Slide 1: Results Presentation for the Year Ended February 2023
RESULTS PRESENTATION FOR THE YEAR ENDED FEBRUARY 2023
Slide 2: Disclaimer
DISCLAIMER This report contains forward-looking statements that relate to Altron’s future operations and performance. Such statements are not intended to be interpreted as guarantees of future performance, achievements, financial or other results. They rely on future circumstances, some of which are
Slide 3: Headline Numbers | Group & Continuing Operations
HEADLINE NUMBERS | GROUP & CONTINUING OPERATIONS Group Revenue Group EBITDA Continuing1 Revenue Continuing1 EBITDA R10.9bn +14% R1.1bn -4% R9.5bn +19% R1.2bn +2% Continuing1 Continuing1 Group Operating Income Group Free Cash Flow Operating Income Free Cash Flow R346m -21% R412m +65% R462m -7% R332m
Slide 4: Headline Numbers | Adjusted Continuing Operations
HEADLINE NUMBERS | ADJUSTED CONTINUING OPERATIONS The following non-cash adjustments negatively Continuing1 Adjusted2 Continuing1 Adjusted2 EBITDA Operating Income impacted earnings. The first two adjustments impacted continuing operations and the last adjustment impacted discontinued operations: R1
Slide 5: Strategy
STRATEGY 5
Slide 6: Strategy | Become the Leading Platform and IT Services Business
STRATEGY STRATEGY | BECOME THE LEADING PLATFORM AND IT SERVICES BUSINESS PLATFORMS Edge Big Artificial Streaming Cloud OWN The Digital revolution IOT computing Data Intelligence Analytics Computing 5G RPA TRANSFORMATION DIGITAL Resulted in a Fintech Digital Asset IT Cyber growing customer need Solut
Slide 7: Strategy | To Become a Leading Platform and IT Services Business
STRATEGY STRATEGY | TO BECOME A LEADING PLATFORM AND IT SERVICES BUSINESS Growth levers PLATFORMS OWN TRANSFORMATION DIGITAL MANAGED SERVICES CUSTOMER GROW IMPROVE TRANSFORMATIVE ESG OBSESSION REVENUE OPERATING LEVERAGE GROWTH ALTRON ARROW Enabled through FINANCIAL EFFICIENTLY DIFFERENTIATION THROUG
Slide 8: Strategy | Customer Obsession Accelerating Revenue
STRATEGY STRATEGY | CUSTOMER OBSESSION ACCELERATING REVENUE PLATFORMS OWN Drive customer obsession Grow revenue by collaboration and differentiation TRANSFORMATION DIGITAL O OBSTACLES – UNDERSTANDING CUSTOMER’S OBSTACLES AND NEEDS Revenue Rm (continuing) Growth (continuing) MANAGED B SERVICES BEST I
Slide 9: Strategy | Improving Operating Leverage with Cost Discipline
STRATEGY STRATEGY | IMPROVING OPERATING LEVERAGE WITH COST DISCIPLINE PLATFORMS OWN Improve gross margin through Reduce operating costs through Grow EBITDA and operating Income margin mix and efficient cost of sales disciplined cost management TRANSFORMATION DIGITAL Gross margin Rm (continuing) Oper
Slide 10: Strategy | Transformative Growth Through Data
STRATEGY STRATEGY | TRANSFORMATIVE GROWTH THROUGH DATA PLATFORMS OWN 80% of SSL certs used 20 million TRANSFORMATION in SA are sold by Altron Smart ID cards embedded with DIGITAL More Altron tech in circulation in SA DATA More More CUSTOMERS SOLUTIONS 1.6 million connected devices 75 000 connected p
