Remgro Limited (REM) Earnings Call Transcript & Summary

[Foreign Language] Good morning, ladies and gentlemen. I'd like to welcome you at the 2024 Annual General Meeting of the company that will be conducted as a hybrid meeting being both in-person and by electronic communication. A quorum is present, and I declare the meeting duly constituted. [Foreign Language] So next year, we'll revert back. But one of the benefits of AI and electronics is that you can today buy ear pods, ear plug, that can translate 144 languages in real time. It won't help Anton with his strive to learn French because you can learn what the other people say, but unless you walk around with ear pods for everybody that is French that you wish to speak to, they can't hear you. Now we've all seen these pocket translators where you can speak in -- you speak in English and you can show it to the taxi driver and repeats, but this will be real live in the future. So hopefully, next year, we will have proper translation equipment. Advise that voting on all resolutions will be conducted by means of a poll. Such voting will be conducted electronically through the electronic online voting facility and voting devices provided by Computershare, the Transfer Secretaries of the company. For the purposes of the poll, I nominate [ Mr. Darren Atwell ] of Computershare and Mr. André de Lange of Cliffe Dekker Hofmeyr to act as scrutineers. Proper notice of the meeting was given in the annual report of the company, which includes the annual financial statements, the directors' report, the auditor's report, the Audit and Risk Committee report and the Social and Ethics Committee report for the financial year ended June 30, 2024. Our Chief Executive Officer, Mr. Jannie Durand; Chief Financial Officer, Neville Williams, and the Chairpersons of the Board statutory committees are present at this meeting to address any questions from shareholders at the correct time. The annual report has been in your possession for some time, and I request that the contents of both the notice of the meeting and the rest of the annual report are considered as read. Will somebody please second this motion? Thank you. Anybody against it? Thank you. The motion is accepted and the notice of the Annual General Meeting and the content of the annual report will be considered read. We shall now proceed with the meeting. We will begin with a short demonstration of how you can participate and vote in this meeting, and we will then proceed with the meeting. [ Andrej ], where are you? Okay. Could you please come up and just show us? And hope, that's the correct pronunciation.

Thank you, Chair, and good morning to you, and good morning to the Board. Good morning, everybody, both in the room and online. As the Chair mentioned, this is a hybrid meeting, so we do have participants online. I'll try and keep this as short as possible, but I will be including some housekeeping as well as technical aspects of how this is all going to work. Firstly, I will give instruction to those of you in the room, and then I will give instruction to those that are online. So for those of you that are in room, if you are entitled to vote and you have chosen to vote at this AGM, you would have received a handset that looks like this. It looks like an old BlackBerry that is on purpose, as well as a smart card. If you could first just make sure that your smart card is inserted correctly, that's with the gold chip facing you in the top of the handset. And in the gold bar at the top, you should see your name or the company you're representing. You'll notice that the voting is currently open on all the resolutions, and voting will remain open until after the Q&A is done and the Chair declares the voting closed. To vote, you'll just use the blue track ball in the middle, and you can scroll up and down through the list of resolutions. I suggest starting on ordinary resolution 1, press on the blue track ball. You'll see the text for the resolution. You can then press on the green button to vote and you can then select your option for, against or abstain. And once you've selected that, you can click on send vote, which is the green button again. You'll see a received message and you can press the green button to move on to the next resolution. And you'll repeat that process for each of the resolutions. Once you get to the end, you'll get a list of all the resolutions on how you voted. And if you wish to change your mind, scroll to the relevant resolution and change your vote and then you'll go back to the list. With regards to Q&A, if you wish to ask a question at the AGM in the room, we ask that you please stand so that you are easier identifiable. Please wait for a handheld microphone and please speak into a microphone. Otherwise, the virtual participants won't be able to hear your question. So please wait for the microphone to come to you. Please just identify yourself so that the Board knows who they're talking to, and you can then ask your question at that point. If anybody in the room does struggle with the voting or the handsets, please just raise your handset up and one of my colleagues in the room will be glad to come and assist you. Once we're done, if I could ask that you hand the handset back to registration where you got it. Right. So for those of you online, Voting is also open. And for those of you that received an access e-mail, you would have had a unique user name and password and you would have logged into the meeting. And at the top of your screen, you will have a voting tab, you'll click on that, and you will then have what looks like an electronic ballot form, and you'll just click on the responses as you wish through all the resolutions. You will also see a received message. And if you wish to change your mind, just click on whatever option you want to change it to. Our system will take whatever the last option is that you've chosen. [Voting]

With regards to Q&A, slightly different this year from last year. You will still have the ability to send messages. To do that, you'll go to the messaging tab, type in your message in the Ask a Question box and then hit the send key to the right-hand side of that, and your message will then come through. We have also incorporated verbal questions from virtual participants. So as a virtual participant if you wish to ask a verbal question, you can either dial the phone numbers that are on info screen or you click on the Request to Speak button that you will find at the bottom of your webcast screen. You will then dial into an operator, who will test the functionality of your microphone so that we can make sure that when you ask your question, everybody here will be able to hear it. And they will place you into a queue at which point you'll be able to carry on listening to the meeting proceedings. Please wait for the Chair or Mr. Durand to acknowledge you to say we have an audio question from this person, please go ahead, at which unmuted and free to ask your question. Please stay on the line if you do wish to ask a follow-up question rather than disconnecting and trying to reconnect. So please stay online until your interaction is complete. For those of you online, if you do struggle, we do have a WhatsApp line and an e-mail address there that you can contact to help with any support queries, and we do have support staff that are online. And with that, Chair, I'll hand back to you.

