Slide 1: Unaudited Interim Results
UNAUDITED INTERIM RESULTS For the six months ended 31 March 2018
Slide 2: Agenda
AGENDA 01 Salient features 02 Financial performance 03 Strategy 04 Segmental performance 05 Business outlook and prospects Reunert unaudited results for the six months ended 31 March 2018 2
Slide 3: Salient Features
SALIENT FEATURES Challenging Strategy Improved external environment execution yields cash returns negatively impacted new acquisitions for shareholders two segments ► Applied Electronics and Electrical ► Good progress in ICT segment ► Share buyback programme: Engineering segments impacted strategy e
Slide 4: External Environment
EXTERNAL ENVIRONMENT RATE OF EXCHANGE ZAMBIAN LIQUIDITY CUSTOMER CONSTRAINTS ► 9,9% stronger ZAR:US$ ► Fiscal constraints within SOEs, including Eskom ► Reduced earnings from foreign subsidiaries EVENTS and Denel, and key municipalities on translation ► Increased country liquidity challenges impacti
Slide 5: Financial Performance
FINANCIAL PERFORMANCE 10% 8% 0% 4% Revenue Operating profit HEPS Dividend per share R4 841m R567m 275 cents 125 cents 2017: R4 421m 2017: R616m 2017: 275 cents 2017: 120 cents Change SIX MONTHS ENDED 31 MARCH 1H2018 1H2017 % Revenue Rm 4 841 4 421 10 Operating profit Rm 567 616 (8) Profit for the pe
Slide 6: Financial Performance
FINANCIAL PERFORMANCE Nick Thomson
Slide 7: Group Income Statement
GROUP INCOME STATEMENT Net interest lower due to 1H2018 1H2017 Change Rm Rm % ► Acquisitions: R468m Revenue 4 841 4 421 10 ► Working capital investment: R439m EBITDA 636 681 (7) ► Share buyback programme: R176m Depreciation & amortisation (69) (65) 6 Operating profit before interest 567 616 (8) ► Lo
Slide 8: Summarised Financial Position
SUMMARISED FINANCIAL POSITION ► Non-current assets higher due to impact of March 2018 March 2017 Sept 2017 Rm Rm Rm acquisitions and increase in the Rental and Finance Lease receivables in Quince PPE, investment properties and intangible assets 1 246 1 066 1 095 Goodwill 1 088 925 921 Other long ter
Slide 9: Cash Flow
CASH FLOW AT 31 MARCH 2018 MOVEMENT IN CASH FLOW (Rm) 661 1 455 (269) 12 (210) (576) (22) 172 (32) (375) 504 (427) (88) (375) Cash Working Interest, Taxation Capital Free cash Capital Investing Financing Total cash Opening Dividends Total cash Closing generated capital dividends paid expenditure flo
Slide 10: Working Capital and Capital Expenditure
WORKING CAPITAL CAPITAL EXPENDITURE WORKING CAPITAL MOVEMENT (Rm) 1H2018 FY2017 Decrease/(increase) in inventory 60 (144) Rm 74 Decrease/(increase) in receivables (98) (284) (Decrease)/increase in payables (269) 258 15 (Decrease)/increase in advance payments 38 (55) 54 Net (outflow)/inflow (269) (22
Slide 11: Strategy
STRATEGY Alan Dickson Reunert unaudited results for the six months ended 31 March 2018
Slide 12: Strategy | SkyWire Acquisition
STRATEGY │SKYWIRE ACQUISITION ICT SEGMENT ICT SEGMENT REVENUE SPLIT (%) ► The segment’s customer base creates a strong opportunity for both scale and new 9 10 9 revenue streams 26 22 36 ► 55 000 customers with only a 20% cross sell ► Successful strategy execution is resulting in financial performanc
Slide 13: Segmental Performance
SEGMENTAL PERFORMANCE REUNERT
Slide 14: Operating Profit Analysis
OPERATING PROFIT ANALYSIS MOVEMENT IN OPERATING PROFIT (Rm) 616 (8%) YOY 32 567 39 (0) (12) 46% YOY (108) (33%) YOY 14% YOY 1H2017 Electrical Engineering ICT Applied Electronics Other JV and associates 1H2018 eliminated OPERATING PROFIT SEGMENTAL CONTRIBUTION (%) (4%) (7%) 10% 11% Electrical Enginee
Slide 15: Electrical Engineering
ELECTRICAL ENGINEERING ► Increased revenue as a result of pass through of higher REVENUE (Rm) copper prices +2% ► Lower margins driven by ► Under utilisation of manufacturing plants, specifically at 2 381 2 431 Zamefa and Telecom Cables 1 965 1 824 ► Change of customer mix ► Lower gross profit margi
Slide 16: ICT
ICT ► Operating profit increased by 14% REVENUE (Rm) +4% ► Increased volumes due to improved market share ► 8% growth in units sold including higher capacity MFPs 1 698 1 689 1 670 1 602 ► Growth in number of voice customers ─ Lower average usage per customer ─ 3 000 new customers added YOY ► Good u
Slide 17: Applied Electronics
APPLIED ELECTRONICS REVENUE (Rm) +25% 863 ► Strong revenue growth 696 693 ► Fuchs and Reutech Communications had strong production output 424 ► Fuchs 1H2018 product mix biased towards lower margin products 1H2015 1H2016 1H2017 1H2018 ► Omnigo held back on local sales to SOEs and strong rand reduced
Slide 18: Business Outlook and Prospects
BUSINESS OUTLOOK AND PROSPECTS
Slide 19: Improved Operational Performance Expected in 2H2018
IMPROVED OPERATIONAL PERFORMANCE EXPECTED IN 2H2018 ELECTRICAL ENGINEERING ICT APPLIED ELECTRONICS ► Improved product mix in power cable ► Continued growth expectations with ► Full export order books plants cross-selling of products and services ► Radar ► Telkom orders expected to resume, but in ICT
Slide 20: Reunert Well Positioned for South African Economic Recovery
REUNERT WELL POSITIONED FOR SOUTH AFRICAN ECONOMIC RECOVERY ► Business risk remains to Reunert in terms of the Rand’s strength, exchange rate volatility and from the fiscal and organisational capacity of key state and municipal customers to place orders at a normal rate ► Change in South African pol