SUPER GROUP LIMITED - Super Group Trading Statement for the year ended 30 June 2020

Super Group Trading Statement for the year ended 30 June 2020

Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
Share code: SPG
ISIN: ZAE000161832
LEI: 378900A8FDADE26AD654
Debt Company Code: BISGL
(“Super Group” or “the Group” or “the Company”)


SUPER GROUP TRADING STATEMENT FOR THE YEAR ENDED 30 JUNE 2020

INTRODUCTION

Super Group shareholders and noteholders were informed, in a detailed trading statement
issued on the JSE Limited’s Stock Exchange News Service (SENS) on 25 June 2020 (the “June
2020 trading update”), that trading conditions were challenging due to constrained consumer
demand in South Africa (SA), political uncertainties in Europe and the United Kingdom (UK)
as well as the severe impact of the outbreak of the novel coronavirus (Covid-19) pandemic on
the Group’s operations.

As highlighted in the June 2020 trading update, the South African economy was already significantly
constrained prior to Covid-19. The outbreak of the pandemic has resulted in an even more demanding
and uncertain social and economic environment. The various national lockdowns applied in South
Africa, Australia, Germany, Spain and the UK, have created significant business disruptions in the
geographies in which the Group operates, and the Group’s trading has been severely impaired
between March and June 2020.

FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2020

The Group is expecting revenue to be between 8% and 10% below the prior year’s revenue of
R37.9 billion, mainly due to the tough trading conditions experienced across all of the Group’s
operations. Some of these trading conditions pre-existed but were severely exacerbated by
the onset of the Covid-19 pandemic at the beginning of the fourth quarter of the financial
year ended 30 June 2020.

Earnings before interest, taxation, depreciation and amortisation for the financial year is
expected to decrease between 32% and 34% from R3.7 billion reported in the prior year.

Super Group has impaired the carrying values of certain goodwill, intangible assets and
properties, mainly against Supply Chain Europe (inTime) of R599 million, Dealerships SA of
R184 million and Supply Chain Africa of R112 million. In addition, provisions for potential bad
debts of approximately R174 million were raised.
Operating profit is expected to be down by between 70% and 75% from R2 606 million in the
prior year. The major contributors to this negative variance being the performances of
Dealerships SA and UK, SG Fleet and the Supply Chain Europe businesses, worsened by the
impairments and bad debt provisions detailed previously.

The expected decline in profit before taxation is estimated at between 93% and 97% from
R2 259 million in the prior year.

The Group’s financial position is strong and cash flow has been resilient in these challenging
circumstances. Net cash generated from operations is expected to increase by between 35%
and 40% from R3 140 million in the prior year. Emphasis remains strongly focused on effective
cash generation and management of working capital exposures. The Group’s financial
position as at 30 June 2020 is robust and net debt to equity (gearing), excluding IFRS 16, was
maintained at approximately 24.1%. Gearing, including IFRS 16 liabilities, is estimated at 46%.

PROSPECTS

Super Group recognises that the Covid-19 pandemic and related lockdowns will result in long-
term social-economic shifts and structural changes to the economy and business in general.
The Group has strategically reviewed all businesses and right-sized operations to make sure
that business models are relevant and appropriate to current levels of demand.

There may still be further cost optimisation and retrenchments in order to reinforce Divisional
competitive positions and financial performance in the future.

In the short-term, management is focused on operational delivery, in a flexible and cost-
efficient manner, and within the parameters set by Governments. Specifically, the Group has
in place a comprehensive suite of safety, health and hygiene protocols for the protection of
all stakeholders including in particular staff and customers.

Covid-19 continues to have an impact across the Group’s operations, and therefore
contingency plans remain critical to operational success over the next six months.

TRADING STATEMENT

Shareholders are referred to the trading update and statement released on 25 June 2020,
advising that Super Group expected its basic headline earnings per share (HEPS) and earnings
per share (EPS) for the year ended 30 June 2020, to be more than 50% and 65%, respectively,
below the comparative figures for the financial year ended 30 June 2019. In this
announcement, the Company undertook to issue a further trading statement once there was
clarity on the specific range by which HEPS and EPS will differ from the prior year.

Based on this, shareholders are now advised that Super Group expects basic HEPS and EPS to
be as follows:
                                                                             For the year
                                                                            ended 30 June
       For the year ended 30 June 2020                                           2019
  HEPS A decrease of between 57% (160.7 cents) and 62% (142.0                373.8 cents
       cents)
  EPS  A decrease of between 122% (a loss of 79.4 cents) and 127% (a
       loss of 97.4 cents)                                                   360.8 cents

These results include the implementation of IFRS 16 in terms of accounting for leases, the
impairments raised against goodwill, intangible assets and properties and the increase in bad
debt provisions.

Shareholders are advised that the financial information on which this trading statement is
based has not been reviewed and reported on by Super Group’s external auditor.

The financial results for the year ended 30 June 2020 will be published on or about 15
September 2020.

Sandton
25 August 2020

Equity Sponsor: Investec Bank Limited
Debt Sponsor: First Rand Bank Limited, acting through its Rand Merchant Bank Debt and
Trade Solutions division

Date: 25-08-2020 12:52:00
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