2019 19 RESUL SULTS S PRESENT SENTATIO ION 26 SEPTEMBER 2019 0
Introduction Portfolio overview C O N T E N T S Valuation overview Liquidity analysis Conclusion 1
Market conditions, cost pressures and uncertainty provide a tough investment backdrop! Key cost of sales drivers… Key drivers rs impacti ting g top- line performance… Petrol ol price Quarte rterly rly GDP growth h (%) Fund VI 1900 Fund VI I m p a c t o f k e y m a r k e t d r i v e r s 8.0 MM Fund Price (95ul; coastal; c/l) 1700 MM Fund 6.0 1500 2011 - 2018 1300 CAGR: 4.0 1100 Quarterly growth (%) 6.2% 6.2% 2.0 900 700 0.0 500 -2.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -4.0 Electric ricity ity price Fund VI -6.0 82.5 81.8 90.0 75.4 Average price c/kWh sold -8.0 67.6 62.8 70.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 58.5 2011 - 2018 50.3 CAGR: 42.2 50.0 MM Fund 10.0% 0% Annu nual l GDP per capita ita (ZAR) 31.9 25.0 30.0 19.6 Fund VI 18.1 17.0 56,500 10.0 56,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 55,500 Foreign ign Exchange hange Rate 55,000 Fund VI 16.0 54,500 14.0 54,000 Average USDZAR MM Fund 12.0 2011 - 2018 53,500 CAGR: 10.0 9.0% 9.0% 53,000 MM Fund 52,500 8.0 52,000 6.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
The difficult operating environment has lent itself to opportunities across the funds Larg rge Equi uity ty • Fund VI finished investing phase and commenced exit phase – two exits Kevro and Eaton • Intensive focus on portfolio companies with strong traction in restructurings and cost reductions U p d a t e o n a f u n d b y f u n d b a s i s ZAR2.6 .6 billion on • Fund VII in investment phase – two deals Channel Vas and Echo – strong pipeline of opportunities Invested ted • Focus on key investment themes and deep value opportunities with cyclical upside ZAR2.1bn in new investments ZAR500m in Mid Marke rket follow on capital • MMF is 65% invested and the team’s focus is on maximising outcomes in the portfolio • Promising signs across the mid-market equity assets (Echo, Gammatek, Synerlytic, Kevro) Autozone, Twinsaver and Eazi Access remain under pressure • Very significant SA focussed investment pipeline – can afford to be selective Mezz zzani nine ne • Strong pipeline of opportunities in East African structured equity growth capital • Negotiations on two transactions nearing completion ZAR2.9 .9 billion on • Chibuku had a challenging year operationally given weather conditions and other exogenous Raised issues in Malawi ZAR2bn for Fund VII R254m for EMP3 R640m for Ai Fund I Ai Ai • Strong traction in fund raising • Differentiated value add impact on Channel Vas and Vertice • Investment in Tyme Bank • Strong pipeline of opportunities 3
Highlights of the operating results # of Portfolio Companies Growth in NAV per share NAV per Share K e y p e r f o r m a n c e m e t r i c s R11.34 19 3% EV / EBITDA Capital Invested Capital Invested (Actual) (Proforma) 6.9x R1.43bn R1.58bn Net Debt / EBITDA Total Assets Proforma invested capital (Actual) (as % of Total Assets) 82% 1.9x R1.93bn 4
Introduction Portfolio overview C O N T E N T S Valuation overview Liquidity analysis Outlook 5
Portfolio overview and value contribution Exposure to 19 portfolio companies across various sectors and vintages Invested Capital by sector / geography 3% 15% 4% 30% 10% P o r t f o l i o o v e r v i e w 12% 26% Banking Consumer goods FinTech Industrials Media MedTech Telco services 40% 60% South Africa Sub Saharan Africa 6
Significant investment in the past 12 months across six new portfolio companies F u n d i n v e s t m e n t s i n 2 0 1 9 867 712 Net new investments 7
Net asset value contribution and “age” of the investment portfolio 18% Assets owned for more than one year 46% P o r t f o l i o c o m p o s i t i o n Assets owned for less than one year 36% Cash Assets < 1yr Assets > 1 yr 8
