Shoprite Holdings Limited · JSE:SHP

Shoprite — H1 2012 Earnings Presentation

20 slides from Shoprite's earnings presentation, 2012

1. Slide 1: For the six months ending December 2011

   For the six months ending December 2011 1

2. Slide 2: Carel Goosen, Deputy Managing Director

   Carel Goosen Deputy Managing Director 2

3. Slide 3: Size of Operation

   Size of OperaGon Dec 2011 Turnover R41bn Owned Outlets 1,303 Franchise Outlets 427 Countries 16 Employees >99,000 Market Capitalisa=on* >R65bn *During January 2012 3

4. Slide 4: Financial Highlights

   Financial Highlights Turnover +13.2% R 41,0bn Trading Profit +16.7% R2,2bn Trading Margin From 5.11% to 5.27% Headline EPS +18.6% 280,8c NAV per share +29.4% 1,574c 4

5. Slide 5: Key Information per Segment

   Key InformaGon per Segment • Turnover – Total + 13.2% – Supermarkets RSA + 12.3% – Supermarkets Non-­‐RSA + 21.2% – Furniture + 13.6% – Other Opera=ng Segments + 11.2% • Trading Profit – Total + 16.7% – Supermarkets RSA + 16.8% – Supermarkets Non-­‐RSA + 22.5% – Furniture + 19.9% – Other Opera=ng Seg

6. Slide 6: Value Added Statement

   Value Added Statement Employees R3,464m Providers 55% 15% of Capital R907m 12% 18% Tax R729m Re-­‐invested R1,140m 6

7. Slide 7: Sales Growth Analysis

   Sales Growth Analysis ExisGng Net New Total Customers Basket Stores Stores Supermarkets RSA 6.8% 5.5% 12.3% 3.6% 7.6% Supermarkets Non-­‐RSA 13.9% 7.3% 21.2% 8.4% 12.4% Furniture 10.8% 2.8% 13.6% Other Divisions 8.0% 3.2% 11.2% Total 8.0% 5.2% 13.2% 7

8. Slide 8: Store Portfolios

   Store Por_olios Dec 2010 Opened Closed Dec 2011 Supermarkets RSA 683 51 (5) 729 Supermarkets Non-­‐RSA 112 12 (1) 123 Hungry Lion 132 15 (4) 143 Furniture 298 16 (6) 308 Owned stores 1,225 94 (16) 1,303 Franchise 280 170 (23) 427 Total Stores 1,505 264 (39) 1,730 Pharmacies 113 17 -­‐ 130 Liquor Sto

9. Slide 9: Highlights of Results: Gross profit margin

   Highlights of Results Dec 2010 Dec 2011 Gross profit margin 19.8% 19.96% • Remain price compe==ve • Higher non-­‐food contribu=on • Investment in systems and logis=cs 9

10. Slide 10: Highlights of Results: Other operating income

    Highlights of Results Other operaGng income Dec 2010 Dec 2011 Growth increased by 25.5% R’m R’m % Finance income earned 97 102 4.6 Net premiums earned 125 143 14.0 Opera=ng lease income 112 125 12.0 Commissions received 209 234 12.1 Franchise fees received 19 22 13.4 Investment income 9 38 >100 Sund

11. Slide 11: Highlights of Results: Operating expenses

    Highlights of Results DepreciaGon and amorGsaGon increased 8.24% • Increased spend on revamps and new branches OperaGng leases increased 14.15% • Due to new stores opened in the past 12 months • Turnover rentals on sales growth Employee benefits increased 12.93% • Resul=ng staff requirements due to in

12. Slide 12: Highlights of Results: Trading profit

    Highlights of Results Trading profit increased 16.7% with turnover increasing by 13.2% • Op=mising of margins • Contained overhead costs • Growth of in-­‐store services • Effec=ve systems and logis=cal infrastructure 12

13. Slide 13: Highlights of Results: Exchange rate differences

    Highlights of Results Exchange rate differences | a Dec 2010: R13 million loss @ ~— Dec 2011: R28 million gain Rand to US Dollar exchange rates (R:S) Dec 2009: R7.60 Dec 2010: R6.63 Dec 2011: R8.23

14. Slide 14: Highlights of Results: Interest and income tax

    Highlights of Results Dec 2010 Dec 2011 R’m R’m Net Interest Expense 18 27 -­‐ Increased average overdrab balance -­‐ High capital expenditure Income Tax Expense -­‐ Normal 517 621 -­‐ STC 85 92 -­‐ Deferred 10 16 Total 612 729 EffecGve tax rate (excl. STC) 29.1% 29.5% 14

15. Slide 15: Highlights of Results: Capital Expenditure

    Highlights of Results Capital Expenditure Dec 2010 Dec 2011 R’m R’m Land and Buildings 507 338 Distribu=on Centres 266 117 Store Refurbishment 270 219 New Stores ] 298 433 Informa=on Technology 182 193 Other Replacements* 275 392 Total 1,798 1,692 *Motor vehicles, generators and office furniture 15

16. Slide 16: Contracted Capital Commitments

    Highlights of Results Contracted Capital Commitments Dec 2010 Dec 2011 R’m R’m Stores: 1,308 336 -­‐ RSA 572 214 -­‐ Non-­‐RSA 736 122 Distribu=on Centres 1,018 548 IT Systems 160 188 Total 2,486 1,072 16

17. Slide 17: Highlights of Results: Net Overdraft Balances

    Highlights of Results Dec 2010 Dec 2011 Growth R’m R’m % Net Overdrab Balances 1,003 396 (60.5) • Favourable cut-­‐off • High capital expenditure on fixed assets • Increased stockholding 17

18. Slide 18: Stockholding

    Stockholding Dec 2010 Dec 2011 Growth R’m R’m % Inventory 7,628 9,353 22.6 • Provision for a net 78 new corporate stores • Increase in internal food infla=on 4% 1% • Taking on new distribu=on capacity 7% 7% Opening Stock 81% Net New Stores Real GEB Growth InflaGon Weakening Rand 18

19. Slide 19: Debtors and other receivables

    Highlights of Results Debtors and other receivables Dec 2011 Growth R’m % Furniture instalment sales 836 980 17.2 Franchise 493 581 17.8 Buy-­‐aid organisa=ons 181 185 2.2 Rental and property debtors 257 212 (17.5) MediRite and Transpharm 238 212 (11.1) Money Market and Compu=cket 227 55 (75.9) Othe

20. Slide 20: HEPS vs Cash EPS vs EBITDA per share

    Highlights of Results HEPS vs Cash EPS* vs. EBITDA per share (cents) 542 Dec 2008 Dec 2009 459 Dec 2010 404 Dec 2011 354 358 281 292 302 290 237 212 190 HEPS Cash EPS* EBITDA per share *Cash flow from opera=ng ac=vi=es excluding dividends paid and changes in working capital 20

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