Unaudited results for the half-year ended December 31 2019 - - PowerPoint PPT Presentation

Unaudited results

for the half-year ended December 31 2019

Unaudited results for the half-year ended December 31 2019

Bidcorp strategy

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

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

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Unaudited results for the half-year ended December 31 2019

Agenda Bernard Berson, CEO Interim results in perspective Bernard Berson, CEO Trading analysis David Cleasby, CFO Financial analysis Q&A Supplementary information

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Interim results in perspective

Bernard Berson

Unaudited results for the half-year ended December 31 2019

Our diversity across multiple geographies, strategic focus and group-wide sharing of what works best has enabled us to navigate through a testing six months to deliver real growth

Group trading margin slightly up at 5,01%

Notable operational features

• Revenue growth predominantly organic as the customer mix evolves, operational resilience despite external challenges in most territories
• Growth momentum has slowed in larger contributors due to relative maturity and also market specific factors
• Very low food inflation continues but wage inflation remains elevated and an impetus for improved productivity
• Guzmán (Spain) and Pier 7 (Germany) were loss-making and are both a continuing work-in-progress
• Political uncertainty in Britain around Brexit and the December election slowed consumer spending, UK result flat overall and

affected by a loss in Bidfresh UK (Oliver Kay) – Bidfresh UK business under new leadership

• Bush fires in Australia did depress consumer spend but partly compensated for by non-discretionary demand
• Significant property investment in New Zealand continues with two new DCs opened in the period
• Hong Kong sales were impacted by ongoing protest action but mainland China sales increased – business has been

transitioning well otherwise from a historic exclusive agency relationship in dairy

• A presence now in three Latin American countries with each business performing well, in spite of macro difficulties
• South Africa, which has three key operations, continues to benefit from good execution
• The strategy in the Netherlands to emphasise return-above-revenue and simplification of the business is paying off
• Running our business in an environmentally sensible and waste-minimising manner is financially beneficial, as our returns demonstrate

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Trading analysis

Bernard Berson

Unaudited results for the half-year ended December 31 2019

Segment overview

• Group trading profit contribution 29,8% (H1F2019: 29,9%)
• Interest rate reductions supportive of GDP growth
• Non-IFRS 16 trading margin improved in both territories
• Emphasis remained on exiting lower margin accounts
• Processing, manufacturing & speciality imports complement foodservice
• CPI is low but food inflation in certain categories did tick up
• Asset management remains good and expenses are well-controlled
• Effects of natural disasters and now the coronavirus will remain a

challenge through H2F2020

Australia (AUD)

• Like-for-like sales growth of 2,5%, trading profit (non-IFRS 16) up 5%
• Freetrade performed well with sales growth of 5%
• National accounts under new management with a focus on not just

exiting business but also acquiring the right new business

• Fresh was sold and remaining logistics site in Perth was closed
• Supply Solutions grew strongly – now contributes 8% of total profits

New Zealand (NZD)

• Whilst overall sales grew by 1,5% Foodservice sales alone grew by 8%

adjusted for the exit of a large national accounts customer, at improved Gross Profit percentage

• Trading profit (non-IFRS 16) up 6% with margin improving
• Additional Auckland DC has had an immediate benefit wef October
• Capex increased by 34% on investment in new DCs
• Processing (butchery and vegetables) is performing well and

contributed almost 9% of total profits

• Fresh ended the period on a firm note at a healthy margin

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Australasia (incorporating Australia and New Zealand)

Trading performance – Australasia (Australia and New Zealand)

Constant currency - revenue flat due to deliberate strategy to evolve the mix, trading profit up 5,2%, trading margin 6,4% vs. 6,1%

980,9 1 031,5

6,1% 6,4%

0,0% 2,0% 4,0% 6,0% 8,0% 500 1000 1500 H1F2019 H1F2020 Trading profit R million (left axis) Trading margin % (right axis)

Unaudited results for the half-year ended December 31 2019

Segment overview

• Group trading profit contribution 25,3% (H1F2019: 26,1%)
• Despite an uncertain backdrop the Foodservice team maintained clear

executional focus, delivering on a five-year vision

• New Liverpool depot (from September) boosted sales in the north west
• Simply Food Solutions made a pleasing contribution, at a good margin

with the range well-received

• Bidfresh was disappointing, largely due to a bungled ERP

implementation but the situation is being rectified under a new MD

• Elite Frozen Foods acquired, trading independently

Bidfood UK (GBP)

• Like-for-like net sales up 0,7%, trading profit (non-IFRS 16) up 1,3%
• Freetrade volume up 6,9% with pleasing growth in independent

trade taking the freetrade/ national accounts mix to 40/60

• National account volumes were down but also affected by timing
• f taking on new wins; focus on quality of margin
• House-brand sales continued to grow in real terms
• Ecommerce platform ‘Catering2You’ successfully launched in

November

• Vision2025 is an evolution on Vison2020 with a focus on

delivering growth

Bidfresh (GBP)

• Sales fell by 5,6% and trading profit(non-IFRS 16) fell due to
• perational complexities from a new ERP system in Produce that

resulted in lost customers (22% lower sales) and higher costs

• Seafood did well to maintain profits given restaurant liquidations

and weaker high street demand

• Campbell’s fresh foods business in Scotland performed well
• Henson, the London-focused meat specialist, reduced losses

substantially

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United Kingdom

Trading performance – United Kingdom (Bidfood and Bidfresh)

Constant currency - revenue up 2,6%, trading profit up 0,2%, trading margin 4,9% vs. 5,0%

856,7 858,3

5,0% 4,9%

0,0% 2,0% 4,0% 6,0% 200 400 600 800 1000 H1F2019 H1F2020 Trading profit R million (left axis) Trading margin % (right axis)

Unaudited results for the half-year ended December 31 2019

Segment overview

• Group trading profit contribution 30,9% (H1F2019: 29,9%)
• Real trading profit growth from Netherlands, Belgium, Czech Republic

and Slovakia, Poland, Italy and Baltics at improved margins

• Guzmán (Spain) and Pier 7 (Germany) have required intervention to

rectify legacy deficiencies – potential is there

• Markets in western Europe are sluggish so the strategy is to optimise

existing businesses and seek expansion through selective acquisitions in existing and adjacent territories – Bidfood market shares overall remain small

Netherlands (EUR)

• Sales up 1,1%, trading profit (non-IFRS 16) up 25,5%
• Reaping the benefits of a three year process of transition
• A switch in mix of business in favour of institutional and freetrade

away from large caterers and logistics

• Associates in meat, fish and fresh produce performed as expected

Belgium (EUR)

• Sales up 3,5%, trading profit (non-IFRS 16) up 4,2%
• An overall 5,6% sales growth in freetrade, institutional and logistics

Czech Republic and Slovakia (CZK)

• Sales up 8,7%, margin (non-IFRS 16) stable
• Restaurant and catering sales remain buoyant due to rising

disposable income with sales up 9,2%, retail sales grew 8,3%

• Meat plant in Opava now operational
• Business is maturing after a decade of non-stop growth since

acquisition in 2009 so expectations need to be tempered

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Europe

(Netherlands, Belgium, Czech Rep & Slovakia, Poland, Italy, Baltics, Iberia, Germany)

