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MSM: MASSMART HOLDINGS LIMITED - Results For The 52 Weeks Ended 25 December 2016

Date: 2017/02/23

MSM: MASSMART HOLDINGS LIMITED - Results for the 52 weeks ended 25 December 2016
Results for the 52 weeks ended 25 December 2016

Massmart Holdings Limited 
("the Company" or "the Group") 
JSE code MSM 
ISIN ZAE000152617 
Company registration number  1940/014066/06 

Results for the 52 weeks ended 25 December 2016 

Massmart, Africa's second largest retail group, comprises four divisions operating in 412 stores, across 13 
sub-Saharan countries. Through our widely-recognised, differentiated, retail and wholesale formats, we have 
leading shares in General Merchandise, Liquor, Home Improvement and basic wholesale Food markets. 
Our key foundation of high volume, low cost and operational excellence are the enablers of our price leadership.

Overview 

During a year where the sub-Saharan consumer environment became increasingly challenging, 
Massmart's total sales were R91.3 billion, an increase of 7.7% over the prior year. Comparable stores' 
sales growth was 5.4%, with product inflation of 6.7%. Currency weakness and challenging operating 
environments saw total sales growth from our non-South African stores slow to 11.2% (13.4% in 
constant currencies) from 23.2% for the six months to June 2016. 
Good margin management and excellent expense control resulted in Group trading profit, excluding 
foreign exchange movements and interest, growing by 11.9% to R2.6 billion, while headline earnings 
increased by 15.6% to R1.3 billion. 
19 stores were opened, including two outside South Africa, representing new space growth of 3.7%. 
Our focus on optimising the Group's store footprint continued, with ten stores being closed, resulting in 
a net space increase of 1.2%. Our portfolio of 412 stores includes 39 outside South Africa producing 
8.7% of the Group's sales. 

South African environment 

The difficulties facing the South African consumer deteriorated in the latter half of 2016. The main 
impact coming from weak underlying economic growth, compounded by high Food inflation which 
averaged about 11.3% in the six months to December 2016 (per StatsSA). The Group's sales trends in 
the final quarter to December 2016 were difficult to interpret usefully as November was distorted by 
our extremely successful Black Friday campaigns, which likely softened early December sales, and an 
additional trading day in the final Christmas week. South African comparable stores' sales growth was 
5.6% for the year. 
The divergent sales performances across our major product categories reflect the economic pressures 
within the South African consumer environment, with total Food & Liquor sales growing at 11.7% for 
the year while General Merchandise grew by only 1.5% and DIY total sales grew by 5.6%. It is clear 
that General Merchandise continues to be negatively impacted by very low discretionary spending by 
consumers. 

African environment 

Drought conditions in southern Africa remain severe and sales growths in this region slowed noticeably 
in the latter part of 2016. Slightly more than 50% of the Group's ex-SA sales are non-Food (General 
Merchandise and Home Improvement) and the difficult economic conditions exacerbated these categories' 
performances. The Group's total sales growth in Rands was 11.2%. Comparable stores' Rand sales growth 
was 3.1%, which at a category level was 9.4% in Food and 0.6% in non-Food. Currency weakness in Nigeria 
and Mozambique significantly impacted our reported Rand sales growth. 

Financial review 

Financial performance 

Massmart's total sales for the year to December 2016 increased by 7.7% over the prior year, with 
comparable sales growth of 5.4%. Product inflation was estimated at 6.7%, suggesting a real 
comparable volume decline of 1.3%. Inflation in General Merchandise, Food & Liquor and Home 
Improvement increased to 5.9%, 7.7% and 4.7% respectively. Our non-SA businesses represented 8.7% 
(2015: 8.4%) of total sales and grew by 11.2% in Rands and 13.4% in constant currencies, while 
comparable sales growth in Rands from these territories was 3.1%. 
Nineteen stores were opened and ten were closed, resulting in a total of 412 stores at December 2016. 
Net trading space increased by 1.2% from December 2015 to 1,568,744m2 . 
The Group's gross margin of 19.0% is marginally higher than that of the prior year of 18.9%, mostly 
driven from business-mix and better category management. Operating expenses were tightly controlled, 
increasing by 7.7% over the prior year, and great expense control resulted in comparable expense 
growth of only 5.4%. Pleasingly expenses as a % of sales were held at 16.4%. 
Growth in employment costs, the Group's biggest cost category, increased by 8.3% (with a comparable 
increase of 7.5%). Occupancy costs increased by 9.3%, mainly due to store openings. Depreciation and 
amortisation increased by 9.5%. Other operating expenses increased by 4.7%. The non-capital costs of 
upgrading our IT infrastructure, as well as pre-opening store expenses of R50.9 million (2015: R56.2 
million), are included in this expense category. 
Included in operating profit is the net insurance gain of R45.0 million arising from the excess of the 
insured replacement value over the net book value of the assets destroyed by the fire at the Jumbo 
Crown Mines store in February 2016. 
Net realised and unrealised foreign exchange losses of R141.8 million (2015: loss of R149.8 million) 
are also included in operating profit. African currencies have been particularly volatile and mostly weaker 
during the year. We have been actively managing the value and currency of our foreign-denominated 
balances, where practicable, and we take out foreign exchange contracts on select exposures. All 
foreign-denominated inventory orders are automatically covered forward. 
Excluding foreign exchange movements, earnings before interest, tax, depreciation and amortisation 
(EBITDA) of R3.7 billion increased over the prior year by 14.3%. 
Net finance costs have grown to R571.9 million (2015: R475.3 million), mainly aggravated by two 
interest rate increases during 2016. The Group's effective tax rate of 30.8% is in line with expectation 
(2015: 30.2%). 
Headline earnings and headline earnings per share (EPS) increased by 15.6% and 15.8% respectively 
over the prior year. Adjusting for the effect of the foreign exchange movements in both years, Headline 
earnings and Headline EPS increased by 12.9% and 13.1% respectively. 

