Slide 1: Final Results Presentation for the year ended 31 March 2017
FINAL RESULTS PRESENTATION for the year ended 31 March 2017 Presented by Arnold Goldstone (Chief Executive Officer)
Slide 2: Agenda
Agenda 01 THE YEAR IN PERSPECTIVE 02 DIVISIONAL REVIEW Capital Equipment Group Engineering Solutions Group Building Supply Group 03 GROUP FINANCIAL OVERVIEW 04 PROSPECTS AND STRATEGY 05 APPENDIX Invicta Holdings Limited | Results Presentation 2017 2
Slide 3: The Year in Perspective
THE YEAR IN PERSPECTIVE Invicta Holdings Limited | Results Presentation 2017 3
Slide 4: Highlights
Highlights REVENUE 8% TO R11.5 BILLION OPERATING PROFIT BEFORE FOREIGN EXCHANGE MOVEMENTS 36% R1.16 BILLION EARNINGS PER SHARE 26% 499 CENTS CASH GENERATED BY OPERATIONS 130% R1.35 BILLION Invicta Holdings Limited | Results Presentation 2017 4
Slide 5: Highlights (continued)
Highlights (continued) PROFIT BEFORE TAX 58% R981 MILLION ATTRIBUTABLE EARNINGS 26% R533 MILLION NAV PER SHARE 5% 4 715 CENTS TNAV PER SHARE 8% 4 000 CENTS TOTAL DIVIDEND PER SHARE 18% 167 CENTS Invicta Holdings Limited | Results Presentation 2017 5
Slide 6: The year in perspective
The year in perspective Excellent results on the back of difficult trading conditions • The markets in which Invicta operates: o Mining & construction: Still weak in Africa and South East Asia o Agriculture: Severely impacted by worst El Niño drought on record o Industrial & manufacturing: Deteriora
Slide 7: Divisional Review
DIVISIONAL REVIEW Invicta Holdings Limited | Results Presentation 2017 7
Slide 8: Divisional structure
Divisional structure CAPITAL EQUIPMENT ENGINEERING SOLUTIONS BUILDING SUPPLY GROUP GROUP GROUP (Discontinued) Importer & distributor of Leading distributor of Manufacturer, wholesaler agricultural equipment, engineering consumables and distributor of building construction equipment, and provider of
Slide 9: Revenue contribution by operating segment
Revenue contribution by operating segment (excluding Head Office) R’million 14 000 11,513 12 000 10,465 10,455 10,620 10 000 1,893 1,388 1,639 1,837 7,558 8 000 630 3,955 4,665 4,209 4,299 6 000 3,425 4 000 2 000 5,122 4,607 4,484 4,955 3,503 0 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017 Building S
Slide 10: Operating profit contribution by operating segment
Operating profit contribution by operating segment (excluding Head Office) R’million 1 200 1,058 1,024 1,043 1 000 67 87 108 838 768 800 70 39 473 499 480 600 406 390 400 200 484 457 470 339 362 0 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017 Building Supply Group 10% (9%) 44% (43%) Capital Equipment
Slide 11: Revenue contribution by region
Revenue contribution by region (includes discontinued operations) Other 5% Asia (3%) 14% (9%) Africa 7% (11%) 74% (77%) South Africa* 2017 (2016) *Target: 50% by 2020 Invicta Holdings Limited | Results Presentation 2017 11
Slide 12: Revenue contribution by sector
Revenue contribution by sector (includes discontinued operations) Mining 12% (14%) 27% Construction Manufacturing & Industry 12% (29%) (15%) 24% 25% General Trading (19%) (23%) Agriculture & Forestry 2017 (2016) Invicta Holdings Limited | Results Presentation 2017 12
Slide 13: Return on Net Operating Assets (RONA)
