Metair Investments Limited · JSE:MTA
Metair Investments — FY2023 Earnings Presentation
28 slides from Metair Investments's earnings presentation, Mar 27, 2024
Slide 1: 2023 Results Presentation
2023 RESULTS PRESENTATION 27 March 2024
Slide 2: Agenda
AGENDA 2 INTRODUCTION FINANCIAL REVIEW OPERATIONAL REVIEW ~ NORMALISING THE RESULT OUTLOOK Q&A 2
Slide 3: Introduction
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail INTRODUCTION
Slide 4: FY2023 Results Summary
F2023 RESULTS SUMMARY 4 REVENUE EBITDA** EBIT HEPS FREE CASH increased 14% to increased 86% to increased 7% to increased to a profit of FLOW R15.9bn R1.1bn R487m 135cps GENERATED R306m FY’22: R13.9bn FY’22: R0.6bn FY’22: R453m FY’22: 17cps loss FY’22: R664m outflow GROUP NET NET DEBT: ROIC Group DEB
Slide 5: Metair in Context
METAIR IN CONTEXT 5 • A champion of localisation in the South African automotive industry for 76yrs ➢ Industry contributes ~ 5% to GDP, > 20% of local manufacturing output and 110 000 direct jobs • Strong forecast growth in SA vehicle production (~ 650 000 to 1.4 million in 2035) • New leadership ap
Slide 6: Immediate Priorities
IMMEDIATE PRIORITIES Stabilise leadership 6 • Increased HQ strategic control • Hold MDs accountable for agreed KPIs • Appoint new HR executive Comp comm issue Address debt levels • Finalise response to Statement of Objection • Delayed non-critical capital expenditure • Medium to long-term issue • R5
Slide 7: Financial Review
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail FINANCIAL REVIEW
Slide 8: Financial Overview: Income Statement
FINANCIAL OVERVIEW: INCOME STATEMENT 8 The group generated profit after tax of R129m (FY22: R4m loss). HEPS improved to 135cps (FY22: 17cps loss) R'million 2022 2023 % Change Other operating income breakdown (R'million) 2022 2023 Revenue 13 905 15 856 14% Government grants and similar 142 160 Other
Slide 9: Business Vertical Overview – IFRS (Reported)
BUSINESS VERTICAL OVERVIEW – IFRS (REPORTED) 9 ENERGY STORAGE Energy VERTICAL Storage vertical 2022 2023 2022 2023 2022 2023 R8 619m R8 040m R7 057m R13 518m R13 905m R15 856m REVENUE 55% 37% 45% 63% Contribution (7% ) Contribution Contribution 92% Contribution 14% R195m R89m R45m R-41m R453m R487m
Slide 10: Financial Overview: Balance Sheet
FINANCIAL OVERVIEW: BALANCE SHEET 10 R'million 2022 2023 Non-current assets 5 341 5 867 PPE & Intangible Assets 4 811 5 245 Other non-current assets 530 622 Current assets 7 491 7 242 Inventory 2 689 3 290 Trade and other current receivables 3 503 2 983 Cash and cash equivalents 1 299 969 Total asse
Slide 11: Capital and Debt Structure
CAPITAL AND DEBT STRUCTURE 11 Financial covenant ratio Covenant Level 2022* Covenant Level 2023 Compliance Dividend and interest Not less than 3X 1.54 Not less than 1.5X 1.69 Y cover ratio Total Net borrowings to Not more than 2.5X 4.95 Not more than 4X 3.06 Y adjusted EBITDA ratio Priority Debt cov
Slide 12: Net Debt Analysis (Including Hesto at 100%)
NET DEBT ANALYSIS (INCLUDING HESTO AT 100%) 12 • Growth in debt arises at Mutlu and Hesto • Increased cost of borrowings in Türkiye, high inflationary environment • Turkish market rates 45% - 55% pa • Turkish market complex & local TL funding squeeze to support currency • Mutlu debt profile mainly s
Slide 13: Working Capital Invested to Support Higher Activity Levels
WORKING CAPITAL INVESTED TO SUPPORT HIGHER ACTIVITY LEVELS 13 • Net working capital of R3.3 bn, support turnover growth • Higher sales in Auto business but complexity increases cost content • Inventory build-up for battery high season, higher lead prices & lead mix balance • Maintained high safety s
