Spar Group Limited · JSE:SPP
Spar — The SPAR Group — H1 FY2025 Earnings Presentation
45 slides from Spar's earnings presentation, Mar 28, 2025
Slide 1: Interim Results Presentation
Interim Results Presentation For the period ended 28 March 2025 My SPAR, Our Tomorrow
Slide 2: Agenda
Agenda FY 2025 Interim Results Presentation Operational Financial Overview Strategy & Outlook update review Angelo Swartz Angelo Swartz Angelo Swartz Reeza Isaacs INTERIM RESULTS PRESENTATION 2025 2
Slide 3: Overview
Overview Angelo Swartz, Group CEO
Slide 4: Key strategic priorities met
Key strategic priorities met Sep 2024 Dec 2024 Jun 2025 Sep 2025 Sept 2026 SPAR Debt Europe SAP South African Poland Exit restructuring strategic system roll EBIT margin review out next 3% decision DC Net debt / EBITDA 1.5X INTERIM RESULTS PRESENTATION 2025 4
Slide 5: H1 2025 Financial Highlights
H1 2025 Financial Highlights Continuing operations adjusted to allow for comparability after taking into account the impact of the adopting 52/26 weeks reporting Revenue Group Operating Southern Africa Ireland2 Operating profit1 Operating profit profit Southern Africa Cash generated from +1.6% +5.5%
Slide 6: Navigating a challenging landscape
Navigating a challenging landscape Challenges faced Mitigating actions Positive developments Margin improvement – especially in KZN Focus on product mix, cost control and DC Low inflation and competitive market in SA Savings in warehouse & distribution costs in efficiencies South Africa Consumer pre
Slide 7: Poland
Poland • Poland disposal concluded January 2025 • Recorded loss on disposal of R531m - Includes R161 million non-cash recognition from FCTR - Impact of suspensive conditions pending at reporting date - now fulfilled - Finalisation of conditions resulted in adjustments to disposal proceeds and costs
Slide 8: Debt
Debt Stable funding profile with well-managed maturities SPAR Group Ltd – R’m SPAR Debt pre-28 March 2025 SPAR Debt post-28 March 2025 Committed GBFs R4,500 Committed GBFs R3,500 Seasonal GBFs R2,300 Seasonal GBFs R750 Bridge Loan R2,000 Syndicated debt R4,500 Facility A (2yrs) R2,000 Facility B (5y
Slide 9: Strategic review complete
Strategic review complete Disposal of SPAR Switzerland and AWG Strategic alignment Capital allocation Value unlock discipline Reallocate capital to higher- Prioritising markets where Growth enabled under well- return, core-market our model and scale drive capitalised players with opportunities compe
Slide 10: Operational Review
Operational Review Angelo Swartz, Group CEO
Slide 11: SA wholesale grocery and liquor businesses
SA wholesale grocery and liquor businesses • Performance impacted by macro trading conditions, seasonal impact of Easter and store closures (0.5% impact) • Liquor performance impacted by Easter and subdued growth in spirits & wine mitigated by good growth in LADS and RTD Wholesale Turnover growth H1
Slide 12: Retail KPIs – Southern Africa G&L
Retail KPIs – Southern Africa G&L SPAR Supermarkets +2.5% TOPS at SPAR liquor +0.0% Combined +2.2% Footfall / Number of transactions at till Average basket spend SPAR Supermarkets -0.7% TOPS at SPAR liquor +2.5% Combined -0.3% KPIs reflected are based on information shared by our retailers and are c
Slide 13: Build it
Build it Turnover growth (%) H1 25 H1 24 Wholesale +4.1 -0.4 Retail +5.1 +1.2 Retail LFL +5.4 +2.6 • SA’s biggest building supplier business • Best in class performance given economic conditions & unseasonal rainfall • GP margin improvement driven by product mix • Build it strategy launched at 2025
Slide 14: SPAR Health
SPAR Health • Turnover increased by 13.7% - Driven by growth in the Wholesale and Scriptwise within the specialised medications market - Positive momentum on Own Brand growth • Continued improvement in retailer loyalty - Currently at 58.0%, up from 53.2% in FY 24 • Increased student enrolment in the
Slide 15: BWG Group
BWG Group Continuing – excluding UK Ireland • Stable performance despite tough trading environment for consumers, impacted by Easter timing Top performing categories: retail Revenue down 0.6% in food service, confectionary & local currency dairy products • Gross margin improvement due to product mix
Slide 16: SPAR Sri Lanka
