ANNUAL RESULTS March 2015 PRESENTATION TO INVESTORS June 2015 - PowerPoint PPT Presentation

ANNUAL RESULTS March 2015 PRESENTATION TO INVESTORS June 2015

Engineering Consumables BMG (Bearing Man Group)  Engineering components & technical services  120 branches  Bearings, Seals, PT, Tools, Fasteners  Drives, Motors, Belting, Field Services  Filtration, Hydraulics, Lubrication, Pneumatics  Mandirk Group (incl SA Tool)  Tools & equipment  20 branches  Autobax  Automotive  OST & Wegezi 

Capital Equipment (CEG SA) 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 

Capital Equipment (Kian Ann Group)

Capital Equipment (Kian Ann Group) Kian Ann Engineering   One of the world's largest independent distributors of equipment spare parts  HQ in Singapore  Subsidiaries in Indonesia, China Kian Chue Hwa Industries   One of Asia’s largest independent distributors of heavy truck spare parts  HQ in Singapore  Subsidiaries in Indonesia, Thailand

Building Supplies (BSG)  Tiletoria  MacNeil Distributors  Brands 4 Africa  15 outlets in SA

Results highlights Revenue R10.46bn  Operating Profit down 3% to R1.01bn  PBT R842m  PAT down 3% to R691m  Attributable PAT R579m  Cash generated by operations up 37% to R979m  Shares in issue (weighted ave) up 5% to 78m  Shares issued in Feb rights offer up 44% to 108.5m  EPS down 6% to 742c  HEPS down 5% to 726c  Normal DPS 196c  Special DPS 2024c 

Results Highlights R’m 31 Mar 15 vs PY Sales 10,460 0% Gross Profit 3,089 +7% GP% 29.5% 27.7% Operating Profit 1,014 -3% OP% 9.7% 10.0% PBT 842 -1% PAT 691 -3%

Results Highlights R’m 31 Mar 15 vs PY PAT 691 -3% Preference shareholders 70 +7% Minority shareholders 42 -34% PAT attrib to ordinary shareholders 579 0% Weighted average shares (‘000) 77,965 +6% EPS (c) 742c -6% HEPS (c) 727c -5% DPS (c) 196c Not meaningful Special DPS (c) 2024c -

Results Highlights R’m 31 March 15 vs PY Inventories 3,803 +9% Trade Receivables 1,942 +5% Trade Payables (2,594) +11% NWC 3,151 +5% NWC as % of Sales 30% 29% NAV (Equity) 4,636 +30% Debt*: Equity 30% 37% *Excludes long-term funding secured by investments and loans

Dividend calculation vs PY vs PY Per share R’m 31 Mar 15 # of shares (cps) (R) (per share) Attributable PAT 579 0% One-off non-cash profit* (70) - Adjusted Attrib PAT 509 -12% Dividend cover 2.75x Ordinary dividend 184 -12% 196c nm - Interim dividend 63 -16% 74.9m 84c -18% - Final dividend 122 -10% 108.5m 112c -39% Special dividend 1,500 - Total dividend 1,685 +700% * R70m one-off gain on reversal of put option liability on purchase of remaining 25% of Kian Ann

Commentary on Results Difficult trading conditions  Mining & resource markets weak in southern Africa and SE Asia  Construction market in China very weak  Infrastructure spend in SA very slow  Drought & soft maize price impacted demand for Ag equipment  BMG showed growth in revenue and operating profit – a great result  CEG revenue dropped 10% but margin management good  BSG showed good growth again in a competitive sector  A few smaller acquisitions in the period 

Commentary on Results Working capital well managed  Strong cash generation  One-off profit of R70m realised on acquiring remaining 25% of Kian Ann  Attributable PAT level with Mar 2014  EPS down 6% due to extra shares in issue (weighted ave)  Ordinary dividend (in Rand) for the year down 12% in line with  normalised earnings (excluding one-off profit) Cover maintained at 2.75x normalised earnings (in Rand)  EPS calculated on wtd ave shares in issue – 78m  Final DPS paid on 108.5m shares 

Commentary on Results Rights issue and special dividend in Feb 2015  Special dividend R1.5bn  Rights issues raised R2.25bn (net R750m)  44% more shares in issue  Group structure simplified and streamlined 

Group Structure BBBEE & Invicta Staff Trusts Holdings 100% 100% 100% 25% 75% 100% Invicta Invicta Invicta Invicta SA Invicta OH Properties Treasury Finance 100% 60% 100% 100% 100% EC CE BS Invicta OT Invicta AH Northmec BMG N Holland Kian Ann Mandirk CSE MacNeil KCHI Autobax Doosan Tiletoria HHI Wegezi HPE B4A API OST ESP AT SA Tool Criterion

