Slide 1: Reunert results for the year ended 30 September 2012
2012 Reunert results for the year ended 30 September 2012
Slide 2: Overview
2012 OVERVIEW Dave Rawlinson, Chief Executive
Slide 3: Agenda
Agenda 1 Welcome to attendees 2 Operational performance – Dave Rawlinson, Chief Executive 3 Financial results – Manuela Krog, Financial Director 4 CBi-electric – Alan Dickson, Managing Director, CBi-electric 5 Nashua JHB Andy Openshaw, Managing Director, Nashua Communications CT Mark Taylor, Managin
Slide 4: Salient features
Salient features Rbn 14 11.7 12 10.9 Revenue 7% up 10 8 • 2012: R11.7bn 6 • 2011: R10.9bn 4 2 0 01 02 03 04 05 06 07 08 09 10 11 12 Rbn 2.0 1.6 1.5 Operating profit 10% up 1.5 • 2012: R1.5bn 1.0 • 2011: R1.4bn 0.5 0.0 01 02 03 04 05 06 07 08 09 10 11 12 4
Slide 5: Salient features
Salient features Cents 700 630.1 644.4 600 Normalised HEPS 9% up 500 400 • 2012: 644.4c 300 • 2011: 590.0c 200 100 0 01 02 03 04 05 06 07 08 09 10 11 12 Cents Cover 500 2.5 1.7x 400 2.0 Final dividend 9% up 300 1.5 • 2012: 275 cents per share 200 1.0 • 2011: 253 cents per share 100 0.5 0 0.0 02 03 0
Slide 6: Operating profit contribution per segment
Operating profit contribution per segment 1 525 1 391 1 263 765 736 789 681 626 582 1H10 2H10 1H11 2H11 1H12 2H12 CBi-electric Nashua Reutech Half Year Full Year 6
Slide 7: Cash on hand
Cash on hand Rbn Cash on hand (including internal financing deposited with Quince) 2.5 2.0 1.5 1.0 0.5 0.0 02 03 04 05 06 07 08 09 10 11 12 Rbn 1.0 0.5 0.0 (0.5) (1.0) (1.5) (2.0) 02 03 04 05 06 07 08 09 10 11 12 Net cash on hand reduced by Quince borrowings Quince net borrowings 7
Slide 8: Operational performance
2012 OPERATIONAL PERFORMANCE
Slide 9: Operations – CBi-electric
Operations – CBi-electric Rbn African Cables Revenue • Slower than expected rollout of infrastructure spend 5.0 • Delays in contract renewals with parastatals 4.0 3.6 constrained growth • Signing of several long-term contracts with public 3.0 sector enterprises provides a revenue base 2.0 • Power In
Slide 10: Operations – Nashua
Operations – Nashua Rbn Nashua Mobile Revenue 8.0 7.2 • Loss of LCR • Further reduction in ARPU as a result of bundled 6.0 tariffs affected Nashua Mobile Nashua Office Automation 4.0 • Increased unit sales, but margin pressure due to 2.0 weakening rand and increased competition Nashua ECN 0.0 07 08
Slide 11: Operations – Nashua Mobile
Operations – Nashua Mobile Nashua Mobile revenue analysis Subscriptions (excl. LCR) Airtime (excl. LCR) Airtime (LCR) Subscriptions (LCR) Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 11
Slide 12: Operations – Reutech
Operations – Reutech Rbn Overview Revenue 1.0 • Strong performance from all divisions 0.8 0.8 • Weakening rand increased margins from export 0.6 sales 0.4 • All operations have stable order books 0.2 Reutech Communications 0.0 • Acquisition of Natcom and SAAB Grintek HF 07 08 09 10 11 12 radio busin
Slide 13: Investment in future capacity
Investment in future capacity Rm 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Replacement Expansion Investment R&D 13
Slide 14: Corporate action
Corporate action Sales Natcom R7.1m Tank Industries R16.7m Total Nashua franchises R76.8m R3.5m SAAB Grintek R29.7m KSS Technologies R19.8m 14
Slide 15: Financial results
2012 FINANCIAL RESULTS Manuela Krog, Financial Director
Slide 16: Group income statement
Group income statement Rm 2012 2011 %∆ Revenue 11 662 10 923 7 EBITDA 1 661 1 513 10 EBITDA % 14.2 13.9 Operating profit (before interest and dividends) 1 525 1 391 10 Operating profit % 13.1 12.7 Effective tax rate (before abnormal item in 2011) % 30.9 29.7 Headline earnings per share (cents) 658.3
Slide 17: Exports
Exports 3% 8% 21% Europe Asia North America Africa 41% 20% Australasia South America 7% • Reutech has the greatest export revenue proportion, with exports comprising 55% of segment revenue • Export revenue for CBi-electric amounted to 12% of segment revenue 17
