PRESENTATION RMB Morgan Stanley Off-Piste Conference 29 Sep 2017 - - PowerPoint PPT Presentation

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PRESENTATION RMB Morgan Stanley Off-Piste Conference 29 Sep 2017 - - PowerPoint PPT Presentation

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PRESENTATION RMB Morgan Stanley Off-Piste Conference 29 Sep 2017 Presented by Arnold Goldstone (Chief Executive Officer) Agenda 01 COPORATE HISTORY 02 BUSINESS PROFILE Capital Equipment Group Engineering Solutions Group Building Supply

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PRESENTATION

RMB Morgan Stanley Off-Piste Conference 29 Sep 2017

Presented by Arnold Goldstone (Chief Executive Officer)

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2 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Agenda

COPORATE HISTORY

01 02

KEY FINANCIAL INFORMATION

03

PROSPECTS AND STRATEGY

04

EXEC MANAGEMENT & SHAREHOLDING

05

Capital Equipment Group Engineering Solutions Group Building Supply Group

BUSINESS PROFILE

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3 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

CORPORATE HISTORY

  • 1989: Founded and listed on Johannesburg Stock

Exchange (JSE)

  • Top 100 Company for 21 years since then
  • Annual Global Revenue of Invicta Group R10bn+ (US$

750m+)

  • Presence in over 20 countries
  • Over 5 000 employees
  • Revenue: 74% SA, 26% rest of world
  • Importer and distributor of industrial consumables,

capital equipment and related spares

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4 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

BUSINESS PROFILE

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5 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Divisional structure

CAPITAL EQUIPMENT GROUP

  • Northmec
  • New Holland*
  • CSE
  • Doosan
  • HPE
  • ESP
  • Criterion
  • Kian Ann Group
  • BMG
  • Hansen
  • OST
  • Mandirk
  • SA Tool
  • Sibuyile
  • Autobax
  • Hyflo
  • MacNeil
  • Distribution
  • Manufacturing
  • Brands 4 Africa
  • Tiletoria

Importer & distributor of agricultural equipment, construction equipment, forklifts and aftermarket replacement parts Manufacturer, wholesaler and distributor of building supplies worldwide Leading distributor of engineering consumables and provider of engineering solutions BUILDING SUPPLY GROUP (Discontinued) ENGINEERING SOLUTIONS GROUP

*Equipment sales discontinued. Aftermarket support continues (spare parts).

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6 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Engineering Solutions

  • BMG (Bearing Man Group)
  • Engineering components & technical services
  • 135 branches
  • Bearings, Seals, PT

, Tools, Fasteners

  • Drives, Motors, Belting, Field Services
  • Filtration, Hydraulics, Lubrication, Pneumatics
  • Hansen
  • Mandirk Group (incl SA Tool)
  • Tools & equipment
  • 19 branches & subsidiaries
  • Autobax
  • Automotive
  • 3 branch network
  • OST
  • Hyflo

Engineering Solutions

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7 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Capital Equipment (SA))

  • Northmec (Agricultural Machinery)
  • New Holland* (Agricultural Machinery)
  • CSE (Earthmoving Machinery)
  • Doosan (Earthmoving Machinery)
  • HPE (Hyundai Earthmoving)
  • Criterion (Forklifts)
  • ESP (Parts)
  • 201 dedicated outlets

*Equipment sales discontinued. Aftermarket support continues (spare parts)

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8 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Capital Equipment (Kian Ann Group)

Kian Ann Engineering

  • One of the world's largest independent distributors of

heavy machinery and diesel engine parts

  • HQ in Singapore
  • Subsidiaries in Singapore, Indonesia, China, Canada,

United Kingdom and Myanmar

  • Joint venture in India
  • Associate in China

Kian Chue Hwa Industries

  • One of Asia’s largest independent distributors of

commercial and industrial vehicle parts

  • HQ in Singapore
  • Subsidiaries in Indonesia, Thailand and Malaysia
  • Associate in Myanmar
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9 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Building Supply Group (Discontinued)

  • Tiletoria
  • MacNeil Distributors
  • Brands 4 Africa
  • 15 outlets in SA
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10 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

KEY FINANCIAL INFORMATION

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11 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

REVENUE (R bn)

1 1 1 2 2 2 2 3 3 5 4 5 6 8 10 10 11 12

  • 2

4 6 8 10 12 14 R billion

Sold Engineparts (T/O R250m) GFC Acquired Macneil Acquired Kian Ann Sold BSG after y/e

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12 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

EPS (cents per share)

46 60 133 164 190 170 292 356 437 453 504 647 737 788 742 396 499

100 200 300 400 500 600 700 800 900 Cents per share

Feb 15: Special div (R1.5bn) & rights issue (44% more shares (107m in issue))

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13 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Revenue contribution by operating segment

(excluding Head Office)

3,503 5,122 4,607 4,484 4,955 3,425 3,955 4,209 4,299 4,665

630

1,388 1,639 1,837 1,893 2 000 4 000 6 000 8 000 10 000 12 000 14 000 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017

