Hudaco Industries Limited · JSE:HDC
Hudaco Industries — H1 2025 Earnings Presentation
37 slides from Hudaco Industries's earnings presentation, May 2025
Slide 1: Unaudited Interim Results
UNAUDITED INTERIM RESULTS For the six months ended 31 May 2025
Slide 2: Agenda
AGENDA ❑ Reflecting on H1 ❑ Business model ❑ Reporting segments ❑ Operating profit and margins ❑ Financial review ❑ Outlook 2
Slide 3: Reflecting on H1
REFLECTING ON H1 ❑ Very tough trading conditions ❑ The positive momentum experienced at the end of 2024 has slowed ❑ “South Africa is one of the most difficult (worst) places in the world to do business” ❑ Another challenging six months with low business confidence (budget fiasco, GNU, tariff wars,
Slide 4: Reflecting on H1
REFLECTING ON H1 Turnover 2,4% to R3,9bn Gross profit margin 0,8% points to 37,8% Operating profit 1,5% to R419m Comparable earnings per share 6,1% to 833 cents Headline earnings per share 19,6% to 938 cents Basic earnings per share 19,9% to 941 cents Interim dividend per share 7,7% to 350 cents 4
Slide 5: Business Model
Hudaco BUSINESS MODEL
Slide 6: The Hudaco Business Model
THE HUDACO BUSINESS MODEL ❑ Hudaco’s main business is the importation and distribution of high-quality branded automotive, industrial and electronic consumable products ❑ The concept of “value-added distribution” is key to our business model ❑ Agency agreements generally restrict our activities to A
Slide 7: Features of Value-Added Distribution
FEATURES OF VALUE-ADDED DISTRIBUTION ❑ Focused business units Inventories R2 806m Receivables R1 324m with application advice ❑ Instant availability ❑ 30 000 active ❑ Technical customers ❑ 31 warehouses specification and ❑ Generally low-value product knowledge ❑ 800 international transactions – low
Slide 8: Reporting Segments
Hudaco REPORTING SEGMENTS
Slide 9: Contribution by Segment
CONTRIBUTION BY SEGMENT Contribution to H1 2025 operating profit H1 2024 (before shared services and head office) 57% 43% 55% 45% Consumer-related products Engineering consumables 9
Slide 10: Consumer-Related Products
CONSUMER-RELATED PRODUCTS The consumer-related products segment imports and distributes branded products, driven by consumer spending and generally sold to installers. Consumer-related products (12 businesses) ❑ Automotive aftermarket products ❑ Power tools and fasteners ❑ Data networking equipment
Slide 11: Segment Results for Consumer-Related Products
SEGMENT RESULTS FOR CONSUMER-RELATED PRODUCTS Turnover Op Margin Operating Profit Rm 2025 % ch 2024 2025 2024 2025 % ch 2024 Operations 18+ 1 777 (6,0) 1 890 11,3 9,9 200 6,9 187 months in group Acquisitions after 1 Dec 2023 Segment total 1 777 (6,0) 1 890 11,3 9,9 200 6,9 187 ❑ CADAC, automotive an
Slide 12: Engineering Consumables
ENGINEERING CONSUMABLES The engineering consumables segment imports and distributes branded products primarily used for repairing and maintaining machines. Engineering consumables (20 businesses) ❑ Bearings, belting and power transmission ❑ Diesel engines and spares ❑ Electrical power transmission ❑
Slide 13: Acquisitions
ACQUISITIONS ❑ Isotec effective date 1 May 2025 ❑ Manufacturer and distributor of thermal and electrical insulation material used in the manufacture and repair of transformers and electrical motors ❑ Operates in the manufacturing, mining, railway, generation and switchgear industries ❑ Initial payme
Slide 14: Acquisitions
ACQUISITIONS ❑ Flosolve effective date 1 June 2025 ❑ Importer and distributor of specialised equipment for the handling of fuels, lubricants, greases and other fluids associated with the servicing and refuelling of plant and machinery, especially in the mining industry ❑ Initial payment R45 million
Slide 15: Segment Results for Engineering Consumables
SEGMENT RESULTS FOR ENGINEERING CONSUMABLES Turnover Op Margin Operating Profit Rm 2025 % ch 2024 2025 2024 2025 % ch 2024 Operations 18+ 2 077 (1,2) 2 102 11,5 11,6 239 (2,0) 244 months in group Acquisitions after 39 11,6 5 1 Dec 2023 Segment total 2 116 0,6 2 102 11,5 11,6 244 (0,1) 244 ❑ Very goo
Slide 16: Combined Segment Results
COMBINED SEGMENT RESULTS Turnover Op Margin Operating Profit Rm 2025 % ch 2024 2025 2024 2025 % ch 2024 Consumer- 1 777 (6,0) 1 890 11,3 9,9 200 6,9 187 related products Engineering 2 116 0,6 2 102 11,5 11,6 244 (0,1) 244 consumables Head office, shared services (7) (9) (25) (17) and eliminations To
Slide 17: Operating Profit and Margins
OPERATING PROFIT AND MARGINS 17
Slide 18: Operating Profit Margin
OPERATING PROFIT MARGIN 2025 2024 Margin (%) Turnover 100% 100% Gross profit 37,8% 37,0% Operating expenses 27,0% 26,6% Operating profit 10,8% 10,4% 18
