Altron Limited Class A · JSE:AEL
Altron Limited Class A — H1 2010 Earnings Presentation
23 slides from Altron Limited Class A's earnings presentation, October 2009
Slide 1: Altron Group 2009 Interim results
Altron Group 2009 Interim results Investec, Johannesburg g October 2009 Agenda Altron group overview Robert Venter Altron group financial results Alex Smith Ope tion l reviews: Operational e ie – Altech Craig Venter – Bytes David Redshaw – Powertech Norbert Claussen Altron – Outlook Robert V
Slide 2: Group overview and financial summary
Group overview Comparing peak of cycle to trough Group revenue and profits reflect recessionary environment Group negatively l impacted d by b the h strength h off the h rand d Despite market pressure, Altech delivers good results underpinned by annuity income and sound acquisitions strategy
Slide 3: Subsidiary company results
Subsidiary company results (for the 6 months ended 31 August 2009) * * li t d on JSE listed * Shareholding: 62% Shareholding: 100% Shareholding: 100% Revenue: R4.7bn 4% Revenue: R4bn (26)% Revenue: R3.4bn 3% EBITDA: R578m 19% EBITDA: R219m 65% EBITDA: R159m 25% EBITDA EBITDA EBITDA 12.2% 10.7% 5.5%
Slide 4: Half-yearly headline earnings
Half-yearly y y headline earnings g Rm 700 600 500 400 300 200 100 - H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 -100 Altech Bytes Powertech Corporate Altron Altron monthlyy operating p g profit p trend Rm 250 200 150 100 50 - Current period Prior period
Slide 5: Corporate activity
Corporate activity Altech acquires q Fleetcall for a maximum p purchase price p of R75m of which R35m is held in escrow - 1/03 /09 Altech acquires Technology Concepts for maximum total consideration of R45 m of which o c R7.5m 5 was as pa paid d upfront up o t and a d R37.5m 3 5 iss held e d in
Slide 6: Group income statement
Financial results Alex Smith Chief Financial Officer: Altron Group income statement - highlights R millions Aug 09 Aug 08 % change Revenue 12 055 13 169 (8) Operating profit before capital items 731 1 123 (35) EBITDA 951 1 317 (28) EBITDA Margin 7.9% 10.0% Net investment income (43) (38) Income from
Slide 7: Impact of appreciating rand
Impact of appreciating rand Altech Bytes Powertech Altron Reported operating profit 479 120 136 731 Operating margin 10.1% 3.6% 3.4% 6.1% Forex losses 36 13 55 96 Effect of translation of foreign ops 16 4 1 21 Adjusted operating profit 531 137 192 848 Adjusted operating margin 11 2% 11.2% 4 1% 4.1%
Slide 8: Summarised balance sheet and cash flow statement
Summarised balance sheet R millions Aug 09 Aug 08 Total non-current assets 5 235 4 783 Current assets 5 818 6 845 Cash balances 1 338 615 Total assets 12 391 12 243 Shareholders equity 4 506 4 636 Minority interests 1 384 1 185 Non-current liabilities 1 305 1 107 Current liabilities 5 196 5 315 Tota
Slide 9: Working capital and expense reductions
Working g capital p Reduction in working capital released R127m Inventory balances have come down significantly, mainly at Aberdare which is now running on just over one month’s stock D bt Debtors d days h have moved d outt slightly li htl due d to t economic i conditions diti and a strong Aug
Slide 10: Altech financial summary
Altech Results Craig g Venter CEO: Altech Altech financial summary R millions Aug 09 Aug 08 % change Revenue 4 732 4 533 4 EBITDA 578 487 19 EBITDA margin 12.2% 10.7% Operating profit 479 409 17 Adj Adjusted d HEPS 304 304c 269 269c 13 Intangible write-off in 14 9 operating profit Forex (loss) / pro
Slide 11: Altech divisional review
Altech divisional review Aug 09 09* % Company revenue growth Comments Rm Altech Autopage 2 796 9% Good growth in Postpaid subscriber numbers. Minimal ARPU Cellular decline – mitigated by strong Data and VAS sales. sales Altech Netstar 434 6% SVR steady. Fleet management showed year-on-year subscribe
