FINANCIAL RESULTS for the year ended 28 February 2018 AGENDA 01 - PowerPoint PPT Presentation

FINANCIAL RESULTS for the year ended 28 February 2018

AGENDA 01 02 03 Highlights Growing capability Financial results 2018 04 05 06 GBK, UK : Insights Imperatives for Questions the future 2

HIGHLIGHTS

23% Strong revenue growth 4

Operating profit before Operating profit after non-operational items non-operational items 5% 37% 5

SA Business Strong results 6

Group under-performed Largely due to GBK UK Coega Concentrate and 7

Tightened up execution against vision strategy and s 8

Continued strategic growing intent of scale and capacity s across operations 9

GROWING BRAND CAPABILITY – SA & AME

2018 BRAND CAPABILITY SYSTEM-WIDE RESTAURANT SALES GROWTH (RANDS) 10,0% 8,3% 8,1% DOMESTIC AME SA & AME TOTAL 11

2018 BRAND CAPABILITY LIKE-ON-LIKE RESTAURANT SALES GROWTH (RANDS) 3,4% 3,0% -0,8% DOMESTIC AME SA & AME TOTAL 12

2018 BRAND CAPABILITY GBK, UK SALES GROWTH (STERLING) 4,9% -6,8% SYSTEM WIDE LIKE-FOR-LIKE 13

2018 BRAND CAPABILITY TRADING FOOTPRINT South Africa 2 346 AME 328 United Kingdom 172 Other 7 2 853 Total Restaurants 14

2018 BRAND CAPABILITY LEADING BRANDS - NEW RESTAURANTS OPENED (SA & AME) 146 49 Total 30 24 16 14 8 5 Steers Wimpy Debonairs Pizza FishAways Mugg & Bean Fego Milky Lane 15

2018 BRAND CAPABILITY TOTAL RESTAURANTS OPENED 182 146 Total 5.7bn Revenue increase of 23 33% across the 10 3 divisions 2 782 Restaurants 16

TO BE UPDATED WITH INFORMATION FROM DARREN 2018 BRAND CAPABILITY TOTAL RESTAURANT NUMBERS 650 625 581 2 853 Total 253 237 164 106 99 80 38 14 6 Steers Wimpy Debonairs FishAways Mugg & Mr Biggs GBK Milky Lane Fego Giramundo Wakaberry Signature Pizza Bean Brands 17

2018 BUILT BRAND CAPABILITY Focus on Leading brands with more allocation of resources Signature Brand openings positive Various consumer awards across Leading and Signature brand portfolios Relentless innovation, improvement and responsiveness to evolving trading landscape Reducing distractions in AME 18

GOALS GROWING BRAND CAPABILITY Review Signature Rapidly grow Leading brands to Open Debonairs Pizza Get more brand portfolio capability in deliver BIG BOLD in Saudi Arabia entrenched in digital arenas initiatives under license key AME markets Prioritise Drive margin Pipeline of branded offers Further entrench home Expand tashas Leading brands improvement on developed in-house delivery offering across footprint in UAE with resources to Signature brands ready to launch all brands drive growth 19

GROWING HOSPITALITY CAPABILITY – SA

2018 BUILT HOSPITALITY CAPABILITY Frozen For You launched Low growth economy had major impact on this sector 21

GOALS GROWING HOSPITALITY CAPABILITY Expand home meal Grow presence replacement space through in ‘premium’ “Bricks” and “Clicks” corporate market 22

GROWING LOGISTICS CAPABILITY – SA & EXPORTS

2018 BUILT LOGISTICS CAPABILITY Work stoppage was a financial setback but a trigger to drive greater efficiency Owner drivers delivered 50% of total volumes – new milestone Longmeadow costs reflected for a full year Good progress on building export capability 24

2018 LOGISTICS CAPABILITY REVENUE GROWTH 14,0% 12,8% 10.7% 11,3% 9,6% 9,4% 7,4% 25

GOALS GROWING LOGISTICS CAPABILITY Embark on Project Decade • Refer to supplementary slides for additional info 26

GROWING MANUFACTURING CAPABILITY - SA

2018 BUILT MANUFACTURING CAPABILITY Cater Chain emerged as a solid business with the right partners WCP Bakery closed August ‘17 LBF business turned around Cheese slice capability commissioned on time Sweetener capability commissioned Coega Concentrate is a longer term play than anticipated – key challenge remains to source long-term suppliers to capitalise on substantial capacity. Loss of R19.6m this year 28

2018 MANUFACTURING CAPABILITY REVENUE GROWTH – OWN PLANTS 11.3% 21.0% 15.1% 14.7% 13.9% 13.4% 3.5% 2.7% -4.8% 29

2018 MANUFACTURING CAPABILITY REVENUE GROWTH – JV PLANTS 28.5% 37.4% 36.0% 30.9% -0.3% -2.1% 30

GOALS GROWING MANUFACTURING CAPABILITY New routes to Drive new Take on previously Focus on Secure sustainable Leverage Juice market for LBF “Food Connect” outsourced grated efficiencies tomato supply Plant Joint Partnership cheese volumes at “Manufacturing or exit Venture FB Cheese Company Way” 31

