Enx Group Limited · JSE:ENX
Enx — H1 2022 Earnings Presentation
39 slides from Enx's earnings presentation, April 2022
Slide 1: Results Presentation for the half year ended 28 February 2022
RESULTS PRESENTATION for the half year ended 28 February 2022
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
Slide 3: Contents
CONTENTS 01 WHO WE ARE 02 WHO WE REPRESENT / POSITION STATEMENT 03 HIGHLIGHTS & KEY FOCUS AREAS 04 FINANCIAL PERFORMANCE 05 BUILDING OUR BUSINESS UNITS 06 DISPOSAL GROUP HELD FOR SALE 07 FINANCIAL REVIEW 08 OUTLOOK 3
Slide 4: Who We Are
AL 14 iS 9 WHO WE ARE Tie
Slide 5: Who We Are
WHO WE ARE FLEET PETROCHEMICALS Fleet management solutions across all vehicle classes: Manufacturing and distribution of chemicals • Rental • Oil lubricants and base oils • Tracking • Rubber chemicals, fillers, additives, • Insurance natural and synthetic rubber • Remarketing • Polyethylene, polysty
Slide 6: Who We Represent / Position Statement
WHO WE REPRESENT / POSITION STATEMENT
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 PETROCHEMICALS EQUIPMENT DISCONTINUED OPERATIONS #1 #1 #1 #1 #1 #2 7
Slide 8: Change in Positioning
CHANGE IN POSITIONING FROM TO enX Group is a diversified industrial group enX Group is an integrated fleet management solutions that provides quality branded industrial, petrochemical provider as well as providing quality branded industrial, and fleet management and logistics products and services p
Slide 9: Highlights & Key Focus Areas
HIGHLIGHTS & KEY FOCUS AREAS
Slide 10: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 1. Continued robust performance for half year 28 February 2022 2. Disposal of EIE SA - SENS announcement: 30 September 2021 following Binding Heads of Terms - Shareholder approval at general meeting on 20 January 2022 - Disposal effective 1 April 2022 - Aggregate consi
Slide 11: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 4. Distribution to shareholders - Recommended an increase from R1.50 per share (R273 million) in terms of EIE SA disposal circular to R2.00 per share (R362 million) - Declared on 4 April 2022 - Anticipated to be paid on 13 June 2022 (timing subject to change) - Will be
Slide 12: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 6. Fix New Way Power - New Leadership in place with several years of industry experience - Improved pricing for long term data centre projects - Capitalise on opportunities arising from load shedding - New renewable (solar) energy business is gaining traction - Events
Slide 13: Highlights and Key Focus Areas
HIGHLIGHTS AND KEY FOCUS AREAS 9. Mandatory offer to remaining enX shareholders - Offer closes on 3 June 2022 10. Continued focused decentralised management teams - Empowering business unit leaders with Group assisting to improve synergies 11. Transformation strategy aligned to Group and business re
Slide 14: Key Focus Areas – Impacts of COVID-19
KEY FOCUS AREAS – IMPACTS OF COVID-19 • Health and safety of our stakeholders remains highest priority • Activity levels and revenues continue to improve ENX GROUP – % OF PRE-COVID-19 REVENUE (ON A ROLLING BASIS) 150% 120% 90% 60% 30% 0% Eqstra WAG New Way Power AG Lubricants Actual Apr 20 64% 57% 1
Slide 15: Financial Performance
FINANCIAL PERFORMANCE
Slide 16: Financial Performance
FINANCIAL PERFORMANCE • Revenue from continuing operations of R2.386 billion (2021: R2.047 billion), up 17% • Operating profit ¹ of R206 million (2021: R132 million), up 56% - Significantly better trading volumes and profitability within WAG and AG Lubricants - Reduction in group overhead costs - Re
Slide 17: Building Our Business Units
aie : ks B ~ BUILDING OUR BUSINESS UNITS
Slide 18: Business Unit Analysis – Eqstra
BUSINESS UNIT ANALYSIS – EQSTRA FLEET REVENUE VALUE CHAIN Rm H1-2022 H1-2021 Revenue 915 896 REMARKETING 18% EBIT ¹ 123 112 PBT ¹ 68 49 43% RENTAL Leasing assets 2 726 2 674 2022 Total assets 3 145 3 102 39% VALUE ADD Interest-bearing liabilities ² 1 408 1 739 SERVICES H1 2022 • Y-on-Y revenue flat
Slide 19: 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 20: Business Unit Analysis – AG Lubricants
BUSINESS UNIT ANALYSIS – AG LUBRICANTS PETROCHEMICALS Rm H1-2022 H1-2021 H1-2022 Revenue 550 411 AG LUBRICANTS • Y-on-Y Revenue ↑ 34% from higher volumes mainly from EBIT ¹ 28 23 mining clients together with a significant price increases as a result of base oil price increasing PBT ¹ 22 15 • Base oi
Slide 21: Business Unit Analysis – WAG
BUSINESS UNIT ANALYSIS – WAG PETROCHEMICALS Rm H1-2022 H1-2021 H1-2022 Revenue 792 565 WAG • Y-on-Y Revenue ↑ 40% with continued record revenues EBIT ¹ 36 12 • Driven by product shortages due to global supply chain issues PBT ¹ 31 11 • Higher demand from mining, industrial and packaging manufacturin
Slide 22: Business Unit Analysis – New Way Power
