Rmb Holdings Limited · JSE:RMH
Rmb — Investor Presentation (September 2018)
21 slides from Rmb's investor presentation, September 2018
Slide 1: Portfolio and strategy overview
RMH Portfolio and strategy overview 0
Slide 2: Context
Context RMH is an investment holding company with a proven track record of investing in disruptive and entrepreneurial financial services businesses This performance has been achieved by partnering with exceptional management teams for the long term RMH positions itself as a value-adding, stable and
Slide 3: RMH has a strong track record of delivering value to investors
RMH has a strong track record of delivering value to investors Total shareholder return CAGR of 25% per annum since listing in November 1992 Nov 92 May 94 Nov 95 May 97 Nov 98 May 00 Nov 01 May 03 Nov 04 May 06 Nov 07 May 09 Nov 10 May 12 Nov 13 May 15 Nov 16 May 18 1992 1995 1997 1998 2010 2011 201
Slide 4: RMH strategy
RMH strategy RMH is the biggest shareholder in FirstRand, South Africa’s largest banking group, holding a 34% stake. RMH is the founding shareholder of FirstRand and views this as its core asset. RMH is represented on all the relevant strategic and governance forums and provides FirstRand with a res
Slide 5: FY18 Results summary
FY18 Results summary KEY PERFORMANCE INDICATORS NORMALISED EARNINGS HISTORY 30,000 9% 8% R’ m Jun-17 Jun-18 % chg. 25,000 FY14 Value, earnings and dividends 20,000 FY15 8 815 8,166 R'm 7,659 7,158 15,000 6,237 Intrinsic value per share (R) 6 306.6 8 632.0 36.9% FY16 26 411 18,663 21,286 22,855 24,47
Slide 6: FY18 Results summary
FY18 Results summary KEY PERFORMANCE INDICATORS NORMALISED EARNINGS (R’m) R’m Jun-17 Jun-18 % chg. 22% 14% 7% 7% 8% 9.9% 30,000 Net interest income 46,626 51,254 Non-interest income 39,268 41,926 6.8% 25,000 Fee and commission 25,598 28,250 10.4% 20,000 Insurance income 3,967 4,197 5.8% 15,000 24,47
Slide 7: The property strategy
The property strategy In late 2015, RMH announced its intention to launch a property strategy, that is now housed in its subsidiary RMH Property (‘RMHP’): • RMHP has an overall NAV target of R10bn, over the next 5-7 years; and • RMHP has made six investments since the launch of strategy and will con
Slide 8: The property strategy
The property strategy BALANCING RETURNS WITH BALANCE SHEET FLEXIBILITY • In the decade leading up to RMH’s announcement of its property strategy in 2015, the South African property sector offered attractive returns and strong diversification benefits for RMH • Over that decade, the South Africa’s li
Slide 9: Capacity and value-add framework
Capacity and value-add framework DEDICATED MANAGEMENT CAPACITY • RMH has appointed a dedicated specialist team to execute the RMH property strategy • RMHP team collectively has over 25 years of property experience as strategic executives, principal investors and lenders • Brian Roberts (CEO of RMH P
Slide 10: RMH Property strategy
RMH Property strategy CREATE A DIVERSIFIED PROPERTY PORTFOLIO OF ENTREPRENEURIAL, DEVELOPMENT FOCUSED PARTNERSHIPS CORE PARTNERSHIP: Target NAV R5-10bn1 SATELLITE PARTNERSHIPS: Target NAV R1-5bn1 • Atterbury Property Holdings is RMHP’s core domestic • RMHP has satellite partners with specific focus
Slide 11: Progress to date
Progress to date RMH HAS MADE PROGRESS ON ITS PROPERTY STRATEGY CORE PARNERSHIP SATELLITE PARTNERSHIPS Three 40.0% stake 27.5% stake 43.9%1 stake 49.9% stake 18.4%2 stake • RMHP has deployed c. R1.3bn in equity capital (excl. committed pipeline) • Further to the equity capital, c. R1.5bn of 3-5 year
Slide 12: Core domestic partner | Atterbury Property Holdings
Core domestic partner | Atterbury Property Holdings OVERVIEW KEY PEOPLE Louis van der Watt (Co-founder and Group CEO) • Atterbury Property Holdings (‘Atterbury’) has significant experience in • Louis co-founded Atterbury in 1994, after completing his articles at property development, having develope
Slide 13: Core European partner | Atterbury Europe
Core European partner | Atterbury Europe OVERVIEW KEY PEOPLE Henk Deist (Group CEO) • Atterbury Europe B.V. (‘Atterbury Europe’) was founded in 2014, when Atterbury Property Holdings co-invested with a consortium of • Since joining as CFO in 2014, Henk has been instrumental in building the portfolio
Slide 14: Core partnership initiative | Divercity Urban Property Fund
Core partnership initiative | Divercity Urban Property Fund(1) OVERVIEW KEY SEED PARTNERS • Divercity is an urban property fund focused on investing in and renewing dense urban precincts rather than individual buildings on, a • The renowned Atterbury Property group brings significant expertise and c
Slide 15: Satellite partner | Genesis Properties Three
Satellite partner | Genesis Properties Three OVERVIEW KEY PEOPLE • Genesis Properties was formed in 2010 as a partnership between Brain Roberts (Director & Founder) Genesis Capital Partners, Kirsh Group and Brian Roberts • Founder & former CEO of Genesis Properties • RMH is invested in Genesis Prope
Slide 16: Satellite partner | Propertuity Development
Satellite partner | Propertuity Development OVERVIEW KEY PEOPLE Reanne van der Merwe (CEO) • 20 years' experience and 10+ years of in property • Propertuity is a leader in urban renewal, having led the development of the flagship mixed-use Maboneng precinct that has attracted • Former CFO of Pareto
Slide 17: FY18 results
FY18 results INTRINSIC VALUE NORMALISED EARNINGS R’m 2018 2017 % change R’m 2018 2017 % change Core portfolio 2 192 610 >100% Core portfolio 152 (1) >100% Satellite portfolio 23 289 (92%) Satellite portfolio (124) 9 (>100%) Holding company net assets (148) - 100% Holding company costs (12) - (>100%)
Slide 18: Prospects to expand the RMH Property portfolio
Prospects to expand the RMH Property portfolio RMHP PLANS TO DIVERSIFY THE PORTFOLIO DOMESTICALLY AND INTERNATIONALLY • Although South Africa’s property sector has strong prospects over the long-term it continues to face significant headwinds at this stage of the cycle. Further diversification beyon
Slide 19: Financial metrics for RMH Property
Financial metrics for RMH Property FOCUS ON CAPITAL GROWTH • RMHP’s investment strategy primarily focuses on development focused businesses with returns driven by capital growth (measured by intrinsic value) • This contrasts with most JSE-listed property companies that have portfolios primarily skew
Slide 20: Financial impact of RMH Property on RMH
Financial impact of RMH Property on RMH OPTIONALITY CREATED FOR RMH WITHOUT COMPROMISING DIVIDENDS DISTRIBUTIONS • RMH funds RMHP’s investments by raising preference shares under RMH’s medium-term debt programme • These investments should not have a material impact on RMH’s intrinsic value, earnings
Slide 21: Questions
Questions 20
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