EBOS GROUP LIMITED — Interim / Quarterly Report 2018

Feb 21, 2018

EBOS GROUP LIMITED Appendix 4D

Interim Report for the Half Year Ended 31 December 2017

RESULTS FOR ANNOUNCEMENT TO THE MARKET

The following information is presented in accordance with ASX listing rule 4.2A.3 and should be read in conjunction with the attached unaudited EBOS Group Limited interim report for the six months ended 31 December 2017.

1. Details of the reporting period and the previous corresponding period

Current period - the half year ended 31 December 2017 Previous corresponding period - the half year ended 31 December 2016

This report and the attached condensed consolidated interim unaudited financial statements are presented in New Zealand dollars, being the Group’s presentation currency.

2. Group financial results – Half year summary

Group results (NZD$000’s)	31 December 2017 NZD$000 (Unaudited)	31 December 2016 NZD$000 (Unaudited)	Change % (actual FX rates)	Change % (constant FX rates)
Revenue	3,942,661	3,960,204	(0.4%)	(3.8%)
EBITDA	138,517	119,868	15.6%	11.7%
Depreciation and amortisation	17,276	12,334	40.1%	35.0%
Earnings before interest and tax (EBIT)	121,241	107,534	12.7%	9.0%
Net profit after tax (NPAT)	77,450	69,269	11.8%	8.2%
Net Profit after tax (NPAT) attributable to the owners of the Company	76,670	68,785	11.5%	7.8%
Basic EPS – (cps)	50.4	45.4	11.0%	7.4%
Net tangible asset backing per ordinary share – ($)	($0.42)	$0.40
Underlying Net profit after tax (NPAT) attributable to the owners of the Company (refer reconciliation below)	76,670	70,237	9.1%	5.5%

1

	Dividends	Amount per security	Franked amount per security to 30% tax rate
	Interim dividend Interim dividend – previous corresponding period	33.0c 30.0c	100% 100%
	Key dates for the 2018 Interim Dividend: Ex-dividend date: 15 March 2018 Record date: 16 March 2018 (5:00pm NZ Time) Dividend payment date: 6 April 2018 Other comments: The interim dividend will be imputed to 25% for New Zealand resident shareholders, and a supplementarydividendpaid to eligible non-resident shareholders.

**Reconciliation of Reported vs Underlying **	**Earnings **
	31 December 2017 NZD$000 (Unaudited)	31 December 2016 NZD$000 (Unaudited)	Change % (actual FX rates)	Change % (constant FX rates)
Reported EBITDA	138,517	119,868	15.6%	11.7%
Add transaction costs incurred on the Terry White Chemmart merger	-	2,389
Underlying EBITDA	138,517	122,257	13.3%	9.5%
Net Profit after tax (NPAT) attributable to the owners of the Company	76,670	68,785	11.5%	7.8%
Add transaction costs incurred on the Terry White Chemmart merger (after non-controlling interests)	-	1,452
Underlying Net Profit after tax (NPAT) attributable to the owners of the Company	76,670	70,237	9.1%	5.5%

Underlying EBITDA and Underlying Net Profit after tax attributable to the owners of the Company are both non-GAAP measures which adjust for the effects of non-recurring items.

For supplementary comments on the Group’s financial results refer to the Results Presentation and Media Release issued 21 February 2018.

3. Entities acquired

There were no acquisitions (or gain of control) or disposals (or loss of control) over any entities during the half year ended 31 December 2017.

2

4. Dividends paid and declared

Dividends paid and declared
	Amount	Total
	Per Share	Amount	Date Paid/
	(cents)	($)	(Payable)
	______	______	______
Dividends paid attributable to the year ended
30 June 2017
2017 interim dividend	30.0 cents	$45,574,000	7 April 2017
2017 final dividend	33.0 cents	$50,338,000	13 October 2017
	______________
Dividends declared in respect of the year ending
30 June 2018
2018 interim dividend	33.0 cents	$50,338,000	6 April 2018

---

5. Dividend Reinvestment Plan

The dividend reinvestment plan will not operate for this interim dividend.

6. Associates and Joint Ventures

The Group equity accounted the following associate entities at 31 December 2017:

Name of business Proportion of shares and voting rights
__________ ______________
Animates NZ Holdings Limited 50%
Good Price Pharmacy Management Pty Limited 25.8%
Good Price Pharmacy Franchise Pty Limited 25.8%

Income from the individual Associates has not been separately disclosed as it is considered immaterial. Total Income from Investments in Associates for the half year ended 31 December 2017 was $2,088,000 (2017: $1,948,000).

