AVI Limited presentation to shareholders and analysts for the six - - PowerPoint PPT Presentation

AVI Limited presentation to shareholders and analysts for the six months ended 31 December 2019

AGENDA

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

KEY FEATURES

 Revenue growth of 1,0%  Constrained consumer demand environment  Aggressive competitor pricing in certain categories  December trading weaker than anticipated, exacerbated by load-shedding  Value versus volume across key categories carefully balanced  Gross profit margins protected despite the challenging environment  Selling and administrative costs held in line with the prior year  Operating profit marginally higher at Group level  Higher finance costs in line with higher average debt levels  Strong cash generation sustained  Capital expenditure of R187,0 million  Capital profit of R374 million on sale of interest in Simplot joint venture  Headline earnings per share down 3,8% to 293,8 cents  Basic earnings per share, including capital items, up 35,3%  Interim dividend cover maintained, interim dividend of 160 cents per share

RESULTS HISTORY

Operating profit history

106 90 111 122 133 167 259 245 247 259 312 351 389 424 468 460 67 89 97 129 140 121 181 203 246 298 340 369 412 452 430 489 39 16 75 75 126 60 3 101 47 74 98 160 167 179 153 169 27 27 31 36 42 57 67 86 91 97 103 124 140 140 128 94 69 100 99 82 111 170 231 303 296 309 306 310 342 287 247 200 400 600 800 1000 1200 1400 1600 H1 F05 H1 F06 H1 F07 H1 F08 H1 F09 H1 F10 H1 F11 H1 F12 H1 F13 H1 F14 H1 F15 H1 F16 H1F17 H1F18 H1F19 H1F20 R million Entyce Snackworks I&J Personal Care Footwear and Apparel 450 1457 282 402 512 1 021 854 921 1 152 240 520 1 456 1 530 1 408 1 302 674

 Constrained environment resulting in volume pressure and lower profit in H1 F19 and H1 F20  Compound annual growth rate from F05 to F20 of 12,8%  Operating profit margin increased from 10,0% in F05 to 20,4% in F20

RESULTS HISTORY

Return on capital employed

 High return maintained in tough environment

10% 15% 20% 25% 30% 35% 1 000 2 000 3 000 4 000 5 000 6 000 7 000 F11 F12 F13 F14 F15 F16 F17 F18 F19 F20* R million Net operating profit after tax Average capital employed ROCE (%)

* F20 represents a rolling 12 month period to 31 December 2019

RESULTS HISTORY

Cash conversion

0% 20% 40% 60% 80% 100% 120% 500 1 000 1 500 2 000 2 500 3 000 3 500 F11 F12 F13 F14 F15 F16 F17 F18 F19 F20* R million EBITDA Cash generated by operations Cash to EBITDA

* F20 represents a rolling 12 month period to 31 December 2019

 Sustained strong conversion of earnings into cash

RESULTS HISTORY

Dividend yield (Year end)

 Based on share price at end of each year (R91,36 at end June 2019)  Current dividend yield based on F19 dividends and share price of R75,00  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% 4.0% 4.5% 5.5% 7.7% 12.0% 6.4% 7.4% 6.5% 4.5% 6.3% 0% 2% 4% 6% 8% 10% 12% 14%

F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 F18 F19 Current dividend yield

Normal dividend yield Total dividend yield

RESULTS HISTORY

Returns to shareholders

 Effective payout ratio from F05 = 90,2% of headline earnings

116 166 229 239 263 301 373 621 810 953 1 065 1 197 1 322 1 430 1 368 528 202 231 227 550 639 823 319 270 318 166 229 789 263 301 870 621 1 360 953 1 704 1 197 1 322 2 253 1 368 528

• 500.0

1 000.0 1 500.0 2 000.0 2 500.0 F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17 F18 F19 F20 R million Normal dividend paid Interim dividend declared Special dividend paid Share Buyback

Group Financial Results

GROUP FINANCIAL RESULTS

Income statement Revenue 7 141,7 7 068,6 1,0 Cost of sales (4 174,8) (4 103,6) 1,7 Gross profit 2 966,9 2 965,0 0,1

Gross profit margin % 41,5 41,9 (1,0)

