Interim Results Presentation January 2012 Ellies Holdings Limited - PowerPoint PPT Presentation

Interim Results Presentation January 2012 Ellies Holdings Limited

Agenda • Financial highlights • The past six months • Divisional overview • Group overview • Strategy and prospects

Financial Highlights

Financial highlights Financial overview • Revenue R721 m 10.5% • EBITDA R105 m 33.6% • Profit after taxation R62 m 35.6% • HEPS 20.98 cents 38.8% • Cash (R24 m) R49m • NAV per share 217.93 cents 20.7%

The past six months

The past six months Market conditions • Recovery of infrastructural spend • Renewable energy growth and energy saving drive • Market share maintained • Depressed consumer market • Challenging retail environment

Group overview

Group overview Ellies is a leading Southern African manufacturer, wholesaler and distributor of electronic products related to television reception including satellite and terrestrial aerial ranges It is further involved in the manufacture and distribution of domestic and industrial audio electronic and electrical equipment (Ellies and ElSat brand) Ellies has the ability to manufacture, install, project manage and monitor complete self sufficient renewable energy solutions and products in houses, buildings and office parks Through Megatron Federal, Ellies is involved in infrastructural power in the fields of power generation, transmission and distribution

Well established footprint …. LUSAKA HARARE BULAWAYO WINDHOEK POLOKWANE GABERONE PRETORIA NELSPRUIT MAPUTO JOHANNESBURG SWAZILAND UPINGTON BLOEMFONTEIN DURBAN EAST LONDON CAPE TOWN PORT ELIZABETH

Strength differentiators Strength differentiators Gross profit: 41.74%, Operating margin: 13.45% Electronics and Electrical sector benchmarks: GP% average of 33.4% to low of 18.7% Operating margin: average of 12.4% • Excellent product diversification • Leading brand in Southern African electronics market • Business positioned for growth opportunities in Southern Africa • Ability to expand on core competencies • Highly experienced team • Ability to identify market opportunities

Group segmental structure WHOLESALE DISTRIBUTION OF INFRASTRUCTURAL CONSUMER GOODS AND ELECTRIFICATION SERVICES 65% of revenue 35% of revenue 63% of PBIT 40% of PBIT

Essence of Ellies Consumer goods Infrastructural electrification • • Manufacture and sourcing Production and manufacture >10,000 line items 5 production facilities • Packaging • Solution development Ability to package up to Energy efficient telecoms 600,000 units per month • Warehousing • Implementation & maintenance >100,000m 2 warehousing space 80% exports • Distribution • Turnkey project management Just in time deliver Mining houses, telecoms 13 distribution centers • Sales and marketing

Divisional Overview

Divisional contributions Revenue (R’000) Operating profit (R’000) 800,000 120,000 100,000 85,526 600,000 251,098 80,000 38,157 8,270 400,000 60,000 567,036 40,000 466 300 63,204 200,000 60,281 20,000 0 0 2012 2011 2012 2011 Consumer Goods Infrastructural Electrification Consumer Goods Infrastructural Electrification EBITDA (R’000) Segmental operating profit margin (%) 20 120,000 100,000 15 36,810 15 80,000 6,214 10 60,000 13 10 40,000 5 72,180 66,111 11 20,000 0 0 2012 2011 2012 2011 Consumer Goods Infrastructural Electrification Consumer Goods Infrastructural Electrification

Consumer Goods • Continued growth in HD television market • Increased range of domestic electrical products • Retained market share

Infrastructural Electrification • Associated power products • Renewable telecoms solutions • Transformer manufacturing plant • Africa’s mining sector

Statement of comprehensive income R’000 6 months 6 months % 12 months 31 October 2011 31 October 2010 change 30 April 2011 Revenue 721 200 652 562 10.5% 1 316 055 Operating profit 97 032 71 769 35.2% 146 055 Operating profit margin 13.5% 11.0% 22.7% 11.1% Profit before taxation 87 384 66 850 30.7% 133 253 Taxation (25 009) (20 835) 20.0% (39 044) Taxation rate 28.6% 31.2% 29.3% Profit for the period 62 620 45 883 36.5% 94 001 Revenue (R’000) Operating profit (R’000) 1,400,000 150,000 1,200,000 1,000,000 663 493 74,286 100,000 800,000 600,000 50,000 400,000 97,032 721 200 652,562 71,769 200,000 0 0 2012 2011 2012 2011 1 Half 2 Half 1 Half 2 Half

