Epe Capital Partners Ltd. Class A · JSE:EPE
Epe Capital Partners Ltd. Class A — Ethos Capital — FY2021 Earnings Presentation
32 slides from Epe Capital Partners Ltd. Class A's earnings presentation, Sep 27, 2021
Slide 1: Ethos Capital Investor Presentation
ETHOS CAPITAL INVESTOR PRESENTATION 27 SEPTEMBER 2021
Slide 2: Contents
1 Executive summary CONTENTS 2 Portfolio overview 3 Liquidity analysis 4 Outlook
Slide 3: Executive Summary
EXECUTIVE SUMMARY Year ended 30 June 2021 headlines at a glance NAV per share: NAV per share: Realisations of R150m R9.19 R6.67 incl. a partial exit of Channel VAS at a on an aggregate basis on an accounting basis with Brait with Brait investment at its NAVPS investment at its share price 1.6x TMB /
Slide 4: Trading Comparables
MARKET BENCHMARKING OF FUND PERFORMANCE Overview of the unlisted portfolio JSE PERFORMANCE # companies 6 months 1 year 3 years Index Strong growth across Growth Growth CAGR all the Ethos Funds JSE All Share 254 6% 14% 5% year-on-year despite FX (excluding penny stocks) impact Ethos Mandate Overexpos
Slide 5: Performance Review: Portfolio Performance
PERFORMANCE REVIEW PORTFOLIO PERFORMANCE – 6% increase in NAVPS to R9.19 from R8.65 as at December 2020 - 1% increase from June 2020 • YoY the unlisted portfolio performed strongly but was negatively impacted by ZAR appreciation and underperformance of 4 COVID-impacted assets (Twinsaver, Kevro, Prim
Slide 6: Performance Review: COVID Impact
PERFORMANCE REVIEW COVID IMPACT – Significant impact on most of the Portfolio Companies (18 of 22 Portfolio Companies were closed during initial lockdown) – Impact on maintainable EBITDA, multiples and also sustainable net debt – Strong bounce back by the majority of Portfolio Companies with many tr
Slide 7: Portfolio Company Performance Overview
PORTFOLIO COMPANY PERFORMANCE OVERVIEW Overview of Ethos key unlisted Portfolio Companies – Strong operational performance has continued despite ongoing COVID impact which has delayed new deployments – 21% increase in YTD EBITDA, driven by advances growth, traction on MFS and tight default managemen
Slide 8: Portfolio Company Performance Overview: Brait
PORTFOLIO COMPANY PERFORMANCE OVERVIEW Brait Portfolio Company overview – Strong operational and financial performance has continued, YTD EBITDA increased by 17% versus prior year – Strong cash generation with gearing at 2.0x (post Mister Sweet transaction) – Integration of Mister Sweet acquisition
Slide 9: Ethos Capital Strategy
ETHOS CAPITAL STRATEGY R282m of net outstanding commitments Return capital to Drive long-term, market-leading shareholder returns from investing shareholders in private equity assets across select sectors Commitment phase Manage liquidity for existing commitments whilst optimizing shareholder return
Slide 10: Contents
1 Executive summary 2 CONTENTS Portfolio overview 3 Liquidity analysis 4 Outlook
Slide 11: Ethos Capital NAV Analysis
ETHOS CAPITAL NAV ANALYSIS Changes in NAV since June 2020 Changes Audited Audited Audited YoY (Brait at NAVPS) (Brait at share price) 30 June 30 June 30 June 2020 2021 2021 Investments 2,529 99.5% (51) 2,478 97.7% 1,827 96.9% Brait (at NAV) 1,068 42.0% (48) 1,020 40.2% 369 19.6% Channel Vas 548 21.6
Slide 12: Total Asset Contribution
TOTAL ASSET CONTRIBUTION The largest 8 assets constitute 84% of total assets 5% 28% 84% of total assets 39% 56% South Africa 10% Rest of sub-Saharan Africa 9% 9% 9% 9% International 6% 4% 4% 3% 2% 2% 2% 1% 1% 1% Other * New Look Bevco Eazi TymeBank MTN Autozone Kevro Primedia Gammatek Synerlytic Pre
Slide 13: Portfolio Company Performance Overview
PORTFOLIO COMPANY PERFORMANCE OVERVIEW The majority of companies (by value) grew both revenue and EBITDA LTM REVENUE GROWTH BY UNLISTED COMPANY LTM INVESTMENT RETURN Value - R'm % Change Number 4 5 106 18% 43 34% 668 31 43% 572 25 16% 3 3 83 19 81% 65 <-25% -25% to <0% 0% to < 15% 15% and greater 19
Slide 14: Portfolio Company Market Implied Multiples
PORTFOLIO COMPANY MARKET IMPLIED MULTIPLES Market implied EV / LTM multiples of the portfolio companies - - - - EV / EBIAT 6.6x 6.6x 10.6x 8.5x 6.5x 9.1x 11.4x 8.8x 12.0x 11.0x 9.0x 10.5x 4.8x 8.3x 5.8x 5.6x 5.2x 5.1x 4.9x 4.7x 4.6x 4.4x 4.3x 4.3x 4.7x 4.0x 3.8x average 3.4x 2.6x Channel Vertice Ech
Slide 15: NAV Composition by Portfolio Company
NAV COMPOSITION BY PORTFOLIO COMPANY The combined NAV of the top 3 assets exceeds Ethos Capital’s market capitalisation Attributable NAV (Brait at 30 June NAVPS) 651 56% NAV (Brait at 30 June share price) 63 58 68 104 169 40% 172 176 369 Current market capitalisation (3) 537 ChannelVAS Brait listed
Slide 16: Channel VAS
CHANNEL VAS 28% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R537m 1.81x 20% +18% yoy return vs. 1.52x in June 2020 (Ethos consortium) Leading Fintech provider of Mobile Financial Services (“MFS”) and Airtime Credit Financial performance and valuation update Services (“ACS”) to prepa
