• Save
Metair Investments Limited HY 2013 financial results presentation
 

Like this? Share it with your network

Share

Metair Investments Limited HY 2013 financial results presentation

on

  • 301 views

Metair Investment Limited HY 2013 financial results presentation

Metair Investment Limited HY 2013 financial results presentation

Statistics

Views

Total Views
301
Views on SlideShare
275
Embed Views
26

Actions

Likes
0
Downloads
0
Comments
0

2 Embeds 26

http://www.africansens.com 25
http://feeds.feedburner.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Metair Investments Limited HY 2013 financial results presentation Presentation Transcript

  • 1. INTERIM RESULTS 6 - MONTHS ENDING 30 JUNE 2013 29TH AUGUST 2013
  • 2. AGENDA • Results Overview – Accounting changes – Trading characteristics for the period – Rombat • Vision & Strategy • Financial Review • Operational Review • Start/Stop Battery Development • Prospects 2
  • 3. 3
  • 4. RESULTS OVERVIEW 4
  • 5. RESULTS OVERVIEW • HEPS maintained at 143 cents/share • Profit after tax up to R209 million from R202 million • Net cash improved slightly to (R54 million) from (R56 million) • Operating margin reduced to 11,1% from 12,0% • Strategic decision to increase working capital 5
  • 6. RESULTS OVERVIEW: ACCOUNTING CHANGES • IFRS 10, 11, 12 – International Financial Reporting Standards 10, 11 and 12, (“new IFRS”) govern consolidated financial statements, joint arrangements and disclosure of interests in other entities. • Metair has 4 such entities – Tenneco Automotive Holdings SA (Tenneco) 25,1% shareholding – Valeo Systems South Africa (Pty) Ltd (Valeo) 49% shareholding – Hesto Harnesses (Pty) Ltd (Hesto) 74,9% shareholding – Smiths Manufacturing (Pty) Ltd (Smiths) 75% shareholding 6
  • 7. RESULTS OVERVIEW: ACCOUNTING CHANGES • Previous Account Structure – Consolidated • Hesto • Smiths Manufacturing – Associate Line • Tenneco • Valeo 7
  • 8. RESULTS OVERVIEW: ACCOUNTING CHANGES • Current Accounting Structure – Consolidated • Smiths Manufacturing – Associate Line • Tenneco • Valeo • Hesto 8
  • 9. RESULTS OVERVIEW: ACCOUNTING CHANGE EFFECT • No effect – HEPS – NAV • Effected Consolidation – Turnover – EBITDA 9
  • 10. RESULTS OVERVIEW: ACCOUNTING CHANGES • Why the change? The amendment to IFRS 10 now focuses more intently on the assessment of control. Consequently, because of Hesto’s arrangement with its minority shareholder Hesto is no longer consolidated into the Group but equity accounted. 10
  • 11. RESULTS OVERVIEW: ACCOUNTING CHANGES • What arrangements? – The Call Option to increase shareholding – Certain protection rights 11
  • 12. TRADING CHARACTERISTICS FOR THE PERIOD • Continued delivery on our strategy • Sustained local OEM (Original Equipment Manufacturer) demand • Expanded local aftermarket sales • Expanded exports aftermarket sales • Declining non-auto business (mining and utilities) • Margin contraction across all segments • Devaluation of Rand and Lei 12
  • 13. TRADING CHARACTERISTICS FOR THE PERIOD • Rombat fully integrated into Metair • Start/Stop battery technology in the local OE (Original Equipment) market expanded to second customer • Start/Stop facility installed and commissioned in Romania • Manufacturing Excellence expanded to Marketing Excellence • International interest in Start/Stop battery supply (2016) • Fire at Supreme Springs • Strategic decision to increase working capital • Finalisation of Automotive Production and Development Program (APDP) 13
  • 14. MARGIN CONTRACTION • OE Sector – Lag in recovery of exchange rate fluctuations from customers – Delayed/postponed economic recoveries from customers • Non-automotive Market – Demand pressure in mining sector • Aftermarket – Increase in lead premiums and lead scrap pricing 14
  • 15. ROMBAT INTEGRATION • According to plan • Start/Stop facility installed and commissioned • Planned opening of Start/Stop facility by Romanian Prime Minister – 28 September 2013 • Investment assistance support claim submitted • First test batteries produced 15
