Lewis Group Limited · JSE:LEW

Lewis — H1 2021 Earnings Presentation

20 slides from Lewis's earnings presentation, November 2020

  1. Slide 1: Unaudited Interim Results for the Six Months Ended 30 September 2020

    UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020 H1 2021

  2. Slide 2: Agenda

    Agenda 01 02 Debtor analysis Highlights  Debtor performance  Review of H1 2021  Gross debtor analysis  Impact of Covid-19  Operational review 2 03 04 Targets and Outlook Financial results • Financial and  Income statement operating targets  Segmental analysis • Outlook  Analysis of costs  B

  3. Slide 3: Highlights

    01  Review of H1 2021 04 Highlights  Impact of Covid-19 05  Operational review 06 3 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 3

  4. Slide 4: Review of H1 2021

    Review of H1 2021 Revenue -1.6% Merchandise sales -4.9% Gross profit margin at 40.5% 4 Operating profit +13.6% Cash generated from operations +81.0% at R611.2m HEPS +9.9% to 236 cents per share Interim dividend + 10.8% to 133 cents per share LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 4

  5. Slide 5: Impact of Covid-19

    Impact of Covid-19  Severe trading restrictions in the first 2 months imposed by the lockdown  Lost sales approximate R360 million  Lost collections approximate R250 million 5  Focus on cash preservation and cost control  Safety and well being of customers and employees prioritised  Spend on P

  6. Slide 6: Operational review

    Operational review Strong customer demand following reopening of stores Merchandise sales down 4.9%  April and May down 59.6%  June to September up 20.1% Trading out of 805 store outlets (LY: 787 stores) 6  12 stores opened, 1 closed  125 stores outside SA (LY:121 stores)  227 small format Lewi

  7. Slide 7: Operational review

    Operational review Credit application decline rate: 41.1% (LY: 37.9%) Credit sales mix: 49.1% (LY: 58.1%)  Cash sales for June to September 2020 increased by 46% Other revenue: up by 2.7% 7 Expense control  Tightly managed  Reduced by 9.1% (excl. debtor costs) in a Covid-19 operating environment

  8. Slide 8: Debtor analysis

    02 Debtor analysis  Debtor performance  Gross debtor analysis 09 10 8 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 8

  9. Slide 9: Debtor performance

    Debtor performance H1/2021 H1/2020 Collections (Rm) Collections from instalment sales 1 866 2 078 Actual collections achieved As a % of one contract instalment per customer per month – 6 months 66.5% 79.6% As a % of one contract instalment per customer per month – 4 months 71.5% 80.1% 9 Contractual

  10. Slide 10: Gross debtor analysis

    Gross debtor analysis Instalments in arrears Number of Gross Impairment Impairment Total customers carrying value provision provision arrears 1 2 3 >3 Customer grouping Total R’000 R’000 % R’000 R’000 R’000 R’000 R’000 Satisfactory paid 2021 408 556 3 237 843 595 765 18.4 603 584 170 710 126 531 93

  11. Slide 11: Financial results

     Income statement 12 03  Segmental analysis 13 Financial results  Analysis of costs 14  Balance sheet overview 15  Key ratios 16 11 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 11

  12. Slide 12: Income statement

    Income statement H1 2021 H1 2020 % Revenue (Rm) 3 034 3 083 (1.6) Merchandise sales (Rm) 1 650 1 735 (4.9) 40.5 40.3 12 Gross profit margin (%) Operating profit (Rm) 277 244 13.6 Operating profit margin(%) 16.8 14.0 Attributable earnings (Rm) 183 171 7.0 EPS (cents) 237 215 10.6 LEWIS GROUP LIMITED

  13. Slide 13: Segmental analysis

    Segmental analysis Group Traditional Cash Revenue (Rm) 3 034 2 798 236 Merchandise sales (Rm) 1 650 1 418 232 Operating profit (Rm) 277 258 19 13 Operating margin: H1 2021 (%) 16.8 18.2 8.3 H1 2020 (%) 14.0 14.6 11.0 Number of stores: H1 2021 805 764 41 H1 2020 787 748 39 LEWIS GROUP LIMITED UNAUDIT

  14. Slide 14: Analysis of costs (excluding debtor costs)

    Analysis of costs (excluding debtor costs) H1 2021 H1 2020 Rm Rm % Employment costs 622 599 3.7 Admin and IT 157 189 (16.7) Marketing 90 183 (50.8) 14 Occupancy costs 62 73 (16.2) Transport and travel 93 127 (27.0) Depreciation, amortisation and impairment 174 168 3.3 Other operating costs 172 165 3

  15. Slide 15: Balance sheet overview

    Balance sheet overview H1 2021 H1 2020 Rm Rm Property, plant, equipment and intangible assets 624 625 Right-of-use assets 653 678 Inventory 858 806 Trade and other receivables 3 321 3 385 Cash on hand 564 243 15 Other assets 780 868 Total assets 6 800 6 605 Shareholders’ equity and reserves 4 813 4

  16. Slide 16: Key ratios

    Key ratios H1 2021 H1 2020 % HEPS (cents) 236 215 9.9 ROE – after tax (%) 7.7 7.1 16 ROCE – after tax (%) 6.9 7.0 ROA – before tax (%) 8.6 8.9 Gearing ratio – including IFRS 16 (%) 5.3 11.9 Interim dividend declared (cents) 133 120 10.8 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 16

  17. Slide 17: Targets and Outlook

    04 Targets and Outlook  Financial and operating targets  Outlook 18 19 17 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 17

  18. Slide 18: Financial and operating targets

    Financial and operating targets The expected impact of Covid-19 has been taken into account when setting targets. Actual % H1 2021 2021 Medium-term Gross profit margin 40.5 38-42 38-42 Operating profit margin – based on revenue 9.1 5-7 10-15 18 Operating profit margin – based on sales 16.8 8-12 17-2

  19. Slide 19: Outlook

    Outlook  Trading conditions expected to become more challenging in 2021.  Resilient business model  Strong balance sheet 19  Share repurchase programme to continue  Plans remain on track to open 20 new stores during the 2021 financial year  Strong sales momentum continued into Q3  Extensive m

  20. Slide 20: Questions

    05 Questions 20 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2021 20

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