rmh investor presentation - rmb holdings€¦ · property strategy launched first investment for...

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RMHPortfolio and strategy overview

1

RMH is an investment holding company with a proven track record of investing

in disruptive and entrepreneurial financial services businesses

This performance has been achieved by partnering with exceptional

management teams for the long term

RMH positions itself as a value-adding, stable and aspirational shareholder

Context

RMH PORTFOLIO OVERVIEW

34% 100%

2

RMH has a strong track record of delivering value to investors

Source: Datastream, Reuters, Company Reports

Nov 92 May 94 Nov 95 May 97 Nov 98 May 00 Nov 01 May 03 Nov 04 May 06 Nov 07 May 09 Nov 10 May 12 Nov 13 May 15 Nov 16 May 18

Total shareholder return CAGR of 25% per annum since listing in November 1992

RMH listed on JSE

1992

Acquired

Launched

1995

Bought

from

Anglo American to form

1997

Started

1998

• The RMH and RMI group of companies have been investing domestically and internationally for over 40 years

• Out of FirstRand and Momentum, we have created four significant South African financial services businesses

(Discovery, OUTsurance, FirstRand and MMI) that sustain jobs for over 80,000 people

1999

Listed

2010

Momentum merged

with Metropolitan to form

2011

Listed separately

on the JSE

Acquires significant

stake in RMH

2015 2016

Property strategy

launched

First investment for

RMH Property is

partnership with

3

RMH strategy

RMH is the biggest shareholder in FirstRand, South Africa’s largest banking group, holding a 34% stake. RMH is the founding shareholder of FirstRand and

views this as its core asset. RMH is represented on all the relevant strategic and governance forums and provides FirstRand with a responsible and stable

major shareholder.

RMH is defined by its shareholding in FirstRand. This core asset provides RMH with exposure across the universal Southern African financial services sector

and should also deliver a sound balance between capital and dividend returns.

It is RMH’s intention to retain its stake in FirstRand, in its current structure as it holds structuring and financial value. It is recognised that RMH’s market value

may trade at a discount to its underlying value. However, the value of the long-term optionality the structure provides, and has provided over the past decades,

outweighs this. RMH will continue to dynamically evaluate this.

On a selective basis, RMH may consider investments in other business where partnerships with entrepreneurial and industry-disruptive management teams can

add value to RMH and its shareholders. Investments with inter alia the following attributes will be of particular interest:

- banking, property and related industries;

- the ability to form a partnership between the investment, RMH and FirstRand;

- unlisted;

- digitally-oriented;

- the ability of RMH to add value; and

- relevance in terms of size of enterprise and shareholding.

RMH will dynamically assess whether investments, other than FirstRand, are optimally housed in RMH. In the past this assessment has inter alia led to the

listing of Discovery, the merger of Momentum and Metropolitan, the listing of MMI and the unbundling of RMI Holdings. The investment in RMH Property

will be evaluated in a similar way. Currently the business is still in its formative phase and building critical mass as a potentially independent development-

focused property investment group.

4

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FirstRand RMH

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FY14

FY15

FY16

FY17

FY18

18,6

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FY14

FY15

FY16

FY17

FY18

FY18 Results summary

NORMALISED EARNINGS HISTORY

DIVIDENDS HISTORY

KEY PERFORMANCE INDICATORS

9% 8%

12% 12%

5 year CAGR

Source: Company reports

R’ m Jun-17 Jun-18 % chg.