7. Foreign Entities

The condensed consolidated interim unaudited financial statements are presented in New Zealand dollars and comply with International Financial Reporting Standards (“IFRS”).

8. Independent Audit Review

The condensed consolidated interim financial statements have been reviewed by an independent Auditor, and the Auditor has given an unmodified review opinion.

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EBOS GROUP LIMITED INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

EBOS GROUP LIMITED INTERIM REPORT 2018

CONTENTS	Page
Summary of Consolidated Financial Highlights	1
Shareholder Calendar	1
Auditor’s Independent Review Report	2
Condensed Consolidated Income Statement	3
Condensed Consolidated Statement of Comprehensive Income	4
Condensed Consolidated Statement of Changes in Equity	5
Condensed Consolidated Balance Sheet	7
Condensed Consolidated Cash Flow Statement	8
Notes to the Condensed Consolidated Interim Financial Statements	9
Directory	16

EBOS GROUP LIMITED INTERIM REPORT 2018 SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS

Six months 31 Dec 17 $’000 (Unaudited) Six months 31 Dec 16 $’000 (Unaudited)

Year ended 30 Jun 17 $’000 (Audited)

Revenue 3,942,661 3,960,204 Earnings before net finance costs, tax expense, depreciation and amortisation (EBITDA) 138,517 119,868 Earnings before interest and tax expense (EBIT) 121,241 107,534 Profit before income tax expense 110,506 98,602 Profit for the period 77,450 69,269 Profit for the period attributable to owners of the Company 76,670 68,785 Equity attributable to owners of the Company 1,171,354 1,108,190 Earnings per share 50.4c 45.4c Interim dividend per share 33.0c 30.0c Net interest bearing debt to net interest bearing debt plus equity 27.3% 20.3%

7,625,854 234,427 208,593 189,568 132,846 133,279 1,132,070 87.8c 30.0c 27.4%

SHAREHOLDER CALENDAR

Release of 2018 half year results	21 February 2018
Interim dividend record date	16 March 2018
Interim dividend payable	6 April 2018
Release of 2018 full year results	23 August 2018
Annual General Meeting	16 October 2018

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INDEPENDENT REVIEW REPORT TO THE SHAREHOLDERS OF EBOS GROUP LIMITED

We have reviewed the condensed consolidated interim financial statements of EBOS Group Limited and its subsidiaries (‘the Group’) which comprise the condensed consolidated balance sheet as at 31 December 2017, and the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six months ended on that date, and a summary of significant accounting policies and other explanatory information on pages 3 to 15.

This report is made solely to the Group’s shareholders, as a body. Our review has been undertaken so that we might state to the Group’s shareholders those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group’s shareholders as a body, for our engagement, for this report, or for the opinions we have formed.

Board of Directors’ Responsibilities

The Board of Directors are responsible for the preparation and fair presentation of the condensed consolidated interim financial statements, in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting and for such internal control as the Board of Directors determine is necessary to enable the preparation and fair presentation of the condensed consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Our Responsibilities

Our responsibility is to express a conclusion on the condensed consolidated interim financial statements based on our review. We conducted our review in accordance with NZ SRE 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity (‘NZ SRE 2410’). NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the condensed consolidated interim financial statements, taken as a whole, are not prepared, in all material respects, in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting. As the auditor of EBOS Group Limited, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.

A review of the condensed consolidated interim financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on those financial statements.

Other than in our capacity as auditor and the provision of advisory services we have no relationship with or interests in EBOS Group Limited or its subsidiaries.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements of the Group do not present fairly, in all material respects, the financial position of the Group as at 31 December 2017 and its financial performance and cash flows for the six months ended on that date in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting.

