Results Presentation YE December 2019 Macro Environment South - - PowerPoint PPT Presentation

Results Presentation

YE December 2019

Macro Environment

South African Key Economical Indicators in a Nutshell

1.2%

• R1.9bn

Trade Balance

2019 + R24.7bn

GDP

Q4/2019

CPI +4.5% PPI +4.6 %

Retail Trade Sales

• 7

Unemployment

9.75%

Q3/2019 rev : -0.6% December 2019 : CPI +4,0% | PPI +3.4% Q3/2019 : -7 Q3/2019 : 29.1% November 2019 : 10%

2020 January 2020

Prime Interest Rate

January 2020 Q4/2019

29.1%

Consumer Confidence

Q4/2019

• 0.4%

December 2019

%

January 2020

2019 GDP : 0.2%

GDP Forecast

1.6%

2021

(was 1,4%)

• 1.4%

2018 + R15.2bn 2019 : +1.2% November 2019 : +2.6%

Real Retail Turnover Growth

Total turnover growth can be misleading in isolation. Real, comparable growth is indicated stripping out internal inflation* and the growth from new stores.

Retailer / Division Financial Period Total Turnover Growth Comparable Growth Growth from Net stores Retailer Internal Price Inflation Internal Inflation Real Growth Real Comp Growth Shoprite FY2019 end Jun 2019 3.6% 0.1% 3.5% 1.6% 2.0%

• 1.5%

Shoprite SA Supermarkets FY2018 end Jun 2018 4.9% 1.9% 3.0% 1.2% 3.7% 0.7% SPAR Retail FY2019 end Sept 2019 6.4% 4.6% 1.8% 3.1% 3.3% 1.5% Massmart FY2019 end Jun 2019 5.5% 3.6% 1.9% 2.7% 2.8% 0.9% Massdiscounters FY2019 end Jun 2019 3.0% 0.7% 2.3% 0.8% 2.2%

• 0.1%

Masswarehouse FY2019 end Jun 2019 3.7% 1.9% 1.8% 2.9% 0.8%

• 1.0%

Masscash FY2019 end Jun 2019 9.1% 8.2% 0.9% 3.6% 5.5% 4.6% Pick n Pay FY2019 end Feb 2018 7.1% 4.8% 2.3%

• 0.3%

7.4% 5.1% Pick n Pay South Africa FY2019 end Jun 2019 7.4% 5.2% 2.2% – – – Woolworths Group FY2019 end Jun 2019 4.6% – – – – – Woolworths Food FY2019 end Jun 2019 7.7% 5.4% 2.3% 1.8% 5.9% 3.6% Clicks Group FY2019 end Aug 2019 7.2% 6.4% 0.8% 1.2% 6.0% 5.2% Clicks Retail FY2019 end Aug 2019 9.7% 6.4% 3.3% 1.5% 8.2% 4.9% DisChem Group FY2019 end Aug 2019 10% – – 1.2% 8.8% – DisChem Retail FY2019 end Feb 2019 9.7% 3.4% 6.3% 1.2% 8.5% 2.2%

* Retailers measure internal inflation by costing a basket of goods relative to the year

• before. They remain focused on investing in price to reduce shopper exposure to higher

prices to try to maintain, and gain market share. As a result retailer’s prices are lower than CPI on food and non-alcoholic beverages. A good indication of the price war.

Retail Environment

Total Dividend Per Share 10.26 CENTS

(2018: 7.96 CENTS)

28.8%

HEPS 51.3 CENTS

(2018: 40.1 CENTS)

27.9%

Revenue R 7.1 B

(2018: R5.5 B)

28.38%

Net Asset Value Per Share 314.0 CENTS

(2018: 284.3 CENTS)

10.4%

Headline Earnings R230.4M

(2018: R179.4 M)

28.4%

Highlights for the Year

• New branding
• All major operations produced good results
• Increased our market share in the countries
• Increased shareholding in Surapax and Array Marketing to 100%
• Appointed new CEO – D Lewis
• Healthy and strong balance sheet
• Strong cash flow generated
• Dividend increased