Selling and administrative expenses (1 509,7) (1 509,4) 0,0 Operating profit 1 457,2 1 455,6 0,1

Operating profit margin % 20,4 20,6 (0,9)

Net financing cost (100,5) (94,4) 6,5 Share of Joint Ventures 15,7 37,1 (57,7) Capital items before tax 444,8 (11,1)

Effective tax rate % 25,7 28,3

Headline earnings 966,5 1 002,0 (3,5)

HEPS (cps) 293,8 305,5 (3,8)

28,0 H1 F20 H1 F19 Rm Rm %

GROUP FINANCIAL RESULTS

Segmental Revenue Segmental Operating Profit Operating Margin H1 F20 Rm H1 F19 Rm Δ % H1 F20 Rm H1 F19 Rm Δ % H1 F20 % H1 F19 % Food & Beverage Brands 5 391,9 5 345,1 0,9 1 118,0 1 051,0 6,4 20,7 19,7 Entyce Beverages 1 967,8 2 032,7 (3,2) 459,7 468,1 (1,8) 23,4 23,0 Snackworks 2 242,6 2 130,6 5,3 489,3 430,1 13,8 21,8 20,2 I&J 1 181,5 1 181,8 0,0 169,0 152,8 10,6 14,3 12,9 Fashion Brands 1 749,8 1 723,5 1,5 340,9 414,9 (17,8) 19,5 24,1 Personal Care * 687,8 584,2 17,7 93,5 128,4 (27,2) 13,6 22,0 Footwear & Apparel 1 062,0 1 139,3 (6,8) 247,4 286,5 (13,6) 23,3 25,2 Spitz 913,5 954,7 (4,3) 253,6 294,7 (13,9) 27,8 30,9 Green Cross 120,4 153,9 (21,8) (11,8) (15,3) 22,9 (9,8) (9,9) Gant 28,1 30,7 (8,5) 5,6 7,1 (21,1) 19,9 23,1 Corporate

• (1,7)

(10,3) Group 7 141,7 7 068,6 1,0 1 457,2 1 455,6 0,1 20,4 20,6

Business unit financial results

* Impacted by change in Coty business model

GROUP FINANCIAL RESULTS

Movement in group revenue

 Price increases in biscuits and snacks, supported by effective management of discounts  Volume pressure materially in footwear

6 000 6 500 7 000 7 500 7 069 177

• 104

7 142 H1 F19 Price Volume H1 F20 R million

GROUP FINANCIAL RESULTS

Gross profit margin history

 Adoption of new accounting standards in F19 resulted in lower margin  Gross profit margin largely protected in difficult environment

44.3% 44.5% 45.3% 43.8% 45.0% 44.3% 41.9% 41.5% 20% 30% 40% 50% 60% H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 Old basis H1 F19 New basis H1 F20

1 350 1 400 1 450 1 500 1 550 1 456

• 8

59 16

• 35
• 41

3 7 1 457 H1 F19 Entyce Snackworks I&J Personal Care Spitz Green Cross Other H1 F20 R million

GROUP FINANCIAL RESULTS

Operating profit 0,1% up

 Entyce: Lower sales volumes partly offset by lower raw material costs, particularly tea  Snackworks: Higher realised selling prices and improvement in biscuit factory yields partly offset by lower

biscuit volumes

 I&J: Weaker Rand, improved wet vessel fishing performance and lower unrealised losses on fuel hedges, partly

• ffset by lower unrealised profit in abalone stock valuation

 Personal Care: Increased marketing costs on product launches and margin pressure due to aggressive

competitor discounting

 Spitz: Fewer consumers able to afford core brand price points, exacerbated by sustained competitor

discounting

 Green Cross: Lower restructuring costs offset by lower sales volumes

GROUP FINANCIAL RESULTS

Marketing expenditure

 Total expenditure for H1 F20 of R405,2 million compared to R387,7 million in H1 F19  Increased spend to support new product launches in personal care  Includes advertising and promotions, co-operative expenditure with customers and marketing

department costs

6.8% 7.1% 4.8% 6.2% 8.6% 4.9% 14.9% 1.7% 6.2% 7.4% 5.1% 6.2% 8.4% 5.5% 16.7% 2.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% H1 F19 H1 F20

