Wrap Text
Unaudited results for the six months ended 31 December 2014
STEINHOFF INTERNATIONAL LIMITED
Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE Code: SHF ISIN: ZAE000016176
("Steinhoff" or "the company" or "the group")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2014
REVENUE INCREASES 12% TO R65 BILLION*
HEADLINE EARNINGS IMPROVE 39% TO R6 BILLION*
HEADLINE EARNINGS PER SHARE INCREASE BY 7% TO 248 CENTS*
NET INTEREST-BEARING DEBT REDUCED 46% TO R16 BILLION#
PEPKOR TRANSACTION APPROVED BY SHAREHOLDERS
*FROM CONTINUING OPERATIONS
#COMPARED TO FY2014
Revenue per geographical region
- Continental Europe 63%
- Southern Africa 26%
- United Kingdom 8%
- Pacific Rim 3%
Total assets
- Retail activities – International operations 50%
- Retail activities – African operations 10%
- Manufacturing, sourcing and logistics – International operations 10%
- Manufacturing, sourcing and logistics – African operations 2%
- Properties 28%
Revenue per segment
- Retail activities – International operations 52%
- Retail activities – African operations 22%
- Manufacturing, sourcing and logistics – International operations 24%
- Properties 2%
Operational review
International operations
The group's international operations performed well, reporting market share gains and margin
improvement in most countries.
The international retail operations continue to benefit from the group's growing purchasing power,
group procurement initiatives and infrastructure.
Retail activities: Household goods
The majority of the group's European retail operations are positioned in the discount and
value market segments of the household goods market. These market segments continue to outperform
the industry as a whole, supporting revenue growth and market share gains within the group's
retail operations. In addition to price positioning, the group's country- specific
national marketing strategies and investment in its store network, resulted in further
market share gains. During the period under review, revenue attributable to the group's
international retail activities increased by 12% to R41.1 billion (1H14: R36.7 billion).
Operating profit improved by 17% to R2.7 billion (1H14: R2.3 billion), mostly due
to increased operating leverage and group procurement and logistics efficiencies.
In France, Conforama delivered excellent revenue growth both in-store and
e-commerce. Growth in market share within Conforama Switzerland was led by the
conversion and opening of three new stores, while the prudent approach and product
rationalisation strategy in Italy supported a resilient performance. The group continued
to capitalise on its investments in Spain, Portugal and Croatia. In Spain and Portugal,
improved trading densities in established and new stores resulted in high double-
digit growth. In line with the product range strategy, growth for the group as a whole
was mostly achieved within the furniture, decoration and white goods
(big, small and built-in appliances) product categories, resulting in improved margins.
Germany remains the largest European market in household goods, both in terms
of per capita spend and market size. The group's retail operations are firmly
positioned in the growing discount and value market segments and continue to
benefit from both organic revenue growth and the operating leverage achieved as a
result of the ambitious store rollout.
The Swiss operations reported good revenue and margin growth, benefitting
from the new stores opened in the previous period. The Polish operations improved
their performance, as a result of renewed focus on their smaller store formats and
improved consumer confidence in this market.
The continued focus of the UK retail group on improving the quality of its trading
estate is supporting much improved trading densities and growth in the underlying
operations. In particular, the group's bedding retail business is benefiting
from underlying growth and encouraging market share gains, while the furniture
retail business continues to outperform the general market.
The supply chain reorganisation and successful new store concepts of the retail
businesses in the Pacific Rim underpin strong revenue growth.
Manufacturing, Sourcing, Logistics and Corporate Services
This division includes the group's global supply chain activities consisting of
European manufacturing, the global sourcing operations, central logistics and
corporate income such as royalties, rebates earned on purchasing volume, treasury and
other income.
In order for the group to continue to benefit from the ability to increase its
central buying power and negotiate better supplier, shipping and distribution terms,
many of the benefits that are derived by this division are passed on to the group's retail
businesses that they serve. Notwithstanding this, the division increased revenue by 7%
and operating profit by 8% as a result of increased efficiencies and good cost control.
European manufacturing performed exceptionally well during this period with improved product
mix and larger volumes, thereby improving efficiencies and profitability. The sourcing and
wholesale division continues to benefit from the additional intra-group volumes, reaching
record levels during the six months under review.
The central logistics division has secured many internal contracts and will in
future also manage the Swiss and Polish distribution and warehousing operations.
The initiatives by this division continue to achieve synergistic savings and efficiencies
achieved both centrally and within the retail operations.
