1
2 Introduction
3 Agenda Introduction Financial review Divisional review Spescom acquisition Prospects by division Conclusion
4 Summary of results Diversified portfolio buffered Jasco against worst of market conditions Domestic Products Electrical Rm Rm Jasco’s share of the operating profit * 12 months to Feb ’08
5 Summary of results Diversified portfolio buffered Jasco against worst of market conditions Domestic Products Electrical Rm Rm Telecommunications Security Rm Rm Jasco’s share of the operating profit * 12 months to Feb ’08
6 Delivery on acquisition strategyAcquisitive strategy Delivered through six acquisitions since June 2008 Spread risk through diversity Leverage existing resources: increasing the scale of turnover, assets & earnings Acquire: In areas where Jasco is already skilled E.g. extending presence across communications value chain Strong management skills & good cultural fit Telecommunications Maringo (July 2009) - Offers entry into the converged communications market RCW (Dec 2008) increases product range and clients Domestic Products Snapper (August 2010) offers diversification of product and client base Electrical M-TEC (June 2008) & Lighting Structures (Sept 2009) delivered on diversification strategy of buffering earnings decline in other areas Group Proposed Spescom acquisition (F2011) Increases size, tradability and cost savings Expands presence in communications supply chain Strengthens cash flow Diversifies income streams and client base
7 Financial summary – June ’10 vs June ’09Rm Audited 12 months 30 June 2010 % change Unaudited 12 months 30 June 2009* Audited 16 months 30 June 2009** Revenue 559,3 -7 599,8 -28 773,3 Operating profit before interest and taxation 32,3 -37 51,1 -51 65,9 EPS (cents) (Incl. impairment & fair value adj.) 19,1 -10 21,2 -47 36,2 Headline EPS (cents) (Excl. impairment, fair value adj. and profit/loss on FA) 16,6 -24 21,7 -55 36,7 Core EPS (cents) (Excl. impairment & fair value adj.) 16,8 -21 -54 Adjustment to core earnings consists of two elements: R24,1m positive – fair value adjustment WebbLeBLANC R21,6m negative – impairment to investment in M-TEC * For comparative purposes ** As published
8 Financial review
9 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Negative effect on group revenue from Telecoms & Security Buffered by R99m 1st time contribution from Lighting Structures (Electrical division) - effective 1 Sept ’09 9
10 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Operating Profit before interest 32,3 -37 51,1 65,9 Trading margin (%) 5,9% - 8,7% Non-operating IFRS adjustments -2,5 Core Operating Profit before interest* 29,8 -42 Core Trading margin (%)** 5,4% Net effect of fair value adjustment & impairment Margins affected substantially by lower volumes in Telecoms & Security Although substantial work went into reducing operating costs by 8%, fixed overhead structure did not decline by the same ratio as volumes * Excludes impairment and fair value adjustment ** Calculated as core operating profit on turnover excl interest received 10
11 IFRS adjustments R24,1m fair value adjustment on disposal of WebbLeBLANC JV Acquired controlling stake (50,5%) in WebbLeBLANC IFRS requires a fair value adjustment on disposal of JV R24,1m difference between valuation and carrying value on 1 March ’10 DCF valuation performed to determine fair value R21,6m impairment of investment in M-TEC Acquisition completed at height of market Although F2010 performance improved, long term profit forecast slightly lower Higher working capital requirement due to raw material imports Methodology DCF valuation performed by independent expert Reasonability tested against a P/E multiple approach Impairment of R21,6m (9% of value) reflects prudent view on future growth Adjusted carrying value includes Jasco’s share of profits of R11,3m 11
