Altron Group Interim results to 31 August 2005 by gyvwpsjkko

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									Altron Group
Interim results to 31 August 2005


12, 13 October 2005

Robert Venter            Diane Radley              Norbert Claussen
Chief Executive          Chief Financial Officer   Chief Executive
Altron                   Altron                    Powertech




Agenda



       Financial summary                            Robert Venter
       Subholding company results and highlights
       Segmental analysis
       Share price performance
       Altron interim financial results             Diane Radley
       Powertech interim results                    Norbert Claussen
       Key growth drivers                           Robert Venter




                                                                       1
Financial summary



                                % Change        Aug 05          Aug 04           Aug 03          3yr CAGR
                                                            IFRS restated

 Revenue                            17%        R 6.99bn      R 5.99bn          R 5.06bn               18%

 EBITDA                             11%         R 693m         R 624m           R 517m               15.8%

 Operating income                   14%         R 502m         R 442m           R 329m                24%

 Operating margin                                   7.2%          7.4%               6.5%

 HEPS (cents)                       16%               81             70                63             14%

 RONA                                                24%            16%               16%

 Cash on hand                                   R 875m         R 1.4bn          R 1.6bn

 Employees                                         11 100       11 200              10 500




Subholding company results
(for the six months ended 31 August 2005)


   ■ JSE listed                            ■




            57.9%                          52.1%                                    100%
        ■                                 ■




Revenue:       R 2.9bn   11%      Revenue:     R 1.75bn      23%            Revenue:       R 2.3bn      22%

Op income: R 250m        1%       Op income: R 128m          36%            Op income: R 131m           28%

Op margin: 8.5%          9.3%     Op margin: 7.3%            6.7%           Op margin: 5.7%             5.5%

HEPS:          181c      15%      HEPS:        47c           31%            HEPS:          27c          27%

Cash:          R 564 m            Net debt:    (R 171m)                     Cash:          R 187 m




                                                                                                               2
Subholding company
highlights


Altech                             BTG                                   Powertech
 Autopage / Netstar delivers        Successful integration of              Calidus acquisition increases
 strong performance                 CSH                                    exposure to infrastructure
 Shortfall at NamITech due to       DHS, Nicor Outsource                   spend
 delay in delivery of Flexopress    Processing, TAR acquisitions           Aberdare Telecoms plant in
 printer                            finalised                              PE mothballed
 UEC shows good signs of            Xerox/BDS performance                  Benefiting from increased
 recovery                           stable                                 public and private
 Pamodzi buys 25.01% of             All divisions profitable for first     infrastructure spending
 Altech Data                        time                                   Rebranding exercise
 R155 million profit from           Turnaround in UK operations            underway
 Econet sale                        Further acquisition                    Building and construction
 NamITech WA facility in            opportunities available                industry remain strong
 Lagos, Nigeria commissioned                                               All divisions except Tridonic
 Long-term agreement signed                                                showing growth
 between Autopage and
 Vodacom




Segmental analysis

         Revenue                     Operating income                       Headline earnings



     33%                                    25%                                    38%
                   42%                                                                        45%
                                                      50%
           25%                              25%                                         17%



         Aug 05                              Aug 05                                 Aug 05
      Altech                       BTG                       Powertech, Corporate & Financial




     32%                                      22%                                 35%
                   44%                                 56%                                    50%
           24%                           22%                                       15%



         Aug 04                              Aug 04                                 Aug 04




                                                                                                           3
 Segmental analysis

  Aug 05                                                            Aug 04
                     0%                                                                  -1%
31%                                                               31%
                                            38%                                                               37%




             31%
                                                    Revenue                        33%


Telecommunications           Information Technology      Power Electronics & Multimedia        Corporate & Financial Serv.



