Slide 1: Reunert results for the year ended 30 September 2013
2013 Reunert results for the year ended 30 September 2013 20 November 2013
Slide 2: Overview
2013 OVERVIEW Dave Rawlinson, Chief Executive Officer
Slide 3: Agenda
Agenda Welcome to attendees – Dave Rawlinson, Chief Executive Officer Operational performance | Reutech – Dave Rawlinson Operational performance | CBI-electric – Alan Dickson Operational performance | Nashua – Mark Taylor Financial results – Manuela Krog, Chief Financial Officer 2014 prospects – Dav
Slide 4: The year in review
The year in review Tough business environment • Delays in placement of orders by state-owned entities • Rapidly changing telecommunications industry • General market conditions • Port and transport strikes (1st Quarter) Operations most affected by adverse trading conditions • African Cables • Nashua
Slide 5: Salient features
Salient features Revenue 3% down Rbn 2.0 • 2013: R11.4bn 1.5 • 2012: R11.7bn 1.0 0.5 0.0 02 03 04 05 06 07 08 09 10 11 12 13 Operating profit 13% down Rbn • 2013: R1.3bn 14.0 12.0 • 2012: R1.5bn 10.0 8.0 6.0 4.0 2.0 0.0 02 03 04 05 06 07 08 09 10 11 12 13 © Copyright 2013 Reunert Limited 20 November
Slide 6: Salient features
Salient features Normalised HEPS 12% down Cents 700 • 2013: 569.1c 600 500 • 2012: 644.4c 400 300 200 100 0 03 04 05 06 07 08 09 10 11 12 13 Cents Cover Dividend maintained 500 2.5 • 2013: 275 cents per share 1.5 400 2.0 • 2012: 275 cents per share 300 1.5 200 1.0 100 0.5 0 0.0 03 04 05 06 07 08 09
Slide 7: Operating profit contribution per segment
Operating profit contribution per segment 1 525 1 391 1 330 1 224 787 736 789 747 582 642 604 583 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 CBI-electric Nashua Reutech Half Year Full Year © Copyright 2013 Reunert Limited 20 November 2013 7
Slide 8: Operational performance
2013 OPERATIONAL PERFORMANCE Reutech | CBI-electric | Nashua Dave Rawlinson
Slide 9: Reutech
Reutech Rbn Revenue Rm 2013 2012 % change 1.2 1.0 Revenue 1 019.9 805.7 27 0.8 0.6 0.4 Operating profit 207.3 150.5 38 0.2 0.0 08 09 10 11 12 13 Profit margin 20.0% 18.7% Rbn Operating profit 0.3 Overview 0.2 • Strong performance from all divisions • Rand weakness boosted margins from 0.1 export sal
Slide 10: Reutech | Communications
Reutech | Communications • Successful integration of SAAB Grintek high frequency (HF) radio businesses • Strong performance in 2nd half › Export of HF radios exceeded expectations • Strong export potential on airborne radio © Copyright 2013 Reunert Limited 20 November 2013 10
Slide 11: Reutech | Radar
Reutech | Radar • Another record year • Continued success of mining surveillance radar • Touws River photovoltaic solar trackers on schedule © Copyright 2013 Reunert Limited 20 November 2013 11
Slide 12: Reutech | Solutions
Reutech | Solutions • Continued to grow business • Diversifying customer base › From defence related logistics to systems and solutions • Awarded Telkom Domain 3 & 4 services contract © Copyright 2013 Reunert Limited 20 November 2013 12
Slide 13: Reutech | Fuchs
Reutech | Fuchs • Strong export sales to Europe • Multiple tender bids submitted during the year • Timing of orders remains difficult to predict • Outlook remains positive © Copyright 2013 Reunert Limited 20 November 2013 13
Slide 14: Operational performance
2013 OPERATIONAL PERFORMANCE Reutech | CBI-electric | Nashua Alan Dickson
Slide 15: CBI-electric
CBI-electric Rbn Revenue Rm 2013 2012 % change 5.0 4.0 Revenue 3 505.7 3 634.3 (4) 3.0 2.0 Operating profit 505.5 592.9 (15) 1.0 0.0 08 09 10 11 12 13 Profit margin 14.4% 16.3% Rbn Operating profit 0.8 0.6 Overview 0.4 • Delayed projects cause static local demand 0.2 • Strong contribution from expor