12 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Operating Profit before interest 32,3 -37 51,1 65,9 Trading margin (%) 5,9% 8,7% Net interest paid (5,6) -51 (11,5) (12,3) Decrease in interest rates Interest paid includes R8m of preference dividend (June ’09: R12m) Positive full year impact of net income from R5,5m security rental contract 12
13 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Operating Profit before interest 32,3 -37 51,1 65,9 Trading margin (%) 5,9% 8,7% Net interest paid (5,6) -51 (11,5) (12,3) Share of income from JV 2,2 3,5 4,6 Represents the contribution from Webb LeBlanc JV for 8 months to Feb consolidated from 1 March on acquiring controlling stake 13
14 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Operating Profit before interest 32,3 -37 51,1 65,9 Trading margin (%) 5,9% 8,7% Net interest paid (5,6) -51 (11,5) (12,3) Share of income from JV 2,2 3,5 4,6 Share of income from Associates 7,1 n/a (3,4) 1,7 Contributions from M-TEC and Maringo M-TEC turnaround due to improved trading conditions R9,3m profit in F2010 vs loss of R3,4m in F2009 Share of Maringo first year loss was R2,2m – in line with expectations 14
15 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Operating Profit before interest 32,3 -37 51,1 65,9 Trading margin (%) 5,9% 8,7% Net interest paid (5,6) -51 (11,5) (12,3) Share of income from JV 2,2 3,5 4,6 Share of income from Associates 7,1 n/a (3,4) 1,7 Profit before tax 36,0 -9 39,7 59,9 Taxation (11,2) -30 (16,0) (22,4) Effective tax rate 31,1% 40,3% 37,4% Audited Unaudited for comparative purposes % Jun 2010 Jun 2009 Statutory tax rate 28,0 Non-deductible preference shares 6,5 8,1 STC 2,3 2,9 5,7 Equity accounted income -7,3 -0,0 -2,9 Other 1,6 1,3 0,1 Effective tax rate 31,1 40,3 37,4 15
16 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Revenue 559,3 -7 599,8 773,3 Operating Profit before interest 32,3 -37 51,1 65,9 Trading margin (%) 5,9% 8,7% Net interest paid (5,6) -51 (11,5) (12,3) Share of income from JV 2,2 3,5 4,6 Share of income from Associates 7,1 n/a (3,4) 1,7 Profit before tax 36,0 -9 39,7 59,9 Taxation (11,2) -30 (16,0) (22,4) Effective tax rate 31,1% 40,3% 37,4% Profit for the period 24,8 +5 23,7 37,5 Outside shareholders interest (3,5) - Profit attrib. to ord. shareholders 21,3 -10 Lighting Structures and WebbLeBLANC minority shareholders 16
17 Statement of comprehensive incomeFor comparative purposes Rm Audited 12 months June 2010 % change Unaudited 12 months June 2009 16 months June 2009 Profit attrib. to ord. shareholders 21,3 -10 23,7 37,5 EPS 19,1 21,2 36,2 Core EPS* 16,8 -22 HEPS (cps) 16,6 -24 21,7 36,7 Diluted HEPS (cps) 15,9 -23 20,7 34,1 Weighted average no. shares (m) 111,6 - 103,5 * Exclude impairment and fair value adjustment 17
18 Average Net Working CapitalDays Net Days 45.1 36.8 29.5 23.9 23.2 22.4 40.9 32.5 Stock Debtors Creditors Negative impact of lower group revenue Changed profile on consolidation of Lighting Structures & WebbLeBLANC Increased debtors days base Maintained stock levels in line with activity levels Reduction in creditors resulted in increase in average days Net working capital target increased to 35 days in line with profile change
19 Summarised Statement of Cash Flows (Rm)30 June 2010 30 June 2009 Cash generated from operations before working capital Working capital changes Cash generated from operations Net finance charges Dividend paid Taxation paid Net effects of financing and investing activities Group overdraft reduced to below R5m (net) (Jun ’09: R28m) Net D:E ratio (incl. redeemable prefs for M-TEC): 49% (Jun ’09: 51%) Net D:E ratio (excl. redeemable prefs for M-TEC):15% (Jun ’09: 12%)
