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CEO AGM Statement May 2014
Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
Company registration No. 1940/014066/06
JSE Code: MSM
ISIN: ZAE 000152617
("Massmart")
CEO AGM Statement May 2014
After a difficult year to December 2013, with comparable sales growth of 3.8%, 2014 started
better with the first 14 weeks comparable and total sales increasing 7.1% and 11.4%
respectively. The exact reasons for this stronger start were not clear but definitely welcome.
For the first 21 weeks of the 2014 financial year, Massmart’s total sales growth was 9.8% and
comparable sales growth at 7%, with a financial YTD sales inflation running at 4.5%.
Total and comparable sales growth over this 21-week period in each Division is:
* 6.9%, 3.9% (3.1% inflation) in Massdiscounters;
* 12.2%, 9.0% (5.1% inflation) in Masswarehouse;
* 14.9%, 8.3% (5% inflation) in Massbuild; and
* 8.2%, 7.0% (4.8% inflation) in Masscash.
All categories performed well other than General Merchandise which only increased by 3.6% on
a comparative basis, signaling things are still tough for the South African middle-income
consumer. The Group Food and Liquor sales were the strongest, increasing 8.5% and with
growth in market share.
All Divisions are performing satisfactorily, other than Game SA where comparable sales growth
is 0.5% and margin pressure remains. We are feeling more confident that the strategy being
implemented is starting to show in operating performance, albeit not yet in financial
performance.
With the Supply Chain investment phase behind us we opened no new DC’s, and focused rather
on opening high-return stores, whilst closing terminally loss-making stores. During 2014 we
opened 14 new stores (including three conversions and two relocations) and closed six stores.
Some of the store opening highlights include the new Builders Warehouse flagship store,
“Inkosi”, in Rivonia, the new Cambridge Food stores in Evaton and Empangeni, a third
Superstore in Tembisa, and as of this week a new Game store in Kano, Nigeria.
Under the revised BBBEE codes we are particularly proud of achieving a level 4 rating. We can
also report on good performance of our Supplier Development Fund, and that a further 58
previously retrenched Game employees have been placed in new positions.
For the remainder of the year, we are hopeful that the current sales performance continues,
although economic data seems not to support this. We are looking to a gradual recovery in the
financial performance in Massdiscounters as the new strategy and operational focus take effect.
Our next sales update will be in July.
As of 1 June 2014 Guy Hayward will take over as Massmart CEO.
The financial information on which this statement is based has not been reviewed and reported
on by Massmart’s external auditors.
Johannesburg
30 May 2014
Sponsor
Deutsche Securities (SA) Proprietary Limited
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