Trellidor Holdings Ltd. · JSE:TRL
Trellidor — H1 FY2018 Earnings Presentation
27 slides from Trellidor's earnings presentation, December 2017
Slide 1: Unaudited Interim Results for the Six Months Ended 31 December 2017
TRELLIDOR HOLDINGS LIMITED UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
Slide 2: Group Highlights
GROUP HIGHLIGHTS 5% Revenue 5% PAT 5% HEPS – 35.2c 5% Interim dividend declared – 11.0 cents per share Slide 2
Slide 3: Group Growth Strategies
GROUP GROWTH STRATEGIES Acquisitive growth • Further acquisitions targeted from mid to late FY2019 Diversified product offering • Aluminium Retractable version launched Sept 2017 • LPCB level 3 certified product developed for UK market • Strong growth in the Trellidor Security Shutter in the per
Slide 4: Group Overview – Trellidor
GROUP OVERVIEW Trellidor Group consists of Trellidor and Taylor Trellidor • Trellidor is the market leading manufacturer of custom-made barrier security products • Distribution through dedicated and skilled owner operated franchises in South Africa and throughout Africa • Further representation in I
Slide 5: Group Overview – Taylor
GROUP OVERVIEW Taylor • Taylor is a major manufacturer and distributor of a range of custom-made blinds, and a range of decorative and security shutters • Strong distribution in Western and Southern Cape • A limited presence in Gauteng, the rest of South Africa and Africa • Products are manufactured
Slide 6: New Product – TA600 and LPCB SR3
NEW PRODUCT – TA600 and LPCB SR3 Substantive in-house developed product Slide 6
Slide 7: The Ultimate Crime Barrier
THE ULTIMATE CRIME BARRIER ¢) ll the bere ir blinds!
Slide 8: Group Financial Overview
GROUP FINANCIAL OVERVIEW Slide 8
Slide 9: Group Financial Performance
GROUP FINANCIAL PERFORMANCE Group financial performance (R'm) FY 16 HY 17 FY 17 HY 18 HY 18 vs HY 17 Revenue 313,4 282,8 525,4 297,4 5% Gross Profit 157,3 136,0 250,5 137,2 1% Core EBITDA 83,2 67,4 119,1 65,0 -4% EBITDA 81,5 63,5 113,9 65,0 2% Profit after tax 54,2 37,4 66,0 39,1 5% Dividends paid 2
Slide 10: Group Financial Performance – Revenue
GROUP FINANCIAL PERFORMANCE Revenue • Tough trading conditions continued to prevail throughout the period for the Trellidor Group • Improved trading in agricultural and mining areas but weaker trading prevailed in urban areas, particularly in Gauteng Slide 10
Slide 11: Group Financial Performance – Core EBITDA
GROUP FINANCIAL PERFORMANCE Core EBITDA • Sales volumes marginally down on comparative prior period – c.2% • Input costs increased in excess of product price increases, squeezing margins H1 • Forex losses of R1.3m in December due to stronger Rand, however will have a positive impact on input costs i
Slide 12: Core Headline Earnings
GROUP FINANCIAL PERFORMANCE Core Headline Earnings (R'm) FY 16 HY 17 FY 17 HY 18 HY 18 vs HY 17 Profit attributable to ordinary shareholders 53,7 36,3 64,3 38,1 5% Adjusted for: Profit on disposal of property, plant and equipment (0,5) 0,0 (0,1) 0,0 Headline earnings 53,2 36,3 64,2 38,1 5% Adjusted
Slide 13: Group Balance Sheet
GROUP BALANCE SHEET • Debt/EBITDA ratio 0.8x • Debt servicing of R15m • Gearing ratio is 47% – down from 55% at year end June 2017 • 2nd tranche Taylor of R30m paid in July 2017 Ratios FY 16 HY 17 FY 17 HY 18 Debt/Equity 18% 70% 55% 47% Interest Cover 32.9x 8.8x 8.4x 11.7x Debt/EBITDA 0.3x 1.2x 1.2x
Slide 14: Net Working Capital
GROUP NET WORKING CAPITAL • Seasonal reduction in trade and other payables • Stock increased on prior year with increased goods in transit and increased product lines Net investment in working capital R'm FY 2015 33,3 HY 2016 44,8 FY 2016 35,2 HY 2017 108,2 FY 2017 100,6 HY 2018 123,6 Future working
