Enx Group Limited · JSE:ENX
Enx — H1 2021 Earnings Presentation
40 slides from Enx's earnings presentation, April 2021
Slide 1: Results Presentation for the six months ended 28 February 2021
RESULTS PRESENTATION for the six months ended 28 February 2021
Slide 2: Disclaimer
DISCLAIMER Certain statements in this presentation regarding enX’s business operations may constitute “forward looking statements.” All statements other than statements of historical fact included in this presentation, including, without limitation, those regarding the financial position, business s
Slide 3: Contents
CONTENTS 01 02 03 04 WHO WE WHO WE HIGHLIGHTS & FINANCIAL ARE REPRESENT KEY FOCUS AREAS PERFORMANCE 05 06 07 08 BUILDING OUR ASSETS HELD FINANCIAL OUTLOOK BUSINESS UNITS FOR SALE REVIEW 3
Slide 4: Who We Are
01 WHO WE ARE
Slide 5: Who We Are
WHO WE ARE FLEET EQUIPMENT PETROCHEMICALS Fleet management solutions across Distribution, rental, pre-owned Manufacturing and distribution all vehicle classes: and value-added services for: of chemicals • Rental • Forklifts • Oil lubricants and base oils • Tracking • Port and crane equipment • Rubbe
Slide 6: Who We Represent
02 WHO WE REPRESENT
Slide 7: Who We Represent
WHO WE REPRESENT BRAND RECOGNITION MARKETING EXPERTISE RESEARCH AND DEVELOPMENT GROWTH OPPORTUNITIES SUPPORTED WITH CONFIDENCE BY GLOBAL TOP 10 AND LEADING INTERNATIONAL BRANDS EQUIPMENT PETROCHEMICALS EIE SA NEW WAY POWER AUSTRO AG LUBRICANTS WEST AFRICAN GROUP #1 #1 #1 #1 #2 #1 IMPACT HANDLING (di
Slide 8: Highlights & Key Focus Areas
03 HIGHLIGHTS & KEY FOCUS AREAS
Slide 9: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 1. Bank refinancing of Impact Handling (UK), EIE SA and Eqstra • Impact Handling (UK) renewed funding arrangements with HSBC to August 2023 • EIE SA and Eqstra raised independent and dedicated funding - Previous bank borrowings, debt market instruments were redeemed on
Slide 10: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 4. Continued management of risks around COVID-19 to ensure ongoing sustainability • Continued management daily across all business units 5. Continued improvement of our transformation strategy • enX was rated a level 3 B-BBEE rating on 2 November 2020 6. “Back to Basic
Slide 11: Key Focus Areas – Impacts of COVID-19
KEY FOCUS AREAS – Impacts of COVID-19 • Health and safety of our stakeholders remains highest priority • Stringent hygiene controls and protocols continue to be implemented • As lock down restrictions have lifted, activity levels and revenues continue to improve ENX GROUP - % OF PRE-COVID-19 REVENUE
Slide 12: Financial Performance
qe \ FINANCIAL PERFORMANCE
Slide 13: Financial Performance
FINANCIAL PERFORMANCE • Revenue from continuing operations: R3.147 billion (2020: R3.095 billion¹), up 2% • The prior year had no impact from COVID-19 lockdown restrictions which only commenced during March 2020 • Profit from continuing operations before depreciation and amortisation of R758 million
Slide 14: Building Our Business Units
05 BUILDING OUR BUSINESS UNITS
Slide 15: Business Unit Analysis – Eqstra
BUSINESS UNIT ANALYSIS – Eqstra FLEET Reported Reported Proforma REVENUE VALUE CHAIN Rm H1-21 H1-20² Adj¹ H1-20 Revenue 896 975 - 975 20% 47% 20% REMARKETING RENTAL EBIT 119 431 (270) 161 PBT Leasing assets 57 2 674 336 2 854 (270) - 66 2 854 2021 47% 33% Total assets 3 101 3 329 - 3 329 VALUE ADD 3
Slide 16: Business Unit Analysis – Eqstra Leasing Book
