Metair Investments Limited · JSE:MTA
Metair Investments — FY2021 Earnings Presentation
35 slides from Metair Investments's earnings presentation, 2022
Slide 1: 2021 Year End Results Presentation
2021 YEAR END RESULTS PRESENTATION
Slide 2: Safety Message: Covid Safety Is Up To Us
SAFETY MESSAGE COVID SAFETY IS UP TO US TEST VACCINATE WEAR A MASK SOCIAL DISTANCE \ SANITIZE GET THAT BOOSTER 2 2
Slide 3: Agenda
AGENDA Welcome and opening observations Salient features Operational and financial review Key takeaways and outlook Q&A Appendices 3 3
Slide 4: Welcome and Opening Observations
WELCOME AND OPENING OBSERVATIONS 4
Slide 5: Top of Mind Matters
TOP OF MIND MATTERS Delivery of key projects in AC Operational Supply chain normalisation Excellence Disruptions that Covid could cause to employees and/or operations overall Monitoring events in Eastern Europe Financial South African economic recovery prospects Performance Wage negotiat
Slide 6: 2021: The Year of Change, Recovery & a Herd of Black Swans
2021: THE YEAR OF CHANGE, RECOVERY & A HERD OF BLACK SWANS • Record HEPS for Metair • Board changes – four new • Vaccination status of at least members including new Chair one jab across the group 68% • Record ES performance driven and CEO by Mutlu • Food parcel support to • Leadership changes - fou
Slide 7: Four New Buildings for AC Projects in 2021
FOUR NEW BUILDINGS FOR AC PROJECTS IN 2021 7 7
Slide 8: Metair Exhibition 2021
METAIR EXHIBITION 2021 METAI
Slide 9: Salient Features
SALIENT FEATURES METAIR
Slide 10: Salient Features at Group Level
SALIENT FEATURES AT GROUP LEVEL DIVIDEND of 90cps REVENUE EBITDA* OPERATING PROFIT NET DEBT FREE CASH FLOW FOR FY21 increased to Increased to UTILISED dividend of 75cps increased 23% to increased 58% to R12.6bn R1.4bn R1.2bn R1.3bn declared and paid From R805m R229m for FY20 Debt refinancing Success
Slide 11: Operational and Financial Overview
OPERATIONAL AND FINANCIAL OVERVIEW 11
Slide 12: Automotive Components Operational Performance
AUTOMOTIVE COMPONENTS OPERATIONAL PERFORMANCE South African OEM production impacted by global supply chain disruptions and lost production due to local SA headwinds OEM 2019 2020 2021 Change SOUTH TSAM 138 781 103 461 128 223 24 762 AFRICA SOUTH FMCSA 94 756 65 503 87 174 21 671 AFRICA VWSA 157 961
Slide 13: Energy Storage Operational Performance
ENERGY STORAGE OPERATIONAL PERFORMANCE The vertical experienced good AM, OEM and export demand, automotive battery volumes increased by 18% to 8.8 million units. Our energy business performed well ahead of our expectations, mainly due to stronger export volumes from Mutlu. • Benefitted from normaliz
Slide 14: 2021 Group Results at a Glance
2021 GROUP RESULTS AT A GLANCE HEPS EBIT EBITDA (incl. share of assoc. excl. impairment) 354cps R1.2bn R1.4bn 139% 107% 58% (2020: 148cps) (2020: R561m) (2020: R891m) Free cash flow EBIT % ROIC Unadjusted - R229m 9.2% 16.4% (2020: 8.6%) 133% 3.7ppt 7.8ppt/ Adjusted * (2020: R687m) (2020: 5.5%) 5.3pp
Slide 15: Our Business Verticals Have Recovered Strongly from 2020
OUR BUSINESS VERTICALS HAVE RECOVERED STRONGLY FROM 2020 ENERGY AUTOMOTIVE STORAGE Energy COMPONENTS METAIR VERTICAL VERTICAL Storage vertical 2020 2021 2020 2021 2020 2021 R6,4bn R7,5bn R4,9bn R6,7bn R10,2bn R12,6bn Revenue 56% 53% 44% 47% contribution contribution contribution contribution 18% 36%
Slide 16: Energy Exceeded Expectations While Auto Continues U-Shape Recovery
ENERGY EXCEEDED EXPECTATIONS WHILE AUTO CONTINUES THE U-SHAPE RECOVERY PATH POST 2019 LEVELS ENERGY AUTOMOTIVE STORAGE Energy COMPONENTS METAIR VERTICAL VERTICAL Storage vertical 2019 2021 2019 2021 2019 2021 R6,9bn R7,5bn R5,6bn R6,7bn R11,2bn R12,6bn Revenue 55% 53% 45% 47% contribution contributi
Slide 17: Financial Highlights: Income Statement
FINANCIAL HIGHLIGHTS : INCOME STATEMENT Revenue improved by 23% and margins expanded to 9.2%, however volume once-off costs and supply chain disruptions impacted the auto business R'million 2020 2021 % Change • Revenue increase driven by volume recovery in both businesses Revenue 10 235 12 621 23% •
Slide 18: Financial Highlights: Income Statement
FINANCIAL HIGHLIGHTS : INCOME STATEMENT Record headline earnings of R682m, up 140% from 2020 and 6% from 2019 (Pre-Covid), despite SA auto challenges. R'million 2020 2021 % Change Attributable profit 174 675 287% Headline earnings 284 682 140% Earnings per share (cents per share) 91 350 286% Weighte
Slide 19: Financial Highlights: Balance Sheet
FINANCIAL HIGHLIGHTS : BALANCE SHEET Higher inventory levels and operating costs contributed to lower cash position including impact of supply chain disruptions. • Non-current assets decreased due to a combination of: R'million 2020 2021 › Spot currency TL devaluation in Mutlu c. 40% vs. ZAR Non-cur
