BELL EQUIPMENT LTD RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2017 AND BUSINESS REVIEW

Transcription

1 BELL EQUIPMENT LTD RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2017 AND BUSINESS REVIEW

2 Financial Highlights for 2017 Revenue up 13% to R6,8 billion NPAT up from R39 million to R272 million HEPS per share up from 48 cps to 270 cps Annual dividend up from 15 cps per share to 45 cps Expenses well managed and down 14% 2

3 The BELL Business Model Global Articulated Dump Truck specialists Full line machinery range for Sub-Saharan Africa Geographic, product and industry diversity Focused on growth 3

4 Geographic, Product & Industry diversity Global network Full-line product ranges Multiple industries Manufacturing plants in Germany & South Africa Products sold in 80 countries around the world Articulated Truck Range core product Full line Mining and Construction machines distributed in Sub-Saharan Africa Expanding range of Forestry and Agriculture machines Diversified Global Industries Mining and Construction Oil & Gas and Industrial Forestry and Sugarcane 4

5 Our Global Corporate structure BELL EQUIPMENT LIMITED Headquarters - Richards Bay, South Africa Main factory Richards Bay, South Africa R&D Centre Richards Bay, South Africa European factory Eisenach-Kindel Germany Global Logistics Centre Jetpark, South Africa BBBEE Investors European Logistics Centre Alsfeld, Germany American Logistics Centre North Carolina USA Bell Equipment Sales SA Jetpark, South Africa 5

6 Distribution Network BELL network management: - BELL Equipment Sales Africa - BELL Equipment European Operations - BELL Equipment North America - BELL Equipment Co SA (dealer mngt) Further growth planned Strategic priority to move to more independent dealers over last 3 years Supporting more than 120 dealer and subsidiary locations around the world Focused on driving dealer performance through training and development and after market support 6

7 Mining & Construction machinery ranges 7

8 New product ranges launched 2017/18 KOBELCO NINE MODELS 8-85 TONNE KAMAZ - FOUR MODELS Broadening our product offering to focused industries and existing customers in Sub-Saharan Africa 8

9 Roadworks, Crushing & Screening 9

10 Forestry and Agriculture machinery ranges 10

11 Aftermarket Services (Annuity income) As the global fleet of operational BELL machines increases so does the opportunity to grow aftermarket revenue (annuity income). Average machine life is years 11

12 Industry Sales Group Sales by Industry (Turnover) % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% CONSTRUCTION MINING PLANT HIRE GOVERNMENT FORESTRY AGRICULTURE INDUSTRIAL QUARRY OTHER 12

13 Industry Sales INDUSTRIAL AGRICULTURE 2% FORESTRY4% 4% GOVERNMENT 5% 2016 UNIT TURNOVER QUARRY 1% OTHER 2% CONSTRUCTION 41% AGRICULTURE 3% FORESTRY 3% GOVERNMENT 4% PLANT HIRE 13% 2017 UNIT TURNOVER INDUSTRIAL 1% QUARRY 3% OTHER 0% CONSTRUCTION 42% PLANT HIRE 15% MINING 26% MINING 31% Global mining activity improving (traditionally >50% of business from this sector) 13

14 Financial Review 14

15 Positive Increased 13% 604% 463% Financial Highlights for R6,0bn R6,8bn REVENUE R38,6m R272,1m NPAT 48c HEPS 270c % R1418m R1226m EXPENSES -R62,5m R7,0m NET CASH INFLOW 15c 45c [FINAL + INTERIM] TOTAL DIVIDEND 15

16 Income statement STATEMENT OF PROFIT OR LOSS Actual Prior R'000 YTD Dec 17 YTD Dec 16 Revenue Cost of sales ( ) ( ) Gross Profit GP % margin 21% 23% Other operating income Expenses ( ) ( ) Profit from operating activities Net interest expense (29 888) (32 557) Profit before taxation Taxation ( ) (77 072) Profit for the year Profit for the year attributable to: - Owners of Bell Equipment Limited Non-controlling interest

