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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?
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THRIVING IN CHALLENGINGECONOMIC TIMES
FABASAJANNIE MOUTON
7 JUNE 2012
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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?
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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
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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
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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
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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
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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)
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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
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GREATTRANSACTIONS
IN THE PAST
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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
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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
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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?
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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
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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
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Schooling in SA is failing!!!
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StrikesDropping standards
Over crowdingDiscipline
Unsafe
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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
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PSG Konsult
Opportunity:- My original
dream- SMK skills
Hurdles:- Industry changed- Struggled to make
profits
Change:- Willem Theron- Revenue sharing
model
Trusted brand
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We are proud!
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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
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PSG Group investments
CHECKLIST
Exceptional management
Easily understood
Significant growth potential
Strong market position
Focused High barriers to entry
Good corporate governance (integrity)
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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
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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%
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O b h l h
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Our business philosophy
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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
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Framework for success
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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
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Soul of PSG
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(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
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Ultimate Empowerment
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(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
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Ultimate Empowerment
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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
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VICTORY
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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
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Wealth creation
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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
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Wealth Creation
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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?
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Who creates wealth?
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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
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Making a contribution
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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
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QUESTIONS?