Bid Corporation Limited Investor Presentation for the half-year ended - - PDF document

Bid Corporation Limited Investor Presentation for the half-year ended December 31 2017 Bid Corporation Limited Investor Presentation for the half-year ended December 31 2017

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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ni l

• l n m

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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naudited results for the halfyear ended December 1 017

ernard erson, CEO Strategy update and trading David Cleasby, CO inancial Operational Executives Open A on their businesses

Supplementary information

• Agenda

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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n in n on

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

naudited results for the halfyear ended December 1 017

idcorp is a complete oodservice offering idcorp serves multiple customer segments idcorp is internationally diversified across developed and emerging markets idcorp people are entrepreneurial and incentivised to be so idcorp has a proven decentralised business model and best practice learnings are widely shared idcorp growth is organic, acquisitiveorganic through bolton’s and acquisitive idcorp believes that balance sheet strength with low debt is a strong competitive advantage idcorp proprietary technology enhances customer relationships and efficiencies

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idcorp strategy update

A proven and focused business model, which delivers quality earnings growth, is alert to opportunity, and has international application

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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naudited results for the halfyear ended December 1 017

ili

• eporting currency relatively stable vs Group trading currencies
• Chipkins Puratos a 50 equity accounted JV wef April 017, previously a 100 contribution
• Logistics classified as discontinued, exiting low margin contracts, unsolicited offer for remaining business a winwin solution
• alfyear and annual comparatives represented for Logistics
• rading profit growth of 9,4 in constant currency, ,5 growth excluding acquisitions and disposals
• Generally benign food inflation with moderate GDP growth
• Successfully focusing on core oodservice and complementary addedvalue business requiring high service levels
• Australian result reflective of strategic decision to selectively expand to fill territorial gaps and be closer to customers in maor metros
• Artificial intelligence to data mine increasingly harnessed as a complement to ecommerce
• Supply and pricing upheaval in the dairy value chain had a meaningful impact in Asia
• ighter labour markets and upward wage pressure through much of idcorp territories

5

Pleasing likeforlike growth in trading profit of ,5 in constant

Group trading margin at 4,9

Continuing Operations Growth Current Growth Constant Likeforlike Constant evenue 7,7 , 6, rading profit ,9 9,4 ,5 eadline earnings , ,9 EPS cents ,6 ,7

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

naudited results for the halfyear ended December 1 017

mn i

• Collectively 1 of trading profit and an important cash contributor
• Australia and New ealand have recorded 0 years and 17 years respectively
• f consecutive profit growth
• Continued real growth in quality business, margins highest in Group
• Ongoing investment in asset base and staff training
• Capex on new, smaller, more manageable urban facilities in Australia
• Continued organic expansion in New ealand
• Gaining traction in resh, eat, Processing and Speciality Imports
• uoyant labour markets, retaining staff a challenge, wage costs up

Ali

• oodservice sales up 5, in AD, total interim sales exceed AD1bn
• rading profit declined marginally due to metro expansion
• New elbourne facilities live in Oct 016 and April 017
• New SE ueensland facility live in July 017
• New Sydney facility live Sept 017
• 60 of population in maor metros, idcorp underrepresented
• Strategy of new investment ahead of return, early signs encouraging
• Supply Solutions (imports) performing well, exciting growth plans
• estival (liquor) bought wef July 017, successfully integrating

Zln

• Capex funded through strong cash generation, high OE
• rom leased to larger owned premises to accommodate growth and

without the need to engage new managers

• 5 new DCs operational with more on drawing board
• Sales growth of 9, and trading profit up 1,1 in ND
• resh, Processing Logistics 7 of trading profit at good margin
• argin up despite relatively high food inflation higher labour rates
• Active on business development and efficiency initiatives

6

Australasia

(incorporating Australia and New ealand)

rading performance – Australasia

Constant currency revenue up 6,, trading profit up ,7, trading margin at 6,0 vs 6,

94,6 944,9

• 00

40 60 00 400 600 00 1000 100 1 017 1 01 rading profit billion (left axis) rading margin (right axis) ,0 6,0 4,0 ,0 0,0

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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naudited results for the halfyear ended December 1 017

mn i

• reetrade focus and simplification of business paying off
• igher pound prices largely passed through
• Systems improvements delivering stability and better sales productivity
• resh a tricky business to master but strategy on track as the business

is professionalised without sacrificing entrepreneurialism

• Nearing the end of the Logistics litigation issue
• Legislative changes on working time and pensions
• oi
• Sales up ,1 and trading profit up 9,6
• Cost control boosted trading margin customer margin
• ix and inflation effect on sales
• reetrade volume share improved to 7,5
• Own brand sales up ,, of sales
• ender activity yielding new accounts and customer retentions
• A mixed result with margin pressure, sales up 6 but trading profit

disappointed by declining 5

• Seafood business stable and growing, meat and produce businesses

remain in a building phase

• Investment in new facilities in London and irmingham
• ish margins improved as salmon pricing eased
• ii ionin
• 0 of Logistics volume (C) exited ebruary 14th 01
• Decisive action taken, orderly process of withdrawal
• Acquisition negotiations with a credible purchaser,

a winwin solution

7

rading performance – nited ingdom

Constant currency revenue up 7,0, trading profit up 5,1, trading margin maintained at 4,5

nited ingdom 699, 7,9

• 00

40 60 00 400 600 00 1000 100 1 017 1 01 rading profit billion (left axis) rading margin (right axis) 6,0 4,0 ,0 0,0