Slide 17: Channel VAS: Key Investment Highlights
CHANNEL VAS Key investment +530m +30 countries Highly cash addressable >US$8bn <1% of operation across highlights: in advances to date default rate on ACS 4 continents generative customer base Value creation initiatives Growth Opportunities – Accelerate MFS by leveraging the Upsell existing products
Slide 18: Vertice
VERTICE 9% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R176m 1.46x 80% +16% yoy return vs. 1.25x in June 2020 (EF VI, EAiF I, EHP) Vertice sells medical technology and supplies across a wide range of applications Financial performance and valuation update predominantly to support em
Slide 19: Vertice: Growth Opportunities
VERTICE Seven bolt-on acquisitions concluded, covering diverse sectors Value creation initiatives Growth Opportunities – Focus on like-for-like growth and Based on Discovery Health’s (DH) manufacturers, Vertice has a c.4.7% market share, making it the 2 nd largest MedTech player in DH advance organi
Slide 20: Echo
ECHO 9% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R172m 1.08x 64% -3% yoy return vs. 1.12x in June 2020 (EMMF I & EF VII) Echo is a corporate Internet Service Provider, providing Information & Communications Financial performance and valuation update Technology (”ICT”) services th
Slide 21: Echo: Value Creation and Growth Opportunities
ECHO Echo provides end-to-end hosting; SaaS / Echo has >102 interconnects and direct connects Echo offers customers a single point of cloud / hosted applications; Internet Access; with upstream infrastructures, which means accountability and the best product that the private cloud / MPLS; all last m
Slide 22: Synerlytic
SYNERLYTIC 9% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R169m 1.65x 94% +34% yoy return vs. 1.26x in June 2020 (EMMF I) Synerlytic operates in subsets of the Testing, Inspection and Certification market and is Financial performance and valuation update one of the leading condition
Slide 23: Gammatek
GAMMATEK 6% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R104m 1.07x 52% +43% yoy return vs. 0.75x in June 2020 (EMMF I) Gammatek is a leading distributor of mobile accessories and low- Financial performance and valuation update technology products LTM Revenue (rebased to 100) – Stro
Slide 24: Primedia
PRIMEDIA 4% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R68m 0.45x 24% -19% yoy return vs. 0.56x in June 2020 (EF VI & EDI) Primedia is a leading media and advertising company in South Africa, with a footprint in Financial performance and valuation update the rest of Africa LTM Reve
Slide 25: Overview of Other Unlisted Portfolio Companies
PORTFOLIO COMPANY PERFORMANCE OVERVIEW Overview of other Ethos unlisted Portfolio Companies % of Total Assets – FY20 impacted by COVID lockdowns, supply chain issues, IT platform integration and consolidation of DCs 3% – New management team has resolved internal operating issues and stabilised the b
Slide 26: Virgin Active
VIRGIN ACTIVE 10% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R179m n/a 12.8% -26% yoy return (EF VII, EDI & LC) Virgin Active is one of the leading international health club operators and strives to provide customers with a combination of outstanding exercise experiences and a worl
Slide 27: Premier
PREMIER 9% Ethos Capital Value: TMB: Ethos ownership: % of Total Assets R171m n/a 12.8% +8 yoy return (EF VII, EDI & LC) Premier is a leading South African FMCG manufacturer offering branded and private label solutions. The business has strong heritage brands in bread, maize meal, wheat flour, femin
Slide 28: Contents
1 Executive summary 2 CONTENTS Portfolio overview 3 Liquidity analysis 4 Outlook
Slide 29: Ethos Capital Liquidity Profile
ETHOS CAPITAL LIQUIDITY PROFILE R282m of net outstanding commitments to be funded through existing debt facility 475 3,950 375 124 2,950 275 1,950 406 175 282 358 950 75 (50) (25) (112) 36 (125) (1,050) Undrawn Fee provision Net undrawn Capacity (incl. Treasury Commitment FY21 FY22 FY23 FY24 commitm
Slide 30: Contents
1 Executive summary 2 CONTENTS Portfolio overview 3 Liquidity analysis 4 Outlook
Slide 31: Outlook
OUTLOOK Despite the difficult operating environment there are signs of improvement POSITIVE NEGATIVE Overall NAV growth dragged down by underperformance of Economic growth outlook is positive albeit off a low base COVID-related companies Consumer sentiment has proved resilient driving solid Impact o
Slide 32: Disclaimer
DISCLAIMER THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATIONAL AND DISCUSSION PURPOSES ONLY AND IS NOT, AND MAY NOT BE RELIED ON IN ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE OR AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY A LIMITED PARTNERSHIP INTEREST IN ANY ETHOS FUNDS.