* Excludes Coty

GROUP FINANCIAL RESULTS

 Strong conversion of earnings to cash  Working capital higher due to increased stock, including Coty stock taken over at the

end of F19

 Interim dividend cover maintained

Cash flow and gearing

H1 F20 H1 F19 F19 Rm Rm % Cash generated by operations 1 646,4 1 677,6 (1,9)

Working capital to revenue % 25,8 23,0 12,2

Capital expenditure (187,0) (290,4) (35,6) Special dividend - (822,9) Proceeds from disposal of Simplot (after costs) 631,8 - Net debt 1 651,1 2 512,0

Net debt / capital employed % 25,2 36,1

Interim dividend – cps 160 165 (3,0)

200 226 560 284 193 290 187 332 623 322 262 227 183 137 150 166 194 206 202 208 146 158 181 200 182 206 293 212 F14 F15 F16 F17 F18 F19 F20

• 100

200 300 400 500 600 700 800 900 1 000 F14 F15 F16 F17 F18 F19 F20 R million Capital expenditure H1 Capital expenditure H2 Depreciation charge H1 Depreciation charge H2 Forecast capital expenditure H2 Forecast depreciation charge H2 408 283 849 308 882 394 347 546

GROUP FINANCIAL RESULTS

Capital expenditure and depreciation (excluding depreciation on right-of-use assets)

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

420 388 480 420 532 473

GROUP FINANCIAL RESULTS

Key capital projects spend summary

H1 F20 H2 F20 F20 Total Actual Planned Planned Rm Rm Rm Rooibos expansion project 33

• 33

Tea packaging line replacements and upgrades 4 12 16 Biscuit line capacity and process improvements 9 16 25 Snack line replacements and upgrades 14 7 21 I&J vessel dry-docks and upgrades 28 63 91 I&J processing plant replacements and upgrades 6 28 34 Abalone farm red tide mitigation 1 8 9 Indigo permanent merchandising 14 7 21 Retail store additions and refurbishments 14 25 39 123 166 289 Total capital expenditure 187 293 480

GROUP FINANCIAL RESULTS

February 2020 to June 2020 July 2020 to December 2020 January 2021 to June 2021 % Cover % Cover % Cover USD imports 80% 36% 1% EUR imports 82% 39% 3% EUR exports 68% 37% 9%

Foreign exchange hedges

 Consistent hedging philosophy provides stability to manage gross margins  H2 rates secured at levels slightly higher than H1  Recent Rand weakness will impact import costs in F21

GROUP FINANCIAL RESULTS

I&J period end fair value adjustments

H1 F20 H1 F19 Actual Actual Var Rm Rm Rm Fuel hedge unrealised loss / (gain) 1,2 23,7 (22,5) Opening mark-to-market asset / (liability) (1,4) 12,0 Closing mark-to-market asset / (liability) (2,6) (11,7) Abalone – movement in unrealised profit in stock 24,3 (6,3) 30,6

 Fuel mark-to-market determined by oil price and exchange rate at reporting date  Abalone fair value determined by market prices and exchange rate at reporting date  Abalone market prices at reporting date impacted by ongoing Hong Kong protests

Performance and Prospects

Income statement

 Growth in tea operating profit supported by lower raw material prices  Gross profit margin improvement

• Rooibos raw material supply materially improved
• Lower black tea costs largely offset by weaker Rand

 Rooibos volumes decreased due to competitor discounting  Five Roses volumes increased  Rooibos upgrade project completed, including innovative packaging  Decrease in selling and administrative costs

H1 F20 Rm H1 F19 Rm % Revenue 1 967,8 2 032,7 (3,2) Operating profit 459,7 468,1 (1,8) Operating profit margin % 23,4 23,0 1,7

Income statement

 Coffee profit decrease due to sustained competitor activity  Lower volumes in all categories  Some relief from lower coffee bean prices, partly offset by weaker

Rand

 Decrease in selling and administrative costs

H1 F20 Rm H1 F19 Rm % Revenue 1 967,8 2 032,7 (3,2) Operating profit 459,7 468,1 (1,8) Operating profit margin % 23,4 23,0 1,7

