Slide 1: Final Results Presentation for the year ended 31 March 2018
FINAL RESULTS PRESENTATION for the year ended 31 March 2018 Presented by Arnold Goldstone (Chief Executive Officer)
Slide 2: Agenda
Agenda 01 First things first 02 Results at a glance 03 Divisional review Capital Equipment Group (CEG) Engineering Solutions Group (ESG) 04 Group financial overview 05 Prospects and strategy 06 Appendix Invicta Holdings Limited | Results Presentation 2018 2
Slide 3: First things first
First things first Invicta Holdings Limited | Results Presentation 2018 3
Slide 4: First things first: Specific Taxation Provision
First things first 1. Specific Taxation Provision • Stakeholder and market commentary over the potential tax consequences of certain transactions which Invicta entered into several years ago • Based on advice received, the board is of the view that the transactions are tax compliant • However, ongoi
Slide 5: Effect of Steinhoff collapse on Invicta
First things first (continued) 2. Effect of Steinhoff collapse on Invicta • In wake of the collapse of Steinhoff International’s share price in Dec 2017, Invicta undertook a full review and considered all possible contagion risks • No direct links to Steinhoff • Common major shareholder (Wiese famil
Slide 6: Involuntary sale of shares by CEO
First things first (continued) 3. Involuntary sale of shares by CEO • Recent SENS announcement regarding the involuntary sale of shares by an associate company of the CEO • Shares were owned by an associate company of the CEO, owned by a trust of which the director is a beneficiary but not a trustee
Slide 7: The year in perspective
The year in perspective Invicta Holdings Limited | Results Presentation 2018 7
Slide 8: Results at a glance
Results at a glance Revenue 0% to R9.6 billion Operating profit before foreign exchange movements -11% to R940 million Headline earnings per share before specific tax provision -23% to 464 cents Headline earnings per share after specific tax provision -81% to 90 cents Invicta Holdings Limited | Resu
Slide 9: Results at a glance (continued)
Results at a glance (continued) Profit before tax -15% to R760 million NAV per share 0% 4 691 cents TNAV PER SHARE 2.0% to 3 921 CENTS Invicta Holdings Limited | Results Presentation 2018 9
Slide 10: The year in perspective: tough markets, satisfactory results
The year in perspective Tough markets, satisfactory results • The markets in which Invicta operates: o Mining : Weak in South Africa but improving in rest of world o Agriculture: Severe drought in Western Cape, low maize prices, land expropriation uncertainty o Industrial & manufacturing: Deteriorat
Slide 11: The year in perspective (continued)
The year in perspective (continued) • Sale of BSG Sep 2017 • SARS negotiations • Loss of New Holland Agricultural machinery agency May 2017 • Volatile ZAR, political uncertainty until Dec 2017 • Reduced staff by 265 (7%) in SA • Bottom of cycle? • Better outlook Invicta Holdings Limited | Results Pr
Slide 12: Exchange rate volatility
The year in perspective Exchange rate volatility 1 Apr 2017 (13.42) 15 June 2018 (13.39) 31 Mar 2018 (11.82) Invicta Holdings Limited | Results Presentation 2018 12
Slide 13: Divisional review
Divisional review Invicta Holdings Limited | Results Presentation 2018 13
Slide 14: Divisional structure