20 Divisional review Telecommunications Security Domestic ProductsElectrical
21 Contributions to consolidated revenue and profit *12 months June ’10: R559,3m 12 months June ’09: R599,8m Revenue* Telecommunications Security Domestic Products Electrical * As per statement of comprehensive income. Excludes revenue from WebbLeBLANC JV (8 months to Feb ’10) as well as revenue from associates M-TEC & Maringo ** Includes Jasco’s share of operating profit of subsidiaries (WebbLeBLANC & Lighting Structures) & associates (M-TEC, Maringo) Note: No contribution from Lighting Structures in 2009 (acquired 1 Sept ’09)
22 Contributions to consolidated revenue and profit *12 months June ’10: R559,3m 12 months June ’09: R599,8m Revenue* Operating profit** Telecommunications Security Domestic Products Electrical * As per statement of comprehensive income. Excludes revenue from WebbLeBLANC JV (8 months to Feb ’10) as well as revenue from associates M-TEC & Maringo ** Includes Jasco’s share of operating profit of subsidiaries (WebbLeBLANC & Lighting Structures) & associates (M-TEC, Maringo) Note: No contribution from Lighting Structures in 2009 (acquired 1 Sept ’09)
23 Telecommunications – Results overviewRm – 12 months to 30 June 2010 % Change 2009 Revenue* 300,5 -21 382,2 Op. Profit 16,3 -66 48,5 Op. Margin 5,4% 12,7% Low fixed-line & wireless spend in SA & rest of Africa due to global recession Continued decline in fixed line spend (20% of Telco revenue) Volumes down due to operator focus on wireless roll out & 3-month World Cup freeze Decline in wireless spend (80% of Telco revenue) Volumes down substantially due to lack of major contracts As expected, Maringo posted a loss during first year of operation Actions implemented against tough markets Restructuring in Telesciences, Maringo & WebbLeBLANC Webb focused on more specialised technology product and service offering * Excludes inter-company sales and interest received
24 Security – Results overviewRm – 12 months to June 2010 % Change 2009 Revenue* 121,6 -30 174,3 Op. Profit** 9,4 -62 24,4 Op. Margin 7,7% 14,0% Recurring business covered overheads in line with business model - buffered against absence of large contracts Project pipeline declined drastically due to cancelled or delayed contracts In both private and in public sectors No major projects (2009: R80m) Increase in competition for available work resulted in pricing pressure Against this, annuity and recurring income covered overheads Recurring revenue increased by 22% Transnet rental contract contributed R5,5m for full year (disclosed as interest as per IFRS) Profit contribution of R9,4m remains at levels above historic trends (excl. exceptional F2009) * Excludes inter-company sales and interest received ** Includes net interest received on Transnet rental contract
25 Domestic Products – Results overviewRm – 12 months to June 2010 % Change 2009 Revenue 114,5 +7 107,4 Op. Profit 15,4 +44 10,7 Op. Margin 13,4% 10,0% Some market improvement & internal actions strongly improved operating profit Slight improvement in market conditions during 2010 Increase in revenue due to volume increase Soft commodity prices in early part of the year resulted in marginally reduced selling prices Substantially improved margins and profitability Continued focus on running a low-cost, efficient operation contributed to better margins Better procurement reduced cost of raw materials Stability in market allowed better production planning, thus reducing labour cost