Value, earnings and dividends

Intrinsic value per share (R) 6 306.6 8 632.0 36.9%

Total ordinary dividend per share (cps) 327 351 7.3%

Normalised earnings (R million) 8 166 8 815 7.9%

Diluted normalised earnings per share (cps) 578.5 624.4 7.9%

Dividend cover based on normalised earnings (x) 1.77 1.78 0.6%

Normalised earnings

FNB 12 801 14 877 16.2%

RMB 6 902 7 327 6.2%

WesBank 3 996 3 626 (9.3%)

Aldermore - 276 n/a

Other 756 305 (59.7%)

FirstRand 24 471 26 411 7.9%

Group normalised earnings

RMH portion of FirstRand’s earnings 8 334 8 995 7.9%

RMH Property 8 16 100.0%

RMH’s funding and administrative costs (176) (196) 11.4%

Group normalised earnings 8 166 8 815 7.9%

R’ m Jun-17 Jun-18 % chg

Intrinsic value (R’m)

FirstRand market value 90 077 122 058 35.5%

RMH Property 899 2 067 >100.0%

Net debt (1 945) (2 267) 16.6%

RMH intrinsic value 89 031 121 858 36.9%

INTRINSIC VALUE

5

18,66321,286 22,855 24,471 26,411

0

5,000

10,000

15,000

20,000

25,000

30,000

FY14 FY15 FY16 FY17 FY18

FY18 Results summary


NORMALISED EARNINGS (R’m)

LONG-TERM CREDIT IMPAIRMENT CHARGE (%)

FRANCHISE CONTRIBUTION TO EARNINGS (%)

22% 14% 7% 7%

KEY PERFORMANCE INDICATORS

8%R’m Jun-17 Jun-18 % chg.

Net interest income 46,626 51,254 9.9%

Non-interest income 39,268 41,926 6.8%

Fee and commission 25,598 28,250 10.4%

Insurance income 3,967 4,197 5.8%

Fair value income 4,255 4,165 (2.1%)

Investment income 2,178 1,959 (10.1%)

Associates & JVs (after tax) 1,041 914 (12.2%)

Other 2,229 2,441 9.5%

Revenue 85,894 93,180 8.5%

Operating costs (43,773) (47,664) 8.9%

Pre-provision operating profits 42,121 45,516 8.1%

Credit impairments (8,054) (8,567) 6.4%

Indirect taxes (1,081) (1,077) (0.4%)

Profit before tax 32,986 35,872 8.7%

Income tax (6,951) (7,865) 13.1%

Profit after tax 26,035 28,007 7.6%

Attributable to minorities (1,208) (1,130) (9.5%)

Contingent convertible securities - (115) >(100.0%)

Attributable to prefs (356) (351) (1.4%)

Normalised earnings 24,471 26,411 7.9%

Key ratios

Normalised diluted EPS (cps) 436.2 470.1 8.0%

Dividend (cps) 255.0 275 7.8%

Normalised tangible NAV (cps) 1,911.7 1,964.1 2.7%

Net Advances 893,106 1,121,227 25.5%

Normalised ROA (%) 2.1% 1.9%

Normalised ROE (%) 23.4% 23.0%

Common equity tier 1 ratio 14.9% 12.1%

Cost-to-income ratio 51.0% 51.2%

NPLs as a % of performing book 2.4% 2.4%

53% 55% 55% 54% 58%

30% 29% 28% 29% 28%

17% 16% 17% 17% 14%

0%

20%

40%

60%

80%

100%

FY14 FY15 FY16 FY17 FY18

Wesbank

RMB

FNB

1.3

8%

1.8

7%

1.4

2%

0.9

3%

1.0

8%

0.9

9%

0.8

4%

0.7

7%

0.8

6%

0.9

1%

0.9

0%

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

6

The property strategy

In late 2015, RMH announced its intention to launch a property strategy, that is now housed in its

subsidiary RMH Property (‘RMHP’):

• RMHP has an overall NAV target of R10bn, over the next 5-7 years; and

• RMHP has made six investments since the launch of strategy and will continue to grow the portfolio

The principal objectives of RMH’s property strategy are to:

• diversify RMH’s earnings base beyond banking, across the breadth of the property value chain;

• enhance RMH’s total return with a focus on net asset value growth, whilst balancing yield;

• partner with entrepreneurs in line with RMH’s investment ethos, track record and expertise;

• retain a dedicated specialist team that independently identifies and manages property assets;

• neither dilute RMH’s FirstRand focus nor reduce flexibility of RMH’s capital structure; and

• create portfolios that can be listed / monetised.

