Slide 1: Interim Results Presentation, Six Months ended 30 June 2020
THE LIBSTAR FAMILY LIBSTAR From our Home to Yours Interim Results Presentation Six Months ended 30 June 2020
Slide 2: Presentation overview
01 02 03 04 05 Presentation overview Introduction Financial Review Category Review Outlook Questions and Answers
Slide 3: Introduction
LIBSTAR 1 Introduction 0 ie} mt S Andries van Rensburg,
Slide 4: Salient features H1 2020
AR Salient features —H1 2020 Introduction 4 key Protecting our people + R44 million spent protecting workforce — R8.5 million donations — R18.5 million personnel-related benefits — R22.0 million operating expenses * 1636 company funded Covid-19 tests * 465 Covid-19 recoveries to date Revenue ¢ Reven
Slide 5: Libstar H1 2020 Group results - summary
Libstar H1 2020 Group results - summary Introcetion Strong retail & wholesale performance, offset by Covid-19 restrictions on QSR*/hospitality Revenue 1.9% A GP margin 0.2 p.p. A Covid-19 extraordinary expenses, IFRS & normalisation* adjustments impacted bottom line Norm. EBITDA (incl. Covid-19 cost
Slide 6: Market conditions — change in sales channel mix
Market conditions — change in sales channel mix * Libstar operates 5 product categories sold in 4 sales channels * H1 2020 effects of Covid-19 most apparent in sales channels Group revenue growth / (decline) H4 2019 gross revenue 17% contribution Gross revenue by sales channel Q2 2020 Six months Q1
Slide 7: Food vs other performance
Introduction 7 Food vs other performance Food Categories Non-food Category Perishables, Groceries, Snacks & Confectionery and Baking & Baking Aids Household & Personal Care fo) of Group fo) of Group 0 of Group fe) of Group 91% revenue fF 93% normalised 9% revenue 7% normalised . Normalised . Normali
Slide 8: Financial Review
LIBSTAR 02 Financial Review Charl de Villiers, CFO
Slide 9: Income Statement - Revenue & Gross Profit
Income Statement - Revenue & Gross Profit Group organic revenue R4.6bn Group revenue R4.7bn Volume Price/mix -2.3% +3.3% Food categories’ HPC H1 2018 H22018 H12019 H22019 H1 2020 organic revenue organic revenue * Increased service revenue (Pringles snacks) * Baking aids & other product performance i
Slide 10: Income Statement - R44m in extraordinary expenses
Income Statement - R44m in extraordinary expenses Financial Review 10 Covid-19 extraordinary expenses % of Total Cost Donations* 8% Personnel-related benefits 42% Covid-19 operating costs 50% Total 100% * In support of needy communities NOTE: Breakdown of Individual expense categories supplied in ap
Slide 11: Income Statement - Operating expenses
Income Statement - Operating expenses FinancialReview 14 Operating expenses (R’000) H1 2020 % ch. H1 2019 Comment Opex 948 914 +16.3% 816 224 Long-term incentives (9 137) - Provision for SARs*, LTIP* and GSP* Retrenchment & restructuring costs (5 215) (4545) Predominantly corporate segment Other non
Slide 12: Income Statement (contd.)
