Remgro Ltd Ord

and welcome to the Realm Grow Limited interim results presentation. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star, then zero. Please note that this call is being recorded. I would now like to turn the conference over to Yanni Gironde. Please go ahead, sir.

Welcome to our interim results presentation for the period ended 30 December 2023. Before we go into the detail of everything, I should forewarn you that today's results presentation will be longer than usual, given the corporate actions we've been executing on the last year and the need to provide you with some context of the numbers behind them and as well as the corporate actions that we've done. The outline of today's presentation has really three areas of focus. Firstly, I will give an overview of the salient features of our results for the period under review. This will include providing you with a recap of our key strategic priorities as communicated in our previous results presentation. I will then also give you a sense of our own assessment of the progress we have been made in delivering against these priorities. Secondly, I will then ask our CFO, Mr Neville Williams, to unpack in more detail our results for this interim period. Thirdly, in keeping in line with our new format from our last results in September, We will be then giving an update on some of our key investments, namely MediClinic, CIVH, RCL Foods and Rainbow Chicken. The CEO of MediClinic, Ronnie van den Merwe, together with his CFO, Jurgens Meijberg, will speak to the MediClinic's operating context, results and strategic priorities. Thereafter, I'll ask the CIVH chairperson, Becker Eys, to do the same for CIVH. And finally, Paul Krushenk, the CEO of RCL, and Martina Stander, the Managing Director of Rainbow, will speak to their respective entity strategy and most recent performance. I will then close off the presentation after that by looking at our key area of focus going forward before opening the floor for questions. Looking at the period on the review. We've been doubling our efforts delivered on our stated strategic priorities. When we presented our year-end results last September, I talked specifically about our key areas of strategic focus in the medium term. This slide revisits those priorities and outlines what we believe is a candid assessment of our own performance against these stated priorities. The execution of these priorities is not a binary target, but an ongoing journey. We are satisfied with our efforts and progress made in our portfolio optimisation since our last reporting period, which also includes the execution and embedding of our various transformation corporate actions, as well as the significant integration work this process has entailed along some of our companies. This has however, as you are probably quite aware, come with many challenges as we will unpack later in this presentation. Good strides have been made in our sustainability journey, which I will elaborate on in greater detail later. Notwithstanding the progress made in advancing our outlined strategic priorities, we consider some of them as still in progress, as I've said, it is a journey, because by the standards we set ourselves, we are not where we would like to be. Let me give you three specific examples. On the earnings side, If you look at the earnings momentum in our portfolio, the following has become clear. Gains have been made in certain areas, and particularly with regards to recovering from various economic shocks that continue to hit us. That said, to be quite frank, some of our assets are clearly not where we want them to be insofar as earnings contribution is concerned, and consequently the dividends that we receive here at the Centre at Remgrove. For us, Driving this performance is at the core of our efforts to further unlock value in the medium term. Much work is being done with our respective investee companies on performance as well as the measurement thereof. Looking at our non-core asset portfolio, the disposal of our non-core assets is a process which requires patience. Further, in line with our value of doing the right thing, we want to make sure we exit our investments in a value-creative and responsible manner. and then allocate the capital realized in this way also in a value accretive way. As I have said in the past, while we may not be able to disclose the specific of our non-core classification per se, we remain committed to an optimal and considered portfolio restructuring on these assets. If we just look at the earnings momentum and resilience of our portfolio, Our desired strategic outcome is to continuously build earnings momentum and growth, and to strengthen our portfolio's resilience, especially during this difficult operating environment we find ourselves in at the moment. I will unpack this in the next slide when I give a snapshot of our performance. A weaker earnings performance was largely driven by non-recurring items. These results are probably one of the more challenging ones that I've delivered in a long time. For the period under review, headline earnings decreased by 40.1% from 3.5 billion to approximately 2.1 billion, while headline earnings per share decreased by 39.1% from 626 cents to 381 cents. The difference of 100 pips in the headline earnings per share measure compared to headline earnings represents the accretive impact of shares repurchased during the 2023 financial year, as well as the period under review. A significant driver of the decline in headline earnings relate to the effect of non-recurring items as a result of the corporate actions implemented in the recent past. The difficult operating environment also contributed to the material decline in our headline earnings, especially the Heineken beverages trading results, as you are all aware. Overall, when excluding the impact of these ones-off items just mentioned, the headline earnings decreased by 13.1% from 3.26 billion to 2.8 billion. When Neville will later unpack the results, he will provide you with more detail around these drivers and the adjusted headline earnings numbers. Delivering on our strategic priorities. For the next section of our presentation, I will go back and provide a bit more detail on our delivery against some of our stated prior beliefs. Firstly, just to recap, as previously mentioned, the preceding financial year was mainly characterized by the execution of our various corporate actions. Both our transformative execution, we focus on the integration, the optimization, as well as the unlocking of value. Accordingly, much of our focus has been on meaningfully embedding our newly unlisted assets to the overall portfolio. It also comes with challenges. This will enable us to drive performance and generate returns. In the next slide, I will expand on what the post-transaction execution process for Heineken Beverages entailed. Thereafter, Ronnie will speak about MediClinic's journey as well as the progress made there. And lastly, Paul and Martinez will respectively talk to the implementation of their strategy at RCL, with a particular focus on what is being done at Rainbow. All these mentioned companies are significant contributors to Remgrove's portfolio, and the strategy that we will discuss has been a collaborative effort between us, our partners, and the respective management team. Hence our excitement at what lies ahead in the future of these companies in this turnaround phases. As you are all aware, the CIBH Vodacom transaction remains in process and is still subject to regulatory approvals. Peter will speak to the specifics on the process later in the presentation. That said, it is important to re-emphasize the following. Delays in regulatory approvals make the cost of doing business in our country very high. We especially experienced this with the Heineken beverages transaction during the two years that we waited for the approvals. That has delayed the integration phase. It also put people under unsure about jobs, things like that, and that clearly has an operational performance on that. And further, the uncertainty with regulatory approval also delays confidence for foreign investors to invest in our country. We have a beautiful country with much potential. We need growth, but we need a more enabling environment for doing business locally and a lot less red tape. This will be critical for attracting foreign investments. If you spend two to three years of getting regulatory approvals, people do get deal fatigue in that phase. Let's look at the Heineken beverages and the integration thereof and how we're going to position it for growth. The integration phase and resulting business performance of Heineken was exaggerated by a tough operating environment. But we think green shoots are starting to become evident. Just talking about the revenue, on the revenue side, Heineken experienced a low and single digit decline in revenues, although there was some recovery in Q4 of 2023. While still trailing behind in the market, its recovery was led by Brandt Heineken, which was boosted by the launch of Heineken Silver. combined with an improved performance of Windhoek and Amstel, following corrective price actions taking, including a strong closing of year for the oldest tail brands of Savannah and Bernini. Volumes in the period under view have been impacted by the following. There was lower industry growth in general. Load shedding, which significantly affected the trading hours for main market outlets. This has driven demand to retail where there is increased competitor activity because of the volume shift. There has also been a shift from premium to mainstream brands and that impacted Heineken Duty's portfolio being over indexed in premium and also combined with our competitors having affordable sizing price points compared to us.

Sorry, we just had an interruption there.