Metair Investments Limited · JSE:MTA
Metair Investments — FY2022 Earnings Presentation
42 slides from Metair Investments's earnings presentation, 2023
Slide 1: 2022 Year End Results Presentation
2022 YEAR END RESULTS PRESENTATION
Slide 2: Agenda
AGENDA 2 • Welcome • Opening observations and overview • Salient features – FY 2022 • Financial and operational review • Outlook and prospects • Q&A • Appendices
Slide 3: Opening Observations and Overview
OPENING OBSERVATIONS AND OVERVIEW
Slide 4: Once-off extraordinary external events experienced in FY'22
A SERIES OF ONCE-OFF EXTRAORDINARY EXTERNAL EVENTS WERE 4 EXPERIENCED IN FY’22, AT A TIME WHEN METAIR IS INVESTING HEAVILY FOR FUTURE GROWTH Conflict in Ukraine Lead and energy prices in Romania and Europe Stoppage at Toyota, start-up and recovery from floods Operatio Hyperinflation in Türkiye nal E
Slide 5: Teams maintained supply and delivered on strategic priorities
OUR TEAMS DID WELL TO MAINTAIN SUPPLY TO CUSTOMERS AND DELIVER 5 ON STRATEGIC PRIORITIES WHICH CONTINUES INTO FY’23 • Effective project management Automotive Components • Operating efficiencies, impacted by stability of power supply Operational Excellence • Breathe with our customers • Support custo
Slide 6: Salient Features
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail SALIENT FEATURES
Slide 7: Core underlying operational performance remains strong
CORE UNDERLYING OPERATIONAL PERFORMANCE REMAINS STRONG. BOTH BUSINESS 7 VERTICALS PERFORMED WELL RELATIVE TO THEIR CHALLENGING OPERATING ENVIRONMENTS REVENUE EBITDA** EBIT NET DEBT NORMALISATION FREE CASH increased 10% to decreased 58% to decreased 61% to increased to excludes non-cash FLOW UTILISED
Slide 8: Financial and Operational Overview
FINANCIAL AND OPERATIONAL OVERVIEW
Slide 9: Financial Overview
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail FINANCIAL OVERVIEW
Slide 10: FY'22 Group Financial Results at a Glance
FY’22 GROUP FINANCIAL RESULTS AT A GLANCE 10 Results reflect a difficult operating and trading environment, outlook still remains positive Energy Storage HEADLINE EARNINGS PER SHARE • Mutlu hyperinflation accounting impact was a R208m loss decreased 105% to a loss of • Ukraine war proximity to Roman
Slide 11: Financial Highlights: Income Statement
FINANCIAL HIGHLIGHTS : INCOME STATEMENT 11 Reported loss driven by hyperinflation, project costs and high interest charges R'million 2021 2022 % Change R'million 2021 2022 % Change Revenue 12 621 13 905 10% Attributable profit/(loss) 675 (40) (106%) EBITDA (incl. share of assoc.) 1 409 586 (58%) Hea
Slide 12: Financial Highlights: Balance Sheet & Working Capital
FINANCIAL HIGHLIGHTS : BALANCE SHEET & WORKING CAPITAL 12 High net debt and working capital levels will unwind into FY’24. Non-current assets increased significantly, strong Mutlu non- monetary asset base protects against hyperinflation from a net asset point of view R'million 2021 2022 R'million 20
Slide 13: Capital and Debt Structure
CAPITAL AND DEBT STRUCTURE 13 We received strong support from our funders who waived covenant breaches. Our balance sheet remains resilient and gearing levels will reduce post new model launches as earnings are generated % 2021 2022 Debt* : Equity 61% 70% Net debt** : Equity 35% 51% 2022 2021 2022 N
Slide 14: Assessing Underlying Performance: Normalising the Result
ASSESSING UNDERLYING PERFORMANCE: NORMALISING THE RESULT
Slide 15: Normalised Earnings and HEPS
NORMALISED EARNINGS AND HEPS 15 Core earnings were robust, considering impact of Rombat’s challenging environment, Turkish Lira devaluations and higher interest costs Business Vertical FY’22 EBITDA: HEPS: HEPS reported: Normalised R1 480m 243cps 354ps (FY21 as reported: R1 409m) Group EBITDA reporte
Slide 16: Normalised Perspectives
NORMALISED PERSPECTIVES 16 On a normalised earnings basis, gearing amounts to 1.6x and we expect gearing levels to reduce by December 2023 EBITDA and HEPS perspective for FY22 ZAR in millions / cps EBITDA HEPS Preliminary EBITDA (post hyper-inflation) 826 Equity earnings (losses) (229) EBITDA incl.