Income Statement (contd.) Financial Review 12 Rm H1 2020 Ch(%) 4H1 2019 Giher income* * Unrealised FX gains of R30.7m (H1 2019: R0.8m loss) f c tae S ) 80.9 | >5x 14.3 | + Realised FX gains of R20.1m (H1 2019: R9.5m gain) orex gains/losses + Sundry income R25.8m (loan write-back) Operating expenses
Slide 13: Underlying margin performance vs targets
Underlying margin performance vs targets FrancialRevew 13 Normalised EBITDA margin H1 2020 H1 2019 Nearterm ft 2020 achieved achieved target target Perishables 7.8% 9.8% 10-13% Below target Food Groceries 14.0% 14.0% 11-14% At top end of target Categories: 11.1% > 5 5 Snacks & Confectionery 19.1% 15
Slide 14: Income Statement (contd)
Income Statement (contd) Financial Review Rm Net interest paid Profit before tax Income tax (effective rate) Profit after tax Normalised earnings Normalised headline earnings H1 2020 -98.8 132.3 -33.3 (25.2%) 14 Ch (%) H1 2019 + Net facility interest expense R68.2m (H1:2019: R78.4m); -4.0% -102.9 re
Slide 15: Reconciliation between Normalised EBITDA and Normalised headline earnings
Income Statement Reconciliation between Normalised EBITDA and Normalised earnings ANd ginanciai Review 15 Normalised headline earnings Rm H1 2020 Ch (%) H1 2019 Normalised EBITDA 456.9 -5.4% 482.9 Depreciation of PPE and Amortisation of Software -103.3 +20.4% -85.8 Depreciation IFRS 16 (leases) -60.
Slide 16: Income Statement - Normalised EPS, HEPS & DPS
Income Statement - Normalised EPS, HEPS & DPS cancattenm 16 H1 2020 Ch(%) H1 2019 Normalised earnings (R million) -19.5% 176.4 WANOS* (million) 595.8 -0.6% 599.3 Normalised EPS (cps) 23.8 -19.0% 29.4 Normalised HEPS (cps) 24.2 -17.7% 29.4 DPS (cps) 25.0 - - * Weighted average number of shares * Paym
Slide 17: Cash Flow summary
Cash Flow summary Financial Review 17 H1 2020 (Rm) H1 2019 (Rm) 855 Opening cash balance MN 468. Cash generated from ops Ms «461 -04 Working capital changes -07 -68 Net finance charges -78 -81 Tax paid -108 Mg 225 Cash generated from operating activities Ma 178 -143 Investment activities* -160 120 F
Slide 18: Cash Flow - working capital days
Cash Flow - working capital days FinancialReview 18 Net working capital (12-month rolling) : Revenue Net working capital days remain within target of 13-15% of revenue Creditors days + Inline with H1 2019 Debtors days * Inline with H1 2019 Inventory days * Higher than usual inventory of imported gro
Slide 19: Capital expenditure
Capital expenditure Francial Review 19 Covid-19 roar H1 2020 Capex Rm related delay New Est. earnings impact * Expansion & operating efficiencies 139 - Milk-receiving area & BEL facility 34 Yes H1 2021 (Lancewood) - Facility move (HPC) 12 No Q4 2020 - Artisanal facility & generators (Amaro Foods) 11
Slide 20: 5-year net debt trend
LIBSTAR 5-year net debt trend Financial Review 20 Net Gearing calculatio = Net debt : Normalised EBITDA (Excluding IFRS 16) Rm 2500 2 000 1500 2016 2017 H1 2018 2018 H1 2019 2019 H1 2020 Normalised EBITDA (12-months rolling) (LHS) =m Net interest-bearing debt (LHS) —* Net gearing ratio (RHS) Suffici
Slide 21: Summary of key financial ratios
Summary of key financial ratios Financial Review 21 H1 2020 H1 2019 Targets foot debt to normalised EBITDA) 14x Below 2.0x Cash from operations before working capital changes R461m Cash generative Cash generated from operations R178m Cash generative Above 60% minimum, Cash conversion 62% supported b
Slide 22: Category Review
LIBSTAR
Slide 23: Our category focused approach
