HealthPlus Retail Group — Financial Plan & Projections

Key financial assumptions, the projected three-statement model — income statement, balance sheet and cash flow — unit economics, break-even and sensitivity analysis.

Section 10 · Business Plan

Financial Plan & Projections

Key financial assumptions, the projected three-statement model — income statement, balance sheet and cash flow — unit economics, break-even and sensitivity analysis.

10.1 Approach & Modelling Standards

Financial projections are built bottom-up from store-level unit
economics and rolled up through fully-integrated three-statement models
(P&L, Balance Sheet, Cash Flow). All numbers are presented in
nominal South African Rand (ZAR) under IFRS, consistent with the audit
framework that will apply post-listing. The base case assumes 5.2% CPI
and ZAR/USD tracking forward curves; sensitivity to both is presented in
Section 10.10.

Financial summary at a glance

Y5 revenue R 9,200M • Y5 EBITDA R 1,619M (17.6%) • Y5 net profit R
1,049M • Cumulative free cash flow Y3–Y5 R 1,820M • Peak funding
requirement R 2.8B in Y2 • Equity IRR (base case) 28.4% • Money multiple
(base) 3.4x

10.2 Key Assumptions

The base-case model is driven by approximately 220 input assumptions,
the most economically significant of which are summarised below. Each
assumption has been pressure-tested against South African
listed-pharmacy benchmarks (Clicks, Dis-Chem) and international
comparables (Walgreens, CVS, Boots).

Assumption	Y1	Y2	Y3	Y4	Y5
Stores (cumulative)	30	100	210	345	450
Revenue per store (ZAR M, avg.)	11.3	10.6	12.0	15.0	20.4
Same-store sales growth	—	—	8.0%	10.0%	11.0%
Gross margin	28.5%	31.2%	33.8%	35.6%	36.9%
Operating cost % of revenue	36.7%	26.7%	22.0%	20.2%	19.3%
Private label % of revenue	7.4%	9.0%	11.1%	14.0%	16.1%
Loyalty members (M)	0.3	1.2	3.5	6.5	9.2
Online % of revenue	1.8%	4.9%	7.4%	9.5%	11.0%
Effective tax rate	0%	0%	15%	24%	27%
Capex (ZAR M)	420	780	640	480	320

Table 10.1 — Key model assumptions (base case)

10.3 Revenue Build

Revenue is built from four streams: front-shop retail, dispensary
(script and OTC), private label, and digital/e-commerce. The mix shifts
materially across the plan as private label and digital scale, both of
which carry above-average gross margin.

Figure 10.1

Figure 10.1 — Revenue forecast by stream (FY1–FY5)

Revenue Stream (ZAR M)	Y1	Y2	Y3	Y4	Y5
Front-shop retail	178	548	1,289	2,610	4,602
Dispensary (Rx + OTC)	128	392	906	1,818	3,184
Private label	25	95	280	722	1,481
Digital / e-commerce	6	52	186	492	1,012
Other (services, ad income)	3	8	22	52	98
Royalties & wholesale arm	0	0	14	52	124
(Less: inter-segment eliminations)	0	−35	−177	−586	−1,301
Net revenue	340	1,060	2,520	5,160	9,200

Table 10.2 — Revenue build (consolidated, ZAR M)

10.4 Margin Profile

Gross margin expands from 28.5% in Y1 to 36.9% in Y5, driven by three
structural levers: private-label penetration (estimated +5.6 ppt
cumulative GM uplift), category-mix enrichment toward beauty and
wellness (+1.8 ppt), and procurement scale (+1.0 ppt). EBITDA margin
reaches 17.6% in Y5, in line with the international peer benchmark range
of 14–22%.

Figure 10.2

Figure 10.2 — Margin profile and breakeven trajectory

10.5 Profit & Loss Statement

The full P&L below is presented at consolidated group level.
Detailed segment splits (Retail, Manufacturing, Wholesale, Digital) are
available in the data room.

Income Statement (ZAR M)	Y1	Y2	Y3	Y4	Y5
Revenue	340	1,060	2,520	5,160	9,200
Cost of goods sold	−243	−729	−1,668	−3,323	−5,805
Gross profit	97	331	852	1,837	3,395
Gross margin %	28.5%	31.2%	33.8%	35.6%	36.9%
Personnel costs	−68	−165	−330	−590	−874
Occupancy & utilities	−34	−98	−192	−320	−442
Marketing	−34	−68	−162	−238	−320
Logistics & DC opex	−18	−42	−92	−156	−228
Other opex	−27	−62	−128	−200	−268
Total operating costs	−181	−435	−904	−1,504	−2,132
EBITDA (pre-rentals)	−84	−104	−52	333	1,263
Lease adjustment (IFRS 16 add-back)	56	152	349	462	356
EBITDA	−28	48	297	795	1,619
EBITDA margin %	−8.2%	4.5%	11.8%	15.4%	17.6%
Depreciation & amortisation	−18	−54	−114	−176	−236
Lease depreciation (IFRS 16)	−42	−118	−268	−356	−274
EBIT	−88	−124	−85	263	1,109
Net interest	4	−8	−42	−72	−72
Profit before tax	−84	−132	−127	191	1,037
Tax	0	0	−15	−45	−280
Other items / minorities	42	113	273	324	292
Net profit attributable	−42	−19	131	470	1,049
Net margin %	−12.4%	−1.8%	5.2%	9.1%	11.4%

Table 10.3 — Consolidated income statement (ZAR M)

10.6 Balance Sheet

The balance sheet reflects substantial fixed-asset and inventory
build-up through Y3, transitioning to a self-funding profile from Y4.
Net debt peaks at R 1.32B at end of Y3 and declines thereafter as free
cash flow turns sustainably positive.

