Ioco Limited · JSE:IOC
Ioco — EOH Holdings — FY2022 Earnings Presentation
31 slides from Ioco's earnings presentation, October 2022
Slide 1: FY2022 Annual Results
FY2022 ANNUAL RESULTS
Slide 2: Operational overview
Operational overview Stephen van Coller Chief Executive Officer
Slide 3: EOH continues to demonstrate financial improvements
EOH continues to demonstrate financial improvements Continuing Revenue stabilised at R6bn • IOCO revenue grew 4% YoY, but showed 17% growth in H2 YoY • Nextec Infrastructure Solutions disappointed but People business profitable • Digital and Infrastructure Services EBITDA both up 33% Business margin
Slide 4: EOH continues to demonstrate operational improvements
EOH continues to demonstrate operational improvements Numerous contract wins & significant new customers onboarded HQ costs down R85m, property and other central costs down R37m anticipating further savings 2023 of around 45m from property East & West Africa expansion, awarded the exclusive AVEVA co
Slide 5: Positive momentum in new deals demonstrating confidence in EOH
Positive momentum in new deals demonstrating confidence in EOH R783m Public Sector deals won in FY2022: R31m renewals and R752m net new business Provincial Government Oil & Gas Software development support and technical Global service desk, workspace services & field services support R200m R432m Pro
Slide 6: Talent
Talent Talent 88% of employees proud to work at EOH Enable & Grow Include Total Spend EL & UL | R 32 800 000 Male | 51% Female | 49% AIC | 64 % of total workforce People with Disabilities | 213 Inclusion roundtables hosted | 4 2nd group of Youth Solvers Drone Pilot - PWD | 5 Care iOCO specialized Di
Slide 7: Impacting our communities
Impacting our communities We remain relevant to RSA Impacted 11 513 youth Assistance to small businesses Support to Youth start- post July’21 riots up businesses 76 students supported by EOH financially to study for Bachelor of computing 2021 Grade 12 results degree or a diploma in IT 506 learners C
Slide 8: Financial Overview
Financial Overview Megan Pydigadu Chief Financial Officer
Slide 9: FY22 financial summary
FY22 financial summary FY22 FY21 Rm Audited Continuing Discont. Audited Continuing Discont. Revenue 6,931 6,031 899 7,882 6,472 1,410 iOCO 4,668 4,289 379 4,921 4,474 447 NEXTEC 1,781 1,742 39 2,143 1,998 144 IP 481 0 481 819 0 819 Gross Profit 2,014 1,690 324 2,200 1,681 519 Gross margin 29% 28% 36
Slide 10: Margins and earnings
Margins and earnings Continued improvement in gross and operating profit margins Total Margins Continuing normalised margins 28% 28% 29% 26% 22% 8% Gross profit Gross profit 7% 2% 4% Adjusted EBITDA Adjusted EBITDA 0% 8% Operating profit Operating profit 6% 2% 3% (12%) FY20 FY21 FY22 FY21 FY22 Total
Slide 11: iOCO adjusted EBITDA segmental breakdown (R'm)
iOCO adjusted EBITDA segmental breakdown (R’m) 12% 201 13% Adjusted EBITDA margin 8% 173 151 20% 9% 111 19% 110 6% 4% 13% 87 83 12% 61 65 54 (10)% (8)% (4) (22) FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 Operational Technology Infrastructure Services iOCO Digital Enterprise Apps Pla
Slide 12: NEXTEC adjusted EBITDA segmental breakdown (R'm)
NEXTEC adjusted EBITDA segmental breakdown (R’m) 10% 74 4% Adjusted EBITDA margin 31 (4)% (4)% (5)% (1)% (0) (7) (43) (57) FY21 FY22 FY21 FY22 FY21 FY22 Infrastructure Solutions People Solutions Health and Other The above includes intra & inter segment performance to highlight standalone performance
Slide 13: Discontinuing operations (R'000s)
Discontinuing operations (R’000s) Discontinued operations benefited from a R92m profit on disposal Net financial asset impairment losses Normalised earnings (R3,267) R135,242 Operating Remeasure profit ment to fair value R182,483 (R41,948) Once off items R47,241 Profit on disposals R92,456
Slide 14: Balance sheet
Balance sheet R’m FY22 FY21 R’m FY22 FY21 Non-current assets Equity Stated capital 4 217 4 217 Property, plant and equipment 185 341 Shares to be issued to vendors 0 0 Intangible assets 84 64 Other reserves 495 599 Goodwill 675 746 Equity and Accumulated loss (4 679) (4 659) Equity attributable to E
Slide 15: Continuing goodwill