Our category focused approach cateooy Review 28 Food Categories Non-Food . . Snacks & Baking & Perishables Groceries Confectionery Baking Aids HPC apeterbs dice Py pIALTA me FINE FEQ0s pIALTA DENNY. Millennium, Foods MONTAGU pcos Ag malti-cp CHAMONIX K SnAcks aA RETAILER BRANDS
Slide 24: Category revenue contributions
Category revenue contributions categoy Revo 24 4 categories 91% 4 categories 920, "00! ¥00 PERISHABLES GROCERIES H1 2020 H1 2019 BAKING & BAKING AIDS HOUSEHOLD & PERSONAL CARE (HPC) HPC 9% HPC 8%
Slide 25: Category Normalised EBITDA contributions
Category Normalised EBITDA“ contributions categoy Review 25 4 categories 93% 4 categories 950, "00! ¥00 PERISHABLES GROCERIES Normalised EBITDA’ Normalised EBITDA’ H1 2020 H1 2019 BAKING & BAKING AIDS HOUSEHOLD & PERSONAL CARE (HPC) ’ Before allocation of HPC 7% corporate costs HPC 5%
Slide 26: H1 2020 Performance by Category & Channel
H1 2020 Performance by Category & Channel Volume Price/mix H1 2020 % ch. H1 2019 Organic Revenue (Rm) -1.7% 2 205.3 Gross profit margin % -0.5 pp 20.9% Normalised EBITDA* (Rm) -21.0% 215.2 EBITDA margin % -2.0 pp 9.8% * Detailed divisional contribution to EBITDA provided in appendix H1 2019 @ Retail
Slide 27: H1 2020 Performance by Category & Channel
H1 2020 Performance by Category & Channel = "7 Volume Price/mix H1 2020 % ch. H1 2019 Organic Revenue (Rm) -2.4% 1 462.5 Gross profit margin % -1.2pp 27.6% Normalised EBITDA* (Rm) -2.0% 207.5 EBITDA margin % 0.0pp 14.0% * Detailed divisional contribution to EBITDA provided in appendix Retail & Whole
Slide 28: H1 2020 Performance by Category & Channel
H1 2020 Performance by Category & Channel = "8 Volume Price/mix H1 2020 % ch. H1 2019 Organic Revenue (Rm) +1.2% 234.8 Gross profit margin % +6.9pp 24.8% Normalised EBITDA* (Rm) +44.4% 37.3 EBITDA margin % +3.5 pp 15.6% * Detailed divisional contribution to EBITDA provided in appendix Retail & Whole
Slide 29: H1 2020 Performance by Category & Channel
H1 2020 Performance by Category & Channel = "9 Volume Price/mix H1 2020 % ch. H1 2019 Organic Revenue (Rm) +22.9% 313.9 Gross profit margin % +3.0pp 24.2% Normalised EBITDA* (Rm) -2.0% 49.8 EBITDA margin % -3.2pp 15.9% * Detailed divisional contribution to EBITDA provided in appendix Retail & Wholes
Slide 30: H1 2020 Performance by Category & Channel
H1 2020 Performance by Category & Channel Volume Price/mix H1 2020 % ch. H1 2019 Organic Revenue (Rm) +11.5% 373.1 Gross profit margin % +1.1pp 18.1% Normalised EBITDA* (Rm) +46.8% 25.3 EBITDA margin % +2. 1pp 6.8% * Detailed divisional contribution to EBITDA provided in appendix Export H1 2020 H1 2
Slide 31: Outlook
LIBSTAR
Slide 32: Short term outlook by Category & Channel
Short term outlook by Category & Channel Outlook 32 Outlook by Sales Channel Retail & Wholesale * Strong demand for in-home dining & sanitisation products Food service * Improved demand since level 3 lockdown * Return to pre-Covid-19 levels expected to be slow * Strong demand expected to continue *
Slide 33: Key priorities & strategies
Key priorities & strategies outook 33 * Protect Libstar’s people Preservation of financial stability & cash flows Maintain high service levels to customers Further restructuring where necessary — contain costs & improve performance Continuation of pre-Covid-19 divisional consolidation around Group c
Slide 34: Consistently meeting consumers' needs with product innovation
Consistently meeting consumers’ needs with product innovation H1 2020 A 88 New products 36 Renovated products CE 454 © Total
Slide 35: Libstar's competitive advantages
Libstar’s competitive advantages A portfolio capitalising on key health, wellness, eco- friendly & convenience trends Strong culture of innovation, differentiation Strong category management Deep customer relationships insight & capabilities in niche product categories World class, low-cost manufact
