Remgro Limited · JSE:REM
Remgro — Remgro Ltd Ord — FY2024 Earnings Presentation
71 slides from Remgro's earnings presentation, Sep 19, 2024
Slide 1: Results Presentation
Results Presentation For the year ended 30 June 2024
Slide 2: Contents
Contents 01 Performance overview and operating context 04 Update on key portfolio companies 02 Delivering on our strategic priorities 05 Outlook & key areas of focus 03 Summarised results for the year 06 Q&A
Slide 3: Performance overview and operating context
Performance overview and operating context 3
Slide 4: A challenging backdrop, but with pockets of improvement
Performance overview and operating context A challenging backdrop, but with pockets of improvement Positive momentum and green shoots locally Global macros remain tenuous • Encouraging traction on reform • Ongoing geopolitical tensions • Improving growth outlook • US recession risk creates an overha
Slide 5: Weaker earnings performance largely driven by non-recurring items
Performance overview and operating context Weaker earnings performance largely driven by non-recurring items Ordinary dividend 264c INAVPS R251.01 HE R5 647m HEPS 1 018c 10.0% 1.0% 20.0% 18.8% (2023: 240c) (June 2023: R248.47) (2023: R7 056m) (2023: 1 254c) Closing share price INAV discount R136.09
Slide 6: Delivering on our strategic priorities
Delivering on our strategic priorities 6
Slide 7: Doubling efforts to deliver on our stated strategic priorities
Delivering on our strategic priorities Doubling efforts to deliver on our stated strategic priorities Strategic Outcome 1 Embedding transformative corporate actions Sustaining momentum and resilience through the 2 Considered portfolio construction and disciplined capital allocation to unlock sustain
Slide 8: Embedding transformative corporate actions
Delivering on our strategic priorities Embedding transformative corporate actions 1 As an Investment Holding Company, Remgro is an astute allocator of capital and strategic partner In process Integration Optimisation Unlocking value • Financial and accounting impacts • Capital allocation • Extractin
Slide 9: Heineken Beverages: Recap
Delivering on our strategic priorities Heineken Beverages: Recap 1 Integration largely completed and well positioned to deliver growth Phase 2: Optimise and deliver on Phase 1: Integration Phase 3: Drive growth Click to add heading synergies Click to add heading 1 Legal Day 1: 26 April 2023 1 System
Slide 10: Heineken Beverages: Performance over the twelve months
Delivering on our strategic priorities Heineken Beverages: Performance over the twelve months 1 H1 performance to December 2023 H2 performance to June 2024 Beyond Beer Portfolio: Beer Portfolio: Unresolved issues Resolved issues Outperformed the Market Remains under pressure Non-recurring expenses S
Slide 11: Capital allocation - Remgro's conceptual framework
Delivering on our strategic priorities Capital allocation - Remgro’s conceptual framework 2 Sources of capital Uses of capital Investment • Engine room for capital formation • Sustainable and stable dividends remain • Primary source of capital over time Dividends income a priority • No fixed targets
Slide 12: Notable deleveraging using cash and non-core assets
Delivering on our strategic priorities 2 3 Notable deleveraging using cash and non-core assets Capital sources (R9.4bn) Capital allocated (R9.4bn) 3.3% 12.7% 14.1% 23.9% 7.7% 39.9% 36.2% 62.2% Investments made Dividends paid Investment income received Investments realised Share repurchases Debt and
Slide 13: Unsatisfactory growth from the core portfolio
Delivering on our strategic priorities Unsatisfactory growth from the core portfolio 2 Portfolio composition June 2024 Portfolio composition June 2023 Net cash Net cash 3% 1% Cash generating Cash generating Other 23% Other 26% 1% 2% Portfolio Recovery Core portfolio Recovery investments Core portfol
Slide 14: Unlocking value through divestments
Delivering on our strategic priorities Unlocking value through divestments 2 3 What defines the ‘tail’? What drives timing? Other considerations: • Sometimes big • Price relative to value investments start as • investments The investment’s contribution to small investments • Market conditions Listed
Slide 15: Summarised Results for the Year
