AVI Limited presentation to shareholders & analysts for the year - - PowerPoint PPT Presentation

AVI Limited presentation to shareholders & analysts for the year ended June 2017

AGENDA

 Key features and results history  Group financial results  Performance and prospects  Questions and answers

KEY FEATURES

 Sound performance in a challenging environment;  Revenue up 8,2% to R13,18 billion;  Gross margin recovered in second semester;  Operating profit up 10,7% to R2,39 billion;  Cash from operations up 8,4% to R2,99 billion;  Capital expenditure of R545,6 million;  Return on capital employed of 28,0%;  Headline earnings per share up 9,4% to 507,7 cents;  Final dividend of 243 cents per share, total normal dividend up

9,5% to 405 cents per share.

RESULTS HISTORY

 Compound annual growth rate from F05 to F17 of 15,2%  Operating profit margin increased from 9,9% in F05 to 18,1% in F17

Operating profit history

199 210 237 254 289 330 400 416 398 442 545 662 735 105 127 157 186 193 233 262 329 388 475 533 609 666 84 6 117 160 238 74 91 179 166 245 248 331 389 47 51 60 73 95 105 133 156 167 172 198 218 241

• 115

147 133 101 151 236 308 410 388 404 345 366 435 509 718 806 915 892 1 121 1 386 1 529 1 722 1 929 2 165 2 398

• 200

400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 2 600 F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 R million

Entyce Snackworks I&J Personal Care Footwear and Apparel

RESULTS HISTORY

 Sustained returns including increasing capital expenditure to support growth and efficiency

Return on capital employed

0% 5% 10% 15% 20% 25% 30% 35% 1 000 2 000 3 000 4 000 5 000 6 000 7 000 F10 F11 F12 F13 F14 F15 F16 F17 % R million

Net operating profit after tax Average capital employed ROCE (%)

RESULTS HISTORY

 Sustained strong conversion of earnings into cash

Historical cash conversion

201.8 230.6 226.6 550.0 0% 20% 40% 60% 80% 100% 120% 500 1 000 1 500 2 000 2 500 3 000 F10 F11 F12 F13 F14 F15 F16 F17 % R million

EBITDA Cash generated by operations Cash to EBITDA

RESULTS HISTORY

 Continued investment in efficiency, capacity and retail stores

Historical cash generation

196 209 224 264 256 325 410 541 567 424 748 622 546 108 101 260 284 227 237 92 363 454 595 502 530 956 699 812 1074 480 436 460 356 619 780 1 005 1 043 1 097 1 488 1 548 1 694 1 620

• 200

400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 R million

Capex I&J vessel replacements Free Cash Flow

RESULTS HISTORY

Dividend yield

 Based on share price at end of each year  Total dividend yield includes payments out of share premium and special dividends  Excludes share buy-backs

2.8% 3.8% 3.7% 6.2% 5.2% 4.5% 4.0% 4.1% 4.4% 4.9% 4.1% 4.3% 7.7% 12.0% 6.4% 7.4% 6.5% 4.5% 0% 2% 4% 6% 8% 10% 12% 14% F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17

Normal dividend yield Total dividend yield

RESULTS HISTORY

 Effective payout ratio from F05 = 89% of headline earnings  R6,53 billion returned to shareholders in last 5 years  Gearing within targeted range at end of June 2017

Returns to shareholders

550.0 116.0 166.0 229.4 238.6 262.8 301.1 373.0 620.7 809.7 953.5 1 064.5 1 197.4 527.5 791.4 201.8 230.6

• 226.6
• 550.0

638.8

• 319.1
• 269.9
• 317.8

166.0 229.4 788.3 262.8 301.1 869.5 620.7 1 359.7 953.5 1 703.3 1 197.4 1 318.9 200 400 600 800 1000 1200 1400 1600 1800 F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 R million

Normal dividend paid Final dividend declared Special dividend paid Share Buyback

Group Financial Results

F17 F16 Rm Rm %

GROUP FINANCIAL RESULTS

Income statement Revenue 13 184,6 12 188,9 8,2 Gross profit 5 762,2 5 346,6 7,8

Gross profit margin % 43,7 43,9 (0,5)

