Bid Corporation Limited Unaudited results for the half-year ended December 31 2019

Annexure

Pro forma information – IFRS 16: Leases

The adoption of the IFRS 16: Leases from July 1 2019 complicates the comparison of the performance of H1F2020 and H1F2019. To provide comparative information in order to assess the group’s performance; a pro forma condensed consolidated statement of profit or loss, pro forma summarised consolidated statement of financial position, pro forma summarised consolidated statement of cash flows and pro forma supplementary pro forma information regarding the currency effects of the translation of foreign operations on the group (the pro forma information) has been presented for the half-year ended December 31 2019. The pro forma financial information of the group as set out in the attached has been prepared for illustrative purposes and reflects the group as if IFRS 16 had not been adopted on July 1 2019.

The directors of Bidcorp are responsible for compiling the pro forma financial information on the basis applicable of the criteria as detailed in paragraphs 8.15 to 8.33 of the JSE Listings Requirements and the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 (applicable criteria). The pro forma information does not constitute financial statements fairly presented in accordance with IFRS. The pro forma information has been prepared for illustrative purposes only and because of its nature may not fairly present the group’s financial position, results of operations and cash flows.

The pro forma information has not been audited or reviewed by the group’s external auditors.

PRO FORMA CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS

		For the half-year ended December 31
R000s		2019* Unaudited	IFRS 16 adjustments Unaudited	Pro forma 2019 Unaudited	2018 Unaudited Restated^#	% change	June 30 Audited
Continuing operations
Revenue		68 215 439	–	68 215 439	66 091 975^#	3,2	129 249 988
Cost of revenue		(51 992 387)	–	(51 992 387)	(50 580 680)^#	(2,8)	(98 418 233)
Gross profit		16 223 052	–	16 223 052	15 511 295	4,6	30 831 755
Operating expenses		(12 643 698)	(163 831)¹	(12 807 529)	(12 233 948)	(4,7)	(24 165 327)
Trading profit		3 579 354	(163 831)	3 415 523	3 277 347	4,2	6 666 428
	Share-based payment expense	(62 316)	–	(62 316)	(58 347)		(114 468)
	Acquisition costs	(1 590)	–	(1 590)	(8 613)		(27 686)
	Capital items	(6 056)	–	(6 056)	(4 897)		44 106
Operating profit		3 509 392	(163 831)	3 345 561	3 205 490		6 568 380
Net finance charges		(329 239)	170 875	(158 364)	(143 246)	10,6	(285 942)
	Finance income	45 991	–	45 991	52 103		109 506
	Finance charges	(375 230)	170 8752	(204 355)	(195 349)		(395 448)
Share of profit of associates and jointly controlled entities		34 164	–	34 164	32 942		59 148
Profit before taxation		3 214 317	7 044	3 221 361	3 095 186	4,1	6 341 586
Taxation		(769 845)	(965)³	(770 810)	(751 981)		(1 472 282)
Profit for the period from continuing operations		2 444 472	6 079	2 450 551	2 343 205	4,6	4 869 304
Discontinued operations
	Loss after taxation from discontinued operations	(147 732)	(957)	(148 689)	(455 011)		(731 969)
Profit for the year		2 296 740	5 122	2 301 862	1 888 194	21,9	4 137 335
Attributable to:
Shareholders of the company		2 273 879	5 122	2 279 001	1 872 734		4 104 169
	From continuing operations	2 421 611	6 079	2 427 690	2 327 745	4,3	4 836 138
	From discontinued operations	(147 732)	(957)	(148 689)	(455 011)		(731 969)
Non-controlling interest from continuing operations		22 861	–	22 861	15 460		33 166
Continuing operations (cents)
	Headline earnings per share	728,3	1,8	730,1	700,2	4,3	1 443,6
	Diluted headline earnings per share	727,3	1,8	729,1	698,9	4,3	1 441,2

*	These figures include the impact of IFRS 16: Leases
^#	Refer to revenue and cost of revenue restatement of comparatives note

Adjustments for IFRS 16: Leases comprise of the following:
¹	Reinstatement of operating lease expenses (R518,8 million) per IAS 17 allocation to operating expenses and the reversal of IFRS 16 amortisation (R355,0 million) on Right-of-Use lease assets
²	Reversal of the IFRS 16 finance cost on Right-of-Use lease liabilities
³	Deferred tax impact on 1 and 2