Summarised Results for the Year 15
Slide 16: Headline earnings reconciliation
Summarised results for the year Headline earnings reconciliation (for illustrative purposes) 9 000 ↓20% ↑84% ↑21.6% ↑31.4% 8 000 499 # 192 108 ↑>100% 7 056 512 7 000 6 475 32 6 413 ↓1% (983) 6 000 (581) ↓<(100%) (281) (141) 5 647 ↓<(100%) (766) 5 000 R million 4 000 3 000 2 000 1 000 - Headline Corp
Slide 17: INAV: Overview of changes
Summarised results for the year INAV: Overview of changes for the year ended 30 June 2024 R251.01 ↑1.0% R248.47 ↑21.6% ↑>100% ↑0.4% ↑47.4% 3 ↑36.6% 3 ↓13.8% R million ↓43.2% ↓100% n edi lini eine en eve ages ent s an e in l ain et ash i d ts the n * Sold in June 2024 INAV per share 17
Slide 18: Valuation approaches – unlisted investments
Summarised results for the year Valuation approaches – unlisted investments Principal valuation methodology Discounts applied Lack of Post Discount marketability % of Remgro Change in value Historic Sum-of-the and/or control Forecast risk Investee Company NAV (1) Equity interest (from 30 June 2023)
Slide 19: Valuations: significant unlisted investments
Summarised results for the year Valuations Significant unlisted investments 50 000 47 268 45 000 43 089 40 756 ↓R6. bl, R .7 ps 40 000 ↓8.8% ↓13.8% 35 000 30 000 25 000 20 000 14 300 14 497 15 000 13 064 12 451 ↓R . bl, R9.7 ps ↓8.6% ↑1.4% 10 000 6 751 7 071 5 972 6 007 6 302 6 103 4 911 4 888 5 000
Slide 20: Results overview per platform: Healthcare
Summarised results for the year Results overview per platform Healthcare Earnings Dividend Intrinsic value Headline earnings Dividends received yield % yield % Remgro 30 June 30 June % 30 June 30 June % 30 June 30 June % 30 June 30 June R million Interest 2024 2023 change 2024 2023 change 2024 2023
Slide 21: Results overview per platform: Consumer Products
Summarised results for the year Results overview per platform Consumer Products Earnings Dividend Intrinsic value Headline earnings Dividends received yield % yield % Remgro 30 June 30 June % 30 June 30 June % 30 June 30 June % 30 June 30 June R million Interest 2024 2023 change 2024 2023 change 202
Slide 22: Results overview: HeinBev/Capevin/Distell
Summarised results for the year Results overview per platform Consumer Products: HeinBev/Capevin/Distell Earnings Dividend Intrinsic value Headline earnings# Dividends received yield % yield % Remgro 30 June 30 June % 30 June 30 June % 30 June 30 June % 30 June 30 June R million Interest 2024 2023 c
Slide 23: Heineken Beverages results overview
Summarised results for the year Heineken Beverages results overview 200 100 92 - (100) (199) (200) R million (300) (316) (209) (400) (500) (600) (573) (257) (700) Headline loss IFRS 3 Headline Once-off costs ** Interest Underlying amortisation* loss excl. and forex *** headline IFRS 3 earnings amort
Slide 24: Results overview per platform: Financial Services
Summarised results for the year Results overview per platform Financial Services Earnings Dividend Intrinsic value Headline earnings Dividends received yield % yield % Remgro 30 June 30 June % 30 June 30 June % 30 June 30 June % 30 June 30 June R million Interest 2024 2023 change 2024 2023 change 20
Slide 25: Results overview per platform: Infrastructure
Summarised results for the year Results overview per platform Infrastructure Earnings Dividend Intrinsic value Headline earnings Dividends received** yield% yield% Remgro 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June R million Interest 2024 2023 % change 2024 2023 % change 2024 202
Slide 26: Results overview per platform: Industrial
Summarised results for the year Results overview per platform Industrial Earnings Dividend Intrinsic value Headline earnings Dividends received yield % yield % Remgro 30 June 30 June % 30 June 30 June % 30 June 30 June % 30 June 30 June R million Interest 2024 2023 change 2024 2023 change 2024 2023
Slide 27: Cash and debt at the centre
Summarised results for the year Cash and debt at the centre % of Year ended Year ended R million total 30 June 2024 30 June 2023 Local cash 48.5 3 309 5 872 Offshore cash 51.5 3 513 3 129 US$ 182.1m (@ R18.19/US$) (30 Jun 2023: US$156.2m @ R18.83/US$) 48.5 3 312 2 940 GB£ 3.4m (@ R23.33/GB£) (30 Jun
Slide 28: Dividends received evolution
