Audited Financial Results for the year ended June 30 2019 Bidcorp - - PowerPoint PPT Presentation

Audited Financial Results

for the year ended June 30 2019

Audited Financial Results for the year ended June 30 2019

Bidcorp strategy

A proven and focused business model, which delivers quality earnings, is alert to opportunity, and 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

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Audited Financial Results for the year ended June 30 2019

Agenda Bernard Berson, CEO Setting the scene Bernard Berson, CEO Trading analysis David Cleasby, CFO Financial Q&A Supplementary information

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Setting the scene

Bernard Berson

Audited Financial Results for the year ended June 30 2019

Growth of 4,7% in constant currency revenue, 7,1% in constant currency trading profit and 7,7% in constant currency headline earnings per share

Group trading margin improves from 5,1% to 5,2%

Setting the scene

• 2019 marks 30 years of continuous growth and development as a multinational foodservice Group, from very small beginnings in 1989
• Over this extended period since our formation we have built a global entrepreneurial Group of decentralised businesses, and we have successfully shaped
• ur environment rather than let the external environment control us
• We apply good sense and sound judgement to what we do, if that is boring then it works for us
• Bidcorp also celebrates 3 years as a listed company; since listing in 2016, we have delivered compound annual growth of 9% in trading profits, 10% in HEPS

and 14% in capital expenditure against a backdrop of negligible food inflation across our basket

• Our growth is largely organic, complemented by typically small, well-priced acquisitions that with time cumulatively add scale and territorial reach for the

Group

• Over the years we have taken difficult but correct decisions to rebalance our customer portfolio and we have exited non-core,

low margin activities

• UK, Europe and Australasia were the drivers of the percentage growth in profits this past year and several Emerging Market territories delivered

commendable performances too

• A strong financial position provides optionality in uncertain times and supports sustainability

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Audited Financial Results for the year ended June 30 2019

Decentralised model a strength and competitive differentiator

Investing in our infrastructure and harnessing technology to improve the customer experience

Notable operational features

• Established businesses are trading well and we are patient to nurture more recent additions to the Group to similar performances
• Decentralisation is our management philosophy yet we embrace shared learnings, including information technology and systems, adjacent new business
• pportunities such as in value add processing, and we are accelerating intergroup procurement opportunities
• Real organic growth against a backdrop of continued negligible food inflation and notable macro challenges in several territories
• We invested R3,6 billion ($250 million) in additions to our property, plant and equipment and in acquisitions - investing ahead of the curve is a theme

throughout the Group, with new capacity driving new business volumes

• Application of technological solutions such as digitisation, online ecommerce, data analytics, modern facilities deploying the latest and most efficient building

techniques and equipment, plus a flexibility to deliver speedily across different temperatures and at differing quantities across varying sizes of location is ensuring a fit-for-purpose customer solution

• Wage & salary inflation is a reality in the current global socio-economic climate and an impetus to try and do things more productively
• Our customers are experiencing similar cost-push pressures and skills challenges and so our value-added offering is in alignment with them by reducing

labour and processing time to optimise sales and profitability

• Traditional foodservice focus increasingly complemented by own-label products and inhouse processing
• Contract Distribution in the UK (reflected as discontinued) is on a much firmer footing and sale negotiations are progressing
• A difficult two years in China, including FX volatility, US/China trade spat, and exit of a large dairy customer, but the process of diversifying is going well and

we are optimistic that we will are well placed in this enormous market

• New generation metro strategy pioneered in Australia is being rolled out in other geographies, ensuring more conveniently located warehouses with “last-

mile” quick response execution of customer orders, more often than not processed via ecommerce channels

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Trading analysis

Bernard Berson

Audited Financial Results for the year ended June 30 2019

Segment Overview

• Group trading profit contribution 31,7% vs. 32,5%
• Economic backdrop muted in both countries with consumer spend cooling
• A clear, multi-year strategy to invest and capture the right business
• Result driven organically with better margin sales
• Payroll costs affected by tight labour markets, regulation and quality

control compliance

• Worldwide sourcing of food imports and own-processing growing strongly
• “myBidfood” a powerful ebusiness portal and app for customers

Australia (AUD)

• Strategy to operate based on profitability rather than topline paying off
• Foodservice profits up by 5,7% in AUD due to a focus on quality business
• Australia in total grew profits by 4,8% in AUD on flat turnover
• Including new depots there are now 40 nationwide Foodservice branches
• Supply Solutions, processing and imports, is performing as anticipated
• Meat and Liquor a work in progress
• Fresh exited at a favourable price post year end to a more suitable owner

