PRESENTATION BRIEF

• FABSA = Family Business Association of South Africa

• 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 busy for 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?

1

THRIVING IN CHALLENGING ECONOMIC TIMES

FABASA JANNIE MOUTON

7 JUNE 2012

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?

.

.

4

Story of PSG

• Started

• Build it out

• How it changed my life

• My personal philosophies

• What I have learned – it might inspire somebody

PSG is my life

5

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

6

For the unemployed:

• Get a office

• Get a soundboard(s)

• Know yourself (SWOT analysis)

• Formulate your dream, your vision and write it down

- my dream in 1995 was my focus and still applicable

• Formulate your action plans – small steps

• Read – read – think and scheme

7

My dream in 1995

• Listed company or big stake in it (control)

• Financial services sector focus

• Raise Capital for strong base

• Management style – decentralised and delegated

• Smart people

• Move to Stellenbosch

• Small head office, relaxed environment

• Think more and do less

8

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)

9

• Communication

“Leaders are only as powerful as the ideas they can communicate. They inspire their followers to higher levels of achievement by showing them how their work contributes to worthwhile ends. It is an emotional appeal to one of the most fundamental of human needs – the need to be important, to make a difference, to feel useful and to be part of a successful and worthwhile enterprise”

– Warren Bennis and Burt Nanus

Lessons learnt

GREAT TRANSACTIONS IN THE PAST

PAG

Dream: listed financial

services business

1995 – defining moment in my life Action: Acquired a listed business that was easy to understand

Personnel placement agency

Principle: “already making tea”

1 year: R7m to R107m

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

JSE

Read and think: - Global trend - Stock exchanges

were changing from “seats”/”rights” to listed entities

Action: - 4 years we bought

rights - Cost R50m - 15% stake

Sale: - R679m!!!!

Yes - we do sometimes sell Obvious opportunity?

PAT: R30m to greater than R1bn Share price: R1 to R220

1998 - 2012

Capitec

Opportunity: - Micro

lending - Fragmented - No strong

players

Action: - Acquire various

companies (300 branches)

- Recruit top management team

Change: - Banking model - TBB banking

licence + R300m tax loss

- New age banking system

Market cap: R50m to R20bn

Focus… Focus… Focus… Focus…

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 to opportunity: - Read, think,

scheme - Understand

regulations

Action: - Execute quickly - Acquired 20% in

both PSG and Capitec in less than 2 years

Schooling in SA is failing!!!

16

Strikes

Dropping standards

Over crowding

Discipline

Unsafe

Curro vision

Initial dream:

7 schools

PSG involvement:

15 schools

Listing:

40 schools

in 2020

Today:

80 schools

in 2022?

Key: Management

R1bn profit after tax?

2009 : 3 schools 2012 : 21 schools

PSG Konsult

Opportunity: - My original

dream - SMK skills

Hurdles: - Industry changed - Struggled to make

profits

Change: - Willem Theron - Revenue sharing

model

Trusted brand

We are proud!

19

PSG Online rated “SA’s top retail stockbroker”

Business Day Investors Monthly Stockbroker of the Year award

PSG Asset Management – Raging Bull awards

PSG Flexible Fund PSG Equity Fund

PSG Konsult voted National Broker of the Year: Commercial lines and Agriculture by Santam

PSG Konsult Moderate Fund of Funds won the Morningstar award for Moderate allocations

PSG Group investments

CHECKLIST

• Exceptional management

• Easily understood

• Significant growth potential

• Strong market position

• Focused

• High barriers to entry

• Good corporate governance (integrity)

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

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%

Brands across the group

Our business philosophy

24

Charter for Extraordinary Achievement

The soul of PSG

Ultimate Empowerment

ULTIMATE GOAL CREATE WEALTH FOR SHAREHOLDERS

“He will win whose army is motivated by the same goal” ~ Sun Tzu

Framework for success

25

CHARTER FOR EXTRAORDINARY ACHIEVEMENT

We have a ten-point charter, which includes:

• vision & desire

• strategy and targets

• positive mind

• assertiveness & decisiveness

• communication

“The general who does not think ahead and takes his adversaries lightly will end up being their captive.” ~ Sun Tzu

Soul of PSG

26

(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 lose his own soul?” ~ Matthew 16:26

Ultimate Empowerment

27

(STYLE AND STRATEGY)

• develop strategic thinking

– independent and own board of directors

• delegate authority and responsibility

– create responsible managers and MD’s

• share the well-being of the company with everyone

– All employees and stakeholders should benefit and be involved

“Controlling a large force involves the same principles as controlling a small one. Just divide their numbers.” ~ Sun Tzu

Ultimate Empowerment

28

• corporate governance “The 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 empower them through trust

LIST THE COMPANY

VICTORY

29

PURPOSE & FREEDOM

for

EVERYONE AT PSG

and

CREATION OF WEALTH

for

STAKEHOLDERS

“The wise general... Rewards his soldiers with the spoils of victory.” ~ Sun Tzu

Wealth creation

30

• “Men had always though of wealth as a static quantity – to be seized, begged, inherited, shared, loathed or obtained as a favour”

• “Americans were the first to understand that wealth needs to be created”

Ayn Rand

• “Wealth cannot be distributed until it is created, what intervenes with the creation intervenes with the distribution”

WR Hearst

Wealth Creation

31

“On the other hand, if you take the wealth you confiscated from one person and give it to someone else, are you encouraging the recipient to build his or her own wealth?”

Stephan Mulholland

Who creates wealth?

32

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

Making a contribution

33

• 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

QUESTIONS?