EQSTRA Holdings Limited: Macquarie Presentation April 2009
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EQSTRA Holdings Limited: Macquarie Presentation April 2009
HOW DOES EQSTRA TOUCH YOUR LIFE?
HOW DOES EQSTRA TOUCH YOUR LIFE?
Asset Clusters
CONSTRUCTION
AND MININGPASSENGER AND
COMMERCIAL VEHICLES
INDUSTRIAL
EQUIPMENT
100%
AND MINING COMMERCIAL VEHICLES EQUIPMENT
Construction and Mining | continued
Contract Mining and Plant Hire
• Volume demand from customers good
• Platinum accounted for 72% of MCC Contracts revenue
• Excessive rain has negatively impacted productivity
• Plant Hire benefiting from infrastructure projects
DistributorshipsDistributorships
• Captured 12%* market share, 3rd in the market ytd 2009
• Marked slowdown in construction and mining sales
• Obtaining bank financing for customers is challenging
• Right sizing in response to market contraction
Note: * 2008
MCC Contracts Customer Base
Customer Mineral Location End Date
Xstrata Base Metals - Eland Platinum Mine Platinum Brits, North West 09/11
Aquarius Platinum – Marikana Mine Platinum Rustenburg, North West 03/11
Aquarius Platinum – Kroondal Mine Materials Handling Rustenburg, North West Indefinite
Arm/Norilsk Joint Venture – Nkomati
MineNickel
Machadodorp,
Mpumulanga08/14
Lonmin Platinum – Pandora Project Platinum Brits 12/09Lonmin Platinum – Pandora Project Platinum Brits 12/09
Pilanesberg Platinum – Tuschenkomst
MinePlatinum Northam, North West 03/13
Areva / Uramin – Trekkopje Mine Uranium Swakopmund, Namibia 03/19
Tharisa Minerals Chrome Sample Marikana, North West 08/09
Coal of Africa* - Vele Colliery Coal Musina, Limpopo 07/17
Note: * Mining activities to start by Q3 2009
Commodities Outlook
Mineral Outlook
Platinum •Medium term strained linked to automotive and jewellery demand
•Long term fundamentals are strong
•Tenders out in market for open cast mining work
Coal •Investment of R90 to R110 billion required in next 10 to 12 years to build 40 new coal
mines to meet projected domestic, power station and export needs*
•Eskom to increase its coal consumption from 120 million tonnes to 200 million by
2018*
Source: Eskom chief geologist and coal expert, Johan Dempers, Business Day 12/03/09
2018*
•Little excess coal production margin within 10 years*
Uranium •New nuclear reactors set for commissioning between 2013 and 2016 set to drive price
higher
•Market expected to be in a deficit by early part of next decade
Nickel •Large cuts in supply in 2009
•Demand expected to recover strongly in late 2009 or 2010
Iron Ore •Collapse in Chinese and European production
•Uneconomic producers in China and India forced out of business
•Recent rally in spot prices suggest supply and demand equilibrium
Platinum Supply vs. Demand
M Oz
Source: Macquarie PGM Fundamental Report January 2009
Platinum Demand Breakdown
M Oz
Source: Macquarie PGM Fundamental Report January 2009
Domestic and Export Coal Potential
M Tons
Source: Wood Mackenzie, Business Day 12/03/09
SA Construction Equipment Sales Decline
+18.2% yoyUnits
SA market down 41% ytd 2009
SA Construction Market Share 2007 vs 2008
