FINANCIAL RESULTS F19 H1
AGENDA 01 02 03 Key Metrics Progress on Financial results F19 H1 plans F19 H1 (Brands, Hospitality, Logistics, Manufacturing) 04 05 06 GBK update Outlook for the Questions second six months 2
KEY METRICS
SA and AME business Strong results 4
5.4% F19 H1 R3.58bn (F18 H1 R3.40bn) Revenue 5
Operating profit before Operating loss after non-operational items non-operational items 3.9% 211.3% F19 H1 R421.8m F19 H1 Loss R452.1m (F18 H1 R406.1m) (F18 H1 Profit R406.1m) 6
16.6% F19 H1 R540.4m (F18 H1 R463.0m) Cash generated from operations 7
Group under-performed due to GBK UK and Coega Concentrate 8
PROGRESS ON F19 H1 PLANS
GROWING BRAND CAPABILITY – SA & AME
F19 H1 BRAND CAPABILITY SYSTEM-WIDE RESTAURANT SALES GROWTH (RANDS) 12.8% 7.8% 7.3% DOMESTIC AME SA & AME TOTAL 11
F19 H1 BRAND CAPABILITY LIKE-FOR-LIKE RESTAURANT SALES GROWTH (RANDS) 3.4% 3.1% 1.0% DOMESTIC AME SA & AME TOTAL 12
F19 H1 BRAND CAPABILITY SYSTEM-WIDE RESTAURANT SALES GROWTH (RANDS) 8.6% 7.1% SIGNATURE BRANDS LEADING BRANDS 13
F19 H1 BRAND CAPABILITY LIKE-FOR-LIKE RESTAURANT SALES GROWTH (RANDS) 4.1% -2.3% SIGNATURE BRANDS LEADING BRANDS 14
F19 H1 BRAND CAPABILITY TOTAL RESTAURANTS OPENED 79 59 Total 5.7bn 16 Revenue increase of 33% across the 4 divisions 2 782 Restaurants 15
TO BE UPDATED WITH INFORMATION FROM DARREN F19 H1 BRAND CAPABILITY TOTAL RESTAURANT NUMBERS 664 630 2 874 574 Total 257 244 171 100 97 84 34 6 13 Steers Wimpy Debonairs FishAways Mugg & Mr Biggs GBK Milky Lane Fego Giramundo Wakaberry Signature Pizza Bean Brands 16
GOALS GROWING BRAND CAPABILITY Review Signature Prioritise Pipeline of branded offers Further entrench home Get more brand portfolio Leading brands developed in-house delivery offering across entrenched in with resources to ready to launch all brands key AME markets drive growth Drive margin Open Debonairs Pizza Rapidly grow Leading brands to Expand tashas improvement on in Saudi Arabia capability in deliver BIG BOLD footprint in UAE Signature brands under license digital arenas initiatives Not achieved Underway Achieved 17
GROWING HOSPITALITY CAPABILITY – SA
GOALS GROWING HOSPITALITY CAPABILITY Expand home meal Grow presence replacement space through in premium “bricks” and “clicks” corporate market Not achieved Underway Achieved 19
GROWING LOGISTICS CAPABILITY – SA & EXPORTS
F19 H1 LOGISTICS CAPABILITY REVENUE GROWTH 10.0% 6.8% 7.9% 7.7% 7.1% 6.9% 3.4% 21
GOALS GROWING LOGISTICS CAPABILITY Embark on Project Decade • Refer to supplementary slides for additional info Not achieved Underway Achieved 22
GROWING MANUFACTURING CAPABILITY - SA
F19 H1 MANUFACTURING CAPABILITY REVENUE GROWTH – OWN PLANTS 21.2% 11.4% 14.2% 9.5% 4.7% -0.6% -6.5% 24 Note: Coega Concentrate and KZN Ice cream plant data not provided. Western Cape Bakery closed in July 2017
F19 H1 MANUFACTURING CAPABILITY REVENUE GROWTH – JV PLANTS 26.1% 2.5% * 10.0% 9.5% 1.8% -5.1% -7.0% *New - formerly TruFruit 25
GOALS GROWING MANUFACTURING CAPABILITY New routes to Take on previously Focus on Drive new Leverage Juice Secure sustainable market for LBF outsourced grated efficiencies “ FoodConnect ” Plant Joint tomato supply or exit cheese volumes at “Manufacturing partnership Venture FB Cheese Company Way” Not achieved Underway Achieved 26
FINANCIAL RESULTS F19 H1
SALIENT FEATURES HY F 2019 HY F 2018 % Change Revenue (Rm) 3 583.6 3 401.2 5.4 Operating profit before non-operational items (Rm) 421.8 406.1 3.9 Operating (loss)/profit after non-operational items (Rm) (452.1) 406.1 (211.3) Cash generated from operations (Rm) 540.4 463.0 16.6 EPS (cents) (572) 171 (434.5) HEPS (cents) 188 170 10.6 Net debt : equity (%) 133.9 145.3 11.4 28
INCOME STATEMENT HY F 2019 Rm HY F 2018 % Change Revenue 3 583.6 3 401.2 5.4 Gross profit 1 916.2 1 816.9 5.5 Selling and administrative expenses (1 494.4) (1 410.8) (5.9) Operating profit before non-operational items 421.8 406.1 3.9 Non-operational items (873.9) - Net finance costs (105.8) (138.2) Share of profit from associates 0.2 1.7 (Loss)/profit before tax (557.7) 269.6 (306.8) Tax 14.1 (77.6) (Loss)/profit for the year (543.6) 192.0 (383.1) 29
