Sephaku Holdings Limited · JSE:SEP
Sephaku — Non-Deal Roadshow (September 2013)
26 slides from Sephaku's roadshow presentation, September 2013
Slide 1: Exploration, Development, Income, Growth – Roadshow Presentation
EXPLORATION, DEVELOPMENT, INCOME, GROWTH ROADSHOW PRESENTATION AUGUST/SEPTEMBER 2013 1
Slide 2: Disclaimer
DISCLAIMER This presentation includes certain forward-looking information. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation those concerning: Sephaku Holdings’ strategy; the economic outlook for the industr
Slide 3: The Sephaku Story
THE SEPHAKU STORY EXPLORATION Sephaku commenced business in 2006 as an HDSA owned, mineral exploration company seeking opportunities brought about by changes in the MPDRA. Limestone and Fluorspar resources were quickly identified and proven as the most viable reserves in Sephaku's portfolio. This re
Slide 4: Company Evolution
COMPANY EVOLUTION LEGEND: Sephaku Holdings key developments Sephaku Cement key developments • Commence production of cement from Delmas early 2014, and Aganang • Acquisition of Métier Mixed Concrete (Pty) Ltd mid 2014 • Securing of R1,95 billion loan facility • Sale of 26% in African Nickel • Shares
Slide 5: The Sephaku Group
THE SEPHAKU GROUP ORGANOGRAM AND DESCRIPTION OF BUSINESS Sephaku Holdings • 30.6% HDSA-owned construction materials company Operational Structure • Focused on the development of its cement project and its related projects and assets held through its interest in Sephaku Cement • Métier was acquired i
Slide 6: Board of Directors
BOARD OF DIRECTORS Front row from left to right: Brent Williams, Gustav Mahlare, Mpho Makwana, Dr Lelau Mohuba, Neil Crafford-Lazarus, Shibe Matjiu, and Pieter Fourie Back row from left to right: Rudolph de Bruin, Moses Ngoasheng, Dr David Twist, Kenneth Capes, Jan Wessels and Jennifer Bennette 6
Slide 7: Board of Directors – CVs
BOARD OF DIRECTORS – CV’S BRENT WILLIAMS (49) NEIL ROBUS CRAFFORD-LAZARUS (53) Chairman – independent non-executive director Financial director – executive director BA (UCT), BProc (UWC), LLM (Harvard University Law School), DLA Piper BCompt (UFS), BCompt (Hons), CA (SA) Harvard Leadership Programme
Slide 8: Board of Directors – CVs Continued
BOARD OF DIRECTORS – CV’S CONTINUED CHRISTIAAN RUDOLPH DE WET DE BRUIN (60) KENNETH CAPES (45) Non-executive director Non-executive director BCom (University of the Free State), LLB (Rand Afrikaans University) Kenneth has extensive experience in the ready-mixed concrete and Rudolph practised as an a
Slide 9: Location of Assets
LOCATION OF ASSETS exploration, Development, INCOME, GROWTH 9
Slide 10: The Cement Business
THE CEMENT BUSINESS www.sephakucement.co.za 10
Slide 11: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM SEPHAKU CEMENT PIETER FREDERICK FOURIE GAY DE WITT CEO Chief financial officer BCom (Accounting), Executive Development Programme (PRISM) for Global BCom (Hons) (University of Pretoria), CTA (Unisa), CA(SA) (SAICA) Leaders (IMD, Switzerland) Gay has experience in various
Slide 12: Project Quantities
PROJECT QUANTITIES Project Concrete Volume Structural Steel exploration, Development, INCOME, GROWTH 12
Slide 13: Sephaku Cement
SEPHAKU CEMENT • Most environmentally efficient producer • 6 000t clinker per day equates to circa 2.5 mtpa cement • Lowest-cost producer • Commences production, beginning 2014 • Plants: Sinoma supplying, constructing on full turnkey basis • Capital: unchanged at R3.2bn fully funded • Latest techn
Slide 14: Aganang Project
AGANANG PROJECT exploration, Development, INCOME, GROWTH 14 14
