Enx Group Limited · JSE:ENX
Enx — FY2023 Earnings Presentation
32 slides from Enx's earnings presentation, November 2023
Slide 1: Results Presentation for the year ended 31 August 2023
RESULTS PRESENTATION for the year ended 31 August 2023
Slide 2: Contents
CONTENTS 1. Who we are 2. Our purpose & who we represent 3. Highlights & key focus areas 4. Financial performance 5. Building our business units 6. Disposal group held for sale 7. Financial review 8. Outlook 2
Slide 3: Who We Are
01 WHO WE ARE
Slide 4: Who We Are
WHO WE ARE LUBRICANTS CHEMICALS POWER DISCONTINUED OPERATIONS BLENDING DISTRIBUTION DISTRIBUTION, RENTAL AND FLEET MANAGEMENT AND DISTRIBUTION OF VALUE-ADDED SERVICES FOR: SOLUTIONS ACROSS OF LUBRICANTS: CHEMICALS: Diesel power solutions, ALL VEHICLE CLASSES: Oil lubricants, greases and Plastics, po
Slide 5: Our Purpose & Who We Represent
02 OUR PURPOSE & WHO WE REPRESENT
Slide 6: Our Purpose
OUR PURPOSE enX Group is a blender and distributor of lubricants and a distributor of quality branded power equipment and chemicals • Quality brands and products - Lubricants - Chemicals - Power • Stock on-the-ground • Nationwide distribution • Currency matching • Technical expertise • Local manufac
Slide 7: Who We Represent
WHO WE REPRESENT BRAND RECOGNITION LUBRICANTS CHEMICALS POWER MARKETING EXPERTISE #1 #1 RESEARCH AND DEVELOPMENT #1 #1 GROWTH OPPORTUNITIES SUPPORTED WITH CONFIDENCE BY GLOBAL TOP 10 AND LEADING INTERNATIONAL BRANDS 7
Slide 8: Highlights and Key Focus Areas
03 HIGHLIGHTS AND KEY FOCUS AREAS
Slide 9: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 1. Continued robust performance for year ended 31 August 2023 across all business units - Solid profitability despite challenging economic conditions - Strong financial position 2. Disposal of Eqstra - Strategic decision to dispose of Eqstra (including Kynite) - SENS C
Slide 10: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 4. Special distribution made to shareholder amounting to R274 million - R1.50 per share paid on 5 September 2022 - Achieved by a reduction of contributed tax capital which are not dividends as defined in terms of the Income Tax Act and do not attract withholding tax 5.
Slide 11: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 8. Securing a sustainable and robust capability for AG Lubricants - In 2021, secured a six-year supply and distribution agreement with ExxonMobil - In 2022, implemented a transaction between AGL and Abakhulu to secure base oil supply - In December 2022, acquired the bl
Slide 12: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 11. Transformation strategy aligned to Group and business requirements - enX Group rated a level 4 B-BBEE scorecard (100% contributor) 12. Continued strategy of - Focus on optimising those areas under our control - Dealing decisively with the inherent structural ineffi
Slide 13: Financial Performance
04 FINANCIAL PERFORMANCE
Slide 14: Financial Performance
FINANCIAL PERFORMANCE • Revenue from continuing operations of R4.195 billion (2022: R3.331 billion), up 26% • Operating profit ¹ of R248 million (2022: R190 million), up 31% - Increasing demand for power solutions and services arising from load-shedding - Once-off items of R39 million in the prior y
Slide 15: Building Our Business Units
05 BUILDING OUR BUSINESS UNITS
Slide 16: Business Unit Analysis – AG Lubricants
BUSINESS UNIT ANALYSIS – AG LUBRICANTS LUBRICANTS Rm F2023 F2022 F2023 Revenue 1 686 1 169 AG LUBRICANTS • Year-on-year revenue ↑ 44% underpinned by higher toll blending volumes EBIT ¹ 104 59 (+16%) and higher sales values. PBT - AGL ¹ 75 44 • Profitability impacted from charge on derecognition of r
Slide 17: Business Unit Analysis – WAG
BUSINESS UNIT ANALYSIS – WAG CHEMICALS Rm F2023 F2022 F2023 Revenue 1 870 1 798 WAG • Year-on-year revenue ↑ 4% EBIT 98 101 - Higher natural and synthetic rubber volumes - Higher conveyor belting, steel cord and conveyor belting fabric volumes PBT 85 92 • Despite commodity cycle softening and impact
