Zeder Investments Limited · JSE:ZED
Zeder Investments — FY2017 Earnings Presentation
24 slides from Zeder Investments's earnings presentation, Feb 28, 2017
Slide 1: Full Year Results
Full Year Results For the year ended 28 February 2017 Presented by: Norman Celliers Chief Executive Officer
Slide 2: An investment holding company – Company overview
An investment holding company Company overview We play an active role in investee companies through strategic interests with a controlling influence. Business definition Strategic Focus • An actively managed investment holding Industry: • Agribusiness company listed on the Johannesburg Sub‐sector: •
Slide 3: Sum-of-the-Parts
Sum‐of‐the‐Parts Performance review FY2017 29 Feb 2016 28 Feb 2017 31 Mar 2017 Interest Interest Interest Company (%) Rm (%) Rm (%) Rm Pioneer Foods 27.2 7,574 27.1 9,538 27.1 10,288 Capespan 96.6 2,027 98.1 1,975 98.1 1,975 Zaad 92.3 1,246 91.4 1,531 91.4 1,531 Kaap Agri 39.4 758 39.8 1,321 39.8 1,
Slide 4: Management fees
Management fees Performance review The pressing issue of the management agreement was successfully addressed with the final R75m paid during the year ‐ no further fees due to PSG in terms hereof. FY2017 Management Fees (R’m) Base Performance 3
Slide 5: Structural discount removed
Structural discount removed Performance review The internalisation of the Management Agreement has resulted in a reduction of the historical discount between share price and Historical overview sum‐of‐the‐parts. R’bn R/share 18.00 12.00 16.00 10.00 14.00 8.95 12.00 8.00 7.75 10.00 6.00 8.00 6.00 4.0
Slide 6: Recurring headline earnings
Recurring headline earnings Performance review Recurring headline earnings per share increased by 0.5% for the year ended 28 February 2017. FY2017 Audited 29 Feb 2016 Change 28 Feb 2017 Rm (%) Rm Recurring headline earnings from investments 805 2 821 Management (base) fee (155) (75) Net interest, ta
Slide 7: Salient features
Salient features Performance review Historical overview Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb % Chg 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 FY16‐FY17 SOTP ‐ pre mgmt liability (R'bn) 1.29 1.31 1.17 2.07 2.68 3.09 4.26 5.16 13.26 12.25 14.71 20.0% SOTP ‐ post mgmt liability (R'bn
Slide 8: Total shareholder return
Total shareholder return Performance review An improved performance over the past 5 years has ensured that Zeder’s overall shareholder value creation since inception has been Shareholder value attractive. 5‐years 5‐years 10‐years 30.0% 25.0% 20.0% 15.0% 26.8% 25.0% 10.0% 17.1% 15.8% 11.6% 11.5% 5.0%
Slide 9: Investments over time
Investments over time Portfolio evaluation Portfolio construction has changed significantly from many small investments to fewer, larger positions that have increased in value. Portfolio construction R’million • 6 investments Agrivision • Portfolio value > R15bn • Pioneer ~ 63% of investments Pionee
Slide 10: Strong understanding and engaged
Strong understanding and engaged Portfolio evaluation We are very close to our companies and management teams and believe that additional growth can be achieved to generate General commentary attractive shareholder returns. • We have a strong and well diversified portfolio that provides us with broa
Slide 11: Business overview – Pioneer Foods
Business overview Portfolio evaluation Pioneer is South Africa’s 2nd largest food producer with leading market share positions across a number of core categories and extensive geographical footprint and penetration. 10
Slide 12: Detailed historical review
Detailed historical review Portfolio evaluation Summarised Income Statement Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Key metrics R'm R'm R'm R'm R'm R'm Revenue 14,139 15,512 16,236 17,699 18,748 20,600 EBITDA 1,342 1,379 1,499 2,006 2,488 2,615 EBITDA margin 9.5% 8.9% 9.2% 11.3% 13.3% 12.7% EBIT 1