7

The property strategy

Note: 1. Total return and correlation based on period from 30 June 2005 – 1 July 2015; 2. Total return in the chart from 30 June 2005 – 1 June 2018

Source: Company reports; Reuters

BALANCING RETURNS WITH BALANCE SHEET FLEXIBILITY

• In the decade leading up to RMH’s announcement of its property strategy in 2015, the South African property sector offered attractive

returns and strong diversification benefits for RMH

• Over that decade, the South Africa’s listed property sector:

‒ outperformed the JSE All Share Index by 3% p.a.; the JSE Financials index by 4% p.a. (on a total return basis)1; and

‒ had low correlation to listed financials (32% vs. 69% between JSE Financial 15 Index and the JSE All-Share Index1) indicating strong

return and diversification benefits for a banking focused portfolio such as RMH

• This outperformance was partly driven by return profiles of listed property counters that were increasingly enhanced by development profits

• RMH’s strategic rationale for launching the property strategy was to capitalise on this opportunity by focusing on development focused

partnerships, whilst generating sufficient yield over time to contain a potential drag on FirstRand dividends distributed to RMH shareholders

from additional financing costs

• Since 2015, despite some headwinds, the listed property sector continued to perform relative to the listed financials and the market until

early 2018

0%

100%

200%

300%

400%

500%

600%

700%

800%

Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17

JSE Financials JSE Property JSE All Share

CUMULATIVE TOTAL RETURN 2

Before announcement

of property strategy

After

announcement

8

Capacity and value-add framework

DEDICATED MANAGEMENT CAPACITY

• RMH has appointed a dedicated specialist team to execute the RMH property strategy

• RMHP team collectively has over 25 years of property experience as strategic executives, principal investors and lenders

• Brian Roberts (CEO of RMH Property) founded and led Genesis Properties, a mezzanine property finance fund backed by Kirsh Holdings,

Genesis Capital and RMH

• Genesis Properties’ first two funds delivered a pre-tax return to shareholders of 62% and 29%, respectively, at the time RMH invested in Genesis

Properties’ third fund

• Since RMH invested in Genesis Properties’ third fund in 2016, RMH has earned a pre-tax return in excess of 25%

Brian Roberts, CEO: RMH Property

• Founder & former CEO of Genesis Properties

• Former Head of Nedbank Corporate Property

Finance

• Former Managing Director of Zenprop

• Over 20 years of property experience

• BComm. (Hons.)

Ekerete Umoetok,

Investment Executive: RMH Property

• Property finance and principal investment experience

at Standard Bank and Phatisa

• Part of the team that invested R10bn for RMI & RMH

• 7 years of property experience

• MComm.; BSc. (Hons.); BComm; CFA

VALUE-ADD FRAMEWORK

RMH PROPERTY TEAM

Strategic oversight

• Drive strategic decision

making at board level

• Reinforce good governance

and processes

Deal making insights

• Craft key transactions with

management

• Provide funding support,

where necessary

Asset management oversight

• Strategically allocate

resources to drive returns at

asset level

• Encourage industry best

practices

9

RMH Property strategy

CREATE A DIVERSIFIED PROPERTY PORTFOLIO OF ENTREPRENEURIAL, DEVELOPMENT FOCUSED PARTNERSHIPS

• Best-of-breed management team

• Scalable development operation diversified across traditional property

asset categories (office, retail, industrial)

