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ANNUAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2006 PRESENTATION. DATATEC GROUP. Performance Highlights Record revenues of $3 billion with strong growth in all operations Continuing margin expansion drove an acceleration in profits
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ANNUAL RESULTSFOR THE YEAR ENDED 28 FEBRUARY 2006PRESENTATION
DATATEC GROUP • Performance Highlights • Record revenues of $3 billion with strong growth in all operations • Continuing margin expansion drove an acceleration in profits • HEPS strong at 27c (Includes 1.8c from positive Lucent settlement) • EBITDA operating profits of $85 million • Consolidated gross margin percentage expanded by 10% • Year end cash on hand of $172 million • 4th year of continuing improvement in key financial ratios
DATATEC GROUP • Continuing Revenues $2,976B $2,525B FY 2005 FY 2006
DATATEC GROUP • Revenues by Region Europe 36% Asia 6% South America 2% South Africa + ME 3% North America 53%
DATATEC GROUP • Gross Margin – Continuing Operations $338.16M $263.45M FY 2005 FY 2006
DATATEC GROUP • EBITDA – Continuing $85.2M $28.4M FY 2005 FY 2006
DATATEC GROUP • Total Headline Earnings per Share 26.91 3.59 FY 2005 FY 2006 US Cents
DATATEC GROUP • Net Cash $172M $140M FY 2005 FY 2006
Revenue Analysys Mason 2% Logicalis 19% 79% Westcon DATATEC GROUP • Segmental Analysis Gross Margin EBITDA Analysys Mason Analysys Mason 7% Logicalis Logicalis 7% 34% 19% 74% 59% Westcon Westcon
(US$000) • Year Ended • FY 2005 • FY 2006 • Revenue • 2,524,769 • 2,975,635 • Gross Profit • 263,448 • 338,164 • As % of Revenue • 10.4% • 11.4% • Operating Expenses • 234,531 • 249,545 • As % of Revenue • 9.3% • 8.4% • EBITDA (excluding IFRS 2 charges) • 28,917 • 88,619 • As % of Revenue • 1.1% • 3.0% • Operating Profit (excluding IFRS 2 charges) • 11,406 • 72,437 • IFRS2 – Share based payment charges • 501 • 3,468 • Operating Profit (including IFRS 2 charges) • 10,905 • 68,969 • As % of Revenue • 0.4% • 2.3% DATATEC GROUP • Financial Performance - Summary
DATATEC GROUP • Future Outlook • Continuing growth expected across the group, margins stable • Revenue increases should be matched by growth in profits • Moderating macro economic conditions • European performance is improving • Considering a secondary listing on AIM • Distribution of 30 South African cents per share to shareholders
World class portfolio in the international networking sector
WESTCON GROUP • Highlights • Revenue increases $228 million to $2.3 billion. Increases in all geographic regions • Gross margins increase from 7.7% to 8.5%, improved margins in all regions • Operating expenses decrease $5.1 million or by 3.8% from FY 2005 • Significant increases in EBITDA, operating profit and PBT • Americas and Asia Pacific performed above expectation for the year. Europe still slow but an improvement over FY 2005 • New Senior Management hires, recruited General Manager of European Operations • Company generated $37m in cash from operations • New $150 million working capital facility and $40 million second lien term loan
WESTCON GROUP • Financial Performance - Summary
WESTCON GROUP • Revenue Geographic Split (% of revenue) Europe Europe 37% 38% Asia Pacific Asia Pacific 8% 7% 55% 55% Americas Americas FY 2005 FY 2006 Americas remain dominant
WESTCON GROUP • Revenue – Product Vendor Mix % Other Other Security Security Avaya Avaya Cisco Cisco Nortel Nortel FY 2005 FY 2006 Cisco remains dominant vendor
FY 2005 FY 2006 WESTCON GROUP • Gross Profit % 9.0% 8.8% 9.0% 8.5% 8.2% 7.9% 7.7% 8.0% 7.6% 7.3% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Americas Europe Asia Pacific Total Gross Profit increases across all regions
FY 2005 FY 2006 WESTCON GROUP • EBITDA $000’s $66,635 $70,000 $55,273 $60,000 $50,000 $40,000 $30,000 $25,043 $18,368 $20,000 $6,134 $5,228 $10,000 $3,600 $3,076 $0 Americas Europe Asia Pacific Total EBITDA increases across all geographic regions Note: Americas results include US non-operating subsidiaries. Excludes intercompany management fees
WESTCON GROUP • Consolidated Balance Sheet - Working Capital - US GAAP Note: Ratios based on trailing twelve month averages
WESTCON GROUP • Consolidated Balance Sheet – Capitalisation - US GAAP *Includes inter-company loan payable to Datatec which is eliminated in consolidation
WESTCON GROUP • Net Cash / Debt Trend Note: Figures in US dollars. Dollar figure shown for each year represents average (debt) cash balance for year
WESTCON GROUP • Headcount by Region
WESTCON GROUP • Future Outlook • FY 06 gross margin, of 8.5%, was helped by several positive one-off events • Expect organic revenue growth to be in line with our major vendors: 9-12% • Expect profits to grow in line with revenues • Positioned to acquire distribution assets and companies which will strengthen our capabilities and market share in VOIP, Security and Wireless • Transitioning to an organisation based on sales groups which address customer segments such as Voice, Security, etc., while internal staff remain dedicated to pursing the vendor’s initiatives
Client focused approach makes us a dynamic solutions provider
LOGICALIS GROUP • Highlights • Revenues up 60% to $546 million (16% organic growth) • Gross Margin maintained at 20% • EBITDA (before IFRS 2) up 83% to $17.8 million from $9.7 million • Significant recovery in profitability of UK operations • Five acquisitions completed during FY2006 (UK/US) • Cisco Worldwide Enterprise Partner of the Year 2005 • Cisco European Service Partner of the Year 2005 • IBM Beacon award for US Enterprise Partner of the Year 2005 • $60 million new banking facilities established in UK and US
