2019 INTERIM RESULTS PRESENTATION, INVESTOR CONFERENCE, SITE VISITS AND COMPANY EXHIBITIONS TAX INTEREST TAX INTEREST PROFIT PROFIT WAGES WAGES SALARIES DIVIDENDS TURNOVER SALARIES DIVIDENDS TURNOVER CASH CSI SPEND CASH CAPITAL CSI SPEND CAPITAL PENSIONS PENSIONS 1
Welcome, introductions, site visit program, agenda and thank you 2 Conference program Wednesday, 14 August 2019 Thursday, 15 August 2019 Friday, 16 August 2019 HESTO HARNESSES INTERIM RESULTS FLIGHT TO EAST LONDON Presentation of Metair’s interim results Presentation on Hesto Harnesses Tour of facilities VIRTUAL TOURS SMITHS MANUFACTURING Rombat (Romania) Presentation on Smiths Manufacturing FLIGHT TO PORT ELIZABETH ABM (Kenya) Tour of facilities Mutlu Aku (Turkey) LUMOTECH TECHNOLOGY PRESENTATIONS Presentation on Lumotech FIRST NATIONAL BATTERY Automotive components Tour of facilities Presentation on First National Battery Battery technology Tour of battery manufacturing and formation facilities Tour of plastics factory FLIGHT TO JOHANNESBURG AUTOMOULD Presentation on Automould OVERNIGHT IN JOHANNESBURG RETURN FLIGHTS Tour of facilities GROUP DINNER 3 2
Interim results agenda Welcome, introductions, thank- you’s and site visit program Salient features of interim results Metair explained Strategic review Financial and operational review Prospects Q & A Supplementary information 4 Key take-aways Good interim result Quality business, people, products All indicators positive All on display Everything by design Structurally well positioned Team approach Company, markets and support systems 5 3
Salient features of interim results 6 Salient features at group level REVENUE Excellent progress increased 19% to R5.3b on delivery of the group strategy 1 st Li-ion line ROIC EBITDA SA automotive investment improved 13.7% concluded 19.4% production Improvement of 2.1ppt expansion Q4 opportunity Consolidated group Continued HEPS Free assessed at increased cash flow strong results B-BBEE 21% to 160c R227m from Level 3 per share international and most South African operations subsidiaries at Level 4 or better 7 4
Salient features: Metair group Continued focus on capital allocation and returns Return of capital to shareholders Improved ROIC performance Total of R244m returned Volume up / value up R199m dividends R45m share buy-backs Operational discipline Well positioned for the future FNB performance on track (10% PBIT achieved) Structural support for growth Manufacturing excellence focus Rombat Li-ion investment in final stages of Export market focus commissioning First Li-Ion starter battery development at -28 degrees Celsius completed 8 Metair explained 9 5
Governance: Definition Metair’s definition of governance: Speaks to the system we designed to direct, grow and control our business; We continuously challenge our approach, design and application in this area; Requires balanced focus on performance and conformance, keeping all stakeholders’ interests in mind. 10 Business design: An institutionalised system bigger than any one person KPIs All MDs GROUP MARKETING CONFERENCE Interpretation of the Metair AUTONOMOUS ANNUAL MDs Budgets Market and Marketing Board SUBSIDIARIES CONFERENCE Excellence GROUP GROUP FINANCE PURCHASING CONFERENCE CONFERENCE Financial and Sourcing Strategies Commercial Drivers Forecasts Specialists COLLECTIVE SYSTEM Shareholder Expectations OUTPUTS Operational Overviews GROUP GROUP HR Strategic Overviews CONFERENCE TECHNICAL Technology Trends CONFERENCE Human Capital Proposed Budget Organisation Technology Shifts Proposed KPIs Final KPIs GROUP Budgets Proposed Capital Expenditure MANUFACTURING Proposed Return Matrix Targets CONFERENCE Manufacturing Capital Expenditure Excellence Group Objectives Annual Performance Expectation Letters INPUTS 11 6
Business design Relevance drivers Design differential Developed and emerging market fit and knowledge Product specification varies according to the model Cost effective solutions for low and mid-size vehicle choice Customer choice Market production volume markets Customer retains the right to change specification AM and export opportunity, low manufacturing cost base Regional distribution networks Manufacturing excellence marked by continuous Fragile products that require significant packaging and improvement mindset High logistical and protection materials Product Cost, quality, delivery and safety track record packaging cost Aesthetically sensitive products OEM localisation opportunity in SA Servicing leading and traditional technology requirements Products degrade over time Blended technology solutions model, covered by own developed IP in energy storage and international licensor Limited shelf life Cannot be easily transported through climate zones Technology know-how agreements for component business due to degradation History of trusted technology transfer and IP protection Commodities used in the manufacture of products Excellent custodians with over 40-year history of multi- Locally available available in local market licensor relationships commodities are Partnerships Partnership of choice for several multi-national licensors and Importing of commodities adds significantly to the preferred customers costs 12 Key businesses: Energy storage vertical KEY BUSINESS AREA IP IN PRODUCT MANUFACTURING KEY OE COMPANY OWNERSHIP AND PRODUCTS DEVELOPMENT PARTNERSHIPS RELATIONSHIPS 13 7
Key businesses: Automotive components vertical KEY BUSINESS AREA IP IN PRODUCT MANUFACTURING KEY COMPANY OWNERSHIP AND PRODUCTS DEVELOPMENT PARTNERSHIPS OE RELATIONSHIPS 14 Strategic review 15 8
Strategic review Metair’s strategy has always been shareholder, Strategy can be challenging but it doesn’t need to be complicated. customer, market and technology driven. In line with the automotive It should connect the dots between how we define winning, the industry principle of tough choices required to differentiate ourselves from the continuous improvement competition…therefore defining our relevance we always review and confirm the strategy on And then about how we enable that strategy as an organisation. an annual basis. 16 Strategic review The Integrated Cascade of Strategic Choices Going through a process that integrated these 5 strategic choices within a single system led to a higher level of intellectual integrity among the leaders of Procter & Gamble in the 2000s. We use the “Cascading Choices” model to design and What is our winning aspiration? cascade strategy. The approach was Where will we play? developed by Dr. Roger Martin and is today acknowledged How will we win in our chosen markets? as global best practice. What capabilities must be in place for us to win? What management systems are required? Source: Playing to Win: How Strategy Really Works 17 9
Strategic review Redefine the game Redefine the playground fast Pressure is high, but we lack The market is rapidly changing? resources and capabilities: For us, that’s a crest of opportunity! The appropriate act fast and radical. Stop the strategic response External Trends bleeding and reinvent our depends on the level core of change expected, STRATEGIC RESPONSE considering our relative internal Redefine cost structure Redefine the strength which and operations business model enables us to lead the There ’s a lot of homework to do, We are in a comfortable position, change. but we still have time. However, but don’t rest – use our position slow change is on the horizon, so better to prepare for the future. get ready. weak Internal Context strong 18 Strategic review: Energy storage vertical Redefine the game Redefine the playground fast The market is rapidly changing? For Pressure is high, but we lack us, that‘s a crest of opportunity! resources and capabilities: act fast Leverage our strengths to design and radical. Stop the bleeding and reinvent our core the future External Trends Strategic Response Redefine cost structure Redefine the and operations business model We are in a comfortable position, but There‘s a lot of homework to do, but don‘t rest, use our position to prepare we still have time. However, change is for the future. We care about the on the horizon, so better get ready. current business model whilst Improve the performance of your slow exploring new current business model business models weak Internal Context strong 19 10
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