Financial position 

During the past few years, investment spend has been focused on new IT infrastructure, store openings, 
and the refurbishment of existing stores. The net book value of property, plant and equipment increased 
by 4.3% over the prior year. Total capital expenditure of R1.8 billion comprises: R0.8 billion on 
replacement expenditure including store refurbishments and our IT systems' investments; and 
R1.0 billion on expansionary expenditure. 
Interest-bearing borrowings increased due to a new term facility taken on in the year. 
Operating cash before working capital movements amounted to R4.0 billion, a pleasing 17.7% higher 
than the prior year. 
Improving inventory management saw our Inventory balance decrease by 1.1% compared to December 
2015, with inventory days reducing by five days to 58 days, despite store openings. Trade and other 
receivables were in line with 2015 and so debtors' days stayed flat, at nine days. Creditors' days 
decreased to 70 days (2015: 76 days) due partly to the lower inventory levels and from early-settling 
some foreign-denominated creditor balances in non-SA countries to limit potential currency volatility. 
Return on equity for the year improved to 22.0% (2015: 20.4%) and excluding foreign exchange 
movements, this figure was 23.6% (2015: 22.4%). 

Our people
 
The contribution of our 48,000 colleagues never goes unnoticed or unappreciated, especially in the 
current environment where likely many of them and their own families were feeling the adverse consequences of 
the weak economy. We would like to acknowledge and thank every colleague for their service and 
support, including those in our administrative offices and distribution centres, knowing that part of the 
Group's improving performance comes from their efforts. 

Directorate and Executive Committee
 
With effect from November 2016, Joe Ralebepa joined the Group as General Counsel and the Massmart 
Holdings Company Secretary. Richard Inskip joined in January 2017 as Group Supply Chain & 
Logistics Executive to focus on leveraging the Group's transport, logistics and supply chain. 
After 2.5 years on the Massmart Board, Walmart-appointee Andy Clarke has resigned with effect from 
22 February 2017. Andy's deep retail experience contributed significantly to the 
Group's retail thinking and execution, especially on Fresh and online, and we thank him for his 
valuable service. 

Strategic priorities 

Our areas of strategic focus remain unchanged: 
To drive the growth and profitability of the core South African business over the medium-term; 
To expand further into Food Retail and the Fresh categories through new stores and our existing 
formats in South Africa; 
Sub-Saharan African expansion through opening Builders Warehouse, Game and Masscash stores. In 
the next two years we anticipate opening 11 new stores representing ex-SA space growth of about 26.2%; and 
To expand, improve and refine our online / ecommerce offerings in DionWired, Makro and Massbuild. 

Prospects
 
For the 8 weeks to 19 February 2017, total sales increased by 0.6% and comparable sales decreased by 
1.5%. South African total and comparable sales growths are 2.5% and 0.4% respectively, while the 
equivalents for ex-SA are both negative. Sales growth in January 2017 was negative but in February accelerated 
positively. It is likely that several key economic drivers in SA will improve in 2017 - lower food price inflation, 
some Rand strength and possibly lower interest rates. High levels of uncertainty and volatility complicate 
any economic guidance however. Despite the slow start to the financial year, we have a reasonable expectation of a 
satisfactory year ahead. 
The financial information on which this outlook statement is based has not been reviewed and reported 
on by the Company's external auditors. 

Dividend 

Notice is hereby given that a gross final cash dividend of 224.80 cents per share, in respect of the year 
ended December 2016 has been declared. The number of shares in issue at the date of this declaration is 
217,136,334. The dividend has been declared out of income reserves as defined in the Income Tax Act, 
1962, and will be subject to the South African dividend withholding tax ("DWT") rate of 15% which 
will result in a net dividend of 191.08 cents per share to those shareholders who are not exempt from 
paying dividend tax. Massmart's tax reference number is 9900/196/71/9. 