Well, I hope you understood that. We shall now proceed with the meeting. The notice of the meeting contains 16 ordinary resolutions and 4 special resolutions. Although after proposing each resolution, I will ask you to indicate your votes in respect of that resolution. You can vote on any of the resolutions at any time until we close the voting on all the resolutions. I will allow questions pursuant to the motions received by e-mail in advance of the AGM as well as any further questions raised at the meeting to be dealt with after I have tabled the last resolution on the agenda. Shareholders who are attending the AGM remotely will also be given the opportunity to verbally ask questions in the manner as described by the representative [ Andrej ]. Approval of the annual financial statements. I now propose the adoption of ordinary resolution #1 and wish to move that the audited annual financial statements of the company and the group for the financial year ended June 30, 2024, be accepted and approved. Will somebody please second this motion? Thank you. I call on you now to indicate your votes in respect of ordinary resolution #1. Appointment of auditor. I now propose the adoption of ordinary resolution #2 and propose that the appointment of Ernst & Young as the company's auditor be accepted and approved and that it be noted that [ Mr. Michael Rapson ] will undertake the audit during the financial year ending June 30, 2025. I call on you now to indicate your votes in respect of ordinary resolution #2. 3 to 7, election of directors. In terms of the provisions of the memorandum of incorporation of the company, 1/3 of the directors are required to retire at this Annual General Meeting. All these retiring directors may be reelected and have presented themselves for reelection for a further term. A short curriculum vitae of each director is included in the annual report and no other nominations have been received. I now propose that [indiscernible] Durand, Malherbe, Neethling, Robertson and Anton Rupert be reelected as directors of the company for a further term. Will somebody please second the motion? Thank you. I call on you now to indicate your vote separately in respect of ordinary resolutions #3 to 7. 8, Appointment of Alternate Director. In terms of the provisions of the memorandum of incorporation of the company, the Board has the power to appoint any person as a director or an alternate director provided that such appointment is confirmed by shareholders at the next Annual General Meeting. I now propose that shareholders confirm the appointment of Mr. Vosloo as an Alternate Director to Mr. Durand. A short curriculum vitae of Mr. Vosloo is included in the annual report. I call on you now to indicate your votes in respect of ordinary resolution #8. 9 to 11, election of members of the Audit and Risk Committee. In terms of the provision of the Companies Act, the Audit and Risk Committee comprising of at least 3 members must be elected at this Annual General Meeting. The directors concerned have presented themselves for reelection by the shareholders. I now propose that Mr. De Bruyn and Nieuwoudt and Rantloane be elected as members of the Audit and Risk Committee for the financial year ended June 30, 2025. Will somebody please second the motion? Thank you. I'll now call on you to indicate your votes separately for each member of the Audit and Risk Committee in respect of ordinary resolutions #9 to 11. 12, general authority to place 5% of the unissued ordinary shares under the control of the director. I propose the approval of ordinary resolution #12, proposing that 5% of the company's unissued ordinary shares be placed under the control of the Board for issue as a general authority subject to the provisions of the Companies Act, memorandum of incorporation and listing requirements. Will somebody please second this motion? Thank you. I call on you now to indicate your votes in respect of ordinary resolution #12. Nonbinding advisory votes on remuneration policy and remuneration implementation report. In terms of the listing requirements, the company's remuneration policy and remuneration implementation report must be tabled every year for a nonbinding advisory vote by the shareholders of the company at the Annual General Meeting. I now propose that the company's remuneration policy and the remuneration implementation report be endorsed by way of nonbinding advisory vote. Would somebody please second the motion? Thank you. Please indicate your vote separately by way of a nonbinding adverse advisory vote on the company's remuneration policy and remuneration implementation report in respect of ordinary resolutions #13 and 14. Amendments to the rules of the Remgro share plans. I now propose the adoption of ordinary resolutions #15 and 16 as set out in the notice of the meeting. These resolutions proposed to grant approval for the amendments of respectively, the conditional share plan and share appreciation rights is set out in the notice of the meeting in terms of the JSE listing requirements. Somebody please second this motion. Now before voting, I just want to say here, interesting thing is how we as individuals will react to incentives. Now for instance, if you look at the American tax code, it was very carefully designed to incentivize American citizens to build the American dream. So if you really analyze it, you'll see in the background the logic of it, it incentivizes studying, it incentivizes building families, home ownership and children. So if you really analyze the crafting, there's a goal behind it. That's why America works. Whatever they do, they are proper incentives. Now over the years here, there was this constant pressure from journalists and shareholders. And discount to NAV. I'm not interested in discount to NAV. I'm interested in sustainable free cash flow. But the incentive was there and NAV was very important. I really think the new one aligns the incentives with all of us as shareholders. And that was the purpose of it. People react to incentives, and I believe the incentives are now better aligned. I call on you to indicate your vote separately in respect of ordinary resolutions 15 and 16. Approval of directors' remuneration, the Board recommends that the directors remuneration for services rendered as directors for the financial year ending June 30, 2025 as set out in special resolution #1b approved. I propose the special resolution #1 as set out in the notice of the meeting. Will somebody please second this motion? Thank you. Call on you now have to indicate your votes in respect of special resolution 1. 18, general authority to repurchase shares. Special resolution #2 is proposed to grant the Board the general authority to approve the repurchase by the company or any subsidiary of the company of up to 10% of the company's ordinary -- issued ordinary shares. I now propose the adoption of special resolution #2 as set out in the notice convening this meeting. Will somebody please second the motion? Thank you. I call on you now to indicate your votes in respect of special resolution #2. Then 19, general authority to provide financial assistance for the subscription and/or purchase securities in the company or in related interrelated companies. Special resolution #3 is proposed to grant the Board the general authority to authorize the company to provide financial assistance in respect of the subscription and/or purchase of the securities of the company or related companies. I propose the adoption of special resolution #3 as set out in the notice convening the meeting. Will somebody please second this motion? Thank you. I call on you not to indicate your vote in respect of special resolution #3. 20, general authority to provide financial assistance to related and interrelated companies and corporations. Special resolution #4 is proposed to grant the Board the general authority to authorize the company to provide financial assistance to related and interrelated companies and corporations of the company. I now propose the adoption of special resolution #4, will somebody please second this motion? Thank you. I call on you now to indicate your votes in respect of special resolution #4. Before closing the meeting, we will now address any questions pursuant to the resolutions tabled at today's Annual General Meeting. I will firstly take questions from the floor, I guess, and I'm going to sit down, Jannie. Because you've got -- Jannie's got the screen in front of him.