• Sizeable capital base in an unlisted vehicle providing scope and

opportunity to increase development potential of the portfolio

• Liquid vehicle to potentially monetise property interest in the future

• Ability to partner with best-of-breed specialist developers on a portfolio

and/or asset specific basis in key niches of the property market

• Allows for diversification of RMHP’s portfolio

• Satellite partnerships may achieve higher yields / faster NAV growth

than the more traditional core partnership

• Flexibility to partner with developers on single assets or entire portfolio

Rationale for Core Partnership Rationale for Satellite Partnerships

International

Domestic

International

Domestic

CORE PARTNERSHIP: Target NAV R5-10bn1 SATELLITE PARTNERSHIPS: Target NAV R1-5bn1

• Atterbury Property Holdings

is RMHP’s core domestic

partner

• RMHP has and will continue

to invest in Atterbury-led

initiatives such as Divercity

Urban Property Fund

• Atterbury Europe is RMHP’s

core partner in Europe

(initial investment via

Brightbridge)

• RMHP has and will support

Atterbury-led initiatives in

Europe

• RMHP has satellite partners with specific focus

areas which include:

• RMHP continues to actively seek international

partners to add further geographic diversification

beyond the current Atterbury Europe footprint

Note: 1. Target collective value of RMHP’s stakes in domestic and international partnerships

10Note: 1. Direct stake only 2. Direct stake only: subject to Competition Commission approval


Progress to date

• RMHP has deployed c. R1.3bn in equity capital (excl. committed pipeline)

• Further to the equity capital, c. R1.5bn of 3-5 year funding support/guarantees have been allocated to portfolio companies

‒ Funding support is intended to catalyse medium-term growth in RMHP investees by supporting development initiatives

‒ Guarantee capacity utilised for the benefit of investees typically earns RMHP a guarantee fee (fee income in excess of

RMH’s cost of funding)

RMH HAS MADE PROGRESS ON ITS PROPERTY STRATEGY

CORE PARNERSHIP SATELLITE PARTNERSHIPS

27.5% stake 43.9%1 stake40.0% stake

49.9% stake18.4%2 stake

Three

11

Core domestic partner | Atterbury Property Holdings


OVERVIEW KEY PEOPLE

SELECT DEVELOPMENTS

• Die Klubhuis

• 5,200m2 offices in Pretoria

• Newtown Junction

• 52,089m2 retail centre in Newtown

• Mall of Africa

• 131,000m2 retail centre in Waterfall

• Atterbury Property Holdings (‘Atterbury’) has significant experience in

property development, having developed more than two million m2 of

commercial, retail, and residential property since its establishment in

1994

• Atterbury has property development, fund management, corporate

services and asset management divisions

• One of Atterbury’s most notable projects began in 2005, where Attacq

was formed and acquired 1,75 million m2 of commercial development

rights at Waterfall City, Midrand from the Islamic Institute. Attacq was

later listed on the main board of the JSE

• Atterbury developed the Waterfall precinct, that now includes the

flagship Mall of Africa and regional head office of PWC

Louis van der Watt (Co-founder and Group CEO)

• Louis co-founded Atterbury in 1994, after completing his articles at

Deloitte

• He also co-founded Attfund, subsequently acquired by Hyprop and

Attacq Limited

James Ehlers (MD Atterbury Property Developments)

• James has successfully run the property development division of

Atterbury since 2002 and was previously Group COO

• He established and operated a successful independent construction

business prior to joining Atterbury

Lucille Louw (MD Atterbury Asset Management)

• Lucille is a seasoned property executive and has led Atterbury’s

Asset Management division since 2005

• Her team manages Atterbury-owned and 3rd party assets valued at

over R15bn

12

Core European partner | Atterbury Europe


OVERVIEW KEY PEOPLE

SELECT DEVELOPMENTS

• Mall of Cyprus

• 24,779m2 retail centre in Nicosia

• Usce

• 41,172m2 retail centre in Belgrade

• Openville

• 115,000m2 mixed-use development in Timișoara

• Atterbury Europe B.V. (‘Atterbury Europe’) was founded in 2014,

when Atterbury Property Holdings co-invested with a consortium of

private investors to form a European focused property company

• Today, Atterbury Europe’s €500m+ property portfolio includes

significant stakes in retail and office developments in Cyprus,

Romania and Serbia. The retail portfolio that makes up the majority of

Atterbury Europe’s assets is primarily comprised of dominant retail

centres in prime locations

• Atterbury Europe partners with leading developers in each market

and contributes world class development and asset management

skills to their partnerships with support from Atterbury

• RMH initially gained indirect exposure to Atterbury Europe via an

investment in Atterbury’s international SPV, Brightbridge Investments

Louis van der Watt (Founder)

