Audited Financial Results for the year ended June 30 2019
Bidcorp strategy A proven and focused business model, which delivers quality earnings, is alert to opportunity, and has international application 2 Bidcorp is a complete foodservice offering Bidcorp serves multiple customer segments Bidcorp is internationally diversified across developed and emerging markets Bidcorp people are entrepreneurial and incentivised to be so Bidcorp has a proven decentralised business model and best practice learnings are widely shared Bidcorp growth is organic, acquisitive-organic through bolt-ons, and acquisitive Bidcorp believes that balance sheet strength with low debt is a strong competitive advantage Bidcorp proprietary technology enhances customer relationships and efficiencies Audited Financial Results for the year ended June 30 2019
Agenda 3 Bernard Berson, CEO Setting the scene Bernard Berson, CEO Trading analysis David Cleasby, CFO Financial Q&A Supplementary information Audited Financial Results for the year ended June 30 2019
Setting the scene Bernard Berson
Growth of 4,7% in constant currency revenue, 7,1% in constant currency trading profit and 7,7% in constant currency headline earnings per share 5 Group trading margin improves from 5,1% to 5,2% Setting the scene • 2019 marks 30 years of continuous growth and development as a multinational foodservice Group, from very small beginnings in 1989 • Over this extended period since our formation we have built a global entrepreneurial Group of decentralised businesses, and we have successfully shaped our environment rather than let the external environment control us • We apply good sense and sound judgement to what we do, if that is boring then it works for us • Bidcorp also celebrates 3 years as a listed company; since listing in 2016, we have delivered compound annual growth of 9% in trading profits, 10% in HEPS and 14% in capital expenditure against a backdrop of negligible food inflation across our basket • Our growth is largely organic, complemented by typically small, well-priced acquisitions that with time cumulatively add scale and territorial reach for the Group • Over the years we have taken difficult but correct decisions to rebalance our customer portfolio and we have exited non-core, low margin activities • UK, Europe and Australasia were the drivers of the percentage growth in profits this past year and several Emerging Market territories delivered commendable performances too • A strong financial position provides optionality in uncertain times and supports sustainability Audited Financial Results for the year ended June 30 2019
Decentralised model a strength and competitive differentiator Investing in our infrastructure and harnessing technology to improve the customer experience 6 Notable operational features • Established businesses are trading well and we are patient to nurture more recent additions to the Group to similar performances • Decentralisation is our management philosophy yet we embrace shared learnings, including information technology and systems, adjacent new business opportunities such as in value add processing, and we are accelerating intergroup procurement opportunities • Real organic growth against a backdrop of continued negligible food inflation and notable macro challenges in several territories • We invested R3,6 billion ($250 million) in additions to our property, plant and equipment and in acquisitions - investing ahead of the curve is a theme throughout the Group, with new capacity driving new business volumes • Application of technological solutions such as digitisation, online ecommerce, data analytics, modern facilities deploying the latest and most efficient building techniques and equipment, plus a flexibility to deliver speedily across different temperatures and at differing quantities across varying sizes of location is ensuring a fit-for-purpose customer solution • Wage & salary inflation is a reality in the current global socio-economic climate and an impetus to try and do things more productively • Our customers are experiencing similar cost-push pressures and skills challenges and so our value-added offering is in alignment with them by reducing labour and processing time to optimise sales and profitability • Traditional foodservice focus increasingly complemented by own-label products and inhouse processing • Contract Distribution in the UK (reflected as discontinued) is on a much firmer footing and sale negotiations are progressing • A difficult two years in China, including FX volatility, US/China trade spat, and exit of a large dairy customer, but the process of diversifying is going well and we are optimistic that we will are well placed in this enormous market • New generation metro strategy pioneered in Australia is being rolled out in other geographies, ensuring more conveniently locate d warehouses with “last - mile” quick response execution of customer orders, more often than not processed via ecommerce channels Audited Financial Results for the year ended June 30 2019
