Slide 1: Investor Presentation
Investor Presentation May 2002
Slide 2: Content
Content • Introduction • Financial Results • Group Operations • Issues • Prospects • Shareholding
Slide 3: Salient features
Salient features Six months ended 31 March 2002 • Revenue R2,5bn +17% • EBITDA R243m +21% • HEPS 101c +30% • Interim dividend 30 cents +25%
Slide 4: Growth drivers
Growth drivers • Acquisitions • Revenue growth • R/$ exchange rate • Market share • Export growth • Improved efficiencies
Slide 5: Recent acquisitions
Recent acquisitions • Nashua Mobile – Increased stake to 100% • Nedcor’s 37,3% & Metropolitan Life’s 4,7% • Effective 1 Dec 2001 • R261,6 million - Includes goodwill of R220,7m – 10 000 Vodacom contract subscribers • Be Clear and Simple • R700 per active subscriber • Effective 1 February 2002
Slide 6: Recent acquisitions
Recent acquisitions • Siemens Telecommunications – Increased stake to 40% – Acquired Marconi’s 21,5% Dec 01 – Siemens exercised 9% share option in Jan 02 • 12,5% = R161,3m – Includes goodwill of R137,7m
Slide 7: Disclosure
Disclosure • Segmental analysis regrouped – Strategic focus • Comparative historical information
Slide 8: Reunert structure
Reunert structure Electronics Electrical Engineering & Cables Office Systems Electrical Engineering Consumer products Cables Telecommunications Reutech
Slide 9: Reunert structure
Reunert structure Electronics Office Systems Consumer products Telecommunications Reutech Nashua Panasonic Sietel RDI 100% 100% 40% 100% RC&C Fin Co Nashua Mobile Fuchs Electronics 100% 100% 100% IQ Works Saco Systems RRS 50% 100% 57% Royce Imaging Futronic RDL 100% 100% 70%
Slide 10: Reunert structure
Reunert structure Electrical Engineering & Cables Electrical Cables Engineering CBI ATC 100% 38,6% African Cables 50%
Slide 11: Financial Results
Financial Results
Slide 12: Group Income Statement
Group Income Statement Six Months ended % Change R Millions 31 March 2002 2001 Revenue 2 469,4 2 112,2 17 EBITDA 242,9 200,4 21 Depreciation & amortisation (37,8) (16,7) (126) Operating profit 205,1 183,7 12 Interest & Dividends 15,5 33,5 (54) PBT 220,6 217,2 2 Taxation (79,2) (73,8) (7) PAT 141,4 1
Slide 13: Group Balance Sheet
Group Balance Sheet 31 March R Millions 2002 2001 NON-CURRENT ASSETS 1 609,0 1 083,2 Fixed Assets 152,2 155,6 Goodwill including associates 386,0 10,9 Investments 237,9 179,4 R C & C Finance Debtors 832,9 748,2 CURRENT ASSETS 1 380,3 1 525,4 Inventory & contracts in progress 509,6 432,2 Accounts Rec
Slide 14: Group Cash Flow
Group Cash Flow 6 months ended R Millions 31 March 2002 2001 EBITDA 242,9 200,4 Working Capital (Increase)/Decrease (2,7) 7,7 Net interest & dividends received 31,9 56,3 Taxation Paid (165,4) (105,0) Dividends Paid (143,7) (120,2) CASH GENERATED BY OPERATIONS (37,0) 39,2 Capital Expenditure (13,2) (
Slide 15: Dividends
Dividends 100 80 1.9 60 Cents 1.9 40 2.4 2.5 20 1.9 0 1997 1998 1999* 2000 2001 2002 Interim Final * Excludes Special dividend of 250 cents
Slide 16: Revenue % contribution
Revenue % contribution Electrical Cables Engineering Reutech 9% 8% Office 5% Systems 12% Telecomms 25% Consumer products 41%
Slide 17: Operating profit % contribution
Operating profit % contribution Electrical Engineering Office Systems 13% Cables 23% 2% Reutech 4% Consumer products Telecomms 25% 33%
Slide 18: Group Operations
Group Operations
Slide 19: Office Systems
Office Systems • Revenue R420m +29% • Operating profit R71m +91% • Nashua – Strong growth – Digital conversion continuing – High % annuity income
Slide 20: Office systems
Office systems • IQ Works – Recently started breaking even – Satisfying growth in sales – Strong synergy with Nashua Mobile • RC&C Finance Company – Good growth in book – No increase in bad debts • Royce Imaging – Sales & profit growth – Support Nashua brand of products
Slide 21: Consumer products