Summarised results for the year Dividends received evolution 3 500 3 108 1% 3 129 3 000 16% 2 679 2 500 1 595 1 641 947 2 000 R million 1 500 1 000 1 732 1 513 1 488 500 - 30 June 2022 30 June 2023 30 June 2024 Year ended Listed Unlisted 28
Slide 29: Final dividend
Summarised results for the year Final dividend 1.2% 1.6% 1.8% 300 264 10% 250 240 60% 200 150 15% 184 160 cents 150 100 100 50 80 flat 80 50 - 30 June 2022 30 June 2023 30 June 2024 Interim Final Dates of importance Last day to trade in order to participate in the dividend Tuesday, 12 November 2024
Slide 30: Update on Key Portfolio Companies
Update on Key Portfolio Companies 30
Slide 31: Mediclinic Group
Mediclinic Group Ronnie van der Merwe (CEO) Jurgens Myburgh (CFO) 31
Slide 32: Mediclinic Group: Overview
Mediclinic Group Mediclinic Group: Overview Our Values Client Centered • The healthcare landscape continues to change rapidly • Mediclinic remains single-minded in our purpose to enhance the quality of life Trusting and Respectful • Our focus is to execute on our strategic objectives: Strengthening
Slide 33: Mediclinic: Strategic priorities - Switzerland
Mediclinic Group Mediclinic Group: Strategic top priorities and focus areas Building resilience in Switzerland Key Priorities Comprehensive plan to adapt the business for sustainability and growth Market dynamics and context Robust negotiation on supplementary insurance tariffs • Stable and growing
Slide 34: Mediclinic: Strategic priorities - Southern Africa
Mediclinic Group Mediclinic Group: Strategic top priorities and focus areas Optimise and expand Southern Africa Key Priorities Drive volume growth and optimise specialty mix Critically assess network participation Market dynamics and context Revenue growth in related business • Improving business co
Slide 35: Mediclinic: Strategic priorities - Middle East
Mediclinic Group Mediclinic Group: Strategic top priorities and focus areas Continue to grow and scale Middle East Key Priorities Organic revenue growth through existing facility utilisation and focused investment Optimising specialty mix by facility Market dynamics and context Improving staff produ
Slide 36: Mediclinic Group: Financial Results
Mediclinic Group Mediclinic Group: Financial Results • Group performance impacted by persistently challenging USD million1 FY24 FY23 Variance operating environment in Switzerland, partially offset by strong performance in the Middle East Revenue 4 592 4 356 5% EBITDA 673 685 (2%) • Group revenue up
Slide 37: Switzerland: Building resilience
Mediclinic Group Switzerland: Building resilience • Revenue and inpatient admissions for the period were broadly stable • Inpatient admissions up 0.8% compared with FY23 CHF million1 FY24 FY23 Variance • General insurance mix increased to 52.1% (FY23: 51.7%) Revenue 1 905 1 900 -% • Outpatient and d
Slide 38: Southern Africa: Expanding across the continuum of care
Mediclinic Group Southern Africa: Expanding across the continuum of care • Good revenue growth of 7% to ZAR20 786m • Ongoing recovery in client activity ZAR million1 FY24 FY23 Variance • PPD growth of 0.5% Revenue 20 786 19 506 7% • Average revenue per bed day impacted by network EBITDA 3 784 3 775
Slide 39: Middle East: Growth region with exciting prospects
Mediclinic Group Middle East: Growth region with exciting prospects • Strong increase in revenue by 10% to AED4 892m AED million1 FY24 FY23 Variance • Inpatient admissions and day cases were up 9% and 15% 4 892 4 459 10% • Outpatient cases up 4% Revenue • Volume increase partly offset by a decrease
Slide 40: Mediclinic Group: Top priorities
Mediclinic Group Mediclinic Group: Top priorities 1 Comprehensive plan to deliver resilience and future growth in Switzerland 2 Drive growth and operating margin improvement in Middle East 3 Initiate core systems replacement in Southern Africa 4 Invest for revenue growth across the continuum of care
Slide 41: CIVH
CIVH Pieter Uys (Chairman) 41
Slide 42: Strategy and Structure
CIVH Strategy and Structure Remgro NewGX CIH Vuma Key 57% 37% 6% Vodacom CIVH Vuma Core Vuma Reach 100% 100% 30 – 40% Open Access CIVH Africa Maziv Wholesale Uncapped Fibre Fibre 100% 100% 100% 50% FTTB Backhaul Dark Fibre Africa Vumatel LoanCo BritelinkMCT (DFA) (Vuma) Fibre-to-the-Telco 49.96% 51%
