Altron Limited Class A · JSE:AEL
Altron Limited Class A — FY2016 Earnings Presentation
32 slides from Altron Limited Class A's earnings presentation, May 2016
Slide 1: Year End Results
Year End Results ROBBIE VENTER / CHIEF EXECUTIVE ALEX SMITH / CHIEF FINANCIAL OFFICER
Slide 2: Agenda
AGENDA 1. Overview & Financial Summary Robbie Venter - CE 2. Financial Results Alex Smith - CFO 3. Operations and Way Forward Robbie Venter - CE May 2016 l Slide 02
Slide 3: Strategy Statement
STRATEGY STATEMENT Decision has been taken to focus the Group on core IT and Telecoms businesses. Reduce exposure to manufacturing through divestment of Altech UEC and Altron Power. Results presented in core / non-core format to give greater insight into Group going forward. Core business ha
Slide 4: Results Overview
RESULTS OVERVIEW Core A solid result from the continuing operations. Strong performance from the IT division at revenue and EBITDA level. Good performance from Bytes UK, BSTS and BPS, with BUS down on prior year. Within Telecoms division, good performance from ARH, while both Altech Netstar
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS Continuing (Core) Operations Rm FY16 FY15 % Change Revenue 14 357 12 014 20 EBITDA 888 993 (11) EBITDA Margin (%) 6.2 8.3 Profit after tax 360 496 (27) Discontinued (Non-core) Operations Rm FY16 FY15 % Change Revenue 12 235 15 609 (22) EBITDA (512) 390 EBITDA Margin (%) (4.2) 2.
Slide 6: Progress on Strategy Implementation
PROGRESS ON STRATEGY IMPLEMENTATION Altech Autopage disposal concluded with initial proceeds received. After costs and balance sheet unwind, should release approximately R800 million. Aberdare disposal awaiting fulfilment of final conditions precedent. On completion should generate net proceeds
Slide 7: Financial Results
Financial Results ALEX SMITH / CHIEF FINANCIAL OFFICER May 2016 l Slide 07
Slide 8: Group Income Statements – Total Operations
GROUP INCOME STATEMENTS – TOTAL OPERATIONS Rm FY16 FY15 % Change Revenue 26 592 27 623 (4) Operating profit before capital items (74) 827 (109) EBITDA 376 1 383 (73) EBITDA Margin (%) 1.4 5.0 Net finance expenses (492) (398) Capital items (508) (400) Foreign exchange profits / (losses) 41 (64) Taxat
Slide 9: Movement in Group Revenue
MOVEMENT IN GROUP REVENUE Overall revenue decline caused by deteriorating performance of the non- core operations. Revenue from continuing operations has seen a pleasing increase, although much of this came from the (2,254) international operations, with the SA 2,470 operations affected by low growt
Slide 10: Movement in Group EBITDA
MOVEMENT IN GROUP EBITDA Marked decline in EBITDA caused by the non-core operations. Decline in the core operations as a result of performance of Altech Netstar, which saw (44) increased subscriber acquisition costs, and BSI which suffered from delays in investment by clients in their SA operations.
Slide 11: Movement in Group Headline Earnings
MOVEMENT IN GROUP HEADLINE EARNINGS Overall decline in headline earnings driven by performance of the non-core 400 businesses incurring significant losses, higher interest costs and no tax relief (60) 200 on those losses. 312 - Core businesses declined marginally (438) due to the declines at Altech
Slide 12: Summarised Balance Sheet
SUMMARISED BALANCE SHEET Rm FY16 FY15 Total non-current assets 2 804 4 496 Current assets 10 152 9 345 Cash balances 1 491 1 341 Total assets 14 447 15 182 Shareholder’s equity 2 847 3 639 Non-controlling interests (111) 123 Non-current liabilities 2 714 3 260 Current liabilities 8 997 8 160 Total e
Slide 13: Cash Flows
Net cash and cash 206 equivalents at the end of the period (100) Other (117) Financing activities (1,121) Investing activities (107) Dividends paid (152) Taxation paid (459) Net finance 1443 expense Changes in Slide 13 working capital CASH FLOWS Cash generated 528 by operations l May 2016 Net cash a
Slide 14: Investing Activities
INVESTING ACTIVITIES 23 Investment in property, plant and equipment limited Rm 306 338 to maintaining the capital base. 131 344 Substantial reduction in investments into intangible assets reflects the closure of the Altech Node business and much lower activity levels at Altech 634 Multimedia. 486 Si
