Truworths International Limited · JSE:TRU
Truworths International — FY2019 Earnings Presentation
85 slides from Truworths International's earnings presentation, 2019
Slide 1: Group Annual Results
2019 GROUP ANNUAL RESULTS FOR THE 52 WEEKS ENDED 30 JUNE 2019 1
Slide 2: Agenda
1. REVIEW OF THE PERIOD 2. FINANCIAL REVIEW 3. TRUWORTHS ACCOUNTS 4. STRATEGIC FOCUS AREAS 5. OUTLOOK 6. QUESTIONS AGENDA 2
Slide 3: Review of the Period
REVIEW OF THE PERIOD
Slide 4: South Africa Trading Environment
SOUTH AFRICA TRADING ENVIRONMENT Difficult trading environment. GDP growth remained subdued throughout 2018/2019 – South African economy contracted by 3.2% in Q1 of calendar 2019, the biggest quarterly fall since Q1 2009. Higher fuel and energy prices and volatile Rand. Unemployment increased in Q2
Slide 5: United Kingdom Trading Environment
UNITED KINGDOM TRADING ENVIRONMENT Consumer confidence has been negative since announcement of Brexit in 2016. Extremely tough retail environment. March 2019 Brexit deadline postponed to end October 2019, uncertainty continues. High street under pressure as growth in sales mainly contributed by onli
Slide 6: Financial Review – Group
FINANCIAL REVIEW – GROUP
Slide 7: Group Trading Overview
GROUP TRADING OVERVIEW Non-cash impairment of Office intangibles – £97 million (R1.7 billion). Improved retail sales growth (3.7%), second half momentum is encouraging. Gross margin down to 51.6%, led by Office full price versus markdown mix; Truworths unchanged at 55.5%. Trading expenses remain wel
Slide 8: Group Integrated Reporting
GROUP INTEGRATED REPORTING The Group continues to strive for excellence in integrated reporting. South African companies are renowned for their high quality of integrated reporting. In a study by Oxford University Business School in March 2019, South Africa was ranked first (scoring 2.85 out of 3) f
Slide 9: Group Performance Against Targets
GROUP PERFORMANCE AGAINST TARGETS Jun 2019 Jun 2019 Jun 2019 Including impairment Comparable* Targets Gross margin (%) 51.6 51.6 51 – 55 Operating margin (%) 9.1 19.4 19 – 24 Return on equity (%) 9 23 23 – 28 Return on assets (%) 12 23 20 – 25 Inventory turn (times) 4.2 4.2 3.5 – 4.5 Asset turnover
Slide 10: Group Financial Performance
GROUP FINANCIAL PERFORMANCE Change on Jun 2019 Jun 2019 Jun 2018 Change on comparable Including prior period prior period* impairment Comparable* % % Sale of merchandise (Rm) 18 094 18 094 17 547 3 3 Gross margin (%) 51.6 51.6 52.4 Trading profit (Rm) 492 2 245 2 518 (80) (10) Trading margin (%) 2.7
Slide 11: Group DPS and Diluted HEPS
GROUP DPS AND DILUTED HEPS (cents) Office UK acquired Dec 2015 700 666 621 613 592 Compound growth rates: 600 561 DPS: 5-year 0% 500 452 452 3-year -5% 420 405 400 384 Compound growth rates: Diluted HEPS: 300 5-year 0% 3-year -6% 200 100 - Jun 2015 Jun 2016 Jun 2017 Jun 2018 Jun 2019 DPS Diluted HEP
Slide 12: Group Return on Equity and Return on Capital
GROUP RETURN ON EQUITY (ROE) AND RETURN ON CAPITAL (ROC) (%) Office UK acquired 60 Dec 2015 51 49 Average: 50 46 ROE: 5-year 30%* 40 3-year 27%* 40 35 35 33* 31 Average: 30 27 ROC: 5-year 44%* 23* 3-year 40%* 20 10 - Jun 2015 Jun 2016 Jun 2017 Jun 2018 Jun 2019 ROE ROC * On a comparable basis, i.e.
