Slides
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1 FOR THE YEAR ENDED 31 DECEMBER 2024 2024 31 December
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4 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 Products outperformed: ▪ 5.4% revenue growth; gross profit margin in line with the prior year at 25.5%; 12.2% growth in EBITDA Perishable Products faced headwinds: ▪ 1.2% revenue growth; gross profit margin reduced to 16.1%; 13.7% reduction in EBITDA Group’s 2024 leverage target achieved: ▪ Improved cash conversion to 80% ▪ Improved interest cover to 5.4x ▪ Proceeds from disposal of Chet Chemicals
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5 (Volume -3.2% Price/mix +6.3%) (2023: 21.3%) (2023: 1.6x) (2023: 9.8%) (2023: 66.1%) * Gross profit margin from continuing operations is restated for the prior period restatement ^ Normalised EBIT/EBITDA and Normalised EPS/HEPS from continuing operations, excludes non-recurring, non-trading & non-cash items (2023: R974 m) (2023: 57.1 cps) (2023: 15 cps)
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6 To deliver sustainable, profitable growth & stakeholder value. SIMPLIFY Portfolio & operating model GROW Categories, channels & people SUSTAIN Operations & cash flows
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7 Sale of Chet Chemicals ▪ Completed 30 December 2024 ▪ Proceeds of R53 million Exit of underperforming Beverage sub-category ▪ Closed Chamonix Spring Water ▪ Effective from 31 August 2024 Ongoing portfolio rationalisation ▪ Remaining non-food business, Contactim ▪ Denny fresh mushroom business Simplification to two super-categories ▪ Perishable Products & Ambient Products Further simplification within Ambient Products ▪ Dry Condiments: Full integration of Khoisan Gourmet into Cape Herb & Spice ▪ Baking Aids: Turnaround of Retail Brands baking aids division & sharing of resources with Wet Condiments cluster ▪ Food Service: Strengthened team capability in Rialto & successful expansion of Food Service ranges SIMPLIFY
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8 Dry Condiments ▪ Revenue growth of 11.1% ▪ Normalised EBITDA growth of 22.1% ▪ 53% growth in Cape Herb & Spice’s own-branded revenue achieved through: • New international listings • Expansions into new territories • New product launches 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 Service volume growth of 4.2% driven by a new support structure & launch of an expanded basket of products Wet Condiments ▪ Revenue growth of 9.4% ▪ Normalised EBITDA growth of 48.5% ▪ Supported by: • Simplified management structure • Procurement & production efficiencies • Improved service levels & distribution
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9 Dairy Challenges in H2 2024 due to industry-wide cyclical pressures Significant inflow of unprocessed milk ▪ Elevated inventory levels ▪ Intensified competitive price promotions ▪ Margin compression & more volatile pricing environment Outbreak of Foot & Mouth Disease in Eastern Cape ▪ Impacted transportation costs & production yields 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 growth of 11.7% ▪ Fresh Mushrooms - Revenue growth of 9.0% & Normalised EBITDA growth of 16.4% (Remains sub-optimal) Value-Added Meats A major Food Service channel customer diversified its beef procurement, resulting in: ▪ Under-recovery of fixed costs, lower gross profit margins & profitability ▪ Decline in revenue of 9.6% ▪ Reduction in Normalised EBITDA of 35.9%
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10 GROW The One Libstar high-performance culture programme ▪ Successfully launched in 2024, will remain a key initiative throughout 2025 ▪ Revitalised focus on:
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11 SUSTAIN Sustainable Operations ▪ Sufficient generator capacity to allow for uninterrupted electricity supply at each site ▪ Investment in water storage & exploration of underground water sources ▪ Main focus of reducing electricity consumption • Solar installations at 5 of 29 manufacturing sites Sustainable Business Practices ▪ Collaborative structure • Implementation of standardised factory efficiency measures • Sharing of best practices ▪ Analysing & understanding utility consumption & demand • Installation of live metering • Weekly KPI’s, measuring electricity & water usage per ton produced ▪ Group Procurement Project • Leveraging the buying power of commonly procured items Sustainable Cash Flows Stronger cash generation & balance sheet ▪ Improved cash conversion to 80.0% (2023: 66.1%) ▪ Improved interest cover to 5.4x (2023: 4.9x) ▪ Balance sheet strengthened with a reduced gearing ratio of 1.5x (2023: 1.6x)
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13 (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 Margin -0.4% 4.6% Normalised operating profit 631.1 -6.3% 673.8 Margin 5.4% 5.9% Normalised EBITDA 974.1 0.0% 974.2 Margin 8.3% 8.5% Net finance cost -210.4 -1.6% -213.7 (Loss)/profit before tax -251.8 -180.7% 312.1 Income tax -27.0 -90.0 Effective tax rate 10.7% 28.9% (Loss)/profit after tax -278.8 -225.6% 222.0 * Restated for prior period error corrections. The comparative profit or loss is further restated as if the discontinued operation had been discontinued from the start of the prior year. ^ 2024 Impairments comprised of Finlar Fine Foods, Denny Mushrooms, Dickon Hall Foods and Cape Herb & Spice. 2023 Impairments comprised of Denny Mushrooms & Khoisan Gourmet.