Slide 15: Working Capital
WORKING CAPITAL 76 54 60 62 69 58 56 43 52 55 51 51 52 49 18 26 19 16 14 12 4 -81 -89 -86 -100 -106 -105 -112 Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Inventory days Debtors Days Creditor days Net days May 2016 l Slide 15
Slide 16: Operations
Operations ROBBIE VENTER / CHIEF EXECUTIVE May 2016 l Slide 16
Slide 17: May 2016 l Slide 17
May 2016 l Slide 17
Slide 18: Altron TMT Financial Summary
ALTRON TMT FINANCIAL SUMMARY Continuing (Core) Operations Rm FY16 FY15 % Change Revenue 14 679 12 209 20 EBITDA 1 056 1 100 EBITDA Margin (%) 7.2 9.0 Headline Earnings 637 697 Discontinued (Non-core) Operations Rm FY16 FY15 % Change Revenue 5 049 7 303 (31) EBITDA (331) 258 EBITDA Margin (%) (6.6) 3
Slide 19: Telecoms Divisional Review
TELECOMS DIVISIONAL REVIEW FY16 % FY16 % Comments Revenue change EBITDA change Continuing (Core) Rm on prior Rm on prior Operations year year Increased cost of acquiring subscribers (in commission and cost of funding units). SVR side of the business contracted due to increased Altech Netstar Group 1
Slide 20: Multi-Media Divisional Review
MULTI-MEDIA DIVISIONAL REVIEW FY16 % FY16 % Comments Revenue change EBITDA change Continuing (Core) Rm on prior Rm on prior Operations year year Successfully increased its market penetration, which has Arrow Altech Distribution 419 13 26 13 also reduced its dependency on inter-group business. Total
Slide 21: IT Divisional Review
IT DIVISIONAL REVIEW FY16 % FY16 % Comments Revenue change EBITDA change Rm on prior Rm on prior year year Bytes Technology 3 554 34 132 25 Produced excellent results. Growing profits and margins in Pound terms. Group UK Software Further helped by currency translation effect of 15%. Performed to exp
Slide 22: May 2016 l Slide 22
May 2016 l Slide 22
Slide 23: Altron Power Financial Summary (Discontinued)
ALTRON POWER FINANCIAL SUMMARY (DISCONTINUED) Rm FY16 FY15 % Change Revenue 7 185 8 288 (13) EBITDA (156) 220 EBITDA Margin (%) (2.2) 2.7 Headline Earnings (350) 1 May 2016 l Slide 23
Slide 24: Power Divisional Review
POWER DIVISIONAL REVIEW FY16 % FY16 % Comments Discontinued (Non- Revenue change EBITDA change core) Operations Rm on prior Rm on prior year year Weak demand in both the informal and formal sectors and margin pressure arising from lack of volume. The Powertech Cables 4 370 (12) (3) (101) internation
Slide 25: The Way Forward
The Way Forward ROBBIE VENTER / CHIEF EXECUTIVE May 2016 l Slide 25
Slide 26: Going Forward
GOING FORWARD Focus on and complete non-core disposals: • Complete Aberdare sale by half year. • Prioritise disposal of Powertech Transformers and Altech UEC. • Utilise proceeds to reduce debt. Ensure appropriate focus is maintained on core operations: • Stabilise SVR and continue growth in flee
Slide 27: 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
Slide 28: May 2016 l Slide 28
May 2016 l Slide 28
Slide 29: Appendix
0. END RESUBTS Lae Y \I_ rj Appendix e\ | May 2016 | Slide 29
Slide 30: Glossary
GLOSSARY TMT: Technology, Multi-media and Information technology GBN: Gauteng Broadband Network HEPS: Headline Earnings per Share Rm: South African Rand (Million) DTT: Digital terrestrial television ARPU: Average revenue per user EBITDA: Earnings before interest, tax, depreciation and amortization R
Slide 31: Glossary cont.
GLOSSARY CONT. AAD: Arrow Altech Distribution ARH: Altech Radio Holdings BDS: Bytes Document Solutions BMS: Bytes Managed Solutions BPS: Bytes People Solutions BSI: Bytes Systems Integration BSTS: Bytes Secure Transaction Solutions BUS: Bytes Universal Systems PTSI: Powertech Systems Integration May
Slide 32: IR Contacts
IR CONTACTS Shenanda Janse van Rensburg Group Executive: Marketing, PR & Communications Email: [email protected] Tel: +27 (0) 11 650 9211 Mobile: +27 (0) 84 777 1977 Lizelle Brink Head: Stakeholder Engagement & Events Email: [email protected] Tel: +27 (0) 11 205 7702 Mobile : +27 (0) 82 928