Altron Limited Class A · JSE:AEL
Altron Limited Class A — FY2017 Earnings Presentation
30 slides from Altron Limited Class A's earnings presentation, Jun 22, 2017
Slide 1: 2017 Year-End Results Presentation
Slide 2: Year-End Results
YEAR-END RESULTS MTETO NYATI / CHIEF EXECUTIVE ALEX SMITH / CHIEF FINANCIAL OFFICER Slide 02
Slide 3: Agenda
AGENDA 1. Overview & Financial Summary Mteto Nyati - CE 2. Financial Results Alex Smith - CFO 3. Operations & Way Forward Mteto Nyati - CE Slide 03
Slide 4: Overview
OVERVIEW Altron’s continuing operations’ produced a credible performance in a difficult economic environment Good progress has been made on implementing strategic objectives: Group’s debt reduced by 42% to sustainable levels Transformation into an independent management structure concluded
Slide 5: Financial Highlights – Total Operations
FINANCIAL HIGHLIGHTS – TOTAL OPERATIONS Rm FY17 FY16 % Change Revenue 19 717 26 592 (26) EBITDA 840 376 123 EBITDA Margin (%) 4.3 1.4 HEPS (cents) 71 (145) 149 Return on Capital Employed (%) 14.5 (1.2) Net Borrowings 1 932 3 435 Net asset value of disposal group 620 2 938 Slide 5
Slide 6: Strategic Wins
STRATEGIC WINS City of Tshwane Broadband Network – Funding Smart Cities eThekwini Municipality TETRA Network Passenger Rail Agency of South Africa (PRASA) GSM-R Network PUTCO Fleet Management Slide 06
Slide 7: Innovation Highlights
INNOVATION HIGHLIGHTS Healthcare Med-e-Mass: Electronic Patient Health Records Financial Services Altech Card Solutions: Pre-paid token dispensing and management platform Altech NuPay: “Man-in-the-Van” debt collection Safety & Security Bytes Systems Integration: Match-on-Card RSA natio
Slide 8: Financial Results
FINANCIAL RESULTS ALEX SMITH / CHIEF FINANCIAL OFFICER Slide 08
Slide 9: Group Income Statements – Total Operations
GROUP INCOME STATEMENTS – TOTAL OPERATIONS Rm FY17 FY16 % Change Revenue 19 717 26 592 (26) Operating Profit/(loss) before capital 618 (74) items EBITDA 840 376 123 EBITDA Margin (%) 4.3 1.4 Net finance expenses (295) (492) Capital items (488) (508) Foreign exchange (losses)/profits (226) 41 Taxatio
Slide 10: Financial Summary
FINANCIAL SUMMARY Continuing Operations FY17 FY16 % Change Rm Revenue 13 892 14 357 (3) EBITDA 950 888 7 EBITDA Margin (%) 6.8 6.2 Headline Earnings 387 425 (9) Discontinued Operations FY17 FY16 % Change Rm Revenue 5 825 12 235 (52) EBITDA (110) (512) 179 EBITDA Margin (%) (1.9) (4.2) Headline Loss
Slide 11: Movement in Continuing Operations Revenue
MOVEMENT IN CONTINUING OPERATIONS REVENUE 14 500 14 000 (168) (1 282) The decline in revenue in the core 985 operations is impacted by the closure of 13 500 NOR Paper and the loss of Altech 14 357 13 000 13 892 Autopage’s prepaid airtime business. These factors reduced revenue by R1.3 12 500 billi
Slide 12: Movement in Group Headline Earnings
MOVEMENT IN GROUP HEADLINE EARNINGS 300 200 The reduction in headline earnings in 107 100 240 the core businesses was largely due to 236 higher interest charges as a result of - lower expected values on the -100 disposals, which resulted in more -200 (488) interest being allocated to the -300 420
Slide 13: Cash Flow
- 500 1 000 1 500 2 000 2 500 Slide 13 Net cash and cash equivalents at the 326 beginning of the period CASH FLOW Cash generated by operations 425 1 308 * Changes in working capital (821) Net finance expense (293) Taxation paid (96) Dividends paid (4) Investing activities 1 580 Financing activities
Slide 14: Investing Activities
INVESTING ACTIVITIES Feb'17 Feb'16 Significant reduction in investing 1200 84 activities due to a combination of disposals and tighter control over 1000 338 capital investment 800 Outflows in respect of acquisitions 131 relate entirely to the settlement of 600 deferred purchase considerations –