LOGICALIS GROUP • Financial Performance - Summary Trading in FY 2006 has produced results significantly better than FY 2005 Note: Includes inter-company transactions which eliminate on Datatec consolidation * 2005Restated for IFRS2 charges
LOGICALIS GROUP • Revenue - Geographic Split (continuing operations) % of Revenue South America 5% South America United Kingdom 7% 30% United Kingdom 21% Germany Germany 1% 1% 73% 62% North America North America FY 2005 FY 2006 North America remains dominant
LOGICALIS GROUP • Revenue - Segmental Split (continuing operations) Maintenance 6% Professional Services 8% Maintenance 7% 4% ManagedServices ProfessionalServices 8% ManagedServices 6% Product 79% Product 82% FY 2005 FY 2006 Product revenue mix has increased
LOGICALIS GROUP • Revenue - Product Vendor Mix % IBM IBM EMC 25% 39% EMC 3% 3% Others Others 12% 9% Cisco 27% Cisco HP HP 24% 33% 25% FY 2005 FY 2006 IBM product was largest revenue segment
FY 2005 FY 2006 LOGICALIS GROUP • Gross Margin % (continuing operations) 35 31.1 31.0 30 25.2 24.6 25 22.5 21.2 19.4 19.6 20.0 18.3 20 15 10 5 0 UK Germany North South Total America America Overall gross margin down due to business mix
FY 2005 FY 2006 LOGICALIS GROUP • EBITDA ($ million - continuing operations) Strong improvement in the UK with solid performance from the US Note: Excluding group costs
LOGICALIS GROUP • Key Financial Measures Net cash reduction reflects cash cost of acquisitions
LOGICALIS GROUP • Headcount by Region Increase predominantly due to acquisitions
LOGICALIS GROUP • Recent Important Wins
LOGICALIS GROUP • Future Outlook • Improved critical mass from complementary acquisitions • Services continue to gain momentum, especially in UK • Cisco Advanced Technologies growing strongly • Steady growth expected from main system vendors (IBM/HP) • Changes in HP channel strategy squeezing margins • Planning for growth but remaining vigilant to changes in business confidence • Acquisition opportunities being evaluated in US, UK and Germany
Technical, business and management consultingin telecomsand high-tech Contact centre,CRM andchange management consulting • Analysys Research • Telecoms research, publicationsand benchmarking • Analysys Consulting • Strategy consulting and economic modelling inthe telecoms sector ANALYSYS MASON GROUP • Overview • The group offers a full spectrum of business advisory, management consultancy, research and implementation services • Trusted “independent” consultancy operating throughout the world with a direct presence in the UK, Ireland, France, Spain, Italy, USA and Singapore • Analysys Mason’s input has become an indispensable part of any major telecoms initiative • The group employs approximately 320 professional consultants and support staff
ANALYSYS MASON GROUP • Highlights • Revenue for the year rose by 15% to $60 million and EBITDA rose 89% to $6.3 million • Analysys Research increased coverage of networked media and IT content • Analysys Consulting increased US and emerging markets revenues • Mason Communications increased its international revenues, strengthened its position in the UK Public Sector and consulted on one of Europe’s largest outsourcing deals • Catalyst returned to profitability, strengthened its management and internal operations • On a Group basis, AMG continued to make market inroads with divisions successfully bidding jointly on 36 projects worth $6.8 million or more, representing 11% of total revenue.
ANALYSYS MASON GROUP • Financial Performance - Summary
Europe Europe 19% 16% Rest of World 17% Rest of World 8% 1% 1% USA USA UK UK 75% 63% ANALYSYS MASON GROUP • Revenue - Geographic Split % of Revenue FY 2005 FY 2006
ANALYSYS MASON GROUP • Revenue - Segmental Split Catalyst 12% Mason 40% Catalyst 12% Analysys Research 8% Analysys Research 7% Mason 48% Analysys Consulting 40% Analysys Consulting 33% FY 2005 FY 2006
FY 2005 FY 2006 ANALYSYS MASON GROUP • EBITDA - $000 7000 6,223 6000 5000 3,860 3,340 4000 3000 2,442 2,134 2000 1,494 1000 508 637 138 (371) 0 Mason ACL ARL Catalyst Total -1000 Note: Feb 05 figures reflect results for 7 month period from formation in Aug 04. 28 Feb 2006 total figures exclude USD659k of aborted acquisition costs. Certain inter group costs are reported in the total results only
ANALYSYS MASON GROUP • Headcount by Division
ANALYSYS MASON GROUP • Recent Important Wins
ANALYSYS MASON GROUP • Future Outlook • Telecoms/IT environment remains stable • Management is addressing the following business issues: • Emphasis on marketing and growing brand awareness • Focus on margin performance of all business units within divisions • Improve productivity and enhance operational synergies • “Hot” industry themes: • 3G and Next Generation Network technology changes • Digital TV technologies (terrestial, cable TV and satellite) • Convergence of media and communications • Fixed-mobile convergence and triple/quadruple play services • Mergers and acquisitions and private equity interest in telecoms • Privatisations and telecoms market liberalisation in developing economies • Large scale regulatory initiatives in key markets • Government intervention to reduce “digital divide” between rich/poor, urban/rural