ABSA Bank and JSE Showcase11 April 2013
• Largest independent electrical distributor in
Sub-Saharan Africa
• Focused on electrical and lighting products
• Supply across all major market segments
• Extensive distribution network across South Africa
Group Overview
Power cablesOverhead line conductors &
equipment
Low voltage products Lighting & lamps
Group at a Glance
ARB Holdings Limited
Corporate Electrical Lighting
Electrical Wholesaling
Proprietary Products
Electrical Wholesaling
• Founded in 1980
• 19 branches across SA (and growing)
• Over 15 000 stock items
• Over 6 000 customers (no customer =>3% of total revenue)
• Well established in industrial, construction, mining, parastatals and public sector
• Annual revenue approaching R2 billion
Geographic Footprint
1980 1988 2000 2002 2003 2004 2008 2009 2010 2011 2012 20130
2
4
6
8
10
12
14
16
18
20
# of Branches
Lighting
• Founded in 1991
• Acquired 60% in January 2012
• Over 4 000 stock items
• Over 1 800 customers
• Well established in retail and domestic sectors
• Owned brand
• SABS mark holder
• Recently introduced pre-packed electrical accessories range
Proprietary Products
ACCC®
Conventional ACSR
Conductor Comparison
Steel Core Composite Core
• Unique, patented technologically advanced products
• Exclusive distribution rights for SADC
Financial Overview
FY2010 FY2011 FY 20120
20,000
40,000
60,000
80,000
100,000
120,000
140,000
97110
128
Operating profit
FY2010 FY2011 FY 20120
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1 0871 256
1 565
RevenueR’000 R’000
CAGR = 20%pa
CAGR = 15%pa
Financial Overview
FY2010 FY2011 FY 20120
50,000
100,000
150,000
200,000
250,000
300,000
350,000
200 235307
Gross profitCAGR = 24%pa
FY2010 FY2011 FY 201226272829303132333435
29.2 30.634.2
HEPS
R’000
Cents FY2010 FY2011 FY 201217%
18%
19%
20%
18.4%
18.7%
19.6%
Gross profit %
6 Months to 31 December 2012 (excludes acquisition of Elektro Vroomen)
• Revenue
• Gross profit
• Operating profit
• Headline earnings
• Cash generated by operations
• Net asset value
• R1.0 Billion
• R196 million
• R76 million
• R43 million
• R25 million
• R596 million
27%
17%
50%
39%
11%
163%
Ungeared with net cash of R153 million
Interim Results
Share Statistics
Listing particulars
JSE ticker ARH
JSE listing Main BoardElectronic & Electrical Equipment sector
Net asset value / share 254 cents per share
Share price 540 cents per share
Market cap ±ZAR1.3 billion
cents
Dividend Policy
40% of after-tax profits(i.e. 2.5x cover)
ARB share price has outperformed the JSE All
Share, Industrial and Electronic & Electrical
indices over past 4 years
2-Feb-09
13-Apr-09
22-Jun-09
31-Aug-09
9-Nov-0
9
18-Jan-10
29-Mar-
10
7-Jun-10
16-Aug-1
0
25-Oct-
10
3-Jan-11
14-Mar-
11
23-May-
11
1-Aug-1
1
10-Oct-
11
19-Dec-11
27-Feb-12
7-May-
12
16-Jul-1
2
24-Sep-12
3-Dec-
12
11-Feb-13
0
100
200
300
400
500
600
ARH share price
Prospects – South Africa
Market potential(Source: A review of SA’s electricity sector – January 2013 by Research Channel Africa)
– Eskom requires 420 000 tons of new steel pylons over next 10 years – ACCC can reduce this significantly
– DSM, RMR and 49M – all promote use of CFL and LED lighting – Eurolux
South Africa International benchmark2%
4%
6%
8%
10%
12%
14%
16%
3%
15%
Reserve margin for electricity
Massive ex-pansion re-quired
Older than 35 year design
life
50%
Within design life
50%
Eskom Power Stations
Prospects – South Africa
Market potential (continued)(Source: A review of SA’s electricity sector – January 2013 by Research Channel Africa)
10 year Transmission Development Plan (R180 billion) - ACCC– R150bn to expand the transmission network, over 12 700km of new lines– R12bn on refurbishing of existing infrastructure
Distribution infrastructure – Overhead Line division– Lifespan of a distribution network = 50 years (SA’s distribution network is 47 years old)– Protracted uncertainty of EDI vs REDs structure resulted in reluctance to invest in
maintenance– Current backlog = R35bn– Need to spend R6.5bn per year (double the current spend)
Electrification programme – Overhead Line and Low Voltage divisions– Budgeted spend = ±R3.5bn per annum– At current rate, will take another 20 years to achieve universal access to electricity
Europe AsiaAfrica: The Dark Continent
Prospects - SADC
Experienced management & strongly independent board
Successful in concluding value adding acquisitions
Only listed focused distributor of electrical & lighting products
Proven and robust business models across all segments
Ungeared with R153 million cash on hand (Dec 2012)
Value Proposition
For further information please visit our website:www.arbhold.co.za