Transcript www.altron.com

www.altron.co.za
Altron Group
Year End Results 2004
Robert Venter
Chief Executive
Altron Group
*
Revenue: R10 bn
Market cap: R3.3 bn
*
Employees: ± 11 000
JSE listed
*
53,4%
Altech
*
54,6%
100%
BTG
Powertech
Telecoms,
Multi-media, Information
Technology (TMT)
Information Technology
Power Electronics
Employees: 1824
Market Cap: R3.5 bn
Employees: 3647
Market Cap: R920 m
Employees: 5171
Based on share prices as of 7 May 2004
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Products and services
Altech
BTG
TELECOMMUNICATIONS
Cellular telephony, vehicle tracking and
recovery systems.
Design, installation and commissioning of twoway radio equipment and systems.
INFORMATION TECHNOLOGY
Microsoft licensing & systems integrator.
Independent IT consulting services and solutions.
Network solutions & maintenance.
Software sales, development, implementation &
application maintenance.
ERP implementation.
Exclusive distributor of NCR products (ATMs),
services and implementation of EFT applications
and scanners.
Desktop services and support. Remote
monitoring of IT facilities.
Sole distributor of Xerox office products and
supplier of document management services.
Electronic switching & transactions processing
for the medical industry.
MULTIMEDIA & ELECTRONICS
Distributors of professional electronic
components and products.
Design and manufacture of digital satellite
decoders and software applications.
INFORMATION TECHNOLOGY
Integrated computer systems solutions and
smart-card technology systems.
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Powertech
POWER ELECTRONICS
Medium- and low-voltage power cables.
Power and distribution transformers.
Automotive, traction batteries and DC
power systems.
Electrical accessories.
Lighting control gear.
TELECOMMUNICATIONS
Fibre-optic and metallic cables and
accessories.
Data cable systems.
Standby power and rectifier systems.
Solar systems.
Companies per segment
Telecoms
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Power Electronics
& Multimedia
Information
Technology
Key financials
2004
2003
% change
Revenue – cont. operations
R10bn
R11bn
-9
Operating income – cont. operations
R718m
R807m
-11
7.1%
7.3%
Adjusted HEPS (cents)*
139
137
RONA
17%
22%
R0.8bn
R1.2bn
R2bn
R1.5bn
Operating margin (%)
Working capital
Cash on hand
* Excluding surplus from Benefit Fund in prior year
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+2
Group highlights






Increased HEPS under strengthening rand environment
Cash increased to over R2bn
Dividend increased by 21%
12 month share price appreciation of 48%
Key acquisitions concluded (Xerox SA, NamITech)
Pre-empted ICT charter with substantial BEE deals
announced
 Vision 2010 approved by board
 Divestitures continue to focus group
 Major orders secured including R500m SAPS 2-way
digital radio system for Gauteng
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Group results at a glance
(for the twelve months ended 29 February 2004)
■
*HEPS: 2%
■ JSE listed
53,4%
■ Altech
Op income: R 718m
Op. margin: 7.1%
54,6%
■ BTG
100%
Powertech
Op income
R 333m
Op income
R 185m
Op income
R 207m
Op. margin
8%
Op. margin
7.1%
Op. margin
6.2%
*HEPS -6%
*HEPS 27%
*HEPS 12%
* HEPS: Adjusted HEPS for the year excludes benefit fund surplus
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Summary of key strategic
philosophies
 Provide shareholders with above average growth and
dividend returns
 Be market share leaders in our focused sectors
 Target 25-30% of revenue to come from non-rand
currencies
 Navigate BEE landscape and ICT charters
 Provide decentralised management culture and encourage
entrepreneurship
 Maintain family control and influence
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Corporate activity
Activity
Effective date
Valuation
BTG acquires 50% of Xerox SA
1 June 2003
R235m
BTG sells 27% of BTG to Kagiso*
1 June 2004
R228m
Altech acquires 85% of NamITech
1 March 2004
R526m
Altech sells 28% of NamITech to Pamodzi
1 March 2004
±R180m
Altech sells 30% of Alcom Matomo to Matoma
1 December 2003
±R7m
Powertech sells 25.1% of Battech to Kagiso
1 March 2004
R19m
Powertech sells 30% of Aberdare Cables to Izingwe
1 March 2004
R165m
Altech sells 25.01% of Altech Data to Pamodzi
31 May 2004
±R50m
* Subject to shareholder approval
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Share price performance
Cents
170
2
150
1
3
130
4
110
90
1
3
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Altron rebased
Electronics index rebased
2
4
Altron preference shares rebased
ALSI rebased
2004/04/19
2004/03/16
2004/02/17
2004/01/20
2003/12/18
2003/11/19
2003/10/22
2003/09/23
2003/08/26
2003/07/29
2003/07/01
2003/06/02
2003/05/05
2003/04/01
2003/03/03
70
Hard currency revenues
R million
3000
2500
2000
1500
1000
500
0
1998
1999
2000
2001
Revenue from foreign operations
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Note: 1998 to 2003 includes AAT exports
2002
2003
Exports
2004
Altron Group
Financial results 2004
Diane Radley
Chief Financial Officer
Group income statement
R million
Revenue - total
Continuing operations
2004
2003
10 045
11 397
-12 (-6)
718
807
-11 (-7)
Discontinued operations
Benefit Fund
28
-
74
Operating income
718
909
Net investment income
119
96
9
19
846
1 024
(134)
(105)
34
244
746
1 166
(252)
(288)
494
878
(152)
(414)
342
464
Income from associates
Income before amortisation and capital items
Goodwill amortised and impaired
Capital items
Net income before tax
Taxation
Net income after tax
Outside shareholders interest
Attributable income
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% change
Group income statement
2004
2003 % change
EPS (cents)
125
173
HEPS (cents)
139
149