Operating profit 2 385,3 2 154,6 10,7

Operating profit margin % 18,1 17,7 2,3

Net financing cost (152,4) (129,4) 17,8 Share of Joint Ventures 63,2 58,1 8,8

Effective tax rate % 28,4 28,4

Headline earnings 1 646,0 1 492,2 10,3

HEPS (cps) 507,7 464,1 9,4

Capital items (127,5) (14,3) Return on capital employed % 28,0 27,9

GROUP FINANCIAL RESULTS

 Price increases in all categories taken to offset weaker Rand and higher raw material costs  Volume pressure in constrained environment with higher selling prices  I&J impacted by lower hake quota and unprotected strike

Movement in group revenue

6 000 7 000 8 000 9 000 10 000 11 000 12 000 13 000 14 000 12 189 1 408

• 412

13 185 F16 Price Volume F17 R million

GROUP FINANCIAL RESULTS

Gross profit margin history

 Price increases haven’t fully recovered accumulated cost pressure in food and beverages  Ongoing focus on cost and efficiencies to protect gross profit margin  Rand exchange rates secured at levels that will assist margin in F18

41.8% 44.9% 45.4% 44.6% 43.1% 43.8% 43.9% 43.7% 20% 30% 40% 50% F10 F11 F12 F13 F14 F15 F16 F17

GROUP FINANCIAL RESULTS

Operating profit 10,7% up

 Entyce: Higher selling prices, especially tea; speciality coffee volume growth  Snackworks: Higher selling prices and snacks volume growth  I&J: Weaker Rand and higher selling prices, offset by unprotected strike in August 2016  Personal Care: Higher selling prices and strong owned-brands performance  Spitz: Stronger Rand improved margin; less price inflation eased volume pressure in H2  Green Cross: Sustained discounting by competitors and lower wholesale demand; offset by

sales growth from new doors

2 000 2 050 2 100 2 150 2 200 2 250 2 300 2 350 2 400 2 450 2 155 73 57 58 24 20

• 1
• 1

2 385 F16 Entyce Snackworks I&J Personal Care Spitz Green Cross Other F17 R million

GROUP FINANCIAL RESULTS

 Total expenditure for F17 of R760m compared to R728m in F16  Spend focused on core brands, new product launches and line extensions

Marketing expenditure

7.8% 7.1% 5.1% 7.7% 8.5% 4.1% 15.3% 1.8% 8.4% 8.1% 4.7% 7.9% 8.4% 4.0% 16.0% 2.3% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

F17 F16

* Excludes Coty

F17 F16 Rm Rm %

GROUP FINANCIAL RESULTS

Cash generation and utilisation Cash generated by operations* 2 993,6 2 761,8 8,4

Working capital to revenue % 22,2 20,3 9,4

Capital expenditure 545,6 881,8 (38,1) Depreciation and amortisation 397,4 350,2 13,5 Net debt 1 444,1 1 428,6 Net debt / capital employed % 22,9 24,1

* Before working capital changes

 Strong conversion of earnings to cash  Working capital increase due to strong 4th quarter trading and timing of raw material

deliveries

 Prior year capital expenditure includes I&J vessel payments  Gearing in targeted range

Dividends

GROUP FINANCIAL RESULTS

Interim dividend - cps 162 150 8,0 Final dividend - cps 243 220 10,5 Total dividend - cps 405 370 9,5

Dividend yield - %* 4,3 4,5

Cover ratio 1,25 1,25 Closing share price - cps 9 500 8 300

* Calculated using the closing share price at 30 June

F17 F16 %

Capital expenditure and depreciation

GROUP FINANCIAL RESULTS

 Continued investment in manufacturing capacity, efficiency and retail stores  Expenditure in respect of new I&J vessels included in F14, F15 and F16

410 541 567 546 108 101 260 191 217 256 283 308 347 394 F11 F12 F13 F14 F15 F16 F17

• 100

200 300 400 500 600 700 800 900 1 000 F9 F10 F11 F12 F13 F14 F15 F16 F17 R million

