Slide 1: Interim results for the six months ended 31 August 2013
Interim results for the six months ended 31 August 2013 Robert Venter Chief Executive Alex Smith Chief Financial Officer
Slide 2: Agenda
AGENDA Overview and financial summary Robert Venter Financial results Alex Smith Operations Robert Venter The way forward Robert Venter
Slide 3: Overview
August Overview 2013 Robert Venter Chief Executive
Slide 4: Results overview
RESULTS OVERVIEW • Good recovery from Altech post Africa disposals • Altech UEC showing impressive growth and record order book • Good performance from Altech Autopage in competitive market • Bytes continues to perform well • Bytes UK businesses and Bytes Universal Systems exceeded expectations • So
Slide 5: Buy-out of Altech minorities
BUY-OUT OF ALTECH MINORITIES • Altron acquired the Altech minority shareholders’ shares in Altech effective 1 August 2013 • Shareholding in Altech is now 100% • Altech delisted from JSE on 20 August 2013 • Shareholders have been settled – elected 91% cash 9% Altron Participating Preference shares •
Slide 6: Altron group structure
ALTRON GROUP STRUCTURE 100% 100% Altron TMT Altron Power Electronics 6 Altron Results presentation for the six months ended 31 August 2013
Slide 7: Efficiencies from new TMT structure
EFFICIENCIES FROM NEW TMT STRUCTURE Examples • Concentrate assets in key growth areas, e.g., Revenue growth Telematics, Cloud, Secure content delivery, Payment Solutions • Product bundling and new solutions and product with better margin protection • Cross-sell into customer bases • One go-to-market
Slide 8: Financial highlights – total operations
FINANCIAL HIGHLIGHTS – TOTAL OPERATIONS FOR THE INTERIM PERIOD ENDED 31 AUGUST 2013 6 months 6 months August August Rm 2013 2012 % change Revenue 13 443 12 640 6 Normalised EBITDA 871 827 5 Normalised EBITDA margin (%) 6.5 6.5 Normalised HEPS (cents) 91 79 15 ROE 15.1 10.2 Net borrowings 3 335 1 318
Slide 9: Africa and public sector revenue growth
AFRICA AND PUBLIC SECTOR REVENUE GROWTH Africa Revenue Public Sector Revenue Rm 700 Rm 1900 22% growth 13% growth 600 1700 500 1500 400 1300 300 1100 200 900 100 700 0 500 6 Months Aug 12 6 Months Aug 13 6 Months Aug 12 6 Months Aug 13 9 Altron Results presentation for the six months ended 31 August
Slide 10: Contribution per subsidiary
TMT Altech Power Electronics Bytes Powertech CONTRIBUTION PER SUBSIDIARY Corporate & eliminations 11% 3% 22% 31% 38% Normalised Normalised 40% Revenue Headline EBITDA* 48% Aug 2013 earnings** Aug 2013 Aug 2013 30% 46% 31% 69% 78% 86% R 114m R 5 140m R 417m R 133m R 4 134m R 264m R 33m R 4 196m R 193
Slide 11: Financial Results
August Financial Results 2013 Alex Smith Chief Financial Officer
Slide 12: Group income statement – continuing operations
GROUP INCOME STATEMENT – CONTINUING OPERATIONS August August Rm 2013 2012 % change Revenue 13 443 12 500 8 Operating profit before capital items 614 634 (3) EBITDA 826 860 (4) Normalised EBITDA 871 860 1 EBITDA margin (%) 6.1 6.9 Normalised EBITDA margin (%) 6.5 6.9 Net finance expense (101) (30) Ca
Slide 13: Movement in group revenue
MOVEMENT IN GROUP REVENUE Rm 13600 • Altech revenue flat as strong growth from UEC 13400 203 13 470 (20%) was offset by the effect of last year’s Africa disposals and 4% revenue decline at 13200 623 Autopage 13000 • Bytes 18% revenue growth led by 40% growth 12800 at Bytes Systems Integration, thoug
Slide 14: Movement in group normalised EBITDA
MOVEMENT IN GROUP NORMALISED EBITDA Rm 920 • Altech EBITDA growth due to good profit 20 (39) improvements out of Autopage and UEC, 900 who both improved margins, as well as the 45 disposal of loss making operations in the 880 prior year 874 860 • Bytes EBITDA increased across most operations with pa
Slide 15: Movement in group normalised headline earnings
MOVEMENT IN GROUP NORMALISED HEADLINE EARNINGS Rm 310 • Increase in Altech’s contribution to the 300 16 (27) group driven by overall profitability 290 improvement as well as the takeout of the 280 38 12 288 minorities which was effective 1 August, giving the group 100% of Altech’s earnings 270 in th
Slide 16: Summarised balance sheet
SUMMARISED BALANCE SHEET August August Rm 2013 2012 Total non-current assets 5 236 4 353 Current assets 7 939 6 955 Cash balances 1 294 1 115 Total assets 14 469 12 423 Shareholders’ equity 3 664 4 771 Non-controlling interests 204 353 Non-current liabilities 2 030 1 042 Current liabilities 8 571 6
Slide 17: Tax rate
TAX RATE % 36 34 (2) 32 (2) 30 34.7 (3) 28 26 28 24 17 Altron Results presentation for the six months ended 31 August 2013
Slide 18: Cash flows
CASH FLOWS Rm (279) 959 (101) (160) (219) 890 18 318 (2 484) 1 694 18 Altron Results presentation for the six months ended 31 August 2013
Slide 19: Investing activities in continuing operations
INVESTING ACTIVITIES IN CONTINUING OPERATIONS Rm 700 • Increase in capital expenditure driven by 600 the completion of several projects in 500 280 Powertech and R50m capacity expansion in UEC manufacturing facility 400 179 • Increased investment in contract fulfilment 300 50 76 costs, primarily at A