Slide 13: Group Return on Assets and Asset Turnover
GROUP RETURN ON ASSETS AND ASSET TURNOVER Return on assets Office UK acquired Asset turnover (%) Dec 2015 (times) 40 1.7 Average: 35 Return on assets: 5-year 27%* 30 1.4 3-year 25%* 25 1.2* Average: 1.2 20 1.1 Asset turnover: 1.1 1.1 5-year 1.1 times* 15 1.0 3-year 1.1 times* 10 0.8 5 38 24 26 25 23
Slide 14: Group Statements of Financial Position
GROUP STATEMENTS OF FINANCIAL POSITION Jun 2019 Jun 2019 Jun 2018 Change on Including Change on comparable impairment Comparable* prior period prior period* Rm Rm Rm % % Property plant and equipment 1 780 1 780 1 726 3 3 Goodwill 346 1 611 1 629 (79) (1) Intangible assets 2 616 3 171 3 227 (19) (2)
Slide 15: Group Capital Management
GROUP CAPITAL MANAGEMENT Net debt Net debt Net debt to equity Net debt to equity Jun 2019 Jun 2019 Jun 2018 Jun 2018 % % Group Rm 663 7.2 968 9.3 Truworths Rm 245 2.8 605 5.9 Office £m 23.5 19.5* 20.1 10.2 After share buy backs of R266 million * Increase in Office’s net debt to equity ratio mainly d
Slide 16: Group Capital Management (Continued)
GROUP CAPITAL MANAGEMENT (CONTINUED) Dividends Final dividend of 135 cents per share (Jun 2018: 159 cents per share). Total dividend per share of 384 cents per share (Jun 2018: 420 cents per share). Financial position Financial position remains strong with net asset value per share up 6%* to 2 569 c
Slide 17: Group Trading Space
GROUP TRADING SPACE Change on Jun 2019 Jun 2018 prior period ‘000 m2 ‘000 m2 % Truworths 388 381 2 Office 15 16 (5) Total 403 397 2 17
Slide 18: Group Online Presence
GROUP ONLINE PRESENCE c 10% of Group retail sales Strong year-on-year growth in followers on Facebook (>20%) Office online sales grew 10%. and Instagram (>50%). Online sales comprising 34% of retail sales. Truworths has nearly 4 million Facebook followers. offspring.co.uk website has grown significa
Slide 19: Group Cash Flow Analysis
GROUP CASH FLOW ANALYSIS (Rm) 4 500 4 000 1 152 8 (77) (968) 3 500 2 930 (266) 3 000 (92) 2 687 (1 766) 2 500 2 000 1 500 1 000 (373) (266) 500 24 306 (422) - (116) ( 500) Cash Working Interest Dividends Finance Tax paid Capex Free Dividends Capex Shares Other Net cash Borrowings Net cash EBITDA cap
Slide 20: Group Cash Realisation Rate
GROUP CASH REALISATION RATE (%) 120 109 100 91 93 89 Average: 80 Cash realisation rate: 80 5-year 92% 3-year 98%* 60 40 20 - Jun 2015 Jun 2016 Jun 2017 Jun 2018 Jun 2019 Group cash realisation rate 20
Slide 21: Group New Accounting Standards
GROUP NEW ACCOUNTING STANDARDS IFRS 9 and IFRS 15 adopted with effect from the start of the period. IFRS 9 Financial Instruments Significant impact on doubtful debt allowance, increasing from 12.3% to 19.0% on transition date (through retained earnings). Doubtful debt allowance now based on expected
Slide 22: Financial Review – Truworths
FINANCIAL REVIEW – TRUWORTHS
Slide 23: Truworths Trading Overview
TRUWORTHS TRADING OVERVIEW Retail sales increased 3%, gaining momentum in H2 (growing at 4%). Gross profit margin unchanged at 55.5%. Trading expenses remain well controlled, growing at 3%. Profit before tax decreased 3%. Continued strong cash generation – net debt R245 million after share buy backs
Slide 24: Truworths Financial Performance
TRUWORTHS FINANCIAL PERFORMANCE Change on Jun Jun prior period 2019 2018 % Sale of merchandise (Rm) 12 863 12 617 2 Gross margin (%) 55.5 55.5 Trading profit (Rm) 2 235 2 240 - Trading margin (%) 17.4 17.8 Operating profit* (Rm) 3 392 3 667 (7) Operating margin (%) 26.4 29.1 Excluding foreign Profit
Slide 25: Truworths Retail Sales Growth Analysis