The salient dates relating to the payment of the dividend are as follows: 
Last day to trade cum dividend on the JSE:   Tuesday, 14 March 2017 
First trading day ex dividend on the JSE:    Wednesday, 15 March 2017 
Record date:                                 Friday, 17 March 2017 
Payment date:                                Monday, 20 March 2017 
Share certificates may not be dematerialised or rematerialised between Wednesday, 15 March 2017 and 
Friday, 17 March 2017, both days inclusive. 

Massmart shareholders who hold Massmart ordinary shares in certificated form ("certificated 
shareholders") should note that dividends will be paid by cheque and by means of an electronic funds 
transfer ("EFT") method. Where the dividend payable to a particular certificated shareholder is less 
than R100, the dividend will be paid by EFT only to such certificated shareholder. Certificated 
shareholders who do not have access to any EFT facilities are advised to contact the company's transfer 
secretaries, Computershare Investor Services at Rosebank Towers, 15 Biermann Avenue, Rosebank, 
Johannesburg, 2196; on 011 370 5000; or on 0861 100 9818 (fax), in order to make the necessary 
arrangements to take delivery of the proceeds of their dividend. 
Massmart shareholders who hold Massmart ordinary shares in dematerialised form will have their 
accounts held at their CSDP or broker credited electronically with the proceeds of their dividend. 

On behalf of the Board 

Guy Hayward 
Chief Executive Officer 

Johannes van Lierop
Chief Financial Officer 
22 February 2017 

Performance highlights

Sales 
R91,250.0 million 
2015: R84,731.8 million 
Up by 7.7% 

Operating profit before interest 
R2,483.4 million 
2015: R2,150.4 million 
Up by 15.5%
 
Headline earnings 
R1,293.3 million 
2015: R1,118.8 million 
Up by 15.6%

Total dividend per share 
298.9 cents 
2015: 258.2 cents 
Up by 15.8% 



Our divisions 

MASSDISCOUNTERS
 
Up 5.3% 
Sales 
R20,544.5 million 
2015: R19,514.1 million 

Up 54.8% 
Trading profit* 
R364.3 million 
2015: R235.4 million 

Massdiscounters comprises the 141-store General Merchandise and Food discounter Game, which 
trades in South Africa and 11 other African countries; and the 24-store Hi-tech retailer DionWired in 
South Africa. 
Total sales for the year increased by 5.3% and comparable sales grew by 1.5% with product inflation of 
4.8%. South African total and comparable sales growths were higher in the second half of 2016 while 
ex-SA sales growth in Rands slowed dramatically. 
Our two-year focus on Game's merchandise execution and addressing in-store and supply chain costs 
manifested in a strong trading margin and expense performance, and so Massdiscounters' trading profit 
before interest and tax increased by 54.8%. DionWired had an exceptional year with good sales, despite 
a very challenging environment, and an impressive profit performance. 
In the last quarter of 2016 we successfully trialled the new SAP point-of-sale system in 12 Game stores 
in South Africa. We have therefore started the next phase of the point-of-sale roll-out, with all Game and 
DionWired stores in SA likely to be converted by June 2017. The more significant SAP ERP 
systems' implementation remains on schedule for mid-2018. 
Our Fresh roll-out continues with 88 Game stores now offering this category. Although not yet in all 
stores, Food and Liquor sales participation is already 23% and is achieving comparable growth of 11%. 
Four Game stores (including one in Kenya and one in Zambia) were opened, whilst two DionWired 
stores were opened and two closed, increasing trading space by 2.3% to 545,094m2 . 

MASSWAREHOUSE

Up 11.0% 
Sales 
R26,270.3 million 
2015: R23,675.9 million 
 
Up 4.4% 
Trading profit* 
R1,251.3 million 
2015: R1,198.7 million 
 
Masswarehouse comprises the 20-store Makro warehouse-club trading in Food, General Merchandise 
and Liquor in South Africa; and Massfresh, which houses the Group's fresh produce, fresh meat and 
bakery operations including The Fruitspot a fruit and vegetable processor and distributor. 
Total sales for the year increased by 11.0% and comparable sales grew by 7.6% with product inflation 
of 6.5%. Total sales growths in Food and Liquor are higher than 11% while the lower General 
Merchandise sales are reflective of soft discretionary spending. There were significant cost pressures 
within the business, including new store pre-opening costs of R17.4 million, resulting in an 
increase in trading profit before interest and tax of 4.4%. 
Online sales more than doubled for the year and we continue to expand and improve the online 
offering. 
New Fruitspot facilities, which will improve our internal and external distribution efficiencies, were 
opened in Cape Town and Durban in the latter part of 2016. 
The April 2016 opening of a new Makro store near Carnival Mall, east of Johannesburg, and an 
extension to the Strubens Valley store, in Johannesburg west, increased trading space by 11.3% to 
217,907m2 . 