PRO FORMA CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		As at December 31
R000s		2019* Unaudited	IFRS 16 adjustments Unaudited	Pro forma 2019 Unaudited	2018 Unaudited	June 30 Audited
Assets
Non-current assets		36 454 844	(4 191 941)	32 262 903	30 649 023	31 294 178
	Property, plant and equipment	14 808 095	–	14 808 095	13 378 632	14 025 113
	Right-of-Use lease assets	4 192 906	(4 192 906)¹	–	–	–
	Intangible assets	717 008	–	717 008	500 188	667 572
	Goodwill	14 934 254	–	14 934 254	14 958 417	14 784 154
	Deferred taxation asset	966 714	965	967 679	943 417	944 212
	Defined benefit pension surplus	20 928	–	20 928	19 380	20 928
	Interest in associates	160 897	–	160 897	223 826	177 978
	Investment in jointly controlled entities	499 439	–	499 439	429 432	481 975
	Investments and loans	154 603	–	154 603	195 731	192 246
Current assets		34 484 658	(845 630)	33 639 028	33 216 575	33 637 800
	Inventories	9 823 477	–	9 823 477	9 871 456	9 703 879
	Trade and other receivables	15 191 469	–	15 191 469	14 592 113	15 213 598
	Assets classified as held-for-sale	4 166 858	(845 630)¹	3 321 228	3 473 095	2 944 460
	Cash and cash equivalents	5 302 854	–	5 302 854	5 279 911	5 775 863

Total assets		70 939 502	(5 037 571)	65 901 931	63 865 598	64 931 978
Equity and liabilities
Capital and reserves		26 155 892	1 040 591	27 196 483	28 250 170	28 735 967
	Attributable to shareholders of the company	25 918 507	1 040 591²	26 959 098	27 977 450	28 498 700
	Non-controlling interest	237 385	–	237 385	272 720	237 267
Non-current liabilities		15 182 942	(4 454 709)	10 728 233	5 615 162	6 524 604
	Deferred taxation liability	688 258	–	688 258	711 785	686 849
	Long-term borrowings	5 500 348	–	5 500 348	3 710 446	4 659 325
	Long-term Right-of-Use lease liabilities	4 527 223	(4 527 223)³	–	–	–
	Post-retirement obligations	58 117	–	58 117	50 358	59 117
	Long-term vendors for acquisition	290 731	–	290 731	299 461	275 144
	Long-term puttable non-controlling interest liabilities	3 805 681	–	3 805 681	305 106	336 620
	Long-term provisions	312 584	–	312 584	432 505	430 462
	Long term lease liabilities	–	72 514	72 514	105 501	77 087
Current liabilities		29 600 668	(1 623 453)	27 977 215	30 000 266	29 671 407
	Trade and other payables	18 861 832	5 687	18 867 519	18 199 848	18 698 495
	Short-term provisions	338 471	–	338 471	121 997	313 892
	Short-term vendors for acquisition	40 448	–	40 448	55 469	103 882
	Short-term puttable non-controlling interest liabilities	38 917	–	38 917	1 155 977	1 126 128
	Liabilities classified as held-for-sale	4 605 042	(1 006 605)³	3 598 437	3 403 101	3 116 633
	Taxation	341 028	–	341 028	435 788	470 753
	Short-term Right-of-Use lease liabilities	622 535	(622 535)³	–	–	–
	Short-term borrowings	4 752 395	–	4 752 395	6 628 086	5 841 624

		70 939 502	(5 037 571)	65 901 931	63 865 598	64 931 978

*	These figures include the impact of IFRS 16: Leases

Adjustments for IFRS 16: Leases comprise of the following:
¹	Reversal of IFRS 16 Right-of-Use lease assets
²	Reversal of the impact of IFRS 16 adjustments to retained earnings comprising of: > Net transition date adjustment of R1,0 billion > Recognition of the current period profit attributable to shareholders of R5,1 million under IAS 17
³	Reversal of IFRS 16 Right-of-Use lease liabilities

