PRESENTATION 18 May 2018
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Table of Contents 1 INTRODUCTION OPERATING COMPANIES REVIEW 2 KEY UPDATES 3 RESTRUCTURING FRAMEWORK UPDATE 4 5 NEXT STEPS i APPENDIX 3
There is an opportunity to realise significant value for all stakeholders… • There are several very valuable businesses within the Steinhoff Group • However, there is a significant risk that this value could be materially impaired: • The liquidity position of the Group’s key finance (non -operating) companies is not sustainable beyond the next few months, absent any solution • The operating companies’ trading is suffering as a result of the uncertain situation • The Austrian companies Steinhoff Europe AG (“SEAG”) and Steinhoff Finance Holding GmbH (“SFHG”) are vulnerable due to insolvency risk, which would lead to: • Additional negative impact on operating companies • Detrimental impact on timing and overall recoveries for the Group’s lenders …but the current position is fragile and the need for a solution in the short-term is critical 4
This presentation sets out the steps to that solution • Present outcome of the strategic review of the Group’s key operating companies • Update lenders on the issues facing the Group Present the proposed Group restructuring framework and way forward • 5
Table of Contents 1 INTRODUCTION OPERATING COMPANIES REVIEW 2 KEY UPDATES 3 RESTRUCTURING FRAMEWORK UPDATE 4 5 NEXT STEPS APPENDIX i 6
Operating Companies Review – Introduction • In early 2018, the Group started a business planning exercise across all its operating companies: • Strategic plans developed, including 3 year financial projections • Turnaround plans developed where applicable • Size of funding needs assessed where applicable • Businesses reviewed in line with the following considerations: • Classification: stable or requires turnaround • “Today” value vs. “Future” value • • • Organic growth and capex requirements • • • Buyer appetite in current M&A market • 7
OpCo Overview – Pepkor Europe (1/2) SEAG Cluster OVERVIEW • Pepco is a discount variety retailer • Operates in CEE through c.1,213 stores • Large footprint in Poland, with expansion taking place across CEE • Strong growth expected through new store openings in current and existing territories coupled with profit growth through continued LFL increases • Significant synergies within Pepkor Europe from the group sourcing office (PGS) STRATEGIC CONSIDERATIONS CLUSTER SEAG ASSESSMENT Stable GROUP FUNDING No REQUIRED? MARKETABILITY FAIR VALUE TODAY? 8
OpCo Overview – Pepkor Europe (2/2) SEAG Cluster OVERVIEW • Poundland is a discount variety retailer • Operates primarily in the UK and Ireland • Large footprint in UK (883 stores), with expansion taking place in CEE countries • EBITDA growth expected from: • Address underperforming stores • Optimisation of core business • CEE and Spanish expansion under the Dealz brand • Significant synergies within Pepkor Europe from the group sourcing office (PGS) STRATEGIC CONSIDERATIONS CLUSTER SEAG ASSESSMENT Stable GROUP FUNDING No REQUIRED? MARKETABILITY TODAY FAIR VALUE TODAY? 9
OpCo Overview – Asia Pacific SEAG Cluster OVERVIEW • The Asia Pacific subgroup operates in the household goods, general merchandise and apparel segments • Footprint of 627 stores • Top 3 player in Australian furniture market with well- performing businesses • Strategy aims to leverage scale of business and focus on vertical integration opportunities STRATEGIC CONSIDERATIONS CLUSTER SEAG ASSESSMENT Stable GROUP FUNDING No REQUIRED? MARKETABILITY FAIR VALUE TODAY? 10
OpCo Overview – SEAG Cluster OVERVIEW • Conforama is a househould goods retailer • 291 stores • Performance subdued due to execution challenges • Enhanced financial projections driven by: • Pricing review and commercial management • Inventory management and cost/cash-out cutting • Supply chain and logistics optimisation STRATEGIC CONSIDERATIONS CLUSTER SEAG ASSESSMENT Profitable with upside potential GROUP FUNDING No REQUIRED? MARKETABILITY TODAY FAIR VALUE TODAY? 11
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