Income statement

 Creamer profits sustained at high level, although lower than last year  Volume decline due to better on-shelf availability of competitor

product

 Raw material cost inflation  Improved price realisation to offset cost inflation

• Followed change in pack size from 800 grams to 750 grams
• Discounts tightly managed

H1 F20 Rm H1 F19 Rm % Revenue 1 967,8 2 032,7 (3,2) Operating profit 459,7 468,1 (1,8) Operating profit margin % 23,4 23,0 1,7

Sales volume and selling prices

% Δ H1 F20 vs H1 F19 Comments Tea revenue growth (3,5) Volume (2,7) Rooibos volume decline due to competitor discounting

• Ave. selling price

(0,8) Increased discounting to support volumes, taking lower raw material into account Coffee revenue growth (9,1) Volume (11,7) Sustained aggressive competitor discounting

• Ave. selling price

3,0 Lower levels of discounting to realise some value growth Creamer revenue growth (0,3) Volume (7,0) Better on-shelf availability of competitor products in H1 F20

• Ave. selling price

7,1 Improved price realisation, including lower levels of discounting

Market shares – 12 months value

29.9% 57.1% 20.8% 43.8% 11.4% 29.7% 56.0% 20.3% 46.5% 11.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Five Roses Freshpak Frisco Ellis Brown Trinco H1 F19 H1 F20

 Balanced price / volume in constrained environment

Raw material costs Cost impact of raw materials and commodities consumed in the period (H1 F20 vs H1 F19):

• 4

13

• 1

4

• 0.1
• 55
• 60
• 50
• 40
• 30
• 20
• 10

10 20 Robusta / chicory Glucose Arabica Casein Palm oil Rooibos/black tea R million

Performance and Prospects

Income statement

 Growth in biscuit profit due to improved price realisation and factory

performance

 Price increase in second semester of F19 in response to

accumulated cost pressures; lower levels of discounting

 Improved factory performance, particularly Isando  Selling and administrative costs well managed

H1 F20 Rm H1 F19 Rm % Revenue 2 242,6 2 130,6 5,3 Operating profit 489,3 430,1 13,8 Operating profit margin % 21,8 20,2 7,9

Income statement

 Strong snacks performance  Profit margins remain healthy  Price increase in second semester of F19 in response to

accumulated cost pressures; lower levels of discounting

 Volume growth in export markets  Selling and administrative costs well managed

H1 F20 Rm H1 F19 Rm % Revenue 2 242,6 2 130,6 5,3 Operating profit 489,3 430,1 13,8 Operating profit margin % 21,8 20,2 7,9

Sales volume and selling prices

% Δ H1 F20 vs H1 F19 Comments Biscuits revenue growth 4,8 Volume growth (3,1) Volume decline due to category pressure

• Ave. selling prices

8,1 Price increases in F19 and lower discounting Snacks revenue growth 6,9 Volume growth 0,1 Volume growth in export markets

• Ave. selling prices

6,7 Price increases in F19 and lower discounting

0,3 6 9 3 1

• 12
• 15
• 10
• 5

5 10 Palm oil Sugar Flour Maize Potatoes Butter R million

Raw material costs Cost impact of raw materials and commodities consumed in the period (H1 F20 vs H1 F19):

Market shares – 12 months value

41.8% 14.1% 18.6% 40.9% 14.1% 17.9% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Bakers (Sweet) Bakers (Savoury) Willards H1 F19 H1 F20

 Volumes resilient in constrained environment

Performance and Prospects

Income statement

 Revenue flat  Higher hake sales volumes and favourable Rand exchange rate  Offset by lower non-core volumes and pressure on selling prices in

some export markets

 Higher catch volumes in line with quota, resulting in:  Increased sales volume  Temporary build-up of stock  Improved wet fleet performance  Sound processing performance and costs tightly managed  Lower unrealised profit in valuation of live abalone in line with market

prices

 Impact of fuel hedge mark-to-market lower than last year

H1 F20 Rm H1 F19 Rm % Revenue 1 181,5 1 181,8 0,0 Operating profit 169,0 152,8 10,6 Operating profit margin % 14,3 12,9 10,9

