AUDITED INTERIM RESULTS AND DIVIDEND DECLARATION for the six months - PDF document

AUDITED INTERIM RESULTS AND DIVIDEND DECLARATION for the six months ended 31 December 2018

CONTENTS FINANCIAL REVIEW 5 5 PRODUCT CATEGORIES 25 27 STORE DEVELOPMENT AND MARKET SUMMARY 36 38 FINANCIAL RESULTS 46 48 2 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

AUDITED INTERIM RESULTS AND DIVIDEND DECLARATION for the six months ended 31 December 2018 NOTES DISCLAIMER This presentation differs from the presentation available on the website and in the hand-out given to presentation participants as a result of industry sensitive information contained therein. The financial information pertaining to Cashbuild Limited’s (Cashbuild’s) results are exactly as published on SENS in terms of the JSE Limited’s Listings Requirements. This presentation may contain certain "forward-looking statements" regarding beliefs or expectations of Cashbuild, its directors and other members of its senior management about Cashbuild’s financial condition, results of operations, cash flow, strategy and business and the transactions described in this presentation. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words "believe", "expect", "anticipate", "intend", "estimate", "forecast", "project", "will", "may", "should" and similar expressions identify forward-looking statements but are not the exclusive means of identifying such statements. Such forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Cashbuild and are difficult to predict, that may cause the actual results, performance, achievements or developments of Cashbuild or the industry in which it operates to differ materially from any future results, performance, achievements or developments expressed by or implied from the forward-looking statements. Each member of Cashbuild expressly disclaims any obligation or undertaking to provide or disseminate any updates or revisions to any forward-looking statements contained in this announcement. 2 NOTES CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 3

NATURE OF BUSINESS • Mass retailer of building materials, home improvement and related products • Offers a focused range of quality products at competitive prices • Selling predominantly for cash • Largest retail chain of building materials in southern Africa • 320 outlets and expanding (254 Cashbuild, 62 P&L Hardware and 4 Cashbuild DIY outlets) 3 NOTES FINANCIAL HIGHLIGHTS Revenue Net asset value per share Operating profit Headline earnings R5.6bn R285m R221m 8 167 cents 12% 11% 3% 12% 6 400 300 90 Rbn Rm Rm Rand 80 5 70 300 4 200 60 50 3 200 40 2 100 30 100 20 1 10 0 0 0 0 HY15HY16HY17HY18HY19 HY15HY16HY17HY18HY19 HY15HY16HY17HY18HY19 HY15HY16HY17HY18HY19 Compound Annual Growth Rate (CAGR) 2 year 4% (11%) (9%) 13% 5 year 9% 8% 10% 11% 4 NOTES 4 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

FINANCIAL REVIEW CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 5

INCOME STATEMENT STATUTORY PERIOD-ON-PERIOD Audited Audited Audited Dec 2018 Dec 2017* % Jun 2018* R’000 (26 Weeks) (26 Weeks) change (52 Weeks) Revenue 5 563 231 5 392 841 3 10 206 730 Gross profit 1 394 256 1 356 375 3 2 568 453 Gross profit % 25.1 25.2 25.2 Operating expenses 1 109 387 1 034 334 7 2 025 258 Operating expenses % 19.9 19.2 19.8 Operating profit 284 869 322 041 (12) 543 195 Operating profit % 5.1 6.0 5.3 Net financing income 27 751 26 951 3 50 985 Profit for the period 219 752 248 269 (11) 425 153 Earnings per share (cents) 956.2 1 083.1 (12) 1 851.6 Dividend per share (cents) 435.0 496.0 (12) 842.0 Weighted number of shares (‘000) 22 715 22 710 22 711 * The application of IFRS 15 has resulted in the restatement of December 2017 and June 6 2018 figures NOTES IFRS 15 ADJUSTMENTS Dec 2018 Dec 2017 R’000 IFRS Adjustment IFRS Adjustment Revenue (12 074) (12 144) Gross profit (3 148) (2 859) Profit for the period (2 256) (2 064) * The application of IFRS 15 relates to expected sale returns after period end 7 NOTES 6 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

REVENUE BREAKDOWN % change Cashbuild stores P&L Hardware stores R’000 FY 2019 FY 2018 Total Total New Existing* Total New Existing* Quarter 1 2 650 823 2 572 837 3 1 3 (2) 19 6 13 Quarter 2 2 912 408 2 820 004 3 2 3 (1) 12 6 6 1 st Half 5 563 231 5 392 841 3 2 3 (1) 15 6 9 Quarter 3 2 398 519 Quarter 4 2 415 370 Total 10 206 730 1 st 6 weeks trading since period end down 1% * All stores in existence prior to 1 July 2017 8 NOTES SALES R’MILLION All stores Growth: Q1: 3% Q2: 3% 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Existing stores Growth: Q1: (1%) Q2: 0% 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 9 NOTES CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 7

