Cashbuild Limited · JSE:CSB
Cashbuild — H1 2019 Earnings Presentation
42 slides from Cashbuild's earnings presentation, 2019
Slide 1: Audited Interim Results and Dividend Declaration
AUDITED INTERIM RESULTS AND DIVIDEND DECLARATION for the six months ended 31 December 2018
Slide 2: Contents
CONTENTS FINANCIAL REVIEW5 5 PRODUCT CATEGORIES25 27 STORE DEVELOPMENT AND MARKET SUMMARY36 38 FINANCIAL RESULTS46 48 2 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018
Slide 3: Disclaimer
AUDITED INTERIM RESULTS AND DIVIDEND DECLARATION for the six months ended 31 December 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.
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 • 320 outlets and expanding (254 Cashbui
Slide 5: Financial Review
FINANCIAL REVIEW CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 5
Slide 6: Income Statement and IFRS 15 Adjustments
INCOME STATEMENT STATUTORY PERIOD-ON-PERIOD Audited Audited Audited Dec 2018 Dec 2017* % Jun 2018* R’000 (26 Weeks) (26 Weeks) change (52 Weeks) Revenue 5 563 231 5 392 841 3 10 206 730 Gross profit 1 394 256 1 356 375 3 2 568 453 Gross profit % 25.1 25.2 25.2 Operating expenses 1 109 387 1 034 334
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 6 13 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 6 9 Quarter 3 2 398 519 Quarter
Slide 8: Customer Transactions and Average Basket Size
CUSTOMER TRANSACTIONS All stores Growth: Q1: (1%) Q2: (1%) 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Existing stores Growth: Q1: (6%) Q2: (5%) 2019 2018 2017 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 10 NOTES AVERAGE BASKET SIZE All stores Growth Q1: 4% Q2: 5% 2019 2018 20
Slide 9: Gross Profit and EBIT Margin; Segmental Disclosure
GROSS PROFIT AND EBIT MARGIN 28% 8% 7.3% * 27% 7.0% 7% 27.0% 26% 6.3% 6.0% 25.9% 6% 25.4% 25.4% 25.7% 25% 25.2% 25.2% 5.1% 25.3% 25.1% 5% 24% 23% 4% 22% 3% 21% 2% 20% 1% 19% 18% 0% FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 1HY 2HY HY EBIT margin * Excludes BEE transaction 12 NOTES SEGMENTAL DISCLOSURE
Slide 10: Sales by Province and Existing Business Results
% of Total sales SALES BY PROVINCE 2.8% 2.7% 4.4% 20.3% 5.2% 3.8% 8.0% 2.0% 10.0% 19.7% 4.0% 11.0% 12.2% 14.7% 1.3% (0.4%) (3.9%) 0.1% (2.2%) 17.3% 68 65 62 58 42 42 38 38 33 33 26 25 14 15 15 15 8 9 10 9 Limpopo Gauteng Mpumalanga Eastern Cape Countries KwaZulu-Natal North West Free State Northern
Slide 11: Operating Expenses and People Cost
OPERATING EXPENSES R’000 FY 2019 FY 2018 % change Existing business (241 Cashbuild and 46 P&L stores) 1 937 604 - 1st Half 1 036 051 1 004 247 3 - 2nd Half 933 357 New business (17 Cashbuild and 16 P&L stores) 87 654 - 1st Half 73 336 30 087 - 2nd Half 57 567 Total 2 025 258 - 1st Half 1 109 387 1 0
Slide 12: Operating Expenses – Delivery and Marketing
OPERATING EXPENSES – DELIVERY EXPENSES R’million FY 2019 FY 2018 % change Existing business (241 Cashbuild and 46 P&L stores) 112.6 - 1st Half 58.1 58.0 - - 2nd Half 54.6 New business (17 Cashbuild and 16 P&L stores) 3.1 - 1st Half 2.9 0.8 - 2nd Half 2.3 Total 115.7 - 1st Half 61.0 58.8 4 - 2nd Half
Slide 13: Operating Expenses – Property; EPS and DPS
OPERATING EXPENSES – PROPERTY R’million FY 2019 FY 2018 % change Existing business (241 Cashbuild and 46 P&L stores) 417.8 - 1st Half 210.1 206.2 2 - 2nd Half 211.6 New business (17 Cashbuild and 16 P&L stores) 21.2 - 1st Half 18.7 7.6 - 2nd Half 13.6 Total 439.0 - 1st Half 228.8 213.8 7 - 2nd Half
Slide 14: Statutory Statement of Financial Position
STATUTORY STATEMENT OF FINANCIAL POSITION Audited * Audited % * Audited R’000 Dec 2018 Dec 2017 change Jun 2018 Assets Property, plant and equipment 1 128 254 1 052 109 7 1 100 132 Intangible assets 428 842 433 017 (1) 433 467 Assets held for sale 25 206 4 477 4 510 Inventories 1 841 293 1 653 099 1