Return on Net Operating Assets (RONA) (based on average net operating assets) 35% 30% 25% 20% 15% 10% 5% 25.8% 29.8% 30.9% 24.8% 17.5% 21.8% 19.4% 17.6% 20.6% 24.1% 27.3% 22.5% 0% FY 2015 FY 2016 FY 2017 CEG ESG BSG IVT Group Invicta Holdings Limited | Results Presentation 2017 13
Slide 14: Divisional Review: Capital Equipment Group
DIVISIONAL REVIEW Capital Equipment Group
Slide 15: Review of 2017
Review of 2017 Revenue 11% Operating profit before foreign exchange movements 30% • Difficult trading conditions overcome by increased market share, better sales mix • Activity in gold and coal mining is driving construction unit sales • Reduced level of investment in infrastructure by both private
Slide 16: Final results summary
Final results summary 31 March 2017 OPERATING PROFIT BEFORE FOREIGN REVENUE (R’m) EXCHANGE MOVEMENTS (R’m) 6 000 600 4,955 457* 5 000 4,607 4,484 500 470 69 362 4 000 400 2,203 2,575 251 2,199 3 000 300 208 181 2 000 200 1 000 2,404 2,285 2,380 100 219 180 181 0 0 MAR 2015 MAR 2016 MAR 2017 MAR 2015
Slide 17: Market volumes
Market volumes FY 2017 • Agriculture equipment volumes o Tractors 10% o Combines 4% o Sprayers 50% • Construction equipment volumes o Segments serviced by Invicta 14% Invicta Holdings Limited | Results Presentation 2017 17
Slide 18: Maize Safex Prices – January 2010 to May 2017
Price in ZAR 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 5 500 18-Jan-10 11-Mar-10 4-May-10 25-Jun-10 18-Aug-10 11-Oct-10 2-Dec-10 25-Jan-11 18-Mar-11 11-May-11 4-Jul-11 25-Aug-11 Invicta Holdings Limited | Results Presentation 2017 18-Oct-11 9-Dec-11 6-Feb-12 29-Mar-12 24-May-12 17-Jul-12
Slide 19: Sales analysis (includes New Holland)
Sales analysis (includes New Holland) 31 March 2017 Manufacturing & Industry 5% Construction 32% Agriculture & Forestry 63% 2017 Invicta Holdings Limited | Results Presentation 2017 19
Slide 20: New Assembly Plant – Camperdown, KwaZulu Natal
New Assembly Plant – Camperdown, Kwazulu Natal 140 000m² site 5 500m² building Occupation date 03 July 2017 Invicta Holdings Limited | Results Presentation 2017 20
Slide 21: Divisional Review: Engineering Solutions Group
DIVISIONAL REVIEW Engineering Solutions Group
Slide 22: Review of 2017
Review of 2017 Revenue 9% Operating profit before foreign exchange movements 18% • Encouraging results considering relocations of facilities (BMG World, regional service centres, financial head office) • Focussed on tight cost management • Simplify for success remained a high priority • No acquisiti
Slide 23: Final results summary
Final results summary 31 March 2017 REVENUE (R’m) OPERATING PROFIT BEFORE FOREIGN EXCHANGE MOVEMENTS (R’m) 6 000 600 499 480 5 000 4,665 500 4,209 4,299 406 4 000 400 2,319 290 239 3 000 2,181 2,214 300 212 2 000 200 1 000 2,028 2,085 2,346 100 209 194 241 0 0 MAR 2015 MAR 2016 MAR 2017 MAR 2015 MAR
Slide 24: Review of 2017
Review of 2017 • Divisional performances: o BMG: robust performance o Autobax: excellent performance o Mandirk: met expectations o Hyflo: met expectations; project work lumpy, muted • African operations: o Good performance of African branches (weakened local currencies) o Establishment of BMG Ghana
Slide 25: Revenue analysis
