0 GROUP CFO 17.5 20.0 - FY 2017 HY 2018 FY 2018 HY 2019 FY 2019 HY 2020 FY 2020 -20.0 -24.5 -40.0 Profit after tax Cash from opera
Slide 19: Capital Allocation
CAPITAL ALLOCATION Return to shareholders FY19 Final dividend of R12m (2019: R17m) was paid R22m spent on the buy-back of 5 561 547 shares at an average price of R3.94 per share DAMIAN JUDGE Debt Servicing GROUP CFO Paydown interest bearing liabilities prior to refinancing of R13.8m which included a
Slide 20: Capital Allocation
CAPITAL ALLOCATION Franchises R11m to acquire four local franchise operations has been deployed FY21 Capital Allocation DAMIAN JUDGE GROUP CFO FY20 interim dividend of 8.0c per share, which was postponed, will be paid in October 2020 The current share price continues to undervalue the business and o
Slide 21: Segments
SEGMENTS | TRELLID@R } nn THE @XSER Le) GROUP
Slide 22: Trellidor – Sales Analysis
TRELLIDOR – SALES ANALYSIS Overall revenue has declined by 20% across the Geographical presence Trellidor markets 4% 21% 32% DAMIAN JUDGE Despite the Covid-19 disruption we still saw a GROUP CFO strong performance on the African continent with sales growing 7% year-on-year 43% There was a weaker per
Slide 23: Trellidor – Sales Analysis
TRELLIDOR – SALES ANALYSIS Diversified product range spans income Product type groups which mitigates weak middle and upper middle-class economy 2% 12% 6% DAMIAN JUDGE GROUP CFO The product mix has remained consistent 12% with prior periods 68% It is pleasing to note that the Rollerstyle product ran
Slide 24: Trellidor – Trading Margin
TRELLIDOR – TRADING MARGIN Cost of sales as a % of net sales Reduced trading margin as a result of the 60.0% under recovery in fixed and semi-variable 52.1% 53.2% 52.2% 52.1% 53.8% costs during the lockdown 50.0% 9.9% 9.2% 9.9% 10.0% 9.4% 40.0% DAMIAN JUDGE 10.5% 10.5% 10.6% 11.1% 15.0% GROUP CFO Un
Slide 25: Segments
SEGMENTS BLINDS & SHUTTERS ts a THE @iXS ERLE.) GROUP
Slide 26: Taylor – Impairment of Goodwill
TAYLOR – IMPAIRMENT OF GOODWILL Coivd-19 has had a significant impact on the performance of Taylor and as result management has tested for impairment. The recoverable amount assessment utilises expected pre-tax cash flows, a conservative DAMIAN JUDGE growth rate for 3 years and a discounted risk adj
Slide 27: Taylor – Sales Analysis
TAYLOR – SALES ANALYSIS Geographical Presence A decline of 14.9% from FY19 driven 2% predominately by the lockdown 5% DAMIAN JUDGE At half-year Taylor was 1.3% ahead of FY19 but GROUP CFO couldn’t capitalise on this position given Covid- 19 93% The Western Cape continues to be the major Main Centres
Slide 28: Taylor – Sales Analysis
TAYLOR – SALES ANALYSIS Turnover well spread across product types Product Type 15% Blind sales, in particular roller-blinds, continued to growth in its contribution to 41% DAMIAN JUDGE GROUP CFO overall sales 38% It is pleasing to note an in the contribution of 7% NMC sales which was only 8% down on
Slide 29: Taylor – Trading Margin
TAYLOR – TRADING MARGIN Cost of sales as a % of net sales Cost control measures implemented have been successful but negatively impacted by the 70.0% 63.5% lockdown 60.0% 56.3% 59.2% 59.6% 6.3% 60.0% 5.7% 5.5% 6.8% 5.8% 7.6% 5.1% 50.0% 4.9% 5.2% 5.7% DAMIAN JUDGE GROUP CFO Group buying strategies ha
Slide 30: Additional Information
ADDITIONAL INFORMATION TRELLID@R J THEY
Slide 31: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW Group summarised cash flow (R'm) FY 2018 HY 2019 FY 2019 HY 2020 FY 2020 EBITDA 103.5 55.7 81.2 49.1 11.6 Movement in non cash items (incl provisions) 3.4 1.1 3.1 (1.9) 45.4 Net working capital movement 0.1 (16.0) (13.6) (0.6) (2.0) Inventory (12.3) (4.2) (2.2) 14.0 11.0 A
Slide 32: Group Summarised Balance Sheet
GROUP SUMMARISED BALANCE SHEET Summarised balance sheet (R'm) FY 2018 HY 2019 FY 2019 HY 2020 FY2020 Non current assets Property, plant and equipment 61.2 66.1 64.9 57.2 56.8 RoU Assets 21.0 19.6 Goodwill and other intangibles 116.8 116.4 113.5 111.7 82.7 Deferred Tax 3.4 2.6 1.6 0.5 3.1 Other finan
Slide 33: Group Financial Performance – HEPS
GROUP FINANCIAL PERFORMANCE HEPS (R'm) FY 2018 HY 2019 FY 2019 HY 2020 FY 2020 FY 20 vs FY 19 Profit attributable to ordinary shareholders 58.8 32.1 42.9 26.3 (21.3) -150% Adjusted for: Profit on disposal of property, plant and equipment (0.1) - 0.2 0.5 (0.1) Impairment of goodwill 34.6 Impairment o
Slide 34: Thank You
TERRY DENNISON DAMIAN JUDGE GROUP CEO GROUP CFO THANK YOU