Massy Holdings Limited – A Global Force For Good

Massy Holdings Limited is an investment holding / management company with three main investment portfolios: Integrated Retail, Gas Products and Motors & Machines as well as other legacy lines of business. The Massy Group has been in operation since 1923 and has businesses throughout the Caribbean basin, as well as in Colombia and South Florida.

The Group employs over 12,000 people in nearly 60 companies across the region. Their scale allows them to leverage synergies and deliver superior growth and value for shareholders.

Massy is a publicly held company which is listed on the Trinidad & Tobago and Jamaica Stock Exchanges.

Leadership

Mr. Robert Riley
Chairman
Appointed: May 2023
Non-Executive Director
Appointed: October 2019

Skills and Experience
Over more than two decades, Robert has held a variety of executive management and senior legal positions in major multinationals, including: Head of Safety and Operations Risk, Safety Risk Leadership and Culture, BP PLC, London, Chairman and Chief Executive Officer, BP Trinidad and Tobago; Vice President, Legal and Government Affairs, Amoco and BP/Amoco. Robert was awarded the Chaconia Medal (Gold) by the Republic of Trinidad and Tobago for his contribution to National Development Robert brings to the board experience in global leadership and business management.

Mr. Gervase Warner
President & Group CEO
Appointed: December 2009-2024
Executive Director
Appointed: September 2004-2024

Skills and Experience
Gervase has been President and Group CEO since 2009. He joined the Group in 2004, as a Director of Massy Holdings Ltd. and has served as the Executive Chairman of the Group’s Energy and Industrial Gases Business Unit. Prior to his Massy experience, his career included a position as Partner at the international management consulting firm, McKinsey & Company, where Gervase spent 11 years serving clients in the US, Latin America and the Caribbean across a wide range of industries

Massy’s 2023 Performance

We are strongly committed to the premise that as a business, the delivery of consistent and improving business performance is fundamental to our ability to deliver our purpose and vision.

The world, including Massy, has had several volatile and challenging years, and we are grateful that 2023 has been one of relative stability although headwinds remain. Oil prices remain healthy, tourist numbers continue to rebound and head towards pre-pandemic levels in the Caribbean. Guyana continues to experience one of the highest growth rates in the world and Jamaica has benefitted from a relatively stable exchange rate in Fiscal Year (FY) 2023. Challenges such as increasing interest rates just at the time the Group increased its borrowings to fund acquisitions, and depreciation in the Colombian peso this year have been accommodated through the Group’s overall performance. The Colombian economy has still grown despite the volatile exchange rate and high interest rates. We have confidence in the long-term outlook for that country.

As we continue to execute our strategy to focus our efforts on the three core industry Portfolios, I am pleased to report that Massy’s Portfolios and Lines of Business teams have grown across the Group’s core territories and delivered commendable results for yet another year. All Portfolios recorded double digit growth with acquisitions in FY2023 contributing to incremental growth in the Integrated Retail and Gas Products Portfolios.

Profit Before Tax from Continuing Operations grew by 24 percent to TT$ 1,229 million (US$182 million) in FY2023. As Discontinued businesses fall off the Group’s Profit and Loss and the one-off gains on sale of assets and businesses are not repeated, there are expectedly lower earnings from Discontinued Operations.

In fact, Discontinued Operations produced a Profit After Tax (PAT) loss in FY2023 of TT$20.4 million (US$3.0 million) versus a PAT contribution of TT$169 million (US$25 million) in FY2022. As a result, Group’s PAT (After Discontinued Operations) declined by 5 percent to TT$813 million; and Earnings Per Share declined by 6.1 percent to TT 38.61 cents.

The Massy Group is continuously committed to creating value for its shareholders and hence, we have declared a final dividend of TT 12.68 cents per share, which brings to total dividend for FY2023 to TT 15.83 cents per share which is an increase in the total dividend from FY2022. Mr. Robert Riley Chairman Massy Group Limited

Strategy, Growth and Global Expansion Update
The Group’s Corporate Strategy remains consistent and follows from the new vision statement with three simple components:
• Growth and Global Expansion
• Capital Management to Increase Value for Stakeholders
• Operating with a Caribbean Heart

In FY2023, we successfully closed three significant acquisitions:
Rowe’s IGA supermarkets in Jacksonville, Florida (US$47 million), Air Liquide operations in Trinidad ($51.5 million with a deferred consideration) and IGL Jamaica (US$142 million).

1 Rowe’s IGA Supermarkets: independent supermarket chain of 7 stores in Jacksonville, Florida USA; Rowe’s IGA acquisition closed on December 12th and is a major step in achieving the Group’s global vision as it provides an excellent beachhead for further niche supermarket acquisitions in the United States, while providing strength in hard currency cash generation.

