ITALTILE LIMITED - Sales Update and Voluntary Trading Statement for the Year Ended 30 June 2023

Sales Update and Voluntary Trading Statement for the Year Ended 30 June 2023

ITALTILE LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1955/000558/06)
Share code: ITE  ISIN: ZAE000099123
("Italtile" or "the Group")


SALES UPDATE AND VOLUNTARY TRADING STATEMENT FOR THE YEAR ENDED 30 JUNE 2023


SALES UPDATE

Trading environment

Basic living costs and interest rates continued to rise during the year ended 30 June 2023 (“Review
Period”), putting further pressure on homeowners experiencing low wage inflation and high levels of
unemployment. In addition, the depreciation of the currency and inflation-driven input cost increases
drove up product and building costs, reducing affordability for consumers in the new build and
renovation markets. Consumer and investment sentiment also declined in the context of socio-
political instability and country-specific risks. These unfavourable trading conditions resulted in a
decline in foot traffic and transaction numbers across the industry.

Competition in the sector has intensified across the spectrum, with local and offshore operators
expanding their footprint, capacity and offerings. The reopening of the global economy and soft
international demand has resulted in increased competitiveness of imported products.

Performance

Our strategy is to optimise our investments in people and technology, and despite the external
challenges of recent years, we have made strong progress in updating our manufacturing technology
capabilities and enhancing the customer experience in our stores.

Our retail brands are Italtile Retail, CTM, TopT and U-Light. Collectively, retail net sales declined,
despite price inflation of 6.7%. Like-for-like retail store turnover for the financial year decreased by
0.3% compared to the prior corresponding period.

In the integrated supply chain, manufacturing businesses Ceramic Industries and Ezee Tile’s combined
sales value grew by 4.1%, although sales volumes declined. These businesses thrive at full capacity
and subdued demand, together with increases in input costs, adversely impacted on profitability.

Collectively, the integrated supply chain import businesses, comprising Cedar Point, International Tap
Distributors (“ITD”) and Distribution Centre, reported a decline in sales of 4.0% compared to the prior
comparable period.

While a portion of product cost increases were absorbed to assist affordability for price sensitive
customers, gross margin was further negatively impacted by lower volumes as a result of subdued
demand, manufacturing inefficiencies, the adverse impact of load shedding, input cost inflation and
increased competition. The consolidated gross margin across the Group reduced by 2.4%.


Investor Communications     083 395 8608      englishd@italtile.co.za                     Page 1 of 2

VOLUNTARY TRADING STATEMENT

The Group is currently finalising its results for the Review Period.

In terms of paragraph 3.4(b) of the JSE Limited (“JSE”) Listings Requirements, shareholders are advised
that earnings per share (“EPS”) and headline earnings per share (“HEPS”) for the Review Period are
expected to be in the range outlined below:

                                Year ended                     Year ended              Percentage
                                30 June 2023                   30 June 2022            decrease
                                (cents)                        (cents)                 (%)
 EPS                            127.7 – 135.3                  152.0 cents             16.0 – 11.0
 HEPS                           127.8 – 135.3                  152.1 cents             16.0 – 11.0

The small disparity between EPS and HEPS is attributable to profits of R5.4 million realised on disposal
of property, plant and equipment during the Review Period.

The Group's results for the Review Period are expected to be published on SENS on or about 28 August
2023.

The above information has not been reviewed or reported on by the Group´s external auditors.

Johannesburg
14 August 2023

Sponsor
Merchantec Capital




Investor Communications     083 395 8608        englishd@italtile.co.za                   Page 2 of 2

Date: 14-08-2023 07:31:00
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