Slide 16: CBI-electric | Factory capacity
CBI-electric | Factory capacity % % Factory capacity utilisation 90 80 70 60 50 40 30 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 13-Mar 13-Sep Low voltage Energy cables Telecom cables © Copyright 2013 Reunert Limited 20 November 2013 16
Slide 17: CBI-electric | African Cables
CBI-electric | African Cables • South African demand was muted › Mining industry reduced capex spend › Industrial action in Q1 › Project awards were slower than expected o Contracts of >R150m delayed o Ingula EHV contract awarded at year end • Competition continues to increase • Renewable energy suc
Slide 18: CBI-electric | Low Voltage
CBI-electric | Low Voltage • Local residential and mining demand remained static • Strong export performance with non-SA sales representing 32% of turnover › 22% increase in poles › Weaker rand improved export margins › Poor performance from Australia • CBi-electric: Solutions was formed › New 24 00
Slide 19: CBI-electric | Telecom Cables
CBI-electric | Telecom Cables 50% JV • Marginal revenue growth • Operating profit negatively impacted › Uncertainty around national broadband strategy and Telkom restructuring › Lower copper cable demand than anticipated • Fibre cable strong demand % Telecoms product mix % of revenue › International
Slide 20: Operational performance
2013 OPERATIONAL PERFORMANCE Reutech | CBI-electric | Nashua Mark Taylor
Slide 21: Nashua
Nashua Rbn Revenue Rm 2013 2012 % change 8.0 Revenue 6 812.1 7 218.3 (6) 6.0 Operating profit 636.1 838.6 (24) 4.0 Profit margin 9.3% 11.6% 08 09 10 11 12 13 Rbn Operating profit 1.0 0.8 Overview 0.6 • Mixed set of results 0.4 • Rand weakness 0.2 • Decline in LCR revenue 0.0 08 09 10 11 12 13 © Copy
Slide 22: Nashua | Mobile
Nashua | Mobile • Saturation in the voice market, data growing • Significant decline in LCR revenue • Decline in ‘out-of-bundle’ airtime revenue • Network agreement negotiations › Vodacom: lower discount base rate effective from March 2013 › MTN could follow suit › Negotiations with networks are con
Slide 23: Nashua | Mobile
Nashua | Mobile 2013 2012 2011 2010 2009 Closing subscriber base 934 911 897 534 846 521 819 035 722 638 Number of subscribers signed up 196 822 214 442 174 151 187 382 159 960 Number of subscribers lost 83 366 120 861 146 665 90 985 100 709 Network base adjustments 61 270 42 568 99 247 - - ARPU R31
Slide 24: Nashua | Mobile
Nashua | Mobile Nashua Mobile revenue analysis Subscriptions (excl. LCR) Airtime (excl. LCR) LCR Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 © Copyright 2013 Reunert Limited 20 November 2013 24
Slide 25: Nashua | Office Automation
Nashua | Office Automation • Marginal revenue growth • Increased unit sales › Total document volumes increased by 5% to an average of 409 million prints per month • Margin pressure from › Weakening rand › Supplier price increases • Annuity income is 42% of revenue • Largest franchise, Nashua North,
Slide 26: Nashua | Quince
Nashua | Quince • An excellent performance, growing rental book by 26% to R1.8 billion • Acquired Nashua North book for R130 million • Achieved A+ national credit rating from Global Credit Rating Co Rm 2013 2012 2011 2010 2009 Nashua Book 1 805.3 1 431.1 1 281.2 1 269.8 1 413.9 Average monthly disco
Slide 27: Nashua | Communications
Nashua | Communications • Sharp decline in Siemens Enterprise Communications product sales and margins › Business restructured to align with available business • Merging three businesses into one has taken time to bed down • Reasonable inroads was made into Cisco data centre and networking sector •
Slide 28: Financial results
2013 FINANCIAL RESULTS Manuela Krog, Chief Financial Officer