Slide 15: Statutory Cash Flow
STATUTORY CASH FLOW R’MILLION 1600 W/Cap flow: 99% 385 29 81 1400 303 343 (11%) 102 24% 120 1200 (4%) 2% 3 1,067 40 1000 953 800 600 3% 400 200 0 Opening Operating profit Inventory Debtors Creditors Interest Dividends Taxation Opening balance Jul'18 Operating (cash) Inventory Debtors Creditors Inter
Slide 16: Notes
NOTES 16 CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018
Slide 17: Product Categories
PRODUCT CATEGORIES CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 25
Slide 18: Cement Sales and Unit Sales
CEMENT SALES POCKETS Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 26 NOTES CEMENT UNIT SALES PER SUPPLIER Dec 2018 Dec 2017 7% 10% 5% 7% 16% 9% 23% 22% 32% 28% 23% 18% AFRISAM PPC NPC SEPHAKU MAMBA OTHER 27 NOTES 18 CASHBUILD AUDITED INTERIM RESULTS FO
Slide 19: Total Timber and Brick Sales
TOTAL TIMBER SALES R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 28 NOTES TOTAL BRICK SALES R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 29 NOTES CASHBUILD AUDITED INTERIM RESULTS FOR T
Slide 20: Total Roof Covering and Opening Sales
TOTAL ROOF COVERING SALES R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 30 NOTES TOTAL OPENING SALES R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 31 NOTES 20 CASHBUILD AUDITED INTERIM R
Slide 21: Total Plumbing and Hardware Sales
TOTAL PLUMBING SALES R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 32 NOTES TOTAL HARDWARE SALES R’MILLION Q1 Q2 Q3 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 INTERIM RESULTS
Slide 22: Total Decorative Sales and Group Sales per Week
TOTAL DECORATIVE SALES R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 34 NOTES GROUP SALES PER WEEK R’MILLION Q1 Q2 Q3 W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 2017 2018 2019 35 NOTES 22 CASHBUILD AUDITED INTERIM RES
Slide 23: Store Development and Market Summary
STORE DEVELOPMENT AND MARKET SUMMARY CASHBUILD AUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 36
Slide 24: Store Development and Half Year Group Summary
STORE DEVELOPMENT Total Cashbuild Stores (excl DIY) 251 254 242 232 6 11 222 12 11 9 240 248 230 213 221 June 2015 June 2016 June 2017 June 2018 Dec 2018 Existing Cashbuild stores New Cashbuild stores Total P&L Hardware Stores 60 62 46 2 42 14 4 248 42 42 46 June 2015 June 2016 June 2017 June 2018 D
Slide 25: New Stores HY2019 and Stores by Location
NEW STORES HY2019 Cashbuild P&L Hardware Gauteng Kwa-Zulu Natal Soshanguve Shallcross Mamelodi Western Cape Limpopo Lansdowne Tibanifontien Metz Gauteng Admin Triangle Tembisa 39 NOTES STORES BY LOCATION Number of stores Dec 2018 (Dec 2017) Excluding DIY stores Location Town- Town Rural Metro (% of
Slide 26: Competitor Landscape – Corporate and Leroy Merlin
COMPETITOR LANDSCAPE – CORPORATE 47 (PY 44) 11 (PY 11) • Approximately 376 stores (PY 379) 94 (PY 94) 42 (PY 42) • Most direct competitor in terms of offering and location • Approximately 136 stores (PY 136) • Recently rebranded 14 (PY 15) 38 (PY 38) • Approximately 110 stores (PY 108) 1 (PY 0) • Ap
Slide 27: Competitor Landscape – Independents; Market Summary
COMPETITOR LANDSCAPE – INDEPENDENTS 134 (PY 140) 120 (PY 160) • 8 stores – Gauteng only (PY 8) • Approximately 254 stores (PY 300) • Approximately 280 stores (PY 280) • Approximately 56 stores (PY 58) • Approximately 400 members representing 651 stores • Various strong independent stores part of thi
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 INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 46
