Cashbuild Limited · JSE:CSB
Cashbuild — FY2019 Earnings Presentation
44 slides from Cashbuild's earnings presentation, September 2019
Slide 1: Final Results and Dividend Declaration
CELEBRATING 40 YEARS FINAL RESULTS AND DIVIDEND DECLARATION for the 53 weeks ended 30 June 2019
Slide 2: Contents
CONTENTS FINANCIAL REVIEW 5 PRODUCT CATEGORIES 25 STORE DEVELOPMENT AND MARKET SUMMARY 36 FINANCIAL RESULTS 47 CASHBUILD AUDITED RESULTS FOR 53 WEEKS ENDED 30 JUNE 2019
Slide 3: Disclaimer
FINAL RESULTS AND DIVIDEND DECLARATION FOR THE 53 WEEKS ENDED 30 JUNE 2019 2019 NOTES DISCLAIMER This presentation differs from the presentation available on the website and in the hand-out given to presentation participants as a result of industry sensitive information contained therein. The financ
Slide 4: Nature of Business and Financial Highlights - Statutory
NATURE OF BUSINESS • Mass retailer of building materials, home improvement and related products • Offers a focused range of quality products at competitive prices • Selling predominantly for cash • 315 stores and expanding (255 Cashbuild, 59 P&L Hardware and one Cashbuild DIY) 3 NOTES FINANCIAL HIGH
Slide 5: Financial Review
CELEBRATING 40 YEARS FINANCIAL REVIEW CASHBUILD AUDITED RESULTS FOR THE 53 WEEKS ENDED 30 JUNE 2019 5
Slide 6: Income Statement and Highlights
INCOME STATEMENT YEAR-ON-YEAR Audited Unaudited Audited Jun 2019 Jun 2019 Jun 2018* % R’000 (53 Weeks) 53rd Week (52 Weeks) (52 Weeks) change Revenue 10 821 235 199 097 10 622 138 10 206 730 4 Gross profit 2 720 006 52 748 2 667 258 2 568 453 4 Gross profit % 25.1 26.5 25.1 25.2 Operating expenses 2
Slide 7: Revenue Breakdown and Sales
REVENUE BREAKDOWN % change Cashbuild stores P&L Hardware stores R’000 FY 2019 FY 2018 Total Total New Existing* Total New Existing* Quarter 1 2 650 823 2 572 837 3 1 3 (2) 19 13 6 Quarter 2 2 912 408 2 820 004 3 2 3 (1) 12 6 6 1st Half 5 563 231 5 392 841 3 2 3 (1) 15 9 6 Quarter 3 2 468 062 2 398 5
Slide 8: Customer Transactions and Average Basket Size
CUSTOMER TRANSACTIONS ‘000 All stores Q4: 4% Growth: Q1: (1%) Q2: (1%) Q3: 1% Q4: 13% (incl W53) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Existing stores Q4: 0% Growth: Q1: (6%) Q2: (5%) Q3: (2%) Q4: 8% (incl W53) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2019 (incl W53) 2019 2018 2017
Slide 9: Gross Profit and EBIT Margin; Segmental Disclosure
GROSS PROFIT AND EBIT MARGIN 28% 8% * 7.1% 27% 7% 27.0% 6.4% 26% 6.0% 6% 25.9% 25.7% 25% 25.4% 25.4% 25.3% 25.2% 25.2% 25.1% 25.2% 5.3% 5% 24% ^ 4.8% 23% 4% 22% 3% 21% 2% 20% 1% 19% 18% 0% FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 1HY 2HY FY EBIT margin • Excludes BEE transaction ^ Excluding 53rd Week
Slide 10: Sales by Province and Existing Business Results
% of 2019 sales SALES BY PROVINCE 2.9% 2.8% R’MILLION (EXCL 53RD WEEK) 4.4% 20.2% 5.1% 8.0% 4.2% 4.9% 10.1% 19.9% 4.1% 11.9% 14.7% 6.7% 4.3% 3.2% (3.7%) 2.1% 16.8% (3.9%) 68 66 63 60 43 42 35 38 32 33 26 25 14 14 15 15 10 9 8 9 Limpopo Gauteng Mpumalanga Eastern Cape Countries KwaZulu-Natal North We
Slide 11: Operating Expenses and People Cost