  • 16. ROMBAT ACQUISITION HEALTH CHECK • Transfer of Associates Complete • Transfer of Technology In progress • Integration Complete • Change Management Complete • Start/Stop facility Complete • Secure subsidy for Start/Stop facility In progress • Expansion of aftermarket footprint Europe In progress • Availability of recycled material In progress • Start/Stop product approval In progress • Secure Start/Stop OE customers In progress 16
  • 17. ROMBAT INTEGRATION Turnover (Lei million) 30 June 2013 30 June 2012 Overall 124 122 Export 63 68 Overall 884 911 OE 277 242 Volume (‘000) • Dacia proved to be a resilient customer in a declining European market • Renault requested Rombat to assist in North Africa 17
  • 18. VISION & STRATEGY 18
  • 19. VISION “To generate value for all our stakeholders by managing and controlling businesses that through manufacturing and/or logistical excellence, deliver quality, cost-competitive products to our customers in a sustainable manner.” 19
  • 20. STRATEGY • Continue to target balance in the business • Nurture Original Equipment (OE) business and expand Original Equipment Manufacturer (OEM) customer base • Focus intently on cost • Secure and grow aftermarket product range • Pursue the acquisition of a complementary business to leverage off our technologies, efficiencies and product range in the aftermarket and non-automotive business 20
  • 21. 3HEADING TO GO STRATEGY X 50% = 100% HERE • 50% of business in OE sector • 50% of business in Aftermarket, Non-auto and exports and • 50% of overall business in batteries 21
  • 22. PERFORMANCE AGAINST STRATEGY 70,0% 60,7% 60,0% 50,0% 39,3% 40,0% 39,1% 30,0% 20,0% 10,0% 0,0% OE Aftermarket * Batteries Actual * Relates to aftermarket, non-automotive and exports 22
  • 23. FINANCIAL REVIEW 23
  • 24. ACCOUNTING CHANGE • IFRS 10 – Hesto a 74,9% subsidiary will now be equity accounted instead of consolidated. – No effect on HEPS 24
  • 25. HEADING TO HIGHLIGHTS FINANCIAL GO HERE June 2013 June 2012 R’000 R’000 2 459 831 2 218 492 EBITDA 375 087 362 441 Operating Profit 274 169 267 144 11,1% 12,0% Profit After Tax 229 102 222 336 Attributable Profit to Ordinary Shareholders 209 457 202 438 Earnings Per Share 143 143 Headline Earnings Per Share 143 143 (53 893) (56 259) - 95 cps ITEM Revenue Operating Income Margin Net Cash including borrowings Dividend per share (gross of WHT/STC) 25
  • 26. GROUP REVENUE / OPERATING PROFIT REVENUE 5 000 OPERATING PROFIT 600 4 603 570 4 500 500 Million 4 000 3 500 400 3 000 2 460 2 500 2 218 300 267 274 June 2012 June 2013 2 000 200 1 500 1 000 100 500 0 0 December 2012 June 2012 June 2013 December 2012 26
  • 27. HEADLINE EARNINGS PER SHARE (HEPS) HEADLINE EARNINGS HEPS 250 160 143 202 140 181 June 2012 June 2013 128 120 cps Million 200 209 143 150 126 100 89 80 100 60 40 50 20 0 0 June 2010 June 2011 June 2012 June 2013 June 2010 June 2011 27
  • 28. HEADING TO GO BALANCE SHEET HERE ITEM ASSETS Non-current assets Property, plant and equipment Intangible assets Other non-current assets Current assets Inventory Trade and other receivables and derivatives Cash and cash equivalents Total Assets EQUITY AND LIABILITIES Capital and reserves Non-controlling interests Non-current liabilities Borrowings Post-employment medical benefits Deferred taxation Current liabilities Trade and other payables Borrowings Bank overdrafts Other provisions and other Total liabilities Total equity and liabilities 30 June 2013 R’million 30 June 2012 R’million 1 234 84 202 1 006 81 177 846 730 433 3 529 677 679 455 3 075 2 127 88 1 699 72 164 29 62 219 25 68 653 56 267 83 1 314 3 529 630 263 30 69 1 304 3 075 28