Slide 43: Pursuing growth in a difficult environment
CIVH Pursuing growth in a difficult environment Macro economic environment • High interest rate • Consumer disposable income ➢ Network freeze with Network limited sales upgrades • Network• upgrades Network to quality enable future growth • Enable future growth ➢ Reduced capital expenditure to ensure
Slide 44: Vumatel bridging the digital divide
CIVH Vumatel bridging the digital divide CORE market REACH market KEY market • Homes with household monthly • Homes with household monthly • Homes with household 2.2 income > R30k 4.8 income between R5k and R30k 9.7 monthly income < R5k million • Market mature million • 42% market penetration millio
Slide 45: DFA connecting corporate South Africa
CIVH DFA connecting corporate South Africa Fibre to the Business (FTTB) Fibre Backhaul Addressable market 570,000 31 Mar 24 31 Mar 23 % change 31 Mar 24 31 Mar 23 % change 41 668 36 788 13.3 23 765 22 188 7.1 Enterprises, SMEs MNOs, FNOs and ISPs As demand for data keeps growing, enterprise connecti
Slide 46: Financial results
CIVH Financial results CIVH (Consolidated) Year ended Year ended R million 31 Mar 24 31 Mar 23 % change Revenue 6 353 6 213 2.3 EBITDA 4 290 4 360 (1.6) Operating earnings 2 090 2 475 (15.6) Headline earnings (134) 361 nm DFA Year ended Year ended R million 31 Mar 24 31 Mar 23 % change Revenue 2 715
Slide 47: CIVH cash flow remains strong
CIVH CIVH cash flow remains strong 2024 (Year ended 31 March) 2023 (Year ended 31 March) 5 000 5 000 4 290 4 360 4 000 4 000 (44) (140) (342) (201) 3 000 3 000 2 013 2 191 2 000 2 000 (2 093) (1 626) 1 000 1 000 R million R million 0 0 (1 000) (1 000) (2 560) (415) (962) (3 483) (78) (1 370) (2 000)
Slide 48: CIVH valuation
CIVH CIVH valuation JUNE 2024 FY24 EV/EBITDA: 11.9x 60 000 50 975 50 000 40 000 31 477 R million 30 000 25 420 (19 498) (52) 20 000 14 497 (6 005) 10 000 0 Maziv enterprise value Maziv debt Maziv equity value Net other assets* Discounts CIVH equity value Remgro at 57.0% JUNE 2023 FY23 EV/EBITDA: 11.
Slide 49: Vodacom investment in Maziv
CIVH Vodacom investment in Maziv Transaction Competition Competition Competition Competition Competition submitted to the Commission Tribunal allowed Tribunal hearing Tribunal hearing: Tribunal ruling Competition recommendation to MTN and Rain as commenced: Final arguments expected Commission and Co
Slide 50: Vodacom investment benefits
CIVH Vodacom investment benefits Beneficial for the country, the economy and lower income households : • Commitment to invest at least R10 billion rand over a 5-year period • Pass at least one million new homes in lower income areas over a 5-year period • Commitment to create up to 10,000 new jobs •
Slide 51: RCL Foods
RCL Foods Paul Cruickshank (CEO) 51
Slide 52: Business well positioned for growth in key categories and brands
RCL Foods Business well positioned for growth in key categories and brands RCL Foods Portfolio Review Strategic Pillars - VECTOR LOGISTICS + RIGHT GROWTH Business disposed of 28 August 2023 • Grow organically through strong brands ➢ Core organic growth - RAINBOW ➢ Innovation in existing categories ➢
Slide 53: Market context - recent months green shoots start to appear
RCL Foods Market context - recent months green shoots start to appear Muted demand due to high price inflation has been a However, we are seeing signs of food inflation easing in continued challenge this year recent months which is positively impacting volumes TOTAL INFLATION VOLUME INDUSTRY 12MM 3M
Slide 54: Market Context - RCL brand performance remains strong
RCL Foods Market Context - RCL brand performance remains strong in tough environment The key market categories in which we operate remain in Despite market declines and focus on maintaining margins, decline in both the long and short-term key RCL brands have held or grown share in the near term MARK
Slide 55: Performance: for the year ended 30 June 2024
RCL Foods Performance: for the year ended 30 June 2024 RCL Foods delivered a pleasing EBITDA result despite consumer demand coming under increased pressure Underlying EBITDA waterfall: June 2023 to June 2024 Continuing operations ↑36.8% 2 500 ↑15.5% 137 2 300 2 300 72 219 2 216 (53) 6 (59) R million
Slide 56: Performance: EBITDA history
