INVESTOR PRESENTATION

Fund Raising for Labat in relation to the acquisition of profitable businesses in the
Logistics distribution and Transport Sector
 “THE NEW DAWN IN THE LOGISTICS INDUSTRY”

Our vision is to be a leading diversified industrial player with initial

focus in the logistics distribution & transport sector operating in
South Africa and sub-Saharan Africa providing transport
infrastructure related services

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 Labat Background & History

 Labat was founded and incorporated in 1995 by Brian van Rooyen and Victor Labat
and listed on the JSE in 1999 as one of the first listed BEE companies.
 Labat Africa Limited (“Labat” or ”Labat Africa”) is a local black owned and managed
Investment Holding Company, listed on the Venture Capital Market of the
Johannesburg Stock Exchange (“JSE”).
 Labat is currently a level 2 BBBEE contributor and is 57% black owned with 34% of
the company black women owned. This will however change with the proposed
acquisitions.
 Through its main subsidiary, South African Micro-Electronic Systems (Pty) Ltd
(“SAMES”), Labat Africa is engaged in the design and marketing of integrated
circuits.

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Labat Background & History

 While the company’s initial focus in 1995 was on the transformation of the Public
Sector as a major Government contractor providing consulting and related services,
it has now expanded its footprint into a variety of high technology and infrastructure
investments that are geared to deliver logistics and distribution services.

 In light of the significant growth opportunities in the logistics sector in general, Labat
has already acquired Labat Logistics and is in the process of the acquisition of three
additional logistics operators in South Africa to create operational scale.

 Labat has identified the Logistics and Transport sector as one of the fastest growing
sectors in the next decade and made a decision to target profitable businesses in
this sector.

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Labat Investment Strategy in the
Logistics and Transport sector

 Labat Africa Limited (“Labat”) has embarked on a process of raising capital in order to create a
fund to target acquisitions of established business in the range of R40m to R300m in the logistics,
distribution & transport sectors.

 Labat Africa has already acquired Labat Bulk Logistics and has concluded agreements to acquire
100% ownership of three additional fuel and logistics operators in South Africa to create
operational scale and further expand its own logistics operations.

 The announcement and implementation of the new stricter BEE codes with effect from 1
May 2015 has created a significant opportunity for companies controlled by BEE
shareholding to secure business and this will be a catalyst for Labat’s desire to accelerate
the building of a well-funded transport and logistics company.

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The Rationale of the Investment in
the Logistics and Transport sector

• The Transport and Logistics sector is a vehicle for growth in the African continent’s
economies and in South Africa it equates to around 11,2% of GDP.

• South Africa is home to the farthest –reaching and highest -quality transport network
on the African continent.

• After years of underinvestment in maintenance and development the African

continent is revitalising its transport networks which will see a growth in cross border
trading for commodities and goods.

• The SA Government concerted efforts to launch large scale , long term capital
investment programmes spending R407billion on new and upgraded infrastructure
across transport, energy, water and sanitation will benefit Labat’s diversified
transport portfolio.

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The Rationale of the Investment in
the Logistics and Transport sector

• The rapid pace of investment and development in recent years on road and rail infrastructure in
the African continent is considered to be a reflection on the sector’s many strengths and long –
term potential for continued growth.

• Road transport is in high demand – While a fair amount of investment is made by stakeholders to
upgrade the rail networks on the African continent to meet the future demand, currently and also in
the foreseeable future the transport of goods is still largely reliant on road transport – this bodes a
massive opportunity for FCMG logistical and transport companies.

• The Labat portfolio is very well diversified , with the transport and distribution of fuel, cement and
water, currently the three largest contributors to our revenue base , and with the continued
investment in infrastructure and transport projects across Africa our targeted companies will
enjoy above average sustainable growth.

• The landscape in the South African political environment with the aggressive transformation
programmes will hugely benefit Labat being a Level 2 BEE Company.

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Labat Investment Strategy

• Labat is engaged in an active acquisition search programme in order to identify and develop a
pipeline of acquisition targets in support of the logistics growth strategy

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Labat Investment Assessment
Parameters

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Acquisition 1 – Labat Logistics

•Labat Logistics was established in 2016.

•Labat Logistics provides transport and logistics

services to the market.

• Labat Logistics operates two divisions, one

division is comprised of its own fleet of 10
vehicles and the other is a brokerage business
that was established with key JV partners with
a vehicle fleet in excess of 100 side tipper
interlinks.

