Trellidor Holdings Ltd. · JSE:TRL
Trellidor — FY2022 Earnings Presentation
35 slides from Trellidor's earnings presentation, Sep 5, 2022
Slide 1: Annual Results Presentation
Trellidor Holdings Limited 30 June 2022 Annual Results Presentation 05 September 2022 | 09:00 | Hosted by PSG Capital WELCOME We will begin shortly holdings.trellidor.co.za
Slide 2: Final Results for the Year Ended 30 June 2022
TRELLIDOR HOLDINGS LIMITED FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2022
Slide 3: Operating Environment
OPERATING ENVIRONMENT The Group's results for F22 are disappointing, but need to be viewed in the TERRY DENNISON GROUP CEO context of the operating environment and a number of major events that impacted the results
Slide 4: Operating Environment
OPERATING ENVIRONMENT • Remained challenging throughout F22 due both to demand and supply related issues • Consumers budgets were stretched leading to a trend of trading down TERRY DENNISON the value chain GROUP CEO • The residential property market is subdued which has a negative impact on homeowne
Slide 5: Operating Environment
OPERATING ENVIRONMENT • Trellidor's distribution in South Africa and Africa is mainly through a network of franchisees. TERRY DENNISON • These are small businesses which have been disproportionately GROUP CEO impacted by the covid related issues • Selling capacity has reduced and the network has bee
Slide 6: Operating Environment
OPERATING ENVIRONMENT • Rampant raw material and freight inflation have had a significant negative impact on margins TERRY DENNISON • Steel and aluminium prices have increased by 87% and 52% GROUP CEO respectively over past two years • Price increases have been implemented but these have been unable
Slide 7: Major Events Impacting Results
MAJOR EVENTS IMPACTING RESULTS Trellidor Segment: • KZN and Gauteng riots and looting in July caused factory closure for 7 days. This had a negative impact on revenue through lost TERRY DENNISON GROUP CEO capacity, and loss of consumer confidence particularly in KZN rural • Delays in insurance settl
Slide 8: Major Events Impacting Results
MAJOR EVENTS IMPACTING RESULTS Trellidor Segment: • National Metalworkers industrial action in October caused TERRY DENNISON factory closure for most of the month GROUP CEO • This was late in the calendar year, meaning the lost capacity could not be recovered prior to the annual factory shut down in
Slide 9: Major Events Impacting Results
MAJOR EVENTS IMPACTING RESULTS Trellidor Segment: • Severe flooding across KZN in April 2022 caused devastation TERRY DENNISON across the province GROUP CEO • The company's facilities were thankfully not damaged • There was however significant damage to road and utilities infrastructure which disrup
Slide 10: Major Events Impacting Results
MAJOR EVENTS IMPACTING RESULTS Trellidor Segment: • The Group has provided for the possible impact of the Labour Court judgement previously disclosed TERRY DENNISON GROUP CEO • This provision provides for the order to reinstate 42 of 123 employees dismissed in 2013 • The Group had previously disclos
Slide 11: Results
RESULTS • Given the operating environment, and major events, achieving a 1% decline in revenue is acceptable TERRY DENNISON • The declines in revenue in Taylor, from Africa and parts of South Africa in Trellidor, GROUP CEO were offset by a commendable performance from our newly acquired UK business,
Slide 12: Strategic Objectives for 2022
STRATEGIC OBJECTIVES FOR 2022 The Group prioritised its key strategies for F22 as follows: • In the UK, bed down management structure and establish strategic plan for growth F22 and beyond TERRY DENNISON GROUP CEO • In the RSA Main Centres, continue with our approach to acquire more areas, starting
Slide 13: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES Trellidor UK management structure and strategic plan • The management team has settled following the transition from an owner-managed entity • The financial performance has been solid during F22 with revenue increasing 26% from prior year TERRY DENNISON GROUP CEO on
Slide 14: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES Leverage introduction of F21 products for desired results in F22 • Trellidor introduced three new product derivatives of existing product ranges and Taylor 1 during F21 TERRY DENNISON GROUP CEO • Demand for the aluminium louvre shutter range has been positive with th
Slide 15: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES NMC ecommerce Route-to-Market • Development of the online store was completed during F22 H2 following the finalisation of the warehouse logistics. TERRY DENNISON GROUP CEO • The platform will go live through F23 H1. Rollout of ESG projects to reduce carbon-footprint
Slide 16: Prospects
PROSPECTS • Accelerated price increases have been implemented early in F23 H1, which will support both top line sales and margins • Aluminium prices have started a downward trend from the highs of F22 TERRY DENNISON and steel prices are forecast to start declining through H1 F23, which will GROUP CE
Slide 17: Prospects