• 50

100 150 200 153 26

• 13

11 22

• 31

1 169 H1 F19 Forex Export prices Vessel utilisation Fuel mark- to-market Abalone unrealised profit Other H1 F20 R million

Operating profit

 Pressure on some export prices from increased competition  Lower unrealised profit included in valuation of live abalone due to

pressure on prices in core markets

Profit history

70 117 130 153 114 154 19 34 27 22 35 5 13 25 50 29 40 25 50 100 150 200 250 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 H1 R million Fishing Abalone Simplot 102 176 207 204 189 185

 Abalone contribution decrease due to lower export prices and resultant lower

unrealised profit in valuation of live abalone stock; H1 trading result similar to last year

 Simplot performance impacted by decline in trading performance and sale of I&J’s

interest in November 2019

Fishing Performance

 Decline mainly due to change in fleet utilisation - increase in wet vessel fishing

days

10.9 11.6 11.4 10.0 9.3 9.1 8.5 8.2 8.3 9.6 8.9 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 H1 F10 H1 F11 H1 F12 H1 F13 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 Hake tons per sea day I&J catch rate

Sales volume and selling prices (Hake)

% Δ H1 F20 vs H1 F19 Comments I&J Domestic revenue growth 5,0 Volume 3,1 Improved wet fleet fishing performance and higher quota

• Ave. selling prices

1,9 Price increases taken to mitigate cost pressure I&J Export revenue growth 3,0 Volume 4,2 Improved wet fleet fishing performance and higher quota

• Ave. selling prices

(1,1) Lower export selling prices in some markets and change in sales mix partly

• ffset by favourable Rand exchange rate

Performance and Prospects

Income statement

 Higher revenue mainly due to change in Coty business model  Lower gross profit and operating profit margins  Owned brand revenue up  Growth in lotions and roll-ons from new product launches  Aerosol volumes slightly higher  Gross profit margin pressure  Change in sales mix  Cost increases not fully recovered in constrained and competitive

market

 Marketing investment of R15 million to support new product launches  Selling and administrative costs tightly managed

H1 F20 Rm H1 F19 Rm % Revenue 687,8 584,2 17,7 Operating profit 93,5 128,4 (27,2) Operating profit margin % 13,6 22,0 (38,2)

Operating profit

• 50

100 150 200 128

• 15
• 24

5 94 H1 F19 NPD marketing costs Gross margin pressure Coty contribution H1 F20 R million

Sales volume and selling prices

% Δ H1 F20 vs H1 F19 * Comments Personal Care revenue growth* 2,5 Volume growth 5,2 Growth mainly from new product launches in lotions and roll-ons; aerosol volumes slightly up

• Ave. selling price

(2,6) Lower realised prices due to change in sales mix; selling prices constrained by aggressive competitor discounting

 Body spray market share declined slightly from 32,1% to 32,0%

* Like-for-like comparison excluding Coty

Performance and Prospects

Income statement

 Footwear volume decline  Lower demand in constrained environment  December trading negatively impacted by extended “Black Friday” in

November, shift in consumer spending and load shedding

 Growth from clothing brands  Gross profit margin pressure  Weaker Rand exchange rate  No price increases on core ranges since April 2016  Selling and administrative costs well contained  Profitability and return on capital remain healthy  Trading space - opened 3 stores and closed 1

H1 F20 Rm H1 F19 Rm % Revenue 941,6 985,4 (4,4) Operating profit 259,2 301,8 (14,1) Operating profit margin % 27,5 30,6 (10,1)

Sales volume and selling prices

% Δ H1 F20 vs H1 F19 Comments Spitz & KG Footwear revenue growth (6,0) Sales volume (8,5) Constrained consumer environment; tough December trading conditions

• Ave. selling price

2,8 Inflation in non core lines and lower volumes sold on sale KG Clothing revenue growth 6,3

Performance and Prospects

Income statement

 Revenue decline of 21,8%  Aggressive discounting across the category  Loss of sales due to store conversion to new GX & Co multi-brand

format

 Late arrival of a portion of summer range  Improved gross profit margin  Costs tightly managed, savings in line with restructuring in F19  8 stores refurbished

H1 F20 Rm H1 F19 Rm % Revenue 120,4 153,9 (21,8) Operating profit (11,8) (15,3) 22,9 Operating profit margin % (9,8) (9,9) (1,0)

