Lewis Group Limited · JSE:LEW
Lewis — H1 2024 Earnings Presentation
31 slides from Lewis's earnings presentation, Nov 29, 2023
Slide 1: Unaudited Interim Financial Results H1 2024
UNAUDITED INTERIM FINANCIAL RESULTS 30 FOR THE PERIOD ENDED SEPTEMBER 2023 § H1 2024 —_ » Group Ltd
Slide 2: Agenda
AGENDA 1 2 3 4 5 Review of Debtor Financial Targets Questions H1 2024 Analysis Results and Outlook LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
Slide 3: Review of H1 2024
REVIEW OF H1 2024 ▪ Highlights 04 ▪ Operational Context 05 ▪ Operational Achievements 06 ▪ Share Buy back 12 ▪ Dividends 13 ▪ Returns to Shareholders 14 3 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
Slide 4: Highlights of H1 2024
HIGHLIGHTS OF H1 2024 Revenue Merchandise Gross Profit Sales Margin at + 8.3% + 4.8% 40.7% Collection Satisfactory Debtor Book Rate at Paid Accounts at Growth of 80.9% 79.9% 10.8% Operating HEPS Interim Dividend Margin at -6.6% to Increased to 14.2% 372 cents 200 cents per Share per Share LEWIS GROU
Slide 5: Operational Context
OPERATIONAL CONTEXT LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 5
Slide 6: LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 6
Slide 7: Operational Achievements
OPERATIONAL ACHIEVEMENTS ▪ Credit sales growth of 19.5% Exceptional ▪ Credit application decline rate settled at quality and 34.8% (LY: 35.8%) performance of the Group’s ▪ Collection rate at a solid 80.9% debtor book ▪ Level of satisfactory paid customers improving to 79.9% (LY: 78.8%) ▪ Reduction i
Slide 8: Operational Achievements
OPERATIONAL ACHIEVEMENTS ▪ Group merchandise sales MERCHANDISE SALES increased by 4.8% ▪ Traditional brands increased by 7.3% ▪ Q1 : 1.1% ▪ UFO declined by 14.3% ▪ Q2 : 8.5% ▪ Group credit sales increased by 19.5% ▪ Group cash sales declined by 14.4% ▪ Sales supported by strong advertising campaigns
Slide 9: Operational Achievements
OPERATIONAL ACHIEVEMENTS ▪ Adoption of IFRS 17 insurance contracts ▪ No material impact on earnings for the current and prior periods ▪ Disclosure changes ▪ Comparatives restated ▪ Operating costs (including insurance service expenses) increased by 4.2%, despite inflationary pressure ▪ Robust balanc
Slide 10: Operational Achievements: Store Expansion
OPERATIONAL ACHIEVEMENTS STORE EXPANSION Net 28 new stores opened in H1 2024 138 stores outside SA (LY:131 stores) 257 small format Lewis stores (52% of Lewis stores) 90 stores refurbished LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 10
Slide 11: Client Engagement via Social Media
CLIENT ENGAGEMENT VIA SOCIAL MEDIA LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 11
Slide 12: Number of Shares Repurchased Since 2018 (Millions)
NUMBER OF SHARES REPURCHASED SINCE 2018 (MILLIONS) LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 12
Slide 13: Dividends per Share (Cents)
DIVIDENDS PER SHARE (CENTS) LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 13
Slide 14: Delivering Returns to Shareholders
DELIVERING RETURNS TO SHAREHOLDERS H1 2024 H1 2023 Return of capital - share buy back (Rm) 124.3 192.2 Return of income - dividends (Rm) 117.5 129.4 Total spent on increasing shareholder returns (Rm) 241.8 321.6 Market capitalisation (Rm) 2 119.5 2 705.5 Return to shareholders (%) 11.4 11.9 LEWIS GR
Slide 15: Delivering Returns to Shareholders
DELIVERING RETURNS TO SHAREHOLDERS 2023 2022 2021 2020 2019 Return of capital - share buy back (Rm) 275.7 353.2 112.6 101.7 98.2 Return of income - dividends (Rm) 241.8 260.4 149.9 198.6 168.1 Total spent on increasing 517.5 613.6 262.5 300.3 266.3 shareholder returns (Rm) Market capitalisation (Rm)
Slide 16: Returning Profits to Shareholders (R'm)
