FINAL RESULTS PRESENTATION for the year ended 31 March 2019 Presented by Arnold Goldstone (Chief Executive Officer)
Agenda 01 First things first 02 The period in perspective 03 Divisional review Capital Equipment Group (CEG) Engineering Solutions Group (ESG) 04 Group financial overview 05 Prospects and strategy 06 Appendix Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 2
First things first Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 3
First things first 1. SARS settlement • SENS announcement 27 September 2018 • R750m full and final settlement – due and payable over four years: › R300m in October 2018 › R100m x 3 payments October 2019, October 2020 and October 2021 (total R300m) › R150m in October 2022 (final) › Fully provided for at 31 March 2019 - R550m in prior years, R200m in FY 2019 • Have paid R450m to date (R150m more than planned) Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 4
First things first (continued) 2. Effect of IFRS changes • IFRS 9 › FY 2018: Decrease in opening retained earnings of R5.6m › FY 2019: not material • IFRS 15: No significant impact • IFRS 16: Coming in next year. Effect on the FY 2019 figures (which will be comparatives next year) disclosed in AFS notes. Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 5
First things first (continued) 3. Cash flow and dividends • Cash generation has been in line with prior year, but tax settlement this year has resulted in higher gearing • Board prefers to conserve cash (improve gearing; market conditions tough; may be acquisition opportunities) • Hence no final dividend declared • Will resume normal dividend policy as cash flow allows • Normal dividend policy is: › 3.50 x dividend cover at interims; and › 2.75 x dividend cover at year end Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 6
First things first (continued) 4. Early retirement of CEO • April 2019 the company announced retirement of the Group CEO (Arnold Goldstone) on 31 December 2019 due to relocation. • Appointment of replacement is imminent • Management strengthened by: › Appointment of CFO (Nazlee Rajmohamed) on 1 July 2018 › New CEO was appointed to BMG (major part of ESG) to free Gavin Pelser to focus on his role of ESG CEO › CEG CEO (Tony Sinclair) employment confirmed post his retirement in July 2019 Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 7
First things first (continued) 5. Revision of write off period of agency (franchise) rights (Other Intangible Assets) • New auditors (EY) appointed in January 2019 • As a consequence of a first-year audit, the application of all accounting policies and estimations were rigorously checked as part of the year-end process • The amortization period of Other Intangible Assets has been reassessed • Resulted in restatement of Retained Earnings at 31 March 2018 of R216m and Assets and Liabilities of R216m Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 8
The year in perspective Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 9
Results at a glance Tough markets, satisfactory results excluding anomalies Revenue ↑ 5% to R10.4 billion Operating profit ↓ 18% to R690 million Headline earnings per share ↑ 93% to 112 cents Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 10
Results at a glance (continued) Profit before tax ↓ 15% to R614 million NAV per share ↑ 7% to 4085 cents TNAV per share ↑ 9% to 3420 cents Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 11
Results at a glance (continued) Share price 21 June 2019 R24.65 40 % discount to NAV 28 % discount to TNAV 3 New acquisitions R331m Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 12
The period in perspective Exchange rate volatility USD to ZAR chart Opening: 11.85610 Closing: 14.34217 17% weaker in 12 months, with volatility Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 13
The period in perspective (continued) Source: SASFIN Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 14
The period in perspective (continued) Source: Stats SA (data as at June 2019) Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 15
The period in perspective (continued) Source: Financial Mail May 2019 Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 16
Divisional review Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 17
Divisional structure Capital Equipment Group Engineering Solutions Group CEG ESG Importer & distributor of agricultural equipment, Leading distributor of engineering consumables construction equipment, forklifts and aftermarket services and provider of engineering solutions replacement spare parts • BMG • Hansen Northmec o OST • New Holland* o Fenner • CSE o Rustenburg Engineering • Doosan o • Joerg Foundry HPE o Belt Brokers • ESP o • • Man-Dirk Landboupart SA Tool • Criterion o Sibuyile • Shamrock o Toolquip & Allied • Kian Ann Group o F&H Machine Tools o • Autobax • Driveshaft Parts • Hyflo * Spare parts Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 18
Revenue contribution by operating segment ( R’m ) ( excluding Head Office ) Chart Title R'million 12 000 10,069 9,620 9,633 10 000 8,816 8,783 8 000 4 831 4 955 5 074 4 484 4 607 6 000 4 000 5 238 4 665 4 559 4 209 4 299 2 000 0 MAR 2015 MAR 2016 MAR 2017 MAR 2018 MAR 2019 52% 48% ESG CEG Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 19
Operating profit contribution by operating segment before forex costs ( R’m ) (excluding Head Office) Chart Title R'million 1200 956 931 912 1000 768 716 800 457 452 426 600 362 374 400 499 486 479 200 406 342 0 MAR 2015 MAR 2016 MAR 2017 MAR 2018 MAR 2019 52% 48% (53%) ESG CEG Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 20
Revenue contribution by region (excluding Head Office) 18% 5% Asia Other South Africa 76% Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 21
Revenue contribution by sector (excluding Head Office) 4% (14%) (16%) 12% (5%) 23% Agriculture & Forestry (11%) Mining Construction Manufacturing & Industry Automotive 16% (63%) (29%) 17% Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 22
DIVISIONAL REVIEW Capital Equipment Group
Review of 2019 Revenue 5% Operating profit before foreign exchange movements 17% • Markets are challenging with major pressure on equipment margins • Good cash generation • Working capital under control • Agriculture • Customer liquidity issues • Value of land (expropriation of land) making it difficult for farmers to gear against farms • Low maize prices • High value of used equipment in the market • Construction • Major construction companies not buying; many in business rescue • Large number of small companies emerging • Bank financing for the sector remains difficult • Forklifts (logistics) • Market stable • Aftermarket spare parts • Holding up Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 24
Review of 2019 (continued) Divisional Performance: • Agriculture • Market share for CaseIH Tractors and Combine Harvesters increased • Retained large portion of the New Holland spare parts business • New equipment business restricted by value of trade ins • Construction • Retained and grown market share in some sectors with volumes up on last year • All construction equipment companies profitable and exceeding last years performance • Forklifts (Logistics) • Forklift import units down for the whole market by 5% (no sales stats available for market) • Profitable and additional investments of R45m to increase long and short term rental fleet • Aftermarket spare parts • S.A. Construction machinery parts business maintained margins and in line with last year • South East Asia performed within expectations under improved market conditions • S.A. Agriculture aftermarket spare parts performed well under the circumstances Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 25
Management structure Chief Executive Officer Tony Sinclair Northmec NHSA Landboupart Doosan HPE Africa CSE Criterion Shamrock ESP Kian Ann MD DH DH MD MD MD MD MD MD MD Johan David Danie Darrel Alex Ross Brenton Marius Andrew Loy van der Merwe Visser van Aswegen Holton Ackron Collard Kemp Schutte Grobler Soo Chew Invicta Holdings Limited | Final results presentation for the year ended 31 March 2019 26
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