Invicta Holdings Limited · JSE:IVT

Invicta — H1 2015 Earnings Presentation

51 slides from Invicta's earnings presentation, Nov 10, 2014

  1. Slide 1: Interim Results 6 months to Sep 2014

    INTERIM RESULTS 6 months to Sep 2014 PRESENTATION TO INVESTORS 10-11 NOV 2014

  2. Slide 2: Core Business: BMG (Bearing Man Group)

    Core Business  BMG (Bearing Man Group)  Leading distributor of engineering components & technical services in Africa  Over 140 branches Southern Africa  Bearings, Seals, Chains, Couplings  Fasteners, Tools  Drives, Motors, Belting  Filtration, Hydraulics, Lubrication  Field service, Conditio

  3. Slide 3: Core Business: CEG (Capital Equipment Group)

    Core Business CEG (Capital Equipment Group)  Northmec (Agric Machinery)  New Holland (Agric Machinery)  CSE (Earthmoving Machinery)  Doosan (Earthmoving Machinery)  HPE (Hyundai Earthmoving)  Criterion (Forklifts)  ESP (Parts)  200 Dedicated Outlets across SA

  4. Slide 4: Core Business: Kian Ann Engineering (Singapore)

    Core Business  Kian Ann Engineering (Singapore) (CEG)  One of the world's largest independent distributors of  heavy machinery parts (KAE) and  diesel engine components (KCHI) for the earthmoving and heavy truck industries  Annual Revenue R1.1 bn+  Outlets in Singapore, Indonesia, China, Malay

  5. Slide 5: Core Business: BSG (Building Supplies)

    Core Business  BSG (Building Supplies)  Tiletoria  MacNeil Distributors (from 1 Oct 2012)  One Owl Distributors (Brands 4 Africa)  Annual Revenue: R1.5 bn+  15 + outlets in SA  Big growth potential

  6. Slide 6: Revenue Contribution 6 months to Sep 2014

    Revenue Contribution 6 months to Sep 2014 BSG 16% BMG 38% CEG 46%

  7. Slide 7: Revenue Contribution 6 months to Sep 2014

    Revenue Contribution 6 months to Sep 2014 International 23% South Africa 77%

  8. Slide 8: Results Highlights

    Results Highlights R’m 30 Sep 14 vs PY Sales 5,270 +3% Gross Profit 1,424 +0% GP% 27.0% 27.8% Operating Profit 427 -13% OP% 8.1% 9.6% PBT 351 -17% PAT 289 -13%

  9. Slide 9: Results Highlights

    Results Highlights R’m 30 Sep 14 vs PY PAT 289 -13% Preference Shareholders 35 +7% Attributable PAT 217 -17% EPS/NEPS 293c -18% HEPS/NHEPS 292c -17% DPS 84c -18% Dividend Cover 3.5x No change

  10. Slide 10: Results Highlights

    Results Highlights R’m 30 Sep 14 vs PY Inventories 3,600 -5% Trade Receivables 2,145 +15% Trade Payables (2,478) -14% NWC 3,267 +18% NWC as % of Sales 31% 27% NAV (Equity) 3,723 +13% Debt*: Equity 38% 34% Excludes long-term funding secured by investments and loans

  11. Slide 11: Interim Results Highlights

    Interim Results Highlights  Difficult trading conditions in all sectors & regions  Mining and industrial unrest impacted BMG  Maize price, late rains, subdued construction market impacted CEG  Chinese and SE Asian markets weakened further, impacting KA  BSG performed extremely well against peer

  12. Slide 12: Turnover (Rm)

    Turnover (Rm) 6 000 +3% 5 000 4 000 3 000 2 000 1 000 0 2010 2011 2012 2013 2014 2015 H1 H2

  13. Slide 13: Operating Profit (Rm)

    Operating Profit (Rm) 600 500 -13% 400 300 200 100 0 2010 2011 2012 2013 2014 2015 H1 H2 One-off

  14. Slide 14: Operating Margin (%)

    Operating Margin (%) 16% 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 H1 H2

  15. Slide 15: NEPS (cps)

    NEPS (cps) 500 450 400 -18% 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 H1 H2 One-off

  16. Slide 16: NEPS and DPS (H1)

    NEPS and DPS (H1) 500 450 400 -18% 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 EPS DPS

  17. Slide 17: Segmental H1 Operating Profit (R'm)

    Segmental H1 Operating Profit (R’m) 600 -13% 500 32 48 400 251 12 300 180 148 200 94 54 39 100 220 209 159 174 142 115 0 2010 2011 2012 2013 2014 2015 -100 BMG CEG BSG Other

  18. Slide 18: Segmental H1 Operating Margin (%)

    Segmental H1 Operating Margin (%) 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 BMG H1 CEG H1 BSG H1

  19. Slide 19: BMG Bearing Man Group

    BMG BEARING MAN GROUP

  20. Slide 20: BMG Results Summary

    BMG Results Summary 6 months to 30 Sep 2014 R’m H1 Sep 14 vs PY Sales 2,028 +3% PBIT 209 -5% PBIT% 10.3% 11.1% NOA 1,592 +16% RoNOA% 28.2%

  21. Slide 21: Sales

    Sales 2 500 2 000 1 500 1 000 500 0 2010 2011 2012 2013 2014 2015 H1 H2

  22. Slide 22: Operating Profit

    Operating Profit 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 H1 H2

  23. Slide 23: Operating Profit %

    Operating Profit % 16% 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 BMG H1

  24. Slide 24: Sales by Segment

    Sales by Segment Fluid Power 15% Engineered Products 23% Consumables 62%

  25. Slide 25: Sales by Industry Sector

    Sales by Industry Sector Petro Chemical Other 1% Construction 14% Mining 2% 25% Automotive 3% OEM 4% Trade 4% Agriculture Cash/COD Processing 6% 8% Light Industry 10% 10% Heavy Industry 9%