New Zealand (NZD)

• Ending the final quarter on a strong note and growing annual sales by

5,6% in NZD and profits by 10,0%, with higher GP and trading margin

• Despite wage pressure and a new national minimum wage, expenses were

flat in Q4 and up only 5,6% for the year

• Freetrade emphasis in Foodservice together with own-brand and imports
• 4 new DCs operational with 5 sites pending – all company owned
• Processing (butchery and vegetables) grew profits by 20% and is

broadening the manufactured offering and investing in capacity and new equipment, benefitting productivity

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Australasia

(incorporating Australia and New Zealand)

Trading performance – Australasia (Australia and New Zealand)

Constant currency - revenue up 1,1%, trading profit up 6,7%, trading margin 6,9% vs. 6,5%

1 962,5 2 147,0 6,5% 6,9% 0,0% 2,0% 4,0% 6,0% 8,0% 500 1000 1500 2000 2500 F2018 F2019 Trading profit R million (left axis) Trading margin % (right axis)

Audited Financial Results for the year ended June 30 2019

Segment Overview

• Group trading profit contribution 25,4% vs. 23,7%
• A clear five-year business improvement strategy is yielding excellent results –

since 2014, Foodservice trading margin has increased from 3,1% to 5,1%, revenue has increased by 26% and trading profit has increased by 111%

• Punjab Kitchen, rebranded Simply Food Solutions, acquired wef January 1st

2019; a value-add ready-meals business

• Significant investment in technology continues and an upgrade of the

ecommerce portal with an improved user experience is currently rolling out

• Earlier contingency measures for Brexit being reactivated for 31 October

Bidfood UK (GBP)

• Sales up 4,7% and trading profit up 17,9%
• Result driven by Freetrade volumes, improved national accounts margins,

more business through the ecommerce channel and brand promotions

• Like-for-like freetrade volume up 5,0%, 36,9% of mix (35,1%)
• Medium term strategy to drive National accounts business and margin

through specialist food and non-food pillars

• House brands sales up 12,7%, 24,4% of wholesale turnover
• Tender conversion rate in national accounts at 41% with retentions at 59%
• Ongoing infrastructure investments, with three new sites up and running
• Specialist exclusive imports and manufacturing growing strongly
• Adopting a proactive but cautious stance on Brexit due to unknowns
• UK is a case study for alignment with the Bidcorp foodservice model

Bidfresh (GBP)

• A 14,8% lower trading profit overall with margin at 2,4% as Meat and

Produce struggled

• Seafood, the main contributor, achieved double-digit profit growth
• With management stability, retention of the right specialist trader

skills, and a more integrated national approach, there is potential to double margins

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United Kingdom

Trading performance – United Kingdom (Bidfood and Bidfresh)

Constant currency - revenue up 3,6%, trading profit up 13,2%, trading margin 5,2% vs. 4,7%

1 430,0

1 720,5 4,7% 5,2% 0,0% 2,0% 4,0% 6,0% 8,0% 500 1000 1500 2000 2500 F2018 F2019 Trading profit R million (left axis) Trading margin % (right axis)

Audited Financial Results for the year ended June 30 2019

Segment Overview

• Trading profit margin has improved from 3,4% to 4,3% since F2016
• Group trading profit contribution 27,5% vs. 26,8%
• Higher GP% and operational efficiencies offsetting upward wage pressures
• Standout performances from Netherlands, Czech and Slovakia, and Poland
• Netherlands showing the benefit of a methodical switch in the sales mix;

requires new investment to capitalise on market potential and expand margin

• Identification of post-acquisition shortcomings in Spain
• Interventions in Spain and Germany to bring them up to the Bidcorp model

Netherlands (EUR)

• 42% increase in trading profit, 2,3% decline in sales
• Freetrade 56,8% of sales mix vs. 52,0% as sales grow 12%, declining in

national accounts, catering and institutional

• Associates in meat, fish and fresh produce contributed positively overall

with an increase in equity a/c profits of 33,3%

• New labour regulations combined with labour shortages a challenge

Belgium (EUR)

• 7,9% increase in trading profit, 3,2% increase in sales
• Freetrade 31% of total sales, Logistics 24%, Institutional 24%,

