BELL Equipment Ltd. Financial Results 2009 Karen van Haght Market Recovery Plan Drivers and Outlook Future Strategy and Opportunities Gary Bell

Transcription

1 BELL Equipment Ltd Introduction Howard Buttery Financial Results 2009 Karen van Haght 2010 Market Recovery Plan Drivers and Outlook Future Strategy and Opportunities Gary Bell Analyst Presentation 12 th March 2010

2 Management Participants Howard Buttery Group Chairman Gary Bell Chief Executive Officer Karen van Haght Group Financial Director Mike Mun-Gavin Chairman designate Leon Goosen Guy Harris Commercial Director Director Strategy and Public Affairs

3 Financial Summary 2009 Revenue R2,699 billion Loss after Tax R272 million Loss per Share 274c NAV per Share 1496c Positive Cash Flow R272 million Inventory Reduction R928 million

4 Financial Results 2009 Condensed Income Statement INCOME STATEMENT Actual Prior R'000 Dec 09 Dec 08 Sales Cost of Sales Gross Profit G P % 20% 26% Other Income Total Income Total expenses Depreciation Net foreign currency losses Salaries and wages (Decrease) increase in warranty provision (17 398) Warranty Manufacturing and services labour and overhead recovered ( ) ( ) General (Loss) profit before interest and tax ( ) Net interest paid (Loss) profit before tax ( ) Taxation ( ) (Loss) profit after tax ( ) Net (loss) profit attributable to: Equity holders of Bell Equipment Ltd ( ) Non-controlling interest (11 962)

5 Condensed Balance Sheet (Assets) Financial Results 2009 STATEMENT OF FINANCIAL POSITION Actual Prior R'000 Dec 09 Dec 08 ASSETS Non-current assets Property,plant and equipment Intangible assets Investments Long-term receivables Deferred taxation Current assets Current portion of long-term receivables Inventory Trade and other receivables Prepayments Cash resources Taxation TOTAL ASSETS

6 Condensed Balance Sheet Financial Results 2009 STATEMENT OF FINANCIAL POSITION Actual Prior R'000 Dec 09 Dec 08 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 liabilties 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

7 Financial Results 2009 Condensed Cash Flow STATEMENT OF CASH FLOWS Actual Prior R'000 Dec 09 Dec 08 CASH GENERATED FROM (UTILISED IN) OPERATIONS Trading (loss) profit before interest and taxation ( ) Adjustment for provisions (7 549) Translation differences (57 564) Adjustment for depreciation and profit on disposal of assets Operating (loss) profit before working capital changes ( ) Movement in working capital Decrease (increase) in inventory ( ) Decrease in receivables and prepayments (Decrease) increase in payables ( ) CASH GENERATED FROM (UTILISED IN) OPERATIONS (17 659) Net interest paid ( ) (74 637) Taxation paid (95 526) ( ) NET CASH GENERATED FROM (UTILISED IN) OPERATIONS ( ) Invested in property, plant and equipment and investments ( ) ( ) Increase in interest-bearing long term receivables (13 095) (29 703) Increase in deferred warranty income Increase in long-term borrowings (Decrease) increase in repurchase obligations (50 824) Proceeds from shares issued Dividends paid - (37 944) NET CASH INFLOW (OUTFLOW) ( )

8 Net Cash Inflow (Out flow) Quarterly R m Q Q Q Q Q

9 Quarterly Operating Costs Reduced Cost Structure R430 m Q Q Q Q Q R245 m Q1 2010

10 Working Capital Reduction Inventory + Receivables Payables = R m R 2334m R 1428m Q Q Q Q Q4 2009

11 Business Review Financial 2009 Review Global Market Crash Significant Drop 60-70% Operating Loss (R263m) Cash Flow Positive +R272m Inventory Reduced +R1billion Commercial Bank Debt Down by 65% Business right sized Fabric Intact Funding Lines Increased R450m (IAB&Co + IDC) Business Conditions 2010 South Africa Recovery accelerates Parts & Service demand up Used Equipment Sales up Mining Equipment enquiries up Africa Strong Mining Equipment demand Europe Slow recovery apparent Performance and Business Drivers Strategy and Opportunities Outlook Questions

