Remgro Limited · JSE:REM
Remgro — Remgro Ltd Ord — FY2023 Earnings Presentation
65 slides from Remgro's earnings presentation, Sep 21, 2023
Slide 1: Results Presentation for the Year Ended 30 June 2023
RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2023 21 September 2023 1
Slide 2: Contents
CONTENTS 01 Performance overview and operating context 02 Delivering on our strategic priorities 03 Summarised results for the year 04 Update on key portfolio companies 05 Key areas of focus 06 Q&A 2
Slide 3: Performance Overview and Operating Context
PERFORMANCE OVERVIEW AND OPERATING CONTEXT 3
Slide 4: Earnings momentum sustained despite headwinds
Performance overview and operating context Earnings momentum sustained despite headwinds HE R7 056m HEPS R12.54 Ordinary Dividend PS INAVPS R248.47 ▲8.7% ▲8.9% R2.40 ▲16.6% (2022: R6 494m) (2022: R11.51) ▲60.0% (June 2022: R213.10) (2022: R1.50) HE excluding the impact of Closing share price INAV Di
Slide 5: A challenging backdrop, but green shoots present opportunity
Performance overview and operating context A challenging backdrop, but green shoots present opportunity Slow recovery Load shedding Independent power producers Rate hikes Renewable China re-opening Infrastructure Recovery South African energy Russia/Ukraine economy Constrained consumer Energy crisis
Slide 6: …in our portfolio context…
Performance overview and operating context …in our portfolio context… Positives Negatives Remgro’s actions − First full year of operations post Covid − Varying impacts of elevated commodity − Macro level (Remgro level) pandemic prices across the portfolio, with − B4SA collaboration emphasis on Siqal
Slide 7: Delivering on Our Strategic Priorities
DELIVERING ON OUR STRATEGIC PRIORITIES 7
Slide 8: Recap: doubling efforts to deliver on our strategic priorities
Delivering on our strategic priorities Recap: doubling efforts to deliver on our strategic priorities 1 Portfolio optimisation through execution of transformative corporate actions 2 Unlocking value through disposal of non-core assets and new growth opportunities 3 Disciplined capital allocation to
Slide 9: Another transformative year in Remgro's history…
Delivering on our strategic priorities 1 2 Another transformative year in Remgro’s history… Actions completed in FY23 Completed in FY24 Focus for FY24 Disposal of Vector Logistics to AP Heineken Take private of Remgro Remgro share Moller by RCL Foods Efforts continue to Beverages / Distell / Medicli
Slide 10: Evolution towards improved asset scarcity
Delivering on our strategic priorities 3 Evolution towards improved asset scarcity 30 June 2022 30 June 2023 ghgh 30 Jun 2023 12% 11% 28% 67% 33% 17% 55% 72% • Listed (2022) to Unlisted (2023): Mediclinic, Distell -> HeinBev & Capevin • Contribution by portfolio investments (FirstRand (5%), Discover
Slide 11: Considered and deliberate sourcing and deployment of capital
Delivering on our strategic priorities 3 Considered and deliberate sourcing and deployment of capital... Capital allocated (R8.3 billion) Sources of capital (R8.3 billion) 6.7% 10.0% 39.3% 12.1% 41.6% 71.2% Investments made Investment income received Dividends paid 19.1% Share repurchase Investments
Slide 12: Increased return of capital to shareholders
Delivering on our strategic priorities 3 ... resulting in an increased return of capital to shareholders 2023 2022 2021 Dividends paid (R million) 1 014 621 452 Dividend in specie (Grindrod) (R million) 1 629 - - Share buy backs (R million) 830 137 - Total returned to shareholders 3 473 758 452 Mark
Slide 13: Net deployment of capital into the core portfolio
