RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 - - PDF document

RESULTS PRESENTATION

FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018

TFG Results presentation September 2018 www.tfglimited.co.za

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RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018

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AGENDA

FINANCIAL HIGHLIGHTS Anthony Thunström GROUP OVERVIEW Anthony Thunström BUSINESS SEGMENT REVIEW Anthony Thunström

• TFG Africa
• TFG London
• TFG Australia

TFG FINANCIAL SERVICES Jane Fisher OUTLOOK Anthony Thunström

Anthony Thunström Chief Executive Officer Jane Fisher Group Director

RESULTS PRESENTATION

FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018

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FINANCIAL HIGHLIGHTS

Headline earnings

growth +14,3%

(excl acq costs +9,1%) Gross margin

expansion to 53,6%

(PY: 51,0%) Free cash flow @

85% of net profit

Debt equity ratio

stable at 63,9%

Turnover growth

+28,6%

HEPS

growth +8,3%

(excl acq costs +3,4%)

FINANCIAL HIGHLIGHTS

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REVIEW OF THE PERIOD CONTINUED

SIGNIFICANT ACCOUNTING CHANGES

• IFRS 15
• Lay-by revenue previously accounted for on initiation of contract
• IFRS 15 requires that the Group accounts for lay-by revenue once the contract is concluded and

the goods handed over to the customer

• Change applied fully retrospectively
• IFRS 9
• Will be dealt with by Jane Fisher

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REVIEW OF THE PERIOD

CHANGES IN GROUP STRUCTURE

Brand Effective date FY 2019 trading included FY 2018 trading included Hobbs 25 November 2017 6 months 0 months RAG 24 July 2017 6 months 2 months

LEADERSHIP CHANGES

• Bongiwe Ntuli appointed as Group CFO as from 14 January 2019

CHANGES IN E-COMMERCE

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additional brands launched online selling (Donna and The FIX)

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total number of brands available online

8%

Group online turnover contribution to total turnover Business segment online turnover contribution to its turnover:

TFG AFRICA TFG LONDON TFG AUSTRALIA

1% of turnover 30% of turnover 4% of turnover

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sept 2013 Sept 2014 Sept 2015 Sept 2016 Sept 2017 Sept 2018 Clothing - value Cellphones Homeware Jewellery Cosmetics

The Group’s performance is underpinned by the success of its diversification strategy which lessens the dependency on any specific merchandise category:

TURNOVER: MERCHANDISE CATEGORY CONTRIBUTION

3,3%

Clothing – international Clothing – fashion

4,2% 4,5% 5,5% 7,6% 17,7% 20,0% 37,2%

Clothing - sport

GROUP OVERVIEW

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4 979,6 5 466,0 4 228,8 4 516,0 0,0 2 000,0 4 000,0 6 000,0 8 000,0 10 000,0 12 000,0 Sept 2017 Rm Sept 2018 Rm

TFG Africa

Cash Credit

• TFG London and TFG Australia cash sales
• nly
• IFRS 15 change resulted in a c.4% lay-by

contribution shift from credit to cash for TFG Africa

• In line with Group’s strategy, cash vs credit

split is well diversified

• Current year cash:credit

– Group: 72:28 – TFG Africa: 55:45

• Prior year cash:credit (restated for IFRS 15)

– Group: 66:34 – TFG Africa: 54:46

TURNOVER: TENDER TYPE CONTRIBUTION

8 148,7 11 397,1 4 228,8 4 516,0 0,0 2 000,0 4 000,0 6 000,0 8 000,0 10 000,0 12 000,0 14 000,0 16 000,0 18 000,0 Sept 2017 Rm Sept 2018 Rm

Group

Cash Credit

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• Strong TFG Africa turnover growth despite challenging start to the financial year
• Clothing: very strong performance
• Jewellery: improved performance against background of market contraction
• Cellphones: strong volume growth in deflationary environment
• Homeware & furniture: strong performance
• Cosmetics: improved performance (Sept 2017: -1,9%)
• TFG London (50,7% growth) and TFG Australia (170,7% growth) non-comparable

