Information communication technologies: Nashua

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Nashua’s office automation and telecommunications expertise enables it to provide services to a range of clients, from individuals to large corporate customers in southern Africa.




Grow customer base and minutes on voice network.
12% growth in minutes sold on voice network and more than 1 500 new installations. Finalise agreements with MTN and Vodacom.

Drive print and document management offerings in office automation segment.

Build VoIP network at a faster pace.

Increase penetration with Cisco product and services.

Secure external funding for Quince.
Market penetration in the converged voice and data network space.
Penetration has been slower than expected, but the skills set and strategy is in place for this to occur in 2014.
Rollout of products developed for hosted PBX, mobile voice and data storage.
Hosted PBX pilot has been deployed, with a full market release expected at the end of 2013.
Strengthen customer focus through training and improved technology.
A customer-centric culture programme was launched at Nashua Office Automation.

Nashua Mobile significantly increased its training interventions.

Technology was upgraded to service customers better. Further enhancements will be made during 2014.
Grow Nashua Mobile’s retail presence.
Given the challenging environment, the rollout plan was put on hold.
Accelerate rollout of office solutions.
Strategic initiatives implemented in the managed document solutions business are gaining traction.
For more on our products and services visit
The Nashua segment faced a challenging operating environment this year. The telecommunications industry’s race for customers, declining business confidence and the impact of the weaker rand affected its performance. Revenue dropped by 6% to R6,8 billion, while operating profit declined 24% from R839 million to R636 million.


HP gold specialist award
Top 500 companies: Top company in the Office Automation Industry
2013 Winners circle award – Laserfiche
Ricoh 30 year award as distributor
Ricoh 40 year association
Ask Africa Orange Index
Independent Cellular Providers
» 2nd in the winning brands category
Cisco Gold Partner
Unify* Premier Solution Provider
* formerly known as Siemens Enterprise Communications
The further reductions in mobile interconnect rates, which resulted in lower tariffs by the network operators, had a negative impact on Nashua Mobile’s revenue contribution. A stalemate on how new incentive agreements will be implemented lowered operating profit as Vodacom decreased the incentive provided to the company from March 2013. The current business model is under scrutiny.

Nashua, with its strong brand recognition, continues to serve a valued customer base. Strategic partnerships with international product suppliers were evaluated and reaffirmed. Nashua will continue to build its solutions’ offerings, while being selective in sourcing best-of-breed products.

Various change management initiatives have been introduced to embed a customer-centric approach and to ensure that employees seamlessly shift from selling products to delivering solutions to clients.

Market conditions are expected to remain tough in the foreseeable future. It is thus critical that the business continues to improve and expand its distribution channels. Further investment in products and systems that will generate greater productivity and efficiencies, coupled with a positive customer experience, will be pursued.


Nashua Office Automation produced respectable results in a competitive environment.
The revenue from increased unit sales was offset by cost pressures driven by a weaker rand and supplier price increases. Although document volumes are expected to decline in the long term, volume increased by 5% in the current year to a monthly average of 409 million prints. Service and annuity income remain a key focus area for the business. Revenue from consumables and parts remained flat in relation to last year. Annuity income comprised 42% of revenue in the current year.

Printer unit sales increased by 9%. However margins were slightly down, as was the case with multifunction unit margins. The production print division showed pleasing growth and is expanding as commercial printers migrate from traditional lithography printing to digital colour solutions.

Partnerships with product suppliers are crucial to Nashua’s business. A five-year, non-exclusive agreement is being concluded with Ricoh International, who remains Nashua’s key strategic partner. Nashua also strengthened its product range by including products sourced from Hewlett Packard, Samsung and Sindoh in its offering.

The acquisition of major franchises remains a strategic focus for Nashua and led to the purchase of the Nashua North business for R248,5 million in July 2013. Further acquisitions in line with the strategy will be concluded in the short to medium term.

The strategic initiatives implemented in the managed document solutions (MDS) business are starting to gain traction. The MDS team has grown in both the sales and technical areas creating a solid foundation for the 2014 fiscal period.

Software solutions and electronic document flow are key strategic growth areas for Nashua. A new entry-level document management system aimed at the SME market was recently launched. Nashua has also solidified its distribution agreement with Laserfiche.

Strategically Nashua is moving from a product-led to a service-led organisation. The shift required in changing the sales dynamic from product offering to software solutions supplier is supported by training programmes and recruitment.

Overall, the franchise channel met expectations, and the sales of other Nashua group products, such as Nashua Communications’ VoIP and PBX offerings, is gaining momentum.

Nashua intends to broaden its presence in the SADC countries by establishing dealer channels in Zambia and Mozambique and further north into Ghana. Potential partners have been identified in other territories and opportunities will be evaluated continually.

Nashua has been working on establishing an industryrecognised training programme for technicians, which will be accredited by the MICT SETA and rated at SAQA NQF level 5. Nine students have already been identified and will start the year-long pilot course in January 2014.

The warehousing system is set to be upgraded and centralised, thereby reducing costs, improving efficiencies and reducing carbon emissions. A direct distribution pilot will be run in the Gauteng region from the middle of 2014 and plans are afoot to roll out nationwide distribution for machines, certain peripherals and consumables by year-end.

