Shoprite Holdings Limited · JSE:SHP
Shoprite — FY2004 Earnings Presentation
33 slides from Shoprite's earnings presentation, August 2004
Slide 1: Shoprite Holdings Ltd
SHOPRITE[3 HOLDINGS LTD
Slide 2: Financial Results – June 2004
Shoprite Holdings Limited Financial Results – June 2004
Slide 3: Carel Goosen, Deputy MD
Carel Goosen Deputy MD, Shoprite Holdings Ltd
Slide 4: Size of Operation
Size of Operation • Sales of R 27 bn • 705 Owned outlets • 300 Franchise outlets • 16 Countries • 61 000 Employees
Slide 5: Financial Results
Financial Results Year Ended June 03 June 04 Revenue (Rm) 25 278 27 172 Revenue growth (%) 13,3 7,5 Operating Profit (Rm) 603 702 Operating Profit growth (%) 21,1 16,4 Operating Margin (%) 2,4 2,6 Adjusted Headline EPS 79,9* 91,7* Adj Headline EPS Growth (%) 23,5 14,7 Dividend per share 30,5 36,0 Di
Slide 6: Highlights on Results
Highlights on Results • Market Share Gained +0.3% – (June 2004 Like for Like) – Increased number of customers + basket size
Slide 7: Highlights on Results
Highlights on Results • Gross Margin Increased +0.2% – Improved product ranges – Efficient replenishment – Sophisticated distribution facilities
Slide 8: Highlights on Results
Highlights on Results • Operating Profit Increased above Revenue growth (16,4% v 7,5%) – Efficient collaboration with suppliers – Substantial growth in financial services – Effective cost control • Improved Cash flow R 363 m – Increased net investment income
Slide 9: Opportunities for the new year
Opportunities for the new year • Operating Profit – Reduced uneconomical leases – OK Franchise turnaround (R 30 m) – Reduced staff cost (R 30 m) – Increased contribution from non-RSA
Slide 10: Opportunities for the new year
Opportunities for the new year • Net Investment income – Reduced stockholding (R 500 m) – Increased Cash Tax
Slide 11: Whitey Basson, CEO
Whitey Basson CEO, Shoprite Holdings Ltd
Slide 12: Shoprite: Where do we play?
Shoprite 1 • Where do we play? • Food Retail – RSA – Non RSA • Value added services • Furniture
Slide 13: RSA Checkers – Top end
RSA Checkers – Top end 2 • High LSM • Rebranding works • Affirm – Profit up 47% • Margin – product mix • Basket size = 1.6 times Shoprite – Market share • 4.08% Customer growth; 2.73% Basket growth
Slide 14: RSA Checkers Market Share
RSA Checkers Market Share 3 11.8 11.6 11.7 11.4 11.2 Jun-03 11.2 11.2 11.0 Jun-04 10.8 10.9 10.6 10.4 Total Like for Like
Slide 15: RSA Checkers Shopper Profile
RSA Checkers Shopper Profile 4 20.0% 19.6% 18.0% 16.0% 16.6% R8,000 + 14.0% 13.9% 12.0% 10.0% Apr-03 Sep-03 Apr-04
Slide 16: RSA Shoprite – Medium
RSA Shoprite – Medium 5 • Middle income market • Established and trusted brand – Fended off competition onslaught successfully • Will benefit from redistribution of wealth • 6.18% Customer growth; 0.72% Basket growth • Top 10 Items = 20% of Turnover • Deflation result in 0.2% loss in market share
Slide 17: Total Republic - Monthly Market Share
- Total Republic - Monthly Market Share Total Store – Total Like for Like Universe Areas covered 6 Great North South Africa Only N.Cape/F.State 'Jun03 'Jun04 -1.3 36.7 KZ Natal +0.3 35.4 E.Cape W.Cape 28.2 27.9 +0.0 23.6 23.6 +1.0 16.7 16.0 15.8 15.6 13.7 13.6 12.8 11.8 9.4 9.2 7.6 7.2 7.2 6.9 6.5 6
Slide 18: Total Republic - Monthly Market Share
- Total Republic - Monthly Market Share All Stores (Like for Like, Closed & New) - Total Universe Areas covered 7 Great North South Africa Only N.Cape/F.State 'Jun03 'Jun04 -0.5 KZ Natal 36.4 35.9 E.Cape W.Cape -0.1 28.1 28.0 -0.5 23.8 23.3 +1.2 16.5 16.0 16.0 15.8 13.8 13.3 12.8 11.6 9.7 9.1 7.3 7.
Slide 19: RSA Usave – Lower end
RSA Usave – Lower end 8 • Covers underserved market • Urban: LSM 1 – 3 (Income R1,200 p.m.) • Rural: includes higher LSM • R8 – R15 m T/o bracket: – No other format can be profitable • ROI: 35% - 12 month trading stores • Africa – low risk market entry
Slide 20: Non RSA Africa – Hedging the future
Non RSA Africa – Hedging the future 9 • Turnover growth – 26% stable currencies • Huge benefits from a weaker rand • Counter balance a downturn in SA • Current market optimism • Other SA Retailers warming to Africa expansion
Slide 21: Tanzania
Tanzania 11 • Initial problems • Slowly turning around • Small loss - 2005
Slide 22: Mauritius
Mauritius 12 • 60% Turnover growth • Improved Gross Profit from global sourcing of French Products • This year will be break even
Slide 23: Egypt
Egypt 13 • Shrinkage problem - 2004 • This year all stores, except 1 to be profitable
Slide 24: Angola
Angola 14 • 2004 Loss (Start-up costs) • Already profitable • 6 new Usaves • 4 Supermarkets
Slide 25: Ghana & India
Ghana & India 15 • Ghana India – Write off of R5m in 2004 • India – Write off of R9m in 2004
Slide 26: Immediate Future
Immediate Future 16 • Revenue • Gross Profit • Cost • Capital – Working Capital – Fixed Capital
Slide 27: Revenue
Revenue 17 • Revenue – Continued assortment optimisation • Non Foods (26% participation) – New products and services • Money Market kiosks • Pharmacies • Liquor stores – New Stores
Slide 28: Supermarket Expansion next 18 months
Supermarket Expansion next 18 m Format RSA Non RSA Total Shoprite 43 10 53 Checkers 34 - 34 Usave 45 15 60 Total 122 25 147
Slide 29: Gross Profit
Gross Profit 19 • Competition decides – 1% cheaper • Global procurement – own DC’s
Slide 30: Costs
Costs 20 • Staff – Permanents: Fixed 8% – Flexi / Part timers: 0% • Admin expense reduction – Leases – Business to Business • Orders and Claims
Slide 31: Capital
Capital 21 • Working Capital – Inventory management • Supermarkets reduced by R 100 m
Slide 32: Statistics – 18 years
Statistics – 18 years 22 Statistics since listing Comp 1986 Growth 2004 Revenue (Rm) 126 34,8% 27 172 Operating Profit (Rm) 3,9 32,6% 623 NAV/share (cents) 3,4 30,7% 419,4 Headline EPS (cents) 0,6 31,2% 79,9 • Long term potential
Slide 33: Thank you
Thank you Questions? <. SHOPRITE(3 HOLDINGS LTD