PRO FORMA CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

			For the half-year ended December 31
R000s			2019* Unaudited	IFRS 16 adjustments Unaudited	Pro forma 2019 Unaudited	2018 Unaudited	June 30 Audited
Cash flows from operating activities			2 065 619	(655 765)	1 409 854	471 779	2 332 967
	Operating profit		3 509 392	(163 831)¹	3 345 561	3 205 490	6 568 380
	Dividends from jointly controlled entity		20 000	–	20 000	–	–
	Acquisition costs		1 590	–	1 590	8 613	27 686
	Depreciation and amortisation		684 696	–	684 696	642 287	1 330 200
	Amortisation on Right-of-Use lease assets		355 010	(355 010)²	–	–	–
	Equity-settled incentive scheme		(272 309)	–	(272 309)	–	–
	Non-cash items^#		182	(39 170)	(38 988)	109 880	94 436
		Cash generated by operations before changes in working capital	4 298 561	(558 011)	3 740 550	3 966 270	8 020 702
		Changes in working capital	(239 102)	5 687	(233 415)	(1 450 864)	(1 439 767)
	Cash generated by operations		4 059 459	(552 324)	3 507 135	2 515 406	6 580 935
	Net finance charges paid		(113 165)	–	(113 165)	(137 672)	(262 813)
	Taxation paid		(950 167)	–	(950 167)	(679 662)	(1 423 951)
	Dividends paid		(1 106 834)	–	(1 106 834)	(939 132)	(1 978 885)
	Net operating cash flows from discontinued operations		176 326	(103 441)¹	72 885	(287 161)	(582 319)
Cash effects of investment activities			(1 571 867)	–	(1 571 867)	(1 811 952)	(3 739 498)
	Additions to property, plant and equipment		(1 382 177)	–	(1 382 177)	(1 268 473)	(2 957 607)
	Acquisition of subsidiaries		(159 297)	–	(159 297)	(337 512)	(448 640)
	Additions to intangible assets		(98 729)	–	(98 729)	(69 848)	(156 023)
	Proceeds on disposal of property, plant and equipment		102 583	–	102 583	29 248	271 349
	Proceeds on disposal of investments		85 755	–	85 755	21 180	33 202
	Proceeds on disposal of interests in subsidiaries		33 185	–	33 185	–	–
	Receipts from associates		3 328	–	3 328	–	70 409
	Proceeds on disposal of intangible assets		54		54	–	3
	Payments made to vendors for acquisition^#		(45 017)	–	(45 017)	(179 021)	(297 443)
	Payments made to puttable non-controlling interests^#		–	–	–	–	(74 428)
	Investments acquired		(61 287)	–	(61 287)	–	(79 166)
	Investment in jointly controlled entity		–	–	–	–	(51 017)
	Net investing cash flows from discontinued operations		(50 265)	–	(50 265)	(7 526)	(50 137)
Cash effects of financing activities			(929 735)	655 765	(273 970)	438 943	856 149
	Borrowings raised		2 711 617	–	2 711 617	2 526 433	5 135 168
	Borrowings repaid		(2 967 886)	–	(2 967 886)	(2 090 041)	(4 232 742)
	Right-of-Use liability payments		(655 765)	655 765¹	–	–	–
	(Payments to) receipts from non-controlling interests		(17 701)	–	(17 701)	2 551	(39 971)
	Treasury shares purchased during the year^#		–	–	–	–	(6 306)

Net decrease in cash and cash equivalents			(435 983)	–	(435 983)	(901 230)	(550 382)
Cash and cash equivalents at beginning of period			6 058 269	–	6 058 269	6 643 149	6 643 149
Exchange rate adjustment			27 762	–	27 762	95 191	(34 498)
Cash and cash equivalents at end of period			5 650 048	–	5 650 048	5 837 110	6 058 269

*	These figures include the impact of IFRS 16: Leases
^#	Refer to statement of cash flow re-presentation note

Adjustments for IFRS 16: Leases comprise of the following:
¹	Reclassification of cash flows relating to lease payments shown as finance costs in financing activities under IFRS 16 to cash generated by operations as previously disclosed under IAS 17
²	Reversal of depreciation on Right-of-Use assets to operating profit

PRO FORMA SUPPLEMENTARY INFORMATION REGARDING THE CURRENCY EFFECTS OF THE TRANSLATION OF FOREIGN OPERATIONS ON THE GROUP

In addition to excluding the adoption IFRS 16: Leases on July 1 2019, the illustrative information detailed below has been prepared on the basis of applying the H1F2019 average rand exchange rates to the H1F2020 foreign subsidiary income statements and recalculating the reported income of the group for the half-year ended December 31 2019.

		Illustrative H1F2020 at H1F2019 average exchange rates* Unaudited	IFRS 16 adjustments translated at H1F2019 average rates Unaudited	Pro forma H1F2020 Unaudited	H1F2019 Unaudited Restated^#	% change
Continuing operations
	Revenue	68 115 403	–	68 115 403	66 091 975^#	3,1
	Trading profit	3 580 079	(162 863)¹	3 417 216	3 277 347	4,3
	Headline earnings	2 432 431	5 628²	2 438 059	2 332 642	4,5
	Headline earnings per share (cents)	728,6	1,7	730,3	700,2	4,3
Constant currency per segment from continuing operations
Revenue
	Australasia	16 048 191	–	16 048 191	16 047 837	–
	United Kingdom	17 649 363	–	17 649 363	17 208 760	2,6
	Europe	23 066 399	–	23 066 399	22 129 984^#	4,2
	Emerging Markets	11 351 450	–	11 351 450	10 705 394	6,0
		68 115 403	–	68 115 403	66 091 975^#	3,1
Trading profit
	Australasia	1 060 190	(28 666)	1 031 524	980 922	5,2
	United Kingdom	902 301	(43 966)	858 335	856 706	0,2
	Europe	1 098 784	(45 376)	1 053 408	979 866	7,5
	Emerging Markets	565 246	(44 506)	520 740	501 993	3,7
	Corporate office	(46 442)	(349)	(46 791)	(42 140)	(11,0)
		3 580 079	(162 863)¹	3 417 216	3 277 347	4,3

*	These figures include the impact of IFRS 16: Leases
^#	Revenue restatement – refer to revenue and cost of revenue restatement of comparatives note

Adjustments for IFRS 16: Leases comprise of the following:
¹	Constant currency reinstatement of operating lease expenses (R515,6 million) per IAS 17 allocation to operating expenses and the reversal of IFRS 16 amortisation (R352,7 million) on Right-of-Use lease assets
²	Constant currency ZAR impact on headline earnings on the adoption of IFRS 16: Leases

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