12% market share ytd 2009, 3rd* position
Note: Terex and New Holland Construction combined
Asset Clusters
CONSTRUCTION
AND MINING
PASSENGER AND
COMMERCIAL VEHICLES
INDUSTRIAL
EQUIPMENT
100%
AND MINING COMMERCIAL VEHICLES EQUIPMENT
Passenger & Commercial Vehicles| continued
South Africa
• Corporate demand for leasing up significantly due to banking liquidity
tightening
• Selectively leasing to clients based on:
- Good margins
- Financial strength of customer
• Resale values on passenger and light commercial vehicles remain
under pressure, countered by good maintenance fund profits
• Focus on non capital management products
- Accident management, driver training, fine management
Asset Clusters
CONSTRUCTION
AND MINING
PASSENGER AND
COMMERCIAL VEHICLES
INDUSTRIAL
EQUIPMENT
100%
AND MINING COMMERCIAL VEHICLES EQUIPMENT
Industrial Equipment | continued
South Africa
• 35% market share
• Forklifts in operation - 22,496 units
• Rental Fleet - 8,371 units
• 70% of new truck sales went into the rental fleet in February, outright
sale down due to unrealistic bank financing requirements
• Parts sales down, customers holding off on repairs
• Order pipeline good, all rental
United Kingdom
• Government forcing banks to lend, volume of enquiries is up
• Good combination of rental and outright sale
• Market share - 4% of counterbalanced units
• Rental Fleet - 3,766 units
• Covers 65% of UK industrial equipment market
South Africa Forklift Market Decline
+11.1% yoy
Units
SA market down 65% ytd 2009
UK Forklift Market Decline
Unchanged
Units
UK market down 61% ytd 2009
Comparative Share Price Performance
60.00
80.00
100.00
Base (
100)
COMPARATIVE SHARE PRICES: Eqstra Holdings vs Barloworld , Bell Equipment and Sentula Re-based to 100
0.00
20.00
40.00
2008/0
5/1
2
2008/0
5/2
6
2008/0
6/0
9
2008/0
6/2
3
2008/0
7/0
7
2008/0
7/2
1
2008/0
8/0
4
2008/0
8/1
8
2008/0
9/0
1
2008/0
9/1
5
2008/0
9/2
9
2008/1
0/1
3
2008/1
0/2
7
2008/1
1/1
0
2008/1
1/2
4
2008/1
2/0
8
2008/1
2/2
2
2009/0
1/0
5
2009/0
1/1
9
2009/0
2/0
2
2009/0
2/1
6
2009/0
3/0
2
2009/0
3/1
6
2009/0
3/3
0
Base (
100)
Eqstra Barloworld Sentula Bell
Comparative Share Price Performance
80.00
100.00
120.00
Base (
100)
COMPARATIVE SHARE PRICES: Eqstra Holdings vs Impala Platinum , Anglo Platinum, Aquarius & LonminRe-based to 100
0.00
20.00
40.00
60.00
2008/0
5/1
2
2008/0
5/2
6
2008/0
6/0
9
2008/0
6/2
3
2008/0
7/0
7
2008/0
7/2
1
2008/0
8/0
4
2008/0
8/1
8
2008/0
9/0
1
2008/0
9/1
5
2008/0
9/2
9
2008/1
0/1
3
2008/1
0/2
7
2008/1
1/1
0
2008/1
1/2
4
2008/1
2/0
8
2008/1
2/2
2
2009/0
1/0
5
2009/0
1/1
9
2009/0
2/0
2
2009/0
2/1
6
2009/0
3/0
2
2009/0
3/1
6
2009/0
3/3
0
Base (
100)
Eqstra IMPLATS Anglo Platinum Aquarius Lonmin
Comparative Share Price Performance
80.00
100.00
120.00
Base (
100)
COMPARATIVE SHARE PRICES: Eqstra Holdings vs Aveng & Basil ReadRe-based to 100
0.00
20.00
40.00
60.00
2008/0
5/1
2
2008/0
5/2
6
2008/0
6/0
9
2008/0
6/2
3
2008/0
7/0
7
2008/0
7/2
1
2008/0
8/0
4
2008/0
8/1
8
2008/0
9/0
1
2008/0
9/1
5
2008/0
9/2
9
2008/1
0/1
3
2008/1
0/2
7
2008/1
1/1
0
2008/1
1/2
4
2008/1
2/0
8
