EPE Capital Partners Ltd. Class A · JSE:EPE
EPE Capital Partners Ltd. Class A — Ethos Capital — Investor Presentation (March 2021)
27 slides from EPE Capital Partners Ltd. Class A's investor presentation, Mar 11, 2021
Slide 1: Ethos Capital Investor Presentation
ETHOS CAPITAL INVESTOR PRESENTATION 11 MARCH 2021
Slide 2: Contents
1 Executive summary CONTENTS 2 Portfolio overview 3 Liquidity analysis 4 Conclusion
Slide 3: Executive Summary
EXECUTIVE SUMMARY Six months ended 31 December 2020 headlines at a glance NAV per share: NAV per share: Realisations of R159m R8.65 R6.65 in CY2020 at an aggregate on an aggregate basis on an accounting basis with the Brait 1.6x TMB / 24% IRR with Brait assets at NAV investment at the Brait share pr
Slide 4: Performance Review
PERFORMANCE REVIEW PORTFOLIO PERFORMANCE – 5% reduction in NAVPS for the six months to 31 December 2020 from R9.12 to R8.65 as a result of: • Decrease in Brait NAVPS from R8.27 to R7.71, largely due to decrease in Virgin Active • Foreign exchange movements negatively impacted Channel VAS’ US$-based
Slide 5: Performance Review: Investments and Disposals
PERFORMANCE REVIEW INVESTMENTS AND DISPOSALS – R154m invested in past six months by Ethos Funds, largely into Eazi and Vertice - Ethos Capital share R10m – Partial sale of Ethos Capital’s Channel VAS stake completed in December 2020 (1.6x TMB, 25.0% IRR) – Proceeds of R7.7m received in December foll
Slide 6: Portfolio Company Performance Overview
PORTFOLIO COMPANY PERFORMANCE OVERVIEW Overview of Ethos key unlisted portfolio companies – Strong operational performance has continued despite impact of COVID which delayed deployments – 19% increase in LTM EBITDA in ZAR to December 2020, driven by advances growth, tight default management and cos
Slide 7: Brait Portfolio Company Overview
PORTFOLIO COMPANY PERFORMANCE OVERVIEW Brait portfolio company overview – Despite the significantly reduced operating costs and utilisation of government support packages, extended lockdown periods have adversely impacted the liquidity of the Virgin Active UK, Italy and Asia Pacific business, partly
Slide 8: Contents
1 Executive summary CONTENTS 2 Portfolio overview 3 Liquidity analysis 4 Conclusion
Slide 9: Ethos Capital NAV Analysis
ETHOS CAPITAL NAV ANALYSIS Changes in NAV since June 2020 Changes during Unaudited Unaudited Audited H1 2021 (Brait at NAVPS) (Brait at share price) 30 June 31 December 31 December 2020 2020 2020 Investments 2,529 99.6% (211) 2,318 97.2% 1,804 96.4% Brait (at NAV) 1,068 42.0% (72) 996 41.8% 482 25.8
Slide 10: Portfolio Overview
PORTFOLIO OVERVIEW 31 December 2019 vs 31 December 2020 Pro forma at 31 December 2019 – adjusted for Rights Issue and Brait investment Capital EV / EBITDA # of Portfolio Ethos Capital Ethos Capital Invested (unlisted) Companies all-in Brait NAVPS @ Brait entry price Cost (R7.99) R2.7bn 7.4x 24 R7.99
Slide 11: Total Asset Contribution
TOTAL ASSET CONTRIBUTION The largest 10 assets constitute 88% of total assets 6% 36% 58% 24% 88% of total assets South Africa Rest of sub-Saharan Africa International 13% 12% 10% 9% 7% 7% 4% 4% 3% 2% 2% 1% 1% 1% Other * MTN Consol Glass Autozone TymeBank Twinsaver Kevro Primedia Gammatek Synerlytic
Slide 12: Portfolio Company Performance Overview
PORTFOLIO COMPANY PERFORMANCE OVERVIEW The majority of companies (by value) grew both revenue and EBITDA LTM SALES GROWTH BY UNLISTED COMPANY INVESTMENT RETURN % Value - R'm Number 2 Change Brait 50.4 12% Vertice 24.7 16% 4 643 4 Synerlytic 11.7 5 10% 299 153 167 Gammatek 9.1 12% < -15% -15% to < 0%
Slide 13: NAV Composition by Portfolio Company
NAV COMPOSITION BY PORTFOLIO COMPANY The combined NAV of the top 2 assets exceeds EC’s market capitalisation Attributable NAV (Brait at 31 Dec NAV) 514 61% NAV (Brait at 31 Dec share price) 75 58 72 82 126 49% 176 186 482 Current market capitalisation (3) 457 Channel Vas Brait listed value Echo Vert
Slide 14: Channel VAS Update
CHANNEL VAS UPDATE % of Total Assets EC Value (Rm) TMB Ethos consortium 24% 457m 1.55x 20% Channel VAS is a leading provider of Airtime Credit Services (“ACS”) to prepaid mobile subscribers and has expanded into Micro Finance Services (“MFS”) leveraging its existing credit scoring capability and acc
Slide 15: Virgin Active Update
VIRGIN ACTIVE UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 13% 241m n/a 10% Virgin Active is one of the leading international health club operators and strives to provide customers with a combination of outstanding exercise experiences and a world class digital offering Maintainable EBITDA
Slide 16: Premier Update
PREMIER UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 12% 215m n/a 12% Premier is a leading South African FMCG manufacturer offering branded and private label solutions. The business has strong heritage brands in bread, maize meal, wheat flour, feminine hygiene and sugar confectionary H1 21
Slide 17: Echo Update
ECHO UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 10% 186m 1.17x 64% Echo is a corporate Internet Service Provider, providing Information and Communications Technology (”ICT”) services through an aggregation of third-party networks YoY growth – Company continues to grow strongly with new c
Slide 18: Vertice Update
VERTICE UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 9% 176m 1.46x 80% Vertice sells medical technology and supplies across a wide range of applications predominantly to support emergency and critical procedures YoY growth (L-f-L) – Strong organic and acquisition-led growth over the past 1
Slide 19: Synerlytic Update
SYNERLYTIC UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 7% 126m 1.39x 94% The Synerlytic group operates in subsets of the Testing, Inspection and Certification market and is one of the leading condition monitoring and fluid analysis specialists in Africa (through WearCheck) and supplier of
Slide 20: Gammatek Update
GAMMATEK UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 4% 82m 0.8x 51% Gammatek is a Leading distributor of mobile accessories and low technology products YoY Growth – Gammatek’s earnings have been resilient despite the impact of COVID driven by (i) the increasing importance of digital devi
Slide 21: Kevro Update
KEVRO UPDATE % of Total Assets EC Value (Rm) TMB Ethos stake 3% 58m 0.30x 33% Kevro is the largest supplier of corporate-branded clothing and promotional products in South Africa – Performance has been weak but in line with expectations. The ongoing difficult external environment was exacerbated by
Slide 22: Overview of Other Ethos Unlisted Portfolio Companies
PORTFOLIO COMPANY PERFORMANCE OVERVIEW Overview of other Ethos unlisted portfolio companies % of Total Assets – One of the leading South African broadcasting and outdoor advertising businesses 4% – A significant pullback in Adspend has had a negative impact on earnings, however Broadcasting has show
Slide 23: Contents
1 Executive summary CONTENTS 2 Portfolio overview 3 Liquidity analysis 4 Conclusion
Slide 24: Liquidity Profile
LIQUIDITY PROFILE Sufficient liquidity to fund outstanding fund commitments 550 4,250 3,750 450 3,250 Realisations 350 125 Existing outflows 2,750 250 Available liquidity 2,250 423 150 298 1,750 (430) 1,250 50 750 (50) (168) 250 (150) (36) (250) (250) (750) Undrawn Fee provision Net undrawn Capacity
Slide 25: Contents
1 Executive summary CONTENTS 2 Portfolio overview 3 Liquidity analysis 4 Conclusion
Slide 26: Conclusion and Outlook
CONCLUSION AND OUTLOOK PORTFOLIO PERFORMANCE – Strong rebound post the COVID induced lockdowns for the majority of the unlisted portfolio – Impact of COVID reflected in lower valuations on Kevro, Primedia, Ster Kinekor and Virgin Active – Strong maintainable EBITDA growth across most of the larger E
Slide 27: Disclaimer
DISCLAIMER THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATIONAL AND DISCUSSION PURPOSES ONLY AND IS NOT, AND MAY NOT BE RELIED ON IN ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE OR AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY A LIMITED PARTNERSHIP INTEREST IN ANY ETHOS FUNDS.