•Forecast Revenue of R150mil and NPAT of

R16mil in 2019. Purchased at a PE of 3.2

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Acquisition 2 – Force Fuel

 Force Fuel was established in 1994.

 Force Fuel is a company that specializes in
the full spectrum service delivery of bulk fuel
products.
 The company operates out of its own storage
depot that is permanently replenished with
fuel loaded exclusively at major fuel
refineries .
 The fuel transportation is facilitated by our
extensive fleet of 17 tankers and our
subcontractors fleet.
 Forecast revenue of R994mil and NPAT of
R16mil in 2019 . Purchased at a PE of 1.9

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 Acquisition 3 – Elf Trans

 Elf Trans was established in 1995.

 The company’s major operational function is
the transport of dry bulk commodities
throughout South Africa and the greater
Southern Africa region.
 The business operates a fleet of 80 dry bulk
tankers and horses with a diversified fleet of
trailers that services various aspects of the dry
bulk logistic sector.
 Major clients are PPC and Lafarge
 Forecast revenue of R171mil and NPAT of
R20mil in 2019. Purchased at a PE of 2.75

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 Acquisition 4 – Centenary Tanker Hire

 Centenary Tanker Hire was established in

1986.
 The company is a specialist water tanker hire
company.
 The company specializes in the hire of water
tankers and water pumps to the construction
and mining industry as well as local and
provincial government departments.
 The company also distribute drinking water to
the above client base.
 The company has a fleet of 89 vehicles.
 Forecast revenue of R54mil and NPAT of
R15mil in 2019. Purchased at a PE of 4

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Transaction Terms for the 4
Acquisitions
 Labat will acquire 100% of the businesses for a consideration of R195million. The forecast NPAT
for 2019 FY for the group is R68million and this equates to an average forward PE of 2,86 for the
4 companies at the effective purchase date.

 The financing will be structured as follows: R45million by way of a fresh issue of shares to the
vendors at an issue price of 100 cents per share, the balance (R100million) from a combination
of equity ,preference shares or debt funding.

 The total number of shares in issue post the transaction will be approximately 300,000,000
(Three hundred million). The transaction is subject to regulatory approval.

 Pursuant to the transactions Labat will transfer its listing from the VCM board to the logistics
sector of the Main Board of the JSE.

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Transaction Summary for the 4
acquisitions

Elf Labat
Centenary Force Fuel Total
Trans Logistics

Acquisition value R55m R60m R50m R30m R195m

Labat Equity
R15m R50m R30m R95m
contribution

Funding requirement
R40 m R60m R100m
for the acquisitions

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 Target Company Financial Indicators:
Forecast for 2019- 2021

Yr1 Yr2 Yr3 Yr1 Yr2 Yr3 Yr1 Yr2 Yr3 Yr1 Yr2 Yr3

Revenue R171m R204m R265m Revenue R54m R60m R68m Revenue R994m R1.3bn R1.6bn Revenue R150m R210m R274m

EBIDTA R34m R49m R64m EBIDTA R19m R22m R25m EBIDTA R39m R52m R72m EBIDTA R22m R34m R56m

NPAT R20m R31m R40m NPAT R15m R17m R19m NPAT R16m R25m R40m NPAT R16m R25m R40m

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Key Consolidated Historical Figures
Labat Group Logistics simulated
2016 2017 2018
figures
REVENUE R995m R865m R765m
EBIDTA R58m R56m R40m
** EBITDA OF AFA &FF R32m R16m R5m

NPAT R45m R34m R18m

**NPAT OF AFA &FF R26m R12m (R2m)

ASSETS R156m R321m R231m

LIABILITIES R69m R195m R168m
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** The passing away of Andre from AFA
as well as the restructuring of the
working capital facility had a enormous ** Indicative
impact on the business of FF – this has figures
however changed dramatically for the
2019 FY
Group Consolidated Balance Sheet
for the period 2019-2021

Labat Group Logistics simulated

2019 2020 2021
figures

ASSETS R401m R497m R649m

CASH ON HAND R69m R138m R262m

SHORT TERM LIABILITIES R84m R115m R148m

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LONG TERM LIABILITIES R191m R165m R150m
Key Consolidated Financial Indicators

Labat Group Logistics indicators over

2019 2020 2021
3 years (year on year)
Revenue R1370m R1834m R2284m

EBIDTA R110m R152m R212m

NPAT(including loan repayments) R52m R82m R125m

Free Cash Flow after loan
R36m R70m R124m
repayments(interest and capital)
Funding costs at 10,5% (Interest only) R10,5m R9,9m R9,2m
Funding costs at 10,5% interest and
19 capital over a 10 year period R17m R17m R17m

