Zimplow Holdings Limited FY2013 financial results' presentation

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Information about Zimplow Holdings Limited FY2013 financial results' presentation
Investor Relations

Published on March 7, 2014

Author: AfricanisCool

Source: slideshare.net

Description

Zimplow Holdings Limited FY2013 financial results' presentation

ANALYST BRIEFING

AGENDA Zondi Kumwenda Chief Executive Officer • Francis Rwakonda Finance Director Strategic and Operational Overview Zondi Kumwenda • • Financial Overview Francis Rwakonda Future Outlook Zondi Kumwenda

STRATEGIC AND OPERATIONAL OVERVIEW Zondi Kumwenda

OUR MISSION To provide agricultural, mining and infrastructural engineering solutions through internationally acclaimed dominant brands.

OUR VALUES We pride ourselves on values based on integrity, teamwork, wisdom and positivity... these are our pillars which will serve as a basis for all our actions. INTEGRITY – Act honestly, responsibly and respectfully towards others at all times TEAMWORK – Trust, support and motivate each other to increase the company’s ability to deliver value to its customers. WISDOM – Work on the ability to discern what is true, right and lasting. POSITIVITY – Envision the future and focus efforts on services, excellence and competitiveness. Create value and optimism and make a difference to both the customers and the employees. SAFETY – We commit to provide a healthy and safe working environment and remind each other to “take care”.

OUR BUSINESS UNITS “ We strive to be our customers’ first choice by establishing long-lasting, fruitful relationships based on trust and mutual respect. ” 1. Significant reduction in the level of borrowings and associated costs by quarter 3. 2. Aim to reduce operating costs in some units and improve efficiencies through the workshops and factories. 3. Improve revenues in the tractor division through asset based finance. 4. Complete the CT Bolts/Tassburg marriage by Quarter

MEALIE BRAND Manufacturer and distributor of agricultural implements PRODUCTS Ploughs, cultivators, planters, harrows, hoes and parts

Manufacturer and distributor of fasteners PRODUCTS • • • • • • • • Mild Steel Bolts and Nuts Mild Steel Hex Sets Mild Steel Studding High Tensile Bolts and Nuts Aluminium Blind Riverts Screws Washer Products Nails and Nail Products

Distributor of mechanised farming equipment PRODUCTS • • • • Tractors: Massey Ferguson, Valtra, Challenger Generators: Perkins, Massey Ferguson Combine Harvesters: Massey Ferguson Implements and Planters: Massey Ferguson, Monosem, Falcon

Distributor of farming equipment. • • • • • PRODUCTS CASE tractors and implements CASE Combine Harvesters Baldan implements TCM Forklifts

Earthmoving and mining equipment PRODUCTS • • • • • • • • Trucks Compactors Draglines Hyster Forklifts Wheel Dozers Wheel Loaders Scrappers CAT Generator sets

OPERATIONS

FARMING – ANIMAL DRAWN BUSINESS UNIT VOLUMES 70,000 34% down 60,000 50,000 28% down 1 % down Units 40,000 30,000 20,000 10,000 - Local implements Export implements Hoes Dec-13 35,449 28,715 39,628 Dec-12 35,782 39,847 60,043

FARMING – ANIMAL DRAWN BUSINESS UNIT VOLUMES (SPARES) 740,000 730,000 720,000 Units 5% up 710,000 700,000 690,000 680,000 Spares Dec-13 Dec-12 735,846 699,469

FARMING – ANIMAL DRAWN BUSINESS Volumes were affected by the following: • • • • Reduced donor activity Low disposable income and the tight liquidity in the market Competition from the East. The wait and see attitude that prevailed in the few months leading up to the election

FARMING – MECHANICAL AND TRACTOR BUSINESS FARMEC - UNIT VOLUMES 160 140 52% down • Service hours down 41% from 31% down 23,803 to 14,091 in 2013 120 • Parts turnover down 14% from Units 100 80 US $ 3.8 million to 3.26 million in 2013. 60 40 70% down 20 0 Tractors Combines Gensets Motorbikes Dec-13 88 1 67 3 Dec-12 127 0 140 10 • Implements turnover down 6% from 2.27millon to 2.12 million in 2013

