Reunert Limited · JSE:RLO
Reunert — H1 2022 Earnings Presentation
27 slides from Reunert's earnings presentation, May 25, 2022
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION For the six months ended 31 March 2022
Slide 2: Agenda
AGENDA A Key highlights B Strategy update C Financial performance D Segmental performance E Business outlook and prospects 2
Slide 3: Key Highlights
Overview KEY HIGHLIGHTS Alan Dickson Group CEO Alan Dickson Group CEO
Slide 4: Overview
OVERVIEW Good segmental performances Cash investment required Key actions successfully executed in a challenging local environment into Group > Covid-19 > Supply chain challenges have increased more > All three segments delivered good performances than expected ─ Health and safety protocols maintain
Slide 5: Financial Performance
FINANCIAL PERFORMANCE Group revenue Operating profit Profit after tax Dividend R5 114m R465m R331m 75c per share 11% 4% 7% 7% H1 FY:2021: R4 614m H1 FY:2021: R448m H1 FY:2021: R310m H1 FY:2021: 70c per share 5
Slide 6: Strategy Review
Overview STRATEGY Alan Dickson REVIEW Group GroupCEO CEO
Slide 7: Renewable Energy Strategy Execution
RENEWABLE ENERGY STRATEGY EXECUTION Renewable energy: solar energy and storage > Market growth remains positive and good order intake continues in both the solar energy and storage businesses - 80% increase in period-on-period revenue > Further market acceleration will result from: - Financial close
Slide 8: Renewable Energy Strategy Execution: Automated Energy Control
RENEWABLE ENERGY STRATEGY EXECUTION NUMBER OF ASTUTE DEVICES Renewable energy: automated energy control > Astute smart energy management devices 30 000 3 500 ─ Strong adoption of the new IoT range 25 500 3 000 2 500 ─ Reduces electricity wastage and optimises the cost of energy storage 21 000 2 000
Slide 9: Renewable Energy Strategy Execution
RENEWABLE ENERGY STRATEGY EXECUTION > Reunert’s Renewable Energy value offering 1. Solar energy embedded generation supplier (EPC) 2. Solar energy asset ownership (BOOs) 3. High performance, ultra reliable, locally manufactured storage solutions 4. Energy control - Astute Range: IoT automated contro
Slide 10: +OneX Strategy Execution
+One X STRATEGY EXECUTION +OneX key value offering > New-age systems integrator and managed services provider that enables organisations to excel in an evolving digital world > Digital transformation partner working with leading organisations to use cloud, data, software development and unified comm
Slide 11: Black Economic Empowerment (BEE) Deal
BLACK ECONOMIC EMPOWERMENT (BEE) DEAL > The BEE transaction, was approved by Reunert shareholders on 15 February 2022, and implemented with effect from 1 April 2022 > Reunert’s restructured BEE ownership structure has been increased by 3% and extended for 10 years until 2032. > Reunert’s BEE ownersh
Slide 12: Financial Performance
OverviewPERFORMANCE FINANCIAL Group CFO Alan Dickson Group CEO
Slide 13: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS Six months ended 31 March Restated 2022 2021 Rm Unaudited Unaudited % change Revenue 5 114 4 614 11 > The restatement brings the presentation of the Operating expenses (4 657) (4 158) 12 half year results in line with the latest guidance received from the JSE
Slide 14: Operating Profit Analysis
% OPERATING PROFIT ANALYSIS Rm Mar 2022 Mar 2021 change Segment operating profit EE 151 163 (7) Six months ended 31 March ICT 305 293 4 Rm 2022 2021 % change Sep 2021 AE 55 31 77 Other (62) (42) (48) Segment operating profit 449 445 1 986 Total 449 445 1 Fair value remeasurements 7 17 65 > Fair valu
