Financial results for the half year ended December 31 2016 Agenda - PowerPoint PPT Presentation

A leading Foodservice group trading across five continents in over 30 countries Financial results for the half year ended December 31 2016

Agenda Brian Joffe, Executive Chairman Introduction Bernard Berson, CEO Strategy and Trading David Cleasby, CFO Financial Q&A Appendices Financial results for the half year ended December 31 2016 2

Update on Strategic and Operational Delivery Bernard Berson

Delivering strategically  Johannesburg Stock Exchange listing Delivering as we guided for Focused  Largest listed Foodservice group outside of the US the first full six months as a Foodservice investment listed company  “ Bidfood ” branding being rolled out internationally  Refining the focus on the correct customer Independence as a stand  Exiting highly commoditised or price-taker markets alone group is energising Business and allows all  Product and range extension to “centre of the plate” model is Foodservice cash flows to  Procurement strategy expanding rapidly across the globe be captured for fine-tuned as  Ecommerce investment enhancing customer service experience the group concentrated organic and  Key executive dedicated to market development and best technology expands acquisitive growth  Spreading good ideas widely (8 bolt-on acquisitions for  Rolling out the Bidcorp way of doing things to new territories the period)  Real home currency growth across all geographies Interim Actual HEPS up 20,3%, financial  Strong cash position mitigates market volatilities and uncertainties, a constant currency HEPS performance up 22,1% competitive advantage when trading across numerous jurisdictions Motivated people delivering  Philosophy of autonomy with accountability People good returns Financial results for the half year ended December 31 2016 4

Delivering operationally  Exiting of Logistics has gone to plan in Australia, boosting overall profit margin and profitability  Increased focus on free trade and supply chain initiatives in New Zealand Australasia  An overall record interim result again  Realistic about the uncertainties posed by the EU referendum vote, positive shifts in business mix  Improved overall margin despite the challenge of currency volatility and import food inflation UK  As flagged, Logistics is a sub-optimal area to be in but we know what to do and the options available  A pleasing regional result at higher margin, notably in Benelux and Eastern Europe Europe  Italy did well on a like-for-like basis and was boosted by a positive Quartiglia contribution  Outperforming against an often negative macro backdrop Emerging markets  Strategic clarity and deep local knowledge delivers a strong operational result  Revenue growth of 3,1% at constant currency reflective of deliberate mix rebalancing  Leading to a 16,3% growth in trading profit at constant currency with margin at 4,2% vs. 3,6% Bidcorp  Bolt-ons provided a minimal contribution for the six months Financial results for the half year ended December 31 2016 5

Trading Performance Bernard Berson

Trading performance Australasia Australia (incorporating Australia and New Zealand)  Three small bolt-ons to plug network gap Trading profit R million Trading margin %  Competitor activity on the increase 1800 6,5% 6,2%  Sales down 8,1% in AUD on exit of low margin Logistics 1600 6,0% 1400  Foodservice sales up 5,7% in AUD 1200 5,5% 1 778 5,3%  Trading profit up 8,7% in AUD 1000 5,0% 800 944  Speciality offering now performing to a higher level 770 600 4,5% PF H1 2016 H1 2017 PF 2016 New Zealand Segment Overview  Largest source of group profit and cash flow  Sales up 12,5% like-for-like (excluding exited retail) with  New Zealand economy outperforming Australia trading profit up 23,3% in NZD  Almost non-existent food inflation  Sourcing and processing initiatives yielding good results  Real growth in Foodservice sales  Continued investment in physical capacity  Focus on quality and mix of business rather than  Business development focused on complementary unit growth offering  Segment margin improves to 6,2% from 5,3% Financial results for the half year ended December 31 2016 7