FARMING – MECHANICAL AND TRACTOR BUSINESS NORTHMEC UNIT SALES 25 • Service hours up 10% from 41% down 20 2,860 to 3,160 in 2013 • Parts turnover up 7% from Units 15 40% down 10 • Implements turnover 5 100% down 0 US $ 201 thousand to US $215 thousand in 2013. Tractors Backhoe loader Implements: Harrows Dec-13 13 0 6 Dec-12 22 1 10 down 6% from 2.27millon to 2.12 million in 2013

FARMING – MECHANICAL AND TRACTOR BUSINESS Volumes and turnover were affected by the continued: • • • • Lack of asset based finance to match the cashflow cycles for farmers Poor land preparation on the farms reduced workshop activity Parts sales turnover negatively impacted by influx of cheap imitation products Deliberate change in business model, from a credit to cash or near cash model.

MINING AND INFRASTRUCTURE BUSINESS BARZEM - UNIT VOLUMES 35 • Service hours down by 43% 182% up from 47,795 to 27,359 in 2013. 30 • Parts turnover down by 12% 25 from US $ 7.48 million to US $ 6.59 million Units 20 15 10 5 0 Earthmoving Liftrucks Gensets Dec-13 17 31 28 Dec-12 21 11 23

MINING AND INFRASTRUCTURE BUSINESS Volumes and turnover were affected by the continued: • Wholegoods unit volumes and sales buoyed by Liftruck and generator sales with lower dollar value than large mining/earthmoving equipment • • • • Service hours and parts turnover negatively impacted by; Decline in the traditional exported labour to Mozambique and DRC Stricter credit control in the second half of the year Low construction activity

FASTENERS BUSINESS UNIT VOLUMES 16,000 • Service hours down by 43% 19% down Units (thousands) 14,000 from 47,795 to 27,359 in 2013. 12,000 • Parts turnover down by 12% 10,000 from US $ 7.48 million to US $ 6.59 million 8,000 6,000 12% down 10% down 4,000 2,000 - 35% down 16% down 28% down Mild steel bolts and nails (kgs) Mild steel bolts(units) HT bolts (units) Screws (units) Factory stock Miscellaneous Dec-13 98,010 4,416,660 2,961,309 11,713,880 288,561 1,087,318 Dec-12 135,780 5,015,898 3,296,441 14,513,968 444,904 1,297,266

FASTENERS BUSINESS (CONTINUED) Volumes and turnover were affected by the continued: • • • • Low disposable incomes Low infrastructural activity within the market Competition from far east Arbitrage opportunities for small traders with very low overheads.

DISPOSALS The motoring division was disposed on 1 June 2013 as it was no longer fitting into the Group strategy and focus. The division made a loss of US $ 682,354 up to the disposal date Due to its size and the strategic thrust of the Group, the Tassburg fasteners division was disposed on 1 November 2013. The division made a loss of US $ 173,722 up to the disposal date

FINANCIAL OVERVIEW Francis Rwakonda

GROUP RESULTS REVENUE FROM CONTINUING OPERATIONS Group operating cashflow 50,000,000 Millions (Us$) 30,000,000 Revenue from continuing operations 20,000,000 10,000,000 Dec-13 Dec-12 Group profit after tax from continuing operations 2,000,000 US $ 1,000,000 Group profit after tax from continuing operations 500,000 Dec-13 (500,000) Dec-12 Dec-13 Dec-12 Group operating cashflow • The 2012 comparative period has been restated for IFRS 5.34 Up 572% 1,500,000 US $ Up 34% 40,000,000 800,000 600,000 400,000 200,000 (200,000) (400,000) (600,000) (800,000) (1,000,000) (1,200,000) (1,400,000) • Group profit before tax up from a loss of US $ 80,660 to a profit of US $ 1,715,897 in 2013

GROUP RESULTS Volumes and turnover were affected by the continued: • Discontinued operations contributed losses after tax of US $ 801,070 and US $ 659,035 in 2013 and 2012 respectively to Group results. • Finalisation of Group restructuring resulted in an additional US $ 572,668 of restructuring costs. • Increase in PBT driven mainly by the following; - Fair value gains on investment properties of US $ 1,239,136 - Net gain on disposal of Puzey and Payne and Bulawayo Steel Products t/a Tassburg of US $ 1,394,548 • Group operating cashflow was $ 549,242 compared to US $ (1,169,650) last year

GROUP AND COMPANY FINANCE COSTS Group interest costs from continuing operations amounted to US $ 956,508 compared to $ 680,284 last year. This was due the high-cost borrowings inherited from the Puzey division, disposed during the year. These expensive borrowings have since been retired. COMPANY FINANCE COSTS 350,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 300,000 250,000 Finance costs US $ US $ GROUP FINANCE COSTS 200,000 Finance costs 150,000 100,000 50,000 Dec-13 Dec-12 Dec-13 Dec-12 Company finance costs were incurred to finance working capital requirements and declined by 75% from US $ 297,851 to US $ 73,357.