Revenue analysis 31 March 2017 0.6% 11.4% (11%) 35% (35%) 65% (65%) 88.0% (89%) Consumables Engineering South Africa Africa Other 2017 (2016) • Strategy of market differentiation by: • African revenue growing as a % of ESG o complementing product distribution with revenues technical expertise • Last
Slide 26: Sales by industry sector
Sales by industry sector 31 March 2017 1% Parastatals Construction 1% Oil & Gas Agriculture 4% Projects / Consultants 6% 24% Mining 4% Food & Beverage 5% Automotive 7% & Transport 8% Cash Sales 20% Industry 20% Other 2017 Invicta Holdings Limited | Results Presentation 2017 26
Slide 27: BMG World upgrade – Droste Park, Jeppestown
BMG World upgrade – Droste Park, Jeppestown Additional land Acquired 10 467m2 Engineering Assembly Building 9 330m2 Parking Deck 6 000m2 BMG Park Original 36 891m2 Fluid Technology Building 9 208m2 Additional Land rented for parking 6 000m2 Additional Land Acquired 3 773m2 Land acquired for CDC 9 20
Slide 28: BMG World upgrade (continued)
BMG World upgrade (continued) Invicta Holdings Limited | Results Presentation 2017 28
Slide 29: Divisional Review: Building Supply Group (Discontinued)
DIVISIONAL REVIEW Building Supply Group (Discontinued)
Slide 30: Review of 2017
Review of 2017 Revenue 3% Operating profit before foreign exchange movements 54% • Marginal sales growth in a challenging market • Substantial growth in operating profit due to increased gross margin (13% up on PY) and expenses up only 5% • Increased penetration of Gauteng market • Export sales grew
Slide 31: Final results summary
Final results summary 31 March 2017 REVENUE (R’m) OPERATING PROFIT BEFORE FOREIGN EXCHANGE MOVEMENTS (R’m) 108 2 000 1,837 1,893 100 87 1,639 80 70 63 1 500 870 883 39 802 60 24 1 000 40 500 837 954 1 023 20 48 46 45 0 0 MAR 2015 MAR 2016 MAR 2017 MAR 2015 MAR 2016 MAR 2017 NET OPERATING ASSETS (R’m
Slide 32: MacNeil – Midrand property development
MacNeil – Midrand property development 38 000m² site 20 000m² warehouse & offices Completion date Mar/Apr 2018 New leases signed – DCLSA , B4A & MacNeil JHB Invicta Holdings Limited | Results Presentation 2017 32
Slide 33: Tiletoria – Malibongwe Drive property development
Tiletoria – Malibongwe Drive property development Completion date Feb 2018 13 000m² site Invicta Holdings Limited | Results Presentation 2017 33
Slide 34: Revenue analysis
Revenue analysis 31 March 2017 BSG Revenue Contribution by Sector BSG Revenue Contribution by Region (35%) 2% 15% 24% 74% 85% Construction Manufacturing South Africa Africa Other Invicta Holdings Limited | Results Presentation 2017 34
Slide 35: Group Financial Overview
GROUP FINANCIAL OVERVIEW Invicta Holdings Limited | Results Presentation 2017 35
Slide 36: Revenue
Revenue 14000 12000 11,525 10,465 10,460 10,636 870 10000 883 8000 7,558 4 905 5 336 5 190 4 410 6000 4 044 1 023 954 4000 5 129 5 270 4 727 2000 4 389 3 514 0 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017 First Half Continuing First Half Discontinued Second Half Continuing Second Half Discontinued I
Slide 37: Operating profit
Operating profit OPERATING PROFIT BEFORE FOREIGN OPERATING MARGIN (%) EXCHANGE MOVEMENTS (R’m) 1 400 1,159 10.1% 1 200 1,043 63 1,014 7.2% 1 000 69 884 8.0%** 853 34 2.8% 800 179 24 611 10.0% 550 9.3%** 9.0%** 12.5% 518 8.4% 600 372 390 10.3% 45 9.6% 10.0% 400 46 4.8% 4.4% 493 377 440 200 427 315 9.