SEGMENTAL ANALYSIS | OPERATING PROFIT Rm % of Total HY F 2019 HY F 2018 % Change Brands 52.7 222.5 202.5 9.9 Leading brands 51.8 218.6 193.3 13.1 Signature brands 0.9 3.9 9.2 (58.1) Supply Chain 60.7 256.0 221.1 15.8 Manufacturing 48.1 203.0 184.3 10.1 Logistics 12.6 53.0 36.8 44.2 Corporate (10.4) (44.2) (30.3) (46.0) South Africa 103.0 434.3 393.3 10.4 International (3.0) (12.5) 12.8 (198.2) UK (8.8) (36.8) (6.3) (481.9) AME 5.8 24.3 19.1 27.2 Total Operating Profit before non-operational items 100.0 421.8 406.1 3.9 30
SEGMENTAL ANALYSIS | OPERATING MARGIN % HY F 2019 HY F 2018 Brands 51.5 48.8 Leading brands 59.6 55.2 Signature brands 5.9 14.3 Supply Chain 11.4 10.5 Manufacturing 13.8 13.4 Logistics 2.7 2.0 South Africa 16.1 15.6 International (1.4) 1.4 UK (4.9) (0.8) AME 18.0 15.5 Total Group 11.8 11.9 31
STATEMENT OF FINANCIAL POSITION Rm HY F 2019 HY F 2018 % Change ASSETS Property, plant and equipment 1 166.7 1 465.2 (20.3) Intangible assets 2 236.7 2 844.1 (21.3) Investments in associates 79.9 83.1 (3.6) Inventories 483.7 530.6 (8.9) Trade and other receivables 788.3 798.7 (1.4) Cash and cash equivalents 924.7 493.0 87.6 Other assets 127.6 84.8 51.2 TOTAL ASSETS 5 807.6 6 299.5 (7.8) EQUITY AND LIABILITIES Equity 1 374.9 1 667.2 (17.5) Borrowings 2 765.1 2 900.6 (4.7) Derivative financial instruments 183.8 244.7 (24.9) Lease liabilities 112.3 96.8 15.5 Trade and other payables 970.9 943.5 3.0 Other liabilities 400.6 446.7 (10.1) TOTAL EQUITY AND LIABILITIES 5 807.6 6 299.5 (7.8) 32
CASH FLOW 34.5 (102.1) (100.0) (98.4) (47.6) (18.9) 540.4 924.7 716.8 Opening Cash Cash from Forex Financing Interest Tax Capex & Other Dividend Closing cash Operations Activities Investing Activities 33
GBK UPDATE
F19 H1 BRAND CAPABILITY GBK UK RESTAURANT SALES DECLINE (STERLING) -6.8% -9.7% SYSTEM-WIDE LIKE-FOR-LIKE 35
F19 H1 BRAND CAPABILITY 8 WEEK GBK UK RESTAURANT SALES DECLINE SINCE HALF YEAR CLOSE -2.2% -5.3% SYSTEM-WIDE LIKE-FOR-LIKE 36
OVERVIEW OF PROPERTY PORTFOLIO Management, with assistance from GBK’s property portfolio consists of Deloitte and CBRE, have categorised 98 leases related to 85 trading sites each site into one of four categories Total number Number of Category A Category B Category C of leases trading sites (B1 & B2) 98 85 Profitable or Sites which Under- strategically cannot be made performing sites important sites viable even with which can where GBK a significant rent become viable Leases in other Number of expects to see reduction with non trading leases GBK entity growth appropriate rent reduction 12 3 37
CVA RESTRUCTURE STRATEGY Launched on 24 October 2018 Category A Category B1 leases leases Creditors meeting on 37 16 9 November 2018 Sites are categorised into four categories, with different Category C Category B2 terms for each leases leases (17 trading) 13 The terms of the CVA will 29 remain in place for three years 38
GOALS KEY IMPERATIVES GOING FORWARD Commence Commence targeted Targeted closure Strengthen measured new store refurb and high street programme for leadership opening programme brand facelift distressed sites core team (2 sites planned programme (6 restaurants in 2018) for 2018) Re-establish the gold Simplify menu design, Launch multi-vendor Re-establish the standard across the entry and exit pricing, delivery platform GBK brand assets entire value chain and simplify supply chain (from 1 to 3) and leverage customer journey, i.e. product & experience Not achieved Underway Achieved 39
OUTLOOK FOR THE SECOND SIX MONTHS
OUTLOOK Local and Focus on Appropriate Complete CVA global trading long term acquisitions restructure conditions growth levers will be pursued strategy in remain in brands and the UK challenging upstream manufacturing segments 41
IMPERATIVES FOR THE FUTURE Definitive Prospects Tighter growth allocation of remain positive agenda corporate costs and admin fees to business units Not achieved Underway Achieved 42
OUR OUR STRATEGIC VISION INTENT Our business is focused on growing To be the leading innovative capability and capacity to position branded franchised and food ourselves to deliver unique services business in South Africa consumer experiences in the and selected international markets branded franchised and by 2020. food service space. 43
QUESTIONS Thank you
SUPPLEMENTARY INFORMATION
F19 H1 BRAND CAPABILITY TRADING FOOTPRINT South Africa 2 365 AME 338 United Kingdom 164 Other 7 2 874 Total Restaurants 46
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