2008/1
2/2
2
2009/0
1/0
5
2009/0
1/1
9
2009/0
2/0
2
2009/0
2/1
6
2009/0
3/0
2
2009/0
3/1
6
2009/0
3/3
0
Base (
100)
Eqstra Aveng Basil Read
Comparative Share Price Performance
60.00
80.00
100.00
Base (
100)
COMPARATIVE SHARE PRICES: Eqstra Holdings vs GrindrodRe-based to 100
0.00
20.00
40.00
2008/0
5/1
2
2008/0
5/2
6
2008/0
6/0
9
2008/0
6/2
3
2008/0
7/0
7
2008/0
7/2
1
2008/0
8/0
4
2008/0
8/1
8
2008/0
9/0
1
2008/0
9/1
5
2008/0
9/2
9
2008/1
0/1
3
2008/1
0/2
7
2008/1
1/1
0
2008/1
1/2
4
2008/1
2/0
8
2008/1
2/2
2
2009/0
1/0
5
2009/0
1/1
9
2009/0
2/0
2
2009/0
2/1
6
2009/0
3/0
2
2009/0
3/1
6
2009/0
3/3
0
Base (
100)
Eqstra Grinrod
Conclusion
• Global economy expected to deteriorate further
- Expectations for global growth have reduced from 2% to 0.5%
- SA economic growth estimated to be at 0.5%
• Commodities and durable goods sectors badly affected
• Global interest rate cuts will begin stimulate demand in H2 2009
• Market capitalisation of R1.5 billion, NAV of R2.0 billion
Appendix
Consolidated Income Statement | continued
Rm H1 2009 H1 2008 % change
Revenue 4,412 3,314 +33.1
Operating profit 735 635 +15.7
Net finance cost (407) (253) +60.9
Profit before taxation 325 359 -9.5Profit before taxation 325 359 -9.5
Taxation (98) (111) -11.7
Profit after taxation 224 248 -9.7
Basic headline earnings per share
(cents) 85.9 83.3 +3.1
Balance Sheet
Rm H1 2009 June 2008
Intangibles 8 5
PPE 361 353
Leasing assets 7,188 6,550
Other assets 165 192
C&M +21.9%P&C +3.0%IE +0.2%
Other assets 165 192
Current assets 3,245 2,990
Total assets 10,967 10,090
Shareholders’ equity 2,000 1,855
Non-current liabilities 5,019 5,166
Current liabilities 3,948 3,069
Total equity and liabilities 10,967 10,090
Terex and New Holland inventory
Includes CP of R1 616 m
Cash Flow
Rm H1 2009 H1 2008 % change
Cash generated from operations 1,533 1,022 +50.0%
Changes in working capital (881) (937) +6.0%
Cash flow from operating activities 264 (179) +247.5%
Cash flow from investing activities (1,480) (938) -57.8%Cash flow from investing activities (1,480) (938) -57.8%
Cash flow from financing activities 1,206 1,102 +9.4%
Ratios
H1 2009 H1 2008
Operating margin 16.7% 19.2%
ROE 23.3% 27.3%
Net working capital to revenue 19.0% 16.7%
Capital adequacy 18.2% 18.4%*Capital adequacy 18.2% 18.4%*
Interest-bearing borrowings to equity 347.9% 310.2%*
Net cash flow to net debt 18.7% 3.5%
Note: * As per June 2008
Funding position
South Africa - RmFacilities
available
Current
debtFacilities
Long term facility 3,850 3,850 -
Short term facility 1,950 300 1,650(1)
Commercial paper - 1,616(1) -
General banking facility 1,150 639 511
Rest of the world 988 553 435
Total borrowings 7,938 6,908 2,596
• Debt levels increased by R1.2 bn
• Bond issue in 2009 to refinance long term debt
• Capital adequacy down slightly to 18.2%, due to increase in inventories, leasing assets
and trade and other receivables
Note: (1) Stand-by liquidity facility with 18 month notice to support commercial paper.
EQSTRA Holdings Limited: Macquarie Presentation April 2009
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