Trellidor Holdings Ltd. · JSE:TRL
Trellidor — FY2019 Earnings Presentation
31 slides from Trellidor's earnings presentation, June 2019
Slide 1: Trellidor Holdings Limited – Audited Final Results for the Year Ended 30 June 2019
TRELLIDOR HOLDINGS LIMITED AUDITED FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2019
Slide 2: Salient Points
SALIENT POINTS 40.1 Headline earnings per share (2018: 54.3) 11.1c Final dividend declared per share (2018: 16.2c) R81m EBITDA (2018: R103m) R71m Cash from operations (2018: R107m) 17.0% Return on Invested Capital (2018: 21.6%) SLIDE 2
Slide 3: Salient Points – Group and Taylor
SALIENT POINTS Group ➢ 2,128,440 shares at an average cost of R4.29 per share repurchased and cancelled as part of the announced buy-back programme during 2019 ➢ An additional 477,247 shares at an average cost of R4.23 were bought-back subsequent to year-end ➢ Taylor product sales through Trellidor
Slide 4: Salient Points – Trellidor
SALIENT POINTS Trellidor ➢ Factory efficiency project yielded cost savings of R6.2m which was ahead of the 2019 target ➢ The Durbanville franchise in the Western Cape, which was acquired in October 2018, reported a 38% increase in turnover for the period November 2018 to June 2019 when compared to t
Slide 5: Market Overview
MARKET OVERVIEW The property market, particularly in the mid to luxury range, has been under pressure from the start of the 2017 financial period This pressure is reflective of the group’s performance over a similar period, specifically in the luxury market which is the target market of Taylor There
Slide 6: Group Growth Strategies
GROUP GROWTH STRATEGIES Acquisitive growth ➢ Organic growth through acquisition of underperforming franchises ➢ Assessment of quality acquisition potential is ongoing Diversified product ➢ Improved roller blind range launched in 2018 grew by 21% year-on-year ➢ New external roller blind range was rol
Slide 7: Group Overview
GROUP OVERVIEW Trellidor Taylor Trellidor is the market leading manufacturer of Taylor is a major manufacturer and distributor of a custom-made barrier security products range of custom-made blinds, and a range of decorative and security shutters Distribution through dedicated and skilled owner-oper
Slide 8: Financial Overview
GROUP FINANCIAL OVERVIEW
Slide 9: Group Financial Performance
GROUP FINANCIAL PERFORMANCE FY 19 vs Group financial performance (R'm) FY 2016 FY 2017 FY 2018 FY 2019 FY 18 Revenue 313.4 525.4 539.0 514.9 -4% Gross profit 157.3 250.5 245.9 231.9 -6% EBITDA 81.5 113.9 103.5 81.2 -22% Profit after tax 54.2 66.0 59.6 43.0 -28% Dividends paid 20.0 28.5 32.9 27.2 -18
Slide 10: Group Financial Performance – Revenue
GROUP FINANCIAL PERFORMANCE 2019 trading reflects the continued Revenue R'm tough economic conditions felt in 600.0 539.0 RSA across the income groups and 500.0 525.4 H2 514.9 H2 H2 geography H2 - Taylor 400.0 H2 H2 - Trellidor H2 H2 313.4 H1 - Taylor 300.0 282.8 297.4 286.2 H1 - Trellidor To mitiga
Slide 11: Group Financial Performance – EBITDA
GROUP FINANCIAL PERFORMANCE EBITDA declined due to: R'm EBITDA ➢ Lower volumes in tough economic conditions 120.0 113.9 ➢ Tighter margins across the product range H2 103.5 100.0 H2 ➢ Inflationary impact on input 81.5 81.2 80.0 H2 H2 Mitigating factors: H2 H2 - Taylor H2 65.0 ➢ Improved factory effic
Slide 12: Balance Sheet
GROUP BALANCE SHEET Debt/Equity ratio of 35% (2018: Invested capital and interest cover 350.0 35.0x 43%) 300.0 30.0x 250.0 25.0x Interest cover 200.0 20.0x R'm 150.0 15.0x Interest bearing debt of R78.6m 100.0 10.0x 50.0 5.0x at 30 June 2019 - 0.0x Dec-16 Jun-17 Dec-17 Jun-18 Dec-19 Jun-19 Debt Equi
Slide 13: Net Working Capital
GROUP NET WORKING CAPITAL R'm Net working capital 200.0 Net working capital investment 150.0 110.6 107.1 increased mainly due to a 100.0 74.6 94.7 95.7 106.4 reduction in payables 50.0 61.7 62.6 62.0 65.1 64.8 62.4 Accounts receivable are in line - (28.1) (34.1) (56.7) (66.9) (55.0) (52.4) with trad
Slide 14: Capital Allocation
CAPITAL ALLOCATION Purchase of the Durbanville Franchise for R2.2m Total Capex of R10.9m of which R6.0m was for the efficiency project at Trellidor Debt Servicing ➢ Paydown interest bearing liabilities R21.2m ➢ Net interest R7.8m Return to shareholders ➢ Dividend final 2018 R17.5m and interim 2019 R
Slide 15: Segments