Trading performance – Europe

Constant currency - revenue up 4,2%, trading profit up 7,5%, trading margin 4,6% vs. 4,4%

979,9 1 053,5

4,4% 4,6%

0,0% 2,0% 4,0% 6,0% 500 1000 1500 H1F2019 H1F2020 Trading profit R million (left axis) Trading margin % (right axis)

Unaudited results for the half-year ended December 31 2019

Trading performance – Europe

Constant currency - revenue up 4,2%, trading profit up 7,5%, trading margin 4,6% vs. 4,4%

Poland (PLN)

• Buoyant economy, GDP growth of over 4%, low unemployment
• Sales up 12,7%, trading profit (non-IFRS 16) up 21,0%, improved GP%

results in a 0,3% rise in trading margin but wage pressure persists

• Freetrade a revenue driver, up 17,5% and now 77% of the portfolio
• Exit of low-margin national account contracts reduces this to 23% of

the portfolio but resulting in an improved GP on independent sales

• New investment underway in depots and value-add processing

Italy (EUR)

• Sales up 4,8%, trading profit (non-IFRS 16) up 21,0%, improved GP%
• f 0,4% and expense control boosted trading margin by 0,8%
• D&D (acquired F2018) now wholly-owned and fully integrated
• Further acquisition opportunities identified

Baltics (EUR)

• Sales up 23,4%, trading profit (non-IFRS 16) up 183,2%, improved

GP% and a lower expense ratio improved the trading margin by 1,1%

• New warehouse in Kaunus a growth driver

Iberia (EUR)

• Sales declined overall by 2,6%, profitability of Guzmán an issue
• Frustock in Portugal (sales up 83%) and Igartza, in the

north of Spain, performed very well and increased profits

• Weaker market conditions have impacted Guzmán but the
• verriding issue is internal and needs fixing
• Bidfood model is well-suited to building market share in the

fragmented Spanish market, so there is big potential to participate in market consolidation

Germany (EUR) (50% interest in Austria)

• Sales were weak on exit from unprofitable national contracts,

a loss (non-IFRS 16)

• Another loss is forecast for H2F2020 but remedial measures

should turn the situation around in F2021

• The new Bergkirchen warehouse, delayed due to building snags,

was opened in November 2019 and is essential to growth in the greater Munich market

• Pier 7 is a good toehold for us to learn about the largest

foodservice market in Europe and then strategically build a niche presence

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Unaudited results for the half-year ended December 31 2019

Segment overview

• Group trading profit contribution 15,4% (H1F2019: 15,3%)
• Against a backdrop of political and economic turmoil in the majority of

territories every single team adapted commendably to the challenges

• Trading profit is up 3,7% but the % contribution to group is down

– Greater China contribution has fallen to 1,3% of group

• Caution is called for in H2F2020 – effects of coronavirus unknown
• We have strength in diversity and history has taught us that results

can bounce back quite quickly after periods of instability

South Africa (ZAR)

• Sales up 4%, trading profit (non-IFRS 16) up 4%, margin maintained –

figures exclude Chipkins Puratos as a 50% JV

• Foodservice trades in a market with several regional and national

competitors but despite a depressed economy and lower food inflation increased sales and trading profit by 3%

• Growth was achieved in both freetrade and national accounts
• Crown revenue increased by 10,9%, assisted by recovery from the

listeriosis outbreak in the prior period – competition is intense

• The Chipkins Puratos JV had a difficult six months with only the

artisanal category rising

Hong Kong and Macau (HKD)

• Sales declined 8,8% as political protests severely impacted demand

for eating out, tourism, lodgings and general consumption – delivery volumes have dropped and customers struggle to make payment

• Sales also affected by loss of a major dairy distributorship that
• pted to go direct-to-market
• Despite this the team did well to trade profitably

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Emerging Markets

(Greater China, Singapore, South Africa, Brazil, Chile, Middle East, Turkey)

Trading performance – Emerging Markets

Constant currency - revenue up 6,0%, trading profit up 3,7%, trading margin 4,6% vs. 4,7%

502,0 520,7

4,7% 4,6%

0,0% 2,0% 4,0% 6,0% 500 H1F2019 H1F2020 Trading profit R million (left axis) Trading margin % (right axis)

Unaudited results for the half-year ended December 31 2019

Trading performance – Emerging Markets

Constant currency - revenue up 6,0%, trading profit up 3,7%, trading margin 4,6% vs. 4,7%

Mainland China (HKD)

• Sales grew by 6,2% and profitability improved, assisted by the transition

from an exclusive agency relationship in dairy to new suppliers

• Diversification through range extension and geographical presence

Singapore, Malaysia and Vietnam (SGD)

• Total sales up 8,5%, trading profit (non-IFRS 16) up 26,7% with a higher

GP% and expense control resulting in a 0,5% improvement in margin

• Malaysia sales increased by 34% – pastry the main category followed

by beverages and dairy

• Vietnam 54% JV began invoicing in December 2018 – predominantly

a speciality offering for now

Brazil (BRL)

• Sales growth achieved in a stagnant economy, expenses are well-

controlled, logistics productivity has increased and ecommerce is being rolled out

Chile (CLP)

• A strong result in a highly disruptive political climate with total sales up

30% and with profits up despite tactical trading to discount stock and provide temporary concessionary terms to customers

• The business is now operating from seven locations with Santiago

the largest at 60% of sales

Argentina (ARS)

• Positive maiden six month contribution at a healthy margin from

Blancaluna in Buenos Aires – offering ambient, frozen and refrigerated products and logistics services to large caterers (38% investment with joint control equity accounted)

Middle East (AED)

• Sales up 43,6%, trading profit (non-IFRS 16) up 88,3%,

trading margin increased by 1,5%

• UAE, Saudi Arabia, Bahrain, Oman and Jordan all recorded

strong growth in sales, assisted by range extension

• 50% sugar tax in Saudi Arabia may dampen syrup demand in H2

but overall food and beverage sector is growing in double digits

• Regional socio-economic reform bodes well for the future

Turkey (TRY)

• Strategy to build a more balanced business is bearing fruit
• New wine & spirits offering has been very successful
• New greenfields presence in Antalya wef October

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Unaudited results for the half-year ended December 31 2019

Outlook

Our family of businesses is in good shape and

• ur people are capable of managing whatever challenges they are confronted with

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Australasia Bidcorp

• Australia – maintaining a balance between optimising profitability, whilst seeking

growth with the right customers served from a modern and expanding branch network

• New Zealand – vigorous business development in our 20th year in New Zealand
• Bidcorp is a growth business with defensive attributes achieving good returns
• Laser focus on decentralised management together with the cumulative impact of

relatively small acquisitions over time has delivered significant profitable growth – interim trading profits of R3,5 billion (GBP187 million) are the same in GBP as the entire annual trading profit of F2014 United Kingdom

• In the past five years Foodservice has increased turnover by 25%, doubled profits and

improved trading margin by 1,7%

• The team is budgeting for an improved full year result

Emerging Markets

• Greater China is being impacted by the coronavirus, adding to our woes in Hong Kong
• Our people adapt well to external challenges and are focused on what they can control

