RMB MORGAN STANLEY OFF-PISTE PRESENTATION September 2016

Transcription

1 RMB MORGAN STANLEY OFF-PISTE PRESENTATION September 2016

2 Group profile Invicta is an investment holding company, managing assets of R15 billion at 31 March 2016 A leading player in the sub-saharan region in industrial equip & parts, capital equip & parts, building supplies A significant player in SE Asia in equipment and automotive parts Capital Equipment Group (CEG) Engineering Solutions Group (ESG) Building Supply Group (BSG)

3 Shareholding at 31 March 2016 Public 40% Wiese family 38% Sherrell family 11% Treasury 1% Management & Staff 1% Exec Directors 2% Samuels family 3% Goldstone family 4%

4 Invicta s history Sibuyile, Hansen, Hyflo SA Tool Brands 4 Africa, Hyundai Power Equipment OMSA, Mandirk, MacNeil, Kian Ann ESP Criterion Doosan SA, Goldquest Tiletoria, OST New Holland BMG Market capitalisation as at 31 March (R million)

5 Group structure BBBEE & Staff Trusts Invicta Holdings SA Non - SA 25% 75% 100% 100% 100% 100% Invicta SA Invicta Properties Invicta Treasury Invicta Finance Invicta Offshore Holdings 100% 100% 60% 100% 100% CEG ESG BSG Invicta African Holdings Invicta Asian Holdings Northmec N Holland CSE Doosan HPE ESP Criterion BMG Mandirk Autobax Wegezi OST SA Tool Hansen Hyflo Sibuyile MacNeil Tiletoria B4A BMG Moz BMG Zam BMG Tanz Nova Vida MRO Kian Ann KCHI HHI (Indo) API (Indo) AT (Thai)

6 Capital Equipment Group (SA) Northmec (Agric Machinery) New Holland (Agric Machinery) CSE (Earthmoving Machinery) Doosan (Earthmoving Machinery) HPE (Hyundai Earthmoving) Criterion (Forklifts) ESP (Parts) > 200 outlets across SA SA

7 Sales analysis 31 March % (33%) 44% (42%) 4% (4%) 18% (21%) Agriculture Equip & Parts Construction Equip & Parts Logistics Aftermarket parts 2016 (2015)

8 Management structure CEO Tony Sinclair Northmec New Holland CSE Doosan HPE ESP Criterion Managing Director Managing Director Managing Director Managing Director Managing Director Managing Director Managing Director Johan van der Merwe Peter Askew Brenton Kemp Chris Whitehead Alex Ackron Andrew Grobler Brenton Kemp

9 Capital Equipment (SE Asia) Kian Ann Engineering One of the world's largest independent distributors of equipment spare parts HQ in Singapore Subsidiaries in Indonesia, China, Canada Associates in UK, Myanmar, India Kian Chue Hwa Industries One of Asia s largest independent distributors of heavy truck spare parts Subsidiaries in Indonesia, Thailand

10 Sales analysis 31 March % 6% 3% 2% 20% 57% SE Asia Other Asia EU/Russia/ME ANZ Americas Africa 2016

11 Management structure Managing Director Loy Soo Chew KCHI HHI API AT SW NAT

12 BMG (Bearing Man Group) Engineering components & technical services 168 branches Bearings, Seals, PT, Tools, Fasteners Drives, Motors, Belting, Field Services Filtration, Hydraulics, Lubrication, Pneumatics, Technical Resources OMSA integrated into BMG Hansen being integrated into BMG Mandirk Group (incl SA Tool & Sibuyile) Tools & equipment 22 branches Autobax Automotive Hyflo Engineering Solutions Group Hydraulics, Pneumatics, Projects

13 Revenue analysis 31 March 2016 Engineering 35% Africa 11% Consumables 65% South Africa 89% Strategy of market differentiation by: complementing product distribution with technical expertise enhanced through the acquisitions of Hansen and Hyflo in the year African revenue growing as a % of BMG revenues Recent acquisitions have mainly SAbased revenues

14 Management structure BMG (Bearing Man Group) Mandirk Group Autobax Hyflo Managing Director Gavin Pelser Managing Director Gavin Hall Managing Director John Black Managing Director Emil Berning

