DIS-CHEM PHARMACIES LIMITED - Trading Update For The 22-Weeks To 2 February 2020

Trading Update For The 22-Weeks To 2 February 2020

Dis-Chem Pharmacies Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/009766/06)
JSE share code: DCP
ISIN: ZAE000227831
(“Dis-Chem” or “the Group”)

TRADING UPDATE FOR THE 22-WEEKS TO 2 FEBRUARY 2020

GROUP

Dis-Chem recorded Group revenue growth of 10.0% to R10.3bn for the 22-week period from 1
September 2019 to 2 February 2020 compared to the corresponding period in the prior year
(“corresponding period”)

Chief executive Ivan Saltzman: “The weak macroeconomic environment in South Africa is
unsupportive of business as constrained consumers continued to trade down resulting in smaller
basket sizes. Our pharmacy focus, everyday low price strategy coupled with focussed promotional
campaigns and availability of choice for our customers enable us to drive strong footfall into our
stores, this despite the negative impact of load shedding on consumer shopping behaviour.

The increased focus on return on invested capital (“ROIC”) continues to deliver strong results with
improved trade terms from our suppliers, as well as more efficient inventory levels. Inventory levels
are approximately R4.45bn, R650m lower than at our 2019 financial year-end. We expect a slight
increase by year-end as a result of return enhancing buy-ins ahead of the gazetted SEP increase.

This strategy will continue to remain a focus together with the addition of new stores as we continue
to benefit from a consolidating pharmacy industry and aim to provide our shareholders with optimal
returns over the long-term.”

RETAIL

Retail revenue increased by 9.2% to R9.4bn for the 22-weeks over the corresponding period. Despite
the weak macro environment, we continued to gain market share in all our core categories.

Comparable store revenue growth and selling price inflation were 2.1% and 1.2% respectively. These
numbers continue to be impacted by a constrained consumer and very competitive pricing across all
categories. We welcome the recently gazetted Single Exit Price (“SEP”) increase of 4.53%.

During the 22 weeks under review, the Group added 12 new stores which contributed R145m to
revenue. Our new stores continue to trade above our expectations, validating our site selection
method.

WHOLESALE

Wholesale revenue grew by 18.3% to R7.1bn for the 22 weeks over the corresponding period. Sales
to our retail stores grew 18.2%, and sales to external customers, The Local Choice (“TLC”) and
independent pharmacies grew by 30.7% and 14.9% respectively, mainly as a result of the Quenets
acquisition and the increased presence of our TLC franchise brand which are loyal supporters of our
wholesale channel. We now have 110 TLC franchise stores versus 91 at the end of the corresponding
period.
SUMMARY

 Million               22-weeks to       22-weeks to    % change        % like-for-like    % price
                   2 February 2020   2 February 2019                  revenue growth      inflation
 Retail                     R9 435            R8 637         9.2%                2.1%         1.2%
 Wholesale                  R7 132            R6 028        18.3%
 Intergroup               (R6 220)          (R5 262)        18.2%
 Total group               R10 347            R9 403        10.0%


The financial information in this trading update has not been reviewed or reported on by the
Group’s independent auditor Ernest and Young.

Dis-Chem’s results for the year ended 29 February 2020 will be released on SENS on Wednesday, 20
May 2020 at around 7:05 am.

For further information, contact the Group’s Investor Relations at investorrelations@dischem.co.za.

Midrand

19 February 2020

Sponsor

The Standard Bank of South Africa Limited

Date: 19-02-2020 07:30:00
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