EQSTRA Holdings Limited: Merrill Lynch Conference March 2009

Transcription

1 EQSTRA Holdings Limited: Merrill Lynch Conference March 2009

2 Group Overview Eqstra is an integrated capital equipment provider and leasing company with value-added services in Construction and Mining, Passenger and Commercial Vehicles, and Industrial Equipment in South Africa, Africa and the UK

3 HOW DOES EQSTRA TOUCH YOUR LIFE?

4 HOW DOES EQSTRA TOUCH YOUR LIFE?

5 Asset Clusters 100% CONSTRUCTION PASSENGER AND INDUSTRIAL AND MINING COMMERCIAL VEHICLES EQUIPMENT

6 Construction and Mining continued Contract Mining and Plant Hire Volume demand from customers good Platinum accounted for 72% of MCC Contracts revenue Excessive rain has negatively impacted productivity Plant Hire benefiting from infrastructure projects Distributorships Captured 10%* market share, 3 rd in the market in January Marked slowdown in construction and mining sales Obtaining bank financing for customers is challenging Right sizing in response to market contraction Note: * 2008

7 Target markets Contract Mining Traditional focus on thin seam hard rock mining applications in the Platinum and Chrome mines of the Bushveld Igneoux Complex that offer unique challenges in terms of expertise and methodology which new entrants to the market find difficult to overcome Other commodities currently mined include Iron ore, Nickel, Uranium and Coal Terex and New Holland Construction Mining, Construction, Agriculture, Government, Plant Hire, Industrial Plant Hire Construction Mining Government Infrastructure development - National Authorities - Local Authorities - Municipal - Gautrain - Dams - Pipelines

8 MCC Contracts Customer Base Customer Mineral Location End Date Xstrata Base Metals - Eland Platinum Mine Platinum Brits, North West 09/11 Aquarius Platinum Marikana Mine Platinum Rustenburg, North West 03/11 Aquarius Platinum Kroondal Mine Materials Handling Rustenburg, North West Indefinite Arm/Norilsk Joint Venture Nkomati Mine Nickel Machadodorp, Mpumulanga 08/14 Lonmin Platinum Pandora Project Platinum Brits 12/09 Pilanesberg Platinum Tuschenkomst Mine Platinum Northam, North West 03/13 Areva/ Uramin Trekkopje Mine Uranium Swakopmund, Namibia 03/19 Tharisa Minerals Chrome Sample Marikana, North West 08/09 Coal of Africa* - Vele Colliery Coal Musina, Limpopo 07/17 Note: * Mining activities to start by Q3 2009

9 Commodities Outlook Mineral Platinum Coal Outlook Medium term strained linked to automotive and jewellery demand Long term fundamentals are strong Tenders out in market for opencast mining work Investmentof R90 to R110 billion required in next 10 to 12 years to build 40 new coal mines to meet projected domestic, power station and export needs* Eskomto increase its coal consumption from 120 million tonnes to 200 million by 2018* Little excess coal production margin within 10 years* Uranium Newnuclear reactors set for commissioning between 2013 and 2016 set to drive price higher Market expected to be in a deficit by early part of next decade Nickel Large cuts in supply in 2009 Demand expected to recover strongly in late 2009 or 2010 Iron Ore Collapse in Chinese and European production Uneconomic producers in China and India forced out of business Recent rally in spot prices suggest supply and demand equilibrium Source: Eskom chief geologist and coal expert, Johan Dempers, Business Day 12/03/09

10 Platinum Supply vs. Demand M Oz Source: Macquarie PGM Fundamental Report January 2009

11 Platinum Demand Breakdown M Oz Source: Macquarie PGM Fundamental Report January 2009

12 Domestic and Export Coal Potential M Tons Source: Wood Mackenzie, Business Day 12/03/09

13 SA Construction Equipment Sales Decline Units +18.2% yoy SA market down 34% in January 2009

14 SA Construction Market Share 2007 vs % market share in January 2009, 3 rd* position Note: Terex and New Holland Construction combined

15 Long Term Civil Engineering Outlook Assumes optimistic GDP growth of 5.5% Assumes GDP growth of 2.3% Source: SAFCEC Q3 2008

