Investor Presentation
May 2002
Content
•
•
•
•
•
•
Introduction
Financial Results
Group Operations
Issues
Prospects
Shareholding
Salient features
Six months ended 31 March 2002
• Revenue
• EBITDA
• HEPS
• Interim dividend
R2,5bn
R243m
101c
30 cents
+17%
+21%
+30%
+25%
Growth drivers
•
•
•
•
•
•
Acquisitions
Revenue growth
R/$ exchange rate
Market share
Export growth
Improved efficiencies
Recent acquisitions
• Nashua Mobile
– Increased stake to 100%
• Nedcor’s 37,3% & Metropolitan Life’s 4,7%
• Effective 1 Dec 2001
• R261,6 million - Includes goodwill of R220,7m
– 10 000 Vodacom contract subscribers
• Be Clear and Simple
• R700 per active subscriber
• Effective 1 February 2002
Recent acquisitions
• Siemens Telecommunications
– Increased stake to 40%
– Acquired Marconi’s 21,5% Dec 01
– Siemens exercised 9% share option in Jan 02
• 12,5% = R161,3m
– Includes goodwill of R137,7m
Disclosure
• Segmental analysis regrouped
– Strategic focus
• Comparative historical information
Reunert structure
Electronics
Electrical Engineering
&
Cables
Office Systems
Electrical Engineering
Consumer products
Cables
Telecommunications
Reutech
Reunert structure
Electronics
Office Systems
Consumer products
Telecommunications
Reutech
Nashua
Panasonic
Sietel
RDI
100%
100%
40%
100%
RC&C Fin Co
100%
Nashua Mobile
Fuchs Electronics
100%
100%
IQ Works
Saco Systems
RRS
50%
100%
57%
Royce Imaging
Futronic
RDL
100%
100%
70%
Reunert structure
Electrical Engineering
&
Cables
Electrical
Cables
Engineering
CBI
ATC
100%
38,6%
African Cables
50%
Financial Results
Group Income Statement
R Millions
Revenue
EBITDA
Depreciation & amortisation
Operating profit
Interest & Dividends
PBT
Taxation
PAT
Associates
Minorities
Headline earnings adjustments
- Amortisation
- Other
Headline earnings
HEPS (cents)
Diluted HEPS (cents)
DPS (cents)
EBITDA %
Tax rate % before amortisation
Six Months ended
31 March
2002
2001
2 469,4
2 112,2
242,9
200,4
(37,8)
(16,7)
205,1
183,7
15,5
33,5
220,6
217,2
(79,2)
(73,8)
141,4
143,4
48,3
28,6
(14,5)
(19,3)
14,0
(0,1)
189,1
101,2
99,2
30,0
9,8
33,8
(0,1)
152,6
77,7
76,7
24,0
9,5
34,0
% Change
17
21
(126)
12
(54)
2
(7)
(2)
69
25
24
30
29
25
3
1
Group Balance Sheet
R Millions
31 March
2002
2001
1 609,0
1 083,2
152,2
386,0
237,9
832,9
155,6
10,9
179,4
748,2
1 380,3
1 525,4
509,6
673,2
197,5
432,2
570,5
522,7
TOTAL ASSETS
2 989,3
2 608,6
SHAREHOLDERS' FUNDS
1 242,4
1 025,4
(234,6)
(226,2)
9,5
13,2
1 972,0
1 796,2
734,6
1 237,4
-
636,6
1 112,7
46,9
2 989,3
2 608,6
NON-CURRENT ASSETS
Fixed Assets
Goodwill including associates
Investments
R C & C Finance Debtors
CURRENT ASSETS
Inventory & contracts in progress
Accounts Receivable
Cash
Shares bought back
NON-CURRENT LIABILITIES (NET)
CURRENT LIABILITIES
R C & C Finance Borrowings
Accounts payable, provisions & tax
Shareholders for normal dividend
TOTAL EQUITY & LIABILITIES
Group Cash Flow
R Millions
EBITDA
Working Capital (Increase)/Decrease
Net interest & dividends received
Taxation Paid
Dividends Paid
CASH GENERATED BY OPERATIONS
Capital Expenditure
Shares bought-back
Purchase of businesses
Other Movements
Net reduction in cash and cash equivalents
6 months ended
31 March
2002
2001
242,9
200,4
(2,7)
7,7
31,9
56,3
(165,4) (105,0)
(143,7) (120,2)
(37,0)
(13,2)
(456,8)
4,2
(502,8)
39,2
(17,2)
(209,5)
(1,8)
2,6
(186,7)
Dividends
100
Cents
80
1.9
60
1.9
40
20
2.4
1.9
2.5
0
1997
1998
1999*
Interim
* Excludes Special dividend of 250 cents
2000
Final
2001
2002
Revenue % contribution
Reutech
5%
Cables
9%
Electrical
Engineering
8%
Office
Systems
12%
Telecomms
25%
Consumer
products
41%
Operating profit % contribution
Electrical
Engineering
13%
Cables
2%
Office Systems
23%
Reutech
4%
Telecomms
33%
Consumer
products
25%
Group Operations
Office Systems
• Revenue
• Operating profit
• Nashua
R420m +29%
R71m +91%
– Strong growth
– Digital conversion continuing
– High % annuity income
Office systems
• IQ Works
– Recently started breaking even
– Satisfying growth in sales
– Strong synergy with Nashua Mobile
• RC&C Finance Company
– Good growth in book
– No increase in bad debts
• Royce Imaging
– Sales & profit growth
– Support Nashua brand of products
Consumer products
• Revenue
R1 387m
• Operating profit
R78m
– Nashua Mobile
– Panasonic
– Futronic
– Saco Systems
+20%
+42%
Consumer products
• Nashua Mobile
– Internal re-organisation
• Least Cost Routers