Europe

• After a strong H1 western Europe is anticipating a strong finish to the year
• Czech Republic & Slovakia and Poland are on track for yet another record full year result
• Plenty of scope still to expand across Europe but on the right terms

An entrepreneurial and decentralised model Our growth is organic, acquisitive-organic through bolt-ons, and acquisitive - we seek value when we acquire and have the balance sheet capacity to be

• pportunistic at the

right time Whatever the future holds we have the people and financial strength to weather unpredictable and challenging times

Financial analysis

David Cleasby

Unaudited results for the half-year ended December 31 2019

Continuing operations (non-IFRS 16)

Highlights

• Minimal FX translation effects in the period
• Revenue R68,2 billion (↑3,2%) with constant FX revenue R68,1 billion (↑3,1%)
• Gross margin up at 23,8% (H1F2019: 23,5%)
• EBITDA (trading) margin of 6,0% (H1F2019: 5,9%)
• Trading margin of 5,01% up on H1F2019 of 4,96%
• Headline Earnings R2,5 billion (↑4,6%)
• HEPS of 730,1cps (↑4,3%)
• Interim dividend of 330,0 cps; 2,2x covered by continuing HEPS
• Good free cash flows driven by much lower working capital absorption and

despite high investment capex

• Return on funds employed 30%; return on average equity 16%
• IFRS 16: Impacts effective July 2019 – Lease liability R5,2 billion,

Right-of-Use assets R4,2 billion, negligible effect on earnings (R6,1 million on H1F2020) and net debt to EBITDA 1,1x, EBITDA interest cover 11x

• 69% of freehold property and 83% of vehicles assets are owned by the group

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Underlying financial performance solid

Translation impacts negligible for the period

4,1 3,9 8,0 H1F2020 H1F2019 F2019 EBITDA (R billion) 3,4 3,3 6,7 H1F2020 H1F2019 F2019 Trading profit (R billion) 25,9 28,0 28,5 H1F2020 H1F2019 F2019 Shareholder equity (R billion) 4,9 5,1 4,7 H1F2020 H1F2019 F2019 Net debt (R billion)

Unaudited results for the half-year ended December 31 2019

• Organic net revenue growth of 2,2% impacted by the strategic exit of

further low margin business but offset by focused independent volume growth

• Gross profit percentage up to 23,8% from 23,5% reflecting better customer

mix – enabling Bidcorp to trade through the higher cost base

• Operating expenses up but reasonably well-controlled – 4,5% in constant FX

(cost of doing business increases to 18,8% from 18,5%) driven by:

• Higher cost to serve independent customer base
• Wage increases for staff, fuel and energy increases (rate of increase

moderating) in a number of geographies and by a higher invested infrastructure base

• Trading margin improved in all segments except Emerging Markets:
• Australasia has the highest segment margin at 6,4%
• Europe showed improvement to 4,6% despite Iberia & Germany detracting
• UK margin decline to 4,9% (H1F2019: 5,0%), improvements in

Foodservice offset by decline in Bidfresh

• Emerging Markets at 4,6% (H1F2019: 4,7%), the largest detractor

being Greater China

• Acquisition (Elite Frozen Foods) had little effect on Headline Earnings

H1F2020; contributions of R450,7 million to revenue and R9,7 million to trading profit

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Statement of profit (non-IFRS 16)

Quality of earnings remains sound, underpinned by solid organic growth

23,8% 18,8% 23,5% 18,5% 23,9% 18,7%

• 4%

1% 6% 11% 16% 21% 26%

Gross profit % Total expenses %

H1F2020 H1F2019 F2019 6,0% 5,01% 5,9% 4,96% 6,2% 5,16% 0% 1% 2% 3% 4% 5% 6% 7%

EBITDA margin % Trading profit margin %

H1F2020 H1F2019 F2019

Unaudited results for the half-year ended December 31 2019

Statement of profit (non-IFRS 16) cont’d

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

• Net interest paid increased by 10,6% to R158,4 million
• Asset management improved as the period progressed
• Higher base interest rates in Greater China; additional funding for acquisitions not in the comparative base
• Additional 1 day of average working capital (equates to R549 million)
• Effective tax rate (excluding associate income and capital items) is slightly lower at 24,2% (H1F2019: 24,5%), within previous guidance
• Associates and jointly controlled entities share of profit is R34,2 million (Netherlands specialist product businesses;

50% of Chipkins Puratos JV; and first time contribution of 38% of Blancaluna (Argentina))

• Minority interests of R22,9 million are small and will remain a feature due to owner-managers often retaining a stake on-acquisition
• Capital items – Net R9,6 million made up of a loss on sale of Fresh Australia (R16,2 million) offset by net profit on PPE sales (R6,6 million)
• Discontinued operations – comprise the UK Logistics businesses (CD and PCL)
• CD sale process near completion, material costs of exit accounted for; much improved operational performance
• PCL residual warehousing contract being exited in March 2020; material costs of exit accounted for

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Unaudited results for the half-year ended December 31 2019

Cash flows (non-IFRS 16)

Solid cash flow in the period while investment in asset base continues to create capacity for growth

• Cash generated from operations before working capital – R3,7 billion (H1F2019: R4,0 billion)
• 91% of EBITDA and 110% of trading profit (H1F2019: 101% of EBITDA and 121% of trading profit)
• Non-cash items mainly comprise equity settled share based payments and provision movements
• Working capital
• Typical working capital cycle is for absorption in H1 and generation in H2
• R0,2 billion absorbed in H1F2020 vs. R1,5 billion absorbed in H1F2019
• Net month-end working capital remained at 10 days
• Impacts in H1F2020:
• Excellent effort by operational management to limit absorption in H1F2020 despite:
• Structural – value-add procurement activities create longer supply chains (without commensurate increased supplier terms)
• n imported products
• Activity levels – 3,2% revenue growth across group and some overstocking (e.g. for Brexit and opportunistic buying)
• Increased investment into depots requires higher absolute stocking levels
• Cash effects of investing activities of R1,6 billion
• Maintenance and expansion capital expenditure of R1,5 billion compares with depreciation and amortisation of R0,7 billion
• Acquisitions consumed R0,2 billion, both relatively small
• Cash and cash equivalents of continuing operations R5,3 billion, very similar to F2019 and H1F2019
• Net debt at R4,9 billion equivalent to 0,6x net debt / EBITDA (H1F2019: R5,1 billion = 0,65x net debt / EBITDA)

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Unaudited results for the half-year ended December 31 2019

• Strong balance sheet underpinned by reliable cash flows

allows flexibility to achieve strategic growth objectives,

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

FCTR movements, IFRS 16 take-on and put option recognition

• Liquidity management
• Short-term debt (R4,8 billion) <Cash (R5,3 billion) all debt defacto long-term
• 46% of gross borrowings termed beyond June 2020, significant euro-term

funding refinanced in H2F2019 for 3 years

• Weighted average interest rate on foreign borrowings 2,9% (H1F2019: 2,7%)
• Risk management
• Debt is matched to the underlying assets for a natural hedge; mixture of

fixed (long-term funding) and floating interest rates (short-term funding)

