Zeder Investments Limited · JSE:ZED
Zeder Investments — H1 2019 Earnings Presentation
20 slides from Zeder Investments's earnings presentation, Aug 31, 2019
Slide 1: Interim Results
Interim Results 6-month period ended 31 August 2019 Presented by: Norman Celliers Chief Executive Officer
Slide 2: Contents
Contents • Corporate overview • Significant transactions • Interim financial results • Portfolio review • Prospects • Questions
Slide 3: Corporate overview
An investment holding company Corporate 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 Joha
Slide 4: Category 1 disposal
Category 1 disposal Significant transactions An offer was announced and Zeder shareholders voted in favour of disposing of its interest in Pioneer Foods to PepsiCo in terms thereof. • PepsiCo has offered to acquire the entire issued share capital of Pioneer Foods • The main terms of the offer are co
Slide 5: Application of the proceeds
Application of the proceeds Significant transactions Once the transaction has been fully implemented, the Zeder Board intends to distribute between R4.25bn and R4.75bn to shareholders and reinvest the remaining portion into existing investee companies and new opportunities. Unaudited indication of a
Slide 6: Disposal and unbundling
Disposal and unbundling Significant transactions Capespan executed and implemented significant transactions and restructuring since the prior comparative period and the corresponding impact should be noted. • Successfully disposed of the investment in China during 2018 • Fair value gains reported in
Slide 7: Additional commitment to Zaad
Additional commitment to Zaad Significant transactions Zeder has committed an additional R300m to Zaad during the period in order to fund its underlying transactions, as announced on SENS. • Diversified specialist in the formulation, manufacture and supply of agrochemicals • Number one supplier of a
Slide 8: Executive summary
Executive summary Interim financial results 31 August 2019 • Intrinsic value indicators: ─ Sum-of-the-Parts increased by 11% to R6.25 per share ─ Share price increased by 11% to R4.70 per share ─ Discount remains around 25% • The PepsiCo offer for Pioneer Foods contributed to increase in SOTP values
Slide 9: Sum-of-the-Parts
Sum-of-the-Parts Interim financial results Zeder’s SOTP value increased by 11% to R6.25 as at 31 August 2019. 31 August 2019 8
Slide 10: Earnings
Earnings Interim financial results Recurring Headline Earnings per share decreased by 63%. 31 August 2019
Slide 11: Intrinsic value
Intrinsic value Historical review Valuations remain in a downward cycle but positively impacted by effect of the PepsiCo offer to Pioneer Foods. R’bn R/share 16.00 12.00 14.00 10.00 12.00 8.00 10.00 10.64 9.65 8.00 6.22 6.00 5.64 5.26 6.00 4.70 4.09 4.23 4.00 5.16 4.00 1.92 2.00 2.00 1.46 1.17 - - F
Slide 12: Strategic interests across value chain
Strategic interests across value chain Portfolio review Portfolio offers strategic exposure to meaningful and leading companies across value chain with strong management teams focused on driving growth in the long-term. Indicative value Company Salient features Zeder Share Zeder Value of 100% • SS A
Slide 13: Portfolio review: Pioneer Foods
Portfolio review Pioneer Foods reported a 15% decrease in adjusted RHEPS for the 6-month period ended 31 March 2019. Historical overview Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Historical R'm R'm R'm R'm R'm R'm Revenue 16,236 17,699 18,748 20,600 19,575 20,152 EBITDA 1
Slide 14: Portfolio review: Capespan
Portfolio review Capespan reported a recurring loss of R89m for their first 6-months ended 30 June 2019 – revenues and profits traditionally in 2nd half of year. Historical overview Summarised Income Statement Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Historical R'm R'm R'm R'm R'm R'm Revenue 7,149
Slide 15: Portfolio review: TLG
Portfolio review TLG reported a recurring profit of R49m for its first 6-months ended 30 June 2019. Historical overview Summarised Income Statement Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Historical R'm R'm R'm R'm R'm Revenue 508 523 511 609 794 EBITDA 152 172 122 172 226 EBITDA margin 29.9% 32.9% 23.9%
Slide 16: Portfolio review: Kaap Agri
Portfolio review Kaap Agri reported an increase of 3.2% in RHEPS for their 6-month period ending 31 March 2019. Historical overview Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Historical R'm R'm R'm R'm R'm R'm Revenue 4,008 4,875 5,341 5,653 6,416 6,549 EBITDA 219 263 311
Slide 17: Portfolio review: Zaad
Portfolio review Zaad reported a recurring headline loss of R8.7m for their 6-month period ended 31 July 2019. Historical overview Summarised Income Statement Feb 14 Feb 15 Feb 16 Jan 17 Jan 18 Jan 19 Historical R'm R'm R'm R'm R'm R'm Revenue 465 947 1,217 1,344 1,409 1,635 EBITDA 92 142 223 222 22
Slide 18: Portfolio review: Zambia
Portfolio review Disappointing recurring losses reported but conservative approach supports Sum-of-the-Parts values in ZAR. Historical overview Summarised Income Statement Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Historical $'000 $'000 $'000 $'000 $'000 $'000 Revenue 14,304 32,532 31,711 39,718 34,
Slide 19: Portfolio review: Quantum Foods
Portfolio review Quantum Foods reported a decrease of 45% in HEPS and declared dividends of 8c per share during the period ended 31 March 2019. Historical overview Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Historical R'm R'm R'm R'm R'm R'm Revenue 3,483 3,561 3,468 3,913
Slide 20: Prospects
Prospects • Challenging macro conditions expected to remain in the short to medium term • Anticipated PepsiCo transaction considered positive for stakeholders • Distribution of R4.25bn – R4.75bn to shareholders if successfully implemented • Remaining portfolio presents opportunity for value creation