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

naudited results for the halfyear ended December 1 017

mn i

• rading margin has improved by 100bps since 1 016
• Likeforlike trading profit up in constant , excluding acquisitions
• Now the second largest contributor to Group profit, assisted by organic

growth, delivery on strategic goals and acquisitions

• Strong outcome in elgium, Czech Slovakia, Poland and Italy
• Netherlands continues to make steady progress in transitioning
• Acquisitions scaleup Iberia to a  €140m revenue business

ln

• evenue growth of 0,9 reflects change in mix toward freetrade and

national accounts, trading profit up substantially

• reetrade now 50 of revenue at higher margin
• Economic backdrop buoyant but competition remains intense
• Process of cost reduction, range rationalisation, I modernisation

lim

• 1,0 growth in reetrade and 1, growth in institutional sales
• 7, growth in sales assisted by estfood acquired wef Sept 016
• Pleasing continual improvement in trading profit
• reetrade 1 of sales vs 9 at better margin
• Logistics margin remains below 1 with no scope to improve

mn n Ai

• Pier 7, a €60m turnover business in Germany / Austria, a new

presence in a large market

• usiness has settled in well, a medium term play on a new market
• Completion of ergkirchen warehouse scheduled for September
• Outside of top maors, German market fragmented
• Currently trading in 6 geographical branches
• rading performance – Europe

Constant currency revenue up 16,, trading profit up ,9, trading margin 4, vs ,6

Europe

(Netherlands, elgium, Czech, Slovakia, Poland, Italy, altics, Iberia, Germany)

59,0 17,0

• 00

40 60 00 400 600 00 1000 100 1 017 1 01 rading profit billion (left axis) rading margin (right axis) 6,0 4,0 ,0 0,0

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

9

naudited results for the halfyear ended December 1 017

n loi

• Sales up 9,1 and trading profits up 1, in C
• Demand robust in all segments, reduced seasonality in the business
• Average summer for ice cream sales
• odern depots and factories yielding high volumes and strong growth
• ln
• One of the most modern branch networks in the Group
• Capex realising improving return in trading margin and OE with

significant future upside potential

• Sales up 11,5 (freetrade 17,4), profits up 5, in PLN
• New depots on stream in Gdańsk, Lublin, Poznań

li – ini i oni

• Lithuania a focal point for growth, 0 of revenue
• altics now profitable
• New depot under construction in aunas, Lithuania

l

• Performing well, scaling up resources to accommodate growth

ambitions nationally

• Acquisition of horeca specialist Doreca wef January 01 takes

annualised turnover to €500 million, second largest in Italy

• 0 of business in street trade with a healthy mix of category
• Sales to other idcorp companies less than of revenue but

growing rapidly i

• Political disturbance and terrorism in Catalonia has had a

temporary dampening effect

• arehousing in arcelona being consolidated into one new site
• rustock, fruit and vegetable specialist, acquired in Portugal wef

August 017

• Crnicas Sez, a meat specialist, acquired in asque Country,

Spain wef August 017

9

rading performance – Europe

Constant currency revenue up 16,, trading profit up ,9, trading margin 4, vs ,6

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

naudited results for the halfyear ended December 1 017

mn i

• rading profit up 9, in constant , adusting for Chipkins Puratos JV
• lat overall performance does not reflect some standout

performances and includes disruptive effects of diary market upheaval

• ong ong experienced large dairy price increases China, a closed

market, experienced deflation due to a supply glut arising from a change in strategy by a large Australasian dairy company

• Dairy pricing increased dramatically globally and avian flu in E

affected poultry product supply

• Greater China profits increased by 10,7 in total in D

Ai

• n on n
• A mixed sales result, trading profit declined by 0 in D
• Initiative to bolster managerial support structure in ong ong
• emporary additional warehousing costs until April 019

inln in

• Sales up 1 with trading profits up by 4
• Dairy sales values declined significantly on pricing issues
• Impacts of dairy disruption will continue to be felt in
• igher margin mix and good results out of eiing and Guangzhou

resulted in a higher overall profit

• Presence in 6 first and second tier cities with growing diversity of

food offering and online retail ino

• Sales growth 6,, trading profit up 1,, expenses well controlled
• Pricing pressure due to market dynamics, including dairy,

impacted margins

• ocus on foodservice and added value is yielding results
• irst time contribution from alaysia
• Vietnam entrance in line with expansion strategy

