JFM Presentation FABASA

7/27/2019 JFM Presentation FABASA

1/34

PRESENTATION BRIEF

FABSA = Family Business Association of SouthAfrica

Hoofsaaklik Engels 40-45 min Tema vir hierdie werkwinkel is: "Thriving in

Challenging Economic Times" . Spesifiek: After many lessons I only invest in companies I

understand, whose management I know and whose

character and culture I like. Three questions kept me busyfor a long time:1. How does one make a company grow?2. When are people happy?3. What's the key to making a success of a company?

1


2/34

THRIVING IN CHALLENGINGECONOMIC TIMES

FABASAJANNIE MOUTON

7 JUNE 2012


3/34

Three questions

1. How does one make a company grow?

2. When are people happy?

3. What's the key to making a success of a

company?

.

.


4/34

4

Story of PSG

Started Build it out

How it changed my life

My personal philosophies

What I have learned it might inspiresomebody

PSG is my life


5/34

5

3/8/1995 Changed my life

I was fired Lost my company and my friends

48 years old and unemployed

I lost my confidence

Defining moment of my life


6/34

6

For the unemployed:

Get a office

Get a soundboard(s)

Know yourself (SWOT analysis)

Formulate your dream, your vision andwrite it down

- my dream in 1995 was my focus and still applicable

Formulate your action plans small steps

Read read think and scheme


7/34

7

My dream in 1995

Listed company or big stake in it (control)

Financial services sector focus

Raise Capital for strong base

Management style decentralised anddelegated

Smart people

Move to Stellenbosch

Small head office, relaxed environment

Think more and do less


8/34

8

Lessons learnt

Make decisions and take risk Involve and inspire your family (PSG....)

Colleagues- Team better than individual but someone responsible- Make them shareholders

Be positive!(reactive vs proactive)


9/34

9

Communication

Leaders are only as powerful as the ideas they cancommunicate. They inspire their followers to higher levels of

achievement by showing them how their work contributes toworthwhile ends. It is an emotional appeal to one of the mostfundamental of human needs the need to be important, to makea difference, to feel useful and to be part of a successful andworthwhile enterprise

Warren Bennis and Burt Nanus

Lessons learnt


10/34

GREATTRANSACTIONS

IN THE PAST


11/34

PAG

Dream:listed financial

services business

1995 defining moment in my life

Action:Acquired a listed business that was easy to understandPersonnel placement agency

Principle: already making tea

1 year: R7m to R107m


12/34

Servgro

Principle: create solid foundation There will be lean times (1998, 2002 & 2008)

PSG traded at a very high PE Reverse into Servgro cash shell

NAV from 147cps to 617cps in the year


13/34

JSE

Read and think:- Global trend- Stock exchanges

were changing from

seats/rights tolisted entities

Action:- 4 years we bought

rights- Cost R50m- 15% stake

Sale:- R679m!!!!

Yes - we do sometimes sell

Obvious opportunity?


14/34

PAT: R30m to greater than R1bnShare price: R1 to R220

1998 - 2012

Capitec

Opportunity:- Micro

lending- Fragmented

- No strongplayers

Action:- Acquire various

companies(300 branches)

- Recruit topmanagement team

Change:- Banking model- TBB banking

licence +R300m tax loss

- New age bankingsystem

Market cap: R50m to R20bn

Focus Focus Focus Focus


15/34

Arch Equity / Thembeka

Issue:BEE

Arch Equity share price: R1 to R8 (2.5 years)

Thembeka value: R1 to R1,100,000,000 (5.5 years)

Change issue toopportunity:- Read, think,

scheme

- Understandregulations

Action:- Execute quickly- Acquired 20% in

both PSG and

Capitec in lessthan 2 years


16/34

Schooling in SA is failing!!!

16

StrikesDropping standards

Over crowdingDiscipline

Unsafe


17/34

Curro vision

Initialdream:

7 schools

PSGinvolvement:

15 schools

Listing:

40 schoolsin 2020

Today:

80 schoolsin 2022?

Key: Management

R1bn profit after tax?

2009 : 3 schools 2012 : 21 schools


18/34

PSG Konsult

Opportunity:- My original

dream- SMK skills

Hurdles:- Industry changed- Struggled to make

profits

Change:- Willem Theron- Revenue sharing

model

Trusted brand


19/34

We are proud!

