UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2013

Transcription

1 UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2013

2 AGENDA AGENDA GROUP OVERVIEW FINANCIAL REVIEW DIVISIONAL REVIEW OUTLOOK QUESTIONS 2

3 3 GROUP OVERVIEW

4 GROUP STRUCTURE INDUSTRIAL EQUIPMENT FLEET MANAGEMENT AND LOGISTICS CONTRACT MINING AND PLANT RENTAL 4 Distribution, leasing, rental and value-added services for: Forklifts Mobile cranes Port equipment Mining trucks Other industrial equipment Value-added corporate leasing: Passenger vehicles Light, medium and heavy commercial vehicles Construction and mining equipment Vehicle remarketing Logistics Opencast mining services: Drilling Blasting Load and haul Short-term plant rental

5 SALIENT FEATURES +14.7% Revenue Dec 2013 Dec 2012 (13.5%) Operating profit Dec 2013 Dec 2012 (0.8%) EBITDA Dec 2013 Dec 2012 R4 935m R4 302m R461m R533m R1 406m R1 418m +36.2% Cash flows from operating activities Dec 2013 Dec 2012 (25.4%) HEPS Dec 2013 Dec % Revenue-generating assets Dec 2013 Jun 2013 R1 370m R1 006m 34.9 cps 46.8 cps R9 942m R9 578m 5

6 GROUP HIGHLIGHTS Industrial Equipment Product/geographical diversification and annuity revenue streams underpinned the business in a declining SA forklift market Improved UK contribution from recovering economy and weaker Rand Fleet Management and Logistics Division returning to normalised earnings Rationalisation and closure of loss making businesses have been concluded Contract Mining and Plant Rental Turn around negatively impacted by R135m loss in earnings due to industrial action Termination of loss making contracts underway 6

7 7 FINANCIAL REVIEW

8 REVENUE OVERVIEW Group revenue +14.7% to R4 935 million (H1 13: R4 302 million)* INDUSTRIAL EQUIPMENT H1'14 H1' % Improved UK sales and weaker Rand FLEET MANAGEMENT AND LOGISTICS H1'14 H1' % Increased revenue in logistics and other value added services CONTRACT MINING AND PLANT RENTAL H1'14 H1' % Higher revenue on equipment sales and a contract changing from dry to wet rates * Excludes inter-company revenue of R209 million (H1 13: R86 million) 8

9 VALUE CHAIN STATEMENT Revenue, excluding corporate office and eliminations (Rm) Distribute Rent/lease Value-add Sell H1 14 Industrial Equipment Fleet Management and Logistics Contract Mining and Plant Rental Total H1 13 Industrial Equipment Fleet Management and Logistics Contract Mining and Plant Rental Total

10 VALUE CHAIN STATEMENT (Continued) 9% 12% Distribute 6% 12% 55% H1'14 24% Rent/lease Value-add Sell 56% H1'13 26% 10

11 INCOME STATEMENT Rm H1 14 H1 13 % ch Revenue % Profit from operations (1.7%) Depreciation, amortisation and recoupments (946) (898) 5.3% Operating profit (13.5%) Foreign exchange losses (1) (3) Net impairment - (19) Sub-standard tyres at Benga Profit before net finance costs (10%) Net finance costs (287) (266) 7.9% Profit before taxation (29.4%) R135m lower due to industrial action at MCC 11

12 INCOME STATEMENT (Continued) Rm H1 14 H1 13 % ch Profit before taxation (29.4%) Income tax expense (32) (60) (46.7%) Profit for the year (23.8%) Lower tax rate due to operating losses in SA Contract Mining Tax rate 18.5% 24.5% Basic and diluted HEPS (cents) (25.4%) Basic and diluted EPS (cents) (22.6%) 12

13 WEIGHTED AVERAGE SHARES IN ISSUE millions H1 14 H1 13 Weighted average shares in issue, net of treasury shares Weighted share buy-back *(5.4) Weighted shares sold for staff share scheme **1.4 Weighted average shares in issue * 9.3 million shares repurchased during H1 13 ** 2.7 million treasury shares sold for settlement of staff share incentive scheme during H

14 BALANCE SHEET TOTAL ASSETS Rm H1 14 H2 13 % ch Revenue-generating assets % Other assets % Inventories % Trade and other receivables % Cash and cash equivalents (77.3%) Total assets % Revenue-generating assets (Rm) Forex impact forex impact Inventories higher as a result of excess Contract Mining and Plant Rental equipment identified as available for sale 14 H1'12 H2'12 H1'13 H2'13 H1'14

