Shoprite Holdings Limited · JSE:SHP
Shoprite — FY2001 Earnings Presentation
30 slides from Shoprite's earnings presentation, Aug 22, 2001
Slide 1: Shoprite Holdings Limited Financial Results 30 June 2001
Shoprite Holdings Limited Fi Financial i l Results R lt 30 June 2001 P Presentation: t ti Investment I t t Analysts A l t Society S i t off Southern S th Africa Af i Cape Town and Johannesburg 22 August 2001
Slide 2: Table of Contents
Table of Contents • Financial highlights • Management M t & personnell • Store Rationalisation • Market analysis • Questions
Slide 3: Financial Results Highlights
Financial Results Highlights Year Ended June June June ’01 01 ’00 00 ‘99 99 Turnover (Rm) 19 597 18 430 17 349 Turnover growth (%) 6,3 6,2 19,1 Operating Profit (Rm) 415 326 126 Operating Profit growth (%) 27,3 158,7 (46,8) O Operating ti Margin M i (%) 21 2,1 18 1,8 07 0,7 Headline EPS 58,0 45,5 10
Slide 4: Key Points: Turnover
Key Points • Turnover – Food inflation – 3.9% – Strategy St t tto rationalise ti li • Open 7 new, close 8 supermarkets • Net trading space reduction 18 000m² – Grow customer base by 2.8% 2 8%
Slide 5: Key Points (Cont): Operating profit
Key Points (Cont) • Operating profit – Operating margin improved to 2.1% – Stock St k llosses improved i d further f th – Effective cost control – Effective utilisation of retail space – Uneconomical U i l leases l – R78m R78
Slide 6: Key Points (Cont): Exceptional items, investment income
Key Points (Cont) • Exceptional items – Provision: employee share scheme - R127m – Negative goodwill - R65m • Investment income – Cash flush - R900m – Stock holding – opportunity (±R500m)
Slide 7: Key Points (Cont): Taxation
Key Points (Cont) • Taxation – Current tax rate 7.5% – Tax T loss l off R900m R900
Slide 8: Information Technology
Information Technology • Capital expenditure Actual ‘00 Actual ‘01 Budget ‘02 R93m R106m R170m • Store communications - bandwidth on demand • Wireless terminals • Exciting new developments – Separate presentation
Slide 9: Financial Statistics 21 Year Review
Financial Statistics 21 Year Review Comp 2001 Growth 1980 Turnover (Rm) 19 597 42,2% 12 Operating Profit (Rm) 415 33,9% 0,9
Slide 10: Share Statistics Since Listing
Share Statistics Since Listing Comp 2001 Growth 1986 Turnover (Rm) 19 597 40,0% 126 Operating Profit (Rm) 415 36,5% 3,9 NAV/share (cents) 269,4 33,8% 3,4 Market Capitalisation (Rm) 3 103 19 1% 19,1% 226 Headline EPS ((cents)) 58,0 , 35,6% , 0,6 , Dividend per share (cents) 20,5 37,7% 0
Slide 11: P/E Ratio comparison
P/E Ratio comparison P/E Ratio USA: Walmart 36.6 Kroger 20.2 Europe: p Tesco 22.9 Sainsbury 21.4 Casino 28.8 South Africa: Pick & Pay 17.2 W l Woolworths h 13 8 13.8 Shoprite Holdings 9.9
Slide 12: Corporate Management
Corporate MANAGING DIRECTOR JW BASSON Management B COMM, CA(SA) AGE: 55 YRS SERV: 30 YRS DEPUTY MANAGING DIRECTOR C GOOSEN PERSONAL B COMM(HONS) CA(SA) ASSISTANT AGE: 48 YRS P ENGELBRECHT SERV 18 YRS SERV: B COMPT (HONS) CA(SA) AGE : 32 YRS SERV: 4 YRS STATUTORY FINANCIAL INFORMATION HUMAN NON FOODS
Slide 13: Operations
MANAGING Operations DIRECTOR JW BASSON B COMM, CA(SA) AGE: 55 YRS SERV: 30 YRS DEPUTY MANAGING DIRECTOR C GOOSEN B COMM(HONS) CA(SA) AGE: 48 YRS SERV: 18 YRS PORTFOLIOS OPERATIONS SUB-SAHARA NORTH-AFRICA E NEL TECHNICAL OPERATIONS OPERATIONS B COMM, S LAUBSCHER AFRICA J HOLTZHAUSEN CA (SA) B SC (ENG
Slide 14: Operations: Supermarkets
Operations: MANAGING DIRECTOR JW BASSON Supermarkets B COMM, CA(SA) AGE: 55 YRS SERV: 30 YRS INLAND COASTAL OPERATIONS OPERATIONS AND BUYING G SMOLLEN B ROGUT AGE : 47 YRS AGE : 75 YRS SERV: 17 YRS SERV: 33 YRS HYPERAMA/ NORTHERN GAUTENG WESTERN GAUTENG WESTERN EASTERN FREESTATE NATAL CHECKERS GAUTE
Slide 15: Employment Statistics
