Reunert Limited · JSE:RLO
Reunert — H1 FY24 Earnings Presentation
30 slides from Reunert's earnings presentation, May 21, 2024
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION For the six months ended 31 March 2024 1
Slide 2: Contents
CONTENTS Overview and key financial highlights Financial performance Segment review Strategy update Prospects 2
Slide 3: Overview and key financial highlights
01 04 Overview and key financial highlights Please share: 3
Slide 4: Investment case continued to deliver value for shareholders
INVESTMENT CASE CONTINUED TO DELIVER VALUE FOR SHAREHOLDERS Positive financial performance Progress on key strategic initiatives Increased shareholder returns ICT Revenue R6 642m ˃ Successfully integrated IQbusiness ˃ Announced intention to merge +OneX and IQbusiness to create a 7% leading digital i
Slide 5: Financial performance
02 Financial performance 04 Please share: 5
Slide 6: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS % Rm H1 FY24 H1 FY23 1 change 7% increase in revenue due to: 1 Revenue 6 642 6 203 7 > Structural changes resulting from the acquisition of Operating expenses (5 960) (5 530) IQbusiness and the disposal of Terra Firma Operating profit before impairment of fin
Slide 7: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS % Rm H1 FY24 H1 FY23 change 2 9% increase in operating profit due to: Revenue 6 642 6 203 7 > Structural changes resulting from the acquisition Operating expenses (5 960) (5 530) of IQbusiness and the disposal of Terra Firma Operating profit before impairment
Slide 8: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS % Rm H1 FY24 H1 FY23 change 3 12% increase in profit before tax and equity- Revenue 6 642 6 203 7 accounted investee due to: Operating expenses (5 960) (5 530) Improved cash management which reduced net Operating profit before impairment of financial assets 6
Slide 9: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS % Rm H1 FY24 H1 FY23 change 4 Increase in basic earnings per share of 12% Revenue 6 642 6 203 7 Increase in HEPS of 8% Operating expenses (5 960) (5 530) Increase in diluted earnings per share of 7% Operating profit before impairment of financial assets 682 6
Slide 10: Consolidated statement of financial position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Debt well within covenants with low gearing Rm Mar 2024 Mar 2023 Sep 2023 PP&E, investment property, ROU assets & IA 1 927 1 716 1 961 Goodwill 1 186 991 1 186 1 The Group has increased its investment in Lumika by 1 Investment in joint venture 189 5 - sub
Slide 11: Cash flow analysis
1 Increased investment into working capital due high level of sales in CASH FLOW ANALYSIS Q2 FY24 and Transnet port congestion Group cash generation supports operational and strategic objectives and 2 Free cash flow covers the interim dividend 3,3 times dividend payments 3 Investing activities Rm Ma
Slide 12: Capital expenditure
CAPITAL EXPENDITURE Majority of capital expenditure supports factory capacity and enhances the Group’s IT environment Rm 150 Rm 150 34 Rm H1 FY24 H1 FY23 Plant and equipment 36 40 33 Computer equipment 16 20 84* 84* 109 Intangible assets 11 41 18 BOO solar plants* - 29 52 Other 21 20 57 34 Total 84
Slide 13: Segment review
03 Reunert Moegment review
Slide 14: Electrical Engineering
ELECTRICAL ENGINEERING Strong power cable performance drove segment profitability Drivers Financial performance Outlook and prospects Segment revenue (Rm) Manufacturing volumes increased 7% Segment remains well positioned ˃ Continued infrastructure investment resulted in ˃ Solid product volumes anti
Slide 15: ICT
ICT Transnet port delays weakened an otherwise solid performance Drivers Financial performance Segment revenue (Rm) Revenue growth driven by the successful 38% integration of IQbusiness 1 929 Flat segment operating profit growth 1 494 1 401 1 253 1 260 ˃ Total Workspace Provider (TWP) was considerab
Slide 16: ICT