Slide 15: Summarised Balance Sheet
SUMMARISED BALANCE SHEET Rm FY17 FY16 Total non-current assets 2 816 2 804 Current assets 5 362 10 152 Cash balance 1 373 1 491 Total assets 9 551 14 447 Shareholder’s equity 2 268 2 847 Non-controlling interests (240) (111) Non-current liabilities 1 971 2 714 Current liabilities 5 552 8 997 Total e
Slide 16: Working Capital
WORKING CAPITAL 150 100 76 60 62 69 54 50 58 59 51 52 52 55 49 16 26 19 51 37 14 12 0 4 4 -86 -105 -92 -89 -50 -100 -112 -106 -100 -150 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Inventory days Debtors Days Creditor days Net days Slide 16
Slide 17: Operations
OPERATIONS MTETO NYATI / CHIEF EXECUTIVE Slide 17
Slide 18: Altron TMT
Slide 19
Slide 19: Altron TMT Financial Summary
ALTRON TMT FINANCIAL SUMMARY Core Operations Rm FY17 FY16 % Change Revenue 14 380 14 679 (2) EBITDA 1 093 1 069 2 EBITDA Margin (%) 7.6 7.3 Headline Earnings 641 676 (5) Non-core Operations Rm FY17 FY16 % Change Revenue 1 225 5 049 (76) EBITDA (75) (344) 78 EBITDA Margin (%) (6.1) (6.8) Headline Ear
Slide 20: Telecommunications Divisional Review
TELECOMMUNICATIONS DIVISIONAL REVIEW % % Altech Netstar FY17 FY17 change change Company/Division Revenue EBITDA Small increase in both subscriber numbers and on prior on prior Rm Rm year year average revenue per user Positive impact of reduced churn in subscriber Core Operations base Good perf
Slide 21: Multi-Media Divisional Review
MULTI-MEDIA DIVISIONAL REVIEW % % Arrow Altech Distribution FY17 FY17 change change Company/Division Revenue EBITDA Excellent results with operational leverage on prior on prior Rm Rm year year leading to EBITDA margin improvement Increase in market share Core Operations Expansion into new are
Slide 22: IT Divisional Review
Bytes UK Good top line performance despite Rand strength in H2. Local currency results extremely strong IT DIVISIONAL REVIEW Margin erosion predominantly the result of a substantial increase in low margin public sector business in the UK % Bytes Document Solutions % FY17 change FY17 Company/ cha
Slide 23: Altron Power
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Slide 24: Altron Power Financial Summary (Non-Core Operations)
ALTRON POWER FINANCIAL SUMMARY (NON-CORE OPERATIONS) Rm FY17 FY16 % Change Revenue 4 601 7 185 (36) EBITDA (67) (156) 57 EBITDA Margin (%) (1.46) (2.17) Headline Earnings (114) (350) Slide 24
Slide 25: Power Divisional Review
POWER DIVISIONAL REVIEW Powertech Cables Disposal effective 30 June 2016 Powertech Transformers % % Increased revenue and reduced EBITDA losses in a FY17 FY17 Company/ change change Revenue EBITD very competitive environment following cost Division on prior on prior Rm A Rm year year reduction e
Slide 26: The Way Forward
THE WAY FORWARD MTETO NYATI / CHIEF EXECUTIVE Slide 26
Slide 27: The Way Forward
THE WAY FORWARD New strategic shareholder – Value Capital Partners R400 million capital injection Turnaround expertise Full review of the strategy for growth of the core businesses currently underway Focus on IP and R&D Focus on cost efficiencies Disposal of various non-core operations
Slide 28: Slide 29
Slide 29
Slide 29: IR Contacts
IR CONTACTS Alex Smith Chief Financial Officer Email: [email protected] Tel: +27 (0) 11 645 3634 Mobile: +27 (0) 82 612 3200 Lizelle Brink Head: Stakeholder Engagement & Events Email: [email protected] Tel: +27 (0) 11 205 7702 Mobile : +27 (0) 82 928 7979 Slide 29
Slide 30: Safe Harbour Statement
SAFE HARBOUR STATEMENT The information contained in this document has not been verified independently. No representation or warranty express or implied is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained herei