Libstar Holdings Ltd. · JSE:LBR
Libstar — H1 2022 Earnings Presentation
53 slides from Libstar's earnings presentation, September 2022
Slide 1: Interim Results Presentation: Six months ended 30 June 2022
THE LIBSTAR FAMILY LIBSTAR From our Home to Yours Interim Results Presentation Six months ended 30 June 2022
Slide 2: Presentation overview
Presentation overview eh Introduction & Strategic Priorities 0 Financial Review "3 Category Review 3 Outlook Questions & Answers
Slide 3: Introduction & Strategic Priorities
LIBSTAR 01 Introduction & Strategic Priorities Andries van Rensburg, CEO
Slide 4: Libstar's strategic journey
Libstar’s strategic journey Iivoducton ang Strategic Priorities Pre-2017 2018-2021 2022 onwards Private label Operator Focused and brand category aggregator leader 2) 3) Where we come from What we’ve accomplished Where we’re headed * Decentralised holding * More organic strategy * Refocus portfolio
Slide 5: Core enabling competencies
Core enabling competencies ivodustonand 8 Category expertise Manufacturing Depth of Talent Category & market insights World-class, low-cost Culture of Innovation manufacturing capabilities Focused Fearless Family Partnerships Go to market Partnerships with Libstar platform of diverse Strong balance
Slide 6: Maintain financial stability & improve ROIC
✓ ✓ ✓ ✓ Maintain financial ✓ ✓ stability & improve • ✓ ROIC ✓ ✓
Slide 7: Brand Solutions (83% of group revenue)
BRAND SOLUTIONS (83% OF GROUP REVENUE)
Slide 8: Libstar Own Brand Market Position
Libstar Own Brand Market Position
Slide 9: Growing longer-term market share
Growing longer-term market share • • •
Slide 10: Private Label progress
Private Label progress Introduction and Strategic Priorities 10 Private Label Value Share Trend - Year Ending 12 Months Moving (MM) May 2022 22.1% 12MM 2020 12MM 2021 12MM 2022 © 2021 Nielsen Consumer LLC. All Rights Reserved. Private Label (PL) accounts for 22.8% of Total Basket value & continues t
Slide 11: Consistently meeting consumers' needs with product innovation
with product innovation Consistently meeting consumers’ needs Introduction and Strategic Priorities 1 Product diversity & innovation Libstar brands Total 364 No. of H1 Since products 2022 2018 New 270 2040 Renovated 94 998 3 038 Growth in branded & Private label offerings i GRATED ~ GOUDA Principal
Slide 12: H1 2022 Group results summary
H1 2022 Group results summary brodutin and = 12 0, Volumes +6.9% Gross profit margin 22.9% Revenue +9.6% Price/mix +2. 7% (H1 2021: 23.0%) Normalised EBIT +10.1% Normalised EBITDA +4.6% Normalised EPS +12.3% NOGeIScCn Sask a Co iyi Total diluted HEPS +101.6%
Slide 13: H1 2022 summary of channel performance
H1 2022 summary of channel performance Introduction and Strategic Priorities 13 Revenue by sales channel Y-o-y change Revenue contribution H1 2021 Retail & Wholesale Food service Export Industrial & Contract Manufacturing Total Group revenue +8.1% +23.9% -10.9% +18.3% +9.6% 57.2% 19.6% 10.4% 12.8% 1
Slide 14: Financial Review
LIBSTAR 02 Financial Review
Slide 15: Margins protected against rising manufacturing cost inflation
Margins protected against rising manufacturing cost inflation through improved capacity utilisation & efficiencies
Slide 16: Income statement - Snapshot
Income statement - Snapshot Financial Review 16 (R’m) % ch. H1 2021 Revenue 5 197.7 +9.6% 4741.2 Gross profit margin (%) 22.9% -0.1pp 23.0% Other income 9.4 15.1 FX and P/L on disposal of PPE -15.3 11 Operating expenses (margin) -921.7 (17.7%) +4.8% -879.3 (18.5%) Operating profit (margin) 260.7 (5.
