Libstar Holdings Ltd. · JSE:LBR
Libstar — FY2024 Earnings Presentation
45 slides from Libstar's earnings presentation, Dec 31, 2024
Slide 1: For the year ended 31 December 2024
31 December 2024 FOR THE YEAR ENDED 31 DECEMBER 2024 1
Slide 2: Presentation overview
—" LIBSTAR PRESENTATION Ou OVERVIEW OF RESULTS & STRATEGIC PROGRESS ~ FINANCIAL REVIEW CATEGORY PERFORMANCE GROUP OUTLOOK
Slide 3: Overview of results & strategic progress
— LIBSTAR QUALITY GREAT FOOD SPECIAL ~ eee OVERVIEW OF RESULTS & STRATEGIC PROGRESS
Slide 4: Strategic progress and results highlights
Strong progress in executing each of the strategic focus areas: ▪ Simplify, Grow & Sustain Positive performance across most areas, despite the impact of notable challenges: ▪ The loss of significant production volumes related to a Food Service customer in the Value-Added Meats sub-category Ambient P
Slide 5: Key financial metrics
(Volume -3.2% Price/mix +6.3%) (2023: 21.3%) (2023: R974 m) (2023: 57.1 cps) (2023: 66.1%) (2023: 1.6x) (2023: 9.8%) (2023: 15 cps) * Gross profit margin from continuing operations is restated for the prior period restatement ^ Normalised EBIT/EBITDA and Normalised EPS/HEPS from continuing operation
Slide 6: Simplify, Grow, Sustain
SIMPLIFY Portfolio & operating model To deliver sustainable, profitable growth & GROW stakeholder value. Categories, channels & people SUSTAIN Operations & cash flows 6
Slide 7: Simplify
SIMPLIFY Sale of Chet Chemicals Simplification to two super-categories ▪ Completed 30 December 2024 ▪ Perishable Products & Ambient Products ▪ Proceeds of R53 million Further simplification within Ambient Products Exit of underperforming Beverage sub-category ▪ Closed Chamonix Spring Water ▪ Dry Con
Slide 8: Grow: Ambient Products category outperformance
GROW Ambient Products Category Outperformance ▪ Revenue growth of 5.4% at a GP margin of 25.5% (2023: 25.6%) ▪ Normalised EBITDA growth of 12.2% Performance attributable to simplification of operating model & focus on growth ▪ Exports channel volume growth of 8.1% driven by Dry Condiments ▪ Food Ser
Slide 9: Grow: Perishable Products headwinds and challenges
GROW Perishable Products Category Headwinds & Challenges ▪ Revenue growth of 1.2% at a GP margin of 16.1% (2023: 16.7%) ▪ Normalised EBITDA decline of 13.7% Smaller gains were unable to offset major headwinds in larger sub-categories ▪ Convenience Meals - Revenue growth of 15.8% & Normalised EBITDA
Slide 10: The One Libstar high-performance culture programme
GROW The One Libstar high-performance culture programme ▪ Successfully launched in 2024, will remain a key initiative throughout 2025 ▪ Revitalised focus on: 10
Slide 11: Sustain
SUSTAIN Sustainable Operations Sustainable Business Practices ▪ Sufficient generator capacity to allow for uninterrupted electricity supply at each site ▪ Collaborative structure ▪ Investment in water storage & exploration of underground • Implementation of standardised factory water sources efficie
Slide 12: Financial review
LIBSTAR QUALITY GREAT FOOD SPECIAL 02 FINANCIAL REVIEW 12
Slide 13: Income statement summary
(R’m) 2024 Change 2023* Revenue 11 773.8 +3.1% 11 418.9 Gross profit margin (%) 21.0% -0.3pp 21.3% Other income 28.0 25.9 Gain/(Loss) on foreign exchange 37.4 -32.6 Capital items^ -554.2 -16.6 Operating expenses -2 019.7 +7.0% -1 886.7 Margin -17.2% -16.5% Operating (loss)/profit -41.4 -107.9% 525.8
Slide 14: Net working capital and capex
2024 % Ch. 2023 Net working capital (NWC) days increased by 5 days to 73 Total Capex R196.7m -19.6% R244.6m 2022^ 2023^ 2024^ Capex % of 1.7% 2.1% revenue NWC (days) 63 68 73 NWC (% of revenue) 17.1% 18.0% 19.1% Contribution to total capex ▪ NWC has increased due to an increase in inventory levels:
