Ioco Limited · JSE:IOC
Ioco — EOH Holdings — FY2017 Earnings Presentation
35 slides from Ioco's earnings presentation, Jul 31, 2017
Slide 1: Results Presentation Year Ended 31 July 2017
RESULTS PRESENTATION YEAR ENDED 31 JULY 2017
Slide 2: Summary and Overview
SUMMARY AND OVERVIEW ZUNAID MAYET GROUP CEO
Slide 3: Key Priorities Over the Last 4 Months
Meeting Defining and with our detailing our Developing leadership Meeting with program of Reviewing deeper and people customers, action Governance, insights into partners and Risk and our shareholders Compliance business 2 4 1 3 5 KEY PRIORITIES OVER THE LAST 4 MONTHS
Slide 4: At a Glance: Purpose and Philosophy
AT A GLANCE PHILOSOPHY Listed in 1998 PURPOSE BEST PEOPLE Over 5 000 Clients PARTNER FOR LIFE To provide the technology, RIGHT 1ST TIME knowledge, skills and A Force for Good organisational ability SUSTAINABLE TRANSFORMATION critical to Africa’s LEAD AND GROW development and B-BBEE Large growth. Ent
Slide 5: EOH Operating Model
EOH OPERATING MODEL EOH’s internal strength, strong entrepreneurial culture and great execution ability bodes well for similar growth in the future.
Slide 6: Lines of Business
LINES OF BUSINESS Industry Consulting IT Services Software IT Infrastructure Industrial Technologies BPO IT Managed Services Enterprise Resource Storage Connectivity Human Capital Planning Infrastructure Application Support Servers Claims and Payment Business Intelligence Safety & Security Solutions
Slide 7: Financial Performance
FINANCIAL PERFORMANCE Sound Performance Operating Profit Dividends In a challenging environment 29% R1 792 m 16% 215 cents Revenue Earnings per Share Cash 17% 29% 825 cents R2 507 m 21% R15 490 m Headline Earnings per Share 16% 832 cents
Slide 8: Operational Review
OPERATIONAL REVIEW ZUNAID MAYET - Group CEO
Slide 9: Revenue for the Year Ended July 2017
REVENUE FOR THE YEAR ENDED 31 JULY 2017 Group Revenue R15 490m 34% 15% 8% 24% 19% 21% Growth IT Services Software IT Infrastructure Industrial Tech. BPO up 21% up 16% up 40% up 30% up 11 % R5 215 million R2 338 million R1 290 million R3 704 million R2 943 million
Slide 10: Earnings Contribution by Segment
EARNINGS CONTRIBUTION BY SEGMENT Contribution to Group 35% 27% 3% 20% 15% 29% Growth IT Services Software IT Infrastructure Industrial Tech. BPO up 46% Up 27% up 39% up 4% up 28% R553 million R435 million R51 million R318 million R240 million
Slide 11: Industrial Technologies - Market Trends
INDUSTRIAL TECHNOLOGIES - MARKET TRENDS Continued investment in infrastructure both in SA and other emerging markets INFRASTRUCTURE DEVELOPMENT Industrial customers need to invest in technology to remain relevant Convergence and Digitalisation Internet of Things (IoT) CLIMATE CHANGE Big Data and Ana
Slide 12: Industrial Technologies - Service Offering
INDUSTRIAL TECHNOLOGIES - SERVICE OFFERING An integrated portfolio of technology, engineering, environmental and societal solutions INDUSTRY SPECIFIC SOLUTIONS INDUSTRY SAFETY AND SECURITY Telecoms CONSULTING TECHNOLOGY SOLUTIONS ICT ADVISORY SERVICES AUTOMATION AND CONTROL Transport/ Logistics SERV
Slide 13: ICT - Market Trends
ICT - MARKET TRENDS • “Digital transformation” and legacy renewal • Internet of Things - IoT applications across all verticals • Security formed a key component of any robust digital transformation strategy • Big data – cognitive analytics integrated with customer applications • Cloud – mostly hybri
Slide 14: ICT - Service Offering
ICT - SERVICE OFFERING MANAGED SERVICES AND OUTSOURCING DIGITAL, BI AND ANALYTICS Managed infrastructure / ENTERPRISE RESOURCE PLANNING SYSTEMS hosting ICT ICTADVISORY ADVISORY Managed workspace SERVICES SERVICES CUSTOMISED APPLICATION DEVELOPMENT Service desk (DIGITAL) Managed networks Strategy Arc
Slide 15: BPO - Market Trends
BPO - MARKET TRENDS Growing market for Robotics and Offshoring strong Public sector in local as well as automation is answer in growth driver Africa major overseas commodity repetitive opportunity companies services businesses
Slide 16: BPO - Service Offering
BPO - SERVICE OFFERING TYPES OF SERVICES KNOWLEDGE PROCESS OUTSOURCING Training IP, ROBOTICS AND ERP PROCESS OUTSOURCING AUTOMATION Recruitment ICT ADVISORY Talent SERVICES HUMAN CAPITAL SOLUTIONS OUTSOURCING Management Strategy Architecture Payroll IT INFRASTRUCTURE Implementation Programme Finance
Slide 17: Financial Results
FINANCIAL RESULTS JOHN KING – Group CFO
Slide 18: Financial Highlights for the Year Ended July 2017
FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 31 JULY 2017 21% 29% 17% 16% 16% 29% Operating Revenue EPS HEPS Dividends CASH Profit R15 490m 825 cents 832 cents 215 cents R2 507m R1 792m
Slide 19: Revenue Growth