  • 29. HEADING TO GO HERE INCOME STATEMENT ITEM 30 June 2013 R’million 30 June 2012 R’million 2 460 2 218 520 24 504 21 (270) (258) Operating profit Net interest Share of results of associates 274 (5) 38 267 (2) 45 Profit before taxation Taxation 307 (78) 310 (88) Profit for the period 229 222 209 20 229 202 20 222 Revenue Gross Profit Other operating profit Distribution, administrative and other expenses Attributed to: Equity holders of the company Non-controlling interests 29
  • 30. SEGMENTAL ANALYSIS LOCAL PBIT LOCAL REVENUE June 2013 1 800 June 2012 June 2013 1 658 160 1 600 156 140 1 400 Million 175 180 1 692 June 2012 120 1 200 100 1 000 92 84 80 800 596 600 60 519 40 400 233 30 243 200 20 0 0 13 9% Original Equipment Aftermarket Non-auto 11% Original Equipment 15% 16% Aftermarket 6% 12% Non-auto 30
  • 31. SEGMENTAL ANALYSIS EXPORT PBIT EXPORT REVENUE June 2013 June 2012 June 2013 June 2012 50 300 283 45 250 40 Million 35 200 30 150 150 25 25 20 100 14 15 54 10 51 50 18 16 9 7 5 13% 0 0 Original Equipment Aftermarket Non-auto 19% Original Equipment 9% 10% Aftermarket 1 5% 1 7% Non-auto 31
  • 32. RECONCILIATION OF EBITDA TO PROFIT 400 337 300 229 Million 200 100 38 0 -5 -63 -100 -78 -200 EBITDA before Associates Depreciation & Amortisation Net financing costs Tax expense Associates Profit 32
  • 33. MOVEMENT IN CASH 300 216 227 Million 200 166 100 25 13 0 -100 -200 -68 -37 -54 -156 33
  • 34. OPERATIONAL REVIEW 34
  • 35. WORKING CAPITAL R’million June 2013 June 2012 Dec 2012 Inventory 846 677 755 Trade & receivables 718 678 668 (653) (630) (602) 911 725 821 Inventory 63 56 60 Trade & receivables 53 56 53 (48) (52) (48) 68 60 65 ITEM Trade & payables Total DAYS Trade & payables Total All days calculations based on turnover 35
  • 36. VEHICLE PRODUCTION PER OEM IN SOUTH AFRICA OEM 2009 2010 2011 2012 2013 Actual (6-months) BMW 46 602 49 243 52 908 44 229 37 340 MBSA 44 526 53 646 50 939 61 439 25 692 FMCSA 34 926 34 822 28 716 51 006 27 513 GM 26 412 27 234 32 530 38 199 19 566 NISSAN 32 700 40 184 43 743 54 657 26 682 VW SA 62 341 120 577 137 872 110 864 55 253 TOYOTA 105 928 123 197 153 052 149 252 80 172 723 264 720 968 500 354 158 449 167 500 480 510 614 272 718 Adjustments TOTAL 36
  • 37. ROMBAT OEM PRODUCTION IN ROMANIA & EXPORT MARKET 2008 2009 2010 2011 2012 2013 Actual (6-months) Dacia– Renault 257 332 299 640 341 866 331 018 304 994 184 343 Slovakia Peugeot 8 880 83 566 121 309 137 942 68 160 18 118 Russia Renault Nissan - - - - 38 868 18 957 266 212 383 206 463 175 468 960 412 022 221 418 COUNTRY OEM Romania Total 37
  • 38. 2013 CAPITAL EXPENDITURE Sector R’000 Maintenance Expansion Efficiency Total OE 8 325 30 433 38 758 Aftermarket/Non-auto 4 471 8 264 12 735 Property 1 607 1 140 2 747 14 403 39 837 54 240 Total 38
  • 39. 2013 CAPITAL EXPENDITURE COMMITMENTS* Approved Sector R’000 Maintenance Expansion Efficiency Total OE 38 337 77 895 116 232 Aftermarket/Non-auto 18 067 18 462 36 529 3 374 28 747 32 121 59 778 125 104 184 882 Property Total * Includes authorised but not contracted for and committed capex 39
  • 40. START/STOP BATTERY DEVELOPMENT 40
  • 41. START/STOP BATTERY DEVELOPMENT AND COMMERCIALISATION PROGRAM 1930 – 1981 Oldham GW flooded battery mining cap lamp 1981 Introduction of VRLA AGM battery mining cap lamp 1981 – 1984 Extensive field testing and warranty analysis 1984 Introduction design improvements on VRLA AGM battery mining cap lamp 1992 1 000 000th sales of VRLA AGM battery mining cap lamp 1995 2 000 000th sales of VRLA AGM battery mining cap lamp 1997 Development of first 12V 100Ah VRLA AGM battery 2003 Introduction of first LED VRLA AGM mining cap lamp 2007 Prototype design for first VRLA AGM battery for Start/Stop vehicle 2008 First commercial production of Start/Stop VRLA battery 41
