Pepkor Holdings Ltd. · JSE:PPH

Pepkor — Debt Investor Presentation (February 2024)

26 slides from Pepkor's debt investor presentation, Feb 1, 2024

  1. Slide 1: DMTN Issuance

    DMTN ISSUANCE 1 February 2024

  2. Slide 2: Disclaimer

    Disclaimer ISSUER The information contained in this presentation is confidential and is intended solely for this presentation. This presentation may contain information proprietary to Pepkor Holdings Limited (“the Company”), and may not be reproduced or disseminated in whole or in part without the Co

  3. Slide 3: Agenda

    Agenda 01 02 03 Financial Bond offering Q&A performance 3

  4. Slide 4: Financial performance

    01 RIAAN HANEKOM – CFO Financial performance Our purpose and values drive our philosophy of continuously building a better business for all stakeholders 4

  5. Slide 5: FY23 in summary

    FY23 in summary Highlights The numbers Strong R87.4bn revenue trading in H2 +7.7% Market share gains in 141.3 cps normalised HEPS key product categories -6.7% Excellent working R13.0bn cash generated capital management +15.9% Solid cash 48.1 cps generation dividend declared 27.0% return on net asset

  6. Slide 6: Modified reporting segments

    Modified reporting segments Traditional retail segments FinTech segment 89% 90% 47 600 5 917 11% 10% 2 400 of group operating of group operating employees revenue profit employees stores revenue profit Clothing and general Furniture, appliances Building materials Financial services Informal market merc

  7. Slide 7: Revenue drivers

    Revenue drivers 6.5% 7.7% growth 52 weeks +5.2% -0.7% R87.4bn 5.6% 4.3% 52 weeks +11.1% -0.1% growth excl. Avenida R81.2bn 8.8% 10% 12% 11% 4.3% H1 H2 52 weeks Cash vs credit 67% 5.6% Credit Cash 10% 90% FY22 FY23 35.6% 53 weeks 27.2% Continuing operations excl. Avenida 7

  8. Slide 8: Sales performance – Q1FY24

    Sales performance – Q1FY24 Total sales growth LFL sales growth 5.5% Retail segments 4.1% Healthy growth on solid base Macroeconomic & 6.8% Clothing and general 5.0% operating environment remains challenging merchandise segment 2.8% Furniture, appliances and 2.7% electronics segment 0.2% Building mat

  9. Slide 9: Sales performance – Q1FY24

    Sales performance – Q1FY24 Total sales growth LFL sales growth Total sales growth LFL sales growth 4.7% 3.3% 8.3% 4.8% 4.1% 1.9% 24.7% 17.9% January: Strong back-to-school trading LFL growth between 8% and 9% 24.6% 10.8% Constant currency sales performance reported for PEP Africa and Avenida 9

  10. Slide 10: Net finance costs

    Net finance costs 27.1% R3.0bn R2.8bn R1.5bn R1.4bn Non-IFRS 16 component R2.2bn Higher interest rates R2.1bn R0.8bn R0.8bn R2.2bn R2.1bn R1.5bn R1.3bn R1.4bn R1.4bn 88 88 3 3 IFRS 16 component FY20 FY21 FY22 FY23 10

  11. Slide 11: Healthy credit books

    Healthy credit books 4.5 Gross book size (Rbn) 3.4 2.2 2.5 1.7 1.9 0.7 0.9 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 31% 33% Provision levels % 24% 20% 21% 21% 17% 18% 21% 19% 16% 13% 13% 14% NPL % 8% 9% FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 11

  12. Slide 12: R13.0bn cash generated

    R13.0bn billion cash generated 24 91% 2 163 92 cash conversion 3 360 14 227 101% 52-week basis 12 962 R1.4bn creditor payments made before cut-off EBITDA1 Debtors’ Other Net working Credit Cash costs capital books generated by operations 1 EBITDA before capital items (Rm) 12