26 Domestic Products – Snapper brand acquisitionProduct base further diversified, with client base broadened Snapper range of products consists of 40 different plugs, adaptors and cord sets for domestic use Transaction Acquired brand from Schneider Electric SA effective 5 Aug ’10 R7,5m in cash (3 equal installments - Aug ’10, Feb ’11 and Aug ’11) Acquired the underlying assets (patents, designs, trade names & moulds) Rationale and benefits Broadens Jasco’s offering and market share Adds new customer base – reduced reliance on major customers No capital expenditure required to manufacture product Immediately earnings-enhancing 26
27 Electrical – Results overviewRm – 12 months to June M-TEC only 2010 % Change 2009 Revenue 807,6 906,5 +33 684,4 Op. Profit 47,8 59,9 - (6,5) Op. Margin 5,9% 6,6% -1,0% Jasco share of M-TEC PAT 9,3 (3,4) Internal actions & market recovery resulted in strong turnaround Turnaround by M-TEC a result of No material losses on copper and aluminium stock vs F2009 Increased profits in copper on better volumes – market recovery Increased profits in aluminium on higher volumes – Eskom contract roll out Impact of cost reduction initiatives during F2009 Lighting Structures* Solid performance – road infrastructure, World Cup stadia, electrification Manufactures & installs steel structures (monopoles, lattice towers, masts) * Acquired 50,5% share and consolidated, effective 1 Sep 2009
28 Spescom acquisition
29 Spescom acquisition: Transaction in a nutshellJasco Spescom Listed in the Electronic & Electrical Services sector - R165m market cap Operates in communications market Listed in the Software & Computer Services sector - R55m market cap Operates in the ICT market Jasco acquires 100% of Spescom shares R12m in cash: 15 cps per Spescom share 32 million Jasco shares: 1 Jasco share for every 2,47 Spescom at date of conclusion Jasco remains 54% black owned ACT = 27,3% + CIH = 18,5% + Vantage = 5,1% + other = 3,1% 29
30 Spescom acquisition: RationaleSatisfies Jasco’s stated strategic objectives of: Earnings enhancing for both Jasco & Spescom shareholders Cost savings from merging the two listed entities Broader product offering to enlarged customer base Expanding presence in communications supply chain Increased participation in growing converged communications market New Spescom data centre – Telesciences & Maringo opportunities ECNS* licence allows offering of converged communications services Increasing size More than R1bn revenue; increased market cap & share liquidity Group benefits Further diversifies income streams & no conflicting businesses No major cultural differences Similar structure of central head office and autonomous divisions Acquiring experienced divisional management & technical teams * ECNS – Electronic Communications Network Service 30
31 Spescom acquisition: Current structure90 Spescom acquisition: Current structure Jasco Head office Telecoms DataFusion Media IT DataVoice New Telco SA Spescom Head office Telecoms Electrical Domestic products Security Spescom delivers integrated business communication solutions that leverage voice, video and data technologies to enhance the way businesses communicate 31 31
32 Spescom acquisition: New Jasco structure90 Spescom acquisition: New Jasco structure Head office Telecoms Electrical Domestic products Security Telecoms New Telco SA DataFusion Media IT DataVoice 32 32
33 Spescom acquisition: Operational synergies90 Spescom acquisition: Operational synergies Head office New Telco SA DataFusion Media IT DataVoice Telecoms Electrical Domestic products Security 33 33