TURNOVER: MERCHANDISE CATEGORY CONTRIBUTION CONTINUED

GROUP % change (ZAR) TFG AFRICA % change (ZAR) TFG AFRICA % same store growth (ZAR) Clothing 36,1 11,2 7,2 Jewellery 2,7 2,7 1,0 Cellphones (2,6) (2,6) (4,2) Homeware & furniture 7,8 7,8 2,8 Cosmetics 1,0 1,0

• Total

28,6 8,4 4,8

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• TFG Australia net borrowings A$2,5 million (March 2018: A$10,9 million)
• TFG London net borrowings £41,7 million (March 2018: £48,2 million)
• For comparability, March 2018 gearing adjusted for IFRS 9 = 64,6%

BORROWINGS

GROUP Sept 2018 (Rm) GROUP March 2018 (Rm) TFG Africa net borrowings (recourse) 7 879,4 7 245,1 TFG Australia net borrowings (non-recourse) 25,7 99,0 TFG London net borrowings (non-recourse) 750,1 800,4 Net borrowings Group 8 655,2 8 144,5 TFG Africa (recourse debt) gearing 58,2% 55,2% Group gearing 63,9% 62,0%

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• Trade receivables lower due to new additional IFRS 9 provisioning requirement
• Inventory growth tracking turnover growth and in line with year-end targets
• Trade and other payables growth in line with expectation

WORKING CAPITAL MANAGEMENT

GROUP Sept 2018 (Rm) GROUP March 2018 (Rm) GROUP % change TFG AFRICA % change Trade receivables 7 083,2 7 373,6 (3,9) (3,9) Other receivables 1 266,9 1 118,6 13,3 8,4 Inventory 7 609,5 6 900,6 10,3 8,0 15 959,6 15 392,8 3,7 1,4 Trade and other payables (4 376,2) (3 724,3) 17,5 12,1 11 583,4 11 668,5 (0,7) (1,0)

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• Gross TFG Africa space growth (Sept vs. Sept) 5,0%
• TFG London and TFG Australia not comparable due to prior year acquisitions
• TFG London capex constrained due to continued online migration and tough retail conditions
• TFG Australia opened 22 stores in line with management’s expectation
• No major shifts in spend

CAPEX

GROUP Sept 2018 (Rm) GROUP Sept 2017 (Rm) TFG Africa 285,3 293,0

• Stores

179,7 178,5

• IT

81,1 83,4

• Other

24,5 31,1 TFG London 58,0 56,7 TFG Australia 118,9 22,6 462,2 372,3

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• Free cash flow conversion of 85,4% well above 10-year average and in line with expectation
• Remains a key focus area

FREE CASH FLOW

GROUP Sept 2018 (Rm) 6 months GROUP Sept 2017 (Rm) 6 months GROUP March 2018 (Rm) 12 months Free cash flow 987,8 1 284,6 1 891,6 % of net profit 85,4% 127,6% 78,5%

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• Tough economic conditions and political uncertainty remains
• The interest rate environment in South Africa remained stable during the financial period
• Prior comparative period: 25bps decrease in July 2017 and in March 2018
• Impact of drought (in SA and other African countries)
• Western Cape province had lowest comp store turnover growth during the period at 2%
• Consumer under pressure
• One percentage point increase in VAT rate since 1 April 2018 (RSA, Lesotho) and 1 August 2018

(Swaziland)

• Continued fuel price increases

TFG AFRICA: OPERATING CONTEXT

Latest period Comparative period CPI % 4,9 5,1 GDP 0,5 0,9 FNB/BER consumer confidence index 22

• 9

RMB/BER business confidence index 38 35

Source: BER, Stats SA

BUSINESS SEGMENT REVIEW: TFG AFRICA

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• Employee costs – annual and promotional increase 7,5%
• Occupancy costs
• New space growth 5,0% since September 2017 (including enlargements)
• Closed space 2,2% - in line with capital optimisation initiative
• Net space growth 2,8%
• Average escalation on rental renewals of 5,9% (previously 7,1%)
• Negative rent reversion average of -8,4% (previously +3,5%) on c.440 lease renewals
• Other costs
• Excluding non-comparable items, like-for-like branch expense growth at 5,7%
• Marketing : 14,3% increase in spend to counter tough market conditions
• Increased omni spend as part of focus on digital transformation
• R46m PY gain on Australia forex
• Net bad debt: IFRS 9 (further information in TFG Financial Services slides)

TFG AFRICA: TRADING EXPENSES

TFG AFRICA Sept 2018 (Rm) TFG AFRICA Sept 2017 (Rm) TFG AFRICA % change Depreciation and amortisation 272,8 245,5 11,1 Employee costs 1 559,6 1 426,6 9,3 Occupancy costs 1 173,9 1 068,9 9,8 Other net operating costs 1 217,9 1 075,8 13,2 Trading expenses before net bad debt 4 224,2 3 816,8 10,7 Net bad debt 514,8 464,6 10,8 Total trading expenses 4 739,0 4 281,4 10,7

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• Turnover growth ahead of management’s expectation (in current trading conditions) with strong growth

in clothing and homeware

• Improved gross margin despite challenging environment and heavy market discounting
• EBITDA: focus on cost control continued (further information on following slide)
• Net space growth of 2,8% since Sept 2017 (0,4% since March 2018)

TFG AFRICA: SEGMENTAL PERFORMANCE

TFG AFRICA Sept 2018 TFG AFRICA Sept 2017 TFG AFRICA % change Retail turnover (Rm) 9 981,9 9 208,4 8,4 Gross margin (%) 47,6 46,6 Interest received 878,4 883,2 (0,5) Value-added services 446,5 429,9 3,9 EBITDA (Rm) 1 842,0 1 761,7 4,6 New outlets 22 74 Closed outlets 26 30 Total outlets at half year 2 648 2 633

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• Political and economic uncertainty has heightened as the Brexit deadline approaches.
• Economic growth slowed during 2018. Growth in consumer spending remained sluggish and consumer

price inflation increased through the year, squeezing disposable incomes.

• The Pound remains weak and volatile, against both the Euro and US Dollar.
• High profile High Street failures have continued, with Coast, East, Jones the Bootmaker, Jacques Vert

entering administration during 2018.

• Department store model suffering significant stress
• House of Fraser (HoF) placed under CVA and administration
• Debenhams: profit collapse (£491 million loss) and store closures (c.50)
• The shift to online continues.

TFG LONDON: OPERATING CONTEXT

Latest period Comparative period CPI % 2,7 2,8 GDP (H1 2018 v H1 2017 y-o-y- growth) 1,1 1,9 GfK Consumer Sentiment

• 9
• 9

CBI Business Optimism

• 3

5

Source: Office for National Statistics, GfK, Tradingeconomics.com, OECD

BUSINESS SEGMENT REVIEW: TFG LONDON

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TFG LONDON REMAINS ON TRACK TO DELIVER ITS STRATEGY

• TFG London shared services platform progressing to the agreed timetable, with people, finance, IT and e-commerce

systems projects well advanced.

TRADING MODEL & MANAGEMENT

• TFG London continues to outperform the broader market through the delivery of a true omni-channel proposition.

› TFG London online sales have grown 15% versus H1 2017 (all brands achieving double-digit growth) › TFG London online sales contribution c.30%

E-COMMERCE

• All three main brands continued to achieve strong international growth in sales and profitability

INTERNATIONAL

• Collapse of competitor brands (including Coast, East and Jacques Vert, Jones the Bootmaker) into administration

has resulted in market share growth for TFG London › TFG London is selectively increasing its occasion wear proposition to fill newly created gaps in the UK market

BRAND DEVELOPMENT / ACQUISITION MARKET SHARE GROWTH

• Hobbs integration on track and largely completed

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• Retail turnover growth of 50,7% including non-comp Hobbs
• 2,3% increase including Hobbs in the base
• Gross margin remained robust through the period
• EBITDA includes
• HoF net write-off (£2,5m)
• Forex gain in 2018 £1,5m compared to 2017 loss £0,6m due to exchange rate movements
• Closure costs have been well contained at £0,4m, a 60% drop from H1 2017 (£1,0m)