Slide 15: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 Mar 2022 31 Mar 2021 30 Sep 2021 Rm Unaudited Unaudited Audited Non-current assets > No non-financial asset impairments required PP&E, investment property, ROU assets and intangibles 1 475 1 424 1 471 Goodwill > Large increase in working capital due to
Slide 16: Cash Flow Analysis
CASH FLOW ANALYSIS (312) 291 (333) 607 (19) (99) (9) 2 32 (74) 43 (65) 72 168 72 Opening Dividends Total cash FX effects Closing Cash Working Interest, Tax paid Capital Free Capital Investing Financing Total cash balance paid generated on OD balance generated capital dividends expenditure- cash flow
Slide 17: Capital Expenditure to 31 March 2022
CAPITAL EXPENDITURE| TO 31 MARCH 2022 R million R million 90 90 83 83 24 Mar 2022 Mar 2021 20 Categories (Rm) YTD YTD Increase in circuit breaker plant capacity 6 12 17 25 Smart Energy Management 10 6 76 74 Last mile broadband infrastructure 12 15 BOO solar plants 24 22 R&D 14 13 45 Other 17 22 39 T
Slide 18: Segmental Performance
Overview Alan Dickson SEGMENTAL Group CEO PERFORMANCE Group CEO
Slide 19: Electrical Engineering
ELECTRICAL ENGINEERING REVENUE (Rm) 11% Operational performance 2 775 2 854 2 561 1 738 Cable operations > H1 FY:2022 performance recovered well from the industry-wide strike during October 2021 1H2019 1H2020 1H2021 1H2022 > Good progress on the lean manufacturing programme delivered improved oper
Slide 20: Electrical Engineering: Circuit Breakers
ELECTRICAL ENGINEERING Circuit Breakers TOTAL SALES INTO AUSTRALIA (US$) > The business remains resilient within a complex supply chain and logistics environment CAGR 8% 10 000 > Margin pressure resulted from cost increases in export logistics and key input materials 9 500 9 000 8 500 Expected H2
Slide 21: ICT
ICT Operational performance SEGMENT REVENUE (RM) Overall segment revenue 51% > Moderate revenue growth due to: 1722 1494 ─ Flat revenues in business communication due to lower minute volumes 1253 1260 ─ The sale of the Pan Solutions book at Quince in H2 FY:2021 ─ Shortage in supply of product from i
Slide 22: ICT
ICT PERCENTAGE OF CUSTOMERS USING MORE THAN ONE PRODUCT Total Workspace Provider > Sales volumes down 1% period-on-period as a result of shortage in product supply from international OEM 29% 31% 27% 24% > Complementary revenues and customer share of wallet continue to accelerate with overall four-ye
Slide 23: Applied Electronics
APPLIED ELECTRONICS Operational performance Defense Cluster SEGMENT REVENUE (Rm) 516% 1 097 > Defense export businesses delivered good period-on-period sales growth 1 038 > Working capital investment increased due to: 999 945 - Increased strategic buffer stock to mitigate against electronic componen
Slide 24: Applied Electronics: Order Books
APPLIED ELECTRONICS Order books RENEWABLE ENERGY SALES (% OF TOTAL SEGMENT SALES) > Applied Electronics export order book continues to grow 40% > Key orders: 33 - R1,2bn order intake year-to-date 30% 21 - R1,8bn orders on hand of which R1,1bn is executable in FY:2022 20% 18 11 Fuchs at full producti
Slide 25: Prospects
Overview PROSPECTS Alan Dickson Group GroupCEO CEO
Slide 26: Prospects: Way Forward
PROSPECTS Way forward > Reunert is positioned to deliver an improved full year performance for FY:2022 > The expected improved performance is to be driven by: ─ Electrical Engineering’s improved volumes and margins supported by circuit breaker exports and secured large cable projects ─ ICT continued
Slide 27: Q&A Key Upcoming Dates
Q&A Key upcoming dates > Please type your questions on the webcast portal > Financial year end 30 September 2022 > Kindly email Karen Smith at karens@reunert.co.za should you > Full-year results 25 November 2022 wish to have a one-on-one call with the management team > JP Morgan Conference 6 – 8 Dec