Divisional structure Capital Equipment Group Engineering Solutions Group CEG ESG Importer & distributor of agricultural Leading distributor of engineering equipment, construction equipment, consumables products, technical forklifts and aftermarket services and provider of engineering replacement spa
Slide 15: Revenue contribution by operating segment
Revenue contribution by operating segment (excluding Head Office) R’million 12,000 9,620 9,633 10,000 9,077 8,816 8,783 8,000 3,955 4,665 4,559 4,209 4,299 6,000 4,000 5,122 4,607 4,484 4,955 5,074 2,000 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 Engineering Solutions Group 47% 53% Capital Equip
Slide 16: Operating profit contribution by operating segment
Operating profit contribution by operating segment after forex costs (excluding Head Office) R’million 1,200 1,000 957 956 912 864 768 800 473 499 486 460 600 406 400 200 484 457 426 404 362 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 Engineering Solutions Group 53% 47% Capital Equipment Group (5
Slide 17: Revenue contribution by region
Revenue contribution by region (continuing operations only) Africa 5% Asia (6%) 11% (10%) Other 5% (4%) 79% South Africa** (81%) 2018 (2017) **Target: 50% by 2020 Invicta Holdings Limited | Results Presentation 2018 17
Slide 18: Revenue contribution by sector
Revenue contribution by sector (continuing operations only) Mining Construction 16% (14%) 14% (16%) (5%) 12% 30% Manufacturing & (11%) Industry (30%) Agriculture & Forestry (63%) 28% General Trading (29%) 2018 (2017) Invicta Holdings Limited | Results Presentation 2018 18
Slide 19: Return on Net Operating Assets (RONA)
Return on Net Operating Assets (RONA) (based on average net operating assets) 30% 25% 20% 15% 10% 5% * 17.5% 21.8% 19.4% 17.6% 20.6% 24.1% 27.3% 22.5% 19.2% 22.0% 18.5% 9.0% 0% FY 2016 FY 2017 FY 2018 CEG ESG Discont. Ops IVT Group *Discontinued operations represents the Building Supplies Group whic
Slide 20: Divisional Review: Capital Equipment Group
DIVISIONAL REVIEW Capital Equipment Group
Slide 21: Review of 2018
Review of 2018 Revenue 2.4% Operating profit before foreign exchange movements 3.8% • Difficult trading conditions overcome by increased market share, better sales mix • Activity in mining in general is saving construction unit sales • Reduced level of investment in infrastructure by both private an
Slide 22: Review of 2018: management
Review of 2018 Chief Executive Officer Managing Director Tony Sinclair Loy Soo Chew Northmec NHSA CSE Doosan HPE Africa ESP Criterion Shamrock Managing Managing Managing Managing Managing Managing Managing Managing Director Director Director Director Director Director Director Director Johan Tony Ro
Slide 23: Final results summary
Final results summary 31 March 2018 Operating profit before foreign Revenue (R’m) exchange movements (R’m) 6,000 5,074 600 4,955 470 452 5,000 4,484 500 4,000 400 362 2,575 2,518 2,199 251 234 3,000 300 181 2,000 200 1,000 2,285 2,380 2,556 100 219 218 181 0 0 MAR 2016 MAR 2017 MAR 2018 MAR 2016 MAR
Slide 24: Market volumes
Market volumes FY 2018 • Agriculture equipment volumes o Tractors 14% o Combines 2% o Sprayers 4% • Construction equipment volumes o Segments serviced by Invicta 15% Invicta Holdings Limited | Results Presentation 2018 24
Slide 25: CEG's volume increases
CEG’s volume increases FY 2018 • Agriculture equipment volumes o Tractors 40% • Construction & Forklift equipment volumes o Case 37% o Hyundai 46% o Forklift 15% Invicta Holdings Limited | Results Presentation 2018 25
