2012 Reunert results for the year ended 30 September 2012
2012 OVERVIEW Dave Rawlinson, Chief Executive
Agenda 1 Welcome to attendees 2 Operational performance – Dave Rawlinson, Chief Executive 3 Financial results – Manuela Krog, Financial Director 4 CBi-electric – Alan Dickson, Managing Director, CBi-electric 5 Nashua Andy Openshaw, Managing Director, Nashua Communications JHB Mark Taylor, Managing Director, Nashua Mobile (CT) CT 6 Executive team focus – Dave Rawlinson, Chief Executive 3
Salient features Rbn 14 11.7 10.9 12 Revenue 7% up 10 8 • 2012: R11.7bn 6 • 2011: R10.9bn 4 2 0 01 02 03 04 05 06 07 08 09 10 11 12 Rbn 2.0 1.6 1.5 Operating profit 10% up 1.5 • 2012: R1.5bn 1.0 • 2011: R1.4bn 0.5 0.0 01 02 03 04 05 06 07 08 09 10 11 12 4
Salient features Cents 644.4 700 630.1 600 Normalised HEPS 9% up 500 400 • 2012: 644.4c 300 • 2011: 590.0c 200 100 0 01 02 03 04 05 06 07 08 09 10 11 12 Cents Cover 500 2.5 1.7x 400 2.0 Final dividend 9% up 300 1.5 • 2012: 275 cents per share 200 1.0 • 2011: 253 cents per share 100 0.5 0 0.0 02 03 04 05 06 07 08 09 10 11 12 Interim Final Special Dividend cover 5
Operating profit contribution per segment 1 525 1 391 1 263 765 736 789 681 626 582 1H10 2H10 1H11 2H11 1H12 2H12 CBi-electric Nashua Reutech Half Year Full Year 6
Cash on hand Rbn Cash on hand (including internal financing deposited with Quince) 2.5 2.0 1.5 1.0 0.5 0.0 02 03 04 05 06 07 08 09 10 11 12 Rbn 1.0 0.5 0.0 (0.5) (1.0) (1.5) (2.0) 02 03 04 05 06 07 08 09 10 11 12 Net cash on hand reduced by Quince borrowings Quince net borrowings 7
2012 OPERATIONAL PERFORMANCE
Operations – CBi-electric African Cables Rbn Revenue • Slower than expected rollout of infrastructure spend 5.0 • Delays in contract renewals with parastatals 3.6 constrained growth 4.0 • Signing of several long-term contracts with public 3.0 sector enterprises provides a revenue base 2.0 • Power Installations division performing well • Acquisition of Tank Industries provides expanded 1.0 product range 0.0 Low Voltage 07 08 09 10 11 12 • Experienced good export demand • Margins supported by a weaker Rand Rbn Profit Operating profit margin • Local residential and mining markets static 0.8 20% • Progress with ITmatic and industrial controls 0.6 businesses slow 0.6 15% • Activity levels in Australia lower due to slow down in mining sector 0.4 10% Telecom Cables • New high bit rate ADSL cable qualified in 2012 0.2 5% • This secured revenue stream from Telkom 0.0 0% • Export market penetration slow 07 08 09 10 11 12 9
Operations – Nashua Nashua Mobile Rbn Revenue • Loss of LCR 8.0 7.2 • Further reduction in ARPU as a result of bundled 6.0 tariffs affected Nashua Mobile Nashua Office Automation 4.0 • Increased unit sales, but margin pressure due to 2.0 weakening rand and increased competition Nashua ECN 0.0 07 08 09 10 11 12 • Successful integration – migration of targeted LCR customers Rbn Profit • Merger with Nashua Communications supports a Operating profit margin 0.8 converged telecommunications offering 1.0 12% Nashua Communications 0.8 9% • Acquisition of KSS provides Cisco networking 0.6 capability 6% 0.4 Quince Capital 3% 0.2 • Solid performance, increase of 11% in the rental book 0.0 0% 07 08 09 10 11 12 10
Operations – Nashua Mobile Nashua Mobile revenue analysis Subscriptions (excl. LCR) Airtime (excl. LCR) Airtime (LCR) Subscriptions (LCR) Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 11
Operations – Reutech Rbn Overview Revenue 1.0 • Strong performance from all divisions 0.8 0.8 • Weakening rand increased margins from export sales 0.6 • All operations have stable order books 0.4 Reutech Communications 0.2 • Acquisition of Natcom and SAAB Grintek HF 0.0 07 08 09 10 11 12 radio business Reutech Radar Systems Rbn Profit Operating profit margin • Continued success of mining surveillance radar 0.3 30% Reutech Solutions 25% 0.15 0.2 20% • 5 year contract for maintenance of defence force 15% communications networks 0.1 10% Fuchs Electronics 5% • Expedited long awaited export order 0.0 0% 07 08 09 10 11 12 12
Investment in future capacity Rm 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Replacement Expansion Investment R&D 13
Corporate action Sales Natcom R7.1m Tank Industries R16.7m Total Nashua franchises R3.5m R76.8m SAAB Grintek R29.7m KSS Technologies R19.8m 14
