An overview of 2023

The group delivered a strong financial performance on the back of record market demand and successfully managed working capital levels, despite challenges in the operating environment.

The group earned profit after tax of R793,6 million for the year, 66% up on R478,9 million earned for the 2022 financial year. Earnings per share and headline earnings per share were 799 cents and 798 cents respectively (2022: earnings per share of 478 cents and headline earnings per share of 473 cents per share) for the year.

The high demand from mining and construction industries in the group’s major markets exceeded the group’s ability to supply product and fully capitalise on the favourable market conditions. In the southern hemisphere markets, strong mining demand was driven by high commodity prices. In North America and Europe, infrastructure projects drove construction demand.

We are particularly pleased that we delivered on our strategy to grow machine sales volumes to our key target market, North America, the largest ADT market in the world. We look forward to building on this progress in the coming years.

With the growth came an increased demand for working capital funding. The allocation of capital to the sales volume strategy was a priority in 2023, as was the allocation of capital to projects that drive progress on re-positioning ADT manufacturing in the northern hemisphere and on growing BHI.

The positive market conditions came with significant challenges - strain on the global supply chain, port delays in SA and Europe which impacted both inbound and outbound shipments, labour shortages in Germany, higher levels of inflation and interest and currency volatility, not only in respect of a depreciating Rand but also from the perspective of the Euro to USD fluctuations experienced by the group’s German operation. The supply chain and port constraints meant that we had to carry more inventory to buffer component and material shortages and logistics delays, which was in conflict with our efforts to reduce the group’s substantial investment in inventory.