Delivering on our strategic priorities 3 …and a net deployment of capital into the core portfolio Portfolio composition June 2022 Portfolio composition June 2023 Net cash Net cash 3% 1% Cash generating Cash generating Other 23% Other 33% 1% 2% Portfolio Turnaround Portfolio Core portfolio Turnaround
Slide 14: Allocating capital in line with strategy
Delivering on our strategic priorities 3 Allocating capital in line with strategy Other material investment activities during the year under review and after year-end: • The Gordon's Gin and Pimm's No1 Cup distribution agreement has been terminated in favour of the brand owner Diageo for a considera
Slide 15: Continued sustainability drive…
Delivering on our strategic priorities 4 Continued sustainability drive… ESG highlights Priorities going forward More impactful ESG outcomes through investee Assessed disclosure gaps from the JSE FTSE, Full time sustainability and ESG expert appointed to ✓ companies Sustainalytics and other drive ES
Slide 16: Enhanced disclosure and shareholder engagement
Delivering on our strategic priorities 5 Enhanced disclosure and shareholder engagement… Material Post results Investor Day Board Valuation Post AGM unlisted set piece showcasing Investor committee Board portfolio management unlisted Governance (unlisted engagements company engagements assets Roadsh
Slide 17: Summarised Results for the Year
SUMMARISED RESULTS FOR THE YEAR 17
Slide 18: Headline earnings overview
Summarised results for the year Headline earnings overview Corporate actions impacted comparability of headline earnings: Year Year 9 000 (358) ended ended 216 353 (1 022) 30 June 30 June 8 000 357 ↑56% R million 2023 2022 426 ↑>100% ↓42% Foreign exchange gain relating to the Mediclinic 443 ↑>100% 6
Slide 19: Valuation approaches – unlisted investments
Summarised results for the year Valuation approaches – unlisted investments Primary valuation methodology Discounts applied Investee % of Remgro Equity interest Change in Internal DCF 3rd party DCF Price of recent Sum of the Lack of Forecast risk Company NAV* value transaction parts marketability (1
Slide 20: Contribution by platform
Summarised results for the year Contribution by platform Headline earnings* Intrinsic NAV* 0.1% 11.7% 11.2% Healthcare 0.6% 2.5% 24.7% Consumer products 4.6% 6.2% 33.8% 2.5% 12.6% 0.1% 1.3% 17.7% Financial services 12.2% 0.8% 25.2% 7.1% 5.3% Infrastructure 25.1% 8.3% Industrial 26.6% Diversified inv
Slide 21: Healthcare
Summarised results for the year Healthcare Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change Mediclinic 50.0%* 1 691 1 267 33.5 47 268 29 568 59.9 - Results for year ended 31 Mar 2023 2 230 1 267 76
Slide 22: Consumer Products
Summarised results for the year Consumer Products Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change Distell# - 555 735 (24.5) 11 969 nm Heineken Beverages# 18.8% (75) nm 12 451 nm Capevin 31.4% 14 n
Slide 23: Financial services
Summarised results for the year Financial services Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change OUTsurance Group (listed) 30.6% 888 796 11.6 15 957 13 069 22.1 - Continuing 888 445 99.6 - Disco
Slide 24: Infrastructure
Summarised results for the year Infrastructure Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change CIVH 57.0% 206 47 338.3 14 300 13 756 4.0 # Grindrod 61 263 (76.8) 1 559 nm SEACOM 30.0% 47 37 27.0 7
Slide 25: Industrial
Summarised results for the year Industrial Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change Air Products 50.0% 476 422 12.8 4 911 4 690 4.7 TotalEnergies 24.9% 54 1 076 (95.0) 3 338 3 274 2.0 Wispe
Slide 26: Cash flow at the centre
