BELL EQUIPMENT LTD. 1 st Half 2009 Review & YTD Financial Results. 12 th August Downturn Management Surviving the Crisis

Transcription

1 BELL EQUIPMENT LTD 1 st Half 2009 Review & YTD Financial Results 12 th August 2009

2 Management Participants Gary Bell Chief Executive Officer Karen van Haght Guy Harris Group Financial Director Group Strategy and Public Affairs Director Apologies: Howard Buttery Group Chairman

3 Agenda Market Perspective Progress to-date Financial Review Strategy and Structure General

4 Our Products Articulated Trucks Designed and built in Richards Bay Built in Germany and distributed in Europe Front End Loaders Deere licenses Bell assembly in R/Bay Tractor Loader Backhoes Deere licenses Bell built in R/Bay Sugar and Forestry machines Designed and built in Richards Bay Branded Machines Imported: Graders Bulldozers Excavators Imported: Compaction & Road building BELL ASSURE Parts Service Finance Training

5 Current Market View 2008/9 Business Cycle Management Europe Total machinery sales down 60% Articulated Dump Truck sales down 79% on 2008 South Africa Total Machinery sales down 46% (Mix change) Articulated Dump Truck sales down 74% Africa Total Machinery sales down 53% Australasia Dealer de-stocking De-stocking accentuates the troughs and peaks

6 Our Key Competition. NEW HOLLAND Hydromek CASE KOMATSU MITSUBISHI FAI DAEWOO HITACHI HYUNDAI IR DYNAPAC VOLVO SANY CAT TEREX XCMG MOXY SHANTUI JCB

7 Europe Region Bell Europe Region ADT volumes Units Pre Bubble Ave Market Down 80%! (F) 2010(F) 2011(F) 2012(F)

8 RSA Machinery Market Units 46% down YTD 900 Total Market Sales: 2008 to 2009 YTD June (Source: Co information) Unit Sa ales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Market Total Market

9 Short Term Actions Business Cycle Management Production cut to release excess inventory to Cash Reduced operating Costs Capital expenditure frozen Rescheduled non-critical path R&D projects Managing key suppliers Significant Reduction in People June June Sept Under absorption of factory cost until 1Q 2010 Improved RSA market shares

10 BELLGroup Machine Production Business Cycle Management Unit Production per 6 months period Actual -80% Planned 1H H H H H H 2009

11 BELLGroup Employment Trend Business Cycle Management June Actual Forecast Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

12 Progress to Date Inventory Reducing Significant Cost Reductions Additional Borrowing Facilities Acquired (IDC R150m and I A Bell Co R150m) Market share Improving LTRS Contribution Improving Certain Commodity prices Improving

13 BELLGroup -Inventory Trend R ACTUAL FORECAST Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Units Other Total

14 BELLGroup Bank Borrowings Actual 900 R Million Quarterly Pe eak Planned 1Q2009 2Q2009 3Q2009 4Q2009

15 BELL Competitor Landscape YTD June 09 4% 3% 3% 3% 3% 2% 2%1%1%0%0% 27% 6% 6% 7% 10% 21% 4% 4% YTD June 08 3% 0% 1% 3% 4% 1%1%1%1% 25% 5% 5% 17% No closure of RSA facilities 11% 13%

16 RSA Market Share - Improved YTD June 08 38% No 1 YTD June 09 68% No 1 YTD June 08 19% YTD June 09 23% No -2 YTD June 08 17% YTD June 09 25% No -2 YTD June 08 4% YTD June 09 3% No -10 YTD June 08 6% YTD June 09 6% No -3 YTD June 08 14% YTD June 09 23% No 2 YTD June 08 5% YTD June 09 17% No -4

17 Annuity Income Training Service Finance Parts Used Life Time Revenue Stream (LTRS)

18 Life-Time Revenue Stream 36% of Revenue Manufactured Product 47% Branded Product 17% Used Machines 7% Parts 21% Service 8% LTRS now 36% of Revenue