Performance and Prospects

Operating profit history

AVI INTERNATIONAL

 Volume growth in all categories apart from personal care  Strong growth in Botswana as well as distributor markets  Good cost control

46 56 70 73 77 82 92 94 93 109 117 20 40 60 80 100 120 140 H1 F10 H1 F11 H1 F12 H1 F13 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 R million

AVI INTERNATIONAL

Entyce, Snackworks and Indigo – Non RSA sales

H1 F20 Rm H1 F19 Rm %

International Revenue 572,7 534,5 7,1 % of Grocery and Personal Care brands 11,7 11,3 3,5 International Operating Profit 117,3 108,8 7,8 % of Grocery and Personal Care brands 11,3 10,6 6,6 International Operating Profit Margin 20,5 20,4 0,5 Grocery and Personal Care brands Operating Margin 21,3 21,6 (1,4)

Prospects for H2

AVI GROUP

 Target Entyce and Snackworks profit growth in a tough environment  Sustain medium term approach  Careful price / volume management in market expected to remain

constrained and competitive

 Raw material prices and exchange rates secured support consistent

gross profit margins if demand is reasonable

 Rooibos raw material costs lower with improved supply  Potential for continued aggressive discounting by competitors  Creamer volumes may be lower if competitor sustains service levels  Increased marketing investment in some categories  New product launches to support brands and gain volume  Steady building of branded positions in export markets  Continued project activity to improve efficiency and capacity  Volume risk from load shedding mitigated with back-up power

AVI GROUP

 Target H2 recovery in Indigo profit  Leverage H1 product launches and marketing investment  Focus on achieving price points necessary to protect gross profit

margin

 Ongoing review of structure and fixed costs  Improve performance of Coty ranges

Prospects for H2 continued

AVI GROUP

Prospects for H2 continued

 I&J performance dependent on catch rates  Exchange rates at levels that support sound export profit margins  Depend materially on catch rates and size mix  Fuel costs effectively hedged, lower than H1  Quota for CY20 unchanged at 39 616 tons  Increased competition in export markets  Ongoing focus on cost reduction  Adverse impact on abalone prices from Hong Kong market

disruption – protests and coronavirus

 Sustained capex / maintenance to preserve fleet capability  Long term fishing rights application process extended to end of

2021 by new minister

AVI GROUP

 Spitz  Price increase implemented in February to protect gross profit margin  Promotion of specific stock to manage inventory levels  Focus on costs  Review store refurbishment plans to minimise disruption  Mitigate impact of load shedding  Continued focus on brand and design via Italian office  Green Cross  Improve trading densities with better product range  Complete roll-out of new GX & co store design

Prospects for H2 continued

Investor proposition

AVI GROUP

 Continue adapting to changing macro environment  Ongoing review of business model  Group initiatives keep focus on margin management, procurement,

cost savings and efficiency

 Manage our unique brand portfolio to its long term potential  Target real earnings growth in constrained environment  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

Questions

 Entyce: Volume declines partly offset by higher realised prices in creamer and coffee  Snackworks: Price increases in F19 and lower levels of discounting partly offset by volume decline

in biscuits

 I&J: Higher hake sales volumes and favourable Rand exchange rate offset by lower non-core

volumes and pressure on selling prices in some export markets

 Personal Care: Change in Coty business model and owned brands product launches  Spitz: Footwear decline in constrained consumer environment  Green Cross: Lower sales volumes in constrained and competitive environment

Revenue 1,0% up

6 800 6 850 6 900 6 950 7 000 7 050 7 100 7 150 7 200 7 250

7 069

• 65

112

104

• 41
• 34
• 3

7 142 H1 F19 Entyce Snackworks I&J Personal Care Spitz Green Cross Other H1 F20

R million

INFORMATION SLIDES

Gross profit 0,1% up

INFORMATION SLIDES

 Entyce: Lower volumes offset by favourable tea raw material costs  Snackworks: Revenue growth and improved factory performance  I&J: Weaker Rand and improved wet fleet fishing performance, partly offset by lower unrealised

profit in abalone stock valuation

 Personal Care: Margin pressure from competitor activity  Spitz: Lower revenue and margin pressure from weaker Rand exchange rate  Green Cross: Lower sales volumes partly offset by improved margin from full import model