MASSBUILD

Up 5.6% 
Sales 
R12,687.1 million 
2015: R12,010.6 million 

Up 2.7% 
Trading profit* 
R712.6 million 
2015: R 693.6 million 

Massbuild comprises 99 stores, trading in DIY, Home Improvement and Building Materials, under the 
Builders Warehouse, Builders Express, Builders Trade Depot and Builders Superstore brands in South 
Africa; and five Builders Warehouse stores in Botswana, Mozambique and Zambia. 
Massbuild grew total sales for the year by 5.6%, with comparable sales increasing by 1.7% and product 
inflation of 4.7%. Sales growth in our South African stores improved slightly in the second half of 2016 
as a result of more effective promotions and good merchandise execution while our ex-SA stores' sales 
growth in Rands decelerated markedly given the weakening economies in those countries. 
Given the sales pressures and despite good expense control, the increase in Massbuild's trading profit 
before interest and tax was 2.7%. 
A pilot online offering for our contractor customers has progressed well. The online proposition is 
exceptional with rich data and broad functionality, and will be available for general use shortly. 
One Builders Warehouse store was closed in Mozambique. Two Builders Express stores and two 
Builders Superstores were opened; and one Builders Trade Depot store was closed in South Africa. Net 
trading space remained similar to 2015 at 449,212m2 . 

MASSCASH

Up 7.5% 
Sales 
R31,748.1 million 
2015: R29,531.2 million 

Up 28.2% 
Trading profit* 
R284.7 million 
2015: R222.0 million 
 
Masscash comprises 54 Wholesale Cash & Carry and 57 Retail stores trading in South Africa; 12 Cash 
& Carry stores in Botswana, Lesotho, Mozambique, Namibia and Swaziland; and Shield, a voluntary 
buying association. 
Total sales increased by 7.5%, comparable sales increased by 7.9% with product inflation of 9.3%. 
Lower-income consumer demand was slightly mitigated by high Food inflation, particularly in 
commodities. Competition and price-pressure was intense in both Retail and Wholesale but both 
businesses responded very effectively. Cambridge and Rhino performed well, growing comparable 
sales above 10%. 
Effective margin management and good cost control enabled Masscash to grow trading profit before 
interest and tax by 28.2%. 
Four Wholesale stores were closed; and eight Retail stores were opened and two closed, resulting in net 
trading space decreasing by 4.3% to 356,531m2 . 

*Trading profit before interest and taxation 


Divisional operational review 
                                   
                      52 weeks                  52 weeks                                       
                      December                  December                          Comparable   Estimated 
                          2016       % of           2015        % of        Year     % sales     % sales 
Rm                   (Reviewed)     sales       (Audited)      sales    % growth      growth   inflation
              
Sales                 91,250.0                  84,731.8                     7.7         5.4         6.7 
Massdiscounters       20,544.5                  19,514.1                     5.3         1.5         4.8 
Masswarehouse         26,270.3                  23,675.9                    11.0         7.6         6.5 
Massbuild             12,687.1                  12,010.6                     5.6         1.7         4.7 
Masscash              31,748.1                  29,531.2                     7.5         7.9         9.3 
Trading profit*        2,612.9        2.9        2,349.7         2.8        11.2 
Massdiscounters          364,3        1.8          235.4         1.2        54.8 
Masswarehouse          1,251.3        4.8        1,198.7         5.1         4.4 
Massbuild                712,6        5.6          693.6         5.8         2.7 
Masscash                 284,7        0.9          222.0         0.8        28.2 

The 'trading profit before interest and tax' above is the amount per the Condensed Consolidated 
Income Statement less the BEE transaction IFRS 2 charge. 