Slide 14: Cash Flows
CASH FLOWS 14 2023 (R'm) 2022 (R'm) Free cash flow (R'million) 2022 2023 980 Opening Cash 962 Auto components (842) 96 1 119 Cash gen. from ops 812 Energy storage (223) 19 28 Working capital changes (661) Group (664) 306 (771) Net finance charges (391) EBITDA (excl. impairm & excl. equity (235) Tax
Slide 15: Operational Review
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail OPERATIONAL REVIEW
Slide 16: Volumes
VOLUMES 16 Key SA Auto customer volumes up 48%. Energy auto battery volumes declined 17% mainly due to lower exports Battery Var. Var. units in '000 s 2021 2022 2023 Change % OEM Volumes 2021 2022 2023 Change % OE 2 252 2 488 2 650 163 7% Aftermarket 6 577 6 238 4 630 (1 607) (26%) TSAM 128 223 115
Slide 17: Capital Expenditure and Commitments (Including Hesto)
CAPITAL EXPENDITURE AND COMMITMENTS (INCLUDING HESTO) 17 Capital expenditure Commitment Vertical Maintenance Efficiency Health, safety Entity Category (R'million) (R'million) & general & expansion & environ. Total Automotive Components 205 164 11 380 Lumotech New model derivatives and expansion 197
Slide 18: Normalising the Result
NORMALISING THE RESULT: - ENERGY STORAGE COMPONENTS – EXCLUDES THE IMPACT OF HYPERINFLATION AND IMPAIRMENTS - AUTOMOTIVE COMPONENTS – EXCLUDES HESTO 18
Slide 19: Normalised Earnings and HEPS
NORMALISED EARNINGS AND HEPS 19 HEPS decreases to 105cps (reported HEPS of 135cps). Impact of high interest costs when comparing to FY22 Vertical HEPS: 243 cps HEPS: 105 cps Group EPS: 49cps 19
Slide 20: Business Vertical Overview – Normalised
BUSINESS VERTICAL OVERVIEW – NORMALISED* 20 ENERGY STORAGE Energy VERTICAL Storage vertical 2022 2023 2022 2023 2022 2023 R8 333m R8 033m R7 057m R7 816m R13 619m R15 849m REVENUE 54% 51% 46% 49% Contribution (4% ) Contribution Contribution 11% Contribution 16% R 760m R 761m R 465m R 567m R1 165m R1
Slide 21: Outlook
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail OUTLOOK 21
Slide 22: Outlook: Strategic Priorities
OUTLOOK 22 Strategic priorities • Rapid change in automotive industry ➢ New technological advances (electric or hybrid models) ➢ Metair components remain applicable for NEV ➢ Lead-acid energy storage relevant into next decade • ROIC: De-risk businesses not fitting investment profile • Portfolio opti
Slide 23: Outlook: Strategic Priorities (contd)
OUTLOOK 23 Strategic priorities (contd) • Customer mix (OEM/aftermarket/exports) balance to be addressed to produce to capacity • Key priority in Türkiye • Close collaboration with OEMs ➢ Balance demand/improve efficiencies/margins ➢ New entry vehicle manufacturers ➢ SA-driven plan to develop pan-Af
Slide 24: Outlook: H1 2024
OUTLOOK 24 H1 2024 • Debt programme ➢ Debt restructuring in progress • Customer volume volatility; extended shutdown of major customer in April 2024 ➢ Action plan: ➢ short-time production, cost cutting, reduced safety stock, adjusting long lead time orders ➢ Excl. effects of hyperinflation & depende
Slide 25: Metair Investments Limited
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail 25
Slide 26: Disclaimer
DISCLAIMER 26 The information supplied herewith is believed to be correct but the accuracy thereof at the time of going to print is not guaranteed. The company and its employees cannot accept liability for loss suffered in consequence of reliance on the information provided. Provision of this data d
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Slide 28: www.metair.co.za
www.metair.co.za