SPAR Sri Lanka JV Footfall Items sold +14.0% +9.0% • Double digit revenue growth in low-teens • In H1, SPAR Sri Lanka: - Added 1 corporate store and 9 independent retailers - 12 independent retailers in total • CPI: -2% as at Dec 2024, expected to increase to range between 2-3% in 2025 • On-demand -
Slide 17: SPAR Switzerland
SPAR Switzerland Held for sale Performance Operating profit* • Retail footfall stabilised but smaller formats favoured over hypermarkets Switzerland • Cyber-attack in March 2025 significantly impacted wholesale and 100,0 3,5% TCC volumes - supply chain continuity largely preserved 3,0% − Estimated i
Slide 18: AWG Group
AWG Group Held for sale Performance Operating profit* • General cost of living crisis in the UK negatively impacted performance UK 12,0 5,0% • Top-line pressure as heavy discounting 4,5% continues driving shift from convenience 10,0 4,0% 3,5% • Tobacco and vapes legislation negatively 8,0 3,0% impac
Slide 19: Financial review
Financial review Reeza Isaacs, Group CFO
Slide 20: Presentation of results
Presentation of results Adoption of the retail calendar: The group adopted the 52/26 week reporting calendar - results for both 2025 and 2024 recalculated 1 to reflect the results for a comparable period of 182 days or 26 weeks. Interim period end: 52 week period end: 28/3/25 (182 days) 26/9/25 (364
Slide 21: Financial highlights
Financial highlights Turnover* from Gross profit* South African continuing SA +3.9% operating profit*^ Ireland PBT* operations up Ireland up +1.2% +5.5% +20.7% 1.1% in constant in local currency (+7.8% adjusted for SAP in local currency currency implementation costs) Working capital and Debt restruc
Slide 22: Group income statement as reported
Group income statement as reported The current period reflects 179 days compared to the prior period’s 183 days. (R'm) Mar 2025 Mar 2024 % change This statutory group income statement is not directly Continuing operations comparable to 2024 due to the adoption of the 52/26 week Revenue - sale of mer
Slide 23: Group income statement – 26 weeks comparable
Group income statement – 26 weeks comparable On the adoption of the 52/26 weeks reporting cycle, the results for March 2025 and 2024 have been adjusted to present 182 days for both periods. All commentary on operations are presented on this basis unless otherwise indicated. (R'm) Mar 2025 Mar 2024 %
Slide 24: Southern Africa
Southern Africa Challenging trading conditions resulted in subdued topline growth; GP expansion and cost containment resulted in underlying operating profit growth of 7.8% Turnover negatively impacted by the challenging trade conditions iro (R'm) Mar 2025 Mar 2024 % change inland regions, the closur
Slide 25: Ireland
Ireland GP expansion offset by higher employment costs which affected operating profit; substantial drop in finance costs; PBT up 20.7%% Mar 2025 Mar 2024 % change 182 days 182 days Sales were marginally down on the prior year but on plan due to a Income statement continuing operations number of bud
Slide 26: Switzerland
Switzerland Tough trading environment and cyber attack significantly impacted performance and EBITDA Mar 2025 Mar 2024 % change Revenue in Retail and TopCC was negatively impacted by a 182 days 182 days highly competitive retail and wholesale sectors and customers Income statement (CHF'000) continue
Slide 27: UK/AWG
27 UK/AWG Adverse trading conditions significantly impacted wholesale and retail sales, resulting in an operating loss of 3m Euro Mar 2025 Mar 2024 % change 182 days 182 days Income statement (EUR'000) Operating performance was well below last year despite the Revenue - sale of merchandise 124 675 1
Slide 28: Group statement of financial position
Group statement of financial position Substantial improvement in working capital and gearing levels during the period; net equity reduced by impairments. The March 2024 statement of financial position was reclassified in respect of the assets and liabilities (R'm) 28 Mar 2025 31 Mar 2024 % change 31
Slide 29: Net borrowings overview
29 Net borrowings overview All covenants met with adequate headroom across facilities Mar 2025 Mar 20241 Group1 (R'm) Net Debt 9 711 11 080 South Africa (R'm) • SA leverage stable despite the inclusion of R2bn Polish debt as Net Debt 3 783 2 949 part of disposal (included in group debt in 2024). Ref
Slide 30: Cashflows for the period
