Recovery of the automotive component vertical and resilience from the energy storage vertical delivers an excellent half year performance

  • Operating profit was 36% higher at R355 million while operating margins improved to 8.71%
  • Headline earnings per share (HEPS) rose 111% to 114 cents
  • A dividend of 70 cps has been declared for the period ending 30 June 2017
  • Automotive Components vertical stabilised following elimination of new vehicle model launch support costs and improvement in efficiencies
  • Energy Storage Vertical showed resilience and despite socio and geopolitical challenges, successfully recovered currency and commodity price pressures from the market
  • Group strategy enhanced as Metair strives to become the leading market player in energy solutions for the full mobility spectrum

17 August 2017 – Metair, a leading international manufacturer, distributor and retailer of energy storage solutions and automotive components, today announced a robust set of results for the six months to 30 June 2017.

Group revenue increased marginally to R4.08 billion while group operating profit rose 36% to R355 million. EBITDA was 35% higher at R527 million with headline earnings per share improving 111% to 114 cents.

Theo Loock, Metair’s Managing Director commented: “The group has delivered an excellent performance in an exciting and very dynamic environment.

“Metair remains well positioned to take advantage of changing technological trends, especially in our Energy Storage Vertical, where the market conditions and dynamics are subject to technology shifts in the mobility market, particularly the possible accelerated mass introduction of electric vehicles.”

These changes have led to a refinement of the group strategy which is to produce 50 million batteries across five continents over five years.

Accordingly, the strategy for the Energy Storage Vertical is to become the world leader in the supply of energy source products used in control and energy solutions across the full spectrum of mobility options and to nurture the Automotive Components Vertical with participation in selected growth opportunities.

Additionally, together with its partners, Metair is developing and deploying leading technology for niche applications at the front end of the technology curve but also extending its existing technology backwards into large developing markets.

“There is no doubt that there is disruption and change in our markets but Metair is very well positioned to capitalise on these changes.

“We have enhanced our globalisation strategy as we strive to become the leading market player in energy solutions for the full mobility spectrum which opens up new markets and opportunities.

“The foundation to achieve our strategy has already been laid through various technology advancements and strategic acquisitions made in recent years including our most recent investment in Moll, a German battery manufacturer and supplier which provides access to Europe and Asia as well as different mobility products and technologies,” concluded Loock.

The Automotive Components businesses stabilised following the elimination of premium support costs as well as costs associated with volume ramp up complexities and variable manufacturing activity linked to the launch of a new light commercial vehicle by a major customer. The business achieved 11.1% turnover growth while profit before interest and tax (PBIT) margins were 9.3% as a result of the manufacturing and volume stability achieved. The stronger South African rand also provided short term currency gains on imported materials and components.

The Energy Storage Vertical showed resilience despite operating currency weakness, higher commodity prices, and pressure to recover pricing in the market. The business attained PBIT growth of 18% excluding the negative impact of currency translation. Overall margins rose slightly as a result of an improved performance from the South African battery business, a satisfactory local operating performance from Turkey and an increase in higher margin export business from both Turkey and Romania.

Looking forward, the improvement in first half results should support a sustained performance for the full year when compared to 2016, as the seasonally stronger half in the Energy Storage Vertical is muted by the full year impact of the Turkish Lira devaluation. The Automotive Component Vertical managed to successfully renew most of its business associated with the new model launches, underpinning the next business cycle linked to the new model launches. The Energy Storage Vertical should benefit from strong seasonal demand in its winter markets and some geopolitical stability in Turkey while the South African market is expected to show moderately improved trading conditions.

ENDS

Enquiries:

Instinctif Partners +27 (0)11 447 3030
Louise Fortuin + 27 (0)71 605 4294
Gift Dlamini +27 (0)82 608 6587

Notes to Editors:

About Metair:

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.

Energy storage
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
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 at: www.metair.co.za

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