• Louis co-founded Atterbury Europe

• He continues to provide strategic direction to this and

other key entities in the Atterbury Group

Henk Deist (Group CEO)

• Since joining as CFO in 2014, Henk has been

instrumental in building the portfolio Atterbury Europe

manages today

• Henk is a seasoned deal maker having spent 11 years at

Rand Merchant Bank, including a tenure as Head of

Resource Finance

• Henk holds a Master’s in Tax and is a qualified CA(SA)

13

• The renowned Atterbury Property group brings significant expertise and

assets to Divercity

• Atterbury Property fund is also seeding Divercity with assets from its

partnership with Talis Property Fund

• Ithemba Property, established in 1998, has its roots in Berea and is a

subsidiary of the Circlevest Property Group

• They provide property and asset management services, including lettings,

collections, property management, marketing and redevelopments of

buildings located in Berea, Hillbrow, Doornfontein, Marshallstown, Kempton

Park and Midrand

• In total, Ithemba’s portfolio consists of over 3,500 residential units and

18,000m2 of retail space

Core partnership initiative | Divercity Urban Property Fund(1)

Note: (1) RMHP investment is subject to Competition Tribunal approval


SELECT DEVELOPMENTS

OVERVIEW KEY SEED PARTNERS

• Divercity is an urban property fund focused on investing in and

renewing dense urban precincts rather than individual buildings on, a

collaborative basis with its seed partners

• Divercity has a preferred offtake arrangement on the seed partners’

completed developments, and enhances its yields by participating in

the development profits of these large-scale, mixed-use and mixed

income urban renewal projects

• Atterbury, Ithemba Group, Genesis Properties and Propertuity as

Divercity’s seed partners have collectively seeded the portfolio with c.

R1.7bn of gross assets

• Atterbury and Ithemba are the largest seed partners each with an

interest of at least 25% in Divercity and will collectively manage all of

Divercity’s assets

• Dual City

• 40,659m2 mixed-used development in Maboneng

• Urban 8

• 175 unit residential building in Maboneng

• Turbine Hall

• 20,761m2 commercial building in Newtown

14

Satellite partner | Genesis Properties Three


SELECT DEVELOPMENTS

• SSD Head Office

• 3,000m2 office building in Randburg

• Devil’s Peak Brewery

• 21,100m2 mixed-use building in Cape Town

• Valley View Retail Centre

• 16,000m2 retail centre in Krugersdorp

Darren Shur (Director, MD Genesis Capital Partners)

• Founded Genesis Capital Partners in partnership with

Genesis Group in 2006

• Former director at Peregrine Investment Banking focused

on their private equity portfolio

• Darren is a qualified CA(SA) having served articles at

Fisher Hoffman Sithole

Brain Roberts (Director & Founder)