STATEMENT OF COMPREHENSIVE INCOME GROUP 31 Dec 2013 31 Dec 2012 39 873 980 29 708 820 Operating profit/(loss) 348 806 2 364 484 Restructuring expenses (572 668) (1 941 388) Gain / (loss) on disposal of subsidiaries 1 394 548 - Fair value gain / (loss) on investment property 1 239 136 (90 000) (82 672) (11 023) Net finance (costs)/income (611 253) (402 733) Profit/(Loss) before tax from continuing operations 1 715 897 (80 660) (82 392) (265 481) Profit/(Loss) after tax 1 633 505 (346 141) Loss from discontinued operations (801 070) (659 035) Profit/(Loss) for the year 832 435 (1 005 176) Non controlling interests (334 535) 192 422 Attributable (Loss)/profit 497 900 (812 754) Revenue Share of loss from joint venture Income tax expense

STATEMENT OF FINANCIAL POSITION • Total assets down by 5% • US $ 557,483 spent on capital expenditure ASSETS • Standing at US $ 7,965,545 in total (long and short term) at better terms than prior year. BORROWINGS • Utilise some of the retained assets from disposed divisions to retire short term borrowings (Refer to Asset held for sale) STRATEGY ON • Replace short term working capital with long term finance to ease pressure on the business units BORROWINGS

STATEMENT OF FINANCIAL POSITION ASSETS GROUP 31 Dec 13 31 Dec 12 13 469 288 14 952 286 5 950 658 6 718 020 27 151 205 31 231 653 3 500 000 - 50 071 151 52 901 959 27 429 365 24 316 977 3 508 276 9 522 812 30 937 641 33 839 789 Long term interest bearing liabilities 1 116 485 18 025 Deferred tax 3 121 494 3 384 251 14 895 531 15 659 894 50 071 151 52 901 959 Property, plant and equipment Other non current assets Current assets Assets classified as held for sale TOTAL ASSETS EQUITY AND LIABILITIES Share capital and reserves Non Controlling interest Total equity Current liabilities TOTAL EQUITY AND LIABILITIES

STATEMENT OF CASHFLOWS GROUP 31 Dec 13 31 Dec 12 549 242 (1 169 650) Tax paid (924 988) (683 334) Net finance costs paid (611 253) (730 649) NET CASH (OUT) IN FLOW FROM OPERATING ACTIVITIES (986 999) (2 583 633) Acquisition of property, plant and equipment (557 483) (351 074) 35 458 51 929 Increases in long term advances - (926) Net cashflows from acquisition of subsidiary - (9 289 198) Net cash inflow from disposal of subsidiaries 422 523 - CASH USED IN INVESTING ACTIVITIES (99 502) (9 589 269) - 11 209 254 8 018 569 621 831 Repayment of Borrowings (5 723 803) - Acquisition of NCI (3 374 495) - Share issue costs - (346 320) Dividends paid - (907 950) NET CASH IN/(OUT)FLOW FROM FINANCING ACTIVITIES (1 079 729) 10 576 815 (Decrease)/Increase in cash and cash equivalents (2 166 230) (1 596 087) (21 225) (66 110) 2 285 715 3 947 912 98 260 2 285 715 Cash (outflow)/inflow from operations Proceeds from disposal of PPE Proceeds from equity instruments of company Increase in Borrowings Effects of exchange rate changes on the balance of cash held in foreign operations Cash and cash equivalents at the beginning of the year CASH AND CASH EQUIVALENT AT THE END OF THE YEAR (net of overdrafts)

FUTURE OUTLOOK Zondi Kumwenda

FUTURE...

TACTICAL PLAN

LASTLY...

QUESTIONS?

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