Reunert Limited · JSE:RLO
Reunert — FY2021 Earnings Presentation
27 slides from Reunert's earnings presentation, Nov 23, 2021
Slide 1: Full Year Results Presentation
FULL YEAR RESULTS PRESENTATION For the year ended 30 September 2021
Slide 2: Agenda
AGENDA A Overview B Strategy update C Financial performance D Segmental performance E Business outlook and prospects 2
Slide 3: Overview
Overview Alan Dickson Group CEO
Slide 4: Overview
OVERVIEW Strong performance Strategic growth areas Improved shareholder in a challenging environment progressed well returns > Targeted growth markets continue to > Total cash returned to shareholders > Good recovery in Electrical Engineering accelerate increased by 32% compared to prior year ─ Circ
Slide 5: Financial Performance
FINANCIAL PERFORMANCE R9 575m R1 050m R986m 207c per share 19% 405% 14% 8% FY2020: R8 046m FY2020: R208m FY2020: R868m FY2020: 192c per share Reunert reviewed results for the year ended 30 September 2021 2021 5
Slide 6: Key Event | Covid-19
KEY EVENT| COVID-19 EVENT IMPACT FY22 Continued Covid-19 impact in > Reduced market activity in ICT > Key SME markets, excluding FY21 Segment : hospitality and leisure, largely > 2nd and 3rd waves had a material ─ Hospitality and leisure market recovered impact on our operations verticals materially
Slide 7: Key Event | Reduced Export Activity in Applied Electronics
KEY EVENT| REDUCED EXPORT ACTIVITY IN APPLIED ELECTRONICS EVENT IMPACT FY22 > Lack of international travel and > Pipeline orders not secured > International travel in-country lockdowns reduced > Permit delays resulted in recommenced new export order intake delayed sales > Order book for FY22 at > Ex
Slide 8: Key Event | Supply Chain
KEY EVENT| SUPPLY CHAIN EVENT IMPACT FY22 > Electronic chip shortage: > Stock outs of key product > Product offering at Nashua ─ impacted manufacturing in lines at Nashua only fully resolved in H2FY22 Applied Electronics ─ R80m revenue lost > Supply chain challenges ─ led to stock outs at > Increase
Slide 9: Strategy update
Strategy update Alan Dickson Group CEO
Slide 10: Our Strategy | Scaling Growth Businesses
OUR STRATEGY | SCALING GROWTH BUSINESSES Providing renewable energy technology and solutions 40 > Electricity generation market improved significantly and provides impetus to our renewable energy businesses and Electrical Engineering % ─ Embedded generation cap lifted to 100MW SOLAR ASSET OWNERSHIP
Slide 11: Our Strategy | Scaling Growth Businesses
OUR STRATEGY | SCALING GROWTH BUSINESSES ICT as an enabler for business’ operational improvement > Further build out of the Solutions and Systems Integration cluster whose key service offering enables enterprises to excel in a digitally transforming world > +OneX service offerings expanded both orga
Slide 12: Our Strategy | Black Economic Empowerment
OUR STRATEGY| BLACK ECONOMIC EMPOWERMENT Restructured strategic BEE credentials > Current deal reaches the end of its 15-year contractual term in March 2022 > The restructuring of the Group’s BEE credentials will be presented to shareholders for approval at the 2022 AGM ─ SENS issued 23 November 202
Slide 13: Financial performance
Financial performance Nick Thomson Group CFO
Slide 14: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS Restated > The restatement is in line with the latest guidance Rm 2021 2020 % change received from the JSE in the November 2021 pro- active monitoring of financial statements report Revenue 9 575 8 046 19 Operating expenses (8 524) (7 252) 18 > SA GDP growth
Slide 15: Operating Profit Analysis
