Offer summary Listing on Main Board of JSE Listing 53.2m shares - PowerPoint PPT Presentation

Listing Roadshow Presentation PRIVATE AND CONFIDENTIAL 12 – 16 October 2015

Offer summary  Listing on Main Board of JSE Listing  53.2m shares representing 49% of Trellidor’s shares in issue – Offer size combination of sale and fresh issue  R319m – R373m placement (R50m fresh issue) R6.00 R7.00 Indicative price range Indicative div yield – based on 2015 4,1% 3,5% Envisaged dividend policy - 50% of PAT normalised AFS R648m R756m Estimated market cap R6.00 R7.00 R6.00 R7.00 ’15 Historic 13.2 15.4 ’15 Historic 9.1 10.5 P/E ’15 Normalised 12.2 14.3 EV/EBITDA ’15 Normalised 8.6 9.9 Growth scenario 11.2 13.1 Growth scenario 7.8 9.1 Slide 2

Anticipated listing timetable Formal roadshow Monday, 12 October – Friday, 16 October 2015 Opening date of the Private Placement at 09h00 on Monday, 19 October 2015 Closing date of the Private Placement at 17h00 on Wednesday, 21 October 2015 Anticipated listing date on JSE and commencement of trade on Wednesday, 28 October 2015 Note The times and dates as indicated above are subject to change Slide 3

Value proposition Growth achieved through Highly cash generative and product innovation profitable business Valuable brand - market Low risk growth strategy leader Growth opportunity in TRELLIDOR National franchise network Africa Competent management Defensive and resilient Dominant market position and staff business – security a non discretionary spend WELL POSITIONED AND MANAGED BUSINESS WITH A STRONG BRAND, NATIONAL DISTRIBUTION, QUALITY EARNINGS AND PROVEN TRACK RECORD READY TO ACCELERATE ITS LOW RISK GROWTH STRATEGY Slide 4

Business overview Slide 5

Overview • Founded in 1976 Trellidor Factory View • 350.0 The trusted brand and market leader Introduction of in barrier security clearguard & rollerstyle 300.0 Branch • Custom designed products – not in closure and Expansion increase of Factory mass produced “DIY” sector 250.0 number of capacity franchisees • Management team with over 70 years 200.0 Millions combined experience 150.0 • Growth platform recently established: 100.0 • investment in manufacturing (2008 and 2010) 50.0 • Branch closure and expanded distribution (2009 to 2012) 0.0 • launch of new products (2012) 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Sales Trading Profit Slide 6

Business model Marketing & Sales Manufacturing Route to market  Modern plant in Durban, assembly  Continuous marketing & advertising  70+ franchise outlets plants in strategic African countries throughout SA campaigns – all media, shows etc.  Comprehensive IT system –  Franchisees obliged to contribute to  17 African franchise outlets in franchisee tracking of order 17 African countries marketing investment  Roll forming, fabricating, painting,  Majority of leads through customer base  Franchise model most effective assembly and packaging  Leads conversion rate of 63% to install custom made  Order despatched 7 – 15 days from products  24 hour turnaround for quotes receipt of order  All products designed to specification  No royalties paid  Overnight delivery to franchisee in  Detailed management of franchisee SA via road transport – outsourced performance stats Price & demand drivers Input cost drivers Installation and after sales service  Product custom designed  Steel, aluminium, fasteners, paint  Franchisee conducts installations  Price not easily comparable  No material stockholding – JIT  3 – 5 year warranty  Trellidor dominant player – price setter system  Franchisee follow up any service  Price increases in line with input price  Major input prices fixed till Feb ‘16 calls – warranty or repair increases achieved – maintaining &  Significant value-add to materials  Warranty claims < 0.5% of turnover improving margins  Imports form significant input  Demand driven by need to be safe from  Labour (manage disruption risk) crime  Load shedding – not affected  Of late large growth in rural areas – non-  Durban property owned title homes Slide 7