RCL Foods Performance: for the year ended 30 June 2024 Continuing operations delivering a more consistent earnings profile EBITDA History (Excl. Rainbow & Vector) 2 500 14.0% 2 216 2 125 1 926 1 918 12.0% 2 000 11.0% 10.0% 1 500 1 379 9.2% 8.5% 7.9% 7.9% 8.0% 1 000 6.0% 500 4.0% - 2.0% F20 F21 F22 F
Slide 57: Performance: ROIC history
RCL Foods Performance: for the year ended 30 June 2024 Return on invested capital (ROIC) continues upward trajectory towards WACC ROIC History 20.0% 15.0% 14.1% 12.2% 11.0% 10.0% 8.5% 8.8% 8.2% 4.6% 5.0% 0.6% 0.0% VECTOR RAINBOW -5.0% SOLD UNBUNDLED -6.3% -10.0% F20 F21 F22 F23 F24 ROIC (Market) ROI
Slide 58: Business Unit Performance
RCL Foods Business Unit Performance EBITDA GROWTH YOY Volume pressure more than offset by best-in-class savings across all Business Units 2023 ➢ Grocery’s improved performance is mostly attributable to a better sales mix as well as ↑22.4% 2024 Groceries* improved Pet Food margins and service levels
Slide 59: Key areas of focus
Key areas of focus 59
Slide 60: Continued focus to deliver on our stated priorities
Key areas of focus Continued focus to deliver on our stated priorities Strategic Outcome 1 Embedding transformative corporate actions Sustaining momentum and resilience through the 2 Considered portfolio construction and disciplined capital allocation to unlock sustainable stakeholder value 3 Unlock
Slide 61: Q&A
Q&A 61
Slide 62: Annexure
Annexure 62
Slide 63: Intrinsic Net Asset Value: Material Investee Companies
Annexure Intrinsic Net Asset Value: Material Investee Companies R million 30 June 2024 30 June 2023 % Change % Contribution Mediclinic 40 756 47 268 (13.8) 28.4 OUTsurance Group 21 792 15 957 36.6 15.2 CIVH 14 497 14 300 1.4 10.1 RCL Foods + Rainbow 10 525 7 141 47.4 7.3 FirstRand 7 572 6 889 9.9 5.
Slide 64: Valuation: Listed vs Unlisted
Annexure Valuation: Listed vs Unlisted Cash, debt and other corporate assets excluded June 22 June 23 June 24 12% 67% 28% 34% 11% 10% 33% 17% 24% 72% 66% 55% Unlisted Investments Listed – Strategic Investments Listed - Portfolio Investments Note: June 23: Mediclinic & HeinBev (Distell) moved to unli
Slide 65: Consumer products | Siqalo Foods performance
Annexure Consumer products | Siqalo Foods performance Year ended Year ended R million 30 June 2024 30 June 2023 % change Revenue 3 594 3 748 (4.1) Operating profit 518 435 19.1 Headline earnings 452 344 31.4 Headline earnings Intrinsic value Drivers 500 7 000 • Cost benefits starting to accrue since
Slide 66: Industrial | unlisted portfolio performance
Annexure Industrial | unlisted portfolio performance Air Products Year ended Year ended Wispeco Year ended Year ended R million 31 Mar 24 31 March 23 % change R million 30 Jun 24 30 Jun 23 % change Revenue 5 360 4 563 17.5 Revenue 3 759 3 813 (1.4) Operating profit 1 545 1 295 19.3 Operating profit
Slide 67: Diversified investment vehicles | KTH performance
Annexure Diversified investment vehicles | KTH performance Headline earnings Intrinsic value 500 3 000 ↑ 8. % Drivers 450 • Valuation based on sum-of-the- 2 797 parts of the investment portfolio, 2 500 400 437 Drivers of which three contribute 95%, • The decrease in headline earnings 2 370 these inc
Slide 68: Cash flow at the centre
Annexure Cash flow at the centre 8 000 627 3 129 6 000 4 000 3 409 R million 2 000 ( 5 366 ) - ( 1 330 ) (1 010) (726) (2 000) (486) (313) (2 179) (113) (4 000) Investments Dividends Interest Preference Dividends Corporate Treasury Finance Investments Exchange Net cash sold and received income share
Slide 69: Dividends received
Annexure Dividends received Year ended Year ended Year ended R million 30 June 2022 30 June 2023 30 June 2024 Listed 1 732 1 513 1 488 OUTsurance Group 883 464 693 FirstRand 389 605 474 RCL Foods 321 214 - Other listed investments 139 230 321 Unlisted 947 1 595 1 641 Mediclinic - 195 366 Air Product
Slide 70: Headline earnings contribution
Annexure Headline earnings contribution Year ended Year ended 30 June 30 June % R million 2024 2023 change Mediclinic US$ adj. earnings flat. Weak Swiss performance, partly offset by a strong Middle East 1 515 1 691 (10.4) OUTsurance Group Normalised earnings ↑ .3% due to good operational performanc
Slide 71: End
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