34 Spescom acquisition: Financial information2010 Unaudited 6 months 2009 Audited 12 months 2008 2007 2006 Audited 12 months Revenue 163 ,0 362,7 362,9 385,5 210,1 Operating profit before non-trading items 5,2 16,0 14,5 1,3 (16,1) Operating margin 3,2% 4,4% 4,0% 0,1% - Profit after tax 3,8 8 ,7 7,4 4,6 * (18,6) HEPS (cents) 5,3 12,7 10,3 6,9 (24,9) Cash on hand 37,9 63,8 43,7 21,9 15,4 Spescom turned around from F2007, with consistent profit performance since then Opportunity to improve Spescom margin through cost savings of R7m: Elimination of one listed entity Combined head office Jasco gearing will improve due to acquired Spescom cash flow From 49% pre-acquisition to 42% post-acquisition * 2007 excludes profit on sale of investment of R20m 34
35 Prospects by division Telecommunications Security Domestic ProductsElectrical
36 Telecommunications: International undersea cable connectivityMediterranean London Increase in bandwidth Atlas offshore 320 Gb SEA-ME-WE 4 1 280 Gb I-ME-WE 3 840Gb EIG Marseille Monaco Vigo, Spain Sesimbra Chipiona, Spain Palermo, Italy Asila, Morocco Tripoli, Lebanon Casablanca, Morocco Sub-Saharan Africa Annaba, Algeria Bizerte, Tunisia Alexandia Suez, Egypt Altavista, Canary Islands Trippoli, Libya Cairo, Egypt Fujairah, UAE Karachi, Pakistan SAT 3 /SAFE 340 Gb Nouakchott, Mauritania Jeddah, Saudi Arabia Oman Dakar, Senegal Mumbai, India The Gambia Port Sudan Guinea-Bissau Conakrie, Guinea Massiwa, Eritrea Chennai Freetown, Sierra Leone Monrovia, Liberia Abijan, Cote D’Ivoire Accra, Ghana Lome, Togo Cotonou, Benin Cochin Djibouti Bonny, Nigeria Colombo, SriLanka Douala, Cameroun Bata, Equatorial Guinea Mogadishu, Somalia Librevile, Gabon Mombasa, Kenya Sao Tome and Principe Pointe Noir, Congo Dar Es Salaam, Tanzania Maunda, DRC Cacuaco, Angola Luanda, Angola Moroni, Comores Tamatave, Madagascar Baie du Jacobet, Mauritius Walvis Bay Maputo, Mozambique St Paul, Reunion Toliara, Madagascar Mtunzini Melkbosstrand
37 Telecommunications: International undersea cable connectivityMediterranean London Increase in bandwidth Atlas offshore 320 Gb SEA-ME-WE 4 1 280 Gb I-ME-WE 3 840Gb EIG Marseille Monaco Vigo, Spain Sesimbra Chipiona, Spain Palermo, Italy Asila, Morocco Tripoli, Lebanon Casablanca, Morocco Sub-Saharan Africa Annaba, Algeria Bizerte, Tunisia Alexandia Suez, Egypt Altavista, Canary Islands Trippoli, Libya Cairo, Egypt Fujairah, UAE Karachi, Pakistan SAT 3 /SAFE 340 Gb TEAMs 1 280 Gb Seacom Nouakchott, Mauritania Jeddah, Saudi Arabia Oman Dakar, Senegal Mumbai, India The Gambia Port Sudan Guinea-Bissau Conakrie, Guinea Massiwa, Eritrea Chennai Freetown, Sierra Leone Monrovia, Liberia Abijan, Cote D’Ivoire Accra, Ghana Lome, Togo Cotonou, Benin Cochin Djibouti Bonny, Nigeria Colombo, SriLanka Douala, Cameroun Bata, Equatorial Guinea Mogadishu, Somalia Librevile, Gabon Mombasa, Kenya Sao Tome and Principe Pointe Noir, Congo Dar Es Salaam, Tanzania Maunda, DRC Cacuaco, Angola Luanda, Angola Moroni, Comores Tamatave, Madagascar Baie du Jacobet, Mauritius Walvis Bay Maputo, Mozambique St Paul, Reunion Toliara, Madagascar Mtunzini Melkbosstrand
38 Telecommunications: International undersea cable connectivityMediterranean London Increase in bandwidth Atlas offshore 320 Gb SEA-ME-WE 4 1 280 Gb I-ME-WE 3 840Gb EIG Marseille Monaco Vigo, Spain Sesimbra Chipiona, Spain Palermo, Italy Asila, Morocco Tripoli, Lebanon Casablanca, Morocco Sub-Saharan Africa Annaba, Algeria Bizerte, Tunisia Alexandia Suez, Egypt Altavista, Canary Islands Trippoli, Libya Cairo, Egypt Fujairah, UAE Karachi, Pakistan SAT 3 /SAFE 340 Gb TEAMs 1 280 Gb Seacom Lion 1 300 Gb MaIN OnE 1 920 Gb GLO-1 2 500 Gb Nouakchott, Mauritania Jeddah, Saudi Arabia Oman Dakar, Senegal Mumbai, India The Gambia Port Sudan Guinea-Bissau Conakrie, Guinea Massiwa, Eritrea Chennai Freetown, Sierra Leone Monrovia, Liberia Abijan, Cote D’Ivoire Accra, Ghana Lome, Togo Cotonou, Benin Cochin Djibouti Bonny, Nigeria Colombo, SriLanka Douala, Cameroun Bata, Equatorial Guinea Mogadishu, Somalia Librevile, Gabon Mombasa, Kenya Sao Tome and Principe Pointe Noir, Congo Dar Es Salaam, Tanzania Maunda, DRC Cacuaco, Angola Luanda, Angola Moroni, Comores Tamatave, Madagascar Baie du Jacobet, Mauritius Walvis Bay Maputo, Mozambique St Paul, Reunion Toliara, Madagascar Mtunzini Melkbosstrand