Slide 15: Targets: gearing, interest cover, ROIC
2024 2023 2022 Targets Gearing ratio 1.5 1.6 1.6 <2.0 Interest cover 5.4 4.9 7.7 >3.5 ROIC 8.6% 9.8% 10.4% WACC plus 2% Target: >65% 15
Slide 16: Category performance
LIBSTAR QUALITY GREAT SPECIAL MOMENTS CATEGORY 4 PERFORMANCE 16
Slide 17: Normalised EBITDA margin
Normalised 2023 2024 Target 2024 Target 2025 EBITDA margin * Continuing Operations 17
Slide 18: Ambient Products category: 50% of group revenue
50% of Group revenue Highlights Challenges ▪ Exports channel margins reduced due to a stronger Rand, ▪ Strong performance of retail Wet Condiment offerings increased costs arising from limited shipment container ▪ Dry Condiments sales growth of 8.1% in the Exports channel availability & unprecedente
Slide 19: Ambient Products sub-category results
50% of Group revenue Sub-category Revenue EBITDA Comments YoY YoY Increased demand in Retail and Wet Condiments +9.4% +48.5% Industrial channels Turnaround of Baking Aids Food Service volume growth Meal Ingredients, Snacks +0.4% -1.6% Direct import model in Meal Ingredients & Spreads Operational iss
Slide 20: Perishable Products category: 49% of group revenue
49% of Group revenue Highlights Challenges ▪ Strong sales of hard & soft cheese and yoghurt in Dairy ▪ Negative operating leverage in the Category driven by reduced ▪ Convenience Meals launched 48 new products contributing to a volumes in value-added beef 10% increase in volume ▪ Significant inflow
Slide 21: Perishable Products sub-category results
49% of Group revenue Revenue EBITDA Sub-category Comments YoY YoY Industry-wide cyclical pressures Dairy +5.7% -4.4% Foot and Mouth disease (Eastern Cape) Increased value-added chicken volumes Value-Added Meats -9.6% -35.9% Reduced value-added beef volumes Convenience Meals +15.8% +11.7% NPD driven
Slide 22: Household and Personal Care: 1% of group revenue
1% of Group revenue Revenue by channel 2024 Contribution Retail & Wholesale -10.1% 92.6% Industrial & Contract Manufacturing -16.6% 3.0% Exports +125.3% 4.4% Category revenue -7.9% 100.0% Category performance Volume Price/mix 2024 Change 2023* Revenue (R’m) -8.5% +0.6% 159.0 -7.9% 172.6 Gross profit
Slide 23: Outlook
LIBSTAR QUALITY BRANDS GREAT SPECIAL MOMENTS OUTLOOK Pd 23
Slide 24: Group outlook
Macro factors ▪ Notwithstanding some improving macro-economic indicators, consumers are expected to remain under pressure Simplify Further operating model simplification: ▪ Shared-service structure to be created in Wet Condiments sub-category ▪ Integration of Meal Ingredients, Snacking & Spreads int
Slide 25: Thank you
LIBSTAR THANK YOU QUALITY GREAT SPECIAL MOMENTS
Slide 26: Supporting data
LIBSTAR SUPPORTING DATA QUALITY GREAT SPECIAL FOOD 26
Slide 27: Reconciliation of normalised EBITDA, earnings and headline earnings
Reconciliation between Normalised EBITDA, Normalised earnings & Normalised headline earnings (R’m) 2024 % Ch. 2023 Normalised EBITDA 974.1 0.0% 974.2 Less: Depreciation & amortisation -343.0 -300.4 Net finance cost -210.4 -213.7 Impairments -548.9 -292.2 Taxation and the tax effect of normalisation
Slide 28: Normalised earnings and EPS
2024 % Ch. 2023 Normalised earnings (R’m) -195.0 -185.2% 228.9 Normalised headline earnings (R’m) 318.4 -6.4% 340.3 WANOS (million) 595.8 595.8 Normalised EPS (cps) -32.7 -185.2% 38.4 Normalised HEPS (cps) 53.4 -6.5% 57.1 28
Slide 29: Revenue by sales channel
YoY change Revenue by Price/ 2024 Volume mix sales channel Retail & Wholesale +3.7% -6.8% +10.5% Food Service -6.1% -6.7% +0.6% Exports +7.6% +4.5% +3.1% Industrial & Contract Manufacturing 14.9% +5.2% +9.7% Total Group +3.1% -3.2% +6.3% 29
