Enx Group Limited · JSE:ENX
Enx — H1 2024 Earnings Presentation
30 slides from Enx's earnings presentation, Feb 29, 2024
Slide 1: Results Presentation
RESULTS PRESENTATION For the six months ended 29 February 2024
Slide 2: Contents
CONTENTS 1. Who we are 2. Our purpose and who we represent 3. Highlights and key focus areas 4. Financial performance 5. Building our business units 6. Disposal group held for sale 7. Financial review 8. Outlook 2
Slide 3: Who we are
01 WHO WE ARE
Slide 4: Who we are
WHO WE ARE LUBRICANTS CHEMICALS POWER DISCONTINUED OPERATION BLENDING DISTRIBUTION DISTRIBUTION, RENTAL AND FLEET MANAGEMENT AND DISTRIBUTION OF CHEMICALS: VALUE-ADDED SERVICES FOR: SOLUTIONS ACROSS OF LUBRICANTS: Polymers, rubber, speciality Diesel power solutions, ALL VEHICLE CLASSES: Oil lubrican
Slide 5: Our purpose and who we represent
02 OUR PURPOSE AND WHO WE REPRESENT
Slide 6: Our purpose
OUR PURPOSE enX Group is a manufacturer and distributor of quality branded lubricants and power equipment and a distributor of quality branded chemicals • Quality brands and products - Lubricants - Chemicals - Power • Stock on-the-ground • Nationwide distribution • Currency matching • Technical expe
Slide 7: Who we represent
WHO WE REPRESENT BRAND RECOGNITION LUBRICANTS CHEMICALS POWER MARKETING EXPERTISE #1 #1 RESEARCH AND DEVELOPMENT #1 #1 GROWTH OPPORTUNITIES SUPPORTED WITH CONFIDENCE BY GLOBAL TOP 10 AND LEADING INTERNATIONAL BRANDS 7
Slide 8: Highlights and key focus areas
03 HIGHLIGHTS AND KEY FOCUS AREAS
Slide 9: Highlights and key focus areas
HIGHLIGHTS AND KEY FOCUS AREAS 1. Excellent performance for six months ended 29 February 2024 across all business units • Growing profitability despite continuing challenging economic conditions • Strong financial position 2. Disposal of Eqstra to Nedbank • Refer section 6 of the Investor Presentati
Slide 10: Highlights and key focus areas
HIGHLIGHTS AND KEY FOCUS AREAS 5. New Way Power sustained turnaround • Continued exceptional performance • Improved margin management for long-term data-centre projects with good pipeline of orders • Benefitting from opportunities arising from load shedding, although less severe than last year - Gen
Slide 11: Highlights and key focus areas
HIGHLIGHTS AND KEY FOCUS AREAS 8. C Butters v TRP and others • Notice published by TRP on SENS on 13 April 2023 where TRP agreed to settle its investigation into certain affected transactions involving enX, eXtract, Zarclear, African Phoenix and others • Notice of motion dated 21 November 2023 made
Slide 12: Financial performance
04 FINANCIAL PERFORMANCE
Slide 13: Financial performance
FINANCIAL PERFORMANCE • Revenue from continuing operations of R2.117 billion (2023: R2.019 billion), up 5% • Operating profit ¹ of R124 million (2023: R76 million), up 63% - Significantly higher toll volumes in AG Lubricants with achievement of contractual savings for mining client - Growth of gener
Slide 14: Building our business units
05 BUILDING OUR BUSINESS UNITS
Slide 15: Business unit analysis – AG Lubricants
BUSINESS UNIT ANALYSIS – AG LUBRICANTS LUBRICANTS Rm H1 2024 H1 2023 H1 2024 Revenue 850 844 AG LUBRICANTS • Year-on-year revenue ↑ underpinned by higher toll blending volumes EBIT ¹ 56 34 (+29%) but at lower selling prices due to pass through of lower base oil PBT - AGL ¹ 48 21 pricing • Manufactur
Slide 16: Business unit analysis – WAG
BUSINESS UNIT ANALYSIS – WAG CHEMICALS Rm H1 2024 H1 2023 H1 2024 Revenue 939 892 WAG • Year-on-year revenue ↑ 5 % EBIT 53 34 - Higher polyethylene and speciality chemicals and components sales PBT 45 26 • Despite commodity cycle softening and impacts of load-shedding, continued growth in new produc
Slide 17: Business unit analysis – New Way
