RNM MORGAN STANLEY OFF-PISTE CONFERENCE PRESENTATION 27 SEP 2018 - - PowerPoint PPT Presentation

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RNM MORGAN STANLEY OFF-PISTE CONFERENCE PRESENTATION 27 SEP 2018 - - PowerPoint PPT Presentation

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RNM MORGAN STANLEY OFF-PISTE CONFERENCE PRESENTATION 27 SEP 2018 Presented by Arnold Goldstone (Chief Executive Officer) Agenda 01 Preliminary comments 02 Corporate profile 03 Trading conditions 04 Propects and Strategy 2 Invicta

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RNM MORGAN STANLEY OFF-PISTE CONFERENCE PRESENTATION 27 SEP 2018

Presented by Arnold Goldstone (Chief Executive Officer)

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Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018

Agenda

Corporate profile

02

Trading conditions

03

Propects and Strategy

04

Preliminary comments

01

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3 Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018

Preliminary comments

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4 Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018

Preliminary comments

  • Invicta’s financial year is 31 March
  • About to hit interim period end (30 Sep 2018), therefore figures reflected in

slides relate to FY 2018 (Y/E 31 Mar 2018)

  • Will cover general trading conditions and SARS dispute update
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Corporate Profile

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Capital Equipment (SA))

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

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

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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, USA 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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Engineering Solutions

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

, Tools, Fasteners

  • Drives, Motors, Belting, Field Services
  • Filtration, Hydraulics, Lubrication, Pneumatics
  • Hansen
  • Man-Dirk Group (incl SA Tool)
  • Tools & equipment
  • 20 branches & subsidiaries
  • Recent acquisition for R150m: Forge Group
  • Toolquip and Allied
  • Belt Brokers
  • F&H Machine Tools
  • Autobax
  • Automotive
  • 3 branch network
  • OST & Hyflo

Engineering Solutions

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9 Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018

Revenue contribution by operating segment

for FY 2018 (Y/E 31 Mar 2018)

(excluding Head Office)

5,122 4,607 4,484 4,955 5,074 3,955 4,209 4,299 4,665 4,559 2 000 4 000 6 000 8 000 10 000 12 000 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018

53% 47%

8,816 9,633 9,620 8,783 9,077

R’million

(52%) (48%) Engineering Solutions Group Capital Equipment Group

2018 (2017)

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Operating profit contribution by operating segment after forex costs (excluding Head Office)

484 457 362 426 404 473 499 406 486 460 200 400 600 800 1 000 1 200 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018

47% 53% 2018 (2017) R’million

957 956 768 912 864

(53%) (47%) Engineering Solutions Group Capital Equipment Group

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Revenue contribution by region FY 2018

(continuing operations only)

**Target: 50% by 2020

79% 5% 11% 5%

South Africa** Africa

2018 (2017)

Asia Other

(4%) (10%) (6%) (81%)

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Revenue H1 v H2

5 129 5 270 4 389 4 727 4 857 5 336 5 190 4 410 4 905 4 783 2000 4000 6000 8000 10000 12000 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 First Half Continuing Second Half Continuing 10,460 8,799 9,632 9,640 10,465

*Restated

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Trading conditions

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14 Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018

Trading conditions

South Africa (79% of revenue)

  • The markets in which Invicta operates:
  • Mining : Weak in South Africa but improving in rest of world; little new investment in

mining (mining charter not finalised yet, uncertainty)

  • Pockets of growth (e g conveyor business)
  • Job losses in mining sector (Impala Platinum, Sibanye)
  • Agriculture: Drought in Western Cape is easing, low maize prices, land expropriation

uncertainty

  • Industrial & manufacturing: Deterioration in activity in South Africa, bottom of cycle?
  • Earthmoving machinery:
  • Generally down, although market vol. of excavators up (mining?)
  • Many construction firm in trouble
  • Little/no infrastructure investment
  • Q1 and Q2 CY 2018: negative GDP = recession
  • Exchange rate volatility
  • Stimulus package: a positive step
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Trading conditions contd

South East Asia (11% of revenue)

  • Trading conditions improved in for first few months, tapering off
  • China appears to be cooling down (trade wars?)

Africa/Rest of world (10% of revenue)

  • No change
  • Growth opportunities
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Prospects

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Prospects

  • Current trading conditions:
  • ESG: pockets of growth, but overall markets flat to negative
  • CEG no meaningful improvement yet
  • South East Asia continued growth
  • Benefits of relocations, restructurings and expansions in ESG
  • e-Commerce
  • Big focus on
  • margin improvement and cost control
  • working capital improvement
  • cash generation
  • SARS settlement – negotiations ongoing. SENS announcement when appropriate
  • Local and international investments, good opportunities in SA
  • Bottom of cycle?
  • Secondary listing (table being prepared to list offshore only when right offshore

acquisition opportunity presents itself. Put on ice until markets improve?)

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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
  • Acquire businesses that are a strategic fit for the Group
  • Maintain RONA >20% for each of the underlying businesses
  • Target real, sustainable growth
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2018 GDP Growth

Source: IMF World Economic Outlook, April 2018 Update

#NORTHMEC #CSE #NEW HOLLAND #DOOSAN #CRITERION #ESP #HPE #LANDBOUPART #CARTCOM #SHAMROCK

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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

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