Trellidor Holdings Ltd. · JSE:TRL
Trellidor — FY2016 Earnings Presentation
25 slides from Trellidor's earnings presentation, June 2016
Slide 1: Trellidor Holdings Limited – Audited Results for the Year Ended 30 June 2016
TRELLIDOR HOLDINGS LIMITED AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2016
Slide 2: Overview
OVERVIEW • Trellidor is the market leading manufacturer of custom made barrier security products • Distribution through dedicated and skilled owner operated franchisees in South Africa and throughout Africa • Further representation in Israel, UK, parts of Europe and Australia • Products manufactured
Slide 3: Business Model
BUSINESS MODEL Route to market Marketing & Sales Manufacturing 71 franchise outlets throughout Continuous marketing & advertising Modern plant in Durban, assembly SA campaigns – all media, shows etc. plants in strategic African countries 18 African franchise outlets in Franchisees obliged
Slide 4: Footprint – RSA
FOOTPRINT – RSA 71 Franchises • 62 Franchise owners • 103 Sales consultants • 98 Installers • 88 Administration staff • National distribution network vs. regional focused competitors in main centres The franchise network is well-established, loyal and extremely effective Not a royalty based mode
Slide 5: Footprint – Africa
FOOTPRINT – AFRICA African franchisees • 18 franchisees in 17 African countries • Company owned assembly plant in Ghana – services West Africa Select assembly shops – shorten lead times, reduce duties and transport costs. Owned and operated by the franchisees Drive to increase African representa
Slide 6: Financial Overview
TRELLIDOR ) THE ULTIMATE CRIME BARRIER FINANCIAL OVERVIEW
Slide 7: Highlights
HIGHLIGHTS 19% Profit after tax 12% Earnings per share – 50.8c 11% Headline earnings per share – 50.3c Final dividend declared - 15.8 cents per share Total dividend for the year post listing of 25c per share Slide 7
Slide 8: Financial Performance
FINANCIAL PERFORMANCE Audited Audited Audited Audited Jun-16 Jun-13 Jun-14 Jun-15 Jun-16 v R'm R'm R'm R'm Jun-15 Revenue 266.3 295.5 293.7 313.4 7% Gross Profit 128.5 145.9 148.9 157.3 6% EBITDA 60.0 68.3 72.8 81.5 12% Profit after tax 36.0 42.2 45.5 54.2 19% Dividends paid 20.0 40.8 43.5 20.0 EPS
Slide 9: Financial Performance
FINANCIAL PERFORMANCE • Final dividend declared of 15.8 cents per share • Despite tough trading conditions and a weakened rand gross margin of 50.1% achieved • Tight management of overheads, and a stable gross margin boost EBITDA margin to 26%. Forex gains of R2.3m help offset the increase in import
Slide 10: Sales Analysis – Geographical presence
SALES ANALYSIS Geographical presence 1.2% • Africa sales growth underpinned by a 63% 15.0% revenue growth in Ghana (Rand) 40.8% • African economies reliant on oil and commodities – weak, mainly Nigeria, Angola, 43.0% Zambia and Botswana • Good revenue growth in the Indian Ocean Islands and Main cent
Slide 11: Sales Analysis – Product type
SALES ANALYSIS Product type • Growth in new product sales of 18% 2.1% • Polycarbonate Bar - first full year of 5.5% sales met expectations 12.8% • Further new product introduced July 2016 – Trellidor Security Shutter • Diversified product range spans 79.6% income groups which mitigates weak middle a
Slide 12: Trading Margin
TRADING MARGIN • Stable trading margin despite rand Cost of Production- costs as % of net sales devaluation and muted sales growth 60.0% 51.7% 50.6% 49.9% • Super inflationary labour costs 50.0% 49.3% continue, mitigated by improved 11.9% 9.4% 9.5% 9.5% utilisation 40.0% 10.0% 9.2% 9.3% 9.7% • Signi
Slide 13: Summarised Balance Sheet
SUMMARISED BALANCE SHEET Audited Audited Audited Audited Jun-13 Jun-14 Jun-15 Jun-16 R'm R'm R'm R'm Non current assets 49,6 49,1 47,7 50,7 Property, plant and equipment 46,2 44,7 41,5 42,6 Goodwill and other intangibles 3,3 3,2 3,1 4,0 Deferred Tax -1,0 0,5 2,7 3,7 Other financial assets 1,1 0,7 0,
Slide 14: Balance Sheet
BALANCE SHEET Invested capital and interest cover 200.0 35.0 • Low financial risk 180.0 32.9 30.0 160.0 • Balance Sheet largely ungeared and 140.0 25.0 reserved for acquisition strategy at year 120.0 19.3 21.4 20.0 end 100.0 15.0 148.9 15.0 80.0 • Utilised R51m cash and debt of R70m to 60.0 62.4 65.