Slide 17: Financial position - Snapshot
Financial position - Snapshot Financial Review 17 (R’m) H1 2022 H1 2021 Key financial ratios Non-current assets 5 757.1 6 338.1 Property, plant and equipment 1 499.1 1 533.0 Right-of-use-assets 387.4 594.1 Other non-current assets 3 870.6 4211.0 Current assets 3 636.1 3 903.3 Assets classified as he
Slide 18: Cash summary
Cash summary Financial Review 18 % Cash flow conversion lower as a result of higher inventory levels in the short term H1 H2 H1 H2 H1 2020 2020 2021 2021 2022 Cash flow analysis H1 2022 (R’m) — 593 Opening cash balance H1 2021 (R’m) na 476 Cash generated from ops -336 Working capital changes Net fin
Slide 19: Cash flow - Working capital days
Cash flow - Working capital days FinancialReview 19 17.4% 15.6% 15.6% Net working capital (12 nth rolling) : Revenue . ‘0 . ‘0 > 14.5% 65 Net working capital days increased from 53 days to 56 57 65 days; remain above target of 13-15% of revenue 53 Percent of revenue + Debtors & creditors days in lin
Slide 20: Capital expenditure
Capital expenditure Francia\Revew 20 Capex % of net revenue Total H1 2022 Projects project cost (R'm) 1. Wet condiment capacity expansion (Montagu Foods) Ri4m 2. New pourable sauces line (Dickon Hall Foods) R12m 3. Facility upgrades (Finlar Fine Foods) Ri1m 4. Electricity generation investment R12m
Slide 21: Capital expenditure (cont.)
Capital expenditure (cont.) FinanilReview 24 fee Total Positive Project project cost contribution (R’m) from 1. Pre-packed hard cheese packaging & manufacturing (Lancewood) R205m H2 2021 2. Distribution centre and milk reception upgrades (Lancewood) R52m H1 2021 3. Plant upgrade & frozen capabilitie
Slide 22: Category Review
03 Category Review
Slide 23: Underlying margin performance vs targets
Underlying margin performance vs targets Category Review 23 Normalised EBITDA H1 2022 H1 2021 Near term 2022 margin achieved achieved target Performance vs target Perishables 9.1% 8.2% 10% - 13% Below target Groceries 11.7% 14.6% 13% - 16% Below target Snacks & D 0 M72 Confectionery 18.4% 16.7% 14%
Slide 24: Divisional highlights and challenges
Divisional highlights and challenges categon Revew 24 Finlar Cape Herb & Spice * Improved efficiencies * Volume decline due to increased out-of-home consumption & unavailability of stacking dates * Limited price realisation vs under-recovery of costs * Improving FX rates and some recovery of volumes
Slide 25: Perishables: H1 2022 Performance by category & channel
PERISHABLES LIBSTAR H1 2022 Performance by category & channel Category Review 25 54% of Group revenue Channel contribution Perishables revenue by channel H1 2022 Retail & Wholesale +11.6% Food service +22.9% Exports +12.1% Industrial & Contract Manufacturing +11.7% @ Retail & Wholesale ™ Food servic
Slide 26: Groceries: H1 2022 Performance by category & channel
LIBSTAR H1 2022 Performance by category & channel categorReview 26 GROCERIES 32% of Group revenue Channel contribution Groceries revenue by channel H1 2022 Retail & Wholesale -1.7% H1 2022 Food service 432.2% revenue revenue Exports a 6.8% Industrial & Contract Manufacturing +26.4% m Retail & Wholes
Slide 27: Snacks & Confectionery: H1 2022 Performance
27 LIBSTAR H1 2022 Performance by category & channel Category Review Sovcconoueey 5% of Group revenue Channel contribution Snacks & Confectionery revenue by channel H1 2022 Retail & Wholesale +12.5% H1 2022 Exports -3.7% revenue revenue Industrial & Contract Manufacturing +6.5% =Retail & Wholesale E