  Aug 05                                                            Aug 04
                     -2%                                                                 -1%
                                                                                                             35%
37%                                         38%                  41%




                     27%                                                                  25%

                                            Operating income




 Share price performance

 180
       Market capitalisation
 170                                                   Current         % Change
                   31 Aug 04        31 Aug 05
                                                       7 Oct 05         to date
 160
         ATN           R 3.5bn          R 5.9bn        R 6.3bn            80.0
         ALT           R 3.5bn          R 4.5bn        R 4.4bn            25.7
 150
         BTG           R 1.0bn          R 1.6bn        R 1.6bn            60.0
 140

 130

 120

                                                                                                      % increase
 110
                                                                                               ATN           80.0
 100                                                                                           Elec Ind      56.0
               Rebased to 100                                                                  ALSI          44.6
  90
  Oct-2004         Dec-2004         Feb-2005          Apr-2005          Jun-2005         Aug-2005         Oct-2005

                           Altron   Electronic & Electrical Equipment Index      All Share Index




                                                                                                                             4
Altron interim financial results

   Diane Radley
   Chief Financial Officer, Altron




Group income statement
- highlights


 R million                               Aug 05   Aug 04   % change

 Revenue                                  6 989    5 959    17%

 Operating income                          502      442     14%

 Operating margin                         7.2%     7.4%

 Net investment income                      18       29

 Income from associates                     29        6

 Goodwill adjusted/impaired                 (3)    (134)

 Taxation                                 (201)    (177)    14%

 Attributable to minority shareholders    (122)     (49)

 Headline earnings per share (cents)        81       70     16%




                                                                      5
IFRS highlights



        Straight lining of leases
        Share based payments
        Goodwill amortisation
        Property, plant and equipment
        Foreign operations




Balance sheet highlights

 R million                              Aug 05   Feb 05   Aug 04
 Assets
 Non-current assets                      2 627    2 456    1 880
  Property, plant, equipment               901      848      795
  Goodwill and intangible assets         1 042      928      724
  Rental finance advances                   89      106      128
  Associates and other investments         497      458      136
  Deferred taxation                         98      116       97

 Current assets                          4 409    4 457    4 397
  Inventories                            1 231    1 158    1 165
  Accounts receivable                    2 303    1 779    1 822
   Net cash and cash equivalents          875     1 520    1 410

 Total assets                            7 036    6 913    6 277
 Equity and liabilities
 Total equity                            3 793    3 692    3 287
 Non-current liabilities                   514      714      620
 Current liabilities                     2 729    2 507    2 370
 Total equity and liabilities            7 036    6 913    6 277
 Net asset value per share (cents)        983      968      884




                                                                   6
Cash flow statement



       Changes in working capital - R 369m invested
          Powertech R 30m
          BTG             R 100m
          Altech          R 194m
       Investing activities - R 269m invested
          Calidus         R 32m
          Nicor           R 12m
          DHS             R 85m
          PPE             R 138m
       Loans repaid by BTG on BEE structure - R 200m




Trading statement
update


 Estimate 155% to 165% on prior year

        % change                  Published           Published
                                   Aug 05              Aug 04
        163%                        84c                 32c

 Estimate 120% to 130% on IFRS restatement

        % change                  Published         IFRS restated
                                   Aug 05              Aug 04
        54%                         84c                 55c

       Difference due to reversal of capital loss on Izingwe transaction
       Delivered estimated EPS of 84c




                                                                           7
Powertech interim results

  Norbert Claussen
  Chief Executive, Powertech




Powertech



                                                   %
  R million                    Aug 05   Aug 04
                                                 change
  Revenue                       2 305    1 888    22%
  Operating income                131      103    28%
  Operating margin              5.7%     5.5%
  HEPS                            27c      21c    27%
  Return on net assets         17.8%    14.4%
  Cash on hand                    187      228
  Employees                     5 146    5 155




                                                          8
Powertech
Segmental results

Aug 05                                 Aug 04
                   R 456m - 20%                                    R 377m - 20%


     R 1 849m - 80%                            R 1 511m - 80%


                               Revenue
                   Power Electronics     Telecoms


Aug 05                                 Aug 04
                                                                   R 4m - 4%


     R 131m - 100%                                R 99m - 96%



                        Operating income




Powertech
Segmental results by product (revenue)

      % increase

         (4.5)%        21m
          7.9%        206m
         12.4%        363m                22m
                                          191m
         38.2%        188m                                Tridonic*
                                          323m
                                                          Industrial Group
                                          136m            PT Battery Group
                                                          Transformers*
                                                          Cables
         25.6%        1 536m
                                         1 223m




                      Aug 05             Aug 04          * ABB PTT & Tridonic revenue
                                                         proportionally consolidated