15 Building Supplies Group Tiletoria MacNeil Distributors Brands 4 Africa 15 outlets in SA

16 Management structure CEO Neil Malherbe MacNeil Tiletoria B4A Managing Director Terry Uys Managing Director Patrick Thonissen Managing Director Antony Wannell

17 Year to March 2016 at a glance Revenue EBITDA 2% R10,636m 11% R1,013m Operating Profit Attributable earnings 17% 28% R846m R419m Earnings per share Cash generated by operations 47% 39% 391 cents R594m NAV per share Total dividend per share 9% 28% cents 142 cents

18 Year to March 2016 at a glance The markets in which Invicta operates saw difficult trading conditions: Mining & construction: Dramatically weaker in Africa and South East Asia Agriculture: Severely impacted by worst El Niño drought on record Industrial & manufacturing: Deterioration in activity in South Africa Group restructure completed simplified and streamlined Overhead costs well maintained Working capital well managed despite adverse currency impact Continued investment in the businesses: Capex R319m (further capital commitments: R182m) Acquisitions R114m (R80m plus potential earn-out R34m)

19 R million Revenue yr CAGR = 19% st Half 2nd Half

20 Revenue contribution by segment (excluding Group segment) R million % (16%) % (40%) 43% (44%) CEG ESG BSG 2016 (2015)

21 Revenue contribution by region 11% (12%) 9% (9%) 3% (3%) 77% (76%) South Africa Africa Asia Other 2016 (2015)

22 Revenue contribution by sector 19% 29% 14% 15% 23% Construction Agriculture & Forestry Manufacturing & Industry Mining General Trading 2016

23 Operating profit Operating profit (R m) Operating margin (%) yr CAGR = 11% % 9.3%* 10.0% 9.0%* % 9.6% 10.3% 10.0% 7.6%* 7.4% % 9.0% 9.6% 8.1% 7.9% st Half 2nd Half Once-off 1st Half 2nd Half * Excluding once-off items

24 Operating profit contribution by segment (excluding Group segment) R million % (48%) 9% (8%) 43% (44%) CEG ESG BSG 2016 (2015)

25 R million Earnings Ordinary s/h Minority s/h Pref s/h Once-off

26 Cents Earnings per share st Half 2nd Half Once-off

27 Return on Net Operating Assets (RONA) 35.0% 32.3% 32.9% 32.4% 30.0% 29.8% 30.6% 25.0% 25.8% 21.8% 20.8% 20.0% 17.5% 15.0% 10.0% CEG ESG BSG

28 BMG World Additional land being Acquired m 2 Engineering Assembly Building 9 330m 2 Parking Deck 6 000m 2 BMG Park Original m 2 Fluid Technology Building 9 208m 2 New CDC 9 206m 2

29 BMG World Central Distribution Centre

30 BMG World Central Distribution Centre

31 The Invicta team Executive team and head office support Executive Deputy Chairman Arnold Goldstone Group CEO Charles Walters Group CFO Craig Barnard CEO CEG SA Tony Sinclair Head Office BMG World (Johannesburg 11 people

32 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

33 Prospects Improved results in the main areas of the business GP margin pressure offset by cost and working capital efficiency Trading conditions expected to remain challenging South Africa; and South East Asia Benefits of relocations, restructurings to start coming through in 2017 Focus of the Group will remain on: margin management and cost control working capital optimisation and cash generation Economic cycle will present acquisition opportunities at reasonable valuations Well positioned for the upturn

34 Why invest in Invicta? A leading player in the sub-saharan region A strong position in Asia Experienced management team Strong supplier networks Represent world leading brands Unrivalled distribution networks Cash generative, fixed asset light Conservative operational Net Debt:Equity Good Tangible Net Asset Value underpin International ambitions Excellent track record: Sunday Times Top 100 performer 21 consecutive yrs (record) until 2015

35 Q&A Thank you for the opportunity! Charles Walters (CEO) (011) For any Investor Relations queries please contact: Marlize Keyter (Keyter Rech Investor Solutions) at or on