Slide 30: Revenue by channel per category
Revenue by channel 2024 Contribution Retail & Wholesale -0.4% 53.6% Exports +14.0% 18.4% Food Service +9.1% 14.3% Industrial & Contract Manufacturing +16.1% 13.7% Category revenue +5.4% 100.0% Revenue by channel 2024 Contribution Retail & Wholesale +8.5% 59.1% Food Service -12.6% 26.7% Industrial &
Slide 31: Balance sheet
LIBSTAR SUPPORTING DATA BALANCE SHEET QUALITY GREAT SPECIAL FOOD 31
Slide 32: Statement of financial position
R’m 2024 2023* Non-current assets 4 810.1 5 537.5 Property, plant & equipment 1 551.3 1 735.4 Right-of-use-assets 497.6 421.1 Other non-current assets 2 761.2 3 381.0 Current assets 4 464.4 4 228.6 Total assets 9 274.5 9 766.1 Equity 4 879.5 5 294.5 Non-current liabilities 2 356.1 2 296.5 Other fina
Slide 33: Net gearing calculation
Net Gearing calculation = Net debt : Normalised EBITDA (Excluding IFRS 16) (R’m) 2 500 Notes: 2.0 R1.3bn in unutilised 2 000 1.6x funding facilities 1.6x 1.5x 1.5 1 500 1.2x Gearing: 1.5x 1 354 1 343 (Debt covenant <2.5) 1.0 1 000 1 183 1 093 916 851 834 811 0.5 Interest cover to EBITDA: 5.4x 500 (D
Slide 34: Debt structure
Rate 3M Facility Maturity 2024 2023 JIBAR (R’m) date Utilised Utilised margin Debt structure Facility A 1 000 Dec-26 1.70% 1 000 1 000 Facility B 150 Dec-26 1.60% 150 150 Facility C 200 Dec-26 1.65% 50 80 Maturity dates of facility B & C extended to Dec 2026 Facility D 350 Dec-26 1.70% - - Total ter
Slide 35: Cash flow statement
LIBSTAR SUPPORTING DATA CASH FLOW STATEMENT QUALITY GREAT SPECIAL FOOD 35
Slide 36: Cash flow summary
2024 (R’m) 2023 (R’m) 397 Opening cash balance 449 983 Cash generated from ops 1 040 -189 Working capital changes -274 -217 Net finance charges -220 -93 Tax paid -120 485 Cash generated from operating 426 activities -74 -80 Investment activities -330 Finance activities -386 15 Effects of exchange ra
Slide 37: Investing and financing activities
R’m 2024 2023 Net investing activities -73.9 -80.4 Purchase of PPE -129.5 -174.9 Sale of PPE +9.0 +21.0 Insurance proceeds - +73.5 Proceeds on sale of Chet Chemicals +46.6 - Net financing activities -330.3 -386.3 Lease payments -95.1 -113.6 Net movement from term loans & asset-based financing -145.8
Slide 38: Category contributions
LIBSTAR SUPPORTING DATA CATEGORY CONTRIBUTIONS QUALITY GREAT SPECIAL FOOD 38
Slide 39: Category and sub-category structure
Baking Meal Ingredients Dairy Value-Added Meats Snacking Spreads Fresh Mushrooms Convenience Meals Wet Condiments HOUSEHOLD AND PERSONAL CARE Household & Personal Care Dry Condiments 39
Slide 40: Revenue contribution by category
2024 2023 49.5% 48.5% 49.1% 50.0% * Restated 1.4% 1.5% * Revenue from continuing operations is restated for prior period error corrections 40
Slide 41: Normalised EBITDA contribution by category
2024 2023 66.4% 59.7% 32.6% 38.0% * Restated 1.0% 2.3% * Normalised EBITDA from continuing operations is restated for prior period error corrections ** Before allocation of corporate costs 41
Slide 42: Ambient contribution to change in EBITDA
Weighted contribution to change in Normalised EBITDA Wet Condiments +6.9% Dry Condiments +5.1% 100% of category Baking +0.9% EBITDA Meal Ingredients -1.4% Beverages +0.3% Total +11.8% 42
Slide 43: Perishable contribution to change in EBITDA
Weighted contribution to change in Normalised EBITDA Dairy -3.1% 103% of category Value-Added Meats -12.6% EBITDA Convenience Meals +0.4% Fresh Mushrooms +1.5% Total -13.8% 43
Slide 44: HPC contribution to change in EBITDA
Weighted contribution to change in Normalised EBITDA 100% of HPC -54.6% category EBITDA Total -54.6% 44
Slide 45: Forward-looking statements
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