Trellidor Holdings Ltd. · JSE:TRL
Trellidor — H1 FY2023 Earnings Presentation
30 slides from Trellidor's earnings presentation, Mar 6, 2023
Slide 1: Interim Results Presentation
Trellidor Holdings Limited 31 December 2022 Interim Results Presentation 06 March 2023 | 09:00 | Hosted by PSG Capital WELCOME We will begin shortly holdings.trellidor.co.za
Slide 2: Interim Results for the Period Ended 31 December 2022
TRELLIDOR HOLDINGS LIMITED INTERIM RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2022
Slide 3: Salient Points
SALIENT POINTS R273 million Revenue for the six (2022: R284 million) months TERRY DENNISON GROUP CEO 44% Gross Profit Margin (2022: 40%) for the six months 25.5 cents Headline earnings per (2022: 25.4 cents) share for the 6 months R7 million Cash from operations (2022: R18 million) for the six month
Slide 4: Reinstatement of Employees
REINSTATEMENT OF EMPLOYEES • Following the Labour Appeal Court upholding the Labour Court Judgement in February 2022, the Group advised shareholders that a provision for the costs of potentially reinstating 42 employees amounting to R32.1 million was provided for as at 30 June 2022. TERRY DENNISON G
Slide 5: Reinstatement of Employees
REINSTATEMENT OF EMPLOYEES • Following this process, 30 employees have returned to work and 11 opted to take a package in full and final settlement of the judgement. • The returning employees have been integrated into the workforce without any notable TERRY DENNISON GROUP CEO disruption to productio
Slide 6: Strategic Objectives for 2023
STRATEGIC OBJECTIVES FOR 2023 The Group prioritised its key strategies for F23 as follows: • Focus on rebuilding franchise and branch selling capacity. TERRY DENNISON • Drive Trellidor’s recovery in the African market sector. GROUP CEO • Recruitment of additional selling resources in Trellidor UK. •
Slide 7: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES Focus on rebuilding franchise selling capacity • Sales consultants are been actively recruited in main centres with additional heads being added in Cape Town and Johannesburg in H1. TERRY DENNISON • Further heads will be added in Johannesburg through H2. GROUP CEO •
Slide 8: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES Recruitment of additional selling resources in Trellidor UK • The UK operation has been focused on expanding its customer base, both commercially and in the residential sector. TERRY DENNISON • Listing as a preferred supplier has been achieved with two new retail cha
Slide 9: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES Rebuilding the fundamentals of the Taylor business • The new management structure was fully populated during F23 H1 and the early signs are positive. TERRY DENNISON • Despite the softer topline, gross profit margins have improved by 2.7% to 32.1%. GROUP CEO Overheads
Slide 10: Progress on Strategic Objectives
PROGRESS ON STRATEGIC OBJECTIVES Introducing new products focusing on expanding our product offering into the commercial property space in South Africa • The first sectional door product, Coroview, was launched during F23 Q1. This specific TERRY DENNISON product is targeted at the automotive and eme
Slide 11: Prospects
PROSPECTS • Sales in January and February are tracking marginally ahead of prior year, although demand remains subdued locally. • Trellidor UK should show incremental growth from H1, with sales to the new retail TERRY DENNISON GROUP CEO customers commencing, a recovery in project work from existing
Slide 12: Prospects
PROSPECTS • Looking further ahead: − The new commercial and industrial product set, which are supported by dedicated selling and installation resources in Cape Town, Johannesburg and Durban, should generate a return from TERRY DENNISON GROUP CEO new markets for Trellidor in the medium term. − The im
Slide 13: Group Financial Performance
GROUP FINANCIAL PERFORMANCE
Slide 14: Sales Analysis – Group Contribution
SALES ANALYSIS – GROUP CONTRIBUTION Group revenue has decreased by 3.6% • Trellidor is up 2.2% driven mainly by recovery in the Rest of Africa. • Taylor is down 9.5% as result of softer sales in both the Western Cape and Gauteng. • NMC has increased 3.8% on the back of increased sales in Cape Town.
