Reunert Limited · JSE:RLO
Reunert — H1 FY2023 Earnings Presentation
24 slides from Reunert's earnings presentation, Mar 31, 2023
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION For the six months ended 31 March 2023
Slide 2: Agenda
AGENDA Overview Financial performance Segment reviews Strategy update Prospects
Slide 3: Overview
REUNERT REUNERT LIMITED 01 Overview Alan Dickson
Slide 4: Overview
OVERVIEW Strong improvement in key Progress on key strategic financial metrics Improved shareholder returns initiatives Renewable energy focus 21% R6 203m > Accelerated growth as revenue H1 FY22: R5 114m increased 38% > Increased investment into: Revenue p Improved quality of earnings, ˉ Solar asset
Slide 5: Financial performance
02 Financial performance Nick Thomson
Slide 6: Segment revenue
SEGMENT REVENUE ▲19% SEGMENT REVENUE (Rm) 6 209 H1 FY22 H1 FY23 ˃ Improved volumes of cable production, including contracts for large cables 5 215 ˃ Increased local sales of circuit breakers, but export volumes decreased due to de-stocking in the US market as US supply chains recover, resulting in c
Slide 7: Segment operating profit
SEGMENT OPERATING PROFIT SEGMENT OPERATING PROFIT (Rm) ▲39% H1 FY22 H1 FY23 625 ˃ Improved margins due to - improved product mix at power cable factories ▲4% 449 - improved factory recoveries ▲44% ▲196% 305 318 - efficiency programs 218 - easing of COVID-19 related supply chain cost pressures 151 16
Slide 8: Reconciliation of segment to statutory operating profit before financial impairment
RECONCILIATION OF SEGMENT TO STATUTORY OPERATING PROFIT BEFORE FINANCIAL IMPAIRMENT % Rm H1 FY23 H1 FY22 change 1 Fair value remeasurements: R27m (H1 FY22: R7m) Segment operating profit 625 449 39 1 ˃ Put and call option contract with Lumika for the Fair value remeasurements 27 7 future sale of 72%
Slide 9: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS % Rm H1 FY23 H1 FY22 change Revenue 6 203 5 114 21 Expected tightening in credit environment due to high 1 Operating expenses (5 530) (4 657) 19 inflation, low growth and high interest rates, compounded by Operating profit before impairment of financial asset
Slide 10: Consolidated statement of financial position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Rm Mar 2023 Mar 2022 Sep 2022 PP&E, investment property, ROU assets & IA 1 716 1 475 1 538 Goodwill 991 960 960 Rm H1 FY23 Investment at fair value through profit or loss 53 51 53 Increase in total assets 1 128 Derivative financial asset - 32 57 Less: Inc
Slide 11: Cash flow analysis
CASH FLOW ANALYSIS Group cash generation supports operational 1 and strategic objectives and dividend payments No further investment into working capital in H2 FY23 expected Rm Mar 2023 Sep 2022 2 Free cash flow covers the interim dividend to 2,25 times Cash and cash equivalents 1 006 957 Bank overd
Slide 12: Capital expenditure
CAPITAL EXPENDITURE Capex maintains organic assets and boosts strategic growth assets Rm 150 150 34 Rm H1 FY23 H1 FY22 Last mile broadband infrastructure 18 12 33 BOO solar plants 29 24 109 83 83 Refurbishment of cable factories 24 1 20 R&D 5 14 52 Lease right on building 30 - 17 74 Computer equipme
Slide 13: Segmental reviews
03 Segmental reviews Alan Dickson
Slide 14: Electrical Engineering
Drivers Financial performance Outlook and prospects p 11% • Higher power cable volumes in South Africa • Stable volumes for cable businesses − 2022 volumes negatively impacted by 3 162 industry-wide, wage negotiation strike 2 854 − Healthy power cable order books in South Africa and 2 561 Zambia − S
Slide 15: ICT: Solid growth in a challenging environment
ICT Solid growth in a challenging environment Drivers Financial performance Outlook and prospects Growth from core markets SEGMENT REVENUE (Rm) Segment revenue growth to continue • Improved period-on-period p +11% • Market demand for TWP and growth in performances from: 1494 complementary products a
Slide 16: ICT: Growth in complementary offerings
ICT Growth in complementary offerings Drivers Financial performance Outlook and prospects Successful execution of the Segment’s TWP COMPLEMENTARY REVENUE BILLED BY THE Complementary solutions and services continue FRANCHISES TO END CUSTOMERS (Rm) diversification strategy to grow CAGRp +22% • Complem
Slide 17: Applied Electronics: Strong export and renewable energy demand drives growth
APPLIED ELECTRONICS Strong export and renewable energy demand drives growth Drivers Financial performance Outlook and prospects Strong performance across the segment SEGMENT REVENUE (Rm) Positive order book and global defence outlook p49% • Driven by the good execution of the large 1 639 • Strong or
Slide 18: Applied Electronics: Renewable energy
APPLIED ELECTRONICS Drivers Financial performance Outlook and prospects Increased contribution from renewable BUILD-OWN-OPERATE ASSET OWNERSHIP • Electricity supply uncertainty will continue to energy (MW) drive private and public investment into • Revenue up 38% period-on-period p CAGR: 28% 40 Rene
Slide 19: Strategy update
04 Strategy update Alan Dickson
Slide 20: Reunert ICT: IQbusiness acquisition rationale
REUNERT ICT IQbusiness acquisition rationale • SA’s largest independent management and technology consulting firm MANAGEMENT DIGITAL CONSULTING CONSULTING • Strong, well-known brand in existence for 25 years • Solutions economy • Agile advisory • Talented team of over 1 000, guided by experienced le
Slide 21: Renewable energy
RENEWABLE ENERGY Renewable energy market Strategic initiatives • Solar will remain the default choice of technology to substitute historical • Invested into capacity to facilitate suitable growth of the business coal-based generation − Retention and hiring of skilled talent • Southern African market
Slide 22: Prospects
REUNERT REUNERT LIMITED 05 Prospects Alan Dickson
Slide 23: Prospects
PROSPECTS Reunert anticipates an improved year-on-year financial result for FY23 ˃ The rate of growth in H2 FY23, in percentage terms, will not match H1 FY23 due to the strong comparative performance ˃ The projection is underpinned by: 1. strong order books in both the cables businesses and the defe
Slide 24: Q&A, Contact Us, Key upcoming dates
Q&A Key upcoming dates Contact Us > Avior Investor Conference 14 June 2023 > Capital Markets Day 22 June 2023 > Full-year results 22 November 2023 > Integrated Report 20 December 2023 karens@reunert.co.za