AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2012
Presentation outline GROUP OVERVIEW OUR STRATEGY FINANCIAL REVIEW DIVISIONAL REVIEW OUTLOOK 2
GROUP OVERVIEW 3
CONTRACT MINING CONSTRUCTION AND FLEET MANAGEMENT INDUSTRIAL AND PLANT RENTAL MINING EQUIPMENT AND LOGISTICS EQUIPMENT Distribution, leasing, Opencast mining services: Distribution and aftermarket: Corporate leasing: aftermarket: • Drilling • Rigid and articulated • Passenger vehicles • Forklifts dump trucks • Blasting • Commercial vehicles • Mobile cranes • Excavator transport • Load and haul systems Value-added services • Port equipment Short-term plant rental Plant leasing Logistics • Agri tractors 4
Market and valuation data Eqstra Holdings Limited (Share code: EQS) General Industrials/ Sector/Sub-sector classification Diversified Industrials Share price (29 June 2012) 695c Market capitalisation R3.0bn Enterprise value R9.5bn Net asset value per share 692c (1.0x price to NAV) EV/EBITDA 3.6x Historic Price/Earnings ratio (HEPS) 9.0x Dividend yield – F2012 dividend 4.0% 5
Salient features (continuing operations) +18.0% +7.9% +35.6% Revenue Operating profit Profit before taxation Jun 2012 Jun 2011 Jun 2012 Jun 2011 Jun 2012 Jun 2011 R8 143m R6 903m R893m R828m R488m R360m +6.2% +12.0% +15.2% HEPS Dividend per share Revenue-generating assets Jun 2012 Jun 2011 Jun 2012 Jun 2011 Jun 2012 Jun 2011 77.2 cps 72.7 cps 28 cps 25 cps R8 884m R7 715m 6
Earnings since listing – all operations 77.2 HEPS 2012 115.9 EPS 77.9 2011 71.5 -21.3 2010 -19.6 12.0 2009 15.1 158.7 2008 170.3 -40 -20 0 20 40 60 80 100 120 140 160 180 Cents per share 7
Group highlights Stakeholder value creation Stakeholder value creation Staff training SHE 15.8m “A” deferred ordinary shares repurchased SED from the Ukhamba Trust 9.0m ordinary shares repurchased as treasury shares during F2012 and 3.3m ordinary shares repurchased post year end and cancelled Dividend of 28 cps, up 12% The divestiture of Eqstra Mining Services (Bucyrus) business unit (EMS) and New Holland Construction distributorship 8
Group highlights (continued) Stakeholder value creation Staff training Staff training SHE Eqstra Technical Training Academy SED • 90 artisans qualified after 4 years of training Operator academies • 2 104 operators trained (2011: 1 620) Eqstra Leadership Academy • 26 managers and supervisors graduated with Wits Business School accreditation Total training spend of R49m (2011: R45m) 9
Group highlights (continued) Stakeholder value creation Safety, Health and Environment Staff training SHE Zero fatalities during the year SED Contract Mining and Plant Rental: LTIFR of 0.18 (2011: 0.16), well below target of 0.39 Bamboo carbon offset project – Leandra, Mpumalanga: • Invested R2.8m, empowering 60 farmers through a partnership with Food and Trees for Africa 10
Group highlights (continued) Stakeholder value creation Socio Economic Development Staff training SHE Ukhamba Trust beneficiaries gained economic SED benefits from the sale of Eqstra shares Level 3 BBBEE rating maintained Eqstralution – programme to assist technical schools to deliver skilled workers to the SA economy: • 10 schools adopted countrywide • 30 learners given apprenticeships at Eqstra 11
OUR STRATEGY 12
Our strategy Business model Geography People Funding Our business model in simple terms... Distribute or buy asset Sell asset Lease or rent out asset Add value to asset 13
Our strategy Business model Geography People Funding Financial gearing is important to us... ...and interest is considered an Long-term operating cost annuity contracts with clients ...therefore profit before taxation is more relevant to us Long-term funding from banks and capital markets Above average returns on shareholders funds 14
Our strategy Business model Geography People Funding We operate in sub-Saharan Africa, the UK and Ireland We plan to increase our penetration into sub-Saharan Africa European expansion is a long-term strategy 15
Our strategy Business model Geography People Funding Training and development is a cornerstone of our strategy Our annual training spend should show meaningful future increases We need highly technically skilled employees that are able to operate and maintain our full range of mobile equipment 16