Properties
The property segment comprises all properties managed centrally by Steinhoff
corporate services. The industrial and retail properties in this segment are located
in Europe, the UK and Africa.
Operating profit increased by 30% to R1.7 billion (1H14: R1.3 billion) mainly as a
result of the rentals now earned on the kika-Leiner properties acquired in June 2014.
African operations
The African operations are invested in three companies, independently listed on the
Johannesburg Stock Exchange. Steinhoff has an 86% interest in JD Group Limited (JD),
45% in KAP Industrial Holdings Limited (KAP) and 18% in PSG Group Limited (PSG).
The investment in KAP is treated as an equity accounted investment and PSG
as a minority investment. The JD operations are fully consolidated.
Retail activities: JD
JD's continuing operations reported revenue growth of 11% to R17.0 billion (1H14:
R15.3 billion) while largely maintaining gross margins. Operating profit increased by 16%
to R356 million compared to R306 million in the comparable period.
Within the Retail segment, furniture retail achieved growth in merchandise sales of 8% despite
more stringent credit granting criteria being applied.
SteinBuild, the building materials and DIY retail operations, reported strong growth in
merchandise sales as a result of buoyant market conditions. The performance of the consumer
electronics and appliance retail operations experienced challenging trading conditions as a
result of competitive pricing.
The Automotive segment reported 15% growth in sales to R8.8 billion (1H14: R7.6 billion).
In line with this, operating profit increased by 15% to R266 million (1H14: R232 million).
As reported under Corporate activity, shareholders of JD approved the sale of the consumer
finance business on 25 February 2015. The consumer finance business, excluding the insurance
operations, are disclosed as discontinued operations and accounted for a loss of R1.5 billion for
the period (1H14: R184 million profit).
Shareholders are referred to the JD Group results announcement which is available at: www.jdg.co.za
KAP
KAP continued its strategy to strengthen its position as a market leader in the industries
that it serves in Africa.
Group revenue from continuing operations increased by 9% to R8.1 billion (1H14: R7.4 billion)
while operating profit before capital items increased to R777 million (1H14: R720 million).
The operating profit of the Diversified Logistics segment increased by 10% to
R430 million (1H14: R392 million) with margins widening slightly. The operating
profit of the Diversified Industrial segment increased by 6% to R347 million
(1H14: R328 million), with margins narrowing slightly as a result of competitive market
conditions in the furniture components sector.
Headline earnings from continuing operations increased by 14% to R435 million (1H14: R381 million)
while headline earnings per share from continuing operations increased by 14% to 18.5 cents (1H14: 16.2 cents).
Shareholders are referred to the KAP results announcement which is available at: www.kap.co.za
*Extracted financial information from the unaudited interim results for the six months ended 31 December 2014.
Shareholders are referred to the JD and KAP results announcements released on the JSE Limited's news service (SENS)
and on the groups' websites (www.jdg.co.za/www.kap.co.za) for a comprehensive review of the JD/KAP results.
Financial Review
Continuing operations
Revenue and operating profit before capital items
Group revenue for the six months ended 31 December 2014 (1H15) increased by 12% to
R64.6 billion (1H14: R57.8 billion) while operating profit before capital items
increased to R6.8 billion, representing a 16% increase on the prior period's
R5.9 billion.
Turnover, after inter-segmental eliminations, earned in currencies other than the rand,
as measured in euro, increased to EUR3.4 billion (1H14: EUR3.1 billion), a 7% increase.
In line with the European strategy to focus on increasing margins, group margins
increased by 40 basis points from 10.1% to 10.5%.
Net finance charges and taxation
Net finance charges reduced to R59 million (1H14: R889 million) due to
the group's reduction in net interest-bearing debt from R30.0 billion at
30 June 2014 to R16.3 billion which translates into a net interest-bearing
debt-to-equity ratio of 15% (FY2014: 34%) and interest earned on interest-
bearing assets.
In line with the growth in profit before tax of 39% to R7.0 billion (1H14: R5.1 billion),
the group's taxation charge increased to R752 million (1H14: R534 million).
Headline earnings and headline earnings per share (HEPS)
Headline earnings from continuing operations increased by 39% to R6.0 billion (1H14: R4.4 billion).
HEPS increased from 232.8 cents to 248.4 cents while diluted HEPS increased to
225.2 cents (1H14: 210.0 cents), an increase of 7% compared to 1H14.
