Enx Group Limited · JSE:ENX
Enx — FY2017 Earnings Presentation
32 slides from Enx's earnings presentation, November 2017
Slide 1: enX Group Limited Results Presentation
enX GROUP LIMITED RESULTS PRESENTATION for the year ended 31 August 2017 1
Slide 2: 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 included in this presentation, including, without limitation, those regarding the financial position, business s
Slide 3: Agenda
AGENDA 1. Overview 2. Track record 3. Building our segments 4. Financial review 5. Outlook 6. Q&A 3
Slide 4: Overview
OVERVIEW 1. Transformed into a pure play industrial company 2. Our quality businesses 4
Slide 5: Transformed into a pure-play industrial company
TRANSFORMED INTO A PURE-PLAY INDUSTRIAL COMPANY REVENUE: ADJ EBIT: ADJ HEADLINE EARNINGS: R6.22 bn R736m R281m NAV per share: NAV per share (excl. EXG): NET DEBT/EBITDA (RSA): R15.06 R13.87 2,3x EQUIPMENT FLEET PETROCHEMICALS REVENUE: R3.06bn REVENUE: R1.65bn REVENUE: R1.54bn ADJ PBT: R197m ADJ PBT:
Slide 6: Our quality businesses
OUR QUALITY BUSINESSES EQUIPMENT FLEET PETROCHEMICALS • Strong OEM partnerships • Market leading suite of • Strong OEM partnership with Toyota and Mitsubishi VAPs with ExxonMobil • Market leader in SA • 14 000 leased units, • Products are an industrial • Annuity revenues, self 130 000 VAPs necessity
Slide 7: Track record
TRACK RECORD 1. Creating shareholder value 2. Delivered in 2017 3. Decoupled from eXtract 7
Slide 8: Creating shareholder value
CREATING SHAREHOLDER VALUE 200 ADJUSTED HEPS (cps)# Total return to shareholders 150 since 2013 CAGR = 33% Incl. 6 months of EIE and EFML 100 Incl. 4 months of EIE and EFML 50 0 2007 2009-12 FY2012 2013 FY2013 2014 FY2014 FY2015^ 2015 2016 FY2016 2017 FY2017 • Listed Austro • Post financial • Wild R
Slide 9: Delivered in 2017
DELIVERED IN 2017 CATEGORY WHAT WE SAID WHAT WE DID • Grow market share with Toyota aspiration • Toyota commitment for a further 3-year distribution agreement Strengthen • LOI signed with ExxonMobil to blend • Local production of ExxonMobil OEM lubricants at Cera plant lubricants partnerships • New
Slide 10: Delivered in 2017
DELIVERED IN 2017 CATEGORY WHAT WE SAID WHAT WE DID • Expand UK footprint • Advanced discussions with multiple Geographical UK dealers diversification • R1.87 Industrial adj. HEPS forecast • Achieved R1.81 • Improve capital structure • R70m/5-year bond Financial • New R550 million financing facility
Slide 11: Decoupled from eXtract
DECOUPLED FROM EXTRACT STRATEGIC RECAPITALISATION THARISA PPM PPM INVESTMENT INVESTMENT UNBUNDLING UNBUNDLING REVIEW AGREEMENT SALE TERMINATION TERMINATION VEHICLE VEHICLE STATUS enX loan receivable from eXtract R250m R100m by March 2018 Expected timing of repayment R150m by August 2019 Share equiva
Slide 12: Building our segments
BUILDING OUR SEGMENTS 1. enX Equipment 2. enX Fleet 3. enX Petrochemicals 4. The way we do things 12
Slide 13: enX Equipment
enX EQUIPMENT Growing our UK operations with the support of our global OEM partners LATENT VALUE DEFENSIVE CHARACTERISTICS • Industrial Equipment • Market leaders in all businesses › Growing our UK operations with the support • Long-term relationships and support from leading of our global OEM partn
Slide 14: enX Fleet
enX FLEET Leveraging data to differentiate our offering LATENT VALUE DEFENSIVE CHARACTERISTICS • Monetising data and technology (R)evolution • Market leading position - Quest offers ability to scale and use data to • Annuity income streams enhance customer value proposition • Asset backed leasing co
Slide 15: enX Petrochemicals
enX PETROCHEMICALS Building a leading independent petrochemicals business in partnership with ExxonMobil LATENT VALUE DEFENSIVE CHARACTERISTICS • Lubricants • Products are an industrial necessity › Growth in ExxonMobil distribution volumes • Contract to service global strategic customers of › Growth
Slide 16: The way we do things
THE WAY WE DO THINGS OPERATIONAL DECISIONS CAPITAL FLOWS • Decentralised • Central cash pool • Agile • Cost efficient centre ? • Disciplined allocation with board oversight • Focused investment criteria and hurdle rates CULTURE GOVERNANCE • Entrepreneurial • Experienced, diverse board • Common set o
Slide 17: Financial review
FINANCIAL REVIEW 1. Highlights 2. Segmental analysis 3. Condensed statement of Reporting periods profit and loss 4. Condensed statement of financial position EIE / EFML 4 months 6 months 10 5. Condensed statement of cash flows Other 6 months 6 months 12 6. Liquidity and funding 7. Capital markets ev
Slide 18: Highlights