Our strategy Business model Geography People Funding Maintain a geared balance sheet Further diversification into the capital market Actively manage refinancing and liquidity risk Achieve a staggered maturity profile that allows us to raise 3, 4 and 5-year debt 17
FINANCIAL REVIEW 18
Segmental contributions Revenue Revenue-generating Profit before taxation R8 143 million assets R8 884 million R488 million 17% 24% 24% 28% 45% 50% 31% 26% 48% 2% 5% Contract Mining & Plant Rental Construction & Mining Equipment Fleet Management & Logistics Industrial Equipment 19
Revenue overview Group revenue: R8 143 million (2011: R6 903 million) Benga project in Mozambique reached full production 3 707 2012 CONTRACT Two SA contracts underperformed MINING AND PLANT RENTAL 2011 3 225 Regionalised industrial action experienced Corporate action and restructuring reduced focus 2012 452 CONSTRUCTION Lower equipment demand from the mining sector AND MINING EQUIPMENT 2011 507 Good end-of-lease remarketing revenues FLEET 2012 2 161 Value-add products unit growth of 57% MANAGEMENT AND LOGISTICS 2011 1 911 Core domestic forklift business was resilient despite 1 978 2012 a strong yen INDUSTRIAL EQUIPMENT Good contributions from Heavy Lift and UK operations 2011 1 607 20
Finance costs Rm 2012 2011 % ch EBITDA 2 683 2 343 14.5% Net finance costs (481) (410) 17.3% Interest cover (EBITDA) 5.6x 5.7x Higher average debt levels resulted in net finance costs increasing 17.3% Interest cover ratio remains well above bank covenant level of 3.5x 21
Taxation and earnings per share Rm 2012 2011 % ch Profit before taxation 488 360 35.6% Income tax expense 111 82 35.4% Normal and deferred tax 100 109 Impairment (utilisation) 11 (27) Profit for the year 377 278 35.6% Tax rate 22.7% 22.8% Low tax rate in F2012 due to Benga concession, a 5.8% impact 22
Taxation and earnings per share Rm 2012 2011 % ch Profit before taxation 488 360 35.6% Income tax expense 111 82 35.4% Normal and deferred tax 100 109 Impairment (utilisation) 11 (27) Profit for the year 377 278 35.6% Tax rate 22.7% 22.8% Basic HEPS (cents) 77.2 72.6 6.3% Diluted HEPS (cents) 76.0 69.8 8.9% Basic EPS (cents) 89.4 66.3 34.8% Basic and Diluted HEPS spread will close due to 15.8m “A” deferred ordinary shares repurchased in 2012 23
Shares in issue millions 2012 2011 Opening weighted average shares in issue 419.4 404.9 Conversion of “B” deferred ordinary shares 14.5 Conversion of “A” deferred ordinary shares* 0.8 Purchase of treasury shares** (0.6) Weighted average shares in issue 419.6 419.4 Dilutionary effect of deferred ordinary shares*** 6.5 16.8 Diluted weighted average shares in issue 426.1 436.2 * On 1 Sep 2011, 1 million “A” deferred ordinary shares converted to ordinary shares ** 9.0 million treasury shares acquired *** On 23 Nov 2011, 15.8 million “A” deferred ordinary shares were repurchased and cancelled 24
Group statement of financial position Rm 2012 2011 % ch Revenue-generating assets 8 884 7 715 15.2% Leasing assets 8 755 7 625 14.8% Benga fleet + currency effect, SA and UK forklift fleet growth 25
Group statement of financial position Rm 2012 2011 % ch Revenue-generating assets 8 884 7 715 15.2% Leasing assets 8 755 7 625 14.8% Finance lease receivables 129 90 43.3% Plant leasing 26
Group statement of financial position Rm 2012 2011 % ch Revenue-generating assets 8 884 7 715 15.2% Leasing assets 8 755 7 625 14.8% Finance lease receivables 129 90 43.3% Inventories 811 986 (17.7%) Trade and other receivables 1 567 1 102 42.1% Late payments in Contract Mining and Plant Rental 27
Group statement of financial position Rm 2012 2011 % ch Revenue-generating assets 8 884 7 715 15.2% Leasing assets 8 755 7 625 14.8% Finance lease receivables 129 90 43.3% Inventories 811 986 (17.7%) Trade and other receivables 1 567 1 102 42.1% Cash and cash equivalents 610 191 219.4% EMS proceeds received 28
Group statement of financial position Rm 2012 2011 % ch Revenue-generating assets 8 884 7 715 15.2% Leasing assets 8 755 7 625 14.8% Finance lease receivables 129 90 43.3% Inventories 811 986 (17.7%) Trade and other receivables 1 567 1 102 42.1% Cash and cash equivalents 610 191 219.4% Other assets 717 647 10.8% Total assets 12 589 10 641 18.3% Total equity 2 980 2 688 10.7% Interest-bearing liabilities 7 153 5 571 28.4% Leasing asset growth and working capital investment 29
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