Slide 1: Interim Results for the six months ended 29 February 2024
INTERIM RESULTS for the six months ended 29 February 2024
Slide 2: Agenda
Agenda 01 Review of the period 02 Financial results 03 Trading performance 04 Outlook 05 Questions 2
Slide 3: Review of the period
01 Review of the period Bertina Engelbrecht 3
Slide 4: Review of the period
Review of the period • Performance continues to prove resilience and defensiveness • Diluted HEPS up 13.0% • Clicks opened 900th store & ClubCard membership now 11m • Strong retail turnover and profit growth • Acquisitions successfully integrated • UPD implemented new IT systems at Lea Glen DC • Ong
Slide 5: Financial Results
02 Financial Results Gordon Traill 5
Slide 6: Financial highlights
Financial highlights Turnover up Operating margin up Diluted HEPS up 9.0% from 8.2% to 13.0% Retail turnover up 12.4% 8.5% to 534 cps UPD reported turnover up 1.3% Interim dividend up Cash returned to Return on equity up 13.5% shareholders from 41.2% to to 210 cps R2.0 bn 43.4% in the six months CLI
Slide 7: Turnover
Turnover % same % stores % R’m H1 2024 H1 2023 change growth inflation Retail 17 283 15 376 12.4 8.8 7.4 Distribution 8 148 8 046 1.3 1.6 Intragroup turnover (3 627) (3 416) 6.2 Total group 21 804 20 006 9.0 5.5 • Retail turnover benefiting from convenient value positioning and strong growth in beau
Slide 8: Total income
Total income % H1 2024 H1 2023 R’m H1 2024 H1 2023 change % margin % margin Retail 5 969 5 205 14.7 34.5 33.9 Distribution 784 707 10.9 9.6 8.8 Intragroup (167) (138) Total group 6 586 5 774 14.1 30.2 28.9 • Retail margin driven by strong growth in private label & beauty, Sorbet franchise fees and f
Slide 9: Operating expenditure – Retail
Operating expenditure – Retail % R’m H1 2024 H1 2023 change Depreciation – PPE 284 247 14.8 Depreciation – ROU asset 502 446 12.5 Occupancy costs 101 90 12.8 Employment costs 2 224 1 958 13.6 Other operating costs 1 156 977 18.2 Total retail costs 4 267 3 718 14.8 % of turnover 24.7% 24.2% Finance c
Slide 10: Operating expenditure – Distribution
Operating expenditure – Distribution % R’m H1 2024 H1 2023 change Depreciation – PPE 27 15 83.5 Depreciation – ROU asset 9 8 0.4 Occupancy costs 1 2 (30.9) Employment costs 197 173 13.8 Other operating costs 354 332 6.5 Total distribution costs 588 530 10.8 • Depreciation of PPE driven by investment
Slide 11: Operating profit
Operating profit % H1 2024 H1 2023 R’m H1 2024 H1 2023 change % margin % margin Retail 1 702 1 487 14.5 9.8 9.7 Distribution 196 176 11.2 2.4 2.2 Intragroup (35) (21) Total group 1 863 1 642 13.5 8.5 8.2 • Benefit of growth in higher margin categories and private label in Retail • UPD recovering fro
Slide 12: Inventory
Inventory Days in stock Inventory (R’m) H1 2024 H1 2023 H1 2024 H1 2023 % change Retail 82 85 5 095 4 740 7.5 Distribution 61 48 2 669 2 101 27.0 Intragroup inventory (187) (149) Total group 86 81 7 577 6 692 13.2 • Retail inventories well managed • UPD stocked up ahead of higher SEP increase • Grou
Slide 13: Cash management for the six months
Cash management for the six months 2 718 R’m (400) (889) (109) 2 455 (571) (314) (1 176) 853 (835) (26) Cash Operating Repayment Working Net Taxation Capex Dividends Share Other Cash FY2023 profit of lease capital finance buybacks investing H1 2024 before liability movements costs activities working
Slide 14: Capital expenditure
Capital expenditure • R920m capex planned for FY2024 • R514m on stores: - 50 – 55 new Clicks stores and 10 – 20 new pharmacies - 50 – 60 store refurbishments • R406m on infrastructure: - R76m on UPD IT and warehouse equipment - R330m on retail systems and infrastructure CLICKS GROUP INTERIM RESULTS
Slide 15: Capital returned to shareholders
