Transcript Slide 1

Altron Group
2002 Interim results
presentation
15 October 2002
Building on solid foundations
www.altron.co.za
Agenda
• Introduction
Dr Bill Venter
• The role of Altron
Robert Venter
• Strategy
Robert Venter
• Financial highlights
Robert Venter
• Strategic partners/customers
Robert Venter
• Interim results
Diane Radley
• Segmental overview
Robert Venter
• The road ahead
Robert Venter
www.altron.co.za
Dr Bill Venter
Chairman
www.altron.co.za
Robert Venter
Chief Executive
www.altron.co.za
Group at a glance
*
53.5%
54.7%
*
*
Telecoms,
multi-media,
information
technology
(TMT)
Succeeding in an
ever-converging
world
100%
Information
technology
IT services
for the
enterprise
Power
electronics
people
innovation
technology
Financial
services
Financing IT
* = 3 listed vehicles
www.altron.co.za
The role of Altron
• Proactively manage our investments in Altech,
BTG, Fintech and Powertech
• Allocate capital where appropriate
• Provide commercial and operational input
through executive committees
• Maximise synergies within group through
centralised services
– Legal, Tax, Audit, Treasury, Insurance,
Purchasing, IT, Corporate Affairs, BEE
• Leverage critical mass of group to maximise
benefits
Maximising value for our investors
www.altron.co.za
Delivering on strategy
Simplify structure
2002
activity
Powertech
delisting
Reduce complexity and entry points
Divest non-core assets
Focus on high growth opportunities
Global expansion
Succession planning
Increase shareholder value
Sale of AAT,
Voltex,
Fintech Manco
Acquisition of
TSS, Plato
Excom managing
day-to-day
operations
www.altron.co.za
ATN SJ Equity
FTSE/JSE IT Index
FTSE/JSE Telecommunications Services index
2002/10/11
2002/10/01
2002/09/19
2002/09/09
2002/08/28
2002/08/16
2002/08/06
2002/07/25
2002/07/15
2002/07/03
2002/06/21
2002/06/11
2002/05/30
2002/05/20
2002/05/08
2002/04/26
2002/04/16
2002/04/04
2002/03/25
2002/03/13
2002/03/01
2002/02/19
2002/02/07
2002/01/28
2002/01/16
2002/01/04
2001/12/25
2001/12/13
2001/12/03
2001/11/21
2001/11/09
2001/10/30
2001/10/18
Electronic & electrical - performance
160
140
120
100
80
60
40
20
FTSE/JSE Electronics Index
www.altron.co.za
Altech acquisition of PTSS
• Altech purchases TransSwitch Services
from Prism Holdings for R47m
• Deal effective 1 December 2002
• Value enhancing annuity business
• Strengthen customer base of Altech Card
Solutions
• Enable Altech to offer full end-to-end card
payment solutions
www.altron.co.za
BTG acquisition of Plato
• BTG acquires Plato Computer Services (UK) Ltd
for GBP 22.5m as initial consideration
• Additional cash consideration of GBP 5.5m based
on EBIT has been agreed
• Software, services and consulting business
• Plato plus Bytes (UK) will generate ± 40% of
BTG’s total revenue for Feb ’04
• Blue chip customer base
• In line with global BTG strategy and complements
current UK business
www.altron.co.za
The building blocks of our strategy
Increase
shareholder
value
Focus on
high-growth
opportunities
Focus on
core
activities
Value
added
services
Global
expansion
Ownership
of IPR
Black
economic
empowerment
Annuity
income
Market
leadership/
critical
mass
www.altron.co.za
Financial highlights
Aug
2002
Aug
2001
Change
Revenue
R6.2bn
R5.0bn