Condensed consolidated income statement 
                                                                        52 weeks     52 weeks 
                                                                        December     December          % 
                                                                            2016         2015     change 
Rm                                                                     (Reviewed)    (Audited) 
Revenue                                                                 91,564.9     84,857.4        7.9 
 Sales                                                                  91,250.0     84,731.8        7.7 
 Cost of sales (note 2)                                                (73,948.9)   (68,689.6)      (7.7) 
 Gross profit                                                           17,301.1     16,042.2        7.8 
 Other income                                                              216.8        125.6       72.6 
 Depreciation and amortisation                                          (1,036.5)      (946.2)      (9.5) 
Employment costs                                                        (7,346.6)    (6,784.3)      (8.3) 
 Occupancy costs                                                        (3,133.2)    (2,865.6)      (9.3) 
 Other operating costs                                                  (3,397.8)    (3,245.8)      (4.7) 
 Trading profit before interest and taxation                             2,603.8      2,325.9       11.9 
 Impairment of assets (note 2)                                             (76.7)       (25.7) 
 Insurance proceeds on items in PP&E (note 2)                               98.1            - 
 Operating profit before foreign exchange movements and interest         2,625.2      2,300.2       14.1 
Foreign exchange loss (note 3)                                            (141.8)      (149.8)       5.3 
 Operating profit before interest                                        2,483.4      2,150.4       15.5 
 - Finance costs                                                          (601.0)      (507.7)     (18.4) 
 - Finance income                                                           29.1         32.4      (10.2) 
Net finance costs                                                         (571.9)      (475.3)     (20.3) 
 Profit before taxation                                                  1,911.5      1,675.1       14.1 
 Taxation                                                                 (588.9)      (505.9)     (16.4) 
 Profit for the year                                                     1,322.6      1,169.2       13.1 

 Profit attributable to: 
 - Owners of the parent                                                  1,308.2      1,112.8       17.6 
 - Non-controlling interests                                                14.4         56.4      (74.5) 
 Profit for the year                                                     1,322.6      1,169.2       13.1 

 Basic EPS (cents)                                                         604.7        513.5       17.8 
 Diluted basic EPS (cents)                                                 594.4        506.1       17.4 
 Dividend (cents): 
 - Interim                                                                  74.1        146.0      (49.2) 
 - Final                                                                   224.8        112.2      100.4 
 - Total                                                                   298.9        258.2       15.8 



Headline earnings 
                                                                         52 weeks     52 weeks 
                                                                         December     December          % 
Rm                                                                           2016         2015     change 
                                                                        (Reviewed)   (Audited) 
Reconciliation of profit for the year to headline earnings 
Profit for the year attributable to owners of the parent                  1,308.2      1,112.8       17.6 
Impairment of assets (note 2)                                                76.7         25.7 
Loss on disposal of tangible and intangible assets                            6.7          2.3 
Profit on sale of non-current assets classified as held for sale                -         (5.2) 
Insurance proceeds for fixed assets impaired                                (98.1)        (1.2) 
Foreign currency translation reserve re-classified to the Income 
                                                                                -        (12.7) 
Statement 
Total tax effects of adjustments                                             (0.2)        (2.9) 
Headline earnings                                                         1,293.3      1,118.8       15.6 
Foreign exchange loss after taxation                                         95.3        111.0 
Headline earnings before foreign exchange (taxed)                         1,388.6      1,229.8       12.9 

Headline EPS (cents)                                                        597.8        516.3       15.8 
Headline EPS before foreign exchange (taxed) (cents)                        641.8        567.5       13.1 
Diluted headline EPS (cents)                                                587.6        508.8       15.5 
Diluted headline EPS before foreign exchange (taxed) (cents)                630.9        559.3       12.8 




Condensed consolidated statement of comprehensive income 
                                                                         
                                                                          December     December                           
                                                                              2016         2015        % 
Rm                                                                       (Reviewed)    (Audited)  change
Profit for the year                                                        1,322.6      1,169.2     13.1 
Items that will not subsequently be re-classified to the Income 
                                                                               3.6          5.0 
Statement: 
Net post retirement medical aid actuarial profit                               3.6          5.0 

Items that will subsequently be re-classified to the Income Statement:      (368.2)       (21.2) 
Foreign currency translation reserve (note 3)                               (376.9)       (24.2) 
Cash flow hedges - effective portion of changes in fair value                (23.2)         4.4 
Fair value movement on available-for-sale financial assets                       -         (3.5) 
Income tax relating to components of other comprehensive income               31.9          2.1 

Total other comprehensive loss for the year, net of tax                     (364.6)       (16.2) 
Total comprehensive income for the year                                      958.0      1,153.0     (16.9) 

Total comprehensive income attributable to: 
- Owners of the parent                                                       943.6      1,096.6 
- Non-controlling interests                                                   14.4         56.4 
Total comprehensive income for the year                                      958.0      1,153.0     (16.9) 




Condensed consolidated statement of financial position
 
                                                
                                                December      December          % 
Rm                                                  2016          2015     change
                                               (Reviewed)     (Audited) 
ASSETS 
Non-current assets                              12,517.6     12,031.2 
Property, plant and equipment                    8,470.2      8,117.8         4.3 
Goodwill and other intangible assets             3,159.0      2,999.1         5.3 
Investments and other financial assets             164.2        165.1 
Deferred taxation                                  724.2        749.2 
Current assets                                  19,348.3     18,687.6 
Inventories                                     11,803.0     11,934.5        (1.1) 
Trade, other receivables and prepayments         4,684.7      4,697.4        (0.3) 
Taxation                                            58.3         50.8 
Cash on hand and bank balances                   2,802.3      2,004.9        39.8 
Non-current assets classified as held for sale      17.7         11.5 