17 Balance sheet STATEMENT OF FINANCIAL POSITION Actual Prior R'000 Dec 17 Dec 16 ASSETS Non-current assets Property, plant and equipment Intangible assets Investments Interest-bearing long-term receivables Deferred taxation Current assets Inventory Trade and other receivables Current portion of interest-bearing long-term receivables Prepayments Other financial assets Current taxation assets Cash and bank balances TOTAL ASSETS Actual Prior EQUITY AND LIABILITIES Capital and reserves Dec Dec Stated capital Non-distributable reserves Retained earnings Attributable to owners of Bell Equipment Limited Non-controlling interest Non-current liabilities Interest-bearing liabilities Repurchase obligations and deferred leasing income Deferred income Long-term provisions and lease escalation Deferred taxation 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 income Current portion of provisions and lease escalation Other financial liabilities Current taxation liabilities Bank overdrafts and borrowings on call TOTAL EQUITY AND LIABILITIES

18 Cash flow statement STATEMENT OF CASH FLOWS Actual Prior R'000 YTD Dec 17 YTD Dec 16 Cash generated from operations before working capital changes Cash utilised in working capital ( ) ( ) Cash generated from operations Net interest paid (29 635) (32 377) Taxation paid ( ) (76 951) Net cash (utilised in) generated from operating activities (10 197) Purchase of property, plant and equipment and intangible assets ( ) ( ) Proceeds on disposal of property, plant and equipment and intangible assets (Increase) decrease in interest-bearing long-term receivables (9 303) Net cash utilised in investing activities ( ) ( ) Interest-bearing liabilities raised Interest-bearing liabilities repaid (73 996) (56 642) Proceeds from share options exercised Payments to non-controlling interest - (10 086) Dividends paid (19 062) (14 273) Net cash generated from (utilised in) financing activities (33 470) Net cash inflow (outflow) (62 521) Net bank overdrafts and borrowings on call at beginning of the year ( ) ( ) Net bank overdrafts and borrowings on call at end of the year ( ) ( ) 18

19 Net debt and finance cost R million % Change Net debt - close ,1% Net debt - average ,4% Net interest costs (8,2%) Gearing % (net debt) 19,5% 15,1% 29,1% Net interest cost down 8,2% Gearing up from 15,1% to 19,5% Interest cover and net debt to EBITDA significantly improved Interest cover (times) (underlying EBIT) 10,0 3,1 Net debt to EBITDA (times) 0,9 1,4 Maturity profile of borrowings Less than 1 yr 1 to 2 yrs 2 to 3 yrs More than 3 yrs TOTAL R million R million R million R million R million Secured interest-bearing liabilities * Unsecured interest-bearing liabilities * Bank overdrafts and borrowings on call * * Including interest and principal cashflows Percentage of total 85,3% 5,4% 4,0% 5,3% 100,0% 19

20 Borrowing profile & currency Maturity profile of borrowings R million Borrowings by currency R million Less than 1 yr 1 to 2 yrs 2 to 3 yrs More than 3 yrs Total ,9% Euro 4,2% US$ GBP 87,9% ZAR 100% Total Secured Unsecured Bank overdraft Borrowings Facilities 20

21 Segmental analysis REVENUE BY REPORTING SEGMENTS R'000 R'000 R'000 R'000 R'000 South African Sales operation South African Manufacturing and Logistics operation * European operation Rest of Africa operation North American operation TOTAL GROUP OPERATING PROFIT (LOSS) South African Sales operation South African Manufacturing and Logistics operation European operation Rest of Africa operation North American operation PROFIT (LOSS) FOR THE YEAR South African Sales operation South African Manufacturing and Logistics operation European operation Rest of Africa operation North American operation * South African Manufacturing and Logistics operation - sales to dealers, John Deere and Hitachi 21

