Slide 1: Results Presentation for the year ended 30 September 2022
RESULTS PRESENTATION For the year ended 30 September 2022
Slide 2: Agenda
AGENDA 1 Overview and key financial highlights 2 Financial performance 3 Segmental review 4 Strategy update 5 Prospects 2
Slide 3: Overview and key financial highlights
Overview and key financial highlights Alan Dickson Group CEO 3
Slide 4: Overview – Creating value for Reunert shareholders
OVERVIEW – CREATING VALUE FOR REUNERT SHAREHOLDERS Continued improvement in Strong performance in Progress in key strategic increasing shareholder key financial metrics initiatives returns Operating profit Renewable Energy Reunert 17% • Existing assets delivered ROCE good growth in revenue and Im
Slide 5: Key highlights – FY2022
KEY HIGHLIGHTS – FY2022 R11 129m R1 140m 519c per share R671m 16% 16% 9% 11% FY21: R9 575m FY21: R986m FY21: 478c per share FY21: R606m 17% maintenance capital 224c per share 83% expansion capital 8% FY21: 207c per share Supporting operational performance and strategic initiatives Reunert
Slide 6: Financial performance
Financial performance Nick Thomson Group CFO 6
Slide 7: Segment revenue
SEGMENT REVENUE +13% − Improved sales mix at power cable factories Segment revenue (Rm) − Pass through of high metal prices 11 237 − Good large contract orders FY21 FY22 9 905 − Continued high demand in both local and export market for circuit breakers +13% 5 551 6 266 ﹥ICT 4% +27% − Strong growth
Slide 8: Segment operating profit
SEGMENT OPERATING PROFIT +16% Strong performance exceeding GDFI growth Segment operating profit (Rm) 1 140 − Benefit from increased sales volumes and improved sales 986 mix at power cable factories FY21 FY22 − Recovery of margin due to +6% - price increases in H2 +17% 644 - efficiency programs 608 -
Slide 9: Reconciliation of segment to statutory operating profit
RECONCILIATION OF SEGMENT TO STATUTORY OPERATING PROFIT Rm 2022 2021 % change Segment operating profit 1 140 986 16 1 Fair value remeasurements 85 65 1 Fair value remeasurements: R85m (FY21: R65m) Financial guarantee cost (4) - Profit on disposal of PP&E and intangible assets Other 1 (6) 12 (8) ﹥Put
Slide 10: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS Rm 2022 2021 % change 1 17% increase in operating profit before impairment of Commentary Revenue 11 129 9 575 16 financial assets and 19% increase in profit after tax Operating expenses (9 903) (8 524) 16 against a 16% increase in revenue 1 Operating profit b
Slide 11: Consolidated statement of financial position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Rm 2022 2021 1 No non-financial asset impairments required PP&E, investment property, ROU assets and intangibles 1 538 1 471 1 Goodwill 960 934 Investment at fair value through profit or loss 53 76 2 Sale of R205m of the Quince rental book (additional 4 D
Slide 12: Working capital
WORKING CAPITAL R334 million investment into working capital during the year Drivers Financial performance Outlook and prospects > Annual growth in Revenue of 16% FY22 investment into working capital (Rm) Gradual reduction in working capital in − 24% increase in revenue in Q4 FY22 expected in FY23 c
Slide 13: Cash flow analysis
CASH FLOW ANALYSIS Group cash generation supports operational and strategic objectives and dividend payments > Reduction in rentals and finance leases > Financing BOO assets (R31m) Rm 2022 2021 of R135m, mainly due to the sale of > Acquisition of minority shareholders in Cash and cash equivalents 95
Slide 14: Capital expenditure
CAPITAL EXPENDITURE Capex maintains organic assets and boosts strategic growth assets Rm Strategic initiatives 238 238 232 232 1− Development of Renewable Energy Ecosystem (excluding BOO assets) 57 64 2− BOO assets are the core component of the renewable energy strategy 44 46 192 196 3− Capital expe
Slide 15: Segmental review
Segmental review Alan Dickson Group CEO 15
Slide 16: Electrical Engineering: strong performance with good prospects
Strong performance with good prospects for continued improvement Drivers Financial performance Outlook and prospects 13% • Actions over past two years at cable factories delivered objectives 6 266 5 457 5 551 – South Africa’s infrastructure • Circuit Breaker’s strategic geographic 5 139 investment
Slide 17: ICT: steady growth as core markets recover