TFG LONDON: SEGMENTAL PERFORMANCE

TFG LONDON Sept 2018 TFG LONDON Sept 2017 TFG LONDON % change Retail turnover (£m) 200,4 133,0 50,7 Gross margin (%) 63,0 63,6 EBITDA (£m) 13,7 14,8 (7,4) New outlets 68 46 Closed outlets 73 39 Total outlets at half year 930* 746

* Includes 188 outlets acquired with Hobbs

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• Annual GDP growth steady at 3,4%
• Consumer sentiment remains slightly above the longer term average
• Business Confidence is in line with long term average
• The level of unemployment remains low with the jobless rate the lowest since November 2012. Wages

per employee are flat, while household savings continued to fall for the year ended June 2018.

• Australian retail market however remains tough
• Roger David entered into administration in October 2018
• Department stores Myer and David Jones under significant pressure

TFG AUSTRALIA: OPERATING CONTEXT

Latest period Comparative period CPI % (June year ended % change) 2,1 1,9 GDP (June year ended % change) 3,4 2,1 Consumer Sentiment (September) 100,5 97,9 Business Confidence (September) 6 7

Source: Australian Bureau of Statistics, Westpac-Melbourne Institute, Tradingeconomics.com, National Australia Bank, Reserve Bank of Australia

BUSINESS SEGMENT REVIEW: TFG AUSTRALIA

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AMERICAN SWISS AUSTRALIA

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• For comparative period ended Sept 2017, 6 months of RAG included as well as G-Star (for comparative

purposes only)

• Turnover growth, gross margin and EBITDA ahead of expectation and market
• Strong performance with LFL sales ahead of Australian market at 7,6% and new outlet growth on track
• Strategy update
• Growth through expansion of existing brands in Australia and New Zealand continues with a net increase of

38 stores expected in the current financial year

• Launch of TFG test brand stores during October 2018

TFG AUSTRALIA: SEGMENTAL PERFORMANCE

TFG AUSTRALIA Sept 2018 TFG AUSTRALIA Sept 2017* TFG AUSTRALIA % change Retail turnover (A$m) 239,0 208,0 14,9 Gross margin (%) 64,4 63,6 EBITDA (A$m) 27,0 20,4 32,4 New outlets 22 22 Closed outlets 6 8 Total outlets at half year 463 431

* Provided for comparative purposes only

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AMERICAN SWISS AUSTRALIA

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AMERICAN SWISS AUSTRALIA

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AMERICAN SWISS AUSTRALIA

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AMERICAN SWISS AUSTRALIA

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TFG FINANCIAL SERVICES

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AMERICAN SWISS AUSTRALIA

The test launch of American Swiss in Australia is on track with 6 store sights confirmed across Sydney, Melbourne and Brisbane:

• Highpoint & Robina

Opened 19 October

• MacArthur Square

Opened 25 October

• Sunshine Plaza

Opened 5 November

• Werribee

Opening 12 November

• Charlestown Square

TBC stown Square TBC

Sunshine Plaza Robina Charlestown McArthur Werribee HighPoint

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TFG FINANCIAL SERVICES: SALIENT FEATURES

+9,1% gross debtors’ book growth (Sept 2017: +8,2%) +6,8% credit turnover growth (Sept 2017: +4,3%) 12,3% overdue values as % to debtors’ book (Sept 2017: 12,5%) +6,4% active account growth (Sept 2017: +0,6%) +2,7% net debtors’ book growth (Sept 2017: +6,3%) +5,0% income growth (Sept 2017: +1,2%)

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TFG FINANCIAL SERVICES: INDUSTRY REVIEW

• Higher inflation and weak income growth resulted in a

decline in the TU CCI from 55 in Q1 2018 to 51 in Q2 2018

• The number of accounts in default (3-months in arrears)

marginally increased

• Household cash flow growth deteriorated in Q2 2018,

with expectations that this could worsen due to fuel price increases

• In spite of the initial “Ramaphoria”, the economic outlook

remains difficult with persistent structural challenges

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• Significant active account growth of 6,4% (Sept 2017: +0,6%) as activations increase, driven by higher

demand, post the favourable affordability court case ruling

• Accept rates stable as risk appetite remains within acceptable limits
• Increase in customer base results in credit turnover growth improving to 6,8% (Sept 2017: +4,3%)
• Credit turnover as a % of total turnover remains stable and aligned to Group strategy