The weighted average number of shares in issue increased by 30%. The
increase relates to the issue of shares towards the end of the comparative
period (thereby affecting the weighting and comparability) as well as the
350 million share issuance relating to the foreign share placement and rights
offer as described under Corporate activity.
Continuing and discontinued operations
Headline earnings
Shareholders are referred to the SENS announcement released by
JD Group on 25 February 2015 whereby it was announced that JD Group shareholders
voted in favour of the disposal of JD Group's consumer finance business, excluding
the insurance operations. In terms of International Financial Reporting Standards (IFRS),
the disposal group is classified as discontinued operations and was written down to
its net realisable asset value of R4.7 billion on 31 December 2014, based on the
purchase price formula in terms of the business sale agreement. Taking
this into account, headline earnings from continuing and discontinued
operations increased by 10% to R4.9 billion (1H14: R4.5 billion).
Cash and cash equivalents
Cash and cash equivalents increased to R18.4 billion as at 31 December 2014
(FY2014: R16.3 billion). This increase arose mainly as a result of the foreign
share placement and rights offer, supported by strong cash generation
during the period under review. As at 31 December 2014, the group had
unutilised facilities amounting to R24.0 billion (FY2014: R19.3 billion)
available for its continuing operations. Accordingly, the board is satisfied that
the group is well capitalised to fund its continued growth.
Cash Flow
In terms of IFRS, the comparable period's cash flow includes KAP as
it was consolidated, but during the current period KAP was accounted for
as an equity accounted investment and therefore the cash flows are not
comparable.
Taking into account the group's higher activity levels and seasonal
trends inherent in its business, where December and January are peak
trading months in Europe, working capital and cash generation remained
satisfactory.
Debt
The majority of the group's assets and liabilities are situated in Europe. In
translating these assets and liabilities into the group's reporting currency
(rand), the closing exchange rate as at 31 December 2014 (being R14.01) was
used, while the comparative period was translated at R14.50. This equates
to a decrease of 3.4% and marginally affects the comparability of all assets
and liabilities to the previous period. The board remains comfortable with
the group's gearing and serviceability of its debt as set out in the
following table.
1H15 FY14
Rm Rm
Interest-bearing long-term liabilities 45 330 55 580
Interest-bearing short-term liabilities 6 038 6 411
Bank overdrafts and short-term facilities 112 2 436
Less cash and cash equivalents (18 434) (16 341)
Gross debt less cash 33 046 48 086
Less interest-bearing assets and receivables (16 702) (18 042)
Net interest-bearing debt 16 344 30 044
Total equity 106 119 87 776
Net interest-bearing debt:equity 15% 34%
EBITDA 7 923 14 638
Finance charges 59 1 998
EBITDA interest cover (times) 134.3 7.3
Corporate activity
The group announced the following corporate transactions during the
period under review:
On 1 August 2014 Steinhoff concluded a foreign share placement and renounceable
rights offer of 350 million shares at an issue price of R52 per share to raise
an amount of R17.9 billion, after expenses. The proceeds were used for general
corporate purposes, including the repayment of certain overdrafts and
other short-term debt facilities;
On 25 November 2014, it was announced that agreements had been reached in terms of
which Steinhoff will acquire 92.34% of the issued share capital of
Pepkor Holdings Proprietary Limited ("the Pepkor acquisition"). The
purchase consideration amounts to an aggregate amount of approximately
R62.8 billion and will be settled as follows: (i) the issue of 839 million
Steinhoff shares ("consideration shares") at R57 per share; and (ii) a cash
payment of R15 billion. Full details of the Pepkor acquisition are contained in
a circular to Steinhoff shareholders dated 15 December 2014.
Steinhoff shareholders approved the acquisition at a General Meeting
held on 26 January 2015 and the first tranche of 609.1 million consideration
shares was issued and listed on the JSE on 23 February 2015. The acquisition
remains subject to the approval of the Anti-trust Authorities applicable to
the jurisdictions in which both Pepkor and Steinhoff operate. Upon obtaining
approval, the remainder of the purchase consideration will be settled
and the acquisition implemented;
Holders of 42.6% of the 5% EUR390 million convertible bonds due 2016 elected to convert
their bonds into equity, resulting in the issue of 61 million shares during the period.