GROWING BUSINESS CAPABILITY

2018 BUILT BUSINESS CAPABILITY Secured a partner for our design business unit “Design HQ” New Group-wide ERP system was implemented on time and within budget Investment in building depth at senior management and executive level Concluded two year wage agreement 33

FINANCIAL RESULTS 2018

SALIENT FEATURES F 2018 F 2017 % Change Revenue (Rm) 7 023 5 720 23 Operating profit before non-operational items (Rm) 890 938 (5) Operating profit after non-operational items (Rm) 518 817 (37) Cash generated from operations (Rm) 1 123 795 41 EPS (cents) 22 414 (95) HEPS (cents) 393 428 (8) Net debt : equity (%) 126 165 39 Return on equity (%) 25 28 (3) 35

REVENUE Rm 23% Compound annual growth 7 023 5 720 4 308 3 283 2 826 2 516 2013 2014 2015 2016 2017 2018 36

INCOME STATEMENT Rm F 2018 F 2017 % Change Revenue 7 023 5 720 23 Gross profit 3 769 2 772 36 Selling and administrative expenses (2 879) (1 834) (57) Operating profit before non-operational items 890 938 (5) Non-operational items ( refer note 1 ) (373) (121) Net finance costs (251) (131) Share of profit from associates 4 4 Profit before tax 270 690 (61) Tax (207) (235) Profit for the year 63 455 (86) 37

INCOME STATEMENT | NON-OPERATIONAL ITEMS Note 1 F 2018 F 2017 Impairment 372 592 20 000 Derivative loss on call option utilised to hedge purchase price - 33 253 Foreign exchange loss on initial recognition of investment - 23 295 Professional fees - 50 420 Gain on bargain purchase - (6 213) 372 592 120 755 38

OPERATING PROFIT BEFORE NON-OPERATIONAL ITEMS Rm Operating Profit (Rm) Margin % 20.5 20.0 938 18.4 18.5 890 16.4 792 672 12.7 566 466 2013 2014 2015 2016 2017 2018 39

SEGMENTAL ANALYSIS | REVENUE Rm F 2018 F 2017 % Change Brands (Franchising and Development) 851 781 9 Supply Chain 4 328 3 983 9 Manufacturing 2 851 2 300 24 Logistics 3 780 3 416 11 Eliminations (2 303) (1 733) 33 Corporate 11 3 South Africa 5 190 4 767 9 International 1 833 953 92 UK 1 581 704 125 Rest of Africa and Middle East (AME) 252 249 1 Revenue 7 023 5 720 23 40

SEGMENTAL ANALYSIS | OPERATING PROFIT Rm % of Total F 2018 F 2017 % Change Brands (Franchising and Development) 48 431 427 1 Supply Chain 58 509 455 12 Manufacturing 46 405 330 23 Logistics 12 104 125 (17) Corporate (6) (50) (49) South Africa 100 890 833 7 International - - 105 (100) UK (5) (45) 55 (182) AME 5 45 50 (10) Operating Profit before non-operational items 100 890 938 (5) 41

SEGMENTAL ANALYSIS | OPERATING MARGIN % F 2018 F 2017 Brands (Franchising and Development) 50.7 54.7 Supply Chain 11.8 11.4 Manufacturing 14.2 14.3 Logistics 2.7 3.6 South Africa 17.2 17.5 International - 11.0 UK (2.8) 7.9 AME 17.6 19.9 Group 12.7 16.4 42

PRODUCTIVITY AND MARGIN RATIOS Operating profit margin % Expense to turnover % Gross profit magin % 60 53,7 48,5 50 44,2 43,4 42,7 41,8 41,0 40 32,0 30 24,0 24,0 23,0 23,0 20 20,5 20,0 18,5 18,4 16,4 10 12,7 0 2013 2014 2015 2016 2017 2018 43

STATEMENT OF FINANCIAL POSITION F 2018 F 2017 % Change ASSETS Property, plant and equipment 1 340 1 398 (4) Intangible assets 2 548 2 819 (10) Investments in associates 81 83 (2) Inventories 436 455 (4) Trade and other receivables 670 649 3 Cash and cash equivalents 717 429 67 Other assets 114 53 115 TOTAL ASSETS 5 906 5 886 - EQUITY AND LIABILITIES Equity 1 632 1 485 10 Borrowings 2 781 2 856 (3) Derivative financial instruments 192 219 (12) Lease liabilities 97 87 11 Trade and other payables 771 791 (3) Other liabilities 433 448 (3) TOTAL EQUITY AND LIABILITIES 5 906 5 886 - 44

RATIOS | NET DEBT / EQUITY 165 180 160 126 140 120 100 80 60 40 8,1 20 -2,1 -0,4 -8,9 0 -20 2013 2014 2015 2016 2017 2018 45

CASH FLOW (274) 1 123 (207) (201) (108) (17) (4) 717 405 Opening Cash Cash from Tax Interest Capex & Other Financing Dividend Forex Closing cash Operations Investing Activities Activities 46

GBK, UK : INSIGHTS

GBK UK THE CRITICAL QUESTIONS How has GBK performed relative to the UK market and its key competitors? What are the key drivers, both controllable and non-controllable, that are causing this under performance in revenue and growth? What are the focus areas for the future? 48