Slide 26: Maize Safex Prices May 2013 to April 2018
Price in ZAR 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 8-May-13 11-Jun-13 15-Jul-13 16-Aug-13 19-Sep-13 23-Oct-13 26-Nov-13 31-Dec-13 3-Feb-14 7-Mar-14 10-Apr-14 14-May-14 17-Jun-14 Invicta Holdings Limited | Results Presentation 2018 21-Jul-14 22-Aug-14 25-Sep-14 29-Oct-14 2-Dec-1
Slide 27: Sales analysis
Sales analysis 31 March 2018 Manufacturing & Industry 4% Construction 45% 51% Agriculture & Forestry 2018 Invicta Holdings Limited | Results Presentation 2018 27
Slide 28: Tractor & Sprayers Market Share
Tractor & Sprayers Market Share 31 December 2017 Tractors Sprayers 14.0% 45% 11.8% 40% 39% 12.0% 35% 10.0% 32.4% 9.1% 8.4% 30% 8.1% 8.0% 7.5% 25% 6.7% 6.6% 6.7% 21% 22% 6.0% 20% 20% 5.5% 19% 15% 16% 4.0% 14% 10% 9% 2.0% 5% 0.0% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 2010 2011 2012 2013
Slide 29: Divisional Review: Engineering Solutions Group
DIVISIONAL REVIEW Engineering Solutions Group
Slide 30: Review of 2018
Review of 2018 Revenue 2% Operating profit before foreign exchange movements 0% • Satisfactory results considering the volatile year • BMG World Site Reveal – complete • Wildcat strike Dec 2017 hurt operations • Focussed on tight cost management • Simplify for Success remained a high priority • One
Slide 31: Management structure
Management structure Chief Executive Officer Gavin Pelser BMG Man-Dirk Autobax Hyflo (Bearing Man Group) Group Managing Director Managing Director Managing Director Managing Director Gavin Pelser Gavin Hall John Black Emil Berning Invicta Holdings Limited | Results Presentation 2018 31
Slide 32: Final results summary
Final results summary 31 March 2018 Operating profit before foreign Revenue (R’m) exchange movements (R’m) 6,000 600 4,665 4,559 480 479 5,000 4,299 500 406 4,000 400 2,319 2,289 239 277 3,000 2,214 300 212 2,000 200 1,000 2,085 2,346 2,270 100 194 241 202 0 0 MAR 2016 MAR 2017 MAR 2018 MAR 2016 MAR
Slide 33: Review of 2018
Review of 2018 • Divisional performances: o BMG: met expectations o Autobax: excellent performance o ManDirk: met expectations o Hyflo: disappointing results; project work lumpy, muted; business restructured • African operations: o Good performance of African branches (weakened local currencies) o E
Slide 34: Revenue analysis
Revenue analysis 31 March 2018 0.9% (0.6%) 10.7% (11.4%) 34% (35%) 66% (65%) 88.4% (88%) Consumables Engineering South Africa Africa Other 2018 (2017) • Strategy of market differentiation by: • African revenue declined marginally as a % of o complementing product distribution with ESG revenues mainl
Slide 35: Sales by industry sector
Sales by industry sector 31 March 2018 1% Parastatals (1%) Construction 3% Oil & Gas (1%) 4% Agriculture (4%) 6% Projects / Consultants (6%) 4%(4%) 28% (24%) Mining Food & Beverage 6% (5%) Automotive 7% (7%) & Transport 8% 18% Cash Sales (8%) (20%) Industry 14% (20%) Other Well diversified 2018 (201
Slide 36: Highlights for 2017/2018
Highlights for 2017/2018 BMG World site reveal 14 - 16 September 2017 5,700 visitors over 3 days BMG – “Be Part” staff engagement initiative Invicta Holdings Limited | Results Presentation 2018 36
Slide 37: Highlights for 2017/2018 (cont.)
Highlights for 2017/2018 (cont.) Acquisition – Fenner Belting Invicta Holdings Limited | Results Presentation 2018 37
Slide 38: Highlights for 2017/2018 (cont.)
