ABSA Bank and JSE Showcase. 11 April 2013

Transcription

1 ABSA Bank and JSE Showcase 11 April 2013

2 Group Overview Largest independent electrical distributor in Sub-Saharan Africa Focused on electrical and lighting products Supply across all major market segments Extensive distribution network across South Africa Power cables Overhead line conductors & equipment Low voltage products Lighting & lamps

3 Group at a Glance ARB Holdings Limited Corporate Electrical Lighting Electrical Wholesaling Proprietary Products

4 Electrical Wholesaling Founded in branches across SA (and growing) Over stock items Over customers (no customer =>3% of total revenue) Well established in industrial, construction, mining, parastatals and public sector Annual revenue approaching R2 billion

5 Geographic Footprint 20 # of Branches

6 Lighting Founded in 1991 Acquired 60% in January 2012 Over stock items Over customers Well established in retail and domestic sectors Owned brand SABS mark holder Recently introduced pre-packed electrical accessories range

7 Proprietary Products Conductor Comparison Conventional ACSR Unique, patented technologically advanced products Exclusive distribution rights for SADC ACCC Steel Core Composite Core

8 Financial Overview R 000 Revenue R CAGR = 20%pa Operating profit CAGR = 15%pa FY2010 FY2011 FY FY2010 FY2011 FY 2012

9 Financial Overview R Gross profit CAGR = 24%pa 20% 20% Gross profit % % % 18% 18.7% 19.6% % 18.4% Cents 0 FY2010 FY2011 FY % FY2010 FY2011 FY HEPS FY2010 FY2011 FY 2012

10 Interim Results 6 Months to 31 December 2012 (excludes acquisition of Elektro Vroomen) Revenue Gross profit Operating profit Headline earnings Cash generated by operations 39% 50% 27% 17% 163% R1.0 Billion R196 million R76 million R43 million R25 million Net asset value 11% Ungeared with net cash of R153 million R596 million

11 Share Statistics Listing particulars JSE ticker JSE listing Net asset value / share Share price Market cap ARH Main Board Electronic & Electrical Equipment sector 254 cents per share 540 cents per share ±ZAR1.3 billion ARB share price has outperformed the JSE All Share, Industrial and Electronic & Electrical indices over past 4 years cents 600 ARH share price 500 Dividend Policy 40% of after-tax profits (i.e. 2.5x cover) Feb Feb Feb Feb Feb-13

12 Prospects South Africa Market potential (Source: A review of SA s electricity sector January 2013 by Research Channel Africa) 16% 14% 12% 10% 8% 6% 4% 2% Reserve margin for electricity 3% South Africa Massive expansion required 15% International benchmark Eskom Power Stations Within design life 50% Older than 35 year design life 50% Eskom requires tons of new steel pylons over next 10 years ACCC can reduce this significantly DSM, RMR and 49M all promote use of CFL and LED lighting Eurolux

13 Prospects South Africa Market potential (continued) (Source: A review of SA s electricity sector January 2013 by Research Channel Africa) 10 year Transmission Development Plan (R180 billion) - ACCC R150bn to expand the transmission network, over km of new lines R12bn on refurbishing of existing infrastructure Distribution infrastructure Overhead Line division Lifespan of a distribution network = 50 years (SA s distribution network is 47 years old) Protracted uncertainty of EDI vs REDs structure resulted in reluctance to invest in maintenance Current backlog = R35bn Need to spend R6.5bn per year (double the current spend) Electrification programme Overhead Line and Low Voltage divisions Budgeted spend = ±R3.5bn per annum At current rate, will take another 20 years to achieve universal access to electricity

14 Prospects - SADC Europe Africa: The Dark Continent Asia

15 Value Proposition Only listed focused distributor of electrical & lighting products Proven and robust business models across all segments Experienced management & strongly independent board Successful in concluding value adding acquisitions Ungeared with R153 million cash on hand (Dec 2012) For further information please visit our website: