IN INTERI ERIM M RESU SULTS S PRESENT SENTATION TION 12 March - PowerPoint PPT Presentation

IN INTERI ERIM M RESU SULTS S PRESENT SENTATION TION 12 March ch 2020 20 0

Introduction Portfolio overview C O N T E N T S Valuation overview Liquidity analysis Brait transaction 1

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 P e r f o r m a n c e a n d o u t l o o k Outside of South Africa, growth rates remain strong although currency and political risks remain elevated with global risk sentiment and lower oil prices Growth in NAV of 1% since June 2019 to R11.48 per share, attributable EBITDA grew 3.2% Post the Brait transaction, Ethos Capital has invested capital of R2.7bn and is 100% invested The focus of the funds and Ethos Capital is on monetization of the current portfolio to return capital to shareholders The direct and indirect effects of Coronavirus will impact both portfolio company profitability and valuations in the short to medium term however over the longer term this should normalise 2

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 19 R11.48 1% (24 post Brait transaction) Capital Invested EV / EBITDA (Post Brait) Capital Invested (Actual) R2.7bn R1.7bn 6.7x Total Assets Invested capital (as % of Total Assets) Net Debt / EBITDA (Actual) 85.5% R1.96bn 1.6x (R2.7bn post Brait transaction) (100% post Brait transaction) 3

Introduction Portfolio overview C O N T E N T S Valuation overview Liquidity analysis Brait transaction 4

R253 million invested and growthin the past 6 months (excluding Brait), including 4 acquisitions R253m F u n d i n v e s t m e n t s 5

Total assets contribution – pre Brait transaction Assets owned for less than two years 41% Assets owned for more than two years 59% P o r t f o l i o c o m p o s i t i o n South Africa Rest of sub-Saharan Africa 6

Total assets contribution – post Brait transaction 13% 24% P o r t f o l i o c o m p o s i t i o n 63% 78% of Total assets South Africa Rest of sub-Saharan Africa International 7

Channel VAS update Date ate of inves estmen ent October 2018 % o of EC Inves ested ted Capital ital 27% Tota otal l Ethos os ow owner ersh ship ip 20% % o of EC Tota otal l Assets ts 23% % of Ethos L6M change Capital TA: in NAV: EC Inves ested ed Capital ital R392m Curren ent t va valuation tion R460m (1.23x TMB) 23% 23% +R38m 8m P o r t f o l i o c o m p a n y o v e r v i e w L6M Ret eturn +R38m (9%) R23m dividends received, increased stake by 3% to 20% 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 >30 countries >25 (most of which are in sub-Saharan Africa) – six Key ey inve vestmen stment t theme emes new deployments initiated 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$1.82bn populations spending making advanced YTD vs US$1.36bn 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 >17 % Y-o-Y LfL EBITDA growth LTM December 2019 * The Global Findex Database 2017 8

Kevro update Date ate of inves estmen ent October 2017 % o of EC Inves ested ted Capita ital: 11% Tota otal l Ethos os ow owner ersh ship ip 28.3% % o of EC Tota otal l Assets ts: 10% L6M change % of Ethos EC Inves ested ed Capital ital R189m Curren ent t va valuation tion: R191m (1.04x TMB) Capital TA: 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 10% 10% -R11m L6M Ret eturn -R11m (-6%) Multiple unchanged, EBITDA decline KEY HIGHLIGH IGHTS  Subdued economic environment has continued to adversely affect end customers  Margin declined due to weak volumes, product mix shifts and pricing pressure ✓ Reasonable financial performance in a difficult market; positive impact from price increase in October 2019 ✓ Operational projects to improve service levels and enhance efficiencies o New Warehouse and IT systems o Optimisation of procurement function ✓ All the above projects to be funded by internally generated cashflows ✓ B-BBEE rating improved to Level 4 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 9

Primedia update Date ate of inves estmen ent December 2017 % o of EC Inves ested ted Capita ital: 11% (including SKT) Tota otal l Ethos os ow owner ersh ship ip 19.9% + 5.0% (EC) % o of EC Tota otal l Assets ts: 10% (including SKT) L6M change % of Ethos EC capital ital inves estme tment R174m Curren ent t va valuation tion: R186m (1.07x TMB) Capital TA: 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 10% 10% -R8m L6M Ret eturn -R8m Primedia EBITDA decreased, multiple slightly down KEY EY HIGHLIG IGHTS  Weak advertising market (industry radio and outdoor advertising spend both down YoY)  Most corporate advertising budgets have been cut  Out-of-Home profits declined due to pressure on higher margin assets ✓ Group performance holding up relatively well given difficult operating conditions ✓ Market share gains in broadcasting limited the revenue decline ✓ Pursuit of ongoing cost saving initiatives to protect margin ✓ Strategic review and operating model changes in Ster Kinekor Theatres (SKT) resulted in improved performance Strate ategic ic re-fo focu cus Mar arket et share are Sold SKE and unbundled SKT to create a Growth in radio market share was a significant focused broadcasting and outdoor positive in 2019 advertising business Digiti itizatio zation of Outdo door bill llbo boards ards Capital expenditure in digitising billboards and creating “new age” solutions for advertisers 10

Echo update Date ate of inves estmen ent February 2018 % o of EC Inves ested ted Capita ital: 10% Tota otal l Ethos os ow owner ersh ship ip 63.6% % o of EC Tota otal l Assets ts: 9% L6M change % of Ethos EC Inves ested ed Capital ital R159m Curren ent t va valuation tion: R170m (1.07x TMB) Capital TA: 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 9% 9% +R10m 0m Increase in gross revenues drove L6M Ret eturn +R9.5m (6%) increased valuation KEY EY HIGHLIG IGHTS  Ongoing delays to obtaining regulatory approvals to complete acquisition of remaining countries (Zimbabwe, Tanzania and Ghana) ✓ Majority of Gondwana acquisition concluded in October 2019, extending Echo’s footprint into Kenya, Uganda, Mauritius and Zamb ia ✓ Business successfully delivered its 1 st B-BBEE rating under the ICT Codes and obtained a level 4 rating ✓ Investment in sales force - strong momentum in delivering against sales targets (147% of full year target achieved in 9 months) ✓ Strategic review and operational model assessment project underway ✓ Strong pipeline of acquisition targets SSA A presen esence Mar arket et oppo portu tunity ity 5 The B2B service market is $9.9 bn bn Countries (more to follow soon) growing faster than any other segment of ICT in SSA Growth th in FTTX TTX conn nnec ecti tion ons Forecast growth in Africa’s data consumption SSA severely underserved outside +42 % x3 x3 CAGR to 2021 SA; FTTX connections projected to grow three-fold to 2020 11