Slide 30: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (restated) (Rm) OPERATING PROFIT (restated) (Rm) revenue ▲ 3% ▼ 12% 6 000 400 363 5 563 329 5 250 300 5 393 322 5 165 285 251 4 500 200 4 504 3 963 3 750 100 3 000 14 15 16 17 18 0 14 15 16 17 18 NAV PER SHARE (restated) (cents) HEADLINE EARNINGS (restated) (Rm) ▲ 12% ▼
Slide 31: Summary Consolidated Interim Income Statement – Audited
SUMMARY CONSOLIDATED INTERIM INCOME STATEMENT – AUDITED *Restated Six months Six months *Restated ended ended Year ended 31 December 31 December 30 June 2018 2017 % 2018 R’000 (26 weeks) (26 weeks) change (52 weeks) Revenue 5 563 231 5 392 841 3 10 206 730 Cost of sales (4 168 975) (4 036 466) 3 (7
Slide 32: Summary Consolidated Interim Statement of Comprehensive Income
SUMMARY CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME – AUDITED *Restated Six months Six months ended ended *Restated 31 December 31 December Year ended 2018 2017 30 June R’000 (26 weeks) (26 weeks) 2018 Profit for the period 219 752 248 269 425 153 Other comprehensive income: Total movemen
Slide 33: Additional Information – Audited
ADDITIONAL INFORMATION – AUDITED *Restated Six months Six months *Restated ended ended Year ended 31 December 31 December 30 June R’000 2018 2017 2018 Net asset value per share (cents) 8 167 7 278 7 561 Net asset value per share (excluding treasury shares) 8 986 8 009 8 320 Ordinary shares (’000s):
Slide 34: Summary Consolidated Interim Statement of Financial Position
SUMMARY CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION – AUDITED *Restated *Restated 31 December 31 December 30 June R’000 2018 2017 2018 ASSETS Non-current assets 1 684 111 1 614 077 1 665 001 Property, plant and equipment 1 128 254 1 052 109 1 100 132 Intangible assets 428 842 433 017 433 46
Slide 35: Summary Consolidated Interim Statement of Cash Flows
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS – AUDITED *Restated Six months Six months *Restated ended ended Year ended 31 December 31 December 30 June R’000 2018 2017 2018 Cash flows from operating activities Cash generated from operations 384 944 577 478 781 720 Interest paid (2 966) (1 02
Slide 36: Statement of Changes in Equity and Segmental Analysis
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY – AUDITED R’000 Balance at 30 June 2017 Total comprehensive income for the period (*Restated) Dividends paid Recognition of share-based payments Balance at 31 December 2017 Total comprehensive income for the period Shares purchased by The C
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 (275 419) 57 317 (8 329) 1 881 901 23 208 1 678 905 – – – 2 773 245 972 2 346 251 091 – – – – (89 223) (565) (89 788) – – 3 556 – – – 3 55
Slide 38: Notes to the Summary Consolidated Interim Financial Information
NOTES TO THE SUMMARY CONSOLIDATED INTERIM FINANCIAL INFORMATION 1. Basis of preparation. The summary consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), the presentation and disclosure requirements of IAS 34 – Interim Financ
Slide 39: Reporting Period and Declaration of Dividend
3. Reporting period. The Group adopts the retail accounting calendar, which comprises the reporting period ending on the last Sunday of the month (2018: 23 December (26 weeks); 2017: 24 December (26 weeks); June 2018: 25 June (52 weeks)). The Group closed on the second last Sunday for the period end
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 (320 at the end of this financial period which includes the four DIY sto
Slide 41: Corporate Information
CORPORATE INFORMATION Directors: IS Fourie* (Chairman), AGW Knock (British)*, Dr DSS Lushaba*, NV Simamane*, HH Hickey*, GM Tapon Njamo*, WF de Jager (Chief Executive), AE Prowse, SA Thoresson, A Hattingh, WP van Aswegen (*Non-executive) Company Secretary: T Nengovhela Registered Office: 101 Norther
Slide 42: www.cashbuild.co.za
www.cashbuild.co.za