INTERIM RESULTS for the six months ended 31 August 2017 Mteto Nyati - - PowerPoint PPT Presentation

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INTERIM RESULTS for the six months ended 31 August 2017 Mteto Nyati - - PowerPoint PPT Presentation

Feb 10, 2024 563 likes •875 views

INTERIM RESULTS for the six months ended 31 August 2017 Mteto Nyati | Chief Executive Alex Smith | Chief Financial Officer Agenda 01 Performance Highlights / Mteto Nyati Chief Executive 02 Strategy Update / Mteto Nyati Chief Executive

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INTERIM RESULTS

for the six months ended 31 August 2017

Mteto Nyati | Chief Executive Alex Smith | Chief Financial Officer

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SLIDE 2

01 02 03 04

Performance Highlights / Mteto Nyati – Chief Executive Strategy Update / Mteto Nyati – Chief Executive Financial Results / Alex Smith - Chief Financial Officer Operational Update / Mteto Nyati – Chief Executive

02

Agenda

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SLIDE 3

Normalised Revenue

+5%*

R6,8 Billion Normalised Ebitda

+19%*

R501 Million Normalised HEPS

+16%*

57 cents per share

EPS 44 cents per share Netstar Revenue Growth 12% Consumer Connections 32% Commercial Connections 9% Net debt of

R1.1 Billion

Expected net debt once all disposals completed

Continuing Operations

Performance Highlights

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* Constant Currency

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SLIDE 4

Mteto Nyati / Chief Executive

Strategy Update

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02

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SLIDE 5

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Driving growth in turbulent times

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SLIDE 6

ALTRON BOARD & GOVERNANCE

Active shareholders Experienced ICT experts as non-executive directors Independent chairperson of the board Ethical culture

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Dolores Mashishi GE: Human Capital Mteto Nyati Group Chief Executive Alex Smith CFO Andrew Holden COO Zipporah Maubane GE: Mkg, PR, Comms Collin Govender GE: Shared Services Johan Gellatly GE: Bytes Secure Transaction Services Harry Louw MD: Altech Netstar Brett Nash MD: Altech Radio Holdings Johan Basson MD: Bytes Document Solutions Leslie Moodley MD: Bytes Systems Integration Chad Baker MD: Bytes Managed Solutions

OUR EXECUTIVE COMMITTEE

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OUR STRATEGIC GOALS

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OUR STRATEGY ROADMAP

FY’18 Positioning for Growth FY’20 Delivering Growth

01 02 03

FY’22 Accelerated Growth

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SLIDE 10

OUR OPCO STRATEGIES

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Opco Life Cycle Stage Strategy Altron Growth One Altron Bytes Secure Transaction Services Growth Bolt on acquisitions Altech Radio Holdings Growth Broadband, IoT and Safe Cities Bytes Systems Integration Growth Cloud, Security & Data Analytics Altech Netstar Growth Geo expansion, telematics & fleet mgmt Bytes People Solutions Growth Organic & acquisitive growth Bytes Managed Solutions Mature Multi vendor support (Diebold, IBM, HP) Bytes Document Solutions Mature Channel management & reset cost base Arrow Altech Distribution Mature Leverage Arrow & drive e-commerce Bytes UK Growth Acquisition & extend into adjacencies

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SLIDE 11

SOLID FOUNDATION FOR GROWTH

Altech Netstar Altech Radio Holdings Bytes Secure Transactions Bytes United Kingdom Bytes People Solutions Arrow Altech Distribution

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SLIDE 12

OUR NEW GROWTH AREAS

Cloud Services Data Analytics Security Internet of Things

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SLIDE 13

DISCONTINUED OPERATION STATUS

Powertech Transformers Sale in process CBI Telecom Cable Joint Venture Powertech Batteries Sale concluded PTSI Sale concluded Swanib Cables Sale concluded Crabtree Agreement signed, completing CPs Switchgear/Quadpro Agreement signed, completing CPs Altech Multimedia/UEC Sale in process

