Cashbuild Limited · JSE:CSB
Cashbuild — FY2018 Earnings Presentation
42 slides from Cashbuild's earnings presentation, June 2018
Slide 1: Audited Results and Dividend Declaration June 2018
AUDITED RESULTS AND DIVIDEND DECLARATION JUNE 2018
Slide 2: Contents
CONTENTS FINANCIAL REVIEW 5 PRODUCT CATEGORIES 27 STORE DEVELOPMENT AND MARKET SUMMARY 38 FINANCIAL RESULTS 48 CASHBUILD AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018
Slide 3: Disclaimer
AUDITED FINAL RESULTS AND DIVIDEND DECLARATION June 2018 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 financial information pertain
Slide 4: Nature of Business and Financial Highlights
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 • Largest retail chain of building materials in southern Africa • 318 outlets and expanding (251 Cashbui
Slide 5: Financial Review
FINANCIAL REVIEW CASHBUILD AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018 5
Slide 6: Income Statement
INCOME STATEMENT STATUTORY YEAR-ON-YEAR Audited Audited Jun 2018 Jun 2017 R’000 (52 Weeks) (52 Weeks) % change Revenue 10 207 603 9 729 640 5 Gross profit 2 568 584 2 480 929 4 Gross profit % 25.2 25.5 Operating expenses 2 025 258 1 860 932 9 Operating expenses % 19.8 19.1 Operating profit 543 326 6
Slide 7: Revenue Breakdown and Sales
REVENUE BREAKDOWN % change Cashbuild stores P&L Hardware stores R’000 FY 2018 FY 2017 Total Total New Existing* Total New Existing* Quarter 1 2 575 455 2 447 381 5 5 4 1 10 9 1 Quarter 2 2 829 529 2 723 526 4 2 3 (1) 22 16 6 1st Half 5 404 984 5 170 907 5 3 3 - 16 12 4 Quarter 3 2 386 761 2 230 311
Slide 8: Customer Transactions and Average Basket Size
CUSTOMER TRANSACTIONS All stores Growth: Q1: 2% Q2: 1% Q3: 1% Q4: 1% 2018 2017 2016 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Existing stores Growth: Q1: (2%) Q2: (3%) Q3: (4%) Q4: (4%) 2018 2017 2016 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun * 2016 has been smoothed for comparative 5 we
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% 26.3% 6.0% 25.7% 6% 25.9% 5.3% 25% 25.3% 25.4% 5.3% 25.4% 25.2% 25.1% 24.5% 5% 24% 23% 4% 22% 3% 21% 2% 20% 1% 19% 18% 0% FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 1HY 2HY FY EBIT margin * Excludes BEE transaction 12 NOTES SEGMENTAL DISC
Slide 10: Sales by Province; Existing Business Results
% of Total sales SALES BY PROVINCE 2.8% 2.7% 4.5% 20.2% 5.5% 8.1% 5.9% 2.4% 10.1% 19.8% 6.5% 11.6% 14.7% 9.5% 4.6% 0.4% 1.6% 1.1% 2.2% 33.4% 66 64 60 51 42 41 38 29 33 30 25 26 14 15 15 15 8 8 10 9 Limpopo Gauteng Mpumalanga Eastern Cape Countries KwaZulu-Natal North West Free State Northern Cape We
Slide 11: Operating Expenses and People Cost
OPERATING EXPENSES R’000 FY 2018 FY 2017 % change Existing business (235 Cashbuild and 41 P&L stores) 1 848 826 1 799 013 3 - 1st Half 955 699 928 400 3 - 2nd Half 893 127 870 613 3 New business (23 Cashbuild and 19 P&L stores) 169 266 61 919 - 1st Half 78 635 20 790 - 2nd Half 97 797 41 129 Total 2
Slide 12: Operating Expenses – Delivery and Marketing
OPERATING EXPENSES – DELIVERY EXPENSES R’million FY 2018 FY 2017 % change Existing business (235 Cashbuild and 41 P&L stores) 107.5 111.5 (4) - 1st Half 54.8 55.1 (1) - 2nd Half 52.7 56.4 (7) New business (23 Cashbuild and 19 P&L stores) 8.2 3.1 - 1st Half 4.0 1.0 - 2nd Half 4.2 2.1 Total 115.7 114.