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Chartered Accountants 20 February 2018 Christchurch, New Zealand

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EBOS GROUP LIMITED CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 31 December 2017

Notes Revenue 2(a) Income from associates Profit before depreciation, amortisation, net finance costs and income tax expense Depreciation 2(b) Amortisation of finite life intangibles 2(b) Profit before net finance costs and income tax expense Finance income Finance costs Profit before income tax expense Income tax expense Profit for theperiod Profit for the period attributable to: Owners of the Company Non-controllinginterests Earnings per share Basic (cents per share) Diluted (cents per share)	Six months 31 Dec 17 $’000 (Unaudited) 3,942,661 2,088 138,517 (8,906) (8,370) 121,241 986 (11,721) 110,506 (33,056) 77,450 76,670 780 77,450 50.4 50.4	Six months 31 Dec 16 $’000 (Unaudited) 3,960,204 1,948 119,868 (6,519) (5,815) 107,534 1,219 (10,151) 98,602 (29,333) 69,269 68,785 484 69,269 45.4 45.4	Year ended 30 Jun 17 $’000 (Audited)
			7,625,854 4,062 234,427 (13,616) (12,218)
			208,593 2,079 (21,104)
			189,568 (56,722)
			132,846
			133,279 (433)
			132,846
			87.8 87.8

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EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 31 December 2017

Profit for the period Other comprehensive income Items that may be reclassified subsequently to profit or loss: Cash flow hedge gains Related income tax Net fair value movement on available-for-sale financial assets Translation of foreign operations Total comprehensive income net of tax Total comprehensive income for the period is attributable to: Owners of the Company Non-controllinginterests	Six months 31 Dec 17 $’000 (Unaudited) 77,450 968 (276) (1,769) 13,669 90,042 89,262 780 90,042	Six months 31 Dec 16 $’000 (Unaudited) 69,269 5,074 (1,470) - (2,270) 70,603 70,119 484 70,603	Year ended 30 Jun 17 $’000 (Audited)
			132,846 5,675 (1,653) - 1,947
			138,815
			139,248 (433)
			138,815

4

EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 December 2017

Notes Six months ended 31 December 2016 (unaudited): Opening balance Profit for the period Other comprehensive income for the period, net of tax Payment of dividends 4 Arising on acquisition of subsidiaries Share based payments Effect of exchange rate fluctuations Balance at 31 December 2016 Year ended 30 June 2017 (audited): Opening balance Profit for the year Other comprehensive income for the year, net of tax Payment of dividends 4 Arising on acquisition of subsidiaries Share based payments Effect of exchange rate fluctuations Balance at 30 June 2017	Share capital $’000 888,513 - - - - - - 888,513 888,513 - - - - - - 888,513	Share based payments reserve $’000 - - - - - 165 - 165 - - - - - 490 - 490	Foreign currency translation reserve $’000 (36,761) - (2,270) - - - - (39,031) (36,761) - 1,947 - - - - (34,814)	Retained earnings $’000 239,578 68,785 - (49,371) - - - 258,992 239,578 133,279 - (94,945) - - - 277,912	Cash flow hedge reserve $’000 (4,053) - 3,604 - - - - (449) (4,053) - 4,022 - - - - (31)	Available-for- sale revaluation reserve $’000 - - - - - - - - - - - - - - - -	Non- controlling interests $’000 - 484 - - 20,303 - (412) 20,375 - (433) - - 20,936 - (175) 20,328	Total $’000
								1,087,277 69,269 1,334 (49,371) 20,303 165 (412)
								1,128,565
								1,087,277 132,846 5,969 (94,945) 20,936 490 (175)
								1,152,398

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EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

For the six months ended 31 December 2017

Notes Six months ended 31 December 2017 (unaudited): Opening balance Profit for the period Other comprehensive income for the period, net of tax Payment of dividends 4 Share based payments Effect of exchange rate fluctuations Balance at 31 December 2017	Share capital $’000 888,513 - - - - - 888,513	Share based payments reserve $’000 490 - - - 360 - 850	Foreign currency translation reserve $’000 (34,814) - 13,669 - - - (21,145)	Retained earnings $’000 277,912 76,670 - (50,338) - - 304,244	Cash flow hedge reserve $’000 (31) - 692 - - - 661	Available-for- sale revaluation reserve $’000 - - (1,769) - - - (1,769)	Non- controlling interests $’000 20,328 780 - - - 931 22,039	Total $’000
								1,152,398 77,450 12,592 (50,338) 360 931
								1,193,393