Further conversion notices have been received and therefore, it was resolved to call on
the redemption of the remainder of the convertible bonds due 2016 on 3 March 2015;
On 25 February 2015, the shareholders of JD Group approved the sale of JD
Group's financial services business to a joint venture company. Full details
of this disposal are contained in a circular to JD Group shareholders
dated 27 January 2015 and its effects as far as they concern Steinhoff, are
dealt with as discontinued operations and explained under the Financial
Review section of this announcement. JD Group's funding requirements
will reduce significantly once this transaction becomes unconditional
and can be implemented;
Steinhoff, in conjunction with a European incorporated holding company,
("Holdco") is at an advanced stage with Holdco's preparation for
its listing on the Prime Standard of the Frankfurt Stock Exchange,
accompanied by an inward listing on the JSE. The timing of such listing will
be dependent on when the Pepkor acquisition becomes unconditional,
the required Steinhoff shareholder support, cost considerations
applicable to Holdco's jurisdiction of incorporation and prevailing market
conditions.
Changes to the board and committee
Shareholders are advised that, with effect from 3 March 2015, the position of
Dr. CH Wiese as non-executive director has changed from independent to non-independent,
arising from the issue of shares relating to the acquisition of Pepkor
(refer corporate activity). In addition the board has resolved to appoint
CE Daun as an additional member of its nomination committee, with effect
from 3 March 2015.
Outlook
The group continues to benefit from the growth experienced within the
value and discount market segments. It remains competitive on price, owing
to its well-established supply chain that is continuing to provide price
advantages supported by the existing infrastructure and increased scale.
The e-commerce strategy is proving successful and the group remains
committed to mirror its in-store market share, online. The investment in new
stores and new concept stores has continued during the period and is
expected to further support growth.
The JD Group's retail businesses will continue to implement its operational
restructuring initiatives to improve margins.
KAP management remains confident that their current growth will continue
due to the continued strategic initiatives and focus, with strong operational execution.
The Pepkor acquisition is expected to be completed prior to the end of
this financial year. This acquisition will increase the group's growth trajectory
by enabling the group to expand its footprint and product offering in the growing
value discount market. In addition, the supply chain of the combined group will
benefit from the additional scale and expertise, especially in the many territories
where the group's retail and sourcing operations overlap.
Len Konar Markus Jooste
Independent Chairman Chief Executive Officer
3 March 2015
Other notes
1. Corporate governance
Steinhoff has embraced the recommendations of the King Report on
Governance and strives to provide reports to shareholders that are timely,
accurate, consistent and informative.
2. Social responsibility
The group remains committed to behaving in a socially responsible manner
and is conscious of its responsibilities in this regard.
3. Human resources
A constructive working relationship is maintained with our group employees and
the relevant unions. Ongoing skills and equity activities ensure compliance with
current legislation.
4. Related-party transactions
The company entered into various related-party transactions. These transactions
are no less favourable than those arranged with third parties.
5. Dividends
In terms of Steinhoff's dividend policy, Steinhoff declares dividends annually,
the details of which are announced during September.
6. Further events
No significant events have occurred, other than those highlighted in Corporate
activity in the period between the reporting date and the date of this report.
Condensed consolidated income statement
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited(1) % Audited
Rm Rm change Rm
Continuing operations
Revenue 64 615 57 796 12 117 364
Operating profit before depreciation, amortisation
and capital items 7 923 6 836 16 14 638
Depreciation and amortisation (1 115) (974) (2 016)