TRUWORTHS RETAIL SALES GROWTH ANALYSIS Unit growth: Retail sales LFL store Product Unit growth: Non-comp Retail sales growth growth Inflation Comp stores stores Rm % % % % % Jun 2019 13 517 3 1 0 1 2 Jun 2018* 13 115 1 (3) (1) (2) 4 Jun 2017# 13 061 (2) (5) 12 (17) 3 Jun 2016 13 264 14 7 9 (2) 7 Jun
Slide 26: Truworths Merchandise Inflation Trend
TRUWORTHS MERCHANDISE INFLATION TREND Inflation (%) 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 - (2.0) (4.0) 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 Summer Winter Summer Winter Summer Winter Summer Winter Summer Winter Summer Winter Summer Winter Summer 26
Slide 27: Truworths Divisional Retail Sales
TRUWORTHS DIVISIONAL RETAIL SALES Change on Jun 2019 Jun 2018 prior period Rm Rm % Truworths ladieswear 3 757 3 753 - Truworths designer emporium* 1 396 1 383 1 Truworths ladieswear emporium 5 153 5 136 - Truworths menswear# 3 675 3 663 - Truworths kids emporium~ 1 097 925 19 Other† 1 443 1 309 10 T
Slide 28: Truworths Trading Space
TRUWORTHS TRADING SPACE Jun 2019 Jun 2018 ‘000 m2 ‘000 m2 Truworths 294 290 Identity 72 70 Other* 15 14 Total excluding YDE 381 374 YDE 7 7 Total 388 381 % change on prior period 1.6 * Other comprises Uzzi, Loads of Living, Earthchild/Earthaddict, Naartjie, Office London, Naartjie/Earthchild and Kid
Slide 29: Truworths Trading Space (Continued)
TRUWORTHS TRADING SPACE (CONTINUED) Continued focus on optimising space utilisation, consolidating space where possible. Leases are typically 5 years with option to extend for a further one or two 5-year periods, providing flexibility in a changing retail landscape. Successful rental negotiations du
Slide 30: Truworths Number of Stores and Departments
TRUWORTHS NUMBER OF STORES AND DEPARTMENTS Jun 2019 Jun 2018 Departments Departments Stores within stores Total Stores within stores Total Truworths 350 - 350 346 - 346 Identity 258 - 258 255 - 255 Uzzi 44 247 291 48 233 281 Truworths Man 35 322 357 37 311 348 Earthchild/Earthaddict 34 135 169 41 90
Slide 31: Truworths Change in Number of Stores
TRUWORTHS CHANGE IN NUMBER OF STORES Jun 2018 New Closed Jun 2019 Stores stores stores Stores Truworths 346 7 (3) 350 Identity 255 6 (3) 258 Uzzi 48 2 (6) 44 Truworths Man 37 1 (3) 35 Earthchild and Earthaddict 41 1 (8) 34 Naartjie 26 - (5) 21 YDE 21 - (1) 20 Office London 13 2 - 15 Loads of Living
Slide 32: Truworths Rest of Africa Corporate Stores
TRUWORTHS REST OF AFRICA CORPORATE STORES Retail sales Retail sales Change on Retail sales Retail sales Change on Number of Number of Jun 2019 Jun 2018 prior period Jun 2019 Jun 2018 prior period stores stores Rm Rm % LC'm LC'm % Jun 2019 Jun 2018 Namibia 183 204 (10) 183 204 (10) 18 18 Botswana 106
Slide 33: Truworths Sales Densities Trend
TRUWORTHS SALES DENSITIES TREND R per m2 40 000 37 350 36 317 35 656 35 256 35 682 34 849 34 586 34 857 35 000 32 979 Compound growth rates: 30 462 Sales density: 30 000 5-year 1% 3-year -2% 25 000 20 000 15 000 10 000 Jun 2010 Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun 2016 Jun 2017 Jun 2018
Slide 34: Truworths Gross Profit Trend
TRUWORTHS GROSS PROFIT TREND Gross profit Gross margin (Rbn) (%) 8.0 70 Compound growth rates: 7.0 55.5 55.5 60 Gross profit: 55.2 55.3 55.2 5-year 4% 6.0 50 3-year 0% 5.0 40 Average: Gross margin: 4.0 5-year 55.3% 30 3-year 55.4% 3.0 20 2.0 10 1.0 6.2 7.1 7.1 7.0 7.1 - - Jun 2015 Jun 2016 Jun 2017
Slide 35: Truworths Trading Expenses
TRUWORTHS TRADING EXPENSES Change on Jun 2019 Jun 2018 prior period Rm Rm % Depreciation and amortisation 322 289 11 Employment costs 1 569 1 474 6 Occupancy costs 1 491 1 462 2 Trade receivable costs 1 037 1 099 (6) Other operating costs 800 720 11 Trading expenses 5 219 5 044 3* * Trading expenses