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EBOS GROUP LIMITED CONDENSED CONSOLIDATED BALANCE SHEET

As at 31 December 2017

Notes Current assets Cash and cash equivalents Trade and other receivables Prepayments Inventories Current tax refundable Other financial assets – derivatives 8 Total current assets Non-current assets Property, plant and equipment Capital work in progress Prepayments Deferred tax assets Goodwill Indefinite life intangibles Finite life intangibles Investment in associates Other financial assets Total non-current assets Total assets Current liabilities Trade and other payables Finance leases Bank loans 7 Current tax payable Employee benefits Other financial liabilities – derivatives 8 Total current liabilities Non-current liabilities Bank loans 7 Trade and other payables Deferred tax liabilities Finance leases Employee benefits Total non-current liabilities Total liabilities Net assets Equity Share capital 3 Share based payments reserve Foreign currency translation reserve Retained earnings Cash flow hedge reserve Available-for-sale revaluation reserve Equityattributable to owners of the company Non-controllinginterests Total equity	31 Dec 17 $’000 (Unaudited) 142,847 1,053,601 9,435 621,314 3,965 253 1,831,415 120,324 45,225 4 48,097 1,008,595 129,245 71,555 38,209 10,643 1,471,897 3,303,312 1,384,159 25 229,321 21,260 40,001 2,262 1,677,028 360,883 13,035 52,588 96 6,289 432,891 2,109,919 1,193,393 888,513 850 (21,145) 304,244 661 (1,769) 1,171,354 22,039 1,193,393	31 Dec 16 $’000 (Unaudited) 175,679 1,134,832 9,093 596,174 83 576 1,916,437 106,914 8,303 209 43,730 859,858 107,316 56,263 34,480 - 1,217,073 3,133,510 1,424,184 118 188,866 12,862 34,134 4,154 1,664,318 274,778 14,297 46,622 - 4,930 340,627 2,004,945 1,128,565 888,513 165 (39,031) 258,992 (449) - 1,108,190 20,375 1,128,565	30 Jun 17 $’000 (Audited)
			162,181 1,041,849 7,834 572,001 168 19
			1,784,052
			115,876 22,923 9 49,263 1,000,050 115,940 80,084 36,455 922
			1,421,522
			3,205,574
			1,327,757 72 155,857 14,209 40,971 2,995
			1,541,861
			440,847 13,837 50,783 103 5,745
			511,315
			2,053,176
			1,152,398
			888,513 490 (34,814) 277,912 (31) -
			1,132,070
			20,328
			1,152,398

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EBOS GROUP LIMITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 31 December 2017

Notes Cash flows from operating activities Receipts from customers Interest received Dividends received from associates Payments to suppliers and employees Taxes paid Interestpaid Net cash inflow from operating activities 5 Cash flows from investing activities Sale of property, plant & equipment Purchase of property, plant & equipment Payments for capital work in progress Payments for intangible assets Acquisition of subsidiaries Investment in other financial assets Net cash (outflow) from investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Dividendspaid to equityholders ofparent 4 Net cash (outflow)/inflow from financing activities Net (decrease)/increase in cash held Effect of exchange rate fluctuations on cash held during the period Net cash and cash equivalents at beginningofperiod Net cash and cash equivalents at end ofperiod	Six months 31 Dec 17 $’000 (Unaudited) 4,006,609 986 703 (3,864,286) (30,595) (11,721) 101,696 87 (9,505) (21,505) (620) (1,449) (11,797) (44,789) - (32,493) (50,338) (82,831) (25,924) 6,590 162,181 142,847	Six months 31 Dec 16 $’000 (Unaudited) 4,146,399 1,219 682 (4,053,068) (37,218) (10,151) 47,863 45 (13,471) (1,852) (670) (11,961) - (27,909) 85,848 - (49,371) 36,477 56,431 (1,003) 120,251 175,679	Year ended 30 Jun 17 $’000 (Audited)
			7,922,392 2,079 913 (7,694,957) (65,380) (21,104)
			143,943 150 (13,507) (22,923) (1,164) (183,228) (879)
			(221,551) 224,456 (10,357) (94,945)
			119,154 41,546 384 120,251
			162,181

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EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 31 December 2017

1. FINANCIAL STATEMENTS

These unaudited condensed consolidated interim financial statements have been prepared in accordance with Generally Accepted Accounting Practice (“GAAP”). They comply with the New Zealand Equivalent to International Accounting Standard 34 (NZ IAS 34) “Interim Financial Reporting” and International Accounting Standard IAS 34, as applicable for profit orientated entities. The same accounting policies and methods of computation are applied in the interim financial statements as were applied in the financial statements for the year ended 30 June 2017. These financial statements should be read in conjunction with the financial statements and related notes included in the Group’s Annual Report for the year ended 30 June 2017. The information is presented in thousands of New Zealand dollars unless otherwise stated.

