Altron Limited Class A · JSE:AEL
Altron Limited Class A — H1 FY2018 Earnings Presentation
30 slides from Altron Limited Class A's earnings presentation, Oct 26, 2017
Slide 1: Interim Results for the six months ended 31 August 2017
INTERIM RESULTS for the six months ended 31 August 2017 Mteto Nyati | Chief Executive Alex Smith | Chief Financial Officer
Slide 2: Agenda
Agenda 01 Performance Highlights / Mteto Nyati – Chief Executive 02 Strategy Update / Mteto Nyati – Chief Executive 03 Financial Results / Alex Smith - Chief Financial Officer 04 Operational Update / Mteto Nyati – Chief Executive 02
Slide 3: Performance Highlights
Performance Highlights Continuing Operations Normalised Revenue Normalised Ebitda Normalised HEPS +5%* +19%* +16%* R6,8 Billion R501 Million 57 cents per share EPS 44 cents per share Netstar Revenue Growth 12% Net debt of Consumer Connections 32% R1.1 Billion Commercial Connections 9% Expected net d
Slide 4: Strategy Update
02 Strategy Update Mteto Nyati / Chief Executive 05
Slide 5: Driving growth in turbulent times
Driving growth in turbulent times 06
Slide 6: Altron Board & Governance
ALTRON BOARD & GOVERNANCE Independent Experienced Active Ethical chairperson of ICT experts as shareholders culture the board non-executive directors 07
Slide 7: Our Executive Committee
OUR EXECUTIVE COMMITTEE Mteto Nyati Group Chief Executive Andrew Collin Govender Dolores Mashishi Zipporah Maubane Alex Smith Holden GE: Shared Services GE: Human Capital GE: Mkg, PR, CFO COO Comms Harry Louw Leslie Johan Gellatly Chad Baker Johan Basson Brett Nash MD: Altech Moodley GE: Bytes Secur
Slide 8: Our Strategic Goals
OUR STRATEGIC GOALS @ oon @® wowsime | re) CAPITAL ALLOCATION ~ & INNOVATION : Consistently grow EBITDA at double digit growth rates Focus on ICT Lean Head Office and Operations Pragmatic implementation of Shared Services Investment Committee driving structured assessment process Key criteria: - acq
Slide 9: Our Strategy Roadmap
OUR STRATEGY ROADMAP 03 02 FY’22 01 Accelerated Growth FY’20 Delivering Growth FY’18 Positioning for Growth 10
Slide 10: Our Opco Strategies
OUR OPCO STRATEGIES Opco Life Cycle Stage Strategy Altron Growth One Altron Bytes Secure Transaction Services Growth Bolt on acquisitions Altech Radio Holdings Growth Broadband, IoT and Safe Cities Bytes Systems Integration Growth Cloud, Security & Data Analytics Altech Netstar Growth Geo expansion,
Slide 11: Solid Foundation for Growth
SOLID FOUNDATION FOR GROWTH Altech Netstar Altech Radio Holdings Bytes Secure Transactions Bytes United Kingdom Bytes People Solutions Arrow Altech Distribution 12
Slide 12: Our New Growth Areas
OUR NEW GROWTH AREAS Cloud Services Data Analytics Security Internet of Things 13
Slide 13: Disposals Update
DISPOSALS UPDATE DISCONTINUED OPERATION STATUS Powertech Transformers Sale in process CBI Telecom Cable Joint Venture Powertech Batteries Sale concluded PTSI Sale concluded Swanib Cables Sale concluded Crabtree Agreement signed, completing CPs Switchgear/Quadpro Agreement signed, completing CPs Alte
Slide 14: Financial Results
03 FINANCIAL RESULTS Alex Smith / Chief Financial Officer 15
Slide 15: Interim Results - Financial Highlights
INTERIM RESULTS - FINANCIAL HIGHLIGHTS Continuing Operations RM H118 H117 % CHANGE Revenue 6 792 7 537 -10 Normalised revenue 6 792 6 497* +5 EBITDA 452 445 +2 Normalised EBITDA 501 420* +19 Normalised EBITDA Margin (%) 7.4 6.5* HEPS (cents) 47 54 -13 Normalised HEPS 57 49* +16 Return on Capital Emp
Slide 16: Group Income Statements - Total Operations
GROUP INCOME STATEMENTS - TOTAL OPERATIONS Rm H118 H117 % Change Revenue 8 697 11 427 (24) Operating profit before capital items 325 272 19 EBITDA 443 380 17 EBITDA Margin (%) 5.1 3.3 Net finance expenses (104) (170) Capital items (79) (108) Foreign exchange losses (4) (104) Taxation (66) (48) HEPS