Operating profit before capital items 6 808 5 862 16 12 622
Capital items 66 (19) 1 500
Earnings before finance charges, dividend income,
equity accounted earnings and taxation 6 874 5 843 18 14 122
Net finance charge (59) (889) (1 998)
Dividend income 28 3 3
Share of profit of equity accounted companies 186 112 290
Profit before taxation 7 029 5 069 39 12 417
Taxation (752) (534) (1 954)
Profit for the period from continuing operations 6 277 4 535 38 10 463
(Loss)/profit for the period from discontinued
operations (1 502) 184 (600)
Profit for the period 4 775 4 719 1 9 863
Attributable to:
Owners of the parent 4 946 4 611 7 10 090
Non-controlling interests (171) 108 (227)
Profit for the period 4 775 4 719 1 9 863
From continuing operations
Headline earnings per ordinary share (cents)2 248.4 232.8 7 461.7
Diluted headline earnings per ordinary share (cents)2 225.2 210.0 7 416.7
Basic earnings per ordinary share (cents)2 251.5 232.6 8 510.2
Diluted earnings per ordinary share (cents)2 227.7 209.8 9 455.2
From continuing and discontinued operations
Headline earnings per ordinary share (cents)2 203.6 240.6 (15) 443.5
Diluted headline earnings per ordinary share (cents)2 188.6 216.2 (13) 402.0
Basic earnings per ordinary share (cents)2 198.8 239.6 (17) 496.8
Diluted earnings per ordinary share (cents)2 184.7 215.4 (14) 444.3
Number of ordinary shares in issue (m) 2 518 2 022 25 2 100
Weighted average number of ordinary shares in
issue (m) 2 431 1 869 30 1 977
Earnings attributable to ordinary shareholders (Rm) 4 832 4 478 8 9 821
Headline earnings attributable to ordinary
shareholders (Rm) 4 947 4 497 10 8 770
Average currency translation rate (rand:euro) 14.1590 13.5482 5 14.1106
Condensed consolidated statement of cash flows
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited(3) Audited(3)
Rm Rm Rm
Cash generated before working capital changes 9 072 9 048 19 039
Increase in inventories (2 334) (2 095) (1 001)
Increase in vehicle rental fleet (398) (102) (323)
(Increase)/decrease in receivables (1 120) (972) 2 431
Increase in payables 1 163 633 3 001
Changes in working capital (2 689) (2 536) 4 108
Cash generated from operations 6 383 6 512 23 147
Movement in instalment sale and loan receivables (815) (998) (1 754)
Net dividends paid (3 849) (1 792) (1 818)
Net finance income/(costs) 223 (780) (1 842)
Taxation paid (897) (704) (1 592)
Net cash inflow from operating activities 1 045 2 238 16 141
Net cash outflow from investing activities (5 736) (4 297) (16 371)
Net cash inflow from financing activities 7 373 2 884 6 200
Net increase in cash and cash equivalents 2 682 825 5 970
Effects of exchange rate changes on cash and cash equivalents (589) 873 1 122
Cash and cash equivalents at beginning of period 16 341 9 249 9 249
Cash and cash equivalents at end of period 18 434 10 947 16 341
Fair values of financial instruments
Fair value Fair value Fair value
as at as at as at
31 Dec 31 Dec 30 June
2014 2013 2014 Fair value
Rm Rm Rm hierarchy
Investments and loans 4 868 126 3 769 Level 1(#)
Investments and loans 202 214 206 Level 2(*)
Derivative financial assets 518 60 13 Level 2(*)
Interest-bearing loans and borrowings (1 682) (1 602) (1 594) Level 2(*)
Derivative financial liabilities (127) (239) (197) Level 2(*)
(#)Valued using unadjusted quoted prices in active markets for identical financial instruments.
This category includes listed shares and unit trusts.
(*)Valued using techniques where all of the inputs that have a significant effect on the valuation are
directly or indirectly based on observable market data. These inputs include published interest rate
yield curves and foreign exchange rates.
Notes
(1)The December 2013 figures have been re-presented for the discontinued operations.
(2)The rights issue announced on 2 July 2014, led to the restatement of December 2013 per share numbers, none of which
resulted in a deviation of more than 1%.
(3)The cash flow has been re-presented to combine the secured and unsecured instalment sales receivables movement,
previously disclosed separately under working capital and cash flows from operating activities. Additions to vehicle rental
fleet which are financed through finance leases are now excluded from working capital movements as non-cash items.
Notice
The preparation of these condensed financial statements was supervised by the financial director Frikkie
(FJ) Nel CA(SA).
