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altron.co.za

www.altron.co.za. Altron Group Welcome. Dr Bill Venter Chairman. Composition of Altron Board. * Chairman of the committee **Independent. Altron Group Year-end results 2003. Robert Venter Chief Executive. Ongoing for 2003/4 Focus on core assets Efficiencies and cost controls

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altron.co.za

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  1. www.altron.co.za

  2. Altron GroupWelcome Dr Bill Venter Chairman

  3. Composition of Altron Board * Chairman of the committee **Independent

  4. Altron GroupYear-end results 2003 Robert Venter Chief Executive

  5. Ongoing for 2003/4 Focus on core assets Efficiencies and cost controls Selective acquisitions Play role in consolidation of IT industry Ongoing BEE equity and skills development Strategy  • Completed • Simplify structure • Reduce entry points • Divest non-core assets • Selected BEE deals • Globalisation • Succession planning

  6. Corporate activity • Altech sold 40% stake in AAT for R335m • Powertech sold share in Voltex for R130m • Purchase of minorities’ interest and delisting of Powertech – R437m activities concluded in 2003 activities in 2003 • Fintech book securitised – R680m • BTG acquired Plato Computer Services for £22.5m activities post 2003 • BTG signs agreement to buy other 50% +1 share of Xerox SA for R235m • Altech acquires NamITech from Nampak for R559,3m

  7. Corporate activityAcquisitions NamITech • Provide critical mass to Altech’s IT division (R1 bn revenue) • Synergies and enhanced market opportunities • Technology and 15% equity partner – Giesecke & Devrient • Manufacture and supply: • secure tokens (SIM cards, smartcards, magcards) • secure solutions technology • Pamodzi empowerment at 28% Xerox • Enhancement of BTG shareholders’ returns • Direct control and access to the cash flows of Xerox SA to use to BTG’s advantage

  8. Five financial drivers

  9. Management of risk • Impact of continued high interest rates on local economy • Strength of ZAR • Uncertainty around ICT charter • Low visibility in telecoms and IT industries

  10. BEE partners Matomo Power Matla (Mvelephanda) Wiphold Kagiso Ventures Maseco TSS Moakomavi Pambili Koerikai Matomo Pamodzi

  11. Financial highlights R912 million 2003 20% R763 million 2002

  12. Group results at a glance * * listed vehicles 100% 53,5% 54,7% * * ALTRON FINANCE Op income R407m HEPS +28% Cash R1,1bn Op income R183m HEPS +14% Cash R260m Op income R55m HEPS +16% Cash (R87m) Op income R267m HEPS -12% Cash R237m

  13. Altron GroupFinancial results 2003 Diane Radley Chief Financial Officer

  14. Group income statement

  15. Group balance sheet

  16. Group cash flow analysis

  17. Fintech securitisation Rationale • Bank perception of funding competition • Difficulty sourcing appropriately priced bank funding • Increasing conflict of interest in funding non-group business • Non-core business administration of the book Direct benefits • Lower cost of borrowing/ increased efficiency of funding • Off balance sheet • Altron resources freed up, cash moved to centre • Focus on core business

  18. Fintech *Medium term note vehicle

  19. Operating income from power electronics more than doubled Impact of telecoms industry downturn Tax rate increased from 22% to 32% Restructuring of telecoms continues Significant impact from forex Powertech

  20. Segmental review Robert Venter Chief Executive

  21. TelecomsSegment profile SA telecoms service revenue growth • CAGR Group companies • (2001-2006) • Fixed line 7,0% • Cellular 19,2% • Data services 19,6% • Broadband 183,6% • Satellite 21,9% UEC; MediaVerge Aberdare; Battech; Rentech Autopage; Supercall; NamITech; Battech Bytes Tech Networks; Bytes Comm Systems Source: BMI-T, 2003

  22. TelecomsThe way forward • Fixed line • opportunities in Africa • diversification into new markets and products • leverage off relationship with Corning • Mobile • extensive opportunities in SA and Africa • exploit voice telephony gap • expand range of value added services • Convergence of fixed & mobile infrastructure and services • Rightsize infrastructure business (cables) to current demand • Opportunities for large projects in radio emergency services

  23. Power Electronics & MultimediaSegment profile Impact of interest rate on building (1960 – 2005) R000 constant 1995 prices (private and public sector) Ave annual interest rate Prime lending rate Building plans passed Source: Industry insight

  24. Power Electronics & MultimediaSegment profile UEC STB estimated market share (MS) RoW = Rest of World Source: UEC International estimates

  25. Power Electronics & MultimediaThe way forward • Multimedia opportunities – USA, China, India, Brazil • Developed products outside of Irdeto technology (NAGRA and NDS) • Resurgence of demand from cable operators • Continued product development and R&D (more than R80m spend in 2003) • Risk of slowdown in SA power electronics market • due to high interest rates and strong rand • Good demand expected to continue in platinum industry

  26. Information TechnologySegment profile Worldwide IT spending growth (%) 10.8% 10.5% 0,5% - 4,1% 2002 2000 1999 2001 Source: ICT 2003

  27. Information TechnologyThe way forward • Market will remain challenged with niche growth opportunities • SA industry will consolidate and restructure to changed market conditions • BEE remains essential – ICT charter • IT spend still based on ROI calculation • Increased levels of outsourcing

  28. The road ahead The Altron Vision is to build a comprehensive local and international ICT group, offering a full range of services and products. • To achieve this we will: • make selected and appropriate acquisitions to strengthen our product range and offerings • invest in R&D in niche areas where we have established market leadership and which we identify as growth areas • strengthen value chain by maintaining strong customer focus • engender group culture of prudent entrepreneurship while maintaining strong financial controls • continue to add strategic value and direction to group companies

  29. Thank you Questions and answers

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