                                                                                        9
Powertech revenues
5-year history


   Rm
  4,500                                                                                  Prop.
                                                                                 consolidation
  4,000
  3,500
  3,000
                                             4 117
                               3 737                                3 740
  2,500                                               3 332
                3 171
  2,000
  1,500
  1,000
                1 523          1 919         2 212    1 764         1 888         2 305
     500
        0
                2001           2002          2003     2004          2005         2006
                                       Half year                     Full year




Eskom / Transnet
infrastructure spend

Combined capex totalling R 160bn announced
Eskom                                                     Spoornet/Transnet
  Will spend R 110bn over next 5 years                        Will spend R 50bn over next 5 years
        R 73bn: Generation                                         R 16bn: Spoornet
        R 12bn: Transmission                                       R 15bn: NPA
        R 16bn: Distribution                                       R 4bn: Petronet
        R 9bn: Corporate / other                                   R 5bn: SA Port Operations
  See demand increasing by 1000MW per annum                        R 10bn: SAA / Non Core
  over next 15 years
                                                              Decades of underinvestment in infrastructure
  Current demand is at ±35,000MW versus capacity              and maintenance
  of ±36,000MW

  Recommissioning of mothballed stations; building            Investment in rolling stock (new and
  new power stations; strengthening of distribution           maintenance); cranes, straddle carriers and new
  and transmission networks; demand side                      container terminals for ports
  management

                                                                                                 Source: Engineering News,
                                         Opportunity for Powertech                                           Financial Mail




                                                                                                                              10
Growth potential from other
industries and customers

    Municipalities and maintenance
        Additional business potential due to the government decree that each municipality
        has to annually spend 3% of its total asset value on upgrades and refurbishments
    Building and construction industry
        Crabtree shows 11% real growth on back of buoyant BCI, despite static prices
        and import competition
        Building and construction industry continues to show strong growth on back of
        R42bn pledge by government for low cost housing
        2010 Soccer World Cup infrastructure upgrades
    Mining and beneficiation industry
        Expansions in platinum and diamond mining (Anglo Plats and De Beers) in
        expectation of continued demand
        Kumba Resources to invest in expansion based on strong demand from China
    Transport investments, Portnet and airport expansions
        Aberdare has already been involved in supplying cable to upgrades of Cape
        Town, Johannesburg and Durban
        Gautrain investment – awaiting detailed requirements




African business
opportunities

    Strong Powertech focus on Nigeria
        Aberdare currently engaging in offering technical assistance at NEPA
        Battery Technologies has firmly established itself as a supplier to Nigerian
        telecommunications industry, V-Mobile in particular
        Nigerian government plans to install 10GW by 2007. As a previous
        supplier, ABB Powertech Transformers expects to compete actively for this
        business
    Next target country is Angola on back of investments in oil capacity expansions
    Crabtree has set up distribution capabilities in African countries and thus
    managed to double its exports
    Southern African Power Pool framework of cooperation
    Over 200 power generation projects planned in African countries e.g.
        Westcor/Inga (>44 GW), Botswana (3.8 GW), North Bank (1.3 GW), Kafue
        Lower Gorge/Zambia (600 MW)




                                                                                            11
Capacity / efficiency investments

                                                                   Investment
    Aberdare Cables
        MV paper cable (increases capacity by 30%)                      R 11m
        MV XLPE cable (doubles capacity)                                R 30m
        SAP ERP system                                                  R 75m
        Copper conform (satisfies 33% of internal requirement)          R 18m
        In-line material control and automated packaging line           R 30m
    ABB Powertech Transformers and DPM (capacity increased by ± 25%)
        SAP implementation                                              R 10m
        Air compressor / winding mandrels                                R 7m
        Core cutting machines                                            R 9m
    Battery Group
        Automotive chargeroom upgrade                                   R 12m
        Industrial factory upgrade                                      R 15m
    Crabtree Electrical Accessories
        Conduit                                                         R 12m
        Moulding machines                                                R 2m
        Tooling                                                          R 3m




Key growth drivers

  Robert Venter
  Chief Executive, Altron




                                                                                12
Key growth drivers for the group



                                Deregulation of the
                                telecoms industry

   Public Sector
(Eskom / Transnet)                                           Mobile telecoms
  infrastructure                                             market in Africa
      spend               Healthy medium-term
                           outlook for Altron