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Slide 16: Trellidor – Sales Analysis
TRELLIDOR – SALES ANALYSIS Overall revenue has declined 3% across the Geographical presence Trellidor markets 5% 16% International revenue growth of 17% driven by 37% excellent growth in the UK (112%) and Ghana (43%) 42% Sales into Africa grew by 5% despite declines in traditionally strong areas in
Slide 17: Trellidor – Sales Analysis (Product Type)
TRELLIDOR – SALES ANALYSIS Diversified product range spans income groups Product type which mitigates weak middle and upper middle class economy 12% 2% 5% As a result of the diversification the decline in 12% sales was held to 3% 70% It is pleasing to note the relatively improved performance of Trad
Slide 18: Trellidor – Trading Margin
TRELLIDOR – TRADING MARGIN Improved trading margin despite muted sales Cost of sales as a % of net sales 60.0% 52.1% 53.2% 52.2% 52.2% 50.7% 50.0% Factory efficiency project yielded savings 9.1% 9.2% 9.9% 9.2% 9.9% before interest and tax of R6.2m which was 40.0% ahead of the 2019 target 10.0% 10.2%
Slide 19: Segments
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Slide 20: Taylor – Sales Analysis
TAYLOR – SALES ANALYSIS A stabilizing of the Western and Southern Cape Geographical presence economy in H2, resulted in sales being held to 1% the 7% decline reported at H1 4% Johannesburg was flat on the prior period which, given the trading environment, is a solid result 95% Main Centres ( incl. W
Slide 21: Taylor – Sales Analysis (Product Type)
TAYLOR – SALES ANALYSIS Turnover well spread by product Product Type Constant innovation and development to keep 13% up with trends 43% The revamped roller blind range, launched in 34% H2 2018, showed a 31% increase year-on-year off-set in a decline in the lower-end ranges 10% Launched external roll
Slide 22: Taylor – Trading Margin
TAYLOR – TRADING MARGIN Under recovery of wages and semi variable Cost of sales as a % of net sales 59.2% 59.6% costs due to decrease in volumes 60.0% 54.6% 56.1% 56.3% 6.8% 6.3% 5.7% 5.8% 5.8% 5.7% 50.0% 5.2% 4.2% 4.9% 4.1% Increased material and input costs, primarily 40.0% due to R/$ fluctuations
Slide 23: Prospects
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Slide 24: Prospects
Prospects Overall the Group is more streamlined and has the capacity to significantly outperform in a more supportive economy Group ➢ Share buy-back programme will continue through 2020 ➢ Consolidation of treasury function to optimise the utilisation and cost of debt facilities ➢ Ongoing research in
Slide 25: Prospects – Trellidor
Prospects Trellidor ➢ Specific project team has been established to develop an implementation strategy to replicate the “Ghana Model” in East Africa ➢ Demand from the UK continues to grow and we have the capacity to exploit this opportunity ➢ Full year of cost benefits of the Efficiency Enhancement
Slide 26: Additional Information
ADDITIONAL INFORMATION
Slide 27: Summarised Cash Flow
GROUP SUMMARISED CASH FLOW Group summarised cash flow (R'm) FY 2016 FY 2017 FY 2018 FY 2019 EBITDA 81.5 113.9 103.5 81.2 Movement in non cash items (incl provisions) (5.9) 4.2 3.4 4.3 Net working capital movement (3.3) (13.4) 0.1 (13.6) Inventory (9.4) (23.1) (12.3) (2.2) Accounts receivable (3.7) 3
Slide 28: Summarised Cash Flow – Cash Conversion
GROUP SUMMARISED CASH FLOW Cash conversion (R'm) 80.0 68.2 70.0 66.0 62.4 63.5 59.6 58.5 60.0 50.0 44.7 43.0 39.1 40.0 40.0 37.4 32.6 30.0 24.3 25.0 24.2 23.3 20.5 20.0 17.5 10.0 - HY 2017 FY 2017 HY 2018 FY 2018 HY 2019 FY 2019 Profit after tax Cash from operating activities Free cash flow SLIDE 28
Slide 29: Summarised Balance Sheet
GROUP SUMMARISED BALANCE SHEET Summarised balance sheet (R'm) FY 2016 FY 2017 FY 2018 FY 2019 Non current assets Property, plant and equipment 42.6 51.5 61.2 64.9 Goodwill and other intangibles 4.0 121.1 116.8 113.5 Deferred Tax 3.7 3.7 3.4 1.6 Other financial assets 0.4 0.3 0.7 0.8 50.7 176.6 182.1
Slide 30: Group Financial Performance – Core HEPS
GROUP FINANCIAL PERFORMANCE Core HEPS (R'm) FY 2017 FY 2018 FY 2019 FY 19 vs FY 18 Profit attributable to ordinary shareholders 64.3 58.8 42.9 -27% Adjusted for: Profit on disposal of property, plant and equipment (0.1) (0.1) 0.3 (0.1) (0.0) Headline earnings 64.2 58.7 43.0 -27% Adjusted for: Amorti
Slide 31: Thank You
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