Value (based on PE multiple of industry

R622m R837m R1484m
average – 11.97)
Labat Africa share price (Based on
R2,07 R2,79 R4,94
industry average – 11.97)
 Investment Rationale

Labat Africa Ltd

Long name: Labat Africa Ltd  Strong incentivised management team
Short name: Labat (LAB)
JSE Sector: VCM  Superior operational platform provides significant
competitive advantage and ability to scale up in
Closing Prices (05/06/2018) support of growth strategy
Close 44c High 44 Low 44c
 Planned expansion of key customers
Shares in issue: 259 202 297  Acquisition price valuation discounted to intrinsic
industry multiple value to average industry multiple
JSE Transport & Logistics Sector
 57% black owned and 34% black women owned with
Excl Big a level 2 BEE status provides revenue upside.
Company Market Cap PE Players
Significant value accretive growth strategy attractive
IMPERIAL 41 089 071 788 15.20
SUPER GROUP 13 065 929 115 11.75 upside for investors.
GRINROD 9 981 822 880 17.24  Labat will become the only black owned logistics
ONELOGIX 1 212 897 151 12.87 12.87
company and will rank nr 6 in the sector prior to the
VALUE GROUP 813 321 860 7.84 7.84
LABAT (2019 execution of the business pipeline in phase 2. After
622 000 000 11.97 11.97
figures)
SANTOVA 547 979 914 7.63 7.63 phase 2 it will rank number 2 in the sector.
Average 11.97 9.91
The Benefits of the transaction

• The individual companies have managed their balance sheets conservatively , with declining
gearing over the last few years. The consolidated group’s balance sheet after the acquisitions
have capacity to fund growth initiatives and corporate activity, which will contribute to additional
growth and create shareholders value.

• The strong cash flow generation of the consolidated group will assist with the working capital
requirements of the individual companies.

• The growth in earnings through horizontal integration and selling products within the group is
substantial – especially Force Fuel who can grow its revenue stream in excess of 40% by just
selling fuel to the group companies.

• Force Fuel experienced a dramatic slow down in revenue after Andre (the previous owner)
passed away in 2014. This is evident in the historical figures of 2015-2017. With the sale of the
business to the new team as well as the restructuring of the funding structure which will free up
working capital the revenue growth is expected to accelerate at growth rates of between 30 and
40%.

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The Benefits of the transaction

• The creation of shareholder value is substantial with the initial equity pick up of R400
million based on the industry average PE because of the structure and pricing levels
of the acquisitions.

• The average forward PE where we acquired the businesses is 2,86 and the industry
average on the JSE is currently trading at 11,9. This will have a marked effect on the
rerating of the Labat share price.

• In addition to the valuation multiples which Labat has bought the companies, earnings
could be poised for a significant uptick in an improving economic environment where
revenue growth resumes as well the added advantage of being a level 2 BEE
contributor

• The cost savings by moving all the operations to one large premise as well as the
cost savings on group shared functions like HR , secretarial and accounting functions
will add substantial savings to the group annually. This figure is not included in the
forecast as yet.

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Labat Corporate Structure after
Acquisitions
•The proposed transaction is to conclude a entire share acquisition of the target businesses for a
purchase consideration of R195million.

•The target shareholders are willing to dispose of their entire equity in a buyout acquisition
structure that will result in the businesses of the targets being wholly-owned subsidiaries of
Labat.

•The vendors and management will retain shareholding in Labat of no less than 45 million
shares with a transaction value of R45m and a minimum holding period of eighteen months

•The vendor’s, Mr. Andre Diederichs, Steven and Mike Boere, Tebogo Mogapi and Gorden
Walters will be deployed within the Labat Group of companies. They will provide strategic input
and facilitate a smooth handover.