Catering 21%

• Freetrade margin >4%, medium term strategy to optimise the sales mix

and seek Horeca acquisitions Czech and Slovakia (CZK)

• 14,6% growth in trading profit, 8,6% growth in sales
• Highest margin in Bidcorp a function of own-manufacturing and value-add
• New meat factory in Opava set to contribute profitably in F2020
• Existing proven management continues with succession plans
• A good example of what can be achieved elsewhere in Bidcorp

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Europe

(Netherlands, Belgium, Czech & Slovakia, Poland, Italy, Baltics, Iberia, Germany)

Trading performance – Europe

Constant currency - revenue up 6,8%, trading profit up 9,0%, trading margin 4,3% vs. 4,2%

1 618,2 1 860,5 4,2% 4,3% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 500 1000 1500 2000 F2018 F2019 Trading profit R million (left axis) Trading margin % (right axis)

Audited Financial Results for the year ended June 30 2019

Trading performance – Europe

Constant currency - revenue up 6,8%, trading profit up 9,0%, trading margin 4,3% vs. 4,2%

Poland (PLN)

• A transformational decade, substantial scope yet to grow and expand margin
• Significant multi-year investment in modern infrastructure, reflected in the

depreciation charge, has yet to reach optimum capacity utilisation

• Freetrade grows to 76% of sales (up 14,4% for the year), national accounts

now 24% (flat), supply of wine and speciality Asian food growing strongly from a low base

• Sales growth of 11,4% and trading profit growth of 33,7% driven by higher

margin freetrade

• Ecommerce orders now 28% of sales

Italy (EUR)

• DAC has continued to perform satisfactorily, ahead of a stagnant economy
• D&D minorities bought out and the business is now integrated
• Sales up 13,3%, improved GP%
• Independent trade now 82% as national accounts fall proportionately
• Cautious on acquisitions but alert to opportunities as they arise

Baltics (EUR)

• 11,8% rise in sales and a small profit
• Lithuania 80% of sales and Latvia 20%; street trade 66% of sales
• New warehouse opened in Kaunus in March, a significant milestone

Iberia (EUR)

• Acquisition of broadline market leader, Igartza, in the

north of Spain for R155 million wef July 17 2018; revenue of R246 million and trading profit of R15 million

• Segment currently constituted by Guzmán Gastronomía, Sáenz Horeca

(meat) and Igartza in Spain plus Frustock in Portugal

• Total sales grew 11,8% but an overall loss was reported as legacy

control issues arising from the earlier private equity ownership of Guzmán Gastronomía came to light; once-off costs of rectification expensed, a modern ERP system and Group managerial interventions should stabilise things

• Frustock performed very well, Igartza is performing to expectation

and Sáenz is adjusting to the loss of a customer due to unfavourable pricing Germany*(EUR)

• A 1,5% rise in sales but the annual loss increased; despite a healthy

GP% expenses are too high, restructuring is necessary and the business requires scaling up

• Remedial actions are in process
• Ambitious medium term objectives in this large market

*a 50% interest in Austria

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Audited Financial Results for the year ended June 30 2019

Segment Overview

• Group trading profit contribution 15,4% vs. 17,0%
• Notable performances from Singapore/Malaysia, Chile, Brazil, Middle East

and South Africa whilst Turkey is now profitable and making good progress

• Greater China has substituted lost business from a major dairy concern that
• pted for direct supply and which originally represented 40% of sales
• Trade tensions between the US and China together with political

demonstrations in Hong Kong make for an uncertain outlook

• Investment in Argentina for $3,5 million in April 2019

South Africa (ZAR)

• A 6,6% growth in revenue excluding Chipkins Puratos JV
• Foodservice returned a commendable result with sales growth of 5,9% at

improved margin, with trading profit up 11,5%, in a very difficult market and with food inflation only 2,2%

• Street trade in Foodservice has increased to 54,2% from 52,8% with

national accounts decreasing to 23,9% from 25,9%

• Crown revenue increased by 8,5% and ended the year with trading profit

down 15,3% compared with a decline of 27,7% in H1 as the impact on processed meat from the listeriosis outbreak lessened as the year went by; independent trade grew to almost 42% in Q4 and wholesale also improved

• The Chipkins Puratos JV is performing well and strongly positioned despite

market challenges with our 50% of profits now worth more than 100% at time of sale; sales grew by 6,3% with profits slightly down, Q4 was particularly difficult as the shift in the market to artisanal and speciality breads away from large plant bakeries impacted yeast sales Hong Kong and Macau (HKD)

