Epe Capital Partners Ltd. Class A · JSE:EPE
Epe Capital Partners Ltd. Class A — Ethos Capital — H1 2019 Earnings Presentation
18 slides from Epe Capital Partners Ltd. Class A's earnings presentation, Mar 26, 2019
Slide 1: Investor Presentation
I N V E S T O R P R E S E N TAT I O N 26 March 2019
Slide 2: Executive Summary section
EXECUTIVE PORTFOLIO VALUATION OUTLOOK SUMMARY OVERVIEW OVERVIEW © Ethos | 2
Slide 3: Executive summary
EXECUTIVE SUMMARY Executive summary Business and consumer confidence in SA remains low – no use complaining! Strong growth in SSA in certain key “tailwind” sectors – strong pipeline of opportunities Strong operational performance (and turnaround) in most portfolio companies offset by underperformanc
Slide 4: Highlights of the results
EXECUTIVE SUMMARY Highlights of the results Key performance metrics # of Portfolio Companies NAV per Share Growth in NAV per share 17 R11.16 3% Average EV / EBITDA Capital Invested Capital Invested (Proforma) (as at Dec 2018) (Proforma) 7.5x R1.30bn R1.55bn Proforma invested capital Net Debt / EBITD
Slide 5: Portfolio Overview
EXECUTIVE PORTFOLIO VALUATION OUTLOOK SUMMARY OVERVIEW OVERVIEW © Ethos | 5
Slide 6: Portfolio overview and value contribution
PORTFOLIO Portfolio overview and value contribution Exposure to 17 portfolio companies across various sectors and vintages Invested Capital by sector / geography 10% 3% 27% 34% 12% 15% Industrial services MedTech Consumer goods Telco services Media FinTech 37% 63% South Africa Sub Saharan Africa © E
Slide 7: Growth in Invested Capital
PORTFOLIO Growth in Invested Capital Significant increase in Invested Capital since 30 June 2018 831 716 Net new investments © Ethos | 7
Slide 8: Fund status (drawn and undrawn commitments)
PORTFOLIO Fund status (drawn and undrawn commitments) Strong investment progress across all of the Ethos funds 148 950 44 250 1250 150 371 3163 3% 5% 14% 13% 38% 50% 56% 71% 82% 14% 95% 8% 86% 84% 2% 47% 9% 42% 42% 18% 21% Fund VI Mid Market Healthcare Mezzanine Fund VII Ai Fund Direct Total Drawn C
Slide 9: Net Asset Value contribution
PORTFOLIO Net Asset Value contribution Contribution by portfolio company to Ethos Capital Proforma NAV Assets owned for less than one year 31% 36% As at 31 Dec 2018 Assets owned for more than one year 32% Cash Assets < 1 year Assets > 1 year © Ethos | 9
Slide 10: Portfolio overview (6 month performance since June 2018)
PORTFOLIO Portfolio overview (6 month performance since June 2018) % of Invested Capital Value (Rm) Performance update • Deal completed in October 2018, Ethos funds retain an option to increase exposure 391 • Strong EBITDA growth (+40%) in Airtime Credit Services business • New long term contracts s
Slide 11: Portfolio overview (6 month performance since June 2018)
PORTFOLIO Portfolio overview (6 month performance since June 2018) % of Invested Capital Value (Rm) Performance update • Deal to acquire Gondwana signed in October 2018, subject to 177 regulatory approval • 14% increase in LTM revenue, 75% increase in VAS revenue 11% • Strong sales drive and strateg
Slide 12: Portfolio overview (6 month performance since June 2018)
PORTFOLIO Portfolio overview (6 month performance since June 2018) % of Invested Capital Value (Rm) Performance update • Consumer, market and inflation pressures have negatively 85 impacted revenue growth (flat) and margins (down) 6% • New management have refocused the business and significantly red
Slide 13: Valuation Overview
EXECUTIVE PORTFOLIO VALUATION OUTLOOK SUMMARY OVERVIEW OVERVIEW © Ethos | 13
Slide 14: Portfolio composition and valuation metrics
14 VALUATION Portfolio composition and valuation metrics Portfolio composition Key valuation metrics % of TNAV % of TNAV Discount to NAV 69% 81% 9.0x 34.0% 30% 8.0x 7.5x 33.0% 32.0% 30%* 7.0x 31.0% 6.0x NAV 30.0% 8.26 5.0x 9.81 29.0% R11.16 4.0x 27% 28.0% 7.80 3.0x 27.0% 2.0x 1.5x 26.0% 2.90 1.0x 25
Slide 15: Portfolio company returns
VALUATION Portfolio company returns Ethos Capital returns on portfolio companies since investment Age of investment in years 2.1 2.1 1.1 2.1 1.9 1.2 0.4 2.1 0.6 0.2 0.4 0.8 2.1 2.1 2.1 1.4 1.63x Positive value contribution New assets at cost 1.30x 1.18x 1.18x 1.11x 1.10x 1.11x Negative value contrib
Slide 16: Valuation implied by the market
VALUATION Valuation implied by the market Portfolio valued at a 27% discount to the peer group... .....market “look-through” values portfolio at 5.1x EV / EBITDA 7.5x 100 NAV BASED VALUATION 2.90 1.4x 27% 11.16 73 8.26 6.3x 30% NAV Cash Invested NAV Valuation 51 5.1x SHARE BASED VALUATION 2.90 1.4x
Slide 17: Outlook
EXECUTIVE PORTFOLIO VALUATION OUTLOOK SUMMARY OVERVIEW OVERVIEW © Ethos | 17
Slide 18: Outlook
OUTLOOK Outlook Not banking on any SA economic tailwinds for foreseeable future – focus for portfolio companies remains operational efficiency, market share growth and strategic acquisitions Significant number of SSA (ex SA) opportunities that have the potential to benefit from strong secular growth