Slide 38: EBITDA %
EBITDA % 14% 1,483 977 652 13% 13% 12% 1,125 1,144 12% 11% 11% 1,103 10% 10% 8% 6% 4% 2% 0% 2012 2013 2014 2015 2016* 2017* EBITDA (R’m) *Based on continuing operations Invicta Holdings Limited | Results Presentation 2017 38
Slide 39: Attributable Earnings
Attributable Earnings 800 743 710 691 700 158 66 69 612 600 64 22 70 82 28 496 42 500 31 74 R’million 400 300 580 535 510 533 200 393 100 0 -2 -3 -100 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017 Ordinary s/h Minority s/h Pref s/h Once-off Invicta Holdings Limited | Results Presentation 2017 39
Slide 40: Earnings per share
Earnings per share 1 000 955 78m weighted 900 average nr of 218 ordinary shares 788 800 742 700 88 Rights issue 600 430 107m weighted Cents 425 average nr of 499 500 ordinary shares 361 396 400 29 246 300 160 200 358 312 293 253 100 207 0 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017 1st Half 2nd Hal
Slide 41: Headline earnings
Headline earnings 31 March 31 March 2016 2017 R'000 Audited Restated % Change Attributable Earnings 533,304 424,219 26 Adjustments Headline EPS adjustments on discontinued operations (578) (366) Impairment of intangible assets – 12,935 Gain from bargain purchase price recognised (235) – Impairment o
Slide 42: Dividend per share
Dividend per share 350 Feb 2015: Special dividend of 2 024 cps was paid 300 Cents per share 250 196 18% 167 200 142 150 112 95 100 75 50 84 72 67 - 2015 2016 2017 Interim Final Salient dates for the 2017 Final Dividend Last day to trade to be eligible for the dividend Tuesday 1 August 2017 Sha
Slide 43: Cash flow movement - 2017
Cash flow movement - 2017 2,000 98 (143) * Capex of R452m less proceeds on sale of PPE R96m 1,250 (245) 1,800 ** Acquisitions of R142m less disposals of R9m 1,600 (190) 1,400 (356)* 1,200 R’million 1,000 (133)** (65) 145 846 (25) (46) 800 701 556 600 400 200 - Invicta Holdings Limited | Results Pres
Slide 44: Prospects and Strategy
PROSPECTS AND STRATEGY Invicta Holdings Limited | Results Presentation 2017 44
Slide 45: Prospects
Prospects • Signs of improvement in South East Asia at start of new year • Recession in SA likely to continue • Benefits of relocations, restructurings and expansions to start coming through • Focus of the Group will remain on: o margin management and cost control o working capital optimisation o ca
Slide 46: Strategy
Strategy Invicta’s strategy is to: • Generate healthy cash from existing businesses • Build on the strength of the current businesses • Focus on customer service, value-added distribution and supply chain efficiencies • Diversify the Group’s revenue stream geographically • Acquire businesses that ar
Slide 47: Q&A
Q&A Thank you for your attendance and participation www.invictaholdings.co.za For any further Investor Relations questions please contact: Arnold Goldstone (CEO) arnoldg@invictaholdings.co.za Craig Barnard (CFO) craigb@invictaholdings.co.za Marlize Keyter (Keyter Rech Investor Solutions) mkeyter@kri
Slide 48: Appendix
APPENDIX Invicta Holdings Limited | Results Presentation 2017 48
Slide 49: Statement of Profit or Loss and other Comprehensive Income
Statement of Profit or Loss and other Comprehensive Income 31 March 2017 31 March 2016 R'million Audited Restated % Change Continuing operations Revenue 9,632 8,799 9 Operating profit before foreign exchange movements 1,051 783 34 Net foreign exchange cost (41) (102) (60) Operating profit 1,010 681
Slide 50: Statement of Profit or Loss and other Comprehensive Income
Statement of Profit or Loss and other Comprehensive Income 31 March 2017 31 March 2016 R'million Audited Restated % Change Profit attributable to: Owners of the company 533 424 26 Non-controlling interest (3) (2) 50 Preference shareholders 82 74 11 612 496 23 Basic EPS from continuing operations (ce
Slide 51: Statement of Financial Position
Statement of Financial Position 31 March 2017 31 March 2016 R'million Audited Restated % Change ASSETS Non-current assets Property, plant and equipment 1,641 1,495 10 Financial investments 1,982 1,790 11 Goodwill 615 663 (7) Other intangible assets 161 169 (5) Financial assets 64 103 (38) Finance le
