Slide 1: Interim Results for the six months ended 28 February 2023
INTERIM RESULTS for the six months ended 28 February 2023
Slide 2: Presentation outline
Presentation outline 01 Review of the period 02 Financial results 03 Trading performance 04 Outlook 05 Questions
Slide 3: Review of the period
01 Review of the period Bertina Engelbrecht
Slide 4: Review of the six months
Review of the six months • Performance continues to prove resilience and defensiveness • Adjusted dHEPS up 10.2% • Strong retail turnover and profit growth despite load shedding • Continued post-Covid recovery benefiting beauty, personal care and impulse categories • Sustained market share growth in
Slide 5: Financial results
02 Financial results Gordon Traill
Slide 6: Financial highlights
Financial highlights Turnover up Operating margin Adjusted dHEPS up Total dHEPS up 6.8%* up from 7.8%** to 10.2%** 1.1% Retail turnover 8.2% to 472.2 cps up 11.9%* UPD reported turnover down 1.8% Interim dividend up Cash returned to Return on equity, Cash balance 2.8% shareholders down from 47.2% to
Slide 7: Impact of insurance payout on base
Impact of insurance payout on base Reported Adjustment Adjusted R’m H1 2023 H1 2022 (see notes below) H1 2022 % change Turnover 20 006 19 558 19 558 Gross profit 4 473 4 133 4 133 Other income 1 301 1 337 (130)¹ 1 207 Expenses (4 132) (3 805) (3 805) Operating profit 1 642 1 665 (130) 1 535 7.0 Capi
Slide 8: Turnover
Turnover % same % stores % R’m H1 2023 H1 2022 change growth* inflation Retail 15 376 14 574 5.5 8.3 6.6 Distribution 8 046 8 189 (1.8) 1.1 Intragroup turnover (3 416) (3 205) 6.6 Total group 20 006 19 558 2.3 4.7 • Retail turnover up 11.9% excluding vaccinations • Administered R4m vaccinations in H
Slide 9: Total income
Total income % H1 2023 H1 2022 R’m H1 2023 H1 2022 change % margin % margin Retail 5 205 4 759 9.4 33.9 32.7 Distribution 707 714 (1.0) 8.8 8.7 Intragroup turnover (138) (133) 3.8 Total group 5 774 5 340 8.1 28.9 27.3 • Retail margin benefiting from recovery in Beauty, strong growth in private label
Slide 10: Operating expenditure – Retail
Operating expenditure – Retail % R’m H1 2023 H1 2022 change Depreciation – PPE 247 220 12.3 Depreciation – ROU asset 446 409 9.0 Occupancy costs 90 78 15.4 Employment costs 1 958 1 841 6.4 Other operating costs 977 892 9.5 Total retail costs 3 718 3 440 8.1 % of turnover 24.2% 23.6% Finance costs –
Slide 11: Operating expenditure – Distribution
Operating expenditure – Distribution % R’m H1 2023 H1 2022 change Depreciation – PPE 15 14 Depreciation – ROU asset 8 6 Occupancy costs 2 3 Employment costs 173 156 10.9 Other operating costs 332 289 14.9 Total distribution costs 530 468 13.3 • Employment costs increased to maintain service levels d
Slide 12: Operating profit
Operating profit % H1 2023 H1 2022 R’m H1 2023 H1 2022 change % margin % margin Retail 1 487 1 319 12.7 9.7 9.1 Distribution 176 246 (28.5) 2.2 3.0 Intragroup (21) (30) Total group 1 642 1 535 7.0 8.2 7.8 • Benefit of recovery of higher margin categories in Retail; impact of low margin vaccinations
Slide 13: Inventory
Inventory Days in stock Inventory (R’m) H1 2023 H1 2022 H1 2023 H1 2022 % change Retail 85 81 4 740 4 357 8.8 Distribution 48 49 2 101 2 198 (4.4) Intragroup inventory (149) (151) Total group 81 78 6 692 6 404 4.5 • Inventories well managed in both businesses • Retail days in H1 2022 benefited from
Slide 14: Cash management for the six months
Cash management for the six months 2 346 (370) R’m 49 (872) 2 015 (545) (351) 1 156 (1 115) (1) Cash Operating Repayment Working Net Taxation Capex Dividends Other Cash FY2022 profit of lease capital finance investing H1 2023 before liability movements costs and activities working settlement capital
Slide 15: Capital expenditure
Capital expenditure • R958m capex now planned for FY2023, including battery storage in UPD’s Lea Glen DC • R477m on stores, including: - 50 new Clicks stores and 40 new pharmacies - 45 store refurbishments • R481m on infrastructure, including: - R210m on UPD IT and warehouse equipment - R271m on ret