OPERATING EXPENSES (EXCL 53RD WEEK) % R’000 FY 2019 FY 2018 change Existing business (236 Cashbuild and 45 P&L stores) 2 011 095 1 949 105 3 - 1st Half 1 036 051 1 004 247 3 - 2nd Half 975 044 944 858 3 New business (20 Cashbuild and 14 P&L stores) 148 859 76 153 - 1st Half 73 336 30 087 - 2nd Half
Slide 12: Operating Expenses - Delivery and Marketing
OPERATING EXPENSES – DELIVERY EXPENSES (EXCL 53RD WEEK) % R’million FY 2019 FY 2018 change Existing business (236 Cashbuild and 45 P&L stores) 111.3 112.6 (1) - 1st Half 58.1 58.0 - - 2nd Half 53.2 54.6 (3) New business (20 Cashbuild and 14 P&L stores) 6.8 3.1 - 1st Half 2.9 0.8 - 2nd Half 3.9 2.3 T
Slide 13: Operating Expenses - Property; EPS and DPS
OPERATING EXPENSES – PROPERTY (EXCL 53RD WEEK) % R’million FY 2019 FY 2018 change Existing business (236 Cashbuild and 45 P&L stores) 421.8 417.8 1 - 1st Half 210.1 206.2 2 - 2nd Half 211.7 211.6 - New business (20 Cashbuild and 14 P&L stores) 41.7 21.2 - 1st Half 18.7 7.6 - 2nd Half 23.0 13.6 Total
Slide 14: Statement of Financial Position and Inventory Analysis
STATUTORY STATEMENT OF FINANCIAL POSITION Audited * Audited % R’000 Jun 2019 Jun 2018 change Assets Property, plant and equipment 1 129 283 1 100 132 3 Intangible assets 426 398 433 467 (2) Investment property 28 158 - Inventories 1 541 295 1 538 708 - Trade and other receivables 117 807 118 489 (1)
Slide 15: Statutory Cash Flow
STATUTORY CASH FLOW R’MILLION 1800 W/Cap flow: >100% 750 1600 (3) 14 1400 6% 53 2% 1200 (548) (10%) 1000 953 (181) 48% 800 (251) (17%) 590 600 (196) (1) 400 (38%) 200 0 Opening Opening Operating Operating Inventory Inventory Debtors Debtors Creditors Creditors Interest Interest Dividends Dividends T
Slide 16: Notes
NOTES CASHBUILD AUDITED RESULTS FOR THE 53 WEEKS ENDED 30 JUNE 2019
Slide 17: Product Categories
CELEBRATING 40 YEARS PRODUCT CATEGORIES CASHBUILD AUDITED RESULTS FOR THE 53 WEEKS ENDED 30 JUNE 2019 25
Slide 18: Cement Sales and Unit Sales
CEMENT SALES POCKETS Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 26 NOTES CEMENT UNIT SALES PER SUPPLIER Jun 2019 Jun 2018 8% 5% 11% 7% 15% 8% 24% 23% 32% 27% 22% 18% AFRISAM PPC NPC SEPHAKU MAMBA OTHER 27 NOTES CASHBUILD AUDITED RESULTS FOR THE 53
Slide 19: Total Timber and Brick Sales
TOTAL TIMBER SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 28 NOTES TOTAL BRICK SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 29 NOTES CASHBUILD AUDITED RESULTS FOR THE
Slide 20: Total Roof Covering and Opening Sales
TOTAL ROOF COVERING SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 30 NOTES TOTAL OPENING SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 31 NOTES CASHBUILD AUDITED RESULT
Slide 21: Total Plumbing and Hardware Sales
TOTAL PLUMBING SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 32 NOTES TOTAL HARDWARE SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 33 NOTES CASHBUILD AUDITED RESULTS FO
Slide 22: Total Decorative Sales and Group Sales per Week
TOTAL DECORATIVE SALES R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 34 NOTES GROUP SALES PER WEEK R’MILLION Q1 Q2 Q3 Q4 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2018 2019 2020 35 NOTES CASHBUILD AUDITED RESULTS
Slide 23: Store Development and Market Summary
CELEBRATING 40 YEARS STORE DEVELOPMENT AND MARKET SUMMARY CASHBUILD AUDITED RESULTS FOR THE 53 WEEKS ENDED 30 JUNE 2019 36
