Libstar Holdings (LBR) H1 2024 earnings summary

Executive summary

• Revenue grew 5.2% year-over-year for H1 2024, driven by strong performance in Ambient Products and price/mix improvements, despite a slight volume decline of 0.2%.

• Gross profit margin increased to 21.5% from 21.2% in H1 2023, reflecting effective price realization and cost management.

• Normalised EBITDA rose 13.4% and normalised HEPS increased 11.4%, with basic HEPS up 32.4% year-over-year.

• Strategic simplification advanced with exit from Chamonix Spring Water and sale agreement for Chet Chemicals, focusing on value-added food categories.

• Launched the One Libstar culture campaign, enhancing collaboration and performance across divisions.

Financial highlights

• Revenue up 5.2% year-over-year to R5,813.2m; gross profit margin at 21.5% (up 0.3pp).

• Normalised EBITDA grew 13.4% to R448.9m; normalised EBIT up 5.3%.

• Normalised HEPS increased 11.4%; total diluted HEPS up 32.4%.

• Gearing ratio improved to 1.6x normalized EBITDA, down from 2.1x; ROIC improved to 9.6%.

• Capex down 35.7% to R80.4m; net working capital days increased to 67.

Outlook and guidance

• Strategic priorities for H2 include further portfolio simplification, operational model reviews, and growth initiatives in retail and exports.

• Expect continued margin improvement and cost efficiencies, with a target gearing ratio below 1.5x by year-end.

• Anticipate subdued consumer demand but expect relief from potential interest rate cuts and retirement system reforms.

• Sufficient inventory in place to support planned promotional activity in H2; strong export pipeline and new product launches anticipated.

• No interim dividend declared; annual dividend policy maintained.