Slide 1: Reunert Presents Results for the Year Ended 30 September 2007
Reunert Presents RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007
Slide 2: Salient Features
SALIENT FEATURES Revenue up 16% to R9,6 billion Operating profit up 4% to R1,3 billion Operating margin down from 16% to 14% EBITDA as % of turnover down to 15% from 16% Associate profit up 56% to R148 million Dividend payments R879 million • Ordinary R526 million • Special R353 million Cash end Sep
Slide 3: Dividends Per Share
DIVIDENDS PER SHARE 2007 2006 2005 2004 2003 Dividend cover 1,8 1,8 1,8 1,7 1,5 (times)
Slide 4: Five-Year Performance
REUNERT FIVE-YEAR PERFORMANCE REUNERT LIMITED Revenue Operating profit 12 - 1400 5 | 1200 - 1000 - Rbn Rm fo) oO oO ON FD CO OO 1 & oO oO N
Slide 5: Income Statement
INCOME STATEMENT for the year ended 30 September 2007 % R Millions Actual Actual Change 2007 2006 on 2006 TURNOVER 9 574 8 236 16 EBITDA 1 393 1 336 4 Depreciation (74) (63) Operating Profit 1 319 1 273 4 Interest & Dividends 55 65 (16) Profit before abnormal items 1 374 1 338 3 Abnormal items (448)
Slide 6: Reconciliation of Headline Earnings Per Share
RECONCILIATION OF HEADLINE EARNINGS PER SHARE 2007 2007 2006 2006 % Cents Rm Cents Rm Increase Headline earnings 481 919 HEPS 272.4 524.6 (48% BEE Cost 557 - Staff Share Cost 44 - BEE Share of Adjustments 8 - Tax on Adjustments (9) - Adjusted Headline Earnings 1081 919 Adjusted HEPS 611.9 524.6 17%
Slide 7: Reconciliation of Profit After Tax
RECONCILIATION OF PROFIT AFTER TAX 2007 2006 % Rm Rm Increase Profit after Tax 498.5 838.7 Abnormal Items 432.7 (1.6) BEE Deal Items 589.6 0.0 Profit on Sale of Finco (2006 - Other) (118.1) (5.0) Profit on sale of assets to Joint Venture (39.7) 0.0 Impairments 0.9 3.4 931.2 837.1 11% Unrealised Prof
Slide 8: Forex and Derivative Instruments Gains/Losses
Forex and derivative instruments gains/losses 2007 2006 Unrealised Realised Total Unrealised Realised Total () = loss Rm Rm Rm Rm Rm Rm CBI-electric: low voltage 1.0 (6.9) (5.9) 10.5 5.2 15.7 Nashua Electronics 8.9 (49.5) (40.6) 19.4 12.4 31.8 CBI-electric: african cables 0.5 (7.2) (6.7) 3.2 23.7 26
Slide 9: Investments and Loans
Investments and loans 2007 2006 Rm Rm Unlisted associate companies 400.3 126.0 Nokia Siemens Networks 119.7 126.0 Quince Capital 280.6 - Other loans and investments 61.5 22.8 Long term accounts receivable 266.1 - Deals discounted with recourse * 235.5 - Financing of capital equipment ** 30.6 - Total
Slide 10: Net Interest and Dividend Income
Net interest and dividend income 2007 2006 Rm Rm Interest received 104.3 92.9 - From RC&C Finance Company up to date of sale * 43.5 57.2 - External 60.8 35.7 Interest paid (57.2) (34.9) Dividend income other than from associate companies 7.7 6.9 Total ** 54.8 64.9 * 2007 includes interest received b
Slide 11: Balance Sheet at 30 September 2007
Balance Sheet at 30 September 2007 R million R million R Millions Sept Sep 2007 2006 Fixed Assets 579 467 Goodwill 373 327 Investments 728 149 R C & C Finance Debtors - 1 404 Current Assets 2 596 2 274 Stock 880 809 Accounts Receivable 1 370 1 111 Other Debit Balances 346 354 Gross Assets 4 275 4 62
Slide 12: Summarised Cash Flow Statement
Summarised cash flow statement for the year ended 30 Sept 2007 2006 Rm Rm EBITDA 1 393 1 336 Dividend and interest income 201 121 1 594 1 457 Increase in inventory (66) (248) Increase in accounts receivable (240) (456) (Decrease)/increase in accounts payable (133) 451 Taxation paid (569) (347) Divid
Slide 13: Capital Expenditure
CAPITAL EXPENDITURE Rm CBi-Electric: energy cables 49,6 CBi-Electric: telecom cables 5,5 CBi-Electric: low voltage 55,4 Nashua Office Automation 6,3 Nashua Consumer 4,0 Nashua Mobile 17,3 Reutech 9,4 Group services 1,5 149,0
Slide 14: Operational Review
REUNERT REUNERT LIMITED OPERATIONAL REVIEW
Slide 15: Reunert
Reunert CBi-electric Nashua Reutech Investments Energy cables (75%) Office systems Radar systems NSN (40%) Telecom cables (37,5%) Mobile Electronic fuzes Quince Capital (48%) Low voltage Electronics Radio communications Logistic support
Slide 16: Segmental Analysis
SEGMENTAL ANALYSIS % CONTRIBUTION TO
Slide 17: Risk Factors