TFG FINANCIAL SERVICES: CREDIT BOOK

Key indicators TFG AFRICA Sept 2018 TFG AFRICA Sept 2017 TFG AFRICA % change Number of active accounts (‘000) 2 621,7 2 463,1 6,4 Credit turnover (Rm)* 4 516,0 4 228,8 6,8 Credit turnover as a % of total retail turnover (TFG Africa only) 45,2 45,9

* Credit turnover restated to exclude lay-by turnover

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• Income growth of 5,0% (Sept 2017: +1,2%) on the back of a gross book growth of 9,1% (Sept 2017:

+8,2%)

• Net bad debt growth of 10,8% (Sept 2017: -4,3%)
• Bad debt write off growth of 10,4% (Sept 2017: +0,7%) in line with book growth and current

consumer stress

• Robust recoveries growth of 12,8% (Sept 2017: +13,3%)
• Higher book growth and implementation of IFRS 9 necessitates increased impairment provision
• Credit cost growth well contained at only 0,5% (Sept 2017: -0,5%) due to efficient workforce

management and ongoing cost control initiatives

TFG FINANCIAL SERVICES: CREDIT PERFORMANCE

TFG AFRICA Sept 2018 (Rm) TFG AFRICA Sept 2017 (Rm) TFG AFRICA % change Income 1 079,9 1 028,4 5,0 Net bad debt (514,8) (464,6) 10,8 Credit costs* (241,3) (240,2) 0,5 EBIT 323,8 323,6 0,1

* Credit costs restated to exclude Group marketing and analytics costs

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TFG FINANCIAL SERVICES: ACCOUNTING STANDARDS & REGULATIONS

ACCOUNTING STANDARD/ REGULATION IMPACT IFRS 9: Financial Instruments (IFRS 9)

• IFRS 9 effective from 1 January 2018 replacing IAS 39 Financial Instruments:

Recognition and Measurement (IAS 39)

• Impairments are determined based on an expected credit loss (ECL) model, reflecting a

probability-weighted outcome and the best forward-looking information available to the Group, as opposed to an incurred loss model applied in terms of IAS 39

• IFRS 9 retrospectively adopted on 1 April 2018 with an adjustment to the Group’s
• pening 1 April 2018 retained earnings; comparative financial statements not restated
• The allowance for impairment as at 1 April 2018 increased by R542,5m or 39,1% (in line

with typical banking industry range of c.30% – 50%) to 22% of debtors’ balance

• A significant component of the increase in the allowance for impairment on

implementation is due to forward-looking information Debt Intervention

• National Council Of Provinces (NCOP) currently considering proposed amendments to

the National Credit Act on debt intervention

• Proposed amendments intended to provide debt relief to over-indebted customers who

meet certain criteria

• The possible impact of the proposed amendments are difficult to quantify
• Proposed amendments are expected to be challenged legally on constitutional grounds,

which will delay / potentially set aside the implementation thereof

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• Book quality stable, resulting in overdue values as a % to debtors’ book declining and an increased ratio
• f customers able to purchase
• Net bad debt write off and net bad debt as % of debtors’ book improved, due to gross debtors’ book

increase and sustained recovery growth in excess of write off growth

• Despite strong gross debtors’ book and turnover growth, the increased level of provisioning required by

IFRS 9 results in:

• Increased allowance for impairment as % of debtors’ book of 21,5% (Sept 2017: 16,7% per IAS 39)
• Net debtors’ book year on year growth limited to 2,7% (Sept 2017: +6,3%)

TFG FINANCIAL SERVICES: CREDIT STATISTICS

Key debtors statistics* TFG AFRICA Sept 2018 TFG AFRICA March 2018 TFG AFRICA Sept 2017 Overdue values % to debtors’ book 12,3 12,4 12,5 % able to purchase 84,7 83,0 84,3 Net bad debt write off as a % of debtors’ book 12,1 12,6 13,5 Net bad debt as a % of debtors’ book 9,8 9,6 10,6 Net bad debt as a % of credit transactions 6,6 6,5 6,5 Allowance for impairment as a % of debtors’ book 21,5 15,8 16,7 Net debtors’ book (Rm) 7 083,2 7 373,6 6 895,0

* Gross and net debtors’ book restated to exclude lay-bys; allowance for impairment reclassified to provide comparable data.

