Unaudited results for the half-year ended December 31 2019
Bidcorp strategy A proven and focused business model, which delivers quality earnings, is alert to opportunity and 2 has international application Bidcorp is a complete foodservice offering Bidcorp serves multiple customer segments Bidcorp is internationally diversified across developed and emerging markets Bidcorp people are entrepreneurial and incentivised to be so Bidcorp has a proven decentralised business model and best practice learnings are widely shared Bidcorp growth is organic, acquisitive-organic through bolt-ons, and acquisitive Bidcorp believes that balance sheet strength with low debt is a strong competitive advantage Bidcorp proprietary technology enhances customer relationships and efficiencies Bidcorp is environmentally conscious Unaudited results for the half-year ended December 31 2019
Agenda 3 Bernard Berson, CEO Interim results in perspective Bernard Berson, CEO Trading analysis David Cleasby, CFO Financial analysis Q&A Supplementary information Unaudited results for the half-year ended December 31 2019
Interim results in perspective Bernard Berson
Our diversity across multiple geographies, strategic focus and group-wide sharing of what works best has enabled us to navigate through a testing six months to deliver real growth 5 Group trading margin slightly up at 5,01% Notable operational features • Revenue growth predominantly organic as the customer mix evolves, operational resilience despite external challenges in most territories • Growth momentum has slowed in larger contributors due to relative maturity and also market specific factors • Very low food inflation continues but wage inflation remains elevated and an impetus for improved productivity • Guzmán (Spain) and Pier 7 (Germany) were loss-making and are both a continuing work-in-progress • Political uncertainty in Britain around Brexit and the December election slowed consumer spending, UK result flat overall and affected by a loss in Bidfresh UK (Oliver Kay) – Bidfresh UK business under new leadership • Bush fires in Australia did depress consumer spend but partly compensated for by non-discretionary demand • Significant property investment in New Zealand continues with two new DCs opened in the period • Hong Kong sales were impacted by ongoing protest action but mainland China sales increased – business has been transitioning well otherwise from a historic exclusive agency relationship in dairy • A presence now in three Latin American countries with each business performing well, in spite of macro difficulties • South Africa , which has three key operations, continues to benefit from good execution • The strategy in the Netherlands to emphasise return-above-revenue and simplification of the business is paying off • Running our business in an environmentally sensible and waste-minimising manner is financially beneficial, as our returns demonstrate Unaudited results for the half-year ended December 31 2019
Trading analysis Bernard Berson
Trading performance – Australasia (Australia and New Zealand) Constant currency - revenue flat due to deliberate strategy to evolve the mix, trading profit up 5,2%, 7 trading margin 6,4% vs. 6,1% Australia (AUD) Australasia (incorporating Australia and New Zealand) • Like-for-like sales growth of 2,5%, trading profit (non-IFRS 16) up 5% Trading profit R million (left axis) Trading margin % (right axis) • Freetrade performed well with sales growth of 5% 1500 8,0% • National accounts under new management with a focus on not just 6,4% 6,1% 6,0% exiting business but also acquiring the right new business 1000 • Fresh was sold and remaining logistics site in Perth was closed 4,0% 1 031,5 500 980,9 • Supply Solutions grew strongly – now contributes 8% of total profits 2,0% 0 0,0% New Zealand (NZD) H1F2019 H1F2020 • Whilst overall sales grew by 1,5% Foodservice sales alone grew by 8% Segment overview adjusted for the exit of a large national accounts customer, at • Group trading profit contribution 29,8% (H1F2019: 29,9%) improved Gross Profit percentage • Interest rate reductions supportive of GDP growth • Trading profit (non-IFRS 16) up 6% with margin improving • Non-IFRS 16 trading margin improved in both territories • Emphasis remained on exiting lower margin accounts • Additional Auckland DC has had an immediate benefit wef October • Processing, manufacturing & speciality imports complement foodservice • Capex increased by 34% on investment in new DCs • CPI is low but food inflation in certain categories did tick up • Processing (butchery and vegetables) is performing well and • Asset management remains good and expenses are well-controlled contributed almost 9% of total profits • Effects of natural disasters and now the coronavirus will remain a • Fresh ended the period on a firm note at a healthy margin challenge through H2F2020 Unaudited results for the half-year ended December 31 2019
