Foschini Group Limited · JSE:TFG
Foschini — The Foschini Group — H1 FY2019 Earnings Presentation
32 slides from Foschini's earnings presentation, November 2018
Slide 1: Results Presentation for the Half-Year Ended 30 September 2018
RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018
Slide 2: Slide 2
Slide 3: Agenda
RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 AGENDA FINANCIAL HIGHLIGHTS Anthony Thunström GROUP OVERVIEW Anthony Thunström BUSINESS SEGMENT REVIEW Anthony Thunström í TFG Africa í TFG London Anthony Thunström Chief Executive Officer í TFG Australia TFG FINANCIAL SERVICES Jane Fish
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS Turnover growth Headline earnings Free cash flow @ +28,6% growth +14,3% 85% of net (excl acq costs +9,1%) profit Gross margin HEPS Debt equity ratio expansion to 53,6% growth +8,3% stable at (PY: 51,0%) (excl acq costs +3,4%) 63,9% RESULTS PRESENTATION FOR T
Slide 5: Review of the Period
REVIEW OF THE PERIOD CHANGES IN GROUP STRUCTURE Brand Effective date FY 2019 FY 2018 trading included trading included Hobbs 25 November 2017 6 months 0 months RAG 24 July 2017 6 months 2 months CHANGES IN E-COMMERCE 2 additional brands launched online selling (Donna and The FIX) 22 total number of
Slide 6: Group Overview: Turnover Merchandise Category Contribution
GROUP OVERVIEW TURNOVER: MERCHANDISE CATEGORY CONTRIBUTION The Group’s performance is underpinned by the success of its diversification strategy which lessens the dependency on any specific merchandise category: 100% 3,3% Cosmetics 4,2% 90% Jewellery 4,5% 5,5% 80% Homeware 7,6% Cellphones 70% 17,7%
Slide 7: Turnover: Merchandise Category and Tender Type Contribution
TURNOVER: MERCHANDISE CATEGORY CONTRIBUTION CONTINUED TFG AFRICA GROUP TFG AFRICA % same store % change % change growth (ZAR) (ZAR) (ZAR) Clothing 36,1 11,2 7,2 Jewellery 2,7 2,7 1,0 Cellphones (2,6) (2,6) (4,2) Homeware & furniture 7,8 7,8 2,8 Cosmetics 1,0 1,0 - Total 28,6 8,4 4,8 í Strong TFG Afr
Slide 8: Working Capital Management and Borrowings
WORKING CAPITAL MANAGEMENT GROUP GROUP TFG Sept 2018 March 2018 GROUP AFRICA (Rm) (Rm) % change % change Trade receivables 7 083,2 7 373,6 (3,9) (3,9) Other receivables 1 266,9 1 118,6 13,3 8,4 Inventory 7 609,5 6 900,6 10,3 8,0 15 959,6 15 392,8 3,7 1,4 Trade and other payables (4 376,2) (3 724,3)
Slide 9: Free Cash Flow and Capex
FREE CASH FLOW GROUP GROUP GROUP Sept 2018 Sept 2017 March 2018 (Rm) (Rm) (Rm) 6 months 6 months 12 months Free cash flow 987,8 1 284,6 1 891,6 % of net profit 85,4% 127,6% 78,5% í Free cash flow conversion of 85,4% well above 10-year average and in line with expectation í Remains a key focus area R
Slide 10: Business Segment Review: TFG Africa Operating Context
BUSINESS SEGMENT REVIEW: TFG AFRICA TFG AFRICA: OPERATING CONTEXT Latest Comparative period period CPI % 4,9 5,1 GDP 0,5 0,9 FNB/BER consumer confidence index 22 -9 RMB/BER business confidence index 38 35 í Tough economic conditions and political uncertainty remains í The interest rate environment i
Slide 11: TFG Africa: Segmental Performance and Trading Expenses
TFG AFRICA: SEGMENTAL PERFORMANCE TFG AFRICA TFG AFRICA TFG AFRICA Sept 2018 Sept 2017 % change Retail turnover (Rm) 9 981,9 9 208,4 8,4 Gross margin (%) 47,6 46,6 Interest received 878,4 883,2 (0,5) Value-added services 446,5 429,9 3,9 EBITDA (Rm) 1 842,0 1 761,7 4,6 New outlets 22 74 Closed outlet