Summarised results for the year Cash flow at the centre 8 000 386 6 000 970 1 593 (1) 4 000 3 107 2 000 R million - (5 935) (2) (1 013) (2 000) (610) (830) (4 000) (947) (3 279) Dividends Investments Interest Exchange rate Investments Dividends Finance Treasury Corporate Net Netcash cash received so
Slide 27: Sustainable cash dividends received evolution
Summarised results for the year Sustainable cash dividends received evolution 3 500 3 107 3 000 2 727 54.4% 2 500 529 (43.8%) 1 594 2 012 2 000 31.2% R million 1 533 1 500 947 1 000 2 198 1 004 1 513 500 1 065 529 - 30 June 2020 30 June 2021 * 30 June 2022 30 June 2023 Year ended Listed Unlisted * C
Slide 28: Final dividend
Summarised results for the year Final dividend 300 Last day to trade Tuesday, 7 Nov 2023 Shares trade ex dividend Wednesday, 8 Nov 2023 250 240 Record date Friday, 10 Nov 2023 Payment date Monday, 13 Nov 2023 60% 200 Cents per share 150 ↑60% 160 150 66.7% 100 90 100 50 60 ↑60% 80 30 50 - 30 June 202
Slide 29: Update on Key Portfolio Companies
UPDATE ON KEY PORTFOLIO COMPANIES 29
Slide 30: Mediclinic Group
Mediclinic Group Ronnie van der Merwe (CEO) Jurgens Myburgh (CFO) 30
Slide 31: Mediclinic Group – a consistent strategy
Mediclinic Group Mediclinic Group – a consistent strategy 1 Drive care coordination as we grow our services and enter new care settings INTEGRATED HEALTHCARE PROVIDER 2 Digital health transformation to improve patient access, engagement and satisfaction as we improve our B2C capabilities GROWTH 1 DI
Slide 32: Switzerland
Mediclinic Group Switzerland • Admissions growth impacted by nursing capacity constraints; further FY23 vs CHF’m1 FY23 FY22 FY22 impacting operating costs with elevated spend on temporary staff and Revenue 1 900 1 885 1% employee overtime costs EBITDA 280 297 (6)% • Strategy remains focused on deliv
Slide 33: Southern Africa
Mediclinic Group Southern Africa • Strong performance driven by growth in patient volumes; partially offset FY23 vs by lower average revenue per case due to changes in acuity and speciality ZAR’m1 FY23 FY22 FY22 mix Revenue 19 506 18 416 6% • EBITDA margin reflects operating leverage from revenue gr
Slide 34: Middle East
Mediclinic Group Middle East • Strong performance driven by growth in patient volumes FY23 vs AED’m1 FY23 FY22 FY22 • EBITDA margin reflects increases in personnel costs to staff growth, Revenue 4 459 4 111 8% pharmacy cost of sales and care-related costs on inpatient and day case EBITDA 641 614 4%
Slide 35: CIVH
CIVH Pieter Uys (Chairman) 35
Slide 36: CIVH Strategy
CIVH Strategy Vuma Key Internet Vuma Core Vuma Reach FTTH FTTH Open Access CIVH Africa Wholesale Uncapped Fibre FTTB Metro-fibre Fibre-to-the-Telco 36
Slide 37: Maziv key metrics: consumer
Maziv key metrics : consumer Vuma Core Vuma Reach Vuma Key (Trial) Homes passed Homes passed Distribution points passed 30 June 23 30 June 22 % change 30 June 23 30 June 22 % change 30 June 23 30 June 22 % change 906 315 899 971 0.7 1 040 453 664 439 56.6 20 596 Subscribers Subscribers DSP/ Subscrib
Slide 38: Bridging South Africa's digital divide
Bridging South Africa’s digital divide 9.7m Number of homes with household monthly income KEY market < R5k Number of homes with 4.8m household monthly income between R5k and R30k REACH market 2.2m Number of homes with household monthly income CORE market > R30k 38
Slide 39: Maziv key metrics: enterprise
Maziv key metrics : enterprise DFA FTTT DFA FTTB DFA Metro-fibre Towers Enterprise Links 30 June 23 30 June 22 % change 30 June 23 30 June 22 % change 30 June 23 30 June 22 % change 12 036 11 973 0.5 38 815 37 135 4.5 10 116 9 868 2.5 39