Thanks very much. Before I come to my question on the resolutions, I'd just like to take this opportunity, Mr. Rupert, to commend you on the way you handle your Richemont, which you chair the actual analyst presentations. It's wonderful to see a presentation where the Q&A is allowed to run for 104 minutes, and it's high level stuff. It's -- I know you don't like using your examples elsewhere, but it is a wonderful example which needs to be taken note of. So very well done on that.

Thank you.

And then I'd like to just move on to something we've spoken about before ownership, and it relates to REM. And specifically, you've introduced minimum shareholding requirements last year, which is great news, but I'd like to explore that a bit more. At the 2019 AGM, the chair spoke powerfully on share ownership essentially saying if the directors all earned a lot of shares that watch the management and make sure that performance was obtained. It's interesting. This is supported by some heavyweight research, ISS Analytics Institutional Shareholder Services, it's a huge organization, did a study. And they found a direct link between how CEO ownership and returns, specifically where the CEO held a lot of money in shares, the EVA margins and EVA momentum were far superior. And it goes to what you said a lot because there, it only kicked in once the CEO had $50 million or more. And locally, while we don't have any empirical research that I'm aware of, we just need to look at the winners. For instance Capitec, which has probably been the most successful share on earth on the JSE, disclosed in the annual report that the CEO has 103x his total guaranteed pay in physical shares. And then we're fortunate enough, Shane Watkins, you all know sent us top analyst, Jarred Houston, yes, and he confirmed that he's done a lot of work on this, and there's also a link between ownership and performance. So I think it's well understood, and it's against that background that people have brought in minimum shareholding requirements. We've been a bit slow here in SA, but they're now there. And if I can start off by saying it's interesting -- it focuses largely on the CEO, so I'm going to stick to that. So as I understand it, Remgro's minimum shareholding requirements is 3.75x the CEO's total guaranteed pay. That's higher for South Africa, but it's exceptionally low compared to say, S&P companies. And if I can give you some examples, for instance, JPMorgan Chase, there, the CEO has to hold 50x his basic salary in shares. And he's got to keep adding to it with all his share awards. So Jamie Dimon, for instance, has something like 80x his guaranteed pay in shares. And he's not allowed to pledge or hedge those shares. And the next level down, the operating committee have to hold up to 40x. Companies like Microsoft and Apple 10x. So don't you think that while it's a great step forward, which you've done, you need to up these requirements.