Slide 19: Operating Profit Margin
OPERATING PROFIT MARGIN % 14,0 13,5 13,0 13,0 12,0 11,9 12,1 12,0 10,0 10,6 10,9 10,8 10,4 8,0 6,0 4,0 3,0 2,0 0,0 2020 2021 2022 2023 2024 2025 H1 H2 19
Slide 20: Financial Review
Hudaco FINANCIAL REVIEW Miro
Slide 21: Profit
PROFIT Rm 2025 % ch 2024 Turnover 3 886 (2,4) 3 983 Operations 18+ months in group 3 847 (3,4) 3 983 Acquisitions after 1 Dec 2023 39 Gross profit 1 470 (0,3) 1 474 Operating expenses 1 051 (1,0) 1 060 Operations 18+ months in group 1 045 (1,5) 1 060 Acquisitions after 1 Dec 2023 6 Operating profit
Slide 22: Profit
PROFIT Rm 2025 % ch 2024 Operating profit 419 1,5 414 Fair value adjustment to vendor liability 35 – estimated capital amount due Fair value adjustments to vendor liabilities (7) (7) – time value of money Net interest on funding (43) (64) Imputed interest on leases (17) (18) Profit before taxation 3
Slide 23: Comparable Earnings
COMPARABLE EARNINGS Rm 2025 % ch 2024 Attributable earnings 267 19,9 223 Profit on disposal of ppe (1) Headline earnings 266 19,6 223 Fair value adjustment – vendor liability (35) Non-controlling interest 5 Comparable earnings 236 6,1 223 23
Slide 24: Comparable Earnings
COMPARABLE EARNINGS R million 350 348 348 300 322 280 250 265 257 230 236 200 223 210 150 100 50 22 0 2020 2021 2022 2023 2024 2025 H1 H2 24
Slide 25: Earnings per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS Cents 2025 % ch 2024 Earnings per share Comparable 833 6,1 785 Headline 938 19,6 785 Basic 941 19,9 785 Dividends per share - Interim 350 7,7 325 - Final 700 Total 1 025 Interim dividend cover (times) 2,38 2,42 25
Slide 26: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2025 2024 Working capital 2 889 2 865 - Inventories 2 806 2 647 - Receivables 1 324 1 341 - Payables (1 241) (1 123) Property, plant and equipment 402 373 Right-of-use assets 359 347 Goodwill and intangibles 1 795 1 453 Tax 24 33 Net assets 5 469 5 071 26
Slide 27: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2025 2024 Equity 3 655 3 433 Net borrowings 957 1 076 Lease liabilities 425 412 Due to vendors 363 147 Tax 69 3 Total equity and liabilities 5 469 5 071 27
Slide 28: Working Capital Elements
WORKING CAPITAL ELEMENTS In months of sales 5 4 3 2 1 0 H1 22 H2 22 H1 23 H2 23 H1 24 H2 24 H1 25 -1 -2 Inventory Payables Receivables Net W Cap One month of sales 2022 = R630m (H1) 2023 = R708m (H1) 2024 = R664m (H1) 2025 = R641m (H1) 2022 = R728m (H2) 2023 = R774m (H2) 2024 = R733m (H2) 2025 adjus
Slide 29: Inventory
INVENTORY In month of sales 5 4,4 4 3,9 4,0 3,8 3,6 3,5 3,4 3 3,2 3,1 3,1 2,7 2 1 0 2020 2021 2022 2023 2024 2025 H1 H2 2025 adjusted for acquisition 29
Slide 30: Cash Flow
CASH FLOW Rm 2025 2024 Cash from trading 534 529 (Increase) decrease in working capital (92) 44 Cash from operations 442 573 Tax paid (143) (112) Cash from operating activities 299 461 Invested in new businesses (252) (45) Invested in software and ppe (37) (41) Cash flow after investing activities 1
Slide 31: Cash Flow
CASH FLOW Rm 2025 2024 Cash flow after investing activities 10 375 Share-based payments (35) (73) Lease payments (rent) (78) (76) Finance costs paid (43) (64) Dividends paid (224) (221) Net movement (370) (59) Foreign exchange translation gain (loss) 2 (4) Opening borrowings (589) (1 013) Closing bo
Slide 32: Key Financial Points
KEY FINANCIAL POINTS ❑ Stock levels are higher for busier H2 ❑ The operating margin is up and is healthy in most businesses ❑ H2 operating margins are higher than H1 ❑ Expenses are tightly managed ❑ Any further decrease in interest rates will be a boost, although paying for acquisitions has added to
Slide 33: Outlook
Hudaco OUTLOOK
Slide 34: Outlook for H2 2025
OUTLOOK FOR H2 2025 ❑ Hudaco remains resilient, even though achieving organic growth from our existing mature businesses in declining market sectors is very difficult ❑ As part of our long-term strategy, we maintain a diversified portfolio of cash-generative businesses and we manage the elements wit
Slide 35: Disclaimer
DISCLAIMER The preceding presentation contains forward-looking statements about the Hudaco Group’s operations and financial position. They are prepared in good faith and are based on Hudaco’s best estimates and information at the time of preparing the presentation. They are nonetheless subject to si
Slide 36: Contact Details
CONTACT DETAILS Graham Dunford Clifford Amoils Chief executive Financial director Tel +27 11 657 5004 Tel +27 11 657 5002 grahamd@hudaco.co.za camoils@hudaco.co.za www.hudaco.co.za 36
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