Nedcor Securities Midcap Conference 27 February Gerrit Pretorius Reunert CEO

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Norman Blankenship
6 years ago
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1 Nedcor Securities Midcap Conference 27 February 2006 Gerrit Pretorius Reunert CEO

2 Fact sheet Market Cap P/E Ratio EY DY Revenue FY05 EBITDA margin HEPS FY05 DPS Dividend cover R12,3 billion 15,7 6,37% 3,48% R7 billion 13,7% 406 cents 222 cents 1.84

3 Group Structure Reunert ELECTRICAL ELECTRONICS ELECTRICAL ENGINEERING OFFICE SYSTEMS CONSUMER PRODUCTS & SERVICES REUTECH TELECOMMUS ATC Nashua Nashua Mobile Fuchs Sietel African Cables Finance Saco Systems RDI Acuo CBI Kopano RC&C Holdings RDL RRS

4 Growth Prospects Infrastructure

5 Mining expansion Platinum Anglo (projects include PPRust & Marikana) 05: R4,4billion 06: R5,5billion Impala (projects include: Rustenburgt, Polokwane & Zimbabwe) 05: R2,0billion already spent 06: R2,5bn 07: R2,4bn 09: R2,0bn 10:R0,9bn Gold Goldfields (projects include: Driefontein & Kloof) 05: R4,5bn

6 Residential growth Low cost housing Constructed to date 2 million Still required 3,4 million households Each home requires A switchboard & breakers Cabling to connect it to the grid Electricity Appliances TV HiFi/Radio

7 Utilities an example of capex spending 03/04 04/05 05/06 Total R217m R469m R675m Power Cable (Rm) R50m + R150m + R150m

8 2010 Soccer World Cup SAFA to spend R5billion on dedicated infrastructure R3billion set aside over next 3 years New stadiums Mbonbela Port Elizabeth Kings Park (Rebuilt) Cape Town Polekwane Upgrades FNB Ellispark Loftus Rustenburg Bloemfontein More cables & circuit breakers

9 African Cables Strong order book Weeks Capacity constraints addressed To date R9 million Approved R32 million Requested R30 million

10 ATC Growing demand from industry Second Network Operator? Telkom spend African demand Aberdare exited telecom cables Growing demand for optical fibre cable Industry Africa (Botswana, Mozambique, Nigeria) SNO Sufficient capacity

11 CBI Local Residential & Mining are strong Industrial subdued New ventures (Motor Control, etc) Still slow International Australia expected to develop quickly Europe investments are paying off Capacity Approved R50 million Requested R50 million

12 Consumer & Business Environment

13 Consumer & Business Environment Characterised by Relatively low interest rates Relatively strong currency More entry level consumers Traditional business Top end market Selling premium products Strong corporate presence Repositioning Access more consumers From LSM6 and upwards To that effect RLO has Introduced more brands Increased its retail presence Diverted some of its advertising spend = target market has increased from 3,4m to 11m customers Deflation Exchange rate Chinese manufactured goods

14 Panasonic

15 Price deflation Leader model prices Dec 04 Dec 05 % price drop Camcoder R3 499 R % Digital still camera R1 999 R % Plasma R R % Television R999 R799 20% VCR R699 R549 21% Audio Home Theater R799 R599 25% DVD R399 R299 25% DVD Recorder R2 999 R % Exchange rate $ price deflation

16 Turnover Business Systems vs Consumer Products Value 03/04 Value 04/05 Value Forecast 05/06 Systems 33% 30% 28% (Panasonic) Consumer 67% 70% 72% (Panasonic, Futronic & Akai) Total 100% 100% 100%

17 Turnover Consumer Products Value 03/04 Value 04/05 Value Forecast 05/06 Unit Growth Y-o-Y Panasonic 79% 81% 81% 35% more units sold Akai - - 4% 42% more units sold Futronic 21% 19% 15% 100% 100% Akai introduced FY2006 Futronic enormous price reductions per unit Panasonic strong entry in photographic industry

18 Nashua

19 Nashua Office Automation Strong volume growth Nashua Kopana >25% of sales Penetration of segment 5 Major player in colour printers Nashua Broadband transferred to Nashua Mobile Acquisition of software analysis capability

20 Nashua Finance Financing assets sold by Reunert group of companies Book over R1,1 billion RLO s equity portion R150 million (10%) RLO s risk R150 million Funding provided by RMB, ABSA & Nedcor For R1,35 billion For 5 years Subject to 5 year notice draw down

21 Nashua Mobile Current subscriber base (FY05) (Feb 06) Vodacom & MTN agreements signed 5 year duration Tough performance targets Cell C No change Valid for + 10 years New services Internet SP acquired Nashua Broadband VOIP Nashua Connect (SMS s 10,8 m in Jan 06) Growing retail presence 15 (Jan 04) - 52 (Jan 05) Increased number of upgrades via this channel To open + 36 additional stores during 2006 Vodacom 41% Nashua Mobile Base (Feb '06) Cell C 6% MTN 53%

22 Telecommunications

23 Mobile Capital Expenditure Vodacom R3 billion pa 80% SA network 83% subscribers in SA 91% of revenue from SA MTN R6 billion pa 25% of spend on SA operations International revenues growth rate of 88% pa 40% of total revenue 61% of subscribers Will this continue? yes

24 Fixed Line Communications in SA Bandwidth For a competitive South Africa bandwidth needs to be Bigger Faster Cheaper Investment is needed We can supply

25 Second Network Operator Roll-out Public Switched Telephone network Access, switching, international gateway & transmission Transmission network Nearly completed R200 million for phase 1 Network cost between R2 billion and R3 billion To complete network between R9 billion and R12 billion next 5 to 7 years Business customers To compete on service

26 Siemens Telecommunication Deflation

27 Defence

28 Reutech RDI Airborne radio contracts secured New SA Army radio development well advanced RDL Long term contracts provide stable base Awaiting adjudication of RCC & Gautrain fair collection systems RRS Completed development of slope stability radar Awaiting production order from Anglo American Significant potential Fuchs Electronics Subdued world markets and rand strength negatively affecting Not expected to improve soon

29 Streamlining Reunert Reunert Electrical Engineering Services Investments CBI Electric Nashua Sietel Protection Equipment Motor Control Factory Automation Wiring Accessories Meters Transformers & MV Power Cables Telecom Cables Telecom Cables Office Automation Telecom Services Consumer Electronics Financial Services Asset Tracking Reutech

30 = + +

32 Thank you

Mobile market dynamics. Telkom SA Limited Analyst day

Mobile market dynamics. Telkom SA Limited Analyst day Mobile market dynamics Telkom SA Limited Analyst day Disclaimer This presentation has been prepared and published by Vodacom Group (Proprietary) Limited. Vodacom Group (Proprietary) Limited is a private