Slide 36: Strong market positioning
Strong market positioning outook 36 Libstar well-positioned to meet changing consumer needs & behaviours through its focus on: Private label (PL) / Dealer own Brands (DOB) * DOB/PL growing ahead of branded products; Libstar’s basket growing market share (t from 12.4% to 12.7% of R27.3bn Defined Bask
Slide 37: F2020 Group Outlook
F2020 Group Outlook outook 37 + Effects of pandemic not yet fully manifest in SA economy; extreme unemployment & spending pressure + Slow food service recovery + Supply chain disruption due to Covid-19 + Some benefits from higher capex over last 2 years delayed by Covid-19 * c. R800k - R1m per week
Slide 38: Questions and Answers
LIBSTAR
Slide 39: Disclaimer
LIBSTAR 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
Slide 40: Appendices
Appendices
Slide 41: Income Statement - R44m in extraordinary expenses
Income Statement - R44m in extraordinary expenses Appendices Covid-19 extraordinary expenses % of Total Cost Rm Donations* 8% 3 459 275 Charitable giving to parties external to the Group 8% 3 459 275 Personnel related benefits 42% 18 472 720 Special transport benefits* 28% 12 357 878 Bonusses or oth
Slide 42: Breakdown of open FEC exposure
UES Breakdown of open FEC exposure Appendices 42 Quarter Dealt Amount - Forward FEC Cover Forward rate FEC revalued at Millions Rate Rm on 30 June 20 30 June 20 Rm Buy (Imports) 2020-Q3 122 125 +EUR 4 19.3 73 19.6 74 +SGD 0 12.4 1 12.5 1 +THB 2 0.6 1 0.6 1 +USD 3 16.7 47 17.4 49 2020-04 1 ahi +USD 1
Slide 43: Breakdown of net investing & net financing activities
Breakdown of net investing & net financing activities Apedices Rm H1 2020 Capital expenditure -144 Sale of PPE 5 Other financial assets acquired 8 Acquisition of business 1 Net financing activities 20 Principal elements of lease payments -73 Net movement from term loans and asset-based financing 93
Slide 44: Net debt structure
Net debt structure Appendices 44 Rm 1300 1.000 1000 mH1 2020 800 670 670 mH 2019 300 _ o | - 200 ~ 700 - 610 -1 200 = 957 Facility A Facility B Facility C Other term loans Vehicle & Asset Net overdraft/ (8M JIBAR +1.68pp) (3M JIBAR +1.75pp) (8M JIBAR +1.85pp) finance facility (Prime (Cash) -1.4pp) *
Slide 45: Perishables: Divisional contribution to EBITDA
4 LIBSTAR PERISHABLES Divisional contribution to EBITDA Appendices 45 92% of category EBITDA* eighted contribution to 21.0% normalised EBITDA decrease Lancewood (Dairy) -8.0% Finlar (Meat) -8.2% Rialto (Value-added perishables) -1.4% Denny (Mushrooms) -2.8% Millennium Foods (Pre-packaged meals) -0.6
Slide 46: Groceries: Divisional contribution to EBITDA
LIBSTAR GROCERIES Divisional contribution to EBITDA Appendices 46 83% of category EBITDA eighted contribution to 2.0% normalised EBITDA decrease Dry condiments (Cape Herb & Spice) +8.8% Meal ingredients (Rialto Foods; NMC) +0.2% Wet condiments (Dickon Hall Foods) -9.4% Spreads (Hurters Honey) -0.1%
Slide 47: Snacks & Confectionery: Divisional contribution to EBITDA
4 LIBSTAR SNACKS & CONFECTIONERY Divisional contribution to EBITDA Appendices 47 Weighted contribution to 44.4% normalised EBITDA increase 100% of | Ambassador Foods category EBITDA | K Snacks (1 month in H1 2019)
Slide 48: Baking & Baking Aids: Divisional contribution to EBITDA
LIBSTAR BAKING & BAKING AIDS Divisional contribution to EBITDA Appendices 48 Weighted contribution to 2.0% normalised EBITDA decrease Amaro Foods 100% of category | Retailer Brands EBITDA Cani Artisan Bakers