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FOCUS APPROACH TFG Rewards Cash rewards customers

• Acquired 960,000 new rewards customers year to date through 20 retail TFG Africa

brands

• Increased rewards visibility and logo usage by brands to enable acquisition
• Ensured always-on rewards offers in-store for customers to exclusively benefit from

additional value-add

• Enabled visibility of performance indicators through the value chain

Leveraging data science

• Measurable cash and credit rewards customer acquisition strategies allow us to

collect data at every swipe

• TFG Rewards programme to be enhanced to ensure we continuously deliver on

customer expectations

• Customer personalisation, content and engagement strategies to be tested and

enriched with data science modeling

• Total TFG Rewards customers base of 13,4 million

TFG FINANCIAL SERVICES: STRATEGY

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FOCUS APPROACH Customer acquisition Account customers

• New lead generation & origination channel launched
• Short codes included in Foschini & Sportscene television adverts
• Customer responds via SMS which triggers a credit bureau check
• Successful leads contacted by credit telemarketing team to finalise application
• Partnered with a 3rd party to build an analytical model that identifies optimal

advert timeslots to maximise response rates

• Introduced a chat bot which enabled and scaled originations
• Customers can apply for an account by scanning a QR code (Quick Response)
• r sending a message via WhatsApp and answering questions posed by the

chat bot

• Big Buy product offering launched in October 2018
• Big Buy is a finance solution for our customers who want to purchase an item
• r basket of goods in excess of R5 000 and pay for them over an extended

period

• Payment plans of 18, 24 and 36 months are offered

TFG FINANCIAL SERVICES: STRATEGY

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• Trading conditions across all three territories expected to remain challenging

TFG AFRICA

• Political / policy uncertainty will remain a concern until 2019 South African elections
• Gross margin and product price inflation expected to be in line with half-year
• Focus on cost control, working capital optimisation and digital transformation continues

TFG LONDON

• Brexit and department store model uncertainties remain
• Shared services platform
• Online sales and omni-channel offering

TFG AUSTRALIA

• Continued store roll out of existing brands
• Proof of concept of American Swiss Australia

GROUP

• Retail trade performance for first four weeks at similar levels to H1 across all three business segments
• 2nd half heavily dependent on Black Friday, Cyber Monday and Christmas trade

OUTLOOK

OUTLOOK

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THIS ANNOUNCEMENT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE FOSCHINI GROUP LIMITED AND ITS SUBSIDIARIES, WHICH BY THEIR NATURE INVOLVE RISK AND UNCERTAINTY BECAUSE THEY RELATE TO EVENTS AND DEPEND ON CIRCUMSTANCES THAT MAY OCCUR IN THE FUTURE.

DISCLAIMER

THANK YOU

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BUSINESS OVERVIEW

TFG

• Diverse group with a successful

portfolio of 28 leading fashion retail brands

• Diversification through:
• Cash and credit turnover
• Geography –

4 041 outlets in 32 countries

• Full omni offering – brick and

mortar, concessions and online

• Broad product offering across

various merchandise categories: › Clothing › Jewellery › Homeware & furniture › Cellphones › Cosmetics

APPENDICES

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OUR FOOTPRINT – TFG AUSTRALIA

19 444

Stores Concessions Total outlets

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OUR FOOTPRINT – TFG AFRICA

2 447

12 110 23 35 04 05 437 211 95 153 282 200 742 185 142

Stores Concessions Total outlets

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OUR FOOTPRINT – TFG LONDON

USA Mexico

Middle East

Qatar United Arab Emirates Kuwait Bahrain Saudi Arabia

Europe

UK & Ireland Sweden Estonia Latvia Netherlands Belgium Germany Switzerland Spain

North America Asia

Japan Hong Kong Macau Malaysia Singapore

3 3 7 7 2 2 2 2 5 5 43 41 2 13 13 676 470 206 13 12 1 1 1 2 2 8 8 5 5 52 50 2 39 30 9 17 17 6 6 11 2 9 2 2 1 1 7 7

