INTEGRATED REPORT 2023

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PERFORMANCE REVIEW

FIVE-YEAR REVIEW OF FINANCIAL PERFORMANCE

Period   2023 
Reported 
2023  
Pro forma^
2022  
Reported  
2022 
Pro forma*
2021  
Reported  
2020  
Reported  
2020  
Pro forma~
2019  
Reported  
2019  
Pro forma~
Number of weeks 52  52  53  52  52  52  52  52  52 
Returns and margin performance
Gross margin (%) 52.5  52.5  53.5  53.5  51.0  50.8  50.8  51.6  51.6 
Trading margin (%) 18.2  16.9  20.2  19.7  13.8  (7.8) 7.9  2.5  12.6 
Operating margin (%) 24.0  22.7  24.7  24.3  18.5  (0.7) 15.0  9.0  19.0 
Return on equity (%) 48  45  50  48  32  (8) 14  22 
Return on assets (%) 30  28  33  32  24  (1) 13  10  19 
Inventory turn (times) 4.2  4.2  4.6  4.5  4.6  4.0  4.0  4.2  4.2 
Asset turnover (times) 1.2  1.2  1.3  1.3  1.3  1.1  0.9  1.1  1.0 
Net (debt)/cash to equity (%) (11) (9) –  (8) (7)
Net (debt)/cash to EBITDA (times) (0.1) (0.1) 0.1  –  –  (0.2) (0.1)
Return on invested capital (ROIC) (%) 28  35  24  (1) 11  19 
Weighted average cost of capital (WACC) (%) 14  14  12  11  11  12  12 
ROIC divided by WACC (times) 2.0  2.5  2.0  (0.1) 1.0  0.8  1.6 
Cash realisation rate (%) 74  80  107  136  136  93  93 
Statements of comprehensive income
Sale of merchandise (Rm) 19 894  19 894  17 886  17 584  16 400  16 379  16 379  18 094  18 094 
Trading expenses (Rm) (7 772) (7 772) (6 607) (6 598) (6 454) (10 027) (7 457) (9 208) (7 388)
Trading profit/(loss) (Rm) 3 616  3 362  3 618  3 468  2 269  (1 274) 1 296  459  2 279 
Profit/(loss) before finance costs and tax (Rm) 4 775  4 515  4 417  4 267  3 038  (110) 2 460  1 620  3 440 
Profit/(loss) before tax (Rm) 4 397  4 137  4 182  4 032  2 746  (463) 2 107  1 226  3 046 
Headline earnings (Rm) 3 219  3 017  2 996  2 886  2 114  1 716  1 716  2 445  2 445 
Statements of financial position
Non-current assets (Rm) 6 716  5 520  5 305  5 856  10 246  8 645  10 465
Cash and cash equivalents (Rm) 1 462  1 068  1 077  2 150  2 150  777  777 
Trade and other receivables (Rm) 5 546  4 908  4 327  4 091  4 091  4 934  4 934 
Inventories (Rm) 2 244  1 819  1 755  2 010  2 010  2 108  2 108 
Other current assets (Rm) 165  176  57  174  174  175  175 
Total assets (Rm) 16 133  13 491  12 521  14 281  18 671  16 639  18 459 
Total equity (Rm) 7 654  6 106  6 191  6 008  9 826  8 379  10 105 
Non-current liabilities (Rm) 3 237  2 628  2 195  2 698  3 270  4 638  4 732 
Current liabilities  (Rm) 5 242  4 757  4 135  5 575  5 575  3 622  3 622 
Total equity and liabilities (Rm) 16 133  13 491  12 521  14 281  18 671  16 639  18 459 
Statements of cash flows                
Cash inflow from operations (Rm) 3 522  3 548  3 849  4 517  4 517  4 002  4 002 
Capital expenditure  (Rm) 717  340  320  435  435  465  465 
Share performance
Basic earnings/(loss) per share (cents) 888.5  833.7  794.1  765.5  480.2  (133.0) 340.3  144.7  503.8 
Headline earnings per share (cents) 873.3  818.5  779.8  751.2  520.3  410.4  410.4  571.7  571.7 
Diluted headline earnings per share (cents) 861.4  807.3  770.8  742.5  516.7  409.0  409.0  569.5  569.5 
Cash flow per share (cents) 955.5  923.5  947.3  1 080.4  1 080.4  935.7  935.7 
Cash equivalent earnings per share (cents) 1 286.2  1 154.6  882.8  795.0  795.0  1 006.3  1 006.3 
Net asset value per share (cents) 2 073  1 658  1 562  1 450  2 371   1 969  2 375 
Annual cash dividend per share (cents) 565  505  350  280  280  384  384 
Dividend cover (times) 1.5  1.5  1.5  1.5  1.5  1.5  1.5 
Number of shares in issue (000's) 408 499  408 499  409 456  409 456  438 407  442 964  442 964  442 876  442 876 
Number of shares in issue (net of treasury shares) (000's) 369 303  369 303  368 334  368 334  396 380  414 427  414 427  425 506  425 506 
Weighted average number of shares (000's) 368 581  368 581  384 219  384 219  406 267  418 121  418 121  427 653  427 653 
Cumulative value of shares repurchased# (Rm) 6 448  6 420  4 831  4 063  4 063  3 480  3 480 
Cumulative number of shares repurchased# (000's) 163 463  162 907  133 555  114 299  114 299  102 391  102 391 
Closing share price  (cents per share) 5 660  4 886  5 616  3 428  3 428  7 000  7 000 
Notes:
^ The "2023 Pro forma" has been calculated by deducting the settlement of a long-standing indirect tax matter with the South African Revenue Service (SARS), resulting in previous adverse assessments that had been issued in the 2022 financial period being reduced by R109 million (including the reversal of interest charged of R37 million), the release of accruals that had been accumulated since the 2008 financial period in respect of this matter amounting to R145 million, and the recognition of interest of R6 million on the overpayment of tax, and its impact on trading profit, profit before finance costs and tax, profit before tax, the resultant tax impact and profit for the period.
* The "2022 Pro forma" has been calculated by deducting first week adjustments which relate to sale of merchandise, the related cost of sales (calculated with reference to the gross profit margin for the 53-week period ended 3 July 2022), weekly payroll expense, concession rent, and tax expense (calculated with reference to the actual tax rate for the 53‑week period ended 3 July 2022) for the one-week period from 28 June 2021 to 4 July 2021, together with the resulting gross profit, trading profit, profit before finance costs and tax, profit before tax and profit for the said one‑week period.
~ Excluding the impact of goodwill and intangible asset impairments.
# Pursuant to the general buy-back programme as well as for share scheme purposes, and includes shares previously repurchased and cancelled: 1 million (cost of R28 million) in 2023, 29 million (cost of R1.6 billion) in 2022, 5 million (cost of R222 million) in 2021, 44 million (cost of R1.9 billion) in 2014, 36 million (cost of R275 million) in 2007 and 7 million (cost of R200 million) in 2006.

The full 10-year review and definitions are available on the website at www.truworths.co.za/reports.

The Summarised Group Annual Financial Statements.

INTEGRATED REPORT 2023