24%
Operating income
R407m
R329m
24%
6.6%
6.6%
-
59.0
51.3
15%
15.4%
14.7%
5%
820.4
612.7
34%
R1.24bn
R1.09bn
14%
Operating income to sales
HEPS (cents)
Return on shareholders’ equity
Net asset value per share
(cents)
Cash on hand
www.altron.co.za
Group interim results at a glance
*
53.5%
Op income R171m
HEPS up 20.1%
Cash
54.7%
*
R926m
Op income R79m
HEPS up 65%
*
Cash R320m
Op income R36m
100%
Op income R407m
HEPS up 12.4%
HEPS up 15%
Cash R1.2
* JSE listed
billion
Op income R121m
100%
HEPS up 10.2%
Cash R79m
www.altron.co.za
5 year group overview
1st half
2nd half
Revenue
Operating income
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
Rm
0
800
700
600
500
5 year
CAGR
16%
1998
1999
2000
2001
2002
400
CAGR
15%
300
200
100
Rm0
8/ 2003
1998
1999
2000
2001
2002
8/ 2003
Actual HEPS
ROCE
140
30
120
25
100
5 year
CAGR
15%
80
60
40
15
10
5
20
Cents
20
0
1998
1999
2000
2001
2002
8/ 2003
% 0
1998
1999
2000
2001
2002
8/2003
www.altron.co.za
Fintech
R millions
2002
2001
% change
201
165
22
107.4
95.8
12
Operating income
35.6
30.4
17
HEPS (cents)
18.2
16.1
12
Net new capital financed
Revenue
• Disposal of management business
• Refocus in terms of core business
• Exploring alternative capital raising options
www.altron.co.za
Powertech
R millions
2002
2001
% change
Revenue
2 212
1 920
15
Operating income
121
92
32
HEPS (cents)
23.8
21.6
10
• Significant performance from power
electronics
• Impact of telecommunications industry
downturn
• Efforts made to find new markets
www.altron.co.za
Powertech
Segmental results (6 monthly)
Telecommunications
Power electronics
Revenue
Aug 01
Feb 02
Aug 02
27%
R1 119m
32%
R607m
68%
R1 236m
Operating income
24%
R532m
7%
R8m
52%
R118m
62%
R63m
38%
R29m
76%
R1 680m
73%
R2 617m
48%
R98m
93%
R113m
www.altron.co.za
Powertech
Segmental results by products (6 monthly)
Revenue
9%
R216m
9%
R161m
15%
R287m
15%
R334m
64%
R1242m
61%
R1355m
14%
R307m
12%
R230m
Aug 01
Cables
Transformers
Battery Group
Electrical accessories
Aug 02
www.altron.co.za
Hard currency revenues
2500
2000
1500
31%
of revenue
1000
500
0
R ‘000
1998
1999
2000
2001
2002
8/ 2003
www.altron.co.za
Strategic partners
www.altron.co.za
Key customers
www.altron.co.za
Interim results
Diane C Radley
Chief Financial Officer
www.altron.co.za
Group income statement
R million
Revenue
Aug
2002
Aug
2001
% change
6 200
5 008
24
Operating income
407
329
24
Income before goodwill amortisation and
exceptional items
455
383
19
Goodwill amortised
(32)
(51)
Exceptional items
302
(7)
Income before taxation
725
325
123
(146)
(103)
42
579
222
161
(270)
(118)
309
104
198
114.9
36.5
214
59.0
51.3
15
Taxation
Income after taxation
Attributable earnings to outside shareholders
Attributable earnings
Basic EPS – cents
Headline EPS – cents
www.altron.co.za
Results by sub-holding company
R million
Aug
2002
Aug
2001
% change
Contribution to revenue
Altech
2 113
1 854
14
Powertech
2 212
1 920
15
BTG
1 768
1 138
55
107
96
11
6 200
5 008
24
Altech
77
64
20
Powertech1
49
34
44
BTG
20
12
67
Corporate & Financial Services2
13
35
(63)
159
145
10
Corporate & Financial Services
Contribution to headline earnings
1.
2.
Prior year comparative reflects Altron’s 59.2% share.
Prior year comparative reflects Altron’s 64.3% share.
