Zeder Investments Limited · JSE:ZED
Zeder Investments — H1 2018 Earnings Presentation
23 slides from Zeder Investments's earnings presentation, Sep 26, 2017
Slide 1: Interim Results
Interim Results 6‐month period ended 31 August 2017 Presented by: Norman Celliers Chief Executive Officer 0
Slide 2: Company overview: An investment holding company
An investment holding company Company overview We play an active role in investee companies through strategic interests with a controlling influence. Business definition Business definition Strategic Focus • An actively managed investment holding Industry: • Agribusiness company listed on the Johann
Slide 3: Challenging conditions prevailed
Challenging conditions prevailed Performance review The period under review continues to reflect financial results derived during a period of challenging environmental conditions Macro environment exacerbated by high levels of political and economical volatility. 2
Slide 4: Sum-of-the-Parts (SOTP)
Sum‐of‐the‐Parts (SOTP) Performance review Zeder’s SOTP declined since 28 February 2017 and closed at R7.17 on 26 September 2017. 1H2018 3
Slide 5: Intrinsic value
Intrinsic value Performance review Despite the recent decline, the longer term trend remains positive and should resume. Historical overview R’bn R/share 16.00 12.00 14.00 14.71 10.00 12.00 12.37 8.53 8.00 10.00 7.44 7.17 8.00 6.00 5.76 6.00 4.00 4.00 3.15 2.85 2.57 2.25 3.09 2.00 2.00 1.29 0.00 0.0
Slide 6: Recurring headline earnings
Recurring headline earnings Performance review Challenging conditions affected portfolio resulting in Zeder’s RHEPS declining by 74.5% during the first six months compared 1H2018 to the same period in the prior year. 5
Slide 7: Business overview: Pioneer
Business overview Portfolio evaluation Pioneer is South Africa’s 2nd largest food producer with leading market share positions across a number of core categories and extensive geographical footprint and penetration. 6
Slide 8: Historical performance
Historical performance Portfolio evaluation Pioneer has performed exceptionally well over the past 5 years but has experienced a pull‐back from its highs of 2015… RHE (R'm) RHEPS (Rand per share) 1,800 1,637 10.00 1,534 8.83 1,600 9.00 8.32 1,400 8.00 1,242 6.78 1,200 7.00 6.00 1,000 853 4.70 726 76
Slide 9: Interim results
Interim results Portfolio evaluation … largely due to their weaker interim results reported for the 6‐month period ended 31 March 2017. This was, in part, due to items that are unlikely to reoccur. 8
Slide 10: Seamless leadership change
Seamless leadership change Portfolio evaluation Phil Roux elected to retire early as CEO and Tertius Carstens has been appointed as his successor. Phil Roux Tertius Carstens Group CEO Group CEO Until 30 September 2017 Effective 1 October 2017 9
Slide 11: Business overview: Capespan
Business overview Portfolio evaluation Capespan is an internationally diversified group with a primary exposure to fruit farming, marketing, distribution, port logistics and related services. 10
Slide 12: Interim results: Capespan
Interim results Portfolio evaluation Capespan reported a decline in RHEPS for their 6‐month period ended 30 June 2017. Prospects remain positive with strong NAV underpin. Summarised Income Statement Dec 14 Dec 15 Dec 16 Jun 16 Jun 17 % % % Key metrics R'm R'm R'm R'm R'm Revenue 7,392 4.0% 7,688
Slide 13: Business overview: Zaad
Business overview Portfolio evaluation Zaad is a specialist agricultural seed company that develops and supplies a broad basket of proprietary seeds to more than 96 international markets. Zaad 12
Slide 14: Interim results: Zaad
Interim results Portfolio evaluation Zaad reported similar results for its 6‐months as new investments contributed positively. Zaad Summarised Income Statement Feb 15 Feb 16 Jan 17 Jul 16 Jul 17 %Δ %Δ %Δ Key metrics R'm R'm R'm R'm R'm Revenue 947 29.5% 1,226 10.0% 1,349 512 ‐3.3% 495 EBITDA 142 63.
Slide 15: Business overview: Kaap Agri
Business overview Portfolio evaluation Kaap Agri is a leading Agri‐related retail, trade, supply and services company. 14
Slide 16: Interim results: Kaap Agri
Interim results Portfolio evaluation Kaap Agri reported an increase of 12.4% in RHEPS for their 6‐month period ended 31 March 2017. Summarised Income Statement Sep 14 Sep 15 Sep 16 Mar 16 Mar 17 %Δ %Δ %Δ Key metrics R'm R'm R'm R'm R'm Revenue 4,875 9.6% 5,341 5.8% 5,653 3,041 13.7% 3,457 EBITDA 263
Slide 17: Successful JSE listing
Successful JSE listing Portfolio evaluation The group successfully listed on the JSE and communicated ambition to generate annual profits in excess of R500m in the medium to long term. • Listed on the JSE main board Monday, 26 June 2017 Encouraging market response • Restructuring over past 5 yea
Slide 18: Business overview: Agrivision Africa
Business overview Portfolio evaluation 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 (irr
Slide 19: Interim results: Agrivision
Interim results Portfolio evaluation Agrivision reported a loss of $2.1m for its 6‐month period ended 30 June 2017. Operations functioning very well but low levels of commodity pricing challenging. Summarised Income Statement Dec 14 Dec 15 Dec 16 Jun 16 Jun 17 Δ% Δ% Δ% Key metrics $'000 $'000 $'000
Slide 20: Agricultural performance
Agricultural performance. Portfolio evaluation We have a total of 6,700 ha (4,200 ha irrigated) and deliver acceptable average yields. Soya yield Wheat yield (tons per hectare) (tons per hectare) 4 3.61 9 8.16 7.92 7.73 3.27 8 7.38 3.10 6.66 2.84 2.85 7 3 6 5 2 4 3 1 2 1 0 0 2012 2013 2014 2015 2016
Slide 21: Business overview: Quantum
Business overview Portfolio evaluation Quantum is South Africa’s #1 commercial egg supplier and operates a regionally dominant and nationally recognised premium animal feeds business. Farming 20
Slide 22: Interim results: Quantum
Interim results Portfolio evaluation Quantum’s reported a decline of 16% in its HEPS for their 6‐month period ended 31 March 2017. Challenging environment but lower commodity pricing likely to benefit going forward. 21
Slide 23: Prospects
Prospects Conclusion With a strong existing platform and focused addition of new opportunities, the prospects are positive going forward. General commentary • We have a strong and well diversified portfolio that provides us with broad exposure to the industry • We have worked hard internally on and