2012 FINANCIAL RESULTS Manuela Krog, Financial Director
Group income statement 2012 2011 Rm % ∆ 11 662 10 923 7 Revenue 1 661 1 513 10 EBITDA 14.2 13.9 EBITDA % 1 525 1 391 10 Operating profit (before interest and dividends) 13.1 12.7 Operating profit % 30.9 29.7 Effective tax rate (before abnormal item in 2011) % 658.3 598.3 10 Headline earnings per share (cents) 644.4 590.0 9 Normalised headline EPS (cents) 5.4 5.6 Dividend yield 10.7 10.0 7 Price earnings ratio For the year ended 30 September 16
Exports 8% 3% 21% Europe Asia North America Africa 20% 41% Australasia South America 7% • Reutech has the greatest export revenue proportion, with exports comprising 55% of segment revenue • Export revenue for CBi-electric amounted to 12% of segment revenue 17
Group balance sheet 2012 2011 Rm Total non-current assets 2 578 2 401 Current assets 4 010 3 705 Total assets 6 588 6 106 Shareholders’ equity 4 442 3 880 Non-controlling interests 56 55 Non-current liabilities 153 100 Current liabilities 1 937 2 070 Total equity and liabilities 6 588 6 106 Total liabilities to shareholders’ funds % 43.6 52.6 Current ratio (times) 2.1 1.8 Normalised return on ordinary shareholders’ funds % 25.1 23.5 As at 30 September 18
Cash flow (Rm) (85) (105) 495 (291) 42 621 565 Increase in Increase in Opening balance Cashflow from Increase in asset Increase in Investing activies Financing Closing balance Quince asset device finance operating rental book handset activities rental book (Nashua Mobile) activities subsidies inlcuding traditional working capital 19
Segmental revenues 2012 2011 7% 6% 30% 31% 2012 2011 R11 662m R10 906m 62% 64% CBI-electric Nashua Reutech 20
Segmental analysis – operating profit 3 (17) 1 525 102 1 44 1 391 2011 CBI-electric Nashua Reutech Other NSN 2012 Operating profit - Rm 2012 % ∑ % ∆ 2011 % ∑ CBi-electric 593 39 - 592 43 Nashua 839 55 6 794 58 Reutech 151 10 209 49 3 Other (57) (4) 5 (61) (4) Total operations 1 525 100 14 1375 100 NSN - 17 Operating profit as reported 1 525 1 391 For the year ended 30 September 21
Operations – research and development 2012 Total R&D Rm Self-funded 2012 2011 2010 2009 2.2 2.2 3.5 3.4 2.8 CBi-electric 3.2 3.2 Nashua 25.1 58.8 48.2 64.4 55.1 Reutech 30.5 64.2 51.7 67.8 57.9 Total 22
2012 Nashua JHB: Andy Openshaw, Managing Director, Nashua Communications CT: Mark Taylor, Managing Director, Nashua Mobile
ECN post acquisition Nashua ECN Monthly Minutes, Nov '09 - Oct '12 80 70 60 50 40 30 20 10 0 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Mobile Local National Inbound Special International On-Net • Successful integration • Exceeded profit targets • Interconnect rates continue to drop • LCR migration targets exceeded › Efficiency and volume support sustainability and boost margins › Lower interconnect rates benefit new entrants 24
New Nashua Communications Creating a strategic platform for future growth 25
Focus for 2013 Creating a strategic platform for future growth Customers ¡ ¡ SERVICE ¡DELIVERY ¡ COLLABORATION ¡ SOLUTIONS ¡ ¡ DATA ¡CENTRE ¡ SOLUTIONS ¡ ¡ TECHNOLOGY ¡ DIRECT ¡ INDIRECT ¡ SOLUTION ¡ ¡ MANAGEMENT ¡ ENGINEERING ¡ SALES ¡ SALES ¡ NETWORK ¡ ¡ SOLUTIONS ¡ CARRIER ¡/ ¡CLOUD ¡ SOLUTIONS ¡ TRAINING ¡ ADMINISTRATION ¡AND ¡SUPPORT ¡ 26
Key milestones achieved • Cisco Gold Partner certification achieved in November 2012 • Cisco Big Bet backing in the corporate data centre space • Siemens Openscape platform deployed in the ECN cloud • ECN Hosted PBX and Mobile Voice applications launch in the new year • Successful cross selling achieved for combined PBX and voice offerings through the Nashua OA channel 27
Nashua Mobile – key focus points for 2013 • To support growth initiatives the business has been restructured into: › Consumer and Enterprise › Customer Operations to provide support • Create efficiencies • Focus on margin growth • New network agreements will be concluded soon 28
Nashua Mobile Retail • Refresh hardware technologies • Update and redo the retail stores • Address technology in the stores to have the same POS and Accounting system • Automated credit collection system • Revamp the front-end systems • Grow retail footprint by partnering with stores › In-store concept › Cost effective › Adding 100 new Nashua Mobile touch points 29
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