Capital expenditure I&J vessel replacement Depreciation charge

532 849 882

Key capital projects spend summary

GROUP FINANCIAL RESULTS

F17 F18 Actual Planned Rm Rm Tea packaging line replacements and upgrades 18 4 Biscuit line capacity and process improvements 81 143 I&J vessel dry-docks and upgrades 33 26 Woodstock processing plant replacements and upgrades 19 21 Abalone farm expansion and upgrades 25 11 Indigo distribution center upgrade 28 37 Retail store additions and refurbishments 31 60 Logistics vehicle fleet replacement 42 14 Bryanston campus extension 25

• Backup power generation

17

• 319

316 Total capital expenditure 546 564

GROUP FINANCIAL RESULTS

September 2017 to December 2017 January 2018 to June 2018 July 2018 to December 2018 % Cover % Cover % Cover USD imports 84% 65% 2% EUR imports 77% 67% 4% EUR exports 76% 60% 16%

Foreign exchange hedges

 Consistent hedging philosophy provides stability to manage gross margins  Better import rates give more flexibility to manage demand in constrained environment  I&J export rates support sound profitability, although lower than last year

Performance and Prospects

F17 Rm F16 Rm % Revenue 3 757,1 3 421,9 9,8 Operating profit 735,1 661,7 11,1 Operating profit margin % 19,6 19,3 1,6

 Strong tea performance despite significant cost inflation  Selling price increases taken to protect margin  Premium product volumes under pressure at higher price points  Rooibos category contraction

• Significant input cost pressure from Rooibos and weaker Rand
• Relative demand resilient at higher prices

 Volume growth in affordable brands  Operating profit and margin up, despite gross profit margin

pressure

Income statement

 Strong coffee performance in a competitive category  Selling price increases taken to protect margin  Volume gains in speciality coffee range (Hug In A Mug)  Aggressive competitor discounting in mixed instant coffee in H2  Input cost pressure from weaker Rand and higher coffee bean prices  Good operating profit growth, despite lower margins

Income statement

F17 Rm F16 Rm % Revenue 3 757,1 3 421,9 9,8 Operating profit 735,1 661,7 11,1 Operating profit margin % 19,6 19,3 1,6

Income statement

 Constrained creamer performance  Volume and market share decline due to aggressive competitor

pricing and new pack size

• Ellis Brown launched in new pack size in H2
• 1kg format promoted successfully in wholesale

 Selling prices constrained  Significant input cost pressure from drought (glucose) and weaker

Rand (palm oil)

 Profit margins lower, but healthy  Operating profit decrease from last year’s record high

F17 Rm F16 Rm % Revenue 3 757,1 3 421,9 9,8 Operating profit 735,1 661,7 11,1 Operating profit margin % 19,6 19,3 1,6

% Δ F17 vs F16 Comments

Tea revenue growth 15,2 Volume (5,0) Category decline at higher price points; offset by growth in value-for-money teas

• Ave. selling price

21,3 Increases in response to cost pressures, mainly rooibos raw material and weaker Rand Coffee revenue growth 11,8 Volume (0,4) Pressure on affordable brands offset by growth in speciality coffee range (Hug In A Mug)

• Ave. selling price

12,2 Price increases in response to cost pressure, mainly weaker Rand and coffee bean prices Creamer revenue growth 0,5 Volume (4,6) Decline due to aggressive competitor pricing and new pack size

• Ave. selling price

5,4 Price increases partly offset by higher levels of discounting in constrained market

Sales volume and selling prices

Market shares – value

 Creamer market share decline due to aggressive competitor pricing and

new pack size

35.3% 58.0% 24.7% 11.1% 47.1% 34.3% 60.3% 24.7% 11.6% 40.5% 0% 10% 20% 30% 40% 50% 60% 70% Five Roses Freshpak Frisco Trinco Ellis Brown

F16 F17

Cost impact of raw materials and commodities consumed in the period (F17 vs F16):

Raw material costs

 Rooibos cost increase due to constrained supply and export pricing opportunity  Black tea cost increase mainly due to weaker Rand

9 11 19 24 49 85 10 20 30 40 50 60 70 80 90 Palm oil Arabica Glucose Robusta / chicory Black tea Rooibos R million