Slide 16: Trading performance
03 Trading performance Bertina Engelbrecht
Slide 17: Clicks business review
Clicks business review
Slide 18: Retail sales performance
Retail sales performance % change* % contribution Pharmacy 9.8 27.1 Front shop health 5.8 25.2 Beauty and personal care 18.0 32.1 General merchandise 14.1 15.6 Total turnover 11.9 100.0 • Comparable stores turnover growth of 8.3% • Inflation 6.6% • Volume growth of 1.7% * Excluding vaccinations in b
Slide 19: Market shares
Market shares % H1 2023 H1 2022 Health Retail pharmacy* 23.6 23.3 Front shop health** 32.7 32.2 Baby** 21.6 20.7 Beauty and personal care Skincare** 42.8 41.3 Haircare** 32.6 31.2 Personal care** 20.5 19.6 General merchandise Small electrical appliances*** 20.2 18.6 * Per IQVIA (Private Retail Pharm
Slide 20: Performance and strategy: Maintaining value
Performance and strategy • Maintaining value Clicks price index* vs: • Price competitive with Retailer A 91.0% Retailer B 93.2% all national retailers Retailer C 93.8% • Promotional sales +14.3% Retailer D 99.1% to 43.3% of turnover * Excluding 3 for 2 promotions • In pharmacy, generics +8.9% to 59%
Slide 21: Performance and strategy: Differentiating our product offer
Performance and strategy • Differentiating our product offer • Private label up 15.1% to 25.3% of sales (front shop 30.3%, pharmacy 11.1%) • New look Beauty hall now in 33 stores • Four Clicks Baby stores performing strongly – one more planned in H2 • New look The Body Shop store format and relaunch
Slide 22: Performance and strategy: Engaging customers through personalisation
Performance and strategy • Engaging customers through personalisation • 10.0m active ClubCard members, 79.7% of sales • Clicks app downloaded by 3.5m customers • Best pharmacy customer experience¹ • Most used loyalty programme² • Best baby loyalty club³ 1. 2022/23 Ask Afrika Orange Index Awards 2. T
Slide 23: Performance and strategy: Extending convenience
Performance and strategy • Extending convenience Mall location Total* • 861* Clicks stores with 691 pharmacies Convenience 643 Destination 218 • 209 stores located in low income areas (22.3% of retail turnover) Total 861 • 50% of population < 5.2km of a pharmacy • M-Kem, a 24 hour pharmacy in the We
Slide 24: UPD business review
UPD business review
Slide 25: Fine wholesale turnover
Fine wholesale turnover Clicks (+5.0%)51.8% • Wholesale turnover up 1.6% Private hospitals (+6.3%) 40.1% • Impact of consolidation of Independent 8.1% independent pharmacies and pharmacies and other channels (-28.7%) application of stricter credit terms • Short-term impact of systems change on Click
Slide 26: Review of the six months
Review of the six months • Total managed turnover +7.8% • Generic medicines +4.3% in volume (73% of volume) • SAP ERP and Knapp WMS implementation update • Durban, Gqeberha and Cape Town DCs completed, with some transitional challenges • The systems are stable and implementation in final two DCs wil
Slide 27: Outlook
04 Outlook Bertina Engelbrecht
Slide 28: Outlook for H2 2023
Outlook for H2 2023 • Consumer environment will remain extremely constrained due to continued impact of load shedding and inflation • Plan to open 50 Clicks stores in FY2023 • Sorbet acquisition awaiting competition approval • M-Kem acquired effective 1 April 2023 • Strict oversight in UPD to manage
Slide 29: Outlook for H2 2023 (continued)
Outlook for H2 2023 (continued) • Sustainable, ethical business practices • Increased investment in renewable energy • Social investment • New Clicks Foundation • Clicks Helping Hand Trust • Earnings forecast for FY2023: • 8 – 13% growth in adjusted* dHEPS * FY2022 adjusted for SASRIA insurance proc
Slide 30: Questions
CLICKS GROUP LIMITED 05 Questions
Slide 31: Disclaimer
Disclaimer Clicks Group has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements' within the meaning of United States securities