Okay. I'll answer that. You're talking, a, about a lot of companies like Capitec where they have founders involved. It's first generation. Remember they're all friends of mine. So in fact, Michiel used to be a colleague of mine and a friend from [indiscernible] from 1969, and I applaud them. I was on the Board at Daimler Chrysler, Advisory Committee for 12, 15 years, I can't remember. And I was the only person in the Advisory Board, the [indiscernible], the Executive Committee, the [indiscernible] who cautioned them against the merger for very many reasons. And I warned them that, that merger will end up with the worst of both worlds. Because in Europe, the salaries are low, but the perks are enormous. And in America, they watch the perks but the salaries in those days, multiples of European salaries. Guess what happened? They adopted both. Again, people react to incentives. And in the United States, as we already discussed what makes it exceptional is -- and why people shouldn't have been surprised that Donald Trump won. People don't envy people who do well. If you look at everybody over the last century, how everybody lives better, health, education, there's that wonderful book factfullness when you get depressed, you must read it. However, as Charlie Munger said, the worst of the seven sins is envy, and you don't even get pleasure out of envy. At least some of the other sins he thought would be pleasurable. But -- so with social media, people only post on Instagram and TikTok and their best moments in life. So we get this elevated set of self-worth when people post. And people don't post their horrible moment. So we have envy growing globally, as I tried to point out in 2015, and there's a social divide. However, in Europe, it's far more pronounced. In China, not really. It's the government that do not want to see incentives. But in the United States, people who are successful are applauded and admired because people believe in the American dream. If you really work, you can get it. And it's a different society. So one must look at the rewards and the remuneration more also in a local sense. My problem is that in our society is going to get more and more fragmented because the modern economy globally is a winner-takes-all economy. Century go, if you were a bricklayer, if you could lay 120 bricks an hour, you got paid x. If you got laid -- could lay 80 bricks, you were paid less, but you still had a job. In the modern economy, the second best software writer gets nothing. And it's a winner-takes-all economy. So there will be, with AI coming out with fourth industrial revolution. I asked in 2015 for that we should start thinking about the universal basic income. People are going to be dislodged, and they cannot be re-trained to be functionally productive. And this is going to get much more pronounced and is going to happen a lot faster. So if you're say a CEO, because you've neglected to also mention the ratio of the highest paid and the highest shareholding employee to the lowest paid worker, which more and more people are demanding. Now that's easy in a software company. But when you're in South Africa, we're also just trying to provide jobs. And if you get to the replacement of man by machine, it's going to cause even further social strife. So I think one must look at it in a far broader vector. And I'm happy that Jannie and his colleagues are fully committed. I don't think they can work harder, I don't think that, frankly, earning more shares will incentivize them more. I think what we're trying to address is to align. At [ Rennet ] it's the opposite. At [ Rennet ] -- Jannie, you can correct me if we're wrong, when we set it up, the incentives are 100% aligned between the management and the shareholders. Management cannot do better than shareholders. It's a very valid point, and we're working towards it, but we also have to look at it in the South African dimensions. We, every year, give a higher increase in salary for instance to the -- lower the salary, the higher the increase. And I think it's -- well, my sister's here, how do we do it on the phones. Inflation bites higher if your disposable income is less. So it's very good question, but it's multidimensional.

Thanks. You've got a wonderful example within the group Wispeco where everyone down to the shop floor is incentivized, and I think they get a percentage of profit before tax. Every 2 weeks or so, it's paid out. So it's a wonderful example. [ Joel Stern ] would jump up and down with delight if he saw it.