Trading performance Foodservice United Kingdom (incorporating Foodservice, Fresh and Logistics)  Sales down 4,6% in GBP, in line with quality of business strategy and an extra week LY Trading profit R million Trading margin % Trading margin % (excl. Logistics) 1 700  Trading profit up 20,8% with margin at 4,5% vs. 3,7% 5,0% 1 500 5,2%  Free trade and own brand volume growth >5% 1 300 4,0% 4,0%  Vivas JV gained good volume in free trade 1 100 2,9% 3,0% 2,5% 1 474 900  Carefully managing customer margin, pricing expectation 2,0% 700 758 750 Fresh 500 1,0% PF H1 2016 H1 2017 PF 2016  Up to 70% of purchases ex UK – currency sensitivity Segment Overview  Seafood particularly affected by pricing pressure  Economic backdrop remained buoyant  Overall profits up, assisted by Noone acquisition  Lower pound and abnormal volatility affected spot Logistics procurement, particularly in Fresh  Despite higher volume, the business remained marginal  Extra trading week in last year’s Foodservice base  Concerted effort to restore sustainable profits (£2 million profit impact)  CD and PCL separated, strategic options for CD under  Two bolt-ons contributed, adding geographic spread consideration Financial results for the half year ended December 31 2016 8

Trading performance Europe Netherlands (incorporating Netherlands, Belgium, Czech, Slovakia, Poland, Italy, Baltics, Spain)  Sales growth of 4,7% in EUR driven by double digit Trading profit R million Trading margin % growth in national accounts and free trade 1 200 3,8%  Investment in capacity upgrades, simplification of 3,6% 3,6% business continues 900 3,4% 3,2%  Whilst small, the Fresh category is performing well 1 053 3,2% 600 Belgium 3,0% 589 464  Brussels sales remain depressed 300 2,8% PF H1 2016 H1 2017 PF 2016  Business outperforming the overall market Segment Overview  Sales up 13,6% in EUR with foodservice up by 18,5%  Strategic initiatives in Netherlands bearing fruit in  Small bolt-on (Bestfood) wef September, no material improved service levels and profitability contribution  Polish business maturing, Lodz warehouse operational  Combined trading profit up 23,5% in constant currency  Segment margin increased from 3,2% to 3,6%  Opportunities identified in existing and new territories Financial results for the half year ended December 31 2016 9

Trading performance Czech and Slovakia Italy  Sales up 8,7% and trading profits up 16,0% in CZK  Sales up 5,2% like-for-like, up 19,9% including Quartiglia acquisition  Shift in mix from retail to HORECA in Czech  Trading profits up 14,4% like-for-like, up 21,8%, including  Slovakia grew sales strongly in HORECA and retail Quartiglia acquisition  Investment in fresh and frozen products  Focus on street trade and foreign sales within Bidcorp  New warehousing capacity Poland  Additional acquisitive opportunities identified  Growth in personnel as business expands  Sales up 19,1% - free trade, national accounts focus Spain  Continued margin improvement  Real growth in EUR, focus on fresh and hotel channels  Ongoing DC investment  Market opportunities are being pursued Baltics – Latvia, Estonia, Lithuania Turkey  Double digit growth in foodservice sales  Growth in sales assisted by Monin brand  Number of new customers continues to grow  Hospitality trade negatively impacted by political events Financial results for the half year ended December 31 2016 10

Trading performance Emerging Markets Greater China (incorporating Hong Kong, China, Singapore, South Africa, Chile, Brazil, Hong Kong Middle East)  Sales up 5,5% in HKD with trading profits up 7,2% Trading profit R million Trading margin % 6,5%  Benefits of promotional initiatives and new product lines 950  Macau business affected by reduced tourism from China 5,9% 850 6,0% 750 5,3% 5,5% 650 934 Mainland China 550  Sales up 15,7% in HKD on buoyant demand 5,0% 585 450  Second tier city focus and new product introductions 467 350 4,5%  China half of revenue and profit, significant potential H1 2016 H1 2017 2016 Segment Overview Singapore  Trading profits up 77,0% in SGD, significant margin  Sales up 12,1% in constant currency, margin up from improvement as commodity operations exited 5,3% to 5,9%  Foodservice focus in restaurants, hotels and catering  A pleasing performance in all territories  Regional Foodservice division developing strategies for  Chipkins Puratos JV in South Africa to strengthen other countries bakery offering  Asian region offering tremendous potential Financial results for the half year ended December 31 2016 11