12 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

13 Dramatic Impact Global Markets Europe Total machinery sales down 50% ADT sales down 75% on 2008 South Africa Total Machinery sales down 30.00% 20.00% 10.00% 0.00% 47% (Mix change) % ADT sales down 69% % Africa Machinery sales down >50% Australasia Market down >50% Hitachi de-stocking Dozer Comparative % change in Total Market Size and Bell Market Share YTD December RSA % % % % % % Excavat or FEL ADT Grader TLB Roller Total Total Market Change % % % % % % 1.60% % Bell Market Share Change -0.33% -0.96% 10.46% 13.66% 5.36% 0.84% 19.13% 1.54%

14 RSA Market Share Improved! Total units in product areas BELL competes 2008: Competitor contribution to Total Market 2009: Competitor contribution to Total Market K 11% T 4% Other 22% Competitor J 7% Competitor V 12% Bell Equipment 21% Competitor C 23% Competitor T 3% Other 15 27% Competitor V 10% Competitor C 22% Competitor J 8% Bell Equipment 23%

15 RSA Market Share Improved! No 1 No 1 No 1 No 6 No 3 No 2 No 4

16 Geographic Sales USA/Deere 1% Australasia 1% Sales % South Africa 60% Africa 25% Europe 13%

17 BELLGroup Sales 1450 Quarterly Revenue R m Forecast 2 Mths Q Q Q Q Q Q (2mth)

18 Total Machine Order Intake BELLplus 3 rd Party Quarterly Order Value Forecast Mths Q Q Q Q Q Q (2mth)

19 Commodities Driving Product Demand RSA Cement Copper

20 Current Large Truck prospects (B35 B50) Budgeted Production Rates for 2010 Priced Tenders and Current Prospects

21 2010 Inventory Opportunity R400m Jan 09 Units Feb Mar Apr May Jun Other Total Jul 09 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 10 Aug Sep Oct Nov Dec

22 Government Action Plan IPAP2 South Africa's new industrial policy action plan (IPAP2) is expected to create almost 2,5-million jobs over the next decade by boosting, and protecting local factories, Minister Rob Davies said on Thursday. Releasing details of the plan, Trade and Industry Minister Rob Davies said it would focus on improving concessional funding by local finance development agencies, introduce new procurement policies and improve the country's long-term manufacturing capacity. 18/2/2010

23 Government Action Plan Metals fabrication, Capital and Transport equipment KEY OPPORTUNITIES Leveraging public infrastructure spend to stimulate industry and reduce import leakage of SOE and Government spend. Export opportunities Mining and Infrastructure in Africa Enhancement of beneficiation chain downstream manufacturing New APDPoffers opportunities for metals component manufacturing.

24 New Industrial and Economic Policy Benefits Re-instated MIDP programme Retrospective to Approx R75m Benefit to Approx R20-30m per annum Included in MHCV new APDP study Distressed sector assistance IDC facility R150m in place Term sheet for further R300m issued Various Skills development Funds Preferential Procurement Policy Framework Act Tariff adjustment - possibilities

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

26 Future Strategy and Opportunities Focused on becoming the Global Leader for Off-Highway Trucks R&D on Track to deliver Design Advantage New engine technology Bauma Superior Aftermarket Sales & Support Life Time Revenue Stream Cautiously ramping up Production Manufacturing efficiency focus Improved Planning Process Product Cost Reductions Low Cost production Location Business Modelling Tools Better defined Markets, Products and priorities

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

28 New Product Programme Leading Technology Products in all Categories New Products introduced in 2009/10 E-Series Wheeled Loaders G-Series Motor Graders E-Series Timber and Cane Loaders Tractor Range BELL Rental Structure 2010 Designed to meet current Customer needs 2011 and 2014 Truck developments on Target Improved Performance Global Emission standards Class leading features

29 Clearly a Better Outlook ahead! Global recovery Commodities recovering Well positioned for Domestic Construction spend Product Inventories approaching expected levels Cost management controlled Improving Price realisation A BETTER YEAR AHEAD... Contingency plans in place if above does not materialise