Slide 28: Baking & Baking Aids: H1 2022 Performance
28 LIBSTAR H1 2022 Performance by category & channel Category Review BAKING & BAKING AIDS 9% of Group revenue Channel contribution Baking & Baking Aids revenue by channel H1 2022 Retail & Wholesale +11.9% i Ley 14 2022 Ht 2004 Food service +10.0% revenue revenue 10% | Exports -30.3% 4% Industrial &
Slide 29: Outlook
: 04 Outlook
Slide 30: Post-period trading: July & August 2022
Post-period trading: July & August 2022 outek 30 GROUP REVENUE GROWTH IN LINE WITH H1 * Low single-digit year-on-year growth as consumer pressure Retail and wholesale remains Food service + Significant year-on-year growth, supported by QSR * Flat year-on-year, availability of stacking dates remain E
Slide 31: F2022 Group outlook
F2022 Group outlook outlook 31 * Manufacturing cost pressure remains * Diversified product mix & channel participation offer resilience Timing delays (costs vs price increases) Structural growth drivers intact Continued supply chain disruptions (increasing Reducing group complexity (HPC & other port
Slide 32: Key takeouts
Key takeouts Outlook 32 Improving yields from large capex projects to deliver medium-term ROIC targets Clustering of functions & portfolio optimisation continues Strong brand solutions offering leaves Group well positioned to grow own and principal branded share and benefit from PL growth
Slide 33: Questions & Answers
- * \ LIBSTAR Questions & 05 Answers
Slide 34: Appendices
LIBSTAR Appendices * Income statement oa breakdowns * Cashflow breakdowns * Debt breakdowns * Category contribution breakdowns
Slide 35: Income statement reconciliation
Income statement reconciliation Appendices 35 Reconciliation between Normalised EBITDA, Normalised earnings & Normalised headline earnings (R’m) Change H1 2021 ov EBITDA 493.2 4.6% 471.4 Depreciation and amortisation -146.3 -156.3 Net finance cost -71.7 -73.3 Taxation and tax effect of normalisation
Slide 36: Income statement - Normalised EPS & HEPS
Income statement - Normalised EPS & HEPS Normalised earnings (R’m) Normalised headline earnings (R’m) WANOS (million) Normalised EPS (cps) Normalised HEPS (cps) Appendices 36 Change H1 2021 211.8 +12.6% 188.1 211.9 +14.2% 185.6 595.8 595.8 35.5 +12.3% 31.6 35.6 +14.1% 31.2 NOTE: Further detail avail
Slide 37: Appendices
LIBSTAR Appendices * Income statement breakdowns ¢ Cashflow breakdowns * Debt breakdowns il * Category contribution breakdowns
Slide 38: Breakdown of net investing & net financing activities
Breakdown of net investing & net financing activities ——sevendces 38 (R’m) H1 2022 Net investing activities Capital expenditure Sale of PPE Payment for acquisition Net financing activities Principal elements of lease payments Net movement from term loans and asset-based financing Dividend paid -122
Slide 39: Appendices
~ = : Appendices * Income statement breakdowns * Cashflow breakdowns * Debt breakdowns * Category contribution breakdowns
Slide 40: 5-year net debt trend
5-year net debt trend Appendices 40 (R'm) Net Gearing calculation = Net debt : Normalised EBITDA (Excluding IFRS 16) 2500 2.000 1500 mm Norm: (LHS) 2.0 Notes: 1.5 1. Gearing remains low 2. R1.2bn in unutilised funding facilities 3. Maximum net gearing aligned with facility covenants 4. Gearing: 1.5x
Slide 41: Net debt structure