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 Labat Organisational Structure after
Acquisitions
Brian Van Rooyen (CEO)
LABAT AFRICA LIMITED Tebogo Mogapi (COO)
Gorden Walters (CFO)
David O Neal (M&A)
Alred Van Rooyen (Corporate Affairs)
Rowena Majiedt (Non Exec Chair)
Rustum Mohamed (Non exec director)
Beverley Anne Penny (Non exec director)

SOUTH AFRICAN MICRO-

LABAT GROUP
ELECTRONIC SYSTEMS
LOGISTICS
PTY LTD

Andre Diedericks (Joint CEO)

Stanton Van Rooyen (joint CEO)
Terry Johnson (CFO)

LABAT BULK LOGISTICS ELF TRANS FORCE FUEL CENTENARY TANK HIRE

Andre Diedricks
Gorden Walters Steve Boere
Stanton Van Rooyen Norman Van Wyk
Tebogo Mogapi Mike Boere
Cassie Van Der Bank Sibusiso Miye
Lesego Mogapi Andre Van Der Plank
Anton Swanepoel Lourens Verwey
Luke Botha Alred Van Rooyen

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Labat Group Logistics – Management team

Within each division of Labat Group logistics the requisite back-up and support staff are in place thereby
ensuring appropriate management succession. The group employs approximately 400 personnel.

Brian Van Rooyen

Brian is a practising member of the Institute of Certified Public Accountants in South Africa. He has more than 25 years

of business experience and during this time he held various positions in Industry including directorships of SBDS,

Italtile, World Rugby Limited, ZANZAR Limited, SAFDICO, Leeuw Mining ,SA Rugby , Gauteng Cricket Board as well

as a number of positions within the Labat Group of Companies.

David O’ Neill
David is a Chartered Accountant with over 30 years of commercial experience gained internationally in a variety of

industries both in the financial field and in general management. Prior to joining Labat, David served as a Consulting

Director for a large Management Consulting practice where he engaged in a variety of investigations and consulting

assignments. He will step down as Chief Financial Officer of the group after 20 years but will remain within the group

to provide support.

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Labat Group Logistics – Management Team

Tebogo Mogapi
Tebogo has over 30 years of extensive commercial experience at the helm of major corporations. He has held various
positions in industry including CEO of MTN Swaziland, CEO of MTN Liberia and has headed up the special projects
division in the MTN group. He possess a wealth of general management experience and skills developed over a period
of more than 30 years working with some of the best companies in Africa and the World. He will join Labat Africa as an
executive director.

Gorden Walters
Gorden is a seasoned business professional with over 27 years of extensive experience with over 22 years in a
corporate and project finance environment. He has had various senior executive and board roles with over 17 years in
the energy sector where he spent over 9 years with a leading power utility company in Namibia in the role as Group
CFO for 5 years. He has been instrumental in the listing of a company on the Africa Board of JSE in 2009. He is
currently the CFO of Force Fuel and has various board memberships, both in South Africa and Namibia. He will join
Labat Africa as an executive director and will replace David O Neal as the group CFO

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Labat Group Logistics – Management Team

Andre Diedericks
Andre retains 37 years of professional experience within the transport management and
logistics sector. He is the CEO of Elf Trans one the biggest companies operating in the dry bulk
logistics sector in South Africa and Southern Africa. He possess a wealth of experience,
relationships and understanding within the transport and logistics sector in SA. Andre has
taken up 15 million Labat shares and will assist in the consolidation of the business into Labat
Logistics. We have agreed that Andre will remain in the group for at least two years.

Stephen Boere
Stephen is one of the founding members of Centenary Tanker Hire and has 32 years experience as a
specialist in the water tanker hire logistics sector. He has grown Centenary Tanker Hire into a
company that has one of the biggest privately owned water tanker hire fleets in South Africa. Stephen
and his brother Hans will continue to run the operations for the next 18 months.

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Labat potential acquisitions/business
pipeline in phase 2

• Labat has engaged with four other potential acquisition targets which are very profitable, well
established businesses in different sectors of the transport and logistics sector.

• These businesses will not only compliment our current portfolio but will also add to our
diversification model.

• Without mentioning names the salient features of the businesses are as follow:

– Target one: A very well established fuel distribution and transportation business with
revenue of R5billion and EBITDA of R86million
– Target two: A portfolio of 34 fuel stations across South Africa which will add to the
distribution network and revenue growth of Force Fuel with potential fuel revenue in excess
of R2billion per annum.
– Target three: A specialist drill hire company in the mining industry with a market share in
excess of 45% and revenue of R200million and EBITDA of R22million
– Target four: The establishment of a Labat Financial Services platform with an established
financial services company with potential net profit of R24million per annum for the group.

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Labat Current Share information

Link Private Equity/ Management 40%

5%
Peregrine

Brian Gutkin & Associates 7%

IDC 4%
Public Shareholders (balance) 44%
 Labat Corporate Information

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Labat Logistics Key Client Base

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011 675 6841, www.labat.co.za, labatafrica@mwebbiz.co.za