Slide 18: Group balance sheet
Group balance sheet Rm 2012 2011 Total non-current assets 2 578 2 401 Current assets 4 010 3 705 Total assets 6 588 6 106 Shareholders’ equity 4 442 3 880 Non-controlling interests 56 55 Non-current liabilities 153 100 Current liabilities 1 937 2 070 Total equity and liabilities 6 588 6 106 Total li
Slide 19: Cash flow (Rm)
Cash flow (Rm) (85) 495 (105) (291) 42 621 565 Increase Opening balance Cashflow from Increase in in asset Increase Increase in in Investing activies Financing Closing balance operating Quince asset device rental book finance handset activities activities rental book (Nashua Mobile) subsidies inlcud
Slide 20: Segmental revenues
Segmental revenues 2012 2011 7% 6% 31% 30% 2012 2011 R11 662m R10 906m 62% 64% CBI-electric Nashua Reutech 20
Slide 21: Segmental analysis – operating profit
Segmental analysis – operating profit 3 (17) 102 1 525 1 44 1 391 2011 CBI-electric Nashua Reutech Other NSN 2012 Operating profit - Rm 2012 %∑ %∆ 2011 %∑ CBi-electric 593 39 - 592 43 Nashua 839 55 6 794 58 Reutech 151 10 209 49 3 Other (57) (4) 5 (61) (4) Total operations 1 525 100 14 1375 100 NSN
Slide 22: Operations – research and development
Operations – research and development 2012 Total R&D Rm Self-funded 2012 2011 2010 2009 CBi-electric 2.2 2.2 3.5 3.4 2.8 Nashua 3.2 3.2 Reutech 25.1 58.8 48.2 64.4 55.1 Total 30.5 64.2 51.7 67.8 57.9 22
Slide 23: Nashua
2012 Nashua JHB: Andy Openshaw, Managing Director, Nashua Communications CT: Mark Taylor, Managing Director, Nashua Mobile
Slide 24: ECN post acquisition
ECN post acquisition Nashua ECN Monthly Minutes, Nov '09 - Oct '12 80 70 60 50 40 30 20 10 0 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Mobile Local National Inbound Special International On-Net • Successful integration • Exceeded profit targets • Interconnec
Slide 25: New Nashua Communications
New Nashua Communications Creating a strategic platform for future growth 25
Slide 26: Focus for 2013
Focus for 2013 Creating a strategic platform for future growth Customers SERVICE DELIVERY COLLABORATION SOLUTIONS DATA CENTRE DIRECT SOLUTION SOLUTIONS TECHNOLOGY INDIRECT MANAGEMENT SALES ENGINEERING SALES NETWORK SOLUTIONS CARRIER / CLOUD SOLUTIONS TRAINING ADMINISTRATION AND SUPPORT 26
Slide 27: Key milestones achieved
Key milestones achieved • Cisco Gold Partner certification achieved in November 2012 • Cisco Big Bet backing in the corporate data centre space • Siemens Openscape platform deployed in the ECN cloud • ECN Hosted PBX and Mobile Voice applications launch in the new year • Successful cross selling achi
Slide 28: Nashua Mobile – key focus points for 2013
Nashua Mobile – key focus points for 2013 • To support growth initiatives the business has been restructured into: › Consumer and Enterprise › Customer Operations to provide support • Create efficiencies • Focus on margin growth • New network agreements will be concluded soon 28
Slide 29: Nashua Mobile Retail
Nashua Mobile Retail • Refresh hardware technologies • Update and redo the retail stores • Address technology in the stores to have the same POS and Accounting system • Automated credit collection system • Revamp the front-end systems • Grow retail footprint by partnering with stores › In-store conc
Slide 30: Nashua Mobile Enterprise
Nashua Mobile Enterprise • Focus on SME and SMME › Better margins and growth opportunities • Augment our product suite to help drive more services into this base • There is pressure for more discounts in the corporate space • Refresh and revamp the technology › Self-serve › Account executives can se
Slide 31: Nashua Office Automation
