Shoprite Holdings Limited · JSE:SHP

Shoprite — H1 2014 Earnings Presentation

13 slides from Shoprite's earnings presentation, February 2014

  1. Slide 1: 30

    30

  2. Slide 2: Trading Environment

    TradingEnvironment • Salesgrowthbeatofficialfoodinflationof5.2%fortheperiod • SAeconomyfallingbehindotherAfricancountrieswherewetrade Continuedunrestinminingindustry(over2millionmandayslostuptoSept2013) LowGDPgrowthandnoimprovementunemploymentat(24%) 5% Forecast 4.8% 5% GDP%Growth 4% 3.3% 3.4% 4% 3.

  3. Slide 3: Trading Environment: RSA

    TradingEnvironment:RSA • Ourshopperprofilerepresentsthepopulation • TheaverageSAconsumernotingreatshape Lowincomeconsumersspend89%ofnetincometoservicedebt, yetneed70%ofincomejusttocoveressentiallivingexpenses (source:BDLive) Accesstonewcreditalsosloweddown FuelandelectricitycosthikesaloneremovedR9.5

  4. Slide 4: Trading Environment: Non RSA

    TradingEnvironment:NonRSA IncontrasttoSA,mostNonRSAoperationshadgood macroeconomicsupport • Naturalresourcescontinuetodriveeconomicgrowth Attractingmoreforeigninvestment Filteringdowntoconsumers’incomeandspending • Middleclassdevelopmentandmigrationtothelargecities is drivingconsumerspend • Angola,Z

  5. Slide 5: Group Overview

    GroupOverview • NonRSAoperationscontinuetoperformexceptionallydespite paceofpropertydevelopment • RSAsalesimpactedby: Storeclosureson15th December– saleslossofR260m,3%effectonDecembergrowth Storesinminingareacatchmentsunderperformingasaresultofunrest Lackofinfrastructurespendingpost2010 Manynewcompe

  6. Slide 6: Market Share

    MarketShare • Opened634storesinthelast5years • SAMarketsharehasreached34%offormalfoodretail SmallgaininmarketshareannuallytoDecember Marketsharedippedmarginallyforthe6monthperiod ƒ Competitorsremainedopenon15December • Sevenyearsofuninterruptedmarketsharegrowth 35

  7. Slide 7: Profitability

    Profitability • At5.3%ourTradingMarginremainsinternationallycompetitive Top250globalretailersaverage3.1%(source:Deloitte) • Fuelandelectricityratehikesimpactedcostsnegatively • Controllablecostdisciplineswellmaintained • SavedR125minelectricitycostsin5years fromefficiencyinitiatives 36

  8. Slide 8: Invested through the cycle

    Investedthroughthecycle • Maintainedourinvestmentfocusonlongtermgrowth: R1,1bnspentonnewstoresandrevamps Overall5.2%spacegrowthfortheperiod Nowtradingfrom2272outlets • Openedanet98newcorporateoutlets in6months 57supermarketsand41pharmacy,liquor,HungryLionandfurnitureoutlets • TheGroupnowemploysatota

  9. Slide 9: 1000th Corporate Supermarket Opened

    1000th CorporateSupermarketOpened CheckersZevenwacht owndevelopment 38

  10. Slide 10: Supermarkets

    Supermarkets • Shoprite’sLSM47consumeristhehardesthit bycostoflivingincreases SubsidisedthepriceofbasicfoodstuffsbyR20mtohelpconsumer Priceleadershipmaintained,confirmedbyweeklyindependentpricesurveys • Usave continuestogainmarketshare– morethandoubledin5years Acceleratedstoreopeningsconfirmed(31)fo

  11. Slide 11: Supermarkets continued

    Supermarketscontinued • Checkers salesgrowthslowedonbackofclosureof15th December Bettercomparable(GEB)storesalesgrowththanShoprite Profitabilitygrowthexceededturnovergrowth • NonRSA salesgrowthof28.1%(14.9%constantcurrencies) Contributes16.1%totheGroup’ssupermarketturnover 26.5%tradingprofitgrowthde

  12. Slide 12: Other Operating Segments

    OtherOperatingSegments Turnoverrelativelyflatat0.4%growth • Computicket salesup3.3% Fewerhighprofileliveevents SellR500minflightticketsayear • Pharmacydivisionsalesdown9.4% MediRitesalesup19.8%with2.4mprescriptionsdispensed Transpharm wholesaledeclined10% • CheckersFoodServicessalesgrowth>100% • Liq

  13. Slide 13: Hungry Lion

    HungryLion • Rolloutofrefreshedbrandingandstoredesign • NonRSAbusinessshowingstronggrowthat34% 42

Shoprite Holdings — H1 2014 Earnings Presentation on 6ix