BUSINESS UNIT ANALYSIS – Eqstra Leasing Book Leasing book remains healthy with risks well managed: • Credit risk: The book remains well diversified in terms of industry exposure and primarily blue-chip customers. The top 5 customers account for around 40% of the Leasing Asset Net Book Value • Intere
Slide 17: Business Unit Analysis – EIE SA
BUSINESS UNIT ANALYSIS – EIE SA EQUIPMENT REVENUE VALUE CHAIN Rm H1-21 H1-20 Revenue 1 037 1 074 11% 36% 36% USED RENTAL EBIT 98 153 EQUIPMENT 11% PBT Leasing assets 33 1 961 60 1 927 2021 30% 30% 23% 23% Total assets 3 018 3 188 VALUE ADD NEW SERVICES EQUIPMENT Interest-bearing liabilities 1 788 1
Slide 18: Business Unit Analysis – EIE SA Leasing Book
BUSINESS UNIT ANALYSIS – EIE SA Leasing Book Leasing book remains healthy with risks well managed: • Credit risk: The book remains well diversified with the largest customer comprising 3.8% and top 10 customers comprising 15.8% of the long-term forklift leasing book • Interest rate risk: Most of the
Slide 19: Business Unit Analysis – New Way Power
BUSINESS UNIT ANALYSIS – New Way Power EQUIPMENT Rm H1-21 H1-20 H1-21 Revenue 195 169 NEW WAY POWER • Y-on-Y Revenue ↑15% EBIT (13) (5) • Challenging construction market and aftermath of COVID-19 lockdown restrictions PBT (17) (10) • Load shedding continued to create some opportunities Inventory 89
Slide 20: Business Unit Analysis – Austro
BUSINESS UNIT ANALYSIS – Austro EQUIPMENT Rm H1-21 H1-20 H1-21 Revenue 68 69 AUSTRO • Continued recovery EBIT 2 (10) • Catch-up after lock down restrictions eased PBT 2 (10) • Y-on-Y Revenue flat, despite COVID-19 lockdown restrictions only commenced during H2-20 Inventory 25 60 • Significant operat
Slide 21: Business Unit Analysis – AG Lubricants
BUSINESS UNIT ANALYSIS – AG Lubricants PETROCHEMICALS Rm H1-21 H1-20 H1-21 Revenue 411 392 AG LUBRICANTS • Y-on-Y Revenue ↑ 5% from higher volumes at more EBIT 25 19 favourable exchange rates and mining sector buoyant • Activity levels increased significantly as customers continued PBT 28 14 to clea
Slide 22: Business Unit Analysis – WAG
BUSINESS UNIT ANALYSIS – WAG PETROCHEMICALS Rm H1-21 H1-20 H1-21 Revenue 565 437 WAG EBIT 13 17 • Y-on-Y Revenue ↑29% • Significant volume growth on the back of increased mining PBT 12 16 activity coupled with customers stocking up ahead of Inventory 188 141 anticipated global shortages. Inventory a
Slide 23: Business Unit Analysis – Impact Handling (UK)
BUSINESS UNIT ANALYSIS – Impact Handling (UK) DISCONTINUED OPERATION REVENUE VALUE CHAIN Rm H1-21 H1-20 Revenue 756 730 45% 45% RENTAL EBIT 50 57 7% DISPOSAL PBT Leasing assets 34 1 286 36 1 280 7% 2021 23% 25% Total assets 2 012 2 069 23% 25% VALUE ADD DISTRIBUTION SERVICES Interest-bearing liabili
Slide 24: Business Unit Analysis – Impact Handling (UK)
BUSINESS UNIT ANALYSIS – Impact Handling (UK) Leasing book remains healthy with risks well managed: • Credit risk: The book remains well diversified with the largest customer comprising 1.6% and top 10 customers comprising 9% of the long-term forklift leasing book. Most of the trade debtors are cove
Slide 25: Assets Held for Sale
06 ASSETS HELD FOR SALE
Slide 26: Assets Held for Sale – Prior Period
ASSETS HELD FOR SALE – PRIOR PERIOD Eqstra: Represented as a continuing operation in prior period • At the end February 2020: Eqstra was required to be recorded as an asset held for sale and was only reclassified as a continuing operation from a discontinued operation in May 2020 • H1-20 results hav
Slide 27: Assets Held for Sale – Current Period