Slide 24: Store Development and Group Summary
STORE DEVELOPMENT Total Cashbuild Stores (excl DIY) 251 255 242 232 9 6 11 12 11 240 246 248 230 221 June 2016 June 2017 June 2018 June 2019 Dec 2018 Existing Cashbuild stores New Cashbuild stores Total P&L Hardware Stores 60 59 46 2 14 2 42 4 57 60 42 42 46 June 2016 June 2017 June 2018 June 2019 D
Slide 25: New Stores FY2019 and Stores by Location
NEW STORES FY2019 Cashbuild P&L Hardware Gauteng Kwa-Zulu Natal Soshanguve Shallcross Mamelodi Western Cape Sky City (Vaal) Lansdowne Limpopo Mpumalanga Tibanifontein Marapyane Metz Giyani Masingita Gauteng Admin Triangle Tembisa 39 NOTES STORES BY LOCATION Number of stores June 2019(June 2018) Excl
Slide 26: Competitor Landscape - Corporate
COMPETITOR LANDSCAPE – CORPORATE 48 (PY 47) 17 (PY 11) • Approximately 389 stores (PY 376) 94 (PY 94) 42 (PY 42) • Most direct competitor in terms of offering and location • Approximately 136 stores (PY 136) • Recently rebranded 13 (PY 14) 39 (PY 38) • Approximately 117 stores (PY 110) 1 (PY 1) • Ap
Slide 27: Cement Market Share
CEMENT MARKET SHARE • PPC and Sephaku estimate industry volumes down between 5 -12% • Other non-listed cement suppliers gave similar indications • Cashbuild Group volumes for FY – 3% down (1% down including Week 53) • Based on the available information - Cashbuild has not lost market share 43 NOTES
Slide 28: Market Summary and Thank You
MARKET SUMMARY • One of the toughest trading years • Continued consumer pressure – high unemployment • Competitive market • Increase in civil unrest leading up to 2019 National Elections • Cement - industry remains in turmoil with new entrant as well as an increase in independent blenders and import
Slide 29: Financial Results
CELEBRATING 40 YEARS FINANCIAL RESULTS CASHBUILD AUDITED RESULTS FOR THE 53 WEEKS ENDED 30 JUNE 2019 47
Slide 30: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (Rm) OPERATING PROFIT (Rm) revenue 600 11000 500 9800 400 8600 300 7400 10 821 200 10 207 7 693 8 669 9 730 559 461 612 620 543 6200 100 5000 0 2015 2016 2017 2018 2019 2015 2016* 2017 2018 2019 HEADLINE EARNINGS (Rm) NAV PER SHARE (cents) 10000 500 8000 400 6000 300 400
Slide 31: Summary Consolidated Income Statement - Audited
SUMMARY CONSOLIDATED INCOME STATEMENT – AUDITED Year ended Year ended 30 June 2018 30 June 2019 *Restated % R’000 (53 weeks) (52 weeks) change Revenue 10 821 235 10 206 730 6 Cost of sales (8 101 229) (7 638 277) 6 Gross profit 2 720 006 2 568 453 6 Selling and marketing expenses (1 884 034) (1 778
Slide 32: Summary Consolidated Statement of Comprehensive Income
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME – AUDITED Year ended Year ended 30 June 2018 30 June 2019 *Restated R’000 (53 weeks) (52 weeks) Profit for the year 432 419 425 153 Other comprehensive income reclassifiable to profit or loss: Total movement in foreign currency translation reser
Slide 33: Additional Information - Audited
ADDITIONAL INFORMATION – AUDITED Year ended Year ended 30 June 2018 R’000 30 June 2019 *Restated Net asset value per share (cents) – unaudited 8 636 7 561 Net asset value per share (excluding treasury shares) – unaudited 9 500 8 320 Ordinary shares ('000s): – In issue 24 990 24 990 – Weighted-averag
