AGENDA
1. WELCOME
2. FINANCIAL HIGHLIGHTS| Marius Bosman
3. OPERATIONAL HIGHLIGHTS| Pieter Engelbrecht
4. STRATEGIC FOCUS AREAS| Pieter Engelbrecht
5. QUESTIONS| Executive Team
FINANCIAL HIGHLIGHTS TRADING MARGIN FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS
Existing Net new Total Sales growth per segment stores stores
Supermarkets RSA 7.4% 3.3% 10.7%
Supermarkets Non-RSA 14.2% 18.1% 32.3%
Furniture 3.9% 6.1% 10.0%
Other Operating Segments - - 10.5%
Total 8.6% 5.4% 14.0%
• Supermarkets Non-RSA at constant currencies 51.7% GROSS PROFIT MARGIN FINANCIAL HIGHLIGHTS
Dec 2015 Dec 2016 Growth Other operating income Rm Rm
Finance Income Earned 159 162 1.9%
Net Premiums Earned 206 192 -6.8%
Operating Lease Income 192 210 9.4%
Commissions Received 388 398 2.6%
Sundry Income 243 245 0.8%
Total 1 188 1 207 1.6% FINANCIAL HIGHLIGHTS
• Depreciation and amortisation: 11.1%
• Operating leases: 8.9%
• Employee benefits: 14.7% KEY INFORMATION PER SEGMENT
Dec 2015 Dec 2016 Growth Trading Profit Rm Rm
Supermarkets RSA 2 665 2 992 12.3%
Supermarkets Non-RSA 459 746 62.5%
Furniture 98 95 -3.1%
Other Divisions 57 74 29.8%
Total 3 279 3 907 19.2% EXCHANGE RATE DIFFERENCES
Rand appreciation against the US Dollar
• Dec 2015: R15.20/$ • Dec 2016: R13.64/$ INVENTORY LEVELS FINANCIAL HIGHLIGHTS
Dec 2015 Dec 2016 Capital expenditure Rm Rm
Land, Buildings & Leasehold Improvements 536 516
Store Refurbishment 378 368
New Stores 665 429
Information Technology 571 683
Other Replacements* 414 587
Total 2 564 2 583
* Vehicles, office furniture and DC equipment FINANCIAL HIGHLIGHTS
Dec 2015 Dec 2016 Growth Rm Rm
Net Cash Balances 8 154 6 034 -26.0%
• Month-end closing date • Dollar-linked Government bonds in Angola
CUSTOMERS VOTED WITH THEIR WALLETS
• Excellent sales growth in weak environment • R71.3bn for six months = full year turnover in 2011 • Trading profit growth > Sales growth • Fitting tribute from the team to Whitey Basson RSA SUPERMARKETS
• Strong festive trading − Three year market share high in December 32.9% • Offensive promotional approach was successful • Internal inflation more than doubled − 7.4% this year versus 2.7% last year − Seven year high in December at 9.1% − Drought and frozen chicken brining NON-RSA GROWTH
Non-RSA trading margin from 4.7% to 5.8%
• 60.1% sales growth • Improved stock levels • 10.6% like-for-like customer growth
Like-for-like customer growth • 9% sales growth • Exceptional performance • Like-for-like sales doubled • Challenging economic climate • Helped by inflation • 21 new opposition stores in 2016 * Local currency COMPLEMENTARYz BUSINESS MOVING FORWARD
Business as usual, driven by culture “Culture eats strategy for breakfast” Strong management team with wealth of experience MOVING FORWARD
Business as usual, driven by culture
Strong management team with wealth of experience
Low price leadership is in our DNA
Source: Brand Tracker 2016 | n=1500 BUSINESS WITH HEART
SIX DRIVERSz OF GROWTH 1. BUILDING A CUSTOMER-FIRST CULTURE
a. Customer science supporting smarter decision making b. Organisation-wide understanding of customers’ expectations
c. Empowered team: No customer leaves the store unhappy • Building the business around ‘The 98%’ • 30% reduction in customer complaints OUR CUSTOMERS’ RESPONSE
Record levels of customer satisfaction
Source: Brand Finance 2016
Source: Brand Tracker 2016 | n=1500 2. GROWING LSM 8-10 SHARE OF WALLET
• Checkers has seen the largest gain in LSM 8-10s since 2011 • Currently serve only 44.7% versus main competitor at 67.1% • Opportunity to further grow share of wallet of upmarket customers
% Customers also shopping at Checkers and Checkers Hyper Source: AMPS 2. GROWING LSM 8-10 SHARE OF WALLET
Our success in Fresh Foods • Trend toward fresh, convenience and added-value foods • Culture of Fresh: Supply chain, speed to market and quality control • Mission: Match taste and quality of market leader at better value
3. DEVELOPING PRIVATE LABEL
Win-win-win • Driving choice at better value and better margin • De-leverage supplier power
Success in difficult categories • Zip Cola, Lovies • Untapped Non-RSA opportunity 500 New products launched
Source: Nielsen 2016 4. STRONGER FRANCHISE OFFER
Opportunities for growth • Private label • General merchandise • Money Market services • Turn-key system solution 13.7% 36% Turnover growth Increase in issues from Shoprite DCs 5. STRATEGIC FOOTPRINT EXPANSION
New stores • 39 new supermarkets to open in next 6 months • 165 will have opened in the 24 months to June 2018 (116 RSA and 49 Non-RSA) Store formats optimised • Flexible formats to better serve each market Own the supply chain • 123 000m2 Cape Town Cilmor DC - Sept 2017 • Two new DCs in Angola • Purchase of Nigeria DC 6. THE AFRICAN ADVANTAGE SIX DRIVERSz OF GROWTH