SHOPRITE HOLDINGS LIMITED - Operational update for the six months ended 29 December 2019

Operational update for the six months ended 29 December 2019

SHOPRITE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Reg. No. 1936/007721/06
ISIN: ZAE000012084
JSE Share code: SHP
NSX Share code: SRH
LuSE Share code: SHOPRITE
(“Shoprite Holdings” or “the Group”)

OPERATIONAL UPDATE FOR THE SIX MONTHS ENDED 29 DECEMBER 2019

For the six months to 29 December 2019 the Shoprite Group increased total sale of merchandise by
7.0% to approximately R81.2 billion. The Group’s supermarket business grew customer visits by 2.1%
and product volumes by 4.4%.

On a segmental basis, approximate sales for the six months to December 2019 were as follows:

                                             H1          Q1 ended         Q2 ended         H1 Total
                                           Sales         Sep 2019         Dec 2019         Dec 2019

  Supermarkets RSA                       R61.7bn            10.3%             9.4%             9.8%

  Supermarkets Non-RSA                   R10.8bn            -4.9%            -1.5%            -3.1%

  Furniture                               R3.3bn            -0.2%            -4.5%            -2.7%

  Other operating segments                R5.4bn             6.4%             2.6%             4.4%

  Total operating segments               R81.2bn             7.3%             6.7%             7.0%

The following provides context to the overall sales growth for the six months:

    -   The Group’s core business, Supermarkets RSA, achieved sales growth of 9.8% for the period.
            -  Internal selling price inflation moderated from 3.0% during the first quarter to 2.4%
               in the second quarter, resulting in internal selling price inflation of 2.7% for the six
               months.
            -  All three supermarket brands, Shoprite, Checkers and Usave, traded well in a tough
               market.
            -  Liquor sales remained strong, with sales growing 20.5%.
    -   Supermarkets Non-RSA recorded a decline in sales of 3.1% in rand terms.
            -  We have continued to experience ongoing currency devaluations and volatility in key
               markets in which we trade. The Angolan kwanza weakened by 40.6% against the US
               dollar since June 2019. During the reporting period, the Angolan kwanza, Zambian
               kwacha and Nigerian naira depreciated 40.4%, 20.8% and 18.2% respectively against
               the US dollar when compared to the previous year.
            -  Constant currency growth measured 4.8%.
    -   The Furniture Division’s sales declined 2.7% for the six months to 29 December 2019,
        impacted by a reduction in the store base of 13 net stores over the period; load shedding in
        South Africa and currency devaluations in certain Non-RSA countries.
    -   Other operating segments which include OK Franchise, Computicket, MediRite Pharmacies,
        Transpharm and Checkers Food Services grew sales by 4.4%. The period included a 6-week
        strike in Transpharm, the Group’s pharmaceutical wholesale business. OK Franchise’s growth
        for the six months to 29 December 2019 measured 7.5%.

For the six months to 29 December 2019 the Group added a net 66 stores to its supermarket business
to end the period with 1 911 stores. Franchise added a net 10 stores to end December with 470 stores.

Shareholders are advised that this update does not constitute an earnings forecast. The figures and
information contained herein have not been reviewed or reported on by the Group’s auditors.

The Group's interim results for the six months ended 29 December 2019 are scheduled for release on
SENS on or about 25 February 2020.

PRO FORMA FINANCIAL INFORMATION

Impact of Angola hyperinflation adjustment in comparative period

For the comparative period ended 30 December 2018, the Angolan economy was assessed to be
hyperinflationary. As such, it required the application of hyperinflation accounting.

For the six months ended 29 December 2019, the Angolan economy was assessed not to be
hyperinflationary. As such, the current period’s results do not require the application of hyperinflation
accounting.

In order to facilitate the comparison of the current period’s results, the table below outlines the pro
forma financial information for the comparative prior period, excluding the impact of hyperinflation.

The financial impact of hyperinflation on the prior period’s turnover was as follows:

                      Pro Forma                     Reported                            Pro Forma
                      Change on           Change on       26 weeks to 30    Hyperinflation     26 weeks to 30
                   prior period        prior period        December 2018        adjustment      December 2018
                              %                   %                   Rm                Rm                 Rm

  Total turnover           6.96                7.01               75 837                30             75 867

The above pro forma financial information is the responsibility of the directors of Shoprite Holdings
and has been prepared for illustrative purposes only.


  Pieter Engelbrecht               Anton de Bruyn                  Natasha Moolman
  Chief executive officer          Chief financial officer         Group investor relations

Tel 021 980 4000

Date issued: 22 January 2020

Sponsor: Nedbank Corporate and Investment Banking

Date: 22-01-2020 10:39:00
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