• Solvency
• Debt to equity ratio 19,1% (H1F2019: 17,9%)
• Net debt to annualised EBITDA 0,60x (H1F2019: 0,65x)
• Trading profit interest cover 21,6x (H1F2019: 22,9x)
• Returns
• Return on average shareholder equity 15,9% (H1F2019: 13,5%)
• Return on average ROFE of 30,4% (H1F2019: 34,3%)

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Financial position

Financial position remains strong

26,2 28,3 28,7

4,9 5,1 4,7 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0 22,0 23,0 24,0 25,0 26,0 27,0 28,0 29,0 30,0 H1F2020 H1F2019 F2019

Equity R billion Net debt R billion 25,9 27,4 28,0

19,1% 17,9% 16,4% 0% 5% 10% 15% 20% 25% 30% 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0

H1F2020 H1F2019 F2019 EBITDA interest cover x Net debt to equity %

Unaudited results for the half-year ended December 31 2019

Financial guidance

Sound financial position provides headroom to fund opportunities

• Financial base supportive of business to deliver continued growth in home currencies:
• Bidcorp remains cash generative, but there is room for improvement in asset management in certain businesses
• Debt levels (including IFRS 16 impact) conservative with ample headroom to fund our organic and acquisitive growth
• Continued focus on working capital into H2F2020 with some generation expected, but growth requires absolute

investment into working capital

• Strength of financial position provides a cushion for the vagaries of markets and unanticipated events
• Bidcorp operates across more than 35 different countries and 20 different currencies
• Core philosophy of naturally hedging assets and liabilities remains
• Businesses are managed and measured in their local currencies, above average returns remain the core driver of

performance measurement

• Currency volatility likely to remain a feature into H2F2020; ZAR is the reporting currency;

However, non-ZAR trading profits contribute to 91% of group

• International shareholder base stable at 50%

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Q&A

Copy to come

Supplementary information

Operations

Unaudited results for the half-year ended December 31 2019

Revenue by constant currency Trading profit by constant currency*

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International operations

Geographically diversified

Emerging Markets 16% Australasia 24% Europe 34% United Kingdom 26% Emerging Markets 16% Australasia 29% Europe 30% United Kingdom 25%

*Before corporate office costs

Unaudited results for the half-year ended December 31 2019

Group overview (all profit reference is non-IFRS 16 and in constant FX for a more meaningful representation)

All segments performed satisfactorily in a demanding operating environment across all territories

Real growth achieved

• Constant FX revenue and trading profit growth of 3,1% and 4,3% respectively
• Food inflation did tick-up slightly in some territories (and some categories) but generally remained benign
• GP margin increased to 23,8% from 23,5%; with expenses rising by 4,5% the higher GP assisted trading margin by 5 basis points
• The drop in profitability in Bidfresh UK was R57 million; losses from Pier 7 (Germany) and Guzmán (Spain) amounted to R67 million
• ZAR/EUR was 0,2% stronger, ZAR/AUD 2,0% stronger, ZAR/GBP 0,8% weaker – FX had no earnings effect on translation for the group
• Blancaluna (Argentina) contributed R7,7 million to associate earnings
• Simply Food Solutions (formerly Punjab Kitchen) was acquired January 1 2019 and thus not in the base – 6 month profit R20 million (0,6%)
• Elite Frozen Foods (UK) was the only sizeable acquisition in the period – R159 million
• Bidcorp reports in South African rand as a Johannesburg Stock Exchange listed company but all businesses are managed and measured in

their home currencies; South Africa contributed 5,7% of revenue and 9% of group trading profit before corporate costs Outlook for the remainder of F2020

• Remedial measures in Bidfresh UK, Pier 7 and Guzmán
• Internal disruption continues, anticipating change and is reinforcing our competitive position and boosting margin

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R’000s Half-year ended December 31 2019 Half-year ended 31 December 2018 Change Revenue (constant FX) 68 115 403 66 091 975 3,1% Trading profit (constant FX and non-IFRS 16) 3 417 216 3 277 347 4,3% Trading margin 5,01% 4,96% 1,2%

Unaudited results for the half-year ended December 31 2019

Australasia

There are now 41 branches and the establishment of smaller depots in CBDs has improved service and timely range availability for customers

Operational features for Australia

• Australia achieves among the best foodservice margins in Bidcorp; however, scope to increase margins further is diminishing as

many branches are performing at optimum levels

• With the exit of fresh and logistics, focus is on foodservice, complemented by value-add processing, speciality imports, liquor and meat
• Sydney, Melbourne and Brisbane are performing well as part of the multi-site strategy to get closer to our customer in CBD’s –

Melbourne and Brisbane were split into three smaller branches and Sydney was split into two

• A new branch was opened in November in the town of Bendigo (Victoria) to service Bendigo and Ballarat (a 230,000 population market)

which, up until now, were served by the depots in Geelong (Victoria) and Truganina (Victoria), both in the greater Melbourne area, which is some distance away

• Whilst Foodservice sales were only up 1% the freetrade is growing by 5% and on a like-for-like basis sales grew by 2,5%
• A refreshed strategy toward national accounts will see growth in this segment again but only on fair and reasonable contractual terms
• Supply Solutions (imported speciality products, including seafood and cheese processing) grew revenue by 12,6% with profits also up;

this division now supplies 753 SKUs in five categories and is now the largest single supplier to Foodservice

• Liquor sales were up 17,7% and has encouraging potential
• Meat sales are channelled through Foodservice branches; the plan is to consolidate meat sourcing and light manufacturing on a single site

Outlook for the remainder of F2020

• The new Richlands (Brisbane) site and Dandenong (Melbourne) site will contribute for a full year, the Launceston (Tasmania) warehouse

expansion has added capacity, and the new Cairns (Queensland) and Bendigo (Victoria) sites will also contribute

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Unaudited results for the half-year ended December 31 2019

Australasia

Bidcorp will celebrate 20 years in New Zealand in April

Operational features for New Zealand

• A milestone year in which sales are anticipated to reach NZD1,2 billion
• North Auckland depot opened in October doubling capacity and improved service in the Auckland market, the largest, with

some business also transferred from Whangarei

• The New Plymouth branch occupied their new DC in November with immediate benefits in logistics efficiencies and service
• New sites to be built in Christchurch, Wellington and Hamilton (Fresh)
• Prepared Produce moved to new leased premises in Christchurch in December
• Processing had a strong six months, particularly in butcheries which have had new investment in capacity and equipment –

6,9% of total sales and 8,7% of total profits

• Fresh has been well-executed in New Zealand and is 8,4% of total sales and 14% of total profits
• Logistics grew sales by 6,9% and contributed to 8,6% of total sales 5,6% of total profits, at a reasonable margin
• Senior management ranks have been bolstered

Outlook for the remainder of F2020

• Continued investment in facilities and equipment is a growth driver and the market is not saturated
• All Foodservice branches are performing to expectation and should end the year on a firm note
• As the business matures and with margins already on par with Australia, profit growth will inevitably slow

