Ioco Limited · JSE:IOC
Ioco — FY2023 Earnings Presentation
43 slides from Ioco's earnings presentation, October 2023
Slide 1: FY23 Results
rN FY23 RESULTS
Slide 2: Operational Overview
Operational Overview Stephen van Coller Chief Executive Officer
Slide 3: Financial Highlights
Financial Highlights Highlights Low lights ❖ Continuing business restructured and operating • 8-month delay in the rights issue was expensive circa R60m successfully • Profitability further affected by once off items ❖ EasyHQ (Nextec BPO) successfully turned around • Public Sector delays affecting s
Slide 4: Resilient Revenue
Resilient Revenue Total revenue by type Total revenue exposure by industry Rentals, 0.3% Hardware, Hardware Rentals Financial Services 25.6% 9.9% Manufacturing and Logistics 14.7% Software, Software 14.6% Public Sector 13.8% Services, 75.2% Mining 8.9% Services Telecomms 7.5% Other 6.5% Retail 6.3%
Slide 5: Business Performance
Business Performance 4% growth on continuing operations 6% Relates to operations sold but included in FY22 Continuing as required by IFRS FY23 4 006 49 (5%) 930 845 52 13 (4%) (12%) 23% 4 189 435 3 957 21 878 831 736 707 33% 488 415 385 398 41% 122 99 5 (>100%) 40 56 11 88 117 -14 -51 Revenue EBITDA
Slide 6: Operational Highlights
Operational Highlights Digital Enablement in Europe and Middle East • 30% increase in client base • 18 now in the GBP 100k+ club United States We invested R94 First US retailer million in growth opportunities won initiatives across our businesses East and West Africa Successfully generated R51m outs
Slide 7: Progress on our GET Strategy
Progress on our GET Strategy Core outcome What does it mean? Key themes » Sales & Coverage Focus » Enhance Pricing Process 1 Focus on Clients » Diversify client base » Focus on delivery & quality Achievement G 10% Profit Deepening our » Ramp up business expansion » Leverage OEM partnering & 2 soluti
Slide 8: Enable & Grow
Talent Include Enable & Grow Male | 56% Female | 44% Total Spend Differently Abled and AIC | 58 % of total workforce Youth | R14 420 000 Inclusion roundtables hosted | 3 People with Disabilities | 32 3rd group of Youth Solvers Drone Pilot - PWD | 15 Care Employee Experience iOCO specialized Digital
Slide 9: Our Impact
Our Impact 28 000 Community Impact / / 1200 Volunteer Hours 150 Job Creation / 25 Adopted schools
Slide 10: Investing in EOH makes a difference....
Investing in EOH makes a difference.... Our People Our Communities Our Women Our Country matter matter matter matters EOH crowned Gender Mainstreaming Champions for Southern Africa EOH solves for period Winners: EOH solves for -Women on boards unemployment poverty -Empowering Women in the 20 jobs –
Slide 11: Cash generated in 4 Years (R'm)
Cash generated in 4 Years (R’m) The Group has generated R1.3bn in cash from operations to service onerous interest and refinance charges as well as legacy related costs
Slide 12: Financial Overview
Financial Overview Megan Pydigadu Chief Financial Officer
Slide 13: FY23 financial summary
FY23 financial summary FY2023 FY2022 Rm Audited Continuing Discont. Audited Continuing Discont. Revenue 6,258 6,229 29 6,931 6,031 899 Digital Enablement 1,122 1,122 - 1,094 1,094 - Infrastructure Services & Applications 2,139 2,110 29 2,414 2,035 379 International 488 488 - 398 398 - Industrial Tec
Slide 14: Business Performance
Business Performance 3% growth on continuing operations iOCO RSA 7% (4%) Relates to operations sold but included in FY22 Continuing as required by IFRS FY23 1 094 49 15% 9% (5%) 930 845 52 (4%) 13 1,187 23% 1,122 1,138 1,045 972 957 848 877 878 831 736 707 488 398 Digital Infrastructure Operational
Slide 15: Continuing Segmental EBITDA
