Slide 1: For the year ended 30 September 2020
For the year ended 30 September 2020
Slide 2: Agenda
1 Salient features 2 Financial performance 3 Strategy update 4 Segmental performance 5 Business outlook and prospects
Slide 3: Salient features
SALIENT FEATURES Good cost management Group’s resilience reflected and working capital in the strong FY20 results negatively impacted by control resulting in fourth quarter three distinct issues strong free cash flow in performance FY20 ► Reflection of underlying ► Covid-19 pandemic ► Free cash flow
Slide 4: Financial performance
FINANCIAL PERFORMANCE 25% 37% ͌ 50% Free cash flow Core operating profit1 conversion2 Final dividend per Group revenue share R8 046m R867m 83.5% 192 cents FY19: R1 376m FY19: 84.8% FY19: 383 cents FY19: 10 714m Year ended 2020 2019 % Change Operating profit Rm (77) 307 1 361 Core operating profit Rm
Slide 5: Key event: Q4 performance
KEY EVENT| Q4 PERFORMANCE EVENT IMPACT HY21 ► Pleasing Q4FY20 performance from all ► Financial performance segments *Quarter 4 *Quarter % commensurate with a solid HY21 Quarter 4 2020 4 2019 Change ► ElectricalEngineering yielded a positive ̶ The EE segment is expected to Core deliver a positive res
Slide 6: Key event: Covid-19
KEY EVENT| COVID-19 ACTIONS IMPLEMENTED EVENT IMPACT ► Primary impact ► Group increased its resilience through: ► Indicative impact of Covid-19 is occurred during reflected in the Q3FY20 results ̶ Increasing credit lines to R2,1bn lockdown in South ̶ Preserving cash across the Group through *Quarter
Slide 7: Key event: Electrical Engineering segment
KEY EVENT| ELECTRICAL ENGINEERING SEGMENT EVENT IMPACT ACTIONS IMPLEMENTED ► Significant ► R101 million: Zamefa ► Significantly reduced Zamefa’s exposure to underperformance in forex losses forex movements the cable companies ► R23 million: ̶ Input VAT ceased on 1 January 2020 ̶ Forex losses at retr
Slide 8: Key event: Quince
KEY EVENT| QUINCE EVENT IMPACT ACTIONS IMPLEMENTED ► External fraud perpetrated ► The external fraud resulted ► Independent external forensic investigation completed against Quince by a non- in a credit write-off of R298 ̶ No criminal or deliberate misconduct occurred within Quince connected, indepe
Slide 9: Financial performance
03 FINANCIAL PERFORMANCE NICK THOMSON
Slide 10: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT Credit write-off Rm OR LOSS Fraud at Quince 298 Reviewed Audited % Rm Credit write-off: Resulting from the external fraud perpetrated 2020 against Quince 2019 capital change Financial impairments Rm – R298m Revenue 8 046 10 714 (25) Leases and loans receivable 219
Slide 11: Consolidated statement of financial position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Reviewed Audited Rm 2020 2019 Right of use asset under IFRS 16 Rm Non-current assets PP&E, investment property and intangibles 1 271 1 292 Gross carrying amount 271 Right-of-use assets 186 - Accumulated depreciation (72) Goodwill 924 999 Leases and loans
Slide 12: Cash flows analysis for year ended 30 September 2020
CASH FLOWS ANALYSIS| FOR YEAR ENDED 30 SEPTEMBER 2020 859 (817)
Slide 13: Capital expenditure to 30 September 2020
CAPITAL EXPENDITURE| TO 30 SEPTEMBER 2020 R million +8% -3% 170 170 162 Sep 2019 Sep 2020 158 158 Category 22 Rm Rm 31 Plant and equipment 64 65 45 37 Computer equipment 9 10 22 Motor vehicles 4 2 102 25 138 Land and buildings 10 11 Intangibles (including software) 60 54 74 Capital work in proress 1
Slide 14: Strategy execution
REUNERT REUNERT LIMITED STRATEGY EXECUTION
Slide 15: Strategy execution
STRATEGY EXECUTION Capital allocation ► Lower interest rate environment is expected to remain for several years. This will diminish the returns from the Quince rental book and on Reunert’s investment therein ► Quince is refinancing a portion of its loan book − No recourse beyond Quince’s assets i.e.
Slide 16: Renewable energy strategy
RENEWABLE ENERGY STRATEGY ► The drivers for the growth of the renewable energy market have strengthened TOTAL INSTALLED SOLAR CAPACITY (MW) SUB- SAHARAN AFRICA ̶ Changes in the Electricity Regulations Act: • Enables municipalities to apply to generate their own electricity 7 300 • Exempts certain el
Slide 17: Renewable energy strategy
RENEWABLE ENERGY STRATEGY ► Reunert’s solar renewable energy strategy is progressing well ̶ We are now able to provide the holistic renewable energy solution: • Solar Energy • High Volume Intelligent Energy Storage • Smart Switching and Smart Metering ► Actively building up the pipeline for renewabl
Slide 18: ICT segment diversification
ICT SEGMENT DIVERSIFICATION COMPLEMENTARY PRODUCT REVENUE (%) Launch of Solutions and Systems Integration Cluster ► The 4th Cluster is strategically positioned as an end-to-end ICT Solutions and Systems Integrator providing cloud and data services, digital consulting, security and managed services ►
Slide 19: Segmental performance
04 SEGMENTAL PERFORMANCE ALAN DICKSON
Slide 20: Electrical Engineering
ELECTRICAL ENGINEERING Cable companies -31% ► Cables businesses faced significant challenges resulting in the REVENUE (Rm) negative segment performance 5 457 5 247 5 139 ̶ Material progress made in addressing the areas that caused the impact 3 767 Circuit breakers 2017 2018 2019 2020 CORE OPERATING
Slide 21: ICT
ICT Total workspace provider -22% ► Lockdown periods resulted in low sales volumes specifically during April and REVENUE (Rm) May ► Sales volumes returned to 75% of pre-Covid-19 lockdown levels by year-end 3 307 3 443 as market segments open in line with government regulations 3 235 ► Cross-selling
Slide 22: Applied Electronics
APPLIED ELECTRONICS Strong execution REVENUE (Rm) -17% ► Record performance in secure communications cluster due to export orders being delivered 2346 2198 ► Due to diversification into the European market, Fuchs generated a profit 1951 1720 despite not enjoying a large profitable Asian order ► Reut
Slide 23: Business outlook and prospects
05 BUSINESS OUTLOOK AND PROSPECTS
Slide 24: Prospects
PROSPECTS ► The Group has recovered well from the business interruption caused by Covid-19 as reflected in the level of core operating profit and cash flow generation in Q4FY20 ► There remains economic uncertainty ahead, but the Group has robust business models that will benefit from the expected ec