• Founder & former CEO of Genesis Properties

• Former Head of Nedbank Corporate Property Finance

• Former Managing Director of Zenprop

• Over 20 years of property experience

• Brian holds a BComm. (Hons.) from the University of

Westville

OVERVIEW KEY PEOPLE

• Genesis Properties was formed in 2010 as a partnership between

Genesis Capital Partners, Kirsh Group and Brian Roberts

• RMH is invested in Genesis Properties’ 3rd fund (‘Genesis Properties

Three’) alongside Genesis Capital Partners

• There is a funding gap in the property market created by banks

providing only 70-80% of funding for new property developments

• Genesis Properties addresses this market gap by providing

mezzanine funding to developers in exchange for equity stakes in the

underlying developments in a prudent and disciplined manner

• This partnership model with seasoned developers is in line with

RMH’s investment ethos, and provides RMHP access to lucrative

property developments with market leading developers

• To date, Genesis Properties has invested in properties with a gross

property cost of R2.6bn

15

Satellite partner | Propertuity Development


SELECT DEVELOPMENTS

OVERVIEW KEY PEOPLE

• Propertuity is a leader in urban renewal, having led the development

of the flagship mixed-use Maboneng precinct that has attracted

tourists, artists, residents and developers alike to join the Maboneng

project

• A decade after establishing the Maboneng precinct, Propertuity

embarked upon a consolidation phase, to strengthen the business

and adapt to challenging property sector headwinds

• Propertuity has repositioned itself as a residential developer focused

on bringing people to Maboneng, and continues to develop and

manage its increasingly focused portfolio of residential units

• Propertuity is committed to Maboneng and will work with the

community, developers and residents to keep the precinct vibrant

Reanne van der Merwe (CEO)

• 20 years' experience and 10+ years of in property

• Former CFO of Pareto Limited, a R30bn property group

with flagship investments in regional retail centres such as

Sandton City, Menlyn Park & Cresta

• Former CFO of Mangwanani Group

• Reanne is a qualified CA(SA)

David Beattie (Asset management partner)

• Founder of Chorus Letting, a leading residential property

rental agency managing 2,000 properties across Cape

Town and Johannesburg

• Chorus Letting has been appointed to manage

Propertuity’s completed assets with their trademark

efficiency

• David is the renowned author of ‘The Expert Landlord’

• Hallmark House


• Craftsmen’s Ship


• Arts on Main

• 1,545m2 mixed-use building in Maboneng

16Source: Company reports

FY18 results

INTRINSIC VALUE NORMALISED EARNINGS

R’m 2018 2017 % change

Core portfolio 2 192 610 >100%

Satellite portfolio 23 289 (92%)

Holding company net assets (148) - 100%

RMH Property

intrinsic value2 067 899 >100%

R’m 2018 2017 % change

Core portfolio 152 (1) >100%

Satellite portfolio (124) 9 (>100%)

Holding company costs (12) - (>100%)

RMH Property

normalised earnings16 8 >100%

• The core partnership (Atterbury) performed well, particularly in terms of intrinsic value growth, RMH Property’s primary

performance metric. The increase in the core portfolio’s intrinsic value is primarily a result of Atterbury Europe’s balance sheet

restructure, in addition to a strong performance from the underlying businesses

• The satellite portfolio underperformed due to a full impairment of the equity investment in Propertuity, partly offset by strong

performance from Genesis Properties

• Propertuity has materially underperformed against expectations due to various factors including: overly optimistic asset selection

and unrealistic valuation expectations by Propertuity’s management team, limited management capacity, excessive gearing and

operational challenges

• Propertuity’s shareholders have taken significant measures to reduce losses herein including changes to strategy and

management, a rationalisation of the portfolio, and the introduction of seasoned property developers and managers

• This asset is not expected to materially impact RMH Property’s future earnings and has been impaired with adequate provisions

recognised for related contingencies

A strong performance from the core portfolio, both in terms of earnings and intrinsic value growth, more

than offsets the satellite portfolio disappointing results

17Note: 1. Eastern Europe excl. Russia 2. Year-on-year real retail sales growth

Source: IMF; Trading Economics; Company reports

Prospects to expand the RMH Property portfolio

RMHP PLANS TO DIVERSIFY THE PORTFOLIO DOMESTICALLY AND INTERNATIONALLY

EXPECTED CAPITAL DEPLOYMENTS

New medium-term assets

Equity capital

R3bn-R5bn • In the medium-term, RMHP plans to make further investments of R3-5bn

(inclusive of the committed pipeline)