ICT Strong operating profit growth in the Solutions and Systems Integration (S&SI) Cluster Drivers Financial performance Solutions and Systems Integration Strong operating profit growth in the S&SI Cluster strengthened the segment’s Cluster operating profit growth (%) financial performance CAGR 124%
Slide 17: ICT
ICT Transnet port delays weakened an otherwise solid performance Drivers Financial performance Outlook and prospects Revenue growth driven by the successful Segment revenue (Rm) 38% South Africa macro trading environment integration of IQbusiness expected to be largely unchanged in H2 1 929 FY24 Fla
Slide 18: ICT
ICT Strong operating profit growth in the Solutions and Systems Integration (S&SI) Cluster Drivers Financial performance Outlook and prospects Solutions and Systems Integration Strong operating profit growth in the S&SI Cluster operating profit growth (%) Improved segment performance over Cluster st
Slide 19: Applied Electronics
APPLIED ELECTRONICS Drivers Financial performance Outlook and prospects The reduction in revenue and operating profit Segment revenue (Rm) caused by structural changes at Lumika/ Terra Renewable Energy 10% Firma Solutions and weak Battery Storage Overall performance in H2 FY24 expected to be busines
Slide 20: Applied Electronics | Defence
APPLIED ELECTRONICS| DEFENCE Strong performance driven by good execution of orderbook and increased global defence spend Drivers Financial performance Outlook and prospects Strong execution of orderbook Defence ˃ Higher revenue attributable to good execution of Outstanding order book (Rm) Strong ord
Slide 21: Strategy Update
04 Strategy Update 04 Please share: 16
Slide 22: Reunert ICT
REUNERT ICT IQbusiness and +OneX Merger positions Reunert ICT as a leading digital integration solutions provider Strong market growth forecasted ˃ ICT solutions and services demand is expected to remain strong as enterprise clients increasingly incorporate advanced digital integration solutions and
Slide 23: Renewable Energy
RENEWABLE ENERGY Strategic objectives aligned to regulatory changes and strong market growth Enabling environment to accelerate liberalisation of the energy generation and transmission markets continues Effective interest* in solar assets (BOOs) – (MW) 81% ˃ The Energy Regulations Amendment Bill (“E
Slide 24: Internationalisation
INTERNATIONALISATION 4-year CAGR International revenues increased by 16% in H1 FY24 Africa (excluding South Africa) 20,5% ˃ 16% CAGR since H1 FY20 Asia 7,9% ˃ Provides a significant income stream to augment South African revenues Australia 3,7% Europe 25,1% ˃ Growth underpinned by strong Defence and
Slide 25: Revitalised Reunert brand positioning and corporate identity
REVITALISED REUNERT BRAND POSITIONING AND CORPORATE IDENTITY > Reunert has a proud history of: − strong governance; − good leadership; and − responsible corporate citizenship > Repositioned the brand and corporate identity to align to the Group’s strategic aspirations > Revitalised Reunert includes:
Slide 26: Prospects
Rewert 05 Vprospects
Slide 27: Prospects
PROSPECTS Reunert remains positioned to deliver an increased financial performance over the prior year ˃ The South African macroeconomic environment remains under pressure due to low GDP growth, constrained public and private investment and national election uncertainty ˃ Reunert continues to expect
Slide 28: The investment case
Rewert 06 ewer "the investment case
Slide 29: Reunert's investment case
REUNERT’S INVESTMENT CASE Delivering financial growth underpinned by a strong balance sheet, financial discipline through considered capital allocation, and pursuing organic and acquisitive growth Investment highlight Drivers Deliverables − Strong, defendable market positions 1 High quality assets i
Slide 30: Q&A Key upcoming dates
Q&A Key upcoming dates > RMB Morgan Stanley Conference 18 September 2024 > Full-year results webcast 22 November 2024 Contact Us > HSBC Conference 05 - 06 December 2024 > Integrated Report 20 December 2024 karens@reunert.co.za 25