16 Source: SAFCEC Q SAFEC Confidence Remains Strong

17 Competitive landscape Division Market information Major customers Competitors Construction and Mining Contract Mining Largest opencast hard rock contract miner in SA Plant Hire MCC does not take any operational mining risk, this remains with the mining company Largest heavy plant hire provider in SA Benefiting from infrastructure construction projects Distributorships Achieved a combined market share of 10.0% Comprehensive range with minimal overlap Aquarius Platinum, Lonmin, Eland Platinum, Associated Manganese, Norilsk, Areva/ Uramin, Xstrara, Pilansberg Platinum, TharisaMinerals, Coal of Africa Roschcon, Concor, Wilson Bailey Homes (WBHO), Stefanutti& Bressan Anglo Platinum, AngloGold Ashanti, Anglo Coal, De Beers, Moolmans, MCC, Basil Read, Diesel Power, Group Five, Sasol, Anglo V3, Marlborough Crane Hire, Sentula Sentula, Moolmans, Basil Read Basil Read, Diesel Power, Aqua Plant, Al s plant Hire, Morado Plant Hire, CAT Rental Store, Teichmann, Alpha Plant Hire Caterpillar, Komatsu, Hitachi Bell, Liebherr, Volvo, Hyundai

18 Asset Clusters 100% CONSTRUCTION PASSENGER AND INDUSTRIAL AND MINING COMMERCIAL VEHICLES EQUIPMENT

19 Passenger & Commercial Vehicles continued South Africa Corporate demand for leasing up significantly due to banking liquidity tightening Selectively leasing to clients based on: - Good margins - Financial strength of customer Resale values on passenger and light commercial vehicles remain under pressure, countered by good maintenance fund profits Focus on non capital management products - Accident management, driver training, fine management

20 Target Market Eqstra Fleet Management - Blue chip corporate fleet owners in South Africa - Select government and parastatal organisations FlexiFleet - Commercial Leasing Primary and secondary distribution, own cargo, specialized markets Blue chip corporate commercial vehicle fleet owners - Workshops Own fleet, corporate fleets, insurance companies (panel shops) Manufacturing Own fleet Stainless steel» Blue chip transport companies Glass reinforced plastic» All insulated transport vehicles Mild steel» All accredited dealers, various transport operators

21 Competitive landscape Market information Major customers Competitors Passenger and Commercial Vehicles Average length of contracts, passenger and light commercial 42 months, medium commercial 60 months, heavy commercial 72 months Over 90% of contracts linked to prime interest rate 25% market share CloverSA Distell Albany Bakeries WurthSouth Africa Sappi Chemical Specialties Cell C Ellerine s Merafong Municipality Chevron South Africa Kite Logistics Agricultural Research Council, Tracker Network HolcimSA PG Glass Mobile Telephone Networks Swissport Avis Debis Fleet Africa Absa-Leaseplan OEM s Stannic Wesbank Nedfleet

22 Asset Clusters 100% CONSTRUCTION PASSENGER AND INDUSTRIAL AND MINING COMMERCIAL VEHICLES EQUIPMENT

23 Industrial Equipment continued South Africa 35% market share Forklifts in operation -22,496 units Rental Fleet -8,371 units 70% of new truck sales went into the rental fleet in February, outright sale down due to unrealistic bank financing requirements Parts sales down, customers holding off on repairs Order pipeline good, all rental United Kingdom Government forcing banks to lend, volume of enquiries is up Good combination of rental and outright sale Market share - 4% of counterbalanced units Rental Fleet -3,766 units Covers 65% of UK industrial equipment market

24 Target market Target segments: Manufacturing Mining FMCG Warehousing Container Handling Port Operations Agriculture Industry Airports Supported by our infrastructure: Branches in all 9 major cities, 3 depots and 11 dealers in Southern Africa Dealers in Botswana, Namibia, Zimbabwe, Malawi, Angola, Madagascar and Mozambique Spare parts at all branches and depots Service and aftermarket personnel at all branches, depots and dealerships Training Facilities Full workshop facilities

