THE BIDVEST GROUP LIMITED - Voluntary Trading Update: Four months to 31 October 2021

THE BIDVEST GROUP LIMITED
('Bidvest' or 'the Group')
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
JSE Share code: BVT
ISIN: ZAE000117321



VOLUNTARY TRADING UPDATE: Four months to 31 October 2021



At the Group's Annual General Meeting (AGM) held today, 26 November 2021, the Group provided an update
on its performance for the first four months, ended 31 October 2021, of the financial year (FY22).


'We delivered a strong financial performance over the past four months, while also advancing various
initiatives to create value for all stakeholders. The global supply chain and the COVID-19 fourth wave are key
challenges, but the Group remains well positioned to deliver on its growth plans, notwithstanding these
headwinds,' said Mpumi Madisa, Bidvest chief executive.


Revenue and profit growth continue to build momentum across the Group, despite the unfortunate
disruptions caused by the unrest in July 2021 as well as the third wave of COVID-19 infections experienced in
South Africa. The bolt-on acquisitions made in Noonan in the second half of FY21 contributed notably,
particularly to revenue.


During the four months to October 2021, the combination of pleasing revenue growth, gross margin focus and
cost management leveraged into strong trading profit growth. Encouragingly, demand is slowly returning in
the travel and tourism related industries as well as corporate office consumables. Discretionary spend is under
some pressure and our manufacturing facilities are being impacted by electricity supply interruptions.


Our business service operations, which include the Services, Freight and Financial Services divisions, delivered
a very strong performance. The acquisitions made by Noonan and the annualization of good volumes through
the new LPG storage terminal augmented robust organic revenue growth driven by the lifting of trade
restrictions, market share gains and the continuation of bumper agricultural volumes handled despite the net
roll-off of the fleet management and finance book. Profit mirrored revenue growth despite the addition of the
low-margin acquired businesses. PHS, Noonan, Protea Coin, BidTrack, South Africa Bulk Terminals and
Bidfreight Port Operations delivered exceptional performances while investment income increased. Early signs
of improved activity in the travel and hospitality related businesses are encouraging.


Our trading and distribution operations, which include the Branded Products, Commercial Products and
Automotive divisions, performed well despite the challenges posed by global supply chain constraints, limited
infrastructure spend and the riots. Market share gains, additional supplies into the growing e-commerce eco-
system and price increases supported revenue. Focus on gross margin, especially given significant input cost
inflation, and cost management culminated in good profit growth. Supply chain challenges, particularly
pertaining to container movement, and product shortages are ongoing headwinds and product substitution
has become common.


Encouragingly, the Group absorbed working capital year-to-date which was largely funded by robust
operational cash generation. This mainly stemmed from an increase in trade receivables, a function of the
improved trade over the recent months, not a deterioration in the quality of the debtors book. There was also
a modest increase in inventory as our businesses managed a constrained supply chain by front loading orders
while trade creditors decreased. In line with historic seasonal patterns, working capital absorption is likely to
be reported at the end of the interim period.


On 16 September 2021, The Bidvest Group (UK) Plc successfully issued its inaugural 5-year USD800mn bond at
a fixed semi-annual coupon of 3.625%. The proceeds were simultaneously swapped into Sterling, using a cross
currency swap, to match the operational currency profile of the international services businesses. Part of the
proceeds were used to repay the Revolving Credit Facility element of the new syndicated credit facility
concluded in July 2021 and funding raised in South Africa to part finance the PHS acquisition in May 2020. The
balance of the proceeds are held offshore for acquisition purposes. Net debt/EBITDA remains well below bank
covenants, Group liquidity strong and the maturity profile of debt extended to FY27.


In terms of corporate action, the focus is on building a pipeline, in the Group's selected niches for international
expansion as well as local bolt-on acquisitions. Nissan Melrose was acquired in September 2021. We are also
actively engaging with Transnet with regards to the Durban Port Master Plan. The board also approved a
R500mn capital investment to establish an inland LPG terminal in Isando, twice the size of the original
ambitions. Commissioning is anticipated towards the end of 2025.


Group ROFE and ROIC improved since financial year end.


We are pleased to report that all employees have returned to work on a full time basis, while we hired
additional employees in the travel services operations in recent weeks.


We have launched vaccination education drives across the Group and facilitated easy access to immunisation
through mobile clinics and other initiatives.


The UK and Ireland, like many other parts of Europe, is currently experiencing a fourth wave but no specific
restrictions have been implemented in response and thus no adverse impact on trading.

Administration


Bidvest results for the six-months ending 31 December 2021 are expected to be released on SENS on or about
Monday, 28 February 2022.


The information above has not been audited, reviewed, or reported on by the Group's auditors and does not
constitute a forecast.


Date: 26 November 2021

Johannesburg
Sponsor: Investec Bank Limited

Date: 26-11-2021 10:20:00

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