Zeder Investments Limited · JSE:ZED
Zeder Investments — FY2016 Earnings Presentation
28 slides from Zeder Investments's earnings presentation, April 2016
Slide 1: Full Year Results FY2016
Full Year Results FY2016 Presented by: Norman Celliers Chief executive officer April 2016
Slide 2: Slide 2
Slide 3: Agenda
Agenda • Business overview • Full year results • Portfolio review
Slide 4: Business overview
Business overview Our corporate strategy and business definition remains unchanged. • Long term active value investor with a primary focus on Agribusiness, specifically the food and beverage sectors • Listed on the JSE – ZED ‐ hybrid private equity vehicle • Key characteristics of investment conside
Slide 5: Strategic focus
Strategic focus We aim to invest in and grow large businesses – the past 36 months priority was “Project Internal Focus”. Before 2012 Since 2012 Industry: • Agribusiness • Agribusiness Sub‐sector: • Food and Beverages • Food and Beverages • Bio Fuels, Bio/Renewable energy* • Non‐food (i.e. Rubber, t
Slide 6: Agenda
Agenda • Business overview • Full year results • Portfolio review
Slide 7: Financial results
Financial results Y‐o‐Y CAGR Feb 13 Feb 14 Feb 15 Feb 16 Change 3yrs Sum of the parts (R’bn) 4.25 5.16 13.24 12.25 ‐7% +42% Recurring headline earnings from investments (R’m) 333 366 540 805 +49% +34% Recurring headline earnings (R’m) 251 300 414 632 +53% +36% Headline earnings (R’m) 196 261 257 545
Slide 8: Sum-of-the-parts
Sum‐of‐the‐parts The value of Zeder’s portfolio was R12,7bn on 31 March 2016. R/share Sum‐of‐the‐parts R’bn 10 14 9 9.17 12 8 8.37 8.03 7 10 6 8 5 5.26 6 4 4.35 3 3.48 4 2 2 1 0 0 Feb‐12 Feb‐13 Feb‐14 Feb‐15 Feb‐16 Mar‐16 Note: Decrease in sum‐of‐the‐parts value largely due to 21% decrease in Pionee
Slide 9: Recurring headline earnings
Recurring headline earnings Recurring headline earnings increased by 20% per share. Total Per Share + 49% + 53% +17% +20% RHE (before funding and RHE RHEPS (before funding RHEPS fees) and fees) FY2015 FY2016
Slide 10: Earnings from investments
Earnings from investments The improved trend in RHEPS growth from underlying investee companies has been maintained. Recurring headline earnings from investments before funding and fees (cents per share) 60 54.0 50 46.1 40 37.4 34.0 30 21.5 19.2 20 12.4 12.6 10 H1 Full Year H1 Full Year H1 Full Year
Slide 11: Management fees
Management fees Due to the downward pressure on Zeder’s share price during the year, no performance fees were paid to PSG Group. Management Fees (R’m) 250 200 118 150 100 59 155 50 118 48 59 59 0 2012 2013 2014 2015 2016 Base Performance
Slide 12: Agenda
Agenda • Business overview • Full year results • Portfolio review
Slide 13: Portfolio distribution
Portfolio distribution No change in the portfolio mix ‐ from a valuations point of view, most of the downward adjustment is due to decrease in Pioneer share price during the period. R’m 10 000 9 533 • 6 Core investments 8 000 7 574 • Strong strategic influence • Portfolio value > R12,5bn 6 000 • Pio
Slide 14: Portfolio review
Portfolio review Pioneer reported sustained strong growth for year ended 30 September 2015 with adj. HEPS increasing by 30%.
Slide 15: Portfolio review
Portfolio review The sustained growth in profitability has to be commended, particularly given the constrained environment. Adjusted headline earnings (cents per share) 900 832 800 700 678 600 500 456 451 H1 406 400 352 300 219 231 200 100 H1 Full Year H1 Full Year H1 Full Year H1 Full Year 0 2012 2
Slide 16: Portfolio review
Portfolio review Market share indicators for core brands in formal retail very positive…
Slide 17: Portfolio review
Portfolio review … with improving margin trend maintained across all divisions.
Slide 18: Portfolio review
Portfolio review Capespan continues to realign its business, invest for growth and reported a modest increase of 8% in RHEPS. Summarised Income Statement Dec 13 Dec 14 Dec 15 R'm % growth R'm % growth R'm Revenue 7,149 3.4% 7,392 4.0% 7,688 EBITDA 228 (0.4%) 227 31.7% 299 EBITDA margin 3.2% 3.1% 3.9
Slide 19: Portfolio review
Portfolio review Capespan operates along three divisions namely Farms, Fruit and Logistics…
Slide 20: Portfolio review
Portfolio review Zaad delivered an increase of 36% in earnings that translated to 20% per share (diluted as a result of investment of R92m during the year). Summarised Income Statement Feb 14 Feb 15 Feb 16 R'm % growth R'm % growth R'm Revenue 465 103.7% 947 29.5% 1,226 EBITDA 79 63.3% 129 68.2% 217
Slide 21: Portfolio review
Portfolio review With a strong product portfolio, proprietary IP and established South African and international market presence, growth is underway.
Slide 22: Portfolio review
Portfolio review Kaap Agri delivered commendable results for the year ended 30 September 2015 with RHEPS up 15.6%. Summarised Income Statement Sep 13 Sep 14 Sep 15 R'm % growth R'm % growth R'm Revenue 5,530 18.0% 6,528 8.5% 7,082 EBITDA 219 20.1% 263 18.3% 311 EBITDA margin 4.0% 4.0% 4.4% EBIT 202
Slide 23: Portfolio review
Portfolio review With a strong footprint and historical base, opportunities exist to continue growing.
Slide 24: Portfolio review
Portfolio review Agrivision Africa remains in net J‐curve but underlying business performances encouraging despite challenges. Summarised Income Statement Dec 13 Dec 14 Dec 15 US$'000 % growth US$'000 % growth US$'000 Revenue 14,305 127.4% 32,532 (2.6%) 31,677 EBITDA 8,322 (7.2%) 7,726 47.5% 11,396
Slide 25: Portfolio review
Portfolio review Limited expansion was undertaken during the year with a focus on existing investments only. Farming & Development Milling & Processing Brands & Distribution • 4,500 ha (irrigated) • 50,000 tons (Maize) • Formal retail • 1,800 ha (dry‐land) • 24,000 tons (Wheat) • Distribution depots
Slide 26: Portfolio review
Portfolio review Following a period of extreme challenges in the industry, Quantum delivered improved results. Summarised Income Statement Sep 14 Sep 15 R'm % growth R'm Revenue 3,561 3,469 EBITDA 84 161.9% 220 EBITDA margin 2.4% 6.3% EBIT (21) 164 Recurring headline earnings 26 384.6% 126 Headline
Slide 27: Portfolio review
Portfolio review Quantum Foods will aim to navigate cyclical volatility while pushing forward in pursuing its strategic objectives. • Raw material prices at higher levels • Weak exchange rate environment • Consumer under pressure • New business model better aligned • Management to focus: - Efficienc
Slide 28: Conclusion
Conclusion We remain optimistic about the prospects of the group. • Drought and tough economic conditions likely to remain a challenge in the short term – but longer term the sector is resilient • Appropriately diversified portfolio likely to mitigate volatility • Strong existing portfolio companies