ASSETS HELD FOR SALE – CURRENT PRERIOD Impact Handling (UK): Shown as an asset held for sale and discontinued operation • During November 2020, Board decided to proceed to divest a business with the aim of reducing overall gearing of enX Group • Shareholders are referred to the SENS announcement reg
Slide 28: Impact of Held for Sale Accounting: Financial Summary
IMPACT OF HELD FOR SALE ACCOUNTING: FINANCIAL SUMMARY H1-21 H1-20 H1-21 IFRS5 H1-21 H1-20 IFRS5 H1-20 R’000 Reported Adjust¹ Proforma Reported Adjust2 Proforma % change CONTINUING OPERATIONS Profit before depreciation and amortisation 758 128 - 758 128 832 176 - 832 176 (9) Profit before interest an
Slide 29: Financial Review
07 FINANCIAL REVIEW
Slide 30: Financial Review – Key performance indicators
FINANCIAL REVIEW Key performance indicators – total operations R’000 H1-21 H1-20 Revenue 3 903 577 3 824 647 Operating profit 315 226 626 091 Proforma Operating profit¹ 290 570 342 565 Headline earnings 110 927 300 089 Proforma headline earnings¹ 93 175 95 950 Proforma basic earnings per share (cent
Slide 31: Condensed statement of financial position
FINANCIAL REVIEW Condensed statement of financial position R’000 Feb 2021 Aug 2020 Goodwill and intangibles 28 555 165 769 Leasing assets 4 659 499 6 087 417 Inventories 992 945 1 622 021 Trade and other receivables 836 358 1 069 503 Property, plant and equipment 338 469 409 482 Right of use asset (
Slide 32: Condensed statement of cash flows
FINANCIAL REVIEW Condensed statement of cash flows R’000 H1-21 H1-20 Cash generated from operations before working capital movements 927 236 1 049 070 Working capital movements 446 281 64 520 Cash generated from operations 1 373 517 1 113 590 Interest and taxation paid (177 168) (287 342) Net cash f
Slide 33: Refinance of leasing businesses
FINANCIAL REVIEW Refinance of leasing businesses In December 2020 a refinance of the Group’s South African leasing business borrowings was completed: • Standalone, ring-fenced funding arrangements for EIE SA and Eqstra were finalised • Note programme was terminated. Only bank debt remains • Funding
Slide 34: Group structure of borrowing facilities
FINANCIAL REVIEW Group structure of borrowing facilities ENX GROUP LIMITED 100% EQSTRA INVESTMENT HOLDINGS ENX LEASING ENX TRADING EQSTRA EIE SA TRADING DIVISION • Borrower: enX Corporation • Borrower: Saficon Industrial Equipment • Borrower: enX Trading • Other SA Eqstra operating subsidiaries • Ot
Slide 35: Gross interest-bearing borrowings
FINANCIAL REVIEW Gross interest-bearing borrowings Funding facilities (R’million) Facility size (Utilised)/Surplus Liquidity Eqstra 2 300.0 (1 703.3) 596.7 Term 1 700.0 (1 700.0) - Revolving 400.0 - 400.0 General Banking 200.0 (79.4) 120.6 Cash on call - 76.1 76.1 EIE SA 2 095.0 (1 767.9) 327.1 Borr
Slide 36: Material covenant levels
FINANCIAL REVIEW Material covenant levels Eqstra Covenants Level H1-21 Net total debt: EBITDA ≤3.5x 2.32x EBITA: net finance charges ≥1.20x 1.56x Net total debt: equity ≤3.5x 2.28x Loan to value ≤0.85x 0.58x EIE SA Covenants Level H1-21 EBITDA : Net finance charges >3.00x 4.09x Non-performing lease
Slide 37: Maturity profile
FINANCIAL REVIEW Maturity profile Consolidated South African debt maturity profile (Rm) 1 600 1 200 800 400 0 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Eqstra EIE SA Trading 37
Slide 38: Outlook
08 OUTLOOK
Slide 39: Outlook
OUTLOOK • Trading activities have recovered to around pre-COVID-19 levels in most businesses as lockdown restrictions have eased • Economy improving as activity increases, but cognisant of possible impacts of COVID-19 third wave • Inventories, which are at an all time low, will need to be replenishe
Slide 40: Q&A
09 Q&A