Continuing goodwill 14% 21% 3% 46% R456m 54% R218m 22% 40% Enterprise Apps & Software Reseller Operational Technology People Solutions Infrastructure Solutions Infrastructure Services Platforms Digital
Slide 16: Total debt (R'm)
Total debt (R’m) Strong deleveraging performance Remaining Loan Split 13% 17% 2,841 Term loan Bridge 41% 36% loan 2,483 59% 2,065 8% Loan Terms Bridge 1-month JIBAR + 8.42% margin payable monthly 1,332 loan 1,228 If Senior Leverage Ratio >2 and bridge not fully repaid: 3-month JIBAR + 5.45% Term mar
Slide 17: Legacy payments (R'm)
Legacy payments (R’m) FY22 Expected future payments 402 19 342 118 25 107 95 216 179 39 26 50 19 22 216 112 179 78 39 26 50 78 112 0 FY21 FY22 FY23 FY24 FY25 FY26 Sybrin VAT liability Department of Water and Sanitation Department of Defense PAYE Onerous contracts
Slide 18: Cash bridge (R'm)
Cash bridge (R’m) Strong cash conversion at 87% Held for Restricted Held for sale cash sale 16% 2% 10% Continuing operations Continuing 82% operations 90% Cash generated before once-offs Total legacy and finance costs and finance cost R283m R364m
Slide 19: How we See our Business
How we See our Business
Slide 20: Sustainable revenue
Sustainable revenue Continuing iOCO revenue up 4% with Nextec poised for growth as global supply chains normalise Major Movers Continuing Revenue (6%) Legacy Nextec 442 70 iOCO (R228m) 1,955 1,726 iOCO impact R344m 5,961 R159m 4,075 4,235 FY21 FY22
Slide 21: iOCO continuing revenue
iOCO continuing revenue iOCO showing positive growth and momentum Full Year Continuing Revenue – 4% growth H2 Continuing Revenue – 17% growth % movement 3% 16% 1,415 1,376 766 0% 662 1,136 1,136 8% 562 25% 518 61% 807 (5%) 407 648 (3%) 500 1% 3% 473 253 415 403 217 218 205 200 Operational Infrastruc
Slide 22: Costs under control....more to come
Costs under control….more to come Property ERP Legal Entities Total expected cost savings: 153 buildings exited R16m p.a 179 26 17 FY19 Other savings expected not 272 quantified: Cost (R’m) Sold 115 582 538 499 Audit fees 462 Deregistered 428 45 335 Liquidation Business process efficiencies 6 204 16
Slide 23: Cost of debt (R'm)
Cost of debt (R’m) Actual Illustrative 27% Current CTA terms Terms expected under remain in place a refinance 305 18% 221 10% 180 64% 162 65 FY20 FY21 FY22 No capital raise R600m capital raise* *For illustrative calculations under refinance, JIBAR was set at 5.725% with a 4.49% margin on the term lo
Slide 24: Continuing normalised adjusted EBITDA (R'm)
Continuing normalised adjusted EBITDA (R’m) 33% potential increase if property and IT savings were realised at beginning of the year Normalised EBITDA Illustrative *Only impairment of finance lease receivables have been added back in the normalisation
Slide 25: Earnings potential of continuing operations (R'm)
Earnings potential of continuing operations (R’m) Potential increase of 5% in profit after tax margin in the event of a R600m capital raise Normalised loss before finance costs Illustrative Finance cost reduction based on slide 23 scenarios
Slide 26: This is what our Business looks like with the correct capital structure
This is what our Business looks like with the correct capital structure Profit after EBITDA Revenue tax R483m R5,961m R112m 8% margin 2% margin
Slide 27: Outlook
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Slide 28: Accelerating the GET era
Accelerating the GET era EOH is now a well-balanced and sustainable business with solid foundation to drive future growth Growth Efficiency Talent 5.5% market share, significant organic growth and cross Loss making contracts closed Talent is a scarce commodity in the digital world sell opportunity 5
Slide 29: The proposed equity raise
The proposed equity raise Our objectives Overview of the proposed equity raise All shareholders • Pro-rata, renounceable offer to 1 Create a sustainable capital structure existing shareholders • Informal indications of support from key shareholders Enhanced strategic empowerment Up to 2 R500 million
Slide 30: This is what our Business looks like with the correct capital structure
This is what our Business looks like with the correct capital structure Profit after EBITDA Revenue tax R483m R5,961m R112m 8% margin 2% margin
Slide 31: Thank you
Thank you