Libstar Holdings (LBR) CMD 2026 summary

Strategic direction and transformation

• Emphasis on the Simplify, Grow, Sustain (SGS) strategy, focusing on operational efficiency, organic growth, and sustainability, with a shift from an acquisitive to an integrated, category-driven approach.

• Portfolio streamlined from 20 business units to 2 super-categories (Ambient and Perishable), 70 sub-categories, and 98 managing executives, reducing management layers and exiting non-core or underperforming businesses.

• No current focus on acquisitions; priority is maximizing efficiency and profitability of existing business units, with investment in people and leadership development through a 10-year people strategy.

• Ongoing simplification includes ERP consolidation, shared services, SKU rationalization, and major facility projects such as Montagu Foods and Cape Herb & Spice consolidations.

• AI, technology, and data-driven decision-making are leveraged for operational efficiency, demand planning, and innovation, with attention to demographic shifts and government policy.

Market environment and growth opportunities

• South African FMCG market is highly constrained, with low GDP growth, high unemployment, and persistent inflation, driving value-seeking and downtrading among consumers.

• Retail landscape is fragmenting, with retailer power growing, more reward programs, premiumisation of private brands, and normalization of private label growth.

• Strong growth in discounters, independent and informal trade, and food service channels, with traditional trade outperforming modern trade due to accessibility and convenience.

• Food service and exports are identified as under-indexed channels with significant growth potential, supported by brands like Lancewood, Red Lion, and Denny.

• Innovation and agility in product development, leveraging global trends and premiumisation strategies, are central to maintaining competitiveness.

Financial performance and outlook

• 2025 marked a turning point, with multiyear declines in EBIT and EBITDA arrested, HEPS/EPS above 2022 levels, and ROIC reaching 10.9%, close to the 11% WACC.

• Group revenue grew at a 5.9% CAGR from 2022 to 2025, with retail/wholesale as the largest channel, and food service and exports showing strong growth when excluding specific volume losses.

• EBITDA margin improved to 8.7% in 2025, with targets for 2028: Group 9.8%, Ambient 12.8%, Perishables 8.2%; revenue growth guidance to 2028: Group CAGR 5.5%, Ambient 6.2%, Perishables 4.6%.

• Margin improvement is structural, not cyclical, with 2025 as the base for further expansion; capital projects and operational improvements in snacking, baking, and condiments expected to drive future margin gains.

• CapEx focused on high-return projects, with working capital and gearing maintained within targeted bands; dividend policy revised to 2x–3x cover, share repurchases underway, and debt maturity extended to 2028.