Reunert Limited · JSE:RLO
Reunert — Investor Presentation (November 2002)
34 slides from Reunert's investor presentation, Nov 20, 2002
Slide 1: Investors' presentation
Investors’ presentation 20 November 2002
Slide 2: Group structure
Group structure REUNERT E le ctro n ics E le ctrica l E n gin e ering and C able s O ffice S yste m s C o n su m er p ro du cts T e le com m u n ica tio ns R e u te ch E le ctrica l E n gin ee ring N a sh ua N a sh ua M o b ile S ie tel RDI CBI 100% 100% 40% 100% 100% Fin a n ce C o R C &C A cu o T
Slide 3: Streamlining the group
Streamlining the group 1997 1998 1999 2000 2001 2002 Future CBI CBI CBI CBI CBI CBI Nashua Nashua Nashua Nashua Nashua Nashua Finco Finco Finco Finco Finco Finco Panasonic Panasonic Panasonic Panasonic Panasonic Panasonic Cellular Mobile Mobile IQ Works IQ Works IQ Works Reutech Reutech Reutech Reut
Slide 4: Performance
Performance 1997 1998 1999 2000 2001 2002 Revenue (Rm) 5 163 4 920 4 566 3 340 4 230 5 063 EBITDA (Rm) 317,3 314,2 366,7 309,7 425,3 559,7 EBITDA % 6,2 6,4 8,0 9,3 10,1 11,1 Operating profit (Rm) 235,9 234,1 296,6 273,2 379,2 472,1 Operating profit margin (%) 4,6 4,8 6,5 8,2 9,0 9,3 HEPS (cents) 37,
Slide 5: Reutech Contribution
Reutech Contribution Revenue Rest Rm 19% Reutech 5% PBIT Rest Rm 14% Reutech 6% 1997 2002
Slide 6: Revenue and operating profit
Revenue and operating profit 6000 500 5000 400 4000 300 3000 200 2000 1000 100 0 0 1997 1998 1999 2000 2001 2002 Revenue (Rm) PBIT (Rm)
Slide 7: Revenue and HEPS
Revenue and HEPS 6000 250 5000 200 4000 150 3000 100 2000 1000 50 0 0 1997 1998 1999 2000 2001 2002 Revenue (Rm) HEPS
Slide 8: Dividend and Dividend Cover
Dividend and Dividend Cover 1.95 120 1.92 100 1.9 80 2.4 88 Cents 60 2.5 67 1.9 56 40 40 30 20 25 24 30 13 18 20 11 0 1997 1998 1999* 2000 2001 2002 Interim Final * Excludes Special dividend of 250 cents
Slide 9: Salient Features
Salient Features • Revenue R5 062,9m +20% • EBITDA R559,7m +32% • Operating profit R472,1m +24% • HEPS 229,5 cents +31% • EBITDA % 11,1% • Dividends per share 118 cents +30% • Dividend cover 1,95
Slide 10: Salient Features
Salient Features • Shares in issue 204,4 million • Shares in treasury 17,2 million • Ave # of shares HEPS 187 million • Shares traded 37,4% • Market price per share – Year-end 1860 – Highest 2220 – Lowest 1610
Slide 11: Acquisitions
Acquisitions – Total R443 million during FY02 • Nashua Mobile • Siemens Telecommunications • Panasonic Franchises – FY03 • ATC • IQ Works
Slide 12: Growth Drivers
Growth Drivers • Acquisitions • Revenue growth • R/$ exchange rate • Market share gains • Export growth • Improved efficiencies
Slide 13: Income Statement
Income Statement 2002 2001 % Rm Rm change Revenue 5 062,9 4,229,8 20 EBITDA 559,7 425,3 32 Operating profit 472,1 379,2 24 Net interest and dividend income 36,5 59,1 (38) Profit before abnormal items 508,6 438,3 16 Abnormal items (18,7) - Profit before taxation 489,9 438,3 12 Taxation 177,3 145,6 22
Slide 14: Balance Sheet
Balance Sheet 30 Sept 2002 30 Sept 01 Rm Rm Non-current assets 1 648,5 1 148,2 Goodwill 360,0 10,9 Finco accounts receivable 953,9 754,1 Fixed assets and investments 334,6 383,2 Current assets 1 656,2 1 395,5 Inventory 659,8 496,5 Accounts receivable 712,9 595,5 Cash 283,5 303,5 Total assets 3 304,7
Slide 15: Cash Flow Statement
Cash Flow Statement 2002 2001 Rm Rm EBITDA 559,7 425,3 Net working capital (366,0) (44,5) Cash generated from operations 193,7 380,8 Interest, dividends and tax (265,1) (172,0) Net cash from operating activities (71,4) 208,8 Net asset additions (38,2) (48,6) Other (net) 29,5 (5,9) Net cash from oper
Slide 16: Segmental Analysis
Segmental Analysis Revenue Operating profit 9% 12% 4% 8% 14% 21% 5% 6% 39% 25% 27% 30% Office systems Consumer Telecomms Reutech Low-voltage Cables products & electrical services
Slide 17: Nashua office systems
