RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2015 RESULTS - PDF document

RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2015

RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2015 AGENDA � � Economy & retail environment Doug Murray � � Review of the year & business review Doug Murray � � Financial review Anthony Thunström � � TFG Financial Services Jane Fisher � � Phase Eight Ben Barnett � � Strategy & outlook Doug Murray 2 TFG | MARCH 2015 RESULTS PRESENTATION TFG | MARCH 2015 RESULTS PRESENTATION 1

ECONOMY & RETAIL ENVIRONMENT THE ECONOMY AND RETAIL ENVIRONMENT � � Mixed view on global economy remains › � Positive impact of lower oil price offset by increased concern over outlook for leading emerging market economies › � Growth prospects downgraded for most economies excluding US � � Domestic economy › � Improved current account position › � Continued Rand weakness against the US dollar › � Industrial action still prevalent – strikes in the platinum, metals and engineering as well as postal sectors › � Load shedding disruption › � Interest rates likely to remain flat or show a marginal increase for remainder 2015 › � CPI reduced sharply to 4,5% at end April – now at the low end of target range – � Fuel price – � Expected to remain within target range for remainder of 2015 and 2016 › � Early signs of improvement in credit cycle – � Upside as a result of fuel price and interest rate environment – � Employment growth remains stagnant › � GDP growth outlook weakens (BER) – � 2015 projection reduced from 3,0% to 1,9% 4 TFG | MARCH 2015 RESULTS PRESENTATION 2 TFG | MARCH 2015 RESULTS PRESENTATION

IMPACT OF LOAD SHEDDING � � Lost sales of approximately R71 million since December 2014 › � approximately 1% impact � � All stores have ability to trade off-line � � Stores not in shopping centres less impacted › � Sufficient light � � Stores in shopping centres › � Often impacted by centre closing › � Considering invertors / batteries in key centres and stores � � We believe customer shopping habits will change over time 5 TFG | MARCH 2015 RESULTS PRESENTATION TRADING ENVIRONMENT Source of graphs: BER Economic Snapshot May 2015 6 TFG | MARCH 2015 RESULTS PRESENTATION TFG | MARCH 2015 RESULTS PRESENTATION 3

TRADING ENVIRONMENT Source of graphs: BER Economic Snapshot May 2015 7 TFG | MARCH 2015 RESULTS PRESENTATION REVIEW OF THE YEAR 4 TFG | MARCH 2015 RESULTS PRESENTATION

REVIEW OF THE YEAR � � Busy year for the group but extremely positive � � Disposal of RCS Group completed June 2014 › � TFG share of proceeds R1,4 billion � � Launch of online selling November 2014 › � @home & TFG Mobile � � Acquisition of Phase Eight in January 2015 › � Will be dealt with in more detail later on in the presentation › � All commentary below excludes Phase Eight � � Continued strong cash sales growth at 19,6% � � Credit consumers under pressure although early signs of improvement in credit cycle › � Improvement in credit sales growth from 2,5% H1 to 6,1% H2 � � Gross margins in all product categories maintained › � Merchandise inflation approximately 7% � � Like-for-like expense growth at 8% � � 195 new stores opened including 29 in rest of Africa � � TFG debtors’ book continues to be well managed in the current climate › � Significant slow down in growth of net bad debt to 9,4% (March 2014: 39,5%) › � Continued implementation of appropriate credit risk measures until sustained improvement evident › � Book adequately provisioned 9 TFG | MARCH 2015 RESULTS PRESENTATION MARCH 2015: SALIENT FEATURES Incl Phase Eight � Excl Phase Eight R16,1bn R15,7bn RETAIL TURNOVER +13,6% +10,8% RETAIL TURNOVER GROWTH 47,3% 46,7% GROSS MARGIN 13,6% NET BAD DEBT / CLOSING DEBTORS’ BOOK 23,4% ROE 76,8% 56,6% DEBT / EQUITY � Results for 31 March 2015 include impact of 2 months of Phase Eight trading 10 TFG | MARCH 2015 RESULTS PRESENTATION TFG | MARCH 2015 RESULTS PRESENTATION 5

MARCH 2015: SALIENT FEATURES CONTINUED + 9,7% HEPS continuing – 897,9 cents (Excluding once-off acquisition cost) FINAL DISTRIBUTION – 325 cents + 10,9% TOTAL DIVIDEND – 588 cents + 9,7% 11 TFG | MARCH 2015 RESULTS PRESENTATION BUSINESS REVIEW 6 TFG | MARCH 2015 RESULTS PRESENTATION

BUSINESS REVIEW: OVERVIEW � � TFG = home of leading retail brands › � 18 brands � � Primarily own brands – leading household names � � Addition of Phase Eight brand during 2015 financial year � � Broad product offering across various merchandise categories › � Clothing › � Jewellery › � Homeware & furniture › � Cellphones › � Cosmetics � � Broad LSM appeal from value to upper end 13 TFG | MARCH 2015 RESULTS PRESENTATION TFG FOOTPRINT INCLUDING PHASE EIGHT � � 2 724 outlets in 27 countries globally › � TFG South Africa 2 132 stores › � TFG rest of Africa 148 stores in 7 countries › � Phase Eight 444 outlets in 19 countries 14 TFG | MARCH 2015 RESULTS PRESENTATION TFG | MARCH 2015 RESULTS PRESENTATION 7