Prospects for F18

 Careful price / volume management in constrained and competitive

market

 Protect Five Roses premium positioning  Rooibos input costs and selling prices at record levels  More stable rooibos raw material cost  Easing of margin pressure with stronger Rand exchange rates secured  Normalisation of creamer market share  Continued support for Hug In A Mug  Annualisation of restructuring benefits  Trial of premium product innovations  Steady building of branded positions in export markets  Ongoing upgrade of tea packing lines – capacity and efficiency

Performance and Prospects

F17 Rm F16 Rm % Revenue 3 956,2 3 643,2 8,6 Operating profit 666,4 609,1 9,4 Operating profit margin % 16,8 16,7 0,6

Income statement

 Constrained biscuits performance  Selling price increases taken in response to input cost pressure from

weaker Rand and higher raw material costs

 Volumes under pressure at higher price points  Increased import competition with stronger Rand  Operating profit growth, despite lower margins

Income statement

 Strong snacks performance  Selling price increases taken in response to input cost inflation from

weaker Rand

 Corn volume growth due to line extensions  Potato chip volumes suppressed by constrained potato supply in H1  Margin improvement from higher selling prices and change in sales mix

• Initial target operating profit margin achieved

 Continued factory focus on upgrading potato and corn lines

F17 Rm F16 Rm % Revenue 3 956,2 3 643,2 8,6 Operating profit 666,4 609,1 9,4 Operating profit margin % 16,8 16,7 0,6

Sales volume and selling prices

% Δ F17 vs F16 Comments

Biscuits revenue growth 7,2 Volume growth (3,7) Constrained demand at higher prices

• Ave. selling prices

11,3 Price increases to recover input cost pressure Snacks revenue growth 13,5 Volume growth 6,1 Corn volume growth due to line extensions

• ffset by potato chips decline due to

constrained potato supply

• Ave. selling prices

7,0 Price increases to recover input cost pressure

Market shares – value

44.8% 15.9% 19.0% 44.2% 15.3% 18.6% 0% 10% 20% 30% 40% 50% Bakers (Sweet) Bakers (Savoury) Willards

F16 F17

Cost impact of raw materials and commodities consumed in the period (F17 vs F16):

Raw material costs

25 27 29 32 5 10 15 20 25 30 35 Palm oil Butter Sugar Flour R million

 Careful price / volume management in constrained and competitive

market

 Stronger Rand exchange rates secured give more flexibility to manage

demand

 Innovation  Continuing program of product extensions to support volumes  New product launch  Ongoing raw material cost pressure from higher sugar and butter prices  Annualisation of restructuring benefits  Steady building of branded positions in export markets  Capital projects – major upgrade of chocolate lines at Westmead

Prospects for F18

Performance and Prospects

Income statement Income statement

F17 Rm F16 Rm % Revenue 2 362,7 2 171,8 8,8 Operating profit 389,1 331,0 17,6 Operating profit margin % 16,5 15,2 8,6

 Revenue growth due to weaker Rand on export sales and selling price

increases in domestic and export markets

 Unprotected strike at trawling operations in August 2016 – R25 million

impact

 Lower sales volumes due to lower quota and change in mix  Freezer vessel availability below target with higher maintenance down time

Movement in operating profit

 Fishing variance due to lower catch rate on wet vessels and lost sea days on freezer vessels

due to maintenance down time

• 50

100 150 200 250 300 350 400 450 331 72 2

• 33
• 25

42 389 F16 Exchange rates Fuel Fishing Unprotected strike Export prices/other F17 R million

Profit history

 Abalone contribution growing in line with investment in capacity  Simplot profit includes royalties on use of the I&J brand in Australia

174 178 243 309 52 53 69 71 47 24 70 73 100 200 300 400 500 F14 F15 F16 F17 R million

Fishing Abalone Simplot

273 255 382 453

 Continued evidence of good recruitment into the resource with high proportion of

small fish

 Freezer vessel catch rates higher than last year, wet vessel catch rates lower

Fishing performance

7.6 9.4 11.0 11.9 11.0 10.2 9.9 8.5 8.3 8.1 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 Hake tons per sea day

