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www.altron.co.za. Altron Group Year End Results 2004. Robert Venter Chief Executive. Altron Group. *. Revenue: R10 bn Market cap: R3.3 bn Employees: ± 11 000. *. JSE listed . *. *. Based on share prices as of 7 May 2004. Products and services. Companies per segment. Information

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Altron co za

www.altron.co.za


Altron co za

Altron GroupYear End Results 2004

Robert Venter

Chief Executive


Altron group

Altron Group

*

Revenue: R10 bn

Market cap: R3.3 bn

Employees: ± 11 000

*

JSE listed

*

*

Based on share prices as of 7 May 2004


Products and services

Products and services


Companies per segment

Companies per segment

Information

Technology

Telecoms

Power Electronics

& Multimedia


Key financials

Key financials

* Excluding surplus from Benefit Fund in prior year


Group highlights

Group highlights

  • Increased HEPS under strengthening rand environment

  • Cash increased to over R2bn

  • Dividend increased by 21%

  • 12 month share price appreciation of 48%

  • Key acquisitions concluded (Xerox SA, NamITech)

  • Pre-empted ICT charter with substantial BEE deals announced

  • Vision 2010 approved by board

  • Divestitures continue to focus group

  • Major orders secured including R500m SAPS 2-way digital radio system for Gauteng


Group results at a glance for the twelve months ended 29 february 2004

Group results at a glance(for the twelve months ended 29 February 2004)

Op income: R 718m

*HEPS: 2%

Op. margin: 7.1%

■ JSE listed

53,4%

100%

54,6%

■■

Altech

BTG

Powertech

Op income

R 333m

Op. margin

8%

*HEPS -6%

Op income

R 185m

Op. margin

7.1%

*HEPS 27%

Op income

R 207m

Op. margin

6.2%

*HEPS 12%

* HEPS: Adjusted HEPS for the year excludes benefit fund surplus


Summary of key strategic philosophies

Provide shareholders with above average growth and dividend returns

Be market share leaders in our focused sectors

Target 25-30% of revenue to come from non-rand currencies

Navigate BEE landscape and ICT charters

Provide decentralised management culture and encourage entrepreneurship

Maintain family control and influence

Summary of key strategic philosophies


Corporate activity

Corporate activity

Activity

BTG acquires 50% of Xerox SA

BTG sells 27% of BTG to Kagiso*

Altech acquires 85% of NamITech

Altech sells 28% of NamITech to Pamodzi

Altech sells 30% of Alcom Matomo to Matoma

Powertech sells 25.1% of Battech to Kagiso

Powertech sells 30% of Aberdare Cables to Izingwe

Altech sells 25.01% of Altech Data to Pamodzi

Effective date

1 June 2003

1 June 2004

1 March 2004

1 March 2004

1 December 2003

1 March 2004

1 March 2004

31 May 2004

Valuation

R235m

R228m

R526m

±R180m

±R7m

R19m

R165m

±R50m

* Subject to shareholder approval


Share price performance

Share price performance

Cents

2

1

3

4

2

1

3

4


Hard currency revenues

Hard currency revenues

R million

Revenue from foreign operationsExports

Note: 1998 to 2003 includes AAT exports


Altron co za

Altron GroupFinancial results 2004

Diane Radley

Chief Financial Officer


Group income statement

Group income statement


Group income statement1

Group income statement


Contribution by subholding company

Contribution by subholding company

Revenue

2004

2003

Altech BTG Corporate & Financial services Powertech


Contribution by subholding company1

Contribution by subholding company

Operating

income

2004

2003

Altech BTG Corporate & Financial services Powertech


Contribution by subholding company2

Contribution by subholding company

Headlineearnings

2004

2003

Altech BTG Corporate & Financial services Powertech


Group balance sheet

Group balance sheet


Group cash flow analysis

Group cash flow analysis


Powertech

Powertech

P/C – Proportional consolidation


Powertech segmental results

PowertechSegmental results

Revenue

Telecoms

Power Electronics

2003*

2004 *

Operatingincome

* Proportionally consolidated


Powertech segmental results by product revenue

Powertech Segmental results by product (revenue)

R 264m

R 333m

R 634m

R 610m

Electrical accessories

Battery & solar

Transformers

Cables

R 274m

R 312m

R 2534m

R 2054m

*

*

2003

2004

* ABB PTT and Tridonic proportionally consolidated


Altron co za

Segmental review


Contribution per segment

Contribution per segment

Revenue

Power Electronics/ Multimedia

IT

Telecoms Corporate & Financial Services

2004

2003

Operatingincome


Telecoms risks and opportunities

TelecomsRisks and opportunities

Risks

  • Slowing of growth in SA mobile market

  • International weakness in demand for infrastructural telecoms products

  • Delays in SNO provides no incentive for Telkom to expand network

  • Need for GSM-based vehicle tracking product

    Opportunities

  • SNO – when it happens!

  • Mobile opportunities in Africa – world’s largest unexploited territory

  • NamITech provides entry into SIM and pre-paid voucher market

  • SAPS Gauteng tender and Free State government opportunity

Altron action

  • Extended Autopage agreements with SA mobile operators

  • Reduced exposure to infrastructure segment

  • Right-sized fibre optic business

  • Key successes in African markets for SIM cards and pre-paid vouchers

  • GSM-based vehicle tracking product developed and launched


Multimedia power electronics risks and opportunities

Multimedia & Power electronicsRisks and opportunities

Risks

  • Strong rand environment

  • Increased competition in low-end set top boxes

  • Rising interest rates

  • High base of power electronics

  • Supply of copper

    Opportunities

  • Infrastructure spend in SA region to remain strong

  • Major projects in mining and industrial sectors announced

  • Strong order book at UEC

  • World Cup 2010

  • Regional electricity distribution supply (REDS)

Altron action

  • Currency hedging in place for both imports and exports

  • Developed and received orders for high-end STB’s (PVR, etc.)

  • Capital expenditure in power electronics focused on efficiencies – not additional capacity

  • Developing alternate suppliers of copper


Information technology risks and opportunities

Information TechnologyRisks and opportunities

Risks

  • BEE landscape and ICT Charter

  • Market conditions in UK IT sector

  • Exchange rate impact on major imports

  • Pressure on pricing

    Opportunities

  • Improving market conditions for IT sector

  • Addressable market enhanced through BEE credentials

  • Europay/Mastercard/Visa (EMV) standard

  • Security (PKI’s and digital certificates) is growth area

Altron action

  • Empowerment deals concluded at BTG SA and NamITech

  • Complete offering relating to EMV

  • Increased level of annuity income to fight price erosion and establish barriers to entry

  • Streamline and consolidate UK businesses


Growth strategies going forward

Growth strategies going forward

Altechgrowth to be driven by a combination of external acquisitions and internal investment in R&D and intellectual capital. Balance sheet provides good flexibility.

BTGgrowth to be driven by consolidation of IT industry and internal investment in systems and intellectual capital. Current balance sheet restricts significant external opportunities.

Powertechgrowth strategies to be driven around reinvestment in capital equipment focusing on efficiencies in the right areas. Complemented by synergistic small to medium size acquisitions.


Altron co za

Thank You


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