Slide 12: Business Segment Review: TFG London Operating Context
BUSINESS SEGMENT REVIEW: TFG LONDON TFG LONDON: OPERATING CONTEXT Latest Comparative period period CPI % 2,7 2,8 GDP (H1 2018 v H1 2017 y-o-y- growth) 1,1 1,9 GfK Consumer Sentiment -9 -9 CBI Business Optimism -3 5 í Political and economic uncertainty has heightened as the Brexit deadline approaches
Slide 13: TFG London: Segmental Performance and Strategy
TFG LONDON: SEGMENTAL PERFORMANCE TFG TFG TFG LONDON LONDON LONDON Sept 2018 Sept 2017 % change Retail turnover (£m) 200,4 133,0 50,7 Gross margin (%) 63,0 63,6 EBITDA (£m) 13,7 14,8 (7,4) New outlets 68 46 Closed outlets 73 39 Total outlets at half year 930* 746 í Retail turnover growth of 50,7% in
Slide 14: Business Segment Review: TFG Australia Operating Context
BUSINESS SEGMENT REVIEW: TFG AUSTRALIA TFG AUSTRALIA: OPERATING CONTEXT Latest Comparative period period CPI % (June year ended % change) 2,1 1,9 GDP (June year ended % change) 3,4 2,1 Consumer Sentiment (September) 100,5 97,9 Business Confidence (September) 6 7 í Annual GDP growth steady at 3,4% í
Slide 15: TFG Australia: Segmental Performance
TFG AUSTRALIA: SEGMENTAL PERFORMANCE TFG TFG TFG AUSTRALIA AUSTRALIA AUSTRALIA Sept 2018 Sept 2017* % change Retail turnover (A$m) 239,0 208,0 14,9 Gross margin (%) 64,4 63,6 EBITDA (A$m) 27,0 20,4 32,4 New outlets 22 22 Closed outlets 6 8 Total outlets at half year 463 431 * Provided for comparativ
Slide 16: American Swiss Australia
AMERICAN SWISS AUSTRALIA RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 27 AMERICAN SWISS AUSTRALIA RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 28 14
Slide 17: American Swiss Australia
AMERICAN SWISS AUSTRALIA RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 29 AMERICAN SWISS AUSTRALIA RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 30 TFG Results presentation September 2018 15 www.tfglimited.co.za
Slide 18: American Swiss Australia Test Launch
AMERICAN SWISS AUSTRALIA The test launch of American Swiss in Australia is on track with 6 store sights confirmed across Sydney, Melbourne and Brisbane: í Highpoint & Robina Opened 19 October í MacArthur Square Opened 25 October í Sunshine Plaza Opened 5 November í Werribee Opening 12 November í Cha
Slide 19: TFG Financial Services: Industry Review and Salient Features
TFG FINANCIAL SERVICES: INDUSTRY REVIEW - Higher inflation and weak income growth resulted in a decline in the TU CCI from 55 in Q1 2018 to 51 in Q2 2018 - The number of accounts in default (3-months in arrears) marginally increased - Household cash flow growth deteriorated in Q2 2018, with expectat
Slide 20: TFG Financial Services: Credit Performance and Credit Book
TFG FINANCIAL SERVICES: CREDIT PERFORMANCE TFG AFRICA TFG AFRICA Sept 2018 Sept 2017 TFG AFRICA (Rm) (Rm) % change Income 1 079,9 1 028,4 5,0 Net bad debt (514,8) (464,6) 10,8 Credit costs* (241,3) (240,2) 0,5 EBIT 323,8 323,6 0,1 * Credit costs restated to exclude Group marketing and analytics cost
Slide 21: TFG Financial Services: Credit Statistics