2. PROFIT FROM OPERATIONS

(a) (b)	Revenue Revenue from the sale of goods Revenue from the renderingof services Profit before income tax expense Profit before income tax has been arrived at after chargingthe followingexpenses bynature: Cost of sales Write-down of inventory Impairment on trade & other receivables Depreciation of property, plant & equipment Amortisation of finite life intangibles Operating lease rental expenses Donations Employee benefit expense Defined contribution plan expense Other expenses Total expenses	Six months 31 Dec 17 $’000 (Unaudited) 3,826,677 115,984 3,942,661 (3,507,129) (712) (572) (8,906) (8,370) (20,896) (25) (149,934) (8,152) (118,827) (3,823,523)	Six months 31 Dec 16 $’000 (Unaudited) 3,890,309 69,895 3,960,204 (3,593,238) (2,842) (465) (6,519) (5,815) (16,038) (17) (119,025) (6,448) (104,213) (3,854,620)	Year ended 30 Jun 17 $’000 (Audited)
				7,471,918 153,936
				7,625,854
				(6,872,190) (8,387) (2,758) (13,616) (12,218) (35,125) (49) (245,813) (14,653) (216,017)
				(7,420,826)

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EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2017

3. SHARE CAPITAL

		Six months 31 Dec 17 No. ’000 $’000 (Unaudited) 151,914 888,513 - - 625 - 152,539 888,513 Six months 31 Dec 17 Cents per share $’000 (Unaudited) 33.0 50,338 - - 33.0 50,338 - - 33.0 50,338 33.0 50,338		No. ’000 151,314 600 - 151,914 Cents per share	Six months 31 Dec 16 $’000 (Unaudited) 888,513 - - 888,513 Six months 31 Dec 16 $’000 (Unaudited) 49,371 - 49,371 - 45,574 45,574	No. ’000 151,314 600 - 151,914 Cents per share 32.5 30.0 62.5 33.0 - 33.0	Year ended 30 Jun 17 $’000 (Audited)
Fully paid ordinary shares Balance at beginning of period Shares issued – September 2016 September 2017 DIVIDENDS Recognised amounts Fully paid ordinary shares Final – prior year Interim – currentyear Unrecognised amounts Final dividend Interim dividend							888,513 - -
							888,513
							Year ended 30 Jun 17 $’000 (Audited)
				32.5 -			49,371 45,574
				32.5			94,945
				- 30.0			50,132 -
				30.0			50,132

4. DIVIDENDS

The Board approved an interim dividend of 33.0 cents per share on 20 February 2018. The record date for the dividend is 16 March 2018 and the dividend will be paid on 6 April 2018.

10

EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2017

5. NOTES TO THE CASH FLOW STATEMENT

Reconciliation of profit for the period with cash flows from operating activities Profit for the period Add/(less) non-cash items: Depreciation of property, plant and equipment Amortisation of finite life intangibles (Gain)/loss on sale of property, plant & equipment Income from associates Expense recognised in respect of share based payments Deferred tax Movements in working capital: Trade and other receivables Prepayments Inventories Current tax refundable/(payable) Trade and other payables Provision for employee benefits Foreign currency translation of opening working capital balances Working capital items relating to investing activities Working capital items acquired on acquisition Net cash inflow from operating activities	Six months 31 Dec 17 $’000 (Unaudited) 77,450 8,906 8,370 (15) (2,088) 360 (175) 15,358 (11,752) (1,596) (49,313) 3,254 55,600 (426) 13,866 9,633 (745) - 101,696	Six months 31 Dec 16 $’000 (Unaudited) 69,269 6,519 5,815 (2) (1,948) 165 (1,816) 8,733 185,555 (834) (17,661) (5,341) (186,056) (1,215) (3,316) (28,868) 682 (1,953) 47,863	Year ended 30 Jun 17 $’000 (Audited)
			132,846 13,616 12,218 497 (4,062) 490 (2,462)
			20,297
			278,538 626 6,512 (4,079) (282,943) 6,436 608
			5,698
			(2,466) (12,432)
			143,943

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EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2017

6. SEGMENT INFORMATION

(a) Products and services from which reportable segments derive their revenues

The Group’s reportable segments under NZ IFRS 8 are as follows:

Healthcare: Incorporates the sale of human healthcare products in a range of sectors, own brands, retail healthcare and wholesale activities.

