Epe Capital Partners Ltd. Class A · JSE:EPE
Epe Capital Partners Ltd. Class A — Ethos Capital — H1 2020 Earnings Presentation
27 slides from Epe Capital Partners Ltd. Class A's earnings presentation, Mar 12, 2020
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION 12 March 2020 0
Slide 2: Contents
Introduction Portfolio overview CONTENTS Valuation overview Liquidity analysis Brait transaction 1
Slide 3: Performance and outlook
Overview of the last six months and market outlook Unexpected load shedding, the recessionary environment, low consumer confidence and productivity levels coupled with inflationary cost increases made 2H19 one of the most difficult operating environments in decades Performance and outlook Outside of
Slide 4: Key performance metrics
Highlights of the operating results # of Portfolio Companies Growth in NAV per share NAV per Share Key performance metrics 19 R11.48 1% (24 post Brait transaction) Capital Invested EV / EBITDA (Post Brait) Capital Invested (Actual) R1.7bn R2.7bn 6.7x Total Assets Invested capital Net Debt / EBITDA (
Slide 5: Contents
Introduction Portfolio overview CONTENTS Valuation overview Liquidity analysis Brait transaction 4
Slide 6: Fund investments
R253 million invested and growth in the past 6 months (excluding Brait), including 4 acquisitions R253m Fund investments 5
Slide 7: Portfolio composition
Total assets contribution – pre Brait transaction Assets owned for less than two years 41% Assets owned for more than two years 59% Portfolio composition South Africa Rest of sub-Saharan Africa 6
Slide 8: Portfolio composition
Total assets contribution – post Brait transaction 13% 24% Portfolio composition 63% 78% of Total assets South Africa Rest of sub-Saharan Africa International 7
Slide 9: Channel VAS update
Channel VAS update Date of investment October 2018 % of EC Invested Capital 27% Total Ethos ownership 20% % of EC Total Assets 23% % of Ethos L6M change Capital TA: in NAV: EC Invested Capital R392m Current valuation R460m (1.23x TMB) 23% +R38m Portfolio company overview L6M Return +R38m (9%) R23m d
Slide 10: Kevro update
Kevro update Date of investment October 2017 % of EC Invested Capital: 11% Total Ethos ownership 28.3% % of EC Total Assets: 10% % of Ethos L6M change EC Invested Capital R189m Current valuation: R191m (1.04x TMB) Capital TA: in NAV: Portfolio company overview L6M Return -R11m (-6%) Multiple unchang
Slide 11: Primedia update
Primedia update Date of investment December 2017 % of EC Invested Capital: 11% (including SKT) Total Ethos ownership 19.9% + 5.0% (EC) % of EC Total Assets: 10% (including SKT) % of Ethos L6M change EC capital investment R174m Current valuation: R186m (1.07x TMB) Capital TA: in NAV: Portfolio compan
Slide 12: Echo update
Echo update Date of investment February 2018 % of EC Invested Capital: 10% Total Ethos ownership 63.6% % of EC Total Assets: 9% % of Ethos L6M change EC Invested Capital R159m Current valuation: R170m (1.07x TMB) Capital TA: in NAV: Portfolio company overview Increase in gross revenues drove 9% +R10
Slide 13: Vertice update
Vertice update Date of investment May 2018 % of EC Invested Capital: 9% Total Ethos ownership 86% % of EC Total Assets: 8% % of Ethos L6M change EC Invested Capital R116m Current valuation: R147m (1.27x TMB) Capital TA: in NAV: Portfolio company overview L6M Return +R28.7m (+24%) Strong EBITDA growt
Slide 14: Synerlytic update
Synerlytic update Date of investment April 2019 % of EC Invested Capital: 7% Total Ethos ownership 94% % of EC Total Assets: 6% % of Ethos L6M change EC Invested Capital R91m Current valuation: R121m (1.34x TMB) Capital TA: in NAV: Portfolio company overview L6M Return +R17.7m (17%) Multiple unchang
Slide 15: Contents