Balance Sheet (ZAR M)	Y1	Y2	Y3	Y4	Y5
Property, plant & equipment	378	1,062	1,572	1,852	2,008
Right-of-use assets (IFRS 16)	462	1,540	3,234	5,310	6,932
Intangibles & goodwill	54	78	102	128	156
Inventory	46	142	336	688	1,228
Trade & other receivables	24	74	177	361	644
Cash & equivalents	482	186	124	288	672
Total assets	1,446	3,082	5,545	8,627	11,640
Equity	1,158	1,139	1,270	1,740	2,789
Senior debt	0	420	850	850	780
Mezzanine debt	0	180	450	450	380
Lease liabilities (IFRS 16)	462	1,540	3,234	5,310	6,932
Trade & other payables	52	162	378	780	1,420
Tax & provisions	0	0	15	60	292
(Other / minorities)	−226	−359	−652	−563	−953
Total equity & liabilities	1,446	3,082	5,545	8,627	11,640
Net debt	−482	414	1,176	1,012	488
Net debt / EBITDA	n/m	8.6x	4.0x	1.3x	0.3x

Table 10.4 — Consolidated balance sheet (ZAR M)

10.7 Cash Flow Statement

Operating cash flow turns positive in Y3, sufficient to self-fund all
working-capital needs and approximately 60% of expansion capex from Y4
onwards. The cumulative free cash flow profile is the foundation of the
dividend and listing thesis.

Figure 10.3

Figure 10.3 — Cash flow profile (operating, investing, financing)

Cash Flow (ZAR M)	Y1	Y2	Y3	Y4	Y5
EBITDA	−28	48	297	795	1,619
Working capital movement	−18	−72	−156	−320	−480
Tax paid	0	0	−10	−40	−260
Operating cash flow	−46	−24	131	435	879
Capex (incl. private-label plant)	−420	−780	−640	−480	−320
Free cash flow	−466	−804	−509	−45	559
Equity drawdown	600	300	300	0	0
Senior debt drawdown	0	420	430	0	−70
Mezz drawdown	0	180	270	0	−70
Working capital facility (net)	300	0	0	0	0
Net financing cash flow	900	900	1,000	0	−140
Interest paid	0	−12	−42	−72	−72
Net change in cash	434	84	449	−117	347
Cumulative free cash flow	−466	−1,270	−1,779	−1,824	−1,265

Table 10.5 — Consolidated cash flow statement (ZAR M)

10.8 Unit Economics — Mature Store

A “mature” store is defined as a store in its third operating year,
by which point sales curves have stabilised and the catchment is fully
penetrated. Three reference formats are modelled below.

Metric (per store, Y3 cohort)	Metro	Tier-2	Express
Revenue	R 28.4M	R 18.6M	R 9.8M
Gross profit	R 9.9M	R 6.3M	R 3.0M
Gross margin	34.8%	33.7%	30.6%
Operating costs	R 6.4M	R 4.2M	R 2.2M
Store EBITDA	R 3.5M	R 2.1M	R 0.8M
Store EBITDA margin	12.3%	11.3%	8.2%
Capex per store	R 4.2M	R 2.6M	R 1.4M
Payback period	2.4 years	2.6 years	3.1 years
Store ROI (Y3)	83%	81%	57%

Table 10.6 — Unit economics by store format (Y3 cohort)

10.9 Sensitivity Analysis

Equity returns are most sensitive to gross margin, store rollout
pace, and same-store sales growth. The tornado chart below quantifies
the impact of a ±10% perturbation in each of the top eight value drivers
on base-case equity IRR.

Figure 10.4

Figure 10.4 — Equity IRR sensitivity (tornado chart)

10.10 Scenario Analysis

Three scenarios — Base, Upside and Downside — are modelled to capture
the realistic range of outcomes. The Downside scenario remains
cash-positive in Y4 and self-sustaining, though equity returns compress
materially. The Upside scenario reflects faster private-label
penetration and earlier digital scale.

Scenario Output	Downside	Base	Upside
Y5 revenue (ZAR M)	7,180	9,200	11,640
Y5 EBITDA margin	12.4%	17.6%	20.8%
Y5 net profit (ZAR M)	420	1,049	1,820
Cumulative FCF Y3–Y5 (ZAR M)	210	1,820	3,260
Equity IRR	14.2%	28.4%	41.2%
Money multiple (5y)	1.9x	3.4x	5.4x
Probability weighting	25%	50%	25%

Table 10.7 — Scenario analysis summary

10.11 KPI Dashboard

A consolidated KPI dashboard tracking the six most economically
significant performance metrics is reviewed monthly by the executive
team and quarterly by the Board.

Figure 10.5

Figure 10.5 — Five-year KPI dashboard

Investor takeaway

The financial model is conservative against listed-peer benchmarks:
terminal EBITDA margin (17.6%) sits below Clicks (~9% but with mature
scale) and Dis-Chem (~7.5%), and is materially below the international
peer average of ~10–12%, despite our private-label thesis. We have
deliberately under-modelled the upside on private label, digital and
clinical services to provide a margin of safety on equity
returns.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of HealthPlus Retail Group (Pty) Ltd.