RISK FACTORS Average euro/rand exchange rate 9.48578 % € High 10.16670 Low 8.58300 18% 2007 2006 Cu price R54 346 R40 256 35%
Slide 18: CBi-electric
REUNERT REUNERT LIMITED CBI-ELECTRIC
Slide 19: Energy Cables
ENERGY CABLES Market mix as % of turnover Export Industry 3% 3% • Revenue up 38% • Operating profit up 21% Utilities 42% Gen market • Upgrading of facilities over past two years 42% – Increased capacity – Additional XLPE MV line Mining 10% – Rod conversion upcaster • 16 000 ton capacity • New produc
Slide 20: Telecom Cables
TELECOM CABLES • JV with Aberdare successfully Capacity utilisation implemented 2007 2006 2005 • Revenue up 45% Copper 92% 78% 39% • Operating profit up 7% OF Cable 62% 30% 7% • Instrumentation UTP Cable – Lamda plant integrated • Significant increase in capacity – Fibre capacity to reach 1 million
Slide 21: Low-Voltage Products
LOW-VOLTAGE PRODUCTS Product Mix Export • Difficult year 28% Residential 29% – Revenue up 8% Utility – Operating profit down 21% Industrial 1% Mining – Material costs increased Controls 5% 19% Commercial & Industrial • Product lines are being rationalised 18% • Reducing number of products & variatio
Slide 22: The Nashua Group
REUNERT REUNERT LIMITED THE NASHUA GROUP
Slide 23: The Nashua Group
THE NASHUA GROUP • Nashua – Office systems • Nashua Mobile – Telecommunications service provider • Nashua Electronics – Consumer products – Business systems • Revenues up 9% • Operating profit down 2%
Slide 24: Office Systems
OFFICE SYSTEMS • Maintained volumes • Margins down – Weakening of rand against euro HY01 • Uncompetitive products (Segment 3) • Bought back two franchises – Tshwane – Port Elizabeth • Continued expansion • Total document volumes >4,1 billion (2003: 3,2 billion) copies • Consumable sales up 22%, 21%
Slide 25: Nashua Mobile
NASHUA MOBILE • Strong year – Revenue up 18% – Operating profit up 12% • Product offering – Voice: cellular, VOIP, Satellite – Data: HSDPA, ADSL, I-burst – Internet services – Nashua Insure • Auto & General • Least cost routers – One of only two independent licensed service providers
Slide 26: Nashua Mobile
NASHUA MOBILE Sep 07 Sep 06 Growth % past year Contract connections for year 151 285 194 832 (22%) 3G/HSDPA connections 27 534 11 095 148% Total connections 178 819 205 927 (13%) Closing contract base 693 432 576 820 20% ARPU (average for period) R443 R485 (8,6%) Churn % 10,67% 10,51% 1,5% Net bad d
Slide 27: Nashua Electronics
NASHUA ELECTRONICS • RC&C Holdings now included under Nashua brand • Consumer electronics fiercely competitive – Revenue down 1% – Operating profit down 49%, however still profitable – Consumer & Business systems • Consumer contributes 63% of revenue • Less than 6% of profits • Business systems incr
Slide 28: Reutech
REUNERT REUNERT LIMITED REUTECH
Slide 29: Reutech
REUTECH • Excellent year – Revenue up 55% – Operating profit up 259% • Terminated sale of company • Demand for products – SANDF – Exports • Airborne radios • Electronic fuzes – New: Mining surveillance radars • Africa, South America, Australia
Slide 30: Associates
REUNERT REUNERT LIMITED ASSOCIATES
Slide 31: Quince Capital
QUINCE CAPITAL • Joint venture with PSG Group – Effective 1 May 2007 – 48% shareholding – Contributed RC&C Finance – PSG R378 million • Asset backed financial services – Nashua Finance (RC&C Finco) – ZS Rationale (bridging finance) – Scripfin (lending against securities) • Book exceeds R1,5 billion
Slide 32: Nokia Siemens Networks
NOKIA SIEMENS NETWORKS • Formerly Siemens Telecommunications • Hold 40% share in Nokia Siemens Networks South Africa • Siemens AG & Nokia merger – Effective 1 April 2007 – Compete with Ericsson, Alcatel-Lucent, Huawei • Operating profit (100%) up 50% to R532 million • Revenue up 33% to R4,3 billion
Slide 33: Prospects
PROSPECTS • Rising interest rates • National Credit Act • Slower growth • Margin pressures especially on consumer side • Rand volatility • Bullish on fixed investment spending • Have products & capacity to benefit • Achieve real earnings growth
Slide 34: For more information contact Reunert Investor Relations
For more information contact Carina de Klerk Reunert Investor Relations carina@reunert.co.za Tel + 27 11 517 9000 Mobile +27 83 631 5743 www.reunert.com www.reunert.co.za