Condensed consolidated statement of financial position
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited Audited
Rm Rm Rm
ASSETS
Non-current assets
Goodwill and intangible assets 63 742 66 934 66 116
Property, plant and equipment,
investment property and biological assets 54 799 53 641 54 422
Investments in equity accounted companies 4 235 2 826 4 223
Investments and loans 11 777 6 999 10 399
Deferred taxation assets 2 057 926 1 390
Other long-term assets 142 3 164 70
136 752 134 490 136 620
Current assets
Inventories 21 105 20 890 18 455
Accounts receivable, short-term loans
and other current assets 26 496 27 343 24 040
Cash and cash equivalents 18 434 10 947 16 341
Assets held for sale 4 782 – 6 865
70 817 59 180 65 701
Total assets 207 569 193 670 202 321
EQUITY AND LIABILITIES
Capital and reserves
Ordinary stated share capital and reserves 101 874 72 308 82 854
Preference share capital 2 881 3 381 3 381
104 755 75 689 86 235
Non-controlling interests 1 364 6 459 1 541
Total equity 106 119 82 148 87 776
Non-current liabilities
Interest-bearing long-term liabilities 45 330 48 607 55 580
Deferred taxation liabilities 10 879 10 587 10 878
Other long-term liabilities and provisions 2 810 4 089 2 859
59 019 63 283 69 317
Current liabilities
Accounts payable, provisions and other current liabilities 36 247 35 430 36 185
Interest-bearing short-term liabilities 6 038 8 348 6 411
Bank overdrafts and short-term facilities 112 4 461 2 436
Liabilities held for sale 34 – 196
42 431 48 239 45 228
Total equity and liabilities 207 569 193 670 202 321
Net asset value per ordinary share (cents) 4 045 3 576 3 946
Closing exchange rate (rand:euro) 14.0070 14.4990 14.5721
Additional information
Continuing Discontinued
operations operations Total
Rm Rm Rm
31 December 2014
Earnings/(loss) attributable to owners of the parent 6 226 (1 280) 4 946
Dividend entitlement on cumulative preference shares (114) – (114)
Earnings/(loss) attributable to ordinary shareholders 6 112 (1 280) 4 832
Capital items
Impairments 1 308 309
Profit on disposal of intangible assets and
property, plant and equipment (70) – (70)
Other 3 – 3
Total capital items (66) 308 242
Taxation effects of capital items (24) (86) (110)
Non-controlling interests' portion of capital items (1) (31) (32)
Capital items of equity accounted companies (net of taxation) 15 – 15
Headline earnings/(loss) 6 036 (1 089) 4 947
31 December 2013
Earnings attributable to owners of the parent 4 479 132 4 611
Dividend entitlement on cumulative preference shares (133) – (133)
Earnings attributable to ordinary shareholders 4 346 132 4 478
Capital items
Impairments 3 15 18
Loss on disposal of intangible assets 38 – 38
Loss on disposal and dilution of investments 17 – 17
Other (39) 19 (20)
Total capital items 19 34 53
Taxation effects of capital items (3) (10) (13)
Non-controlling interests' portion of capital items (9) (9) (18)
Capital items of equity accounted companies (net of taxation) (3) – (3)
Headline earnings 4 350 147 4 497
30 June 2014
Earnings/(loss) attributable to owners of the parent 10 355 (265) 10 090
Dividend entitlement on cumulative preference shares (269) – (269)
Earnings/(loss) attributable to ordinary shareholders 10 086 (265) 9 821
Capital items
Impairments 76 78 154
Loss on disposal of intangible assets 45 – 45
Profit on disposal and dilution of investments (1 651) (94) (1 745)
Other 30 10 40
(1 500) (6) (1 506)
Loss on disposal of discontinued operations – 229 229
Total capital items (1 500) 223 (1 277)
Taxation effects of capital items 561 (251) 310
Non-controlling interests' portion of capital items (11) (65) (76)
Capital items of equity accounted companies (net of taxation) (8) – (8)
Headline earnings/(loss) 9 128 (358) 8 770
Segmental analysis
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited(1) % Audited
Rm Rm change Rm
Revenue – continuing operations
Retail activities
– International operations 41 061 36 654 12 73 262
– African operations 16 989 15 349 11 30 587
Manufacturing, sourcing, logistics
and corporate services
– International operations 18 747 17 561 7 33 381
Properties 1 834 1 295 42 2 911
78 631 70 859 11 140 141
Inter-segmental revenue eliminations (14 016) (13 063) (22 777)
64 615 57 796 12 117 364
Operating profit before capital
items – continuing operations
Retail activities
– International operations 2 660 2 279 17 4 579
– African operations 351 326 8 862
Manufacturing, sourcing, logistics
and corporate services
– International operations 2 146 1 991 8 4 451
– African operations 186 158 18 324
Properties 1 651 1 266 30 2 730
6 994 6 020 16 12 946
Reconciliation between operating profit per
income statement and operating profit per
segmental analysis
Operating profit before capital items per income
statement 6 808 5 862 12 622
Add: KAP equity accounted earnings at 45% 186 158 324
6 994 6 020 12 946
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited Audited
Rm % Rm % Rm %
Total assets
Retail activities
– International operations 81 980 50 76 911 50 79 958 49