Slide 52: Statement of Financial Position
Statement of Financial Position 31 March 2017 31 March 2016 R'million Audited Restated % Change Current assets 8,098 7,496 8 Inventories 3,663 4,093 (11) Trade and other receivables 1,542 1,971 (22) Current portion of finance lease receivables 41 37 11 Current portion of financial investments 709 56
Slide 53: Statement of Financial Position
Statement of Financial Position 31 March 2017 31 March 2016 R'million Audited Restated % Change EQUITY Equity attributable to the equity holders 5,116 4,857 5 Non-controlling interest 152 183 (17) SHAREHOLDERS' EQUITY 5,268 5,040 5 Shares in issue (‘000) 108,495 108,495 - Net asset value per share (
Slide 54: Statement of Financial Position
Statement of Financial Position 31 March 2017 31 March 2016 R'million Audited Restated % Change Non-current liabilities Long-term borrowings 6,793 6,064 12 Financial liabilities 64 100 (36) Deferred taxation 35 29 21 Non-current liabilities 6,892 6,193 11 Invicta Holdings Limited | Results Presentat
Slide 55: Statement of Financial Position
Statement of Financial Position 31 March 2017 31 March 2016 R'million Audited Restated % Change Current liabilities 4,105 3,661 12 Trade and other payables 1,939 2,210 (12) Provisions 198 197 1 Share appreciation rights liability 6 9 (33) Taxation liabilities 170 32 431 Shareholders for dividends 50
Slide 56: Group structure
Group structure Non - BBEE & Staff Invicta SA SA Trusts Holdings 25% 75% 100% 100% 100% 100% Invicta Invicta Invicta Invicta Offshore Invicta SA Holdings Properties Treasury Finance 100% 100% 60% 100% 100% BSG Invicta African Invicta Asian ESG CEG (Discontinued) Holdings Holdings BMG Northmec Mandir
Slide 57: Capital Equipment (SA)
Capital Equipment (SA)) • Northmec (Agricultural Machinery) • New Holland* (Agricultural Machinery) • CSE (Earthmoving Machinery) • Doosan (Earthmoving Machinery) • HPE (Hyundai Earthmoving) • Criterion (Forklifts) • ESP (Parts) • 201 dedicated outlets *Equipment sales discontinued. Aftermarket supp
Slide 58: Capital Equipment (Kian Ann Group)
Capital Equipment (Kian Ann Group) Kian Ann Engineering • One of the world's largest independent distributors of heavy machinery and diesel engine parts • HQ in Singapore • Subsidiaries in Singapore, Indonesia, China, Canada, United Kingdom and Myanmar • Joint venture in India • Associate in China K
Slide 59: Engineering Solutions
Engineering Solutions Engineering Solutions • BMG (Bearing Man Group) o Engineering components & technical services o 135 branches o Bearings, Seals, PT, Tools, Fasteners o Drives, Motors, Belting, Field Services o Filtration, Hydraulics, Lubrication, Pneumatics • Hansen • Mandirk Group (incl SA Too
Slide 60: Building Supply Group (Discontinued)
Building Supply Group (Discontinued) • Tiletoria • MacNeil Distributors • Brands 4 Africa • 15 outlets in SA Invicta Holdings Limited | Results Presentation 2017 60
Slide 61: Group profit drivers
Group profit drivers • Mining and industrial activity (ESG) • Agricultural activity (Northmec and aftermarket parts) • Construction activity (CSE, Doosan SA & HPE) • Warehousing (Criterion Equipment) • Building and renovations (BSG) (Discontinued) • Global replacement spares market (Kian Ann) Invict
Slide 62: Executive Management Team
Executive Management Team BOARD OF DIRECTORS Dr Christo Wiese (Non-Executive Chairman) ENTITY CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Invicta Holdings ARNOLD GOLDSTONE CRAIG BARNARD Capital Equipment Group TONY SINCLAIR GEOFF BALSHAW Engineering Solutions Group GAVIN PELSER BENNIE GROENEWALD
Slide 63: Shareholding as at 31 March 2017
Shareholding as at 31 March 2017 1% Exec Directors 2% Samuels Family 1% Treasury Goldstone Family 4% Sherrell Family 7% Directors’ Total % 53% 47% Public % 47% 38% Public Wiese Family Invicta Holdings Limited | Results Presentation 2017 63