Audited resultsfor the year ended 30 September 2018

Agenda

Significant matters03

Chairman’s remarks 01

Financial performance04

Segmental performance05

Outlook06

Overview02

Chairman’s opening remarks

JAYENDRA NAIDOOCHAIRMAN

Overview

LEON LOURENSCEO

Year in review

5

10.9%revenue growth to

R64.2bn

10.7%growth in operating

profit to R6.4bn(excluding one-off costs)

1.9%growth in operating

profit to R5.9bn(including one-off costs)

3.6%Growth in retail

space

R18bnrefinanced and

guarantees released

27.8 cents

per share maiden dividend declared

(dividend cover of 3 times)

What we do

Provide everyday productsAn extensive product range focusing on everyday needs

At affordable pricesBest price leadership ensures product differentiation

At customers’ convenienceLargest footprint in African market

The right product adds

value to customers’

lives

Customer loyalty

through value for money

Enhanced customer shopping

experience

6

Who we are

7

12African

countries5 200+

stores

2.4+million m2 total

retail space

48 000+employees

400+million

transactions annually 1 billion+

units sold

Who our customers are

88

It isimportant for our customers to look and feel good. We want to make their

lives better and easier.

Leon Lourens,Pepkor CEO

Everyone,

rich and poor,

deserves the same

access to products,

services and friendly

customer service from

people who treat

them with dignity

and respect.

Milestones achieved

9

Published 2017 full audited financial results

Strengthened board composition

Appointed new auditors

Retention scheme implemented

Completed refinancing and release from guarantee

Milestones achieved (continued)

10

Terminated SNH services

Pepkor name change

Credit book agreements

2018 audited financial results

New segmental reporting

Significant matters

LEON LOURENSCEO

1. Sourcing office

• CFH sourcing from PGS: 15% for Pep and Ackermans

FY18 sourcing of Clothing, Footwear and Home (CFH) via PGS

12

SA local35%

Imports65%

PGS29%

2. Tekkie Town

13

Like-for-like growth

-20%

0%

20%

3. Credit agreements

14

Build new book

Maintain profitability

Own the customer

experience

Terminate commercial relationship

with Fulcrum

1 2 3 4

4. Dividend policy

15

GearingCapital

commitmentsStrategic

investments

3 x cover

1 x net debt-to-EBITDA

Financial performance

RIAAN HANEKOMCFO

Highlights

COMPARABLE: FY18: Add-back of R511 million one-off costs / FY17: Use WANOS of 3 450 million

Revenue 10.9%

Statutory

to

R64.2bn

Operating profit 1.9%

to

R5.9bn

Operating margin 90 bps

to

9.2%

HEPS36.7%

to

84.5 cps

Revenue10.9%

Comparable

to

R64.2bn

Operating profit 10.7%

to

R6.4bn

Operating margin maintainedat

10.0%

HEPS4.2%

to

99.3 cps

17

Highlights (continued)

Refinanced 3

18

Cash generated

R5.3bn

Return on net assets

23.4%R18bn

Maiden dividend declared of

27.8c

Effective tax rate

38.4%

and guarantees released

Consumerfinance

Refinanced

27.5% excl. one-off costs

@ 3 times cover

Pepkor will collect existing loan books owned by CenCap:

Market-related collection fee

Capital investment required in FY19: R2.2bn

Consumer finance

19

➔

➔

➔

• JD secured credit: c.R1.6bn – average 27-month term

• Capfin unsecured loans: c.R1.7bn – average eight-month term

133,6

103,7 99,384,5

29,9

14,8

FY17 statutoryHEPS

Impact of 882mshares issued

FY17comparable

HEPS

FY18comparable

HEPS

Impact of one-off costs

FY18 statutoryHEPS

Comparability of earnings

-4.2%

Statutory vs comparable headline earnings per share (HEPS) – cents

20

Effective tax rate up

21

South African standard rate of taxation 28.0

FY18 %

Effect of other African countries’ tax rates 0.5

(Utilisation of unrecognised taxation losses)/taxation losses generated unrecognised 3.4