Animal care: Incorporates the sale of animal care products in a range of sectors, own brands, retail and wholesale activities.

Corporate: Includes net financing costs and central administration expenses that have not been allocated to either the healthcare or animal care segments.

(b) Segment revenues and results

The following is an analysis of the Group’s revenue and results by reportable segment:

Revenue from external customers Healthcare Animal care Segment result (EBITDA) Healthcare Animal care Corporate Segment expenses Healthcare: Depreciation of property, plant and equipment Amortisation of finite life intangibles Income tax expense Animal care: Depreciation of property, plant and equipment Amortisation of finite life intangibles Income tax expense Corporate: Depreciation of property, plant and equipment Net finance costs Income tax credit Profit for the period Healthcare Animal care Corporate	Six months 31 Dec 17 $’000 (Unaudited) 3,734,719 207,942 3,942,661 120,004 24,342 (5,829) 138,517 (8,176) (7,047) (31,686) (46,909) (517) (1,323) (6,296) (8,136) (213) (10,735) 4,926 (6,022) 73,095 16,206 (11,851) 77,450	Six months 31 Dec 16 $’000 (Unaudited) 3,744,059 216,145 3,960,204 106,659 21,115 (7,906) 119,868 (5,970) (4,591) (28,909) (39,470) (549) (1,224) (5,317) (7,090) - (8,932) 4,893 (4,039) 67,189 14,025 (11,945) 69,269	Year ended 30 Jun 17 $’000 (Audited)
			7,202,688 423,166
			7,625,854 208,782 44,712 (19,067)
			234,427 (12,562) (9,719) (53,762)
			(76,043) (1,054) (2,499) (11,206)
			(14,759) - (19,025) 8,246
			(10,779) 132,739 29,953 (29,846)
			132,846

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EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2017

6. SEGMENT INFORMATION (Continued)

The accounting policies of the reportable segments are consistent with the Group’s accounting policies. Segment result represents profit before depreciation, amortisation, net finance costs and tax. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

(c) Segment assets

The following balance sheet and cash flow items are not allocated to operating segments as they are not reported to the chief operating decision maker at a segment level:

• Assets

• Liabilities

• Capital expenditure

(d) Revenues from major products and services

The Group’s major products and services are transacted the same as its reportable segments i.e. healthcare, animal care and corporate.

(e) Geographical information

The Group operates in two principal geographical areas; New Zealand (country of domicile) and Australia.

The Group’s revenue from external customers by geographical location (of the reportable segment) and information about its segment assets (non-current assets excluding financial instruments, investments in associates and deferred tax assets) are detailed below:

Revenue from external customers New Zealand Australia Non-current assets New Zealand Australia	Six months 31 Dec 17 $’000 (Unaudited) 791,880 3,150,781 3,942,661 290,560 1,095,031 1,385,591	Six months 31 Dec 16 $’000 (Unaudited) 761,251 3,198,953 3,960,204 286,278 852,585 1,138,863	Year ended 30 Jun 17 $’000 (Audited)
			1,509,094 6,116,760
			7,625,854
			286,837 1,048,967
			1,335,804

• (f) Information about major customers

No revenues from transactions with a single customer amount to 10% or more of the Group’s revenues (December 2016: Nil, June 2017: Nil).

7. BANK FACILITY AND BORROWINGS

The Group fully complies with and operates within the financial covenants under the arrangements with its bankers. At 31 December 2017 the Group had unutilised term facilities of $13.3m (December 2016: $86.3m, June 2017: $8.7m).

The Group also has a trade debtor securitisation facility of which $323.3m was unutilised at 31 December 2017 (December 2016: $255.1m, June 2017: $292.0m).

13

EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2017

7. BANK FACILITY AND BORROWINGS (Continued)

As at 31 December 2017, the maturity profile of the Group’s term debt and securitisation facilities was:

Facility Term debt facilities Term debt facilities Term debt facilities Term debt facilities Securitisation facility	Amount $95.4m $273.4m $35.9m $55.0m $467.2m	Maturity Within the next 12 months 1-2 years 2-3 years 3-4 years Within the next 12 months

8. FINANCIAL INSTRUMENTS

The Group enters into foreign currency forward exchange contracts to hedge trading transactions, including anticipated transactions, denominated in foreign currencies and uses interest rate swaps to manage cash flow interest rate risk.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as cashflow hedges of highly probable forecast transactions.