Slide 20: Financial Highlights: Balance Sheet
FINANCIAL HIGHLIGHTS : BALANCE SHEET Funding was renewed and adequate facilities in place to support growth in new projects and higher operating activity levels. • Total equity reduction driven by TRY currency devaluation R'million 2020 2021 • Total debt at R2.3 billion, R80m lower but mainly impact
Slide 21: Working Capital Has Increased to Support Higher Activity Levels
WORKING CAPITAL HAS INCREASED TO SUPPORT HIGHER ACTIVITY LEVELS • Working capital reduction in FY20 was largely temporary, and R'million 2020 2021 aided by lower commodity prices Inventory 1 695 1 959 • FY21 increase incorporates normalisation, some investment for Trade and other receivables 1 819 1
Slide 22: Capital and Debt Structure Remains Strong Despite Higher Gearing
CAPITAL AND DEBT STRUCTURE REMAINS STRONG DESPITE HIGHER GEARING We received strong support from our funders during the year. Net debt has increased, but FY22 is the peak year of funding. Net debt levels will reduce post new model launches. • Net debt increased to R1.3bn (2020: R805m) due to higher
Slide 23: Capital Expenditure and Commitments (Including Hesto)
CAPITAL EXPENDITURE AND COMMITMENTS (INCLUDING HESTO) R1.2bn has been allocated for 2022 (2020: R1.3bn) and includes carry over allocations and new technology investments at Mutlu (AGM). • 2021 was a significant year of investment for secured new Capital expenditure spend model launches and facelift
Slide 24: Automotive Components Recovery Impacted by Supply Chain Disruptions
AUTOMOTIVE COMPONENTS RECOVERY SIGNIFICANTLY IMPACTED BY SUPPLY CHAIN DISRUPTIONS AND PREMIUM COSTS Revenue PBIT EBITDA 36% 191% 63% R6,7bn R257m R370m Free cash PBIT % ROIC flow -R871m 2.0ppt 5.9ppt -R820m 3.8% 10.7% • Turnover of R6.7bn achieved and represents 120% of 2019 levels • OEM customer vo
Slide 25: Energy Storage Results Driven by Sustained Demand for Lead Acid Batteries
ENERGY STORAGE RESULTS DRIVEN BY SUSTAINED DEMAND FOR AUTOMOTIVE LEAD ACID BATTERIES IN EXISTING MARKETS AS WELL AS NEW EXPORT REGIONS Revenue PBIT EBITDA 18% 51% 35% R7,6bn R887m R1 067m Free cash PBIT % ROIC flow 93% 2.5ppt 9.7ppt R52m 11.7% 25.5% • Turnover of R7.6bn represents 118% of 2019 level
Slide 26: Energy Storage Automotive Margins Were Strong at 13.3%
ENERGY STORAGE AUTOMOTIVE MARGINS WERE STRONG AT 13.3% Total automotive battery margins increased from 10.5% to 13.3% 8 000 7 020 5 887 6 000 R’million Export auto 4 000 Revenue • Auto exports PBIT margin increased from 10.6% to 14.7% 2 000 530 530 • Improved quality of earnings at Mutlu and Rombat,
Slide 27: Energy Storage – Overall Exceptional Operating Result for 2021
ENERGY STORAGE – OVERALL EXCEPTIONAL OPERATING RESULT FOR 2021 • First National Battery (‘FNB’) PBIT increased from R73m to R156m • Although a challenging and competitive SA environment, AM sales were stronger in Q4 and lead recoveries better • FNB is also migrating their Industrial business model t
Slide 28: Outlook and Prospects
OUTLOOK AND PROSPECTS METAIR 28
Slide 29: Ford New Business Progress Update
FORD NEW BUSINESS PROGRESS UPDATE 29
Slide 30: Project Is Tracking Within Plan, Despite Industry Disruptions
PROJECT IS TRACKING WITHIN PLAN, DESPITE INDUSTRY DISRUPTIONS Project and capital spend still within budget, and further business secured for wire localisation OVERVIEW REVENUE (INCLUDES SOUTH SHARE HESTO) (INCLUDES AFRICA HESTO) • Significant additional revenue secured over model life • Customer de
Slide 31: Key Takeaways and Outlook
KEY TAKEAWAYS AND OUTLOOK Record HEPS and record ROIC achieved Record performance in ES driven by Mutlu Strong Recovery AC turnover achieved represents 120% of 2019, but margins temporarily depressed due to once off items Projects on track ES volume outlook remains positive with increased
Slide 32: Metair Investments Limited
InvesTweNTS UMiTED 32
Slide 33: Disclaimer
DISCLAIMER The information supplied herewith is believed to be correct but the accuracy thereof at the time of going to print is not guaranteed. The company and its employees cannot accept liability for loss suffered in consequence of reliance on the information provided. Provision of this data does
Slide 34: Appendices
APPENDICES METAIR
Slide 35: Energy Storage Volumes (Rounded)
ENERGY STORAGE VOLUMES (ROUNDED) 1. Total volumes by operation (including 2. Automotive volumes by market 3. Mutlu automotive volumes industrial) 4. Rombat automotive volumes 5. First National Battery automotive 6. Industrial volumes volumes 35 35