Withholding tax 3.3

One-off items 3.0

Other adjustments 1.2

Effective tax rate 38.4

New reporting segments

22

FinTech

10.6%

Segmental revenue growth

+10.9%

FY17 FY18

23

FY18 revenue segmental composition

FY18 – Rm

66%

8%

13%

13%57 850

7.2%

19.9%

35.5% 64 168

Credit sales

100%

82%92%

70%

92%

36%

86%

18% 8% 30% 8% 64% 14%

PEP & PEPAfrica

Ackermans Speciality Furniture Electronics &Appliances

Buildingmaterials

Pepkor group

Cash sales Credit sales

24

FY18 merchandise sales

Gross profit margin

25

• Increased markdowns and discounts

• Building materials discounts and reduced rebates

35.3%

FY17

34.5%

FY18

Other income

FY18

26

24.8%

Growth to

R875m

Insurance and other income25%

Distribution fee17%

Commission50%

Marketing and advertising

income8%

Other17%

Property26%

Personnel47%

Depreciation7%

Lowest cost of doing business

FY18

27

26.6%

CODBIncluding

one-off costs

25.8%

CODBExcluding

one-off costs

Segmental operating profit growth

FY18 – Rm

28

8.1%

5 815

6 43955.8%

5 928

(511)(11.9%)

10.6%

FY17 FY18comparable

One-off costs

FY18statutory

Before capital items

93%

4%3% 0%

FY18 operating profit segmental composition+10.7%

+1.9%

29

Goodwill and intangibles

R61.0bn

Net working capital

R5.4bn

Inventory

Trade receivables

Trade payables

+R1.9bn

+R1.1bn

+R0.4bn

Balance sheet considerations

-8

-6

-4

-2

0

2

4

6

8

FY18 FY19 FY20 FY21 FY22 FY23

Net debt

30

Net debt (contractual)

R12.6bn

Net debt-to-EBITDA

1.64

EBITDA: Interest cover

6.51

Net cash

R b

illion

s

Unutilised facilitiesDebt repayments

Cash generated from operations

31

5 8915 312

3021 134

489451

376

3 331

Operating profit

Debtors' cost Amortisation and

depreciation

Inventory write-downs

and provisions

Provision: One-off costs

Other non-cash

adjustments

Net changes in working

capital

Cash generated

from operations

FY18 – Rm

( )

Capex

32

2.9%R1 869m

Capex

% of revenue

Expansion

66%Replacement

34%

1.8%R1 134m

Depreciation

% of revenue

Segmental performance

LEON LOURENSCEO

Clothing & general

merchandise

8.0%Sales growth

3.3%Like-for-like sales

growth

4.5%CFH

deflation

9.0%Volume growth

5.0%Retail space

growth

PEP & Ackermans

35

2 231

Stores

97.5%Best Price Leadership

294mNumber of

transactions

12 000Number of employees

137New stores

opened

PEP

36

731

Stores

17%

Lay-byes

58mNumber of

transactions

7 000Number of employees

12%Credit sales

growth

Ackermans

37

80New stores

opened

No.1 Value Retailer for women with kids in their lives

-1.8%Sales growth

Number of employees

23mNumber of

transactions

PEP Africa

38

3 0003 000

Stores

347

12.5%Sales growth

14mNumber of

transactions

6 000Number of employees

82New stores

opened

Speciality

39

911

Stores

Furniture, appliances

& electronics

892

Stores

9.7%Sales growth

7 000Number of employees

Furniture, appliances & electronics

41

81

New stores opened

3.5mNumber of

transactions

Furniture, appliances & electronics

42

JD GROUP LIMITEDJD GROUP LIMITED

Furniture retail

Bedding Furniture

Appliances and electronics

Financial Services

Supply Chain ServicesSupply Chain Services

Mas

s m

arke

tTo

p-en

d

Dis

coun

tVa

lue

Nic

he

Building materials

-3.1%Sales

decline

124

Stores

7 000Number of employees

Building materials

44

General building

materials

SBM –Retail

SBM –Wholesale

1 2 3

FinTech

FinTech

46

145 000

Active traders

23m

Monthly consumers

2.8m

Daily transactions

Initiatives

LEON LOURENSCEO

Adult wear

48

Discount variety – Dealz

49

FMCG

50

PAXI

51

Cellular – direct imports

52

Outlook

LEON LOURENSCEO

Outlook

54

Store openings

Portfolio strategy

➔

➔

Back to retail

Future performance

➔

➔

Leadership and culture➔

Putting the customer at the centre

of whatwe do

Audited resultsThank you

PEP – Historic performance

57

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Revenue

Operating profit

19-yearCAGR15%

19-yearCAGR28%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Revenue

Operating profit

18-yearCAGR16%

18-yearCAGR23%

Ackermans – Historic performance

58