Reunert Limited · JSE:RLO
Reunert — H1 2009 Earnings Presentation
11 slides from Reunert's earnings presentation, May 13, 2009
Slide 1: Reunert Interim Results: Salient features
5/13/2009 Reunert Interim Results 6 months ended 31 March 2009 The era of the balance sheet has arrived Salient features • Revenue +1% to R5,1 billion • Operating profit down 27% to R531 million • EBITDA as % of revenue dropped to 11,3% from 15,1% • Cash position R962 million at 31 March 09 • Intere
Slide 2: Group Structure; Impact of global economic crisis
5/13/2009 Group Structure CBI-electric Nashua Reutech Investments Energy cables Office systems Communications NSN (40%) Telecom cables Mobile Precision products Low voltage Electronics Radar systems Medium voltage Finance Solutions % contribution to 32% 62% Revenue 5% 1% 34% 51% Operating profit 9%
Slide 3: Our view; Copper price
5/13/2009 Our view • Not economists or philosophers • Deal in reality • Since beginning 2009 business deteriorated on a monthly basis • Volumes are on a decline • Recent rand strength • Bad debts are a growing issue Copper price Copper in US$/ton Copper in ZAR/ton Prior Prior Year $ % Change $ Year
Slide 4: Exchange rate; Building plans passed
5/13/2009 Exchange rate Rand/US$ Rand/Euro Yen/Rand 01-Oct-07 01-Oct-08 01-Oct-07 01-Oct-08 01-Oct-07 01-Oct-08 31-Mar-08 01-Mar-09 31-Mar-08 01-Mar-09 31-Mar-08 01-Mar-09 Low 7.17 8.23 15% 9.30 11.50 24% 11.97 8.33 30% High 8.24 11.85 44% 13.09 15.22 16% 17.62 12.81 27% Av 7.17 9.96 39% 10.56 13.07
Slide 5: Decline in volumes; Our response
5/13/2009 Decline in volumes Business unit % Decrease CBI-electric Low-voltage products Number of poles produced (43%) Energy cables Cable tons (20%) Nashua Office automation Unit sales (34%) Mobile Total connections (3%) Our response • Finance company is top priority – End 2008 a decision was made
Slide 6: CBI-electric and Nashua Mobile
5/13/2009 CBI-electric • Reduced receivables and stock • Result more cash freed up • Maintaining investment programme • Positioning for growth Nashua Mobile • Imposed call limits • Stringent vetting criteria lead to lower bad debts • Slower growth in customers 6
Slide 7: Nashua Mobile; Nashua Electronics
5/13/2009 Nashua Mobile % 2009 2008 Change Contract connections for year 60 857 60 543 0.5 3G/HSDPA connections 11 782 13 962 (16) Total connections 72 639 74 505 (3) Closing company base * 683 580 671 579 2 ARPU 499 456 9 Churn % ** 14 12 15 Net bad debts % Turnover 1 1 (6) Number of Retail Outlets
Slide 8: Reutech; Balance Sheet as at 31 March
5/13/2009 Reutech • Revenue flat in HY09 with operating profit down 23% to R50 million – Period of preparation – Deliveries commenced late in 2nd quarter • Exchange rate locked in at R10,60 for remainder of FY09 • Expect to perform well ahead of FY08 Balance Sheet as at 31 March 2009 2008 Rm Rm EMPL
Slide 9: Income statement and Cash Flow Statement
5/13/2009 Summarised Cash Flow Statement for the months ended 31 March R Millions (excl movements relating to finco) 2009 2008 EBITDA 578 769 Dividend and interest income 52 31 630 800 Decrease/(Increase) in inventory 181 (65) Decrease/(Increase) in accounts receivable 332 (211) (Decrease)/Increase
Slide 10: Segmental analysis; Future
5/13/2009 Segmental analysis 2009 2008 % R million R million change Revenue CBI-electric 1 611 1 750 (8) Nashua 3 168 3 126 1 NSN 59 — Reutech 281 282 0 Total operations 5 119 5 158 (1) Less: Reunert's attributable portion of associate companies' revenue — (73) Revenue as reported 5 119 5 085 1 Oper
Slide 11: Prospects
5/13/2009 Prospects • It is unlikely that the South African economy will turn positive in the short term. Recovery in South Africa will depend on a global recovery. • Previously we indicated that we were hopeful of achieving a result similar to that of the past financial year. The severity of the do