10

rading performance – Emerging arkets

Constant currency revenue up 0,7, trading profit up 1,7 (9, likeforlike), trading margin 5,9 vs 5,

Emerging arkets

(incorporating ong ong, China, Singapore, South Africa, Chile, razil, iddle East)

5, 51,

• 00

40 60 00 400 600 00 1000 100 1 017 1 01 rading profit billion (left axis) rading margin (right axis) ,0 6,0 4,0 ,0 0,0

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

11

naudited results for the halfyear ended December 1 017

• Ai
• Likeforlike sales grew 6,4 in A and profits by 1,6 with

foodservice, food ingredients, and bakery all trading well

• Independent trade 5,6 of foodservice sales for 1, 54,5 in
• Chipkins Puratos JV doing very well with good relationships being

built, positive for innovation and competitiveness going forward

• Griffith oods 51/49 JV with Crown National in S ingredients

market began operations in October 017

• All market segments face stiff competition, idfood strategy clear

il

• Sales grew 1,7 in CLP, boosted by the bolton in Concepcin, the

new branch in Via del ar, and range extension strategy

• Profits flat as we reinvest into product and geographic growth

il

• Sales grew 44 in L and profits by 4, including the benefit of the

ariusso acquisition wef October 016

• Likeforlike Avelino sales and profit grew despite negative macros
• Competition for acquisitions but idcorp will not overpay

il

• A mixed result, with Saudi Arabia trading better relative to the

AE, but total sales and profitability declined for the half

• Difficult macros and political tensions, implementation of new

taxes and user charging across GCC states

• Strategic decision to downscale retail and rationalise the

number of brands on offer

• Group management input to assist in repositioning
• ocus switch from agency import to local foodservice and

house brands

• Small bolton of a local foodservice wholesaler in October 017

11

rading performance – Emerging arkets

Constant currency revenue up 0,7, trading profit up 1,7, trading margin 5,9 vs 5,

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

12

Notes

naudited results for the halfyear ended December 1 017

idcorp

1

Outlook

Confident in our strategy to deliver sustainable growth with good quality earnings and reliable cash flows

Australasia

• Australia – reinventing and investing to capture more urban market share
• New ealand – organic expansion with modern owned premises
• Capital deployment for modernisation and expansion off a sound financial position
• Encouraging the sharing of best practice and individual initiative
• Acquisitions always on the radar, they have to have strategic fit and be fairly priced

nited ingdom

• Nervousness around political developments
• Executing on a successful strategy
• New capacity increasingly required

Emerging arkets

• ecent market disruptions in Greater China due to dairy and poultry are temporary
• esilient and motivated teams have outperformed in challenging circumstances
• A positive second half is anticipated

Europe

• A growing geographic footprint outside of our traditional markets
• Exposure in both Italy and Iberia has already scaled up significantly
• Entry to the German market opens up a huge mediumterm opportunity
• Eastern Europe will continue to realise increasing returns

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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innil i l

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

Unaudited results for the half‐year ended December 31 2017

A solid underlying financial performance driven by organic growth

Translation impacts negligible in the period

Based on continuing operations of the Group

Highlights

• Underlying business trajectory in home FX in H2 F2017 continued

through H1 F2018

• Revenue R61,5bn (↑ 8%) in line with constant FX revenue R61,8bn
• EBITDA (trading) margin of 5,9% maintained
• Trading margin of 4,9% in line with H1 F2017
• Translational FX impacts muted through H1 – 0,1% negative effect on

H1 HEPS

• Headline Earnings R2,1bn (↑9%) in line with constant FX earnings

R2,0bn (↑9%)

• HEPS of 640,0 cps (↑8,6%), similar to constant FX HEPS 640,7 cps

(↑8,7%)

• Interim dividend of 280,0 cps 2,3x covered by continuing HEPS
• Free cash flows impacted by working capital absorption and

meaningful reinvestment capex

• Return on funds employed 35%; return on average equity 16%

14

3,6 3,4 6,7 H1 F2018 H1 F2017 F2017 EBITDA (R billions) 24,5 22,2 23,5 H1 F2018 H1 F2017 F2017 Shareholder equity (R billions) 3,0 2,8 5,5 H1 F2018 H1 F2017 F2017 Trading profit (R billions) 3,4 1,7 1,7 H1 F2018 H1 F2017 F2017 Net debt (R billions)

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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naudited results for the halfyear ended December 1 017

Statement of Profit

uality of earnings remains sound, underpinned by solid top line growth

• nderlying free trade constant net revenue growth of ,
• Gross profit percentage slightly down to ,6 from , some

absorbed to fund free trade growth and abnormal dairy inflation

• Operating expenses very well controlled – like4like increase of

,6 (cost of doing business declines to 1,7 from 1,9), despite driven by

• higher cost to serve independent business mix
• labour cost pressures for staff in a number of geographies and by higher

activity levels

• rading margin improved in most geographic segments
• Australasia has the highest segment margin at 6,0