39 Telecommunications: International undersea cable connectivityMediterranean London Increase in bandwidth Atlas offshore 320 Gb SEA-ME-WE 4 1 280 Gb I-ME-WE 3 840Gb EIG Marseille Monaco Vigo, Spain Sesimbra Chipiona, Spain Palermo, Italy Asila, Morocco Tripoli, Lebanon Casablanca, Morocco Sub-Saharan Africa Annaba, Algeria Bizerte, Tunisia Alexandia Suez, Egypt Altavista, Canary Islands Trippoli, Libya Cairo, Egypt Fujairah, UAE Karachi, Pakistan SAT 3 /SAFE 340 Gb TEAMs 1 280 Gb Seacom Lion 1 300 Gb MaIN OnE 1 920 Gb GLO-1 2 500 Gb EASSy 3 840 Gb Nouakchott, Mauritania Jeddah, Saudi Arabia Oman Dakar, Senegal Mumbai, India The Gambia Port Sudan Guinea-Bissau Conakrie, Guinea Massiwa, Eritrea Chennai Freetown, Sierra Leone Monrovia, Liberia Abijan, Cote D’Ivoire Accra, Ghana Lome, Togo Cotonou, Benin Cochin Djibouti Bonny, Nigeria Colombo, SriLanka Douala, Cameroun Bata, Equatorial Guinea Mogadishu, Somalia Librevile, Gabon Mombasa, Kenya Sao Tome and Principe Pointe Noir, Congo Dar Es Salaam, Tanzania Maunda, DRC Cacuaco, Angola Luanda, Angola Moroni, Comores Tamatave, Madagascar Baie du Jacobet, Mauritius Walvis Bay Maputo, Mozambique St Paul, Reunion Toliara, Madagascar Mtunzini Melkbosstrand
40 Telecommunications: International undersea cable connectivityMediterranean London Increase in bandwidth Atlas offshore 320 Gb SEA-ME-WE 4 1 280 Gb I-ME-WE 3 840Gb EIG Marseille Monaco Vigo, Spain Sesimbra Chipiona, Spain Palermo, Italy Asila, Morocco Tripoli, Lebanon Casablanca, Morocco Sub-Saharan Africa Annaba, Algeria Bizerte, Tunisia Alexandia Suez, Egypt Altavista, Canary Islands Trippoli, Libya Cairo, Egypt Fujairah, UAE Karachi, Pakistan SAT 3 /SAFE 340 Gb TEAMs 1 280 Gb Seacom Lion 1 300 Gb MaIN OnE 1 920 Gb GLO-1 2 500 Gb EASSy 3 840 Gb WACS 5 120 Gb Nouakchott, Mauritania Jeddah, Saudi Arabia Oman Dakar, Senegal Mumbai, India The Gambia Port Sudan Guinea-Bissau Conakrie, Guinea Massiwa, Eritrea Cape Verde Chennai Freetown, Sierra Leone Monrovia, Liberia Abijan, Cote D’Ivoire Accra, Ghana Lome, Togo Cotonou, Benin Cochin Djibouti Bonny, Nigeria Colombo, SriLanka Douala, Cameroun Bata, Equatorial Guinea Mogadishu, Somalia Librevile, Gabon Mombasa, Kenya Sao Tome and Principe Pointe Noir, Congo Dar Es Salaam, Tanzania Maunda, DRC Cacuaco, Angola Luanda, Angola Moroni, Comores Tamatave, Madagascar Baie du Jacobet, Mauritius Walvis Bay Maputo, Mozambique St Paul, Reunion Toliara, Madagascar Mtunzini Melkbosstrand
41 Telecommunications: International undersea cable connectivityMediterranean London Increase in bandwidth Atlas offshore 320 Gb SEA-ME-WE 4 1 280 Gb I-ME-WE 3 840Gb EIG Marseille Monaco Vigo, Spain Sesimbra Chipiona, Spain Palermo, Italy Asila, Morocco Tripoli, Lebanon Casablanca, Morocco Sub-Saharan Africa Annaba, Algeria Bizerte, Tunisia Alexandia Suez, Egypt Altavista, Canary Islands Trippoli, Libya Cairo, Egypt Fujairah, UAE Karachi, Pakistan SAT 3 /SAFE 340 Gb TEAMs 1 280 Gb Seacom Lion 1 300 Gb MaIN OnE 1 920 Gb GLO-1 2 500 Gb EASSy 3 840 Gb WACS 5 120 Gb ACE Nouakchott, Mauritania Jeddah, Saudi Arabia Oman Dakar, Senegal Mumbai, India The Gambia Port Sudan Guinea-Bissau Conakrie, Guinea Massiwa, Eritrea Cape