Trading analysis Bernard Berson
Trading performance – Australasia (Australia and New Zealand) Constant currency - revenue up 1,1%, trading profit up 6,7%, trading margin 6,9% vs. 6,5% 8 Australasia Australia (AUD) (incorporating Australia and New Zealand) • Strategy to operate based on profitability rather than topline paying off Trading profit R million (left axis) Trading margin % (right axis) • Foodservice profits up by 5,7% in AUD due to a focus on quality business 2500 8,0% • Australia in total grew profits by 4,8% in AUD on flat turnover 6,9% 2000 6,5% 6,0% • Including new depots there are now 40 nationwide Foodservice branches 1500 4,0% • Supply Solutions, processing and imports, is performing as anticipated 2 147,0 1000 1 962,5 • Meat and Liquor a work in progress 2,0% 500 • Fresh exited at a favourable price post year end to a more suitable owner 0 0,0% F2018 F2019 New Zealand (NZD) Segment Overview • Group trading profit contribution 31,7% vs. 32,5% • Ending the final quarter on a strong note and growing annual sales by 5,6% in NZD and profits by 10,0%, with higher GP and trading margin • Economic backdrop muted in both countries with consumer spend cooling • Despite wage pressure and a new national minimum wage, expenses were • A clear, multi-year strategy to invest and capture the right business flat in Q4 and up only 5,6% for the year • Result driven organically with better margin sales • Freetrade emphasis in Foodservice together with own-brand and imports • Payroll costs affected by tight labour markets, regulation and quality control compliance • 4 new DCs operational with 5 sites pending – all company owned • Worldwide sourcing of food imports and own-processing growing strongly • Processing (butchery and vegetables) grew profits by 20% and is • “myBidfood” a powerful ebusiness portal and app for customers broadening the manufactured offering and investing in capacity and new equipment, benefitting productivity Audited Financial Results for the year ended June 30 2019
Trading performance – United Kingdom (Bidfood and Bidfresh) Constant currency - revenue up 3,6%, trading profit up 13,2%, trading margin 5,2% vs. 4,7% 9 Bidfood UK (GBP) United Kingdom • Sales up 4,7% and trading profit up 17,9% Trading profit R million (left axis) Trading margin % (right axis) • Result driven by Freetrade volumes, improved national accounts margins, 2500 8,0% more business through the ecommerce channel and brand promotions 2000 • Like-for-like freetrade volume up 5,0%, 36,9% of mix (35,1%) 6,0% 5,2% 1500 4,7% • Medium term strategy to drive National accounts business and margin 4,0% through specialist food and non-food pillars 1000 1 720,5 1 430,0 2,0% • House brands sales up 12,7%, 24,4% of wholesale turnover 500 • Tender conversion rate in national accounts at 41% with retentions at 59% 0 0,0% F2018 F2019 • Ongoing infrastructure investments, with three new sites up and running Segment Overview • Specialist exclusive imports and manufacturing growing strongly • Group trading profit contribution 25,4% vs. 23,7% • Adopting a proactive but cautious stance on Brexit due to unknowns • A clear five-year business improvement strategy is yielding excellent results – • UK is a case study for alignment with the Bidcorp foodservice model since 2014, Foodservice trading margin has increased from 3,1% to 5,1%, Bidfresh (GBP) revenue has increased by 26% and trading profit has increased by 111% • A 14,8% lower trading profit overall with margin at 2,4% as Meat and • Punjab Kitchen, rebranded Simply Food Solutions, acquired wef January 1 st Produce struggled 2019; a value-add ready-meals business • Seafood, the main contributor, achieved double-digit profit growth • Significant investment in technology continues and an upgrade of the ecommerce portal with an improved user experience is currently rolling out • With management stability, retention of the right specialist trader skills, and a more integrated national approach, there is potential to • Earlier contingency measures for Brexit being reactivated for 31 October double margins Audited Financial Results for the year ended June 30 2019
Recommend
More recommend