• Sales increased 5,4% with trading profit flat on the prior year but with

Q4 substantially better

• The cessation of a legacy lease in April saves HK$3,4 million per month

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Emerging Markets

(South Africa, Greater China, Singapore, Brazil, Chile, Argentina, Middle East, Turkey)

Trading performance – Emerging Markets

Constant currency - revenue up 7,7%, trading profit down 1,4%, trading margin 4,9% vs. 5,5%

1 027,7 1 042,3 5,5% 4,9% 0,0% 2,0% 4,0% 6,0% 500 1000 1500 F2018 F2019 Trading profit R million (left axis) Trading margin % (right axis)

Audited Financial Results for the year ended June 30 2019

Trading performance – Emerging Markets

Constant currency - revenue up 7,7%, trading profit down 1,4%, trading margin 4,9% vs. 5,5%

Mainland China (HKD)

• Sales held up well for the year and grew 7,2% in Q4 with Q4 profits up

sharply from a low base as the transition from an agency relationship in dairy to broadline distribution across new products gains traction

• The short-term hiatus is a blessing in disguise as the business will be better

balanced across additional revenue sources in premium products

• Building an expanded presence in second tier Chinese cities

Singapore (SGD)

• A strong end to the year with sales and mix both beneficial to margin and

with trading profit growing by 20% excluding start-up costs in Vietnam

• Malaysia business is successfully evolving and sales grew 7% for the year
• Vietnam is a 54% Vietnam JV with majority Board representation; start up

losses of S$1,1 million incurred; product listings with hotels are growing Argentina (ARS)

• A 38% interest with joint control in Blancaluna, Buenos Aires

Chile (CLP)

• Sales grew 46,6%, benefitting from acquisition and organic growth and

assisted by the Viña del Mar branch, plus Temuco and Antofagasta acquired in the Foodchoice acquisition

• Six regional locations with Santiago the largest (65% of sales) followed by

Concepción and Puerto Montt

• Acquisition of the Foodchoice customer base has bulked up the business

Brazil (BRL)

• Sales growth 8,0%, profit growth 15,0%
• An excellent result in continuing trying economic and political

conditions

• The business is well managed and several sales and efficiency

initiatives will assist in achieving growth F2020 Middle East (AED)

• A strong record result off a poor prior year with sales up 20,5% and

trading profits up 58,0%

• UAE, Saudi Arabia, Bahrain, Oman and Jordan had real growth in sales
• The introduction of the Fonterra agency in UAE became effective in H2

and initiatives to diversify the Saudi business is underway

• The regional backdrop remains volatile but there is scope to build

a solid clutch of businesses in a region with oil-derived high purchasing power Turkey (TRY)

• Strategy to build a proper foodservice business, with a better mix of

imported vs. local brands

• Sales grew by 68,5% and the business made a small trading profit but

a debt burden means a loss after interest

• An opportunity has been seized to enter the Antalya market

wef August 2019

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Audited Financial Results for the year ended June 30 2019

Outlook

Bidcorp has the ingredients to continue delivering superior results

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• Bidcorp trades in very competitive markets in every territory and it is imperative we

remain relevant to our customers requirements

• Demand for out-of-home, healthy eating, quality produce, variety of choice and value

for money are positive trends that Bidcorp is capitalising on

• Bidcorp is at the forefront of technological solutions in foodservice
• Bidcorp is anticipatory in ever-changing consumer markets and we’ll

sacrifice short-term growth through timely interventions to ensure longevity

• Bidcorp maintains a strong financial position, reliable cash flows and the

goal of a real return on funds employed of >30%

• Bidcorp strives to be a good citizen in all we do within our communities
• Unknowns include potential Brexit disruption, the trade war effect on China, and

economic disruption from dissent in Hong Kong

• In F2020 management is targeting real growth in HEPS through a combination of organic

and acquisitive expansion

Bidcorp is an international foodservice group of entrepreneurial and decentralised businesses with each team incentivised to do what is right for them in their respective markets but within a common framework and strategic direction Our service-intensive business model has been proven over thirty years across diverse geographies and cultures We are confident for our future