Slide 36: Truworths Analysis of Trading Expenses
TRUWORTHS ANALYSIS OF TRADING EXPENSES Depreciation and amortisation 11% Capital expenditure of R420 million (Jun 2018: R419 million) in the period. INCREASE Excluding non-comparable stores, depreciation and amortisation increased 2%. Employment costs 6% Excluding non-comparable store costs and ince
Slide 37: Truworths Analysis of Trading Expenses (Continued)
TRUWORTHS ANALYSIS OF TRADING EXPENSES (CONTINUED) Trade receivable costs 4%* INCREASE Excluding IFRS 9 stage 3 interest reclassification, trade receivable costs increased 4%. Gross bad debts decreased 4%, recoveries increased 6% and debt sold decreased 31%, resulting in net bad debts decreasing 6%
Slide 38: Truworths Operating Profit Performance
TRUWORTHS OPERATING PROFIT PERFORMANCE Operating profit Margins (Rbn) (%) *Jun 2019 not comparable to prior years due to restructure of SA funding arrangements in Jun 2018. 4.5 The numbers in the graph below have been adjusted to exclude the impact of the funding restructure. 45 The reported numbers
Slide 39: Truworths Capital Expenditure
TRUWORTHS CAPITAL EXPENDITURE Actual Actual Change on Committed Jun 2019 Jun 2018 prior period Jun 2020 Rm Rm % Rm Store renovations and development 252 320 (21) 291 Computer infrastructure and software 48 59 (19) 88 Land, buildings and refurbishment 113 31 265 151 Motor vehicles 4 4 - 4 Distributio
Slide 40: Truworths Cash Flow Analysis
TRUWORTHS CASH FLOW ANALYSIS (Rm) 4 000 1 149 8 (54) (917) 3 500 3 000 2 758 (157) (80) 2 707 (1 766) 2 500 2 000 1 500 1 000 (340) (266) 500 359 (302) 24 57 - Cash Working Interest Dividends Finance Tax paid Capex Free Dividends Capex Shares Other Net cash Borrowings Net cash EBITDA capital receive
Slide 41: Truworths Cash Realisation Rate
TRUWORTHS CASH REALISATION RATE (%) 120 110 100 97 Average: 83 84 Cash realisation rate: 80 80 5-year 91% 3-year 97% 60 40 20 - Jun 2015 Jun 2016 Jun 2017 Jun 2018 Jun 2019 Truworths cash realisation rate 41
Slide 42: Financial Review – Office
FINANCIAL REVIEW - OFFICE
Slide 43: Office Overview
OFFICE OVERVIEW “It’s worth bearing in mind that just about everything happening in Britain today seemed implausible just a few years ago. This situation is, as the pundits say, “fluid” and “dynamic”. About the only thing that can be predicted with confidence is that come November, Brexiteers will e
Slide 44: Office Trading Overview
OFFICE TRADING OVERVIEW Retail sales decreased by 1% to £279 million. Second half retail sales grew at 2% compared to a decrease of 3% in the first half, due to increased markdown activity. Decrease in gross margin to 42.3% (Jun 2018: 44.4%) primarily due to a shift in the full price versus markdown
Slide 45: Office Financial Performance
OFFICE FINANCIAL PERFORMANCE Jun Jun Jun Change on 2019 2019 2018 comparable Including prior period* Impairment Comparable* % Sale of merchandise (£m) 285.5 285.5 286.0 - Gross margin (%) 42.3 42.3 44.4 Trading expenses (£m) 215.9 113.9 111.2 2 EBITDA (£m) (89.8) 12.2 21.8 (44) Operating (loss)/prof
Slide 46: Office Retail Sales and Stores by Country
OFFICE RETAIL SALES AND STORES BY COUNTRY Retail sales Retail sales Change on Number of Number of Jun 2019 Jun 2018 prior period stores stores £m £m % Jun 2019 Jun 2018 United Kingdom 254.3 256.7 (1) 124 138 Germany 12.7 13.5 (6) 8 8 Republic of Ireland 11.3 10.3 10 7 7 United States of America 0.3
Slide 47: Office Trading Expenses
OFFICE TRADING EXPENSES Change on Jun 2019 Jun 2018 prior period £m £m % Depreciation and amortisation 4.8 5.6 (14) Employment costs 35.3 37.0 (5) Occupancy costs 48.4 45.1 7 Trade receivable costs 0.6 -* Other operating costs 24.8 23.5 6 Trading expenses, before impairment 113.9 111.2 2 Impairment