• Further investments will be made domestically and internationally to support

our core partnership with Atterbury and broaden satellite partnerships, with a

bias towards European investments

• Although South Africa’s property sector has strong prospects over the long-term it continues to face significant headwinds at this stage of the

cycle. Further diversification beyond our existing international earnings stream is warranted

• There are significant opportunities for RMHP in Europe and other jurisdictions that offer access to dynamic markets and robust rand-hedged

returns particularly in Eastern European Retail, where Atterbury Europe operates

REAL GDP GROWTH OUTLOOK(1)

0.6%

1.3% 1.5%

1.7% 1.8% 1.9% 1.8% 1.6% 1.5% 1.6%

2.0%

2.7% 2.5% 2.1%

1.8%

3.2%

5.8%

4.3%

3.7% 3.3%

2016 2017 2018 2019 2020

South Africa UK EU Eastern Europe

RETAIL SALES GROWTH(1) (2)

(3.3%)

0.3%

(0.9%)

(2.8%)

(1.8%)

(1.0%)

0.3% 0.7% 0.8%

0.3%

1.1% 0.7%

3.8% 4.2%

3.1%

1.6%

2017 2018 2019 2020

South Africa UK EU Eastern Europe

18Note: Figures in millions of rands; 1. Net of RMH Property related debt; 2. Normalised earnings excl. revaluation gains

Source: Company reports; RMH analysis

Financial metrics for RMH Property

• RMHP’s investment strategy primarily focuses on development focused businesses with returns driven by capital growth (measured by intrinsic value)

• This contrasts with most JSE-listed property companies that have portfolios primarily skewed towards more mature yielding assets with predictable cash

flows and consistent dividends

• In the medium-term, RMHP will target an 15-20% p.a. gross equity return on a portfolio wide basis driven by:

‒ Development profits and other capital growth (majority of return)

‒ Stable yields on completed assets (minority of return)

RMHP GROSS INTRINSIC VALUE RMHP NORMALISED EARNINGS 2RMHP NET INTRINSIC VALUE 1

(62)

668

FY17 FY18

FOCUS ON CAPITAL GROWTH

610

2,192

289

23 -

(148)

899

2,067

FY17 FY18

Core Satellite Other RMH Property

(1)

152

9

(124)

-

(12)

8 16

FY17 FY18

Core Satellite Other RMH Property

19

FY17 FY18

Market cap net of debt Total debt

FY17 FY18

RMH excl. RMH Property RMH Property

FY17 FY18


0.2%

Note: 1. RMHP intrinsic value net of RMHP related debt 2. Only RMH Property related debt service costs

Source: Company reports; Reuters consensus forecasts for FirstRand; RMH analysis

Financial impact of RMH Property on RMH

• RMH funds RMHP’s investments by raising preference shares under RMH’s medium-term debt programme

• These investments should not have a material impact on RMH’s intrinsic value, earnings, dividends in the medium term

RMHP GROSS CONTRIBUTION TO INTRINSIC VALUE RMHP CONTRIBUTION TO EARNINGS

RMH DEBT-TO-MARKET CAP % DIVIDENDS APPLIED TO DEBT SERVICE2

1.0%

% of intrinsic value

1.7%

% of earnings

0.1%

2.3%

Debt-to-market cap

2.4% 1.4%

% of RMH’s FSR dividends

1.6%

RMHP NET CONTRIBUTION TO INTRINSIC VALUE1

RMHP RELATED DEBT AS % OF TOTAL RMH DEBT

(0.1%) 0.6%

RMHP related debt %

49.4% 59.3%

% of intrinsic value

FY17 FY18


FY17 FY18


OPTIONALITY CREATED FOR RMH WITHOUT COMPROMISING DIVIDENDS DISTRIBUTIONS

FY17 FY18

Dividends applied to debt service

Residual FirstRand dividend

20

Questions

rmh investor presentation - rmb holdings€¦ · property strategy launched first investment for...

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