Financial

David Cleasby

Audited Financial Results for the year ended June 30 2019

Continuing operations

Highlights

• Trading profit trajectory in home FX in H1F2019 continued into H2F2019
• Revenue R129,3 billion (↑9,8%) with constant FX revenue

R123,2 billion (↑4,7%)

• Gross margin up at 23,9% (F2018: 23,3%)
• EBITDA (trading) margin of 6,2%, up from 6,1%
• Trading margin of 5,2% up on F2018 of 5,1%
• Translational FX impacts more pronounced into H2 –

4,8% positive effect on HEPS but constant FX growth maintained

• Headline Earnings R4,8 billion (↑12,7%) with constant FX earnings

R4,6 billion (↑7,9%)

• HEPS of 1443,6cps (↑12,5%), constant FX HEPS 1381,4cps (↑7,7%)
• Final dividend of 330,0 cps; 2,26x covered by continuing HEPS
• Solid free cash flows despite higher working capital absorption and
• ngoing reinvestment capex
• Return on monthly average funds employed 33%;

return on monthly average equity 16%

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Underlying financial performance solid

Translation impacts positive for the year

6,7 7,2 8,0 F2017 F2018 F2019 EBITDA (R billions) 5,5 6,0 6,7 F2017 F2018 F2019 Trading profit (R billions) 23,6 26,5 28,7 F2017 F2018 F2019 Shareholder equity (R billions) 1,7 3,6 4,7 F2017 F2018 F2019 Net debt (R billions)

Audited Financial Results for the year ended June 30 2019

• Real constant FX net revenue growth of 4,7%, our global food inflation estimated

at 1,5%

• Gross profit percentage up to 23,9% from 23,3% – enabling BID to trade through

the higher cost base

• Operating expenses up but well controlled – 7,0% in constant FX

(cost of doing business increases to 18,7% from 18,3%), driven by:

• Higher cost to serve larger independent customer base
• Wage pressures for staff, fuel and energy increases in a number of

geographies and by a higher invested infrastructure base

• Trading margin improved in all segments except Emerging Markets:
• Australasia has the highest segment margin at 6,9%
• Europe showed improvement to 4,3% despite Iberia & Germany detracting
• UK margin is now 5,2% (4,7%), improvements in Foodservice offset by

decline in Fresh

• Emerging markets at 4,9% significantly impacted by large decline in Greater

China

• New acquisitions had a 0,6% effect on Headline Earnings –

F2019 results assisted by acquisitions of R517 million of revenue and R29 million of trading profit

Statement of Profit

Quality of earnings remains sound, underpinned by solid organic growth

24,0% 19,0% 23,3% 18,3% 23,9% 18,7%

• 4%

1% 6% 11% 16% 21% 26%

Gross profit % Total expenses %

F2017 F2018 F2019 6,02% 4,97% 6,05% 5,07% 6,19% 5,16% 0% 1% 2% 3% 4% 5% 6% 7%

EBITDA margin % Trading profit margin %

F2017 F2018 F2019

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Audited Financial Results for the year ended June 30 2019

• Net interest paid increased by 25,5% to R285,9 million
• Asset management is generally good with a few exceptions
• Sunday June 30 was particularly challenging year-end close both with collections and payments
• Higher base rates in Greater China; some areas of overstocking; higher activity levels (Gross profit up by 12,3%)
• Additional 1 day of average working capital (equates to R478 million)
• Effective tax rate (excluding associate income and capital items) is slightly lower at 23,3% (F2018: 24,4%), guiding to approximately 24% - 25%
• n average for next year (mix dependent)
• Associates and Jointly Controlled entities share of profit is R59,2 million (Netherlands specialist businesses and 50% of Chipkins Puratos)

and will remain immaterial (38% of Argentina into F2020)

• Minority interests of R33,2 million are small and will remain a feature due to owner-managers often retaining a stake on acquisition
• Capital items – Impairment of assets of R40,7 million offset by net profit on PPE sales of R65,4 million
• Discontinued operations – comprise the UK Logistics businesses (CD and PCL)
• CD sale process ongoing; much improved operational performance and most of customer base at sustainable revenue levels
• PCL – Customer relationship broke down, significant trading losses to April 2019 (and intangible asset impairment £25,3 million) Bidcorp sold

distribution activities and exited residual vehicle fleet

Statement of Profit cont’d

Finance charges, taxation, associates, minority interests and capital items

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Audited Financial Results for the year ended June 30 2019

