Reunert Limited · JSE:RLO
Reunert — Nedcor Securities Midcap Conference 2006
32 slides from Reunert's conference presentation, Feb 27, 2006
Slide 1: Nedcor Securities Midcap Conference
Nedcor Securities Midcap Conference 27 February 2006 Gerrit Pretorius Reunert CEO
Slide 2: Fact sheet
Fact sheet Market Cap R12,3 billion P/E Ratio 15,7 EY 6,37% DY 3,48% Revenue FY05 R7 billion EBITDA margin 13,7% HEPS FY05 406 cents DPS 222 cents Dividend cover 1.84
Slide 3: Group Structure
Group Structure Reunert ELECTRICAL ELECTRONICS CONSUMER ELECTRICAL OFFICE PRODUCTS REUTECH TELECOMMUS ENGINEERING SYSTEMS & SERVICES ATC Nashua Nashua Mobile Fuchs Sietel African Cables Finance Saco Systems RDI Acuo CBI Kopano RC&C Holdings RDL RRS
Slide 4: Growth Prospects: Infrastructure
Growth Prospects Infrastructure
Slide 5: Mining expansion
Mining expansion • Platinum – Anglo (projects include PPRust & Marikana) • ’05: R4,4billion • ’06: R5,5billion – Impala (projects include: Rustenburgt, Polokwane & Zimbabwe) • ’05: R2,0billion – already spent • ’06: R2,5bn • ’07: R2,4bn • ’09: R2,0bn • ’10:R0,9bn • Gold – Goldfields (projects includ
Slide 6: Residential growth
Residential growth • Low cost housing – Constructed to date • 2 million – Still required • 3,4 million households • Each home requires – A switchboard & breakers – Cabling to connect it to the grid – Electricity – Appliances – TV – HiFi/Radio
Slide 7: Utilities – an example of capex spending
Utilities – an example of capex spending Total Power Cable (Rm) 03/04 R217m R50m 04/05 R469m + R150m 05/06 R675m + R150m
Slide 8: 2010 Soccer World Cup
2010 Soccer World Cup • SAFA to spend – R5billion on dedicated infrastructure – R3billion set aside over next 3 years • New stadiums – Mbonbela – Port Elizabeth – Kings Park (Rebuilt) – Cape Town – Polekwane • Upgrades – FNB – Ellispark – Loftus – Rustenburg – Bloemfontein • More cables & circuit br
Slide 9: African Cables
African Cables • Strong order book – Weeks • Capacity constraints addressed – To date R9 million – Approved R32 million – Requested R30 million
Slide 10: ATC
ATC • Growing demand from industry • Second Network Operator? • Telkom spend • African demand • Aberdare exited telecom cables • Growing demand for optical fibre cable – Industry – Africa (Botswana, Mozambique, Nigeria) – SNO • Sufficient capacity
Slide 11: CBI
CBI • Local – Residential & Mining are strong – Industrial subdued – New ventures (Motor Control, etc) • Still slow • International – Australia expected to develop quickly – Europe investments are paying off • Capacity – Approved R50 million – Requested R50 million
Slide 12: Consumer & Business Environment
Consumer & Business Environment
Slide 13: Consumer & Business Environment
Consumer & Business Environment • Characterised by – Relatively low interest rates – Relatively strong currency – More entry level consumers • Traditional business – Top end market – Selling premium products – Strong corporate presence • Repositioning – Access more consumers – From LSM6 and upwards
Slide 14: Panasonic
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Slide 15: Price deflation
Price deflation Leader model prices Dec’04 Dec’05 % price drop Camcoder R3 499 R2 289 35% Digital still camera R1 999 R1 499 25% Plasma R25 000 R10 999 56% Television R999 R799 20% VCR R699 R549 21% Audio Home Theater R799 R599 25% DVD R399 R299 25% DVD Recorder R2 999 R1 399 53% • Exchange rate • $
Slide 16: Turnover Business Systems vs Consumer Products
Turnover Business Systems vs Consumer Products Value Value Value 03/04 04/05 Forecast 05/06 Systems 33% 30% 28% (Panasonic) Consumer 67% 70% 72% (Panasonic, Futronic & Akai) Total 100% 100% 100%
Slide 17: Turnover Consumer Products
Turnover Consumer Products Value Value Value Unit Growth ’03/04 ‘04/05 Forecast Y-o-Y ’05/06 Panasonic 79% 81% 81% 35% more units sold Akai - - 4% 42% more units sold Futronic 21% 19% 15% 100% 100% • Akai introduced FY2006 • Futronic – enormous price reductions per unit • Panasonic – strong entry in
Slide 18: Nashua
Nashua
Slide 19: Nashua Office Automation
Nashua Office Automation • Strong volume growth • Nashua Kopana – >25% of sales • Penetration of segment 5 • Major player in colour printers • Nashua Broadband transferred to Nashua Mobile • Acquisition of software analysis capability
Slide 20: Nashua Finance
Nashua Finance • Financing assets sold by Reunert group of companies • Book over R1,1 billion • RLO’s equity portion R150 million (10%) • RLO’s risk R150 million • Funding provided by – RMB, ABSA & Nedcor – For R1,35 billion – For 5 years – Subject to • 5 year notice draw down
Slide 21: Nashua Mobile
Nashua Mobile • Current subscriber base – 460 000 (FY05) Nashua Mobile Base (Feb '06) – 473 000 (Feb 06) • Vodacom & MTN agreements signed Vodacom Cell C – 5 year duration 41% 6% – Tough performance targets • Cell C – No change – Valid for + 10 years MTN • New services 53% – Internet SP acquired – N
Slide 22: Telecommunications
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Slide 23: Mobile Capital Expenditure
Mobile Capital Expenditure • Vodacom R3 billion pa – 80% SA network – 83% subscribers in SA – 91% of revenue from SA • MTN R6 billion pa – 25% of spend on SA operations – International revenues growth rate of 88% pa • 40% of total revenue • 61% of subscribers • Will this continue? – yes
Slide 24: Fixed Line Communications in SA
Fixed Line Communications in SA • Bandwidth – For a competitive South Africa bandwidth needs to be • Bigger • Faster • Cheaper • Investment is needed • We can supply
Slide 25: Second Network Operator
Second Network Operator • Roll-out Public Switched Telephone network – Access, switching, international gateway & transmission • Transmission network – Nearly completed – R200 million for phase 1 • Network cost – between R2 billion and R3 billion – To complete network between R9 billion and R12 bill
Slide 26: Siemens Telecommunication
Siemens Telecommunication • Deflation
Slide 27: Defence
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Slide 28: Reutech
Reutech • RDI – Airborne radio contracts secured – New SA Army radio development well advanced • RDL – Long term contracts provide stable base – Awaiting adjudication of RCC & Gautrain fair collection systems • RRS – Completed development of slope stability radar – Awaiting production order from Ang
Slide 29: Streamlining Reunert
Streamlining Reunert Reunert Electrical Engineering Services Investments CBI Electric Nashua Sietel Protection Equipment Office Automation Reutech Motor Control Telecom Services Factory Automation Consumer Electronics Wiring Accessories Financial Services Meters Asset Tracking Transformers & MV Powe
Slide 30: Reunert Limited
REUNERT LIMITED
Slide 31: (ki electric
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Slide 32: Thank you
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