19

PSG Online rated SAstop retail stockbrokerBusiness Day Investors

MonthlyStockbroker of the Year award

PSG Asset Management Raging Bull awards

PSG Flexible FundPSG Equity Fund

PSG Konsult votedNational Broker of the

Year: Commercial lines andAgriculture by Santam

PSG Konsult ModerateFund of Funds won the

Morningstar award forModerate allocations


20/34

PSG Group investments

CHECKLIST

Exceptional management

Easily understood

Significant growth potential

Strong market position

Focused High barriers to entry

Good corporate governance (integrity)


21/34

Lesse van Warren Buffett

Besoek Omaha 2012

35,000 mense - 6 ure vrae

Waardasie teenoor prys (begin maatskappye)

Betroubare & talentvolle bestuur

Korporatiewe beheer / Integriteit

39 jaar, 25% per jaar

Stroom-op Verstaan maatskappy

Grag Kompiterende Voorkeer

d


22/34

PSG Group structure - today

100%

32.5%

71.3%

42.4%

63.1%

22

49%

R10.7bn market cap 39 underlying companies

39,000 people

100%


23/34

O b h l h


24/34

Our business philosophy

24

Charter for Extraordinary Achievement

The soul of PSG

Ultimate Empowerment

ULTIMATE GOALCREATE WEALTH FOR SHAREHOLDERS

He will win whose army is motivated by the same goal~ Sun Tzu

F k f


25/34

Framework for success

25

CHARTER FOR EXTRAORDINARYACHIEVEMENTWe have a ten-point charter, which includes:

vision & desire

strategy and targets

positive mind

assertiveness & decisiveness

communicationThe general who does not think ahead and takes his adversaries lightlywill end up being their captive. ~ Sun Tzu

S l f PSG


26/34

Soul of PSG

26

(VALUES AND CULTURE)

It embraces the following key qualities

ethos and values enthusiasm

transparency (internally / externally)

fairness

empowerment

For what is a man profited, if he shall gain the whole world, and losehis own soul? ~Matthew 16:26

Ul i E


27/34


27

(STYLE AND STRATEGY) develop strategic thinking

independent and own board of directors

delegate authority and responsibility create responsible managers and MDs

share the well-being of the company with

everyone All employees and stakeholders should

benefit and be involvedControlling a large force involves the same principles as controlling asmall one. Just divide their numbers. ~ Sun Tzu

Ul i E


28/34


28

corporate governanceThe PSG way of life audit committee

chaired by independent non-executive

remuneration committee chaired by independent non-executive

Integrity of results and management information

employ competent people and empowerthem through trust

LIST THE COMPANY

VICTORY


29/34

VICTORY

29

PURPOSE & FREEDOMfor

EVERYONE AT PSG

andCREATION OF WEALTH

for

STAKEHOLDERS

The wise general... Rewards his soldiers with the spoils of victory.

~ Sun Tzu

W lth ti


30/34

Wealth creation

30

Men had always though of wealth as astatic quantity to be seized, begged,inherited, shared, loathed or obtained as afavour

Americans were the first to understandthat wealth needs to be created

Ayn Rand

Wealth cannot be distributed until it is

created, what intervenes with the creationintervenes with the distribution

WR Hearst

W lth C ti


31/34

Wealth Creation

31

On the other hand, if you take the wealthyou confiscated from one person and giveit to someone else, are you encouragingthe recipient to build his or her own

wealth?Stephan Mulholland

Wh t lth?


32/34

Who creates wealth?

32

The entrepreneur

provides employment

takes calculated risks

pays taxes, build houses & hospitals supports the arts and charitable causes

does not expect handouts and grants, but

rather provides investment opportunities spends time and money on innovation

has to think and scheme

M ki t ib ti


33/34

Making a contribution

33

A profitable company makes a contribution in

society employs people provides training makes donations and other contributions

pays taxes

PSG Group of companies Donations > R34m Bursaries > R13m Salaries > R7.6bn Taxes > R4.5bn

Akkerdoppies


34/34

QUESTIONS?

Documents

JFM Presentation FABASA