INTERIM RESULTS 6 months to Sep 2014 PRESENTATION TO … Presentation/Invicta... · 2018-05-14 ·...

transcript

INTERIM RESULTS

6 months to Sep 2014

PRESENTATION TO INVESTORS 10-11 NOV 2014

Core Business

BMG (Bearing Man Group)

Leading distributor of engineering

components & technical services

Africa

Over 140 branches Southern Africa

Bearings, Seals, Chains, Couplings

Fasteners, Tools

Drives, Motors, Belting

Filtration, Hydraulics, Lubrication

Field service, Condition monitoring

Man-Dirk, Autobax, Wegezi, OST

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

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, Malaysia

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

Revenue Contribution

South Africa

International

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%

Results Highlights

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

Results Highlights

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*: EquityExcludes long-term funding secured by investments and loans

38% 34%

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 peers, posting good growth

No significant acquisitions in the period

Margin pressure due to competitive markets across all businesses

Expenses well contained

Working capital well managed

Turnover (Rm)

2010 2011 2012 2013 2014 2015

Operating Profit (Rm)

2010 2011 2012 2013 2014 2015

H1 H2 One-off

Operating Margin (%)

2010 2011 2012 2013 2014 2015

NEPS (cps)

2010 2011 2012 2013 2014 2015

H1 H2 One-off

NEPS and DPS (H1)

2010 2011 2012 2013 2014 2015

EPS DPS

Segmental H1 Operating Profit (R’m)

115 142 159 174

220 209

2010 2011 2012 2013 2014 2015

BMG CEG BSG Other

Segmental H1 Operating Margin (%)

2010 2011 2012 2013 2014 2015

BMG H1 CEG H1 BSG H1

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%

2010 2011 2012 2013 2014 2015

Operating Profit

2010 2011 2012 2013 2014 2015

Operating Profit %

2010 2011 2012 2013 2014 2015

BMG H1

Sales by Segment

Consumables62%

Engineered Products23%

Fluid Power15%

Mining25%

Processing10%Light Industry

10%Heavy Industry

Cash/COD8%

Agriculture6%

Trade4%

Automotive3%

Construction2%

Petro Chemical1%

Other14%

Sales by Industry Sector

Sales by Region

Africa13%

South Africa87%

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)

• Conclusion of two acquisitions:

– SA Tool (subject Comp Comm approval)

– Mpumulanga agency minority buy-out

CEG Results Summary 6 months to 30 Sep 2014

Sales 2,404 -7%

PBIT 180 -29%

PBIT% 7.5% 9.7%

NOA 1,664 +5%

RoNOA% 22.1%

2010 2011 2012 2013 2014 2015

Operating Profit

2010 2011 2012 2013 2014 2015

CEG H1

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 and margins affected by:

– Reduced project work

– Industrial unrest

– Competitive market

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 (reduction)

• Good working capital management

Yellow Maize Safex Prices from 1 Jan 2014

BSG Results Summary 6 months to 30 Sep 2014

Sales 837 +48%

PBIT 48 +50%

PBIT% 5.7% 5.7%

NOA 283 +42%

RoNOA% 39.8%

2013 2014 2015

Operating Profit

2013 2014 2015

BSG H1

Sales Analysis

South Africa77%

Exports23%

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 well - exports into Africa

• Looking for new premises in Gauteng to enhance logistics

capabilities and support growth

Share Price History

CAGR since 2000 = 29% p.a. (15 years)

7th in Sunday Times Top 100 = 41% p.a. (5 years)

Directors61%

Staff and Treasury

Public36%

Analysis of shareholders

Shareholding Sep 2014

CH Wiese * (Chairman) 36.4%

Sherrell family

(LR Sherrell) *

A Goldstone (CEO) 5.7%

D Samuels * 4.8%

Other Exec Directors 3.0%

75.6 million shares in issue

(1.5 million held in treasury)

* Non-Executive

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 stays at 3.5x NEPS interims, 2.75x NEPS FY

Group is considering an international listing

Historically acquisitions were made using gearing

Will need to raise equity for larger acquisitions in future

Aim to increase non-SA income to 50% of total in medium term

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 to fund operational and strategic growth

International listing still under investigation

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 and Commercial

Tony Sinclair – CEO of CEG

Neil Malherbe – CEO of BSG

Loy Soo Chew – CEO of KA

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)

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 to be flat

Commodity cycle in a weak phase

Building supplies market expected to show modest growth

Good time to be making acquisitions

Sunday Times Top 100 Companies

Thank you and Questions

THANK YOU

INTERIM RESULTS 6 months to Sep 2014 PRESENTATION TO … Presentation/Invicta... · 2018-05-14 ·...

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