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14 47.5% 37.1% 15.4% Contribution to total capex 2024 % Ch. 2023 Total Capex R196.7m -19.6% R244.6m Capex % of revenue 1.7% 2.1% Net working capital (NWC) days increased by 5 days to 73 ▪ NWC has increased due to an increase in inventory levels: ▪ A significant inflow of unprocessed milk in the Dairy sub- category (impact 3 days) ▪ Increased stockholdings to mitigate continued port inefficiencies (impact 2 days) ▪ The Group target range has increased to 16% - 18% ▪ The restatement in the income statement has a 1% impact on the NWC % of revenue ▪ Continued shipment delays & excess milk volumes ^ From continuing operations Expansionary / Capacity Quality / Improvement Replacement / Maintenance 2022^ 2023^ 2024^ NWC (days) 63 68 73 NWC (% of revenue) 17.1% 18.0% 19.1%
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15 Target: >65% 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%
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17 Normalised EBITDA margin 2023 2024 Target 2024 Target 2025 * Continuing Operations
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18 50% of Group revenue Category performance Volume Price/mix 2024 Change 2023* Revenue (R’m) -4.1% +9.5% 5 833.0 +5.4% 5 533.8 Gross profit margin % 25.5% -0.1pp 25.6% Normalised EBITDA (R’m) 703.1 +12.2% 626.8 EBITDA margin % 12.1% +0.8pp 11.3% RONA %** 16.1% +0.6pp 15.5% * Restated ** Normalised EBIT x (1-27%)/(NWC + Lease Assets + PPE) Highlights Challenges ▪ Strong performance of retail Wet Condiment offerings ▪ Dry Condiments sales growth of 8.1% in the Exports channel ▪ Existing private label offerings performed strongly & expansion of own-branded market penetration in exports retail markets ▪ Food Service volume growth of 4.2% across the category ▪ Exports channel margins reduced due to a stronger Rand, increased costs arising from limited shipment container availability & unprecedented increases in global peppercorn pricing ▪ Retail Meal Ingredients volumes impacted by the direct import model ▪ Operational issues in Snacking
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19 50% of Group revenue Sub-category Revenue YoY EBITDA YoY Comments Wet Condiments +9.4% +48.5% Increased demand in Retail and Industrial channels Turnaround of Baking Aids Meal Ingredients, Snacks & Spreads +0.4% -1.6% Food Service volume growth Direct import model in Meal Ingredients Operational issues in Snacking Dry Condiments +11.1% +22.1% Growth in Exports driven by new Branded listings Volume growth in Retail Baking +4.3% +2.6% Strong Retail performance TOTAL +5.4% +12.2% Beverages sub-category closed in 2024 and not shown separately above
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20 Category performance Volume Price/mix 2024 Change 2023* Revenue (R’m) -2.0% +3.2% 5 781.8 +1.2% 5 712.5 Gross profit margin % 16.1% -0.6pp 16.7% Normalised EBITDA (R’m) 344.1 -13.7% 398.6 EBITDA margin % 6.0% -1.0pp 7.0% RONA %** 8.5% -2.1pp 10.6% * Restated for prior period error corrections and as if the discontinued operation had been discontinued from the start of the prior year. ** Normalised EBIT x (1-27%)/(NWC + Lease Assets + PPE) 49% of Group revenue Highlights Challenges ▪ Strong sales of hard & soft cheese and yoghurt in Dairy ▪ Convenience Meals launched 48 new products contributing to a 10% increase in volume ▪ Volume growth of 18.2% in value-added chicken ▪ Negative operating leverage in the Category driven by reduced volumes in value-added beef ▪ Significant inflow of unprocessed milk & an outbreak of foot-and- mouth disease (Eastern Cape) in the Dairy sub-category
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21 49% of Group revenue Sub-category Revenue YoY EBITDA YoY Comments Dairy +5.7% -4.4% Industry-wide cyclical pressures Foot and Mouth disease (Eastern Cape) Value-Added Meats -9.6% -35.9% Increased value-added chicken volumes Reduced value-added beef volumes Convenience Meals +15.8% +11.7% NPD driven volume increase Fresh Mushrooms +9.0% +16.4% Increased yields TOTAL +1.2% -13.7%
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22 Retail & Wholesale -10.1% 92.6% Industrial & Contract Manufacturing -16.6% 3.0% Exports +125.3% 4.4% Revenue by channel 2024 Contribution Category performance Volume Price/mix 2024 Change 2023* Revenue (R’m) -8.5% +0.6% 159.0 -7.9% 172.6 Gross profit margin % 28.2% -8.6pp 36.8% Normalised EBITDA (R’m) 10.8 -54.6% 23.9 EBITDA margin % 6.8% -7.0pp 13.8% RONA %** -3.1% -23.0pp 19.9% Category revenue -7.9% 100.0% 1% of Group revenue * Restated for prior period error corrections and as if the discontinued operation had been discontinued from the start of the prior year. ** Normalised EBIT x (1-27%)/(NWC + Lease Assets + PPE)