Slide 17: Energy Storage Main Impact: IAS 29, Hyperinflation Accounting in Türkiye
ENERGY STORAGE MAIN IMPACT: IAS 29, HYPERINFLATION ACCOUNTING IN TÜRKIYE
Slide 18: IAS 29 Adopted by Mutlu in FY'22
IAS 29 ADOPTED BY MUTLU IN FY’22 18 Hyperinflation recap. 4 steps: Türkiye's inflation rate rose to 64.3% in FY’22, accelerating 1) Restatement of Mutlu opening balance sheet 2) Re-indexing of non-monetary items dramatically in the beginning of 2022. Inflation levels breached 3) Re-indexing of retai
Slide 19: Restatement of Inventory and Cost of Goods Sold
RESTATEMENT OF INVENTORY AND COST OF GOODS SOLD 19 Simply applying average indexing on cost of sales is not correct. Cost of sales is re-expressed from the date of production and not date of sale and dependant on inventory cycle. Days on hand can range between 60-90 days, depending on stage of produ
Slide 20: Non-cash Hyperinflation Impact of R208m to Net Profit After Tax
NON-CASH HYPERINFLATION IMPACT OF R208M TO NET PROFIT AFTER TAX 20 IAS 29 increases Mutlu’s non-monetary assets by c.22% (R1.8bn), using CPI tables since acquisition. A foreign currency translation gain of c. R1.8bn arises in other comprehensive income. Mutlu operating profit ‘re-expressed’ as a fin
Slide 21: Operational Overview
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail OPERATIONAL OVERVIEW
Slide 22: Business Vertical Overview - Reported
BUSINESS VERTICAL OVERVIEW - REPORTED 22 ENERGY STORAGE Energy VERTICAL Storage vertical 2021 2022 2021 2022 2021 2022 R7.5bn R8.6bn R6.7bn R7.1bn R12.6bn R13.9bn Revenue 53% 55% 47% 45% contribution 14% contribution contribution 5% contribution 10% R887m R195m R257m R45m R1.16bn R453m Operating 78%
Slide 23: Business Vertical Overview - Normalised
BUSINESS VERTICAL OVERVIEW - NORMALISED 23 ENERGY STORAGE Energy VERTICAL Storage vertical 2021 2022 Normalised 2021 2022 Normalised 2021 2022 Normalised R7.5bn R8.3bn R6.7bn R7.1bn R12.6bn R13.6bn Revenue 53% 54% 47% 46% contribution 10% contribution contribution 5% contribution 8% R887m R760m R257
Slide 24: Automotive Components
AUTOMOTIVE COMPONENTS 24 Market volumes increased by 7% but key customers overall flat due to production challenges, stoppages and flood impact at Toyota. Volume variability and instability also impacted efficiencies Revenue PBIT EBITDA 5% 83% 37% R7.1bn R45m R265m Free cash PBIT % ROIC flow 3.2ppt
Slide 25: Energy Storage
ENERGY STORAGE 25 Auto battery volumes benefitted from higher exports and OEM sales at Mutlu. Revenue up 14%, sales price and export growth in hard currency. Auto batteries sold represent 104% of pre-Covid levels Revenue PBIT EBITDA 14% 78% 62% R8.6bn R195m R407m Free cash PBIT % ROIC flow 9.4ppt 20
Slide 26: Energy Storage Segment Analysis
ENERGY STORAGE SEGMENT ANALYSIS 26 Strong local currency operating profit growth at Mutlu and FNB Reported Pre Hyperinflation 1 450 933 1 450 933 756 (13.3%) (13.3%) (9.8%) R’million R’million 950 950 231 PBIT (2.9%) -36 450 -46 -46 -10 (-6.1%) 450 (-8.7%) (-8.7%) (-1.8%) -50 -50 2021 2022 2021 2022
Slide 27: Capital Expenditure and Commitments (including Hesto)
CAPITAL EXPENDITURE AND COMMITMENTS (INCLUDING HESTO) 27 R750m allocated for FY’23, includes new technology investments and localisation projects • R1.2bn of approved spend was undertaken in the year Capital expenditure spend Vertical Maintenance Efficiency Health, safety • Mainly spent on future gr
Slide 28: Ford New Business Progress Update
FORD NEW BUSINESS PROGRESS UPDATE
Slide 29: Project was launched despite industry disruptions and delays