Successful exit of Eaton Towers Inves estmen ent t / E Exit date ate: June 2015 / October 2019 Ethos os conso sortiu tium ow owner ersh ship ip: 14.4% Busin sines ess: Telecommunications Fund d VI Inves ested ed Capital ital: R405m P o r t f o l i o c o m p a n y o v e r v i e w Ethos os Fund VI ow owner ersh ship: 4.8% Gross ss ret eturns s (ZAR): ): 2.4x TMB / 23.4% IRR Pan-reg regio ional l prese sence ce 5 Presence across Ghana, Uganda, Kenya, Eaton Towers is a leading independent pan-African tower company Burkina Faso and Niger with over 5,000 tower sites across five countries Blue e chip ip custom stomer er base se A ++ Airtel Africa, MTN, Orange, Vodafone and Safaricom, amongst others Key ey inve vestmen stment t theme emes Balan lance ced d portfoli tfolio expo posu sure re <27 % No single country has more than 27% of total number of towers Ann nnuit ity y profi file le 10 yrs New lease contracts typically entered into for a Pan-African Scalable Multi-currency Increasingly 10 year duration Footprint business model exposure connected populations Operati rating effic icien iencie cies (Data & Voice) >50% EBITDA margin increased from 30% to >50% over life of investment 9
Channel VAS update Date ate of inves estmen ent October 2018 % o of EC Inves ested ted Capital ital 26% Tota otal l Ethos os ow owner ersh ship ip 17.5% (increasing to 20%) % o of EC NAV 21% % of Ethos LTM change Capital NAV: in NAV: EC Inves ested ed Capital ital R372m Curren ent t va valuation tion R408m (1.14x TMB) 21% 21% +R53m 3m P o r t f o l i o c o m p a n y o v e r v i e w LTM Retu eturn +R53m (14%) Dividends received, valuation largely unchanged Glob obal al prese sence Channel VAS provides Airtime Credit Services and Mobile Financial Services to prepaid mobile subscribers through MNOs Presence across 4 continents and >25 countries >25 (most of which are in sub-Saharan Africa) – six Key ey inve vestmen stment t theme emes new deployments since May 2018 Acce ccess ssib ible le custome stomer base se 650 m Access to +650m mobile subscribers Dail ily adv dvan ance ces Financial Increasingly Rising Ai and hyper Inclusion +$5m advances distributed daily, with over 6 connected consumer decision- +$5 m million transactions per day (US$799m populations spending making advanced YTD vs US$566m in 2018) Defa fault ult rates es 1.7 billion adults remain unbanked * <1 % Lowest default rates in the industry and the 67% * of unbanked adults have access to a m 67% mobile phone highest service penetration Channel VAS aims to provide the underbanked in emerging markets with mobile access to financial services through impactful technologies Stron ong g finan anci cial al perfo formance >20 % Y-o-Y LfL EBITDA growth LTM June 2019 * The Global Findex Database 2017 10
Kevro update Date ate of inves estmen ent October 2017 % o of EC Inves ested ted Capita ital: 13% Tota otal l Ethos os ow owner ersh ship ip 27.6% % o of EC NAV: 11% LTM change % of Ethos EC Inves ested ed Capital ital R185m Curren ent t va valuation tion: R202m (1.10x TMB) Capital NAV: in NAV: P o r t f o l i o c o m p a n y o v e r v i e w 11% 11% +R9m LTM Retu eturn +R9m (5%) Multiple unchanged, gearing benefit KEY EY HIGHLIG IGHTS Weak economic environment adversely impacted end customers Service level challenges, recent improvements point to greenshoots ✓ Relatively strong financial performance in a difficult market, focus on new product strategies to drive growth ✓ COO appointed ✓ Full strategy review & operating model re-assessment completed ✓ Operational projects to improve service levels and enhance efficiencies o New Warehouse and IT systems ✓ All the above projects to be funded by internally generated cashflows ✓ Delivered 1 st B-BBEE rating in FY2018. This year rating was enhanced the business achieved a Level 4 rating Constr tructin ing New Wareh rehou ouse se Faci cili lity ty ERP & WMS System stem “1 Box” Integr tegrate ate Ops & System ems - Increased pallet locations - Enhance inventory management - Warehousing, picking mezz & branding - Improve quality of BI in support of decision-making processes Allows Kevro to consolidate into one site; expected to drive efficiencies 11
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