Total assets                                    31,883.6     30,730.3 

EQUITY AND LIABILITIES 
Total equity                                     6,183.7      5,791.1 
Equity attributable to owners of the parent      6,108.1      5,636.0         8.4 
Non-controlling interests                           75.6        155.1 
Non-current liabilities                          4,722.4      3,053.4 
Interest-bearing borrowings                      3,301.9      1,819.6        81.5 
Deferred taxation                                   73.9         73.5 
Other non-current liabilities and provisions     1,346.6      1,160.3 
Current liabilities                             20,977.5     21,885.8 
Trade, other payables and provisions            19,634.0     20,077.7        (2.2) 
Taxation                                           138.4        155.6 
Bank overdrafts                                    180.6        446.4 
Interest-bearing borrowings                      1,024.5      1,206.1 

Total equity and liabilities                    31,883.6     30,730.3 



Condensed consolidated statement of cash flows 
                                                               December      December 
Rm                                                                 2016          2015 
                                                              (Reviewed)     (Audited) 

Operating cash before working capital movements                 3,984.9       3,384.4 
Working capital movements                                        (263.0)        372.0 
Cash generated from operations                                  3,721.9       3,756.4 
Taxation paid                                                    (573.9)       (631.0) 
Net interest paid                                                (489.3)       (437.0) 
Investment income                                                  50.0          40.3 
Dividends paid                                                   (453.2)       (958.3) 
Cash inflow from operating activities                           2,255.5       1,770.4 
Investment to maintain operations                                (826.7)       (983.7) 
Investment to expand operations                                  (953.7)       (710.7) 
Investment in subsidiaries                                        (17.7)        (16.9) 
Proceeds on disposal of property, plant and equipment              27.3          38.7 
Proceeds on disposal of assets classified as held for sale            -          23.1 
Other net investing activities                                     (4.1)          3.9 
Cash outflow from investing activities                         (1,774.9)     (1,645.6) 
Increase/(decrease) in non-current liabilities                  1,463.4        (314.1) 
(Decrease)/increase in current liabilities                       (223.0)        372.3 
Non-controlling interests acquired                               (177.7)        (60.1) 
Net acquisition of treasury shares                               (103.2)        (23.6) 
Cash inflow/(outflow) from financing activities                   959.5         (25.5) 

Net increase in cash and cash equivalents                       1,440.1          99.3 
Foreign exchange movements                                       (376.9)        (24.2) 
Opening cash and cash equivalents                               1,558.5       1,483.4 
Closing cash and cash equivalents                               2,621.7       1,558.5 

 




Condensed consolidated statement of changes in equity
                                                                                
                                                                              
                                                                                       Equity
                                                                                 attributable           Non-
                                      Share      Share       Other     Retained      to owners    controlling 
 Rm                                 capital    premium    reserves       profit  of the parent      interests       Total 
 
 Balance as at December 2014            2.2      733.4       550.5      4,048.3        5,334.4          192.8     5,527.2 
 (Audited) 
 Dividends declared                      -          -           -       (914.1)         (914.1)         (52.7)     (966.8) 
 Total comprehensive income              -          -       (16.2)     1,112.8         1,096.6           56.4     1,153.0 
 Changes in non-controlling 
 interests                               -          -       (18.7)           -           (18.7)         (41.4)      (60.1) 
 IFRS 2 charge and Share Trust 
 transactions                            -          -       218.5        (23.6)          194.9              -       194.9 
 Treasury shares acquired                -      (58.3)        1.2            -           (57.1)             -       (57.1) 

 Balance as at December 2015 
 (Audited)                             2.2      675.1       735.3      4,223.4         5,636.0          155.1     5,791.1 

 Dividends declared                      -          -           -       (404.4)         (404.4)         (48.5)     (452.9) 
 Total comprehensive income              -          -      (364.6)     1,308.2           943.6           14.4       958.0 
 Changes in non-controlling  
 interests                               -          -      (132.3)           -          (132.3)         (45.4)     (177.7) 
 IFRS 2 charge and Share Trust           -          -       198.5        (28.1)          170.4              -       170.4 
 transactions                     
 Treasury shares acquired                -     (106.1)        0.9            -          (105.2)             -      (105.2) 
 Year ended December 2016            
 (Reviewed)                            2.2      569.0       437.8      5,099.1         6,108.1           75.6     6,183.7                         


Fair value hierarchy
 
For financial instruments traded in an active market (level 1), fair value is determined using stock 
exchange quoted prices. For other financial instruments (level 2), appropriate valuation techniques, 
including recent market transactions and other valuation models, have been applied and significant 
inputs include market yield curves and exchange rates. For non-current assets classified as held for sale 
(level 3) fair value less costs to sell, in terms of IFRS 5, has been determined based on the sale 
agreements. The table below reflects 'Financial instruments' and 'Non-current assets classified as held 
for sale' carried at fair value, and those 'Financial instruments' and 'Non-current assets classified as held 
for sale' that have carrying amounts that differ from their fair values, in the Statement of Financial 
Position. 