Highlights for 2017/2018 (cont.) Regional Service Centres DURBAN PORT ELIZABETH CAPE TOWN Invicta Holdings Limited | Results Presentation 2018 38
Slide 39: Group financial overview
Group financial overview Invicta Holdings Limited | Results Presentation 2018 39
Slide 40: Revenue
Revenue 12000 10,465 10,460 9,632 9,640 10000 8,799 8000 5,336 5,190 4,905 4,783 4,410 6000 4000 5,129 5,270 4,857 4,389 4,727 2000 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 *Restated First Half Continuing Second Half Continuing Invicta Holdings Limited | Results Presentation 2018 40
Slide 41: Operating profit
Operating profit Operating profit before foreign Operating margin (%) exchange movements (R’m) 1,200 1,043 1,051 10.9% 1,014 1,000 69 940 10.0%** 9.0%** 8.5%** 9.8% 783 800 550 34 611 12.5% 518 514 10.3% 10.0% 8.4% 10.7% 600 372 400 493 440 9.6% 200 427 426 8.6% 9.3% 8.8% 377 8.1% 0 MAR 2014 MAR 201
Slide 42: Attributable earnings
Attributable earnings (R’m) 800 710 691 700 66 69 612 631 600 64 70 42 496 150 500 31 74 82 400 400 R’million 300 580 510 200 393 383 84 21 100 126 -2 -3 0 -100 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 Ordinary s/h Minority s/h Pref s/h Once-off Tax Provision Invicta Holdings Limited | Results P
Slide 43: Earnings per share
Earnings per share 1,000 78m weighted 900 average nr of ordinary shares 800 788 742 700 88 Rights issue Cents 600 107m weighted 430 average nr of ordinary shares 499 492 500 361 396 400 246 29 359 250 300 160 200 358 293 118 253 100 207 242 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 *Restated Fi
Slide 44: Headline earnings
Headline earnings 31 March 2018 31 March 2017 R’million Audited % Change Attributable Earnings 126,215 533,304 (76) Adjustments Headline EPS adjustments on discontinued operations – (578) Impairment of intangible assets – – Gain from bargain purchase price recognised – (235) Impairment of PPE – 3,51
Slide 45: Dividend per share
Dividend per share 350 300 Feb 2015: Special dividend of 2 024 cps was paid Cents per share 250 196 200 18% 167 142 150 112 119 95 100 75 50 50 84 72 67 69 - 2015 2016 2017 2018 Interim Final Salient dates for the 2018 Final Dividend Last day to trade to be eligible for the dividend Tuesday 24 J
Slide 46: Cash flow movement - 2018
Cash flow movement - 2018 2,000 * Capex of R285m less proceeds on sale of PPE R51m 1,800 1,013 (585) ** Acquisitions of R99m less disposals of R50,3m 1,600 1,400 1,200 (136) R’million (264) 1,000 135 (19) 5 857 (11) 846 800 701 (163) 404** 600 (234)* 400 200 - Invicta Holdings Limited | Results Pres
Slide 47: Prospects and strategy
Prospects and strategy Invicta Holdings Limited | Results Presentation 2018 47
Slide 48: Prospects
Prospects • Current trading conditions: • ESG improving • CEG no meaningful improvement yet • South East Asia continued growth • Benefits of relocations, restructurings and expansions beginning to bear fruits • e-Commerce • Big focus on • margin improvement and cost control • working capital improve
Slide 49: Strategy
Strategy Invicta’s strategy is to: • Generate healthy cash from existing businesses • Build on the strength of the current businesses • Focus on customer service, value-added distribution and supply chain efficiencies • Diversify the Group’s revenue stream geographically • Acquire businesses that ar
Slide 50: Q&A
Q&A Thank you for your attendance and participation www.invictaholdings.co.za For any further Investor Relations questions please contact: Arnold Goldstone (CEO) arnoldg@invictaholdings.co.za Craig Barnard (CFO) craigb@invictaholdings.co.za Marlize Keyter (Keyter Rech Investor Solutions) mkeyter@kri
Slide 51: Appendix
Appendix Invicta Holdings Limited | Results Presentation 2018 51
Slide 52: Statement of Profit or Loss and other Comprehensive Income
Statement of Profit or Loss and other Comprehensive Income 31 March 2018 31 March 2017 R'million Audited % Change Continuing operations Revenue 9,640 9,632 0 Operating profit before foreign exchange movements 940 1,051 (11) Net foreign exchange cost (71) (41) 75 Operating profit 869 1,010 (14) Inter
Slide 53: Statement of Profit or Loss and other Comprehensive Income
