LONG4LIFE LIMITED RESULTS PRESENTATION PERIOD ENDED 28 FEBRUARY 2018 SMALL BEGINNINGS BIG VISION
AGENDA Brian Joffe - CEO • Welcome and introduction Peter Riskowitz - CFO • Results overview Brian Joffe - CEO • Progress • The future Q&A Supplementary company information 2 PERIOD ENDED 28 FEBRUARY 2018
WELCOME AND INTRODUCTION Brian Joffe - CEO LONG4LIFE LIMITED SMALL BEGINNINGS PERIOD ENDED 28 FEBRUARY BIG VISION
RESULTS OVERVIEW Peter Riskowitz - CFO LONG4LIFE LIMITED SMALL BEGINNINGS PERIOD ENDED 28 FEBRUARY BIG VISION
RESULTS OVERVIEW Financials P&L • Acquired companies contributed for four months • Corporate expenses for eleven months • EBITDA (pre-acquisition costs and SBP) R170 million • Interest income on capital raised R124 million • Headline earnings of R170,4 million equivalent to HEPS of 30,2 cents Balance sheet • Net asset value R4,5 billion (506 cents per share) • Net cash of R1,5 billion (R1,2 billion post part payment for Chill) Dividend • Maiden dividend of 5,4 cents declared • Based on operating earnings, net of corporate expenses • Cover of approximately 2,5x going forward 5 5 PERIOD ENDED 28 FEBRUARY 2018
PROGRESS Brian Joffe - CEO LONG4LIFE LIMITED SMALL BEGINNINGS PERIOD ENDED 28 FEBRUARY BIG VISION
PROGRESS Listing and acquisition of businesses JSE listing • 7 April 2017 through the placement of 405 million shares Capital raised • R2 billion in equity Shares issued post listing in respect of acquisitions • 484 million shares for the acquisition of businesses + R436 million cash Date of acquisitions • Sport & Recreation assets, Sorbet, and Inhle Beverages wef November 2017 • Chill Beverages wef March 2018 Post year end • Chill Beverages acquired for an enterprise value of R720 million Combined acquisition valuations approximately R3,6 billion 7 7 PERIOD ENDED 28 FEBRUARY 2018
PROGRESS L4L is a work in progress from small beginnings Invested in lifestyle assets A decentralised philosophy Access to equity & debt capital for businesses L4L Sport & Corporate Recreation Sharing of best practices Maximisation of potential A home for entrepreneurs Current segmentation fits criteria Venture Capital Personal Beverages • R100 million allocated Care & • Support and nurture fresh disruptive activities Wellness • Investment in Veldskoen Shoes Alert to opportunity 8 PERIOD ENDED 28 FEBRUARY 2018
PROGRESS Ownership of high quality trading assets As at 28 February 2018 • Sport & Recreation, Personal Care & Wellness, and Beverage assets acquired for a collective R2,9 billion • Approximately R420 million in annualised EBITDA • Average EBITDA multiple of 6,9x Effective 1 March 2018, Chill incorporated in the Beverage segment with Inhle • Approximately R100 million in annualised EBITDA • EV/EBITDA multiple of 7,1x R3,6 billion invested for approximately R520 million in combined EBITDA Effectively ungeared Outstanding and proven human capital in the businesses bolsters the L4L team 9 PERIOD ENDED 28 FEBRUARY 2018
OUR CURRENT STABLE OF BRANDS… WITH MORE TO FOLLOW 10 PERIOD ENDED 28 FEBRUARY 2018
SPORT & RECREATION Foundation retail brands of Sportsmans Warehouse and Outdoor Warehouse date back three decades Wholesale brands of African Nature, Cape Storm, First Ascent, and Second Skins are equally well established OTG a recent addition Leading market positions in specialist retail and performance apparel Ecommerce an important component piece with physical store complementarity Strong base for an expanded L4L Sports and Recreation presence Cautious approach to footprint, focus on returns and sales per m² Evolving the Sportsmans and Outdoor customer experience, product and service offering 11 PERIOD ENDED 28 FEBRUARY 2018
PERSONAL CARE & WELLNESS Founded in 2004 First nationwide branded chain in SA Fully franchised, owner-operator, beauty treatment business A proven and sustainable business model Currently 200 stores Same-store growth currently being achieved with new openings boosting overall revenue Expansion of Sorbet Man and Candi & Co Scope for organic and bolt-on complementary Personal Care & Wellness offerings Category offers expanded treatment and merchandising opportunity Supply chain management initiatives 12 PERIOD ENDED 28 FEBRUARY 2018
