Annual General Meeting 2019
Disclaimer This presentation (the “Presentation”), is being provided by Conduit Capital Limited. The purpose of the Presentation is to present information pertaining to Conduit, it’s subsidiaries, associates and investments, collectively and herein after referred to as the Group. The Presentation may not be used for any other purpose without the prior written consent of Conduit. The Presentation is incomplete without reference to, and should be viewed solely in conjunction with, the verbal briefing provided by Conduit. The Presentation has been prepared on the basis of publicly available information. With the exception of certain financial information which has been extracted from audited financial statements, the Presentation itself and the information contained herein, has not been reviewed or reported on by the Company’s auditors. The Presentation does not purport to be comprehensive, has not been independently verified as to accuracy or completeness, does not constitute or serve as a substitute for an audit, a due diligence or a similar review, does not purport to give or serve as a substitute for legal, tax or financial advice, does further not contain an independent valuation of assets or liabilities, is based on prevailing, economic, regulatory, market and other conditions as well as the information provided to the Group as of the date of the preparation of this Presentation, all of which are subject to changes which may impair the information and statements given in this Presentation. The Group is, however, under no obligation to update, revise or confirm this Presentation or the information provided therein. Corrections and/or changes remain reserved. No representation or warranty, expressed or implied, is or will be made and, save in the case of intention or fraud, no responsibility or liability is or will be accepted by the Group or by any of its directors, employees, agents or affiliates as to or in relation to the Presentation or the information contained therein or forming the basis of this Presentation or for any reliance placed on the Presentation by any person whatsoever. Save in the case of intention or fraud no representation or warranty is given and neither the Group nor any of its directors, employees, agents or affiliates assume any liability as to the achievement or reasonableness of any future projections, targets, estimates or forecasts contained in the Presentation. This Presentation does not constitute an offer or invitation for the sale or purchase of shares, securities or any businesses or assets described in it. This Presentation is being made available on a strictly non-reliance and hold harmless basis only. No representations or warranties whatsoever are given or to be implied. No commitment is made and no presumed actions should be assumed, including with regards correcting or updating or following-up. It is entirely for the professional recipients of this presentation to make their own determination about what may or may not be accurate or appropriate.
Overview Conduit Capital is a JSE-listed investment holding company Build a diversified insurance group supported by value-oriented non-insurance investments Create value on a per share basis over the long-term
Structure
Capital Allocation and Investment Strategy
Performance Change in Invest- JSE ALSI ments at Share NAV (incl. Float fair value price Date (cps) Change dividends) (Rm) Change (cps) Change (cents) Change 2015 174.8 93.7 40.7 220 2016 169.5 -3.0% 3.7% 64.3 -46.0% 74.6 83.3% 275 25.0% 2017 175.5 3.5% 1.7% 129.9 22.3% 154.7 107.4% 240 -12.7% 2018 198.0 12.8% 14.6% 198.9 17.0% 172.7 11.6% 198 -17.5% 2019 104.4 -47.3% 4.3% 232.1 16.7% 120.3 -30.3% 134 -32.3% Average annual -12.1% 6.0% -2.6% 31.1% -11.7% Since inception -40.3% 26.1% -9.9% 195.6% -39.1%
Constantia Insurance Group
Constantia Insurance Group Three insurance licenses, writing business across South Africa and select African countries Premium growth from R788 million in 2015 to R2.05 billion in 2019 (27% compound annual growth rate) 95% combined ratio (“CR”) target (2019: 109.5%¹) Heavy investment in business infrastructure and people Health, MedMal doing well, issues in P&C (corrective action since taken) Expect growth in annual premiums to R3.5 billion by 2024, at 95% CR target 1 Adjusted to exclude growth initiatives
Combined Ratios – P&C 180% COMBINED RATIO 160% 140% 120% 100% 80%
Combined Ratios – Short-term portfolio (overall) 140% 130% COMBINED RATIO 120% 110% 100% 90% 80%
01. Jockey Key Investment Criteria 03. Runway 02. Horse 04. Price
Market Comment South Africa emerged from a decade of widespread corruption Business confidence at 30-year low Government has changed and determined to clean up and enable business growth Investors and businesses accumulated capital but not investing Relationship between price and value has decoupled Market pricing is irrational and arithmetically inconsistent In our opinion, companies we own valued between 20% and 50% of intrinsic value Momentum slowly starting to return
Private Investments 51% 40% 25%
Questions
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