Highlights for the Group

Overview

• Listed on Botswana Stock Exchange and 4 Africa Exchange in SA
• Operate in 8 countries
• Specialise in:
• Distribution across Southern African
• Warehousing, Transport & Logistics
• Sales & Merchandising - South Africa & Southern Africa
• Shopper Marketing, Brand Activation and Promotions
• Specialist Training Services

The CA&S Group specialises in the fast-moving consumer goods industry, delivering on-shelf availability to many of the world’s leading consumer brands. Services span warehousing, distribution, selling, merchandising, shopper marketing, training and debtors administration. Bringing the businesses closer together the group embarked on a rebranding exercise in 2019 which has resulted in a new logo, corporate identity and collective manifesto of “the power of &”, developed collaboratively by the collective

New Group Branding : An enabling Platform

At inception the group simply adopted the same name as the first business it acquired: CA Sales Botswana and with a slight logo adaptation became known as CA Sales Holdings. In time with further acquisitions in different terretories differentiating between one of the operating entities and the collective became problematic. Creating a more intentional and meaningful brand framework will further foster collaboration and facilitate joint sales efforts across services and geographies presenting a more cohesive and consistent client offering. Enhanced client credibility and legitimacy will be forged over time as the new identity is applied and becomes a beacon around which the individual businesses can begin to build consistency of processes and work standards that enable enhanced alignment and ultimately client value. The intention was to build an enabling platform and endorsed branding architecture so companies retained their overall equity, autonomy and entrepreneurial freedom but benefitted from the endorsement of the parent brand in terms of:

• Enhanced operations &
• Access to shared opportunity

A Wutow Distribution, Sales & Merchandising, Debtors Management Bull Red Distribution Distribution, Sales & Merchandising CA Sales & Distribution Distribution, Debtor Management, Sales & Merchandising Smithshine Enterprises Distribution for frozen and ambient goods – retail, forecourts and bottom end Expo Africa Brand Activation & Pop-Up’s Promotions, Marketing, Events, Research & Digital Services Kalahari Training Institute Vocational Training Specialist in Botswana Array Marketing Hardware Sales & Merchandising Whitakers Sales & Merchandising in Lesotho PacknStack Sales & Merchandising in mutli-channels / categories SMC Brands Distribution, Sales & Merchandising of Liquor Brands PEO Promotions Marketing, Branding & Gift

• Services. Shopper Promotions,

Events & Digital in Botswana Surapax Hardware Sales & Merchandising

Group Companies Overview

Promexs Sales, merchandising and expert promotional Services in Zambia Logico Primary & Secondary Distribution for ambient, chilled & frozen

• goods. Sales & Merchandising

Retail Development Solutions Specialist strategic retail advisory consultancy and industry recruitment services.

Warehousing & Distribution Retail Services Brand Activation Sales & Merchandising

Namibia Zimbabwe Botswana Botswana, Eswatini, Namibia Eswatini Botswana Zimbabwe Botswana Namibia Botswana Eswatini South Africa Lesotho Zambia Botswana, Eswatini, Lesotho, Namibia Botswana, Eswatini, Lesotho, Mozambique, Namibia, Zambia, Zimbabwe, South Africa Botswana Zambia Botswana South Africa

Service Structure Overview

Warehousing & Distribution

The Group’s excellent storage solutions and distribution network enables it to consistently deliver for its clients, giving them surety their products are safely stored, maintained and readily available for distribution through our unrivalled distribution network.

Sales & Merchandising

We partner with clients to grow their brands by increasing their market share and volume. We build on shelf visibility,

• ptimising brand positioning.

We implement category flows and ensure sufficient stock is

• n hand and readily available,

especially when there is fluctuating demand. We assist in the maintenance of retailer systems and influence sales where we are able.

Training & Promotions

We specialise in training, empowering & motivating work forces to improve

• productivity. Practical

modules are tailored to customer’s needs and include Sales & Merchandising as well as a menu of business, IT, wellness and personal development topics. We also offer shopper brand promotions in and out of store, bringing brands to life where it counts.