I&J catch rate

 2017 quota reduced by 3 344 tons due to lower TAC (2 000 tons) and lower allocation of

inshore rights (1 344 tons)

 Inshore quota 2017 increased from 813 tons to 1 589 tons following appeal process  Deep sea rights in place to end 2020. Renewal process expected to commence in 2018

I&J hake fishing quota (calendar year)

5 000 15 000 25 000 35 000 45 000 2011 2012 2013 2014 2015 2016 2017 Quota tons

Deep sea Inshore

% Δ F17 vs F16 Comments

I&J Domestic revenue growth 0,0 Volume (10,2) Lower retail and whole fish volumes; increased allocation to export

• Ave. selling prices

11,3 Price increases taken to mitigate cost pressure I&J Export revenue growth 19,9 Volume 1,0 Increased fillets from improved freezer vessel catch rates; higher processed fish from wet vessel landings

• Ave. selling prices

18,8 Benefit of weaker Rand and price increases

 Local market share increased to 48,5% from 48,4% in F16

Sales volume and selling prices (hake)

 Exchange rate secured at levels that support sound export profit margins  Growing markets for Cape Hake brand supportive for F18  Fuel costs well hedged  Remain exposed to catch rate and size mix volatility  Impact of global weather patterns  Current small fish mix signals good recruitment  Quota for CY17 down 8.1% to 37 901 tons  Ongoing focus on cost reduction  Evaluate alternative water supply  Abalone aquaculture expansion to 500 tons proceeding well  Current phase to be upsized to 600 tons at nominal cost  Additional 500 ton expansion being evaluated

Prospects for F18

Performance and Prospects

 Income Statement

Income Statement

F17 Rm F16 Rm % Revenue 1 194,5 1 096,4 9,0 Operating profit 241,5 218,0 10,8 Operating profit margin % 20,2 19,9 1,5

 Revenue from owned brands grew by 11,3%  Strong performance from core ranges and innovation  Lower commissions from Coty – R14,9 million  Successful product launches in key export markets

 Sale volume and selling prices

Sales volume and selling prices

% Δ F17 vs F16 Comments

Personal Care revenue growth* 11,3 Volume growth 3,5 Increase in fragrances, roll ons and body care, and export aerosol growth

• Ave. selling price

7,5 Price increases to recover input cost pressure; sales mix

* Like-for-like comparison excluding Coty

 Body spray market share improved slightly from 37,2% to 38,7%

 Pressure on selling prices in competitive environment  Stronger Rand improves ability to manage demand and margin pressure  Product ranges positioned to benefit from constrained environment  Further traction from new ranges in export markets  New product launches to benefit local and export demand

Prospects for F18

Performance and Prospects

Income statement

 Core brands performed well considering higher price points  No price increases in F17 supported improved H2 performance  Volume decline  Consumers under pressure with less disposable income for

discretionary spending

 Fewer shoes cleared on sale vs prior year  Continued growth in lay by volumes – increase from 18% to 24% of sales

units for the year

 Like-for-like trading density improved in Spitz and Kurt Geiger  Cost reduction initiatives implemented

F17 Rm F16 Rm % Revenue 1 497,4 1 467,7 2,0 Operating profit 339,9 320,2 6,2 Operating profit margin % 22,7 21,8 4,1

% Δ F17 vs F16 Comments

Spitz & KG Footwear revenue growth 0,6 Sales volume – Total – Normal price – Discounted on sale (14,4) (6,8) (7,6) Constrained demand at higher price points

• Ave. selling price

14,9 Price increases and lower volumes discounted on sale KG Clothing revenue growth 9,1 Price increases

Sales volume and selling prices

Spitz and Kurt Geiger

50 100 150 200 250 300 350 400 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 R million

Operating profit (Rm)

0% 20% 40% 60% 80% F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 Margin %

Operating profit % Gross profit % Gross profit and operating profit margins

Spitz and Kurt Geiger

5 000 10 000 15 000 20 000 25 000 55 000 57 500 60 000 62 500 65 000 67 500 F12 F13 F14 F15 F16 F17 m2 R/m2 Trading density (R/m2) Average trading space (m2)