BUSINESS UNIT ANALYSIS – NEW WAY POWER EQUIPMENT Rm H1-2022 H1-2021 H1-2022 Revenue 148 195 NEW WAY POWER • Y-on-Y Revenue 24% due to a large data centre project EBIT (17) (13) in H1-2021, which was completed at the end of F2021 • Profitability impacted by an onerous provision raised on PBT (20) (
Slide 23: Business Unit Analysis – EIE SA
BUSINESS UNIT ANALYSIS – EIE SA DISCONTINUED OPERATION ¹ REVENUE VALUE CHAIN Rm H1-2022 H1-2021 RENTAL Revenue 1 053 1 037 USED 37% EQUIPMENT EBIT ² 86 89 8% PBT ² Leasing assets 28 2 018 23 1 962 2022 27% Total assets 3 111 3 061 VALUE ADD 28% NEW SERVICES Interest-bearing liabilities³ 1 684 1 828
Slide 24: Business Unit Analysis – Austro
BUSINESS UNIT ANALYSIS – AUSTRO DISCONTINUED OPERATION ¹ Rm H1-2022 H1-2021 H1-2022 Revenue 42 68 AUSTRO • Y-on-Y Revenue 38% EBIT (7) 2 • Profitability has been negatively impacted by relocation, exit and resizing costs PBT (6) 2 • Controlled wind-down of the business with the specific Inventory
Slide 25: Disposal Group Held for Sale
Be DISPOSAL GROUP HELD FOR SALE
Slide 26: Disposal Group Held for Sale – Current Period
DISPOSAL GROUP HELD FOR SALE – CURRENT PERIOD EIE SA: Shown as an asset held for sale and discontinued operation • EIE SA was classified as an asset held for sale and discontinued operation in terms of IFRS 5 with effect from 31 August 2021 • In terms of IFRS 5, enX was required to cease depreciatio
Slide 27: Disposal Group Held for Sale – Prior Period
DISPOSAL GROUP HELD FOR SALE – PRIOR PERIOD Impact Handling (UK): Shown as an asset held for sale and discontinued operation • Shareholders are referred to the SENS announcement regarding Impact Handling (UK) on 15 April 2021 • Impact Handling (UK) reported as an asset held for sale and discontinued
Slide 28: Impact of Held for Sale Accounting
IMPACT OF HELD FOR SALE ACCOUNTING H1-2022 H1-2022 H1-2022 H1-2021 H1-2021 H1-2021 R’000 reported IFRS5 adjust¹ proforma reported IFRS5 adjust2 proforma % change TOTAL OPERATIONS Operating profit * 508 209 (222 438) 285 771 306 132 (24 655) 281 477 2% Profit before taxation 168 709 (10 134) 158 575
Slide 29: Financial Review
FINANCIAL REVIEW
Slide 30: Financial Review – Key Performance Indicators, Total Operations
FINANCIAL REVIEW Key performance indicators: Total operations (R millions, unless stated) H1-2022 H1-2021 Revenue 3 481 3 904 Operating profit * 508 306 Operating profit on a like for like basis * ¹ 286 281 Headline earnings 268 111 Headline earnings on a like for like basis ¹ 108 93 Basic earnings
Slide 31: Financial Review – Key Performance Indicators, Continuing Operations
FINANCIAL REVIEW Key performance indicators: Continuing operations (R millions, unless stated) H1-2022 H1-2021 Revenue 2 386 2 047 Operating profit * 206 132 Headline earnings 96 50 Basic earnings per share (cents) 53 28 Headline earnings per share (cents) 53 28 31 * Operating profit before impairme
Slide 32: Condensed Statement of Financial Position
FINANCIAL REVIEW CONDENSED STATEMENT OF FINANCIAL POSITION R millions Feb 2022 Aug 2021 Goodwill and intangibles 34 33 Leasing assets 2 726 2 770 Inventories 726 665 Trade and other receivables 767 811 Property, plant and equipment 119 133 Right of use asset (IFRS 16) 86 127 Other assets 112 125 Ban
Slide 33: Condensed Statement of Cash Flows
FINANCIAL REVIEW CONDENSED STATEMENT OF CASH FLOWS R millions H1-2022 H1-2021 Cash generated from operations before working capital movements 786 927 Working capital movements 49 446 Cash generated from operations 835 1 373 Net interest and taxation paid (153) (177) Net cash flows from operating act
Slide 34: Gross Interest-Bearing Borrowings
FINANCIAL REVIEW GROSS INTEREST-BEARING BORROWINGS Funding facilities (R’million) Facility size (Utilised)/surplus Liquidity Eqstra 1 950 (1 403) 547 Term 1 350 (1 350) - Revolving 400 - 400 General banking * 200 (53) 147 EIE SA 2 095 (1 629) 466 Borrowing base 1 585 (1 316) 269 General banking * 41
Slide 35: Material Covenant Levels
FINANCIAL REVIEW MATERIAL COVENANT LEVELS Eqstra Covenants Level Feb 22 Net total debt: EBITDA ≤3.25x 1.23 EBITA: net finance charges ≥1.30x 2.13 Net total debt: equity ≤3.25x 1.77 Loan to value ≤0.80x 0.45 EIE SA Covenants Level Feb 22 EBITDA : Net finance charges >3.00x 5.45 Non-performing lease b
Slide 36: Maturity Profile
FINANCIAL REVIEW MATURITY PROFILE Combined maturity profile – financial years (Rm) 1 000 750 500 250 0 FY 2022 FY 2023 FY 2024 FY 2025 Eqstra Trading 36
Slide 37: Outlook
OUTLOOK
Slide 38: Outlook
OUTLOOK • Within Eqstra: - The diversified customer base with annuity revenue and in use fleet provides a stable revenue stream - Some growth is expected as replacement business, which was previously interrupted by the impacts of the pandemic and challenges with shortages of vehicles, reaches pre-CO
Slide 39: Q&A
Q&A