Spur Corporation Limited · JSE:SUR

Spur — H1 2018 Earnings Presentation

47 slides from Spur's earnings presentation, 2018

1. Slide 1: Interim Results for the Period Ended 31 December 2017

   INTERIM RESULTS FOR THE INTERIM RESULTS YEAR ENDED RESULTS FOR THE 30PERIOD JUN ENDED 2017 FOR THE PERIOD ENDED 31 DECEMBER 2017 31 DECEMBER 2017

2. Slide 2: Overview

   OVERVIEW R3.7 billion Comparable HEPS restaurant down 19.6% sales (from continuing operations) achieved Restaurant Comparable profit before tax sales down down 18.6% 2.6% (from continuing operations)

3. Slide 3: Overview

   OVERVIEW  Economic conditions – political instability, impact on consumer sentiment  Increasing living costs – discretionary spend under pressure  Sharp decline in shopping centre foot traffic Restaurant sales  Effect upof social media – turned the corner, lessons learnt 129%  Strategy to drive

4. Slide 4: Financial Results for the Six Months to December 2017

   FINANCIAL RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2017

5. Slide 5: Restaurant Turnovers – South Africa July to September

   RESTAURANT TURNOVERS – SOUTH AFRICA July to September Brand HY 2018 (R’000) HY 2017 (R’000) % change Spur Steak Ranches 998 133 1 160 120 (14.0) Pizza Pasta 195 781 182 425 7.3 John Dory’s Fish Grill Sushi 106 984 105 557 1.4 Captain DoRegos 25 750 31 090 (17.2) The Hussar Grill 39 929 33 208 20.2 R

6. Slide 6: Restaurant Turnovers – South Africa October to December

   RESTAURANT TURNOVERS – SOUTH AFRICA October to December Brand HY 2018 (R’000) HY 2017 (R’000) % change Spur Steak Ranches 1 243 462 1 312 604 (5.3) Pizza Pasta 220 698 208 182 6.0 John Dory’s Fish Grill Sushi 131 839 129 080 2.1 Captain DoRegos 30 113 32 510 (7.4) The Hussar Grill 50 242 39 448 27.4

7. Slide 7: Restaurant Turnovers – South Africa Six months to December

   RESTAURANT TURNOVERS – SOUTH AFRICA Six months to December Brand HY 2018 (R’000) HY 2017 (R’000) % change Spur Steak Ranches 2 241 595 2 472 724 (9.3) Pizza Pasta 416 479 390 607 6.6 John Dory’s Fish Grill Sushi 238 823 234 637 1.8 Captain DoRegos 55 863 63 600 (12.2) The Hussar Grill 90 171 72 656

8. Slide 8: Restaurant Count

   RESTAURANT COUNT (31 December 2017) Brand South Africa International Total Spur Steak Ranches 292 41 333 Panarottis Pizza Pasta 83 11 94 Casa Bella 7 - 7 Restaurant John Dory’ssales Fish Grill Sushi 51 3 54 Captainup DoRegos 42 2 44 129% The Hussar Grill 17 1 18 RocoMamas 58 5 63 Total 550 63 613

9. Slide 9: Franchise - Spur

   FRANCHISE - SPUR R’000 HY 2018 HY 2017 % change Revenue July – September 47 508 57 652 (17.6) October – December 59 662 65 361 (8.7) Six months to December 2017 Revenue 107 170 123 013 (12.9) Operating profit 90 184 108 822 (17.1) Operating margin 84.2% 88.5% (4.3)

10. Slide 10: Franchise – Pizza Pasta

    FRANCHISE – PIZZA PASTA R’000 HY 2018 HY 2017 % change Revenue July – September 9 179 8 845 3.8 October – December 9 601 9 643 (0.4) Six months to December 2017 Revenue 18 780 18 488 1.6 Operating profit 11 595 12 372 (6.3) Operating margin 61.7% 66.9% (5.2)