Trading density - Spitz stores

1 000 2 000 3 000 4 000 5 000 10 000 20 000 30 000 40 000 50 000 60 000 F12 F13 F14 F15 F16 F17 m2 R/m2

Trading density (R/m2) Average trading space (m2) Trading density - Kurt Geiger stores

 Constrained spending environment expected to persist in F18  Stronger Rand improves pricing flexibility while maintaining gross profit margins  Ongoing focus on product planning and store-tiering to underpin volume growth in F18  Sustained improvement in brand and design via Italian office  Retail space  4 new stores  6 refurbishments  Annualisation of cost saving benefits  Development and rollout of new store designs/concepts

Prospects for F18

Performance and Prospects

 Retail revenue growth of 15,5%  Price increases in response to weaker Rand  Increased trading space  Improved assortment and stock replenishment  Gross profit and volume pressure from extensive sustained discounting by

competitors

 Wholesale revenue decline of 4,7% from volume pressure offset by prices  Trading space  4 new stores in F17 (8 new stores in F16)  6 stores refurbished

Income Statement

F17 Rm F16 Rm % Revenue 371,9 339,7 9,5 Operating profit 26,8 27,3 (1,8) Operating profit margin % 7,2 8,0 (10,0)

 Constrained spending environment expected to persist in F18  Improved range to attract a new, younger Green Cross customer  Stronger marketing execution in-store and traditional media formats  Benefits expected from increased retail space  Store tiering initiatives to widen customer base for improved product  5 new doors coupled to store-design enhancements  Stabilise wholesale volumes  Annualisation of cost saving benefits

Prospects for F18

INTERNATIONAL

Performance and Prospects

AVI INTERNATIONAL

 Currency liquidity crises in Angola, Mozambique and Zimbabwe  Rand strength impacted pricing and demand in export markets  Price increases to recover input cost pressure  Double digit profit growth in Tea and Coffee  Successful launch of new personal care ranges  Profit decline in Creamer due to aggressive competitor pricing  Investing to build long-term brand positions

Operating profit history

76 92 117 129 132 159 194 197

• 50

100 150 200 250 F10 F11 F12 F13 F14 F15 F16 F17 R million

Entyce, Snackworks and Indigo – Non RSA sales

AVI INTERNATIONAL

F17 Rm F16 Rm % International Revenue

1 016,2 962,2 5,6 % of Grocery and Personal Care brands 11,4 11,8 (3,4)

International Operating Profit

196,9 193,7 1,7 % of Grocery and Personal Care brands 12,1 13,0 (6,9)

International Operating Profit Margin

19,4 20,1 (3,5) Grocery and Personal Care brands Operating Margin 18,3 18,2 0,6

AVI GROUP

 Sustain Entyce, Snackworks and Indigo profit growth in a tough

environment

 Tactile price / volume management essential  Constrained consumer spending expected to persist  Stronger Rand exchange rates secured give more flexibility to

manage demand

 Input cost pressure from raw materials  Annualisation of restructuring benefits  Innovation to gain market share  Continued project activity to improve efficiency and capacity  Steady building of branded positions in export markets

Prospects for F18

AVI GROUP

 I&J performance dependent on catch rates  Exchange rates hedged at levels that support good profit margins  Key export markets healthy  Fuel well hedged  Improved abalone contribution  Cost reduction initiatives  Preparation for hake long term rights renewal

Prospects for F18 continued

AVI GROUP

 Spitz  Stronger Rand exchange rates secured

• Less price pressure for consumers
• Maintain gross profit margin

 Annualisation of restructuring benefits  Focus on retail execution

• Evolution of store designs
• Incremental space growth and in-cycle refurbishments
• Kurt Geiger clothing

 Green Cross  Attract new customers  Continued growth of retail space and revenue  Stabilise wholesale volumes  Cost savings

Prospects for F18 continued

AVI GROUP

 Group initiatives  Portfolio review – test I&J value realisation options  Ongoing focus on business unit margin management  Ongoing focus on procurement, cost savings and efficiency