                                                      Conversion to
                  Integrated                      Europay / Mastercard /
                  IT offering                          Visa (EMV)
                                                        standard




Public sector infrastructure spend
- current update



    Capital expenditure plans remain robust with projects worth R28bn
    announced in first 6 months
    Both public and private sector
    Building and construction sector remains strong with greater than 20% growth
    Strong uptake in demand from Eskom and municipalities; still to come from
    Transnet/Spoornet
    First RED introduced




                                                                                   13
Infrastructure spend
- announced value of capital projects




   R bn                                                                       GFCF % y/y
   200                                                                              15

                                                                                    10
   150

                                                                                    5
   100
                                                                                    0

    50
                                                                                    -5

     0                                                                              -10
          93   94    95   96     97     98    99   00     01   02   03   04    05
                          Public Enterprises: Eskom and Transnet
                          Value of announced projects
                          Official gfcf
                                                                              Source: Nedbank




Key growth drivers for the group



                                  Deregulation of the
                                  telecoms industry

   Public Sector
(Eskom / Transnet)                                                  Mobile telecoms
   infrastructure                                                   market in Africa
       spend                Healthy medium-term
                             outlook for Altron

                                                           Conversion to
                    Integrated                         Europay / Mastercard /
                    IT offering                             Visa (EMV)
                                                             standard




                                                                                                14
Deregulation of the telecoms industry
- current update


   Autopage obtains VANS licence
   Autopage signs a 5+5 year service provider and incentive agreement with
   Vodacom on Oct 10. MTN in final stages
   SNO to be operating by early 2006
   Convergence Bill being finalised and likely to legislate for MVNO’s
   Number portability has been promulgated and published in Government
   Gazette – expected introduction mid 2006
   VOIP presents opportunities for growth




Key growth drivers for the group



                               Deregulation of the
                               telecoms industry

   Public Sector
(Eskom / Transnet)                                         Mobile telecoms
  infrastructure                                           market in Africa
      spend             Healthy medium-term
                         outlook for Altron

                                                     Conversion to
                 Integrated                      Europay / Mastercard /
                 IT offering                          Visa (EMV)
                                                       standard




                                                                              15
Mobile telecoms market in Africa
– current update


    NamITech West Africa commissioned, will be producing ±30 million vouchers
    per month – main customer MTN Nigeria
    Econet divested – restraint clauses waived
    Battery Technologies makes major inroads for batteries and rectifiers in
    Nigeria and Africa – main customers Vodacom, V-Mobile
    NamITech EVD solution seeing increasing acceptance – customers include
    Vodacom, Mascom, MTN
    ISIS showing strong growth for ICap Solution – V-Mobile, Vodacom




Key growth drivers for the group



                               Deregulation of the
                               telecoms industry

   Public Sector
(Eskom / Transnet)                                         Mobile telecoms
  infrastructure                                           market in Africa
      spend             Healthy medium-term
                         outlook for Altron

                                                     Conversion to
                 Integrated                      Europay / Mastercard /
                 IT offering                          Visa (EMV)
                                                       standard




                                                                                16
Conversion to Europay /
Mastercard / Visa (EMV) standard
- current update

   EMV impact on group companies:
          BSS for EMV card reader upgrades, ATM’s and BMS for installation of
          upgrades
          ACS for card personalisation equipment, software solutions and
          EFTpos terminals
          NamITech for chip-based cards, card personalisation and software
          solutions
   Despite delays in EMV standardisation implementation, benefits derived by
   group companies year to date is more than R120m
   Order books going forward to year-end is looking promising
   NamITech has signed up large contracts with major banks in SA and in Africa
   NamITech has partnerships with overseas software companies to provide
   added software solutions to banks, i.e. loyalty systems and other card
   lifestyle management systems




Key growth drivers for the group



                               Deregulation of the
                               telecoms industry

   Public Sector
(Eskom / Transnet)                                         Mobile telecoms
  infrastructure                                           market in Africa
      spend             Healthy medium-term
                         outlook for Altron

                                                     Conversion to
                 Integrated                      Europay / Mastercard /
                 IT offering                          Visa (EMV)
                                                       standard