(declined from 6, in 1 017) followed by Emerging markets at 5,9

• Europe showed significant improvement as all businesses

performed better

• margin is a respectable 4,5 (4,5), improvements in oodservice
• ffset by decline in resh
• New acquisitions had no effect on result post acquisition and

funding costs – 1,bn on revenue (,0) and ,5m (pre acquisition and funding costs) of trading profit (1,1)

15

,6 1,7 , 1,9 4,0 19,0 5 10 15 5 Gross profit

• tal expenses

1 01 1 017 017 5,9 4,9 5,9 4,9 6,0 5,0 1

• 4

5 6 EIDA margin rading profit margin 1 01 1 017 017

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

naudited results for the halfyear ended December 1 017

• Net interest paid increased by 16,6 to 16,5 million
• Asset management is generally good with a few exceptions
• Structural supply chain changes in Greater China and some strategic stocking
• Additional term debt for Spain (1 017), Germany ( 01) and other acquisitions
• Effective tax rate (excluding associate income and capital items) is 5,1 (1 017 4,7), guiding to approximately 5
• n average for the year (mix dependent)
• Associates and Jointly Controlled entities share of profit is 9, million (Netherlands specialist businesses and

50 of Chipkins Puratos) and will remain immaterial

• inority interests of 10, million are small and will remain a feature due to ownermanagers often retaining a stake on acquisition
• Capital items
• Net profit on disposal of end of life properties in Australia
• Other individually insignificant items

16

Statement of Profit cont’d

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

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

17

naudited results for the halfyear ended December 1 017

inancial position

inancial position remains robust

• Strong balance sheet underpinned by reliable cash flows allows

enormous flexibility to achieve strategic growth obectives,

• rganic and acquisitive
• Shareholders equity impacted by profit, dividends paid,

and C movements

• Liquidity management
• No material changes from June 017 position
• Net finance charges 17 higher due to working capital absorption cycle

in 1 acquisition funding

• Of gross borrowings of ,5 billion, 9 is nonSouth African
• 65 of gross borrowings termed to beyond December 01
• eighted average interest rate on foreign borrowings ,,
• verall Group ,7
• isk management
• Debt is matched to the underlying assets for a natural hedge
• Solvency
• Debt to equity ratio 14 (1 017)
• Net debt to EIDA 0,47x (1 0170,5x)
• rading profit interest cover ,1x (1 017 ,7x)
• eturns
• eturn on average shareholder equity 16, vs 17,4 (1 017)
• eturn on average OE of 5, vs 6,0 (1 017)

17

4,5 , ,5 ,4 1,7 1,7 00 10 40 50 160 10 00 40 60 1 01 1 017 017 Equity billion Net debt billion ,0 ,7 5,4 14,0 7,5 7, 5 10 15 00 50 100 150 00 50 00 50 1 01 1 017 017 EIDA interest cover x Debt to equity 5,0 4,0 ,0 ,0 1,0 0,0 6,0 4,0 ,0 0,0 1,0 16,0 5,0 0,0 5,0 0,0 10,0 0,0 15,0 5,0 15 10 5

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

18

Notes

naudited results for the halfyear ended December 1 017

• Cash generated from operations before working capital – ,5bn
• 97 of EIDA and 16 of trading profit
• Non cash items mainly comprise share based payments and provision releases
• orking capital
• ypical working capital cycle is for absorption in 1 (1,9bn absorbed) vs 1 017 (1,bn absorbed)
• Generally well managed but some impacts in 1 017
• Structural – shifting business mix in GC changed supplier terms in China and longer supply chain on imported products
• Activity levels – revenue growth across group and some strategic stocking
• Acquisitions – Guzman (not in 1 017 base) and others (Pier7 and other bolton’s)
• Net average working capital cycle 9 days (1 017 5 days)
• Cash effects of investing activities of 1,6 billion
• Stayinbusiness and expansion capital expenditure of 1,0bn compares with depreciation amortisation of 0,6bn
• Acquisitions consumed 0,6 billion, none of which are a singularly material business
• Proceeds on disposals relate to end of life properties in Australia
• Cash and cash equivalents of 5,bn

1

Cash flows

Cash flow remains consistent and investment in asset base continues to create necessary capacity for growth

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

19

naudited results for the halfyear ended December 1 017

• inancial base supportive of business to deliver continued real growth in home currencies
• idcorp remains cash generative (managed well)
• Debt to equity ratio low at 14 with ample headroom to fund our organic and acquisitive growth
• Absorption of working capital in 1 expected to reverse to some extent in
• Looking to create further funding capacity (and efficiency) but complex and holding costs are expensive
• Strength of financial position provides a cushion for the vagaries of markets and unanticipated events