• Cash generated from operations before working capital – R8,0 billion (F2018: R6,9 billion)
• 100% of EBITDA and 120% of trading profit (F2018: 98% of EBITDA and 116% of trading profit)
• Non cash items mainly comprise share based payments, provision movements and asset impairments
• Working capital
• Typical working capital cycle is for absorption in H1 and generation in H2
• R1,4 billion absorbed in F2019 vs. R1,0 billion absorbed in F2018; Net monthly average working capital cycle 13 days (F2018: 11 days)
• Impacts in F2019:
• Structural – value-add procurement activities create longer supply chains (without commensurate increased supplier terms) on imported products
• Activity levels – 9,8% revenue growth across Group and some overstocking (eg for Brexit)
• Year-end cut off fell on Sunday
• Increased investment into depots requires higher stocking levels
• Cash effects of investing activities of R3,7 billion
• Maintenance and expansion capital expenditure of R2,9 billion compares with depreciation & amortisation of R1,3 billion
• Acquisitions consumed R0,8 billion, none of which are a singularly material
• Cash and cash equivalents of continuing operations R5,8 billion
• Net debt up at R4,7 billion equivalent to 0,59x net debt / EBITDA (F2018: R3,6 billion = 0,5x net debt / EBITDA)

Cash flows

Solid cash flow in the period while investment in asset base continues to create capacity for growth

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Audited Financial Results for the year ended June 30 2019

• Strong balance sheet underpinned by reliable cash flows allows flexibility to

achieve strategic growth objectives, organic and acquisitive

• Shareholders equity impacted by retained profit, dividends paid

and FCTR movements

• Liquidity management
• Short-term debt (R5,8 billion) = Cash (R5,7 billion),

all debt defacto long-term

• 44% of gross borrowings termed to beyond June 2020, significant

Euro term funding refinanced in H2 for 3 years

• Weighted average interest rate on foreign borrowings

2,6% vs. 2,4% in F2018

• Risk management
• Debt is matched to the underlying assets for a natural hedge; mixture of

fixed (long-term funding) and floating interest rates (short-term funding)

• Solvency
• Debt to equity ratio 16% (F2018: 13%)
• Net debt to annualised EBITDA 0,59x (F2018: 0,5x)
• Trading profit interest cover 23,3x (F2018: 26,2x)
• Returns
• Return on monthly average shareholder equity 16,1% vs. 16,6% (F2018)
• Return on monthly average ROFE of 32,6% vs. 36,3% (F2018)

Financial position

Financial position remains strong

23,6 26,5 28,7

1,7 3,6 4,7 0.1 0.2 0.2 0.3 0.3 0.4 0.4 0.5 0.5 0.6 0.6 0.7 0.7 2.2 2.4 2.6 2.8 3.0 F2017 F2018 F2019

Equity R billions Net debt R billions 30,9 30,8 28,0

7,3% 13,5% 16,4% 0% 5% 10% 15% 20% 25% 30% 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0

F2017 F2018 F2019 EBITDA interest cover x Net debt to equity %

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Audited Financial Results for the year ended June 30 2019

• Financial base supportive of business to deliver continued real growth in home currencies:
• Bidcorp remains cash generative but there is room for improvement in asset management in certain businesses
• Debt to equity ratio low at 16% (ex IFRS 16 impacts into F2020) with ample headroom to fund our organic and acquisitive growth
• Absorption of working capital in H1F2020 expected but continued growth requires absolute investment into working capital
• Rolling over further term debt early in H1F2020 at favourable rates
• Strength of financial position provides a cushion for the vagaries of markets and unanticipated events

(Bidcorp operates across more than 35 different countries and 20 different currencies)

• Core philosophy of naturally hedging assets and liabilities remains
• Businesses are managed and measured in their local currencies, above average returns remain the core driver of performance measurement
• IFRS 16 Impacts effective July 2019 – Lease liability R5,1 billion, Right of use assets R4,2 billion, negligible effect on earnings, net debt to equity 34%

and net debt to EBITDA 1,1x, EBITDA interest cover 14x

• 68% of property and 82% of vehicles owned by the Group
• Currency volatility to remain a feature into F2020; ZAR is the reporting currency however non-ZAR trading profits 92% of Group
• International shareholder base stable but has declined a little (49%)
• Bidcorp budgeting to continue delivering real growth in earnings for F2020

Financial guidance

Sound financial position supportive of continued growth into F2020

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Q&A