REVENUE GROWTH (R millions) 18 000 R15 490 16 000 14 000 R12 762 12 000 R9 734 10 000 R7 220 8 000 R5 086 6 000 R3 643 4 000 R2 429 2 000 2011 2012 2013 2014 2015 2016 2017
Slide 20: Earnings
EARNINGS Operating Profit (R Millions) Profit Before Tax (R Millions) R2 000 R2 000 R1 792 Growth up 29% R1 635 R1 393 Margin 11.6% R1 500 R1 324 R1 500 R1 047 R951 R1 000 R1 000 R720 R669 R496 Growth up 24% R467 R500 R357 R500 R340 R233 Margin 10.6% R234 R- R- 2011 2012 2013 2014 2015 2016 2017 201
Slide 21: EBITDA
EBITDA EBITDA (R Millions) Growth up 24% R2 278 R2 500 Margin 15% R1 830 R2 000 Amortisation R277m R1 287 R1 500 Depreciation R171m R908 R1 000 R597 Interest R186m R439 R300 R500 Tax R462m R- 2011 2012 2013 2014 2015 2016 2017
Slide 22: New Joiners vs Organic Growth
NEW JOINERS VS ORGANIC GROWTH Revenue Profit before tax Organic Growth New Joiners Organic Growth New Joiners 42% 41% 37% 41% 32% 46% 44% 48% 51% 49% 58% 59% 63% 59% 68% 54% 56% 52% 49% 51% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Slide 23: Earnings per Share
EARNINGS PER SHARE Earnings per Share Headline Earnings per Share 900 825 900 832 800 704 R8.25 800 719 700 561 17% 700 575 600 600 447 447 500 500 344 400 339 400 255 253 300 196 300 196 200 R8.32 200 100 16% 100 0 0 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017
Slide 24: Dividends (Cents)
DIVIDENDS (CENTS) 250 215c Growth up: 16% 185c 200 150c 150 120c Dividend: 215 cents 95c 100 70c Cover: 3.9 x 48c 50 0 2011 2012 2013 2014 2015 2016 2017
Slide 25: Condensed Consolidated Statement of Profit or Loss
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS 2017 2016 % (R’000) (R’000) Change • Increased activity from all businesses Revenue 15 489 524 12 761 810 21% • Organic growth (63%) ; Acquisitive (37%) Cost of sales -10 409 487 -8 656 183 • Excludes equity accounted investments Gross profit 5 080
Slide 26: Condensed Consolidated Statement of Financial Position
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2017 2016 R’000 R’000 ASSETS • Mainly IT infrastructure Non-current assets 8 180 866 6 790 469 • Depreciation of R171 million Property, plant and equipment 677 719 492 221 • Acquired PPE through acquisitions : R132 million Goodwill and intangibl
Slide 27: Condensed Consolidated Statement of Financial Position
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2017 2016 (R’000) R’000) Equity and Liabilities Equity attributable to the owners of EOH 8 505 188 6 576 167 Holdings Limited • Subsidiaries in which EOH does not own 100% Non-controlling interest 56 416 9 678 Total equity 8 561 604 6 585 845 •
Slide 28: Condensed Consolidated Statements of Cash Flows
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR 2017 2016 (R'000) (R'000) • Improved cash conversion – can do more Cash generated from operations 1 314 064 917 197 • Increases debtors / WIP/ inventory as a result of increased activity in business Investment income 72 681 49 269 • Workin
Slide 29: Looking Forward
LOOKING FORWARD ZUNAID MAYET GROUP CEO
Slide 30: Market and Environment: SA Business Optimism
• A strong diversified economy MARKET AND ENVIRONMENT • SA slipped into recession in Q1 - 2.5% growth in Q2 SA Business Optimism • Business confidence subdued 80 60 • Customer spend and investment delayed or postponed 40 55 45 46 • #Guptaleaks dominating the news cycle 39 40 37 39 20 33 35 22 0 • Po
Slide 31: Market and Environment
MARKET AND ENVIRONMENT Need for continued investment in infrastructure Disruptive Technologies creating growth both in SA and other emerging markets opportunities GDP growth forecasts: 3.5% globally; 1% in Customers need to invest in technology to SA;4.6% in Emerging markets remain relevant •Utility
Slide 32: Our Market
OUR MARKET International IT Spending Forecast SA IT Spending Forecast 4000 300000 3500 250000 3000 $1 408 $1 426 R122 281 $1 384 200000 R121 115 R112 019 2500 $ Billions R Millions 2000 150000 $899 $938 $981 1500 R74 813 R67 228 R70 996 100000 1000 $588 $589 $589 R38 489 R36 710 R38 117 500 50000 $3
Slide 33: Our Market: Total Addressable R227 Billion
OUR MARKET IND TECH EOH Turnover R45 billion 2017 Combined Total Addressable R227 billion R15 R40 R142 BPO billion billion ICT Billion International Opportunity – Substantially larger
Slide 34: The Way Forward
THE WAY FORWARD VALUES, PURPOSE OPERATING AT OUR CONTINUING OUR DRIVING INNOVATION AND PHILOSOPHY FULL POTENTIAL GROWTH STRATEGY PROGRAMME OF ACTION
Slide 35: Growth Drivers
GROWTH DRIVERS Cloud Globalising EOH IP Big Data & Analytics Digital Transformation Water Technologies Smart Infrastructure Everything as a Service Execute our Programme of Action Strategic and Key Account Management Programs Strategic acquisitions – New markets, technologies & offerings Emerging ma