HIGHLIGHTS Key performance indicators R’000 FY2017 FY2016 Revenue 6 281 342 1 150 951 Adjusted earning before interest and taxation (EBIT) 735 626 40 122 Adjusted headline earnings 281 072 21 135 Adjusted headline earnings per share (cents) * 181.2 41.1 Number of shares in issue* 180 439 427 54 562
Slide 19: Highlights: adjustments to EBIT and headline earnings
HIGHLIGHTS Adjustments to EBIT and Headline Earnings explained Headline R’000 EBIT Earnings Earnings before interest and taxation (EBIT)/ Headline Earnings (66 080) (467 332) IFRS 2 – charges 6 708 6 708 Restructuring and transaction costs 28 720 28 720 Amortisation of intangible assets 27 311 27 31
Slide 20: Segmental analysis: Equipment
SEGMENTAL ANALYSIS EQUIPMENT FY 2017 REVENUE ADJ EBIT Industrial Equipment R3 063 R346 • Y-on-y growth in forklift market million million • Market share maintained in line with expectations • Overhead recovery from aftermarket growing • Marginal increase in leasing book ADJ PBT LEASING ASSETS R197 R
Slide 21: Segmental analysis: Fleet
SEGMENTAL ANALYSIS FLEET FY 2017 REVENUE ADJ EBIT EFML R1 650 R327 • Stabilising leasing book after multiple years of decline million million on the back of capital constraints • VAPs and remarketing showed continued traction increasing to 49% Revenue contribution ADJ PBT LEASING ASSETS • Adj. PBT m
Slide 22: Segmental analysis: Petrochemicals
SEGMENTAL ANALYSIS PETROCHEMICALS FY 2017 REVENUE ADJ EBIT Lubricants R1 539 R101 • Production volumes increased million million • New Cera facility significantly increased capacity • CAT Lubricants integrated into Centlube business across 14 SADC countries ADJ PBT INVENTORY • Maintained contracts w
Slide 23: Condensed statement of profit and loss
CONDENSED STATEMENT OF PROFIT AND LOSS R’000 FY2017 FY2016 Revenue 6 218 342 1 150 951 Net operating expenses (4 485 094) (1 111 076) Profit before depreciation and amortisation 1 733 248 39 875 Depreciation and amortisation (1 026 379) (9 799) Profit on disposal of property, plant and equipment 27
Slide 24: Condensed statement of financial position
CONDENSED STATEMENT OF FINANCIAL POSITION R’000 FY2017 FY2016 Property, plant and equipment 374 470 121 928 Leasing assets 5 077 814 - Goodwill and intangibles 933 453 279 729 Other investments and loans 237 323 - Inventories 1 229 624 542 626 Trade, other receivables and derivatives 1 213 608 400 5
Slide 25: Condensed statement of cash flows
CONDENSED STATEMENT OF CASH FLOWS R’000 FY2017 FY2016 Cash generated from operations before working capital movements 1 699 545 42 178 Working capital movements 391 735 (20 016) Cash generated from operations 2 091 280 22 162 Net cash flows from interest and taxation (450 559) (9 868) Net cash flows
Slide 26: Liquidity and funding
LIQUIDITY AND FUNDING Overview of interest-bearing borrowings Funding facilities (R’million) Facility size Utilised Unutilised enX Leasing (EIE and EFML) - SA Banking 4 522 3 822 700 General banking facility 400 - 400 Term facility 2 383 2 383 - Liquidity facility 506 206 300 BBB notes 1233 1 233 -
Slide 27: Liquidity and funding
LIQUIDITY AND FUNDING Liquidity and funding Funding outlook Long-term funding objectives • Total debt levels to remain stable • Diversify funding sources • Planned refinancing of upcoming maturities in line • Ample liquidity buffers for trading and upcoming with market appetite maturities • Ring-fen
Slide 28: enX capital markets evolution
enX CAPITAL MARKETS EVOLUTION A-RATING Bond market access: R70 million (EQS10) 5-year money R447 million 300bps 3M Jibar note maturities redeemed Investment grade credit rating secured (BBB) Bank and bond debt restructure to alleviate short term EIE and EFML liquidity challenges facilities separated
Slide 29: Outlook
OUTLOOK 1. Outlook 2. Investment proposition 29
Slide 30: Outlook
OUTLOOK EQUIPMENT FLEET PETROCHEMICALS Forklifts • 12 vs. 10 months Lubricants • 12 vs. 10 months • Stabilise and then grow the • Commencement of ExxonMobil • Organic and acquisitive UK leasing book through blending growth as planned improved retention and new • Growth of ExxonMobil distribution bus
Slide 31: enX investment proposition
enX INVESTMENT PROPOSITION Returns in excess of WACC, with Three distinct industrial clusters with further opportunities to widen spread market leading market positions Experienced board and established management Strong partnerships with in place to drive delivery leading global brand owners of pro
Slide 32: Q&A IR contacts
Q&A IR contacts Paul Mansour, Dep Exec Chairman paul.mansour@enxgroup.co.za Irwin Lipworth, CFO irwin.lipworth@enxgroup.co.za Frank Ford enx.ir@fticonsulting.com 32