22 R m Losses per half year R m Rest of Africa operational costs reduced Continued slowdown in mining activity in DRC / Zambia / Zimbabwe / Mozambique during R123m Rest of Africa operating losses Dealer appointed in Mozambique during the year and BELL operations curtailed Further reduction in operational costs in DRC and Zambia implemented Improved economic activity in Zimbabwe and additional cost reductions delivered a much improved and profitable result Recovery in commodity pricing and increased mining activity expected during R63m R46m R24m 1HALF HALF HALF HALF 2017 Ageing of past due debt (Mostly rest of Africa) R47m R27m R30m R19m R113m R19m R171m R85m DAYS DAYS 120+ DAYS TOTAL 22

23 Prospects & Strategy 23

24 Mining sector indicators continue to improve Commodity pricing generally trending well and supporting improved activity levels from this sector Machinery markets expect 10-12% growth in 2018 Source: 24

25 Strategic priorities Global ADT specialist Global Truck Volumes Technology leadership Build dealer network No capacity constraints R&D investment and expand BELL Truck range Invest in inventory for rapid market response Manufacture closer to major markets Consolidate alliance product offering Enhance Service Offering Grow annuity income Ring fence all opportunities RSA, European and American distribution centres in place Continuous Improvement Factory positioning Strategic sourcing Cost reduction Volume benefits Rationalise loss making ops Enhance aftermarket and product support offering Customer Financing Solutions Priority Customers Dealers 25

26 Growing USA dealer network Industry ADT Sales Split Percentage Opportunity to grow dealer network Currently approx. 70% coverage of North America Largest single ADT market in world German factory source Good market recovery Bell Dealer Market Coverage Planned market share growth targeted 26

27 Growing global dealer support INVESTING IN DEALER SUPPORT AND BELL LOGISTICS STRUCTURES Regional parts distribution centres - faster response to customer needs Global Logistics Centre Jetpark South Africa (2008) Global sourcing from most appropriate suppliers with consolidated volumes Cross-dock supply to factories in Germany and South Africa Significant cost reduction opportunities in logistics and combined volumes European Logistics Centre Alsfeld Germany (2017) American Logistics Centre North Carolina USA (2018) 27

28 Factory expansion Germany RATIONALE FOR INVESTMENT Significant cost benefits arising from: EISENACH-KINDEL FACTORY PHASE II Majority of ADT sales in Northern hemisphere Majority of components and materials from EU Elimination of double logistics costs Completion - 2Q 2019 Reduction of inventory holding costs PHASE I Quicker response to market Elimination of duties on steel and tyres into South Africa 28

29 Outlook Strongest upswing in global machinery demand since post financial crisis recovery in 2010/

30 Outlook 2018 Global mining and construction activities will drive increased BELL equipment demand Improved commodity pricing over the past year will drive higher equipment demand Recent political moves have raised expectations of accelerated growth opportunities in South Africa Well positioned to respond rapidly to Global growth & any domestic (RSA) economic stimulus Inventory levels increased to take advantage of positive global outlook Increased factory throughput drives significant unit cost benefits Factory expansion in Germany to positively impact 2019 costs and volumes New Kamaz trucks and Kobelco excavator range to provide incremental Africa sales volumes for 2018 New Parts distribution centres in Europe and USA will support growth of aftermarket business Rand / US$ and Euro / US$ stronger rates have negative impact on pricing and profitability Diversity strategy for products, industries and geographic regions to minimise cyclicality 30

31 Leadership changes Leon Goosen to assume the role of CEO of Bell Equipment Limited as proposed on SENS in June 2017 and in terms of the Company s succession plans Gary Bell to step down from the role of CEO on 31 May 2018 and take up the role of nonexecutive chairman of the Group John Barton will step down from his current independent non-executive chairman position and will take up a new role as lead independent non-executive director Above changes ensure adherence to good governance principles and compliance with King IV requirements Gary Bell steps down 31 May 2018 Leon Goosen assumes CEO role 1 June 2018 John Barton Lead Independent Director 1 June

32 Contact Details: Gary Bell BELL the Global Articulated Dump Truck Specialist Chief Executive Tel: Leon Goosen CEO designate Tel: Karen van Haght Financial Director Tel: Vanessa Rech Keyter Rech Investor Solutions Tel: