Reunert Limited · JSE:RLO
Reunert — H1 2007 Earnings Presentation
27 slides from Reunert's earnings presentation, May 2007
Slide 1: Unaudited results for the six months ended 31 March 2007
Unaudited results for the six months ended 31 March 2007 19% REVENUE 16 % DIVIDEND PER SHARE 16% OPERATING PROFIT 16% NORMALISED HEADLINE EARNINGS PER SHARE
Slide 2: Salient features
Salient features • Strong performance – Electrical Engineering, Telecommunications & Defence • Slow down in consumer trading • Modest increase in demand due to infrastructural spending • Abnormal items – R572,4 million – BEE transaction and Employee Share Trust • Derivative instruments • Dividend pe
Slide 3: Income Statement for the six months ended 31 March 2007
Income Statement % for the six months ended 31 March 2007 Adjusted Change 2007 2007 on 2006 2006 Rm Rm Rm Rm TURNOVER 4,654 4,654 19 3,911 EBITDA 643 643 17 551 Depreciation (36) (36) (32) (27) Operating Profit 608 608 16 524 Interest & Dividends 27 27 (18) 33 Profit before abnormal items 635 635 14
Slide 4: Balance Sheet as at 31 March 2007
BALANCE SHEET 2007 2006 as at 31 March 2007 R million R million Non-current assets Property, plant and equipment & Intangible assets 546 361 Goodwill 337 330 Investments and loans 211 107 Finco accounts receivable 1,155 890 Deferred taxation 69 38 2,319 1,725 Current assets Inventory and contracts i
Slide 5: Cash Flow Statement for six months ended 31 March 2007
CASH FLOW STATEMENT 2007 2006 for six months ended 31 March 2007 R million R million EBITDA 643 551 Increase in net working capital (411) (394) Increase in Finco accounts receivable (197) (208) Increase in other working capital (215) (187) Cash generated from operations 232 157 Net interest and divi
Slide 6: Segmental analysis: % Contribution
Segmental analysis: % Contribution to
Slide 7: Segmental Revenue
mHYOS mHYO6 mHYO7 Tel Cc Office Segmental Revenue Reutech ecomms (24)% onsumer 9% systems M% Jineering 41% 500 1 500 2, 500 R million REUNERT REUNERT LIMITED
Slide 8: Segmental Operating Profit
= HY05 Segmental Operating Profit BHYO6 = HY07 Reutech 332% (7)% 20% | 0 50 100 150 200 250 #300 R million REUNERT REUNERT LIMITED
Slide 9: Operational Review
Period March 2006 to March 2007 OPERATIONAL REVIEW
Slide 10: Electrical Engineering
ELECTRICAL ENGINEERING
Slide 11: Energy Cables
Energy Cables • Eskom requirements Contribution per category – Reached tender stage Low-voltage 46% of sales • Capacity constraints General Market 56% addressed – Adequate to meet foreseeable Utilities 25% demand Mining 17% – Commissioning phase impact Other 2% • Imports Medium &HV 54% of sales – In
Slide 12: Energy Cables: Capex
Energy Cables: Capex Upcaster Installed and commissioned Compounding line Installed and commissioned Wire drawing machine Installed and commissioned Double twist stranding machine Installed and commissioned Drum Twister arming machine Installed and commissioned Bedding extruder Installed and commiss
Slide 13: Telecommunications Cables
Telecommunications Cables • JV CBi-electric: Aberdare ATC Telecom Cables • Effective 1 February 2007 – 50% share proportionally consolidated • Products – Copper – Industrial & Data • Strong contribution from Lambda – Fibre optic cables • Neighbouring countries • Nigeria • Infracom/Neotel
Slide 14: Telecommunications Cables
Telecommunications Cables • Strong demand for all Sales 2006 2007 products – Telkom upgrade of network By market – Creation of Neotel network Telkom 68% 64% • First orders received Industrial 23% 26% – Exports into Africa Export 9% 10% – Industrial demand By product – Office/Business Copper 87% 85%
Slide 15: Other activities
Sales growth Low voltage Residential 5% Commercial/Industrial 11% MSA Switchgear 20% • Modest decline in building activity Wiring accessories 81% Residential • Increased presence of cheap imports • Low-cost housing static Commercial • Healthy demand & Industrial • Growth expected to continue • Facto
Slide 16: Low voltage: Regional Sales
Low voltage Regional Sales • Overseas subsidiaries – Europe: strong growth 5% – USA: strong growth 6% – Australia: flat 9% • Industrial action • Modernising of factory 4% 2% – 20% of sales to USA, Europe & Australia 74% – 25% of total revenue exported USA Europe Australia Africa Far East Local
Slide 17: Electronics
REUNERT LIMITED
Slide 18: SA Industry Statistics: Consumer Electronics
SA Industry Statistics: Consumer Electronics • Brown goods – +10% growth in value Y-o-Y to March 2007 • White Goods – +15% growth in value Y-o-Y to March 2007 – Zero growth Jan – March 2007 vs Jan – March 2006. • Product Growths – All Audio products 8% – Video Camera (1%) – Digital Still Camera 19%
Slide 19: Nashua
Nashua • Market size static in 2006 – Nashua market share up from 22,5% to 23,8% (Infosource data 2006) • 8,5% growth in total document volume – 12 months to March 2006: 3,646 billion clicks – 12 months to March 2007: 3,956 billion clicks • Acuo Technologies • Nashua Finance – Release of retention m
Slide 20: Nashua Mobile
Nashua Mobile 2006 2007 Contract subscriber base 484,728 640,361 Net increase in period 155,633 % increase 32% ARPU ( average ) R517 R446 Annualised churn 10% 9% Number Portability No of ports to Nashua Mobile 3,903 No of ports leaving (1,547) Net positive ports 2,356
Slide 21: Nashua Electronics
Nashua Electronics • RC&C Holdings renamed Nashua Electronics – Consumer business – Business systems • Consumer sales are down • Margins squeezed • Increased advertising & marketing spend • Digital broadcast – Opportunities • IAS39 adjustments
Slide 22: Business Systems
Business Systems PBX • Unit growth • Switch to VOiP and digital/IT technology Office Systems • Margin erosion • Printers, copiers & multifunctional machines • Increased demand for colour printing & copying Broadcast equipment • Move to internal storage technology & high definition CCVE • Strong grow
Slide 23: Siemens Telecommunications
Siemens Telecommunications • Nokia Siemens Networks – Deal effective 1 April 2007 – Shareholders • Strong order book – Telkom – Cellular networks – Neotel (SNO) – Africa
Slide 24: Reutech
Reutech • Excellent performance – 60% improvement in revenue – Operating profit grew from R3,8 million to R16,4 million • Strong order book – Up to two years • Business no longer for sale • Forecast good contribution to profits for FY07 & FY08
Slide 25: Quince Capital
Quince Capital • New venture with PSG Group • RC&C Finance Company + R379 million cash • Deal effective 1 May 2007 – Earnings dilutive in short-term • Bridging bank loan facility of R1,4 billion – Reunert guarantee • Securitisation facility of R5 billion • Equity accounted in future – Reunert share
Slide 26: Prospects
Prospects Growth in normalised headline earnings per share for the full year is anticipated to be in line with the increase achieved in the first six months. This statement has not been audited or reviewed by the external auditors
Slide 27: Contact: Carina de Klerk
CONTACT: Carina de Klerk +27 (0)11 517 9033 +27 (0)83 631 5743 carina@reunert.co.za