Our collective footprint with a presence in all major centres in 8 countries. Local market and country knowledge & understanding. Customer relationships combined with regional connectivity and shared collective expertise give CA&S Group a competitive advantage in the region. Namibia

• Wutow
• Expo Africa
• Pns
• SMC Brands

Botswana

• CA Sales & Distribution
• Expo Africa
• Kalahari Training Institute
• PEO Promotions
• SMC Brands
• Smithshine Enterprises

South Africa

• Array Marketing
• PnS
• Surapax
• Expo Africa

Lesotho

• Expo Africa
• SMC Brands
• Whitakers

eSwatini

• Expo Africa
• Logico
• SMC Brands

Zimbabwe

• Bull Red Distribution
• Expo Africa

Zambia

• Expo Africa
• Promexs

Mozambique

• Expo Africa

Footprint Overview

Coverage

Zambia Namibia Botswana South Africa Zimbabwe Mozambique eSwatini Lesotho

Segmental Overview

Service Structure

100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1 000 000 2018 2019

Financial Review

GP OP PAT

Strategic Priorities

Warehousing & Distribution Retail Services Brand Activation Sales & Merchandising

2019 2018

% Growth

Botswana 4 217 718 3 364 479 25,4% Eswatini 940 660 714 014 31,7% Namibia 956 342 719 984 32,8% South Africa 1 026 461 761 434 34,8% Other countries 13 003 7 937 63,8% Headline Earnings 230 391 179 401 28,4% HEPS (cent) 51,31 40,11 27,9%

Revenue

1: ENABLE GROWTH

Individual Businesses

2: FACILITATE GROWTH

Leveraging the collective

3: EXPAND GROWTH

Expand & Diversify

» Champion the individual businesses to look for ways to accelerate their growth. » Maintain & build competitive advantage – invest in capacity » Supportive Structures » Prepared people / Succession » Scalable processes » Future Readiness: Systems that will support growth » Insight led sales » Leverage our interdependence to mine and extract opportunities within the group. Mine our collective customer base » Geographical reach – partnerships beyond borders » Industry insights & specific expertise » Technologies » Specific Expertise » Expand our portfolio through Mergers and Acquisitions that will enhance our offerings based on strategic thinking, market research and leveraging existing strengths. » Expand our geography / channel reach » Expand our services » Business of Tomorrow Team to be exploring new technologies & industry / supply chain digitisation. How to participate? High Growth Strategy :

2019

Revenue 7 131 967 Gross Profit 1 024 074 GP % 14,3% Other Income 88 681

2018

5 555 533 824 066 14,8% 15 262

2019 2018

Operating Profit 336 449 260 185 PAT % 2,92% 3,09% Net Working Capital 697 651 597 409 Equity 1 467 556 1 327 649

Operational Performance

Expenses

776 306 579 143

Profit after Tax

208 346 172 006

Increase / (Decrease) Increase / (Decrease)

28,4% 24,2% 29,31% 21,13%

Financial Performance

59% 13% 14% 14%

2019

Botswana Eswatini Namibia South Africa

60% 13% 13% 14%

2018

Botswana Eswatini Namibia South Africa

Botswana

Segmental Highlights

» Pleasing performance by all businesses in country » CA Sales increased its market share – added new clients » SMC Botswana increased its FMCG portfolio » KTI growing and exploring training opportunities with training partners » Promotions businesses getting traction

Service Structure Financial Performance

2019

Revenue 4 217 718 Adjusted EBITDA 220 236 EBIT

2018

3 364 479 151 027 Total assets 1 834 825 1 599 434

Growth

25,4% 45,8% 14,7% Total liabilities 195 639 120 615 62,2% 1 122 344 1 003 872 11,8%

Financial Review

50 000 100 000 150 000 200 000 250 000 2018 2019 Adjusted EBITDA EBIT

Companies

Demand Management Warehousing and Storage Distribution and Fulfilment Support Services

» Sales » Merchandising » Promotions » Consumer Demand planning » Multi Principal » Fine & Bulk Picking » Best Practice Compliance » Perishable Solution » Multi Principal » Own Fleet » Maximum Market Coverage » Formal & Informal Market » Procurement » IT Infrastructure » Mobility solutions » Process Optimisation » Operational Planning » Specialist Training » Debtors

