Group gearing to become multiple-site giga factory delivering on energy requirements of international customer base
- Revenue up 6.3% to R9.5bn
- Operating profit up 15.9% to R847m
- HEPS up 22.6% to 281 cents
- Final dividend of 80 cents per share declared
- Energy storage vertical well on its way to become a diversified multi location Giga factory
- Gigawatt-hours sales already exceeding Tesla’s Giga factory automotive output
- Automotive Components Vertical stabilised following disruptive 2016 new model launch
Metair, a leading international manufacturer, distributor and retailer of energy storage solutions and automotive components, today announced a solid set of results for the twelve months to 31 December 2017. The performance was supported by a bounce-back in the results of its automotive component vertical following disruptions related to a new model launch in 2016 and the energy storage businesses in Turkey and Romania growing revenue by 31% in local currencies.
Group revenue increased 6.3% to R9.5 billion and operating profit grew 15.9%. The group margin expanded to 8.9%, supported by the margin recovery in the automotive component businesses. Group earnings before interest, tax, depreciation and amortisation (EBITDA) increased 17.6% to R1.2 billion and headline earnings per share grew 22.6% to 281 cents per share.
Theo Loock, Metair’s Managing Director, commented: “The group performed very well in a dynamic environment marked by major technology shifts in the mobility market. We have continued to position our considerable intellectual capital through strategic investments that better focus on the need that our products fulfil.
“We have also made good progress in becoming a multiple site Giga factory, servicing customers closer to the geographies where they operate. To put this into perspective, our combined energy vertical sold over 10.4 gigawatt-hours in 2017, which is equivalent to Tesla’s Giga factory automotive output.”
Automotive components vertical
The Automotive components vertical recovered strongly as production ramped up and stability returned following the 2016 new model launch for a key customer in South Africa. Turnover increased 5.2% to R4.4 billion, contributing 41% to group revenue and 42% to operating profit. Profit before interest and tax (PBIT) margins increased to 10% from 6% in 2016 due to the benefits of improved consistency in production volumes, manufacturing efficiency and the stronger Rand against major currencies during the entire year.
“Metair provided input into the review of the Automotive Production and Development Programme (APDP) and we believe that the programme will continue to support the South African automotive industry effectively. Against this backdrop, our outlook for South African vehicle production in the medium term has improved and we believe volumes of 650,000 to 700,000 is attainable,” added Loock.
Energy storage vertical
The Energy storage vertical delivered a strong performance, increasing revenue by 6.3% to R6.2 billion and contributing 59% to the group revenue. The vertical’s operating profit grew 6% and contributed 58% to the group operating profit. Battery sales in Turkey and Romania peaked in the early winter months during late 2017 and a strong performance by Mutlu Akü substantially offset the impact of depreciating currencies and higher lead input costs. In the South African market, competition remained high and performance improved as the corrective measures at First National Battery (FNB) continue to be implemented.
“2018 will see us focus on the transfer of technology in emerging markets with our key goal to participate in the development of an electric vehicle (EV) energy source for at least one OEM,” commented Loock.
In 2017, Metair acquired a 25.1% stake in German-based battery manufacturer and supplier, Akkumulatorenfabrik Moll GmbH & Co. KG (“Moll”). This investment provides Metair with a presence next to its European customers in Germany and, through Moll’s shareholding in Chaowei Power Holdings Limited (“Chaowei”), expands Metair’s global reach in Asia with a small but very critical access point into the Chinese market.
Metair is establishing a new research and development centre in Germany in partnership with Moll and Chaowei and is in the process of finalising the structure of its Li-ion research and production division, following the acquisition of a 35% in Primemotors in Romania, to accelerate its production of Li-ion batteries for the growing European market.
Metair also launched a programme to partner with universities and industry agencies for the production and certification of li-ion batteries. The programme is an important move for Metair which historically used available Li-ion solutions from upstream suppliers in order to deliver customer specific systems and solutions by adding its own system design and controls.
A key programme milestone has already been achieved with Metair successfully delivering its first Li- ion electric vehicle conversion from its Romanian operations to an OEM in Turkey.
The group is well positioned to take advantage of growth from product expansions through the addition of new OE business and expanded product ranges with existing clients. Customer model changes planned for the next two to three years will also offer further opportunities for new business.
“We are well positioned to respond to the major technology and market shifts shaping our operating environment and we will continue to ensure that our products fulfil the energy and components requirements of our international customer base. Subject to current market conditions, we expect 2018 to be a good year for the group,” Loock concluded.
Instinctif Partners +27 (0)11 447 3030
Frederic Cornet + 27 (0)83 307 8286
Gift Dlamini +27 (0)82 608 6587
NOTES TO EDITORS
Metair Investments Ltd (Metair) is a publicly owned company listed on the Johannesburg Stock Exchange. The group is headquartered in Johannesburg and manages an international portfolio of companies that manufacture, distribute and retail products for its energy storage and automotive component verticals, exporting to approximately 46 countries.
The group’s operations manufacture, assemble, distribute and retail energy storage products and automotive components in Africa, Europe, Turkey, the Middle East and Russia.
The energy storage segment manufactures batteries for automotive, telecoms, utility, mining, retail and materials/products handling sectors. Automotive batteries are mainly supplied to the aftermarket through Metair’s unique aftermarket distribution channels and franchised retail networks, and are supplied to automotive original equipment manufacturers (OEMs).
Aftermarket products are also exported to approximately 46 destinations across Africa, Europe, the Middle East, Russia and Turkey. Non-automotive products are mainly sold into sub-Saharan Africa and Turkey.
Metair supplies batteries to all major OEMs in South Africa, Europe, Romania, Turkey and Russia through subsidiaries in Romania (Rombat), Turkey (Mutlu Akü) and South Africa (FNB). Key territories include Romania, Russia, South Africa, Turkey and Slovakia.
Automotive components include original equipment (OE) components used in the assembly of new vehicles by OEMs as well as spare parts and other products used in the automotive aftermarket. These include brake pads, shock absorbers, lights, radiators and air conditioners. The group also produces generic aftermarket products for use in the increasing number of imported vehicles.
For more information on Metair and the group’s subsidiaries please visit the website fully.