Zeder Investments Limited · JSE:ZED
Zeder Investments — Shareholder Meeting (July 2019)
28 slides from Zeder Investments's shareholder meeting presentation, Jul 26, 2019
Slide 1: Annual General Meeting
Annual General Meeting Presented by: Norman Celliers Chief executive officer 26 July 2019
Slide 2: Agenda
Agenda • Corporate overview • Significant transactions • Financial results • Portfolio review • Social and ethics feedback • Conclusion • Questions
Slide 3: Corporate overview
An investment holding company Corporate overview We play an active role in investee companies through strategic interests with a controlling influence. Positioning Business definition Strategic Focus • An actively managed investment holding Industry: • Agribusiness and related company listed on the
Slide 4: Category 1 disposal
Category 1 disposal Significant transactions The Zeder Board supports the transaction and has recommended to shareholders to vote in favour of the PepsiCo offer as announced to the market on 19 July 2019. • PepsiCo has offered to acquire the entire issued share capital of Pioneer Foods • The main te
Slide 5: Application of the proceeds
Application of the proceeds Significant transactions Once the transaction has been fully implemented, the Zeder Board intends to distribute between R4.25bn and R4.75bn to shareholders by way of a special dividend. Unaudited indication of anticipated application of proceeds Gross proceeds from the di
Slide 6: Disposal and unbundling
Disposal and unbundling Significant transactions Capespan executed and implemented significant transactions and restructuring during the period under review. • Successfully disposed of the investment in China • Fair value gains reported in headline earnings • Transaction completed and proceeds recei
Slide 7: Results summary
Results summary Financial results FY2019 • Investor sentiment and capital allocation towards country and sector deteriorated significantly during the period under review ─ JSE Food Producer’s Index declined by 34.7% (declined further since YE) ─ Economy constrained / GDP numbers reflect downcycle •
Slide 8: Earnings and dividends
Earnings and dividends Financial results Recurring Headline Earnings per share increased by 0.4% while headline earnings increased by 81.9%. FY2019 Observations: • Recurring Headline Earnings: ─ Apart from Capespan’s Farming and Fruit Divisions, most investee companies improved on prior year numbers
Slide 9: Sum-of-the-Parts
Sum-of-the-Parts Financial results Zeder’s SOTP value is 6.36 as at 19 July 2019 (R6.62 with Pioneer at R110/share). Updated 28 Feb 2018 28 Feb 2019 19 Jul 2019 Pioneer @ R110 ps Company % interest Rm % interest Rm % interest Rm % interest Rm Pioneer 27.0% 7,660 27.1% 4,689 28.6% 5,971 28.6% 6,408 Z
Slide 10: Intrinsic value
Intrinsic value Financial results The recent trend has been disappointing, but we are committed to resuming an upward trend through value enhancing initiatives. Historical overview R’bn R/share 16.00 12.00 14.00 10.00 12.00 11.32 8.00 10.00 9.65 6.62 8.00 6.00 5.64 5.26 4.89 6.00 4.09 4.23 4.00 5.16
Slide 11: Strategic interests across value chain
Strategic interests across value chain Portfolio review Portfolio offers strategic exposure to meaningful and leading companies across value chain with strong management teams focused on driving growth in the long-term. Company Salient features Zeder Share Zeder Value Value of 100% • SS Africa’s 2nd
Slide 12: Financial results (Pioneer Foods)
Financial results Portfolio review Pioneer Foods reported a 25.1% increase in adjusted RHEPS for the period ended 30 September 2018. Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Historical R'm R'm R'm R'm R'm R'm Revenue 16,236 17,699 18,748 20,600 19,575 20,152 EBITDA 1,499
Slide 13: Business overview (Zaad)
Business overview Portfolio review Zaad is a specialist agricultural seed company that develops and supplies a broad basket of proprietary seeds to more than 96 international markets.
