Slide 1: For the year ended 31 December 2023
For the year ended 31 December 2023 1
Slide 2: Executive summary, strategic direction, financial review, category performance, outlook
wih LIBSTAR QUALITY BRANDS GREAT FOOD SPECIAL MOMENTS EXECUTIVE STRATEGIC FINANCIAL CATEGORY OUTLOOK SUMMARY DIRECTION REVIEW PERFORMANCE
Slide 3: Executive Summary
LIBSTAR EXECUTIVE SUMMARY SPECIAL MOMENTS
Slide 4: H2 2023 objectives achieved, aided by H1 2023 strategy review
H2 2023 objectives achieved, aided by H1 2023 strategy review: Revenue growth YoY Gross profit margin Normalised EBITDA Normalised HEPS growth/(decline) YoY growth/(decline) YoY 21.4% 10.6% 29.0% 6.2% 5.2% 20.8% 4.0% 20.0% -18.3% -3.3% -44.9% -11.2% H1 2023 H2 2023 2023 H1 2023 H2 2023 2023 H1 2023
Slide 5: Load-shedding days, generator capacity and diesel spend
Days with load-shedding: Source: Eskom se Push Libstar generator capacity Diesel spend in 2023 2021 2022 2023 2022 2023 kVA of generators 17 477 22 872 33 168 Capital cost Diesel for generators R39.2m R76.5m R5.2m R13.1m R19.3m of generators 5
Slide 6: Revenue by sales channel
YoY change Revenue contribution Revenue by Price/ 2023 Volume mix 2023 2022 sales channel Retail & Wholesale +7.7% -2.8% +10.5% 58.9% 57.4% Food Service +8.7% +2.4% +6.3% 20.2% 19.6% Export +6.6% -7.5% +14.1% 10.4% 10.3% Industrial & Contract Manufacturing -12.6% -12.4% -0.2% 10.5% 12.7% Total Group
Slide 7: Strategic Direction
LIBSTAR STRATEGIC Quay DIRECTION GREAT FOOD SPECIAL MOMENTS
Slide 8: Key themes highlighted by strategic review
Key themes highlighted by strategic review: Portfolio Categories Operations & & & operating model channels cash flows Objectives to improve: Cost competitiveness Earnings quality ROIC 8
Slide 9: Portfolio composition: reduce exposure to underperforming business units
Portfolio composition: Reduce exposure to underperforming business units Central Snacks & Household & Perishables Groceries Baking & Baking Aids Office Support Confectionery Personal Care Lancewood Cape Herb & Spice Amaro Foods Ambassador Foods Chet Chemicals Millennium Foods Khoisan Cani Contactim
Slide 10: Operating Model: from divisions to two super-categories
Operating Model: From a division-based structure to a category structure comprising two super-categories Central Perishable Products Ambient Products Office Support Lancewood Cape Herb & Spice Amaro Foods Millennium Foods Khoisan Cani Finlar Fine Foods Cape Foods Retailer Brands Denny Mushrooms Mont
Slide 11: Operating Model: Perishable Products category
Operating Model: Actively pursuing functional and/or operational consolidation of appropriate product lines & divisions ▪ Perishable Products Category Perishable Products Perishables category integration objectives: Lancewood ▪ Mitigate competitor risk ▪ Improve margins through cost efficiency Mille
Slide 12: Operating Model: Ambient Products category, dry condiments
Operating Model: Actively pursuing functional and/or operational consolidation of appropriate product lines & divisions ▪ Ambient Products Category ̶ Dry Condiments Ambient Products Ambient category integration objectives: Cape Herb & Spice Rialto Dry Condiments Khoisan Amaro Foods ▪ Leverage existi
Slide 13: Operating Model: Ambient Products category, wet condiments