11. Slide 11: Franchise – John Dory's

    FRANCHISE – JOHN DORY’S R’000 HY 2018 HY 2017 % change Revenue July – September 4 843 4 722 2.6 October – December 5 875 5 597 5.0 Six months to December 2017 Revenue 10 718 10 319 3.9 Operating profit 5 133 5 657 (9.3) Operating margin 47.9% 54.8% (6.9)

12. Slide 12: Franchise – Captain DoRegos

    FRANCHISE – CAPTAIN DOREGOS R’000 HY 2018 HY 2017 % change Revenue July – September 718 701 2.4 October – December 915 888 3.0 Six months to December 2017 Revenue 1 633 1 589 2.8 Operating profit 38 110 (65.5) Operating margin 2.3% 6.9% (4.6)

13. Slide 13: Franchise – Hussar Grill

    FRANCHISE – HUSSAR GRILL R’000 HY 2018 HY 2017 % change Revenue (pre-interco eliminations) July – September 1 983 1 581 25.4 October – December 2 384 1 886 26.4 Six months to December 2017 Revenue (pre-interco eliminations) 4 367 3 467 26.0 Operating profit 2 487 2 323 7.1 Operating margin 56.9% 67.

14. Slide 14: Franchise – RocoMamas

    FRANCHISE – ROCOMAMAS R’000 HY 2018 HY 2017 % change Revenue (pre-interco eliminations) July – September 8 038 5 525 45.5 October – December 9 332 6 336 47.3 Six months to December 2017 Revenue (pre-interco eliminations) 17 370 11 861 46.4 Operating profit 12 726 8 224 54.7 Operating margin 73.3% 70

15. Slide 15: South Africa Retail

    SOUTH AFRICA RETAIL* R’000 HY 2018 HY 2017 % change Revenue 35 144 30 677 14.6 Operating profit 3 571 2 312 54.5 Operating margin 10.2% 7.5% 2.6 * Comprises four The Hussar Grill restaurants and one RocoMamas

16. Slide 16: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION R’000 HY 2018 HY 2017 % change Revenue 101 340 98 356 3.0 Operating profit 33 523 37 041 (9.5) Operating margin 33.1% 37.7% (4.6)

17. Slide 17: Corporate Services & Other SA

    CORPORATE SERVICES & OTHER SA R’000 HY 2018 HY 2017 % change Revenue 32 304 33 794 (4.4) Operating loss (28 245) (22 140) (27.6) IFRS2 charge (net of hedge) 2 283 (2 246) IFRS2 charge (new scheme) 1 138 1 671 Profit on sale of Braviz (17 500) - Spur Foundation (79) 877 RocoMamas contingent 10 607 2

18. Slide 18: Australasia

    AUSTRALASIA R’000 HY 2018 HY 2017 % change Revenue 3 813 5 614 (32.1) Net (loss)/profit (462) 533 (186.7) Net operating margin (12.1%) 9.5% (21.6)

19. Slide 19: Africa, Mauritius & the Middle East

    AFRICA, MAURITIUS & THE MIDDLE EAST R’000 HY 2018 HY 2017 % change Revenue 13 445 11 632 15.6 Operating profit 6 974 5 272 32.3 Operating margin 51.9% 45.3% 6.5

20. Slide 20: International Corporate Services

    INTERNATIONAL CORPORATE SERVICES R’000 HY 2018 HY 2017 % change Operating loss (3 191) (2 991) (6.7) Exceptional items Foreign exchange loss 174 164 Adjusted operating loss (3 017) (2 827) (6.7) * Applying a constant exchange rate, corporate costs increased by 4.0%

21. Slide 21: Comparable Profit – Continuing Operations

    COMPARABLE PROFIT – CONTINUING OPERATIONS R’000 HY 2018 HY 2017 % change Profit before tax 134 333 162 477 (17.3) Loss from discontinued operations - (3 456) Profit before tax – continuing operations 134 333 159 021 (15.5) Share appreciation rights (net of related 2 283 (2 246) hedge) Share apprecia