Statement of Profit or Loss and other Comprehensive Income 31 March 2018 31 March 2017 R'million Audited % Change Profit attributable to: Owners of the company 126 533 (76) Non-controlling interest 21 (3) Preference shareholders 84 82 2 231 612 (62) Earnings per share from continuing operations (cen
Slide 54: Statement of Financial Position
Statement of Financial Position 31 March 2018 31 March 2017 R'million Audited % Change ASSETS Non-current assets Property, plant and equipment 1,721 1,641 5 Financial investments - 1,982 (100) Goodwill 661 615 7 Other intangible assets 175 161 (9) Financial assets - 64 (100) Finance lease receivable
Slide 55: Statement of Financial Position
Statement of Financial Position 31 March 2018 31 March 2017 R'million Audited % Change Current assets 7,386 8,098 (9) Inventories 3,918 3,663 7 Trade and other receivables 1,620 1,542 5 Current portion of finance lease receivables 49 41 20 Current portion of financial investments 588 709 (17) Curren
Slide 56: Statement of Financial Position
Statement of Financial Position 31 March 2018 31 March 2017 R'million Audited % Change EQUITY Equity attributable to the equity holders 4,990 5,116 (3) Non-controlling interest 99 152 (35) SHAREHOLDERS' EQUITY 5,090 5,268 (3) Shares in issue (‘000) 108,495 108,495 - Net asset value per share (cents)
Slide 57: Statement of Financial Position
Statement of Financial Position 31 March 2018 31 March 2017 R'million Audited % Change Non-current liabilities Long-term borrowings 1,647 6,793 (76) Financial liabilities - 64 (100) Deferred taxation 38 35 9 Non-current liabilities 1,685 6,892 (76) Invicta Holdings Limited | Results Presentation 201
Slide 58: Statement of Financial Position
Statement of Financial Position 31 March 2018 31 March 2017 R'million Audited % Change Current liabilities 3,540 4,105 (14) Trade and other payables 1,685 1,939 (13) Provisions 178 198 (10) Share appreciation rights liability 1 6 (83) Taxation liabilities 583 170 243 Shareholders for dividends 49 50
Slide 59: Group structure
Group structure Non - BBEE & Staff Invicta SA SA Trusts Holdings 25% 75% 100% 100% 100% 100% Invicta Invicta Invicta Invicta Offshore Invicta SA Properties Treasury Finance Holdings 100% 100% 100% 100% Invicta African Invicta Asian ESG CEG Holdings Holdings BMG Northmec Man-Dirk New Holland* Mozambi
Slide 60: Capital Equipment (SA)
Capital Equipment (SA)) • Northmec (Agricultural Machinery) • New Holland* (Agricultural Machinery) • CSE (Earthmoving Machinery) • Doosan (Earthmoving Machinery) • HPE (Hyundai Earthmoving) • Criterion (Forklifts) • ESP (Parts) • 138 dedicated outlets *Equipment sales discontinued. Aftermarket supp
Slide 61: Capital Equipment (Kian Ann Group)
Capital Equipment (Kian Ann Group) Kian Ann Engineering • One of the world's largest independent distributors of heavy machinery and diesel engine parts • HQ in Singapore • Subsidiaries in Singapore, Indonesia, China, Canada, United Kingdom, USA and Myanmar • Joint venture in India • Associate in Ch
Slide 62: Engineering Solutions
Engineering EngineeringSolutions Solutions • BMG (Bearing Man Group) o Engineering components & technical services o 102 branches o Bearings, Seals, PT, Tools, Fasteners o Drives, Motors, Belting, Field Services o Filtration, Hydraulics, Lubrication, Pneumatics • Hansen • Man-Dirk Group (incl SA Too
Slide 63: Group profit drivers
Group profit drivers • Mining and industrial activity (ESG) • Agricultural activity (Northmec and aftermarket parts) • Construction and earthmoving activity (CSE, Doosan SA & HPE) • Warehousing (Criterion Equipment) • Global replacement spares market (Kian Ann) Invicta Holdings Limited | Results Pre
Slide 64: Executive Management Team
Executive Management Team BOARD OF DIRECTORS Dr Christo Wiese (Non-Executive Chairman) ENTITY CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Invicta Holdings ARNOLD GOLDSTONE CRAIG BARNARD Capital Equipment Group TONY SINCLAIR GEOFF BALSHAW Engineering Solutions Group GAVIN PELSER BENNIE GROENEWALD
Slide 65: Shareholding as at 31 March 2018
Shareholding as at 31 March 2018 1% Exec Directors 2% Samuels Family 1% Treasury Goldstone Family 4% Sherrell Family 7% Directors’ Total % 53% 47% Public % 47% 38% Public Wiese Family Invicta Holdings Limited | Results Presentation 2018 65