1、Audited Group Resultsfor the year ended 30 November 2009,Value added distribution our core competency,Audited Group Resultsfor the year ended 30 November 2009,1,IntroductionReview of results & operationsDivisional analysisFinancial statements Outlook and conclusion,2,Agenda,Sales down 12% to R2.4bnN
2、HEPS down 19% to 801cDividends reduced 12.5% to R3.50Impact of recessionsales were outside our controldid well to manage matters within our controlStrong balance sheetOptimistic about recovery in H2 2010,Results highlights,3,R 2bn 6300c100%, no controlNov 2009 7.9x Nov 2009 5.6%,2006 R 585m 2007 R 1
3、.4bn R 974m R 791m,Market capitalisationFree FloatP:E ratio 6300cDividend yield 6300cAnnual Trade (to Nov),Market information,4,Major shareholdersAt 30 November 2009,5,Old Mutual32% Abax12 PIC11 Stanlib 7 Peregrine 5 Melville Douglas 4 Sanlam 4 RMB 4 Nedbank Group 483%,Review of results and operatio
4、ns,6,Results highlights,7,Hudacos business is the importation and distribution of branded engineered consumable products generally used in the repair and maintenance of machines Three areas of activity: Bearings and power transmission products Diesel engines & power tools Security equipmentThe conce
5、pt of “value added distribution” is core to our business model,Hudacos business,8,Inventory R600m in 18 warehouses: 4 to 6 month supplier lead times 1 500 international suppliers 250 000 line items,Accounts receivable R350m: 20 000 customers low value transactions rarely sell on tender or contract d
6、ecentralized credit management low concentration of risk,Value add is:Instant availabilityApplication adviceTechnical specificationTrainingCredit provisionTechnically skilled sales & support staff: in focused business units with technical product knowledgewho build and retain customer and supplier l
7、oyalty,Features of value added distribution,9,4-yr CAGR: 28% NHEPS,Value added for shareholders,10,Broad and mostly exclusive product rangeExposure to GDP spending in diversified southern African industrial marketsStrong financial controls Cash generative with attractive dividend yieldAcquisitive,18
8、%,Operating background to the results,11,The recession - what we could not controlSales, out of our hands, declined 12%Volume sales down 15% to 20% (business dependent)Prices up in H1, down in H2 as Rand strengthened,Operating background to the results,12,Mitigating measures taken : Moratorium on ac
9、quisitions Hiring freeze Maintain margins Expense reduction Stock reduction programme Tighten credit management,Operating background to the results,13,What we could control: Gross margins maintained at 39% Expenses down 2% Stock down R183m Debtors days maintained at 45 daysResult: Operating profit t
10、o sales 12.7% RONA 30% Cash on hand up R266m to R335m,Operating profit - 5 year margin performance,14,Divisional Analysis,15,Contribution to Operating Profit (before HO),Divisional contributions,16,Big customers:AmplatsSandvikToyotaEskomImpala Plats.Imperial Auto PartsCash sales,Used for: Repairs Ma
11、intenance Expansion Resale New capex,Main markets:ManufacturingMiningAutomotive,Segmental analysis bearings & transmission,17,Competitors: BMG SKF Altron Siemens Hytec Zest,Project business dried up completelyCustomers scrambled to cut costs as sales fellEvidence of stripping idle equipment for spar
12、e parts,Segmental analysis bearings & transmission,18,Big customers:ValfriraAard Mining Equip.SandvikBuilders WarehouseBell Equipment,Used for: Underground equipment Gen. sets Woodworking Grinding Renovations Boating,Main markets:MiningPower generationBuilding finishingBuilding additionsLeisure,Segm
13、ental analysis powered products,19,Competitors: Caterpillar Cummins Perkins Bosch Hitachi Metabo Yamaha,Segmental analysis powered products,20,Industrial power tool users bought down as order books shrunkEvidence of stripping idle diesel engines for spare parts,Big customers:ADTChubbFNBIndependent i
14、nstallers,Used for: Intruder detection at home and work Access control Video monitoring (CCTV),Main markets: Residential and commercial securityArmed response providers,Segmental analysis security equipment,21,Competitors: ADI Inhep Texacom Sony,Response companies have been removing more equipment t
15、han they are installing,Segmental analysis security equipment,22,Financials statements -Income statement, balance sheet and cash flow,23,Income statement,24,Income statement,25,Income statement,26,Balance sheet,27,One month of sales in H2 08 = R 256m H2 09 = R 207m,H2 09Net Working Cap at 3 months a
16、bout R50m or 10% too high. Will correct itself as sales pick up,Working capital traditionally peaks end of H1 to cope with anticipated increased seasonal demand in H2 - sales are generally split 40:60 between H1 and H2 (2009 49:51)Target working capital at end H2 - range of 2.4 to 2.7 months of sale
17、s,Working capital in months sales,28,One month of sales in H2 08= R256m H2 09= R207m,Accounts payable low R30m as buying cut back in to balance stockholding,Overstocked +/-5% or R35m,Working capital elements in months sales,29,50% of equity = R 590mand Net interest covered 5 times,Unsubordinated Deb
18、t capacity,2009 PBIT R307m/5 = R 61mLong term position = R 33mAvailable for new debt = R 28m 12% pa = R 233mCash on hand= R 335mCapacity= R570m,Balance sheet,30,We import directly 75% of group cost of sales (as do our competitors)On average these cost 17% less in H2 09 than in H1 09We do not take a
19、house view on exchange ratesWe hedge all liabilities and 20 - 30% of ordersDemand not price sensitive in short term.,Exchange rate environment,Import currencies: USD* 35% Euro 45% Yen 15% GBP 5%* Imports from China, Korea etc are priced in USD,31,Hudaco has a hurdle rate of 18% for new investments =
20、 pre tax cost of capital at current interest and income tax levels,Return on net operating assets,32,Outlook & Conclusion,33,2009 sales by market sector,34,Hudaco sales are predominantly driven by GDP activityGDFI adds cream (and adds capacity for future GDP activity)Rand exchange rate has a big imp
21、act on pricingHudaco has investment capacity of about R600m,Reminders,35,Manufacturing & Construction (27%)Demand from manufacturers stabilised towards year endExpect restocking as recovery gets under wayInfrastructure spend (particularly power station building) set to continueOverall growth in 2010
22、 expected to be muted, waiting for mining industry to start expanding,Key markets - outlook,36,Mining (22%)Prices of commodities have recovered substantiallyMiners still wary of another “bubble” in commodity prices and demandSigns that expansion plans are being dusted off but no orders yetMechanised
23、 mining (in gold and platinum mines) expected to grow strongly in medium term,Key markets - outlook,37,Key markets - outlook,38,Security, wholesale/retail & automotive (32%)Job losses of 2009 will continue to impact negatively on consumer spendingJob creation unlikely to start again before H2 of 201
24、0Consumer spending expected to be weak for some time,Outlook for F2010,39,Recovery will be slowOnly gaining momentum across a broad front once employment picks up and the mines start to expandH1 2010 no fireworksH2 2010 will be betterRand exchange rate generally provides its own surprisesAcquisition team strengthened, now a major focus for 2010,Clifford AmoilsGroup Financial Director+27 (011) 345-8203camoilshudaco.co.za,Stephen ConnellyGroup Chief Executive+27 (011) 345-8201sjchudaco.co.za,www.hudaco.co.za,40,Contact Details,