You know that I worked with [ Joel Stern ] at [indiscernible] Bank. And when he started when he left the bank, I was the first person he came and he met with my father. Things have overtaken a lot of -- [ Joel ] was there before we had the iPhones or Apple Mac or anything, and things have changed substantially. It's -- accounting is not caught up with it. Today, it's so amusing -- be amusing actually that governments and tax authorities still do not realize that the real value today lies in the intellectual property and not in fixed assets. And you look at all the great -- look at in [ Joel's ] time there was the NIFTY 50, the top 50 companies. They've all disappeared. Look at the top value today, NVIDIA. Look at Apple. These all intellectual property-driven companies. And a lot of the EVA, a lot of [ Joel's ] theories, had he lived long enough, sadly he passed away. He would have -- he was too smart. He would have really -- I think the problem started with my then [indiscernible] Milton Friedman, and exemplified by Jack Welch when they adopted certain philosophies to run businesses. And you can directly look at Boeing's demise as a brilliant engineering company. Taken back Boeing bought Lockheed Martin to get the defense contracts. Lockheed Martin run by ex GE employees. And financial engineering overtook proper engineering. So when you start looking at incentives, the ultimate culture of having somebody -- look at Elon Musk can tell you how a rocket works. The head of Boeing didn't understand any engineering. Who had to go and fetch the astronauts, not NASA, Boeing. So [ Joel ] -- that whole Milton Friedman, things are evolving constantly. And we shouldn't -- I mean we should be aware that things are changing and very fast. And AI is especially. My wife and I were invited to a -- it used to be the -- it's a conference that they have in Aspen, it's now run by Eric Schmidt. And you sit there and you listen to the top brains in America. Europe, forget about the Chinese get it and the Americans get it. The rest of the world are so far behind the revolution that's going to hit all of us. So it's multidimensional. We want to create value, but ultimately, you create value through free cash flow. Now where went wrong. I hate capital-intensive regulated businesses. So where did we end up with 2 of them, Mediclinic, where, for instance, in Switzerland, the government told the insurers you're charging too much and it's a cantonal system. The insurers are telling the hospitals you're charging too much. And it's vox populi, guess what happens? There's a pricing pressure. It will be resolved, but it's government interference. In South Africa, I'm glad to see, and we -- I don't know the minister at all. I've never met him. I'm glad to see that he saw the absurdity of the Competition Board ruling because it's a capital-intensive business that we really started with years ago to connect South Africans to the world. When I became Chancellor of Stellenbosch University it was 2007. The optical fiber network went to that great industrial metropolis of [indiscernible]. Stellenbosch had an Intranet for the students, mainly used for p***, not for stunning. Yes, Jannie, you remember. Not as a student, but when they proudly told us, so I promised them we'd connect them to the world. We then laid that cable from India to Africa. Stupidly, we got persuaded to link it up through the East Coast and the [indiscernible] thought it brilliant to cut our cable. And we couldn't find too many people to go and replace the cable there. But by then, luckily, we connected to Europe in other ways. We then put fiber optic and [ Fred ] was very helpful when the gangsters in the cape flats asked for us to pay them and bribe them to get connections to the schools. And [ Fred ], through his contacts with the churches and civil society helped us that we could connect universities and the schools. And it's a highly capital-intensive business. But unless you do it, as a country, we're going to fall behind. Luckily, we seem to be heading in the right direction now. It's fascinating, but where governments realize that their role is to make it possible for private sector to flourish, the countries do well. Ronald Reagan said it's the business of government to stay out of business. Now the socialists believe that if we tax you more, we will provide everything. The problem with socialism, as [indiscernible] said, sooner or later, you run out of other people's money. Now we have a great opportunity here. We as a private sector during the period of President Mandela and then especially during Thabo Mbeki, our economy grew in leaps and bounds. We didn't have deficits. We repaid our debt. It's not that long ago. And I've apologized because we, as a private sector couldn't believe our luck, and we didn't invest enough in those days. We should have. I believe we're at another [indiscernible] where we've got to do certain things. Now we believe that we do not only serve shareholders. And I said it at Richemont. I'll say it here. My father said it 50 years ago, we have a wider responsibility to the communities that we live in, to our shareholders, our colleagues, to the communities that we live in and the countries that we live in and where we operate. And as such, it's not only the Jack Welch theory of shareholder supremacy and nothing else matters. So some of the things may not make sense. For instance, [ Stellis ] I said to Jannie, I saw Vasco da Gama was for sale. It was bankrupt. So I said to Jannie, Jannie, we need to unite the people at Stellenbosch because we had some problems between -- let's put it Kayamandi and [indiscernible] Valley, et cetera. Today, they are all united in their support for Stellis. I did ask him, please do not get to the top division immediately because then it's going to cost us money. So stay in basically the second division because we'll unite the people. But once they got these kids fit, they now in the confederation company. That was not done to help shareholder supremacy. But our town here is now more united. And when I stop at filling stations now, I'm [ Stellis ]. I'm not Johann Rupert. The petrol attendants come and tell me that we're stupid to sell that player and buy this player. So it's a broader responsibility.

I take that point, and that's why I'm encouraging you to make the wonderful model that Wispeco is a bit more public.

Well, sorry, I must tell you, I never thought Wispeco had a chance 10, 15 years ago. But it shows you what good management can do. And we can't take credit for what they did. They did it themselves.

Yes. Well, if I can add, they told me they got a 20% carry because everyone thought they were going to the wall. And...

That's correct. I think it's correct, I said let's incentivize them.

But it's very interesting. I don't want to speak too much time on Wispeco. But it's very interesting. The primary competitor is Hulamin which is owned by the IDC, which is the Department of Trade and Industry, and they often push some hair brain schemes. The Department of Trade and Industry.

Well, we're talking about socialism again.

Okay. So -- but Wispeco has killed them, killed them.

Yes, we -- look, you and I can speak offline because there are all that people who are online that are getting bored of you on me.

Okay, okay. But I just wanted to make one point. Back on the minimum shareholding requirement. That is -- you say Capitec, that's because of their founders. That's correct. But that minimum shareholding requirement is the way to keep owner managers coming through and to keep their founder thing. So I'd encourage you -- I'd feel far happier if you were JPMorgan level.

I'm not going to go into individuals here. But do you really think that people don't appoint their friends to give them more options. Okay. But we certainly view that as a key ingredient. Thank you. Any other questions?