15 BALANCE SHEET TOTAL EQUITY AND LIABILITIES Rm H1 14 H2 13 % ch Total equity % Interest-bearing borrowings % Accounts payables and provisions (5.7%) Other liabilities % Total equity and liabilities % ROE 15.0% 17.2% Includes profit on sale of EMS 12.3% 12.9% Includes R135m loss from industrial action 8.6% Capital adequacy ratio 24.4% 23.7% 23.0% 24.6% 24.4% H1'12 H2'12 H1'13 H2'13 H1'14 H1'12 H2'12 H1'13 H2'13 H1'14 15

16 CASH FLOW STATEMENT Rm H1 14 H1 13 % ch Cash generated from operations before working capital movements (5.5%) Working capital movements 257 (185) Cash generated from operations % Net cash flows from operating activities % Net cash flows from investing activities (1 702) (1 278) 33.2% Net cash flows from financing activities 96 (137) Net decrease in cash and cash equivalents before effect of exchange rate (236) (409) 16

17 MOVEMENT IN CASH AND CASH EQUIVALENTS At beginning of the year 300 Cash generated from operations Increase in interest-bearing borrowings Decrease in working capital Movement in finance lease receivables Taxation paid Net finance costs and fx movements Net capital expenditure Transactions with shareholders 129 Business acquisitions 18 At the end of the year 68 Rm

18 CAPITAL EXPENDITURE Rm H1 14 H1 13 Expansion Industrial Equipment* Fleet Management and Logistics*# Contract Mining and Plant Rental - 84 Net replacement (net of proceeds) Industrial Equipment* Fleet Management and Logistics*# Contract Mining and Plant Rental Net expenditure * Prior year re-presented for CME divisional restructuring # Includes corporate office and eliminations 18

19 FUNDING POSITION Funding facilities (Rm) Facility size Utilised Unutilised RSA bank debt General banking facility Liquidity facility* Term facility ECA backed debt US Ex-Im and Coface Call facility Asset manager Total RSA non-bank debt Capital markets Maturity date CP+EQ187 various 800 EQS01 18 Nov EQS02 01 Jul EQS04 22 Sep EQS09 28 Nov New EQS05 25 Apr EQS06 09 Apr EQS07 09 Apr EQS08A 04 Oct 2018 Amortising 465 New Total SA funding Rest of World Total funding * Liquidity facility with 13-month notice period to support commercial paper 19

20 RSA DEBT MATURITY PROFILE CP backed by 13-month notice liquidity facility Rm F2014 F2015 F2016 F2017 F2018 F2019 Overnight Borrowing ECA Commercial paper Bonds Long-term facilities 20

21 FUNDING DIVERSIFICATION Geographical diversification of debt South African debt diversification 10% 9% 3% 43% 54% 81% South Africa Rest of Africa United Kingdom Bank Debt Capital Market and CP ECA's 21

22 22 DIVISIONAL REVIEW

23 SEGMENTAL CONTRIBUTIONS Revenue Revenue-generating assets Profit after taxation R million R9 942 million R141 million 46% 28% 45% 22% 11% 39% 26% 33% 50% Industrial Equipment Fleet Management and Logistics Contract Mining and Plant Rental 23

24 24 INDUSTRIAL EQUIPMENT

25 INDUSTRIAL EQUIPMENT Rm H1 14 H2 13* % ch Revenue-generating assets % Inventories % Trade and other receivables % Other assets % Operating assets % H1 14 H1 13* Revenue % EBITDA % Operating profit % Foreign exchange losses (1) (3) Net finance costs (70) (50) 40.0% Profit before taxation % PBT margin 4.9% 4.6% EBITDA to net finance costs 5.3x 5.7x * Includes Construction and Mining Equipment 25

26 INDUSTRIAL EQUIPMENT 8% Forklifts - SA 7% 38% Forklifts - UK 26% Heavy equipment (trucks, cranes, port equipment) 21% Truck mounted cranes, aerial platforms and waste compactors Other Divisional revenue by segment (R1 507m) 26

27 INDUSTRIAL EQUIPMENT UK Forklift Market (Units) 9,200 7,200 5,200 3,200 1,200 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 SA Forklift Market (Units) H1 14: +6% on H1 13 3,000 2,000 1,000 H1 14: -25% on H1 13 UK achieved a 17% ROE and a 67% increase in PBT (in GBP) Secured distributorships for Konecranes and Mafi in the UK Strategy to reduce reliance on SA forklift business progressing well Overhead costs in SA have been aligned to a declining forklift market Heavy Equipment achieved improved sales volume Terex crane distributorship was not renewed at 31 December 2013; Terex trucks to continue as per agreement 0 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 27