PROSPECTS • The Trellidor owned and managed branches in three of the major cities in South Africa continue to show positive results. • Full year inclusion of the Cape Town Southern Suburbs franchise acquired in March 2022. TERRY DENNISON GROUP CEO • A further acquisition of one of the Durban franchi
Slide 18: Prospects
PROSPECTS • The new management team at Taylor is focused on rebuilding the fundamentals of the business that have deteriorated in the last few years. Margin improvement, sales growth and cash generation are focal areas TERRY DENNISON • Recruitment of an experienced National Sales Manager into Taylor
Slide 19: Group Financial Performance
GROUP FINANCIAL PERFORMANCE
Slide 20: Group Financial Performance
GROUP FINANCIAL PERFORMANCE FY 22 vs R’m HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 FY 21 CAGR Revenue 286.2 514.9 274.8 421.5 281.6 518.4 283.5 513.2 -1% 7% DAMIAN JUDGE Gross profit 128.9 231.9 122.5 175.5 125.6 219.4 113.7 197.2 -10% 4% GROUP CFO EBITDA 55.7 81.2 49.1 11.6 57
Slide 21: Sales Analysis – Geographical Presence
SALES ANALYSIS – GEOGRAPHICAL PRESENCE Trellidor revenue has increased by 3.6% 12% • Trellidor Retail’s revenue is up 33.7% driven by 12% Main centres (DBN, CPT, GP) 37% the acquisition of the 2 new JHB franchises and Outlying regions (RSA) 1 new franchise Cape Town during the year. DAMIAN JUDGE Afr
Slide 22: Sales Analysis – Product Type
SALES ANALYSIS – PRODUCT TYPE Trellidor’s traditional retractable range continues 17% to be the primary contributor to the topline Trellidor • The expansion of the Aluminium Louver Shutter Polycarb range has resulted in the contribution of Security 13% Clearguard DAMIAN JUDGE Shutters increasing fro
Slide 23: Trading Margin
TRADING MARGIN 54.4% 54.4% 56.1% 52.8% 52.9% • At a group level, margins have declined to 38.4% in 12.1% 10.9% 10.8% F22 from 42.7% in the prior year. This has been 9.6% 12.1% driven largely by: 10.3% 10.5% 12.1% 11.7% • Significant raw material cost increases experienced. 10.7% • Reduced production
Slide 24: EBITDA
EBITDA • The group’s EBITDA has decreased 65.7% to 70.2 R29.3m from R85.3m in F21 mainly as a result 63.1 60.2 of the labour court judgement provision, 30.7 24.7 42.1 24.2 19.3 DAMIAN JUDGE reduced production capacity in Trellidor and 7.1 GROUP CFO supply constraints in Taylor. 39.5 38.4 35.0 36.0 3
Slide 25: Group Financial Position
GROUP FINANCIAL POSITION Camp 7 THE IER BLIND: THE @iXSHePLe9 GROUP
Slide 26: Group Balance Sheet
GROUP BALANCE SHEET • Debt/Equity ratio of 58% represents an increase from F22 H1 at 51%. 350.0 35.0x 30.0x • We remain at a conservative level 300.0 218.2 226.7 25.0x 250.0 DAMIAN JUDGE despite a challenging 12 months. 161.2 179.1 166.9 Interest cover 20.0x GROUP CFO 200.0 R'm 15.0x • Interest cove
Slide 27: Group Net Working Capital
GROUP NET WORKING CAPITAL • Increase in inventory is necessary to cover the raw material cost escalation 106.4 107.6 122.0 107.1 and to mitigate the current supply 93.1 DAMIAN JUDGE chain challenges. GROUP CFO 65.1 62.4 56.5 65.4 58.7 • Payables include R32.1m for the labour (43.2) (52.4) (66.9) cou
Slide 28: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW DAMIAN JUDGE 68.2 70.5 69.9 GROUP CFO 59.6 58.5 43.0 43.5 44.9 40.4 40.3 37.0 18.7 18.9 0.3 Jun 18 Jun 19 Jun 20 Jun 21 Jun 22 -24.5 Profit after tax Cash from operating activities Free cash flow
Slide 29: Capital Allocation
CAPITAL ALLOCATION • Return to shareholders − F21 Final dividend of R10.5m was distributed. − No final dividend declared for F22 due to labour court provision − Share Buy-Back and Dividend strategy to be re-assessed once we have clarity from the Constitutional Court DAMIAN JUDGE GROUP CFO • Debt Ser
Slide 30: Additional Information
ADDITIONAL INFORMATION
Slide 31: Earnings Per Share
EARNINGS PER SHARE R’m FY 22 vs HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 FY 21 DAMIAN JUDGE Profit attributable to ordinary shareholders 32.1 42.9 26.3 -21.3 30.4 39.8 24.1 0.4 -99% GROUP CFO Adjusted for: Profit on disposal of property, plant and equipment - 0.2 0.5 (0.1) (0.
Slide 32: Group Summarised Balance Sheet
GROUP SUMMARISED BALANCE SHEET R’m R’m HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 Non current assets Property, plant and equipment 66.1 64.9 57.2 56.8 58.2 57.6 60.5 59.9 RoU Assets - - 21.0 19.6 20.0 15.4 47.1 42.2 Goodwill and other intangibles 116.4 113.5 111.7 82.7 89.6 88.5
Slide 33: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW R’m HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 EBITDA 55.7 81.2 49.1 11.6 57.8 85.4 46.5 29.3 Movement in non cash items (incl provisions) 1.1 3.1 (1.9) 45.4 (1.4) (2.6) 0.3 34.5 Net working capital movement (16.0) (13.6) (0.6) (2.0) 7.5 13.5 (18.4) (2
Slide 34: F22 Salient Points
F22 SALIENT POINTS R513 million Revenue for (2021: R518 million) the year DAMIAN JUDGE R39 million Cash from operations GROUP CFO (2021: R96 million) for the year 0.4 cents Headline earnings (2021: 40.8 cents) per share 12% Return on Invested (2021: 22%) Capital 0 cents Final dividend (2021: 11.0 ce
Slide 35: Thank You
TERRY DENNISON DAMIAN JUDGE GROUP CEO GROUP CFO THANK YOU holdings.trellidor.co.za