DISPOSALS UPDATE

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SLIDE 14

Alex Smith / Chief Financial Officer

FINANCIAL RESULTS

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03

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RM H118 H117 % CHANGE

Revenue 6 792 7 537

  • 10

Normalised revenue 6 792 6 497* +5 EBITDA 452 445 +2 Normalised EBITDA 501 420* +19 Normalised EBITDA Margin (%) 7.4 6.5* HEPS (cents) 47 54

  • 13

Normalised HEPS 57 49* +16 Return on Capital Employed (%) 14.5 12.0 Net Borrowings 1 834 2 038

* Constant Currency

Continuing Operations

INTERIM RESULTS - FINANCIAL HIGHLIGHTS

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Rm H118 H117 % Change

Revenue 8 697 11 427 (24) Operating profit before capital items 325 272 19 EBITDA 443 380 17 EBITDA Margin (%) 5.1 3.3 Net finance expenses (104) (170) Capital items (79) (108) Foreign exchange losses (4) (104) Taxation (66) (48) HEPS – Total operations (cents) 40 31 29

GROUP INCOME STATEMENTS - TOTAL OPERATIONS

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Continuing Operations Rm H118 H117 % Change

Revenue as reported 6 792 7 537 (10) Disposed businesses (586) Constant currency adjustment (453)

Normalised revenue 6 792 6 497* 5

Continuing Operations Rm H118 H117 % Change

EBITDA as reported 452 445 2 Disposed businesses (5) Once-off restructuring costs 49 Constant currency adjustment (20)

Normalised EBITDA 501 420* 19

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NORMALISED CONTINUING OPERATIONS

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  • On a normalised basis

(before constant currency adjustments) EBITDA increased to R501 million with most segments contributing to the growth

  • Growth in the ICT
  • perations was led by

Bytes Secure Transaction Services, with the international

  • perations also

performing well

  • A significant

improvement from the corporate line on a normalized basis reflects the restructuring activities undertaken during the period

MOVEMENT IN NORMALISED EBITDA

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53 149

Continuing Operations

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CASH FLOW

20 A B C D E F G H I J

A : Net cash & cash equivalents at the beginning of the period B : Cash generated by operations C : Change in working capital D : Net finance expense E : Taxation paid F : Net dividends paid G : Investing activities H : Financing activities I : Other J : Net cash & cash equivalents at the end of the period

100 200 300 400 500 600 700 800 900 1000

417 598 (363) (128) (90) (2) (296) 73 55 264

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SLIDE 20
  • Increase in investing activities

primarily due to acquisition activity as well as higher investment into contract fulfilment costs

  • Investment into PPE and intangibles

slightly lower than the depreciation and amortisation charge in the continuing

  • perations, broadly maintaining the

capital base

  • Investment into contract fulfilment

costs relates entirely to Altech Netstar and reflects improved growth in the subscriber base

* The graph presented excludes proceeds from disposals of operations.

INVESTING ACTIVITIES

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AUG ‘16 AUG ‘17

50 100 150 200 250 300 350 400 450

Other Acquisition of subsidiaries Additions to property, plant and equipment

30 67 86 86 99 70 43 101 118

Additions to intangible assets Investment to contract fulfillment costs

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Rm H118 H117

Total non-current assets 3 187 2 907 Current assets 3 541 3 776 Assets held for sale 1 013 2 399 Cash balance 1 072 1 449 Total assets 8 813 10 531 Shareholder’s equity 2 760 2 729 Non-controlling interests (237) (377) Non-current liabilities 1 694 198 Liabilities held for sale 739 1 189 Current liabilities 3 857 6 792 Total equity and liabilities 8 813 10 531

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SUMMARISED BALANCE SHEET

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Rm H118 FY17

Net debt 1 834 1 932 Net asset value of disposal group 274 620 Net debt in disposal group 142 114 Deferred disposal receipts 269 116

  • Continual progress being made on the disposals
  • Reduction in carrying value of disposal group mainly due to disposal of Batteries and PTSI
  • Some of the proceeds deferred and now carried on main balance sheet

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NET DEBT POSITION AND CARRYING VALUE OF DISPOSAL GROUP

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(112) (96) (106) (95) (105) (81) (92) (95)