  13. Slide 13: Low net debt

    Low net debt R13.9bn 0.8 times 0.7 times net debt- net debt- to-EBITDA to-EBITDA 6.8 times 6.5 times EBITDA- EBITDA- interest cover interest cover R7.6bn R7.1bn R7.1bn R6.2bn R5.0bn FY19 FY20 FY21 FY22 FY23 FY23 Normalised Excluding IFRS 16 13

  14. Slide 14: Interest-bearing loans & borrowings

    Interest-bearing loans & DEBT REPAYMENT PROFILE: 30 SEPTEMBER 2023 (Rbn) borrowings FY24 FY25 FY26 FY27 FY28 30 September 2023 Facility Utilisation Rm -0.9 Term loans 6 412 6 412 -2.1 -2.3 Floating rate notes (DMTN) 3 604 3 604 -3.0 -3.2 Revolving credit facilities 2 500 1 500 R1.2bn notes successfu

  15. Slide 15: Capital allocation

    Capital allocation Organic growth M&A Share repurchases Dividend Capex Opportunities R511m spent FY23 3x earnings cover 2.9% continuously maintained 2.7% 2.4% considered 27.8m shares bought 48.1 cps declared - 1.8% back and cancelled CFH & FinTech impairment disregarded Neutralise equity-based incen

  16. Slide 16: Bond offering

    02 DELIA PATERSON/LEIGH BUCKLEY – RMB Bond offering Pepkor maintains its focus on achieving growth by delivering affordable value and serving customer needs. 16

  17. Slide 17: Proposed offering

    Proposed offering Indicative term sheet Issuer Pepkor Holdings Ltd Guarantor Pepkor Trading Pty Ltd Credit rating Aa1.za Programme ZAR10bn Auction date 4 March 2024 Settlement date 7 March 2024 Indicative target issue size Up to ZAR2bn PEP07 PEP08 Indicative tenor 3-year 5-year Maturity date 6 March

  18. Slide 18: Q&A

    PEPKOR Q&A

  19. Slide 19: Thank you

    THANK YOU

  20. Slide 20: Annexures

    ANNEXURES

  21. Slide 21: Bond programme features

    Bond programme features Issuer Pepkor Holdings Ltd Guarantor Pepkor Trading Pty Ltd Programme Type Domestic Medium Term Note Programme Programme Size ZAR10bn For so long as any Tranche of the Senior Notes remains Outstanding, the Issuer undertakes not to, and shall procure that the Guarantor and any

  22. Slide 22: Cash vs credit sales

    Cash vs credit sales 4% 0% 4% 18% 100% 11% 42% 11% 20% 10% 96% 96% 89% 89% 90% 82% 80% 58% Credit Cash PEP Ackermans PEP Speciality Avenida JD JD JD Pepkor Africa Group Home Tech group 22

  23. Slide 23: Group structure

    Group structure DMTN Guarantor Programme Guarantor contribution: Revenue 60% EBIT 63% Pepkor Speciality (Pty) Ltd will be divisionalised into Pepkor Trading (Pty) Ltd during 2024 23

  24. Slide 24: Governance

    Governance Executive directors Independent non-executive directors CEO CFO Chair 17% 75% Non-executive director 8% Diversity Audit Human Investment Nomination Social and Black 5 Male 6 and risk committee resources and remuneration committee committee ethics committee committee White 7 Female 6 As an

  25. Slide 25: FY23 Highlights

    FY23 Highlights +7.7% growth in revenue to R87.4bn -6.7% decrease in normalised HEPS to 141.3c +15.9% Access and affordability growth in cash generated to R13.0bn R48 average item price in PEP 01 02 48.1 cps 2/3 baby garments sold in SA 1/2 kids garments sold in SA dividend declared Enabling Inclusi

  26. Slide 26: Read more

    Read more For further information, contact investor relations: investors@pepkor.co.za Refer to Pepkor’s 2023 integrated reporting suite, available on the group’s website: www.pepkor.co.za 26

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