Cashflows for the period Improved FCF as a result of working capital improvements and lower capex 2 374,1 ( 508,0) ( 406,0) ( 113,2) 26 weeks to 932,7 March 2025 ( 414,2) ( 125,5) 282,2 ( 525,0) Cash from Working capital Net finance Taxation paid Capital Free cash flow Acquisition of Disposal of Net
Slide 31: Capital expenditure forecast for continuing operations
Capital expenditure forecast for continuing operations Total capex forecast to remain stable at c.1.0% of turnover Forecast capital expenditure (R'm) 1 600,0 1 400,0 1 200,0 1 000,0 800,0 600,0 400,0 200,0 - A 1HFY25 FC 2HY25 FY25 FC FY26 FC FY27 IT/SAP Replacement Expansion Total INTERIM RESULTS PR
Slide 32: EPS and HEPS
EPS and HEPS Stable HEPS on a comparable basis Total continuing operations - 182 days (cps) 460,0 450,1 451,9 450,0 438,9 HEPS from continuing operations on a comparable 440,0 basis is flat – effects of Irish earnings translated at 430,0 a lower rate and interest costs are higher due to 420,0 the tr
Slide 33: Return metrics
Return metrics SPAR Southern SPAR Group BWG Group Africa ROIC 15.6% 13.1% 19.4% ROCE 20.4% 22.6% 18.4% WACC 11.1% 12.1% 8.8% ROIC and ROCE have been calculated on a pre-IFRS 16 basis. INTERIM RESULTS PRESENTATION 2025 33
Slide 34: Strategic review
Strategic review Angelo Swartz, Group CEO
Slide 35: Final two strategic priorities in focus
Final two strategic priorities in focus Timing – CY 26 Timing – H2 26 Sep 2025 Sept 2026 SAP system South African roll out next profitability DC 3% EBIT margin Sep 2024 Dec 2024 Jun 2025 SPAR Poland Debt Europe strategic Net debt / EBITDA x Exit restructuring decisions 1.5X • Strong recovery in KZN
Slide 36: SAP implementation update
SAP implementation update 2 In FY26, two distribution Enhanced centres are set to launch procurement capabilities and Build it imports warehouse automated in H1 2026 followed by two forecasting are Bulk of capex anticipated to other in H2 2026 spent optimise inventory levels Followed by three in FY2
Slide 37: Southern Africa margin
Southern Africa margin Road to 3% goal KZN DC SA (excluding KZN) Corporate stores • Warehouse • Cost control • Disposal of loss- optimisation • Product mix making stores • Enhanced • Private label • Improved procurement penetration performance • Top-line growth through loyalty improvement & accelera
Slide 38: Looking forward
Looking forward Angelo Swartz, Group CEO
Slide 39: Legal & Regulatory Update
Legal & Regulatory Update No material impact on continuing operations Swiss sanction • Hearing took place 15 May 2025 • Outcome of the hearing expected to be announced by end-September 2025 • Should the decision be unfavourable, SPAR can appeal (on both merits and quantum of the fine) Giannacopulos
Slide 40: Post Period-End Trade
Post Period-End Trade Encouraging sales momentum Continued momentum in operating profit due to cost saving initiatives INTERIM RESULTS PRESENTATION 2025 40
Slide 41: Well-positioned to deliver on growth ambitions
Well-positioned to deliver on growth ambitions Southern Africa International Sri Lanka Grocery and Liquor Building/ DIY Pharmacy Ireland JV SPAR SPAR SPAR Pharmacy at SPAR SaveMor Kwik SPAR EUROSPAR Build it Consumer Health SPAR Xpress Super SPAR MACE Brands Build it Plus Non-SPAR Medical Pharmacy a
Slide 42: Executing on growth
Executing on growth Growing revenue and managing costs responsibly • Enhanced offering Organic • On-demand • Strategic retail partnerships • New formats New • New sites Sales • Adjacencies • Enhanced procurement Loyalty • Right stock, right time, right price • Overrider and rebate schemes Value Corp
Slide 43: Unwavering focus on Retailers
Unwavering focus on Retailers Key Focus on Profitability & Success of our retailers Independent SPAR retailers crucial for long-term growth Our Ambition: Management Collaboration with retailers Unleash the Power of Ensuring a competitive business model Independent Retail Efficiency and Sustainabilit
Slide 44: Detailed results available on Group website
Detailed results available on Group website https://thespargroup.com/investors/ My SPAR, Our Tomorrow
Slide 45: Appendix: Indicative inflation
Appendix: Indicative inflation 2025 2024 • CPI +2.7% +3.8% Food and non-alcoholic beverages +3.1% +4.7% Alcohol and tobacco +4.2% +4.7% Southern Africa 2025 2024 Southern Africa • CPI +2.0% +0.7% Internally measured wholesale Food and non-alcoholic beverages +3.3% +1.9% price inflation Alcohol and t