Slide 20: Working capital
WORKING CAPITAL 69 57 61 51 49 50 29 24 20 Creditor days Debtors Days Inventory days (84) (81) (99) Net days Aug 11 Aug 12 Aug 13 20 Altron Results presentation for the six months ended 31 August 2013
Slide 21: Operations
August Operations 2013 Robert Venter Chief Executive
Slide 22: Key wins
KEY WINS Altech Autopage Bytes Managed Solutions Powertech Transformers • National Health Laboratory Service • ABSA/Barclays SA and Africa • Eskom, distribution transformers (NHLS), R21m for 2100 SIM cards IMAC/break and fix contract - R400m order for mini substations - R350m Altech UEC Multimedia o
Slide 23: Altech
Altech
Slide 24: Altech financial summary – total operations
ALTECH FINANCIAL SUMMARY – TOTAL OPERATIONS August August Rm 2013 2012 % change Revenue 5 140 5 157 0 Normalised EBITDA 417 372 12 Normalised EBITDA margin (%) 8.1 7.2 Normalised Headline earnings 151 124 22 ROE 21.8 17.2 Net borrowings 1 214 864 24 Altron Results presentation for the six months end
Slide 25: Altech divisional review
ALTECH DIVISIONAL REVIEW % Aug 13 % Aug 13 Normalised change change Company / division Revenue Comments on prior EBITDA on prior R’m year year R’m Altech Autopage 2 907 (4) 139 14 Subscriber base grew by 2.1% to 1,087 million Gross connections did not meet expectation due to termination of outbound
Slide 26: Progress on key strategic growth initiatives
PROGRESS ON KEY STRATEGIC GROWTH INITIATIVES Growth initiative Progress made Focus on core assets & TMT Entering new growth markets in Autopage and Netstar. Cross, up sell opportunities and cost saving opportunities from Altron TMT structure Commercialisation of bundled Autopage offering voice and d
Slide 27: Bytes
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Slide 28: Bytes financial summary
BYTES FINANCIAL SUMMARY August August Rm 2013 2012 % change Revenue 4 134 3 511 18 EBITDA 264 244 8 EBITDA margin (%) 6.4 6.9 Headline earnings 133 117 14 ROE 21.1 20.7 Cash net of borrowings 100 98 28 Altron Results presentation for the six months ended 31 August 2013
Slide 29: Bytes operational review
BYTES OPERATIONAL REVIEW % % Aug 13 Aug 13 Change Change Company Revenue EBITDA Comments on prior on prior R’m R’m year year Significant revenue growth across the board (growth in Banking, Telco, Systems Integration 747 41 41 7 Multimedia & Government contracts). Margins under pressure due to commod
Slide 30: Progress on key strategic growth initiatives
PROGRESS ON KEY STRATEGIC GROWTH INITIATIVES Growth initiative Progress made Grow the business in Africa “Follow our customers” e.g. Barclays Africa, Illovo, Shoprite, Pick n Pay. Campaigns being developed with global partners to pursue national identity and border control management opportunities.
Slide 31: Powertech
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Slide 32: Powertech financial summary
POWERTECH FINANCIAL SUMMARY August August Rm 2013 2012 % change Revenue 4 196 3 993 5 EBITDA 193 232 (17) EBITDA margin (%) 4.6 5.8 Headline earnings 33 60 (45) ROE 2.6 4.7 Net borrowings 858 824 32 Altron Results presentation for the six months ended 31 August 2013
Slide 33: Powertech divisional review
POWERTECH DIVISIONAL REVIEW % % Aug 13 Aug 13 Change Change Company Revenue EBITDA on prior on prior R’m year R’m year Powertech Cables 2 508 6 47 (37) LOCAL: Showed good improvements in the second quarter. Productivity improvements and lowering the cost base continues to be a focus INTERNATIONAL: P
Slide 34: Powertech order book
POWERTECH ORDER BOOK Orders on hand Feb 2012 Feb 2013 Aug 2012 Aug 2013 Cables R 462m R 434m R 457m R 685m Transformers R 851m R 692m R 737m R 801m System Integrators R 262m R 337m R 203m R 487m Total R 1 575m R 1 463m R 1 397m R 1 973m Enabling Contracts Aug 2012 Aug 2013 Value Term of Value Term o
Slide 35: Progress on key strategic growth initiatives
PROGRESS ON KEY STRATEGIC GROWTH INITIATIVES Growth Initiative Progress made Africa • Continued focus on Sub-Sahara Africa countries for Powertech basket of goods and services has achieved good wins Renewables • Successful participation in REIPPP Round 1, first orders for Round 2 received, tendering
Slide 36: The way forward
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Slide 37: New markets to drive growth
NEW MARKETS TO DRIVE GROWTH Markets today Markets tomorrow • Mobile telephony and data • Connected home (voice, data, entertainment, • Cell phones, set top boxes payments, energy efficiency) Consumer • Vehicle recovery • Vehicle management and advanced telematics • VOIP • Triple play services • Flee
Slide 38: Going forward
GOING FORWARD • Successful Altron TMT integration • Continue improvement at Powertech operations – focused on Cables • Implement shared services across Group • Continue focus on strategic initiatives • Public Sector • Africa • Cross and up sell • Cost savings • Capital allocation focus and efficienc
Slide 39: Questions
Questions | 2013 A “> ALTRON