Libstar Holdings Ltd. · JSE:LBR
Libstar — H1 2024 Earnings Presentation
37 slides from Libstar's earnings presentation, September 2024
Slide 1: Six months ended 30 June 2024
Six months ended 30 June 2024 1
Slide 2: Agenda
QUALITY BRANDS GREAT FOOD SPECIAL MOMENTS EXECUTIVE FINANCIAL CATEGORY H2 OUTLOOK SUMMARY REVIEW PERFORMANCE STRATEGIC PRIORITIES
Slide 3: Executive Summary
LIBSTAR EXECUTIVE QUallly SUMMARY GREAT FOOD SPECIAL MOMENTS
Slide 4: Simplify, Grow, Sustain progress
Continued progress in execution of simplification, growth and sustainability strategy: Retail channel volume pressures persisted SIMPLIFY ▪ Exit of beverage manufacturing ▪ Sale of Chet Chemicals Food service channel volumes impacted by weak ▪ New Perishable Category operating structure consumer dem
Slide 5: Key financial highlights
(Volume -0.2% Price/mix +5.4%) (H1 2023: 21.2%) (H1 2023: 2.1x) (H1 2023: 8.0%) * Restated ^ Normalised EBIT/EBITDA, Normalised EPS/HEPS, from continuing operations, excludes non-recurring, non-trading and non-cash items 5
Slide 6: Load-shedding, generator capacity and diesel spend
Days with load-shedding: Source: Eskom se Push Libstar generator capacity Diesel and electricity spend in 2024 2022 2023 H1 2024 H1 2023 H1 2024 kVA of generators 22 872 33 168 33 768 Diesel for generators R45.1m R13.7m Capital cost of generators R13.1m R19.3m R4.2m Electricity R78.1m R92.1m 6
Slide 7: Revenue by sales channel
YoY change Revenue contribution Revenue by Price/ H1 2024 Volume mix H1 2024 H1 2023* sales channel Retail & Wholesale +7.0% -5.3% +12.3% 59.2% Food Service -5.8% -4.3% -1.5% 18.7% Export +2.7% +8.4% -5.7% 10.5% Industrial & Contract Manufacturing +20.4% +14.6% +5.8% 11.6% Total Group +5.2% -0.2% +5
Slide 8: Financial Review
YUN Wa FINANCIAL QUALITY BRANDS GREAT FOOD SPECIAL MOMENTS REVIEW
Slide 9: Financial results summary
(R’m) H1 2024 change H1 2023* Revenue 5 813.2 +5.2% 5 523.6 Gross profit margin (%) 21.5% +0.3pp 21.2% Other income 7.3 22.3 FX and P/L on disposal of PPE 11.8 -25.1 Operating expenses -1 061.3 +8.2% -980.9 Margin 18.3% 17.8% Operating profit 208.0 +12.6% 184.8 Margin 3.6% 3.3% Normalised operating
Slide 10: Net working capital and capex
H1 2024 % ch. H1 2023 Net working capital (NWC) days increased by 4 days to 67 Total Capex R80.4m -35.7% R125.1m H1 2024 H1 2023 2023 Capex % 1.4% 2.3% of revenue NWC (days) 67 63 67 Contribution to total Capex NWC (% of revenue*) 17.6% 16.6% 17.7% Replacement / 36.1% Maintenance Quality / Improveme
Slide 11: Key financial ratios and cash flow analysis
Key financial ratios Cash flow analysis H1 2024 H1 2023 2023 Targets H1 2024 (R’m) H1 2023 * (R’m) Gearing 397 Opening cash balance 449 1.6 2.1 1.6 <2.0 ratio 444 Cash generated from ops 403 Interest 5.6 5.2 4.9 >3.5 cover Working capital changes - 163 -123 WACC ROIC 9.6% 8.0% 9.8% - 96 Net finance
Slide 12: Category Performance
LIBSTAR - CATEGORY QUALITY PERFORMANCE GREAT FOOD SPECIAL MOMENTS 12
Slide 13: Category structure and sub-categories
Dry Condiments Meal Ingredients Dairy Value-added Meats Snacking Spreads Fresh Convenience Meals Mushrooms Wet Condiments HOUSEHOLD AND PERSONAL CARE Household & Personal Care Baking Beverages 13
Slide 14: Normalised EBITDA margin by category
Normalised EBITDA margin H1 2024 H1 2023 * 2024 Target 11.2% 10.7% 11% - 13% 5.8% 5.3% 9% - 11% * Restated 7.5% 6.9% 5% - 8% * Restated 14
Slide 15: Ambient category performance
48% of Group revenue Revenue by channel H1 2024 Contribution Margin drivers Retail & Wholesale +5.0% 56.1% ▪ Volume improvement in Industrial Wet Condiments Exports +8.7% 17.1% ▪ Exports driven by strong Private Label Industrial & Contract Manufacturing +33.3% 14.8% performance Food Service +5.3% 12
Slide 16: Perishable category performance
47% of Group revenue Revenue by channel H1 2024 Contribution Margin drivers Retail & Wholesale +10.1% 58.8% ▪ Retail performance driven by dairy and Food Service -10.0% 27.5% value-added chicken ▪ Fresh Mushrooms volumes increased Industrial & Contract Manufacturing +4.8% 9.0% ▪ Food Service channel
Slide 17: HPC category performance
5% of Group revenue Revenue by channel H1 2024 Contribution Margin drivers Retail & Wholesale +1.5% 91.6% ▪ Continued procurement savings and Industrial & Contract Manufacturing +3.3% 6.1% production efficiencies Exports -6.9% 2.3% Category revenue +1.3% 100.0% Category performance Volume Price/mix