Good morning, everyone. Good morning, Chair. Good morning to the Board. My name is [indiscernible] and I've been a shareholder for the past 3 years. I've been coming to Remgro AGMs for the past 3 years. And before I ask my questions, I just want to say thank you to you, Chair as well as the Board for making this platform available. And for me, I've gained a lot of learning and a lot of network opportunities. I get to engage with the likes of you, Chair, Mr. Durand as well as Mr. Gideon here. So thank you so much. I have three questions, sir. The first question will have to do with the implementation of the strategy across the struggling investees. The second question has to do with the actual portfolio optimization itself, focusing on the portfolio investments. And then the third question has to do with the outcome of the U.S. election. The first question on the strategy in itself. We saw that HeinBev struggled, not only has to do with the post-corporate action integration, which is very much inherent. But also some own goals, I would say. How far are we with the resolution of that? I know the report mentioned something about the bottles, about having refundable bottles as well as creating new products to balance out the over-indexing of the premium brands. How far are we with that? And have we taken away some learnings so that eventually, when the competition commission catches the wake up, when that massive deal goes through so that we can avoid things like that in future corporate actions. That's the first question. The second question has to do with the optimization of the portfolio. Sticking in line with that strategy direction of creating scarcity to eventually decrease the consolidation discount, we saw some moves made with the disposal of momentum. We still have FirstRand there as well as Discovery there. Are those also going to be up for consideration to dispose them? In fact, my question is, what use are the portfolio investments sticking in line of creating more scarcity. Are they not creating more complexity? Are they not creating more availability? And then the last question, Chair, this one is for you. It's for -- it's a -- rather it's about the election of Donald Trump. We saw it the first time it happened. It is not the first time he gets selected, and we saw how badly that ended. But you, sir, what are your thoughts on the man? Do you think this time is going to be better than the first time? And is Remgro itself, does it position itself in a different way for the incoming administration, particularly when you think about AGOA, what is the Trump's administration stance on AGOA, à la, Rainbow Chicken as well as RCL Foods. Those are the three questions. And thank you so much once again. I really appreciate this, and hopefully, I'll see again next year.

Thank you. Jannie, you can have 1 and 2, please.

I'll do that, chair. So just on the Heineken Beverages side, you're absolutely right. There were quite a few own goals scored. As we put the merger together, there were certain pricing decisions that they take on some of their brands that was actually just put them out of the market completely lost a lot of market share. In the supply chain side, they made a few own goals of what they did thereon. But maybe let's focus on the positive going forward. The supply chain have been sorted out. So in the last 2 months, we're actually producing beer at record volumes in the Sedibeng Brewery there. So it's actually running at full capacity in anticipation of the festive season, which is critical for us in this stage. It will be the first festive or let's call it, peak period that we will be able to deliver fully. And it's already our first peak season as well as a combined company with the back office in place. The integration has been done and supply chain is working optimally. So the complete focus now is clearly on the front end. And there's a lot of things happening on the front end and a lot of changes have been made of how we actually approach the market, the route to market. We're making some changes going forward in our route-to-market strategy to compete more effectively with AB InBev. But I think -- so the building blocks are in place now to do that and to deliver. So the initial results, as we said at our presentation, seems to be encouraging. So let's hope that it carries on like this. But as I said, it's the supply chain, there's no more operational issue on the supply chain side this [ InBev ] growth. It's not just making the sales and actually let the people drink our brands. We're looking at portfolio optimization as well in terms of we probably got too many SKUs across the whole portfolio, and there's a huge effort in that and actually streamlining that and that we actually -- when we do the marketing and investment behind the brands, a bit more focused on the strategic brands. Just maybe I think it's about 4, 5 months ago, Savanna is now the biggest cider in the world, actually overtaken Stellenbosch as the biggest cider in the world. And that was developed here in Stellenbosch. I think we something that the town can be very proud of in that respect. Maybe on your second question, in terms of portfolio optimization, yes, it's public knowledge. We sold the MMH stake. There's a lot of people that have been pushing us for 3 years to sell it, sell it. And we always said we've got a target price and when we actually see value realization. And we got a lot of criticism for why we took so long. And eventually, we did it. Now we're getting criticism we should have waited 3 months later and you should have staggered and things like that. So you can never get it right in hindsight it's a perfect science. But we were happy with the price that we got, and we did it via good volume, it worked out well for us. So you can see that. FirstRand, as we all know, as we said, it is part of the [indiscernible] transaction that we got that we put that against the debt that we've incurred a while ago, so that is matched. And Discovery for us is -- at this point in time, is a great asset. It's doing quite well for us. If we had sold that 6 months ago, we would have been crying here again. So it's a good hold for us. It's a strategic asset but a national footprint, operating in the right spaces, especially in health care, in well-being and all of those things. And so we'll be very happy with the Discovery asset as such. Chair, do you want to add anything?