43% 41% 16%

(17%)

10,465 11,513 10,620 10,455 7,558

R’million

(43%) (40%) Engineering Solutions Group Building Supply Group Capital Equipment Group

2017 (2016)

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14 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Operating profit contribution by operating segment (excluding Head Office)

339 484 457 362 470 390 473 499 406 480

39

67 87 70 108 200 400 600 800 1 000 1 200 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017

44% 46% 10% 2017 (2016) R’million

768 1,024 1,043 838 1,058

(48%) (43%) Building Supply Group Engineering Solutions Group Capital Equipment Group (9%)

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15 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Revenue contribution by region

(includes discontinued operations)

74% 7% 14% 5%

South Africa* Asia Other Africa

Y/E 31 Mar 2017 (2016)

(77%) (9%) (11%) (3%)

*Target: 50% by 2020

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16 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Revenue contribution by sector

(includes discontinued operations)

27% 25% 24% 12% 12%

Mining Manufacturing & Industry Agriculture & Forestry Construction (29%) General Trading (23%) (19%) (15%) (14%)

2017 (2016)

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17 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Return on Net Operating Assets (RONA)

(based on average net operating assets)

25,8% 17,5% 20,6% 29,8% 21,8% 24,1% 30,9% 19,4% 27,3% 24,8% 17,6% 22,5%

0% 5% 10% 15% 20% 25% 30% 35% FY 2015 FY 2016 FY 2017 CEG ESG BSG IVT Group

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18 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Earnings per share H1 & H2 (5 yr history)

312 358 293 207 253 425 430 361

160 246

218 88 29 100 200 300 400 500 600 700 800 900 1 000 MAR 2013 MAR 2014 MAR 2015 MAR 2016 MAR 2017

1st Half 2nd Half Once-off

107m weighted average nr of

  • rdinary shares

Cents

955

78m weighted average nr of

  • rdinary shares

Rights issue

788 742 396 499

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19 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

INVICTA SHARE PRICE HISTORY 5 YRS (CENTS)

Special dividend and rights issue

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PROSPECTS AND STRATEGY

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Prospects

  • Signs of improvement in South East Asia
  • SA: tough trading conditions (mining charter, recession, low business

confidence, too much political uncertainty = very little new investment)

  • Benefits of relocations, restructurings and expansions to start coming through

in H2

  • Focus of the Group will remain on:
  • margin management and cost control
  • working capital optimisation
  • cash generation
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22 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Prospects contd.

  • Proceeds from sale of BSG likely to flow in next month
  • R1bn + available for acquisitions. Stay focused on industrial consumables and

capital equipment (deep knowledge of these industries, high cash generation, good return on sales and good return on equity)

  • Local and international investments
  • Local acquisition opportunities improving at realistic prices
  • Offshore acquisitions: hallmark is high P:E’s but low cost of debt
  • Regulatory approval obtained for secondary listing (will do it only if it makes

sense to do so to raise hard currency)

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23 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Strategy

Invicta’s strategy is to:

  • Generate healthy cash from existing businesses
  • Build on the strength of the current businesses
  • Focus on customer service, value-added distribution and supply chain efficiencies
  • Diversify the Group’s revenue stream geographically by organic growth and

acquisition

  • Make targeted acquisitions
  • Maintain RONA >20% for each of the underlying businesses
  • Improve group return on equity
  • Targeting 50% of group income from offshore by 2020
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24 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Group profit drivers

  • Mining and industrial activity (ESG)
  • Agricultural activity (Northmec and aftermarket parts)
  • Construction and earthmoving activity (CSE, Doosan SA & HPE)
  • Warehousing (Criterion Equipment)
  • Global replacement spares market (Kian Ann)
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EXECUTIVE MANAGEMENT AND SHAREHOLDING

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26 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

ARNOLD GOLDSTONE

Executive Management Team

BOARD OF DIRECTORS Dr Christo Wiese (Non-Executive Chairman) ENTITY Invicta Holdings Capital Equipment Group Engineering Solutions Group Building Supply Group (Discontinued) CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER CRAIG BARNARD TONY SINCLAIR GEOFF BALSHAW GAVIN PELSER BENNIE GROENEWALD KEVIN DIAB NEIL MALHERBE

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27 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Shareholding as at Sep 2017

47% 38% 7% 4%

Public (approx. 25%

  • f shares in issue are
  • wned by financial

institutions) Directors’ Total % 53% Public % 47%

Wiese Family Sherrell Family Goldstone Family 2% Samuels Family 1% Exec Directors 1% Treasury

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28 Invicta Holdings Limited | Off-Piste Conference 29 Sep 2017

Q & A

Thank you for your attendance and participation www.invictaholdings.co.za For any further Investor Relations questions please contact: Arnold Goldstone (CEO) arnoldg@invictaholdings.co.za Craig Barnard (CFO) craigb@invictaholdings.co.za

Marlize Keyter (Keyter Rech Investor Solutions) mkeyter@kris.co.za 087 351 3810