Adjusted HEPS (cents)
139
137
+2
52
43
+21
Dividend per share declared
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Contribution by subholding company
Revenue
2004
2003
1%
26.0%
27%
36%
41.2%
33.2%
Altech
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BTG
36%
Corporate & Financial services
Powertech
Contribution by subholding company
Operating
income
2004
2003
6%
26%
20%
45%
46%
29%
Altech
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BTG
29%
Corporate & Financial services
Powertech
Contribution by subholding company
Headline
earnings
2004
2%
2003
6%
15%
15%
45%
38%
Altech
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BTG
48%
31%
Corporate & Financial services
Powertech
Group balance sheet
R million
2004
2003
Fixed and non-current assets
1 415
1 437
189
286
Cash and cash equivalents
2 004
1 510
Receivables and inventories
2 447
2 943
Total assets
6 055
6 176
Ordinary shareholders’ interest
2 475
2 267
Outside shareholders’ interest
1 082
1 291
Long-term loans
277
281
Short-term loans
247
193
41
120
Current liabilities
1 933
2 024
Total equity and liabilities
6 055
6 176
901
837
Rental finance advances
Other long term liabilities
NAV per share
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Group cash flow analysis
R million
2004
2003
Operating activities
778
710
Cash generated by operations
778
1 056
Net investment income
106
87
Changes in working capital
387
(7)
(295)
(202)
976
934
Dividends paid
(198)
(224)
Investing activities
(310)
(27)
68
(582)
536
101
1 510
1 444
(42)
(35)
2 004
1 510
Taxation paid
Cash from operating activities
Financing activities
Net funds generated
Cash and cash equivalents
Translation & effect on cash of proportionate consolidation
Cash and cash equivalents – end of year
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Powertech
R million
2004
2003
Revenue
3 332
4 117
P/C 3 790
-19
-12
Operating income
207
267
P/C 228
-22
-9
Headline earnings
146
143
+2
Headline earnings
(excl Benefit Fund)
146
130
+12
P/C – Proportional consolidation
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% change
Powertech
Segmental results
Revenue
18%
27%
74%
82%
Telecoms
Power Electronics
2003*
2004 *
6%
94%
* Proportionally consolidated
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Operating
income
15%
85%
Powertech
Segmental results by product (revenue)
R 333m
R 610m
R 264m
R 634m
Electrical accessories
R 274m
R 312m
Battery & solar
Transformers
R 2054m
2004 *
* ABB PTT and Tridonic proportionally consolidated
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R 2534m
2003 *
Cables
Segmental review
Contribution per segment
1%
Revenue
28%
29%
37%
36%
34%
Power Electronics
/ Multimedia
36%
2004
IT
2003
3%
Operating
income
Telecoms
Corporate & Financial Services
10%
25%
35%
30%
24%
32%
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41%
Telecoms
Risks and opportunities
Risks
 Slowing of growth in SA mobile market
 International weakness in demand for
infrastructural telecoms products
 Delays in SNO provides no incentive for
Telkom to expand network
 Need for GSM-based vehicle tracking
product
Opportunities
 SNO – when it happens!
 Mobile opportunities in Africa – world’s
largest unexploited territory
 NamITech provides entry into SIM and
pre-paid voucher market
 SAPS Gauteng tender and Free State
government opportunity
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Altron action
 Extended Autopage agreements
with SA mobile operators
 Reduced exposure to infrastructure
segment
 Right-sized fibre optic business
 Key successes in African markets
for SIM cards and pre-paid
vouchers
 GSM-based vehicle tracking product
developed and launched
Multimedia & Power electronics
Risks and opportunities
Risks
 Strong rand environment
 Increased competition in low-end set top
boxes
 Rising interest rates
 High base of power electronics
 Supply of copper
Opportunities
 Infrastructure spend in SA region to
remain strong
 Major projects in mining and industrial
sectors announced
 Strong order book at UEC
 World Cup 2010
 Regional electricity distribution supply
(REDS)
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Altron action
 Currency hedging in place for both
imports and exports
 Developed and received orders for
high-end STB’s (PVR, etc.)
 Capital expenditure in power
electronics focused on efficiencies –
not additional capacity
 Developing alternate suppliers of
copper
Information Technology
Risks and opportunities
Risks
 BEE landscape and ICT Charter
 Market conditions in UK IT sector
 Exchange rate impact on major imports
 Pressure on pricing
Opportunities
 Improving market conditions for IT
sector
 Addressable market enhanced through
BEE credentials
 Europay/Mastercard/Visa (EMV)
standard
 Security (PKI’s and digital certificates) is
growth area
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Altron action
 Empowerment deals concluded at
BTG SA and NamITech
 Complete offering relating to EMV
 Increased level of annuity income to
fight price erosion and establish
barriers to entry
 Streamline and consolidate UK
businesses
Growth strategies going forward
Altech growth to be driven by a combination of external acquisitions and
internal investment in R&D and intellectual capital. Balance sheet
provides good flexibility.
BTG growth to be driven by consolidation of IT industry and
internal investment in systems and intellectual capital. Current
balance sheet restricts significant external opportunities.
Powertech growth strategies to be driven around reinvestment in capital
equipment focusing on efficiencies in the right areas. Complemented by
synergistic small to medium size acquisitions.
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Thank You