Slide 11: Strategy | Enabled Through Efficient Capital Allocation
STRATEGY STRATEGY | ENABLED THROUGH EFFICIENT CAPITAL ALLOCATION PLATFORMS ANNUAL FREE CASH FLOW OWN MAINTENANCE GROWTH CAPITAL EXPENDITURE RETURN TO CAPITAL PROVIDERS TRANSFORMATION CAPITAL EXPENDITURE DIGITAL • Maintenance Capex < 65% of Dividends & Organic Reinvestment Mergers & Acquisitions Debt
Slide 12: Own Platforms
OWN PLATFORMS Netstar, Altron FinTech and Altron HealthTech 12
Slide 13: Netstar | A Year Old Trusted Household Name
STRATEGY NETSTAR | A 27 YEAR OLD TRUSTED HOUSEHOLD NAME Exciting Total South Africa SE Asia Australia Africa (ex SA) PLATFORMS Car Parc +11m OWN opportunity +100m +20m +10m 1,116K TRANSFORMATION FY23 Netstar 176K 68K 15K DIGITAL subscriber penetration MANAGED SERVICES Over 1.6m connected devices and
Slide 14: Netstar | Driving Customer Obsession in Our Base
STRATEGY NETSTAR | DRIVING CUSTOMER OBSESSION IN OUR BASE PLATFORMS OWN GO-TO-MARKET STRATEGY: STOLEN VEHICLE RECOVERY VS TELEMATICS DEVICE SEGMENTED CUSTOMERS: SALES AND OPERATIONAL LEVEL TRANSFORMATION DIGITAL OEM CONSUMER LIGHT FLEET COMMERCIAL MANAGED SERVICES • Expanding OEM partnerships • Comp
Slide 15: Netstar | Profit Improvement Strategy in Execution
STRATEGY NETSTAR | PROFIT IMPROVEMENT STRATEGY IN EXECUTION PLATFORMS OWN Revenue growth driven by strong Margin pressures Delivering future growth performance in OEM and Malaysia negatively impacting earnings TRANSFORMATION DIGITAL • Operating income down 27% largely Hardware revenue (Rm) SaaS reve
Slide 16: Netstar | More Customers, More Data, Better Solutions
STRATEGY NETSTAR | MORE CUSTOMERS | MORE DATA | BETTER SOLUTIONS PLATFORMS Volume and breadth OWN More ASSETS of Netstar data More More TRANSFORMATION OEMS DATA DIGITAL 181bn IoT messages processed More More per month CUSTOMERS CUSTOMERS MANAGED SERVICES 170 500 hours video footage recorded CONNECTE
Slide 17: Altron FinTech | Processing and Commerce Enablement Platform
STRATEGY ALTRON FINTECH | PROCESSING AND COMMERCE ENABLEMENT PLATFORM PLATFORMS Unique data advantage across our platforms OWN Debit Order Processing Digital Wallet TRANSFORMATION Merchants DIGITAL Merchant Acquiring Collection Management 20 277 Card Acquiring MANAGED SERVICES Enable Card Personalis
Slide 18: Altron FinTech | Strong Hardware Sales Boosted Performance
STRATEGY ALTRON FINTECH | STRONG HARDWARE SALES BOOSTED PERFORMANCE PLATFORMS OWN Leading provider of fintech solutions Revenue growth supported by stronger Revenue growth flowed to bottom line to our clients hardware sales and total value processed TRANSFORMATION • All offerings delivered revenue D
Slide 19: Altron HealthTech | Investing for Growth