BEVERAGES Inhle founded in 2003 Contract packaging manufacture Growth accelerating, boosted by L4L investment capacity Chill founded in 2001 Strong own-brands developed, complemented by liquor brands, and contract packaging Gauteng and Western Cape manufacturing bases of Inhle and Chill provides scope for synergistic growth opportunities BEVERAGES DIVISION Inhle and Chill expected to continue performing strongly over the medium term and will benefit from mutual cooperation 13 PERIOD ENDED 28 FEBRUARY 2018
THE FUTURE Brian Joffe - CEO LONG4LIFE LIMITED SMALL BEGINNINGS PERIOD ENDED 28 FEBRUARY BIG VISION
THE FUTURE L4L Group Well-positioned lifestyle assets with exposure across retail, wholesale, manufacturing, service, merchandising, and distribution, and ecommerce Substantial opportunities to expand in existing and adjacent areas Group financial strength provides optionality for growth ambitions Remain patient to strike the right deals at the right price Venture Capital investments Introduction of additional B-BBEE shareholders complemented by empowerment initiatives at the operating level Discretionary spending is tight but the consumer mood has improved 15 PERIOD ENDED 28 FEBRUARY 2018
SUPPLEMENTARY INFORMATION LONG4LIFE LIMITED SMALL BEGINNINGS PERIOD ENDED 28 FEBRUARY BIG VISION
FINANCIALS P&L • Corporate expenses for eleven months, acquired companies contributed for four months • Corporate operating expenses R19,2 million • Corporate share based payment expense R11,6 million • Acquisition costs of R16,8 million • R124,3 million of interest earned on capital raised • Pre-tax income R239,3 million – split approximately 50/50 between interest and trading income • Headline earnings of R170,4 million equivalent to HEPS of 30,2 cents 17 17 PERIOD ENDED 28 FEBRUARY 2018
FINANCIALS Balance sheet • Weighted average shares in issue 564,1 million • Shares in issue as at balance sheet date 889,8 million • Shareholders equity R4,5 billion (506 cents per share) • Total assets R5,1 billion • Goodwill and intangibles arising on acquisitions R2,6 billion • Cash of R1,7 billion • Short term borrowings R160 million Company to all intents and purposes dormant as at 31 March 2017 February year end aligned to that of the largest acquired investee businesses Refer to PLS and subsequent public announcements relating to acquisitions 18 18 PERIOD ENDED 28 FEBRUARY 2018
SEGMENT CONTRIBUTIONS EXCLUDING CORPORATE (FOUR MONTHS) Sport & Personal Care R’m Recreation & Wellness Beverages Total Revenue 637,5 32,8 60,4 730,7 Trading profit 133,7 8,3 22,6 164,6 8% 14% 5% 5% Contribution Contribution to revenue to trading profit (excluding corporate) 4 months 4 months Sport & Recreation Personal Care & Wellness Beverages 87% 81% 19 PERIOD ENDED 28 FEBRUARY 2018
SPORTS & RECREATION Segment overview Performance tracking in line with pre-acquisition expectation, annualised sales grew in real terms Price inflation dropped to 1,4% from 8,1% in the previous year Sales mix marginally favoured Outdoor Warehouse and Wholesale, which continued to grow strongly Total number of stores increased to 66 from 63, with trading density remaining constant Weighted space increased by 3,5% Continued focus on working capital and supply chain efficiencies 20 PERIOD ENDED 28 FEBRUARY 2018
SPORTS & RECREATION Sportsmans Warehouse • Breadth and depth of sports offering plus specialist advice a clear “head to toe” differentiator • One new store with two openings and an expansion in F2019 • New smaller store concept with modified fixtures and design being rolled out, retaining complete experience • First OTG Active store • In touch with global trends in sports apparel, including “athleisure” • Rewards programme, developed through in-house Online expertise, launched November 2017 rapidly gathering new participants • New online sneaker footwear range 21 PERIOD ENDED 28 FEBRUARY 2018
SPORTS & RECREATION Wholesale • Benefiting from buoyant internal and corporate demand for apparel, double digit turnover growth • A mix of internal sales (arm’s length), corporates, schools, and game lodges both in South Africa and regionally • Production a combination of local and China • Long lead times, efficient supply chains and product development expertise are key 22 PERIOD ENDED 28 FEBRUARY 2018
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