  26. Slide 26: Sales by Region

    Sales by Region South Africa 87% Africa 13%

  27. Slide 27: Highlights of H1 2015

    Highlights of H1 2015 • Resilient performance in the difficult trading conditions in mining and industrial markets • Growth of new product lines • Opened 2 new branches in the period (Nacala, Mwanza) • Working capital management • R300m, 3-year investment in central distribution capabilities (Jhb) •

  28. Slide 28: Slide 28

  29. Slide 29: CEG Results Summary

    CEG Results Summary 6 months to 30 Sep 2014 R’m H1 Sep 14 vs PY Sales 2,404 -7% PBIT 180 -29% PBIT% 7.5% 9.7% NOA 1,664 +5% RoNOA% 22.1%

  30. Slide 30: Sales

    Sales 3 000 2 500 2 000 1 500 1 000 500 0 2010 2011 2012 2013 2014 2015 H1 H2

  31. Slide 31: Operating Profit

    Operating Profit 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 H1 H2

  32. Slide 32: OP %

    OP % 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 CEG H1

  33. Slide 33: Features of H1 2015

    Features of H1 2015 • Expected record maize crop - maize price down 50% since March • Agricultural equipment sales and margins affected by: – Late rains, drought conditions in certain parts – Fight for market share – Correction of over-stocked position, now complete • Construction equipment sales an

  34. Slide 34: Features of H1 2015

    Features of H1 2015 • Forklift demand significantly reduced in period (imports down 33%) • ESP continues to grow well despite challenging market • KA contribution declined • KA performance relative to peers very good • Parts contribution to GP improving - defensive quality • Expense management (redu

  35. Slide 35: Yellow Maize Safex Prices from 1 Jan 2014

    Yellow Maize Safex Prices from 1 Jan 2014

  36. Slide 36: Building Supply Group

    BUILDING SUPPLY GROUP DIVISION OF INVICTA HOLDINGS

  37. Slide 37: BSG Results Summary

    BSG Results Summary 6 months to 30 Sep 2014 R’m H1 Sep 14 vs PY Sales 837 +48% PBIT 48 +50% PBIT% 5.7% 5.7% NOA 283 +42% RoNOA% 39.8%

  38. Slide 38: Sales

    Sales 900 800 700 600 500 400 300 200 100 0 2013 2014 2015 H1 H2

  39. Slide 39: Operating Profit

    Operating Profit 60 50 40 30 20 10 0 2013 2014 2015 H1 H2

  40. Slide 40: OP %

    OP % 10% 8% 6% 4% 2% 0% 2013 2014 2015 BSG H1

  41. Slide 41: Sales Analysis

    Sales Analysis South Africa 77% Exports 23%

  42. Slide 42: Highlights of H1 2015

    Highlights of H1 2015 • Good growth in a challenging market • Plastic pipe factory affected by July strike • Closure of Marley plastics manufacturing a positive for market consolidation • Tile business showed good growth • Increasing penetration of all products in Gauteng • Brands 4 Africa growing w

  43. Slide 43: Share Price History

    Share Price History 14000 12000 CAGR since 2000 = 29% p.a. (15 years) 10000 7th in Sunday Times Top 100 = 41% p.a. (5 years) 8000 6000 4000 2000 0

  44. Slide 44: Shareholding Sep 2014

    Shareholding Sep 2014 Analysis of shareholders CH Wiese * (Chairman) 36.4% Public Directors 36% 61% Sherrell family 10.9% (LR Sherrell) * A Goldstone (CEO) 5.7% D Samuels * 4.8% Staff and Treasury 3% Other Exec Directors 3.0% 75.6 million shares in issue (1.5 million held in treasury) * Non-Executiv

  45. Slide 45: Strategic Objectives

    Strategic Objectives  Aim to grow EPS at CPI plus 10% over the long term  Last 13 financial yrs = 32% pa CAGR  Long term aggressive growth  Focus on generating strong cash flows  Acquisitions and organic growth  Looking for acquisitions - will stay in core businesses  Dividend cover policy st

  46. Slide 46: Group Developments

    Group Developments  Kian Ann 25% minority buy-out completed:  Effective 1 October 2014  Final price based on NAV to Mar 2015  Executive management changes at KA in place  Several local and international acquisitions under investigation  Capital raising announcement imminent  Capital required

  47. Slide 47: Group Executive Management

    Group Executive Management  Byron Nichles appointed CEO of BMG  Charles Walters  Deputy CEO of Invicta, Chairman of BMG and KA  Becomes CEO of Invicta on 1 April 2015  Arnold Goldstone  Executive Deputy Chairman  CEO of Invicta until 31 March 2015  Craig Barnard – Executive Director, Finance

  48. Slide 48: Group Profit Drivers

    Group Profit Drivers  General mining and industrial activity (BMG)  Agricultural activity (Northmec & New Holland)  Construction activity (CSE, Doosan SA & HPE)  Warehousing (Criterion Equipment)  Building and Renovations (BSG)  Global replacement spares market (KA)

  49. Slide 49: Prospects

    Prospects  Trading conditions expected to remain very challenging in H2  Mining and industrial activity expected to be better than experienced in H1 but has reduced to a lower base  Conditions in agricultural market expected to remain challenging  Construction equipment industry sales expected t

  50. Slide 50: Sunday Times Top 100 Companies

    Sunday Times Top 100 Companies

  51. Slide 51: Thank you and Questions

    Thank you and Questions THANK YOU

Invicta Holdings — H1 2015 Earnings Presentation on 6ix