Operating Model: Actively pursuing functional and/or operational consolidation of appropriate product lines & divisions ▪ Ambient Products Category ̶ Wet Condiments Ambient Products Ambient category integration objectives: Dry Condiments Rialto Wet Condiments ▪ Market-beating results from the integr
Slide 14: Operating Model: Ambient Products category, food service
Operating Model: Actively pursuing functional and/or operational consolidation of appropriate product lines & divisions ▪ Ambient Products Category Ambient Products Dry Condiments Rialto Ambient category integration objectives: ▪ Expansion of food service offering beyond Dickon Wet Montagu Retailer
Slide 15: Operating Model: category-led and brand-driven organisational design
Operating Model: Align organisational design, accountability structures & reporting to a simplified, category-led & brand-driven approach Central Managing Executive: Managing Executive: Office Support Perishable Products Meal Wet DryBeverages Snacking Spreads Condiments Bakery Ingredients Ambient Pr
Slide 16: Sustainable operations and cash flow generation
Sustainable operations ▪ Seven operating facilities have been earmarked for solar energy ▪ 10-year solar savings of R40m targeted Sustainable generation cash flows installations ▪ Continued focused capital allocation (lower-end of guidance) ▪ NWC to remain elevated amidst port congestion (goods in t
Slide 17: Strategic milestones FY23 to FY27
FY23 FY24 FY25 FY27 Reduce NWC ▪ Return gearing to <1.5x ▪ Operating model change finalised and operational Reduce capex ▪ Earn right to consider Achieve buy-backs ROIC ambition Formalise of 15.5% divestment mandates ▪ Finalise simplification of portfolio and implement Scope and quantify operating m
Slide 18: Financial Review
LIBSTAR FINANCIAL QUalily REVIEVV GREAT FOOD SPECIAL MOMENTS
Slide 19: Income statement summary
(R’m) 2023 change 2022 Revenue 12 382.3 +5.2% 11 771.6 Gross profit margin (%) 20.8% +0.1pp 20.7% Other income 146.0 83.2 FX and P/L on disposal of PPE -26.4 -13.5 Impairments* -143.0 -296.0 Operating expenses -2 017.4 -2.0% -1 978.7 Margin 16.3% 16.8% Operating profit 529.3 +123.2% 237.1 Margin 4.3
Slide 20: Net working capital and capex
2023 % ch. 2022 Net working capital (NWC) days increased by 4 days to 63 Total Capex R244.6m -36.4% R384.4m 2021 2022 2023 Capex % of 2.0% 3.3% revenue NWC (days) 56 59 63 Contribution to total Capex NWC (% of revenue) 15.4% 16.0% 17.0% Replacement / Maintenance 47.1% ▪ Creditors days down two days
Slide 21: Key financial ratios and cash flow analysis
Key financial ratios Cash flow analysis 2023 2022 2021 Targets 2023 (R’m) 2022 (R’m) Gearing 249 Opening cash balance 593 1.6 1.6 1.2 <2.0 ratio 1 040 Cash generated from ops 1 008 Interest 4.9 7.7 8.9 >3.5 cover -285 Working capital changes -277 WACC ROIC 9.8% 10.4% 12.5% Net finance charges plus 2
Slide 22: Category Performance
LIBSTAR CATEGORY QUalily PERFORMANCE GREAT FOOD SPECIAL MOMENTS 22
Slide 23: Normalised EBITDA margin by category
Normalised 2022 H1 2023 H2 2023 2023 2023 Target EBITDA margin PERISHABLES 8.4% 6.0% 8.4% 7.3% Below GROCERIES 12.2% 9.8% 12.0% 11.0% In line SNACKS & CONFECTIONERY 18.5% 18.1% 10.5% 14.1% Below BAKING & BAKING AIDS 8.9% 8.4% 9.4% 8.9% Below HOUSEHOLD & PERSONAL CARE 1.7% 5.7% 7.2% 6.5% Above 23
Slide 24: Perishables
PERISHABLES 50% of Group revenue Revenue by channel 2023 Contribution Margin drivers Retail & Wholesale +4.2% 56.3% ▪ Food service performance is driven by dairy products Food Service +7.2% 30.7% ▪ Denny fire impact on volumes Industrial & Contract Manufacturing +0.4% 7.9% ▪ Volume pressure in retai