Turnover (Rm) 12 000 10 000 10 yr CAGR = 18% p.a. 8 000 6 000 4 000 2 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Turnover (Rm) 12 000 10 000 8 000 5 190 5 336 6 000 4 044 4 000 3 036 2 361 1 983 5 270 5 129 2 000 3 514 2 563 2 173 1 986 0 2010 2011 2012 2013 2014 2015 H2 H1

Revenue Contribution by Segment 2015 (2014) Building Supplies Engineering 16% (13%) Consumables 40% (38%) Capital Equipment 44% (49%)

Revenue Contribution SA vs International 2015 (2014) International 24% (22%) South Africa 76% (78%)

Operating Profit (Rm) 1 200 1 000 10 yr CAGR = 16% p.a. 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Operating Profit (Rm) 700 600 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 H1 H2 One-off

Operating Profit Contribution by Segment 2015 (2014) Building Supplies 8% (7%) Engineering Capital Consumables Equipment 48% (46%) 44% (47%)

Segmental Operating Profit (Rm) 1 200 1 000 87 67 800 39 457 484 14 600 339 247 400 158 499 473 200 390 371 320 - 2011 2012 2013 2014 2015 -200 BMG CEG BSG Other

Segmental Operating Margin (%) 16% 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 BMG CEG BSG

Earnings (Rm) 800 700 600 500 400 300 580 579 535 492 200 354 100 0 2011 2012 2013 2014 2015 Ordinary s/h Minority s/h Pref s/h One-off

EPS (cps) 1 000 900 218 800 700 600 500 400 788 742 737 647 300 504 453 437 200 356 292 100 170 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EPS One-off

EPS (cps) 500 450 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 H1 H2 One-off

EPS and DPS (cps) Excludes special dividend of 2024cps - Feb 2015 1 000 900 800 700 600 500 400 300 200 287 268 254 100 196 183 151 138 138 104 68 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EPS One-off DPS

BMG Results Summary 31 Mar 2015 Rm 31 Mar 2015 vs PY Sales 4 209 +6% Operating Profit 499 +6% OP% 11.9% 12.0% Ave NOA 1 675 +16% RoNOA 29.8% 32.9%

Sales 4 500 4 209 3 955 4 000 3 425 3 500 3 000 2 742 2 395 2 500 2 056 1 928 2 000 1 550 1 500 1 350 1 000 500 - 2007 2008 2009 2010 2011 2012 2013 2014 2015

Operating Profit 600 499 500 473 390 400 371 319 320 293 300 220 200 174 100 - 2007 2008 2009 2010 2011 2012 2013 2014 2015

OP % 18% 16% 14% 12% 10% 8% 6% 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sales by Segment Fluid Power 12% Engineered Products 24% Consumables 64%

Sales by Industry Sector Forestry & Resale/ Trade Paper (2%) Projects & (1%) Building & Consultants (7%) Construction Oil, Gas & COD (4%) Chemicals (1%) Accounts (13%) Other (1%) Food & Beverage (8%) Mining (25%) Automotive & Light Heavy Agriculture (8%) Transport (7%) Industry (18%) Industry (5%)

Sales by Region South Africa 87% Africa 13%

Review of FY 2015 • Adverse market conditions continue • Acquisitions effective 1 October 2014: • SA Tool & Klep Valves • Stand out performances: • BMG Core / Mandirk / BMG Africa • Engineering businesses affected by lack of project activity • Overheads (up 4%) and working capital well controlled • Strong cash generation • 40 th celebrations & Expo • All companies’ BBBEE ratings maintained or improved • Simplify for Success initiative progressing well • Strategic positioning and differentiated value proposition paying off

BMGP Upgrade Additional land being Acquired • R350m 7 971m 2 Engineering investment Assembly Building 9 330m 2 • R44m spent in Parking Deck FY2015 6 000m 2 BMG Park Existing • 81,100m 2 on 36 891m 2 completion Engineering Manufacturing Building 9 208m 2 Land acquired for CDC 9 206m 2 Land Acquired 2 500m 2

BMGP Upgrade • Objectives: • Invest in our central distribution capabilities • Consolidate up to 10 warehouses into 1 • Rationalise our engineering/workshop facilities • Consolidation of duplicated head office setup • Optimise stock holding & improve operational efficiencies • Internalise property rentals