STRATEGY ALTRON HEALTHTECH | INVESTING FOR GROWTH PLATFORMS OWN Revenue growth supported by Expanding our platform to grow Earnings impacted by R11.7m investment growth in corporate segment TRANSFORMATION • Revenue growth +8% supported by DIGITAL Revenue Growth EBITDA (Rm) growing corporate segment
Slide 20: Digital Transformation
DIGITAL TRANSFORMATION Altron Systems Integration, Altron Karabina, Altron Security 20
Slide 21: Altron Systems Integration | Poised for Growth
STRATEGY ALTRON SYSTEMS INTEGRATION | POISED FOR GROWTH PLATFORMS OWN Disappointing earnings performance Profit improvement strategy H2 Revenue growth up 31% yoy impacted by restructuring process TRANSFORMATION Restructuring costs (Rm) • Restructuring process complete DIGITAL Revenue (Rm) Growth EBI
Slide 22: Altron Karabina | Delivering on Profit Improvement Strategy
STRATEGY ALTRON KARABINA | DELIVERING ON PROFIT IMPROVEMENT STRATEGY PLATFORMS OWN Back to the acquisition base case Growing revenue in a competitive market Operating leverage driving earnings growth TRANSFORMATION • Solid revenue growth supported by DIGITAL Revenue (Rm) Growth EBITDA (Rm) EBITDA ma
Slide 23: Altron Security | Exceeding Expectations
STRATEGY ALTRON SECURITY | EXCEEDING EXPECTATIONS PLATFORMS OWN Growing our offering and customer reach Higher demand driving revenue Delivering a solid earnings performance TRANSFORMATION Industry leader in a high-growth DIGITAL • Lawtrust Revenue (Rm) Lawtrust EBITDA (Rm) market Security Revenue (
Slide 24: Managed Services
MANAGED SERVICES Altron Managed Solutions and Altron Nexus 24
Slide 25: Altron Nexus | Non-Cash Adjustments Impacted Performance
STRATEGY ALTRON NEXUS | NON-CASH ADJUSTMENTS IMPACTED PERFORMANCE PLATFORMS OWN Pivoting the business to focus on Delivering double-digit revenue growth Earnings impacted by COT and GBN adj critical communications TRANSFORMATION • Earnings negatively impacted by DIGITAL Critical comms (Rm) Enterpris
Slide 26: Altron Managed Solutions | Growing Annuity Revenue
STRATEGY ALTRON MANAGED SOLUTIONS | GROWING ANNUITY REVENUE PLATFORMS OWN Forward thinking client service Delivering solid 4 year revenue growth Operating leverage driving earnings growth TRANSFORMATION DIGITAL MS Revenue (Rm) EBITDA (Rm) EBITDA margin • Delivered revenue growth through MS Revenue (
Slide 27: Altron Arrow
ALTRON ALTRON ARROW 27
Slide 28: Altron Arrow | Higher Product Demand Supporting Growth
STRATEGY ALTRON ARROW | HIGHER PRODUCT DEMAND SUPPORTING GROWTH PLATFORMS OWN Disciplined cost management Strong recovery post COVID Revenue supported by increased demand driving operating leverage TRANSFORMATION DIGITAL • Leading electronic components Revenue (Rm) Growth EBITDA (Rm) EBITDA margin d
Slide 29: Financial Results
FINANCIAL RESULTS NICHOLAS BOFILATOS 29
Slide 30: Financial Results | Summarised Income Statement
STRATEGY FINANCIAL RESULTS | SUMMARISED INCOME STATEMENT CONTINUING OPERATIONS1 PLATFORMS OWN Year ending 28 February 2023 Statutory Adjusted Statutory Adjusted % Change % Change R’million FY23 FY232 FY22 FY223 Statutory Adjusted Revenue 9 464 9 464 7 930 7 930 19 19 TRANSFORMATION DIGITAL EBITDA 1