26

Unaudited results for the half-year ended December 31 2019

United Kingdom

Delivered on five-year vision

Operational features for United Kingdom Bidfood UK

• New five-year vision builds on the success to the one just ended, with the business now at a record annualised trading profit
• Focus remains on freetrade volume, maximising national account margins, growing own-brand and exclusive-brand products, driving

ecommerce solutions and realising improved productivity in operations and support services

• Manufacturing (Simply Food Solutions, Yarde Farm and Quality Cuisine) is trading well at good margin and sales efforts have been beefed

up to channel more product to customers through the Foodservice depots, which is a complement to own-brand range

• A new Marshalls brand within Yarde Farm will be at a lower price point to the main brand, creating an opportunity to replace some
• f the branded sales that go to national accounts customers
• Own-brand sales up 5,8% at improved margin per customer with the exclusive-brands range 32% of own-brand sales and 8% of total sales
• In Salisbury, a new cold store is being built, the ambient warehouse is being extended and there will be a new marshalling area
• A new depot in Glasgow is planned and a new office will be built in Manchester on the existing site
• Investment in new depots will be on a case-by-case basis as the costs of site development in the UK are high
• Unity Wines & Spirits grew volume by 5,3% at a good margin and gaining traction in the market through the wholesale channels
• Liverpool depot is now accommodating the volume previously delivered out of Manchester and has increased volumes as a result

Bidfresh

• Seafood is performing to expectation and is well-managed, Henson’s meat is improving, Campbell’s fresh foods business (Scotland) had a

strong six months, whilst R Noone & Son greengrocers (Manchester) is profitable and well-established in its market

• Oliver Kay, the fresh produce and ingredients supplier (Lancashire) that delivers nationwide, had a loss-making six months but

the problems are known and fixable

Outlook for the remainder of F2020

• Another good result is anticipated in Bidfood, Bidfresh is expected to improve, albeit slowly

27

Unaudited results for the half-year ended December 31 2019

Europe

A pleasing performance, with two notable exceptions

Operational features for Europe

• Czech Republic & Slovakia and Poland both continue to perform at a high level after ten years of growth
• Land in Bydgoszcz (Poland) is being bought for expansion and there are plans to increase expansion investment
• There are no opportunities at this stage to acquire further in eastern Europe
• A strong profit improvement in the Netherlands but there is further to go to reach an optimal level of return and mix of business
• New leased premises for the Gorle branch, the Geleen leased premises is being expanded, the Ede branch is being relocated,

at the Meppel branch a new freezer is being commissioned to eliminate bottlenecks and a new building has been occupied in Almere

• Belgium has improved its overall mix and margin, but the challenge is the half of sales that earn less than a 1% margin, tying up

time and resources, whilst the other half averages in line with the group

• Capex limited to the existing network, including fleet replacement, with no immediate plans for depot expansion but acquisitions are being considered
• Italy is on track to generate EUR500 million in sales this year at a trading margin in line with the group norm; Italy now consists of

DAC, Quartiglia, D&D and Bidfood Italy which procures made in Italy product for other group companies

• With Guzmán’s platform being stabilised into H2F2020, we will have a good, albeit small presence, in the Spanish and Portuguese

markets and a base to expand off sales of EUR150 million

• The Baltics business had a profitable six months and the outlook is favourable

Outlook for the remainder of F2020

• Budgeting for a positive segment result, driven by further improvements in the Netherlands, eastern Europe and Italy whilst

the aim is to stem losses in Spain and Germany

28

Unaudited results for the half-year ended December 31 2019

Emerging Markets

Holding the line in tough times

Operational features for Emerging Markets

• South Africa is key as it contributed 34% to revenue in H1F2020 and has the largest contribution to segment profits
• Bidfood South Africa, Crown and Chipkins Puratos are world-class businesses and generate world-leading returns
• Digital is key with 66% of revenue is processed through myBidfood, the ecommerce portal, and among the highest in the group, whilst
• wn-brand is 33% of revenue at good margin
• Investment in facilities continues and acquisition opportunities are always considered if there are synergies to be gained
• China now has a better balanced product mix with the emphasis remaining on prestige western brands, imported, chilled

and processed meats and own-brand

• Tier 1 cities of Shenzhen, Beijing, Guangzhou and Shanghai are the largest contributors but there is significant scope outside of those cities
• Tier 2 cities Shandong, Qingdao, Nanjing, Yunnan, Xiamen, Changsha, Xian, Sanya, Nanning and Jilin are being assessed, to further growth
• Hong Kong / Macau has been the gateway to the China expansion and despite political upheavals is a key part of the group and

the base for Bidfood Procurement Community (BPC)

• Brazil, Chile and now Argentina have excellent, entrepreneurial management teams that are accustomed to handling bouts of instability
• Middle East is finally coming into its own and well-placed for future market share gains and real growth
• Singapore has transitioned to a higher margin, non-commoditised business and making inroads to the Malaysian and Vietnam markets

Outlook for the remainder of F2020

• Given some of the macro challenges and now the coronavirus pandemic, it is premature to make a call on the second half
• Management is focused on their own businesses and on what they can manage within their control

29

Unaudited results for the half-year ended December 31 2019

Ecommerce and Procurement

Group-wide initiatives

BidOne ecommerce and CRM development

• BidOne ecommerce covers nearly a third of group revenues and is evolving and embracing the best of worldwide IP;

leveraged for the greater benefit of the group, a major competitive advantage

• New Zealand is the base for BidOne
• Sales enablement / CRM application “BidIQ” being rolled out
• ‘myBidfood’ South Africa is in the top 5 of volume activity on Bidfood ecommerce sites, and is the first major transition

to the new cloud environment

• Newly developed Supplier-Turn-In-Order app

Bidfood Procurement Community (BPC)

• Broadening the supplier base for more choice, better prices and availability
• Sales increasing by double digits as more group companies buy into the procurement advantages BPC provides
• BPC facilitates joint tenders and encourages businesses across the world to work together

30

Unaudited results for the half-year ended December 31 2019

Bidcorp is proud to take a sustainability-based approach to ensure we play an active role in minimising the impact of our environmental footprint

• Running our businesses in an environmentally sensible and

waste-minimising manner

• Demonstrating the financial benefits of being environmentally

conscious and responsible

• Rolling out a sustainability strategy that reflects the wider

industry drive towards the UN’s 17 SDGs

• Committed to a

25% reduction in our carbon footprint by 2025*

* Based on the F2018 reported carbon emissions on a like-for-like basis

• Committed to accurate monitoring, creating efficiencies and

reporting reductions in:

• Electricity usage
• With investment in solar panels, use of LED lighting,

implementing refrigeration efficiencies with ammonia based units

• Water usage
• Water towers, rain water tanks and recycling water

for sanitary and cleaning purposes to reduce our consumption of water

• Waste management
• Cost control, recycling and reuse remains a priority,

minimising packaging consumption and choosing biodegradable organically based materials where possible

• Fuel consumption
• Electric trucks, shorter distances and smaller engine

vehicles are used to minimise our fleet fuel consumption

31

Supplementary information

Segmental information

Unaudited results for the half-year ended December 31 2019

Continuing segmental revenue

R million Revenue H1F2020 Share of group % Change % Revenue H1F2019 Share of group % Constant currency revenue H1F2020 Change % Australasia 15 833,2 23,2 (1,3) 16 047,8 24,3 16 048,2 0,0 United Kingdom 17 787,3 26,1 3,4 17 208,8 26,0 17 649,4 2,6 Europe 23 040,1 33,8 4,1 22 130,0* 33,5 23 066,4 4,2 Emerging Markets 11 554,8 16,9 7,9 10 705,4 16,2 11 351,4 6,0 Total 68 215,4 3,2 66 092,0* 68 115,4 3,1

33

* Following a re-assessment of the group's judgements of agent versus principal it was detected that Bidfood Netherlands (Europe segment) was acting as an agent instead of as principal on certain chilled food deliveries. A restatement of R321,6 million to Europe was recorded for the half-year ended December 31 2018 restatement had no impact on the group’s gross profit, earnings per share, headline earnings per share or statement of financial position.