Slide 40: Financial results
Financial results Vumatel (Consolidated) Year ended Year ended R million 31 Mar 23 31 Mar 22 % change Revenue 3 432 2 981 15.1 Operating earnings 1 283 953 34.6 Headline earnings 82 261 (68.6) DFA Year ended Year ended R million 31 Mar 23 31 Mar 22 % change Revenue 2 653 2 485 6.8 Operating earnings
Slide 41: CIVH cash flow
CIVH cash flow 2023 2022 5 000 5 000 4 360 4 000 4 000 3 641 46 (342) (201) 3 000 3 000 (155) 2 191 2 225 2 000 2 000 (1 307) (1 626) 1 000 1 000 R million R million 0 0 (1 000) (1 000) (3 483) (78) (1 370) (3 341) (2 000) (2 000) (3 000) (3 000) (1 912) (3 028) (4 000) (4 000) EBITDA Working Tax In
Slide 42: CIVH valuation
CIVH valuation 2023 FY23 EV/EBITDA: 11.4x 60 000 49 345 50 000 40 000 31 030 R million 30 000 25 075 (18 315) (73) 20 000 (5 882) 14 300 10 000 0 Maziv enterprise value Maziv debt Maziv equity value Net other assets* Discounts CIVH equity value Remgro at 57.0% 2022 60 000 FY22 EV/EBITDA: 12.6x 50 00
Slide 43: Vodacom investment in Maziv
Vodacom investment in Maziv o December 2021 : the transaction was submitted to the Competition Commission and ICASA. o 8 August 2023 : the Competition Commission made a recommendation to the Competition Tribunal that the transaction be prohibited. o 2 October 2023 : parties intending to intervene in
Slide 44: RCL Foods
RCL Foods Paul Cruickshank (CEO) 45
Slide 45: Strategy Review
RCL Foods Strategy Review “WE GROW WHAT MATTERS” A purpose led business that delivers value for all & that creates the fuel to fund enduring positive impact Our current portfolio is not optimally configured for RCL FOODS OF THE FUTURE sustainable value creation in line with our strategic ambitions g
Slide 46: Our Strategy: Focus Areas
RCL Foods Our Strategy: Focus Areas RCL FOODS OF THE FUTURE + GROW VALUE-ADD PORTFOLIO PEOPLE FIRST • Leverage dynamic platform through partnerships & acquisitions • • Build diverse, inclusive, high-performance culture Strengthen community resilience - VECTOR LOGISTICS • Invest in strategic capabili
Slide 47: Performance: for year ended 30 June 2023
RCL Foods Performance: for year ended 30 June 2023 AROUND NEARLY 125 TONS 36 TONS 350 000 TONS 16 500 791 000 OF MAYONNAISE OF FLOUR MILLED OF PEANUT EMPLOYEES TONS OF SUGAR SOLD SOLD DAILY PER YEAR BUTTER SOLD DAILY 1.3 MILLION 740 000 196 TONS 121 000 LITRES TONS OF 30 WELL KNOWN UNITS OF OF PET F
Slide 48: Performance: for year ended 30 June 2023
RCL Foods Performance: for year ended 30 June 2023 -24.5% -11.0% 49
Slide 49: Performance: for year ended 30 June 2023
RCL Foods Performance: for year ended 30 June 2023 Strong underlying Sugar performance supports underlying growth in RCL Foods Value-Added business, while unrecovered costs drive decline in Rainbow 34.3% 1 054 2022 2023 785 1.4% 16.6% 548 R million 540 487 406 343 74.9% 86 GROCERIES CHICKEN BAKING S
Slide 50: Our Brands: Market Share Performance
RCL Foods Our Brands: Market Share Performance A number of South Africa's much-loved brands are Volume Share % for the Period produced by RCL FOODS 12MM 12MM 6MM GROCERIES June 22 June 23 June 23 Dogfoods (RCL Brands) 31.9 28.7 26.9 Catfoods (RCL Brands) 38.3 35.5 33.8 Yum Yum Peanut Butter 30.2 33.
Slide 51: Key Areas of Focus
KEY AREAS OF FOCUS 52
Slide 52: Relative market performance remains an area of focus…
Relative market performance remains an area of focus… As at As at As at 18 Sep 23 % change 30 Jun 23 % change 30 Jun 22 Discount to intrinsic value 39.4% 140 bps 40.8% (180 bps) 39.0% Intrinsic value per share – after tax (Rand) 252.51 ▲1.6% 248.47 ▲16.6% 213.10 Closing share price (Rand) 152.92 ▲4.