– African operations 16 579 10 18 324 12 13 787 8
Manufacturing, sourcing, logistics and
corporate services
– International operations 16 852 10 16 892 11 19 419 12
– African operations 4 085 2 4 041 3 4 041 3
Properties 45 629 28 36 615 24 45 401 28
165 125 100 152 783 100 162 606 100
Reconciliation of total assets per statement of financial position to total assets per
segmental analysis
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited Audited
Rm Rm Rm
Total assets per statement of
financial position 207 569 193 670 202 321
Less: Cash and cash equivalents (18 434) (10 947) (16 341)
Less: Investments in equity accounted companies (4 235) (2 826) (4 223)
Add: 45% investment in KAP 4 085 4 041 4 041
Less: Investments and loans (11 777) (6 999) (10 399)
Less: Short-term loans receivable (7 301) (4 955) (5 928)
Less: Assets of discontinued operations
and assets held for sale (4 782) (19 201) (6 865)
Total assets per segmental analysis 165 125 152 783 162 606
Geographical information
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited(1) Audited
Rm % Rm % Rm %
Revenue – continuing
operations
Continental Europe 40 861 63 36 821 64 73 850 63
Pacific Rim 1 959 3 1 669 3 4 094 3
Southern Africa 17 035 26 15 314 26 30 572 26
United Kingdom 4 760 8 3 992 7 8 848 8
64 615 100 57 796 100 117 364 100
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited Audited
Rm % Rm % Rm %
Non-current assets
Continental Europe 109 709 80 100 962 75 106 627 78
Pacific Rim 2 090 2 1 985 1 2 222 2
Southern Africa 19 322 14 25 487 19 17 730 13
United Kingdom 5 631 4 6 056 5 10 041 7
136 752 100 134 490 100 136 620 100
Condensed consolidated statement of comprehensive income
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited Audited
Rm Rm Rm
Profit for the period 4 775 4 719 9 863
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to profit or loss:
Actuarial loss on defined benefit plans (83) (67) (145)
Deferred taxation 19 12 43
(64) (55) (102)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign subsidiaries (3 087) 5 633 5 959
Net value gain/(loss) on cash flow hedges and other fair value reserves 992 (29) (124)
Deferred taxation (182) 14 32
Other comprehensive (loss)/income of equity accounted companies, net
of deferred taxation (15) 10 1
(2 292) 5 628 5 868
Other comprehensive (loss)/income for the period (2 356) 5 573 5 766
Total comprehensive income for the period 2 419 10 292 15 629
Total comprehensive income attributable to:
Owners of the parent 2 589 10 185 15 844
Non-controlling interests (170) 107 (215)
Total comprehensive income for the period 2 419 10 292 15 629
Condensed consolidated statement of changes in equity
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2014 2013 2014
Unaudited Unaudited Audited
Rm Rm Rm
Balance at beginning of the period 87 776 66 768 66 768
Changes in ordinary stated share capital
Net shares issued 20 260 7 009 10 685
Net movement in treasury shares (6) 5 21
Changes in preference share capital
Redemption of preference shares (500) (378) (496)
Net utilisation of treasury shares – 262 380
Changes in reserves
Total comprehensive income for the period attributable to owners of the
parent 2 589 10 185 15 844
Equity portion of convertible bonds redeemed and issued net of deferred
taxation (51) (2) 351
Ordinary dividends (3 749) (1 516) (1 516)
Preference dividends (217) (99) (152)
Share-based payments 191 175 431
(Premium)/discount on introduction and recognition of
non-controlling interests – (22) 228
Other reserve movements 3 (43) 346
Changes in non-controlling interests
Total comprehensive (loss)/income for the period attributable to non-
controlling interests (170) 107 (215)
Dividends and capital distributions paid (8) (198) (208)
Net shares bought from/sold to non-controlling interests – (56) (1 768)
Released on derecognition of subsidiary – – (2 814)
Other transactions with non-controlling interests 1 (49) (109)
Balance at end of the period 106 119 82 148 87 776
Comprising:
Ordinary stated share capital 40 761 16 815 20 507
Preference share capital 2 881 3 381 3 381
Distributable reserves 47 615 39 968 46 637
Convertible and redeemable bonds reserve 1 379 858 1 430
Foreign currency translation reserve 10 696 13 499 13 784
Share-based payment reserve 1 202 811 1 011
Other reserves 221 357 (515)
Non-controlling interests 1 364 6 459 1 541
106 119 82 148 87 776
Selected explanatory notes
Statement of compliance
The condensed consolidated interim financial information for the six months ended 31 December 2014,
has been prepared and presented in accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting
Guide as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements as issued
by the Financial Reporting Standards Council, the information required by IAS 34 – Interim Financial Reporting,
the Listings Requirements of the JSE Limited and the Companies Act, 71 of 2008, as amended, of South
Africa. The consolidated interim financial information should be read in conjunction with the annual financial
statements for the year ended 30 June 2014.