ICT Steady growth as core markets recover Drivers Financial performance Outlook and prospects Market demand strengthening Core markets continue to recover REVENUE (Rm) 4% • Good performances from Total 3 443 3 235 − Demand for office equipment remains robust, Workspace Provider (TWP), Finance and 2
Slide 18: ICT: steady growth as core markets recover
ICT Steady growth as core markets recover Drivers Financial performance Outlook and prospects COMPLEMENTARY REVENUE FROM END Complimentary solutions and services continue to Total Workspace Provider CUSTOMERS (Rm) show strong growth including: − Market demand for office equipment remains 518 − Respo
Slide 19: ICT: steady growth as core markets recover
ICT Steady growth as core markets recover Drivers Financial performance Outlook and prospects Business Communications VBX PORTS ON NETWORK Data and complementary products and − Minute volumes lost as a result of loadshedding 27 980 services expected to continue double-digit 24 130 growth and help to
Slide 20: Applied Electronics
APPLIED ELECTRONICS Drivers Financial performance Outlook and prospects Material recovery in revenue and REVENUE (Rm) 27% Strong export order operating profit − Record order book of R2,4bn for delivery in FY23 • Strong export performance capitalising on 2 198 2 346 1 951 2 361 and FY24 1 854 increa
Slide 21: Strategy update
Strategy update Alan Dickson Group CEO 21
Slide 22: Reunert investment case
REUNERT INVESTMENT CASE Investment Highlight Drivers Focus Areas − Investments in: − Demonstrable track record of consistent 1 earnings and defendable market positions − Good market fundamentals support • ICT continued growth in all segments Diversified Group of • Applied Electronics − Low capital i
Slide 23: Reunert investment case
REUNERT INVESTMENT CASE Investment Highlight Drivers Focus Areas 3 − Dividend payments remains a core element − Typical EBITDA/FCF conversion > 65% of the investment case − Strong dividend payer Good cash generation with • DY = 6,9% (2022) a strong balance sheet − Earnings growth supported by 4 − Up
Slide 24: Positioning Reunert for growth: renewable energy strategy execution
POSITIONING REUNERT FOR GROWTH RENEWABLE ENERGY STRATEGY EXECUTION Significant market size and growth The Renewable Energy Ecosystem − The liberalisation of the generation market in South Africa continues to accelerate The end-to-end “RE Ecosystem” − Embedded generation cap lifted to 100MW − REIPP p
Slide 25: Renewable energy strategy execution
RENEWABLE ENERGY STRATEGY EXECUTION Delivering a comprehensive eco-system of Renewable Energy solutions Reunert’s renewable energy ecosystem now includes: − A leading South African Engineering, Procurement and Construction solar energy service provider in TFS; − A growing set of renewable energy sol
Slide 26: ICT segment strategy execution
ICT SEGMENT STRATEGY EXECUTION Acquisitions and growth strategy − Acquisition of an application and software development and EUC business, further enhanced +OneX’s services and value offerings − +OneX’s total solution offerings now include o Managed services o Unified communications and collaboratio
Slide 27: Acquisition: Etion Create
ACQUISITION Etion Create Rationale for acquisition Market Segments ﹥Original Design Manufacturer with a product portfolio that ﹥Mining covers mining, defence and the industrial market verticals − Designed and developed a precision blasting solution and various safety products used by major equipment
Slide 28: Strategy update: Sustainability strategy: ESG
STRATEGY UPDATE Sustainability Strategy: ESG Current Disclosures Reunert will enhance its ESG strategic efforts in 2023 • Reunert adheres to high standards of environmental • Our support for the global focus on climate change has management compliance across the Group resulted in increased action on
Slide 29: Prospects
Prospects Alan Dickson Group CEO 29
Slide 30: Prospects
PROSPECTS • The macro environment in which we operate is likely to remain stable, however, we recognise the risks associated with global recessionary pressures and South Africa’s muted economic growth expectations • Reunert remains well positioned in these conditions due to: − Our strong, unleverage
Slide 31: Key upcoming dates and Q&A
Key upcoming dates Q&A > Should you wish to ask a question, type your question on the webcast portal ﹥Integrated Report On or around 20 December 2022 > Kindly email Mohini Moodley at ﹥AGM 14 February 2023 mohinim@reunert.co.za should you wish to ﹥Interim results 24 May 2023 (tbc) have a one-on-one c