Trading performance – United Kingdom (Bidfood and Bidfresh) Constant currency - revenue up 2,6%, trading profit up 0,2%, trading margin 4,9% vs. 5,0% 8 Bidfood UK (GBP) United Kingdom • Like-for-like net sales up 0,7%, trading profit (non-IFRS 16) up 1,3% Trading profit R million (left axis) Trading margin % (right axis) • Freetrade volume up 6,9% with pleasing growth in independent 1000 6,0% trade taking the freetrade/ national accounts mix to 40/60 5,0% 4,9% 800 • National account volumes were down but also affected by timing 4,0% of taking on new wins; focus on quality of margin 600 856,7 858,3 • House-brand sales continued to grow in real terms 400 2,0% • Ecommerce platform ‘Catering2You’ successfully launched in 200 November 0 0,0% • Vision2025 is an evolution on Vison2020 with a focus on H1F2019 H1F2020 delivering growth Segment overview Bidfresh (GBP) • Group trading profit contribution 25,3% (H1F2019: 26,1%) • Despite an uncertain backdrop the Foodservice team maintained clear • Sales fell by 5,6% and trading profit(non-IFRS 16) fell due to executional focus, delivering on a five-year vision operational complexities from a new ERP system in Produce that resulted in lost customers (22% lower sales) and higher costs • New Liverpool depot (from September) boosted sales in the north west • Seafood did well to maintain profits given restaurant liquidations • Simply Food Solutions made a pleasing contribution, at a good margin and weaker high street demand with the range well-received • Campbell’s fresh foods business in Scotland performed well • Bidfresh was disappointing, largely due to a bungled ERP implementation but the situation is being rectified under a new MD • Henson, the London-focused meat specialist, reduced losses • Elite Frozen Foods acquired, trading independently substantially Unaudited results for the half-year ended December 31 2019
Trading performance – Europe Constant currency - revenue up 4,2%, trading profit up 7,5%, trading margin 4,6% vs. 4,4% 9 Netherlands (EUR) Europe (Netherlands, Belgium, Czech Rep & Slovakia, Poland, Italy, Baltics, Iberia, Germany) • Sales up 1,1%, trading profit (non-IFRS 16) up 25,5% Trading profit R million (left axis) Trading margin % (right axis) • Reaping the benefits of a three year process of transition 1500 6,0% • A switch in mix of business in favour of institutional and freetrade 4,6% 4,4% away from large caterers and logistics 1000 4,0% • Associates in meat, fish and fresh produce performed as expected 1 053,5 500 979,9 2,0% Belgium (EUR) 0 0,0% • Sales up 3,5%, trading profit (non-IFRS 16) up 4,2% H1F2019 H1F2020 • An overall 5,6% sales growth in freetrade, institutional and logistics Segment overview • Group trading profit contribution 30,9% (H1F2019: 29,9%) Czech Republic and Slovakia (CZK) • Real trading profit growth from Netherlands, Belgium, Czech Republic and Slovakia, Poland, Italy and Baltics at improved margins • Sales up 8,7%, margin (non-IFRS 16) stable • Guzmán (Spain) and Pier 7 (Germany) have required intervention to • Restaurant and catering sales remain buoyant due to rising rectify legacy deficiencies – potential is there disposable income with sales up 9,2%, retail sales grew 8,3% • Markets in western Europe are sluggish so the strategy is to optimise • Meat plant in Opava now operational existing businesses and seek expansion through selective acquisitions • Business is maturing after a decade of non-stop growth since in existing and adjacent territories – Bidfood market shares overall acquisition in 2009 so expectations need to be tempered remain small Unaudited results for the half-year ended December 31 2019
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