22. Slide 22: Comparable Headline Earnings

    COMPARABLE HEADLINE EARNINGS R’000 HY 2018 HY 2017 % change Headline earnings 96 625 107 999 (10.5) United Kingdom - 1 525 Headline earnings – continuing operations 96 625 109 524 (11.8) Impact of share scheme (old) 738 (3 817) Impact of share scheme (new) – IFRS2 charge 983 1 403 RocoMamas continge

23. Slide 23: Cash Flow

    CASH FLOW R’000 HY 2018 HY 2017 Cash flow from operations 122 623 139 427 Net interest received 10 191 12 939 132 814 152 366 Distributions paid (61 236) (71 879) Taxation paid (33 513) (43 649) Working capital changes (36 512) (21 341) Net investment in fixed and intangible assets (3 305) (11 504)

24. Slide 24: Financial Position

    FINANCIAL POSITION R’000 HY 2018 HY 2017 ASSETS Intangible assets and goodwill 361 870 368 298 Loans receivable 144 032 149 223 Tax receivable 42 686 33 917 Trade and other receivables 150 078 117 557 LIABILITIES Contingent consideration – LT - 12 323 Contingent consideration – ST 16 404 13 784

25. Slide 25: Operational Overview for the Six Months to December 2017

    OPERATIONAL OVERVIEW FOR THE SIX MONTHS TO 31 DECEMBER 2017

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27. Slide 27: Spur Steak Ranches

    SPUR STEAK RANCHES  286 Spur Steak Ranches in South Africa  6 Spur Grill & Go restaurants in South Africa  14.0% restaurant turnover decline Q1  5.3% restaurant turnover decline Q2  Menu price increases  3.5% December 2016  1.1% December 2017

28. Slide 28: Spur Steak Ranches Strategy for the Six Months Ahead

    SPUR STEAK RANCHES Strategy for the six months ahead  Back to basics  Focus on core quality products  Service excellence  Kids’ experience  Innovations on kids entertainment opportunities  Creative and focused marketing – new agency  Employed a full-time chef to drive innovation  In-house ma

29. Slide 29: Pizza Pasta

    PIZZA PASTA  83 Panarottis restaurants in South Africa  7 Casa Bella restaurants in South Africa  Store turnover growth 6.6%  Menu price increases: Date of increase Panarottis Casa Bella July 2016 5.1% November 2016 7.2% December 2016 2.9% July 2017 1.8% December 2017 0.9% 4.2%  Focus on produc

30. Slide 30: Pizza Pasta Strategy for the Six Months Ahead

    PIZZA PASTA Strategy for the six months ahead  Further opening of Casa Bella  Installation of rotating wood-fired pizza oven – enhance product authenticity and franchisee profitability  Basic operational fundamentals – more compact footprint, labour and energy efficiencies and rental negotiations

31. Slide 31: Fish Grill Sushi

    FISH GRILL SUSHI  51 restaurants in South Africa  1.8% turnover growth  Menu price increases  6.0% December 2016  5.6% May 2017  4.0% December 2017  Focus on labour costs and effective scheduling  Making in-house products to improve margins and quality

32. Slide 32: Captain DoRegos

    CAPTAIN DOREGOS  42 restaurants in South Africa  12.2% decrease in turnover (same stores 7.4% decline)  Menu price increase  3.9% December 2016  4.5% December 2017  Consolidation of operations  Impact of economic factors on brand and customers  Disposed of with effect from 1 March 2018 for R

33. Slide 33: The Hussar Grill

    THE HUSSAR GRILL  17 restaurants in South Africa  24.1% turnover growth (existing restaurant turnover up 11.1%)  Menu price increase  6.0% May 2017  Three new restaurants opened  Waterfall Corner, Pretoria  Monte Casino, Johannesburg  Franschhoek, Western Cape  Consumer less affected by eco

34. Slide 34: RocoMamas

    ROCOMAMAS  58 restaurants in South Africa  Menu price increase  2.3% November 2016  3.9% September 2017  Focused on growing market share in a highly competitive environment  Focus on franchisee profitability  Product engineering and innovation  Monitor market pulse and consumer trends eg GoR

