Pepkor Europe Investor Pres 15 11 06 v1

Investor Presentation

November 2015

Pepkor Europe: Pepkor has a strong footprint in Central & Eastern Europe and a

growing presence in Western Europe

2

France: 25

Eastern

Europe: 700+

UK: 50

European footprint

Content

3

UK

Central & Eastern Europe

Western Europe

Group leverage opportunities

UK market overview: 3 key retail trends driven by long-term structural change

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• The way people shop has changed

• Time-poor, looking for convenience

• Growth of local, smaller formats

Convenience

• Macro improvements in digital

infrastructure

• Sophistication of service

proposition

• Significant channel shift online

Online

• Behaviours learned during recession

now entrenched

• Price is king

• Limited line formats resonate with

budget-conscious shoppers

Discount

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2

3

CAGR 2004-14 CAGR 2014-19

CAGR 2004-14 CAGR 2014-19

CAGR 2004-14 CAGR 2014-19

Source: IGD; Verdict

UK discount landscape: 6 sub-sectors of UK discount retail (majority smaller, local

formats)

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Single price variety Multi price variety Grocery

Clothing & home Health & beauty Other

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PEP&CO’s target customer: Mums on a budget shopping for value family apparel

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Value conscious mum with kids

(focus on C1/2DE demographic)

Likes flattering and feminine clothes

Fashion attitude of 25-50

Interested in fashion, but is a follower not a

leader; tempted by broad appeal, multi-

purpose items

She’s practical and on a tight budget, loves a

bargain for herself and her kids

Target customer

PEP&CO store dynamics: Womenswear, childrenswear and babywear for under

£10 in a clean and easy-to-navigate store environment

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• Mix of womenswear,

childrenswear/babywear and

small selection of home and

FMCG/impulse

• 95% of product is <£10 and

prices start at £1

Product & priceStore environment & campaign

PEP&CO location strategy: PEP&CO has national coverage with its first 50 stores

located in secondary towns across the UK

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Strategy

• Avg. store size of 3.5k sq feet of

ground floor selling space

• Located in shopping centres in

secondary towns (shopping

centres anchored by other

discount shops and value

fashion offers)

National coverage

Content

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UK


Western Europe


Current overview of PEPCO: PEPCO operates over 700 stores in Central & Eastern

Europe and the business continues to see strong growth

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• Vision to be the best and

cheapest clothing and

housewares discount

brand in Europe

• As of September 2015,

Pepco operated over 700

stores across 5 countries in


• Continued strong

momentum in the region

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Central & Eastern European footprint

Competitor landscape: PEPCO competes with domestic and foreign discount

players and maintains leadership positions in key categories

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Discount clothing & GM retailers

Discount food brands

Adjacent & emerging discount players

Informal market

Not yet in PEPCO markets

PEPCO’s key success factors

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Strength of PEPCO brand – 4th place in Poland

to be known for clothing & household articles

(behind Ikea, H&M, Home & You)

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EDLP price leadership – Target to be equal or

lower than competitors on 95% of basket of

entry and key volume lines

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Assortment of product – ‘Everything under

one roof’

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Availability of product – 93% in stock on

minimum display quantities at store level

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Footprint – Known for convenient locations

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Cost leadership – Focus on efficiency

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Rollout strategy in Eastern Europe: Expansion plans are progressing in all 5 of

PEPCO’s markets

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Rollout strategy

• Significant in-fill

opportunity in all markets

outside of Poland

• Continued opportunity for

growth within Poland

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Central & Eastern European footprint

Content

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UK


Western Europe


Current overview of Mac-Dan: Mac-Dan is well-positioned to build out a discount

variety chain in Western Europe

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• Discount variety chain acquired in

2014 from the founding Roticci

family

• Currently trading 25 stores, 13

owned, 12 franchised

• Of the owned stores, 4 have been

converted to the new Mac-Dan

format

• Geographically well-positioned in

less competed area of Western

European discount market

French footprint

Market overview & strategy: Mac-Dan has moved to the less-competed discount

sector of the non-food market

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Value

Discount

Food Non-Food

Clothing & footwear Non-clothing (“bazar”)

Other country opportunity: Markets in Western Europe present an attractive

opportunity for potential Mac-Dan expansion

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Monthly “Mac-Dan” market value in 000’s EUR**

*Estimated data

** Assuming all expenditure for category offered at Mac-Dan would be spent there

Next steps for Mac-Dan

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Continue store conversion

programme

Continue modernisation of offer

and service

Improve visual merchandising

Explore other market

opportunities

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2

3

4

Content

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UK


Western Europe


Pepkor Europe & group leverage

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• Pepkor GPS

• Product sharing

• Product knowledge sharing

Sourcing

• Logistics partner relationshipsLogistics

Back-Office• IT hosting and shared platforms

• Talent acquisition & HR

• Finance

• Shared UK property teamProperty

Steinhoff group leverage

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• Co-location opportunities

• Property investment & development

Sourcing

Logistics

Back-Office

Property

• Logistics partner relationships

• Shared distribution opportunities

• Product sharing

• Product knowledge sharing

• Shared services (eg, IT, Treasury)

• Market knowledge sharing

Pepkor Europe Investor Pres 15 11 06 v1

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