Basis of preparation
The condensed interim financial statements are prepared in millions of South African rands (Rm) on the
historical-cost basis, except for certain assets and liabilities which are carried at amortised cost, and certain
financial instruments which are stated at their fair value.
Accounting policies
The accounting policies adopted in the preparation of the condensed interim financial information are
consistent with those of the annual financial statements for the year ended 30 June 2014 except during the
period under review, the group adopted all the IFRS and interpretations that were effective and deemed
applicable to the group. None of these standards and interpretations had a material impact on the results.
Effect of restatement of prior period
The 31 December 2013 per share numbers have been restated for the bonus element of the rights issue
announced on 2 July 2014. The effect of this restatement was a decrease in the respective earnings per share
figures for the period ended 31 December 2013 of between 1.7 cents per share and 2.4 cents per share. Please
refer to note 2.
Effect of re-presentation of prior period
The prior period figures in the income statement have been re-presented to disclose the discontinued
operations: KAP and the financial services division of JD.
The effect of the above re-presentation was a decrease in the earnings per share figures from continuing
operations for the six months ended 31 December 2013 of between 5.6 cents per share and 7.8 cents per
share. Revenue from continuing operations and profit from continuing operations for the six months ended
31 December 2013 decreased by R9 627 million and R184 million, respectively.
Administration
Steinhoff International Holdings Limited Registration number: 1998/003951/06
(Incorporated in the Republic of South Africa)
JSE share code: SHF ISIN: ZAE000016176
Registered office: 28 Sixth Street, Wynberg,
Sandton 2090, Republic of South Africa
Tel: +27 (11) 445 3000 Fax: +27 (11) 445 3094
Directors: D Konar- (chairman), MJ Jooste (chief executive officer), SF Booysen-, DC Brink-, CE Daun-*,
HJK Ferreira, SJ Grobler, TLJ Guibert -#, AB la Grange, MT Lategan-, JF Mouton-, FJ Nel, HJ Sonn-,
BE Steinhoff-*, PDJ van den Bosch-†, DM van der Merwe, CH Wiese-
Alternate directors: JNS du Plessis, KJ Grové, A Krüger-Steinhoff-*,M Nel †Belgian
#French *German -non-executive
Company secretary: Steinhoff Africa Secretarial Services Proprietary Limited
Auditors: Deloitte & Touche
Sponsor: PSG Capital Proprietary Limited
Transfer secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg 2001
www.steinhoffinternational.com
STEINHOFF INVESTMENT HOLDINGS LIMITED
Registration number: 1954/001893/06
(Incorporated in the Republic of South Africa)
JSE Code: SHFF ISIN: ZAE000068367
(Steinhoff Investments)
Dividend to preference shareholders
Preference shareholders are referred to the above results of Steinhoff for a
full appreciation of the consolidated results and financial position of
Steinhoff Investments.
The board has declared a gross dividend of 384 cents per preference
share on 3 March 2015, in respect of the period from 1 July 2014 to
31 December 2014 ("the dividend period"), payable on Monday,
20 April 2015, to those preference shareholders recorded in the books of
the company at the close of business on Friday, 17 April 2015.
The dividend will be payable in the currency of South Africa. The dividend
is subject to a local dividend tax rate of 15%, resulting in a net dividend
of 326.4 cents per share, unless the shareholder is exempt from dividend
tax or is entitled to a reduced rate in terms of the applicable double-tax
agreement. The company's income tax reference number is: 9375046712.
At the date of declaration, there were 15 000 000 preference shares in issue.
Anticipated dates: 2015
Last date to trade cum dividend Friday, 10 April
Shares trade ex dividend Monday, 13 April
Record date Friday, 17 April
Payment date Monday, 20 April
Share certificates may not be dematerialised or rematerialised between Monday,
13 April 2015, and Friday, 17 April 2015, both days inclusive.
On behalf of the board of directors.
Len Konar Piet Ferreira
Non-Executive Director Executive Director
3 March 2015
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