Slide 15: Delmas Project
DELMAS PROJECT exploration, Development, INCOME, GROWTH 15 15
Slide 16: Our Markets
OUR MARKETS • The cement market is Existing Sephaku Total Total Percentage Year Surplus / deficit Capacity Cement Capacity demand capacity expected to reach capacity in late 2017 to 2012 14.55 - 14.55 12.48 2.07 86% early 2018 2013 14.55 - 14.55 13.04 1.51 90% • Anticipated retirement 2014 14.13 1.0
Slide 17: Our Markets Continued
OUR MARKETS CONTINUED 25 000 000 20 000 000 Cement Mtpa 15 000 000 10 000 000 5 000 000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 PPC Inland PPC Eastern Cape PPC Western Cape Afrisam Inland Afrisam NC & Coastal Lafarge NPC Southern KZN Sephaku Demand exploration, Development, INCOME,
Slide 18: Competitive Edge to Industry Average
COMPETITIVE EDGE TO INDUSTRY AVERAGE • Power utilisation efficiency – 94 kwh per ton of cement • Logistical advantage – location of Delmas mill • Environmental impact – lowest carbon footprint • Minimal maintenance requirements due to brand new plants • Inland price structures exploration, Developme
Slide 19: Market Comparables – Cement Only
MARKET COMPARABLES – CEMENT ONLY • PPC trading at high multiples • Large and unreliable spread across P/NAV valuations • Market multiples imply a share price well in excess of where it is currently trading • Discounted cash flow valuations imply prices in the region of R13 per share depending on the
Slide 20: The Métier Business
c SEPHAKU HOLDINGS LTD THE METIER BUSINESS
Slide 21: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM MÉTIER WAYNE WITHERSPOON GLEN TALMAGE Operations director Commercial manager, Northern Region BCom (University of Natal, Durban), LDP (UNISA School of Business) NHCD (Wits Tech) Wayne spent 14 years with Barloworld Equipment Company in various Glen has extensive experienc
Slide 22: Métier
MÉTIER • Significant operations around the Durban, Pietermaritzburg and Gauteng areas • Experienced management with five concrete technologists • Fleet of 115+ trucks • Large fixed plant footprint supplemented by mobile plant operations • Métier clients include: Group Five Construction/Coastal WBHO
Slide 23: Transaction Rationale
TRANSACTION RATIONALE • Rationale for Sephaku: immediate cash flow positive earnings and value accretive benefits from the inclusion of a mixed concrete producer vertical integration • Rationale for Métier: secures input material liquidity event become part of larger, JSE listed group
Slide 24: Transaction Structure
TRANSACTION STRUCTURE • Cash: R110m • 5m primary shares: R30m @ R6 per share • 11.1m secondary shares: R100m @ R9 per share Closing 1 Dec 2014 28 Feb 2013 • Cash: R125m • Agterskot: an additional amount of shares at current 60-day VWAP which would make total consideration in secondary shares at curr
Slide 25: Sephaku Holdings Investment Case
SEPHAKU HOLDINGS INVESTMENT CASE • Focused cement and cement-related products play • Métier provides immediate cash flow and earnings • Will be a significant force in the South African cement sector • Most environmentally efficient cement plants in South Africa • Capacity expected to come on line at
Slide 26: Contact Details
CONTACT DETAILS Contact Office Mobile E-mail Dr Lelau Mohuba 012 622 9400 082 802 1496 lmohuba@sepman.co.za Neil Crafford-Lazarus 012 622 9400 082 451 8211 neil@sepman.co.za Pieter Fourie 012 684 6300 079 492 1850 pfourie@sepcem.co.za Kenneth Capes 031 716 3600 082 611 6090 kenneth@metiersa.co.za ex
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