Slide 13: Business overview – Capespan
Business overview Portfolio evaluation Capespan is an internationally diversified group with a primary exposure to fruit farming, marketing, distribution, port logistics and related services. 12
Slide 14: Detailed historical review
Detailed historical review Portfolio evaluation Summarised Income Statement Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Key metrics R'm R'm R'm R'm R'm R'm Revenue 3,181 5,631 7,149 7,392 7,688 8,311 EBITDA 146 206 228 227 299 250 EBITDA margin 4.6% 3.7% 3.2% 3.1% 3.9% 3.0% EBIT 109 165 191 169 220 15
Slide 15: Business overview – Zaad
Business overview Portfolio evaluation Zaad is a specialist agricultural seed company that develops and supplies a broad basket of proprietary seeds to more than 96 international markets. Zaad 14
Slide 16: Detailed historical review – Zaad
Detailed historical review Portfolio evaluation Zaad Summarised Income Statement Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Jan 17 Key metrics R'm R'm R'm R'm R'm R'm Revenue 257 294 465 947 1,226 1,349 EBITDA 39 48 92 142 232 219 EBITDA margin 15.2% 16.3% 19.8% 15.0% 18.9% 16.2% EBIT 36 45 80 120 197 185 E
Slide 17: Post balance sheet investment
Post balance sheet investment Portfolio evaluation Agreement has been reached to acquire 35% of May Seed (Turkey). Zaad Company overview • Biggest independent seed company in Turkey • Family owned business • Strong management team • Locally bred and adapted products ‐ strong local brand • Expert ind
Slide 18: Business overview – Kaap Agri
Business overview Portfolio evaluation Kaap Agri is South Africa’s leading Agri‐related retail, trade, supply and services company. 17
Slide 19: Detailed historical review
Detailed historical review Portfolio evaluation Summarised Income Statement Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Key metrics R'm R'm R'm R'm R'm R'm Revenue 2,624 3,212 4,008 4,875 5,341 5,653 EBITDA 147 183 219 263 311 368 EBITDA margin 5.6% 5.7% 5.5% 5.4% 5.8% 6.5% EBIT 134 169 202 243 291 33
Slide 20: Business overview – Agrivision
Business overview Portfolio evaluation Agrivision Africa is a vertically integrated, grain‐related food supplier that farms, mills and distributes products in the northern region of Zambia and southern parts of the DRC. Farming & Development Milling & Processing Brands & Distribution • 4,200 ha (irr
Slide 21: Financial performance
Financial performance Portfolio evaluation Operational and financial trends are encouraging and Agrivision reported a profit of $1,3m for 2016. Summarised Income Statement Dec 13 Dec 14 Dec 15 Dec 16 Key metrics $'000 $'000 $'000 $'000 Revenue 14,304 32,532 31,711 39,718 EBITDA 2,831 3,576 2,199 7,3
Slide 22: Financial performance
Financial performance Portfolio evaluation We have a total of 6,700 ha (4,200 ha irrigated) and have managed to deliver acceptable average yields. Soya yield Wheat yield (tons per hectare) (tons per hectare) 4 3.61 9 8.16 7.92 7.73 4 3.27 8 7.38 3.10 6.66 2.84 2.85 7 3 6 3 5 2 4 2 3 1 2 1 1 0 0 2012
Slide 23: Business overview – Quantum Foods
Business overview Portfolio evaluation Quantum is South Africa’s #1 commercial egg supplier and operates a regionally dominant and nationally recognised premium animal feeds business. Farming 22
Slide 24: Detailed historical review
Detailed historical review Portfolio evaluation Summarised Income Statement Sep 13 Sep 14 Sep 15 Sep 16 Key metrics R'm R'm R'm R'm Revenue 3,483 3,561 3,468 3,913 EBITDA (40) 84 220 134 EBITDA margin ‐1.1% 2.4% 6.3% 3.4% EBIT (251) (21) 164 124 EBIT margin ‐7.2% ‐0.6% 4.7% 3.2% Recurring headline e