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24 Macro factors ▪ Notwithstanding some improving macro-economic indicators, consumers are expected to remain under pressure Value unlock ▪ Assessing strategic options Simplify Further operating model simplification: ▪ Shared-service structure to be created in Wet Condiments sub-category ▪ Integration of Meal Ingredients, Snacking & Spreads into new sub-category Grow ▪ Continued development of markets for value-added meat products ▪ A more balanced supply-demand dynamic in Dairy sub-category ▪ Investment in high-margin categories of soft cheese & yoghurt ▪ Continued growth in Exports & Food Service channel offerings
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27 (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 adjustments -66.8 -60.9 Plus: non-controlling interest 0.0 0.2 Normalised earnings -195.0 -185.2% 228.9 Impairments (after tax) 508.7 116.0 (Gain)/loss on disposal of property, plant & equipment (after tax) 4.7 -4.6 Normalised headline earnings 318.4 -6.4% 340.3 Reconciliation between Normalised EBITDA, Normalised earnings & Normalised headline earnings
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28 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
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29 YoY change Revenue by sales channel 2024 Volume Price/ mix 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%
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30 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 & Contract Manufacturing +13.3% 9.5% Exports -12.6% 4.7% Revenue by channel 2024 Contribution Category revenue +1.2% 100.0%
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32 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 financial liabilities 1 383.2 1 285.0 Lease liabilities 531.7 492.4 Other non-current liabilities 441.2 519.1 Current liabilities 2 038.9 2 175.1 Total equity & liabilities 9 274.5 9 766.1 * Restated for prior period error corrections
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33 916 851 834 811 1 093 1 354 1 343 1 183 1.2x 1.6x 1.6x 1.5x 0.0 0.5 1.0 1.5 2.0 500 1 000 1 500 2 000 2 500 2021 2022 2023 2024 Normalised EBITDA (Excl. IFRS 16) (LHS) Net interest-bearing debt (LHS) Net gearing ratio (RHS) (R’m) Net Gearing calculation = Net debt : Normalised EBITDA (Excluding IFRS 16) R1.3bn in unutilised funding facilities Gearing: 1.5x (Debt covenant <2.5) Interest cover to EBITDA: 5.4x (Debt covenant >3.5x) Sufficient headroom for bolt-on or stand-alone acquisition opportunities to enable further category/sub-category diversification and/or new channels & markets Notes:
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34 Maturity dates of facility B & C extended to Dec 2026 93% (R1.5bn) in long term borrowings Facility (R’m) Maturity date Rate 3M JIBAR margin 2023 Utilised 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 Facility D 350 Dec-26 1.70% - - Total term loans 1 200 1 230 Vehicle & Asset finance facility 650 N/A 276 310 Total debt 1 476 1 540 Less cash -293 -197 Net debt 1 183 1 343 Prime less 1.4% 2024 Utilised
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36 Opening cash balance Cash generated from ops Working capital changes Net finance charges Tax paid Cash generated from operating activities Investment activities Finance activities Effects of exchange rate changes Closing cash balance493 15 -330 -74 485 -93 -217 -189 983 397 397 - 11 -386 -80 426 -120 -220 -274 1 040 449 2024 (R’m) 2023 (R’m) Available facilities: R1.3bn
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37 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 -141.0 Dividend paid -89.4 -131.7
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39 Snacking Dry Condiments Meal Ingredients Wet Condiments Spreads Baking Fresh Mushrooms Convenience Meals Dairy Value-Added Meats Household & Personal Care HOUSEHOLD AND PERSONAL CARE 39
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40 48.5% 50.0% 1.5% 49.5% 49.1% 1.4% 20232024 * Restated * Revenue from continuing operations is restated for prior period error corrections
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41 ** Before allocation of corporate costs 20232024 * Normalised EBITDA from continuing operations is restated for prior period error corrections * Restated 66.4% 32.6% 1.0% 59.7% 38.0% 2.3%
