arivia.kom Overview

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arivia.kom Overview
Portfolio Committee September 2002 Zeth Malele
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OBJECTIVES

• Improve arivia.kom understanding
• Share progress made to date
• Highlight strategic imperatives for the company
• Get input from all to improve shareholder value
• Improve stakeholder relationships

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compelling strategic ambition for arivia.kom with
a clear financial agenda for future leadership
arivia.kom Vision
High
arivia.kom as a fully merged commercial company

• To be the dominant ICT solutions company in Africa

Degree of Integration
Years
Entity Migration
Entity Integration
Datavia
Entity Consolidation
Ariel
Eskom IT
2006
2003
2002
Low
Degree of Commercialisation

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• Vision
• To be the dominant ICT solutions company in
  Africa
• Statement of corporate purpose
• With pride, to take our distinctly African
  heritage to the world through innovative and
  relevant ICT solutions

A14GBGHNMHIJO.
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The arivia.kom vision is to be the dominant ICT
solutions company in Africa

• The group is realising this vision through a
  strategy that
• Leverages the significant Infrastructure
  capability and scale,
• Maximises experience and intellectual property in
  Focused Business and Niche Solutions, and
• Establishes long-term ventures with our clients
  and partners to fully exploit business value from
  information-related technologies

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arivia.kom management structure
arivia.kom Board of Directors
Chief Executive Officer
Chief Operating Officer
Chief Financial Officer
HR Executive
Market Development Executive
Infrastructure Business Executive
Focused Business Solutions Executive
Niche Markets Executive
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Business focus

• Provides integrated business solutions that
  include the entire spectrum of information
  technology services
• Focus is high-end business technology solutions
• Solutions support the public sector and large
  private sector corporates
• Primarily within the South African and African
  markets
• Large, end-to-end information technology
  outsource agreements
• Turn-key business solutions
• Niche solutions
•  

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Market Focus
A14GBGHNMHIJO.

• Energy
• Transportation
• Public Sector
• Financial Services
• Media and Communication
• Africa
• Emerging Markets

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arivia.kom business structure
arivia.kom Corporate

InfrastructureBusiness
Focused Business Solutions
Niche Markets




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Infrastructure Business

• Delivers end-to-end IT infrastructure solutions
• Deploys over 1100 skilled professionals
• Delivers infrastructure services through -
• Hosting
• Connectivity
• Support Services
• Owns significant infrastructure capacity on a
  national basis

Infrastructure Business provides network and
other infrastructure capacity on a national
basis.
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Infrastructure Business Business model
arivia.kom
Infrastructure Business
Hosting
Connectivity
Support

• Mail
• Network
• Internet

• Managed Desktop Services
• Regional Network Connectivity
• Regional Application Support
• Regional Infrastructure

• Mainframe
• Unix
• Midrange Servers
• Enterprise Management
• Risk Management

User Interface
2nd line support routed to specialist area
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Focused Business Solutions

• Provides totally integrated business applications
  to business needs
• Deploys over 250 skilled professionals
• Significant development, integration and
  deployment capability
• Structured around three focused areas
• Application Development Support
• IT Consulting Services
• Enterprise Solutions
• E-Ventures

Provides an extensive range of end-to-end
business solutions ranging from analysis and
conceptual design, through to full solution
development, implementation and support.
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Focused Business Solutions Business Model

• arivia.kom

Focused Business Solutions
e-Ventures
Application Development And Support
IT Consulting Services
Enterprise Solutions (Csiper Consulting) Products
packaged into integrated solutions Post-implemen
tation maintenance and support
e-consulting complete e-business solutions
IS Strategy Architecture
Full Application Development Lifestyle
Change Management
Business case development Feasibility
analyses
Business Process Re-engineering
System Integration
Evaluation of e-ventures e-products and
e-partners
Packaging Implementation
Business Re-engineering
Research for e-business promotion
Application Lifecycle Planning
Project Management Consulting
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Niche Markets
Niche Markets provides specialised technologies
and niche business solutions. These include GIS
(Geographic Information Systems), smart card and
biometrics, as well as knowledge and document
management. These technologies are the basis for
integrated niche solutions such as election
solutions, national identification solutions and
traffic information management solutions. Niche
Markets also offers an IT financing capability
through the 50 joint venture, Spartan Computer
Rentals.