Management Slide 8

Management team Terry Dennison (47) CEO Craig Peter Rawson Chris Wright Craig Meekers Cunningham Colin Heads (58) (55) (44) (40) (51) Sales and Production and Projects and Finance and HR Marketing Engineering Technology admin • Combined executive management experience with Trellidor – 70 years • Total workforce (excluding franchisee network) - 363 • Blue collar workforce – 284 Loyal and highly competent management and staff Slide 9

Board of directors Terry Dennison – CEO (47) Joined as FD in 1999 and appointed as CEO in 2001. Former deputy general manager of an agricultural company owned by the Commonwealth Development Corporation. Terry qualified with KPMG as a chartered accountant in 1992. Mark Olivier – Independent non-executive chairman (46) Mark has over 20 years' experience in managing debt, property and private equity assets and providing corporate finance and strategic advice, predominantly in the UK. Mark is a non-executive director of a $1 billion Chinese real estate fund managed by Blackstone Inc and Macquarie and is the chairman of Rockcastle, a $2 billion public company investing in retail properties in Africa and in Eastern Europe. Craig Cunningham – FD (40) Craig is a chartered accountant with experience post-articles with Ernst and Young in the UK, Citigroup and, more recently, financial management posts at Unitrans and Manline (both logistics companies). John Winship – Independent non-executive director (61) John was key to the development of BOE Asset Management, served on the board of BOE Limited and went on to establish Abvest, an institutional asset manager subsequently bought by ABSA. Ralph Patmore – Independent non-executive director (63) Ralph co-founded and was instrumental in the listing of Iliad Africa Limited, a building supply company, which he led as CEO until retirement in 2008. Prior to that Ralph held numerous executive positions including MD of Group Five Limited manufacturing division. Slide 10

Industry and positioning Slide 11

The industry “According to our online survey, 38% of respondents have been a victim (or someone close to them has been a victim) of crime in KEY TRENDS the last 6 months” Source: Crime stats SA SA market growth - increasing crime, growing middle class,  Number of people murdered and victims of attempted murder ineffective policing and power outages annually in South Africa…… African market growth – urbanisation and increasing asset  36000 ownership Margins stable - above inflation sales price increases and flat  35000 commodity prices offset by higher energy and labour costs No new entrants in custom sector, churn in DIY market  34000 Change in the nature of crime – electronic circumvention, house  raids etc 33000 MACRO DRIVERS 32000 31000 Partly counter cyclical and defensive  Crime rate and perceptions of crime  30000 Growth in housing stock – middle to upper LSM and non-title  deed homelands housing 29000 Change in ownership and value of homes  2012 2013 2014 2015 Increase in middle class - SA and Africa  28000 Disposable income  “During periods of growing crime people buy the best……Trellidor performs relatively well during these times” Slide 12

Market focus DEFINING THE MARKET CUSTOMER PROFILE • Residential • Domestic LSM 6 and up • Office and professional services property • Strong growing rural (former homelands) demand • Light retail (a small part of the business) • Focus on South Africa and Africa  95% of sales are retrofit into existing homes  95% of customers are end users (not construction, etc)  New builds generally become an opportunity after few years  Focus on non-commodity custom designed & installed  No retail off shelf “DIY” sales  Market leader  Avoid construction sector – low margin and bad payers Slide 13

Trellidor – not a construction play Growth in construction Index vs Trellidor EBITDA 440% 390% 340% 290% Results uncorrelated to 240% construction 190% index 140% 90% 40% 01 July 2011 01 January 2012 01 July 2012 01 January 2013 01 July 2013 01 January 2014 01 July 2014 01 January 2015 01 July 2015 JSE Construction & Materials EBITDA  Results uncorrelated to construction index  Material growth achieved by Trellidor in a depressed construction environment Defensive and resilient business Slide 14

Brand awareness and market share  Very high in South Africa - generic for sliding door security BRAND AWARENESS  Growing in Africa  No formal statistics – estimated size of market (custom made barrier security) – approximately 300,000 units and R900m annually in SA MARKET SIZE  Market penetration – substantial DIY product replacement & new builds MARKET SHARE ESTIMATES Outlying areas Main centres in SA Trellidor = +/- 50% Trellidor = +/-35% Dominant market position in South Africa but particularly outside the main centers Slide 15

Brand awareness Valuable brand - market leader Slide 16