(idcorp operates across more than 0 different countries and 0 different currencies)

• Core philosophy of naturally hedging assets and liabilities remains
• usinesses are managed and measured in their local currencies, returns focus remain the core driver of performance measurement
• Currency volatility likely to remain a feature into 01 A is the reporting currency however nonA profits 90 of group
• International shareholder base growing slowly but steadily (5), focus on longterm shareholder following
• idcorp budgeting to continue delivering real growth in earnings into 01

19

inancial guidance

Sound financial position supportive of continued growth into 01

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

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Notes

lmn inomion ion

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

21

naudited results for the halfyear ended December 1 017

evenue by constant currency rading profit by constant currency

1

International Operations

Geographically diversified

Australasia 26% United Kingdom 27% Europe 31% Emerging Markets 16% Australasia nited ingdom Europe Emerging arkets Australasia 31% United Kingdom 24% Europe 26% Emerging Markets 19% Australasia nited ingdom Europe Emerging arkets

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

22

Notes

naudited results for the halfyear ended December 1 017

Group overview rading post December 1 017 has been positive overall and to expectation

A li inim l i on innil nmnl inlin i in o lo o i io n R o

• Constant currency trading profit growth of 9,4 in a generally benign inflation environment but with sharp dairy deflation in China
• Average currency translation impacts small A/E , weaker, A/AD 1, stronger, A/GP 1,6 stronger
• Acquisitions (1 01 vs 1 017) contributed 1, billion to revenue (,9) and 70 million (,) to trading profit
• argin benefitting from focus on foodservice and added value products and exit from low quality box shifting
• Intergroup shared learning continues to help with minimising potentially costly mistakes and avoid reinventing the wheel

loo o

• usinesses are managed and measured in home currencies
• rading post December 1 017 has been positive overall and to expectation
• eporting currency is A and so recent relative strength, if it persists, will depress the reported result
• Another positive underlying operating performance is anticipated for the second half

R’000s Half-year ended December 31 2017 Half-year ended December 31 2016 Change Revenue (as reported in actual FX) 61 476 926 57 076 135 7,7% Trading profit (as reported in actual FX) 3 022 660 2 775 950 8,9% Trading margin 4,9% 4,9% 1,2%

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

23

naudited results for the halfyear ended December 1 017

ionl o Ali

• oodservice over 0 of total sales in 1 and will remain largest contributor with complementary contributions from fresh, meat

and liquor

• oodservice sales up 5, with trading profit down , as costs of multisite strategy were absorbed
• New generation foodservice branches opened in risbane/Gold Coast (x1), elbourne (x) and otany (x1) in Sydney
• estival City, a family owned business for four decades, has liquor distribution in Adelaide, elbourne and Darwin
• Supply Solutions (imports) has introduced a cheese processing offering, adding to the growing range of highquality products defined by

place of origin from around the world and sourced directly by idfood

• resh has had some challenges but looking better for

loo o

• Internal disruption a necessary strategy to remain competitive and secure additional market share
• Accelerating Inhouse sourcing through own Supply Solutions and idfood Procurement Community
• resh and eat offering is well below potential
• udgeting for a stronger with current trends encouraging
• Australasia

Strategy to open smaller, more manageable, service intensive facilities, closer to customers in maor metros is showing early promise

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

24

Notes

naudited results for the halfyear ended December 1 017

ionl o Zln

• Another strong result from oodservice with profits up by ,7 and sales at better margin
• ood inflation as measured internally trended higher, with poultry and fresh produce key drivers
• Gross margin continued to rise ahead of sales growth, helping offset effects of rising expenses and wages
• resh, Logistics and Processing contributed positively with the complementary added value offering now 16 of sales and of profit
• New or upgraded DC’s became operational with the extra costs budgeted for and mitigated by better operating efficiencies
• imaru DC opened November 017, Invercargill opened January 01, amilton was completed ebruary 01, Nelson was occupied at

the end of October 017, Greymouth is already occupied, whilst the resh operation in Christchurch has been upgraded

• Land was acquired in New Plymouth for development and completion by mid019, a new site has been identified for ellington, in

Christchurch there are plans for new oodservice DC, in obsonville (North Auckland) plans are being finalised for a new building to be

• perational in mid019, and otorua and auranga are scheduled to have new facilities on adoining land owned by idcorp

loo o

• Despite annual revenue well exceeding ND1 billion strategy to relocate from smaller, leased premises into idcorp owned, purpose

built premises continues to drive growth as do supply chain improvements, complementary offerings and good service

• A strong and a positive full year is anticipated

4

Australasia

Supply chain improvements and ongoing investment in the asset base underpins a strong New ealand business

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

25

naudited results for the halfyear ended December 1 017

ionl o ni inom

• Despite difficult condition in retail generally and the restaurant trade, idfood sales substantially exceeded budget and the 9,7 rise in

trading profit was after accommodating a pay review Customer margin and margin per item both improved