2 Air Liquide Trinidad & Tobago Ltd: a manufacturer and supplier of industrial and medical gases in Trinidad & Tobago; In January, the Group acquired Air Liquide’s operations in
Trinidad solidifying the Group’s position as the leading industrial gas manufacturer and distributor in the region and generating additional export opportunities.

3 IGL (St. Lucia) Limited: the parent company of a distributor of LPG, and manufacturer and distributor of industrial and medical gases in Jamaica. The IGL Jamaica acquisition closed in May 2023, and this consolidated the Group’s position as the leading LPG business in the region and will also provide access to additional economies of scale to bring efficiencies to consumers.

The Group deployed over US$240.5 million in capital to consummate these transactions and during the fiscal year. An additional TT$1.1 billion (US$158 million) in Revenue and TT$142 million (US$21 million) in PBT were derived specifically from the three deals in aggregate. We are actively engaged in efforts to integrate the companies within the Massy Group. These integration efforts are not only focused on capturing the desired synergies for enhanced financial performance, but also on ensuring cultural integration and alignment with our core values for wider stakeholder value creation.

After divesting non-core assets over the past few years, the strategy of focusing the Group on the three Portfolios continues to pay off and these acquisitions demonstrate the benefits of such focus. During the year, we strengthened our commitment to global expansion by executing focused business development activities as well as implementing key structures to sustainably propel this effort.

For example, we hosted a Global Expansion Summit in April 2023 which brought together several executives from both the Portfolios and Investment Holding Company for problem-solving and fostering alignment on global expansion. We also conducted roadshows and market visits to specific territories in the US, Europe, and Africa throughout the year to strengthen relationships with key stakeholders including investment bankers, financial advisors, law firms and prospective partners which has already supported the development of our investment opportunity pipeline.

We commenced the process of developing pitchbooks and investment prospectuses to engage key stakeholders and provide clarity on where each respective Portfolio will focus, not only in terms of participating within industry sub-sectors but also as it relates to geographic coverage. Additionally, we established clear roles between the Investment Holding Company and Portfolios with respect to various phases involved in Merger and Acquisitions (M&A) execution as we continue to source, assess and integrate new acquisitions internationally.
Mr. Gervase Warner President & Group CEO

Financially, The Group Continues To Perform Commendably.

Massy Holdings Ltd. (MHL) Third Party Revenue increased to $14.2 billion (US$2.1 billion) in 2023 up 15 percent from 2022. Integrated Retail Portfolio (IRP) Revenue grew by 20 percent, while Gas Products and Motors and Machines Portfolio Revenues grew by 11 percent and 5 percent respectively.

The Group continued with robust performance in 2023 with Profit Before Tax (PBT) from Continuing Operations reaching $1,229 million (US$182 million) from $995 (US$148) million in 2022 which represents growth of 24 percent. We are excited and energized
by the performance of our portfolios/LoBs whose combined performance contributed to a 15 percent improvement from the prior year.

Furthermore, our three core portfolios all recorded double digit growth in 2023! The Integrated Retail Portfolio aided by its Rowe’s IGA acquisition continued its strong performance with growth of 23 percent in PBT from 2022, Gas Products followed suit with a 12 percent increase over 2022 supported by their acquisition of Air Liquide Trinidad and Tobago Limited and I.G.L. (St. Lucia) I.B.C Limited and the Motors & Machines Portfolio
saw an increase of 10 percent from 2022.

In FY 2023 the DFP recorded a gain of $17 million (US$2.6 million) with a positive variance of $51 million (US$7.5 million) versus its losses of $33 million (US$4.9 million) in FY 2022, these losses were curtailed in FY 2022 when the Group revised its investment philosophy thereby limiting further losses and volatility while at the same time making a significant contribution to Group profits.

As mentioned above, PBT from Continuing Operations and PAT from Continuing Operations grew by 24 percent and 21 percent respectively. As mentioned in the Chairman’s message, we expected PAT from Discontinued Operations to decline in FY2023, knowing that the companies whose operations were discontinued in FY2022 would no longer contribute to the Group and some of the one-off gains on sales of assets and companies (such as Massy United) would also not be repeated in FY2023.

In FY2023, Discontinued Operations produced a loss of TT$20.4 million (US$3.0 million) mainly derived from impairments associated with non-core real estate assets and businesses in Barbados slated for divestment in FY2024. This is in comparison to PAT contribution of TT$169 million (US$25 million) from Discontinued Operations in FY2022. As a result, Group’s Profit After Tax (After Discontinued Operations) declined by 5 percent to TT$813 million; and Earnings Per Share declined by 6 percent to 38.61 TT cents per share.

EPS from Continuing Operations grew by 22 percent while EPS from Discontinued Operations declined by 112 percent.
James McLetchie Chief Financial Officer