Nashua had its stage 2 environmental management system audit at year-end. ISO 14001 certification is expected by the end of January 2014. Nashua retained its level 4 BBBEE rating.

Nashua continues with its corporate social investment initiatives through the Nashua Children’s Charity Foundation (NCCF). NCCF originated as a charity project in 2006, largely as an HIV/Aids initiative to support township schools. It has grown steadily over the years and today the Foundation is a registered non-profit organisation that supports 54 charities. The focus is on addressing the basic needs and education of orphans and indigent and vulnerable children. The trustees meet monthly to assess requests for donations and assistance. This year R4,5 million was invested in providing food, clothes and infrastructure improvements for the community.


Nashua Mobile experienced strong headwinds as competition between mobile operators intensified in a saturated cellular industry. Downward pressure on call and subscription rates saw subscribers using less out-of-bundle airtime and average revenue per user (ARPU) declined by 7% to R312 per user.
Gross profit was dampened further by reduced margins received from Vodacom for seven months of the year under review. We expect this pressure to continue and that the other operators will follow suit by reducing ongoing margins to the independent distribution partners wherever possible.

Costs were contained and increased by just 2%. Headcount increased slightly to 752 employees, excluding staff employed by franchises and channel partners.

The post-paid subscriber base grew by 4% to 934 911 subscribers. During the year, a further 9 715 least-cost routing (LCR) sim cards were deactivated, leaving a small base, which will wind down over the next two years.

Data subscribers grew by 30% during the period under review. Nashua Mobile continues to strengthen its position as a supplier of smartphones, with 82% of all devices sold being smartphones. By year-end, monthly sales of smartphones had exceeded 88% of total devices sold.

Higher customer churn is a combination of an increase in bad debt, shortfall on customer service and the continued reduction in customer incentive bonuses received from the networks.

Bad debt increased significantly in the current year and is a reflection of the pressure on small enterprise and consumers in the current economic climate. Tighter customer acquisition rules, as well as the automation of many of the credit control functions are receiving the required attention to reduce the bad debt to more acceptable levels.

High-end smartphones are sought after and the number of handset devices financed increased by 46 000 to 247 000. We expect continued growth in the handset financing book. While these handsets are currently funded from Nashua Mobile generated cash, alternative funding options are being explored.

The capital expenditure programme initiated in 2012 continued with both the company’s server and network infrastructures being replaced in 2013. These enhancements will contribute to business innovation and agility and signal the introduction of customer-friendly technologies.

The migration of the call centre to Bloemfontein, started in January 2009, is complete. Located close to the University of the Free State, the call centre is a major employer of graduates in the city. A number of students have been recruited to work during peak periods or after hours and on weekends. These students are potentially a valuable pool of skilled workers once they graduate.

In collaboration with SAICA, 33 learnerships in general business administration or financial management were offered to staff. A 97% pass rate was achieved in these two programmes. A grass roots programme was successfully run with the Reunert College to provide 20 graduates from the College with basic telecoms and retail experience and making them more marketable in the workplace.

Nashua Mobile successfully retained its Level 3 BBBEE status in 2013. Good progress was made in accelerating transformation at both middle and senior management levels.

A total of R1,8 million was spent on corporate social investment of which R1,6 million was in aid of the NCCF.
  2013 2012 2011 2010 2009
Closing subscriber base
934 911
897 534 846 521 819 035 722 638
Number of subscribers signed up
196 822
214 442 174 151 187 382 159 960
Number of subscribers lost
83 366
120 861 146 665 90 985 100 709
Network base adjustments
61 270
42 568 99 247
R337 R416 R463 R501
Churn %1
18,7% 17,6% 11,8% 13,6%
Smartphones as % of total subscriber base
Number of prepaid sims
63 148
44 863 22 676 12 419 6 093
1 Churn has been restated to include base adjustments.
  247 000


The consolidation of three businesses (ECN, KSS Technologies and Nashua Communications) under the Nashua Communications banner over the past 18 months proved challenging and produced mixed results.
Continued growth in the voice network, solid progress within the Panasonic product-set and reasonable inroads into the Cisco data centre and networking sector could not offset the decline in Siemens Enterprise Communications’ (SEN) product sales and margins. This performance led to a decision after year-end to right size this division to match expected revenue.

Nashua Communications continues to value its relationship with SEN, which was renamed Unify on 15 October 2013. Sales, service, support and maintenance of the Unify products and the installed base will not be affected by the cost reductions that were effected after financial year-end.

The shift to supplying and supporting best-of-breed solutions that fit customers’ needs will ensure that the business is in a position to move rapidly in the wider ICT space as the market evolves. Off-premise solutions will predominantly consist of Nashua Communications branded cloud services using Cisco technologies to host and deliver these services over the Nashua Communications Network (NCN).

The economic environment this past year has caused many large enterprises to sweat their ICT assets. They are cautious and cost conscious when considering and negotiating an upgrade or technology change. The slowdown in hardware and solution sales due to this has been offset by demand for the savings the NCN offerings provide.

