Investor Presentation May 2002. Content Introduction Financial Results Group Operations Issues...

Investor PresentationMay 2002

Content

• Introduction

• Financial Results

• Group Operations

• Issues

• Prospects

• Shareholding

Salient features

• Revenue R2,5bn +17%

• EBITDA R243m +21%• HEPS 101c +30%• Interim dividend 30 cents +25%

Six months ended 31 March 2002

Growth drivers

• Acquisitions

• Revenue growth

• R/$ exchange rate

• Market share

• Export growth

• Improved efficiencies

Recent acquisitions

• Nashua Mobile– Increased stake to 100%

• Nedcor’s 37,3% & Metropolitan Life’s 4,7%• Effective 1 Dec 2001 • R261,6 million - Includes goodwill of R220,7m

– 10 000 Vodacom contract subscribers • Be Clear and Simple • R700 per active subscriber• Effective 1 February 2002

Recent acquisitions

• Siemens Telecommunications– Increased stake to 40%– Acquired Marconi’s 21,5% Dec 01– Siemens exercised 9% share option in Jan 02

• 12,5% = R161,3m– Includes goodwill of R137,7m

Disclosure

• Segmental analysis regrouped– Strategic focus

• Comparative historical information

O ffice System s

C onsum er products

Te lecom m unica tions

R eutech

E lectron ics

E lectrica l Eng ineering

C ab les

E lectrica l Eng ineering&

C ables

Reunert structure

N ashua100%

R C &C F in Co100%

IQ W orks50%

R oyce Im ag ing100%

O ffice System s

Panason ic100%

N ashua M ob ile100%

Saco System s100%

Futron ic100%

C onsum er p roducts

S ie tel40%

Telecom m unica tions

R D I100%

Fuchs E lectron ics100%

R R S57%

R DL70%

R eutech

E lectron ics

Reunert structure

C BI100%

E lectrica lEngineering

ATC38,6%

African C ab les50%

C ables

E lectrica l Eng ineering&

C ables

Reunert structure

Financial Results

Group Income Statement

R Millions

RevenueEBITDADepreciation & amortisationOperating profitInterest & DividendsPBTTaxationPATAssociatesMinoritiesHeadline earnings adjustments- Amortisation- OtherHeadline earningsHEPS (cents)Diluted HEPS (cents)DPS (cents)EBITDA %Tax rate % before amortisation

20022 469,4

242,9(37,8)205,1

15,5220,6(79,2)141,4

48,3(14,5)

14,0(0,1)

189,1101,2

99,2

9,833,8

20012 112,2

200,4(16,7)183,7

33,5217,2(73,8)143,4

28,6(19,3)

-(0,1)

152,677,776,724,0

9,534,0

% Change

1721

(126)12

(54)2

(7)(2)6925

243029

31

Six Months ended 31 March

30,0 25

Group Balance Sheet31 March

Fixed AssetsGoodwill including associatesInvestmentsR C & C Finance Debtors

Inventory & contracts in progressAccounts ReceivableCash

Shares bought back

R C & C Finance BorrowingsAccounts payable, provisions & taxShareholders for normal dividend

R Millions

NON-CURRENT ASSETS

CURRENT ASSETS

TOTAL ASSETS

SHAREHOLDERS' FUNDS

NON-CURRENT LIABILITIES (NET)

CURRENT LIABILITIES

TOTAL EQUITY & LIABILITIES

2002

1 609,0152,2386,0237,9832,9

1 380,3509,6673,2197,5

2 989,3

1 242,4(234,6)

9,5

1 972,0734,6

1 237,4-

2 989,3

2001

1 083,2155,610,9

179,4748,2

1 525,4432,2570,5522,7

2 608,6

1 025,4(226,2)

13,2

1 796,2636,6

1 112,746,9

2 608,6

Group Cash Flow

6 months ended R Millions

EBITDA

CASH GENERATED BY OPERATIONS

Working Capital (Increase)/DecreaseNet interest & dividends receivedTaxation PaidDividends Paid

Capital ExpenditureShares bought-backPurchase of businessesOther Movements

Net reduction in cash and cash equivalents

2002242,9(2,7)31,9

(165,4)(143,7)

(37,0)(13,2)

-(456,8)

4,2(502,8)

2001200,4

7,756,3

(105,0)(120,2)

39,2(17,2)

(209,5)(1,8)

2,6(186,7)

31 March

Dividends

0

20

40

60

80

100

Cen

ts

1997 1998 1999* 2000 2001 2002

Interim Final

* Excludes Special dividend of 250 cents

1.9

1.92.5

2.4

1.9

Revenue % contribution

Consumer products

41%

Telecomms25%

Cables9%

Electrical Engineering

8% Office Systems

12%

Reutech5%

Operating profit % contribution

Office Systems23%

Consumer products

25%Telecomms33%

Reutech4%

Cables2%


13%

Group Operations

Office Systems

• Revenue R420m +29%

• Operating profit R71m +91%

• Nashua– Strong growth– Digital conversion continuing– High % annuity income

Office systems

• IQ Works– Recently started breaking even– Satisfying growth in sales– Strong synergy with Nashua Mobile