Slide 17: Normalised Continuing Operations
NORMALISED CONTINUING OPERATIONS Continuing Operations H118 H117 % Change Rm Revenue as reported 6 792 7 537 (10) Disposed businesses (586) Constant currency adjustment (453) Normalised revenue 6 792 6 497* 5 Continuing Operations Rm H118 H117 % Change EBITDA as reported 452 445 2 Disposed businesse
Slide 18: Movement in Normalised EBITDA
MOVEMENT IN NORMALISED EBITDA Continuing Operations • On a normalised basis (before constant currency adjustments) EBITDA increased to R501 million with most segments contributing to the growth • Growth in the ICT 53 149 operations was led by Bytes Secure Transaction Services, with the international
Slide 19: Cash Flow
CASH FLOW 1000 900 800 (363) 700 598 600 (128) 500 (90) (2) 400 300 (296) 55 200 417 73 264 100 0 A B C D E F G H I J A : Net cash & cash equivalents at the beginning of F : Net dividends paid the period G : Investing activities B : Cash generated by operations H : Financing activities C : Change in
Slide 20: Investing Activities
INVESTING ACTIVITIES 450 AUG ‘16 AUG ‘17 • Increase in investing activities primarily due to acquisition activity as 400 well as higher investment into contract 67 fulfilment costs 350 • Investment into PPE and intangibles 300 slightly lower than the depreciation and 86 amortisation charge in the co
Slide 21: Summarised Balance Sheet
SUMMARISED BALANCE SHEET Rm H118 H117 Total non-current assets 3 187 2 907 Current assets 3 541 3 776 Assets held for sale 1 013 2 399 Cash balance 1 072 1 449 Total assets 8 813 10 531 Shareholder’s equity 2 760 2 729 Non-controlling interests (237) (377) Non-current liabilities 1 694 198 Liabiliti
Slide 22: Net Debt Position and Carrying Value of Disposal Group
NET DEBT POSITION AND CARRYING VALUE OF DISPOSAL GROUP Rm H118 FY17 Net debt 1 834 1 932 Net asset value of disposal group 274 620 Net debt in disposal group 142 114 Deferred disposal receipts 269 116 • Continual progress being made on the disposals • Reduction in carrying value of disposal group ma
Slide 23: Working Capital
WORKING CAPITAL 150 100 76 66 69 58 59 76 59 62 56 50 55 52 51 49 47 31 37 36 19 22 0 12 11 4 6 4 3 (96) (106) (81) -50 (112) (95) (92) (95) (105) -100 -150 FEB ‘14 AUG ‘14 FEB ‘15 AUG ‘15 FEB ‘16 AUG ‘16 FEB ‘17 AUG ‘17 Debtors days Inventory days Creditors days Net days 24
Slide 24: Operational Update
04 Operational Update Mteto Nyati / Chief Executive 25
Slide 25: Operational Review
OPERATIONAL REVIEW Altech Radio Holdings % Increase in activity levels primarily attributable to % • H118 change H118 change the City of Tshwane broadband project though Company/Division Revenue on EBITDA on prior Rm prior Rm other areas also growing year year • Lower operating margins reflect incre
Slide 26: Operational Review
OPERATIONAL REVIEW Bytes Technology Group UK % % • Excellent first half from the UK operations H118 change H118 change Company/Division Revenue on EBITDA growing revenue by 25% and EBITDA by 21% in on prior Rm prior Rm local currency terms year year Altron ICT continued Bytes Technology Other intern
Slide 27: Operational Review
OPERATIONAL REVIEW Altech Netstar Group % % H118 change H118 • Continued improvements in the performance of change Company/Division Revenue on EBITDA Altech Netstar on prior Rm prior Rm year year • Improved subscriber growth in the period, particularly in SVR, with churn and retentions Altron Operat
Slide 28: Looking Ahead
Interim results LOOKING AHEAD • Achieve our 2nd half financial commitments • Finalise BDS restructuring & BSI / BUS integration • One Altron One Customer sales enablement initiative • Complete Powertech Transformers and Altech UEC disposals • Strategic Partnerships • Global consultants • Technology
Slide 29: Questions?
Questions? Driving growth in turbulent times 30
Slide 30: Thank You
THANK YOU 31