• Corporate Customers
– Clear focus at top end of corporate market
• 260 000 Contract subscribers
• ARPU over R500 per month
• 11 % Churn lowest in market
– Focus on quality service & product offering
• SMS gateway
• R&D facility opened in Stellenbosch
Consumer products
• Panasonic
– Benefit from improved business model
• Direct sales to customer - Leaf
• Indent
• Retail
• Introduced Futronic
• Focus on lower end of consumer market
• Sourcing additional product
Telecommunications
Reunert
40.0%
Siemens
60.0%
• Revenue
R867m
• Operating profit
R100m
• Siemens Telecommunications
+57%
+112%
– Excellent growth
• R/$ exchange rate
– Progress on roll-out of Cell C
• No overdue debts
– Well positioned to benefit from SNO
• Eskom’s Easitel
– 30% of total turnover is into Africa
– Cellular opportunities in RSA - GPRS (2.5G); 3G
Teledensity
Gambia
Fixed Line 2.56%
Cellular 0.43%
Internet Subs’ 4 000
Burkina Faso
Fixed Line 0.45%
Cellular 0.99%
Internet Subs’ 10 000
Nigeria
Fixed Line 0.43 %
Cellular 0.03%
Internet Subs’ 200 000
Sudan
Fixed Line1.24%
Cellular 0.29%
Internet Subs’ 30 000
DRC
Fixed Line 0.04%
Cellular 0.93%
Internet Subs’ 500
Eritrea
Fixed Line 0.8%
Cellular 0.00 %
Internet Subs’ 5 000
Guinea Conakry
Fixed Line 0.79%
Cellular1.04%
Internet Subs’ 8 000
Uganda
Fixed Line 0.28%
Cellular 1.55%
Internet Subs’ 40 000
Congo
Fixed Line 0.75%
Cellular 4.57%
Internet Subs’ 500
Zambia
Fixed Line 0.85%
Cellular 0.81%
Internet Subs’ 20 000
Angola
Fixed Line 0.53%
Cellular 0.28%
Internet Subs’ 30 000
Tanzania
Fixed Line 0.49%
Cellular 0.95%
Internet Subs’ 115 000
Namibia
Fixed Line 5.94%
Cellular 6.07%
Internet Subs’ 30 000
Malawi
Fixed Line 0.44%
Cellular 0.46%
Internet Subs’ 15 000
Zimbabwe
Fixed Line 1.91%
Cellular 2.76%
Internet Subs’ 30 000
Mauritius
Fixed Line 23.52%
Cellular 15.49%
Internet Subs’ 87 000
Botswana
Fixed Line 9.27%
Cellular 16.40%
Internet Subs’ 15 000
Feb 2002 © Siemens
Lesotho
Fixed Line1.03%
Cellular1.32%
Internet Subs’ 1 000
RSA
Fixed Line 11.36%
Cellular 22.77%
Internet Subs’ 2 400 000
Mobile Network
Swaziland
Fixed Line 3.19%
Cellular 4.52%
Internet Subs’ 10000
Fixed Network
Mozambique
Fixed Line 0.44%
Cellular 0.62%
Internet Subs’ 30 000
Madagascar
Fixed Line 0.36%
Cellular 0.61%
Internet Subs’ 30 000
South Africa
Fixed vs mobile phones
12
Millions
10
8
Fixed Line
Mobile
6
4
2
0
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
Reutech
•
•
•
•
•
Revenue
R186m
-26%
Operating profit R12m
-73%
Difficult 6 months
Substantial order received
Major increase in revenue and earnings
FY03+
• Excellent prospects to grow order book
Electrical Engineering
• Revenue
• Operating profit
• CBI
R268,9m
R41,9m
+46%
+39%
– 26% revenue growth from Mitsubishi product range
– 71% from exports
– Mitsubishi & meter products lower margins than
traditional CBI products
• Export to Europe, USA, Africa & Far East
CBI Ratio Export/Total Sales
Ratio
30%
Excluding
Acquisitions
Total
20%
10%
0%
96
97
98
99
00
01
02
Cables
• Revenue
• Operating profit
R295,6m
R6,0m
+1%
-82%
African Cables
ATC
Reunert
38.6%
Pirelli
50.0%
Marconi
50.9%
Pirelli
10.5%
Reunert
50.0%
Cables
• African Cables
– Performance continued
– Gaining market share
– Improved efficiencies
– Strong order book
• BEE
African Cables
1.4
1.2
Rbn
1
25%
0.8
0.6
21%
0.4
0.2
18%
0
1999
2000
Total market
2001
29%
27% 27%
25%
23%
21%
19%
17%
15%
2002
% Market share
%
Domestic demand
Cables
• ATC
– Sporadic copper demand
– Weak demand for optical fibre continues
– Restructured business to reduce costs
• No short-term improvement expected
Issues & Prospects
Black Economic Empowerment
• Equity participation
– Subsidiaries
– Reunert
– Franchisees
• Expected Revenue of R95m by Sept 02
• Employment equity
– Agreed plans in place
– Focus on senior management & professional level
Black Economic Empowerment
Community involvement
– Reunert College
• 400+ Students since 1993
• Maths, Science & English
– Outsourcing & subcontracting
Prospects
• Continued strong growth for 2nd half
expected
Thank you
Questions
Shareholding
Equity
• Shares in issue
–
–
–
–
In issue
204 060 264
Shares held by subsidiary 17 168 058
No additional shares bought back since May 2001
AGM approval
• Ave value traded
R19,7m/week
Major institutional shareholders
Other holdings
OMAM
BOE AM
Sanlam IM
Franklin
Templeton
RMB
Coronation
Stanlib
Reunert
Investec