Slide 15: Net Working Capital
NET WORKING CAPITAL Net working capital (R’m) Working capital investment has increased 100 mainly due to higher inventory levels, which is predominantly due to: 80 60 • the impact of a weaker currency; 22.3 21.4 30.8 • Increased inventory and trade 40 20 37.7 receivables in our Ghanaian subsidiary 2
Slide 16: Summarised Cash Flow
SUMMARISED CASH FLOW Audited Audited Audited Audited Jun-13 Jun-14 Jun-15 Jun-16 R'm R'm R'm R'm EBITDA 60,0 68,3 72,8 81,5 Movement in non cash (incl provisions) 1,1 2,0 2,9 -5,9 Net working capital movement 0,7 -10,4 2,8 -3,3 Inventory -3,7 -2,3 0,9 -9,4 Accounts receivable -1,0 -13,7 2,7 -3,7 Acc
Slide 17: Summarised Cash Flow
SUMMARISED CASH FLOW Cash Conversion (R’m) 60.0 50.0 40.0 54.2 51.6 44.4 40.6 30.0 54.2 50.6 43.4 42.2 45.5 36.5 41.3 36.7 20.0 10.0 - Jun-13 Jun-14 Jun-15 Jun-16 Profit after tax Free cash flow from operations Free cash flow net of PPE Highly cash generative Slide 17
Slide 18: New Product
New Product • Trellidor Security Shutter launched July 2016 • In-house designed and developed • Premium product targeted at the upper income groups • Popular product set in gated communities • Sales volumes expected to reach Trellidor Clear Guard levels in a few years • Highly factory efficiency, ma
Slide 19: New Product
NEW PRODUCT Substantive in house developed product Slide 19
Slide 20: Taylor/NMC Acquisition
Taylor/NMC acquisition Slide 20
Slide 21: Taylor/NMC Acquisition
TAYLOR/NMC ACQUISITION • Transaction completed early July 2016 with an effective date of 1 May 2016 • After tax earnings for May and June of R7,7m is offset against goodwill • No earnings included in profit and loss for FY16 • Total revenue for FY16 was R231m • The business will be housed in a newly
Slide 22: Taylor/NMC Acquisition
TAYLOR/NMC ACQUISITION • Taylor Blinds and Shutters is based in Cape Town with a modern factory manufacturing a wide range of blinds and shutters • Brands include Shutterguard, the market leading aluminium shutter product in South Africa • Significant spare capacity exists in the Blind manufacturing
Slide 23: Taylor/NMC Acquisition
TAYLOR/NMC ACQUISITION • Effective purchase consideration for 92.5% - R121m, funded by cash of R51m and new debt of R70m • A second tranche of up to R30m (100%) is due if the business achieves a PAT of R33m before the cost of debt for the 12 months ending 30 April 2017, this payment reduces by R5,50
Slide 24: Prospects
PROSPECTS • Trellidor Security Shutter launched – highly synergistic incremental revenue • Africa – 2 new franchisees appointed in Nigeria and a further one in the DRC. Training is in progress and sales are expected to commence later in the calendar year • The acquisition of the business of Taylor B
Slide 25: Thank You
Thank You TRELLIDGR } THE ULTIMATE CRIME BARRIER