  • 42. START/STOP BATTERY DEVELOPMENT AND COMMERCIALISATION PROGRAM 2008 Design and tested to German Automobile & Industry Association Specification (VDA) 2009 Improved Start/Stop VRLA battery design Additional BMW testing Requested to consider transferring Start/Stop technology to Europe 2010 Start/Stop VRLA battery compliant to VDA and BMW testing requirements Installation of state of the art VRLA production line at FNB Sign Technical Aid Agreement with Rombat on Start/Stop Develop relationship with Rombat 2011 Install state of the art VRLA formation plant at FNB Entered into first negotiations with Rombat 42
  • 43. START/STOP BATTERY DEVELOPMENT AND COMMERCIALISATION PROGRAM 2011 Further develop of relationship with Rombat Conditional supply approval on Start/Stop batteries for German Supply Council 2012 Automechanica SA Innovative Gold Award to FNB for VRLA Battery Acquire Rombat Supply first Start/Stop VRLA batteries to Rombat for Europe market BMW SA give release to supply Start/Stop batteries to BMW Rosslyn plant First delivery of Start/Stop VRLA batteries to BMW Rosslyn Order state of the art Start/Stop VRLA production line for Rombat Sale of 5 000 000 VRLA batteries to date (Including mining cap lamp) 43
  • 44. START/STOP BATTERY DEVELOPMENT AND COMMERCIALISATION PROGRAM 2013 Installed and commissioned a Start/Stop facility at Rombat Obtained approval for second OE customer in SA for supply of Start/Stop batteries from 2014 First international interest in supply of Start/Stop batteries from 2016 Conceptual design of second generation of Start/Stop battery completed 44
  • 45. PROSPECTS 45
  • 46. PROSPECT STATEMENT: MACRO ENVIRONMENT APDP Automotive Production and Development Program (APDP) • Finalised and implement • First quarter review proves the program to be MIDP plus • Duty neutral position for most OEM’s • Secure OE production volumes for SA in future • Local component production incentive range from 4% to 8% depending on product 46
  • 47. PROSPECT STATEMENT: MACRO ENVIRONMENT LABOUR • 2nd week in strike period at all OEM’s • Most suppliers on short-time • OEM offer 3-year wage agreement • 10%; 8,5%; 8,5% • Component industry position currently 5% • 2-week strike period envisaged from component manufacturers (2-weeks in Sept) 47
  • 48. PROSPECT STATEMENT – FOCUS ON ACQUISITION AND KPI’S Metair is intently focused to identifying a suitable acquisition that will support our strategy to ensure delivery on our key performance indicators. KPI’s 1. Pursue Metair strategic path 2. Pursue Africa strategy – 10% of turnover needs to come from Africa 3. Diversification strategy – 10% of turnover must come from new customers or products 4. Organically grow aftermarket, non-auto and export – organic growth in operating profit from these segments to be greater than 20% 5. Deliver on Rombat strategic path – ROE target (12%) for 2013 met or exceeded 48
  • 49. PROSPECT STATEMENT – FOCUS ON ACQUISITION KPI’s continued 6. Expand aftermarket product route to market 7. Ensure forex neutrality 8. Energy strategy – volume adjusted increase in electricity for the group should be less than 15% 9. Employee wellness communication with employees – need to be proactive so that structures and communications process in place before we enter labour negotiations/strike season 10. Implement group IT steering committee and standards 11. Transformation focus, BBBEE, RBH shareholding 49
  • 50. PROSPECT STATEMENT Maintaining ourselves in the coming period is going to be challenging and would require continued demand for local vehicle production and aftermarket products supported by conclusion of economic recovery negotiations. A reasonably stable labour environment without prolonged strikes combined with a currency stability will be desirable. 50
  • 51. Q&A THANK YOU WWW.METAIR.CO.ZA 51
  • 52. DISCLAIMER The information supplied herewith is believed to be correct but the accuracy thereof at the time of going to print is not guaranteed. The company and its employees cannot accept liability for loss suffered in consequence of reliance on the information provided. Provision of this data does not obviate the need to make further appropriate enquiries and inspections. 52