RMB MORGAN STANLEY OFF-PISTE … Presentation/INVICTA RMB Morgan... · Invicta’s history New Holland Tiletoria, OST Doosan SA, Goldquest Criterion ESP OMSA, Mandirk, MacNeil, Kian
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Group profile
Capital Equipment Group (CEG)
Engineering Solutions Group (ESG)
Building Supply Group (BSG)
• Invicta is an investment holding company, managing
assets of R15 billion at 31 March 2016
• A leading player in the sub-Saharan region in industrial
equip & parts, capital equip & parts, building supplies
• A significant player in SE Asia in equipment and
automotive parts
Shareholding at 31 March 2016
Wiese family 38%
Sherrell family11%
Goldstone family4%
Samuels family3%
Exec Directors 2%
Management & Staff 1%
Treasury 1%
Public 40%
Invicta’s history
New Holland
Tiletoria, OST
Doosan SA, Goldquest
Criterion
ESP
OMSA, Mandirk, MacNeil, Kian Ann
Brands 4 Africa, Hyundai Power Equipment
SA Tool
Sibuyile, Hansen, Hyflo
BMG
- 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
2001
2007
2008
2009
2010
2012
2013
2014
2015
2016
Market capitalisation as at 31 March (R’million)
Group structure
Invicta
Holdings
Invicta
PropertiesInvicta SA
Invicta Offshore
Holdings
Invicta
Treasury
Invicta
Finance
BBBEE &
Staff Trusts
CEG ESGInvicta Asian
HoldingsBSG
Kian Ann
KCHI
HHI (Indo)
API (Indo)
AT (Thai)
BMG
Mandirk
Autobax
Wegezi
OST
SA Tool
Hansen
Hyflo
Sibuyile
Northmec
N Holland
CSE
Doosan
HPE
ESP
Criterion
MacNeil
Tiletoria
B4A
75%25% 100% 100% 100%100%
100%100%60%100%100%
Invicta African
Holdings
BMG Moz
BMG Zam
BMG Tanz
Nova Vida
MRO
Non
- SASA
SA
Capital Equipment Group (SA)
Northmec (Agric Machinery)
New Holland (Agric Machinery)
CSE (Earthmoving Machinery)
Doosan (Earthmoving Machinery)
HPE (Hyundai Earthmoving)
Criterion (Forklifts)
ESP (Parts)
> 200 outlets across SA
Sales analysis31 March 2016
44% (42%)
18% (21%)
4% (4%)
34% (33%)
Agriculture Equip & Parts Construction Equip & Parts Logistics Aftermarket parts
2016 (2015)
NorthmecNew
HollandCSE Doosan HPE ESP Criterion
CEO
Tony Sinclair
Managing
Director
Johan
van der Merwe
Managing
Director
Peter
Askew
Managing
Director
Brenton
Kemp
Managing
Director
Chris
Whitehead
Managing
Director
Brenton
Kemp
Managing
Director
Andrew
Grobler
Managing
Director
Alex
Ackron
Management structure
Capital Equipment (SE Asia)
Kian Ann Engineering
One of the world's largest independent
distributors of equipment spare parts
HQ in Singapore
Subsidiaries in Indonesia, China, Canada
Associates in UK, Myanmar, India
Kian Chue Hwa Industries
One of Asia’s largest independent distributors of
heavy truck spare parts
Subsidiaries in Indonesia, Thailand
• BMG (Bearing Man Group)• Engineering components & technical services
• 168 branches
• Bearings, Seals, PT, Tools, Fasteners
• Drives, Motors, Belting, Field Services
• Filtration, Hydraulics, Lubrication, Pneumatics, Technical Resources
• OMSA – integrated into BMG
• Hansen – being integrated into BMG
• Mandirk Group (incl SA Tool & Sibuyile)
• Tools & equipment
• 22 branches
• Autobax
• Automotive
• Hyflo
• Hydraulics, Pneumatics, Projects
Engineering Solutions Group
Revenue analysis31 March 2016
Strategy of market differentiation by:
• complementing product distribution
with technical expertise
• enhanced through the acquisitions
of Hansen and Hyflo in the year
• African revenue growing as a % of
BMG revenues
• Recent acquisitions have mainly SA-
based revenues
Consumables65%
Engineering35%
South Africa89%
Africa 11%
BMG
(Bearing Man Group)Mandirk Group Autobax Hyflo
Managing Director
Gavin Pelser
Managing Director
Gavin Hall
Managing Director
John Black
Managing Director
Emil Berning
Management structure
MacNeil Tiletoria B4A
Managing Director
Terry Uys
Managing Director
Patrick Thonissen
Managing Director
Antony Wannell
CEO
Neil Malherbe
Management structure
Year to March 2016 at a glance
Revenue EBITDA
R10,636m R1,013m
Operating Profit Attributable earnings
R846m R419m
Earnings per share Cash generated by operations
391 cents R594m
NAV per share Total dividend per share
4 486 cents 142 cents
2%11%
17% 28%
47%
28%
39%
9%
Year to March 2016 at a glance
The markets in which Invicta operates saw difficult trading conditions:
Mining & construction: Dramatically weaker in Africa and South East Asia
Agriculture: Severely impacted by worst El Niño drought on record
Industrial & manufacturing: Deterioration in activity in South Africa