FOOTPRINT (TFG EXCLUDING PHASE EIGHT) Total South number Brand Africa Africa of stores 4 84 80 @home 20 1 21 @home livingspace 18 233 215 American Swiss 11 - 11 Charles & Keith 4 87 83 DonnaClaire 41 5 46 Duesouth 13 262 249 Exact Fabiani 16 - 16 16 229 213 Fashion Express 254 20 274 Foschini - 6 6 G-Star Raw 3 - 3 hi 22 312 290 Markham 28 - 28 Mat & May 12 207 195 Sportscene 162 16 178 Sterns 17 283 266 Totalsports 2 132 148 2 280 Group Total 15 TFG | MARCH 2015 RESULTS PRESENTATION FOOTPRINT: REST OF AFRICA � � All stores in rest of Africa are corporate stores � � Rest of Africa now 148 stores across 7 countries › � 29 stores opened during the year › � This includes 5 stores opened in Ghana during November 2014 � � 23,9% turnover growth with 12,2% same store turnover growth � � Further expansion › � Kenya (October 2015) › � Mozambique › � Angola � � 2020 target: 375 stores � � Trading in rest of Africa excludes Phase Eight as they do not currently trade in these territories 16 TFG | MARCH 2015 RESULTS PRESENTATION 8 TFG | MARCH 2015 RESULTS PRESENTATION

TURNOVER BY MERCHANDISE CATEGORY % INCL EXCL EXCL Same PHASE PHASE PHASE store % % EIGHT EIGHT EIGHT Change Change growth March March March INCL EXCL EXCL Retail turnover by 2015 2015 2014 PHASE PHASE PHASE EIGHT EIGHT merchandise category (Rm) (Rm) (Rm) EIGHT Clothing 10 849,9 10 447,8 9 481,9 14,4 10,2 4,6 Jewellery 1 466,8 1 466,8 1 387,8 5,7 5,7 1,2 Cellphones 1 556,3 1 556,3 1 306,1 19,2 19,2 14,8 Homeware & furniture 1 211,7 1 211,7 1 073,6 12,9 12,9 7,4 Cosmetics 1 001,2 1 001,2 909,6 10,1 10,1 6,3 Total 16 085,9 15 683,8 14 159,0 13,6 10,8 5,5 Cash sales 7 548,1 7 146,0 5 976,5 26,3 19,6 Credit sales 8 537,8 8 537,8 8 182,5 4,3 4,3 Group total 16 085,9 15 683,8 14 159,0 13,6 10,8 � � Cash sales › � Represent 45,6% (TFG INCL PHASE EIGHT : 46,9%) of total sales (March 2014: 42,2%) › � Excellent growth at 19,6% (TFG INCL PHASE EIGHT : 26,3%) � � Credit sales stronger in the 2 nd half at 6,1% from 2,5% in 1 st half › � Full year growth of 4,3% 17 TFG | MARCH 2015 RESULTS PRESENTATION TURNOVER: MERCHANDISE CATEGORY CONTRIBUTION TFG EXCL PHASE EIGHT Cosmetics 6,4% Homeware and furniture 7.7% Cellphones 9,9% Jewellery Clothing and footwear 9,4% 66,6% 18 TFG | MARCH 2015 RESULTS PRESENTATION TFG | MARCH 2015 RESULTS PRESENTATION 9

TURNOVER: MERCHANDISE CATEGORY CONTRIBUTION TFG EXCL PHASE EIGHT Cosmetics 6,4% Homeware and furniture Sport 7,7% 20,8% Cellphones 9,9% Jewellery 9,4% Fashion 32,9% Value 12,9% 19 TFG | MARCH 2015 RESULTS PRESENTATION CASH VS CREDIT TURNOVER GROWTH (EXCLUDING PHASE EIGHT) 25,0% 20,3% 19,6% 20,0% 19,0% 15,9% Growth in sales (%) 15,0% Growth in credit sales improved in Growth in cash second half sales Growth in credit 10,0% sales 6,1% 5,7% 4,3% 5,0% 2,5% 0,0% April 2014 - Sep 2014 Oct 2014 - Mar 2015 FY 2015 FY 2014 TFG (excl Phase Eight) 9,7% 11,7% 10,8% 9,8% 20 TFG | MARCH 2015 RESULTS PRESENTATION 10 TFG | MARCH 2015 RESULTS PRESENTATION

CASH VS CREDIT TURNOVER GROWTH FY (INCLUDING PHASE EIGHT) 30,0% Cash sales 26,3% growth inflated 25,0% by Phase Eight acquisition 19,6% Growth in sales (%) 20,0% Growth in cash sales 15,9% 13,7% Growth in credit sales 15,0% 9,1% 10,0% 5,7% 4,3% 4,3% 5,0% 0,0% FY 2013 FY 2014 FY 2015 FY 2015 TFG (Excl Phase Eight) TFG (Incl Phase Eight) 10,9% 9,8% 10,8% 13,6% 21 TFG | MARCH 2015 RESULTS PRESENTATION FINANCIAL REVIEW TFG | MARCH 2015 RESULTS PRESENTATION 11