35. Slide 35: Brand Development in South Africa

    BRAND DEVELOPMENT IN SOUTH AFRICA Brand 31 December 2017 30 June 2018 Spur Steak Ranches 10 3 Pizza Pasta 5 2 John Dory’s Fish Grill Sushi 7 - Captain DoRegos 2 5 The Hussar Grill 3 1 RocoMamas 8 10 Total 35 21

36. Slide 36: Restaurant Turnovers – International

    RESTAURANT TURNOVERS – INTERNATIONAL Location HY 2018 (R’000) HY 2017 (R’000) % change % change* Australasia 119 590 135 858 (12.0) (13.5) Africa 180 046 181 601 (0.9) 2.2 Mauritius 70 809 61 205 15.7 15.0 Middle East 15 195 2 099 623.9 653.3 Total 385 640 380 763 1.3 3.2 * Using a constant exchange

37. Slide 37: Restaurant Footprint – International

    RESTAURANT FOOTPRINT – INTERNATIONAL Location Spur Panarottis John Dory’s DoRegos Hussar RocoMamas Total Australia 6 4 10 Botswana 3 3 Ethiopia 1 1 Kenya 5 1 6 Lesotho 1 1 Malawi 1 1 Mauritius 4 6 1 11 Namibia 7 2 2 1 12 New Zealand 1 1 Nigeria 4 1 5 Oman 1 1 Saudi Arabia 1 1 Swaziland 2 2 Tanzania

38. Slide 38: International

    INTERNATIONAL  Australasia  10 franchised restaurants  Franchisee assistance  Concessions  Marketing assistance  Joint venture to open a RocoMamas in Melbourne  1st opening in April 2018  Mauritius  11 restaurants  Good growth  Continued prospects across our brand family

39. Slide 39: International

    INTERNATIONAL  Africa  Volatile trading conditions  Currency devaluations result in pressure on margins  Constantly improving supply channels  GoReview and loyalty  Middle East  RocoMamas Oman opened in October 2016  RocoMamas Saudi Arabia opened in February 2017  Second RocoMamas to open i

40. Slide 40: Brand Development - International

    BRAND DEVELOPMENT - INTERNATIONAL Brand 30 June 2018 Australia – RocoMamas 1 Mauritius – Panarottis Express 1 Namibia – Panarottis 2 Namibia – Spur Grill & Go 1 Saudi Arabia – The Hussar Grill 1 Saudi Arabia – RocoMamas 1 Swaziland – Spur 1 Zambia – The Hussar Grill 1 Zimbabwe – RocoMamas 1 Total 10

41. Slide 41: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION  Sauce factory turnover and margins under pressure  7% price increase in March 2017  Balancing margins of franchisee and franchisor  Investigation continuing into the relocation of current facility to Baker Street; looking into a storage facility (hub) in Gauteng reg

42. Slide 42: Prospects / Outlook

    PROSPECTS / OUTLOOK

43. Slide 43: Prospects

    PROSPECTS  Erratic exchange rate  Regional droughts in South Africa  Western Cape water crisis  Economy  Stabilising political environment  Franchisee profitability and margins  Improvements coming through in stores  New footprints – more franchising opportunities; improved ROI for franchise

44. Slide 44: Prospects

    PROSPECTS  Reengineering BOH facilities  New sauce factory – improved efficiencies and wider range of sauces  Investment in marketing automation – commenced June 2017  Continuous investment in social media  New store openings locally and internationally  Acquisitive – local brands with growth

45. Slide 45: Disclaimer

    DISCLAIMER • Spur Corporation 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 secu

46. Slide 46: Thank You Questions?

    THANK YOU QUESTIONS?

47. Slide 47: Contact Details

    CONTACT DETAILS CEO – Pierre van Tonder pvt@spur.co.za CFO – Ronel van Dijk ronelv@spur.co.za Tier 1 Investor Relations 021 702 3102

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