Stores Concessions Total outlets

Australia

Australia

15 15

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Condensed consolidated statement of financial position

Sept 2018 Unaudited Rm Restated* Sept 2017 Unaudited Rm Restated* March 2018 Audited Rm ASSETS Non-current assets Property, plant and equipment 2 931,6 2 792,3 2 861,9 Goodwill and intangible assets 8 484,4 8 236,9 7 667,2 Deferred taxation asset 891,4 729,3 663,6 12 307,4 11 758,5 11 192,7 Current assets Inventory 7 609,5 6 412,5 6 900,6 Trade receivables – retail 7 083,2 6 895,0 7 373,6 Other receivables and prepayments 1 082,2 838,8 821,8 Concession receivables 184,7 267,9 296,8 Cash and cash equivalents 1 002,5 744,8 1 206,1 16 962,1 15 159,0 16 598,9 Total assets 29 269,5 26 917,5 27 791,6 EQUITY AND LIABILITIES Equity attributable to equity holders of The Foschini Group Limited 13 538,6 13 190,0 13 121,5 Non-controlling interest – 4,1 4,5 Total equity 13 538,6 13 194,1 13 126,0 LIABILITIES Non-current liabilities Interest-bearing debt 4 929,7 5 724,9 4 825,7 Put option liability 80,8 113,2 72,7 Cash-settled share incentive scheme – 7,3 – Operating lease liability 373,8 323,8 335,1 Deferred taxation liability 923,0 915,5 829,4 Post-retirement defined benefit plan 224,8 241,6 215,8 6 532,1 7 326,3 6 278,7 Current liabilities Interest-bearing debt 4 728,0 2 821,6 4 524,9 Trade and other payables 4 376,2 3 497,3 3 724,3 Operating lease liability 22,5 18,9 30,7 Taxation payable 72,1 59,3 107,0 9 198,8 6 397,1 8 386,9 Total liabilities 15 730,9 13 723,4 14 665,6 Total equity and liabilities 29 269,5 26 917,5 27 791,6

* Refer to note 14 of the unaudited interim condensed consolidated results for the half-year ended 30 September 2018 for the change in accounting policy.

TFG Results presentation September 2018 www.tfglimited.co.za

27

Condensed consolidated income statement

6 months ended 30 Sept 2018 Unaudited Rm Restated* 6 months ended 30 Sept 2017 Unaudited Rm % change Restated* Year ended 31 March 2018 Audited Rm Revenue 17 466,7 13 880,6 31 463,0 Retail turnover 15 913,1 12 377,5 28,6 28 519,5 Cost of turnover (7 386,5) (6 065,4) (13 557,5) Gross profit 8 526,6 6 312,1 14 962,0 Interest income 878,4 883,2 1 755,8 Other income 675,2 619,9 1 187,7 Trading expenses (8 165,5) (6 029,7) (13 779,0) Operating profit before acquisition costs and finance costs 1 914,7 1 785,5 7,2 4 126,5 Acquisition costs – (48,6) (79,4) Finance costs (373,7) (339,4) (696,6) Profit before tax 1 541,0 1 397,5 3 350,5 Income tax expense (384,0) (390,6) (942,3) Profit for the period 1 157,0 1 006,9 2 408,2 Attributable to: Equity holders of The Foschini Group Limited 1 156,8 1 006,1 2 406,9 Non-controlling interest 0,2 0,8 1,3 Profit for the period 1 157,0 1 006,9 2 408,2 Earnings per ordinary share (cents) Total Basic 500,8 459,5 9,0 1 070,2 Diluted (basic) 496,8 456,9 8,7 1 060,0

* Refer to note 14 of the unaudited interim condensed consolidated results for the half-year ended 30 September 2018 for the change in accounting policy.

Notes

GREYMATTER & FINCH # 12397