Eswatini (Swaziland)

Segmental Highlights

» Excellent volume and revenue growth in Logico and SMC » Focus and growth of transport division scaled down » Invested in building capabilities - Management » Logico increased market share – new clients

Service Structure Financial Performance

2019

Revenue 940 660 Adjusted EBITDA 83 600 EBIT

2018

714 014 66 614 Total assets 355 470 237 285

Growth

31,7% 25,5% 49,8% Total liabilities 72 962 61 874 17,9% 171 627 91 748 87,1%

Financial Review

10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2018 2019 Adjusted EBITDA EBIT

Companies

Sales and Merchandising Warehousing Distribution Support Services

» Key Account stores » Monday to Sunday coverage » At least 1 full time merchandiser, all of who can place orders » Established Store » Partnerships » 700+ outlets covered » Warehousing structured per principle » Multi temperature for frozen, cold and ambient products » World Class systems » Best Practice Management » 13 000 m2 paved yard » 18 000 m2 warehouse space » 400x chilled pallet bays » 6500x ambient pallet bays » 1100x frozen pallet bays » Primary fleet collects and transports stock ex-factory to Swaziland » Primary & Secondary Fleet = 50+ vehicles » Consolidation facilities in Gauteng and KZN » Operate 7 days a week » Deliveries: ominated order days with 48hrs turnaround for outer-lying areas » Drop Shipment from Factory to end-user » Satellite tracking » Continuous Fleet Replacement » Procurement » IT Infrastructure » IT Mobility solution » Process Optimisation » Operational Planning » Market Intelligence » Brand Activation & Promotions » Debt Collecting » Stock Financing

South Africa

Segmental Highlights

» Retained number 2 position in SA market » SA Sales & Merchandising industry consolidating – Imperial CPG » Most principals showed low or no volume growth » Represents top 3 global FMCG manufacturers / Brand Owners » Own 100% of hardware channel – increased profit contribution

Service Structure Financial Performance

2019

Revenue 1 026 461 Adjusted EBITDA 119 255 EBIT

2018

761 434 85 725 Total assets 698 689 602 151

Growth

34,8% 39,1% 16,0% Total liabilities 89 617 76 255 17,5% 239 275 125 969 89,9%

Financial Review

20 000 40 000 60 000 80 000 100 000 120 000 140 000 2018 2019 Adjusted EBITDA EBIT

Companies

Demand Management Warehousing and Storage Distribution and Fulfilment Support Services

» Sales » Merchandising » Shopper Marketing Programmes » Promotions » Trans-shipment Depots » POS Storage, Maintenance, Management & Tracking » Best Practice Compliance » Specialist Retail Consultancy » Key Accounts & Negotiation Services » Specialist Retail Recruitment ▪ POS Technical Installation services ▪ Auditing » IT Infrastructure » Mobility solutions » Process Optimisation » Operational and Route-to- Market Planning » Market Intelligence » Training

Namibia

Segmental Highlights

» Namibian market contracting due to continued recession\ » Consumer spend under pressure » Wutow increased market share – new clients » Sales of premier liquor brands decreased significantly » Premier liquor manufacturer decreased margins and gave up exclusivity » Focus on increasing market share - new liquor manufacturers

Service Structure Financial Performance

2019

Revenue 956 342 Adjusted EBITDA 14 332 EBIT

2018

719 984 21 646 Total assets 362 189 253 207

Growth

32,8%

• 33,8%

43,0% Total liabilities

• 25 820

20 314

• 227,1%

263 863 151 845 73,8%

Financial Review

(30 000) (20 000) (10 000) 10 000 20 000 30 000 2018 2019 Adjusted EBITDA EBIT

Companies

Demand Management Warehousing and Storage Distribution and Fulfilment Support Services

» Sales » Merchandising » Promotions » Brand Strategy » Category Management » Consumer Demand » Debtors » Multi Principal » Fine & Bulk Pick » Best Practice Compliance » Trans-shipment » Consolidation » Available Capacity