Group restructure completed – simplified and streamlined
Overhead costs well maintained
Working capital well managed despite adverse currency impact
Continued investment in the businesses:
Capex R319m (further capital commitments: R182m)
Acquisitions R114m (R80m plus potential earn-out R34m)
2 563 3 514
5 129 5 270 5 325
3 036
4 044
5 336 5 190 5 311
-
2 000
4 000
6 000
8 000
10 000
12 000
MAR 2012 MAR 2013 MAR 2014 MAR 2015 MAR 2016
R’m
illion
1st Half 2nd Half
5 599
7 558
10 465 10 460 10 636
Revenue
5-yr CAGR = 19%
2 549 3 503
5 122 4 607 4 484
2 742
3 425
3 955 4 209 4 299
308
630
1 388 1 639 1 837
-
2 000
4 000
6 000
8 000
10 000
12 000
MAR2012
MAR2013
MAR2014
MAR2015
MAR2016
R’million
Revenue contribution by segment(excluding Group segment)
43% (44%)
40% (40%)
17% (16%)
CEG ESG BSG
2016 (2015)
5 599
7 558
10 465 10 455 10 620
Revenue contribution by region
77% (76%)
11% (12%)
9% (9%)
3% (3%)
South Africa Africa Asia Other
2016 (2015)
Revenue contribution by sector
29%
23%15%
14%
19%
Construction Agriculture & Forestry Manufacturing & Industry Mining General Trading
2016
Operating profit
* Excluding once-off items
261 315
493 427 422
340
390
550
518
390
179
69
34
-
200
400
600
800
1 000
1 200
MAR2012
MAR2013
MAR2014
MAR2015
MAR2016
Operating profit (R’m)
1st Half 2nd Half Once-off
601
884
1 0431 014
846
10.2% 9.0% 9.6% 8.1% 7.9%
11.2%
9.6% 10.3%10.0%
7.4%
MAR2012
MAR2013
MAR2014
MAR2015
MAR2016
Operating margin (%)
1st Half 2nd Half
10.7%
9.3%*
10.0%
9.0%*
7.6%*
5-yr CAGR = 11%
Operating profit contribution
by segment (excluding Group segment)
2016 (2015)
43% (44%)
48% (48%)
9% (8%)
CEG ESG BSG
247 339
484 457 362
371
390
473 499
406
14
39
67 87
75
-
200
400
600
800
1 000
1 200
MAR2012
MAR2013
MAR2014
MAR2015
MAR2016
R’million
632
768
1 0241 043
843
Earnings
492 535
580 510
388
23
28
64
42
17
22
66
70
74
158 69
31
-
100
200
300
400
500
600
700
800
MAR 2012 MAR 2013 MAR 2014 MAR 2015 MAR 2016
R’m
illion
Ordinary s/h Minority s/h Pref s/h Once-off
515
743710
691
510
Earnings per share
269 312
358 293
207
378
425
430
361
155
218
88
29
-
100
200
300
400
500
600
700
800
900
1 000
MAR 2012 MAR 2013 MAR 2014 MAR 2015 MAR 2016
Cents
1st Half 2nd Half Once-off
647
955
788742
391
Return on Net Operating Assets
(RONA)
32.3%
25.8%
17.5%
32.9%
29.8%
21.8%
32.4%
30.6%
20.8%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
MAR 2014 MAR 2015 MAR 2016
CEG ESG BSG
Additional land
being Acquired19 000m2
Engineering
Assembly
Building9 330m2
Parking Deck6 000m2
BMG Park
Original36 891m2
New CDC
9 206m2
Fluid
Technology
Building9 208m2
BMG World
Executive team and head office support
Executive Deputy Chairman Arnold Goldstone
Group CEO Charles Walters
Group CFO Craig Barnard
CEO – CEG SA Tony Sinclair
Head Office BMG World (Johannesburg
11 people
The Invicta team
Invicta’s strategy is to…
Generate healthy cash from existing businesses
Build on the strength of the current businesses
Focus on customer service, value-added distribution and supply
chain efficiencies
Diversify the Group’s revenue stream geographically
Acquire businesses that are a strategic fit for the Group
Maintain RONA >20% for each of the underlying businesses
Prospects
Improved results in the main areas of the business
GP margin pressure offset by cost and working capital efficiency
Trading conditions expected to remain challenging
South Africa; and
South East Asia
Benefits of relocations, restructurings to start coming through in 2017
Focus of the Group will remain on:
margin management and cost control
working capital optimisation and cash generation
Economic cycle will present acquisition opportunities at reasonable
valuations
Well positioned for the upturn
A leading player in the sub-Saharan region
A strong position in Asia
Experienced management team
Strong supplier networks
Represent world leading brands
Unrivalled distribution networks
Cash generative, fixed asset light
Conservative operational Net Debt:Equity
Good Tangible Net Asset Value underpin
International ambitions
Excellent track record: Sunday Times Top 100 performer – 21 consecutive yrs (record) until 2015
Why invest in Invicta?
Q&A
Thank you for the opportunity!
www.invictaholdings.co.za
Charles Walters (CEO)
charlesw@invictaholdings.co.za
(011) 620-7300
For any Investor Relations queries please contact:
Marlize Keyter (Keyter Rech Investor Solutions)
at mkeyter@kris.co.za or on 087 351 3810
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