Nashua Office Automation Strategy to follow a two-pronged approach for 2013 • Maintain and grow current hardware and service model › Grow production printing › Improve penetration into strategic accounts › Continuous training, motivation and support via our existing franchise channel • Transform int
Slide 32: Nashua companies working together
Nashua companies working together • Customers continue to look for a consolidated product offering › Our businesses will continue to work and move closer together › Each bringing their expertise, solutions and routes to market › Into a converged product environment • Cross selling across and between
Slide 33: CBi-electric
CBi-electric Alan Dickson, Managing Director, CBi-electric
Slide 34: Market conditions
Market conditions Market conditions are predominantly driven by state infrastructure projects 1a Generation build (IRP 2010) Coal, Pumped Storage & Eskom Wind YEAR (MW) 2013 1 455 2014 1 721 2015 1 444 2016 722 2017 2 168 Total generation build 7 510 34
Slide 35: Market conditions
Market conditions Market conditions are predominantly driven by state infrastructure projects 1b Transmission expansion (TDP) New assets expected in Transmission Assets 2013 - 2017 HVDC 0 765kV Lines (km) 1 890 400kV Lines (km) 5 668 275kV Lines (km) 52 Total kms of line 7 610 35
Slide 36: Market conditions
Market conditions Market conditions are predominantly driven by state infrastructure projects 2 Renewable energy Window 1 Window 2 Remaining by 2016 (MW) (MW) (MW) Solar PV 632 417 401 Solar CSP 150 50 - Wind 634 562 653 1 416 1 029 1 054 • R18bn local content in Window 1 and will grow in subsequent
Slide 37: Market conditions – Residential
Market conditions 3 Residential ZAR (m) Buildings reported as completed 6.0 Constant 2005 prices 5.0 4.0 3.0 2.0 1.0 0.0 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 • Stable 37
Slide 38: Market conditions – Commercial
Market conditions 4 1 Commercial Welcome to attendees • Chance of improved conditions 5 Mining • Operational mining expected to continue at pre-unrest levels • Deep level mining capital to be significantly reduced • Iron ore and coal are primary drivers of capital expenditure 38
Slide 39: Head winds
Head winds • Mining uncertainty on project roll out • Rising cost base (electricity and labour) • Increasing competition and margin pressure • State infrastructure execution risks 39
Slide 40: Positioning
Positioning • Strong local corporate responsibility › Level 2 BBBEE › Product designation › Local manufacture investment • Reduced component exposure by expanding in Value Added Services business › IT Matic › Power Installations › Tank Acquisition • Export 12% of CBi-electric group revenue across th
Slide 41: Positioning
Positioning • Proven track record on operating efficiencies • Well positioned within the electrical sector which has strong demand and long term fixed investment › Eskom › Renewable Energy › Transnet 41
Slide 42: Executive team focus
Executive team focus Dave Rawlinson, Chief Executive
Slide 43: Team focus 2013 – CBi-electric
Team focus 2013 – CBi-electric 1 Local supplier of choice for R18 billion local spend on renewable energy roll-out 2 Increase export activity in Europe, USA and Africa 3 Participate actively in Eskom and Transnet expansion 43
Slide 44: Team focus 2013 – Nashua
Team focus 2013 – Nashua 1 Grow customer base and minutes on voice network 2 Market penetration in converged voice and data network space 3 Roll-out recently developed products for Hosted PBX Mobile voice Data storage 4 Grow mobile customer base Increase outlets in retail space Automate customer pro
Slide 45: Team focus 2013 – Reutech
Team focus 2013 – Reutech 1 Integrate Saab Grintek and Natcom acquisition into Reutech Communications 2 Increase MSR market penetration 3 Secure further orders for concentrated photovoltaic tracker solution 4 Obtain and execute set-top box order 5 Secure further export orders for Fuchs 45