Fair value of derivative financial instruments Other financial assets – derivatives: Foreign currency forward exchange contracts Interest rate swaps Other financial liabilities – derivatives: Foreign currency forward exchange contracts Interest rate swaps	Six months 31 Dec 17 $’000 (Unaudited) 219 34 253 (192) (2,070) (2,262)	Six months 31 Dec 16 $’000 (Unaudited) 576 - 576 (132) (4,022) (4,154)	Year ended 30 Jun 17 $’000 (Audited)
			19 -
			19
			(428) (2,567)
			(2,995)

The Group has categorised these derivatives, both financial assets and financial liabilities, as Level 2 under the fair value hierarchy contained within NZ IFRS 13.

The fair value of foreign currency forward exchange contracts is determined using a discounted cashflow valuation. Key inputs include observable forward exchange rates, at the measurement date, with the resulting value discounted back to present values.

Interest rate swaps are valued using a discounted cashflow valuation. Key inputs for the valuation of interest rate swaps are the estimated future cash flows based on observable yield curves at the end of the reporting period, discounted at a rate that reflects the credit risk of the various counterparties.

There have been no changes in valuation techniques used for either foreign currency forward exchange contracts or interest rate swaps during the current reporting period.

During the period, on 24 October 2017, the group acquired a 14.1% equity interest in Medadvisor Ltd (ASX:MDR) for $11.8m. This investment has been classified as an available for sale financial instrument and has been valued using level 1 under the fair value hierarchy, therefore using the listed share price to determine fair value at the reporting date.

There were no transfers between fair value hierarchy levels during either the current or prior periods.

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EBOS GROUP LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

For the six months ended 31 December 2017

9. ACQUISITION INFORMATION

The Group acquired a 100% equity interest in Alchemy Holdings Pty Ltd in June 2017. Due to the timing of the acquisition the acquisition accounting fair value adjustments were identified as being on a provisional basis in the Group’s 30 June 2017 financial statements.

During the current period, the acquisition accounting adjustments have been updated to reflect independent valuations performed on the net assets recognised as part of the acquisition. As a result, the following adjustments have been recognised in the current period: an increase in indefinite life intangible assets ($9.5m), a decrease in finite life intangible assets ($4.8m) and an increase in deferred tax liabilities ($2.7m). Consequently the goodwill recognised on the acquisition has decreased by $2.0m to $128.3m.

10. EVENTS AFTER BALANCE DATE

Subsequent to 31 December 2017, the Board approved an interim dividend to shareholders. For further details please refer to Note 4.

In January 2018, the Group entered into a new three year securitisation facility (A$400m) which expires in January 2021.

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EBOS GROUP LIMITED DIRECTORY

CORPORATE HEAD OFFICE

108 Wrights Road PO Box 411 Christchurch 8024 New Zealand Telephone +64 3 338 0999 E-mail: ebos@ebosgroup.com Internet: www.ebosgroup.com

AUSTRALIA HEAD OFFICE

Level 7, 737 Bourke Street Docklands Melbourne 3008 Australia Telephone +61 3 9918 5555

DIRECTORS

Mark Waller Chairman Elizabeth Coutts Independent Director Stuart McGregor Sarah Ottrey Independent Director Peter Williams

SHARE REGISTER

Computershare Investor Services Ltd Private Bag 92119 Auckland 1142 New Zealand Telephone: +64 9 488 8777

Computershare Investor Services Pty Ltd GPO Box 3329 Melbourne, Victoria 3001 Australia Telephone: 1800 501 366

Managing Your Shareholding Online:

To change your address, update your payment instructions and to view your investment portfolio including transactions, please visit: www.investorcentre.com/nz

General enquiries can be directed to:

• enquiry@computershare.co.nz

• Private Bag 92119, Auckland 1142, New Zealand or GPO Box 3329, Melbourne, Victoria 3001, Australia

• Telephone (NZ) +64 9 488 8777 or (Aust) 1800 501 366

• Facsimile (NZ) +64 9 488 8787 or (Aust) +61 3 9473 2500

• Please assist our registrar by quoting your CSN or shareholder number.

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