Continuing Segmental EBITDA 6% Margin after investing R60 million into investment in the business iOCO RSA (6%) Relates to operations sold but included in FY22 165 Continuing as required by IFRS FY23 21 33% 121 0% (22%) 5 99 11 145 (2%) 41% 136 108 117 102 103 84 88 60 59 56 40 (>100%) (14) (51) Dig
Slide 16: Normalised Continuing EBITDA (R'm)
Normalised Continuing EBITDA (R’m) 17% of normalised EBITDA invested into the business focusing on long term investor returns EBITDA margin 6% 7%
Slide 17: Normalised Continuing Operating Profit (R'm)
Normalised Continuing Operating Profit (R’m) 25% increase in normalised operating profit from FY22 229 FY22: R184m
Slide 18: Investments (R'm)
Investments (R’m) Strong focus on future proofing business with targeted spend on exponential growth & savings opportunities Investment Type Area of Investment 28 25 3 14% 20 16 17 36% 7 R94m 22 17 12 10 4 50% 4 3 Operational RocketLab Infrastructure IT Initiatives Digital/ Technology Services Inter
Slide 19: Corporate costs
Corporate costs Continued focus on head office rationalization has resulted in a R182m saving compared to FY20 20% 26% 5% 410 326 241 228 FY20 FY21 FY22 FY23
Slide 20: Balance Sheet
Balance Sheet R’m FY23 FY22 R’m FY23 FY22 Non-current assets Equity Stated capital 4 775 4 217 Property, plant and equipment 145 185 Shares to be issued to vendors 0 0 Intangible assets 94 84 Other reserves 112 495 Goodwill 669 675 Equity and Accumulated loss (4 325) (4 679) Assets 16 18 Liabilities
Slide 21: Working Capital (R'm)
Working Capital (R’m) Increased net working capital as a result of investment in certain areas for growth and as a result of top line growth 1 829 2 002 1 772 Trade and other Payables 334 Trade and other Receivables 218 253 90 83 74 Inventory Net working capital (1 701) (1 603) (1 742) FY22 HY23 FY2
Slide 22: Cash flow (R'm)
Cash flow (R’m) Strong cash generation allowing for investment in net working capital and capital expenditure despite high finance charge burden incurred for 9 months of the year Onerous Escrow contracts Net (35) 21% Disposal Proceeds 136 SIU 79% Net Debt Paid Net Capital (664) Raise Proceeds 557
Slide 23: Legacy Payments (R'm)
Legacy Payments (R’m) Final payments expected by FY26 141 4 10 37 83 4 42 37 45 4 45 37 42 3 4 FY24 FY25 FY26 DOD Mheleketo DWS SARS Autospec Pia Solar
Slide 24: Debt (R'm)
Debt (R’m) With the net capital raise of R550m used to pay down debt, the Group has managed to right-size its capital structure Current Debt Breakdown 17% 2,483 Term Amortising Loan, 237 Loan, 200 2,065 36% Rolling Credit Facility, 250 1,332 48% Loan Terms 3-month JIBAR + below margins: 687 Leverage
Slide 25: Finance Charges (R'm)
Finance Charges (R’m) The full benefit of the successful capital raise is expected to be realized in FY24 where finance charges are expected to be 25% of that incurred in FY20 27% 305 18% 13% 221 180 157 52% 75 FY20 FY21 FY22 FY23 FY24 (illustrative) The above excludes interest incurred on utilizati
Slide 26: Outlook
Outlook
Slide 27: Outlook
The central growth focus is partnering with both key OEM’s The tough economic and and top customers assisting political conditions globally and them to realise their in RSA are set to continue but digital strategies create both opportunities and threats EOH will continue to drive efficiencies to inv
Slide 28: Questions
> > , Questions A se),
Slide 29: Appendix
> > Appendix EOH
Slide 30: Balance Sheet (Commercially agreed with Lender)
Balance Sheet (Commercially agreed with Lender) R’m FY23 FY22 R’m FY23 FY22 Non-current assets Equity Stated capital 4 775 4 217 Property, plant and equipment 145 185 Shares to be issued to vendors 0 0 Intangible assets 94 84 Other reserves 112 495 Goodwill 669 675 Equity and Accumulated loss (4 325
Slide 31: Our Operations
> Our Operations EOH