Capital returned to shareholders 2 500 Total returned to date since 2006 of R19.1 billion R’m 2 000 (dividends R12.1 billion + R7.0 billion buybacks at an average price of R43.31) 1 500 1 000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 2024 Divi
Slide 16: Trading Performance
03 Trading Performance Bertina Engelbrecht 16
Slide 17: Clicks business review
CLICKS GROUP LIMITED so. | PORTIA Wm Clicks business review
Slide 18: Retail sales performance
Retail sales performance % change % contribution Pharmacy 8.7 26.2 Front shop health 9.5 24.7 Beauty and personal care 17.1 33.3 General merchandise 14.0 15.8 Total turnover 12.4 100.0 • Comparable stores turnover growth of 8.8% • Inflation 7.4% • Volume growth of 1.4% CLICKS GROUP INTERIM RESULTS 2
Slide 19: Market shares
Market shares % H1 2024 H1 2023 Health Retail pharmacy* 24.3 23.5 Front shop health** 33.2 32.7 Baby** 21.0 21.3 Beauty Skincare** 44.1 42.9 Haircare** 33.3 32.9 Personal care** 21.8 20.6 General merchandise Small electrical appliances** 19.1 19.5 * Per IQVIA (Private Retail Pharmacy S1-6) (restated
Slide 20: Performance and strategy – Maintaining value
Performance and strategy • Maintaining value Clicks price index* vs: • Price competitive with all national retailers Retailer A 97.1% Retailer B 98.3% • Promotional sales +14.0% Retailer C 99.7% to 44.7% of turnover Retailer D 95.1% * Excluding all promotional pricing, • R387m cashback paid to ClubC
Slide 21: Performance and strategy – Differentiating our product offer
Performance and strategy • Differentiating our product offer • Private label up 14.3% to 26.1% of sales (front shop 30.9%, pharmacy 11.7%) • New look Beauty hall now in 36 stores • Five Clicks Baby stores and four store- in-stores performing strongly • Sorbet salons total turnover up 14.9% • The Bod
Slide 22: Performance and strategy – Engaging customers through personalisation
Performance and strategy • Engaging customers through personalisation • 11.0m active ClubCard members, 82.0% of sales • New look Clicks app launched • New pharmacy management system to be rolled out to 50 pharmacies in H2 of 2024 CLICKS GROUP INTERIM RESULTS 2024 22
Slide 23: Performance and strategy – Extending convenience
Performance and strategy • Extending convenience Format Total • 902* Clicks stores with 718 pharmacies Convenience 681 Destination 221 • 223 stores located in low income areas Total 902 (22.2% of retail turnover) • 51% of population < 5.0km of a pharmacy • Planning for rollout of M-Kem format • Furt
Slide 24: UPD business review
UPD business review CLICKS GROUP INTERIM RESULTS 2024 24
Slide 25: Fine wholesale turnover
Fine wholesale turnover 55.6% • Wholesale turnover down 2.3% Clicks (+4.7%) (Q2 +5.7%) 37.7% Private Hospitals • Short-term impact of systems change (-8.1%) on Clicks and hospital purchases • Lower activity in hospitals 6.7% Independent Pharmacies • Wholesale market share down and other Channels (-1
Slide 26: Review of the period
Review of the period • Total managed turnover -6.4% • Non-renewal of two contracts (annual turnover of R3bn) • Provides capacity for growth in other bulk contracts • Will be exiting rented DCs as leases expire • Generic medicines +6.2% in value (75% of volume) • SAP ERP and Knapp WMS implementation
Slide 27: Outlook
04 Outlook Bertina Engelbrecht 27
Slide 28: Outlook for H2 2024
Outlook for H2 2024 • Consumer environment will remain constrained due to continued impact of inflation & load shedding and disruption of elections • Accelerating opening of Clicks stores – planning 50 - 55 in FY2024 • Awaiting approval of Unicorn restructure from DoH • UPD to continue to recover po
Slide 29: Questions
CLICKS GROUP LIMITED 05 Questions 29
Slide 30: 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