Slide 18: H2 Strategic Priorities
LIBSTAR H2 UNS STRATEGIC ea PRIORITIES SPECIAL MOMENTS 18
Slide 19: H2 strategic priorities
▪ Support retail growth with innovation and promotional activity ▪ Divestment from remaining HPC division, ▪ Invest in food service front-end capabilities Contactim ▪ New value-added meat contract manufacturing ▪ Value unlocking initiatives in Fresh ▪ Execute strong pipeline of export orders Mushroo
Slide 20: Outlook
LIBSTAR QS OUTLOOK QUALITY BRANDS SPECIAL MOMENTS
Slide 21: Outlook: macro factors and opportunities
Macro factors Opportunities ▪ Consumer pressure to remain ▪ Portfolio and operating structures simplified by year-end ▪ Interest rate relief and two-pot system to potentially stimulate demand ▪ On track to lower gearing below 1.5x ▪ Port efficiency continues to impact shipments ▪ Sufficient inventor
Slide 22: Thank you
LIBSTAR THANK YOU QUALITY GREAT SPECIAL MOMENTS
Slide 23: Income statement, balance sheet and cash, category contributions
Income statement Balance sheet and cash Category contributions 23
Slide 24: Reconciliation of Normalised EBITDA and earnings
Reconciliation between Normalised EBITDA, Normalised earnings & Normalised headline earnings (R’m) H1 2024 % Ch. H1 2023* Normalised EBITDA 448.9 +13.4% 396.1 Less: Depreciation and amortisation -188.4 -148.7 Net finance cost -96.5 -108.6 Taxation and the tax effect of normalisation adjustments -41.
Slide 25: Normalised earnings and EPS
H1 2024 % Ch. H1 2023* Normalised earnings (R’m) 122.8 +11.2% 110.4 Normalised headline earnings (R’m) 122.2 +11.7% 109.3 WANOS (million) 595.8 595.8 Normalised EPS (cps) 20.6 +11.4% 18.5 Normalised HEPS (cps) 20.5 +11.4% 18.4 * Restated 25
Slide 26: Income statement, balance sheet and cash, category contributions
Income statement Balance sheet and cash Category contributions 26
Slide 27: Statement of financial position
R’m H1 2024 H1 2023* Non-current assets 5 480.0 5 807.0 Property, plant and equipment 1 686.1 1 765.4 Right-of-use-assets 466.4 477.8 Other non-current assets 3 327.5 3 563.8 Current assets 4 278.1 3 983.3 Total assets 9 758.1 9 790.3 Equity 5 285.6 5 119.3 Non-current liabilities 2 306.5 2 668.3 Ot
Slide 28: Investing and financing activities
R’m H1 2024 H1 2023* Net investing activities -44.7 -104.7 Purchase of PPE -51.0 -109.4 Sale of PPE +6.0 +4.7 Insurance proceeds +0.3 - Net financing activities -195.5 -104.7 Lease payments -56.7 -58.2 Net movement from term loans and asset-based financing -49.4 +85.2 Dividend paid -89.4 -131.7 * Re
Slide 29: Net gearing calculation
Net Gearing calculation = Net debt : Normalised EBITDA (Excluding IFRS 16) (R’m) 2 500 2.1x 2.0 2 000 Notes: 1.6x 1.6x 1.6x 1.5x 1.5 1 500 1 568 1 451 1 432 1. R1.2bn in unutilised funding facilities 1 354 1 343 1.0 1 000 2. Gearing: 1.6x (Debt covenant <2.5) 956 885 *** 842 834 500 746 0.5 3. Inter
Slide 30: Debt structure and maturities
Rate 3M Facility Maturity H1 2024 H1 2023* JIBAR (R’m) date Utilised Utilised margin Debt structure Facility A 1000 Dec-26 1.70% 1000 1000 ▪ Renegotiated debt package Facility B 150 Dec-24 1.60% 150 150 implemented Dec 2021 Facility C 200 Dec-25 1.65% 80 120 Facility D 350 Dec-26 1.70% - 50 ▪ Debt m
Slide 31: Income statement, balance sheet and cash, category contributions
Income statement Balance sheet and cash Category contributions 31
Slide 32: Category contribution to revenue
H1 2024 H1 2023* 47.9% 46.2% 46.9% 48.4% * Restated 5.2% 5.4% * Restated 32
Slide 33: Category contribution to EBITDA
H1 2024 H1 2023* 63.1% 62.5% 32.3% 32.7% * Restated 4.6% 4.8% * Restated ** Before allocation of corporate costs 33
Slide 34: Ambient contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA Meal Ingredients +5.9% 89% of Dry Condiments +4.7% category Baking +2.4% EBITDA Wet Condiments +7.2% Snacking -7.0% Spreads +0.3% Beverages +0.6% Total +14.2% 34
Slide 35: Perishable contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA Dairy +9.0% 122% of category Value-added Meats -14.4% EBITDA Convenience Meals +0.1% Fresh Mushrooms +17.1 Total +11.8% 35
Slide 36: HPC contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA 100% of HPC +9.8% category EBITDA Total +9.8% 36
Slide 37: Forward-looking statements disclaimer
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 the environments i