Slide 25: Groceries
GROCERIES 31% of Group revenue Revenue by channel 2023 Contribution Margin drivers Retail & Wholesale +17.8% 45.2% ▪ Impact of Cape Foods acquisition Exports +7.5% 23.5% ▪ Increased volumes in retail wet condiments Industrial & Contract Manufacturing -15.0% 19.1% ▪ Strong performance in food service
Slide 26: Baking & Baking Aids
BAKING & BAKING AIDS 9% of Group revenue Revenue by channel 2023 Contribution Margin drivers Retail & Wholesale +12.0% 84.2% ▪ Recovery of volumes in H2 2023 Food Service +19.8% 11.5% ▪ Food service performance driven by Exports +43.9% 3.4% wraps from Amaro Foods Industrial & Contract Manufacturing
Slide 27: Snacks & Confectionery
SNACKS & CONFECTIONERY 4% of Group revenue Revenue by channel 2023 Contribution Margin drivers Retail & Wholesale +0.7% 94.1% ▪ Kellogg’s Pringle manufacturing Exports +69.3% 3.2% terminated in prior year Industrial & Contract Manufacturing -84.7% 2.2% ▪ Change in sales mix to lower-margin Food Serv
Slide 28: Household & Personal Care
HOUSEHOLD & PERSONAL CARE 6% of Group revenue Revenue by channel 2023 Contribution Margin drivers Retail & Wholesale +2.9% 90.8% ▪ Discontinuation of unprofitable lines Industrial & Contract Manufacturing -1.6% 7.4% ▪ Procurement savings and production Exports +2.4% 1.8% efficiencies Category revenu
Slide 29: Perishable and Ambient Products categories
Normalised H1 2023 H2 2023 2023 2024 Target EBITDA margin PERISHABLE PRODUCTS 6.0% 8.4% 7.3% 9% - 11% AMBIENT PRODUCTS 10.3% 11.3% 10.9% 11% - 13% Category performance 2023 Category performance 2023 Revenue (R’m) 6 226.1 Revenue (R’m) 5 419.4 Gross profit margin % 18.7% Gross profit margin % 23.7% N
Slide 30: Outlook
LIBSTAR QS OUTLOOK QUALITY BRANDS GREAT FOOD SPECIAL MOMENTS 30
Slide 31: Macro factors, opportunities and post-period trading
Macro factors Opportunities ▪ Consumers to remain under pressure Channel opportunities: ▪ Interest rates to remain elevated ▪ Export channel demand has stabilised to new base: ▪ Direct and indirect impact of loadshedding and port ▪ Targeting significant opportunities in meat, dry and wet congestion
Slide 32: Thank you
LIBSTAR THANK YOU QUALITY GREAT SPECIAL MOMENTS
Slide 33: Income statement, balance sheet and cash, category contributions
Income statement Balance sheet and cash Category contributions 33
Slide 34: Reconciliation of Normalised EBITDA, earnings and headline earnings
Reconciliation between Normalised EBITDA, Normalised earnings & Normalised headline earnings (R’m) 2023 % Ch. 2022 Normalised EBITDA 998.2 -3.3% 1 032.3 Less: Depreciation and amortisation -319.8 -342.3 Net finance cost -220.5 -166.0 Impairments -143.0 -292.2 Taxation and the tax effect of normalisa
Slide 35: Normalised earnings and headline earnings per share
2023 % Ch. 2022 Normalised earnings (R’m) 234.0 +109.4% 111.7 Normalised headline earnings (R’m) 345.4 -11.2% 389.1 WANOS (million) 595.8 595.8 Normalised EPS (cps) 39.3 +109.0% 18.8 Normalised HEPS (cps) 58.0 -11.2% 65.3 35
Slide 36: Income statement, balance sheet and cash, category contributions
Income statement Balance sheet and cash Category contributions 36
Slide 37: Statement of financial position