Verde Chennai Freetown, Sierra Leone Monrovia, Liberia Abijan, Cote D’Ivoire Accra, Ghana Lome, Togo Cotonou, Benin Cochin Djibouti Bonny, Nigeria Colombo, SriLanka Douala, Cameroun Bata, Equatorial Guinea Mogadishu, Somalia Librevile, Gabon Mombasa, Kenya Sao Tome and Principe Pointe Noir, Congo Dar Es Salaam, Tanzania Maunda, DRC Cacuaco, Angola Luanda, Angola Moroni, Comores Tamatave, Madagascar Baie du Jacobet, Mauritius Walvis Bay Maputo, Mozambique St Paul, Reunion Toliara, Madagascar Mtunzini Melkbosstrand 46x more bandwidth expansion to 2013 Significant growth opportunity for Jasco
42 Jasco’s Telecommunications presenceInternational Connectivity - SAT3/SAFE Seacom EASSy WACS ACE
43 Jasco’s Telecommunications presenceInternational Connectivity - SAT3/SAFE Seacom EASSy WACS ACE Long Distance - Telco Operators Infraco DFA
44 Jasco’s Telecommunications presenceInternational Connectivity - SAT3/SAFE Seacom EASSy WACS ACE Long Distance - Telco Operators Infraco DFA Metro Rings - Telco Operators DFA Municipalities
45 Jasco’s Telecommunications presenceInternational Connectivity - SAT3/SAFE Seacom EASSy WACS ACE Long Distance - Telco Operators Infraco DFA Metro Rings - Telco Operators DFA Municipalities Access network - Telco Operators New Entrants
46 Jasco’s Telecommunications presenceInternational Connectivity - SAT3/SAFE Seacom EASSy WACS ACE Long Distance - Telco Operators Infraco DFA Metro Rings - Telco Operators DFA Municipalities Access network - Telco Operators New Entrants Customer Premises Equipment - Telco Operators Many other players
47 Jasco’s Telecommunications presenceInternational Connectivity - SAT3/SAFE Seacom EASSy WACS ACE Long Distance - Telco Operators Infraco DFA Metro Rings - Telco Operators DFA Municipalities Access network - Telco Operators New Entrants Customer Premises Equipment - Telco Operators Many other players JASCO portfolio traditionally strong in these areas
48 Prospects for Jasco TelecommunicationsJasco well positioned for significant market developments Medium & long term growth potential from broadband expansion & low penetration Slow recovery over short term in both fixed line and wireless Improved levels of expenditure by Telkom following contribution to successful World Cup communications Cell-C network roll outs started – secured site build contract Increase in planned wireless network roll outs on African continent - actual roll outs expected to commence during H2 Maringo expected to break even in F2011 Benefits of restructuring to flow through Telesciences and Maringo merged – annual savings, R3m in 1st year (mainly salaries & rental) WebbLeBLANC combined with Lighting Structures – annual savings of R2m
49 Prospects for SecurityBusiness model set to continue protecting against uncertain markets Procure recurring income and secure project business Tenders to the value of R360m submitted during last 6 months Timing still uncertain, but expect roll outs to commence during H2 F2010 Re-organisation and expansion Increase in sales force, invest in regional offices to become profit centres Improve service delivery through investment in dedicated training facility Create new alliance partners Building management systems through Jasco alliance with Schneider Electrical Access, CCTV surveillance, fire protection, energy management 49
50 Prospects for Domestic ProductsProduct expansion through Snapper will add to income Drive to be an efficient, low-cost producer continues Slow recovery in consumers’ demand expected to continue Acquisition of Snapper brand and range of products R8 million orders secured from 1 May 2010 Increased production throughput will increase overhead recovery SA market for plugs, adapters and cord sets = ±R120 million p.a Snapper will enhance Jasco’s share Benefit from continued roll out of low-cost housing and electrification Electricity price increases might affect, although entry-level market base is very reliant on electricity 50
