Invicta Holdings Limited · JSE:IVT

Invicta — FY2015 Earnings Presentation

61 slides from Invicta's earnings presentation, June 2015

  1. Slide 1: Annual Results March 2015

    ANNUAL RESULTS March 2015 PRESENTATION TO INVESTORS June 2015

  2. Slide 2: Engineering Consumables

    Engineering Consumables  BMG (Bearing Man Group)  Engineering components & technical services  120 branches  Bearings, Seals, PT, Tools, Fasteners  Drives, Motors, Belting, Field Services  Filtration, Hydraulics, Lubrication, Pneumatics  Mandirk Group (incl SA Tool)  Tools & equipment  20 b

  3. Slide 3: Capital Equipment (CEG SA)

    Capital Equipment (CEG SA)  Northmec (Agric Machinery)  New Holland (Agric Machinery)  CSE (Earthmoving Machinery)  Doosan (Earthmoving Machinery)  HPE (Hyundai Earthmoving)  Criterion (Forklifts)  ESP (Parts)  200 dedicated outlets across SA

  4. Slide 4: Capital Equipment (Kian Ann Group)

    Capital Equipment (Kian Ann Group)

  5. Slide 5: Capital Equipment (Kian Ann Group)

    Capital Equipment (Kian Ann Group)  Kian Ann Engineering  One of the world's largest independent distributors of equipment spare parts  HQ in Singapore  Subsidiaries in Indonesia, China  Kian Chue Hwa Industries  One of Asia’s largest independent distributors of heavy truck spare parts  HQ in

  6. Slide 6: Building Supplies (BSG)

    Building Supplies (BSG)  Tiletoria  MacNeil Distributors  Brands 4 Africa  15 outlets in SA

  7. Slide 7: Results highlights

    Results highlights  Revenue R10.46bn  Operating Profit down 3% to R1.01bn  PBT R842m  PAT down 3% to R691m  Attributable PAT R579m  Cash generated by operations up 37% to R979m  Shares in issue (weighted ave) up 5% to 78m  Shares issued in Feb rights offer up 44% to 108.5m  EPS down 6% to 7

  8. Slide 8: Results Highlights

    Results Highlights R’m 31 Mar 15 vs PY Sales 10,460 0% Gross Profit 3,089 +7% GP% 29.5% 27.7% Operating Profit 1,014 -3% OP% 9.7% 10.0% PBT 842 -1% PAT 691 -3%

  9. Slide 9: Results Highlights

    Results Highlights R’m 31 Mar 15 vs PY PAT 691 -3% Preference shareholders 70 +7% Minority shareholders 42 -34% PAT attrib to ordinary shareholders 579 0% Weighted average shares (‘000) 77,965 +6% EPS (c) 742c -6% HEPS (c) 727c -5% DPS (c) 196c Not meaningful Special DPS (c) 2024c -

  10. Slide 10: Results Highlights

    Results Highlights R’m 31 March 15 vs PY Inventories 3,803 +9% Trade Receivables 1,942 +5% Trade Payables (2,594) +11% NWC 3,151 +5% NWC as % of Sales 30% 29% NAV (Equity) 4,636 +30% Debt*: Equity 30% 37% *Excludes long-term funding secured by investments and loans

  11. Slide 11: Dividend calculation

    Dividend calculation vs PY Per share vs PY R’m 31 Mar 15 (R) # of shares (cps) (per share) Attributable PAT 579 0% One-off non-cash profit* (70) - Adjusted Attrib PAT 509 -12% Dividend cover 2.75x Ordinary dividend 184 -12% 196c nm - Interim dividend 63 -16% 74.9m 84c -18% - Final dividend 122 -10%

  12. Slide 12: Commentary on Results

    Commentary on Results  Difficult trading conditions  Mining & resource markets weak in southern Africa and SE Asia  Construction market in China very weak  Infrastructure spend in SA very slow  Drought & soft maize price impacted demand for Ag equipment  BMG showed growth in revenue and operat

  13. Slide 13: Commentary on Results

    Commentary on Results  Working capital well managed  Strong cash generation  One-off profit of R70m realised on acquiring remaining 25% of Kian Ann  Attributable PAT level with Mar 2014  EPS down 6% due to extra shares in issue (weighted ave)  Ordinary dividend (in Rand) for the year down 12%

  14. Slide 14: Commentary on Results

    Commentary on Results  Rights issue and special dividend in Feb 2015  Special dividend R1.5bn  Rights issues raised R2.25bn (net R750m)  44% more shares in issue  Group structure simplified and streamlined

  15. Slide 15: Group Structure

    Group Structure BBBEE & Invicta Staff Trusts Holdings 25% 75% 100% 100% 100% 100% Invicta Invicta Invicta Invicta SA Invicta OH Properties Treasury Finance 100% 100% 60% 100% 100% EC CE BS Invicta OT Invicta AH Northmec BMG N Holland Kian Ann Mandirk CSE MacNeil KCHI Autobax Doosan Tiletoria HHI Weg

  16. Slide 16: Turnover (Rm)

    Turnover (Rm) 12 000 10 000 10 yr CAGR = 18% p.a. 8 000 6 000 4 000 2 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