2 500 2 600 2 700 2 800 2 900 3 000 3 100

2 965

• 10

67 5

• 13
• 40
• 5
• 2

2 967 H1 F19 Entyce Snackworks I&J Personal Care Spitz Green Cross Other H1 F20

R million

Cash flows

INFORMATION SLIDES

• 200

400 600 800 1 000 1 200 1 400 1 600 1 800 2 000

1 753

• 77
• 341
• 187
• 88
• 101
• 825

632

• 766

Cash from

• perations

Working capital and

• ther

Taxation Capital expenditure Lease liabilities paid Net interest paid Odinary Dividends Simplot sale Decrease in net debt

R million

I&J fishing quota

INFORMATION SLIDES

 2020 quota remains unchanged Quota (tons) CY14 CY15 CY16 CY17 CY18 CY19 CY20 South African Total Allowable Catch (TAC) 155 308 147 500 147 500 140 126 133 120 146 430 146 430 % change in TAC (0,5) (5,0)

• (5,0)

(5,0) 10,0 0,0 I&J 43 471 41 223 41 245 37 901 36 013 39 616 39 616 % 28,0 27,9 28,0 27,1 27,1 27,1 27,1

Impact of change in Coty business model

INFORMATION SLIDES

H1 F20 Reported Rm H1 F20 Old basis Rm Revenue 687,8 568,8 Operating profit 93,5 88,5 Operating profit margin % 13,6 15,6

 Coty agreement renewed for 3 years  Full revenue and cost of sales on Coty product in Indigo income statement  Increased operating profit, but lower profit margin  Working capital of approximately R85 million on Indigo balance sheet

Spitz and Kurt Geiger profit history

INFORMATION SLIDES

0% 20% 40% 60% 80% H1 F11 H1 F12 H1 F13 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 Margin % Operating profit % Gross profit % 50 100 150 200 250 300 350 400 H1 F11 H1 F12 H1 F13 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1 F19 H1 F20 R million

Trading space and trading density

INFORMATION SLIDES

Like-for-like metrics* H1 F20 H1 F19 Number of stores 73 73 Turnover (Rm) 774,9 819,0 Average & closing m2 19 159 19 122 Trading Density (R/m2) 40 445 42 831 Spitz H1 F20 H1 F19 Number of stores 75 76 Turnover (Rm) 789,6 837,7 Average m2 19 551 19 572 Trading Density (R /m2) 40 387 42 801 Closing m2 19 645 19 745

Trading space and trading density

INFORMATION SLIDES

Like-for-like metrics* H1 F20 H1 F19 Number of stores 32 32 Turnover (Rm) 123,8 119,4 Average & closing m2 4 284 4287 Trading Density (R/m2) 28 904 27 854 Kurt Geiger H1 F20 H1 F19 Number of stores 34 33 Turnover (Rm) 122,1 117,0 Average m2 4 230 4 194 Trading Density (R /m2) 28 854 27 910 Closing m2 4 289 4 194

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

Trading space and trading density

INFORMATION SLIDES

Like-for-like metrics* H1 F20 H1 F19 Number of stores # 40 40 Turnover (Rm) 89,5 107,5 Average & closing m2 4 792 4 792 Trading Density (R/m2) 18 686 22 435 Green Cross H1 F20 H1 F19 Number of stores # 41 44 Turnover (Rm) 90,5 114,6 Average m2 4 901 5 431 Trading Density (R /m2) 18 473 21 108 Closing m2 4 896 5 410

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

Period End Spitz Kurt Geiger Green Cross

# of stores Closing m² # of stores Closing m² # of stores Closing m² 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 75 19,544 33 4,087 39 4,896 June 2017 77 20,037 33 4,115 42 5,218 December 2017 77 20,243 33 4,194 45 5,536 June 2018 75 19,460 33 4,194 45 5,536 December 2018 76 19,745 33 4,194 44 5,410 June 2019 74 19,363 33 4,191 41 4,936 December 2019 75 19,645 34 4,289 41 4,896

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

INFORMATION SLIDES