I like Discovery, I think Adrian Gore is a genius. I do want to talk to him about that bloody dog suit that he's got in his ads abroad because everybody remembers the dog, but nobody remembers what it's for, for Vitality Life. The American people have spoken. And it's actually astonishing because at that conference in Aspen, I said to [indiscernible], I think it's probably only 3 of us there that thought that President-elect Trump would win. There is the 2 of us and Bret Baier, the political commentator. And they were lauding Nancy Pelosi for stabbing President Biden in the back. And there are many theories as to exactly how it happened and why President Biden nominated his Deputy or Vice President. But the American, they've spoken. Now I have known President Trump for 24 years through golf. And I think that he will use these import duties as -- this is my gut feeling as a negotiating tool. And I think you've got to look at why America and China are at [indiscernible]. My Chinese friends say to me that the world had made a critical error by allowing China into the World Trade Organization in the early '80s on the conditions that they did. And they became the factory to the world. They're hardworking, they're smart. They study and they study [ stem ]. They don't study the 90% rubbish where you're unemployable. Science, technology, electronics, engineering, mathematics. So it's not a surprise that they've become the factory to the world. And now in terms of knowledge and technology, their base is growing exponentially, but the Chinese do not want war. They want trade. President Trump didn't start any wars during his 4 years when he was there. There were no wars started. If you look at the history, Johnson and Kennedy were responsible for the Vietnam war. Nixon got the blame. Now I think you've got to look at his appointees, the Secretary of Treasury. I urge you to read an article, Anton was it in Monday's Financial Times? That lady wrote who had worked with the Secretary of Treasury. It's very, very interesting. It's a lady who worked with the incoming Secretary of Treasury. No, it's not a book. It was in the Financial Times on Monday. She wrote an article that I found very illuminating. I don't think you've got to underestimate this person could turn -- their writing could turn into his James Baker. He would not have appointed him. I happen to know him, to think about [indiscernible] and his electoral base for him to have the guts to appoint an openly gay man married to another man as his Secretary of Treasury and thinking about some of the Republican base. It was a bold move. I'm pretty sure that I know the next head of the Fed is going to be. And he, again, is absolutely -- is the previous head of the New York Fed. These are balanced people, highly intelligent. So we shouldn't underestimate the fact that the American people have spoken. In terms of a AGOA, I think it's now been in the papers. I certainly didn't leak it out. But let's say, somebody from the Biden administration and ambassador contacted me in January, Gideon we had dinner with him January, February this year. And he suggested to me that the bilateral delegation of Senators and Congressmen were heading for South Africa. And because clause 3 of AGOA says that no member or somebody who had -- who's a beneficiary of AGOA should act against the best interest of the United States. Now South Africa, certainly in the view of these bilateral Republicans and Democrats, we were not acting in the best interest of the United States. I mean, if you look where I have visa-free travel with my South African -- my only passport, I can go to Iran. I can go to -- where Russia, basically places that I don't really wish to go to. To give you an idea, we have a Chinese lady who is a Board member of Richemont, Professor London School of Economics. Her father happens to be the head of the Belt and Road Bank that we beg for money every year. She and her husband would like to buy a place somewhere in South Africa. We give her a single entry 5-day visa. And that was only because we helped. So a single entry 5 day. Now -- so we're shooting ourselves in both feet continuously. I then, after this warning, spoke to the government here and said the allegations that we're actually training pilots, Chinese pilots and private flight schools. I mean, are we mad? And the people at the top didn't even know about it. But once again, [ Ernie ] said that maybe I should meet with President Elect Trump. So I went there and I pleaded with him to give us a chance and to give our President a chance. And he did it. And let's put it postponed, he must have said to some this is -- I assume these are assumptions. So I told him, yes, I owe you one. And yes, we've been in contact quite regularly subsequent to that. And I just believe that anybody who can help to keep -- if we lose AGOA, and this is this ridiculous thing, people do not understand what it's going to mean. Our automobile industry, our farmers, our exports, we will have a serious blow to our economy if we lose AGOA. And so yes, I will try to use whatever little influence I have to try and keep AGOA intact. I do believe that the new administration will use it tactically and not just 30% here, 20% here, you scrapped, and it will be bilateral. They're not stupid, they're highly intelligent. And I wish him well because America must succeed. The bigger problem, however, for everybody is how to create jobs, sustainable jobs in a world economy that's rapidly evolving. And you know we're partners with MSC in Mediclinic. I think they control over 20% of the world's shipping. And we had dinner with them in the beginning of November where they told me that Chinese exports had grown 17% monthly annual tracking October to October. So Chinese exports are doing very well. Their domestic market is a bit subdued. But I don't think anybody is under the illusion that trade must go down. I believe the real question is what is fair trade. And I think over the next decade, there will be a rebalancing. I think COVID also showed the vulnerability of supply chain management. If you look at the automobile industry, I drive an Audi in London. And I was surprised to find where the electronic components were all made and where they had to access from. The -- it's a matrix. People don't have a factory and they make all the components. Everything is interrelated. And I think people will find that we will find over the next decade that certain critical components for national security will be re-homed. You take the chip industry. This Intel used to be the go-to so it's not only just trade, it's national security that's also at play. So I don't think we can fear that they will be acting irrationally. We've got to get our own house in order. I think that's the critical thing. We cannot -- you cannot play both sides of the fence all the time. And we have to realize that ultimately, we are going to rely upon certain countries for our markets. We must not antagonize them. I hope that's a sufficient answer.

Any more questions from the floor? If not, I'm going to -- a couple of questions on the screen. I'm just going to read them out for the Chair and then he can direct them. With only -- this is from [indiscernible] with only 14% female representation on the Board and no formal diversity targets, how does Remgro plan to enhance gender and racial diversity within the Board and management structures to align with global best practices? And when will formal targets be introduced?

I'm still trying to teach my Africans colleagues to speak English. So we're a bit slow here in the Western Cape. I mean, Gideon has been living in the U.K. for 20 years and his Africans accents getting more pronounced. Now obviously, we're working on it.

Next question. Considering that 71% of independent directors have a tenure exceeding 9 years, how does Remgro reconcile their Scheme 4 guidelines on director independence? And what specific steps are being taken to refresh the Board of new, diverse and independent talent? I think your previous question is you've answered that.