Slide 29: Group income statement
Group income statement Rm 2013 2012 %∆ Revenue 11 351 11 662 (3) EBITDA 1 461 1 661 (12) EBITDA % 12.9 14.2 Operating profit 1 330 1 525 (13) Operating profit % 11.7 13.1 Effective tax rate % 27.7 30.9 Headline earnings per share (cents) 583.2 658.3 (11) Normalised headline EPS (cents) 569.1 644.4 (
Slide 30: Total exports
Total exports Export regions Segmental exports 6% 2% 34% 38% 33% 53% 17% 9% 8% Europe Asia North America CBI-electric Nashua Reutech Africa Australasia South America © Copyright 2013 Reunert Limited 20 November 2013 30
Slide 31: Group balance sheet
Group balance sheet Rm 2013 2012 Total non-current assets 3 072 2 578 Current assets 4 371 4 010 Total assets 7 443 6 588 Shareholders’ equity 4 878 4 442 Non-controlling interests 59 56 Non-current liabilities 165 153 Current liabilities 2 341 1 937 Total equity and liabilities 7 443 6 588 Total li
Slide 32: Cash flow (Rm)
Cash flow (Rm) ( 288) 361 ( 409) 621 45 330 Opening balance Cashflow from Rental and Investing Financing Closing balance operating finance lease activities Activities activities receivables © Copyright 2013 Reunert Limited 20 November 2013 32
Slide 33: Cash on hand
Cash on hand Rbn Cash on hand (including internal financing deposited with Quince) 2.5 2.0 1.5 1.0 0.5 0.0 03 04 05 06 07 08 09 10 11 12 13 Rbn 1.0 0.5 0.0 (0.5) (1.0) (1.5) (2.0) 03 04 05 06 07 08 09 10 11 12 13 Net cash on hand reduced by Quince borrowings Quince net borrowings © Copyright 2013 Re
Slide 34: Segmental revenues
Segmental revenues 7% 9% 31% 31% 2012 2013 R11 662m R11 351m 62% 60% CBI-electric Nashua Reutech © Copyright 2013 Reunert Limited 20 November 2013 34
Slide 35: Segmental analysis | Operating profit
Segmental analysis | Operating profit ( 87) 1 525 ( 203) 38 57 1 330 September 2012 CBI-electric Nashua Reutech Other September 2013 (R'm) (R'm) Operating profit - Rm 2013 %∑ %∆ 2012 %∑ CBI-electric 506 38 (15) 593 39 Nashua 636 48 (24) 839 55 Reutech 207 16 38 151 10 Other (19) (2) 66 (57) (4) Oper
Slide 36: Investment in future capacity
Investment in future capacity Rm 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Replacement Expansion Investment R&D © Copyright 2013 Reunert Limited 20 November 2013 36
Slide 37: Research and development
Research and development 2013 Total R&D Rm Self-funded 2013 2012 2011 2010 2009 1.2 1.3 2.2 3.5 3.4 2.8 0.2 0.2 3.2 15.4 70.7 58.8 48.2 64.4 55.1 16.8 72.2 64.2 51.7 67.8 57.9 © Copyright 2013 Reunert Limited 20 November 2013 37
Slide 38: Focus areas
2014 FOCUS AREAS David Rawlinson, Chief Executive Officer
Slide 39: 2014 | CBI-electric
2014 | CBI-electric • Secure Eskom 5-year cable contract • Secure delayed parastatal and municipal HV contracts • Continue with strategic development of our solutions businesses › Projects › Installations › Commissioning › Maintenance • Drive exports into Africa • Exports of electrical protection eq
Slide 40: 2014 | Nashua
2014 | Nashua • Finalise agreements with MTN and Vodacom • Drive print and document management offerings in office automation segment • Build Nashua Communications VoIP network at faster pace • Increase penetration with Cisco product and services • Secure external funding for Quince © Copyright 2013
Slide 41: 2014 | Reutech
2014 | Reutech • Secure export fuze orders • Secure production contracts for ground communications • Secure additional technology funding • Continue to grow non-defence business › Solar trackers › Set-top box › Eskom IP MPLS network upgrade › Expand Telkom installation and maintenance contract © Cop
Slide 42: Reunert results for the year ended 30 September 2013
2013 Reunert results for the year ended 30 September 2013 20 November 2013