• Cimandis (Channel Islands) is being repositioned to deliver a much improved with doubledigit sales growth
• Swithenbank, the fresh produce business, is being turned around with positive results
• ith the business performing well attention is turning to capacity constraints and thus new investment in infrastructure A new building

is scheduled to be completed in orthing in 01, expansion required in Greater anchester, whilst Salisbury and attersea have new upgrades planned

• resh is an important offering and whilst trading is more variable than foodservice other territories show that this is an important

strategic complement and the business is making good progress loo o

• After a strong 1 the target of an improvement on the 017 result remains
• anagement are not complacent about the risks associated with rexit outcomes and the current political situation
• Consumer sentiment is poor and there are some prominent corporate failures
• Exit from Logistics is timely as it allows full focus on oodservice and resh

5

nited ingdom

Pushing up against capacity constraints requires forward planning for expansion

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

26

Notes

naudited results for the halfyear ended December 1 017

ionl o o

• oodservice focus yielding improved margins with further scope to improve
• In Netherlands, sales mix continues to improve
• elgium focused on growing OECA through various sales initiatives, 1 of total sales, margins double that of the total business
• Italy and Spain combined are on track to be an approximately €650 million combined turnover business from virtually nothing a few

years ago testament to the correctness of the idfood strategy to target new markets selectively and develop sustainably

• In Czech and Slovakia, OECA complemented by substantial investment in added value processing
• In Poland, freetrade grew to 7 of total sales in 1, boosting overall margin to over from ,5 with scope to improve
• altics business are now profitable with a focus on Lithuania
• Pier 7 headquartered in unich, a small platform to learn and grow in the German market

loo o

• Eastern Europe continuing to trade strongly, benefitting from investment in modernisation, but challenged by a tight labour market
• Netherlands simplifying, highservice strategy showing benefits
• Acquisitive strategy is to identify fair value opportunities, often ownermanager, learn and then grow

6

Europe

Scaling up in Italy and Iberia and an exciting new entry to Germany, the largest market in Europe

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

27

naudited results for the halfyear ended December 1 017

ionl o min

• Now present in Greater China, Africa, Latin America and exploring niche opportunities in Asia
• China focus is on premium international products
• aor Chinese cities include Shenzhen, eiing, Guangzhou and Shanghai and a base for exploiting growth and developing sales in

smaller second tier cities

• Acquisition of Aeroshield in alaysia wef July 017 and JV in Vietnam wef 01
• hilst idfood in South Africa is experiencing revenue pressure excellent expense management is bolstering margin a large number of

Chipkins Puratos JV staff have been retrained in elgium and changes are already underway to manufacturing processes with new product launches in the pipeline loo o

• South Africa in a good position to take advantage of positive political developments and will leverage of significant opportunities from

the Puratos JV

• A more normalised trading situation in China and ong ong but effects of dairy price disruption will remain for some months
• Obective to outperform in challenging markets

7

Emerging arkets

Outperforming in challenging markets

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

28

Notes

naudited results for the halfyear ended December 1 017

ioo omn ommni

• uge scope to leverage Group purchasing power by procuring through PC channels
• CEO’s encouraged to drive the process
• Procurement

Groupwide sourcing internationally

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

29

lmn inomion io mn oi il

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

30

Notes

naudited results for the halfyear ended December 1 017

ZAR’ million Rn Share of group Change

• evenue

1 017 Share of group Australasia

• 15 1,
• nited ingdom
• 15 419,
• Europe
• 16 9,0
• Emerging arkets
• 10 045,7
• tal
• 57 076,1

Segment revenue detail

Continuing operations

Emerging arkets Excluding the disposal of Chipkins (akery Supplies in April 017) revenue growth was 7,1 constant currency terms Net revenue Excluding the disposal of Chipkins (akery Supplies in April 017) revenue growth was 9,5 in constant currency terms

Rn

• nn n

Change

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

31

naudited results for the halfyear ended December 1 017

ZAR’ million in oi argin

• Share of group
• Change
• rading profit

1 017 argin

• Share of group
• idfood
• 16,
• Australasia
• 94,6
• nited ingdom
• 699,
• Europe
• 59,0
• Emerging arkets
• 5,
• Corporate
• (40,)
• tal
• 776,0
• 1

Segment trading profits detail

Continuing operations

Emerging arkets Excluding the disposal of Chipkins (akery Supplies in April 017) trading profit (A) was up 7,1 rading profit Excluding the disposal of Chipkins (akery Supplies in April 017) trading profit (A) was up 10,5

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

32

Notes

naudited results for the halfyear ended December 1 017

ZAR’ million in oi argin

• Share of group
• Change
• rading profit

1 017 argin

• Share of group
• idfood
• 16,
• Australasia
• 94,6
• nited ingdom
• 699,
• Europe
• 59,0
• Emerging arkets
• 5,
• Corporate
• (40,)
• tal
• 776,0
• Segment trading profits detail (Constant currency)