  17. Slide 17: Turnover (Rm)

    Turnover (Rm) 12 000 10 000 8 000 5 336 5 190 6 000 4 044 4 000 3 036 2 361 1 983 5 129 5 270 2 000 3 514 2 173 2 563 1 986 0 2010 2011 2012 2013 2014 2015 H2 H1

  18. Slide 18: Revenue Contribution

    Revenue Contribution by Segment 2015 (2014) Building Supplies 16% (13%) Engineering Consumables 40% (38%) Capital Equipment 44% (49%)

  19. Slide 19: Revenue Contribution

    Revenue Contribution SA vs International 2015 (2014) International 24% (22%) South Africa 76% (78%)

  20. Slide 20: Operating Profit (Rm)

    Operating Profit (Rm) 1 200 1 000 10 yr CAGR = 16% p.a. 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

  21. Slide 21: Operating Profit (Rm)

    Operating Profit (Rm) 700 600 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 H1 H2 One-off

  22. Slide 22: Operating Profit Contribution by Segment

    Operating Profit Contribution by Segment 2015 (2014) Building Supplies 8% (7%) Engineering Capital Consumables Equipment 48% (46%) 44% (47%)

  23. Slide 23: Segmental Operating Profit (Rm)

    Segmental Operating Profit (Rm) 1 200 1 000 67 87 800 39 457 484 600 14 339 247 400 158 473 499 200 371 390 320 - 2011 2012 2013 2014 2015 -200 BMG CEG BSG Other

  24. Slide 24: Segmental Operating Margin (%)

    Segmental Operating Margin (%) 16% 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 BMG CEG BSG

  25. Slide 25: Earnings (Rm)

    Earnings (Rm) 800 700 600 500 400 300 580 579 535 492 200 354 100 0 2011 2012 2013 2014 2015 Ordinary s/h Minority s/h Pref s/h One-off

  26. Slide 26: EPS (cps)

    EPS (cps) 1 000 900 218 800 700 600 500 400 788 737 742 300 647 504 437 453 200 356 292 100 170 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EPS One-off

  27. Slide 27: EPS (cps)

    EPS (cps) 500 450 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 H1 H2 One-off

  28. Slide 28: EPS and DPS (cps)

    EPS and DPS (cps) Excludes special dividend of 2024cps - Feb 2015 1 000 900 800 700 600 500 400 300 200 254 268 287 100 183 196 138 138 151 68 104 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EPS One-off DPS

  29. Slide 29: BMG Bearing Man Group

    BMG BEARING MAN GROUP

  30. Slide 30: BMG Results Summary

    BMG Results Summary 31 Mar 2015 Rm 31 Mar 2015 vs PY Sales 4 209 +6% Operating Profit 499 +6% OP% 11.9% 12.0% Ave NOA 1 675 +16% RoNOA 29.8% 32.9%

  31. Slide 31: Sales

    Sales 4 500 4 209 3 955 4 000 3 425 3 500 3 000 2 742 2 500 2 395 2 056 1 928 2 000 1 550 1 500 1 350 1 000 500 - 2007 2008 2009 2010 2011 2012 2013 2014 2015

  32. Slide 32: Operating Profit

    Operating Profit 600 499 500 473 390 400 371 319 320 293 300 220 200 174 100 - 2007 2008 2009 2010 2011 2012 2013 2014 2015

  33. Slide 33: OP %

    OP % 18% 16% 14% 12% 10% 8% 6% 2007 2008 2009 2010 2011 2012 2013 2014 2015

  34. Slide 34: Sales by Segment

    Sales by Segment Fluid Power 12% Engineered Products 24% Consumables 64%

  35. Slide 35: Sales by Industry Sector

    Sales by Industry Sector Forestry & Resale/ Trade Paper (2%) Projects & (1%) Building & Consultants (7%) Oil, Gas & Construction COD Chemicals (1%) (4%) Accounts (13%) Other (1%) Food & Beverage (8%) Mining (25%) Automotive & Agriculture (8%) Heavy Light Transport (7%) Industry (5%) Industry (18%)

  36. Slide 36: Sales by Region

    Sales by Region South Africa 87% Africa 13%

  37. Slide 37: Review of FY 2015

    Review of FY 2015 • Adverse market conditions continue • Acquisitions effective 1 October 2014: • SA Tool & Klep Valves • Stand out performances: • BMG Core / Mandirk / BMG Africa • Engineering businesses affected by lack of project activity • Overheads (up 4%) and working capital well controlled •

  38. Slide 38: BMGP Upgrade

    BMGP Upgrade Additional land being Acquired 7 971m2 • R350m Engineering Assembly investment Building 9 330m2 • R44m spent in Parking Deck 6 000m2 FY2015 BMG Park Existing 36 891m2 • 81,100m2 on Engineering Manufacturing completion Building 9 208m2 Land acquired for CDC 9 206m2 Land Acquired 2 500m2

  39. Slide 39: BMGP Upgrade

    BMGP Upgrade • Objectives: • Invest in our central distribution capabilities • Consolidate up to 10 warehouses into 1 • Rationalise our engineering/workshop facilities • Consolidation of duplicated head office setup • Optimise stock holding & improve operational efficiencies • Internalise property r