Slide 48: Office Analysis of Trading Expenses
OFFICE ANALYSIS OF TRADING EXPENSES Depreciation and amortisation 14% Capital expenditure of £2.5 million (Jun 2018: £3.6 million) in the period. DECREASE Decrease due to assets becoming fully depreciated and lower capex spend during the period. Employment costs 5% Store wages and salaries decreased
Slide 49: Office Analysis of Trading Expenses (Continued)
OFFICE ANALYSIS OF TRADING EXPENSES (CONTINUED) Occupancy costs Onerous lease provision increased £1.9 million. 7% INCREASE Excluding once-off costs, occupancy costs increased 2%. Trade and other receivables Trade receivable costs amounted to £0.6 million due to House of Fraser entering administrati
Slide 50: Office Capital Expenditure
OFFICE CAPITAL EXPENDITURE Actual Actual Change on Committed Jun 2019 Jun 2018 prior period Jun 2020 £’000 £’000 % £’000 Store renovations and development 790 2 338 (66) 993 Computer infrastructure and software 1 666 1 197 39 1 383 Distribution facilities 26 84 (69) 60 Head office refurbishment 10 2
Slide 51: Office Update on Debt Restructuring
OFFICE UPDATE ON DEBT RESTRUCTURING Office entered into debt restructuring negotiations with lenders in June 2019. Office and lenders appointed advisors Alvarez & Marsal (A&M) and Deloitte respectively. An amount of c £42.5 million is owed to UK lenders, and Office has cash balances currently of c £
Slide 52: Office CEO Update: Focus & Priorities – Strategic Opportunities
OFFICE CEO UPDATE FOCUS & PRIORITIES – STRATEGIC OPPORTUNITIES SEE TURNAROUND WORKSTREAMS ‘OPERATIONAL’ PARTNERSHIPS OFFSPRING OXFORD STREET Positioning Strong growth @+32% New model trial store Strength of messaging – Win in Unique community position Significant improvement London and w
Slide 53: Truworths Accounts
TRUWORTHS ACCOUNTS
Slide 54: South African Credit Environment
SOUTH AFRICAN CREDIT ENVIRONMENT TRANSUNION SA CONSUMER CREDIT INDEX The TransUnion SA Consumer Credit Index (CCI) increased marginally to 49 in 2019 Q2 from 48 in 2019 Q1. The increase in the TU CCI signals the end to a declining trend for the past three consecutives quarters. The index measures Ne
Slide 55: Accounts Overview
TRUWORTHS ACCOUNTS OVERVIEW Strong demand for Truworths merchandise evidenced by record new account application volumes of 2.8 million. Majority of applicants are under 30 years old. Strict credit granting criteria maintained. Sales growth from new accounts has been sustained with two years of doubl
Slide 56: Total Good/Total Bad Balance Ratio
TRUWORTHS ACCOUNTS TOTAL GOOD(0-1)/TOTAL BAD (2+) BALANCE RATIO Total Good (0-1)/Total Bad (2+) balance ratio for Truworths has improved by 7% year-on-year , while industry deteriorated by 13% compared to the same period in the prior year 20% 15% Improving 10% Year-on-Year Change 5% 0% Deteriorating
Slide 57: Total 4+ Cycle Balances
TRUWORTHS ACCOUNTS TOTAL 4+ CYCLE BALANCES Truworths Total 4+ balances improved by 4% compared to prior year while industry deteriorated by 16% 20% 15% Deteriorating 10% 4+ Cycle Balances 5% 0% Improving -5% -10% Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug
Slide 58: New Applications vs Risk Approved vs Opened
TRUWORTHS ACCOUNTS NEW APPLICATIONS VS RISK APPROVED VS OPENED No. of account applications (millions) High standard of credit granting criteria (%) 3.0 maintained and improved 60% 2.5 50% 2.0 40% 1.5 30% 1.0 20% 0.5 10% - 0% 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/
Slide 59: New Accounts Opened
TRUWORTHS ACCOUNTS NEW ACCOUNTS OPENED No. of new accounts opened Record number of new accounts opened (‘000) 800 700 600 500 400 300 200 100 0 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 Application Date 59