NCN recorded a solid year, increasing total voice minutes by 12% to 790 million minutes, and ending the year with 1 504 new customer installations. Initial problems with the Telkom backbone infrastructure hampered the successful transfer of ported numbers, but these have been resolved and inbound traffic to the Nashua number ranges is growing steadily. Network stability, up time and voice quality continue to far exceed internationally accepted carrier standards.

Telecommunications regulator Icasa’s announcement, proposing further drops in interconnect rates over the next three years bodes well for the business. As the interconnect rates reduce, the efficiency of the Nashua network allows for improved margins.

Nashua Communications will continue its efforts to remain a low cost quality network providing integrated communications services. New wireless opportunities in the last mile (LTE /4G) as well as the roll out of fixed-line VDSL (Very High Bit rate DSL) offer interesting options and variety in this important space.

Further consolidation is expected over the medium term as the large operators look to combine fixed and mobile offerings. Medium-sized players will likely look at developing critical mass to ensure that they remain relevant. This should lead to aggressive competition and continue to drive communication costs down.

Nashua Communications improved its BBBEE rating to level 3 after year-end and has implemented plans to address equity transformation at senior management level. The company made significant contributions to the NCCF and the Thembalitsha Foundation as part of its corporate social investment programme.
1 504


PanSolutions experienced another difficult year. Revenue and operating profit was down as the market remained highly competitive and margins contracted. The office automation dealer channel has settled, providing a suitable base to build from in the future.
Technical support provided to the office automation dealers has been turned into a value proposition. A change management process was implemented to assist with the industry shift towards managed document solutions and print services. Opportunities exist to expand the dealer network in Gauteng, the Western Cape and KwaZulu-Natal. It is expected that new dealer appointments will be made in 2014.

The appointment of relationship consultants contributed to growing the customer base and this initiative will be extended to the Cape Town and Durban branches. The Centurion branch was moved to the head office in Midrand to contain costs.

The placement of remanufactured machines will start in 12 to 18 months time as used equipment becomes available. This is expected to provide opportunities into new sales segments for the company. PanSolutions has been a distributor of Kyocera equipment for the past three years.

Economic pressures, industrial action and lower demand in the automotive industry had a negative impact on the supply of Panasonic radios to that sector, and this in turn affected growth figures. The launch of new vehicle models next year could be beneficial and the ISO 14001 standard will be implemented in the company in line with international requirements.

Projectors and digital panel sales worsened in the second half as customers’ building projects slowed. New technology using laser projectors could see increased sales to the media sector. Demand for the Panasonic Toughbook was subdued. The launch of a robust Windows-based tablet, which works well in harsh environments, could boost sales in the mining and construction sectors.

Online advertising saw a rapid uptake of entry-level broadcast equipment and new products, including ceiling-mounted cameras used in diverse applications.

The retention of key employees and technical skills is receiving attention and certain gaps will need to be filled through mentorship programmes and technical learnerships in future.

PanSolutions improved its BBBEE rating from a Level 4 to Level 3 and will continue to focus on employment equity transformation at senior management level.


A sound business model and a high quality rental book contributed to Global Credit Rating Co issuing an A+ national credit rating to Quince in August 2013. Quince had a strong year, growing its book by 26% to R1,8 billion.
Asset performance remained strong and defaults were the lowest they have been since the economic crisis in 2008. The rental book was boosted by R130 million following the acquisition of the Nashua North franchise book. A conservative approach ensures that expected losses are well provided for, while diversification across the different Nashua channels guarantees a lower risk exposure. The customer base spans all business types and industries, represented by more than 50 000 devices.

More than 80% of business is generated by Nashua franchises, with the remainder from the PanSolutions and Nashua Communications dealer networks. Onsite presence at these franchises and dealers contributes to the book growth and quality. Improved turnaround times, accurate paperwork, and a good understanding of customers’ needs all contribute to cementing long-term business flow. Recurring business accounts for more than half of the transactions entered into by the company.

Margins reduced slightly following Nashua’s increased focus on larger corporate customers. Tough trading conditions are expected to continue with interest rates likely to remain flat. The moderate shift from the traditionally preferred fixed rates to the relatively lower linked rates has further negatively impacted margins.

Operating expenses are well controlled and service quality remains core to the success of the business. Further enhancements will be made in 2014 to the bespoke FinSight online credit vetting system.

Quince’s level 3 BBBEE rating was re-confirmed in July 2013. Employment equity targets have been set and are monitored at executive level. Employees are being groomed for various positions in the company through formal and on-the-job training, job rotation and mentoring.

This year, five female learners continued the SAICA approved Association of Accounting Technicians learnership. This three-year course is internationally accredited.

Quince made a contribution to the Reunert College, continued its support to the NCCF and initiated various other corporate social investment initiatives. These contributions are set to continue in 2014.
  2013 2012 2011 2010 2009
Nashua book
1 820,0
1 431,1 1 281,2 1 269,8 1 413,9
Average monthly discounting
64,5 55,4 47,7 52,8
  50 000
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