51 Prospects for ElectricalMarket situation continues to improve M-TEC Volumes set to continue to improve Orders of R180m received for aluminium overhead conductor under long-term contract Fixed-line telecommunications contracts in place: Copper telecoms products & optical fibre cable orders received Further tenders under adjudication - both local & export Closer, more formalised alliance with Taihan to enhance existing partnership Lighting Structures to continue with strong contribution R60m order book on hand Expansion of offering to include maintenance services – R3 million of contracts Lighting for low-cost housing developments & road infrastructure 51
52 Conclusion
53 Conclusion Proposed Spescom transaction would significantly alter the face of the group Benefits of restructuring & cost cutting to flow through in F2011 Management focus areas: Driving sales Margin improvements Controlling costs Profitable businesses will help to combat continuing tough markets in the short term Telecommunications – expected recovery in H2 F2011 Security – recurring income to ensure profitability Domestic Products – further growth expected Electrical – continued recovery Improvement expected in H2 F2011
54 but not limited to predictions of or indications of future earnings.Disclaimer Forward looking statements Certain statements in this release that are neither reported financial results nor other historical information are forward looking statements including but not limited to predictions of or indications of future earnings. Undue reliance should not be placed on such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and company plans and objectives to differ materially from those expressed or implied in the forward looking statements. The information in this presentation has not been reviewed or reported on by Jasco’s auditors.
55
56 Appendix
57 Contributions to segmental revenue and profit *12 months June ’10: R1 443m 12 months June ’09: R1 355m Revenue* Operating profit* Telecommunications Security Domestic Products Electrical * Segmental revenue and operating profit includes 100% of WebbLeBLANC, Lighting Structures (10 months), M-TEC and Maringo
58 Spescom Background Spescom DataVoice designs and develops proprietary solutions that record, manage, re-create and analyse voice and screen transactions. Spescom DataFusion is a business communication and customer interaction solutions specialist. It provides world class contact centre and enterprise telephony solutions to medium and large organisations that must manage high volumes of internal and customer interactions. Spescom Media IT provides the solutions, services and enabling technologies and equipment that take the broadcast industry from image capture through to transmission. Spescom Telecommunications is a systems integrator for fixed and mobile telecommunications network operators; utilities; transportation and government communications backbones; and for carrier of carrier network operators’ Transmission and Access networks. NewTelco South Africa is one-stop shop for carrier-neutral co-location service provision. A division of Spescom Limited, NewTelco South Africa was established in 2010 in partnership with NewTelco GmbH, a German company that is a leader in this arena with more than five neutral carrier co-location hubs in major world capitals, such as Frankfurt, London, New York, Vienna and Kiev. 58