Slide 18: Business Unit Analysis – New Way
BUSINESS UNIT ANALYSIS – NEW WAY POWER Rm F2023 F2022 F2023 Revenue 683 397 NEW WAY POWER • Revenue ↑ 72% EBIT 98 14 - As a result of load-shedding PBT 101 10 - Strong demand for generators, parts accompanied by maintenance services Inventory 202 136 - Entry into photovoltaic market assisted in crea
Slide 19: Business Unit Analysis – Eqstra
BUSINESS UNIT ANALYSIS – EQSTRA DISCONTINUED OPERATIONS Rm F2023 F2022 F2023 Revenue 1 755 2 226 • Year-on-year performance - Eqstra delivered a strong financial performance achieving pleasing margins EBIT 292 244 across the key product offerings - While year-on-year rental revenue was down 9% mainl
Slide 20: 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 22% of the Leasing assets net book value • Inter
Slide 21: Disposal Group Held for Sale
06 DISPOSAL GROUP HELD FOR SALE
Slide 22: Disposal Group Held for Sale – Current Year
DISPOSAL GROUP HELD FOR SALE – CURRENT YEAR Eqstra: disposal group held for sale and discontinued operation in terms of IFRS 5 • Eqstra reported as a disposal group held for sale and discontinued operation from 31 August 2023 • Strategic decision to dispose of Eqstra (including Kynite) • SENS Cautio
Slide 23: Disposal Group Held for Sale – Prior Year
DISPOSAL GROUP HELD FOR SALE – PRIOR YEAR EIE SA: disposal group held for sale and discontinued operation • EIE SA reported as a disposal group held for sale and discontinued operation from 31 August 2021 - Depreciation and amortisation of R263 million (after tax R189 million) ceased with effect fro
Slide 24: Financial Review
07 FINANCIAL REVIEW
Slide 25: Financial Review – Key Performance Indicators
FINANCIAL REVIEW Key performance indicators: Total operations (Rm, unless stated) F2023 F2022 Revenue 5 950 6 858 Operating profit* 538 536 Operating profit on a like-for-like basis *¹ 538 489 Headline earnings 298 481 Headline earnings on a like-for-like basis ¹ 298 266 Basic earnings per share (ce
Slide 26: Condensed Statement of Financial Position
FINANCIAL REVIEW CONDENSED STATEMENT OF FINANCIAL POSITION Rm Aug 2023 ¹ Held for sale Aug 2023 ² Aug 2022 # Goodwill and intangibles 68 20 48 78 Leasing assets 2 615 2 615 - 2 350 Inventories 909 42 867 854 Trade and other receivables 1 055 213 842 1 057 Property, plant and equipment and right-of-u
Slide 27: Condensed Statement of Cash Flows
FINANCIAL REVIEW CONDENSED STATEMENT OF CASH FLOWS Rm F2023 F2022 Cash generated from operations before working capital movements 1 152 1 331 Working capital movements (868) (514) Cash generated from operations 284 817 Net interest and taxation paid (260) (298) Net cash flows from operating activiti
Slide 28: Gross and Net Interest-Bearing Borrowings
FINANCIAL REVIEW GROSS AND NET INTEREST-BEARING BORROWINGS Funding facilities (Rm) Facility size (Utilised)/Cash Liquidity Eqstra 1 647 (1 474) 173 Term 726 (726) - Revolving 736 (616) 120 General banking 185 (132) 53 Trading Businesses ¹ 461 (265) 196 Property and Equipment Term loan - Ingwe 45 (45
Slide 29: Covenant Levels
FINANCIAL REVIEW COVENANT LEVELS * Eqstra covenants Level August 2023 Net total debt: EBITDA ≤3.0x 1.8x EBITDA: net finance charges ≥1.5x 2.4x Net total debt: equity ≤2.5x 1.3x Loan to value ≤65% 47% WAG covenants Level August 2023 Equity levels >R190m R252m AGL covenants Level August 2023 Equity le
Slide 30: Outlook
08 OUTLOOK
Slide 31: Outlook
OUTLOOK Lubricants • Conditions expected to be stable and Chemicals • Trading continues to be robust with load-shedding induced opportunities Power • Performance dependent on the extent and duration of load-shedding • Good order book of data centre power units • The diversified customer base with an
Slide 32: 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 are included in this presentation, including, without limitation, those regarding the financial position, busine