• RC&C Finance Company– Good growth in book– No increase in bad debts

• Royce Imaging– Sales & profit growth– Support Nashua brand of products

Consumer products

• Revenue R1 387m +20%

• Operating profit R78m +42%– Nashua Mobile

– Panasonic

– Futronic

– Saco Systems

Consumer products

• Nashua Mobile– Internal re-organisation

• Least Cost Routers• Corporate Customers

– Clear focus at top end of corporate market• 260 000 Contract subscribers• ARPU over R500 per month• 11 % Churn lowest in market

– Focus on quality service & product offering• SMS gateway• R&D facility opened in Stellenbosch

Consumer products

• Panasonic– Benefit from improved business model

• Direct sales to customer - Leaf• Indent• Retail

• Introduced Futronic• Focus on lower end of consumer market• Sourcing additional product

Telecommunications

• Revenue R867m +57%• Operating profit R100m +112%• Siemens Telecommunications

– Excellent growth• R/$ exchange rate

– Progress on roll-out of Cell C• No overdue debts

– Well positioned to benefit from SNO• Eskom’s Easitel

– 30% of total turnover is into Africa– Cellular opportunities in RSA - GPRS (2.5G); 3G

Reunert40.0%

Siemens60.0%

AngolaFixed Line 0.53%

Cellular 0.28% Internet Subs’ 30 000

ZambiaFixed Line 0.85%

Cellular 0.81%Internet Subs’ 20 000

ZimbabweFixed Line 1.91%


NamibiaFixed Line 5.94%


BotswanaFixed Line 9.27%Cellular 16.40%

Internet Subs’ 15 000

RSAFixed Line 11.36%

Cellular 22.77%Internet Subs’ 2 400 000

UgandaFixed Line 0.28%


Tanzania Fixed Line 0.49%Cellular 0.95%


MalawiFixed Line 0.44%


MozambiqueFixed Line 0.44%


MauritiusFixed Line 23.52%


SwazilandFixed Line 3.19%

Cellular 4.52%Internet Subs’ 10000

CongoFixed Line 0.75%


DRCFixed Line 0.04%


Burkina FasoFixed Line 0.45%


Guinea ConakryFixed Line 0.79%

Cellular1.04% Internet Subs’ 8 000

LesothoFixed Line1.03%

Cellular1.32%Internet Subs’ 1 000

NigeriaFixed Line 0.43 %


SudanFixed Line1.24%Cellular 0.29%


MadagascarFixed Line 0.36%


GambiaFixed Line 2.56%


EritreaFixed Line 0.8%Cellular 0.00 %


Feb 2002 © Siemens Fixed NetworkMobile Network

Teledensity

Fixed vs mobile phones

0

2

4

6

8

10

12

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

Mill

ion

s Fixed LineMobile

South Africa

Reutech

• Revenue R186m -26%

• Operating profit R12m -73%

• Difficult 6 months

• Substantial order received

• Major increase in revenue and earnings FY03+

• Excellent prospects to grow order book


• Revenue R268,9m +46%• Operating profit R41,9m +39%• CBI

– 26% revenue growth from Mitsubishi product range– 71% from exports– Mitsubishi & meter products lower margins than

traditional CBI products

• Export to Europe, USA, Africa & Far East

0%

10%

20%

30%

96 97 98 99 00 01 02

Ratio

ExcludingAcquisitionsTotal

CBI Ratio Export/Total Sales

Cables

• Revenue R295,6m +1%

• Operating profit R6,0m -82%

Reunert38.6%

Marconi50.9%

Pirelli10.5%

ATC

Reunert50.0%

Pirelli50.0%

African Cables

Cables

• African Cables– Performance continued– Gaining market share– Improved efficiencies– Strong order book

• BEE

Domestic demand

18%

21%

25%

27%

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1999 2000 2001 2002

Rb

n

15%

17%

19%

21%

23%

25%

27%

29%

%

Total market % Market share

African Cables

Cables

• ATC– Sporadic copper demand – Weak demand for optical fibre continues– Restructured business to reduce costs

• No short-term improvement expected

Issues & Prospects

Black Economic Empowerment

• Equity participation– Subsidiaries– Reunert– Franchisees

• Expected Revenue of R95m by Sept 02

• Employment equity– Agreed plans in place – Focus on senior management & professional level

Black Economic Empowerment

Community involvement– Reunert College

• 400+ Students since 1993• Maths, Science & English

– Outsourcing & subcontracting

Prospects

• Continued strong growth for 2nd half expected

Thank youQuestions

Shareholding

Equity

• Shares in issue– In issue 204 060 264– Shares held by subsidiary 17 168 058 – No additional shares bought back since May 2001– AGM approval

• Ave value traded R19,7m/week

Major institutional shareholders

OMAM

RMB

InvestecReunert

Stanlib

Coronation

Franklin Templeton

Sanlam IM

BOE AM

Other holdings

Investor Presentation May 2002. Content Introduction Financial Results Group Operations Issues...

Documents

Transcript of Investor Presentation May 2002. Content Introduction Financial Results Group Operations Issues...