                                                                     
                                      December       Level     Level     Level    December       Level    Level    Level 
Rm                                        2016           1         2         3        2015           1        2        3
                                     (Reviewed)                                   (Audited) 

Financial assets at fair value 
through profit or loss                   142.9          -      142.9         -       188.1           -    188.1       - 
- Investment in cell captives 
  and other                              140.9          -      140.9         -       139.3           -    139.3       - 
- FEC asset (non-designated 
  hedge)                                   2.0          -        2.0         -        48.8           -     48.8       - 
Financial asset designated as a 
cash flow hedging instrument               3.1          -        3.1         -        20.7           -     20.7       - 
- FEC asset                                3.1          -        3.1         -        20.7           -     20.7       - 
Loans and receivables                     13.1          -       13.1         -        13.9           -     13.9       - 
- Employee share trust loans              13.1          -       13.1         -        13.9           -     13.9       - 
Available-for-sale financial 
assets                                     2.4        2.4          -         -         4.9         4.9        -       - 
- Listed investments                       2.4        2.4          -         -         4.9         4.9        -       - 
Non-current assets classified 
as held for sale                          20.8          -          -      20.8        11.5           -        -    11.5 

                                         182.3        2.4      159.1      20.8       239.1         4.9    222.7    11.5 
 
Financial liabilities at 
amortised cost                         3,214.1          -    3,214.1         -     2,522.0           -  2,522.0       - 
- Medium-term loan and bank 
loans                                  3,214.1          -    3,214.1         -     2,522.0           -  2,522.0       - 

Financial liabilities at fair 
value through profit or loss               7.5          -        7.5         -         5.6           -      5.6       - 

- FEC liability 
(non-designated hedge)                     7.5          -        7.5         -         5.6           -      5.6       - 

Financial liability designated 
as a cash flow hedging             
instrument                                 3.5          -        3.5         -         2.1           -      2.1       - 
- FEC liability                            3.5          -        3.5         -         2.1           -      2.1       - 
                                       3,225.1          -    3,225.1         -     2,529.7           -  2,529.7       - 

There were no transfers of financial instruments between Level 1, Level 2 and Level 3 fair value 
measurements during the year ended December 2016. 
The financial assets and financial liabilities have been presented based on an analysis of their respective 
natures, characteristics and risks. 



Additional information 
                                                           December     December 
                                                               2016         2015 
                                                          (Reviewed)  (  Audited) 
Net asset value per share (cents)                           2,813.0      2,595.6 
 Ordinary shares (000's): 
 - In issue                                               217,136.3    217,136.3 
 - Weighted average (net of treasury shares)              216,352.8    216,688.8 
 - Diluted weighted average                               220,091.9    219,892.9 
Preference shares (000's): 
 - Black Scarce Skills Trust 'B' shares in issue            2,840.5      2,840.5 
 Capital expenditure (Rm): 
 - Authorised and committed                                   612.0        953.4 
 - Authorised not committed                                 1,147.8      1,033.9 
Net operating lease commitments (2017 - 2030) (Rm)         19,084.7     15,575.7 
US dollar exchange rates: - year end (R/$)                    14.11        15.23 
 - average (R/$)                                              14.74        12.74 

Share Data 
28 Dec 2015 - 25 Dec 2016 
Closing price, 23 Dec 2016   R122.59 
Share price (52 week high    R156.46 
Share price (52 week low)     R99.36 
Market Cap (billions)          R26.6 
Shares in issue (millions)     217.1 
Shares traded (millions)       115.1 
Percentage of shares traded     53.0% 

Reuters MSMJ.J 
Bloomberg MSM SJ 

Source: I-Net 

Notes 

1. These provisional reviewed condensed consolidated results have been prepared in accordance 
with the framework concepts and the measurement and recognition requirements of International 
Financial Reporting Standards (IFRS), its interpretations issued by the IFRS Interpretations 
Committee, the SAICA Financial Reporting Guides as issued by the Accounting Practices 
Committee and Financial Pronouncements as issued by the Financial Reporting Standards 
Council, presentation and disclosure as required by International Accounting Standard (IAS) 34 
Interim Financial Reporting, the JSE Limited Listings Requirements and the requirements of the 
Companies Act 71 of 2008 of South Africa. The accounting policies and methods of 
computation used in the preparation of the provisional reviewed condensed consolidated results 
are in terms of IFRS and are consistent in all material respects with those applied in the most 
recent annual financial statements, as none of the amendments coming into effect in the current 
financial year have had an impact on the financial reporting of the Group. 