BUSINESS UNIT ANALYSIS – NEW WAY POWER Rm H1 2024 H1 2023 H1 2024 Revenue 333 302 NEW WAY POWER • Revenue ↑ 10% EBIT 44 30 - Continued load-shedding PBT 46 28 - Good demand for generators, especially from data-centre customers, accompanied by related maintenance services Inventory 256 186 - Sale of
Slide 18: Business unit analysis – Eqstra
BUSINESS UNIT ANALYSIS – EQSTRA DISCONTINUED OPERATIONS Rm H1 2024 H1 2023 H1 2024 Revenue 942 898 • Year-on-year performance - Total revenue ↑ 5% EBIT ² 153 140 - Leased assets units were 11 905 units (2023: 11 210 units), an increase of 6% period-on-period, with a net book value of leased assets g
Slide 19: Business unit analysis – Eqstra leasing book
BUSINESS UNIT ANALYSIS – EQSTRA LEASING BOOK Leasing book remains healthy with risks well managed: • Credit risk: The book remains well diversified in terms of industry exposure and primarily blue-chip customers. The top 5 customers account for around 25% of the Leasing assets net book value • Inter
Slide 20: Disposal group held for sale
06 DISPOSAL GROUP HELD FOR SALE
Slide 21: Disposal group held for sale – current year
DISPOSAL GROUP HELD FOR SALE – CURRENT YEAR Eqstra: disposal group held for sale and discontinued operation in terms of IFRS 5 • SENS dated 12 December 2023 announcing disposal of Eqstra to Nedbank after definitive transaction agreements had been concluded • Disposal constitutes all or a greater par
Slide 22: Financial review
07 FINANCIAL REVIEW
Slide 23: Financial review
FINANCIAL REVIEW Key performance indicators: Total operations (Rm, unless stated) H1 2024 H1 2023 % Revenue 3 059 2 917 5 Operating profit* 334 216 - Operating profit on a like-for-like basis *¹ 260 216 20 Headline earnings 356 126 - Headline earnings on a like-for-like basis ¹ 156 126 24 Basic earn
Slide 24: Financial review: condensed statement of financial position
FINANCIAL REVIEW CONDENSED STATEMENT OF FINANCIAL POSITION Rm Feb 2024 ¹ Held for sale Feb 2024 ² Aug 2023 ¹ Held for sale Aug 2023 ² Goodwill and intangibles 66 23 43 68 20 48 Leasing assets 3 063 3 063 - 2 615 2 615 - Inventories 1 041 30 1 011 909 42 867 Trade and other receivables 875 189 686 1
Slide 25: Financial review: condensed statement of cash flows
FINANCIAL REVIEW CONDENSED STATEMENT OF CASH FLOWS Rm H1 2024 H1 2023 Cash generated from operations before working capital movements 574 427 Working capital movements (667) (384) Cash (utilised) / generated from operations (93) 43 Net interest and taxation paid (138) (107) Net cash flows from opera
Slide 26: Gross and net interest-bearing borrowings
FINANCIAL REVIEW GROSS AND NET INTEREST-BEARING BORROWINGS Funding facilities (Rm) Facility size (Utilised)/Cash Liquidity Eqstra 1 847 (1 706) 141 Term 726 (726) - Revolving 936 (936) - General banking 185 (44) 141 Trading Businesses 504 (341) 163 Property and Equipment Term loan - Ingwe 38 (38) -
Slide 27: Financial review: covenant levels
FINANCIAL REVIEW COVENANT LEVELS * Eqstra covenants Level February 2024 Net total debt: EBITDA ≤3.0x 1.98 EBITDA: net finance charges ≥1.5x 2.04 Net total debt: equity ≤2.5x 1.53 Loan to value ≤65% 51% WAG covenants Level February 2024 Equity levels >R190m R285m AGL covenants Level February 2024 Equ
Slide 28: Outlook
08 OUTLOOK
Slide 29: Outlook
OUTLOOK Lubricants • Conditions expected to be stable and Chemicals • Load-shedding induced opportunities continue, but with market saturation Power • Performance dependent on the extent and duration of load-shedding • Good order book in respect of data-centre power units Eqstra • Sale expected to b
Slide 30: Disclaimer
DISCLAIMER Certain statements in this presentation regarding enX’s business operations may constitute “forward-looking statements”. All statements other than statements of historical fact are included in this presentation, including, without limitation, those regarding the financial position, busine