Slide 15: Segments
TRELLIDGR ) THE ULTIMATE CRIME BARRIER SEGMENTS
Slide 16: Sales Analysis - Trellidor Division
SALES ANALYSIS - TRELLIDOR DIVISION • H1 revenue in South Africa grew by c.9% driven mainly by outlying areas growth of c.12% • African economies reliant on oil - remain weak, mainly Nigeria, Angola • Africa sales growth of c.7% reflects tough trading in H1 Geographical Presence FY 2017 HY 2018 Main
Slide 17: Sales Analysis - Trellidor Division
SALES ANALYSIS - TRELLIDOR DIVISION • New product sales grew by c.34% • Diversified product range spans income groups which mitigates weak middle and upper class economy Product Type FY 2017 HY 2018 Traditional Trellidor 73% 68% Clear Guard 14% 12% Rollerstyle 5% 6% Polycarbonate Bar 2% 2% Security
Slide 18: Trading Margin - Trellidor Division
TRADING MARGIN - TRELLIDOR DIVISION • Reduced trading margin due to input price Cost of sales – costs as % of net sales pressure and changing sales mix. Should improve in H2 • Labour utilisation good in a weak demand environment • New wage increment agreement signed in September 2017 sees lower incr
Slide 19: Sales Analysis – Taylor Division
SALES ANALYSIS – TAYLOR DIVISION • Concentration of sales in the Geographical presence Western and Southern Cape • Branch in Johannesburg • Geographic growth opportunity using proven Trellidor model – now at c.3% of sales • Tough trading conditions – revenue up c.2% with volumes down c.2% Geographic
Slide 20: Sales Analysis – Taylor Division
SALES ANALYSIS – TAYLOR DIVISION • Turnover well spread by product Product type • Constant innovation and development to keep up with trends • Strong growth in aluminium shutters in a competitive market • Good growth in Roller Blinds and PVC Shutters driven by product enhancements in the year • Cust
Slide 21: Trading Margin – Taylor Division
TRADING MARGIN – TAYLOR DIVISION Cost of sales – costs as % of net sales • Stronger Rand will benefit input costs in H2 and FY2019 • Gross profit margins down due to increased input costs. Selling prices adjusted mid H2 • Efficient factory with significant spare capacity. Margins under pressure – bu
Slide 22: Summarised Cash Flow
GROUP SUMMARISED CASH FLOW Group summarised cash flow (R'm) FY 2016 HY 2017 FY 2017 HY 2018 EBITDA 81,5 63,5 113,9 65,0 Movement in non cash items (incl provisions) (5,9) 2,1 4,2 0,9 Net working capital movement (3,3) (20,2) (13,4) (18,8) Inventory (9,4) (3,9) (23,1) (1,0) Accounts receivable (3,7)
Slide 23: Summarised Cash Flow – Cash Conversion
GROUP SUMMARISED CASH FLOW Cash conversion • Cash conversion cycle in line with expectation for Interims. This should improve by Year End Slide 23
Slide 24: Summarised Cash Flow – Debt Servicing and Dividend
GROUP SUMMARISED CASH FLOW • New debt servicing ± R15m per year • Capital repaid of R10m • Interest serviced of R5.0m • Interim dividend declared of 11.0 cents per share – payable in April 2018 Interim Dividend 11 cents per Share 5% Slide 24
Slide 25: Summarised Balance Sheet
GROUP SUMMARISED BALANCE SHEET Summarised balance sheet (R'm) FY 2016 HY 2017 * FY 2017 HY 2018 Non current assets Property, plant and equipment 42,6 50,8 51,5 54,7 Goodwill and other intangibles 4,0 122,8 121,1 118,8 Deferred tax 3,7 1,6 3,7 2,8 Other financial assets 0,4 0,5 0,3 0,9 50,7 175,6 176
Slide 26: Prospects
PROSPECTS • Improved consumer sentiment after ANC elections in December 2017 • Stronger Rand – positive impact on gross profit margin due to reduced input costs • Driving geographic growth in Taylor • Continued focus in Africa driving sales in recently appointed franchise areas. Service opportunitie
Slide 27: Thank You
CTRELLID@R ) THE ULTIMATE CRIME BARRIER Thank You