  40. Slide 40: Slide 40

  41. Slide 41: Market environment

    Market environment • Drought – 32% of maize crop lost • Maize price down 38% • Land tenure issue – Government threat • Load shedding – irrigation • Coal mine closures • Lack of infrastructure spending • Low hard commodity prices – hampering development • Strikes • Resource slow-down in Malaysia, Ind

  42. Slide 42: CEG Results Summary

    CEG Results Summary 31 Mar 2015 Rm 31 Mar 15 vs PY Sales 4,607 -10% Operating Profit 457 -6% OP% 9.9% 9.4% Ave NOA 1,771 +18% RoNOA% 25.8% 32.3%

  43. Slide 43: Turnover

    Turnover 31 Mar 2015 6 000 5 122 5 000 4 607 4 000 3 503 3 000 2 549 2 254 2 000 1 877 1 701 1 750 1 000 - 2008 2009 2010 2011 2012 2013 2014 2015

  44. Slide 44: Operating Profit

    Operating Profit 31 Mar 2015 600 500 484 457 400 339 300 247 200 158 142 121 123 100 - 2008 2009 2010 2011 2012 2013 2014 2015

  45. Slide 45: OP %

    OP % 31 Mar 2015 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 2008 2009 2010 2011 2012 2013 2014 2015

  46. Slide 46: Sales Analysis

    Sales Analysis March 2015 Workshop Rentals 2% 1% Parts 45% Equipment 52%

  47. Slide 47: Construction Market

    Construction Market Unit sales 3 000 TLBS 2 500 Excavators 2342 2379 Loaders Skidsteers 2314 2 000 1900 1822 1604 1636 1 500 1382 1321 1199 1061 1178 1167 1 000 970 990 783 824 714 673 695 734 523 550 435 639 500 612 584 528 520 210 181 0 93 2008 2009 2010 2011 2012 2013 2014 2015

  48. Slide 48: Tractor Sales

    Tractor Sales Unit sales 9 000 7899 8 000 7549 7517 7370 7379 7 000 6451 6049 6000 6 000 5721 5727 5550 5280 5155 5 000 4679 4677 4308 4428 4330 4015 4 000 3122 2847 3 000 2624 2668 2207 2 000 1 000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

  49. Slide 49: Combine Sales

    Combine Sales Unit sales 400 352 339 350 343 341 300 291 278 275 260 250 228 220 209 200 191 188 175 178 179 165 165 168 150 135 124 125 100 97 70 50 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

  50. Slide 50: Conclusion

    Conclusion • Good results under very difficult conditions • Good cash generation • FY 2016 expected to be challenging in Construction and Agriculture • Focus on supporting and developing distribution network further • Focus on growing spare parts business in southern African markets • Restructured m

  51. Slide 51: Building Supply Group

    BUILDING SUPPLY GROUP DIVISION OF INVICTA HOLDINGS

  52. Slide 52: BSG Results Summary

    BSG Results Summary 31 Mar 2015 Rm 31 Mar 15 vs PY Sales 1,638 +18% Operating Profit 87 +31% OP% 5.3% 4.8% Ave NOA 284 +37% RoNOA 30.6% 32.4%

  53. Slide 53: Sales

    Sales 31 Mar 2015 1 800 1 639 1 600 1 388 1 400 1 200 1 000 800 630 600 400 308 200 - 2012 2013 2014 2015

  54. Slide 54: Operating Profit

    Operating Profit 31 Mar 2015 100 90 87 80 70 67 60 50 39 40 30 20 14 10 - 2012 2013 2014 2015

  55. Slide 55: OP %

    OP % 31 Mar 2015 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 2012 2013 2014 2015

  56. Slide 56: Sales Summary

    Sales Summary 31 Mar 2015 South Africa 74% Exports 26%

  57. Slide 57: Review of FY 2015

    Review of FY 2015 • Good growth in a challenging market • Plastic pipe factory affected by load shedding • Closure of Marley plastics manufacturing a positive for market consolidation • Tiletoria showed growth • MacNeil Johannesburg showed exceptional growth • Brands 4 Africa showed excellent growth

  58. Slide 58: Shareholding March 2015

    Shareholding March 2015 Wiese family Public 36% 39% Treasury 1% Management & Staff 1% Sherrell family 11% Exec Directors Samuels family Goldstone family 3% 4% 5%

  59. Slide 59: Group profit drivers

    Group profit drivers  Mining and industrial activity (BMG)  Agricultural activity (Northmec & New Holland)  Construction activity (CSE, Doosan SA & HPE)  Warehousing (Criterion Equipment)  Building and renovations (BSG)  Global replacement spares market (Kian Ann)

  60. Slide 60: Prospects

    Prospects  Trading conditions expected to remain very challenging in coming year  Focus on customer service, value-added distribution and market share gain  Focus on gross margin management and tight expense control  Focus on working capital management and supply chain efficiency  Continued pus

  61. Slide 61: Thanks and Questions

    Thanks and Questions THANK YOU

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