2. In the current year, the majority of the impairment of assets of R76.7 million and the insurance 
compensation income of R98.1 million are as a result of the Jumbo Crown Mines' store fire that 
occurred within the Masscash Division. Inventories in the store, of R93.1 million, were written 
off and insurance proceeds to the same value were recognised in the âEUR~Cost of Sales' line . In the 
prior year, the impairment of assets was as a result of store closures. 

3. The majority of Massmart's foreign exchange loss of R141.8 million (2015: R149.8 
million) arose as a result of its short-term Rand-denominated intercompany loans to its African 
subsidiaries, as well as the settlement of its Rand-denominated foreign creditors. On the Statement of 
Financial Position, the Group's net investments in its African operations, as well as the foreign exchange 
translation reserve, increased by R352.7 million (2015: R21.5 million) as a result of 
translating the African operations' results from their respective functional currency into Rands. 

4. There were no significant subsequent events after the year end. 

5. Massmart and its divisions enter into certain transactions with related parties in the normal course 
of business. Details of these are, and will be, disclosed in Massmart's Integrated Annual Report. 
At December 2016, the Supplier Development Fund had a closing balance of R72.2 million 
(2015: R111.6 million). A net amount of R1.0 million remains unpaid to Walmart 
(2015: R292.7 million), which has been accounted for in âEUR~trade, other payables and 
provisions'. The Group has a medium-term loan with Walmart that is repayable in April 2018, on 
which interest of 7.46% is paid quarterly. The loan of R600.0 million is accounted for under 
interest-bearing non-current liabilities. As a 52.4% shareholder, Wal-Mart Stores, Inc. will also 
be receiving a dividend based on their number of shares held. 
    
6. Due to Christmas trading, Massmart's earnings are weighted towards the six months to 
December. 

7. These provisional reviewed condensed consolidated results have been reviewed by independent 
external auditors, Ernst & Young Inc. and their unmodified review report is available for 
inspection at the Company's registered office. The review was performed in accordance with 
ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of 
the Entity. Any reference to future financial performance included in this announcement has not 
been reviewed or reported on by the Group's external auditors. The auditor's report does not 
necessarily report on all of the information contained in this announcement/financial results. 
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the 
auditor's engagement they should obtain a copy of the auditor's report together with the 
accompanying financial information from the Group's registered office. The Massmart Board take 
full responsibility for the preparation of the Group's provisional reviewed condensed consolidated 
financial statements which was supervised by the Chief Financial Officer, Johannes van Lierop, Bachelor 
of Business Economics, RA (Amsterdam). 

For more information call +27 11 517 0000 or visit massmart.co.za/results2016 

Registered office 
Massmart House, 
16 Peltier Drive, 
Sunninghill Ext 6, 2191 
Company secretary 
NJ Ralebepa 

Sponsor 
Deutsche Securities (SA) Proprietary Limited 
3 Exchange Square, 87 Maude Street, 
Sandton, Johannesburg, 2196, South Africa 

Transfer secretaries 
Computershare Investor Services Pty Ltd, 
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196, 
South Africa 

Registered auditors 
Ernst & Young Inc. 
102 Rivonia Road, Sandton, 
Johannesburg, 2196, South Africa 

Directorate 
K Dlamini (Chairman), CS Seabrooke (Deputy Chairman), GRC Hayward* (Chief Executive Officer), 
A Clarke**, NN Gwagwa, R Kgosana, 
P Langeni, E Ostale***, JP Suarez****, 
JJM van Lierop* (Chief Financial Officer)***** 
*Executive **UK ***Chile ****USA *****Netherlands 

Our stores 

MASSDISCOUNTERS
General Merchandise discounter and Food retailer 

Game 
141 Stores
South Africa, Botswana, Ghana, Kenya, Lesotho, 
Malawi, Mozambique, Namibia, Nigeria, Tanzania, 
Uganda, Zambia 

DIONWIRED 
24 Stores
South Africa 

MASSWAREHOUSE 
Warehouse club 

Makro  
Fruitspot 
20 Stores
South Africa 

MASSBUILD
Home Improvement retailer and building materials supplier 
Builders Warehouse  
38 Stores
South Africa, Botswana, Mozambique, Zambia 

Builders Express
43 Stores
South Africa

Builders Trade Depot
13 
South Africa 

Builders Superstore
10 
South Africa

MASSCASH 
Food wholesaler, retailer and buying association 

66 WHOLESALE 
South Africa, Botswana, 
Lesotho, Mozambique, 
Namibia, Swaziland 

57 RETAIL 
South Africa
 
BUYING ASSOCIATIONS 
South Africa, Botswana, Swaziland 


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