OPERATING PROFIT ANALYSIS Rm 2021 2020 % change Segment operating profit 986 868 14 Fair value remeasurements (R65m) Impairment of goodwill and property, plant and equipment (1) (79) > R103m remeasurement gain on fair value of Fair value remeasurements 65 (1) Zimbabwean power cable factory. Profit o
Slide 16: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Rm 2021 2020 Non-current assets PP&E, investment property, ROU assets and intangibles 1 471 1 457 > No non-financial asset impairments required in Goodwill 934 924 2021 (2020: (R79m)) Investment at fair value through profit or loss 76 - Derivative financi
Slide 17: Cash Flow Analysis
CASH FLOW ANALYSIS MOVEMENT IN CASH FLOW (Rm) 1 158 323 411 291 (15) (200) (38) 606 137 (272) 411 (42) (196) (136) (428) Opening Dividends Total cash FX effects Closing Cash Working Interest, Tax paid Capital Free cash Capital Investing Financing Total cash balance paid generated on OD & balance gen
Slide 18: Capital Expenditure to 30 September 2021
CAPITAL EXPENDITURE | TO 30 SEPTEMBER 2021 238 64 170 21 Sep 2021 Sep 2020 46 Categories (Rm) YTD YTD 37 Circuit breaker plant 30 - Smart Energy Management 18 1 Skywire infrastructure 27 24 124 99 BOO solar plants 81 40 Capitalised development expenditure 29 38 Other 53 67 4 13 Total 238 170 Sept 20
Slide 19: Segmental performance
Segmental performance Alan Dickson Group CEO
Slide 20: Electrical Engineering - Cables
ELECTRICAL ENGINEERING Cables 47% REVENUE (Rm) > Much improved performance at all companies 5 247 5 139 5 457 5 551 > Impact of prior year’s actions delivered desired results 3 767 ─ Reduced cost bases matched production volumes ─ Reduced impact of forex movements in Zambia > Moderate improvement
Slide 21: Electrical Engineering - Circuit Breakers
ELECTRICAL ENGINEERING Circuit Breakers VOLUME OF POLES EXPORTED > Strategic actions continued to augment a strong operational performance > Geographic diversification 5 065 4 752 4 839 20% ─ Product launches drove new customer and market acquisition in our targeted international geographies 4 228 T
Slide 22: ICT - Solutions and Systems Integration
ICT Solutions and Systems Integration > +OneX continued scaling up its operations to position the business for strong long-term -1% growth REVENUE (Rm) > Successful build out and adoption of +OneX brand as a new-age Solutions and Systems 3 443 3 235 Integrator 2 524 2 490 > Revenue growth of 21% >
Slide 23: ICT
ICT % CUSTOMERS WITH MORE THAN ONE PRODUCT Total Workspace Provider 28% 30% > Volumes returned to 90% of pre-Covid-19 lockdown levels 22% 24% > Good progress made in executing the strategy of Total Workspace Provider ─ Improved cross-selling of complementary products and services to existing custome
Slide 24: Applied Electronics
APPLIED ELECTRONICS Current year performance impacted by low export business -5% > Disproportionate drop in segment operating profit caused by: REVENUE (Rm) ─ Higher margin export orders either not received or unable to be concluded 2 198 2 346 1 951 1 854 ─ Impact of riots at Terra Firma Solution
Slide 25: Business outlook and prospects
Replace with Reunert relevant pic Business outlook and prospects Alan Dickson Group CEO
Slide 26: Prospects
PROSPECTS Way forward > Reunert is expecting to continue to steadily improve its financial performance due to: ─ Moderate improvements in market conditions experienced by Electrical Engineering and ICT segments ─ Increased renewable energy investment and our strong position to benefit therefrom ─ Co
Slide 27: Q&A and Key Upcoming Dates
Q&A Key upcoming dates > Please type your questions on the webcast portal > JP Morgan Investor Conference 7 – 8 December 2021 > Kindly email Karen Smith at karens@reunert.co.za > Integrated Report 17 December 2021 should you wish to have a one-on-one call with the > AGM 15 February 2022 management t