Net debt structure Appendices 4 H1 2022 Utilised H1 2021 Utilised Facility Maturity Rate 3M (R’m) date JIBAR margin Old debt structure Facility A 670 Nov-22 1.68% = 670 Facility B 1000 Nov-23 1.75% = 1000 Facility C 240 Nov-23 1.85% = - Facility A 1000 Dec-26 1.70% 1000 - Facility B 150 Dec-24 1.60%
Slide 42: Summary of key financial ratios
Summary of key financial ratios Gearing ratio (net debt to normalised EBITDA) Cash generated from operating activities Cash conversion ratio Net working capital (as percentage of revenue) Appendices 42 | Hi 2022 | H1 2021 Targets 1.5x 1.4x Optimal range 1.0-2.0x Cash from operations before working c
Slide 43: Breakdown of open FEC exposure
Breakdown of open FEC exposure hovendces 43 Quart Dealt Amount Forward FEC Cover FEC spot rate FEC revalued uarter - Millions Rate Rm on 30 June 2022 at 30 June 2022 Rm Buy (Imports) 2022-03 258,9 264,5 +EUR 10,3 17,13 176,9 17,20 VW77 +JPY 01 0,12 0,0 0,12 0,0 +USD 5,3 15,53 82,0 16,45 86,8 2022-04
Slide 44: Appendices
LIBSTAR Appendices * Income statement breakdowns * Cashflow breakdowns * Debt breakdowns * Category contribution breakdowns
Slide 45: Libstar categories
Libstar categories hopendoss 45 1 2 S 4 ’ - Baking & jw | capri pIALTA pIALTQ Millennium Foods DickonHsliFoeds khoisan gourmet + CAPE COASTAL Horney i; MONTAGU sae LIBSTAR aS nenasl fi fnanos
Slide 46: Category revenue contributions
Category revenue contributions Aonendies 46 4 categories 100%, 4 categories 100% 400! ¢00' PERISHABLES GROCERIES H1 2022 H1 2021 BAKING & BAKING AIDS
Slide 47: Category Normalised EBITDA contributions
Category Normalised EBITDA“ contributions Aapendies 47 4 categories 100%, 4 categories 1000 400! ¢00' PERISHABLES Normalised EBITDA’ GROCERIES Normalised EBITDA* H1 2022 H1 2021 BAKING & BAKING AIDS ’ Before allocation of corporate costs
Slide 48: Perishables: Divisional contribution to EBITDA
4 LIBSTAR PERISHABLES 86% of category EBITDA Divisional contribution to EBITDA Appendices 48 Weighted contribution to change in Normalised EBITDA Lancewood (Dairy) Finlar (Meat) Rialto (Value-added perishables) Denny (Mushrooms) Millennium Foods (Pre-packaged meals) Umatie (Baby food) Total Incl. IF
Slide 49: Groceries: Divisional contribution to EBITDA
LIBSTAR GROCERIES Divisional contribution to EBITDA Appendices 49 84% of category EBITDA eighted contribution to change ormalised EBITDA RS 16 Dry condiments (Cape Herb & Spice) -21.4% Meal ingredients (Rialto Foods) +1.0% Wet condiments (Dickon Hall Foods) +8.4% Spreads (Cape Coastal Honey) -0.7% W
Slide 50: Snacks & Confectionery: Divisional contribution to EBITDA
4 LIBSTAR SNACKS & CONFECTIONERY 100% of category EBITDA Divisional contribution to EBITDA Appendices 50 Weighted contribution to change Incl. in Normalised EBITDA IFRS 16 Ambassador Foods +22.3% K Snacks +0.9% Excl. IFRS 16 +26.6% -0.5%
Slide 51: Baking & Baking Aids: Divisional contribution to EBITDA
LIBSTAR BAKING & BAKING AIDS Divisional contribution to EBITDA Appendices 51 100% of category EBITDA Amaro Foods Retailer Brands Cani Artisan Bakers
Slide 52: > dD) (<b) £ oO _ s n {o)) & < Oo _ oO
52 > dD) (<b) £ oO _ s n {o)) & < Oo _ oO t ¢ =) 5 ) > ” fe) as ~~ § : re O 5 a a SD - 0 Q 2 5 CO Sm 6
Slide 53: Disclaimer
LIBSTAR Disclaime Certain matters discussed in this document regarding Libstar’s future performance, that are neither reported financial results nor other historical information but involve known and unknown risks based on assumptions regarding the group’s present and future business strategies and