Employment Statistics 45.3 K 45.5 K 45.8 K 44.7 K 29.4 K 29.1 K 28.7 K 26 6 K 26.6 23.5 K 16.0 K 1997 1998 1999 2000 2001 FTE P Permanent tEEmployees l Centrally process 184,000 payslips per month for 10 countries on African continent
Slide 16: Sales per FTE
Sales per FTE Thousands 40 K OK B Bazaars takeover k 35 K 30 K 25 K 20 K 15 K '98 '99 '00 '01 '94 '95 '96 '97 '93
Slide 17: Sales per R1 Cost of Employment
Sales per R1 Cost of Employment OK Bazaars takeover R 13.00 R 12.00 R 11.00 R 10.00 R 9.00 R8 8.00 00 R 7.00 R6 6.00 00 R 5.00 ' 99 ' 00 ' 01 ' 94 ' 95 ' 96 ' 97 ' 98 ' 93
Slide 18: Service Analysis
Service Analysis Staff 30 Management 27 Executives 24 21 18 % 15 12 9 6 3 0 0-2 2-4 5-9 10 - 14 15 - 19 20 - 24 25+ Years 62.7% of employees have service of 10 years +
Slide 19: Post Matric Qualifications
Post Matric Qualifications 200 175 150 Degree 125 Diploma 100 75 50 25 0 LEGAL TECHNICAL BUSINESS AND FINANCIAL ADMINISTRATION Included: 9 CA = 31 9 MBA = 7 9 LLB = 6 9 Masters = 18 9 Doctorate = 4
Slide 20: Retail Management Trainees July '01
Retail Management Trainees July ‘01 01 Black Male 39% Female 22% White Male 25% Female 14% Recruited Internally 37% Externally 63% Total 338 464 Promoted to assistant manager since 1998
Slide 21: Trainee Managers With Qualifications
Trainee Managers With Qualifications Black Black White White Male Female Male Female Degrees 14 9 3 2 Diplomas 42 14 7 9 Certificates 5 5 2 2 Total 61 28 12 13 6 Chartered Accountant Article Clerks 23 IInformation f ti T Technology h l Trainees T i
Slide 22: Training and Development
Training and Development MAJOR AREAS OF AVAILABLE EMPLOYEES SKILLS & LEARNING PROGRAMMES/ TRAINED COURSES Staff Training & 39 19 468 Development Management g 20 361 Development Information Technology 42 232 Distribution 16 339 Fresh Produce 12 252 Procurement Furniture Retailing 5 782 TOTAL 134 21 4
Slide 23: Highlights
Highlights • Productivity improvement of 190% over last 8 years (the implementation of an automated Time & Attendance Management system and labour scheduling contributed towards achieving the improvements) • More than 10,000 employees assisted with school and post matric education
Slide 24: Highlights (cont)
Highlights (cont) • First Fi t Western W t Cape C based b d company and d first retailer in South Africa to be accredited to offer accountancy articles • Successfully S f ll implemented i l t d SAP HR and d Payroll vers. 4.6B in record 9 months • Rated in November 2000 by Financial Mail andd Human H
Slide 25: Size of the Operation – Group
Size of the Operation – Group June 00 June 01 Number of Outlets 911 941 Supermarkets – RSA 326 321 – Non RSA 34 38 Hyperama yp 18 18 Furniture – OK 118 135 - House & Home 20 20 Hungry Lion 30 41 Franchise 365 368 No of Non RSA countries 6 9
Slide 26: Trading Area of Supermarkets – Group
Trading Area of Supermarkets – Group OK Take-over Shoprite Checkers & Hyperama 423 414 398 397 Checkers Take-over Trading Area m2 243 238 235 231 234 241 72 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Slide 27: Trading Area of Supermarkets
Trading Area of Supermarkets Movement since OK Bazaars Take-over 423 S Stores 397 Stores Trading Area m2 35 Stores 41 Stores 60 Stores 1998 New Reduced Closed 2001
Slide 28: Excess Rental and Space
Excess Rental and Space • Net excess rentals - R77m • 27 closed outlets and offices (150 000 m2)
Slide 29: Shoprite Checkers Properties
Shoprite Checkers Properties • Manages 145 properties • Market value of portfolio approximately i t l R2.4 R2 4 billi billion • Owns 48 properties • Market value of own portfolio approximately R550 million
Slide 30: Summary
Summary Since listing 2001 Compound Growth Turnover R 19 597 m 40,0 % Operating Profit R 415 m 36 5 % 36,5 EPS 58 0 c 58,0 35 6 % 35,6 No of Stores 941 26,7 , % No of Staff 62 000 24,7 % (monthly ave)