» Multi Principal » Own Fleet » Wide Market Coverage » Informal Market » Capacity on Demand » Procurement » IT Infrastructure » IT Solutions Mobility, EMA » Process Optimisation » Operational Planning » Market Intelligence

Segmental Highlights

Zambia » Promexs increased its sales and merchandising services offering » The country has its challenges and investment is delivering results although still small Lesotho » Small market dominated by informal market and cross border trading » Focus on consolidating operations in Lesotho » Market too small for most principals to pay any attention to it Zimbabwe » Unavailability of forex remain critical issue » Well positioned if economy does improve

Service Structure Financial Performance

2019

Revenue 13 003 Adjusted EBITDA 1 969 EBIT

2018

7 937 2 303 Total assets 14 656 17 514

Growth

63,8%

• 14,5%
• 16,3%

Total liabilities 1 894 2 164

• 12,5%

3 982 7 188

• 44,6%

Financial Review

10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2018 2019 Adjusted EBITDA EBIT

Companies

Services in smaller markets include a mixture of Sales and Merchandising, Warehousing and Distribution and Brand Activation.

Other: Zambia, Lesotho, Zimbabwe, Mozambique

Financial Performance

FY 2019

Financial Performance

3 585 284 4 030 606 4 838 511 5 555 533 7 131 967 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000 7 000 000 8 000 000 2015 2016 2017 2018 2019

Revenue (R’000)

Financial Performance

21,4 26,3 33,2 40,1 51,3 0,0 10,0 20,0 30,0 40,0 50,0 60,0 2015 2016 2017 2018 2019

HEPS (cents)

Income Statement

R'000 2015 2016 2017 2018 2019 Revenue 3 585 284 4 030 606 4 838 511 5 555 533 7 131 967 EBITDA 219 559 234 218 267 638 322 969 442 578 Profit after tax 117 259 136 423 171 847 172 006 208 346 Headline earnings 86 560 106 439 136 881 179 401 230 391 Headline earnings per share (cents) 21,4 26,3 33,2 40,1 51,3

Financial Performance

Financial Performance

Balance Sheet

R'000 2015 2016 2017 2018 2019 Non-current Assets 710 829 682 331 696 142 983 210 1 056 250 Current Assets (excl. cash) 887 449 906 801 1 193 664 1 346 401 1 804 684 Total Assets 1 598 278 1 589 132 1 889 806 2 329 611 2 860 934 Non-current Liabilities 51 002 29 145 27 532 306 596 324 133 Current Liabilities 589 177 614 777 617 566 785 039 1 176 744 Total Bank (cash and overdraft) 51 410

• 80 610

60 840

• 89 673
• 107 499

Total Liabilities 691 589 563 312 705 938 1 001 962 1 393 378 Total Equity 906 689 1 025 820 1 183 868 1 327 649 1 467 556

Financial Performance

Working Capital Levels

R'000 2017 2018 2019 Debtors 878 389 1 004 987 1 318 229 Inventory 313 550 335 958 483 360 Payables 595 744 743 536 1 103 938 Net Working Capital 596 195 597 409 697 651

Financial Performance

Cashflow

R'000 2015 2016 2017 2018 2019 Profit from Operations 205 589 252 140 264 076 309 416 451 429 Working Capital (84 461) 6 147 (222 376) 16 564 ( 101 989) Taxation (48 389) (48 875) (59 250) (79 048) ( 105 250) Interest (16 992) (11 305) (2 909) (14 473) ( 34 315) Operational Cash Generated 55 747 198 107 (20 459) 232 459 209 875 Investments (4 886) 2 996 (119 784) 4 329 ( 27 557) Capex (19 691) (38 492) (10 969) (13 665) ( 48 594) Free Cash Flow 31 170 162 611 (151 212) 223 123 133 744

Financial Performance

21,35 26,26 33,23 40,11 51,31 3,57 5,25 5,99 7,96 10,26

• 10,00

20,00 30,00 40,00 50,00 60,00 2015 2016 2017 2018 2019

HEPS and DPS (cents)

HEPS Dividend

ANY QUESTIONS

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