R’m 2023 2022 Non-current assets 5 537.5 5 883.0 Property, plant and equipment 1 735.4 1 738.9 Right-of-use-assets 421.1 521.5 Other non-current assets 3 381.0 3 622.6 Current assets 4 305.0 4 038.9 Total assets 9 842.5 9 921.9 Equity 5 294.4 5 202.4 Non-current liabilities 2 296.5 2 625.2 Other fin
Slide 38: Investing and financing activities
R’m 2023 2022 Net investing activities -80.4 -387.8 Purchase of PPE -174.9 -298.9 Sale of PPE +21.0 +12.2 Sale of Glenmor - +1.0 Insurance proceeds +73.5 - Acquisition of Cape Foods, net of cash acquired - -102.1 Net financing activities -386.3 -484.3 Lease payments -113.6 -156.2 Net movement from t
Slide 39: Net gearing calculation
Net Gearing calculation = Net debt : Normalised EBITDA (Excluding IFRS 16) (R’m) 2 500 2.0 Notes: 2 000 1.6x 1.6x 1. R1.2bn in unutilised funding 1.5 1.4x facilities 1 500 1.2x 1 354 1 343 2. Gearing: 1.6x (Debt covenant 1 276 1.0 1 000 <2.5) *** 1 093 914 916 851 834 500 0.5 3. Interest cover to EB
Slide 40: Debt structure
Rate 3M Facility Maturity 2023 2022 JIBAR (R’m) date Utilised Utilised margin Debt structure Facility A 1000 Dec-26 1.70% 1000 1000 ▪ Renegotiated debt package implemented Dec 2021 Facility B 150 Dec-24 1.60% 150 150 Facility C 200 Dec-25 1.65% 80 120 ▪ Debt maturity dates were extended Facility D 3
Slide 41: Income statement, balance sheet and cash, category contributions
Income statement Balance sheet and cash Category contributions 41
Slide 42: Categories and brands
PERISHABLES (Value-added dairy) (Meat products) (Value-added dairy and deli) (Fresh mushrooms) (Convenience) (Baby food, ready-made frozen meals) GROCERIES (Dry condiments) (Groceries) (Teas) (Wet condiments) (Speciality beverages) SNACKS & CONFECTIONERY BAKING & BAKING AIDS HOUSEHOLD & PERSONAL CAR
Slide 43: Revenue contribution by category
2023 2022 PERISHABLES GROCERIES 50.4% 50.6% SNACKS & CONFECTIONERY 31.1% Revenue Revenue 30.6% BAKING & BAKING AIDS 4.1% 4.8% HOUSEHOLD & PERSONAL CARE 5.9% 8.5% 7.9% 6.1% 43
Slide 44: Normalised EBITDA contribution by category
2023 2022 PERISHABLES GROCERIES 43.8% 41.6% 38.8% 38.7% SNACKS & CONFECTIONERY Normalised Normalised EBITDA* EBITDA* BAKING & BAKING AIDS 6.6% HOUSEHOLD & PERSONAL CARE 9.2% 4.4% 8.6% 1.1% 7.2% * Before allocation of corporate costs 44
Slide 45: Perishables: contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA PERISHABLES Lancewood -1.4% 96% of category EBITDA Finlar Fine Foods +0.4% Rialto +1.9% Millennium Foods -0.1% Umatie 0.0% Denny Mushrooms -10.0% Total -9.2% 45
Slide 46: Groceries: contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA GROCERIES Rialto -0.4% 76% of Cape Herb & Spice +2.3% category EBITDA Dickon Hall Foods -13.7% Montagu Foods +1.9% Cecil Vinegar +3.3% Cape Foods +3.4% Cape Coastal Honey +0.7% Khoisan Gourmet -2.1% Chamonix +0.4% Total -4.2% 46
Slide 47: Snacks & Confectionery: contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA SNACKS & CONFECTIONERY Ambassador Foods -19.0% 100% of category KSnacks -12.0% EBITDA Total -31.0% 47
Slide 48: Baking & Baking Aids: contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA BAKING & BAKING AIDS Amaro Foods +12.1% 100% of Cani Artisan Bakers +7.3% category EBITDA Retailer Brands -5.5% Total +13.9% 48
Slide 49: Household & Personal Care: contribution to change in Normalised EBITDA
Weighted contribution to change in Normalised EBITDA HOUSEHOLD & PERSONAL CARE 100% of HPC +284.2% category EBITDA Total +284.2% 49
Slide 50: 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