Slide 34: Summary Consolidated Statement of Financial Position
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION – AUDITED 30 June 2018 R’000 30 June 2019 *Restated ASSETS Non-current assets 1 716 090 1 665 001 Property, plant and equipment 1 129 283 1 100 132 Intangible assets 426 398 433 467 Rent prepayments 66 470 85 707 Investment property 28 158 – Defer
Slide 35: Summary Consolidated Statement of Cash Flows
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS – AUDITED Year ended Year ended 30 June 2019 30 June 2018 (53 weeks) (52 weeks) Cash flows from operating activities Cash generated from operations 213 079 781 720 Interest paid (3 853) (3 143) Taxation paid (251 414) (169 775) Net cash/(utilised) generat
Slide 36: Statement of Changes in Equity; Segmental Analysis
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – AUDITED R’000 Balance at 1 June 2016 (Restated) Total comprehensive income for the year Shares purchased by The Cashbuild Share Incentive Trust and Cashbuild (South Africa) Proprietary Limited Shares sold by The Cashbuild Share Incentive Trust Di
Slide 37: Attributable to Owners of the Company
Attributable to owners of the company Share- based Non- Share Share payments Retained controlling capital premium reserve FCTR earnings interests Total equity 227 (275 384) 52 985 10 645 1 651 042 21 948 1 461 463 – – – (18 974) 464 882 2 636 448 544 – (2 561) – – – – (2 561) – 2 526 – – – – 2 526 –
Slide 38: Notes to the Summary Consolidated Financial Information
NOTES TO THE SUMMARY CONSOLIDATED FINANCIAL INFORMATION 1. Basis of preparation. The summary consolidated annual financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), the presentation and disclosure requirements of IAS 34 – Interim Financial Repor
Slide 39: Pro-forma Information on the 53rd Week
3. Unaudited pro-forma information illustrating the impact of the 53rd week on the annual results for the year ended 30 June 2019. The group adopts the retail accounting calendar, which comprises the reporting period ending on the last Sunday of the month (2019: 30 June (53 weeks); 2018: 24 June (52
Slide 40: Notes to the Summary Consolidated Financial Information Continued
NOTES TO THE SUMMARY CONSOLIDATED FINANCIAL INFORMATION CONTINUED 6. Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings per ordinary share are based on headline earnings of R434.0 million (June 2018: R424.0 million) and a weighted average of 22
Slide 41: Commentary
COMMENTARY Nature of business Cashbuild is southern Africa’s largest retailer of quality building materials and associated products, selling direct to a cash-paying customer base through our chain of stores (315 at the end of this financial year which includes one DIY store and 59 P&L Hardware store
Slide 42: Corporate Information
CORPORATE INFORMATION Directors: IS Fourie* (Chairman), WF de Jager (Chief Executive), M Bosman*, A Hattingh, HH Hickey*, AGW Knock (British)*, Dr DSS Lushaba*, AE Prowse, NV Simamane*, GM Tapon Njamo*, SA Thoresson, WP van Aswegen (*Non-Executive) Company Secretary: T Nengovhela Registered Office:
Slide 43: Ance
Ance
Slide 44: www.cashbuild.co.za
www.cashbuild.co.za