Consumer products • Revenue R1 387m +20% • Operating profit R78m +42% – Nashua Mobile – Panasonic – Futronic – Saco Systems
Slide 22: Consumer products: Nashua Mobile
Consumer products • Nashua Mobile – Internal re-organisation • Least Cost Routers • Corporate Customers – Clear focus at top end of corporate market • 260 000 Contract subscribers • ARPU over R500 per month • 11 % Churn lowest in market – Focus on quality service & product offering • SMS gateway • R
Slide 23: Consumer products: Panasonic
Consumer products • Panasonic – Benefit from improved business model • Direct sales to customer - Leaf • Indent • Retail • Introduced Futronic • Focus on lower end of consumer market • Sourcing additional product
Slide 24: Telecommunications
Telecommunications Reunert 40.0% Siemens 60.0% • Revenue R867m +57% • Operating profit R100m +112% • Siemens Telecommunications – Excellent growth • R/$ exchange rate – Progress on roll-out of Cell C • No overdue debts – Well positioned to benefit from SNO • Eskom’s Easitel – 30% of total turnover i
Slide 25: Teledensity
Teledensity Gambia Burkina Faso Nigeria Sudan DRC Eritrea Fixed Line 2.56% Fixed Line 0.45% Fixed Line 0.43 % Fixed Line1.24% Fixed Line 0.04% Fixed Line 0.8% Cellular 0.43% Cellular 0.99% Cellular 0.03% Cellular 0.29% Cellular 0.93% Cellular 0.00 % Internet Subs’ 4 000 Internet Subs’ 10 000 Interne
Slide 26: South Africa fixed vs mobile phones
South Africa Fixed vs mobile phones 12 10 8 Millions Fixed Line 6 Mobile 4 2 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Slide 27: Reutech
Reutech • Revenue R186m -26% • Operating profit R12m -73% • Difficult 6 months • Substantial order received • Major increase in revenue and earnings FY03+ • Excellent prospects to grow order book
Slide 28: Electrical Engineering
Electrical Engineering • Revenue R268,9m +46% • Operating profit R41,9m +39% • CBI – 26% revenue growth from Mitsubishi product range – 71% from exports – Mitsubishi & meter products lower margins than traditional CBI products • Export to Europe, USA, Africa & Far East
Slide 29: CBI Ratio Export/Total Sales
CBI Ratio Export/Total Sales Ratio 30% 20% Excluding Acquisitions Total 10% 0% 96 97 98 99 00 01 02
Slide 30: Cables
Cables • Revenue R295,6m +1% • Operating profit R6,0m -82% African Cables Pirelli Marconi 50.0% ATC 50.9% Reunert 38.6% Reunert Pirelli 50.0% 10.5%
Slide 31: Cables: African Cables
Cables • African Cables – Performance continued – Gaining market share – Improved efficiencies – Strong order book • BEE
Slide 32: African Cables domestic demand
African Cables Domestic demand 1.4 29% 1.2 27% 27% 1 25% 25% 0.8 Rbn 23% % 0.6 21% 21% 0.4 19% 18% 0.2 17% 0 15% 1999 2000 2001 2002 Total market % Market share
Slide 33: Cables: ATC
Cables • ATC – Sporadic copper demand – Weak demand for optical fibre continues – Restructured business to reduce costs • No short-term improvement expected
Slide 34: Issues & Prospects
Issues & Prospects
Slide 35: Black Economic Empowerment
Black Economic Empowerment • Equity participation – Subsidiaries – Reunert – Franchisees • Expected Revenue of R95m by Sept 02 • Employment equity – Agreed plans in place – Focus on senior management & professional level
Slide 36: Black Economic Empowerment
Black Economic Empowerment Community involvement – Reunert College • 400+ Students since 1993 • Maths, Science & English – Outsourcing & subcontracting
Slide 37: Prospects
Prospects • Continued strong growth for 2nd half expected
Slide 38: Thank you
Thank you Questions
Slide 39: Shareholding
Shareholding
Slide 40: Equity
Equity • Shares in issue – In issue 204 060 264 – Shares held by subsidiary 17 168 058 – No additional shares bought back since May 2001 – AGM approval • Ave value traded R19,7m/week
Slide 41: Major institutional shareholders
Major institutional shareholders Other holdings OMAM BOE AM Sanlam IM Franklin Templeton RMB Coronation Stanlib Reunert Investec