Slide 31: Revenue Analysis by Segment and Service
STRATEGY FINANCIAL RESULTS | REVENUE ANALYSIS BY SEGMENT AND SERVICE (RM) CONTINUING OPERATIONS PLATFORMS OWN +19% Managed Digital Own Platforms Other* TRANSFORMATION Services Transformation DIGITAL 9,464 505 +66% 3,253 7,930 MANAGED SERVICES 304 2,917 2,789 2,847 2,563 3 253 +14% 2,216 2 847 ALTRON
Slide 32: Operating Income Movement by Segment
STRATEGY FINANCIAL RESULTS | OPERATING INCOME MOVEMENT BY SEGMENT (RM) CONTINUING OPERATIONS PLATFORMS OWN YoY ▲35% ▼5% ▲>100% ▼30% ▲14% ▼7% TRANSFORMATION DIGITAL 97 17 20 25 54 MANAGED SERVICES 165 Non-cash ALTRON ARROW adj for GBN and COT FINANCIAL RESULTS 498 552 627 462 OUTLOOK FY22 Statutory M
Slide 33: Group Working Capital Analysis
STRATEGY FINANCIAL RESULTS | GROUP WORKING CAPITAL ANALYSIS (RM) PLATFORMS OWN Reduction in working capital – R321m TRANSFORMATION DIGITAL 48 54 (4) MANAGED SERVICES 131 ( 17 ) 109 27 ALTRON ARROW 105 104 FINANCIAL RESULTS OUTLOOK 1 597 1 276 FY22* Digital Own Platforms Managed Non-cash COT & Other,
Slide 34: Group Cash Flow Bridge
STRATEGY FINANCIAL RESULTS | GROUP CASH FLOW BRIDGE (RM) PLATFORMS OWN 2 00 1 9 5 0 321 Strong cash generation with free 1 9 00 1 85 0 974 127 cash flow increasing by R163 million TRANSFORMATION 50 1 80 1 7 5 0 213 to R412 million DIGITAL 1 7 00 1 6 5 0 1 6 00 213 108 144 1 5 0 1 5 00 1 45 0 MANAGED
Slide 35: Balance Sheet Strength
STRATEGY FINANCIAL RESULTS | BALANCE SHEET STRENGTH PLATFORMS OWN TRANSFORMATION DIGITAL MANAGED SERVICES 0,37x 0,36x 0,35x ALTRON ARROW 0,20x 0,22x FINANCIAL RESULTS 0,80 0,70 0,80 0,80 0,60 OUTLOOK FY21** HY22 FY22 HY23 FY23 Net Debt as Reported (Billions)* Net Debt/EBITDA (Multiple) ANNEXURE * Ne
Slide 36: Outlook
ALTRON mm OUTLOOK WERNER KAPP 36
Slide 37: Altron Outlook | Outlook for 2024
STRATEGY ALTRON OUTLOOK | OUTLOOK FOR 2024 PLATFORMS OWN Exit non-core assets Deliver profit improvement strategies Execute on growth strategy TRANSFORMATION DIGITAL 1. Conclude exit from Rest of Africa: Execute on Netstar’s profit improvement 1. Customer obsession through strategy: engagement • Ken
Slide 38: Annexure
ANNEXURE 38
Slide 39: Annexure | Summarised Group Balance Sheet
STRATEGY ANNEXURE | SUMMARISED GROUP BALANCE SHEET PLATFORMS OWN Period ending 28 February 2023 Statutory Statutory % Change Adjusted Commentary R’million FY23 FY22 (Statutory) TRANSFORMATION Total non-current assets 4 013 3 965 1 DIGITAL • Increase in trade receivables and inventory Total Current a
Slide 40: Annexure | Healthy Group Debt Levels
STRATEGY ANNEXURE | HEALTHY GROUP DEBT LEVELS PLATFORMS OWN Rm FY23 HY23 FY22 FY21 TRANSFORMATION Net debt as reported 563 767 811 453 DIGITAL Less: Back-to-back rental finance advances (ADS) (372) (393) (441) (466) MANAGED SERVICES Add: Cash excluded from Adjusted Net Debt for Covenant Ratios 28 36