• #1 digital office automation player in SA • Re-brand Ricoh products • 61 offices • Annuity income • Revenue drivers – Digital conversion – Document storage – Network integration – Colour • Royce Imaging – doubling sales • Partnership opportunities – Microsoft, etc
Slide 18: Nashua Finance
Nashua Finance • Asset based financing – Nashua (90%), Panasonic & Sietel • Book R954m • Average lease 42 months • Evergreen rolling facility – ABSA, Nedcor, RMB
Slide 19: IQ Works acquisition
• Acquiring 50% stake held by The IQ Business Group • Sales growth • Auto-digital business environment – Content services – Technical services – Mobile services • Strong synergy with Nashua Mobile & Nashua
Slide 20: Nashua Mobile
• Now wholly-owned • 22 franchises, 17 outlets, 10 branches, 50 dealers • Increased contract subscribers to 265 000 (+9%) • 45 000 pre-paid (+144%) • ARPU R570 p/month (+15%) • Churn <11% ( Norm: 18%) • SMS gateway delivered by IQ works • Prepaid charge system developed by Acuo
Slide 21: RC&C
RC&C • NPC (Electronics) – Panasonic – Technics – National • Futronic – New brand – Entry-level consumer • Nintendo • Positive growth in business systems • Consumer market under pressure
Slide 22: Acuo Technologies
• Focus on tag, track and trace solutions • Time and attendance systems
Slide 23: Siemens Telecommunications
Siemens Telecommunications • Increased shareholding to 40% • Broaden client base – Cell C, SNO (Eskom Easitel), Telkom – Vodacom – SA & African countries – Mozambique, Lesotho, Botswana, Tanzania • Mobile 60%. Fixed line 25%. Enterprise 15% • Annuity income is growing + 200 software engineers
Slide 24: New software venture
• New venture • Highly skilled software engineers • Complex software systems capability
Slide 25: Reutech
Reutech • Fuchs Electronics – Received export orders – Significant impact on FY03 • RDI – Radio export orders • RRS – Progress on tracking radar – Significant export orders • RDL – Secured long-term SANDF contract
Slide 26: Reunert Electrical Engineering
• Mitsubishi agency (Switchgear, FA) – Low SA market penetration & Africa • Entered electrical metering business – Growing demand in Africa for prepayment meters – Augmented metering range with Tellumat products • Surge and lightning protection equipment – Growing demand – Possible regulatory requir
Slide 27: CBI export drive
• Export drive – New products developed – Build an international standards test centre – Established sales offices in Europe and USA – Exports to Europe, USA, Africa and Far East – IP protected by international patents CBI Ratio Export/Total Sales Ratio 30% 20% 10% 0% 90 91 92 93 94 95 96 97 98 99 0
Slide 28: Acquiring Marconi stake in ATC
• Process of acquiring 51% stake held by Marconi plc – Below net asset value – Effective holding 89,5%. Remaining 10.5% held by Pirelli Cables & Systems – Earmarked 21% for BEE partner
Slide 29: Cables outlook
• International downturn in demand for optical fibre cable continues • Restructuring & impairment write-downs • Telkom court case • SNO, Africa telecommunications • Breakeven FY03
Slide 30: Performance is continuing
Performance is continuing – Gaining market share – Improved efficiencies – Strongest order book ever • Mines • Local developments in infrastucture – To introduce BEE partner
Slide 31: Opportunities
Opportunities • Further Black economic empowerment • Acquisitions • Export growth
Slide 32: Shareholding
Shareholding Major managers Old Mutual Asset Management (SA) 23,1% RMB Asset Management (SA) 17,5% Investec Asset Management (SA) 10,3% Sanlam Investment Managers (SA) 5,8% Stanlib Limited (SA) 5,8% Franklin Templeton Investments (US) 3,8% Investec Securities (SA) 2,0% BOE Asset Management (SA) 1,8%
Slide 33: Shareholding
Shareholding Insurance Pension funds companies 29.28% 20.06% Below threshold 0.96% Unclassified 1.2% Other funds 1.39% Unit trusts 15.59% Investment trusts 2.51% Private investors Corporate 9.79% Other managed holdings 9.52% funds 9.7% These analyses represent 100% of the register; "BELOW THRESHOLD"
Slide 34: Thank you
Thank you REUNERT