TFG FINANCIAL SERVICES: CREDIT STATISTICS TFG AFRICA TFG AFRICA TFG AFRICA Key debtors statistics* Sept 2018 March 2018 Sept 2017 Overdue values % to debtors’ book 12,3 12,4 12,5 % able to purchase 84,7 83,0 84,3 Net bad debt write off as a % of debtors’ book 12,1 12,6 13,5 Net bad debt as a % of de
Slide 22: TFG Financial Services: Strategy
TFG FINANCIAL SERVICES: STRATEGY FOCUS APPROACH Customer acquisition Account customers í New lead generation & origination channel launched í Short codes included in Foschini & Sportscene television adverts í Customer responds via SMS which triggers a credit bureau check í Successful leads contacted
Slide 23: Outlook
OUTLOOK OUTLOOK í Trading conditions across all three territories expected to remain challenging TFG AFRICA í Political / policy uncertainty will remain a concern until 2019 South African elections í Gross margin and product price inflation expected to be in line with half-year í Focus on cost contr
Slide 24: Thank You
THANK YOU DISCLAIMER THIS ANNOUNCEMENT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE FOSCHINI GROUP LIMITED AND ITS SUBSIDIARIES, WHICH BY THEIR NATURE INVOLVE RISK AND UNCERTAINTY BECAUSE THEY RELATE TO EVENTS AND DEPEND ON CIRC
Slide 25: Appendices: Business Overview
APPENDICES BUSINESS OVERVIEW TFG í Diverse group with a successful portfolio of 28 leading fashion retail brands í Diversification through: • Cash and credit turnover • Geography – 4 041 outlets in 32 countries • Full omni offering – brick and mortar, concessions and online • Broad product offering
Slide 26: Our Footprint – TFG Africa and TFG Australia
OUR FOOTPRINT – TFG AFRICA 185 05 142 742 200 04 153 282 95 35 23 110 211 437 12 12 2 447 Stores Concessions Total outlets RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2018 47 OUR FOOTPRINT – TFG AUSTRALIA 444 19 Stores Concessions Total outlets RESULTS PRESENTATION FOR THE HALF-YEAR EN
Slide 27: Our Footprint – TFG London
OUR FOOTPRINT – TFG LONDON North America Europe Asia 2 41 43 USA 206 470 676 UK & Ireland 6 6 Japan 13 13 Mexico 1 12 13 Sweden 9 2 11 Hong Kong 1 1 Estonia 2 2 Macau Middle East 2 2 Latvia 1 1 Malaysia 3 3 Qatar 8 8 Netherlands 7 7 Singapore 7 7 United Arab Emirates 5 5 Belgium 2 2 Kuwait Australia
Slide 28: Condensed Consolidated Statement of Financial Position
Condensed consolidated statement of financial position Restated* Restated* Sept 2018 Sept 2017 March 2018 Unaudited Unaudited Audited Rm Rm Rm ASSETS Non-current assets Property, plant and equipment 2 931,6 2 792,3 2 861,9 Goodwill and intangible assets 8 484,4 8 236,9 7 667,2 Deferred taxation asset
Slide 29: Condensed Consolidated Income Statement
Condensed consolidated income statement Restated* 6 months 6 months Restated* ended ended Year ended 30 Sept 30 Sept 31 March 2018 2017 2018 Unaudited Unaudited % Audited Rm Rm change Rm Revenue 17 466,7 13 880,6 31 463,0 Retail turnover 15 913,1 12 377,5 28,6 28 519,5 Cost of turnover (7 386,5) (6
Slide 30: Notes
Notes
Slide 31: GREYMATTER & FINCH # 12397
GREYMATTER & FINCH # 12397
Slide 32: Brand Portfolio
[ @home @homelivingspace AmericanSwiss Archive Charles & Keith Colette Connor Donna Duesouth Exact Fabiani TheFix Foschini G-StarRaw hi Hobbs Johnny Bigg Markham Mat &May Phase Eight Rockwear SodaBloc Sportscene Sterns Tarocash Totalsports Whistles yd.