Slide 41: Annexure | Revenue Movements by Segment
STRATEGY ANNEXURE | REVENUE MOVEMENTS BY SEGMENT (RM) CONTINUING OPERATIONS PLATFORMS OWN YoY ▲26% ▲14% ▲14% ▲66% ▲19% ▲21% TRANSFORMATION DIGITAL 9 909 445 MANAGED SERVICES 201 354 406 ALTRON ARROW 8 203 573 9 464 9 464 273 FINANCIAL RESULTS 7 930 7 930 OUTLOOK Gross invoiced FY22 * Digital Own Pla
Slide 42: Annexure | EBITDA Movement by Segment
STRATEGY ANNEXURE | EBITDA MOVEMENT BY SEGMENT (Rm) CONTINUING OPERATIONS PLATFORMS OWN YoY ▲10% ▲5% ▲ 66% ▼50% ▲11% ▲2% TRANSFORMATION DIGITAL 10 MANAGED SERVICES Non-cash 80 adj for GBN and 14 48 COT ALTRON ARROW 165 54 FINANCIAL RESULTS 1 140 1 194 1 326 1 161 OUTLOOK FY22 Statutory Modification
Slide 43: Annexure | Percentage Annuity Revenue by Operating Company
STRATEGY ANNEXURE | PERCENTAGE ANNUITY REVENUE BY OPERATING COMPANY PLATFORMS OWN Annuity Revenue TRANSFORMATION Altron Managed Solutions 48% Managed Services DIGITAL Altron Nexus 44% Altron Systems Integration 52% MANAGED SERVICES Digital Transformation Altron Security 83% Altron Karabina ALTRON AR
Slide 44: Annexure | Private vs Public Revenue Contribution
STRATEGY ANNEXURE | PRIVATE VS PUBLIC REVENUE CONTRIBUTION PLATFORMS OWN Public % Private % Altron Managed Services 100 TRANSFORMATION Managed Services DIGITAL Altron Nexus 66 34 Altron System Integration 6 94 MANAGED SERVICES Digital Transformation Altron Security 36 64 Altron Karabina 9 91 ALTRON
Slide 45: Annexure
ALTRON mm ize) ANNEXURE 45
Slide 46: Annexure | Netstar Subscribers
STRATEGY ANNEXURE | NETSTAR SUBSCRIBERS (‘000) PLATFORMS OWN ▲20% TRANSFORMATION 1,375 ▲23% DIGITAL 258 1,144 ▲11% MANAGED SERVICES 173 ▲17% 930 ▲6% 835 108 716 80 383 262 ALTRON ARROW 678 55 140 63 60 FINANCIAL RESULTS OUTLOOK 618 653 700 682 709 734 FY18 FY19 FY20 FY21 FY22 FY23 ANNEXURE South Afr
Slide 47: Annexure | Netstar Profitability Analysis
STRATEGY ANNEXURE | NETSTAR PROFITABILITY ANALYSIS (RM) PLATFORMS OWN OPERATING INCOME EBITDA TRANSFORMATION DIGITAL MANAGED SERVICES ALTRON ARROW FINANCIAL RESULTS OUTLOOK 224 250 244 233 262 192 490 582 611 602 631 629 ANNEXURE FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 RESULTS fo
Slide 48: Annexure | Netstar Revenue Analysis
STRATEGY ANNEXURE | NETSTAR REVENUE ANALYSIS (RM) PLATFORMS OWN Revenue (SA vs International) Revenue (Cash Sales vs Annuity) TRANSFORMATION DIGITAL 1 859 1 859 1 670 MANAGED SERVICES 1 670 1 521 1 541 1 549 1 521 1 541 1 549 1 378 359 1 378 301 190 ALTRON ARROW 229 256 178 FINANCIAL RESULTS 1522 1
Slide 49: Annexure | Netstar Regional Analysis
STRATEGY ANNEXURE | NETSTAR REGIONAL ANALYSIS PLATFORMS OWN FY21 FY22 FY23 FY21 FY22 FY23 TRANSFORMATION South Africa & Africa Australia DIGITAL Subscribers 682 710 748 Subscribers 59 64 68 ARPU 158 159 165 ARPU 290 321 365 MANAGED SERVICES Nature of Business: Consumer, SME and Large enterprises Nat