www.altron.co.za
Group balance sheet
R million
Aug
2002
Aug
2001
Feb
2002
Assets
Non-current assets
2 269 2 226 2 302
Current assets
4 997 3 937 4 678
Inventories
1 168 1 040 1 106
Accounts receivable
2 590 1 806 2 128
Net cash and cash equivalents
1 239 1 091 1 444
Total assets
7 266 6 163 6 980
Equity and liabilities
Ordinary shareholders’ interest
2 213 1 632 1 945
Outside shareholders’ interest
1 198 1 626 1 635
Non-current liabilities
1 031
819
892
54
53
50
Deferred taxation
Current liabilities
2 770 2 033 2 458
Total equity and liabilities
7 266 6 163 6 980
Net asset value per share - cents
820.4 612.7 725.1
www.altron.co.za
Group cash flow
R million
Operating activities
Aug
2002
Aug
2001
Feb
2002
64
317
542
466
468
821
45
39
82
(179)
147
238
Taxation paid
(71)
(92)
(247)
Cash available from operating activities
261
562
894
Dividends paid
(197)
(245)
(352)
Investing activities
(283)
(376)
(229)
14
68
(51)
Net funds (utilised)/generated
(205)
9
262
Cash and cash equivalents – beginning of period
1 444
1 082
1 082
-
-
100
1 239
1 091
1 444
Cash generated by operations
Net investment income
Changes in working capital
Financing activities
Translation of foreign cash
Cash and cash equivalents – end of period
www.altron.co.za
Segmental
review
www.altron.co.za
Telecoms
Portfolio of assets – product and services
Cellular service
provider
Installation of vehicle
tracking devices
Sustainable
customer base of
500k subscribers
Vehicle monitoring
and recovery
Fibre optic and metallic
cables and
accessories
Standby power and
rectifier systems
Solar systems
Installation and
commissioning of twoway radio equipment
and systems
Subscriber base of
200k
www.altron.co.za
Electronics & multi-media
Portfolio of assets – products and services
DESTA POWER
MATLA
Whiteleys
Design of settop boxes and
related
interactive
software
solutions
Distributors of
electronic
components
and products
Power and
distribution
transformers,
including high
voltage
transformers
Medium and
low voltage
power cables
Automotive
batteries
Electrical
accessories
Process
Control
Metering
www.altron.co.za
Information technology
Portfolio of assets – products and services
Bytes
Communication
Systems
BTG UK
Implementer of
OMS solutions
in the SA
process industry
Design,
development
and integration
of vendor
independent
solutions
Microsoft
licensing,
storage
solutions, IT
consulting
Bytes Software
Smart card
technologies
Employee
benefit
solutions
development,
installation and
maintenance
Bytes Technology Networks
Document
management
and outsourcing,
PABX, voice &
data solutions
Network
infrastructure,
managed
services, ATM,
point-of-sale, data
warehousing,
Microsoft
licensing
Medical Aid
claims
submission
and electronic
transaction
switching
Practice
management
software
www.altron.co.za
Contribution per segment
Revenue
Financial &
Corporate
1%
Elect. &
Multimedia
36%
IT
31%
Elect. &
Multimedia
38%
Financial &
Corporate
0%
Telecoms
32%
2002
IT
25%
Telecoms
37%
2001
www.altron.co.za
Contribution per segment
Operating income
Financial &
Corporate
13%
Financial &
Corporate
10%
IT
15%
IT
23%
Telecoms
24%
Elect. &
Multimedia
43%
Elect. &
Multimedia
30%
2002
Telecoms
42%
2001
www.altron.co.za
Industry prospects
• Telecoms
– Telecoms industry remains depressed and key players
burdened by excessive debt
– Telkom IPO - end 1st quarter 2003. Will absorb
substantial investor telecom funds due to high
prospective weighting in FTSE / JSE Top 40 and All
Share indices
– No recovery expected in short term
www.altron.co.za
Industry prospects (cont)
• Multimedia & electronics
– World-wide industry is challenged but still niche market
growth opportunities
– China and USA untapped
– Local interest rates are a concern
• Information technology
– Restructuring expected to become an overriding sector
theme as companies respond to changed market
conditions
– BEE continues to be an essential factor
www.altron.co.za
Strategic and equity BEE partners
• Labat
• Matomo
• Maseco
• TSS
(Tactical Software
Systems)
• Matomo
• Arivia.kom
• Power Matla
• Wiphold
• Alcon Marepha
www.altron.co.za
The road ahead
•
•
•
•
Focus on core activities
Integrate TSS and Plato
Maintain current listings
Build the critical mass of BTG and play role in IT
industry consolidation
• Next phase of growth at Altech is acquisition
driven
• Fintech – refocus regarding core/non-core
activities and review funding alternatives
• Ongoing corporate governance review (King II)
and focus on BEE initiatives
www.altron.co.za
Thank you
Questions and answers
www.altron.co.za