Slide 60: New Account Applications by Age Group
TRUWORTHS ACCOUNTS NEW ACCOUNT APPLICATIONS BY AGE GROUP 30 – 34 years 25 – 29 years 19% 24% Almost half of all applicants are under 30 35 – 39 years 13% 18 – 24 years 25% 40 – 49 years 13% 50+ years 6% 60
Slide 61: Account Sales Growths
TRUWORTHS ACCOUNTS ACCOUNT SALES GROWTHS Account sales growth year-on-year Affordability legislation impact on sales growth Months Jun 2016 Jun 2017 Jun 2018 Jun 2019 moving into the older on book % % % % account groups impacting the overall sales growth. 1 to 12 months 11 (24) 21 14 Positive future
Slide 62: Shoppable Accounts
TRUWORTHS ACCOUNTS SHOPPABLE ACCOUNTS No. of Shoppable accounts continued to improve in line accounts with increase in active customer base Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2018 - Shoppable 2019 - Shoppable 62
Slide 63: Accounts Statistics
TRUWORTHS ACCOUNTS STATISTICS Jun Jun 2019 2018 Number of active accounts (000's) 2 658 2 591 Change in number of active accounts (%) 3 2 Gross trade receivables (before doubtful debt allowance) (Rm) 5 898 5 663 Change in gross trade receivables (before doubtful debt (%) 4 (3) allowance) Account sal
Slide 64: Accounts Statistics (Continued)
TRUWORTHS ACCOUNTS STATISTICS (CONTINUED) Jun Jun 2019 2018 Active account holders able to purchase at period-end (i.e. (%) 83 84 not in arrears) Overdue accounts as a % of gross trade receivables (%) 13 14 Net bad debt as a % of account sales (%) 8.3 9.2 Net bad debt as a % of gross trade receivabl
Slide 65: Accounts Regulatory Update
TRUWORTHS ACCOUNTS REGULATORY UPDATE National Credit Amendment Act Debt relief legislation signed into law on 13 August, announced by Parliament yesterday. Regulations will need to be drafted and circulated. Stakeholders will have an opportunity to comment on regulations. Comes into effect on date t
Slide 66: Strategic Focus Areas
STRATEGIC FOCUS AREAS
Slide 67: Group Strategic Focus Areas
GROUP STRATEGIC FOCUS AREAS Group focus areas • Truworths and Office continue to collaborate • Investigate strategic acquisitions • Board transformation Truworths focus areas Office focus areas • Leadership and succession • Turnaround strategy • New store concepts • Marketing, customer • Merchandise
Slide 68: Group Board Transformation
GROUP BOARD TRANSFORMATION Committed to transformation of the Truworths International Ltd board. Medium-term target of 30% female representation on the board. Cindy Hess appointed as independent non-executive director with effect from 1 May 2019. Cross-industry experience predominantly in the FMCG s
Slide 69: Leadership and Succession
TRUWORTHS STRATEGIC FOCUS AREAS LEADERSHIP AND SUCCESSION Succession is an important area of focus. New divisional directors appointed with effect from 1 March 2019. Cathy Kirkman appointed as Divisional Director: Merchandise Planning. 21 years experience with the Group. Myles Apsey appointed as Div
Slide 70: New Store Concepts
TRUWORTHS STRATEGIC FOCUS AREAS NEW STORE CONCEPTS Context One of a kind EXPERIENTIAL concept store by TRUWORTHS. Upmarket brand offering a collection of fashion, beauty and homeware. Modern retail experience for the discerning female customer. Aimed at capturing market share in the better-end segme
Slide 71: New Store Concepts (Continued)
TRUWORTHS STRATEGIC FOCUS AREAS NEW STORE CONCEPTS (CONTINUED) ID Kids Successfully piloted ID Kids range in 26 Identity stores in summer 2018, rolling out to a large number of stores for summer 2019. Range is focused on the 2-8 year old age group and covers both girls and boys collections. Utilise