PROJECT WAS LAUNCHED, DESPITE INDUSTRY DISRUPTIONS AND DELAYS 29 Capital expenditure within budget and further business secured for wire localisation. Once off projects costs significant at Hesto, due to ramp up complexities and December production required by customer Overview (includes Hesto) • Cu
Slide 30: Outlook and Prospects
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail OUTLOOK AND PROSPECTS
Slide 31: Key Takeaways and Outlook
KEY TAKEAWAYS AND OUTLOOK 31 WE HAVE A SOLID PLATFORM FOR GROWTH IN AUTO, WHILE ENERGY REMAINS RESILIENT AND WELL PLACED TO NAVIGATE THROUGH EXTERNAL MARKET CHALLENGES Automotive Components • Project ramp up and delivery Short-term focus • Investment in future growth could still bring short-term mar
Slide 32: Metair
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail
Slide 33: Appendices
METAIR INVESTMENTS LIMITED ‘automotive | industrial | retail APPENDICES
Slide 34: Energy Storage Volumes (Rounded)
ENERGY STORAGE VOLUMES (ROUNDED) 34 1. Total volumes by operation (including 2. Automotive volumes by market 3. Mutlu automotive volumes industrial) 4. Rombat automotive volumes 5. First National Battery automotive 6. Industrial volumes volumes
Slide 35: Combined Battery Volumes: FNB, Mutlu and Rombat
COMBINED BATTERY VOLUMES: FNB, MUTLU AND ROMBAT (ROUNDED) 35 Battery units ('000) 2021 2022 Change % Change Automotive original equipment 2 252 2 487 235 10% Original equipment - Local 1 846 1 900 54 3% - Export 406 587 181 45% Automotive aftermarket 6 577 6 238 (339) (5%) Aftermarket - Local 3 156
Slide 36: First National Battery Volumes
FIRST NATIONAL BATTERY VOLUMES 36 FNB Battery units ('000) 2021 2022 Change % Change Original Automotive original equipment 358 361 3 1% equipment - Local 358 361 3 1% Automotive aftermarket 1 174 1 185 11 1% Aftermarket - Local 907 922 15 2% - Export 267 263 (4) (2%) Total automotive units 1 532 1
Slide 37: Mutlu Battery Volumes
MUTLU BATTERY VOLUMES 37 Mutlu Battery units ('000) 2021 2022 Change % Change Automotive original equipment 1 483 1 645 162 11% Original equipment - Local 1 077 1 149 72 7% - Export 406 496 90 22% Automotive aftermarket 3 191 3 258 67 2% Aftermarket - Local 1 736 1 552 (184) (11%) - Export 1 455 1 7
Slide 38: Rombat Battery Volumes
ROMBAT BATTERY VOLUMES 38 Rombat Battery units ('000) 2021 2022 Change % Change Automotive original equipment 411 481 70 17% Original equipment - Local 411 390 (21) (5%) - Export 91 91 Automotive aftermarket 1 212 1 795 (417) (19%) Aftermarket - Local 513 429 (84) (16%) - Export 1 699 1 366 (333) (2
Slide 39: Vehicle Production per OEM in South Africa
VEHICLE PRODUCTION PER OEM IN SOUTH AFRICA 39 OEM 2015 2016 2017 2018 2019 2020 2021 2022 % Change TSAM 133 497 122 115 128 578 139 307 138 781 103 461 128 223 115 327 (10%) FMCSA 73 735 86 496 93 817 105 099 94 756 65 503 87 174 92 166 6% VW SA 121 583 120 799 108 156 133 543 157 961 114 158 129 11
Slide 40: Vehicle Production per OEM in Turkey
VEHICLE PRODUCTION PER OEM IN TURKEY 40 OEM 2015 2016 2017 2018 2019 2020 2021 2022 Oyal Renault 339 240 339 950 365 002 336 778 342 777 308 568 248 000 247 100 Ford 334 622 333 765 373 005 373 702 369 035 327 936 348 029 376 476 Tofaş 278 254 383 495 384 174 301 750 264 196 250 630 228 544 263 747
Slide 41: Vehicle Production per OEM in Romania
VEHICLE PRODUCTION PER OEM IN ROMANIA 41 OEM 2015 2016 2017 2018 2019 2020 2021 2022 Renault Dacia 342 856 338 593 313 883 335 262 349 528 259 199 257 405 314 228 Ford 68 339 52 829 49 771 141 507 140 884 179 008 163 350 195 237 Total 411 195 391 422 363 654 476 769 490 412 438 207 420 755 509 465
Slide 42: Disclaimer
DISCLAIMER 42 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