Prospects for F18 continued

AVI GROUP

 Manage our unique brand portfolio to its long term potential  Organic earnings growth; target >10% HEPS growth p.a.  High dividend yield – maintain normal dividend payout ratio of 80%  Sustain high return on capital employed  Effective capital projects  Leverage domestic manufacturing capability to grow export

markets

 Return excess cash to shareholders efficiently  Replicate our category market leadership in selected regional

markets

 Acquisition of high quality brand opportunities if available  Increased potential for acquisitions if environment deteriorates

Investor proposition

Questions

Information slides

Segmental Revenue Segmental Operating Profit Operating Margin F17 Rm F16 Rm Δ % F17 Rm F16 Rm Δ % F17 % F16 % Food & Beverage Brands

10 076,0 9 236,9 9,1 1 790,6 1 601,8 11,8 17,8 17,3

Entyce Beverages 3 757,1 3 421,9 9,8 735,1 661,7 11,1 19,6 19,3 Snackworks 3 956,2 3 643,2 8,6 666,4 609,1 9,4 16,8 16,7 I&J 2 362,7 2 171,8 8,8 389,1 331,0 17,6 16,5 15,2 Fashion Brands

3 108,6 2 950,7 5,4 607,5 563,0 7,9 19,5 19,1

Personal Care 1 194,5 1 096,4 9,0 241,5 218,0 10,8 20,2 19,9 Footwear & Apparel 1 914,1 1 854,3 3,2 366,0 345,0 6,1 19,1 18,6 Corporate

• 1,3

(12,8) (10,2) Group

13 184,6 12 188,9 8,2 2 385,3 2 154,6 10,7 18,1 17,7

INFORMATION SLIDES

Business unit financial results

Segmental Revenue Segmental Operating Profit Operating Margin F17 Rm F16 Rm Δ % F17 Rm F16 Rm Δ % F17 % F16 % Footwear & Apparel

1 914,1 1 854,3 3,2 366,0 345,0 6,1 19,1 18,6

Spitz 1 497,4 1 467,4 2,0 339,9 320,2 6,2 22,7 21,8 Green Cross 371,9 339,7 9,5 26,8 27,3 (1,8) 7,2 8,0 Gant 44,8 47,2 (5,1) (0,7) (2,5) 72,0 (2,1) (5,3)

INFORMATION SLIDES

Footwear & apparel financial results

INFORMATION SLIDE

Revenue 8,2% up

 Entyce: Price increases in tea, coffee and creamer together with speciality coffee volume

growth

 Snackworks: Price increases in biscuits and snacks together with snacks volume growth  I&J: Weaker Rand and price increases in domestic and export markets  Personal Care: Strong growth in owned brands offset by decline in Coty commission  Spitz: Higher selling prices offset by footwear volume decline  Green Cross: Price increases offset by lower wholesale volumes

11 600 11 800 12 000 12 200 12 400 12 600 12 800 13 000 13 200 13 400 12 189 335 313 191 98 30 32

• 3

13 185 F16 Entyce Snackworks I&J Personal Care Spitz Green Cross Other F17 R million

INFORMATION SLIDE

 Entyce: Revenue growth offset by higher input costs, mostly rooibos and weaker Rand  Snackworks: Revenue growth offset by higher input costs, mostly weaker Rand  I&J: Benefit of weaker Rand and higher export prices, offset by unprotected strike in August  Personal Care: Revenue growth offset by higher input costs, mostly weaker Rand  Spitz: Revenue growth offset by pressure from weaker Rand  Green Cross: Revenue growth offset by pressure from weaker Rand

Gross profit 7,8% up

5 100 5 200 5 300 5 400 5 500 5 600 5 700 5 800 5 347 101 105 133 24 40 12 5 762 F16 Entyce Snackworks I&J Personal Care Spitz Green Cross F17 R million

INFORMATION SLIDE

Cash flows

• 500

1 000 1 500 2 000 2 500 3 000 2 994

• 516
• 547
• 546

12

• 152
• 1 245

Cash from

• perations

Working capital and other Taxation Capital expenditure Increase in net debt Net interest paid Dividends paid R million

F17 Rm F16 Rm % Revenue as stated 2 362,7 2 171,8 8,8 Foreign exchange (losses)/gains recorded in S&A costs (9,1) 30,8 2 353,6 2 202,6 6,9

