Enx Group Limited · JSE:ENX
Enx — FY2020 Earnings Presentation
36 slides from Enx's earnings presentation, Aug 31, 2020
Slide 1: Results Presentation for the year ended 31 August 2020
RESULTS PRESENTATION for the year ended 31 August 2020
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 s
Slide 3: Contents
CONTENTS 01 02 03 04 WHO WE WHO WE KEY FOCUS AREAS FINANCIAL ARE REPRESENT PERFORMANCE 05 06 07 08 BUILDING EQSTRA FINANCIAL OUTLOOK OUR BUSINESS ACCOUNTING REVIEW UNITS 3
Slide 4: Who We Are
01 WHO WE ARE
Slide 5: Who We Are
WHO WE ARE FLEET EQUIPMENT PETROCHEMICALS Fleet management solutions across Distribution, rental, pre-owned Manufacturing and distribution all vehicle classes: and value-added services for: of chemicals • Rental • Forklifts • Oil lubricants and base oils • Tracking • Port and crane equipment • Rubbe
Slide 6: Who We Represent
02 WHO WE REPRESENT
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 EQUIPMENT PETROCHEMICALS EIE SA WEST AFRICAN NEW WAY POWER AUSTRO AG LUBRICANTS IMPACT HANDLING (UK) GROUP #1 #1 #1 #2 #1 #
Slide 8: Key Focus Areas
KEY FOCUS. |” ~ AREAS |* 7
Slide 9: Key Focus Areas – Back to basics
KEY FOCUS AREAS – Back to basics 1. New management team and streamlined Board composition 2. Implementation of refinancing 3. Managing risks around COVID-19 to ensure sustainability of the businesses 4. Follow a “back to basics” strategy by: - Focus on optimising those areas under our control - Deal
Slide 10: Key Focus Areas – Impacts of COVID-19
KEY FOCUS AREAS – Impacts of COVID-19 • Health and safety of our stakeholders remains highest priority • Stringent hygiene controls and protocols have been implemented • Gradual easing of lock down restrictions has lifted activity levels and improved revenues ENX GROUP - ACTIVITY OF NORMALISED REVEN
Slide 11: Financial Performance
qe \ FINANCIAL PERFORMANCE
Slide 12: Financial Performance
FINANCIAL PERFORMANCE • Extraordinarily challenging with unprecedented circumstances arising from COVID-19 • Revenue of R7.206 billion (2019: R7.791 billion), down 8% on last year • Profit from operations before depreciation and amortisation of R1.795 billion (2019: R1.909 billion), down 6% • Operat
Slide 13: Building Our Business Units
05 BUILDING OUR BUSINESS UNITS
Slide 14: Business Unit Analysis – Eqstra
BUSINESS UNIT ANALYSIS – Eqstra FLEET Reported Proforma Reported Proforma REVENUE VALUE CHAIN Rm 2020 Adj¹ 2020 2019² Adj¹ 2019 Revenue 1 860 - 1 860 2 064 - 2 064 19% 48% 19% REMARKETING RENTAL EBIT 148 120 268 429 (62) 367 PBT Leasing assets (29) 120 2 732 - 91 2 732 237 2 893 (62) (62) 175 2 831
Slide 15: 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 16: Business Unit Analysis – EIE SA
BUSINESS UNIT ANALYSIS – EIE SA EQUIPMENT Reported Proforma Reported REVENUE VALUE CHAIN Rm 2020 Adj¹ 2020 2019 Revenue 1 890 - 1 890 2 211 6% 41% 41% USED RENTAL EBIT 202 38 240 342 EQUIPMENT 6% PBT Leasing assets 29 1 916 38 - 67 1 916 175 1 911 2020 27% 27% 26% Total assets 3 091 - 3 091 3 139 VA
Slide 17: Business Unit Analysis – EIE SA Leasing Book
BUSINESS UNIT ANALYSIS – EIE SA Leasing Book Leasing book remains healthy with risks well managed: • Credit risk: The book remains well diversified with the largest customer comprising ~3.0% and top 10 customers comprising ~14% of the long-term forklift leasing book • Interest rate risk: Most of the
Slide 18: Business Unit Analysis – Impact Handling (UK)
BUSINESS UNIT ANALYSIS – IMPACT HANDLING (UK) EQUIPMENT Reported Proforma Reported REVENUE VALUE CHAIN Rm 2020 Adj¹ 2020 2019 Revenue 1 448 - 1 448 1 334 7% 43% 43% DISPOSAL RENTAL EBIT 93 10 103 102 7% PBT Leasing assets 53 1 435 10 - 63 1 435 70 1 132 2020 25% 25% Total assets 2 344 - 2 344 1 811
Slide 19: Business Unit Analysis – Impact Handling (UK) Leasing Book
BUSINESS UNIT ANALYSIS – IMPACT HANDLING (UK) Leasing book remains healthy with risks well managed with no reliance on any particular industry sector: • Credit risk: The book remains well diversified with the largest customer comprising ~1.4% and top 10 customers comprising ~8% of the long-term fork
Slide 20: Business Unit Analysis – New Way Power
BUSINESS UNIT ANALYSIS – NEW WAY POWER EQUIPMENT Reported Proforma Rm 2020 Adj¹ 2020 2019 2020 Revenue 276 - 276 339 NEW WAY POWER • Y-on-Y Revenue ↓19% EBIT (22) 19 (3) (3) • Management restructure during 2019 PBT (31) 19 (12) (3) • No activity during hard lock-down. Activity returned after lockdow