Slide 53: Looking ahead: strategic priorities to unlock shareholder value
Looking ahead: strategic priorities to unlock shareholder value ✓ Accelerated portfolio performance • Considered portfolio construction and capital allocation • Embedding strategic partnerships, cleaning tail of non-core assets and looking at new growth opportunities • Drive underlying performance w
Slide 54: Q&A
Q&A 55
Slide 55: Annexure
ANNEXURE 56
Slide 56: Headline earnings contribution
Annexure Headline earnings contribution Year ended Year ended R million 30 June 2023 30 June 2022 % change Mediclinic Adjusted GBP earnings up 15%; Margin pressures, Swiss nursing shortages, additional headcount in Middle East 1 691 1 267 33.5 OUTsurance – Continuing 62.2% increase in Normalised ear
Slide 57: Intrinsic Net Asset Value: Material Investee Companies
Annexure Intrinsic Net Asset Value: Material Investee Companies R million 30 June 2023 30 June 2022 % Change % Contribution Mediclinic 47 268 29 568 59.9 33.1 OUTsurance Group 15 957 13 069 22.1 11.2 CIVH 14 300 13 756 4.0 10.0 Heineken Beverages 12 451 nm 8.7 14 027 Capevin/Distell 1 576 11 969 nm
Slide 58: Consumer products | Siqalo Foods performance
Annexure Consumer products | Siqalo Foods performance Year ended Year ended R million 30 Jun 23 30 Jun 22 % change Revenue 3 748 3 546 5.7 Operational EBITDA 524 568 (7.8) Operating profit 435 535 (18.7) Headline earnings Intrinsic value 450 7 000 5.3% 400 401 14.2% Drivers 6 000 6 345 Drivers 350 6
Slide 59: Industrial | unlisted portfolio performance
Annexure Industrial | unlisted portfolio performance Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change Air Products 50.0% 476 422 12.8 4 911 4 690 4.7 TotalEnergies 24.9% 54 1 076 (95.0) 3 338 3 274
Slide 60: Industrial | unlisted portfolio performance
Annexure Industrial | unlisted portfolio performance Air Products Year ended Year ended Air Products • Overall trading conditions for the year remained mixed R million 31 Mar 23 31 Mar 22 % change • Erratic and generally lower levels of demand from several large tonnage Revenue 4 563 3 990 14.4 cust
Slide 61: Diversified investment vehicles | KTH performance
Annexure Diversified investment vehicles | KTH performance Headline earnings Intrinsic value 500 2 500 10.5% Drivers 450 446.3% • Valuation based on sum of the parts of 2 370 investment portfolio, of which three 400 437 2 000 2 145 contribute 93% • Kagiso Media – DCF 350 - A 4.7% increase due to sol
Slide 62: Diversified investment vehicles
Annexure Diversified investment vehicles Headline earnings Intrinsic value Remgro Year ended Year ended As at As at R million interest 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change KTH 43.5% 437 80 446.3 2 370 2 145 10.5 Prescient China Equity Fund 43.0% - - - 1 137 1 189 (4.4) Invenfin
Slide 63: Other investments, treasury and corporate costs
Annexure Other investments, treasury and corporate costs Headline earnings Intrinsic value Year ended Year ended As at As at R million 30 Jun 23 30 Jun 22 % change 30 Jun 23 30 Jun 22 % change Media 171 178 (3.9) 841 888 (5.3) Portfolio investments 804 444 81.1 15 641 14 799 5.7 FirstRand 605 389 55
Slide 64: Cash and debt at the centre
Annexure Cash and debt at the centre 30 June 30 June R million % of total 2023 2022 Local cash 65.2 5 872 9 796 Offshore cash 34.8 3 129 2 484 US$ 156.2m (@ R18.83/US$) (2022: US$146.8m @ R16.30/US$) 32.7 2 940 2 392 GB£ 3.4m (@ R23.80/GB£) (2022: GB£1.4m @ R19.63/GB£) 0.9 82 27 Other 1.2 107 65 Cas
Slide 65: Dividends received
Annexure Dividends received Year ended Year ended Year ended Year ended R million 30 June 2020 30 June 2021 30 June 2022 30 June 2023 Listed 2 198 529 1 065 1 513 RMI/OUTsurance - ordinary dividends 516 106 216 464 FirstRand 655 191 389 605 Mediclinic 479 - - - RCL Foods 169 176 321 214 Momentum Met