Reunert Limited · JSE:RLO
Reunert — H1 2004 Earnings Presentation
28 slides from Reunert's earnings presentation, May 2004
Slide 1: Interim results
Interim results For the six months ended 31 March 2004 JSE: RLO
Slide 2: Reunert at a glance
Reunert at a glance six months ended 31 March 2004 Market capitalisation * R4,9bn Revenue R3bn EBITDA R390,4m EBITDA as % of turnover 13% Attributable earnings R256m Headline earnings R263m Net cash R688,8m Interim dividend 40 cents per share *10 May 2004 2
Slide 3: Share price performance
Share price performance Profile’s ResultsData 3
Slide 4: Current structure
Current structure Electrical Engineering Electronics Consumer products Information & Electrical and services Reutech Office Systems communication Engineering Technologies CBI Nashua Nashua Mobile Siemens RDI 100% 100% 100% 40% 100% ATC Nashua Finance RC&C Acuo Technologies Fuchs Electronics 75% Effe
Slide 5: Financial results
Financial results REUNERT REUNERT LIMITED
Slide 6: Results in perspective
Results in perspective 2004 2003 Delta HEPS Rm Rm Rm cents Siemens Telecommunications 33,1 (21,3) 54,4 28,7 Reutech 14,7 43,0 (28,3) (14,9) RC&C Finance Company 45,5 15,0 30,5 16,1 Rest of group 169,7 180,2 (10,5) (5,5) Headline earnings 263,0 216,9 46,1 24,3 6
Slide 7: Salient features
Salient features •Dramatic turnaround – ATC – Siemens Telecommunications – RC&C Holdings (Panasonic) •Revenue flat - 1% down •Further improvement in margins •Reutech as predicted down •Sale of finance book 7
Slide 8: Critical issues: Nashua Mobile
Critical issues Nashua Mobile • Network Operator 1: – licence extended until March 2006 – Same margin • Network Operator 2: – licence extended until April 2006 – Variable margins – Volume dependent • Network Operator 3: – contract signed for 5 year period • Market – Clear signs of saturation – Churn
Slide 9: Critical issues: CSH
Critical issues CSH • Potential offer of 35 cents per share is withdrawn – Section 228 for assets and liabilities • Reunert directors have resigned from the board of CSH with immediate effect • Have looked at all possibilities • CSH is a listed entity – Precludes Reunert from making any further comm
Slide 10: Income statement
Income statement Highlights 2004 2003 % R million Revenue 3 011,9 3 047,5 (1%) Operating profit 339,5 333,3 2% Tax 141,5 124,8 13% Attributable earnings 256,0 192,0 33% Headline earnings 263,0 216,9 HEPS (cents) 138,7 115,4 20% Effective tax rate 35,6% 33,0% Interim div/share (cents) 40,0 32,0 25% 1
Slide 11: Balance sheet
Balance sheet at 31 March 2004 2003 R million R million Non-current assets Property, plant and equipment 201,4 223,3 Goodwill 312,8 331,2 Investments 70,4 80,2 RC&C Finance Company accounts receivable 236,2 1 114,8 Deferred taxation assets 32,6 25,9 853,4 1 775,4 Current assets Inventory and contrac
Slide 12: Balance sheet (2)
Balance sheet (2) at 31 March 2004 2003 R million R million Shareholders' funds Ordinary 1 490,2 1 345,1 Reunert Limited shares held by a subsidiary (234,6) (234,6) Preference 0,7 0,7 1 256,3 1 111,2 Outside shareholders in subsidiaries 120,5 103,8 1 376,8 1 215,0 Non-current liabilities Deferred ta
Slide 13: Segmental analysis
Segmental analysis including associate companies Revenue 5% Operating profit 4% 19% 13% 16% 27% 14% 36% 46% 20% Electrical engineering Electrical engineering Office systems Office systems Consumer products and services Consumer products and services ICT ICT Reutech Reutech 13
Slide 14: Consolidated revenue
Consolidated revenue % R million 2004 change Electrical engineering 667,1 (4%) Office systems 501,8 13% Consumer products & services 1 664,2 6% ICT 563,5 (27%) Reutech 178,7 (51%) Less: Associates (563,4) Revenue as reported 3 011,9 (1%) 14
Slide 15: Consolidated operating profit
Consolidated operating profit R million 2004 % change Electrical engineering 114,1 23% Office systems 85,4 11% Consumer products & services 150,0 30% ICT 56,4 1 384% Reutech 15,8 (76%) Less: Associates (57,0) Operating profit as reported 364,7 2% 15
Slide 16: Cash flow
Cash flow Highlights 2004 2003 203 2002 EBITDA 390,4 380,5 Increase in net working capital 1 064,9 (123,0) Decrease/(increase) in Finco accounts receivable 983,8 (160,9) Decrease in other working capital 81,1 37,9 Interest & dividends received less taxation and dividends paid (362,1) (278,8) Net cas
Slide 17: Cash resources
Cash resources Highlights 2004 2003 Cash and cash equivalents (net) 688,8 180,0 RC&C Finco short-term borrowings (44,5) (855,9) Net cash/(borrowings) 644,3 (675,9) 17
Slide 18: Operational review
Operational review REUNERT REUNERT LIMITED
Slide 19: Reutech
Reutech • Order book has to be firmed up • Optimistic: Prospects are better than before Reutech Defence Industries – Well-positioned to benefit from multi-billion rand communication and command spend over next three years • SADF & SAAF – Enhanced product development on radio’s is in progress 19
Slide 20: Reutech cont
Reutech cont Fuchs Electronics – R500m requirement for air weapons contract spanning over 2 years – R100m contract - first order expected July 2004 Reutech Radar Systems – Optical radar tracker is nearing completion – GBADS • Phase 1 - completion 2005 • Phase 2 - expected August 2005 – R300m Reunert
Slide 21: Circuit Breaker Industries
Circuit Breaker Industries • Overall positive growth • Mining down 30% • Exports for the 1st time exceed budget – +25% of traditional sales • Markets in USA and Europe show improvement • Exports into Africa much stronger • Investigating foothold into Australian market 21
Slide 22: African Cables
African Cables • Very strong demand • Municipalities – Cables in metropolitan areas are overloaded and have to be upgraded • Record order book – strong demand for paper cable • Cafca – blend rate has a severe impact on the company’s viability 22
Slide 23: ATC
ATC • ATC breaking even – R160m of sales • Market is showing signs of recovery • Sales are expected to increase by 50% next year • Confident that ATC will regain part of the Telkom fibre optic market share • Will cease the manufacture of fibre optic in August 2004 – Plant will be mothballed – Can im
Slide 24: RC&C Holdings
RC&C Holdings • Market position greatly improved – better management of foreign currency • Consumer electronics – highly competitive – focusing on profitability • Business systems – living up to expectations – direct outlets – business is growing 24
Slide 25: Nashua
Nashua • Record sales of copiers • Market leader • Market shares – Digital: Nashua 29% + Panasonic 3% – Analogue: Nashua 27% + Panasonic 4% • Strong push into printer market 25
Slide 26: Siemens Telecommunications
Siemens Telecommunications • Excellent turnaround in profitability • Strong order book • Fixed line business – gradually improving • Second Network Operator – not included in current budget • Mobile business is strong 26
Slide 27: Prospects
Prospects The rate of increase in headline earnings per share in the second half is likely to be higher than that achieved in the first half 27
Slide 28: For more information contact Carina de Klerk
For more information contact Carina de Klerk Tel 011 517 9000 or e-mail carina@reunert.co.za or invest@reunert.co.za