76

52 49 47 51 31 37 36

WORKING CAPITAL

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  • 150
  • 100
  • 50

50 100 150

FEB ‘14 AUG ‘14 FEB ‘15 AUG ‘15 FEB ‘16 AUG ‘16 FEB ‘17 AUG ‘17 Debtors days Creditors days 76 66 69 59 58 56 59 62

19 22 12 11 4 6 4 3

55 Inventory days Net days

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Mteto Nyati / Chief Executive

Operational Update

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04

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Altech Radio Holdings

  • Increase in activity levels primarily attributable to

the City of Tshwane broadband project though

  • ther areas also growing
  • Lower operating margins reflect increased

contribution from mega projects

Bytes Document Solutions

  • Challenging first half, though improved on the

second half of last year. Right-sizing process underway to complete end October.

Bytes Managed Solutions

  • Revenue well down due to reduced spend from

traditional financial services customer base. New MD appointed and focused on top line growth

Bytes Secure Transaction Services

  • Continued strong performance from this focus

area, with growth primarily in the Fintech space

Bytes Systems Integration / Bytes Universal Systems

  • Improved performance from Bytes Systems

Integration though still below expectations

  • Bytes Universal Systems poor performance for

first half

  • Businesses to be combined and refreshed under a

new MD

Company/Division H118 Revenue Rm % change

  • n

prior year H118 EBITDA Rm % change

  • n prior

year Altron ICT Altech Radio Holdings Group 586 29 32 19 Bytes Document Solutions Group 660 (31) 25 (29) Bytes Managed Solutions 517 (23) 29 (9) Bytes People Solutions 220

  • 19

(10) Bytes Secure Transaction Services 504 8 110 16 Bytes Systems Integration SA Group 625 (3) 7 NM Bytes Universal Systems 296 (18) 16 (43) Altron ICT South Africa Operations 3 408 (10) 238 (1)

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OPERATIONAL REVIEW

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Bytes Technology Group UK

  • Excellent first half from the UK operations

growing revenue by 25% and EBITDA by 21% in local currency terms

Other international operations

  • Primarily Bytes African operations
  • Reduced revenue on non-recurrence of a

significant project in the prior year

  • EBITDA significantly affected by forex

movements – favourable in the current period

Company/Division H118 Revenue Rm % change

  • n

prior year H118 EBITDA Rm % change

  • n prior

year Altron ICT continued Bytes Technology Group UK 2 525 2 109 (1) Other International

  • perations

114 (45) 12 NM Altron ICT International

  • perations

2 639 (2) 121 4 Shared Services, Corporate and cons

  • NM

6 NM Total Altron ICT 6 047 (6) 365 2

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OPERATIONAL REVIEW

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Altech Netstar Group

  • Continued improvements in the performance of

Altech Netstar

  • Improved subscriber growth in the period,

particularly in SVR, with churn and retentions under close control

  • Australian acquisitions performing in line with

expectations

Arrow Altech Distribution

  • Reduction in revenue and EBITDA following

significant growth in the prior year due to slow down in several projects

  • Strengthening of the Rand works against the

business as all product imported

Corporate

  • Significant once-off costs in the period due to

head office right-sizing

Company/Division H118 Revenue Rm % change

  • n

prior year H118 EBITDA Rm % change

  • n prior

year Altron Operations Altech Netstar Group 668 12 133 6 Arrow Altech Distribution 291 (6) 21 (13) Corporate, cons and financial services (214) NM (67)

  • Total Altron

Continuing Operations 6 792 (10) 452 2

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OPERATIONAL REVIEW

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Interim results

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  • Achieve our 2nd half financial commitments
  • Finalise BDS restructuring & BSI / BUS integration
  • One Altron One Customer sales enablement initiative
  • Complete Powertech Transformers and Altech UEC disposals
  • Strategic Partnerships
  • Global consultants
  • Technology firms
  • Gear up ARH for hyper growth

LOOKING AHEAD

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Questions?

Driving growth in turbulent times

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THANK YOU

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