Continuing operations

Emerging arkets Excluding the disposal of Chipkins (akery Supplies in April 017) trading profit was up 9, in constant currency terms rading profit Excluding the disposal of Chipkins (akery Supplies in April 017) trading profit was up 11,0 in constant currency terms

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

33

lmn inomion innil nli

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

34

Notes

naudited results for the halfyear ended December 1 017

• ninin oion

ZAR’ million l n A R alfyear ended Dec 1 016 Avg / 17,94 017 Currency effects / 17,94 evenue

• 57 076,1

61 1,4

• 4

Condensed interim statement of profit or loss

• Continuing revenue grew 7,7 to 61,5 billion (017 57,1 billion), on a constant currency growth was ,
• Segment revenue performance
• ioo Ali 15,9 billion – ,6 growth (Local 6, growth)
• ioo 16, billion – 5, increase (Local 7,0 growth)
• odservice key focus remains on growing freetrade, local own brand sales National account volumes were up on ongoing tender wins
• ioo o 19,6 billion – 0,0 growth (Local 16, growth)
• ioo 9, billion – , decline (Local 0,7 growth)

50 sale in April 017 of akery Supplies to Puratos NV contributed to the relatively low sales growth, excluding Chipkins Puratos JV, likeforlike revenue growth was up 7,1

• Pier 7 and bolton acquisitions in the period accounted for 1, billion (,0), including Guzman (Spain), net revenue of 1, billion (,)

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

35

naudited results for the halfyear ended December 1 017

• ninin oion

ZAR’ million l n A R alfyear ended Dec 1 016 Avg / 17,94 017 Currency effects / 17,94 evenue

• 57 076,1

61 1,4

• rading profit
• 776,0

06,1

• 5

Condensed interim statement of profit or loss

• Gross profit percentage was maintained at ,6 (1 017 ,) Certain businesses sacrificed margin to grow their free trade volumes and significant

inflation in the dairy category marginally impacted gross margins

• Operating expenses
• Overall operating costs (excluding acquisitions and disposals) were well controlled increasing by ,6 (4, in constant currency terms), despite

labour cost pressures in some economies

• Overall cost of doing business declined to 1,7 (1 017 1,9) despite the focus on growing independent trade, reflects ongoing efficiency gains

rading margins 1 016 Comment idfood

• 4,6

1,1 improvement in trading margin

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

36

Notes

naudited results for the halfyear ended December 1 017

• ninin oion

ZAR’ million l n A R alfyear ended Dec 1 016 Avg / 17,94 017 Currency effects / 17,94 evenue

• 57 076,1

61 1,4

• rading profit
• 776,0

06,1

• Net finance expense
• (117,0)

(140,9)

• 6

Condensed interim statement of profit or loss

• €90 million new debt for Iberia and Germany acquisitions
• 65 of gross debt termed beyond December 01
• igher working capital absorption of 611,1 million resulting in an increase in net working capital days (4 days)

Share of profit of associates and ointlycontrolled entity

• 11,5

9,0

• akery Supplies business in SA sold to Puratos NV wef April 017 – equity accounted investment

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

37

naudited results for the halfyear ended December 1 017

• ninin oion

ZAR’ million l n A R alfyear ended Dec 1 016 Avg / 17,94 017 Currency effects / 17,94 evenue

• 57 076,1

61 1,4

• rading profit
• 776,0

06,1

• Net finance expense
• (117,0)

(140,9)

• Share of profit of associates and ointlycontrolled entity
• 11,5

9,0 axation

• (646,6)

(71,)

• 7

Condensed interim statement of profit or loss

1 017 Comment Effective tax rate (ex capital items and associates and JV’s)

• Estimated sustainable tax rate going forward is

approximately 5

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

38

Notes

naudited results for the halfyear ended December 1 017

• ninin oion

ZAR’ million l n A R alfyear ended Dec 1 016 Avg / 17,94 017 Currency effects / 17,94 evenue

• 57 076,1

61 1,4

• rading profit
• 776,0

06,1

• Net finance expense
• (117,0)

(140,9)

• Share of profit of associates and ointlycontrolled entity
• 11,5

9,0 axation

• (646,6)

(71,)

• Noncontrolling interests
• (,)

(11,5) eadline earnings

• 1 956,5

10,9

• EPS (cps)
• 59,

640,7

• Condensed interim statement of profit or loss

lin nin

• Net capital items of 14,m aority relates to the sale of end of life properties in Australia
• Negative currency effect of 0,1 on headline earnings Average rand rate weaker versus euro (,) Czech krona (7) offset

by stronger rand average rate versus sterling (1,6), AS dollar (4,9) N dollar (4,9)

• sing current rates as an approximation to determine our year end rates versus 017 average rates