INFORMATION SLIDE

I&J revenue growth including forex gains and losses recorded in S&A costs

Quota (tons)

CY11 CY12 CY13 CY14 CY15 CY16 CY17 South African Total Allowable Catch (TAC) 131 847 144 742 156 088 155 308 147 500 147 500 140 126 % change in TAC 10,0 9,8 7,8 (0,5) (5,0)

• (5,0)

I&J 36 906 40 515 43 689 43 471 41 223 41 245 37 901 % 28,0 28,0 28,0 28,0 27,9 28,0 27,1

INFORMATION SLIDE

 2017 quota reduced by 3 344 tons due to lower TAC (2 000 tons) and lower allocation of

inshore rights (1 344 tons)

I&J fishing quota

Like-for-like metrics*

F17 F16 Number of stores 71 71 Turnover (Rm) 1 246 1 246 Average & closing m2 18 424 18 449 Trading Density (R/m2) 67 631 67 531

Spitz

F17 F16 Number of stores 77 76 Turnover (Rm) 1 287 1 271 Average m2 19 776 19 388 Trading Density (R /m2) 65 071 65 550 Closing m2 20 037 19 726

INFORMATION SLIDE

Trading space and trading density

* Based on stores trading for the entire current and prior periods.

Like-for-like metrics*

F17 F16 Number of stores 24 24 Turnover (Rm) 167 163 Average & closing m2 3 005 3 107 Trading Density (R/m2) 55 506 52 317

Kurt Geiger

F17 F16 Number of stores 33 34 Turnover (Rm) 211 196 Average m2 4 135 4 187 Trading Density (R /m2) 50 920 46 883 Closing m2 4 115 4 266

INFORMATION SLIDE

Trading space and trading density

* Based on stores trading for the entire current and prior periods.

Like-for-like metrics*

F17 F16 Number of stores # 31 31 Turnover (Rm) 238 225 Average & closing m2 3 837 3 787 Trading Density (R/m2) 62 147 59 383

Green Cross

F17 F16 Number of stores # 42 38 Turnover (Rm) 275 238 Average m2 4 925 4 210 Trading Density (R /m2) 55 778 56 484 Closing m2 5 218 4 697

INFORMATION SLIDE

Trading space and trading density

* Based on stores trading for the entire current and prior periods # including value stores

Period End Spitz Kurt Geiger Green Cross

# of stores Closing m² # of stores Closing m² # of stores Closing m² December 2007 46 12,974 3 346 June 2008 51 14,095 3 346 December 2008 57 15,448 3 346 June 2009 56 15,595 3 346 December 2009 56 15,220 3 346 June 2010 56 15,012 3 346 December 2010 57 15,124 7 1,047 June 2011 57 14,991 15 1,910 December 2011 59 15,240 22 2,922 29 3,304 June 2012 61 15,662 26 3,507 30 3,382 December 2012 64 16,586 31 4,113 30 3,382 June 2013 64 16,586 30 3,751 30 3,382 December 2013 67 17,156 32 3,960 30 3,382 June 2014 70 17,813 32 3,880 31 3,517 December 2014 72 18,342 33 3,978 30 3,423 June 2015 74 19,144 29 3,677 30 3,529 December 2015 75 19,376 33 4,156 34 4,097 June 2016 76 19,726 34 4,266 38 4,697 December 2016 77 19,544 33 4,087 39 4,896 June 2017 77 20,037 33 4,115 42 5,218

INFORMATION SLIDE

Closing number of stores and trading space at the end of each period

INFORMATION SLIDE

Normal dividend history

37 53 73 80 88 100 125 203 260 300 332 370 405 108 107 147 159 175 189 246 320 341 375 413 459 504

2.50 2.00 2.00 2.00 2.00 2.00 2.00 1.50 1.25 1.25 1.25 1.25 1.25 F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17

• 0.40

0.80 1.20 1.60 2.00 2.40 2.80 3.20 3.60

• 100

200 300 400 500 600 Cents per share

Diluted headline earnings and dividends per share

Normal dividend declared Diluted headline earnings per share

Normal dividend cover (times)