Slide 15: Sales Analysis – Geographical Presence
SALES ANALYSIS – GEOGRAPHICAL PRESENCE Trellidor revenue has increased 2.2%: • A key driver in the growth has been the Rest of Africa whose contribution increased from 8% to 14% with sales up 64% from F22 H1. • Volume through the RSA franchises outside the major cities increased 7% over the same per
Slide 16: Sales Analysis – Product Type
SALES ANALYSIS – PRODUCT TYPE Trellidor’s Traditional product has shown growth: • Sales of the Traditional Trellidor product set has increased 11% vs F22 H1. • Rollerstyle’s contribution has declined from 10% to 7% in F23 H1 as result of subdued demand in the UK which is expected to improve through
Slide 17: Trading Margin – Cost % of Net Sales
TRADING MARGIN – COST % OF NET SALES • The Group’s GP% has improved 3.6% to 43.7% from 40.1% as at F22 H1 • Improvement has been across the business units: • Trellidor’s material consumption has improved to 30.9% of Net Sales and tracking towards pre-Covid levels; • Taylor has improved its material
Slide 18: EBITDA
EBITDA • The Group’s EBITDA has decreased to R42.0m (F22: R46.5m) given the weaker topline and a R2.0m forex loss due to the devaluation of the Ghanian Cedi. • Normalising for the forex loss would result in a 3% decline in EBITDA on a like for like basis. • Despite the decrease in sales, improved ma
Slide 19: Group Financial Performance
GROUP FINANCIAL PERFORMANCE HY 23 vs 5 YR R’m HY 2018 FY 2018 HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 HY 2023 HY 22 CAGR Revenue 297.4 539.0 286.2 514.9 274.8 421.5 281.6 518.4 283.5 513.2 273.3 -4% -2% Gross profit 137.2 245.9 128.9 231.9 122.5 175.5 125.6 219.4 113.7 197.2
Slide 20: Group Financial Position
GROUP FINANCIAL POSITION
Slide 21: Group Balance Sheet
GROUP BALANCE SHEET • Debt/Equity ratio of 63% represents an increase from F22 H1 at 51%. • Key driver for the increase is the debt raised to settle the Labour Court judgement. • Interest cover ratio of 6.7x (F22 H1: 8.5x) has decreased as result of increased debt DAMIAN JUDGE GROUP CFO levels and i
Slide 22: Group Net Working Capital
GROUP NET WORKING CAPITAL • Our investment in inventory has increased, particularly in Taylor and NMC, to cater for increased prices, and to mitigate stock outs. • This investment is anticipated to normalise through F23 H2 following more favourable DAMIAN JUDGE Covid regulations in China. GROUP CFO
Slide 23: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW • Profit after tax levels has declined slightly from F22 H1 levels • The impact of the investment in inventory has resulted in reduced cash from operations. DAMIAN JUDGE GROUP CFO 70.5 69.9 49.6 49.6 37.0 40.4 40.3 31.8 31.8 31.2 26.8 24.5 24.3 18.2 16.5 19.7 18.9 11.9 7.0
Slide 24: Capital Allocation
CAPITAL ALLOCATION • Debt Servicing − Paydown of interest-bearing liabilities of R13.6m (including interest). − Net interest R5.2m (excluding IFRS16 finance leases). − Despite increased debt levels, Group remains comfortably with covenant levels. DAMIAN JUDGE GROUP CFO • CAPEX − R3.5m which includes
Slide 25: Capital Allocation
CAPITAL ALLOCATION • Dividends - As a result of the Company reinstating 30 employees and making certain limited back-pay payments to 41 employees during the period and having to increase the Group’s gearing levels in order to fund the payments, the Board has taken a DAMIAN JUDGE GROUP CFO decision n
Slide 26: Additional Information
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Slide 27: Earnings Per Share
EARNINGS PER SHARE R’m HY 23 vs HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 HY 2023 HY 22 DAMIAN JUDGE Profit attributable to ordinary shareholders 32.1 42.9 26.3 -21.3 30.4 39.8 24.1 0.4 24.3 1% GROUP CFO Adjusted for: Profit on disposal of property, plant and equipment - 0.2 0.
Slide 28: Group Summarised Balance Sheet
GROUP SUMMARISED BALANCE SHEET R’m HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 HY 2023 Non current assets Property, plant and equipment 66.1 64.9 57.2 56.8 58.2 57.6 60.5 59.9 63.3 RoU Assets - - 21.0 19.6 20.0 15.4 47.1 42.2 40.0 Goodwill and other intangibles 116.4 113.5 111.7
Slide 29: Group Summarised Cash Flow
GROUP SUMMARISED CASH FLOW R’m HY 2019 FY 2019 HY 2020 FY 2020 HY 2021 FY 2021 HY 2022 FY 2022 HY 2023 EBITDA 55.7 81.2 49.1 11.6 57.8 85.4 46.5 29.3 42.0 Movement in non cash items (incl provisions) 1.1 3.1 (1.9) 45.4 (1.4) (2.6) 0.3 34.5 0.6 Net working capital movement (16.0) (13.6) (0.6) (2.0) 7
Slide 30: Thank You
TERRY DENNISON DAMIAN JUDGE GROUP CEO GROUP CFO THANK YOU holdings.trellidor.co.za