                                                                                 17
 Information Technology
 - current update



        Consolidation in the industry continues to offer opportunities to BTG
        IT market is expected to grow at a rate of 7.4% this year and expected to
        reach R27.5 billion by 2009
        Software continues to be fastest growing with sales growing by 12% in
        2004
        Clear signs of IT market recovery




                                                                                    Source: BMIT




 Information Technology
 - FTSE / JSE IT index

% increase or decrease in
       index value

       60%
                                                        43%
       40%
                                                                             20%
       20%
                                                                      7%
        0%
                  2000       2001          2002         2003         2004    2005
      -20%

      -40%        -31%

      -60%
                             -60%
                                           -64%
      -80%
                            FTSE / JSE Africa IT index Jan 2000 – Sep 2005




                                                                                                   18
Key growth drivers for the group



                              Deregulation of the
                              telecoms industry

   Public Sector
(Eskom / Transnet)                                        Mobile telecoms
  infrastructure                                          market in Africa
      spend            Healthy medium-term
                        outlook for Altron

                                                    Conversion to
                Integrated                      Europay / Mastercard /
                IT offering                          Visa (EMV)
                                                      standard




   Thank you




                                                                             19
  Supplementary slides




Products and services
Altech



            Telecommunications and Wireless Communications – Autopage
            Cellular, Supercall Cellular, Mobile Direct, Mobile Xpress, Netstar, Alcom
            Radio Distributors, Alcom Matomo · Installation and commisioning of
            Motorola two-way radio equipment and systems.


            Multi-Media and Electronics – Arrow Altech Distribution · Distributors of
            a vast range of professional electronic components and products · UEC
            Technologies, MediaVerge Solutions, 3CTV, Global Decoder Logistics
            (GDL) Design and manufacture of satellite and terrestrial digital set top
            decoders.

            Information Technology – NamITech, Altech Card Solutions
            (incorporating ITS, Altech Smart Card, Cardtronics and Card
            Personalisation Solutions) Telecommunications middleware, payment
            systems and solutions, secure solutions and smart card technologies.




                                                                                         20
Products and services
Powertech



            Power Electronics – Aberdare Cables, Alcobre (Portugal), Aberdare Intelec
            (Mozambique), ABB Powertech Transformers, Desta Power Matla, Autotech (Willard
            Batteries, Sabat Battery), Willard DC Power, Dynamic (UK), Crabtree Electrical
            Accessories SA, EPC, Powertech Calidus, Strike Technologies, Whiteleys, Yelland
            Control, Tridonic SA · Medium and low-voltage power cables and cable accessories ·
            Power and distribution transformers · Automotive batteries · DC power systems · Lighting
            control gear · Electrical Accessories · Insulation material

            Telecommunications – Cables de Comunicaciones Zaragoza (Spain), Raytech
            Energy, Lambda Cables, Battery Technologies, Rentech · Fibre optic and metallic
            cables and accessories · Data cable systems · Standby power and rectifier systems ·
            Solar systems.




Products and services
BTG



            Bytes Technology Group – International Operations – Bytes
            Technology Group (UK), Plato Computer Services (UK), BTG
            Botswana, BTG Namibia, BTG Mozambique, BTG Mauritius · Microsoft
            licensing, Systems integration, Microsoft certified solution provider, Consulting,
            Document services, Specialised equipment services, Network solutions and
            maintenance, Corporate internet provider.
            Digital Healthcare Solutions – E-commerce · Business-to-business
            solutions.
            Bytes Technology Group South Africa (BTG SA) – Bytes Document
            Solutions (BDS), Bytes Specialised Solutions (BSS), Bytes Managed
            Services (BMS), Bytes Communications Systems (BCS), Bytes
            Systems Integration (BSI), Bytes Outsource Services (Outsource
            Services), Bytes People Solutions (People Solutions). · Xerox office
            products, Document management services, NCR products for ATM’s, Desktop
            services and support, Remote monitoring of computer facilities, Business
            communications solutions, Network and solutions management, Corporate
            internet provider, Business solutions, Software sales, development,
            implementation and application maintenance, SAP implementation, IT
            infrastructure as well as business application, high quality training and education
            solutions.




                                                                                                       21

								
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