Strauss & co - Review 2023

Chairperson’s Report I am pleased to present this Chairperson’s Report for the trading year January to December 2023. Strauss & Co enjoyed another brisk year of trade. We successfully hosted 57 auctions of modern and contemporary art, decorative arts, jewellery and fine wine, including six charity auctions. Notwithstanding significant headwinds, our total revenue increased by 2% compared to the previous year, reaching R363.7 / $19.7 million from 5 457 lots sold (excluding turnover from charity auctions) sold at 51 auctions. We sold 12% fewer lots than in 2022 – a pleasing improvement on value per lot sold. We continued to optimise our business processes and organisational structure, notably appointing two new members to our Board of Directors, and decisively settling into our new Cape Town premises. Selling art in unpredictable times Before I discuss in greater detail Strauss & Co’s key economic achievements and strategic initiatives in 2023, I want to reflect on the wider trading landscape. Globally, inflation showed signs of easing in the second half of the trading year (H2), albeit in a fragmented manner. Unpromising factors like slowing economic growth in China and war in the Middle East however impacted on market sentiment, especially in H2. In South Africa, the country’s economy experienced additional stresses due to sustained high interest rates, deteriorating public infrastructure and irregular power supply. These factors led to softer demand for goods handled by Strauss & Co, notably in H2. We were not alone in negotiating market turbulence. Journalists and economists reported indifferent demand at auctions globally throughout 2023. Aggregate sales at major international auction houses were down by 16% in H1, with results in H2 showing little sign of improvement. Despite continuing political headwinds and economic uncertainties, Strauss & Co responded to these macro- economic conditions with resilience and adaptability. Headline achievements for 2023 The total revenue including charity auctions, from which Strauss & Co does not profit but nevertheless consume considerable time and resources, was R372.8 / $20.2 million* from 5 687 lots sold at 57 auctions. Our profitability also remained resilient. This positive bottom- line outcome is the result of disciplined cost management, fiscal and operational efficiency, and a consistent focus on delivering value to our shareholders. We continued to invest in a very targeted fashion in the fitout of our offices in Cape Town and Johannesburg, deepening and optimising the technology stack that drives our operational and performance capacity. We also invested in training and development of our people and in expanding our international footprint by establishing a permanent presence in the United Kingdom and representation in the United States. Demand persists for collectable art The art market was subdued in 2023, but passion for quality art endures. Collectors are judicious and there was strong demand for artists with institutional pedigree. We saw robust bidding for works by artists with significant museum presence, from Irma Stern and Sydney Kumalo to William Kentridge and Cinga Samson. At a time of restrained demand, it was particularly encouraging to note strong interest in BIPOC (black, indigenous, and people of colour) artists, in particular historical black modernists. There was sustained demand 4