Unaudited results for the half-year ended December 31 2019

Continuing segmental trading profit

R million Trading profit H1F2020 Margin % Share of group % Change % Trading profit H1F2019 Margin % Share of group % Constant currency Trading profit H1F2020 Change % Bidfood 3 626,0 5,3 3 319,5 5,0 3 626,5 Australasia 1 045,9 6,6 29,2 6,6 980,9 6,1 29,9 1 060,2 8,1 United Kingdom 909,4 5,1 25,4 6,1 856,7 5,0 26,1 902,3 5,3 Europe 1 098,9 4,8 30,7 12,2 979,9 4,4 29,9 1 098,8 12,1 Emerging Markets 571,8 4,9 16,0 13,9 502,0 4,7 15,3 565,2 12,6 Corporate (46,7) (42,1) (46,4) Total 3 579,3 5,3 9,2 3 277,4 5,0 3 580,1 9,2

34

Unaudited results for the half-year ended December 31 2019

Continuing segmental trading profit (non-IFRS 16)

R million Trading profit H1F2020 Margin % Share of group % Change % Trading profit H1F2019 Margin % Share of group % Constant currency Trading profit H1F2020 Change % Bidfood 3 462,6 5,1 3 319,5 5,0 3 464,0 Australasia 1 017,7 6,4 29,8 3,7 980,9 6,1 29,9 1 031,5 5,2 United Kingdom 865,0 4,9 25,3 1,0 856,7 5,0 26,1 858,3 0,2 Europe 1 053,7 4,6 30,9 7,5 979,9 4,4 29,9 1 053,5 7,5 Emerging Markets 526,2 4,6 15,4 4,8 502,0 4,7 15,3 520,7 3,7 Corporate (47,1) (42,1) (46,8) Total 3 415,5 5,0 4,2 3 277,4 5,0 3 417,2 4,3

35

Supplementary information

Financial analysis

Unaudited results for the half-year ended December 31 2019

Consolidated statement of profit or loss

R million Half-year ended Dec 31 2019 Avg R/£ 18,49 % change Half-year ended Dec 31 2018 Avg R/£ 18,34 H1F2020 Currency effects R/£ 18,34 Revenue 68 215,4 3,2 66 092,0 68 115,4 3,1

37

• Continuing revenue grew 3,2% to R68,2 billion (H1F2019: R66,1 billion). Revenue growth reflective of our customer portfolio rebalancing and pressures on

larger national account customers, which are seeing competitors becoming more desperate for volume

• Segment revenue performance
• Australasia: R15,8 billion – 1,3% decrease (Local FX: Flat)

New Zealand exited a large caterer dropping roughly NZ$50 million in annualised sales which has been replaced by independent business Australia were flat due to the sale of the Fresh business, impact of the Australian bush fires, closure of Logistics WA and low growth in national accounts

• United Kingdom: R17,8 billion – 3,4% increase (Local FX: 2,6% growth)

Impacts of Brexit fatigue, national elections and low consumer confidence impacted national account volumes for Bidfood UK Bidfresh impacted by lost customers in Produce

• Europe: R23,0 billion – 4,1% growth (Local FX: 4,2% growth)

Eastern European jurisdictions showed record revenue growth

• Emerging Markets: R11,6 billion – 7,9% growth (Local FX: 6,0% growth)

Pleasing sales growth from the Turkey (up 56%) through new agency contracts and a new branch in Antalya; Middle East (42%) due to Saudi’s growth in beverages and Chile (30%) exceptional growth given the Chilean unrest

Unaudited results for the half-year ended December 31 2019

Consolidated statement of profit or loss

R million Half-year ended Dec 31 2019 Avg R/£ 18,49 % change Half-year ended Dec 31 2018 Avg R/£ 18,34 H1F2020 Currency effects R/£ 18,34 Revenue 68 215,4 3,2 66 092,0 68 115,4 3,1 Trading profit 3 579,4 9,2 3 277,4 3 580,1 9,2 Gross profit % 23,8% 1,3 23,5% Trading margin % – trading operations 5,3% 5,8 5,0%

38

• Gross margins have benefited from the better mix of business, better pricing margins achieved to cover off a higher cost base
• Margins IFRS 16

non-IFRS 16 non-IFRS 16 Trading margins Trading margins EBITDA margins – Australasia 6,6% from 6,1% (H1F2019) 6,4% from 6,1% (H1F2019) 7,2% from 6,9% (H1F2019) – UK 5,1% from 5,0% (H1F2019) 4,9% from 5,0% (H1F2019) 6,0% from 6,0% (H1F2019) – Europe 4,8% from 4,4% (H1F2019) 4,6% from 4,4% (H1F2019) 5,6% from 5,4% (H1F2019) – EM 4,9% from 4,7% (H1F2019) 4,6% from 4,7% (H1F2019) 5,4% from 5,5% (H1F2019)

• Operating expenses:

The group’s overall cost of doing business (operating costs excluding the IFRS 16 impact) increased to 18,8% (H1F2019: 18,5%) partly due to our greater focus on independent customers. Our significant investments over the past few years into operational capacity have also contributed to overhead growth, the full efficiency benefits of which have yet to fully manifest themselves. Cost pressures continue to be experienced in wages, fuel and energy, though the rate of increase appears to be moderating

• Excluding the impacts of IFRS 16, like-for-like trading profit growth was 4,2%. The like-for-like trading margin increased to 5,01% (H1F2019: 4,96%)

Unaudited results for the half-year ended December 31 2019

Consolidated statement of profit or loss

R million Half-year ended Dec 31 2019 Avg R/£ 18,49 % change Half-year ended Dec 31 2018 Avg R/£ 18,34 H1F2020 Currency effects R/£ 18,34 Revenue 68 215,4 3,2 66 092,0 68 115,4 3,1 Trading profit 3 579,4 9,2 3 277,4 3 580,1 9,2 Net finance expense (329,2) (129,8) (143,2) (326,4) (127,9)

39

• Finance costs are higher due to:
• IFRS 16 implementation interest of R170,9 million; excluding IFRS 16, net finance charges were up 10,6%
• Increase in HIBOR and SIBOR rates; average HIBOR rates for H1F2020 of approx. 2,3% vs. H1F2019 average HIBOR rates of approx. 2,0%
• Significant infrastructure spend – gross capex on PPE and Intangibles of R1,5 billion
• Increase in average net working capital days (2 days)
• Bidcorp remains well-capitalised and retains adequate headroom for further organic and acquisitive growth
• Non-IFRS 16 trading profit interest cover is at a healthy 21,6 times (H1F2019: 22,6 times)