Slide 13: Operating Expenses – Property; Operating Profit
OPERATING EXPENSES – PROPERTY R’million FY 2018 FY 2017 % change Existing business (235 Cashbuild and 41 P&L stores) 394.7 366.4 8 - 1st Half 195.5 183.4 7 - 2nd Half 199.2 183.0 9 New business (23 Cashbuild and 19 P&L stores) 44.3 12.1 - 1st Half 18.3 3.7 - 2nd Half 26.0 8.4 Total 439.0 378.5 16 -
Slide 14: Earnings per Share and Dividend per Share
EARNINGS PER SHARE (EPS) STATUTORY YEAR-ON-YEAR 5 Year CAGR = 12% 2400 2 048 1 920 (10%) 1 852 2000 1 557 1600 859 760 1 148 1076 Cents 1200 733 547 800 1189 1092 400 824 844 601 0 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total 1st Half 2nd Half EPS 22 NOTES DIVIDEND PER SHARE (DPS) 1200 1 001 930 10
Slide 15: Statement of Financial Position and Inventory Analysis
STATUTORY STATEMENT OF FINANCIAL POSITION Audited Audited R’000 Jun 2018 Jun 2017 % change Assets Property, plant and equipment 1 100 132 978 615 12 Intangible assets 433 467 397 015 9 Assets held for sale 4 510 4 345 4 Inventories 1 512 823 1 289 491 17 Trade and other receivables 118 489 122 462 (
Slide 16: Statutory Cash Flow
STATUTORY CASH FLOW R’MILLION 1800 W/Cap inflow: R72m >100% 51 302 1600 38% 710 (223) (14%) (19%) 1400 (202) (7) (14%) 1200 (170) 100% (7%) 33% 5 953 1000 (241) 801 (73) 800 600 19% 400 200 0 Opening Opening Operating Operating Inventory Inventory Debtors Debtors Creditors Creditors Interest Interes
Slide 17: Product Categories
PRODUCT CATEGORIES CASHBUILD AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018 27
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 2017 2018 2019 28 NOTES CEMENT UNIT SALES PER SUPPLIER Jun 2018 Jun 2017 5% 4% 4% 7% 15% 19% 27% 23% 32% 24% 18% 22% AFRISAM PPC NPC SEPHAKU MAMBA OTHER 29 NOTES CASHBUILD AUDITED RESULTS FOR THE YE
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 2017 2018 2019 30 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 2017 2018 2019 31 NOTES CASHBUILD AUDITED RESULTS FOR THE
Slide 20: 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 2017 2018 2019 32 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 2017 2018 2019 33 NOTES CASHBUILD AUDITED RESULT
Slide 21: 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 2017 2018 2019 34 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 2017 2018 2019 35 NOTES CASHBUILD AUDITED RESULTS FO
Slide 22: 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 2017 2018 2019 36 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 2017 2018 2019 37 NOTES CASHBUILD AUDITED RESULTS
Slide 23: Store Development and Market Summary
STORE DEVELOPMENT AND MARKET SUMMARY CASHBUILD AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018 38
Slide 24: Cashbuild and P&L Hardware Store Development
CASHBUILD STORE DEVELOPMENT Total stores 242 251 251 232 11 10 222 9 11 9 233 240 241 213 221 June 2015 June 2016 June 2017 June 2018 Dec 2017 Existing Cashbuild stores New Cashbuild stores Refits and relocations 33 30 24 14 14 19 16 16 10 14 8 4 June 2015 June 2016 June 2017 June 2018 1st Half 2nd
Slide 25: New Stores FY2018 and Stores by Location
NEW STORES FY2018 Cashbuild P&L Hardware Gauteng Western Cape Alexandra Delft Diepsloot Lesotho Dobsonville Butha Buthe Kwa Thema Mpumalanga Roodekop Casteel Limpopo Zambia Mutale Kabwe Ndola Gauteng Eastern Cape Alexandra Butterworth* Braamfisherville Hunters Retreat* LESOTHO Senaoane Peddie* Meado
Slide 26: Competitor Landscape – Corporate and Independents
COMPETITOR LANDSCAPE – CORPORATE 47 (PY 44) 11 (PY 11) • Approximately 379 stores (PY 350) 94 (PY 95) 42 (PY 41) • Most direct competitor in terms of offering and location • Approximately 136 stores (PY 136) 14 (PY 15) 38 (PY 38) • Approximately 110 stores (PY 108) • Approximately 75 stores (PY 64)
Slide 27: Independent Cement Blenders and Summary
INDEPENDENT CEMENT BLENDERS 45 NOTES SUMMARY • Continued consumer pressure - low growth environment • Political changes - no significant impact • Competitive market • Civil unrest - 121 lost store trading days • Current trading environment - not expected to change until 2019 National Elections • Cem
Slide 28: Thank you for your attendance and participation