19 Financial Results 2009

20 Sales Steady at new Level... Sales R'000 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 June July

21 Income Statement -YTD June 2009 CONDENSED CONSOLIDATED INCOME STATEMENT R'000 Reviewed Reviewed Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December Revenue Cost of sales ( ) ( ) ( ) Gross profit Other operating income Expenses ( ) ( ) ( ) (Loss) profit from operating activities ( ) Net interest paid (Loss) profit before taxation ( ) Taxation (income) expense (27 987) (Loss) profit for the period ( ) (Loss) profit for the period attributable to: - Non-controlling interest (6 086) Equity holders of Bell Equipment Limited ( )

22 Balance Sheet (Assets) June 2009 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION R'000 Reviewed Reviewed Audited at 30 June at 30 June at 31 December ASSETS Non-current assets Property, plant and equipment Intangible assets Interest-bearing investments and long-term receivables Deferred taxation Current assets Inventory Trade and other receivables Current portion of interest-bearing long-term receivables Taxation Cash resources TOTAL ASSETS

23 Balance Sheet (continued) June 2009 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) R'000 Reviewed Reviewed Audited at 30 June at 30 June at 31 December EQUITY AND LIABILITIES Capital and reserves Stated capital Non-distributable reserves Retained earnings Equity attributable to equity holders of Bell Equipment Limited Non-controlling interest Non-current liabilities Interest-bearing liabilities Repurchase obligations and deferred leasing income Deferred warranty income Long-term provisions and lease escalation Current liabilities Trade and other payables Current portion of interest-bearing liabilities Current portion of repurchase obligations and deferred leasing income Current portion of deferred warranty income Current portion of provisions and lease escalation Taxation Short-term interest-bearing debt TOTAL EQUITY AND LIABILITIES

24 Cash Flow YTD June 2009 CONDENSED CONSOLIDATED CASH FLOW STATEMENT R'000 Reviewed Reviewed Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December Cash operating (loss) profit before working capital changes ( ) Cash generated from (invested in) working capital ( ) ( ) Cash generated from (utilised in) operations (17 659) Net interest paid (61 712) (34 903) (74 637) Taxation paid (70 992) (84 058) ( ) Net cash generated from (utilised in) operating activities 60 ( ) ( ) Net cash flow utilised in investing activities (21 697) ( ) ( ) Net cash flow from financing activities Net cash inflow (outflow) ( ) ( ) Net short-term interest-bearing debt at beginning of the period ( ) ( ) ( ) Net short-term interest-bearing debt at end of the period ( ) ( ) ( )

25 Strategy and Restructure Overall Focus Area Core Product Business Drivers

26 Strategy Continue with Critical Path R&D Sustainable advantage is in design. Maintain Improving Cash Flow Profitability secondary Maintaining the Fabric to leverage upturn RSA 2010? Commodities? Europe? Aggressive Right-sizing For new Baseline reality Business Cycle Modelling John Deere assistance Customer Focus Take advantage of new Global Logistics Centre (GLC)

27 Focused on Short Term Africa Advantage Less affected by Global Slowdown BELL more competitive Supply Chain advantage Network Coverage

28 Structure to Support Product and Market mix

29 ARTICULATED TRUCKS CORE PRODUCT

30 Commodities Driver COPPER COPPER

31 Infrastructure -Driver Infrastructure spend at high level Machinery fleet replacement rather than expansion Confidence levels low order books shrinking Banks have begun returning to the market? GDP growth greater than 2-3% drives our market growth

32 Government Assistance Distressed Sector Assistance Positive Preference for Local product? Alignment of Duties?? Funding for Training? Customer Project Funding Progress IDC loan of R150m Concluded

33 Key Risk Analysis Liquidity Excess Inventory Major Market changes Bad Debt Skills availability Quality Supplier Base Physical Injuries New facilities in place and cash forecasting focus IDC Loan R150 m and I A Bell &Co R300m Reducing and well controlled Sales forecasting and monitoring Credit management tightened adequate provisions Re-structuring and retention of key scarce skills Robust process for continuous improvement Monitoring and alternatives Insurance and regular assessment Safety priority, training and audits

34 BELL-Component Purchases down 80% Actual Planned 0

35 Concluding... The Bell Group faces difficult Global markets in the short term BELL will: Survive the current global recession and emerge leaner, meaner and more competitive Continue to Strengthen our Distribution and customer service Participate aggressively in infrastructure spend in Southern Africa Invest in its products and people Grow the Global machine park and Life-Time Revenue Stream Lead in Technology of our Core Products

36 QUESTIONS?