28 28 FLEET MANAGEMENT AND LOGISTICS

29 FLEET MANAGEMENT AND LOGISTICS Rm H1 14 H2 13* % ch Revenue-generating assets % Inventories % Trade and other receivables % Other assets % Operating assets % H1 14 H1 13* Revenue % EBITDA % Operating profit % Net finance costs (87) (78) 11.5% Profit before taxation % PBT margin 7.1% 8.2% EBITDA to net finance costs 6.1x 6.3x * Includes heavy plant leasing 29

30 FLEET MANAGEMENT AND LOGISTICS 8% 17% Fleet Management - passenger vehicles 45% Fleet Management - commercial vehicles Logistics 30% Fleet Management - Rest of Africa Divisional revenue by segment (R1 351m) 30

31 FLEET MANAGEMENT AND LOGISTICS Marginal growth in leasing fleet due to selective capital allocation to new business (measured growth) Solid revenue growth in the core leasing and logistics business units Operating margin impacted by non-reoccurring rationalisation costs and lower overall margins in our vehicle remarketing activities Profit contributions of value added products continued, in particular GPS Tracking Solutions Concluded an empowerment transaction with Nozala to position the division to compete for future government and parastatal tenders 31

32 32 CONTRACT MINING AND PLANT RENTAL

33 CONTRACT MINING AND PLANT RENTAL Rm H1 14 H2 13 % ch Revenue-generating assets % Inventories % Trade and other receivables (11.7%) Other assets % Operating assets % H1 14 H1 13 Revenue % EBITDA (20.6%) Operating profit (47.2%) Asset impairment - (18) Net finance costs (130) (138) (5.8%) Profit before taxation - 90 PBT margin % EBITDA to net finance costs 4.0x 4.7x 33

34 CONTRACT MINING AND PLANT RENTAL 7% 3% SA contract mining 21% Rest of Africa contract mining 69% SA plant rental Rest of Africa plant rental Divisional revenue by segment (R2 286m) 34

35 CONTRACT MINING AND PLANT RENTAL FY'10 FY'11 FY'12 FY'13 H1'14 Revenue by commodity 35% 25% 24% 32% PGM's 63% 45% 37% 49% 41% 19% Energy (Coal and Uranium) Other & Plant Rental 28% 26% 31% 18% 26% Increased volumes at Tharisa and successful start up at Mogalakwena Negotiating a further extension of 5 years at PPM Exiting loss making contracts (Wolvekrans January 2014 and Nkomati August 2014) Equipment will be redeployed to existing contracts that have requested increased volumes Benga performed in line with expectations MCC not affected by current industrial action in the platinum sector 35

36 MINING CONTRACTS Client Mineral Location Monthly volumes End date Platmin - Pilanesberg Platinum Mine Platinum Northam, North West m 3 *02/2014 Angloplat Mogalakwena Mine Platinum Mokopane, Limpopo m 3 08/2014 ARM/Norilsk JV - Nkomati Nickel Nickel Machadodorp, Mpumalanga m 3 08/2014 Tharisa Minerals Chrome Marikana, North West m 3 *09/2017 Rio Tinto - Benga Mine Coal Tete, Mozambique m 3 12/2015 Khutala Colliery Coal Ogies, Mpumalanga m 3 11/2014 Total Coal - Dorstfontein East Coal Kriel, Mpumalanga m 3 01/2016 * Contracts extension under negotiation 36

37 37 OUTLOOK

38 ORDER BOOKS (Rm) Dec Jun Dec Jun Dec ,000 10,000 15,000 20,000 Industrial Equipment Contract Mining and Plant Rental Fleet Management and Logistics Contract mining contracts under negotiation Total confirmed order book at 31 Dec 2013 = R m 38

39 OUTLOOK Strategy to remain invested in the UK will benefit earnings as the UK economy improves Drive to continually improve efficiencies has resulted in on-going cost reductions that will position the group for an anticipated weaker SA economy Earnings from leasing activities to remain defensive and will benefit from higher interest rates The mining sector, more specifically Benga, is expected to remain challenging 39

40 40 QUESTIONS AND ANSWERS

41 CONTACTS Walter Hill (CEO) +27 (0) Jannie Serfontein (CFO) +27 (0) Investor relations: Paul Siddall +27 (0)