Share of profit of associates and jointly-controlled entities 34,2 3,7 32,9 34,2 3,7

• Principally attributable to the Chipkins Puratos JV interest in South Africa, a 38% interest in Blancaluna (a broadline foodservice wholesaler in Argentina)

and various investments by Bidfood Netherlands into a number of specialist product businesses

Unaudited results for the half-year ended December 31 2019

Consolidated statement of profit or loss

R million Half-year ended Dec 31 2019 Avg R/£ 18,49 % change Half-year ended Dec 31 2018 Avg R/£ 18,34 H1F2020 Currency effects R/£ 18,34 Revenue 68 215,4 3,2 66 092,0 68 115,4 3,1 Trading profit 3 579,4 9,2 3 277,4 3 580,1 9,2 Net finance expense (329,2) (129,8) (143,2) (326,4) (127,9) Share of profit of associates and jointly-controlled entities 34,2 3,7 32,9 34,2 3,7 Taxation (769,8) (2,4) (752,0) (772,4) (2,7)

40

H1F2020 % H1F2019 % Comment Effective tax rate (ex-capital items and associates and JV’s) 24,2 24,5 Effective tax rate is in-line with guidance A sustainable tax rate going forward is mix dependent - Czech Rep tax rate 19% and UK tax rate expected to decrease to 18% from April 2020

Unaudited results for the half-year ended December 31 2019

Consolidated statement of profit or loss

R million Half-year ended Dec 31 2019 Avg R/£ 18,49 % change Half-year ended Dec 31 2018 Avg R/£ 18,34 H1F2020 Currency effects R/£ 18,34 Revenue 68 215,4 3,2 66 092,0 68 115,4 3,1 Trading profit 3 579,4 9,2 3 277,4 3 580,1 9,2 Net finance expense (329,2) (129,8) (143,2) (326,4) (127,9) Share of profit of associates and jointly-controlled entities 34,2 3,7 32,9 34,2 3,7 Taxation (769,8) (2,4) (752,0) (772,4) (2,7) Non-controlling interests (22,9) (15,5) 22,8 Headline earnings from continuing operations 2 431,2 4,2 2 322,6 2 432,4 4,3 HEPS from continuing operations (cps) 728,3 4,0 700,2 728,6 4,1

41

Headline earnings:

• Net capital pre-tax loss of R6,1 million:

R8,5 million capital profit realised on the sale of two South African properties in Nelspruit; and net of an accounting loss on the disposal of Australia Fresh R14,6 million

• Impact of IFRS 16 on HEPS of 1,8 cents
• Non-IFRS 16 continuing operations HEPS of 730,1 cps, an increase of 4,3% and headline earnings increase by 4,5%

Unaudited results for the half-year ended December 31 2019

Consolidated statement of profit or loss

R million Half-year ended Dec 31 2019 Avg R/£ 18,49 % change Half-year ended Dec 31 2018 Avg R/£ 18,34 H1F2020 Currency effects R/£ 18,34 Revenue 68 215,4 3,2 66 092,0 68 115,4 3,1 Trading profit 3 579,4 9,2 3 277,4 3 580,1 9,2 Net finance expense (329,2) (129,8) (143,2) (326,4) (127,9) Share of profit of associates and jointly-controlled entities 34,2 3,7 32,9 34,2 3,7 Taxation (769,8) (2,4) (752,0) (772,4) (2,7) Non-controlling interests (22,9) (15,5) 22,8 Headline earnings from continuing operations 2 431,2 4,2 2 322,6 2 432,4 4,3 HEPS from continuing operations (cps) 728,3 4,0 700,2 728,6 4,1 Diluted HEPS (cps) 727,3 4,1 698,9 727,6 4,1 Dividend (cps) 330,0 6,5 310,0

42

• Interim dividend declared of 330,0 cps
• Dividend cover of approximately 2,2x continuing HEPS

Unaudited results for the half-year ended December 31 2019

Consolidated statement of financial position

43

R million

Dec 31 2019 Dec 31 2018 June 30 2019 Non-current assets 36 454,8 30 649,0 31 294,2 Property, plant and equipment 14 808,1 13 378,6 14 025,1 Goodwill 14 934,3 14 958,4 14 784,2 Right-of-Use lease assets 4 192,9

• Other non-current assets

2 519,5 2 285,0 2 484,9 Current assets 34 484,7 33 216,6 33 637,8 Inventories 9 823,5 9 871,5 9 703,9 Trade and other receivables 15 191,5 14 592,1 15 213,6 Assets classified as held-for-sale 4 166,8 3 473,1 2 944,4 Cash and cash equivalents 5 302,9 5 279,9 5 775,9 Total assets 70 939,5 63 865,6 64 932,0 Equity 26 155,9 28 250,2 28 736,0 Non-current assets 15 182,9 5 615,1 6 524,6 LT borrowings 5 500,3 3 710,5 4 659,3 LT Right-of-Use lease liabilities 4 527,2

• Other non-current liabilities

5 155,4 1 904,6 1 865,3 Current liabilities 29 600,7 30 000,3 29 671,4 Trade and other payables 18 861,8 18 199,8 18 698,5 ST borrowings 4 752,4 6 628,1 5 841,6 ST Right-of-Use lease liabilities 622,5

• Liabilities held for sale

4 605,0 3 403,1 3 116,6 Other current liabilities 758,5 1 769,3 2 041,7 Total 70 939,5 63 865,6 64 932,0

• Investment in PPE infrastructure
• Gross capex spent of R1,5 billion; gross capex % of net revenue 2,2%
• Driven by infrastructure investment in depots (Australia, Czech Republic, New Zealand,

Bidfood UK, South Africa and Germany)

• Working capital management
• Net working capital of R6,4 billion (H1F2019: R6,3 billion)
• Significantly reduced working capital absorption in H1F2020 of R1,2 billion
• Cash generation from operations after working capital ↑ 61,4% or R1,5 billion
• IFRS 16 impact
• Post implementation net debt of R10,1 billion
• Debt to equity ratio of 42%
• Net debt to annualised EBITDAR of 1,1x
• Liquidity management (non-IFRS 16)
• Short-term debt (R4,8 billion) < Cash (R5,3 billion), all debt defacto long-term
• 46% of gross borrowings termed beyond Dec 2020, significant euro-term funding

refinanced in H2F2019 for 3 years

• Solvency (non-IFRS 16)
• Debt to equity ratio 19,1% (H1F2019: 17,9%)
• Net debt to annualised EBITDA 0,60x (H1F2019: 0,65x)
• Trading profit interest cover 21,6x (H1F2019: 22,9x)
• Other non-current liabilities
• DAC Italy 40% put option was renegotiated in December 2019
• Key terms include a five year lock-in period and present value of the put option liability
• f EUR220 million
• Returns
• Return on average shareholder equity 15,9% (H1F2019: 13,5%)
• Return on average ROFE of 30% (H1F2019: 34%)
• Assets and liabilities held for sale
• Material movement relates to the recognition of RoU lease assets (R845 million) and

liabilities (R1,0 billion)