Slide 72: New Store Concepts (Continued)
TRUWORTHS STRATEGIC FOCUS AREAS NEW STORE CONCEPTS (CONTINUED) New emporium concept Launched refreshed emporium store concept in a number of large stores. Examples include Gateway, Eastgate, Westville Pavilion, East Rand Mall and Westgate. New store design elements Introduced several new designs to
Slide 73: Merchandise and Supply Chain
TRUWORTHS STRATEGIC FOCUS AREAS MERCHANDISE AND SUPPLY CHAIN Product life-cycle management (PLM) system Implementation of first phase successfully completed in April 2019. Consolidation of fabric purchasing across departments Drive improved margins and value offering through volume consolidation and
Slide 74: Digital
TRUWORTHS STRATEGIC FOCUS AREAS DIGITAL Integrated brand marketing E-commerce Data-driven decision making 74
Slide 75: Office Turnaround Strategy
OFFICE TURNAROUND STRATEGY Office turnaround strategy managed through three workstreams: Trading alignment – focuses on merchandise performance and stock to reduce markdowns by managing stock position. Short-term essentials – aimed at prioritising Office’s operational and capital expenditure. Market
Slide 76: Office Strategy – Our Vision
OFFICE STRATEGY – OUR VISION “ We will focus on the basics to drive a more profitable business for all stakeholders: Look after our people, invest in our customers, harness our brand relationships and improve our product process “ Our strategic priorities: BACK TO BASICS TURNAROUND GROW Morale P
Slide 77: Office Strategic Focus Areas
OFFICE STRATEGIC FOCUS AREAS Marketing, customer engagement and loyalty Customer research and analysis exercise in progress. E-receipts Expansion and growth of e-commerce Ongoing enhancement of customer experience and transactional touch points continues, supporting the popularity of this channel in
Slide 78: Outlook
OUTLOOK
Slide 79: Truworths Outlook
TRUWORTHS OUTLOOK Consumer spending expected to remain under pressure in the short term – prolonged economic downturn and renewed demands on disposable income. Labour market continues to weaken with unemployment at a 15-year high level. Consumer confidence stabilised following the country’s national
Slide 80: Office Outlook
OFFICE OUTLOOK Trading conditions and consumer confidence remain under intense pressure ahead of the end-October 2019 Brexit deadline. Retail sector will remain constrained in the medium term. Turnaround initiatives implemented by management progressing according to plan. Ongoing focus on inventory
Slide 81: Questions
QUESTIONS
Slide 82: Disclaimer
DISCLAIMER This announcement contains certain forward-looking statements with respect to the financial condition and results of operations of Truworths International Limited and its group companies which by their nature involve risk and uncertainty because they relate to events and depend on circums
Slide 83: Appendices
APPENDICES
Slide 84: Summarised Group Statements of Financial Position
SUMMARISED GROUP STATEMENTS OF FINANCIAL POSITION Note ASSETS Non-current assets 5185 6.904 Property, plant and equipment 1780 1726 Goodwi 6 346 1623 Intangible assets 7 2616 3227 Derivative financial assets 2 10 Assets held at fair value* 3 30 Loans and receivables 99 109 Deferred tax 301 173 Curre
Slide 85: Summarised Group Statements of Comprehensive Income
SUMMARISED GROUP STATEMENTS OF COMPREHENSIVE INCOME 52 weeks to1 Jul 2018 % Audited change Rm Revenue 4 19577 17 19 254 Sale of merchandise 4 18094 31 17547 Cost of sales (8 749) (8 354) Gross profit 9345 VW 9193 Other income 4 322 279 Trading expenses (9175) 31.9 (6.954) Depreciation and amortisati
Truworths International — FY2019 Earnings Presentation on 6ix