Stronger rand Sterling 0,9, AS dollar ,5 and N dollar 6,1 eaker rand Euro ,4 and Czech krona 7,

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

39

naudited results for the halfyear ended December 1 017

• ninin oion

ZAR’ million l n A R alfyear ended Dec 1 016 Avg / 17,94 017 Currency effects / 17,94 evenue

• 57 076,1

61 1,4

• rading profit
• 776,0

06,1

• Net finance expense
• (117,0)

(140,9)

• Share of profit of associates and ointlycontrolled entity
• 11,5

9,0 axation

• (646,6)

(71,)

• Noncontrolling interests
• (,)

(11,5) eadline earnings

• 1 956,5

10,9

• EPS (cps)
• 59,

640,7

• Diluted EPS (cps)
• 57,

6,7

• Distribution (cps)
• 50,0

9

Condensed interim statement of profit or loss

• Dividend cover of approximately ,x continuing headline EPS, policy of ,5x headline EPS
• 1,0 dividend growth

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

40

Notes

naudited results for the halfyear ended December 1 017 Cash generated from ops pre wc

• rking capital absorption

Net finance charges axation Distributions Cash effects of investment act’s Cash effects of financing act’s 0,4 16 0, 0, 0,1 1,9 ,5 5 0 15 10 05 00 05 10 15 0 5 0 5 40 0,4 0,6 0, 0,6 0,1 1, , 15 10 05 00 05 10 15 5 5 40

40

Condensed interim consolidated cash flow statement

Dec 1 017 (A billion) Dec 1 016 (A billion)

• orking capital absorption increase 611 million due to structural investment and tighter foreign supplier terms in Greater China, some strategic stocking

(oodservice South Africa) and impact of acquisitions ( 017 1 01)

• Noncash items Largely made up of net share based payments of 7 million and noncash provision movements
• ree cash flow was negative at 0,9 billion (1 017 0, billion – positive) Significant investment took place in the period through strategic investment

in infrastructure (1,1 billion) and new geography and interritory bolton acquisitions (5 million) to expand our geographic reach and product range

0,0 0,5 1,0 1,5 ,0 ,5 ,0 ,5 4,0 0,5 1,0 1,5 ,0 ,5 0,0 0,5 1,0 1,5 ,0 ,5 ,0 ,5 4,0 0,5 1,0 1,5 ,0

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

41

naudited results for the halfyear ended December 1 017

1, 0, 0,5 1,9 , ,9 6, ,5 1 017 017 017 1 01 Net working capital Cash generated by operations

41

Net working capital flows vs cash generated by operations

A billion

• Cash generated from operations before working capital – ,5 bn (4,5 increase)
• he Group generally absorbs working capital in the first half of the year and generates in the second half of the financial year

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

42

Notes

naudited results for the halfyear ended December 1 017

60 6

• 9

40

4

6 month rolling average working capital days

Net working capital days

• Debtors days

Stock days Creditors days Net days

1 01 1 017

• mon ollin oin il i
• Structural change in Greater China (foreign suppliers demanding earlier payment terms on imported products, longer supply chain for imported products

and mainland China a larger proportion of the Greater China mix)

• Strategic inventory buying
• Acquisitions

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

43

naudited results for the halfyear ended December 1 017

1,7 1,7 1,7 ,4 17,5 , 5,1 ,1 00 50 100 150 00 50 00 016 1 017 017 1 01 00 05 10 15 5 5 40 45 50 Net interestbearing debt (Abn) Interest cover (x) ,

4

Gearing

arget interest cover range

• A conservative approach to gearing with trading profit interest cover at ,1x (1 017 ,x) exceeds Group benchmark of 5 6x
• Ample headroom to fund organic or acquisitive expansion

5,0 4,5 4,0 ,5 ,5 1,5 ,0 ,0 1,0 0,5 0,0 0,0 5,0 0,0 15,0 5,0 10,0 0,0

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

44

Notes

lmn inomion io ioil l

Notes

Bid Corporation Limited Unaudited results for the half-year ended December 31 2017

45

naudited results for the halfyear ended December 1 017

Continuing trading margin eturns (annual)

idcorp istoric Performance

Continuing headline earnings per share Dividend per share (cents)

4,16 4,4 4,97 4,9 00 10 40 50 P 015 P 016 017 1 01 499,1 59, 640,0 10,4 547,7 59,9 00 400 600 00 1 000 1 00 1 400 P 015 P 016 017 01

cps

1

• 1 179,

6,0 5, 17,4 16, 00 50 100 150 00 50 00 50 400 1 017 1 01

• OE

OE 41 50 50 00 400 600 016 017 01

cps

1

• 500

1 046,

45

• 1 01 year CAG 16,5

5,0 4,0 ,0 ,0 1,0 0,0 40,0 5,0 5,0 15,0 0,0 0,0 10,0 5,0 0,0

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