Slide 32: Digital Enablement
Digital Enablement Bench The strength of this team lies marking Application Venture Assessments Security Studio in the depth, breadth and User Data, ML scale of multiple digital Experience Digital specialisations/competencies; Design Architecture & specifically how they come AlwaysON Insights Innova
Slide 33: Digital Enablement continued
Digital Enablement continued Our Recent Wins Work we have done for a client LOB Revenue Split Add wins Our Recent Wins The business expanded its market share within large accounts, resulting in substantial new earnings from clients in the financial Integrated services and telecommunications sector
Slide 34: Digital Enablement Case Study
Digital Enablement Case Study Case Study: How iOCO successfully transitioned a global top 30 company from its incumbent digital service provider to add immediate value through modernisation, unlocking savings, efficiencies and innovation to support the client to achieve its business strategy for the
Slide 35: Enterprise Applications & Software Reseller
Enterprise Applications & Software Reseller Our Product Offering Our Core OEMS Enterprise Applications We help clients streamline operations, improve performance, Global OEM Software Resale and strengthen customer relationships through three distinct service areas: enterprise resource planning, ente
Slide 36: Infrastructure Services
Infrastructure Services Our Product Offering Our Core OEMS The strength of this team lies in understanding the importance of Compute digitisation in any organisation’s transformation journey while ensuring that security is seamlessly integrated into every Anything-As-A-Service (Infra Xaas) layer of
Slide 37: Industrial Technologies (excl Nextec businesses)
Industrial Technologies (excl Nextec businesses) Our Product Offering Our Core OEMS Industrial Technology designs, operates and optimises client’s critical information Operational Technology technology and infrastructure across all heavy industry sectors. The Operational Technology business is the e
Slide 38: EasyHQ Solutions Platform
EasyHQ Our Product Offering LOB Revenue Split We focus on essential non Recruitment revenue- generating functions of our clients' businesses, Solutions Platform People directly influencing customer, Learning and Development Businesses; 31% staff and supplier experiences. Additionally, we manage Empl
Slide 39: International
International Our Product Offering Geographic Split Europe Cloud Quality Software Assurance Reseller Switzerland , 35% AppDev Own IP UK, 65% SaaS Data Security asset Analytics management Egypt & Middle East UAE, 21% Our international business diversifies our portfolio Saudi Arabi, 37% and mitigates
Slide 40: International continued
International continued Core OEMS Scaled Contracts (USD’000) UK & Europe OpenText Implememtation , 500 Arrow IP, 300 AppDev, 2200 OpenText Support, 300 Support and AppDev, 1500 New Contracts (USD’000) Arrow IP, 700 Financial Performance Value (R’m) Margin Appdev, 1670 Revenue 488 Gross Profit 174 35
Slide 41: Socio Economic Development
Socio Economic Development SED Partner Project Description Rand Value Impact Wethinkcode This is a pioneering initiative aimed at addressing the scarcity of developers in ICT Learnership South Africa. Recognizing the growing demand for coding and programming skills R5m 50 graduates in the digital ag
Slide 42: Socio Economic Development
Socio Economic Development SED Partner Project Description Rand Value Impact Prime Stars 11513 Step Up to a Green Start Up A program focused on entrepreneurship and the green economy R1.5m Youth Afribiz This project is a transformative program dedicated to addressing period Period Poverty Project po
Slide 43: Thank you
> Thank you EOH