Thank you for your attendance and participation www.cashbuild.co.za Switchboard: +27 11 248 1500 Werner de Jager Etienne Prowse Shane Thoresson Chief Executive Finance Director Operations Director For any further Investor Relations questions please contact: Keyter Rech Investor Solutions mkeyter@kri
Slide 29: Financial Results
FINANCIAL RESULTS CASHBUILD AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2018 48
Slide 30: Financial Highlights
FINANCIAL HIGHLIGHTS revenue REVENUE OPERATING PROFIT 12% (Rm) 5% (Rm) 650 10000 9000 550 8000 450 7000 350 10 208 6000 6 781 7 693 8 669 9 730 543 358 461 612 620 5000 250 2014 2015 2016 2017 2018 2014 2015 2016* 2017 2018 *2016 Excluding BEE HEADLINE EARNINGS 9% NET ASSET VALUE 14% (Rm) PER SHARE
Slide 31: Summary Consolidated Income Statement – Audited
SUMMARY CONSOLIDATED INCOME STATEMENT – AUDITED Year ended Year ended 30 June 2018 30 June 2017 % R’000 (52 weeks) (52 weeks) change Revenue 10 207 603 9 729 640 5 Cost of sales (7 639 019) (7 248 711) 5 Gross profit 2 568 584 2 480 929 4 Selling and marketing expenses (1 778 355) (1 595 510) 11 Adm
Slide 32: Summary Consolidated Statement of Comprehensive Income
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME – AUDITED Year ended Year ended 30 June 2018 30 June 2017 R’000 (52 weeks) (52 weeks) Profit for the year 425 248 469 486 Other comprehensive income reclassifiable to profit or loss: Total movement in foreign currency translation reserve (FCTR)
Slide 33: Additional Information – Audited
ADDITIONAL INFORMATION – AUDITED Year ended Year ended R’000 30 June 2018 30 June 2017 Net asset value per share (cents) 7 578 6 642 Net asset value per share (excluding treasury shares) 8 338 7 309 Ordinary shares ('000s): – In issue 24 990 24 990 – Weighted-average 22 711 22 708 – Diluted weighted
Slide 34: Summary Consolidated Statement of Financial Position
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION – AUDITED R’000 30 June 2018 30 June 2017 ASSETS Non-current assets 1 663 396 1 481 122 Property, plant and equipment 1 100 132 978 615 Intangible assets 433 467 397 015 Rent prepayments 85 707 80 328 Deferred income tax assets 44 090 25 164 Curre
Slide 35: Summary Consolidated Statement of Cash Flows
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS – AUDITED Year ended Year ended 30 June 2018 30 June 2017 Cash flows from operating activities Cash generated from operations 781 720 651 625 Interest paid (3 143) (3 785) Taxation paid (169 775) (197 336) Net cash generated from operating activities 608
Slide 36: Summary Consolidated Statement of Changes in Equity
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – AUDITED R’000 Balance at 1 July 2015 Total comprehensive income for the year Buy-back of shares for empowerment transaction Shares purchased by The Cashbuild Share Incentive Trust and Cashbuild (South Africa) Proprietary Limited Shares sold by Th
Slide 37: Attributable to owners of the company
Attributable to owners of the company Share- Treasury Treasury based Non- Share share Share share payments Retained controlling Total capital capital premium premium reserve FCTR earnings interests equity 252 (25) 65 823 (192 382) 45 091 (4 289) 1 410 081 20 483 1 345 034 – – – – – 14 934 437 442 2
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: Acquisition of Business
7. Acquisition of business. In August 2017 the Group acquired the business of Build it Hunters Retreat and in September 2017 acquired Buffalo Building Supplies for a combined consideration of R72.6 million with the intention that the businesses trade as P&L Hardware stores. These acquisitions are in
Slide 40: 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 constantly expanding chain of stores (318 at the end of this financial year which includes the seven DIY stor
Slide 41: Corporate Information
CORPORATE INFORMATION Directors: IS Fourie* (Chairman), WF de Jager (Chief Executive), A Hattingh, HH Hickey*, AGW Knock (British)*, Dr DSS Lushaba*, GM Tapon Njamo*, AE Prowse, NV Simamane*, SA Thoresson, WP van Aswegen (*Non-Executive) Company Secretary: Corporate Governance Leaders CC Registered
Slide 42: www.cashbuild.co.za
www.cashbuild.co.za