It takes 5 years for a director to actually understand what's going on. And I'm always quite amused to -- let me put it at Richemont. The directors that got the most votes for many years were the most useless directors. We paid for attendance, and they got paid the least because they never attended where they should have. And this was before Zoom. So I don't think one should only look at tenure. You should look at the character of the individuals. When I first sat in front of the shareholders at Remgro, it's still [indiscernible] I think I knew 85% of the shareholders. Okay, well, Sanlam and Mutual had big stakes. I think before people invest, they should look at the character of the individuals. And appointing people for appointments sake. In the end, there's a huge backlash in the United States against DEI and ESG. And it's part and pronouns, he, she, his, her, me. I mean, Elon tells a story about a new person in his group. And after 2 weeks, he walked around, he walks around a lot. And I'm paraphrasing. He found this young new person sitting with her feet on the chair, et cetera. And he said, man, what are you up to? He says my pronouns, she said to him, he or her. And he said, my pronouns are you fired. The other beautiful one is when he walked in the difficult times in Tesla. And he found some guy with blue hair hanging around, standing -- leaning against the wall. He said, what are you waiting for? The person said to get paid. He said, how much are you earning a month? The guy said $3,000. And he took his wallet out. He gave him $5,000, he said, get out of here, you're gone. And then he saw his colleagues talking amongst themselves. He said, why are you talking? He said that was the pizza delivery boy. So we all do make mistakes as well.

The third question is still from the same person regarding the ESG milestones and he says a bit potentially subjective ESG milestones and he asked how does Remgro plan to ensure that ESG linked targets are specific, measurable and align with shareholder interest?

I think I addressed that. I think I addressed that under the culture. Firstly, ESG are 3 totally separate subjects. And we have always, as a family and our culture has been ESG driven. The environment, social. We discussed it in our -- remember, I knew Jack Welch. I won't go into when I played golf with him and his wife and she asked me why are you so bad to me because we were playing foursomes, alternate shot and she just started, why -- look at Jack, look at -- he picks a [indiscernible] and clean her shoes. Any case, we -- I knew him well, but we disagreed on shareholders supremacy and that everything is driven by shareholder value. So we've always embodied ESG in our corporate culture. And I don't think he needs to be codified to be a good person, to have empathy, to care about the environment. So we try to hire on empathy as well.

The last question from this person and what strategies are the Board implementing to address the NAV discount and demonstrate the value of the unlisted investments to the market?

We do not determine the discount. The shareholders do. And this is what I've been trying to tell my colleagues, if you provide superior returns, people want your shares, stop worrying about the discount. If you think we're going to do better, you buy the shares. If you think we are going to do worse, you cannot sell your shares. So we do not determine the discounts. What I want our management to focus and this is why Carel is creating free cash flow. When we have free cash flow, we can reinvest that cash at a superior return. And that's got to be our goal.

Thank you. Sorry, the next question was from [ Peter Jochen ]. He asked about the MMH share sale and why didn't you wait a bit longer. I think I answered that in my previous discussion. Then the question from a different person, [indiscernible] with changes in the political landscape in the country with the introduction of [indiscernible] the future indicated that [indiscernible] will be led by [indiscernible] do you think that such changes may result in Remgro integrated companies facing [indiscernible]?

We don't comment on politics. We do not support, we've never given money to political parties and we don't give money to churches because our shareholders and colleagues belong to different political parties and to different churches.

There's two more political questions, which I'll just ignore, but there's one regarding currencies. With the strengthening of BRICS, the dollar and pound losing value due to countries joining BRICS, is Remgro investments in the U.S. and U.K. still relevant or should we reposition our investment, as we don't have investments in the U.S. Sorry. No, sorry, the strengthening of BRICS, the dollar and pound losing value -- with the strengthening our BRICS, the dollar and pound losing value due to countries joining BRICS, is our Remgro investments in the U.K. still relevant or should we reposition our investment?

What's the BRICS' currency? Where is the BRICS' currency? Is it renminbi? No, because the Chinese are wise enough not to make the renminbi a reserve currency. So as long as oil is traded in dollars, it will be the reserve currency. And very interestingly, China issued a -- was it a [ $2 billion ] bond recently, which they -- in Saudi Arabia, very interesting -- and there the risk premium was substantially lower than one would have thought. So we try to be currency -- we do not speculate on currencies. And I don't think if we trade in Africa or anywhere, people are going to say to us, can you pay us in a BRICS currency? I've never heard that request before.

Chair, that is all the questions.

Luckily, I sat down for that. Given that there are no further questions, I'll allow shareholders another minute to indicate their votes before closing the voting. I think everybody has voted and the results will be shown shortly. Thank you, ladies and gentlemen. The results of the poll are displayed on the screen. I declare that all the ordinary and special resolutions have been passed by the requisite majority. The last item on the agenda is any other business. I think we've covered just about the world. So our proceedings are herewith concluded, and I declare the meeting closed. Thank you very much. All shareholders who are physically present, that's a bit of an oxymoron, are welcome to join us for the refreshments outside on the lawn. Thank you very much for your attendance.