Headline earnings per share 35.00 303 505 691 30.00 270 674 399 192 682 775 Cents per share 25.00 303 505 691 16.30 8.70 11.95 20.00 15.00 20.98 10.00 17.72 15.12 14.47 5.00 0.00 2012 2011 2010 2009 1 Half 2 Half Weighted average shares in issue R’000 6 months 6 months % 12 months 31 October 2011 31 October 2010 change 30 April 2011 Headline earnings for the year 63 682 45 891 38.7% 95 356 Weighted average shares in issue 303 505 691 303 505 691 0% 303 505 691 Basic earnings per share (cents) 21.01 15.16 38.6% 31.49 Headline earnings per share (cents) 20.98 15.12 38.8% 31.42

Statement of financial position - assets ``` R’000 6 months 6 months % 12 months 31 October 2011 31 October 2010 change 30 April 2011 Non-current Assets 326 512 291 190 12.1% 309 553 Property, plant and equipment 91 226 60 824 50.0% 76 584 - Land and buildings 48 825 25 013 95.2% 41 353 - Other 42 401 35 811 18.4% 35 231 Goodwill and other intangible assets 225 472 224 684 0.4% 223 988 Investment in associate 2 358 - - 1 039 Deferred taxation 7 456 5 682 31.2% 7 942 Current Assets 862 750 551 307 56.5% 655 240 Inventories 455 211 367 449 23.8% 358 895 Trade and other receivables 327 765 172 460 90.0% 224 319 Taxation receivable 344 93 269.9% 418 Bank and cash balances 42 973 11 305 280.1% 71 608 Total assets 1 152 805 842 497 36.8% 964 793

Statement of financial position – equity & liabilities R’000 6 months 6 months % 12 months 31 October 31 October change 30 April 2011 2010 2011 Capital and reserves 658 699 547 961 20.2% 596 079 Non-current liabilities 39 283 44 967 (12.6)% 44 059 Current liabilities 454 823 249 569 82.2% 324 655 Total equity and liabilities 1 152 805 842 497 36.8% 964 793 NAV per share (cents) 217.93 180.54 20.7% 196.40 NTAV per share (cents) 143.44 106.24 35.0% 122.81

Statistics 6 months 6 months 12 months 31 October 31 October 30 April 2011 2010 2011 Gross profit % 42% 38% 38% Debt to equity ratio 28% 16% 15% Debt to equity ratio (excl property) 22% 12% 9% Return on Shareholder Funds (ROE) 27% 24% 21% Return on Total Assets % (incl 15% 14% 13% Goodwill) Return Tangible Asset % 21% 23% 20% EBITDA / net interest 13.85 16.05 13.02

Cash flow movement R’000 31 October 2011 Net profit before tax 87 384 Non-cash effects (e.g. Depreciation etc.) 10 462 Taxation paid (2 807) 95 039 Cash flows from Working Capital financing (211 786) PPE – excluding properties (15 340) Properties (7 472) Carbon credit programme (1 763) SkyeVine (3 353) (27 928) Payment of Old Term loans (14 428) New Short term loans obtained 110 083 95 655 (49 020) Cash at the beginning of the year 25 352 Cash at the end of the year (23 668)

Working capital Financial overview Movement in working capital since 30 April 2011: Inventory R96. 3m Accounts receivable R103.4m Accounts payable R(12.0) m Working capital cycle: 202.29 149.85 144.94 Inventory day 197.71 164.63 159.94 Trade receivables days on turnover 72.76 42.31 62.21 Trade Payable days on operating cost 68.18 57.08 77.21

Strategy and prospects

What lies ahead? • Shop within a shop concept for renewable energy • Emphasis in energy saving devices • Domestic electrical product growth

Prospects • Well positioned for DTT • Roll out planned through agreement with Altech UEC • New product development • Renewable energy • Megatron – strong order book • New ventures for Megatron (telecommunication towers, infrastructural data centre facilities etc) Ellies has the ability to expand core competencies and continue to deliver returns and maintain market share

Investment Case Sustainable growth Leading Strong brand geographical name presence Substantial Experienced market Management penetration team Strength Expansion of of balance unique core sheet competencies

Ellies rebranding • Re-engineered the Ellies brand, mission, vision and values • More end-user focused and customer-needs driven • Ellies’ goal to be known as the future of meaningful electrical technology • Fresh new look and feel – simplified brand with which consumers can engage • Revitalised image to bring Ellies into the digital era

Thank you for your attendance and participation www.elliesholdings.com www.ellies.co.za For any further Investor Relations questions please contact: Wayne Samson(CEO) – 011-490-3840 Vanessa Rech (Keyter Rech Investor Solutions): 011-447-8656 Research report: Thebe Stock broking Nowana.Mlungwana@thebestockbroking.co.za