RETURNING PROFITS TO SHAREHOLDERS (R’M) Average % of profits returned to shareholders over the past 4 financial years: 120% Actual % of profits returned to shareholders during H1 2024: 124% LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 16
Slide 17: Debtor Analysis
DEBTOR ANALYSIS ▪ Debtor Performance 18 ▪ Gross Debtor Analysis 20 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
Slide 18: Debtor Performance
DEBTOR PERFORMANCE INSTALMENT COLLECTIONS (%) 79.6% 81.7% 80.9% 78.7% 66.5% H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 18
Slide 19: Debtor Performance
DEBTOR PERFORMANCE H1 2024 H1 2023 Collections (Rm) Collections from instalment sales (+9.9%) 2 564 2 332 Contractual arrears (Rm) 1 707 1 903 % of debtors at gross carrying value 26.6% 32.9% Debtor costs (Rm) Debtor costs (+76%) 446 254 ▪ Net bad debts written off 299 271 ▪ Debtors’ impairment prov
Slide 20: Gross Debtor Analysis
GROSS DEBTOR ANALYSIS Instalments in arrears Number of Gross Impairment Impairment Total Customer grouping customers carrying provision provision arrears ≤3 months >3 months Total value R’000 R’000 % R’000 R’000 R’000 H1 2024 495 613 4 782 969 1 076 177 22.5 627 961 411 463 216 498 % 79.9 74.7 46.6
Slide 21: Debtor Performance
DEBTOR PERFORMANCE SATISFACTORY PAID ACCOUNTS (%) 79.9% 78.8% 74.2 % 75.2% 69.5% H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 21
Slide 22: Financial Results
FINANCIAL RESULTS ▪ Income Statement 23 ▪ Segmental Analysis 24 ▪ Balance Sheet Overview 25 ▪ Key Ratios 26 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
Slide 23: Income Statement
INCOME STATEMENT H1 2024 H1 2023 % Revenue* (Rm) 3 831 3 537 8.3 Merchandise sales (Rm) 2 174 2 076 4.8 Gross profit margin (%) 40.7 39.3 Total operating costs* (Rm) 1 775 1 703 4.2 Operating costs* (1 412) (1 381) 2.3 Insurance service expenses* (363) (322) 12.7 Impairments and capital items (Rm) (
Slide 24: Segmental Analysis
SEGMENTAL ANALYSIS Group Traditional UFO H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023 Revenue (Rm) 3 831 3 537 3 617 3 288 214 249 Merchandise sales (Rm) 2 174 2 076 1 964 1 830 211 246 Total Operating costs 1 775 1 703 1 689 1 598 86 105 Operating profit/(loss) before impairments and 322 321 318
Slide 25: Balance Sheet Overview
BALANCE SHEET OVERVIEW H1 2024 H1 2023 Rm Rm Property, plant, equipment and intangible assets 629 650 Right-of-use assets 775 743 Inventory 959 1 245 Trade and other receivables* 4 182 3 666 Insurance contract assets* 263 181 Cash on hand 247 241 Other assets 570 582 Total assets 7 625 7 308 Shareho
Slide 26: Key Ratios
KEY RATIOS H1 2024 H1 2023 % EPS (cents) 355 346 2.6 HEPS (cents) 372 398 (6.6) ROE – after tax (%)(1) 8.4 8.8 ROCE – after tax (%) (1) 7.7 7.4 ROA – before tax (%) (1) 8.9 8.6 Borrowings ratio (gearing excluding lease liabilities) (%) 13.4 4.1 Gearing ratio – including lease liabilities (%) 34.0 24
Slide 27: Target and Outlook
TARGET AND OUTLOOK ▪ Financial and Operating Targets 28 ▪ Outlook 29 LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
Slide 28: Financial and Operating Targets
FINANCIAL AND OPERATING TARGETS H1 2024 Targets (%) Actual Year-end 2024 Medium-term Gross profit margin 40.7 40-42 41-43 Increase in operating costs 4.2 6-10 3-6 Credit sales as a % of total sales 64.4 59-63 52-56 Satisfactory paid customers 79.9 77-80 77-80 Debtor costs as a % of debtors at gross
Slide 29: LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 29
Slide 30: LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024
LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024 30
Slide 31: Questions Thank You
QUESTIONS THANK YOU LEWIS GROUP LIMITED UNAUDITED INTERIM RESULTS H1 2024