CUSTOMER TRANSACTIONS All stores Growth: Q1: (1%) Q2: (1%) 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Existing stores Growth: Q1: (6%) Q2: (5%) 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 10 NOTES AVERAGE BASKET SIZE All stores Growth Q1: 4% Q2: 5% 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Existing stores Growth Q1: 5% Q2: 6% 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 11 NOTES 8 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

GROSS PROFIT AND EBIT MARGIN 28% 8% * 7.3% 7.0% 27% 7% 27.0% 6.3% 26% 6.0% 25.9% 6% 25.7% 25.4% 25.4% 25% 5.1% 25.2% 25.2% 25.3% 25.1% 5% 24% 23% 4% 22% 3% 21% 2% 20% 1% 19% 18% 0% FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 1HY 2HY HY EBIT margin * Excludes BEE transaction 12 NOTES SEGMENTAL DISCLOSURE Cashbuild Namibia, Cashbuild P&L Hardware Cashbuild Botswana, Lesotho and Total Group South Africa South Africa Malawi and Zambia Swaziland Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Rm % % % % % 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 Revenue 4 338 4 262 2 671 582 15 314 321 (2) 240 228 5 5 563 5 393 3 Gross profit 1 138 1 109 3 121 115 5 77 77 - 58 55 5 1 394 1 356 3 GP % 26.3 26.0 18.0 19.8 24.4 24.1 24.1 24.1 25.1 25.2 Operating profit 248 277 (10) 17 18 (6) 15 22 (32) 5 5 - 285 322 (12) OP % 5.7 6.5 2.5 3.1 4.9 7.0 2.0 2.1 5.1 6.0 Capital 110 91 20 9 73 (88) 4 14 (71) 1 9 (89) 124 187 (33) investment Revenue Revenue Operating profit Operating profit Dec 2018 Dec 2017 Dec 2018 Dec 2017 5% 2% 6% 4% 7% 1% 6% 4% 6% 6% 12% 11% 78% 79% 87% 86% South Africa South Africa Namibia, Lesotho and Swaziland Botswana, Malawi and Zambia (Cashbuild) (P&L Hardware) 13 NOTES CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 9

% of Total sales SALES BY PROVINCE 2.8% 2.7% 4.4% 20.3% 5.2% 3.8% 8.0% 2.0% 10.0% 19.7% 4.0% 11.0% 12.2% 14.7% 1.3% (0.4%) (3.9%) 0.1% (2.2%) 17.3% 68 65 62 58 42 42 38 38 33 33 26 25 14 15 15 15 8 9 10 9 Limpopo Gauteng Mpumalanga Eastern Cape Countries KwaZulu-Natal North West Free State Northern Cape Western Cape Period-on-period sales growth 14 NOTES EXISTING BUSINESS RESULTS R’000 Dec 2018 Dec 2017 % change Revenue 5 309 127 5 339 656 (1) Gross profit 1 342 987 1 338 758 - Gross profit % 25.3 25.1 Operating expenses 1 036 051 1 004 246 3 Operating expenses % 19.5 18.8 Operating profit 306 936 334 512 (8) Operating profit % 5.8 6.3 “Existing business” refers to stores that have comparative trading results for the entire prior financial year 15 NOTES 10 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

OPERATING EXPENSES R’000 FY 2019 FY 2018 % change Existing business (241 Cashbuild and 46 P&L stores) 1 937 604 - 1 st Half 1 036 051 1 004 247 3 - 2 nd Half 933 357 New business (17 Cashbuild and 16 P&L stores) 87 654 - 1 st Half 73 336 30 087 - 2 nd Half 57 567 Total 2 025 258 - 1 st Half 1 109 387 1 034 334 7 - 2 nd Half 990 924 16 NOTES OPERATING EXPENSES – PEOPLE COST R’million FY 2019 FY 2018 % change Existing business (241 Cashbuild and 46 P&L stores) 830.2 - 1 st Half 444.2 422.3 5 - 2 nd Half 407.9 New business (17 Cashbuild and 16 P&L stores) 30.1 - 1 st Half 22.7 11.9 - 2 nd Half 18.2 Total 860.3 - 1 st Half 466.9 434.2 8 - 2 nd Half 426.1 % of sales 8.4 8.0 FTE headcount 6 283 6 401 (2) • Increase for Cashbuild and P&L Hardware staff of 6.0% and 6.5%, respectively • Continued focus on efficiencies • Minimum wage legislation will have minimal impact in 2H2019 on P&L Hardware 17 NOTES CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 11