RNM MORGAN STANLEY OFF-PISTE CONFERENCE PRESENTATION 27 SEP 2018 - PowerPoint PPT Presentation

RNM MORGAN STANLEY OFF-PISTE CONFERENCE PRESENTATION 27 SEP 2018 Presented by Arnold Goldstone (Chief Executive Officer)

Agenda 01 Preliminary comments 02 Corporate profile 03 Trading conditions 04 Propects and Strategy 2 Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018

Preliminary comments Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 3

Preliminary comments • Invicta’s financial year is 31 March • About to hit interim period end (30 Sep 2018), therefore figures reflected in slides relate to FY 2018 (Y/E 31 Mar 2018) • Will cover general trading conditions and SARS dispute update Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 4

Corporate Profile Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 5

Capital Equipment (SA) ) • Northmec (Agricultural Machinery) • New Holland* (Agricultural Machinery) • CSE (Earthmoving Machinery) • Doosan (Earthmoving Machinery) • HPE (Hyundai Earthmoving) • Criterion (Forklifts) • ESP (Parts) • 138 dedicated outlets *Equipment sales discontinued. Aftermarket support continues (spare parts) Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 6

Capital Equipment (Kian Ann Group) Kian Ann Engineering • One of the world's largest independent distributors of heavy machinery and diesel engine parts • HQ in Singapore • Subsidiaries in Singapore, Indonesia, China, Canada, United Kingdom, USA and Myanmar • Joint venture in India • Associate in China Kian Chue Hwa Industries • One of Asia’s largest independent distributors of commercial and industrial vehicle parts • HQ in Singapore • Subsidiaries in Indonesia, Thailand and Malaysia • Associate in Myanmar Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 7

Engineering Solutions Engineering Solutions BMG (Bearing Man Group) • Engineering components & technical services o 102 branches o Bearings, Seals, PT , Tools, Fasteners o Drives, Motors, Belting, Field Services o Filtration, Hydraulics, Lubrication, Pneumatics o Hansen • • Man-Dirk Group (incl SA Tool) Tools & equipment o 20 branches & subsidiaries o Recent acquisition for R150m: Forge Group o Toolquip and Allied o Belt Brokers o F&H Machine Tools o Autobax • Automotive o 3 branch network o • OST & Hyflo Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 8

Revenue contribution by operating segment for FY 2018 (Y/E 31 Mar 2018) (excluding Head Office) R’million 12 000 9,633 9,620 9,077 10 000 8,783 8,816 8 000 4,559 4,665 3,955 4,209 4,299 6 000 4 000 5,122 5,074 4,955 4,607 4,484 2 000 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 47% 53% Engineering Solutions Group Capital Equipment Group (48%) (52%) 2018 (2017) Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 9

Operating profit contribution by operating segment after forex costs (excluding Head Office) R’million 1 200 957 956 912 1 000 864 768 800 473 499 486 460 600 406 400 484 457 426 200 404 362 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 53% 47% Engineering Solutions Group Capital Equipment Group (47%) (53%) 2018 (2017) Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 10

Revenue contribution by region FY 2018 (continuing operations only) Africa 5% Asia (6%) 11% (10%) Other 5% (4%) 79% South Africa** (81%) **Target: 50% by 2020 2018 (2017) Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 11

Revenue H1 v H2 12000 10,465 10,460 9,632 9,640 10000 8,799 8000 5 190 5 336 4 783 4 905 4 410 6000 4000 5 270 5 129 4 857 4 727 4 389 2000 0 MAR 2014 MAR 2015 MAR 2016 MAR 2017 MAR 2018 *Restated First Half Continuing Second Half Continuing Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 12

Trading conditions Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 13

Trading conditions South Africa (79% of revenue) • The markets in which Invicta operates: o Mining : Weak in South Africa but improving in rest of world; little new investment in mining (mining charter not finalised yet, uncertainty) o Pockets of growth (e g conveyor business) o Job losses in mining sector (Impala Platinum, Sibanye) o Agriculture: Drought in Western Cape is easing, low maize prices, land expropriation uncertainty o Industrial & manufacturing: Deterioration in activity in South Africa, bottom of cycle? o Earthmoving machinery: o Generally down, although market vol. of excavators up (mining?) o Many construction firm in trouble o Little/no infrastructure investment o Q1 and Q2 CY 2018: negative GDP = recession o Exchange rate volatility o Stimulus package: a positive step Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 14

Trading conditions contd South East Asia (11% of revenue) • Trading conditions improved in for first few months, tapering off • China appears to be cooling down (trade wars?) Africa/Rest of world (10% of revenue) • No change • Growth opportunities Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 15

Prospects Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 16

Prospects • Current trading conditions: • ESG: pockets of growth, but overall markets flat to negative • CEG no meaningful improvement yet • South East Asia continued growth • Benefits of relocations, restructurings and expansions in ESG • e-Commerce • Big focus on • margin improvement and cost control • working capital improvement • cash generation • SARS settlement – negotiations ongoing. SENS announcement when appropriate • Local and international investments, good opportunities in SA • Bottom of cycle? • Secondary listing (table being prepared to list offshore only when right offshore acquisition opportunity presents itself. Put on ice until markets improve?) Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 17

Strategy Invicta’s strategy is to: • Generate healthy cash from existing businesses • Build on the strength of the current businesses • Focus on customer service, value-added distribution and supply chain efficiencies • Diversify the Group’s revenue stream geographically • Acquire businesses that are a strategic fit for the Group • Maintain RONA >20% for each of the underlying businesses • Target real, sustainable growth Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 18

2018 GDP Growth Source: IMF World Economic Outlook, April 2018 Update #NORTHMEC #CSE #NEW HOLLAND #DOOSAN #CRITERION #ESP #HPE Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 19 #LANDBOUPART #CARTCOM #SHAMROCK

Q & A Thank you for your attendance and participation www.invictaholdings.co.za For any further Investor Relations questions please contact: Arnold Goldstone (CEO) arnoldg@invictaholdings.co.za Marlize Keyter (Keyter Rech Investor Solutions) mkeyter@kris.co.za 087 351 3810 Invicta Holdings Limited | RMB Morgan Stanley Off-Piste Conference 2018 20