2018/07/19, 07:30:00
Johannesburg Stock Exchange - SENS NEWS DELAYED
Sales update for the 26 weeks ended 1 July 2018

Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1940/014066/06)
Share code: MSM
ISIN: ZAE000152617
(‘Massmart’ or ‘the Company’)

Sales update for the 26 weeks ended 1 July 2018

The prescribed method of accounting for the adoption of IFRS 15 has the unfortunate
consequence in this financial year of complicating the ability to make useful comparisons between
the 2017 and 2018 sales performances from a statutory reporting perspective. The material
changes arising from adopting IFRS 15 are that Shield’s sales are excluded from the current year
and that comparative figures cannot be restated.

To assist shareholders this 26-week sales update is presented as required under IFRS 15 but
also on a like-on-like basis.

                                  June 2018          June 2017        % change       % change
                                                                        total       comparable
 Sales excluding Shield in         R41.55bn           R40.78bn         +1.9%          +0.2%
 both periods (i.e. like-on-
 Sales per IFRS 15 (i.e.           R41.55bn           R42.50bn           -2.2%         -3.9%
 including Shield in 2017 but
 excluding in 2018)

Like-on-Like Basis
This paragraph provides a more meaningful assessment of the current 2018 sales performance.
Excluding Shield from the current and prior periods shows that Massmart’s total sales for the 26-
week period of R41.6 billion represented an increase of 1.9%, with comparable store sales
increasing by 0.2%. Product deflation is estimated at 0.7%. Total sales from our South African
(SA) stores increased by 2.0%, while comparable SA store sales increased by 0.5%. Total Rand
sales from our ex-SA stores grew by 1.0%.

Per IFRS 15
As noted above, following the adoption of IFRS 15, with effect from 1 January 2018 Massmart no
longer includes Shield with the Group’s reported sales figures but instead only includes Shield’s
margin. The adoption of IFRS 15 has been effected using the ‘modified retrospective approach’
which requires that comparative period figures are not restated for this change. Using this method
Massmart’s total sales for the 26-week period of R41.6 billion represent a decline of 2.2% and
comparable store sales decline of 3.9% (compared to the unrestated prior period). The adoption
of IFRS 15 has an immaterial effect on reported sales for any other Massmart division and neither
does it impact profits.

Excluding this accounting change, recent sales growths in all divisions and major product
categories have been higher than that reported at the Massmart annual general meeting on 24
May 2018 (for the 19-week period up to that date).
This improved sales performance for those subsequent seven weeks has had a positive margin
impact and, once we have reasonable certainty following the external auditor’s review of the
Group’s interim earnings, a further trading update for the six months to 1 July 2018 will be issued.

Massmart’s financial results for the six months to 1 July 2018 will be released on the Stock
Exchange News Service of the JSE Limited on 23 August 2018.

The information contained in this sales update has not been reviewed and reported on by the
Company’s external auditors.

19 July 2018

Sponsor: Deutsche Securities (SA) Proprietary Limited

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