Unaudited results for the half-year ended December 31 2019

Consolidated statement of cash flows

44

(0,9) (1,6) (1,1) (1,0) (0,1) (0,2) 4,3

• 2
• 1

1 2 3 4 5

Half-year ended Dec 31 2019 (R billion)

Cash generated from ops pre-wc Working capital (utilised) generated Net finance charges Taxation Dividends paid Cash effects of investment act’s Cash effects of financing act’s

Half-year ended Dec 31 2018 (R billion)

• Pro forma cash generated by operations after working capital higher by R1,0 billion, an increase of 39,4% over H1F2019
• 113% of H1F2020 trading profit was turned into cash; pro forma trading profit generation of 103% (H1F2019: 77%) which is a significant improvement
• Continuing operations free cash inflow (excluding dividends paid) of R1,5 billion (H1F2019: cash outflow of R106 million) despite significant infrastructure

investment

• Tax paid increase due to changes in tax provisional requirements in the UK
• Investment activities
• Significant investment took place in the period through strategic investment in infrastructure in Australia, New Zealand, Czech Republic, Bidfood UK, South Africa and Germany
• Gross capex % of net revenue was 2,2% (H1F2019: 2,0%)
• Gross capex was 2,2x (H1F2019: 2,1x) of depreciation and amortisation

0,4 (1,8) (0,9) (0,7) (0,1) (1,5) 4,0

• 3
• 2
• 1

1 2 3 4 5

Pro forma* Half-year ended Dec 31 2019 (R billion)

(0,3) (1,6) (1,1) (1,0) (0,1) (0,2) 3,7

• 2
• 1

1 2 3 4

* Pro forma includes the reclassification of cash flows relating to lease payments shown as finance costs in financing activities under IFRS 16 to cash generated by operations as previously disclosed under IAS 17

Unaudited results for the half-year ended December 31 2019

Cash generated by operations, net working capital and cash conversion

45

Working capital vs. cash generated by operations % cash conversion of CGO* before working capital % cash conversion of CGO* after working capital

R billion

(1,5) 0,1 (1,4) (0,2) 4,0 4,0 8,0 4,3

H1F2019 H2F2019 F2019 H1F2020

Net working capital 101% 93% 121% 120%

H1F2019 H1F2020

EBITDA Trading profit 64% 88% 77% 113%

H1F2019 H1F2020

EBITDA Trading profit

• Strong cash conversion remained in H1F2020
• H1F2020 EBITDA includes R355 million for RoU lease amortisation
• Non-IFRS 16 cash generated by operations

after working capital higher by R1,0 billion, an increase of 39,4% over H1F2019

• Reduction in working capital absorption
• f R1,2 billion

* CGO: Cash generated from operations

Unaudited results for the half-year ended December 31 2019

(62) (62) (65) (66) 33 35 35 36 41 41 40 40

Continuing operations net working capital days

46

10

Debtors days Stock days Creditors days Net days

• Net 7-month rolling average working capital days increased by 2 days to 14 days
• Month-end net working capital days remain at 10 days
• Impacts in H1F2020:
• Operations growing their importing activities which has led to increased supply chain lead times
• Excess stocking in the UK due to possibility of a No-Deal Brexit
• Inventory investment into new depots
• Timing of stock purchases in South Africa ahead of festive season
• Higher activity levels (3,2% revenue growth)

12 7-month rolling average working capital days H1F2019 H1F2020 10 14 December month-end working capital days H1F2020 H1F2019

Unaudited results for the half-year ended December 31 2019

Gearing (non-IFRS 16)

47

3,6 5,1 4,7 4,9 26,2 22,9 23,3 21,6 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 F2018 H1F2019 F2019 H1F2020 0.0 0.1 0.2 0.3 0.4 0.5 0.6 Net interest-bearing debt (R billion) Interest cover (x)

• A conservative approach to gearing with trading profit interest cover at 21,6x (H1F2019: 22,9x)

exceeds group internal covenant of 5x to 6x

• Net debt to annualised EBITDA of 0,6x (H1F2019: 0,65x)
• Ample headroom to fund organic or acquisitive expansion; however, we remain conscious of the need to balance gearing and

shareholder returns

Target interest cover range 5x - 6x

Unaudited results for the half-year ended December 31 2019

IFRS 16 impact (effective F2020)

48

2,2 0,5 2,7

H1F2020 IFRS 16 impact PF H1F2020

8,1 3,6 11,7

H1F2020 IFRS 16 impact PF H1F2020

The group elected to adopt IFRS 16 using a modified retrospective approach. Under a modified retrospective approach, the group applies IFRS 16 from July 1 2019 and does not restate its prior-period financial information. The lease liability will be measured as the present value of the remaining lease payments discounted at the incremental borrowing rate at July 1 2019. The Right-of-Use lease asset will be measured as if IFRS 16 had always been applied (but using the incremental borrowing rate at July 1 2019) The impact of IFRS 16 on the group was as follows (but not limited to): Continuing operations

• Recognition of a Right-of-Use (RoU) asset of R4,4 billion and lease liability
• f R5,3 billion on July 1 2019
• An overall increase in the group's net debt to R10,1 billion
• Net debt to EBITDA of 1,1x
• 42% debt/ equity ratio
• Amortisation of the RoU Asset for H1F2020 of R355 million
• Lease finance charges for H1F2020 of R171 million
• Decrease in EBITDA interest cover to 10,9x
• Negative effect on H1F2020 income statement (before tax) of R7 million

Total operations

• Difference between the RoU Asset, lease liability, derecognition of the

straight-lining lease liabilities and other IFRS 16 adjustments accounted for as an opening retained earnings adjustment on transition of R1,0 billion Pro forma Freehold property (R billion) Pro forma Vehicles (R billion)

256 1 431 148

Property Vehicles Equipment

4,9 5,2 10,1

H1F2020 IFRS 16 impact PF H1F2020

Pro forma Net debt (R billion) Leases brought on balance sheet

69% of Bidcorp’s freehold property and 83% of vehicle assets are owned

Supplementary information

Bidcorp historical results

Unaudited results for the half-year ended December 31 2019

50

Bidcorp historic performance

34,3 30,4 13,5 15,9 H1F2019 H1F2020

%

Continuing operations returns % (annual)

ROFE ROE

3,60 3,66 4,97 5,07 5,16 5,25 PF2015* PF2016* F2017 F2018 F2019 H1F2020 %

Trading margin

407,6 499,1 600,3 641,0 700,2 728,3 407,6 580,9 580,7 641,9 743,4 PF2015* PF2016* F2017 F2018 F2019 H1F2020 cps

Headline earnings per share

1 282,9 1 181,0 1 080,0 1 443,6 815,2

◼ H1 ◼ H2

* F2015 & F2016 = Pro forma (Continuing and Discontinued)

H1: 5-year CAGR 12,3% 241 250 280 310 330

250

280 330 2016 2017 2018 2019 2020 cps

Dividend per share (cents)

500 560 640