• Biometric Solutions
• Healthcare Management Solutions
• Geographic Information Solutions
• IT hardware peripheral financing

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Niche Markets Business model

• arivia.kom

Niche Markets
Computer Foundation Geographic Information
Solutions
Intersolve Health Informatics Healthcare
Management Solutions
Face Technologies Biometric Solutions
Spartan Computer Rentals IT hardware and
peripheral financing
Externalalliances associations
Internal Delivery Channels Integrated Solutions
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arivia.kom maiden financial year performance
end of March 2002
Abridged Selected Financial Results

• Revenue R1.51 billion
• EBITDA1 R159.1 million
• Net Profit R33.7 million
• Cash R47.2 million

1. Earnings before interest, tax, depreciation and
   amortisation.

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Abridged Group Income Statement
Revenue
2002 (R000)
Revenue
1 510 450
Gross Profit
1 097 062
Operating income (EBITDA)1
159 069
Depreciation
(125 697)
Net Finance Costs
(5 939)
Operating income from normal operations
27 433
Goodwill amortisation
(4 189)
Income before taxation
23 244
Taxation
8 005
Net income after taxation
31 249
Share of associate companies retained income
2 467
Income attributable to outside shareholders
(44)
Net income for the period
33 672

1. Earnings before interest, tax, depreciation and
   amortisation.

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Abridged Group Balance Sheet
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Abridged Group Cash-Flow Statement
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arivia.kom National Framework Agreement
commitments have been honoured

• All staff from the three entities will be
  transferred to arivia.kom
• No-one will overall be worse off due to the
  consolidation process
• There will be no forced retrenchments during the
  first 3 years of the consolidation process

• All staff from the three entities will be
  transferred to arivia.kom
• No-one will overall be worse off due to the
  consolidation process
• There will be no forced retrenchments during the
  first 3 years of the consolidation process

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We completed a number of key initiatives to
improve the financial performance

• Acquisition of an ERP business
• Migrated excess capacity
• Cost saving initiatives across the business
• Aggressive drive towards new business
  development
• Have been awarded new business contracts in
  excess of R640m of which less than 35 was
  generated from our traditional customer base

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We also completed a number of consolidation
activities

• Implemented a competitive business model
• Integrated over 1800 staff and conditions of
  service
• Consolidated our infrastructure and assets
• Structured governance mechanisms and corporate
  processes
• Established a respected brand in the market place
• Achieved an employment equity target of 51 and
  gender equity of 30

This positioned arivia.kom as a competitive
business in the local and African IT markets.
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Going forward we will become the dominant
provider of ICT solutions provider on the African
continent

• Diversifying our revenue base into selected
  market sectors and Africa with an emphasis on
  annuity contracts
• Enhancing our solutions portfolio and delivery
  capacity
• Continue taking the messages of our solution
  offerings, leadership and track record into our
  target markets
• Focusing on the quality of our service delivery
  and the formulation of solutions for specific
  industries
• Consummate the arivia.kom/SITA relationship

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Going forward we will become the dominant
provider of ICT solutions provider on the African
continent

• Fully exploiting trends, emerging business
  applications and technologies for our clients
• Driving sustainable cost-saving and efficiency
  initiatives throughout the business
• Further maximising shareholder value through the
  exploitation of consolidation synergies and
  economies of scale
• Be exemplary in our commitment to Black Economic
  Empowerment in all its dimensions

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We have set ourselves an aggressive but
achievable budget for 2002 / 2003
Budget 2002 / 2003
Growth

• 60 from shareholding entities (internal)
• 35 from external customers
• Public Sector - 20
• Private Sector - 12
• Africa - 8

1,626
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Revenue
96
417
PBIT
77
296
Attributable Earnings

• After funding all acquisitions from operating
  cash flow
• After investment in Africa

80
800
Average Cash Flow
6
----
Operating Margin -
20
----
Return on average shareholders funds -
This budget is supported by the necessary
Operational and Financial infrastructure
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The arivia.kom strategic milestones
Strategic Milestone 1
Strategic Milestone 2
Strategic Milestone 3
Strategic Milestone 4

• BEE
• Acquisition strategy to achieve scale and scope

Commercialised Business
IPO

• Creation of the business
• Launch the brand
• Structure transaction

• Final value extraction for shareholders
• If less than 3 year reverse listing of
  arivia.kom

• Stabalise the business
• Merger integration process- People / processes
• Acquire capability
• Commercialisebusiness model and process

• Structured Black Economic Empowerment
  transaction
• Acquisitions
• Potential SEP structure

Timeline between 3 5 years
We are on track in achieving our strategic
milestones.