25 Competitive landscape Market information Major customers Competitors Industrial Equipment 35% (1) market share The majority of all forklifts sold are leased to customers Shoprite DHL Spar Tigerbrands Toyota SA VWSA Parmalat ABI Viamax TFD PFG Clover SA Linde Hyster TCM Mitsubishi Nissan Crown Source: (1) As per Wits orders placed on Original Manufacturers

26 South Africa Forklift Market Decline Units +11.1% yoy SA market down 44% in January 2009

27 UK Forklift Market Decline Units Unchanged UK market down 50% in January 2009

28 Comparative Share Price Performance Eqstra Holdings vs Barloworld, Bell Equipment and Sentula Re-based to Base (100) /05/ /05/ /06/ /06/ /06/ /07/ /07/ /08/ /08/ /08/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /02/ /02/ /03/08 Eqstra Barloworld Sentula Bell

29 Comparative Share Price Performance Eqstra Holdings, Impala Platinum, Anglo Platinum, Aquarius & Lonmin Re-based to Base (100) 2008/05/ /05/ /06/ /06/ /06/ /07/ /07/ /08/ /08/ /08/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /02/ /02/ /03/08 Eqstra IMPLATS Anglo Platinum Aquarius Lonmin

30 Comparative Share Price Performance Eqstra Holdings, Aveng & Basil Read Re-based to Base (100) 2008/05/ /05/ /06/ /06/ /06/ /07/ /07/ /08/ /08/ /08/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /02/ /02/ /03/08 Eqstra Aveng Basil Read

31 Comparative Share Price Performance Eqstra Holdings vs Grindrod Re-based to 100 Base (100) 2009/01/ /05/ /05/ /06/ /06/ /06/ /07/ /07/ /08/ /08/ /08/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /02/ /02/ /03/08 Eqstra Grinrod

32 Conclusion Global economy expected to deteriorate further - Expectations for global growth have reduced from 2% to 0.5% - SA economic growth estimated to be at 0.5% Commodities and durable goods sectors badly affected Global interest rate cuts will begin stimulate demand in H Market capitalisation of R1.5 billion, NAV of R2.0 billion

33 Appendix

34 Consolidated Income Statement continued Rm H H % change Revenue 4,412 3, Operating profit Net finance cost (407) (253) Profit before taxation Taxation (98) (111) Profit after taxation Basic headline earnings per share (cents)

35 Balance Sheet Rm H June 2008 Intangibles 8 5 PPE C&M +21.9% Leasing assets P&C +3.0% 7,188 6,550 IE +0.2% Other assets Terex and New Current assets Holland inventory 3,245 2,990 Total assets 10,967 10,090 Shareholders equity 2,000 1,855 Non-current liabilities 5,019 5,166 Includes CP of Current liabilities R1 616 m 3,948 3,069 Total equity and liabilities 10,967 10,090

36 Cash Flow Rm H H % change Cash generated from operations 1,533 1, % Changes in working capital (881) (937) +6.0% Cash flow from operating activities 264 (179) % Cash flow from investing activities (1,480) (938) -57.8% Cash flow from financing activities 1,206 1, %

37 Ratios H H Operating margin 16.7% 19.2% ROE 23.3% 27.3% Net working capital to revenue 19.0% 16.7% Capital adequacy 18.2% 18.4%* Interest-bearing borrowings to equity 347.9% 310.2%* Net cash flow to net debt 18.7% 3.5% Note: * As per June 2008

38 Funding position South Africa -Rm Facilities available Current debt Facilities Long term facility 3,850 3,850 - Short term facility 1, ,650 (1) Commercial paper - 1,616 (1) - General banking facility 1, Rest of the world Total borrowings 7,938 6,908 2,596 Debt levels increased by R1.2 bn Bond issue in 2009 to refinance long term debt Capital adequacy down slightly to 18.2%, due to increase in inventories, leasing assets and trade and other receivables Note: (1) Stand-by liquidity facility with 18 month notice to support commercial paper.

39 Contact WALTER HILL +27 (0)

40 EQSTRA Holdings Limited: Merrill Lynch Conference March2009