absa bank and jse showcase 11 april 2013. largest independent electrical distributor in sub-saharan...
TRANSCRIPT
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ABSA Bank and JSE Showcase11 April 2013
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• Largest independent electrical distributor in
Sub-Saharan Africa
• Focused on electrical and lighting products
• Supply across all major market segments
• Extensive distribution network across South Africa
Group Overview
Power cablesOverhead line conductors &
equipment
Low voltage products
Lighting & lamps
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Group at a Glance
ARB Holdings Limited
Corporate Electrical Lighting
Electrical Wholesaling
Proprietary Products
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Electrical Wholesaling
• Founded in 1980
• 19 branches across SA (and growing)
• Over 15 000 stock items
• Over 6 000 customers (no customer =>3% of total revenue)
• Well established in industrial, construction, mining, parastatals and public sector
• Annual revenue approaching R2 billion
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Geographic Footprint
1980 1988 2000 2002 2003 2004 2008 2009 2010 2011 2012 20130
2
4
6
8
10
12
14
16
18
20
# of Branches
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Lighting
• Founded in 1991
• Acquired 60% in January 2012
• Over 4 000 stock items
• Over 1 800 customers
• Well established in retail and domestic sectors
• Owned brand
• SABS mark holder
• Recently introduced pre-packed electrical accessories range
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Proprietary Products
ACCC®
Conventional ACSR
Conductor Comparison
Steel Core Composite Core
• Unique, patented technologically advanced products
• Exclusive distribution rights for SADC
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Financial Overview
FY2010 FY2011 FY 20120
20,000
40,000
60,000
80,000
100,000
120,000
140,000
97110
128
Operating profit
FY2010 FY2011 FY 20120
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1 0871 256
1 565
RevenueR’000 R’000
CAGR = 20%pa
CAGR = 15%pa
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Financial Overview
FY2010 FY2011 FY 20120
50,000
100,000
150,000
200,000
250,000
300,000
350,000
200235
307
Gross profit
CAGR = 24%pa
FY2010 FY2011 FY 201226272829303132333435
29.2 30.634.2
HEPS
R’000
Cents FY2010 FY2011 FY 201217%
18%
19%
20%
18.4%
18.7%
19.6%
Gross profit %
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6 Months to 31 December 2012 (excludes acquisition of Elektro Vroomen)
• Revenue
• Gross profit
• Operating profit
• Headline earnings
• Cash generated by operations
• Net asset value
• R1.0 Billion
• R196 million
• R76 million
• R43 million
• R25 million
• R596 million
27%
17%
50%
39%
11%
163%
Ungeared with net cash of R153 million
Interim Results
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Share Statistics
Listing particulars
JSE ticker ARH
JSE listing Main BoardElectronic & Electrical Equipment sector
Net asset value / share 254 cents per share
Share price 540 cents per share
Market cap ±ZAR1.3 billion
cents
Dividend Policy
40% of after-tax profits(i.e. 2.5x cover)
ARB share price has outperformed the JSE All
Share, Industrial and Electronic & Electrical
indices over past 4 years
2-Feb-09
13-Apr-0
9
22-Jun-09
31-Aug-0
9
9-Nov-0
9
18-Jan-10
29-Mar-
10
7-Jun-10
16-Aug-1
0
25-Oct-
10
3-Jan-11
14-Mar-
11
23-May
-11
1-Aug-1
1
10-Oct-
11
19-Dec-
11
27-Feb-12
7-May
-12
16-Jul-1
2
24-Sep-12
3-Dec-
12
11-Feb-13
0
100
200
300
400
500
600
ARH share price
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Prospects – South Africa
Market potential(Source: A review of SA’s electricity sector – January 2013 by Research Channel Africa)
– Eskom requires 420 000 tons of new steel pylons over next 10 years – ACCC can reduce this significantly
– DSM, RMR and 49M – all promote use of CFL and LED lighting – Eurolux
South Africa International benchmark2%
4%
6%
8%
10%
12%
14%
16%
3%
15%
Reserve margin for electricity
Massive ex-pansion re-quired
Older than 35 year design
life
50%
Within design life
50%
Eskom Power Stations
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Prospects – South Africa
Market potential (continued)(Source: A review of SA’s electricity sector – January 2013 by Research Channel Africa)
10 year Transmission Development Plan (R180 billion) - ACCC– R150bn to expand the transmission network, over 12 700km of new lines– R12bn on refurbishing of existing infrastructure
Distribution infrastructure – Overhead Line division– Lifespan of a distribution network = 50 years (SA’s distribution network is 47 years old)– Protracted uncertainty of EDI vs REDs structure resulted in reluctance to invest in
maintenance– Current backlog = R35bn– Need to spend R6.5bn per year (double the current spend)
Electrification programme – Overhead Line and Low Voltage divisions– Budgeted spend = ±R3.5bn per annum– At current rate, will take another 20 years to achieve universal access to electricity
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Europe AsiaAfrica: The Dark Continent
Prospects - SADC
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Experienced management & strongly independent board
Successful in concluding value adding acquisitions
Only listed focused distributor of electrical & lighting products
Proven and robust business models across all segments
Ungeared with R153 million cash on hand (Dec 2012)
Value Proposition
For further information please visit our website:
www.arbhold.co.za