Slide 21: Business Unit Analysis – Austro
BUSINESS UNIT ANALYSIS – AUSTRO EQUIPMENT Reported Proforma Rm 2020 Adj¹ 2020 2019 2020 Revenue 107 - 107 161 AUSTRO • Y-on-Y Revenue ↓ 34% EBIT (20) 9 (11) (19) • No activity during hard lockdown PBT (20) 9 (11) (20) • Activity returned slowly • Significantly above normalised revenue for September
Slide 22: Business Unit Analysis – AG Lubricants
BUSINESS UNIT ANALYSIS – AG LUBRICANTS PETROCHEMICALS Reported Proforma Rm 2020 Adj¹ 2020 2019 2020 Revenue 778 - 778 804 AG LUBRICANTS • Y-on-Y Revenue ↓ 3% EBIT 37 7 44 (54) • Activity decreased to half normalised revenue during hard lockdowns PBT 31 7 38 (71) • Activity levels improved substantia
Slide 23: Business Unit Analysis – WAG
BUSINESS UNIT ANALYSIS - WAG PETROCHEMICALS Rm 2020 2019 2020 Revenue 896 910 WAG EBIT 38 21 • Y-on-Y Revenue ↓ 2% • Activity levels during hard lockdown were at around 60% of PBT 34 13 normalised revenue. Supplied essential service customers Inventory 207 175 with packaging for the food industry To
Slide 24: Eqstra Accounting
06 EQSTRA ACCOUNTING
Slide 25: Eqstra Accounting
EQSTRA ACCOUNTING • On 15 July 2019, enX announced the disinvestment of Eqstra to Bidvest Bank and Fleet was classified as an asset held for sale. • From this date, depreciation and amortisation on the assets held for sale ceased in terms of IFRS 5 • Final condition precedent, being approval by the
Slide 26: Impact of Eqstra Accounting: Financial Summary
IMPACT OF EQSTRA ACCOUNTING: FINANCIAL SUMMARY Performance showing as if Eqstra had been disclosed as a continuing operation on a like for like basis 31 Aug 31 Aug 31 Aug 31 Aug 2020 2020 2019 2019 % Rm Reported Adjust¹ Proforma Reported Adjust¹ Proforma change Profit from operations before deprecia
Slide 27: Financial Review
07 FINANCIAL REVIEW
Slide 28: Financial Review – Key performance indicators
FINANCIAL REVIEW Eqstra has been represented as a continuing operation in prior year Key performance indicators R’000 2020 2019 Revenue 7 206 109 7 790 851 Operating profit 381 751 757 175 Headline (loss)/earnings (36 410) 253 315 Pro-forma headline earnings ¹ 11 015 205 890 Pro-forma basic (loss)/e
Slide 29: Financial Review – Condensed statement of financial position
FINANCIAL REVIEW Condensed statement of financial position R’000 2020 2019 Goodwill and intangibles 165 769 723 484 Leasing assets 6 087 417 5 937 005 Inventories 1 622 021 1 547 864 Trade, other receivables and derivatives 1 064 879 1 131 705 Property, plant and equipment 409 482 425 296 Right of u
Slide 30: Financial Review – Condensed statement of cash flows
FINANCIAL REVIEW Condensed statement of cash flows R’000 2020 2019 Cash generated from operations before working capital movements 1 860 593 1 908 585 Working capital movements 610 280 296 421 Cash generated from operations 2 470 873 2 205 006 Interest and taxation paid (475 348) (468 622) Net cash
Slide 31: Financial Review – Funding facilities
FINANCIAL REVIEW Funding facilities Funding facilities (R’million) Facility size Utilised/(Surplus) Unutilised enX Leasing (EIE SA and Eqstra) – South Africa 4 487 3 991 496 General banking 400 376 24 Term 2 853 2 853 0 Note specific liquidity 316 316 0 Outstanding notes 918 918 0 Cash on call - (47
Slide 32: Financial Review – Covenant Levels
FINANCIAL REVIEW Covenant Levels enX Leasing SA Covenants ZAR (x) Level FY2020 FY2019 Net total debt: EBITDA Marginal Increase ≤3.00 2.49 2.39 EBITA: net finance charges Decline ≥1.40 1.41 1.87 Net total debt: equity Marginal decrease ≤3.37 1.82 1.87 Loan to value Stable ≤0.85 0.60 0.63 enX Trading
Slide 33: Financial Review – Maturity Profile
FINANCIAL REVIEW – Maturity Profile AS AT AUG 2020 – SA Leasing maturity profile (R’m) 2 500 Millions 2 000 1 500 1 000 500 0 Aug 2021 Aug 2022 Aug 2023 Aug 2024 Aug 2025 Aug 2026 Bank Bond TARGET – Consolidated SA Leasing maturity profile (R’m) 1 600 Millions 1 200 800 400 0 Aug 2021 Aug 2022 Aug 2
Slide 34: Outlook
08 OUTLOOK
Slide 35: Outlook
OUTLOOK • Improved B-BBEE score-rating with improved ownership score • EIE SA and Eqstra have raised own independent financing and all existing bank borrowings repaid and debt capital market instruments will be redeemed on flow of funds • SA and UK economies expected to recover slowly. Lockdown rest
Slide 36: Q&A
09 Q&A