Slide 12: Altech – the way forward
Altech – the way forward Annuity revenue (defensive) Cost containment Maintain operating margins Strong balance sheet Globalisation Liberalisation of telecoms market Digital Migration DTT (SA and Australia) E t Af East African i growth th engine i Bytes Technology Group Results David
Slide 13: Bytes financial summary
Bytes financial summary R millions Aug 09 Aug 08 % change Revenue 3 374 3 279 3 EBITDA 159 213 (25) EBITDA margin 4 7% 4.7% 6 5% 6.5% Operating profit 120 177 (32) Adjusted diluted HE 71 115 (38) Intangible write-off in 14 12 operating profit Forex (loss) / profit (13) 2 p included in operating g pr
Slide 14: Bytes divisional review
Enhanced BBBEE Empowerdex BBBEE Standard BBBEE BBBEE LEVEL Value Added Score Recognition Level Supplier Level BBBEE LEVEL 2 LaserCom 91.02 125% 156.25% B t P Bytes People l SSolutions l ti 85 08 85.08 125% 156.25% 156 25% BBBEE LEVEL 3 Bytes Outsource Services 83.41 110% 137.50% Bytes Specialised So
Slide 15: Bytes the way forward
Bytes the way forward BDS annuity business remains solid Continuing improved performances from BSI and Intelleca Major cost reductions in UK Xerox operations but markets remain difficult Retail ATM model undergoing radical revision Good orders received for top level ATM machines (Intellige
Slide 16: Powertech financial summary and order book
Powertech financial summary R millions Aug 09 Aug 08 % change Revenue 3 981 5 363 (26) EBITDA 219 621 (65) EBITDA margin 5.5% 11.6% Operating p g profit p 136 542 ((75)) Adjusted diluted HE 60 292 (79) Intangible write-off in 22 21 operating profit Forex ((loss)) / profit p (55) 9 included in operat
Slide 17: Powertech divisional review and way forward
Powertech divisional review Aug 09 Revenue % Company Comments growth Rm Challenging market conditions with significant reduction in Powertech 1 913 (46%) demand. Significant restructuring on LV Cable operation. Cables Excellent working capital management. Powertech Solid performance for the period,
Slide 18: Altron – the road ahead: key growth drivers
Robbie Venter Altron – the road ahead Key growth drivers for the group Infrastructure spend Technology convergence Integration of acquisitions and launching of new ventures Gl b l footprint Global f
Slide 19: Key growth drivers: building and construction market
Building and construction market Source: September 09 Econometrix Report Key growth drivers for the group Infrastructure spend Technology convergence Integration of acquisitions and launching of new ventures Gl b l footprint Global f
Slide 20: Technology convergence
Technology convergence East Africa – Revenue up 51% to R260m – Operating profit f up 80% to R88m – Currently 5% of Altech’s revenue but already 18% of total operating profit – Investment in TEAMS, Seacom provides undersea link to terrestrial network – Data centre capex approved – 12 month commissi
Slide 21: Acquisition analysis
Acquisition analysis Annual after Upfront tax interest Effective (Price) / Historic Interim Annualised earned / R millions date Sale Multiple PAT PAT 2009 PAT (foregone) Acquistions Fl t ll Fleetcall M 09 Mar (40 0) (40.0) 38 3.8 10 5 10.5 84 8.4 16 7 16.7 (1 8) (1.8) Technology Concepts Mar 09 (7.5
Slide 22: Global footprint and Outlook
Global footprint Revenue Operating income Aug 09 Aug 08 Aug 09 Aug 08 R millions Exports 524 843 Foreign Ops 2 286 2 564 164 162 Total 2 810 3 407 164 162 % of total 23.3% 25.9% 22.4% 14.4% Outlook Bottom of economic cycle with tentative signs of recovery p Operations reported p improved p resul
Slide 23: Thank you
Thank you ALTRON