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42 100% of category EBITDA Weighted contribution to change in Normalised EBITDA Wet Condiments +6.9% Dry Condiments +5.1% Baking +0.9% Meal Ingredients -1.4% Beverages +0.3% Total +11.8%
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43 103% of category EBITDA Weighted contribution to change in Normalised EBITDA Dairy -3.1% Value-Added Meats -12.6% Convenience Meals +0.4% Fresh Mushrooms +1.5% Total -13.8%
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44 100% of category EBITDA Weighted contribution to change in Normalised EBITDA HPC -54.6% Total -54.6%
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45 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 in which it operates now and in the future and uncertainties which relate to events and depend on circumstances that will occur in the future. These matters are regarded as ‘forward-looking statements’. They involve and include initiatives and the pace of execution thereon and any number of economic or geopolitical conditions, including factors which are in some cases beyond management’s control and which may cause the actual results, performance or achievements of the group, or its industry, to be materially different from any results, performance or achievement expressed or implied by such forward-looking statements. They furthermore involve and include, without limitation, the group’s ability to successfully control costs and execute on and achieve the expected benefits from operational and strategic initiatives, the availability of necessary skilled staff, disruptions impacting the execution of the group’s strategy and business, including regional instability, violence (including terrorist activities), cybersecurity events and related costs and impact of any disruption in business, political activities or events, weather conditions that may affect the group’s ability to execute on its contracts, adverse publicity regarding the group, initiatives of competitors, objectives to compete in the market and to improve financial performance, all forward-looking financial numbers and statements, currency translation, macroeconomic conditions, growth opportunities, contributions to pension plans, ongoing or planned real estate, ongoing or planned contracts and investments and future capital expenditures, acquisitions, divestitures, financial conditions, dividend policy and prospects, the effects of regulation of the group’s businesses by governments in the countries in which it operates and all other statements that are not purely historical. These forward-looking statements have not been reviewed or reported on by the group’s auditors. Such statements are based on management’s beliefs as well as assumptions made by, and information currently available to, management. Forward- looking statements made in this document apply only as of the date of this document. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as ‘will’, ‘may’, ‘anticipates’, ‘aims’, ‘could’, ‘should’, ‘expects’, ‘believes’, ‘intends’, ‘plans’, ‘targets, ‘estimate’, ‘project’, ‘potential’, ‘goal’, ‘strategy’, ‘seek’, ‘endeavour’, ‘forecast’, ‘assume’, ‘positioned’, ‘risk’ and similar expressions and variations of such words and similar expressions. Forward-looking statements are inherently predictive, speculative, are not guarantees of future performance and are based on assumptions regarding the group’s present and future business strategies and the environments in which it operates now and in the future. All of the forward-looking statements made in this document are qualified by these cautionary statements and the group cannot assure the reader that the results or developments anticipated by management will be realized or, even if realized, will have the expected consequences to, or effects on, the group and its business, prospects, financial condition, results of operations or cash flows. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Neither Libstar nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (based on negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. While the group may elect to update forward-looking statements from time to time, it specifically disclaims any obligation to do so, even in light of new information or future events, unless otherwise required by applicable laws. The list of factors discussed herein is not exhaustive. This should be carefully considered when relying on forward-looking statements to make investment decisions.