Introduction Portfolio overview CONTENTS Valuation overview Liquidity analysis Outlook 14
Slide 16: Portfolio composition and valuation metrics
Portfolio composition and valuation metrics Portfolio composition Key valuation metrics 8.0x 50.0% % of TAPS Actual 46% NAV discount 45.0% 7.0x 6.7x Portfolio Composition 86% 40.0% 6.0x 34% 35.0% 5.0x 30.0% NAV 34% 4.0x 25.0% 11.48 20.0% 10.67 3.0x 15.0% 2.0x 1.6x 7.53 10.0% 1.0x 5.0% 0.81 - 0.0% 31
Slide 17: Market implied valuation analysis
Market implied valuation analysis Portfolio valued at a 46% discount to the peer group... .....market “look-through” values portfolio at 4.7x EV / EBITDA 120 6.7x 0.81 1.6x NAV BASED VALUATION 100 100 Valuation over view 11.48 10.67 5.1x 80 46% 60 NAV Cash Invested NAV Valuation 54 34% 40 SHARE BASE
Slide 18: Portfolio company performance
Growth rates and market implied EV / LTM EBITDA multiples of the portfolio LTM Sales growth by company Net debt / EBITDA by company Portfolio company performance 3 3 5 2 5 5 616 4 3 497 2 396 317 320 339 227 240 205 <= 0% > 0% - <= 5% > 5% - <= 15% > 15% <= 0x > 0x - <= 1.5x > 1.5x - <= 2.5x > 2.5x
Slide 19: Portfolio company - market implied valuations
Portfolio company - market implied valuations Period-end market price implies the following EV / EBITDA multiples and EV / EBIAT multiples - - - - EV / EBIAT Implied = 8.1x 6.8x 8.4x 10.1x 7.0x 8.6x 9.5x 10.6x 13.1x 5.8x 9.7x 12.7x 5.6x 11.5x 10.7x 11.3x 8.5x Market implied valuations 7.2x 6.3x 6.1x
Slide 20: Contents
Introduction Portfolio overview CONTENTS Valuation overview Liquidity analysis Brait transaction 19
Slide 21: Available liquidity and outlook
Liquidity profile analysis based on current commitments (post Brait) % outflows by year Realisations 7% Existing outflows Available liquidity and outlook 4,250 12% 4,250 Available liquidity 42% 297 12% 3,360 3,250 3,250 27% 1,638 2,250 2,250 H2 FY20 FY21 FY22 FY23 FY24 3,800 3,503 277 2,823 1,250 73
Slide 22: Contents
Introduction Portfolio overview CONTENTS Valuation overview Liquidity analysis Brait transaction 21
Slide 23: Ethos' key deliverables pre and post transaction completion
Ethos’ key deliverables pre and post transaction completion Management • Finalise the operating model and integration of the Brait team Company • Provide stability and clarity to underlying portfolio company boards and management Ethos key deliverables • Stakeholder alignment around revised value re
Slide 24: Resource Allocation
Resource Allocation Ethos will appoint Senior Ethos Executives to key positions, alongside the Brait Executives New Look, DGB & Consol Resource allocation Anthonie de Beer Bruce Baisley Jonathan Matthews Rolf Hartmann Stuart MacKenzie Rolf Hartmann Stuart MacKenzie Bruce Baisley Investment Team Inve
Slide 25: Brait valuation overview
Brait valuation overview Brait Sept NAV and transaction pricing Effective entry multiples for Ethos Capital Ethos Capital entry valuation Discounts* (37%) (45%) (86%) R38.00 1,728 6,905 R17.16 10,591 R7.99 R6.60 10,547 4,758 375 Ethos NAV / Share (pre Ethos NAV / Share (post Rights Offer In-price NA
Slide 26: Strategic Game Plan – Value creation approach
Strategic Game Plan – Value creation approach An analysis of each business by financial performance / outlook, competitive landscape, strategy implementation, valuation outlook and exit readiness will determine the Brait game plan Operational, strategic and management considerations Valuation and ex
Slide 27: Disclaimer
DISCLAIMER THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATIONAL AND DISCUSSION PURPOSES ONLY AND IS NOT, AND MAY NOT BE RELIED ON IN ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE OR AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY AN INTEREST IN ANY OF THE ETHOS PRIVATE EQUITY FUN