Slide 14: Financial results (Zaad)
Financial results Portfolio review Zaad reported commendable operating results but RHEPS declined by 5.5% for the year ended 31 January 2019 due to share dilution resulting from rights issues. Summarised Income Statement Feb 14 Feb 15 Feb 16 Jan 17 Jan 18 Jan 19 Historical R'm R'm R'm R'm R'm R'm Re
Slide 15: Business overview (Kaap Agri)
Business overview Portfolio review Kaap Agri is a leading Agri-related retail, trade, supply and services company.
Slide 16: Financial results (Kaap Agri)
Financial results Portfolio review Kaap Agri reported an increase of 0.7% in RHEPS for the year ended 30 September 2018 amidst the drought experienced in the Western Cape. Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Historical R'm R'm R'm R'm R'm R'm Revenue 4,008 4,875 5,3
Slide 17: Business overview (Capespan)
Business overview Portfolio review Capespan is an internationally diversified group with a primary exposure to fruit farming, marketing, distribution, port logistics and related services.
Slide 18: Financial results (Capespan)
Financial results Portfolio review Strong performance from Logistics Division off-set by losses incurred in the Farming and Fruit Divisions resulting in a recurring loss at consolidated level. Summarised Income Statement Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Historical R'm R'm R'm R'm R'm R'm Re
Slide 19: Financial results (The Logistics Group)
Financial results Portfolio review The diversification and expansion of logistical customers and capabilities has delivered pleasing results and reduced volatility. Summarised Income Statement Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Historical R'm R'm R'm R'm R'm Revenue 508 523 511 609 794 EBITDA 152 17
Slide 20: Business overview (Agrivision Africa)
Business overview Portfolio review Agrivision Africa is a vertically integrated, grain-related food supplier that farms, mills and distributes products in the northern region of Zambia and southern parts of the DRC. Farming & Development Milling & Processing Brands & Distribution • 4,200 ha (irrigat
Slide 21: Financial results (Agrivision Africa)
Financial results Portfolio review Disappointing recurring losses reported but conservative approach supports Sum-of-the-Parts values in ZAR. Summarised Income Statement Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Historical $'000 $'000 $'000 $'000 $'000 $'000 Revenue 14,304 32,532 31,711 39,718 34,99
Slide 22: Business overview (Quantum Foods)
Business overview Portfolio review Quantum is South Africa’s #1 commercial egg supplier and operates a regionally dominant and nationally recognised premium animal feeds business. Farming
Slide 23: Financial results (Quantum Foods)
Financial results Portfolio review Quantum Foods reported an increase of 234% in RHEPS and declared dividends of 90c per share during the year ended 30 September 2018. Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Historical R'm R'm R'm R'm R'm R'm Revenue 3,483 3,561 3,468 3
Slide 24: Business overview (CAN Agri)
Business overview Portfolio review CAN Agri is a green-field, startup vertical farming business that owns international patents through which improved yields are delivered at lower costs. First full-scale unit completed in January 2019 – within budget First harvest completed in February 2019 – w
Slide 25: A structured approach
A structured approach Social and ethics Zeder implements its monitoring and adherence to Social and Ethics obligations through conscious and deliberate participation at investee company level. Feedback Listed Companies Unlisted Companies • Pioneer Foods • Capespan – Formally constituted Social & Eth
Slide 26: Examples of initiatives
Examples of initiatives Social and ethics While it is impossible to record each “social and ethical” initiative across the group, below are examples referenced to illustrate our actions and intentions. Feedback Education Skills Development Sustainability Community Outreach • >187 bursaries • Wellnes
Slide 27: Conclusion
Conclusion Our thoughts: • Investor sentiment towards country and sector is likely to remain subdued in the short- medium term (will recover in the long-term) • Underlying South African economy likely to remain under pressure with constrained consumer spending in the short-medium term (will recover
Slide 28: Thank you Questions
Thank you we Questions (D ZEDER